What’s the next destination for the aviation industry? After a postpandemic upswing in demand for air travel and improvements in the sector’s financial performance, airlines now face a more uncertain trajectory. A new McKinsey report on the state of aviation explores how economic and geopolitical tensions, consumer behavior, aircraft shortages, and other forces may shape the industry’s direction of travel. This week, we examine trends in the aviation sector and how these developments could affect travel planning for organizations—and their leaders—across industries.

ALL BUSINESS

With global uncertainty in the air, some companies are tightening travel budgets while weighing the potential business impact of geopolitical shifts. Still, overall demand for business travel has been rising after a few years of instability. McKinsey Partner Ryan Mann cites a key reason for this upturn: “People have found that there is no substitute for face-to-face engagement with their leaders and colleagues. Employees craving in-person encounters bodes extremely well for business travel.” Corporate travelers’ habits have changed in other ways. Some are extending their stays in certain destinations, alternating leisure days with workdays while they’re on the road. “It's important to remember, obvious as it may be, that business travelers have identities outside of work,” Mann says. “Many of the same elements that can inspire and energize them when engaging in leisure travel might also enhance their business outings.”

Lead by keeping tabs on aviation trends.