The recent U.S. tax bill that sharply reduces the corporate tax rate is expected to boost business travel, according to Bank of America analysts.
Industry analyst Andrew Didora highlights that the corporate tax cuts should benefit carriers such as United Airlines, American Airlines and Delta Air Lines, which derive a substantial portion of their revenue from corporate clients. Historically, nearly two-thirds of revenue for legacy carriers has come from business travelers.
“We view tax reform as a significant positive for corporate spending, and we believe this can drive a pickup in corporate travel pricing,” Didora said. He noted that corporate fares have declined since 2014, and that tax-driven corporate spending increases—combined with solid international demand—could provide a favorable environment for airlines more dependent on corporate travel than those focused on domestic leisure passengers.
In December, the U.S. Congress approved legislation lowering the federal corporate tax rate from 35 percent to 21 percent, and the president signed the bill into law.
Analysts expect the tax changes to translate into several practical effects for the travel industry. Companies facing reduced tax burdens may raise travel budgets, leading to higher premium cabin demand, more frequent business trips, and increased sales of ancillary services such as lounge access and flexible fares. For airlines, this can mean improved load factors and higher average revenue per passenger on routes popular with corporate travelers.
Legacy carriers, which traditionally serve a larger share of business routes and maintain extensive global networks, stand to gain more than low-cost, leisure-focused airlines. Increased corporate travel often favors flights timed for business schedules, premium seating classes, and routes connecting major business hubs. Those strengths can help legacy carriers capture incremental revenue as corporate travel rebounds.
That said, the timing and scale of the rebound in business travel depend on corporate budgeting cycles and broader economic conditions. Companies typically adjust travel policies and contracts with travel management firms, and changes in corporate travel demand can take several quarters to materialize. Still, with tax reform lowering costs for many firms, analysts see a clear catalyst for renewed corporate travel spending.
Overall, the tax law is viewed by aviation industry watchers as a tailwind for carriers with strong exposure to corporate customers, potentially supporting healthier yields and more stable revenue streams as business travel activity recovers.