Corporate Travel Saw a Rare Bright Spot in the Oil and Gas Industry: Why That's Now Changing
Skift Take
The energy sector has so far been a safe harbor for many corporate travel agencies during this crisis, but cracks are starting to show.
It’s well-known that working in the oil and gas industry comes with more risks than the average office job, but now it seems there’s a heightened risk managing travel within the sector too.
Following the collapse of one specialist travel agency, experts are warning that fault lines are starting to appear. One described a "Catch 22" situation for those agencies that bankroll their customers' travel as they struggle with cashflow problems caused by airline refund delays.
And there's more uncertainty ahead for an industry hit by weaker demand for jet fuel and a growing movement towards more sustainable energy production.
Pandemic-related restrictions are also taking their toll on complex travel requirements, and range from self-isolating helicopter pilots to hotel capacity squeezes.
It wasn't always the case. During the pandemic, the wider energy sector — alongside medical and key workers — was regarded as a resilient one compared to traditional corporate travel. “With oil and gas coming under the essential workers classification, passenger numbers in the energy sector have not seen the dramatic drop that other sectors have,” said Graeme Fyvie, strategic operations director at corporate travel agency Reed & Mackay.
The offshore oil and gas business is big business. In the UK alone, it supported 260,000 jobs during 2019, with around 50,000 traveling offshore for their work. Half that number will spend 100 days offshore every year. But the pandemic now stands to bring about significant long-term changes.
Loss of a Historic Name
On November 11, UK-based Horncastle Executive Travel, shuttered. Its marine and offshore travel division originated from the travel department of the Common Brothers' Shipping Company, which was founded in Sunderland in 1893.
In 2010, Horncastle's managing director, Peter Drummond, who ran the business alongside his wife, Christina, was appointed member of the board at the Guild of Travel Management Companies (which has since rebranded to the Business Travel Association).
Horncastle was also part of the Lufthansa City Center global network. In 2019, the agency recorded gross sales worth £13.9 million.
Despite a wealth of experience, it becomes the latest agency to fall victim to the pandemic. Its closure has affected more than 30 employees, across offices in Edinburgh, Newcastle and Norwich.
