Your weekly travel and aviation Quote-a

1 July, 2022

At a time of crisis, it is important that we share our insights and experience, helping each other to contain and mitigate the impact of COVID-19. CTC – Corporate Travel Community each week brings you a roundup of the most thought-provoking and interesting comments from those industry leaders in the know.

Australian Federation of Travel Agents CEO: Forward bookings rarely longer than 30 days

Australian Federation of Travel Agents (AFTA) CEO Dean Long said the period of time in which individuals would book travel "used to be about 120 days, up to 170 [days] for international travel by Australian", however it is "now very rarely longer than 30 [days]". Mr Long said interest in international travel for agents increased 404%, and that corporate travel on a domestic level has increased 74% on 2021 levels.

IATA director general: Aviation senior management 'will look very different' in the coming years

IATA director general Willie Walsh stated "A few years ago, just 3% of IATA airline CEOs were women. Today, that is nearing 9%". Mr Walsh said: "Even more importantly, there are many more women in the senior ranks as we are seeing with the growing commitment to the 25by2025 initiative". He noted: "As the industry scrambles with skill shortages, it cannot afford to ignore half the population. Change will not happen overnight". Mr Walsh added: "I am confident that the face of aviation's senior management will look very different in the next years".

Air France-KLM CEO warns Schiphol labour shortage issues may take 'weeks or months' to resolve

Air France-KLM CEO Ben Smith stated Amsterdam Schiphol Airport's security and ground personnel shortages are out of the airline group's control, adding the group will seek compensation for some of its losses incurred due to flight cancellations. Mr Smith added government security clearance requirements mean "it could take weeks or months" for the issue to be resolved. Schiphol has established a limit on the maximum daily passengers for summer 2022 due to labour shortages.

Virgin Australia 'absolutely committed' to achieve net zero by 2050

Virgin Australia CEO Jayne Hrdlicka stated Virgin Australia is "absolutely committed" to achieve net zero by 2050. Ms Hrdlicka stated there is "no single one thing to go do", however "lots of little things" and "two big things". Ms Hrdlicka said the "little things" are things the company can control "on the ground, everyday, electrifying everything that we can" trying to get reduce its carbon footprint to as close to zero as possible. Ms Hrdlicka added that in the air it is "slightly more complicated", as technology is at the "heart of big step change, that will get us to Net Zero by 2050… both with equipment and with fuel".

Finnair CEO highlights 'question marks' over Asian markets

Finnair CEO Topi Manner stated the carrier faces major strategic changes due to "question marks" over its main market in Asia, outlining it has "to adapt to the increasingly closed Russian airspace". Mr Manner added despite increased flight times, operations to Tokyo remain possible due to higher ticket and cargo yields, and expects the same to apply for Hong Kong and Shanghai once reopened.

Qatar Airways CEO sees 'zero second hand market' for A380s

Qatar Airways CEO Akbar Al Baker said there is "zero second hand market" for A380 aircraft, stating: "especially with the current oil prices, it's the most un-economic aeroplane to operate" (New Straits Times, 23-Jun-2022). Mr Al Baker added the carrier is "forced to operate [the A380] because we are in desperate need of capacity" while the majority of its A350 fleet remains grounded. The carrier has reactivated six of its 10 A380s under the "short term" measure since late 2021.

Lufthansa Group CEO: Europe faces 'structural problem' of 'shifts of the labour market'

Lufthansa Group CEO Carsten Spohr stated the issue of labour shortages in Europe has been exacerbated by restrictive immigration policies. Mr Spohr said: "This is in my view just the beginning of a structural problem we have in Europe when it comes to blue collar labour due to the demographic developments". He added: "That's something politics has to look at... this is the beginning of shifts of the labour market we better gear ourselves for".

Spirit Airlines CEO: Frontier transaction 'the right bet' amid US recession concerns

Spirit Airlines CEO Ted Christie stated the carrier's proposed merger with Frontier Airlines is "the right bet" amid concerns of a recession hitting the US. Mr Christie explained ULCCs have generally outperformed other airlines during recessionary periods as people are looking for lower cost travel.

Frontier Airlines CEO: Spirit merger would immediately introduce 300 new markets

Frontier Airlines CEO Barry Biffle stated the proposed Spirit Airlines transaction will immediately introduce 300 new markets to consumers. Mr Biffle noted there are several existing markets served on a connection basis, and the Frontier/Spirit merger can contribute seamless, one-ticket connections.

JetBlue CEO: Frontier/Spirit merger would be a 'missed opportunity for increased competition'

JetBlue Airways CEO Robin Hayes, in a letter to the carrier's crew members, stated a merger between Frontier Airlines and Spirit Airlines would be "a missed opportunity for increased competition". Mr Hayes added the transaction would deny customers "an attractive alternative to bare bones travel", while JetBlue's proposal would "turbocharge" the carrier's expansion, adding more aircraft, gates, airport space, flights, and staff to its operations. Mr Hayes also stated Spirit's board of directors has not "run a fair process" since negotiations commenced, as they believe a Frontier/Spirit merger is "inevitable". Spirit shareholders were set to vote on the Frontier merger on 30-Jun-2022.

Austrian Airlines CEO: Fuel price increase dents chances of achieving 'black zero'

Austrian Airlines CEO Annette Mann said the carrier would have "had a good chance to achieve at least a black zero" had the price of kerosene not increased so drastically in 2022. Ms Mann stated as a result the carrier's only chance to become profitable again is to increase ticket prices, and expects an increase of "a few euros" on short haul routes and between EUR50 to EUR100 on long haul services.

LIFT CEO takes ‘careful’ approach but sees regional growth opportunity

LIFT Airline CEO Jonathan Ayache confirmed the airline plans to expand its fleet over the next six to 12 months with A320s from partner Global Aviation Operations. LIFT will deploy the additional aircraft to increase capacity between Cape Town, Durban and Johannesburg rather than launching new routes. Mr Ayache commented: "Our approach is careful one, we are constantly monitoring demand. Comair exiting the market represents a big opportunity for us and this has expedited our growth, but the environment is still very challenging. One of the key challenges remains the slow recovery of demand". He said "regional markets will be of interest" to the airline in 2023. Mr Ayache stated: "Africa has many underserved markets compared with Europe, South America and the US. We are looking at the different ways we could enter our regional markets. It could be through our own presence, through partnerships or collaboration". He also commented: "If and when we were to look at regional routes, we would likely look at... regional jets".