Your weekly travel and aviation Quote-a

20 January, 2023

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.

Corporate Traveller MD: The 'demand is there' for China travel

Corporate Traveller global MD Tom Walley said: "The reopening of borders and the relaxing of COVID testing into China is a landmark way to start the year for businesses big and small". Mr Walley said: "Looking at our internal data, we saw a tremendous spike in flight searches to China on the day it was announced that borders would reopen (27-Dec-2022) and since then, searches have been consistently more than 40 per cent higher than before Christmas", noting the "demand is there", with the demand being converted into bookings. Mr Walley said: "The next stage is for airlines to bring capacity back".

SWISS: Business travel between 60% and 70% of pre-pandemic level

SWISS CEO Dieter Vranckx stated the carrier expects to reach between 80% and 85% of 2019 capacity during 2023, with aim to be at the same level or slightly above the pre-pandemic level in 2025. Mr Vranckx said business travel figures are around 60% to 70% of the pre-pandemic level, with recovery happening slightly slower than expected.

Fiji Airways CEO: 'About 95% of our traffic is holiday makers'

Fiji Airways CEO Andre Viljoen said: "About 95% of our traffic is holiday makers and we have very little business traffic", adding "Leisure travellers have a lot of time and little money, whereas business travellers have little time, and more money". Mr Viljoen said the carrier is in need of amending "the thinking of the US traveller who thinks of Fiji as 'exotic'; a bucket-list destination that is unaffordable. 18 million Americans travel to Hawaii each year… we are not Tahiti". Mr Viljoen said the carrier handles approximately 70% of tourists into Fiji.

United expecting 'significant bounce back' in Asia-Pacific demand, carefully watching Japan: CCO

United Airlines EVP and CCO Andrew Nocella, via the carrier's 4Q2022 earnings call, stated the carrier expects a "significant bounce back" in Asia-Pacific demand in 2023, similar to that experienced in the South Korea and Australia markets. Mr Nocella reported the carrier is carefully watching Japan, which has been slower to rebound. Mr Nocella noted current numbers "look really good", however they are based on US point of sale systems, with Japanese point of sale figures to be realised in mid 2023.

AerCap CEO: SAF transition cost 'extraordinary'

AerCap CEO Aengus Kelly said a sustainable aviation fuel (SAF) transition over a 30 year period is "an extraordinary cost", noting it may cost USD1.5 trillion. Mr Kelly said governments will not "do it all. That's not going to happen".

Delta Air Lines CEO: Aviation to experience 'tens of billions of dollars of incremental demand'

Delta Air Lines CEO Ed Bastian, via the carrier's 4Q2022 earnings call, stated he has never seen "a more constructive backdrop" for the aviation industry despite continued supply constraints. Mr Bastian noted demand levels remain strong post-COVID-19 and forecast the aviation industry to experience "tens of billions of dollars of incremental demand in the next few years" post COVID-19. Mr Bastian reported Delta is "well-positioned" to build on its momentum in 2023.

Ryanair Group CEO expects airfare rise in the 'high single-digit' range

Ryanair Group CEO Michael O'Leary reported expectations for an airfare increase in the "high single-digit" range. Mr O'Leary cited lack of capacity, high demand and fuel costs for the increase in airfare. He added: "I don't think you're going to see GBP9.99 fares for a year or two while oil prices are high". The carrier has hedged approximately 50%, while it is scheduled to receive an increase in fuel cost of 35%.

Hospitality Association of Namibia CEO: 2022 occupancy rates more than 70% of pre coronavirus levels

Hospitality Association of Namibia CEO Gitta Paetzold said "Depending on the results of the final month, December, performance thus far indicates that Namibia will end the year 2022 at over 70% of pre-pandemic levels for the entire year" for occupancy in Namibia. Ms Paetzold said US and UK markets are conveying "healthy signs of growth". For the 11 months to Nov-2022, occupancy rates were almost 80% of pre coronavirus levels.

SMBC CEO expects further mergers and acquisitions 'over the next number of years'

SMBC CEO Peter Barrett said he expects further mergers and acquisitions "over the next number of years… because the level of relevance and scale is tipping up over the years". Mr Barrett also noted: "There has always been" activity of the like "in our space".

WestJet opposes proposed regulation to provide passengers automatic compensation: VP

WestJet VP of external affairs Andrew Gibbons stated the carrier opposes regulations to provide passengers with automatic compensation in the event of flight delays or cancellations. Mr Gibbons noted the carrier prefers "to have an individual relationship with our guests", adding he hopes Canadian policymakers update regulations to include provisions for the aviation industry as a whole to share accountability for delays and cancellations. Mr Gibbons stated: "This is not about a blame game. It is simply about improving the system overall".

Iberia CEO wants to finalise Air Europa purchase in 2023

Iberia CEO Javier Sánchez-Prieto said 2023 is the year it must be able to convince of the benefits its purchase of Air Europa would have for the "entire system" and in particular customers. Mr Sánchez-Prieto added that if the acquisition is not achieved in a certain period of time, it would be better for Iberia to move on and continue with the development of the Madrid hub to the best of its ability.