CTC – Corporate Travel Community brings you a roundup of the most thought-provoking and interesting comments from those industry leaders in the know during the recent Feb-2021 edition of CAPA Live – a monthly virtual summit, offering insights, information, data and live interviews with airline CEOs and industry executives across a next-gen virtual event platform.
SWISS: ‘The expectation is that in 3Q2021 there will be some substantial change’
SWISS CCO Tamur Goudarzi Pour commented on planning in the aviation industry during the pandemic, stating: “We have to distinguish between short-term, medium-term and long-term”. He added that in the short-term, demand is expected to drop and “we will not see a major uplift for Easter”. He proceeded: “The big question for the whole industry is what is happening in summer 2021?”. He concluded that considering all the biosafety safeguards, including testing regimes and quarantine regulations allied with the roll-out of vaccinations across different markets, “the expectation is that in 3Q2021 there will be some substantial change” and for certain carriers it will be a question of survival.
Emirates projects premium economy will be ‘really, really important’: president
Emirates president Sir Tim Clark stated the airline’s premium economy offering is expected to add significant value and enhance income per seat kilometre over time. Sir Tim noted the opportunity to capitalise on reduced business class demand with this offering, and reported high demand for existing premium economy seats: “We’ve been absolutely shocked at the demand… We’re in the process of [establishing] how many of the existing fleet we can put through conversion. We’re going to do that at pace”.
Frontier Economics: Desire to win new business to drive demand for corporate travel
Frontier Economics economist Anna Wilson stated “there’s an aspect of business which doesn’t do well” relying on videoconferencing “and that’s winning new business”. Ms Wilson said “face-to-face interaction is actually critical” for businesses trying to secure new clients, customers and contracts, noting: “you don’t remember people that you’ve met on a Zoom call, but you do when you’ve met them face-to-face”. She added that she expects “that desire to start winning work for different businesses and expanding” to drive recovery of demand for corporate air travel.
Finnair: ‘We strongly believe that loyalty goes both ways’
Finnair head of loyalty Karolina Baszarkiewicz stated the airline “strongly believes that loyalty goes both ways”, noting that “customers were loyal to us for years”, so Finnair made a point of demonstrating its loyalty to its customers through its Finnair Plus loyalty programme when the COVID-19 pandemic outbreak began to impact air travel in early 2020. Ms Baszarkiewicz said Finnair introduced a six month waiver on the expiration of Finnair Plus points from Mar-2020, while also extending the tier tracking period for all Finnair Plus members by six months, and later extended the waiver and tier tracking period for a further six months from Aug-2020 and again from late 2020. She explained that Finnair wants to “give our loyal customers peace of mind that they can return to where they left off, once they are able to travel again”, in terms of mileage points and benefits.
easyJet CEO: ‘We don’t need any more studies to recognise that people want to go on holiday’
easyJet CEO Johan Lundgren said there is “no doubt” that leisure travel will be the fastest segment to rebound when travel restrictions are lifted, followed by VFR traffic and business travel. “We don’t need any more studies to recognise that people want to go on holiday”, Mr Lundgren continued. He said there could be an “absolute boom” in terms of travel due to underlying pent up demand if the COVID-19 vaccine rollout is successfully implemented and travel restrictions are lifted. Mr Lundgren added he remains “positive” for a “strong summer” in 2021 if vaccination programmes are successful and effective against the different variants of the COVID-19 virus.
Australia’s Acting CMO: ‘We’ve learned things happen within timeframes we didn’t expect’
Australia’s Acting Chief Medical Officer (CMO) Michael Kidd stated “We don’t know how quickly it will take before we see transmission start to improve around the world”. Mr Kidd said: “I hope things improve dramatically – one of the things we’ve learned is that things happen within timeframes we didn’t expect, things do change very quickly”. He added: “We need to watch and wait and be ready to update our plans in light of what happens”.
Hawaiian Airlines ‘keen’ to operate to Australia and New Zealand when markets reopen
Hawaiian Airlines CEO Peter Ingram stated “We haven’t flown at all to Australia and New Zealand” due to the coronavirus pandemic, adding the countries have taken a “very strict approach” to closing borders. Mr Ingram stated the countries not only sought to control COVID-19, but to “completely eradicate it within their countries”. He said the markets are unlikely to reopen until the end of 2021, adding: “We’re keen to get back in when conditions are available to do so”.
Deutsche Bank: Trans-Atlantic load factor is ‘jaw-dropping’
Deutsche Bank MD and senior research analyst Michael Linenberg commented on trans-Atlantic load factors, stating: “It is jaw-dropping”. He added: “When you see three people sitting upfront in a cabin that has 60 seats, and the even the premium economy, one or two, and the back, 30 or 40 passengers”.
Travelport: ‘There’s a real desire to improve the whole retailing proposition’
Travelport head of customer strategy and marketing Will Owen Hughes commented on the implementation of NDC during the COVID-19 pandemic, stating: “Maybe there was a little bit of slowing up at the heights [of the COVID-19 pandemic…] We have probably seen some airlines pause some of their plans while we get through this period but probably most of the airlines who have already invested in NDC, like Qantas, have been doubling down”. He added: “That’s where we are at actually. We recognise that there’s a real desire to improve that whole retailing proposition and we’ve double up our investments to make sure that we can deliver on that”.
SWISS planning for 2021 ranges between three recovery scenarios: 40%, 50% and 60%
SWISS CCO Tamur Goudarzi Pour commented on scenario planning in the aviation industry during the pandemic, stating: “We are now thinking of three different [demand] scenarios for 2021, 40%, 50% or 60% scenario, that’s the range”. He questioned: “How much penned up travel there is? We definitely get from the customers that there is a big wish to travel and a lot of people can’t wait to take a summer vacation”.
PATA: Discussions over travel corridors ‘a little bit on hold at the moment’
Pacific Asia Travel Association (PATA) CEO Dr Mario Hardy stated discussions over opening travel corridors “are a little bit on hold at the moment”. Mr Hardy said: “There was a lot of discussions around corridors. Some were already planned, there were ongoing discussions to open more”. He added these discussions have now been “altered” but will eventually come back when governments shift focus from “controlling the respective situations in their destinations”.
Emirates president sees ‘plenty of scope’ for Etihad partnership
Emirates president Sir Tim Clark stated there is “plenty of scope” for partnership with Etihad Airways and confirmed “there is work going on there”. Sir Tim said the possibility of partnership is subject to a number of competitive conditions, adding: “A certain amount of convergence would bring value to both businesses, but keeping the brands separate, being competitors as we were… I still think that’s the way to go”.
Corporate Travel Community: Worldwide airline bookings not reflecting optimism around vaccination
Corporate Travel Community executive director Benson Tang reported worldwide airline bookings are not reflecting the “good news” regarding progress in COVID-19 vaccination programmes. Dr Tang said net passenger bookings are “basically not reflecting the optimism at the moment”.
Qantas: NDC implementation suffered ‘a big shock’ with the pandemic but ‘we didn’t actually stop’
Qantas head of distribution Nadine Dawood-Morgan commented on the carrier’s plans for NDC implementation following the start of the COVID-19 pandemic, stating: “It obviously had a big shock… We had a lot of momentum already going and there was a pause across the industry”. She added: “Some of our partners were just in survival mode, some took a deep breath and went ‘maybe this is an opportunity to double down'”. She concluded: “We definitely slowed down, we didn’t actually stop though, and we had our production environment open and we kept going. It was quite short-lived that pause because we kept going. Some of our partners really wanted to accelerate”.
Association of Flight Attendants: Industry needs to continue ‘layers of security’
Association of Flight Attendants international president Sara Nelson stated the US aviation industry needs to continue the “layers of security” in place to limit COVID-19 risks and ensure “everybody gets access to the vaccine”. Ms Nelson added: “It has been a very trying time for flight attendants because the health crisis has also been one of the biggest financial crisis in aviation ever”. She added the company is working to ensure an extension to the payroll support programme when it expires on 31-Mar-2011.
E&P: Recovery of domestic air travel in Australia still ‘very volatile’ in the short term
Evans and Partners (E&P) head of research Cameron McDonald stated “there are some green shoots” for the recovery of domestic air travel in Australia, but noted: “It’s very, very volatile and we’ve seen state-based premiers very quick to lock down borders, in some cases within an hour of notification”. Mr McDonald said this volatility and unpredictability “makes planning of holidays and business travel very, very, very difficult”. He added: “I think you’ll probably end up seeing a lot more intrastate holiday making than interstate in the short term, before we start seeing the benefits of a vaccine being rolled out”.
Ethiopian Airlines ‘very optimistic’ about African Continental Free Trade Area: CEO
Ethiopian Airlines Group CEO Tewolde GebreMariam stated the launch of the African Continental Free Trade Area is a “very huge, significant milestone”. Mr GebreMariam said Ethiopian is “very optimistic” about the trade agreement, adding: “Hopefully it will improve the intra-Africa trade”. However, Mr GebreMariam noted there are “huge and daunting challenges ahead of us” and commented: “Tax barriers are challenging”.
Airlines for America: US mask mandate will be ‘critical’ for government enforcement
Airlines for America (A4A) senior VP of legislative and regulatory policy Sharon Pinkerton stated A4A is “cautiously optimistic” regarding COVID-19 vaccine developments, adding the US federal mask mandate will be “critical in terms of government’s ability to enforce and assess penalties”. She said the presence of masks in airports and aircraft “will really make a difference”, adding not having a mask requirement previously “was a gap in the system”.
Wizz Air expects to be among the first to return to 2019 traffic levels
Wizz Air EVP and group CFO Jourik Hooghe said the company expects it will “definitely” be the first or among the first airlines to return back to 2019 traffic levels post-COVID-19, due to its efforts to develop and renew its fleet and develop its network. He said this level of recovery is still not expected until at least the end of 2021 or potentially 2022, depending on the successful rollout of the COVID-19 vaccine.
Wesfarmers procurement manager: Technology will replace some in-person meetings, but not all
Wesfarmers group procurement manager Stephen Turner stated he expects video conferencing will replace some in-person meetings and events, but not all. He said: “You can’t replace face-to-face contact… especially with building relationships initially”.
flyadeal: ‘We have done remarkably well in a very, very difficult environment’
flyadeal CEO Con Korfiatis commented on restrictions brought about by the COVID-19 pandemic, stating: “On our case, we are blessed that we were just a domestic operator prior to the lockdown, we had not embarked on an international journey nor had a significant portion of our fleet that was dedicated to international”. He added: “We have done remarkably well in a very, very difficult environment to the point that flyadeal has kept its full staffing”. He stated the carrier is operating around 90% of pre-pandemic frequencies and “since day one [of the pandemic…] our flights have been full, the seats we are allowed to sell we fill”. He concluded: “It has been a very robust domestic market”.
Hyundai UAM: Electric VTOL vehicles will be ‘disruptive’ to the industry
Hyundai Urban Air Mobility (UAM) chief policy officer Michael Whitaker stated around 300 companies are currently building electric vertical takeoff and landing (VTOL) vehicles, adding: “A lot of resources are going into this space”. Mr Whitaker said battery technology is “developing” and in 10, 15 or 20 years the vehicles “will be very disruptive” to the industry. He said: “With costs that will be dramatically lower than existing aircraft, they’re simpler to design and maintain”, adding: “Once it develops it has a lot of potential”.
Air Serbia: Eurocontrol’s new forecast ‘a bit of a surprise’
Air Serbia CCO Jiří Marek commented on managing capacity in the European market in light of restrictions seeking to curb the spread of COVID-19, stating: “We have a bit of a different perspective since we are already outside the European Union”. He added: “Basically, over the last year we have been already heavily impacted by these restrictions where our colleagues in Europe can still serve the demand in the Schengen area”. He concluded: “We already had to adjust through the course of last year… Eurocontrol’s new forecast… came a bit as a surprise but it will not require too much adjustment on our side because we have already been on this, let’s say, limited capacity. We currently operate around 38% of 2019 capacity”.
Association of Asia Pacific Airlines: Cargo is a ‘silver lining’ for the industry
Association of Asia Pacific Airlines director general Subhas Menon stated forward sales “are all looking pretty grim” in 2021, adding cargo is a silver lining for the industry. Mr Menon said cargo is doing “extremely well” due to the rising demand for speedier delivery of merchandise and COVID-19 vaccines. However, he stated it is “not very sustainable just to rely on cargo”, adding: “A lot of the discussions are happening behind the scenes, but the airlines are still operating and they are still on their feet for the time being”.
Raymond James: US Northeast feed highlighted as major JetBlue advantage over Norwegian
Raymond James managing director Savanthi Syth commented on JetBlue’s entry into the trans-Atlantic market stating: “The difference between JetBlue’s success with the Mint, in the trans-Continental and the trans-Atlantic will be that in the trans-Continental they have a lot of frequency, they can be a real alternative for the business passenger”. She added that it is uncertain what number of trans-Atlantic frequencies the carrier will have and “for it to be a success in the longer term, joining oneworld might be the way to go”. Ms Syth compared JetBlue’s planned trans-Atlantic operations to Norwegian’s, stating: “I think JetBlue has a better chance at succeeding where Norwegian failed because JetBlue actually has a feed in the North East where Norwegian didn’t really have that domestic feed”.
airBaltic: ‘Everybody’s a loser overall from this pandemic’
airBaltic CFO Vitolds Jakovlevs said that “there’s probably no winners overall from COVID-19 in the airline industry” due to the long term ramifications of the crisis such as regulation, demand changes and asset value modelling now and in future risk situations. “We’ll see how it plays out long term but in the short term… everybody’s a loser overall from this pandemic”, Mr Jakovlevs continued.
ACCC chairman: Slot management important factor for Rex network plans
Australian Competition and Consumer Commission (ACCC) chairman Rod Sims stated Regional Express (Rex) is “a slightly different beast than others that have tried to be the third or indeed second player” in Australia’s airline industry, adding “they’re as well placed, or probably better placed than anyone else who’s tried to pull it off”. Mr Sims said slot management will be a major factor for Rex’s network plans, noting: “If Rex is going to operate on the nine routes, Melbourne-Sydney, also Sydney-Brisbane, Melbourne-Brisbane, it needs slots, particularly, obviously in Sydney Airport”. He stated: “we’ve just got to make sure that we haven’t grandfathered the slots in such a way that Rex can’t get in there”.