Your weekly travel and aviation Quote-a – CAPA Live special

12 March, 2021

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 Mar-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.

Jetstar Group CEO: 'where borders are open... people are booking'
Jetstar Group CEO Gareth Evans stated "where borders are open and there are no restrictions, people are booking. It's really strong, 10% to 20% above pre-COVID levels of bookings for leisure". Mr Evans added: "But where borders are closed or there are restrictions, bookings are zero. So if people feel they can go, they want to go". He said the group is "getting there from a domestic point of view" operating "90% of pre-COVID domestic flying", as well as operating approximately 80% of pre-coronavirus levels for domestic New Zealand prior to Auckland's lockdown.

United focused on carbon capture, not 'fig leaf' carbon offsets: CEO
United Airlines CEO Scott Kirby stated sustainable aviation fuels will be a "huge component" of the airline's efforts to reduce 100% of its greenhouse gas emissions by 2050. The other major element will be direct carbon capture and sequestration, which Mr Kirby said "is what the solution ultimately has to be". Mr Kirby said traditional carbon offset programmes "are a fig leaf" for companies "to pretend that they've done the right thing for sustainability", while sequestration is "something that can really make a difference" and represents "a real opportunity for us to lead". He said climate change is "the defining issue for our generation to solve".

LATAM Airlines: 'You just do the simple math... there's going to be a significant change'
LATAM Airlines CEO Roberto Alvo commented on the expected state of the airline industry coming out of the COVID-19 pandemic, stating: "You just do the simple math, and I think it easy to understand that there's going to be a significant industrial change in the following years". He explained: " The recovery is going to be slow… I believe that we will see for a while a significant set-up in how the industry is composed today. Just the math doesn't add up if you don't think about that, at least in the next couple of years".

Air France operating at close to 40% of usual capacity as hub model 'has proved to be quite resilient': CEO
Air France CEO Anne Rigail stated the airline is operating at "close to 40%" of its usual capacity. Ms Rigail said domestic and medium haul operations have been impacted by European travel restrictions since late Jan-2021 and capacity is at only 30% compared to 2019 levels. She said long haul operations are "a bit more dynamic" due to cargo demand. Air France-KLM is expected to offer 40% capacity in ASKs for 1Q2021. The airline's hub model at Paris Charles de Gaulle Airport "has proved to be quite resilient through the crisis," said Ms Rigail with the airline able to maintain 80% of routes at the hub, across a network supported by cargo demand. "The hub system is really proving that it has a future," she added.

JetBlue Airways: Trans-Atlantic market presents 'unique opportunity'
JetBlue Airways VP network planning Andrea Lusso stated he believes there are advantages to entering the trans-Atlantic market in the current COVID-19 environment. Mr Lusso said: "If you look at the capacity that is out there in the market today it presents a fairly unique opportunity, not just access to valuable airports but also pent up demand". He added: "People will be ready to fly as soon as they're allowed to in a safe way. There's a lot of moving pieces from the US side and the UK side but right now we remain fairly confident".

Emirates Skywards aims to 'create stickiness for the airline brand'
Emirates Airline divisional SVP Skywards Nejib Ben Khedher stated throughout the impact of COVID-19 on its operations, Emirates has "seen that people continue to engage with our airline while on the ground, while not flying, through our loyalty programme". Dr Khedher said Emirates Skywards "provides a means for passengers to engage with our airline above and beyond flying and helps us to stay on top of mind in preparation for the day when people are ready to start flying again". He said Emirates Skywards aims to "create stickiness for the airline brand", adding: "really ultimately our goal is to make people think of Emirates when they're thinking about travel".

Traveltopia futurist: Simple emissions calculation engines no longer sufficient for corporate travel
Traveltopia futurist Johnny Thorsen stated sustainable travel programmes now provide much more than just a carbon emissions number. Additional modules are becoming standard, including the emissions calculator, offset shop, booking widget, emissions dashboard, booking reminders and carbon accounting. Mr Thorsen commented: "The original, simple calculation engine doesn't cut it any more for a corporate travel buyer".

CAPA - Centre for Aviation chairman emeritus: 'You shouldn't waste a good crisis'
CAPA - Centre for Aviation chairman emeritus Peter Harbison stated "you shouldn't waste a good crisis, and I think a lot of people are actually wasting" the coronavirus crisis. Mr Harbison added: "We're just going to try and go back to the way things were before, which is not what's good for airlines, and it's not what's good for passengers, and it's certainly not what's good for the environment".

Flight Centre 'well placed' to do well in northern hemisphere markets; hoping to 'take advantage' of vaccination rollout on road to recovery
Flight Centre CEO Graham 'Skroo' Turner stated the company spends "a lot of time" talking to customers and suppliers, adding Flight Centre is "well placed" to do well in the northern hemisphere market. Mr Turner said: "We're confident in the UK, Europe and North American markets as we've been growing rapidly organically there over the last couple of years…We see no reason why that won't continue when things come back," he said. Mr Turner added: "Now, it's a matter of taking advantage of the vaccination rollout and we hope that on the road to recovery, we can bring people back as time goes on".

Airbus: 'What we are interested in is making climate neutral aviation economically viable'
Airbus SAS VP Zero Emission Aircraft Glenn Llewellyn commented on Airbus' plans for zero emissions aircraft, stating: "We are not just interested in making something fly. That's relatively easy". He explained: "What we are interested in is making climate neutral aviation economically viable. And so that's what we're focused on. And that means that we need to consider the aircraft, the technologies, but also the energy and the ecosystem all the way up to getting green hydrogen at airports".

TTF CEO: 'the number one thing stopping people travelling is uncertainty around state borders'
Tourism & Transport Forum (TTF) CEO Margy Osmond stated "the number one thing stopping people travelling is not COVID, the number one thing stopping people travelling is uncertainty around state borders". Ms Osmond added: "It's just about time that the vast bulk of Australian premiers woke up to themselves and open their borders and understood how they are crippling one of the most critical industries in the country". She explained "the industry across the board is facing pretty grim times", with one in five businesses across Australia expected to close by the end of 2021, following the cessation of JobKeeper. "If you happen to be in a CBD or far North Queensland, where the impact is so much greater, it could be three in five," she warned.

L.E.K. Consulting: eVTOL 'on the cusp of commercialisation'
L.E.K. Consulting partner Natasha Santha commented on the commercial feasibility of advanced air mobility (AAM) using eVTOLs, stating: "We believe at L.E.K. that the industry is on the cusp of commercialisation and it is likely that we will see the first commercial flight before the end of 2025". Ms Santha commented on the main potential benefits of AAM, stating: "eVTOLs gives us the potential to deliver high speed, point to point connections more ubiquitously and in some cases more cost effectively than other alternative modes of transport". She also highlighted that "travel time savings can be quite material… reducing travel times by a factor of five or more".

EUROCONTROL director general: 'We need some kind of a vaccine passport'
EUROCONTROL director general Eamonn Brennan stated "we need some kind of a vaccine passport, otherwise we can't travel", adding "everybody's talking about it but not a lot's happening". Mr Brennan said the "biggest piece of good news I've had in a long time" is the President of the European Commission Ursula von der Leyen agreeing "that she will issue a draft law and vaccine passport this month".

KLM's CO2 reduction short term strategy focuses on reducing and replacing
KLM SVP corporate centre & general counsel Barbara van Koppen commented on the carrier's short and medium term strategy for reducing CO2 emissions, stating: "Our transition strategy for the short/medium term is built on two important pillars: Reduce and Replace". She explained: "Reduce means the entry into service of new aircraft which are more fuel efficient, hence, emitting less CO2". Ms van Koppen added that on the replace side, "we are pretty much focusing on stepping up the use of sustainable aviation fuel". She concluded by stating that on the long term, "we certainly need new technologies that will help and enable to further reduce emissions".

ICAO: CORSIA is 'on track', regulatory framework in place; current pace of sustainable technology development is unparalleled
ICAO deputy director environment Jane Hupe stated the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is "on track", with ICAO having completed all necessary steps in the pilot phase stated on 01-Jan-2021. Ms Hupe confirmed: "The regulatory framework is in place". The ICAO environment executive said the current crisis affecting aviation is "unprecedented, but so is the volume and speed of initiatives for disruptive, revolutionary solutions for a greener aviation". She added: "The pace by which you see the development of electric and hydrogen planes, or new processes for generating sustainable aviation fuels, is unparalleled and for the first time, sustainably motivated".

Perth Airport CEO: 'we mustn't lose sight of being ready and prepared'
Perth Airport CEO Kevin Brown stated "we mustn't lose sight of being ready and prepared and having the people in the industry ready to rebound really important". Mr Brown said due to efforts to control coronavirus, "we're able to rebound and grab a market share in the broader market, whether that's in international education, whether it's a trade and doing business and tourism". Mr Brown added: "'I'm not interested in recovering to where we are because I think in a lot of sectors, Australia was not leading the way versus a number of other countries when it comes to education and exports".

IATA: 'The last time the region was actually in the black... was back in 2017'
IATA VP Latin America Peter Cerda commented on figures for the Latin American aviation industry, stating: "The last time the region was actually in the black, Latin American carriers, was back in 2017". Mr Cerda pondered that pre-COVID the industry was growing. "We were better connected in Latin America than ever before. But we're still losing money. What needs to change fundamentally for our region to become more competitive?" he questioned.

American Airlines: Comparing US aid with Middle Eastern subsidies 'apples and oranges comparison'
American Airlines VP regulatory/head of regulatory & international government affairs Molly Wilkinson, speaking at CAPA Live March 2021, commented (11-Mar-2021) on the question about complaints made by US carriers against subsidies given to Middle Eastern carriers, and the current governmental assistance given to US carriers, stating: "You can't even compare the two… it is an apples and oranges comparison". She argued: "This a black swan event, once in 100 years and it affected the entire industry".

Neste Components EVP for renewable energy: 'the peak is still to come' for sustainability
Neste Components EVP for renewable energy Thorsten Lange stated "the peak is still to come" for sustainability, and is "years ahead". Mr Lange said "making things right", as well as laying the foundation and "paving the way" is what is important. He warned travelling and the "aviation industry will never be the same as it was pre-COVID", but is confident in the return of travel and that the "industry has a future", but this future "has to be a more sustainable future".

Denver International Airport: Outbound leisure traffic has been 'relatively resilient'
Denver International Airport VP air service development Laura Jackson stated outbound leisure traffic has been "relatively resilient" based on a number of metrics including hotel data. Ms Jackson said the airport ranked first for US TSA throughput over several months in summer 2020, stating: "That never happens, we usually rank eighth or tenth".

CAPA analyst: vaccines 'a positive story in a sea of bad news was like a desert island oasis and seduced us into believing life would quickly get better'
CAPA- Centre for Aviation EMEA Analyst Richard Maslen said: "The arrival of vaccines certainly represents a significant step to the new post-COVID world, but that still remains some distance away. A positive story in a sea of bad news was like a desert island oasis and seduced us into believing life would quickly get better. It will, but the reality is that will remain longer-term and right now things are perhaps tougher then ever for the world's airlines and the many business sectors they play an important role supporting."

Brisbane Airport executive GM: coronavirus not 'causing a reluctance to travel these days'
Brisbane Airport Corporation (BAC) executive GM Jim Parashos stated coronavirus is not "causing a reluctance to travel these days", however it is "border openings" causing a reluctance to travel. Mr Parashos added: "Everyone I speak to says we're just holding off because we don't want to get caught out".

ALTA: Lack of government funding in Latin America 'was terrible for the industry'
ALTA CEO Jose Ricardo Botelho commented on governmental assistance in the Latin America and Caribbean region, stating: "I wish that I could bring you some different news about this subject… It has been hard for us in the region". He added: "We are the region that has received the least support when you're talking about financial support". Mr Botelho explained: "We are not talking about [governments] giving money to the industry, we're talking here… to get some market-based loan… but until now, nothing". He concluded that the lack of government funding "was terrible for the industry".

IBM: Aviation industry must prepare for more intense and more frequent weather events
IBM aviation offering management leader Elizabeth Krajewski stated "science indicates that... extreme weather events are going to continue to increase in intensity and frequency... as we head into a warmer climate with climate change". Ms Krajewski added: "The expectation is more intense, longer duration, more frequent significant events. Weather is going to continue to become a critical aspect of... planning and operation for years to come", for both airports and flight routing.

Aviation Week head of MRO research: Engine failure incident 'another blow' for Boeing and P&W
Aviation Week Network head of MRO research Andy Webster commented on the engine failure involving a United Airlines Boeing 777 powered by Pratt & Whitney (P&W) PW4000 series engines in Feb-2021, stating: "This comes as another blow to the two manufacturers, who've also suffered repeated entry into service issues with new technology in recent years".