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 Apr-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.
Qantas Group retains Oct-2021 international service resumption plan as ‘the market’s getting stronger and stronger each quarter’
Qantas Group CEO Alan Joyce stated it has not “walked away” from its Oct-2021 start date for the resumption of international travel. Mr Joyce said: “We’re of the view at that there’s still a possibility with the right level of assumptions around us”, adding the reopening of Australia’s borders “could happen bubble by bubble, which is what the government is saying”. He also noted “what we’re seeing each time is that the market’s getting stronger and stronger each quarter”, adding “demand is improving all the time”. Mr Joyce added the Group is planning for capacity levels of 80% in Q4FY2021, up from 20% in Q1FY2021.
Skytra: Airfare pricing volatility ‘has dramatically increased’ during pandemic
Skytra co-founder and chief sales and marketing officer Elise Weber stated volatility in airfare pricing “has dramatically increased” in the context of the COVID-19 pandemic, adding: “In this context, being able to protect the top line… can make a big difference”. Ms Weber said “volatility has doubled or tripled” in some markets and she believes the volatility “will last for at least two to three years”, adding: “I think it will drive some further market consolidation”. Ms Weber said the ability for airlines to hedge both revenue and fuel costs “is protecting the EBIT margin” and makes the EBIT margin “more predictable”
Eurowings CEO: COVID-19 prompted us to ‘get leaner, and a little meaner’
Eurowings chairman and CEO Jens Bischof stated the LCC responded to the COVID-19 pandemic by streamlining its operations, including by “reducing management, reducing the head count, driving efficiency, getting leaner, and a little meaner”. Mr Bischof said Eurowings “from our cost position” is “much more competitive than we used to be” prior to the pandemic and in a better position to compete with pan European LCCs, including Ryanair, easyJet and Wizz Air. He added that the pandemic prompted Eurowings to make tough decisions regarding its fleet, resulting in “a consistent homogeneous fleet” of A319 and A320 aircraft “which provides us more operational reliability, and certainly also a better cost efficiency”.
British Airways CEO: UK Govt communications represent ‘a step in the right direction’
British Airways CEO Sean Doyle stated communications from the UK Government represent “a step in the right direction”, however noted the framework does not recognise travellers who are vaccinated for coronavirus. Mr Doyle added: “I think we need to be more ambitious”, with a simplified and more affordable framework. Mr Doyle stated he hopes “that it gets better, as we get closer to the summer”.
Cranky Flier: ‘People really want to travel’
Cranky Flier president and chief airline dork Brett Snyder commented on recovering travel demand in the US, stating: “I think what we’ve seen proven here, pretty resoundingly, is that people really want to travel”. Mr Snyder believes the biggest risks to travel are another wave of coronavirus infections in the domestic market and travel restrictions in international markets. Mr Snyder said US carriers are generally “not feeling very good about Europe or Asia”, but are “feeling pretty good” about Latin America.
JetBlue board member: LCCs will ‘certainly gain share’ moving out of the pandemic
JetBlue Airways board member Ben Baldanza stated low cost carriers will “certainly gain share as we pull out of the pandemic”, due to three reasons COVID-19 “highlighted the importance of”. Mr Baldanza said: “One is the low cost of production, which allows them to reach a cash break even and then cash positive operation much sooner than larger airlines”. He added: “The second is most of the well structured LCCs in the world don’t depend on corporate business travel, which is at risk for a number of years going forward”. Mr Baldanza concluded: “The third and possibly the biggest, and the story not being told loudly enough, is the incredible drag widebody long haul airplanes are going to be for the next few years, due to changing country rules about who can go where”.
JetSMART CEO: South America will be our ‘primary source of business’
JetSMART CEO Estuardo Ortiz stated “we are going to be ready and open international leisure destinations post pandemic in destinations like Brazil”, adding: “I believe people still want to travel more so than ever”. He said: “Our focus has been on connectivity, a South America that can grow faster and bigger than it is today to will be our primary source of business”.
Air Seychelles CEO: ‘Where people are allowed to travel, the pent up demand is enormous’
Air Seychelles CEO Remco Althuis reported an “immediate positive effect” following the reopening of Seychelles to international visitors in Mar-2021. Mr Althuis said “business is picking up quite considerably” and has reached about 500 arrivals per day, which is around half of 2019 levels. Mr Althuis noted: “The source market mix right now is very different from what it has been historically”, highlighting important new markets such as Israel, the UAE and Russia. He commented: “Where people are allowed to travel, the pent-up demand is enormous… the bookings really jump up very, very quickly”.
IATA former general counsel ‘encouraged’ by government investment in airlines
IATA former general counsel and former US Undersecretary for Transportation Jeffrey Shane stated “I’m not troubled at all but am encouraged by the willingness of governments to invest in their airlines in the form of debt or loan guarantees or other forms of support”. Mr Shane said: “Government ownership isn’t the issue it’s whether government participates in the running of the airline. If providing financial sustenance is the objective that’s fine, but I don’t necessarily think and I hope the investment will not begin to distort policy”. He added: “When governments become owners of airlines they become assets, and the instinct is to protect those assets. It’s something the industry needs to stay focused on, but I don’t think its necessarily a bad thing or will distort competition in the future”.
Sky Airline CEO: Pandemic will open up opportunities for digitalisation in Latin America
Sky Airline CEO Jose Ignacio Dougnac stated “supply is just a lot higher than demand in the region and that’s going to remain that way for some time”. Mr Dougnac said he believes low cost carriers are “in a good starting point” due to a lot of domestic presence and low cost structures. He added the pandemic will open up opportunities for more digitalisation in Latin America.
China Southern Airlines: Domestic traffic fully recovers from COVID-19 in China
China Southern Airlines SVP of international and corporate relations Guoxiang Wu stated domestic air traffic has more or less fully recovered in mainland China to pre COVID-19 outbreak levels, noting: “domestic travel in China is very safe”. Mr Wu said international traffic to and from China remains well below pre-pandemic levels due to travel restrictions. He reported China Southern is operating to approximately 10% of the international destinations it served prior to the outbreak at present.
JLS Consulting: Ryanair and Wizz Air ‘ambitious in their growth and have not missed an opportunity’
JLS Consulting director John Strickland stated Ryanair and Wizz Air have been moving forward due to “enormous cash resources”, adding: “they’ve both been ambitious in their growth and have not missed an opportunity”. Mr Stickland explained: “They’re moving into more efficient aircraft as well in a sensible way”. He said: “IAG certainly has been cost focused and I would expect that to continue, they move more quickly to deal with cost issues and labour challenges which puts them in a good position moving ahead”.
SriLankan Airlines aims to commence service to Moscow in May/Jun-2021
SriLankan Airlines CEO Vipula Gunatilleka stated the airline aims to commence service to Russia, specifically to Moscow, in May-2021 or Jun-2021, operating initially with a weekly frequency. Mr Gunatilleka noted more than 4000 tourist passengers have travelled from destinations in eastern Europe, including Russia and Ukraine, to Sri Lanka in the past two months. He added that travel restrictions in destinations like Egypt and Turkey increase the attractiveness of Sri Lanka to tourist arrivals from eastern Europe.
Travelport sees ‘tremendous demand’ for information during pandemic
Travelport global head of customer strategy and marketing Kyle Moore stated Travelport has experienced “tremendous demand” for information during the coronavirus pandemic and has sought to provide a “hub of information around COVID-19”. Mr Moore said the company also “rolled out a lot of new initiatives” with the aim to support the industry in managing the pandemic.
KLM CFO: ‘The problem we are facing with SAFs is that the volumes are still very low’
KLM Royal Dutch Airlines MD and CFO Erik Swelheim said KLM has been striving to increase its use of sustainable aviation fuels (SAFs) for almost a decade, but acknowledged “the problem we are facing with SAFs is that the volumes are still very low, and that creates a chicken and egg problem”. He explained: “because the volumes are so low, the price is still extremely high”, adding “compared to fossil fuels, the price is very high”.
Las Vegas International Airport ‘very much tied’ to tourism industry
Las Vegas McCarran International Airport director of aviation Rosemary Vassiliadis stated “as a destination airport, we’re very much tied to the number one industry which is tourism”. Ms Vassiliadis added: “As gaming closed, we plummeted to nothing, but as the strip hotel properties started to reopen, our traffic matched it”.
Dallas International Airport CEO: ‘We’re getting back to some level of certainty’
Dallas Fort Worth International Airport CEO Sean Donohue stated “we’re getting back to some level of certainty, and that’s the most positive thing I see right now”. Mr Donohue said: “When we look at the bookings and talk to the airlines, we believe we will be at 80%+ vs 2019 for this summer, which is a pretty good recovery”. He added: “It’s all going to be leisure as business has still not come back and certainly international hasn’t, with the exception of Mexico”.
Airport Authority CEO: Pittsburgh International to bounce back via domestic traffic
Allegheny County Airport Authority CEO Christina Cassotis said Pittsburgh International Airport expects to recover well from the coronavirus pandemic owing to its “heavy focus” on the domestic market. Ms Cassotis also said that “international continues to be important” for the airport, adding that she feels “nobody’s got an advantage” in the international segment and the market is likely to be “demand-driven just like it is for leisure”, with the exception of hub airports.