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 May-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.
CAPA chairman: Business travel is not going to come back in any big way in the near future
CAPA – Centre for Aviation chairman emeritus Peter Harbison stated “a lot of people are trying to talk it up, but the reality is that business travel is not going to come back in any big way in the near future”. Mr Harbison noted that according to Citi, “a 1% drop in corporate travel impacts airline profits by 10%”, meaning “even if it’s down only 20% in the next two years”, the impact of that 20% decrease in corporate travel volume will have a “massive impact” on airline profits. He further noted “business travel was actually slowing even before COVID-19”. Mr Harbison concluded that corporate travel is likely to “be very slow to return for most carriers” and “lower reliance on business travel will be very important for those [airlines] who survive”.
ALC chairman: ‘Politicians have tried to change the psychology of human beings about travelling’
Air Lease Corporation (ALC) executive chairman Steven Udvar-Házy stated “politicians have tried to change the psychology of human beings about travelling”. Mr Udvar-Házy said: “They somehow have made the issue that there’s a risk to travelling, although we have not seen any demonstration of that risk from a health point of view”. He commented: “I think a vast majority of the population has been influenced by this sense of fear”, and added: “I do believe that with the increasing amount of vaccines coming online, hopefully that sense of fear will slowly dissipate and people will try to get back to normalcy”.
IATA CEO: Structure and behaviour of aviation industry will not change due to COVID-19
IATA director general and CEO Willie Walsh said he doesn’t see the structure or behaviour of the aviation industry changing as a result of the coronavirus pandemic. Mr Walsh also stated: “When it comes to business travel, I think it’s important for us to remember that not all business travellers travel in premium cabins… and I think there’s often confusion with people associating business travel with premium”.
Southwest Airlines: ‘Financial strength and employee engagement’ boosted COVID recovery
Southwest Airlines EVP and CCO Andrew Watterson stated “our financial strength and employee engagement really gave us a boost” during the COVID-19 pandemic. Mr Watterson said: “We are an investment grade credit rating airline, the only one in the US, which allowed us to quickly raise money without having to use collateral”, adding: “We were able to get a war chest to make it through whatever was to come”.
Dubai Airport will emerge ‘stronger’ as a connecting hub serving more destinations: CEO
Dubai Airports CEO Paul Griffiths said Dubai International Airport has “become a destination more than a transfer hub over the last few months”, though its position as a transfer hub is expected to emerge “stronger” than it was before the outbreak of COVID-19 with more secondary markets served by smaller aircraft over time. Noting the reintroduction of Boeing 737 MAX aircraft to service, Mr Griffiths also stated a number of long haul routes requiring narrowbody aircraft are made accessible through Emirates’ and flydubai’s network cooperation, adding “this is an immense opportunity for us to solidify the close collaboration between Emirates, flydubai and Dubai International to rebuild an incredibly strong connecting hub”.
Volaris focusing on leisure, VFR traffic to recover demand
Volaris CCO Carolyn Prowse stated leisure and visiting friends and relatives (VFR) traffic are main focuses for the carrier and have rebounded more quickly, adding the segments make up 70% of Volaris’ business. Ms Prowse stated: “All of our capacity is domestic or regional, and the domestic network has never really had any travel restrictions”, adding the offer of low based fares has helped to stimulate demand and create ancillary revenue. She said: “In 1Q2021, our ancillary revenue per passenger was 36% higher year-on-year and now accounts for 50% of our revenue”.
Singapore Airlines: Our biggest advantage is that our members are premium
Singapore Airlines VP Loyalty Ryan Pua stated: “In the course of a year our members have redeemed a lot of miles, increasingly on lifestyle products as we expand our redemption offerings”. Mr Pua said: “We have a relatively small home base but our biggest advantage is our members are premium and they are very high spending in nature”. He added: “I think the premium positioning of Singapore Airlines does benefit the loyalty programme and we have a strong advantage because our customer base is the who’s who of many countries”.
Barbados Tourism Minister: Single set of COVID-19 travel rules for the Caribbean would be difficult
Barbados’ Minister of Tourism and International Transport Lisa Cummins noted “there are no uniform risk requirements across Europe for entry” and said the “same factors that prevent there from being universal requirements” on entry to countries in Europe have also prevented countries in the Caribbean from implementing a single set of COVID-19 travel and entry rules that apply throughout the region. Senator Cummins said: “I’m not necessarily saying that the Caribbean countries could not or should not have better coordination mechanisms, but I’m saying that we’re not dissimilar from any other region of the world, where each country has had to make an individual decision based on their own unique circumstances”. She noted “Barbados is in the top 10 most densely populated countries in the world… that’s not a distinction that any other Caribbean country has”, so the entry of a COVID-19 infected person “is going to have an entirely different impact on Barbados than it may on a country that has a larger expanse, [a] more spread out population, and multiple islands”.
PATA CEO: 2022 looks ‘more promising’ for international travel reopening
Pacific Asia Travel Association (PATA) CEO Mario Hardy stated international travel intent “is still there and it will happen, but it won’t happen in the timeline that people expected it would as goals were too ambitious”. Mr Hardy said: “If you look at New Zealand and Australia and why that has been so successful is that the number of cases is under control, its minimal and that is the key to opening a bubble”. He stated: “When it comes to regions where only a fraction of the population have been vaccinated, it will take a much longer period for them to reopen”, adding: “I don’t want to sound too pessimistic but 2022 looks more promising to me”.
Copa Airlines: Network diversity has been ‘critical’ to COVID recovery
Copa Airlines SVP, commercial and planning Dennis Cary stated network diversity and serving multiple markets have been “critical” to the carrier’s COVID recovery over the last few months. Mr Cary said: “The fact that our network is essentially 100% international has been a huge challenge for us”, adding since Sep-2020 it has “worked our way back up to around 40% of 2019 capacity”. He stated: “With some signs of recovery, we’re looking forward to getting back to 50%, 60% or 70% of capacity in 2021 and that will happen as we see demand come back”.
MUFG Bank: Long haul business travel demand recovery will be by far the slowest segment
MUFG Bank director – advisory for global aviation finance Albert Muntane Casanova stated “you could argue that VFR, visiting friends and relatives”, will be the fastest travel segment to recover from the impact of COVID-19, noting: these are “people who haven’t seen their families for a long time”. Mr Casanova said following the recovery of VFR travel “then you will see leisure demand coming back”, although this will depend on “when travel restrictions are lifted” and “most of it will be short haul”. He concluded that “long haul business travel” will be “by far the slowest” demand recovery travel segment.
Rex deputy chairman: Regional network business travel ‘starting to feed into our domestic network’
Regional Express (Rex) deputy chairman John Sharp stated business travel from its regional network is “starting to feed into our domestic network”, adding “we expect that to continue, and we expect it to grow as word of mouth gets around”. Mr Sharp added the carrier has “tried to realign our flight schedules a bit so that the regionals come in, in parallel or close to” domestic departures, for the carrier to “facilitate an easy transition from one to the other”.
Canadian North: Around 80% to 90% of bookings disappeared in Mar-2020
Canadian North CEO Chris Avery, speaking at CAPA Live May 2021, stated (12-May-2021) in Mar-2020 the carrier saw around 80% to 90% of bookings disappear, adding: “It hit us just as hard as everyone else”. Mr Avery said: “And then we saw the territories we serve close off their borders”, adding in order to travel to the Nunavut region residents and visitors are required to undergo a two week hotel quarantine. He stated: “We support those closures, but it’s devastating for business”. He said territorial governments are “working very hard to get everyone vaccinated quickly”, and that Canadian North delivered the first vaccines to Nunavut and continues to do so.
AAPA: Restrictions and border closures in Asia ‘much higher’ than anywhere else
Association of Asia Pacific Airlines (AAPA) director general Subhas Menon stated: “The level of restrictions and border closures is much higher in Asia than anywhere else”. Mr Menon said: “The vaccine deployment with the exception of Singapore, is below 10% even in Australia, so the mood is a bit more despondent”. He added: “It looks like countries that are able to control or eradicate the virus are in no rush to reopen their borders, meanwhile the debt burden is also increasing for the airlines, so they will require a lot of help from government to stay in the game”.
Etihad Airways executive director: Rapid scheduling amid COVID-19 ‘does nothing to pay the bills’
Etihad Airways executive director operations strategy Chris Youlten stated airlines scheduling agility amid the impacts of the pandemic has been “survival based” and “does nothing to adequately pay the bills”, reporting a “raging battle on the sidelines” regarding slot allocations and confirmations. Mr Youlten added: “Every season, even during the pandemic, we sit here hoping we get a waiver… We still have that fear that there will be a rapid turn to some regulation that constrains us”.
TTF CEO: ‘top four or five of the 10 reasons’ of travel hesitancy is border closures
Tourism & Transport Forum (TTF) CEO Margy Osmond stated “I’d love to say, yes people are infinitely more confident” for travel, however “I don’t actually believe that is the case”. Ms Osmond added: “Every time we survey and ask people about reasons why they choose not to travel at the moment, the top four or five of the 10 reasons are all to do with border closures”.
interCaribbean Airways aims to create connectivity within the Caribbean
interCaribbean Airways CEO Trevor Sadler stated the airline aims to enable “the Caribbean traveller to get around the Caribbean without having to travel through Miami or Panama”, by “creating connectivity within the Caribbean, by the Caribbean and not relying on external sources”. Mr Sadler said interCaribbean Airways has “built this network that starts in Havana on the western side, now, over to Barbados, and in the news recently is our approval for Guyana”, adding “and we certainly fill in most everything in between, except presently, for the French Caribbean”.
TravelDaily China CCO: Chinese domestic tourism will continue to grow in 2021/22
TravelDaily China and ChinaTravelNews CCO Joseph Wang stated 4.1 billion domestic trips will be made in China in 2021, up 42% year-on-year, commenting: “Domestic tourism will continue to grow in 2021 and 2022”. Mr Wang said that prior to the COVID-19 pandemic, China’s travel market was projected to grow at 10% p/a until 2022. He added: “OTAs have led China’s online travel growth and dominated the air and hotel booking sectors”.
Bahamasair expects to recover to 65% of pre COVID-19 capacity in summer 2021
Bahamasair MD Tracy Cooper stated the airline has “seen some resurgence both in international and domestic travel recently because of the testing regimen and new procedures that the government is implementing”, which has supported travel “not just for coming into the Bahamas, but also traveling in and around the Bahamas”. Mr Cooper said Bahamasair was operating approximately 30% of its pre COVID-19 outbreak schedule at the end of 2020, while “right now, going into summer, we’re going to be around 65%”. He added: “so we’re not going to be 100%, but the growth is encouraging”.
Tourism Australia executive GM aviation/eastern markets: Australia ‘heavily geared’ for VFR/leisure
Tourism Australia executive general manager aviation and Eastern markets Andrew Hogg stated Australia is “heavily geared towards both VFR and leisure travel, both inbound and outbound”. Mr Hogg said a proportion of corporate travel pays carriers a “significant yield”, adding “we will require a good balance on that”.
The Commons Project places ‘people back in control of their own data’: CommonPass president
The Commons Project CommonPass president Simon Talling Smith stated “the critical objectives” in the Commons Project “is about unlocking the full potential of technology and data, to improve people’s lives”, as well as “use the power of the internet for the common good”. Mr Talling Smith added The Commons Project places “people back in control of their own data”.
AFTA executive chairman: New Zealand ‘not a huge tourist market’
Australian Federation of Travel Agents (AFTA) executive chairman Tom Manwaring stated New Zealand is “not a huge tourist market”, adding “outside of Auckland, Wellington and Christchurch, I mean, you’re talking one pub towns”. Mr Manwaring added: “It’s not your Hawaii, Fiji, Singapore” where there is “scale” of accommodation and activity to attract tourists.
Adani Airports CEO: All our airports will operate on renewable, sustainable energy by summer 2022
Adani Airports Group CEO Ben Zandi stated “by summer of 2022, all of our airports will be operating on renewable, sustainable green energy”. Mr Zandi said the Adani enterprise owns “a transmission business, a gas business, a solar energy business as well as power”, adding “we’re going to take the combination of all of our sources of energy and create a sustainable, renewable micro grid energy source for all of our airports”.
Honeywell: We really believe there is a huge opportunity in the UAM/AAM sector
Honeywell Urban Air Mobility and Unmanned Aerial Systems business unit VP and general manager Stéphane Fymat stated the company “very quickly saw the opportunity, became believers, and decided we really want to make an impact here” in the urban air mobility (UAM) or advanced air mobility (AAM) sector. Honeywell “looked at this opportunity, at this market space, at what people were trying to accomplish and we really believe it” he said, and it “really believe[s] that there is a huge opportunity here”.
Hong Kong Air Cargo Terminals CEO reports ‘very strong rebound’ for cargo
Hong Kong Air Cargo Terminals CEO Wilson Kwong commented on the recovery of aviation and the air cargo sector from crises, stating: “Every time, after all the challenges, it eventually rebounds”. Mr Kwong said: “Already we are seeing a very strong rebound… in terms of cargo freight and eventually passenger demand will come back”.