> Soundbytes: travel and aviation industry insights – week ending 03-Nov-2023

Soundbytes: travel and aviation industry insights – week ending 03-Nov-2023

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.

CTM reports gradual recovery in travel activity among large segment accounts

Corporate Travel Management (CTM) reported revenue increased 36% year-on-year to AUD187.9 million (USD119.4 million) in Q1FY2024. CTM MD Jamie Pherous said travel activity by large CTM clients in North America, Europe, Australia and New Zealand is “gradually improving”, adding: “Until now this segment has been a recovery laggard”.

AAPA: Asia Pacific airlines record ‘solid expansion’ in international pax in Sep-2023

Association of Asia Pacific Airlines (AAPA) reported “solid expansion in international passenger markets” in Sep-2023, “led by a steady rebound in tourist arrivals across the region”. AAPA director general Subhas Menon stated: “The outlook for the region’s travel markets is broadly positive going into the final quarter of this year, with continued expansion in air passenger demand supported by resilient growth in the Asian economies”. However, Mr Menon added: “Airlines are facing increasing headwinds, marked by sharply higher fuel costs in recent months”.

American Airlines CEO: Loyalty revenue is an ‘untapped opportunity’ for the carrier

American Airlines CEO Robert Isom reported revenue generation through the carrier’s loyalty programme is an “untapped opportunity” for the carrier, with upcoming enhancements aiming to “touch more points in the travel ecosystem”. Mr Isom noted the carrier aims to take its loyalty programme “to another level” in 2024 and strengthen its customer base.

Air France-KLM CEO: Dutch Govt actions and focus a ‘total gift’ to competitors

Air France-KLM CEO Ben Smith, commenting on the Dutch Government’s plans to restrict annual aircraft movements at Amsterdam Schiphol Airport, stated “what is going on in the Netherlands for us is absolutely incomprehensible”. Mr Smith added: “The actions and the punitive focus on KLM, it’s a total gift to Lufthansa Group” and IAG.

Aer Rianta International CEO reports ‘reassuringly resilient passenger spends’

Aer Rianta International CEO Ray Hernan reported the company is recording growth compared to 2022, “as we experience reassuringly resilient passenger spends versus 2022”. Mr Hernan said spending is “still well ahead of pre-COVID levels, further underpinned by passenger levels recovering to, and in some locations exceeding, 2019 levels”.

Ryanair ‘astonished’ at new UK NATS price controls: Group CEO

Ryanair Group CEO Michael O’Leary, commenting on the UK Civil Aviation Authority’s (CAA) final decision on new price controls for NATS En-Route Plc (NERL), stated “We are astonished at the CAA’s decision to award NATS another 26% increase in their already high charges after a summer where NATS repeatedly delayed flights due to badly managed staff rosters and mismanaged operations”. Mr O’Leary added: “What we need in NATS is new and competent management”.

United Airlines CCO: Current demand cycle to continue for ‘a very long time’

United Airlines CCO Andrew Nocella reported the carrier expects the current demand cycle to continue for “a very long time”. Mr Nocella stated United believes there is “a lot more opportunity” in growing international operations due to high long haul travel demand.

Norwegian CEO: SAF purchase to demonstrate emission reductions are possible now

Norwegian CEO Geir Karlsen stated the carrier’s purchase of 140 tonnes of sustainable aviation fuel (SAF), to be delivered to Aalborg Airport, is intended “to draw attention to the fact that there is fuel and infrastructure that can ensure a dramatic reduction in emissions almost overnight”. Mr Karlsen said: “It is a response to the objective that the Danish government has set, to have a green domestic route from 2025”, adding: “We want this initiative to show that we do not just want to talk about it, but that we believe that this is the way in which it can be made a reality”.

Kenya Airways faces ‘difficult survival’ as foreign exchange losses grow: CEO

Kenya Airways Group MD and CEO Allan Kilavuka stated: “The depreciation of the Kenya shilling against the US dollar has negatively impacted the airline’s financial standing”. He added: “A weakening shilling significantly increases the airline’s financing and operating costs”. Mr Kilavuka described foreign exchange losses as the airline’s “biggest threat” and commented: “Can we survive in the short term? Yes, we can survive but it will be a difficult survival”.

BCDA chairman: New Clark City to be ‘smart, sustainable, and future-ready metropolis’

Bases Conversion and Development Authority (BCDA) chairman Delfin Lorenzana presented initiatives and best practices implemented to push forward the development of New Clark City as the Philippines’ first “smart, sustainable, and future-ready metropolis”. Mr Lorenzana said New Clark City is envisioned to become the “new epicentre of economic growth” in the Philippines, through collaborative efforts with national government, LGUs, and the private sector.

Southwest Airlines expects ‘healthy’ booking demand to continue in 4Q2023: CCO

Southwest Airlines CCO Ryan Green reported the carrier expects “a continuation of healthy leisure booking demand” and “stable business travel patterns” going into 4Q2023.

Emirates SkyCargo VP: Southeast Asia undergoing ‘renaissance’

Emirates SkyCargo VP commercial cargo for Far East and Australasia Ravishankar Mirle stated: “The region is currently undergoing a renaissance… Asia is well positioned with Vietnam, Thailand, the Philippines, and Malaysia offering manufacturing capability and attractive investment incentives”.

Planned JetBlue/Spirit merger aiming to create ‘fifth viable competitor’ in US market: Spirit CEO

Spirit Airlines CEO Ted Christie reported JetBlue Airways’ planned USD3.8 billion acquisition of Spirit aims to “establish a fifth viable competitor”. Mr Christie stated Spirit remains “relatively insignificant” in the US market and disputed claims that JetBlue is attempting to eliminate competition, noting Spirit faces “more effective” competition from the larger carriers including American Airlines, Delta Air Lines, Southwest Airlines and United Airlines.

Ethiopian Airlines Group CEO: ‘Fine with us’ if Nigerian Government wants to cancel Nigeria Air

Ethiopian Airlines Group CEO Mesfin Tasew stated the carrier “initially” did not have “any intention or plan to set up an airline in Nigeria”. Mr Tasew said the carrier had “other initiatives in other countries” but “the Nigerian government insisted that Ethiopian Airlines is an African airline”, which was required to support the establishment of the new Nigeria Air. Regarding the ongoing legal dispute between the Nigerian Government and Airline Operators of Nigeria over Nigeria Air, Mr Tasew commented: “If the government wants us to cancel the project, it is fine with us… If the government wants to continue with the project, then the government has to resolve the legal case in court”.

UPS: Unfavourable economic conditions impact global demand in 3Q2023

UPS CEO Carol Tomé commented: “While unfavourable macro-economic conditions negatively impacted global demand in the quarter, our US labour contract was fully ratified in early September and volume that diverted during our labour negotiations is starting to return to our network”. Ms Tomé added: “We are well prepared for the peak holiday season”.

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