> Soundbytes: travel and aviation industry insights – week ending 06-Oct-2023

Soundbytes: travel and aviation industry insights – week ending 06-Oct-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.

AAPA: Forward bookings ‘indicate resilient travel demand’ in Asia Pacific

Association of Asia Pacific Airlines (AAPA) director general Subhas Menon reported forward booking trends in Asia Pacific “indicate resilient travel demand in the coming months”. Mr Menon said: “While this augurs well for the passenger business segment, airlines are facing higher costs, driven by inflation and the recent rise in jet fuel prices, which threaten to squeeze margins”. He added: “Delays in aircraft deliveries and parts shortages may affect airline fleet deployment plans. Competition is also intensifying, in tandem with the increase in capacity globally. Asian airlines remain focused on efforts to increase productivity, as the industry strives to return to profitability following three consecutive years of heavy losses”.

KLM CEO: Supply chain bottlenecks slowing us down, not demand

KLM CEO Marjan Rintel stated “it’s not demand that’s slowing us down, it’s the bottleneck in our supply chain”. Ms Rintel said: “We don’t have enough new aircraft”, while “at the airports, the service providers cannot provide the necessary capacity for processing”. In addition, Ms Rintel says the carrier also lacks staff, in particular pilots, and is “currently hiring hundreds of new employees every month”.

IATA: Airline industry almost fully recovered, buoyed by international traffic

IATA director general Willie Walsh commented: “For the year to date, international traffic has increased by 50% versus last year and ticket sales data show international bookings strengthening for travel in the last part of the year”. He added: “Heading into the last quarter of the year, the airline industry is nearly fully recovered to 2019 levels of demand. The focus, however, has not been on getting back to a specific number of passengers or flights, but rather on meeting the demand by businesses and individuals for connectivity that was artificially suppressed for more than two years”.

Pegasus Airlines CEO: Means for SAF production, incentives and collaboration needed to meet targets

Pegasus Airlines CEO Güliz Öztürk stated the aviation industry needs to find the means for sustainable aviation fuel (SAF) production, provide the right incentives and pursue industry wide collaboration to meet the Net Zero 2050 target. Ms Öztürk added: “With the right production capabilities and incentives, the aviation industry will find a way to achieve its net zero goals”. Chief information technologies officer Barış Fındık noted: “If you can make an airline more efficient, it also becomes much greener”.

Cebu Pacific CEO: Philippines ‘strategically placed’ to be a hub within ASEAN

Cebu Pacific CEO Michael Szucs stated the Philippines is “strategically placed” within the ASEAN region to be a hub, allowing for “more connectivity between all the people in this region”. Mr Szucs added: “The growth story is impressive and consistent, and the tourism potential here is massive”.

Widerøe: Half leisure travellers are planning to travel less

Widerøe conducted a travel survey of 17,000 passengers in Sep-2023 and found 50.4% will travel less than before in the coming year; 40% state that their travel plans remain unchanged despite reduced purchasing power and financial uncertainty. CEO Stein Nilsen commented: “We are very satisfied that a large proportion of Widerøe’s customers will still prioritise travel in the future”. Mr Nilsen noted the “tougher economic times” will “obviously affect demand going forward and will require precision in the way we adapt the offer if we are to manage to keep unit income and cabin factor in the coming months”.

A4E MD: Ensuring the economic and competitive viability will be a longer term challenge

Airlines for Europe (A4E) managing director Ourania Georgoutsakou, via the association’s official LinkedIn account, stated “ensuring the economic and competitive viability of Europe’s airlines will be a longer-term challenge”. Ms Georgoutsakou added: “The EU has passed some of the most comprehensive sustainability legislation in the world and the impact on aviation will be significant”.

United Airlines CCO: Runway constraints driving aircraft upgauge, fleet orders

United Airlines CCO Andrew Nocella stated the US is “not building a lot more runways”, forcing the carrier to continuously upgauge aircraft in response to growing demand. Mr Nocella noted demand cannot be met without utilising larger aircraft. This follows the carrier announcing firm orders for 50 Boeing 787-9s and 60 A321neo aircraft, with deliveries scheduled to begin in 2028.

TAP CEO: Privatisation does not ruin transformation plans

TAP Air Portugal CEO Luís Rodrigues stated “privatisation does not ruin our plans to try to transform this company into one of the most attractive in the industry”. Portugal’s Government plans to sell a share of at least 51% of TAP Air Portugal, after the cabinet approved the privatisation process.

Dubai Airports ‘very optimistic’ traffic will exceed pre-pandemic levels in 2023: CEO

Dubai Airports CEO Paul Griffiths reported the company is “very optimistic” traffic levels at Dubai International Airport will exceed pre-pandemic figures in 2023. Mr Griffiths stated 60% of Dubai Airport traffic is point-to-point rather than transfer, compared to 40% in 2019.

easyJet CEO calls for ATC reform following flight restrictions at London Gatwick Airport

easyJet CEO Johan Lundgren called for “wide-ranging” reform of air traffic control (ATC) in the UK, following UK NATS’ imposition of flight restrictions at London Gatwick Airport on 25-Sep-2023. Mr Lundgren added: “We need reform of how NATS is regulated to ensure that all its services are robust and resilient so that UK travellers can be confident their flights will take off”.

Wizz Air CEO maintains confidence in GFT engine in the long term

Wizz Air CEO József Váradi is confident in Pratt & Whitney’s GTF engines in the long term. Mr Váradi added: “Short term? We don’t know what we don’t know, so we try to understand the issues”.

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