> Soundbytes: travel and aviation industry insights – week ending 1-Sep-2023

Soundbytes: travel and aviation industry insights – week ending 1-Sep-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.

Flight Centre MD: Corporate TTV ‘comfortably surpassing’ broader sector recovery

Flight Centre Travel Group MD Graham Turner stated sales “more than doubled” group wide in FY2023, as both leisure and corporate divisions delivered over AUD10 billion (USD6.5 billion) in annual total transaction value (TTV) for the first time. Mr Turner said corporate TTV reached AUD11 billion (USD7.1 billion), “comfortably surpassing” the previous record and broader sector recovery. He said: “Our transformed leisure business is also on a steep TTV recovery trajectory, with several businesses, including online and the independent agency network, delivering record sales”. Mr Turner added: “Looking ahead to FY2024, we are well placed to capitalise on opportunities that will arise as industry recovery continues”. He noted: “Already, we have seen further solid TTV and profit growth in early trading in a resilient travel market that seems to be holding up reasonably well compared to other sectors”.

Qantas CEO: Regulatory regime between airports and airlines ‘isn’t working’

Qantas Group CEO Alan Joyce said increased airport pricing would prove a “major cost pressure” for the company, adding: “The regulatory regime that governs the relationship between airports and airlines isn’t working”. Mr Joyce stated: “Dedicated pricing principles drafted to solve this problem have never been formally enshrined, and are typically ignored by airports”.

AirAsia X ‘optimistic’ of growth from China market: CEO

AirAsia X (AAX) CEO Benyamin Ismail stated the LCC continues to focus on a consolidated growth strategy to build yield and gradually enhance the recovery of its network capacity. Mr Ismail said a revised business plan continues to highlight “improvements” across all key metrics. He added AAX is “optimistic” of growth from China and expects flight frequency to China to “grow by three-fold” by the end of 2023. Mr Ismail noted the company is “driving our commercial ambitions with new and improved product offerings across all revenue segments”.

Riyadh Air will not complete with Emirates or Qatar Airways: CEO

Riyadh Air CEO Tony Douglas stated the carrier does not plan to directly compete with Emirates Airline or Qatar Airways’ hub operations. Mr Douglas stated Riyadh Air will instead focus on serving niche markets under its “super aggressive” growth plans. The carrier plans to serve 100 destinations via Riyadh King Khalid International Airport by 2030.

‘No indications’ of cyberattack following UK NATS technical failure : CEO

UK NATS CEO Martin Rolfe, commenting on a technical failure which affected UK airspace on 28-Aug-2023, stated “While we resolved the problem quickly, I am very conscious that the knock-on effects at such a busy time of year are still being felt by many people travelling in and out of the UK… There are no indications that this was a cyber-attack”.

Ryanair Group CEO: UK NATS disruptions ‘not acceptable’

Ryanair Group CEO Michael O’Leary commented on the UK NATS technical issue impacting UK airspace. Mr O’Leary stated: “It is sadly outside of our control. We have been in contact with UK NATS. We still have not had an explanation from them on what exactly caused this failure yesterday”, adding: “It’s not acceptable that UK NATS simply allowed their systems to be taken down and everybody’s flights get delayed or cancelled”.

Perth Airport acting CEO calls for capacity increase, open sky model after Qatar Airways decision

Perth Airport acting CEO Kate Holsgrove, commenting on the Australian Government’s rejection of additional Qatar Airways services to Melbourne, Brisbane and Sydney, stated: “We would like to understand more around the drivers of these decisions… particularly where we have airlines who have the capacity and the availability to run routes in what are very highly sought after destinations”. Ms Hollygrove said the airport is hoping to see an “increase in the bilateral capacity” between a number of countries which are currently limited, or a move towards an “open sky model”, adding: “We’re closer to 60% of the world’s population and we’ve got this really unique opportunity with direct flights across into Europe and certainly across most of Asia”.

Avinor: Traffic will not return to pre-pandemic levels until 2027/28

Avinor handled (29-Aug-2023) 23 million passengers across its airport network in 1H2023, up 16.5% year-on-year and down 11% compared to 1H2019. The strongest recovery was recorded among holiday and leisure travellers, while business travellers remain below pre-pandemic levels. Avinor CEO Abraham Foss stated: “Traffic is still not back at the levels seen before the pandemic and this is having a significant financial impact”. Mr Foss added: “We are now estimating that traffic will not return to pre-pandemic levels until 2027/2028”.

Jetstar to clear USD64m in flight credits owed to customers by end of 2023: CEO

Jetstar Airways CEO Stephanie Tully confirmed “around AUD100 million” (USD64.3 million) in pandemic flight credits is still owed to Jetstar customers. Ms Tully said: “Our focus right now is to make sure Australians are using that credit or getting a refund by the end of the year”. She noted the LCC has an “absolute goal” of “zero credit left” by the end of Dec-2023.

Norse Atlantic Airways president: Air cargo an important part of the business model

Norse Atlantic Airways president Charles Duncan stated: “Air cargo is a fundamentally important part of our business model, and the 787-9 is a really good cargo hauler”. Mr Duncan said freight has “been an intentional part of our strategy from the beginning”, and added: “With luggage and nine PMC pallet positions, a heavy cargo flight for us is 30 tons… We move 30 tons of fish to JFK out of Oslo regularly”.

Air Premia to ‘aggressively’ expand network in 2024: EVP

Air Premia EVP Sean C Kang stated the carrier plans to “aggressively” expand its Americas and Europe network in 2024 with the introduction of at least four additional Boeing 787-9 aircraft. Mr Kang reported the carrier is “now facing a great opportunity of expansion”, with ECS Group expected to significantly contribute to the carrier’s expansion plans over the upcoming years.

Norwegian CEO: We are hit by inflation in general

Norwegian CEO Geir Karlsen stated “we are hit by inflation in general”, and in particular that “we see that salaries for perhaps especially pilots in the airline industry are under a lot of pressure and we will discuss this issue as well”. As previously reported by CAPA, the carrier stated that in light of the inflationary impact on both supplier costs and salaries, and the weakening of NOK against USD and EUR, it does not expect to reach its target of a reduction in unit cost excluding fuel compared to 2022.

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