> Soundbytes: travel and aviation industry insights – week ending 10-Nov-2023

Soundbytes: travel and aviation industry insights – week ending 10-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.

Singapore Airlines CEO: Lag in corporate travel not an ‘immediate concern’

Singapore Airlines reported it is operating almost full first and business class cabins due to a rise in leisure travel. CEO Goh Choon Phong stated a lag in corporate travel is “not much of an immediate concern”.

IATA DG: 2023 a year of ‘strong recovery’ in demand as passengers took full advantage of their freedom to travel

IATA director general Willie Walsh described 2023 as “a year of strong recovery in demand as passengers took full advantage of their freedom to travel”. Mr Walsh added: “There is every reason to believe that this momentum can be maintained in the New Year, despite economic and political uncertainties in parts of the world. But we need the whole value chain to be ready. Supply chain issues in the aircraft manufacturing sector are unacceptable. They have held back the recovery and solutions must be found. The same holds true for infrastructure providers, particularly air navigation service providers. Equipment failures, staffing shortages and labour unrest made it impossible to deliver the flying experience our customers expect. A successful 2024 needs the whole value chain to be fully prepared to handle the demand that is coming”.

AAPA: Full return of Chinese travellers will generate ‘significant wave of growth’

Association of Asia Pacific Airlines (AAPA) director general Subhas Menon stated air travel demand remains resilient “in spite of the challenges in the global economy, as there is a distinct shift in spending from goods to services, including on air travel”. Mr Menon also commented: “The return of Chinese travellers in full force will kick off another significant wave of growth for the region and global tourism”. AAPA also stated that air cargo demand in Asia Pacific “is expected to improve as the global economy stabilises, manufacturing output strengthens and inventories accumulated during past years are drawn down”. Mr Menon said: “The robust growth in air travel demand will keep the industry on track to full recovery”.

JetBlue Airways CEO: Consolidation of smaller airlines ‘inevitably’ to compete with larger carriers

JetBlue Airways CEO Robin Hayes stated the carrier’s proposed USD3.8 billion acquisition of Spirit Airlines aims to transform the carrier into a significant competitor to the US ‘Big Four’ airlines. Mr Hayes said consolidation among smaller airlines was “in some ways inevitable to compete with the larger airlines”, adding carriers could “never ever to get the size [of the Big Four] based on organic growth”. Mr Hayes noted large US carriers including American Airlines and United Airlines grew to their current size through mergers and acquisitions.

Air France-KLM CEO rules out plans to move its own traffic to Scandinavia

Air France-KLM CEO Benjamin Smith stated the group is “not considering transferring our own traffic or moving our own traffic” to Scandinavia, following the announcement it is taking a stake in SAS. Mr Smith said SAS was “looking for incremental traffic, which today is more difficult to capture, because SAS is not part of the United and Lufthansa joint venture, and that probably held them back from taking advantage of what we believe is a positive strategic, geographic location”.

DAT CEO: Regional aviation in Europe is having a hard time

DAT CEO Jesper Rungholm stated “it is quite clear that regional aviation in Europe is having a hard time”, highlighting “there are very few regional flights that can survive without being part of a larger network such as KLM Cityhopper”. Mr Rungholm said that while other countries have seen “growth in state support for regional aviation in order for it to survive”, in Denmark “regional aviation must exist on its own”. He added: “The state has chosen to subsidise other forms of transport, and the picture is therefore distorted”.

Frontier Airlines CEO: ‘Out-and-back’ business model ‘makes sense’

Frontier Airlines CEO Barry Biffle stated the carrier believes that simplifying its business model to that of European LCCs would “provide improved reliability and enable the airline to make continued progress toward pre-COVID utilisation levels”. Mr Biffle stated the carrier is “at a size and scale” where the ‘out-and-back’ business model used by Ryanair and Wizz Air would “make sense”.

Norse Atlantic Airways ‘would be of interest to some of the big players’: CEO

Norse Atlantic Airways CEO Bjorn Tore Larsen stated an alliance would help the LCC save on costs, increase revenue, and provide access to a partner network. Mr Larsen said partnership with Norse “would be of interest to some of the big players, not necessarily only in Europe, but elsewhere as well”.

US NTSB chair: Recent uptick in near-miss aviation incidents is sign system is ‘sharply strained’

US National Transportation Safety Board (NTSB) chair Jennifer Homendy, in a written testimony to the US Senate Commerce Committee, stated a recent uptick in near-miss aviation incidents in the US is “a clear warning sign that the US aviation system is sharply strained”. Ms Homendy called for “more technology for runway and cockpit alerting”, adding the US “cannot wait until a fatal accident forces action”.

RwandAir CEO: ‘A lot more incentives’ needed for SAF production

RwandAir CEO Yvonne Makolo commented on the availability and cost of sustainable aviation fuel (SAF), stating: “A lot more incentives need to be put into place for manufacturers to start producing enough SAF and then we can deal with the issue of affordability”. Ms Makolo added: “For us African airlines, already operating is very expensive and now we need expensive fuel so that doesn’t make sense”.

Really Cool Airlines CEO: ‘We’re not here to compete with Thai Airways’

Really Cool Airlines CEO Patee Sarasin stated the carrier is expected to gain operational profit in its first full year of operations in 2025. Mr Sarasin stated: “We’re not here to compete with Thai Airways, but we aim to complement the market with more choice on long haul routes, which remain a blue ocean in Thailand”. Mr Sarasin added: “Particularly when more passengers want to skip connecting flights due to geopolitical concerns and are looking for a more direct service”.

PLAY entering winter with healthy booking position in most markets: CEO

PLAY CEO Birgir Jónsson stated “we enter the winter with a healthy booking position in most markets”, however noted the carrier is still observing “somewhat lower demand than expected due to seasonal fluctuations and the uncertain economic situation in the world”. Mr Jónsson added the carrier is “well prepared for this challenge and will continue to use our flexibility to change supply and routing to match market demand, as we have done in the past with great success”.

Porter Airlines CEO: 2023 has been ‘an incredible year’

Porter Airlines CEO Michael Deluce reported 2023 has been “an incredible year” for the carrier, noting the market has been “very receptive to our elevated economy product”. Mr Deluce stated there is “more opportunity” for the carrier to further expand its domestic network as well as build upon its US presence.

Norwegian CEO: Ticket sales for Christmas and New Year solid

Norwegian CEO Geir Karlsen stated the carrier is “well prepared for the quieter winter season and has, among other things, reduced capacity and entered into favourable hedging positions on fuel’. Mr Karlsen added “ticket sales for Christmas and New Year are solid, both domestically and to our European destinations”.

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