> Soundbytes: travel and aviation industry insights – week ending 27-Oct-2023

Soundbytes: travel and aviation industry insights – week ending 27-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.

Cathay Group ‘enthusiastically supports’ Hong Kong Govt SAF initiatives: CEO

Cathay Group CEO Ronald Lam reported the carrier “enthusiastically supports” the Hong Kong Government’s intention to establish a framework to drive the use of sustainable aviation fuel (SAF) domestically. Mr Lam stated SAF will be “one of the most important levers for achieving net-zero carbon emissions within the aviation industry”, adding Cathay will continue working with the Government to promote SAF utilisation.

American Airlines international demand continues to drive revenue growth: CEO

American Airlines CEO Robert Isom stated the carrier’s international demand “continues to drive revenue growth”, with the Atlantic, Caribbean and Central American markets leading performance. Mr Isom noted domestic demand “remains steady”.

IATA: Airlines must explore and invest in new payment instruments

IATA director industry payment programmes Thierry Stucker stated “If airlines want to maximise sales and collect payments in ways that make customers happy, then they have to explore and invest in the new payment instruments that make sense according to their markets”. Head of payment services Christophe Kato added: “Payment is fast becoming a fragmented sector with the emergence of numerous local payment instruments, and airlines will need to develop robust partnerships to meet that new challenge”.

United Airlines CEO: Proposed credit card legislation would ‘kill’ rewards programmes

United Airlines CEO Scott Kirby reported proposed legislation to increase credit card competition would “kill” debit card rewards programmes including airline loyalty partnerships. Mr Kirby stated the legislation would be “really, really bad policy for consumers”, noting 84% of US consumers use rewards cards. The proposed Durbin-Marshall Credit Card Competition Act aims to enhance competition and choice in the credit card market.

Finnair CEO: 3Q2023 characterised by strong growth and profitability

Finnair CEO Topi Manner stated “strong growth and profitability characterised the busiest quarter of the year [3Q2023]”, with the carrier handling three million passengers with a load factor of 81%. Revenue grew 13.7% year-on-year to EUR817 million, while the comparable operating profit was EUR94 million, equalling a comparable EBIT margin of 11.5%. Mr Manner said: “This was the fifth consecutive quarter with a positive comparable EBIT driven by continued revenue optimisation and cost efficiency as per our strategy”, adding “our net result was also positive for the fourth consecutive time, this time EUR53 million”.

Sydney Kingsford Smith Airport CEO: ‘We are now within touching distance’ of pre-pandemic traffic

Sydney Kingsford Smith Airport reported it handled 3.4 million passengers in Sep-2023, an increase of 19.5% year-on-year and a decline of 7.7% compared to Sep-2019 pre-pandemic levels. The airport reported Sep-2023 represented its “strongest post-COVID traffic recovery rate to date”. CEO Geoff Culbert stated: “We are now within touching distance of pre-pandemic passenger traffic. Our international recovery continues to push ahead, eclipsing the domestic recovery for the third month in a row. Increased capacity from China, boosted by the return of group travel, and a big jump in trans-Tasman travel over the school holiday period helped the airport record its strongest international passenger traffic since the border reopened”.

Delta Air Lines: Proposed credit card legislation would lead to ‘unbelievable’ consumer backlash

Delta Air Lines CEO Ed Bastian stated proposed credit card legislation would impact airline rewards programmes and lead to “unbelievable” consumer backlash. Mr Bastian stated credit card companies would no longer receive funding needed to invest in rewards-back opportunities, adding Delta is “watching” the legislation. The proposed Durbin-Marshall Credit Card Competition Act aims to enhance competition and choice in the credit card market.

City Airlines ‘only way’ for Lufthansa ‘to grow and sustainably strengthen’ Frankfurt and Munich hubs

Lufthansa Group announced City Airlines will commence flight operations in summer 2024. The carrier will operate from Munich and Frankfurt hubs and thus also offer feeder flights for Lufthansa, and operate alongside Lufthansa CityLine with A319 aircraft. City Airlines managing director Jens Fehlinger commented: “With City Airlines, we want to create prospects for the coming decades and secure sustainable jobs in Germany. This is the only way for us to grow and sustainably strengthen the hubs in Munich and Frankfurt”.

CASA PNG: Cancellations ‘necessary’ to make sure all aircraft are safe to operate

Papua New Guinea’s Civil Aviation Safety Authority (CASA PNG) CEO and director Benedict Oraka highlighted the importance of safety to all stakeholders in the aviation industry. Mr Oraka stated: “CASA PNG makes sure that all airlines have the right people, the right processes, the right tools, the right data, the right aircraft, the right maintenance and an assurance program of continuous improvement”. He noted: “The cancellations whilst being inconvenient, they are necessary to ensure all operating aircraft are safe to operate”.

Transavia France CCO: Leisure travel continues to dominate France-Portugal traffic

Transavia France CCO Nicolas Henin stated: “The main profile of passengers transported to and from Portugal remains practically the same as in the pre-pandemic period, with leisure customers being the most frequent passengers in both directions”. Mr Henin added: “At the same time, although not yet fully recovered, we are once again experiencing an upward trend in business travel, also in both directions”. He highlighted: “In terms of booking behaviour, we are seeing a trend towards bookings more in advance than last year”.

Volaris CFO: Pratt & Whitney engine issues impacting ability to relocate aircraft for US routes

Volaris CEO Enrique Beltranena said 73 of the carrier’s 126 aircraft could be affected by a powder metal defect detected in Pratt & Whitney engines. CFO Jaime Pous added mandatory engine inspections have impacted the airline’s ability to relocate aircraft for US routes “more than anticipated”. As previously reported by CAPA, Pratt & Whitney reported sales decreased 83% year-on-year to USD926 million in 3Q2023, including the impact of USD5401 million charge related to “the powder metal matter”.

ALA: SAF plants in Spain would generate EUR56bn GDP

Spain’s Association of Airlines (ALA) president Javier Gándara stated “sustainable aviation fuel (SAF) is not only an opportunity to decarbonise the aviation sector, it is an opportunity for the country”. Mr Gándara highlighted that if the between 30 and 40 SAF plants needed to cover the needs of Spain’s aviation were developed, EUR56 billion of GDP and 270,000 new jobs would be generated. He added “we cannot waste time, we have to take advantage of the great opportunity that is presented to Spain, to our industry, to become a production and export centre for SAF to the rest of Europe”.

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