Analysis Reports

The NDC (New Distribution Capability) servicing features that are critical to achieving NDC at scale are those than enable refunds and the management of customer and airline-initiated changes, according to new research by the Travelport hosted NDC Leadership Council.

The NDC Leadership Council was formed by Travelport in 2019 to facilitate the industry-wide collaboration required to ensure NDC’s success. It has a geographically diverse group of participating airlines, agencies and corporate travel managers and providers from companies including American Airlines, Qantas, United Airlines, American Express Global Business Travel, AmTrav, dnata Travel, and UBS.

To conduct the study, members of the NDC Leadership Council individually prioritised a selection of 18 discrete servicing features and then, separately, identified the capabilities that have potential to slow progress if they are not supported, which it called ‘blockers’. The results revealed six of the servicing capabilities to be both key priorities and blockers, and hence, considered by the Council to be mandatory for the success of NDC’s rollout. These were:

The results showed strong consensus between agency and airline participants on the six priority capabilities. However, demand for ‘pay using 3D-Secure’, ‘adding an ancillary’ and ‘seat selection’ capabilities was considerably higher among airlines and corporate travel providers. ‘Order history’ was also shown to be in high demand among travel agencies.

“We’ve been delivering NDC for several years and engage our customers at every step of the roll out process to continually improve the NDC shopping, selling, and servicing process” said Kyle Moore, Global Head of Customer Strategy at Travelport. “This detailed research into the priority servicing needs for NDC validates the direction that we have taken to-date. It also highlights the fact that key functionality is in place and that we are now focused on situation-specific features. To that end, we are working with both our airline partners to enable their NDC programs and our agency customers to integrate NDC content into their workflows.”

Even before the COVID-19 pandemic, Allegiant Air had a highly defensible business model, reflected in many years of its stock trading in the triple digits before the crisis struck. Now the company is rightfully boasting that it could be the first US operator to recover fully, and its market cap has surpassed pre-pandemic levels. 

It remains an unknown just how the US landscape will evolve post pandemic. But Allegiant’s ability to recover faster than some of the country’s other airlines, and its cost structure combined with an overall still smaller footprint, will continue to be catalysts for the airline as it joins other airlines in capitalising on an inflection point in US demand.

Talking at the CAPA Live on 14-Apr-2021, Qantas Group CEO Alan Joyce spoke with CAPA’s chairman emeritus Peter Harbison.

Some the key quotes from the following verbatim report:

- "We're planning on being 80% (capacity) or above for the last quarter."

- “We are seeing that the demand yields hold up pretty well, but we have been out there stimulating the market."

- "International is burning around 5 million a week."

- "We've won nearly 30 corporate accounts in the last few months."

- "Jetstar should be out of COVID a lot bigger than it was going into COVID."

- "When the Qantas group plays its best game it always wins."

- "We're also seeing the corporate market, the business market, not being as impacted as other markets around the globe."

- "Internationally we don’t think we’ll get back to 2019 levels until 2024."

- "To travel (internationally), you either need to do quarantine or you need to be vaccinated."

- "I think that the 2020’s big strategic move for us is going to be (Project) Sunrise."

The Vietnamese government has estimated that following a rapid pre-pandemic rise in passenger numbers, the requirement for airport infrastructure during the next five years will be twice what it was in the past five years.

Airports Corporation of Vietnam (ACV) reports that VND25 trillion (USD1 billion) has been invested in expanding airport infrastructure over the past five years to support passenger and cargo growth, but that it will need approximately VND120 trillion (USD5.2 billion) from 2021 to 2025 to complete infrastructure projects.

Vietnam's passenger and cargo traffic increased by an average of 17% and 13% respectively from 2012 to 2019.

However, there are questions about the selection of infrastructure projects, their geography, and whether traffic forecasts have been exaggerated.

Of greater concern still is the lingering question of where the finance and the operating experience will come from.

In President Biden's address to Congress in he very briefly mentioned airports, but not within any context that suggests they are high on his government's list of priorities. They will get a comparatively miniscule USD25 billion from the infrastructure fund over eight years.

A bipartisan movement, however, is supportive of increasing the passenger facility (user) charge, which would help improve finances and perhaps even build some new infrastructure, but the people who can really help, in the private sector, are not 'party to the conversation'.

Several airports have just recently announced the continuation or implementation of infrastructure schemes though, which suggests there is still life left in the concept, and some of those schemes do involve the private sector by way of ‘P3’ deals.

The creation of a travel bubble between Australia and New Zealand represents a major milestone for Air New Zealand and Qantas, and the wider airline industry. However, setbacks in the early stages of the arrangement also illustrate the challenges airlines face in rebuilding demand.

The bubble, which was launched on 19-Apr-2021, is the Asia-Pacific region’s first two-way quarantine-free international travel corridor to open since the start of the COVID-19 pandemic. It has allowed Air New Zealand and the Qantas group to restore many of their flights in this market, providing their first solid international passenger revenue streams in more than a year.

There was an initial rush of passengers, as expected, and they were primarily those who wanted to reunite with family members or had other urgent travel needs.

But demand has eased since then, as discretionary travel has been dampened by the prospect of the bubble being closed at short notice when new COVID-19 cases occur. Governments have been clear about the disruption risk, and a couple of snap closures resulting from lockdowns in Australian cities have served to reinforce this message. New cases in Sydney and Perth prompted New Zealand to exclude those cities from the bubble temporarily.

In the broader scheme of things, Taiwan, Republic of China, barely gets a look-in in the west. Taiwan sits quietly in the South China Sea and calmly goes about its own business, and most people outside the region can’t easily locate it on a map.

But it is in the news right now as Beijing ramps up the political pressures. Taiwan is actually in a position to benefit from the attention it is receiving from the world as it has managed to keep COVID-19 infections largely at bay, and as – finally – it signs a contract to build a big new terminal at its main airport.

Ryanair and Trinity College launch 'Ryanair Sustainable Aviation Research Centre'

LATAM Airlines Group aims to achieve carbon neutrality by 2050

Alaska Airlines to replace single use plastic bottles with 92% plant based cartons

Envirotainer launches first in new family of temperature controlled airfreight containers

Port of Seattle Commission reviews SAF strategic plan at Seattle-Tacoma International Airport

Much of Europe, specifically the EU and UK, is preparing to lower international travel restrictions. Details of which countries will be on the green lists are yet to be provided, and they will probably change over time once announced, but this is welcome.

Schedules filed for the peak summer months show a determined optimism. OAG data, together with CAPA seat configuration data, project Europe capacity at 78% of 2019 levels (i.e. down only 22%) in 3Q2021. This compares with current capacity (week of 3-May-2021) in Europe at 71.9% below 2019.

Europe has fallen further behind other regions on this measure: the next weakest region is Africa, where capacity is down by 51.1% versus 2019, Middle East is down by 49.7%, Latin America by 43.8%, North America by 36.2%, and Asia Pacific by 31.3%.

The relaxation of travel restrictions will be a vital step towards aviation's recovery, although 78% of 2019 levels looks too optimistic, given the uneven vaccination rates and epidemiology. The recovery could also be stalled by very high testing costs for travellers.

Nevertheless, 3Q should show a big improvement from current capacity levels in Europe.

There is little argument that Southwest Airlines is one of the best positioned operators for a robust rebound from the COVID-19 crisis. Its balance sheet strength is unmatched, and the company remains well positioned to repay the debt it has amassed during the coronavirus pandemic.  

Southwest is, no doubt, encouraged by the inflection point in US leisure demand, and believes the worst of the crisis is now over. However, the company has adopted what can be deemed as a more realistic view of the recovery, as visibility into the US autumn period remains murky. 

But the airline’s typically cautious approach does not mean Southwest has been resting on its laurels during the pandemic. It is in the midst of adding 17 new markets, and has solidified its order book for the next decade and a half – neither of which are small feats, when the airline's traffic during 1Q2021 was still down by approximately 38%.