CAPA Live: the future of business travel for airlines
Early this month (09-Jun-2021) CAPA Live welcomed more than 7,100 aviation and corporate travel participants from around the globe, to hear from airline CEOs and industry executives. The below summary features some of the key session highlights from airline CEOs and industry leaders.
There is a broad recognition that corporate and business travel will be reduced for a period of time, although opinions vary widely; also, a common theme for several airlines is a plan to address premium sales efforts - and aircraft configurations - to cater more for premium leisure travellers.
All CAPA Live sessions are also available to view on demand via CAPA TV.
- Corporate and business travel is expected to be reduced for a period of time, leading airlines to focus on premium leisure travelers.
- KLM plans to reconfigure aircraft to cater to changing market needs, including introducing a premium economy class.
- Finnair anticipates a slower recovery in corporate travel and is preparing to introduce a new premium economy class.
- Wizz Air remains focused on its low-cost business model and is cautious about the business travel market due to higher operational costs.
- Business travel is expected to be limited in 2021, impacting the full-service airline business model.
- CAPA Live featured discussions on business travel recovery, including segments that will return first, technology to support recovery, and changing expectations of business travelers.
Business travel outlook according to Australian airline, airport and tourism leaders
CAPA Live captured the viewpoints on business travel recovery from executives at the key Australian gateway airports, as well as leading airlines serving Australia, on the sidelines of the Australian Tourism Exchange event at the ICC Sydney.
View the montage video here to view the comprehensive wrap of what's going on in the business travel market across Australia.
Exclusive Interview with KLM CEO Pieter Elbers
Pieter Elbers has been CEO of the Netherlands' national airline KLM since 2014, making him one of the longest serving heads of a leading European full service airline.
Part of the Air France-KLM group, KLM is a top 10 European airline in its own right, ranked by 2019 passenger numbers. Historically, it has also been a pioneer in the development of the international hub and of airline alliances.
The pandemic has placed pressure on both of these concepts, but KLM has been operating at a higher percentage of pre-crisis capacity than most other major European airlines.
During the CAPA Live interview (09-Jun-2021) Mr Elbers said that he is more optimistic about business travel than is demonstrated in recent reports, with plans to reconfigure aircraft to better suit the changing market needs.
"We are reconfiguring aircraft for premium economy to have that positioned as a class, which could both accommodate business class travellers not coming back in business class and economy class, making sure that there's a little bit more room and a little bit more space, which could, again, post-COVID, could be a value element for our consumers."
View the full interview here.
Exclusive Interview with Finnair CEO Topi Manner
Finnair is the national carrier of Finland, with a network of international services from its base in Helsinki. Thanks to its geographical location the airline has an extensive west-east network, but this has been hit hard by the pandemic.
Mr Manner stated during the exclusive CAPA Live interview:
"As an airline we are a little bit less exposed to corporate travel than some of the other, for example, European flight carriers. Back in 2019 corporate travel constituted 20% of our passengers, 30% of our revenue. So we are getting ready for some of that to be not coming back that soon, so effectively corporate travel seeking a new baseline and then starting to grow from that.
"But we do think that premium leisure will be increasingly important for us as a segment going forward, and we are getting ready to introduce a new premium economy gapping class in our long haul fleet during the next years."
View the full interview here.
Exclusive Interview with LCC Wizz Air CEO József Váradi
Wizz Air is a low cost carrier based in Budapest. The carrier predominantly uses secondary airports and is continuously looking at opportunities to expand its network of destinations and provide low cost air transport to and from Central and Eastern Europe.
The LCC has aggressive growth plans, and its low unit costs and healthy balance sheet should help them to recover with greater capacity growth when the recovery materialises, since it is likely to be a recovery led by price sensitive market segments rather than by high yield business traffic.
During his exclusive interview, Wizz Air CEO József Váradi shared:
"We remain very selectively with that regard, and I think it is very important that we stay focused on the business we are into. We know how to deliver a very efficient European or short haul point-to-point traffic at very low cost by minimising complexities of the execution of the business. And we just need to stick to it. Let's not forget that.
"The business travel market might be attractive for some time, but it can put significant strains on your business model. It can come with higher cost of operation, these airports or top airports or main capital airports tend to be more expensive, operationally more constraints."
View the full interview here.
CAPA Chairman's Lounge: understanding and tapping into business travel recovery
In 2021, at least, there'll be very limited business travel, perhaps as much as 50% of previous levels in the second half of the year, but even that's probably optimistic.
The loss of business travel will undermine the full service airline business model and limit what has historically been an important and profitable market segment.
During the June edition of the Chairman's Lounge, we were joined by: American Express Global Business Travel, Chief Commercial Officer, Andrew Crawley; Microsoft Global Director Travel, VenueSource and Payment, Eric Bailey; oneworld CEO, Rob Gurney; and Travelport CEO, Greg Webb, to look at the recovery of business travel and try to answer: What segments of the industry will return first? What technology exists to help support recovery? How have the expectations of business travellers changed?
View the full panel discussion here.
CAPA Live returns next month (14-Jul-2021) with a stellar line-up of airline CEOs and industry leaders, including AirAsia Group CEO Tony Fernandes, Ryanair DAC CEO Eddie Wilson, Rwandair CEO Yvonne Manzi Makolo, American Airlines Former Chairman and CEO Bob Crandall, (and many more), to open the discussion on surviving the pandemic for LCCs and full service business models.
Register here to claim your free annual pass to join the conversation.