Challenges, Innovations, and Trends in Australia's Travel and Aviation Industry

Transcript

Ram Chhabra:Well, hello.

Robyn Ironside:I'm Robyn. I'm from The Australian, and I have got an amazing panel here this afternoon with Cinzia from HelloWorld, James Kavanagh from Flight Centre, Ram Chhabra from CVFR Group, and James Thornton from Intrepid. And the title of the session is Challenges, Innovation, and Trends in the Travel Industry. And I'm sure we'll all agree that it has been a challenging year for travel. We've had the Middle East conflict, which has created a lot of uncertainty. There's been cost of living issues, there's been the fuel issue, and then of course there's been the expansion of AI. So first I'm going to go to Cinzia. It's great to have a woman on the panel.

Cinzia Burnes:Thank you. And so, so what do you see as the biggest challenge for your Well, I think we might be lucky to be servicing a demographic that has been affected by the cost of living crisis less than others, and we have seen demand remain very resilient except for this— a few weeks where there was a bit of hesitation. But as soon as the travel advice from DFAT went from level 4 to level 3, we've seen the pent-up demand actually turn into bookings. Not to say that these economic challenges are not there, I'm just saying that for our group, probably less evident and less impactful.

Robyn Ironside:Yes. Is that similar to what you've seen at Flight Centre?

James Kavanagh:Actually, it's interesting because what— one of the challenges that we face more than anything right now is there's the macro factors, there's AI, all of those things, but I think one of the greatest challenges that we're facing is uncertainty versus confidence. And we actually need a degree of momentum to actually push us through. We've seen July's been actually quite promising where we're seeing a reasonably good uplift, but certainly if we look back in the last quarter at the end of the financial year, wasn't the best. And, uh, but at the end of the day, we— what we do know is that Australians love to travel. And for those that have been around for a long time will know if you look back in the last 50 years, we get events nearly every 7 years. And it's something that once you realize that, you know that there's always a sharp rebound and a sharp recovery after it. So demand itself is— it's not terminal. It basically just shifts to another phase. And, and we're expecting good pent-up demand when we get a good degree of certainty and confidence for consumers.

Robyn Ironside:And how damaging are you finding uncertainty to the CVFR?

Ram Chhabra:I think, I think, I think JK is right. It's the uncertainty of of so many factors. It's, it's the war, it's, it's fuel prices, and also the local economy. Let's look at Australia's economy at the moment. We are in a softening. And if you take the 7-year cycle, as you said, I mean, COVID was 2020, maybe it's, you know, '26. We're close by now. But, um, it's the uncertainty at the moment. So we're seeing that, um, airlines are reacting. Um, fuel prices are putting pressure on them. Fares go up.

Cinzia Burnes:Yeah.

Ram Chhabra:In an environment where the economy is quite soft, so passengers are choosing where to fly to. Is it long haul, short haul? So I think the uncertainty and sort of the economic contraction is affecting our business. We are seeing a— do I think we'll bounce back? It always does. I think that's always the positive, that every time we see a downturn, the bounce back is usually very hard. So the first few months post the downturn are And how about Intrepid?

Robyn Ironside:Is, is this the most difficult year since the pandemic?

James Thornton:Definitely, definitely. I mean, we grew 27% last year. We're a 37-year-old company on track to become the world's first billion-dollar adventure travel company. January and February were fantastic, and our bookings in March were down 50% out of Australia. So it's been a really rollercoaster year. It's progressively got better in April and May. And then June, the minute that DFAT and FCDO changed their travel regulations, we had the 4th biggest bookings month in our history.

James Kavanagh:Mm.

James Thornton:So it really just has been a rollercoaster of an experience. And I think customers just want the confidence. And you're seeing now people are still booking to travel later this year. But what's looking very strong is 2027 at the moment. So I think 2027 will be a great year. on the basis that geopolitically things will settle down. But that's the joy of being an adventure tour operator to more than 100 countries. There's always something going on in the world.

Robyn Ironside:Has there been a shift in where people want to go?

James Thornton:I think so. I think people are perhaps looking closer to home in some occasions. You've got 2 types— well, there are 3 types of people right now. The people that won't go because they are scared and they're intimidated and they don't want to risk it, and they're the ones that are booking further ahead. You've got the ones that are perhaps changing their travel plans and might be looking a little closer to home. So we've seen, domestic travel in Australia perform well. We've also seen, you know, bookings into places like Japan continue to be very strong. And then people probably like myself and probably the rest of the panelists and perhaps most of you in this room that are just going on holiday regardless. And I flew through Dubai in March, I came back through Dubai in July, and if I wasn't on my phone, I'd have had absolutely no idea that anything was untoward in the world. So people are still traveling. And certainly when you get up to Europe and you see people traveling from the UK and the US, Yeah. US, it's busy, it's crowded, it's hot, so people are still out there travelling.

Robyn Ironside:And Cinzia, your less, I guess, cost-sensitive customers, have you seen any shift in where they are going?

Cinzia Burnes:Not particularly, actually. We noticed that normally cruise bookings, for example, are very long lead, almost sometimes 2 years in advance. And we, as soon as the travel advice lifted, we actually saw people booking cruises in Europe for a month after that. So the shortest lead time we've ever seen in cruises, to be honest. So it's, it certainly had that impact. There's definitely been an increase in domestic travel, particularly in March, April, when things were a bit concerning for people. And the short haul has been always pretty popular. And I think some people that perhaps were thinking of going to Europe in May and June may have decided to go and opt for Asia, Japan, the Pacific. And incredible as it might sound, our second largest destination still is the USA.

Robyn Ironside:Really? That's surprising. Is it— have you found that at Flight Centre?

James Kavanagh:Well, the UK has been number 2 for us and the US always featured in our top 5. But what we saw, particularly in the last quarter, was that real shift in demand. And interestingly, Of the cancellations, even though the war was on, we actually only saw single-digit cancellations. There was just a huge surge in rebooking, which showed that people were determined to have that holiday. And usually in that last period of the financial year, we get a surge of lights, those bookings that come through into Europe. And unfortunately, you don't get that spike at this time. But if I look at the data point now, US and the UK in the month of June has just passed year on year in terms of growth. Now I have to say that the previous corresponding period in that June financial year was not great either because there was macro events happening there, but what it's shown is we're starting to see that lift again, and, and once you get a degree of stability, demand starts to come back.

Robyn Ironside:Ram, do you think that do not travel advisory, did it just stay on for too long? Sorry to keep you waiting.

Ram Chhabra:No, no, it's a very political question. Look, the government had it there for a long time, obviously, because for them, they're worried about their passengers and all their citizens. And should they get stranded, they'll be blamed politically that, you know, you lowered your advisory and suddenly, you know, we're stuck there. Was it too long? I think so. From a personal view, I think so. I was in— I went through Doha 3 weeks ago. The Qatar flight was chock-a-block. There wasn't an empty seat. Now, I was maybe one of only 4 passengers that got off to stay in Doha. I was there for a Qatar Airways event and everybody transited through. So, it was quite depressing seeing only 3 bags on the baggage carousel going around in Doha Airport. But when I was in Doha, Yeah. It was fantastic. It was really quite sad to see not many tourists there because it was very safe. It was all normal, the restaurants were fine, everything was fantastic. So sometimes I think governments can be overcautious for political reasons more than anything else. So I think in hindsight, I think, yeah, the government probably kept it on just a bit too long. But the positive is that the moment it came down, as these two have said, The bookings from the Middle East carriers to Europe just shot through. And we just, I mean, we went from, in one week, we went from the Middle East carriers not being in our top 5 to being the top 3 in a week. So that's a positive sign. And I think that the reason for that is that passengers are now more resilient and more adaptive. So they're more willing to change their decisions very quickly and bounce back very quickly.

Robyn Ironside:So there's still that strength of outbound travel. I'm wondering about domestically. We heard earlier that the domestic passenger numbers are still a million below what they were pre-COVID. Are your travel agencies doing enough to promote sort of travel within Australia?

James Thornton:James? Well, Intrepid's currently acquiring accommodations all over Australia at the moment and being active in the domestic walking space. So we're definitely investing in Australia, and that's because we think that's where the growth is. Because we want to be able to provide travel solutions for people closer to home. Even the most loyal Intrepid customer only travels with us once every 700 days. So we have to have a way to have a relationship and interaction with a customer that goes beyond that fantastic adventure to Machu Picchu or going to Antarctica or whatever it might be. So, you know, we now own the Daintree Eco Lodge in far northern Queensland, which we acquired for the first time 4 years ago. And that worked very well and it gave us the confidence acquire the Edge of the Bay Resort in Tasmania. We've just acquired the Wildbush Luxury assets. I'm about to go up to Akubar in the Flinders Ranges, 5 hours drive from here. So we're investing into Australia because we see it as a great way for loyal Intrepid customers to be able to experience products into this market. And it's a great destination. And the reality is, as we've all unfortunately experienced, that travel does go through unsettling times. And so you want to have a range of product that if it's not as easy and accessible to get out internationally, that you I think you also have to appreciate domestic travel is not just competing with Melbourne, Sydney, Adelaide.

Ram Chhabra:Domestic travel is competing with Auckland, with Bali, with Fiji, the Pacific Islands. So a passenger living in Sydney has a choice. Do I go Sydney-Brisbane and spend a few nights there? But he might get a— he or she might get a cheaper cost going to Bali. So domestic travel is definitely competing with international travel. And I think that's a really good point. You know, Pacific travel, Bali, so it makes it a bit tougher as well.

Robyn Ironside:So is Australia too costly as a destination, Cinzia?

Cinzia Burnes:Not if you've been to the UK or Europe recently, I don't think so. The prices there are ridiculous. Look, I think certainly the aviation in the domestic arena is, you know, flights are expensive, and yes, there is definitely a point it's cheaper to go to Bali than go to Cairns, But I think people that go to Bali may be different from the people that want to go to Cairns. I mean, domestic is still one of the largest parts of what we sell in leisure. And, you know, you can't find Uluru or Kakadu or the Kimberley in these sort of cheap fly-and-flop destinations. So I think it certainly continues to attract a lot of people who haven't visited their backyard and want a certain type of experience. And Intrepid, you know, for example—

James Kavanagh:Yeah.

Cinzia Burnes:runs a lot of very specialised tours around Australia, and that does have an audience that is happy to pay more for those experiences they couldn't find anywhere else.

Robyn Ironside:So what is the balance for Flight Centre? Is it sort of fairly well balanced between domestic and international, or do you sell far more international?

James Kavanagh:Well, if I look at volume, 50% of our volume of transactions are actually here in Australia. But value, there's a vast difference because in terms of spend, international collectively are— the difference between them is nearly 6x difference in price. And that's because typically when Australians are traveling, they're traveling far. They like to travel far. When they travel far, they go for longer duration. So as a result, they will spend a lot more. So the average basket size can be an anything between like $1,000 for a domestic holiday to $6,000 for an international. So when you put that relativity, it's not binary of one over the other. It's a lot of situational, and sometimes there'll be a big international trip, but the next time it might be a local holiday. So it really depends on the need state, who they're traveling with, family, multi-generational, etc. But it's still a very strong part of what we sell, being 50% of our transactions.

Robyn Ironside:We've certainly heard a lot about cost and the costs facing the airline and travel industry today. Is AI a way that we can help bring those costs down? Who wants to tackle that one?

Cinzia Burnes:I don't think so.

Robyn Ironside:You don't?

Ram Chhabra:No.

Robyn Ironside:You don't think AI will help reduce costs?

Cinzia Burnes:There is costs and obviously there is fares. And as it's been mentioned, Flights are going full. So to me, it's just a simple supply and demand. If you've got the demand, you increase the fare, same as a hotel. They've got demand, they increase the room rate. But I'm just not sure. I mean, certainly, AI, in terms of automation, can help a lot behind the scenes, but— and costs that are not necessarily linked to fuel and taxes, et cetera.

Ram Chhabra:So—

Cinzia Burnes:know, office-based roles, etc., etc. But I don't see how AI could reduce the cost that the previous panels have been talking about.

Robyn Ironside:James?

James Kavanagh:Um, look, I think it really depends on— Cinzia touched on supply-demand will play a major role in it. The businesses that embrace AI is going to determine what their cost base looks like, and many businesses are looking at AI from a productivity an efficiency standpoint. How we're looking at it within the Flight Centre Group is we take a 70-20-10 model to go, well, yes, we want to be a more efficient business, more productive, but we're also in this viewpoint of AI is so pervasive and it's going to be in every industry touching everyone's life in the future. And if you look at the way the industry was from, say, 30 years ago when I started in travel, I remember at the time that the internet was just starting then. And now today it's taken about 6, you know, 30 years later, there's about a 65% penetration booking rate of bookings that are online. Now that in itself has brought efficiencies in travel and has brought some level of cost down. It's made travel more accessible. It's brought so many new entrants. So I think if we look to the next 5 years and then we imagine, well, what, like if it's taken 30 years to get to 70%, What is it going to look like in the next 5 years at the pace of change? I think that's genuinely quite exciting for the industry and, um, and I think no business can just sit on their laurels in the traditional way. So I talked about that 70% is about real productivity. 20% for us is reimagining work. And that is, you know, it's uncomfortable. Nobody knows what the outcome is going to be. Um, but we're doing a range of trials right now in different ways to actually imagine different futures for James, do you see AI as being a help or a hindrance to the travel industry?

James Thornton:Oh, that's a big question. I guess from, from my perspective, I don't get up in the morning and get really excited about AI. It clearly can help a business like Intrepid, like it can help every business on this panel and every business in this room. 40% of our code's being written by AI now, and that simply means that we can do more technology projects faster, faster, better, Faster better. and quicker, which for anyone involved in technology projects is probably a good thing because usually they cost too much money and they take too long to go and execute. So for me as the CEO, that, that's an excellent outcome. But Intrepid obsesses about human connection. My job is to get 350,000 to 400,000 people to have amazing experiences on the ground. I'm trying to get you off your phone. I want you to try the local food. I want you to meet the local people. I want you to stay in different types of accommodation. I want you to recognize that while someone might have a different religious background or race or ethnicity or gender, that in this geopolitically divided world we have way more similarities than differences. So I'm actively trying to get you off your phone when you get to destination. Clearly though, to find the destination and to have the experience, AI will hopefully play a role in that. But, you know, certainly I've just spent 3 weeks in Greece and I was trying to avoid my phone at any instance. And, you know, even to the point now we're seeing certain apps kind of limit the ability for you to use your phone on holiday. I do wonder if one day the world of Lonely Planets will return to us so we can have a more kind of analog experience when we're on our holidays. So we'll help you get there, but when you physically get there, I think you rely on companies like us to show you those amazing experiences.

James Kavanagh:Ram?

Ram Chhabra:Reduced cost, I guess, looking from 2 perspectives. I mean, from a business perspective, yes, it will increase productivity and efficiency. Will the business pass that cost saving on to the customer? Not too sure. Will they keep it in margin? Not too sure. From a passenger perspective, AI can allow a passenger to create far more interesting and colourful itineraries, which may save cost. It'll find them options that will take them maybe through different points to get to their destination, which often can be a cost saver. But Yeah, it's hard to sort of conclude how much of a cost saving it will be.

Cinzia Burnes:Yeah.

Robyn Ironside:Is it something that people want to do? Do people want to deal with an AI agent to book a trip?

James Kavanagh:We see actually a lot— it's interesting. We look at a lot of research points, as you can imagine, and the data shows today that if you go back to, say, within the last 2 years, how are customers— if you think about the customer journey, how somebody is inspired, looking for inspiration, dreaming about a holiday, right the way back to recollecting on the experience they've had. Well, imagine that customer journey, and then you wake up and a slice of it has been taken away overnight, and that's your value chain disruption. But what's been really interesting was you can see that search engines are now actually— have dropped from about 50% as a starting point for people looking for inspiration down to below 40%, and GenAI platforms are now moving into that space. So that's starting to disrupt the inspiration phase where you can see that consumers are getting confidence with it. Now, if you go through to where does the friction point come is, will somebody hand over their credit card and will they pay and use this? And you can see ChatGPT, OpenAI said, we are pulling back from this, we're not going to go into the transaction part, whereas others are forging ahead. And if you look at Shopify and that, as soon as you see that payment safety security, it starts to build trust. So at what value points do people start to use it more and trust it more and hand over their credit card? Well, it generally starts with lower value amounts and then it builds. I'd share one interesting story, and we, we talked about this, Robyn, whereby if you think about imagining a different future, we recently ran an exercise around— well, imagine the role of the customer isn't the customer that you know it. So what does that look like? Well, imagine you're a customer, and we had a huge leadership conference on this, and the customer is now using AI to shop every one of our businesses. And as a result of that, is your business built for a huge surge in demand? Well, we ran this exercise and the outcome of it was a few things whereby we had a digital human created that contacted our stores. And they had an Aussie accent. They said, they said, stuttered, and they sounded like humans. So what did they do? They secured an appointment, they generated quotes, they negotiated a better rate, and they actually spoke to our competition as well in different ways. Now sometimes they didn't get it right. And some people in those call recordings said, is this AI? Is this AI calling me? But imagine a future whereby not the entire population, but digital savvy and digital native humans are actually getting AI agents to act on their behalf.

Ram Chhabra:Hmm.

James Kavanagh:So I think it just shifts the paradigm around what if the customer as you know them is not necessarily the customer. So it's different thinking, but it's one that we have to constantly reimagine.

Robyn Ironside:Given your very face-to-face approach in Intrepid Travel, is that something you could see your company embracing?

James Thornton:In terms of AI bots, or— yeah, I mean, Intrepid already now uses AI for some of our 24/7 live chat, and actually we get really good results from it, to be honest with you. We measure the feedback score, the human feedback score, via the AI feedback score, and we're seeing really good results. is exactly the same, and we've only had it in place for 3 months, and it's able to complete a lot of the basic inquiries very, very well for us. So I think it's going to be complementary, a bit like JK talked to earlier. The internet came along, then it became a complementary part of the tool. AI has come along. We find it very good for our sales consultants around knowledge search base when they're trying to provide information to our customers about the intricacies of a trip. So I think it will be one of the many tools that we will use. But You have to remember Intrepid, we carry, I don't know, 150,000 Australians go on Intrepid trips every year. Still 60% of them book by going to a Flight Centre or going to a HelloWorld. And we've had the internet for how long? And that the reality is because our type of product's slightly more complex. What differs a small group tour from a larger group tour? I want to speak to a person. I'm connecting it with many other travel experiences. So I think AI will be complementary, but I don't think it's going to completely disrupt and replace at this stage.

Robyn Ironside:And we've got a question from the floor about this, how it will impact the role of travel agents. Cinzia, is there a future for the travel agent?

Cinzia Burnes:Look, I started a bit earlier than James, not much earlier, but a little bit earlier than him. And at that point, travel agents were going to be dead, so were inbound tour operators. And that's about 35 years ago. So we currently run the largest DMC business in Australia, and doesn't show any sign of being replaced by AI or completely closed down. And, you know, travel agents— I actually think events like the recent one, as well as COVID was, in fact brings people back to the travel agent. Because guess what? When they shut Dubai Airport, Doha Airport, Abu Dhabi, then you're not going to call the bot. You want to call Mary that organized your trip and get her to fix You know, how you're getting back home. So certainly in our experience at the moment, and, you know, God knows what will happen in the future, but at the moment there is in fact more people that are going back to the travel agent for that sense of security, and particularly for assistance while they're away if something goes wrong.

Robyn Ironside:Ram?

Ram Chhabra:I complete 30 years in December this year in the travel industry. When I first started, I was in— I'm consolidation as well. I was told consolidation will be dead in a year. 30 years on, I'm still going. And I remember about 4 years into my industry or 5 years in, travel.com.au started. Remember that one? And they said, oh, the bricks and mortar is going to be dead, it's all going online. It's still going. So I think the industry adapts. I think travel agents will very much be there in the long term. As travel gets more complex and itineraries get more complex, the agent is needed. And I think one thing that changed a lot post-COVID, a lot of the customers who bought from online, from overseas OTAs and so on, really struggled and suffered getting refunds back. But the ones who dealt with travel agents were the ones, the first ones to get their refunds back because the agents fought for them. And so I think The role of the travel agent has actually gotten stronger post-COVID. And as the world gets more complex as well with all these wars and refund rules and non-refundable tickets and travel advisories, I think it's a case of the agent becomes even more important. And I'll give one more example. I won't name the Middle East carrier, but they recently told me that, oh, you know, we're getting more direct sales. This is during the time, the peak of the war. They're getting more ticketed sales via their online direct port than travel agents.

Cinzia Burnes:Wow.

Ram Chhabra:And they said, so, you know, agents are dead. And I said, well, hold on, are you— when the passenger's making a booking online on your direct portal, are you putting the warning up saying, warning, warning, travel advisory, you can't travel, it's not safe? Probably not. But the travel agents have a duty of care. So when a passenger calls a travel agent, the travel agent will say, look, Smart Traveller says this, says this, gotta be careful, insurance companies say this.

Robyn Ironside:Yeah.

Ram Chhabra:So that can often put the passenger off and they'll say, okay, we'll go on a non-release carrier. So I think as the world gets more complex and things change and get harder, I think the role of travel agent will become even more important. And I think travel agents will adapt AI. It'll actually work together. It'll make the agent probably more efficient, make them smarter, and probably able to offer passengers more options.

Robyn Ironside:Well, certainly coming out of COVID we did see airlines cut their commissions to travel agents, which leads me to the question on screen, what do you look for from an airline partner? Probably not one that's going to cut your commissions. But Cinzia, do you want to try that one?

Cinzia Burnes:Look, a lot of people here are surprised that I'm here because I sort of recognize myself as the landlady, not necessarily airline. But the reality is that commissions were cut around the world A lot earlier than in Australia. Now, nobody likes reduction in margins or commission, but to think that we could have been isolated from that happening ever here was a bit of an illusion, I think. So it is what it is. You know, it's like NDC. NDC, it's here to stay, so we just have to live with it. In terms of, you know, what we look for from HelloWorld, what we look for in an airline partner, the same as we look in any partner, whether it's a land partner, an airline, a cruise line, A partnership, trust, very important, transparency, and the understanding that the deal needs to be mutually beneficial because otherwise it doesn't last very long.

Robyn Ironside:James?

James Kavanagh:I think you've said it beautifully, but I think with any partnership it's got to be a win-win, and, and that's the strength of it. At the end of the day, the customer, whether they deal with us or they deal with HelloWorld or anybody, They're not thinking about a segment of their holiday. They're thinking about the entire experience, and it's our job collectively to make sure that that's incredible. So that's the entire outcome that we want. And then ultimately you want to get paid a fair remuneration for the job that you do, like any business, and that's a win-win relationship.

Ram Chhabra:Well, I'm going to use it— I'm in an interesting position because we have a consolidation business which deals with travel agents and airlines, buying tickets from the airline. And I've also got a GSA business when that means we are the airline. So I get to see both sides. And I think James Kavanagh put it perfectly. It has to be a win-win. So as a consolidator, I understand when airlines say, we're not going to pay you more money for less revenue. You know, airlines have their targets as well. So you've got to find that balance where we do work with the airline to grow their revenue and get rewarded for it.

James Thornton:Yeah.

Ram Chhabra:So I don't think it's a case of, you know, what's the best airline partner. Everyone's a valued airline partner. It's coming to an agreement with that airline to explain to them that we do add value. And I hate this word consolidation too. I think we're a distribution partner. Our role is to explain to the airline that we can distribute their product to the agency network more efficiently and more cost-effective than they can. So all we want to be is rewarded for that, that efficiency we provided them, and show them that the money they're paying us is still far better and cheaper and economically better for them than doing it themselves with 700 travel agents.

Robyn Ironside:And James, has Intrepid's relationship with airlines changed much over the last 5 or 6 years?

James Thornton:Not really for us because we have a very limited relationship with airlines directly anyway because we work so directly with the Flight Centres and HelloWorlds to distribute our products as the Intrepid brand name has become more familiar and our style of travel has been perceived to be less niche and a little bit more mainstream. We're definitely having some relationships with airlines, but it's, it's a very new thing for us. And so you're talking to the experts here. I'm certainly not the expert for it.

Robyn Ironside:Well, on the topic of airlines, I know that there has been some misgivings within the aviation industry about the new consumer protection legislation, which actually excludes travel agents from the sort of accountability, I guess, that airlines are expected to provide. Is that fair? Should travel agents be left out of that legislation?

Cinzia Burnes:Absolutely.

Ram Chhabra:Absolutely, yeah, I agree.

James Kavanagh:Absolutely.

Ram Chhabra:Absolutely, yes.

Robyn Ironside:I guess where the airlines are coming from is that sometimes passengers have the experience that it can be difficult to get their refund, And they are blaming the airline rather than the travel agent, and the airline's saying it's the travel agent.

Ram Chhabra:I'll give you an example. Would be during COVID and even one of the airlines during one of the Middle East carriers during this recent war outbreak, you know, there's 2 forms of refunds. I'm sorry to sound technical here, but for those in the airline industry know what I'm talking about, you know, there's auto refunds and there's manual RAs. And a lot of the airlines during COVID and one of the airlines during this Middle East crisis, actually switched it off for a while too. They switched off what's called auto refunds, which means the money doesn't come back to us within 2 weeks. You have to actually manually apply for the refund from the airline. Now, then it's up to the airline to decide when they pay us. It could be 2 weeks, it could be 4 weeks, it could be 6 weeks, it could be 8 weeks. And so we're not in control of that. We are just basically passing through the money. So the travel agent can't be held liable if, if the airline switched off auto refunds for whatever reason, because maybe they're expecting a huge influx of numbers coming in.

Robyn Ironside:Yeah.

Ram Chhabra:So they've switched it off. So we've raised the manual RA, we've submitted it. I am not in control of when the airline approves that refund and the money comes to me, so I can't be held liable for it. So ultimately it will come back to the airline to process that refund, and then once we get it, yes, all good agents, especially A-tier accredited agents, will pass the refund straight back to the passenger as soon as we get it.

Robyn Ironside:Is that something Flight Centre has a difficulty with getting those refunds back to the customer?

James Kavanagh:Uh, actually it's improved quite considerably, and I think we've got great airline relationships that we're actually focused on making sure that we can keep our customers happy. I think we learned a lot of lessons in the pandemic collectively, so ultimately it's about making sure that the customer gets a great experience. Australian customers are covered by Australian consumer law in terms of how they deal with us. So I think it's about these new policies and regulations that are put in. It's knowing the role that each party plays in the value chain, and then it's— and then make the conditions around that. We have it in the UK. We're in multiple countries around the world, and we can see some geographies that we're in are far more regulated, and there's a misinterpretation of what the role of the agent is in that situation. So I think it's just getting the right protection for the right space of the value chain that you own is going to be critical.

Robyn Ironside:Do we have time for one question from the floor, if anyone wants to volunteer, if there's a question anyone wants to ask? Otherwise, I have another question. This is about every year, unfortunately, we do tend to see a travel company collapse. This year it was AVG Travel, which, you know, left a lot of people out of pocket, and I just wonder what, what more can be done to protect consumers knowing that this travel agent wasn't accredited with AATIA. Is there more that can be done to promote that, Ram?

Ram Chhabra:I think there needs to be a better branding or understanding of what AATIA is, and I think that requires a bit of government intervention. You know, I think governments need to spend a bit of money to explain to the consumers what ATR is. You are protected, you know, if you're an ATR agent. There used to be a great— with this new system called AFTRA, it used to be a great line called, without a travel agent, you're on your own. And they went to, without an AFTRA agent, you're on your own. And I really think the government needs to spend some money to educate the passengers, consumers, what ATR stands for, what it means, that they are protected and covered. They can't rely— they can't expect ATR to do all the Or they've lifted themselves. It's a not-for-profit. It's not designed to make money. So I think if government can do that, they'll be protecting consumers and passengers.

Robyn Ironside:James T., does—

James Thornton:Oh, I think, I think from a customer's perspective as well, there's a responsibility. If a deal looks too good to be true, it probably is too good to be true. And so encouraging customers to take the responsibility of booking with an established agent or consolidator or tour operator.

Robyn Ironside:Thank you. And that's time up. So thank you to all our panellists. A round of applause for their wonderful insights.

James Thornton:Thank you.

Copyright policy: All transcripts on this site are the copyright of CAPA - Centre for Aviation. Our reproduction policy is as follows: you may quote up to 400 words of any transcript on the condition that you attribute the transcript to CAPA - Centre for Aviation and link to the original video page. All other use is prohibited. While we aim for 100% accuracy in the transcript, there may be some minor transcribing errors.