Climate change and Coronavirus loom for business travel
Business Travel Show 2020
Although it was business as usual at The Business Travel Show co-located with Travel Technology Europe at Kensington Olympia in London this week, day two and the vibe was a little subdued compared to last year.
Many airlines made their usual appearance on the show floor and tech companies like Rydoo and SABS were in abundance, but overriding issues like Coronavirus and climate change are starting to impact. As the show progressed, outside the venue, news was filtering out of a nosedive in airlines’ profits and share prices due to weakening global demand due to these uncontrollable external events. No wonder then that companies that deal in risk and insurance like Riskline were making their presence felt.
Doing a round of major airlines revealed a brave face on the shifting sands of passenger demand. As one airline source told me, airlines take the brunt of all kinds of external factors, from freak weather to financial market fluctuations.
Then there is the climate change backlash forcing airlines to focus on their green credentials and demonstrate activities to support them. Extinction Rebellion and other similar groups, are now permanently camped right on the doorstep of the airline industry. This has been reinforced with the announcement of a ruling by the Court of Appeal against a third runway at Heathrow on the basis that it flies contrary to the UK government climate change pledge in the Paris Agreement.
In fighting talk Heathrow airport said, ‘we are ready to work with the government to fix the issue that the court has raised. Heathrow has taken a lead in getting the UK aviation sector to commit to a plan to get to Net Zero emissions by 2050, in line with the Paris Accord.’
Singapore Airlines business class suites
Many airlines in Asia Pacific have already weathered the storms of the initial impact of the coronavirus. Singapore Airlines for example has reduced destinations to China from weak demand. However where one regional marker falters, another beckons. At the show SIA was promoting its four times daily London-Singapore service.
Cathay Pacific said it had enough cash reserves to weather the storm and is taking a proactive strategy with handouts on measures to deal with Coronavirus. Cathay’s aim is to reassure passengers and buyers of corporate travel.
Lufthansa is offering to rebook passengers for free who have been affected by suspensions of service to mainland China and more recently to northern Italy. Other airlines are taking similar steps.
Qantas has battled bushfire outcomes resulting in a diminished tourist market. However the crisis has peaked and the bushfires receded so a fresh impetus is being driven for inbound tourism. Qantas is also setting its compass towards Project Sunrise, well documented last year with nonstop flights criss-crossing the globe in three trial flights. A decision is expected later this year whether the trials will be given the green light to rollout across the fleet.
Here in the UK, Flybe remains upbeat this year as it looks forward to a rebrand to Virgin Connect. The airline is naturally defensive over the measures implemented by the government to tide it over its financial crisis last year, with a temporary deferment of Air Passenger Duty payments. With regional UK air connectivity as an inarguable imperative, its future in serving underserved towns and communities around the UK looks assured.
A recent poll* of European travel buyers hints at an industry ‘split in two’ when it comes to the environment. It showed that 29percent of buyers think air miles should be banned for encouraging unnecessary air travel, three quarters of buyers welcome the UK government’s Net Zero legislation but 60percent of buyers admit they do not have an ethical travel programme; and 83percent do not offset aviation-related carbon emissions.
Sustainability is likely to heat up in the coming months with more pressure to come from the travelling public on travel companies, who will likely be forced into demonstrating active initiatives.
Next year the Business Travel Show is scheduled to take place at eXcel. This is a sign of a growth market but at what cost? Buyers and industry alike will be put under continuing pressure both economically and in social responsibility and sustainability.
*Survey polled 114 European Travel Buyers. More information at businessandindustry.co.uk