Travel in the age of COVID-19

Cirium CEO Jeremy Bowen and industry experts share their predictions for travel in the age of COVID-19 and address the challenges for air travel recovery.

COVID-19 has decimated travel and tourism, an industry worth US$10 trillion and with a significant ricochet into business and leisure economy.

As the world begins the journey to air travel recovery, the industry needs to consider a number of major changes and innovations over the coming months. Accessing comprehensive and reliable airline data and analytics can be a sure way to navigate through the uncertainty. To discuss this topic, Cirium’s CEO Jeremy Bowen joined a virtual panel hosted by trend forecasting agency Globetrender.

Jenny Southan, Founder & Editor of Globetrender invited guest speakers from across the industry to share their predictions for travel and hospitality recovery, including Paul Charles, CEO of travel consultancy The PC Agency, and George Morgan-Grenville, CEO of luxury tour operator Red Savannah.

The panel took place on the day Globetrender’s Travel in the Age of Covid-19 report was unveiled, and discussions addressed some important questions surrounding air travel recovery and the challenges faced – as well as what effect travel restrictions, quarantine rules and health concerns have had on the industry so far.

What are the most immediate challenges we face as an industry?

Addressing the immediate challenges that lie ahead for travel and aviation post-coronavirus, Bowen explained that the biggest hurdle is rebuilding trust:

“Passengers will want to be convinced that it is safe to be on an aircraft. There are still lots of debates on how this will happen – is it PPE, testing, enforced social distancing by removing seats and so the reconfiguration of aircraft, or a combination of everything? Either way, ensuring that the passenger is willing to travel via an airport is essential.”

In the longer term, the majority of airlines will turn their attention to winning back business travelers. Leisure travel is guaranteed to return but, with most of the world learning to manage their businesses from the comfort of their homes, it is possible that the volume of corporate travel will never be the same again, Bowen explained.

Will travelers go back to their pre-coronavirus habits, or will the fear of getting ill change people’s behavior in the coming months?

On the topic of ‘germaphobia’, Red Savannah’s George Morgan-Grenville stressed that he believes travelers will fall into two camps as travel bans come to an end: those who will continue to avoid travel in the longer term, and those who are willing to take a risk.

“I think many people will feel [by now] that the virus probably isn’t going to go away, and they’ll be willing to take the risk of traveling – though they’ll probably be sensible when they do so.”

Morgan-Grenville added that we’ll have two years of travel consolidated into one as people rebook their holidays for 2021. Despite this, however, he does not expect 2021 bookings to reach 2019 levels.

Are there any sections of society that will be less reluctant to travel?

Asked about whether certain segments of travelers won’t ‘suffer’ from germaphobia, Paul Charles observed that He predicted this audience segment will come back much earlier than the 60+ age group, who are at a higher risk from coronavirus and may find it more difficult or costly to secure travel insurance.

“The 18 to 30 age group are going to be less risk-averse, desperate to travel as soon as possible. Maybe they’ll have a bit less money to spend, of course, as they worry about employment options, but undoubtedly they’ll want to explore as soon as possible.”

How will this affect the airline industry? Can we be optimistic about what lies ahead?

Turning specifically to the challenges airlines are facing, Bowen stressed the crucial importance of liquidity for carriers, branding the situation as “survival of the richest.”

“At the start of the crisis airlines were burning through a phenomenal amount of cash per day. They have slashed their schedules, they’ve furloughed staff and yet with all the cost saving measure put in place, they are still hemorrhaging cash.”

On a positive note about air travel recovery, the airline industry is particularly resilient, as Bowen added. While there may be further consolidation, the industry as a whole will bounce back and innovate in response – airlines will take the opportunity to experiment.

Will the luxury travel market bounce back before other sectors?

George Morgan-Grenville explained Red Savannah has seen a steady increase in enquiries from the luxury sector in recent months, but the impact of COVID-19 on businesses may dampen the demand from travelers.

“I think the luxury sector will probably come back first, but this will ultimately depend on how many businesses [are] damaged by this virus… I think there will be many people who, until they can see some visibility as to where their business is going to go… [they] are just going to be a little bit cautious to start with.”

What new trends can we observe in aviation?

Acknowledging that with borders closing and re-opening every day, Bowen explained that can change minute by minute – but added that businesses across the wider travel industry are increasingly relying on aviation data and analytics to make strategic decisions.

“We’ve had lots of enquiries [at Cirium] that present new use cases for utilizing our data… Hotel chains want to know who is going to be flying to their destinations, or how to prioritize which ones get opened, so we were helping them to understand how their schedules are starting to be resurrected.”

Cargo and freight companies, which have been utilizing the cargo hold on commercial flights pre-coronavirus, are also keen to tap into to understand what routes are still being operated, Bowen added.

Charles commented on some of Cirium’s data, stating that around 55% of the world’s commercial jet fleet were still grounded and that it will take time for aircraft to return to the skies.

“People won’t be able to get to certain places, for some time anyway, because until the airlines bring back their aircraft and start flying again… there won’t be the frequency to get to those destinations.”

How will route networks and airline ticket pricing develop for the remainder of 2020 and early 2021?

Research has shown that Chinese carriers had to reduce ticket prices by 40% to stimulate consumer demand in their domestic market. Bowen concluded that when aviation does return, we can expect great deals to get people back in the air.

“Airlines will wait to see who actually flies. There is always a gap between what you schedule, what you book, and what is actually flown… A lot of airlines will trial their routes, and will look to see what the demand is, and then they will either ramp up very quickly or cut those loss-making routes.”

However, closing the session, Bowen did concede that in the longer term, if middle seats disappear or aircraft are required to remain at the airport longer for deep cleaning, these factors are likely to have an impact on air fares.

For more insight from Cirium and other industry experts, download a copy of Globetrender’s “Travel in the Age of Covid-19” report at globetrender.com/downloads.

Or view our event listings of on-demand and upcoming webinars to hear more industry discussions.


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