FlightPlan C-Suite Week | Flightaware Launches Aviator | Morgan Stanley Corporate Travel Survey | Boeing Releases Sustainability Report | Other News

AVIATION RECOVERY IMPACTED BY LACK OF GLOBAL SYNCHRONISATION, INDUSTRY LEADERS STATE DURING RECORD-BREAKING VIRTUAL BROADCAST

FlightPlan: C-Suite Week, hosted by Inmarsat and APEX, aired a series of ‘no holds barred’ discussions with the CEOs of Qatar Airways, AirAsia, United Airlines, TAP Air Portugal and IATA

Exclusive interviews were viewed by 6,500 viewers from 80 countries around the world, with thousands more expected to watch the videos on demand

26 JULY 2021: The biggest names in global aviation came together at FlightPlan: C-Suite Week for a series of exclusive ‘no holds barred’ interviews with leading BBC World News reporter Aaron Heslehurst, touching on the most immediate and pressing issues facing air travel in 2021.

The latest edition in the popular FlightPlan online broadcast, developed by Inmarsat Aviation and APEX (Airline Passenger Experience Association), attracted a record-breaking audience of 6,500 from 80 countries worldwide last week, with thousands more expected to watch the videos on demand.

FlightPlan: C-Suite Week aired interviews on five consecutive days with:

• Akbar Al Baker, Group CEO, Qatar Airways.
• Tony Fernandes, CEO and Founder, AirAsia Group.
• Scott Kirby, CEO, United Airlines and APEX/IFSA Board of Governors Chair.
• Christine Ourmières-Widener, CEO, TAP Air Portugal.
• Willie Walsh, Director General, IATA (and former CEO of IAG).

Several pertinent topics were debated during the daily ‘power hour’ broadcasts, including leadership lessons from the industry’s biggest ever crisis, how airline recovery has been stilted by a lack of global synchronization, and the importance of addressing sustainability challenges. The interviews also explored the ability of digitalization to accelerate profitable growth for airlines and meet evolving passenger needs.

Summarizing the event, Philip Balaam, President of Inmarsat Aviation, said: “FlightPlan was launched by Inmarsat and APEX during the very onset of the global pandemic, bringing the global aviation industry together for much needed debates, discussions and direction at a time of great uncertainty.

“The response has been phenomenal, with a combined audience of approximately 17,000 for the first three editions, reinforcing its position as the industry’s biggest virtual broadcast. FlightPlan: C-Suite Week delivered insight into the difficult decisions faced by leaders over the past 18 months. It also uncovered many impressive future-facing initiatives underway – from sustainability to passenger experience – that will not only secure a strong recovery for airlines, but also ensure a bright future for the industry at large.”

Never waste a crisis

FlightPlan’s C-Suite line-up shared valuable leadership lessons from steering their aviation businesses through the COVID-19 travel crisis over the past 18 months. Al Baker shared his biggest learning for leaders: “there should always be a plan B and even sometimes a plan C of how to conduct your business in dire circumstances like the pandemic.”

For Kirby, a major learning has been the critical importance of customer experience. “Many of us in aviation have a new focus and commitment to change the customer experience. To use what we went through – the worst crisis in history – as a transformative moment to really make it better for customers,” he said. Kirby’s ambition is to turn flying into something passengers truly enjoy as part of the journey, “so that their vacation starts the moment they leave the house, instead of once they land at the other side”.

Unilateralism has stilted recovery

Across the board, the interviewees agreed that industry recovery has been stilted by unilateralism and a lack of global synchronization. For Fernandes, co-ordination between different governments “has been a failure… because every country has their own vaccine rules and entry requirements”. Lamenting the lack of standardised policies, he called for closer co-ordination between airlines and airports, noting: “we’re symbiotic; we need each other”.

Walsh echoed the challenges of a siloed international approach: “You would have expected the EU to have corralled everybody together and say, look, ‘we’ve got to demonstrate to everybody now that we are in this together’. That’s probably been the most disappointing thing for me. If we’ve struggled to see a political and a coordinated political response from the EU, I think we’ve no hope of expecting to see a coordinated political response globally.”

Sustainability in aviation

With climate change rapidly rising up the consumer, corporate and policy agenda, sustainability was highlighted as an urgent priority for the airline industry to ensure its right to operate in the future. As OurmieÌres-Widener told viewers: “Our contribution to the future of the climate is key.”

Walsh backed further political focus on environmental performance, noting: “The equipment that we have on aircraft today is so advanced and yet we’re still operating the way we were back in the 1960s. It’s a scandal on environmental grounds and is making our operations so much more inefficient than they could be.” He speculated, “Why isn’t it being done? Because there’s a lack of political will to address the issue.”

Kirby agreed that policies are needed to drive forward ambitious targets, but that “we have to be real about the art of the doable,” noting that Net Zero by 2035 would come at the expense of reliable power supplies. He shared insight on United’s efforts to invest in Boom aircraft that run on sustainable fuel – part of the airline’s commitment to reach Net Zero without carbon offsetting.

Qatar Airways is also underway with its sustainability drive, according to Al Baker, who said: “We are prepared to look after our environment, and this is why we are continuously investing in aeroplanes that are more fuel-efficient.” 

Readiness for digital transformation

OurmieÌres-Widener mused that while the crisis brought many challenges to the industry, it has also confirmed several trends – one being the huge opportunity for airlines that embrace digitiation. She said that the “full digital experience” is no longer just a buzzword, but a reality that airlines need to offer.

Digitization is well underway for AirAsia, too, with data sitting at the heart of Fernandes’ vision to make the brand more than just an airline. “We have much better customer data than Uber,” from credit card to loyalty information, Fernandes explained. His ambition is to make AirAsia “a travel company like Expedia,” encompassing services from currency to grocery delivery. “We’re trying to turn the AirAsia customer on the plane into a customer on the ground, keeping them with us before and after their flight,” he said.

To watch all interviews on demand, visit: flightplan.wavecast.io.

FLIGHTAWARE

FlightAware, the largest global provider of flight information and actionable aviation intelligence, announced the launch of Aviator, the ultimate flight tracking suite for piston airplane pilots and operators.

FlightAware’s Aviator is an inexpensive subscription-based software, accessible via the web and iOS. Any subscriber can register multiple aircraft, including rentals, and unlock indispensable features like Ready To Taxi™, Premium Weather and Map Layers, Surface Visualizations, FBO Scheduling, and ETAs automatically updated via FlightAware’s powerful machine predictive technology, Foresight™.

“Aviator was created by FlightAware pilots to share advanced flight tracking features with other piston airplane pilots. Over the years we’ve gone from flight tracking to becoming the central data hub for both the business and commercial aviation industries. With Aviator, we’re bringing a product with robust tools and processes developed for the most sophisticated flight departments and commercial airlines, right to the GA pilot.” said Daniel Baker, FlightAware CEO.

With Aviator family, friends, and FBOs can receive alerts from preflight and taxi out, through landing and taxi in.

Communications are coordinated as stakeholders stay informed. From surface visualizations displaying taxiing planes and surface movements to comprehensive airborne flight tracks, Aviator also provides monthly history reports for pilots and operators to review critical flight details.

MORGAN STANLEY

Airlines: Corporate Travel Survey 2H2021: US is leading the recovery

High number of Covid cases and slow lifting of travel bans have postponed the recovery of corporate travel budgets to post 2022. The shift of travel volume to virtual has stabilized at 27% by 2022 and is expected to be 19% by 2023. US travel is benefiting from a quicker corporate recovery vs EU and Asia.

We conducted an online survey of ~140 corporate travel managers between June 30-July 12, who represent over US$8B of typical annual travel spend. Around 67% are headquartered in the US, 19% in Europe, and 14% in Asia/Other, and their travel budgets are allocated relatively similarly. This survey is the fourth wave since the Covid pandemic started a stabilization, which we find interesting to track changes in trends as we return to normal.

Travel budgets recovery has slowed down, with the US leading the recovery. Travel budgets are expected to be down an average of 39.2% vs 2019 in 2H21 compared to the 57.3% drop seen in the 1H21. The pace of recovery will increase in 2022 with budgets expected to be down only 17.5% on average, which is 2pp worse than our previous survey in March. The US will lead the recovery as 17% of US based respondents replied that their 2H21 travel budgets would be increasing vs 2019, compared to 10% of Europeans and 0% of Asian/Other responders. In addition, while 62% of European responders expected cuts of greater than 50%, only 45% of US counterparts expected the same.

Passenger volumes continue to deteriorate, though expectations are for higher fare increases. Similar to travel budgets, our latest data suggests 2022 volumes vs 2019 will be down 21.1%, a 2.7pp decrease vs March. Once again Europe will be the laggard with 57% expecting a decline of 30-50% compared to just 25% of US respondents expecting the same. Expectations of air fares have improved, with 2.8% increases in 2022 (up 80bps vs March).

The shift to virtual meetings trend seems to be stabilizing. Despite some deterioration in corporate travel expectations for 2021/2022, the shift to virtual meetings in 2022 remains at 27% level, with 2023 expected to be 19%, on average.

Time and cost cited as key issues for switch to virtual, with environmental concerns higher in Europe. More efficient use of employee time and cost reductions were cited by 74% and 72% of respondents, respectively, as at least a top 3 reason for replacing travel with virtual options. Perhaps unsurprisingly, European companies considered environmental concerns as the most important reason to replace corporate travel. 25% of Europe based travel managers cited this as their number 1 reason compared to just 5% of US counterparts.

Conclusions for Europe: We think US based respondents’ more positive outlook for travel could be an indication of a faster recovery once restrictions ease. Nonetheless, we still do not anticipate corporate air travel in Europe to recover before 2023/2024, and higher environmental concerns on travel support our thesis. All in all, weaker demand and 27% convergence of travel into virtual events should negatively affect legacy carriers (Lufthansa, IAG and Air France-KLM, in that order) more than low cost carriers (easyJet, Ryanair and Wizz). We continue to prefer Ryanair and easyjet (OW), over Lufthansa and AF-KLM.

Conclusions for US Airlines: From a US perspective, it is encouraging to see the results lead the rest of the world given the higher pace of vaccinations and the growing momentum toward return to the office, which will likely lead corporate travel. We note that most airlines have already seen a notable pickup in corporate travel from -80% vs. 2019 in April to -60% in May and expected to be -40-45% in September.

Furtherrmore, the Airlines expect the momentum to continue to pick up in 3Q/4Q and their internal surveys show that permanent substitution of corporate travel will be as little as 5% (in DAL’s survey down from 8% a quarter ago) to zero (for UAL), vs. our ~20-25%. Perhaps all this tells us is that there is still significant uncertainty out there on how much the corporate tide will rise as we re-open and whether that will stop 20%, 10% or 0% below 2019 levels or even exceed 2019 levels. What is clear to us is that the initial rising tide (returning to 70-80% of normal corporate) is nowhere close to being priced into the US Airline stocks today (esp. Legacies like DAL and UAL) and none of this debate really impacts the investment decision on the LCC/ULCC stocks (JBLU, ALK, ALGT, ULCC, LUV) that have limited exposure to corporate. As a result, we continue to remain bullish on the US Airline stocks. We will closely watch the progression of the COVID variant but if we do not see incremental lockdowns or steps backward by Labor Day (Sept 7), we expect corporate travel to recover quickly after that.

“The U.S. will not lift international travel restrictions at this time due to the Covid-19 Delta variant. The U.S. announced earlier this week that it will not lift any existing travel restrictions “at this point” due to concerns over the highly transmissible Covid-19 Delta variant and the rising number of U.S. coronavirus cases. According to a White House official, cases of Covid-19 are rising within the U.S., particularly among those who are unvaccinated and appear “likely to continue to increase in the weeks ahead.” This comes a week after the Biden Administration said U.S. borders with Canada and Mexico will remain closed to non-essential travel until at least August 21st, despite Canada announcing it will reopen its borders to fully vaccinated Americans beginning on August 9th. In early June, the Biden Administration formed expert working groups with Canada, Mexico, the European Union and the U.K. to determine how to best reopen international borders safely; however, the White House official stated that any decision to lift restrictions “has to be a sustainable decision” going forward. Although international travel restrictions remain in place for now, many U.S. airlines stated that the Delta variant has not had much of an impact on domestic leisure bookings. During an earnings conference call, UAL’s management said the company hadn’t seen “any impact at all on bookings” due to the Covid-19 Delta variant, and ALK’s management noted that they have seen “no slowing signs of demand,” but that they are continuing to watch trends carefully.”

BOEING

Boeing released its first Sustainability Report. In the report, the company shares its vision for the future of sustainable aerospace, establishes broad sustainability goals and highlights environmental, social and governance (ESG) progress in alignment with global sustainability standards.

“In September 2020, amidst a global pandemic, Boeing formed a Sustainability organization dedicated to advancing our ESG efforts across the enterprise. As we continue on this journey, we are pleased to publish our first comprehensive report, focused on stakeholder responsiveness and data transparency,” said Boeing Chief Sustainability Officer Chris Raymond. “We know there’s still work to do and are committed to communicating our progress and holding ourselves accountable to ensure the aerospace industry is safe and sustainable for generations to come.”

Boeing’s sustainability efforts are organized around four key pillars: people, products and services, operations and communities. In 2020, highlights across these four pillars included:

Establishing six broad new sustainability goals in alignment with our key sustainability priorities and stakeholder interests.

Defining the company’s vision for the future of sustainable aerospace through fleet renewal, network operational efficiency, renewable energy and advanced technology.

Committing to deliver commercial airplanes capable of flying on 100% sustainable fuels by 2030.

Partnering with Etihad Airways on the 2020 ecoDemonstrator program, which tested sustainable technologies on one of the airline’s new 787-10 Dreamliners.

Implementing digital engineering tools on the T-7A Red Hawk program, achieving a 75% increase in first-time engineering quality and an 80% reduction in assembly hours.

Advancing flight tests for Cora, an all-electric, self-flying air taxi developed by Boeing and Kitty Hawk joint venture Wisk.

Responding to COVID-19 by executing airlift missions to transport supplies, providing community vaccination sites and minimizing air travel health risks through the Confident Travel Initiative.

Establishing a 20-member Racial Equity Task Force to represent diverse viewpoints and amplify all voices at Boeing.

Setting 2030 environmental performance goals to reduce emissions, waste, water use and energy consumption.

Achieving net-zero carbon emissions at work sites, while reducing energy consumption by 12%, water use by 23%, solid waste by 44% and hazardous waste by 34%.

Attaining the ENERGY STAR Partner of the Year Award for Sustained Excellence every year since 2010.

Contributing $234 million in community giving, working with 13,400 community partners and volunteering 250,000 hours.

United Aviate Academy has selected Boeing to provide a comprehensive suite of training tools, materials and digital solutions to develop and provide early career training to United Airlines’ next generation of pilots. The companies commemorated the five-year training agreement with a ceremonial signing event at EAA AirVenture.

The comprehensive training package of courseware and multimedia materials spans Boeing’s portfolio of service offerings, including its Jeppesen and ForeFlight solutions, and provides United Aviate Academy with the tools to help cadets master key concepts and information needed to confidently and safely pilot aircraft.

“We are pleased to extend our long-term partnership with Boeing to help train the next generation of United pilots,” said Bryan Quigley, United’s senior vice president of flight operations. “Boeing’s unique suite of tools and materials will help provide effective training for Aviate pilots who are working to meet future air travel demands and uphold United’s high standards of safety and excellence.”

The agreement includes:

• Initial cadet assessment materials with accompanying online courses and e-books, supporting higher program completion rates through analytics of data-driven assessments
• Jeppesen Academy courseware, textbooks and digital learning materials for private, instrument, commercial, multiengine and instructor training
• The ForeFlight Mobile integrated flight app for pilots equipped with Jeppesen NavData®, electronic charts and Airway Manuals, a one-stop shop for flight tasks like routing flights, planning and filing flight plans, managing electronic charts and maps, and gathering destination and weather information
• Pilot supplies including Bose headsets, computers, student flight bags, logbooks and more
• GPS NavData for the United Aviate Academy fleet

“We are fully committed to providing United Aviate Academy—and all of our customers—with tailored, high-quality training solutions that enhance safety and meet the learning and development needs of pilots from all backgrounds,” said Chris Broom, vice president of Training Solutions, Boeing Global Services. “By leveraging our broad portfolio of solutions, we offer customers tremendous value in delivering efficient, effective training throughout the pilot training life cycle.”

Following the agreement signing, Boeing further demonstrated its support for the program and its commitment to diversity by presenting Delia Nina Nava with a scholarship to United Aviate Academy to join a future pilot training class. Nava is a Hispanic woman from Houston with a passion for aviation and aspirations of becoming an airline pilot. She is a graduate of Ross Shaw Sterling Aviation High School and a student at the University of Houston.

Boeing produced their first sustainability report this week and you can read it here: Boeing: 2021 Sustainability Report Interestingly, they want to deliver commercial planes flying on sustainable fuels by 2030. Here is another bit of data on the report: Boeing’s 1st Sustainability Report: Here’s What You Need To Know – Simple Flying

OTHER NEWS

• A lot of folks have quotes but this one is really significant and important. Steve Jobs, a person we have forever respected, had a remark we think makes a lot of sense: “You have to work hard to get your thinking clean to make it simple. But it is worth it in the end because once you get there, you can move mountains!” (Editor’s Note: Also, we should probably mention that Robin Williams said something that means a lot to us as well: “Being a famous print journalist is like being the best-dressed woman on the radio.”)
• If Boeing regressions have you wondering, you need to read this story because there are a number of downward changes that might be a clue to what is going on and what might happen! Boeing ($BA) News: Talent Loss to Amazon, SpaceX Hurts Turnaround Prospects – Bloomberg