President of AirInsight Group and Michel Merluzeau, who heads AIR (AirInsight Research) discussed the future and lasting impacts from the Pandemic and the nature of changes to the industry we might see. The focus was on changes – permanency vs temporary – and what we can expect over the next few years. This article summarizes their “fireside chat” conversation.
Merluzeau is immediately concerned by the current situation: “the world has been affected by this once in a generation event. There are plenty of issues that have surfaced and even violently emerged” but remains positive about the adaptability of society and business in general with ” the new tools to compensate for business travel in an environment in which negotiations are not necessarily discussed in person. As we’ve discussed many times, Ernie, the question is whether this is going to be here stay, or return to normality in the next 2-3 years. That is the over-hanging question and is the Damocles sword for airlines.”
Arvai is more constrained about the evolution of the recovery: ” we will see some changes that will be sustained, including a change in the ratio of leisure to business traffic. I see companies being more comfortable with employees working from home, leading to changes in demographics and where employees live, and we also will see corporations working quite effectively internally and with customer with tools like Zoom that could have a long-term impact on the demand for business travel“. Generally, Arvai and Merluzeau agree that the impact on business travel is still a bit of a moving target with Arvai suggesting that ” whether that is a 5%, or 10%, or 25% impact will have a huge impact down the road for airlines, so that will be a key element to watch, given the different levels of yields for business and leisure travel and the impact that mix has on airline margins and profitability.“
Ernie Arvai, President of AirInsight Group and Michel Merluzeau, who heads AIR (AirInsight Research) discussed the longer-term impacts of the Pandemic and the nature of changes to the industry we might see. The focus was on changes – permanency vs temporary – and what we can expect over the next few years. This article summarizes their “fireside chat” conversation.
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