“Most businesses rely on human contact, and more importantly, most businesses face competition…” this is a quote from David Radcliffe, chief executive of leading corporate travel agents, Hogg Robinson Group, from CNBC Business News.
While it’s easy to think that the Aviation industry is being garroted by the current economic climate, actually many are taking a longer-term view and investing in the Premium Class Traveler. Although the International Air Transport Association reports that passenger numbers are down 16% in premium cabins, the big three networks, Lufthansa, BA, and Air France, actually have strong balance sheets and are investing in top-end travel, for when the recession wind turns.
It’s true that most airlines have lowered their prices in the last nine months, hoping to sustain customers’ interest at the top and bottom, but it’s an approach to the market not shared by everyone. Lufthansa, for instance, has been spending lavishly on lounges and onboard products, and is due to relaunch its first-class cabin next year with the arrival of its A380s. “We decided a couple of years ago to follow a premium strategy approach, says Dr Karsten Benz, vice-president for sales and services in Europe. “This has been successful and we can’t see any reason to change it.” BA and Emirates are following a similar approach. They understand there is a strong premium market out there, and that CEO’s don’t want, or need to fly budget buckets like Ryanair.
So, it’s hold-your-breath-time and wait. “There will be recovery, there will be lots of travel needs to be fulfilled,” says Benz. “We see this crisis as an opportunity to integrate our partners and be ready for upswing.” For David Radcliffe, he saw executives change companies within their sector during the second Gulf War, one of the reasons being that their new position allowed for being able to travel “decently.”
That’s more than just a perk, it’s an affirmation that arriving and being ready to do business isn’t the same thing as just arriving.
- Virgin Atlantic to make loss this year (guardian.co.uk)
- Airlines face deep trouble, consolidation (dailyfinance.com)