International market: Europe will ban "climate neutral" marketing; France plans to introduce a minimum price for European flights
News from Civil Aviation Resources Network on September 24, 2023: What are the latest developments in the international aviation market this week (9.16-9.22)? The Civil Aviation Resource Network takes you through the relevant news of the past week, allowing you to have a clear overview of important information.
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Market dynamics
Report: Global business travel demand and costs are higher than pre-epidemic levels
According to the latest report from the FCM Consulting Department, as the demand for business travel continues to increase, flight and accommodation costs have also increased, and significant price increases have occurred in the UK and Europe. FCM's second quarter 2023 trend report released on September 21 pointed out that the demand and cost of global business travel are now higher than pre-epidemic levels.
According to the report, compared with the same period in 2019, economy class ticket prices in Europe increased by 17% and business class ticket prices by 15%. The largest increases globally were in Latin America, where economy class fares increased by 25%, and business class fares in the Middle East rose by 29%. The global average fare for both classes increased by 18%.
Collinson: British travelers spend up to £350 a year in airport departures areas
New research from airport lounge operator Collinson shows that British passengers spend around £300-350 a year in airport departure areas. Collinson's research found that 97% of Britons spend money at the airport before traveling, with the average departures area visit spending around £50.
For a frequent flyer, someone who takes 6 to 7 flights a year, this means spending around £300-350 over the course of a year. When it comes to food and drink purchases, airports have the highest spend. More than half of respondents (56%) spend the most on this, while 38% spend the most on duty-free items such as perfume and aftershave.
Global tourism investment shows signs of recovery, but remains well below 2019
According to reports from the United Nations World Tourism Organization and fDiIntelligence, following the pause during the epidemic, global companies have begun investing in tourism projects again, but there is still a long way to go to catch up with 2019 levels.
Global tourism investment increased in 2022 for the first time since 2020: the number of new capital projects increased by 23% to 352. But that's a far cry from 2019's 753 new projects. Not only has the total number of projects declined compared to 2019, but the project value has also declined. The projects are valued at $10.2 billion in 2022, down from $60.9 billion in 2019. Tourism investment projects will create more than 36,000 jobs in 2022, up from 30,000 in 2021. However, this metric falls far short of the more than 120,000 jobs created in 2019.
Report: Latin America’s mobile-dominated market means higher online penetration
Latin America is a region that is clearly dominated by mobile phones, with mobile phone penetration expected to reach 74% in 2025. For many travelers, smartphones are the primary, or even only, device for accessing the Internet. In Brazil, for example, smartphone penetration is expected to rise to 88% in 2025, the highest among the five core country markets included in Phocuswright's travel research report, Latin America Travel Market Report 2022-2026.
Mobile users in Brazil and Mexico are expected to account for half of all mobile users in Latin America. As a result, overall mobile penetration of supplier-direct online travel bookings is expected to almost double from 2022 to 2026. Meanwhile, mobile revenue is expected to surge. Latin American airlines will account for two-thirds of total mobile bookings in 2022. In 2022, the Latin American travel market experienced its second year of strong double-digit growth, with total bookings increasing by 37% to $48.2 billion.
Policy management
The UK government will increase visa fees from October
The UK government will increase visa fees for international visitors by 15% to 20% from October to help pay for rising public sector wages. From 4 October, the fee for a visa of less than six months will increase by £15 to £115, while the price of a student visa will increase by £127 to £490.
The UK will also begin implementing a new Electronic Travel Authorization (ETA) system for visitors from visa-exempt countries, which will be implemented in phases from October and will initially only apply to visitors from Qatar. ETA's initial fee per passenger is £10.
Europe is about to ban “climate neutral” marketing, affecting “greenwashing” of travel brands
The European Union plans to ban the use of marketing terms such as "climate neutrality" by 2026 because these terms cannot be verified through scientific certification. Phrases such as "carbon neutral," "environmentally friendly" and "eco" will require companies to verify the merits of their products through third-party certification bodies.
Travel companies may be one of the industries affected by the upcoming ban. For example, airlines may need to change their booking interfaces to offer “climate neutral” flights by purchasing carbon offsets to support projects that lack credibility.
France to push for lowest prices on European flights
French Transport Minister Clement Beaune said that France will seek support from other EU countries in implementing minimum fares for European flights to reduce the aviation industry's impact on climate change. If approved, the move would hit airlines offering ultra-low fares.
However, it may struggle to gain sufficient support among EU countries, including island nations that rely on air transport and regions with tourism industries supported by low-cost flights. Beaune said in written comments that France aimed to "open a debate on fair social and environmental prices for air tickets".
aviation airport
Travel boom fails to boost profits for U.S. budget airlines
The tourism boom has brought huge profits to U.S. airlines, but low-cost airlines such as Frontier Airlines and Spirit Airlines have struggled to achieve sustainable profits. This has led some of these companies to consider offering high-value services, including first-class seats, VIP lounges and branded food, even as they expect fares to remain the main driver of bookings.
Ultra-low-cost airlines provide a low-cost service experience and charge higher fees for ancillary services. They are considered to be the biggest winners after the epidemic, but continued operational restrictions have exacerbated their cost pressures and there is an urgent need to find new high-margin revenue sources.
Ryanair cuts routes from Dublin base
Ryanair said on September 21 that it would cut 17 routes from its winter flight program at its base airport in Dublin, allocating 19 new Boeing 737 MAX aircraft to other European airports that offer incentives to fly quieter, less carbon dioxide Aircraft with lower emissions.
Ryanair executive Eddie Wilson said Ryanair plans to move some of its new MAX aircraft, which Boeing says will burn 15-20% less fuel and make 40% less noise, to airports in Spain and Italy, as well as Luton Airport in the UK. . Ryanair cited increases in Dublin Airport Authority passenger charges and a failure to provide "meaningful" environmental incentives as motivations for the decision.
KLM opposes government tax on transfer passengers at Schiphol Airport
KLM Chief Executive Marjan Rantal has issued a firm rebuttal to a proposal by the Dutch legislator to impose a tax on connecting passengers at Schiphol, the airline's hub. "You tax and add taxes on top of taxes, driving passengers away to foreign airports. This does not ensure a greener aviation industry," Rintel said in a September 22 LinkedIn post.
Rintel claims that if the proposal is implemented, it could reduce KLM's transfer passenger traffic at Schiphol Airport by up to 36%. She added that 60% of KLM passengers are transit passengers. The potential tax proposal is part of the climate policy of the Dutch House of Representatives and was proposed on the 21st.
British Airways and Indigo Airlines sign codeshare agreement
British Airways and Air India have entered into a codeshare agreement to enhance connections between the UK and India. The agreement will enable British Airways passengers flying from London Heathrow to Delhi and Mumbai to connect to eight additional Indian cities served by Blue Air.
New codeshare destinations in India include Amritsar via New Delhi and seven cities via Mumbai: Cochin, Ahmedabad, Goa, Trivandrum, Kolkata, Rajkot ( Shirasal) and Wadala.
product service
San Jose Mineta International Airport launches autonomous personal mobility vehicle pilot project
San Jose Mineta International Airport (SJC) has launched a pilot program using BBGO, a fully autonomous personal mobility vehicle from Blueberry Technology. BBGO is designed to "assist the transportation needs of those who do not want to use a wheelchair but still require airport navigation support."
The vehicle participating in the pilot is called "Dorothy", named after the famous chemist Dorothy Hodgkin. It will provide users with a fully autonomous ride service to the boarding gate by scanning the boarding pass, and can choose a personalized itinerary, including stops at restrooms and shops. and restaurants. In addition to the fully autonomous option, BBGO can be maneuvered via a user-controlled joystick or traditional manual push. For safety reasons, the vehicle is equipped with an automatic collision avoidance system.
Emirates to launch advance meal ordering service on European routes
Emirates is launching a new advance ordering service for business class customers on its European routes. The service was piloted this summer on all flights between Dubai and London Heathrow, Gatwick and Stansted airports, and will now be expanded to include Warsaw, Venice, Rome, Bologna, Prague, Vienna, Moscow , Istanbul, Dublin, Hamburg, St. Petersburg, Brussels and Madrid.
Business class passengers can pre-select their main courses between 14 and 24 days before departure, which Emirates says will ensure customers "get their preferred choice every time" while helping to reduce food waste.
Aircraft manufacturing and fleet
Air France-KLM plans to purchase about 50 wide-body aircraft
Air France-KLM is planning to order about 50 new long-range twin-aisle aircraft, with a decision expected to be made by the end of this month.
The group is preparing to replace aging Boeing 777-200s, Airbus A330-200s and A330-300s, but will not replace the newer Boeing 777-300ERs. The choice between Airbus' A350 family and Boeing's 787-10 and 777-9 will depend on range and on-time delivery, as delays in aircraft deliveries create operational problems for airlines.
Boeing secured 45 orders and delivered 35 aircraft in August
U.S. aircraft manufacturer Boeing's aircraft deliveries fell last month due to suspected manufacturing issues. The company delivered a total of 35 aircraft in August and reportedly received 45 new orders.
In addition, Boeing's order count has declined compared with July, when the company reported net orders of more than 50 aircraft. Boeing delivered more than 20 737MAX aircraft in August. Boeing has received orders for more than 400 737MAX series aircraft in 2023.
Distribution technology
Google enhances artificial intelligence capabilities in travel
Google is further integrating its generative artificial intelligence product, Bard, with its various apps and services, allowing Bard to answer more specific travel requests. Starting September 19, Bard users will be prompted to link to other Google accounts, including Gmail, Docs, and Drive. This will allow Bard to summarize and answer questions about users' personal details, such as upcoming travel arrangements.
Bard will also integrate with YouTube, Google Maps, Google Flights and Google Hotels and be able to incorporate real-time data into its answers. Conversations with Bard about travel plans can be shared with others through Bard's link sharing feature.
Expedia Group applies generative AI to multiple of its products
Expedia Group will release a series of new features and products, some for travelers and others for supplier partners. In branded apps for Expedia, Hotels.com and Vrbo, travelers can ask questions about property amenities and services, such as whether Wi-Fi is strong in all rooms, whether towels are provided at the pool, and more, with answers generated by generative AI. Search property information and generate customer reviews.
Additionally, within the Expedia and Hotels.com apps, users can access Dynamic Travel Guides, which provide detailed destination information and provide generative AI-driven conversational capabilities.
other
U.S. government shutdown could exacerbate air traffic control shortages
On September 20, when speaking to the House Transportation and Infrastructure Committee, U.S. Transportation Secretary Pete Buttigieg made pessimistic remarks about the impact of a potential federal government shutdown on the country’s air traffic system. "A federal shutdown would put us in a difficult position at a critical time when we are recruiting and expanding our air traffic control workforce," Buttigieg said.
Funding from the U.S. federal government will expire in 10 days on September 30. If funding expires, non-essential government functions will be shut down starting on October 1. The Federal Aviation Administration (FAA), which is responsible for U.S. air traffic control, currently has a shortage of more than 3,000 air traffic controllers.
KLM reaches salary agreement with ground staff
KLM Royal Dutch Airlines has reached a new collective bargaining agreement with the two unions representing its ground handling employees. KLM said that both the FNV aviation union and the CNV aviation union will present new salary proposals to their members. Three other unions - DeUnie, NVLT and VKP - are also currently considering whether to accept the agreement.
The unions have previously threatened strikes, but KLM said it hoped to reach an agreement soon with the five unions representing its 15,000 ground workers.
Finnair CEO says penalties won’t help achieve decarbonization goals
Finnair’s chief executive said on September 19 that European aviation regulators should focus on incentivizing the aviation industry to decarbonise, rather than threatening penalties against the industry.
At an event in London to mark Finnair's upcoming centenary, outgoing Finnair CEO Topi Manner acknowledged the huge challenge for the aviation industry to decarbonise by 2050, while Finnair shortened its target to 2045 , but he argued that aviation plays a beneficial role for the economy and society. Manner believes that "penalizing, taxing or banning people from flying" will not help achieve decarbonization goals. "