Business travel is back — not to pre-pandemic levels, of course, but companies are encouraging their employees to hit the road and get real face time (not to be confused with Apple’s video calls) with vendors, partners, and potential new customers. As airlines take big steps toward a better future with investments for sustainable fuel and pay increases designed to solve the labor shortage, it’s time for the industry to focus on making a difference long before any of those business travelers arrive at the gate with better booking and service processes.

Plenty of corporate travelers opt to book direct, preferring the same experience they are used to on their favorite carrier’s website or mobile app. However, it’s no secret that the process is often more complicated than it needs to be. Since a corporate traveler will often appear as any other regular customer, policies for expenses aren’t available. Then, they might have to submit their expenses — only to discover that their tickets or ancillaries are not eligible for reimbursement. Plus, travel managers aren’t even aware about the booking in the first place. It’s a mess of disjointed information that creates headaches and frustrations for everyone involved in the process.

Navigating Around the ‘Iceberg’

That deep cavern of information is what Kyle Moser, director of multinational sales at American Express Global Business Travel, compares to an “iceberg.”

“Only about 10 percent of [a travel reservation] is visible,” Moser said in a recent episode of Airlines Reporting Corporation’s (ARC) Omnichannel Chatter podcast. “There is a mass of stuff that goes on underneath that most people don’t get.”

Omnichannel retailing and servicing helps sync all that information and turns a turbulent booking journey into a smooth ride. ARC acquired nuTravel in 2020 with a focus on making omnichannel a reality for the aviation industry, and now, nuTravel has unveiled Universal Connect — the first open and agnostic integration platform that enables direct booking capabilities with access to corporate rates and travel policies. United Airlines is already part of the beta, with American Airlines coming onboard soon.

“If a traveler’s company is registered with nuTravel’s Universal Connect,” Joe Ascanio, vice president of marketing and digital strategy at nuTravel, told Skift, “that traveler can go to a participating carrier’s app or website and book their travel with their corporate negotiated rates, payment methods, and travel policy information available, creating a consistent experience with corporate or TMC booking tools.”

For business travelers who are tired of dealing with a cumbersome booking process, the chance to book that flight to next week’s big meeting the same way they booked that flight for their summer vacation is a breath of fresh air. Finally, they can enjoy the ingredients that have seemed elusive for so long: flexibility and freedom.

Taking a Cue From Consumer-Facing Brands

An omnichannel approach might sound new for the corporate world, but Sarah Boyd, senior manager of airline retailing solutions at ARC, highlights that all those business travelers are quickly getting used to frictionless planning and purchasing in every other facet of their lives. Consider how Amazon — the ultimate name in ecommerce — has embraced a brick-and-mortar approach to give customers access to services away from their screens. The company operates physical counter locations where customers can easily pick up packages, drop off returns, and get in-person assistance. The experience that a customer might begin on their smartphone or laptop picks up right where they left off when they walk into the store. And if a customer doesn’t have access to an Amazon counter location, they can head to a dedicated Amazon counter at Kohl’s.

It’s not just Amazon, either. Consumers can browse for eyeglasses in store and then buy them in an app with Warby Parker, and they can try on makeup in an app and then buy it in store with Sephora. It’s a buy anywhere, service anywhere model that customers love.

“Today’s traveler expects an omnichannel experience since they receive that with other products,” Boyd said. “Customers don’t understand why they might not see their corporate rate if they book directly with the airline or why they don’t have access to certain ancillaries through travel agencies.”

Simplifying the Servicing Aspect — And Keeping Everyone Informed

The initial booking decision is just one critical piece of the omnichannel puzzle. When corporate travelers want to make changes — opting to extend a trip to have their family join them, for example — that adjustment shouldn’t require retracing any steps to get back to the original booking channel. “When customers need to manage their booking,” Boyd said, “they can do that through whichever channel is most convenient and have access to the same options and policies.”

While it’s important to make the traveler’s life easy, it’s equally essential to make sure that corporate policies are applied and the travel manager is in-the-know, too. “If a traveler books through an agency using a direct connection with an airline, like NDC, but needs to make changes at the airport with a customer service representative, the airline can then use NDC messaging to push those changes back to the agency,” Boyd said.

Speaking of change, it has never come easy in a corporate travel space that often seems unmovable — a characteristic that makes Moser’s iceberg comparison even more appropriate. While Boyd acknowledges that shifting to an omnichannel model is a “complicated challenge” for airlines and agencies, she believes it is essential for the future of travel. She explained, “The members of the travel industry who best keep pace — whether airlines, agencies, or travel managers — will be best positioned for success.”

Source: Skift

Kenyans seeking to travel to different destinations across the world are always forced to cut short their trips due to Visa-related hitches that can be avoided in the application process.

The issue involving Africa’s fastest man, Ferdinard Omanyala, who is set to take part in 100m championships in Oregon in the US, lifted the lid on the headache and stress most Kenyans face while planning their journeys.

Other than obtaining a passport, some countries require Kenyan travellers to apply for a Visa, which comes at a fee.

The basic requirements in filling visa forms include family and given name, gender, date of birth, country of passport, passport number, passport date of issue and passport date of expiry, as well as place of issue.

Most travellers receive their approved e-Visas within 72 hours of application.

Common Mistakes

Kenyans are in most cases denied Visas due to mistakes made while completing the application forms or for leaving out some crucial information.

Different embassies expect Kenyans to provide exact details that match those in their passports. Any differences in spelling lead to automatic rejection of the application.

Most Kenyans make mistakes when filling in passport number, date of issue and expiry date fields. Mistakes are made when copying the digits and this may deem the whole process null and void.

Most embassies do not accept any applications with missing information.

While completing the Visa form, Kenyan travellers must upload an image of their passport, a recent passport-size photograph, and proof of travel. Failing to fill the form as stated amounts to disqualification.

Embassies reject applications with passports that do not show all the information clearly. The use of flashlights should be avoided as it causes reflections affecting the clarity of communication.

Others miss out by failing to present the correct size of a passport-size photograph, which does not align with the format stated in the application form.

The proof of travel relevant to the applicant’s reason for visiting should be uploaded. Tourists require a hotel reservation and onward flight tickets. Failing to present the evidence of travel calls for immediate disqualification by any given Embassy.

Kenyans travelling for other purposes such as medical and business must also upload corresponding documentation. Failure to do so prevents the Visa from being approved.

Options for Kenyans who have been denied Visas

Based on the issue, Kenyans who are blocked from travelling due to Visa hitches are given second chances by Embassies and consulates.

Those with mistakes are allowed to correct any errors they made before submitting new requests. 

However, the Visa application fee is non-refundable. For any new application, Kenyans must pay the required fee again.

If the process is rejected, Kenyans who apply through travelling agencies may be refunded some of the application fees.

A Visa still does not guarantee a Kenyan entry to the country of destination. The permit only indicates that a Kenyan traveller is eligible to enter the other country abroad.

Immigration officers conduct inspections and determine whether a Kenyan may enter the country based on immigration laws.

Visas validity varies with the country. An entry Visa to Kenya is valid for a period of three months from the day it was issued.

However, there has been a global delay in the processing of visas and this has affected millions of travellers. 

The British High Commissioner to Nairobi, Jane Marriott, recently admitted that her office was overwhelmed by the growing demand and the backlog created during the pandemic.

Marriott advised Kenyans to apply for their visas six weeks before the travel date to give the Embassy ample time to process them.

She emphasised that Kenyans were not the only ones affected by the delayed process. 

“I know how inconvenienced many of you are. I am sorry. It is a global challenge, not a Kenyan problem only,” the envoy stated.

Source: Kenyans

Business executives in Kenya are optimistic about growth prospect of their companies and the wider economy post election.

According to the latest Kenya Private Sector Alliance (KEPSA) Business Confidence Index, the business community is upbeat about this year’s post-election economic stability unlike in previous years.

The survey reported a confidence index reading of 61, compared to 44 and 53.8 index points in 2017 and 2012 respectively, when fear of violence and disruptions was high. 

With a backdrop of previous cases of electoral violence, it was assumed that some violence would occur which created protection concerns.

However, a high rating this year means most CEOs are expecting a stable economy at least six months after the August 9 polls.

Most business executives also expressed optimism to hire additional full-time employees in the next six months, which will translate to increased business operations.

Conducted between July 4 and July 25, the survey engaged a total of 173 business leaders from medium and large businesses.

It sought views on selected sector indicators including business confidence and optimism, current quarter business activity, and outlook for business activity in the near term.

Most CEOs are counting on a smooth power transition for the economic conditions to improve across all industries compared to six months ago.

Specifically, there is rise in optimism and business expectations for the tourism and hospitality sectors at 85 index points and wholesale and retail at 70 index points.

The least optimistic sectors are finance and ICT, probably because businesses in these sectors were already experiencing growth relative to other sectors at the height of the Covid-19 pandemic, hence executives do not expect much change in the coming six months.

These sentiments are reported against the backdrop of the Russia Ukraine War that disrupted value chains, resulting in fuel, energy, wheat and fertiliser price increase.

This was further compounded by the rising inflation in Kenya and across the globe as well as the extended drought.

Even so, majority of business owners are certain that the economy will continue to grow after elections.

The economy grew by 6.8 per cent in the first three months of the year, the highest in 22 years according to Kenya National Bureau of Statistics (KNBS) data.

This was mainly supported by rebounds in most economic activities that contracted significantly in the first quarter of 2021 due to measures instituted to curb the spread of Covid-19.

According to the survey business executives remain sckeptical about the possibility of reduced production costs due to the prevailing high fuel, raw materials, and other input costs that are expected to go up, thus projecting lower industry growth prospects over the next six months.

They foresee prices of goods and services increasing after elections.

“For the 23 per cent expecting lower growth prospects for their companies and the 29 per cent expecting lower growth prospects for their industries, these expectations were tied to failure to address the high-cost production, inflation, rise in fuel prices,” Victor Ogalo, KEPSA deputy CEO said.

The report shows business executives are encouraged by the implementation of key policies and ongoing infrastructure improvement initiatives as well as the various business support subsidies by the government.

In addition to these efforts, executives now want tax concessions and the lowering of raw material prices to improve the business environment.

Source: The Star

IATA has again called on the Canadian Government to urgently discontinue its COVID-19 related travel restrictions. These are now out of step with the global trend of lifting travel restrictions and are partly responsible for the ongoing delays and disruption affecting air travelers across Canada.

“Canada has become a total outlier in managing COVID-19 and travel. Though governments across the globe are rolling back restrictions, the Government of Canada is reinstating them. The government should follow the lead of its peers, including, for example, Australia. Though that country had some of the toughest travel restrictions during the height of the pandemic, it has now lifted them, including the vaccination requirement. Rather than following this example and enabling travel and tourism to recover, those in power in Canada believe that throwing more red tape at the pandemic is the way forward,” said Peter Cerda, IATA’s Regional Vice President for the Americas.

IATA is calling on the Government of Canada to quickly address the following issues:

• Remove random testing of international arriving passengers
  If, as announced, random testing is reinstated from 19 July 2022, then travelers will be forced to either go to a designated testing center or administer a self-test after arrival. In case of a positive test result, travelers must isolate for 10 days, which is twice as long as the average isolation period recommend by any provincial or territorial health authority in Canada and once again singles out travelers compared with the rest of the population.
• End the vaccination requirement for international travel
  The vaccination mandate for international travel to Canada is in essence obsolete, as only the basic immunization and no booster shots are required to be considered fully vaccinated. In addition, the proof of vaccination is no longer used in everyday life in Canada. Ending this travel-related mandate would remove the need for the manual and time-intensive documentation check at flight origins outside Canada and during immigration upon arrival.
• Use ArriveCAN solely as an entry tool for customs
  The removal of the vaccination mandate would also allow ArriveCAN to be used solely for customs and immigration purposes and not for capturing and validating COVID-19 related health and vaccination information. This is what is slowing down border processing. In addition, airlines are now being asked to provide a list of passengers who have not completed ArriveCAN not later than one hour after the departure of an international flight to Canada. This is tying up critical staff at a time when resources are already stretched to the limit.
• Ending Mask Mandates
  Mask mandates at airports and on aircraft need to be withdrawn, especially since they are no longer in place in most public settings in Canada, including public transport and sporting venues.

“After more than two-years of onerous COVID-19 restrictions people want to be able to travel again, as we can clearly see from the current level of demand. Ramping up the entire value chain has come with some challenges. Maintaining outdated COVID-19 restrictions contributes to the delays passengers are experiencing at major Canadian international gateways. Governments need to ensure that travel restrictions are designed to address today’s environment, not the environment of the previous two years. Now is the time for the Government of Canada to join its counterparts around the world and remove unnecessary and outdated measures,” said Cerda.

Source: Airlines.

Canceled flights. Long lines. Staff walkouts. Missing luggage. 

Sound familiar? The chaos engulfing many major airports in North America and Europe since summer hasn’t abated much, and news outlets and social media users continue to report on hordes of impatient travelers and mountains of misplaced suitcases.

Just this week, German carrier Lufthansa canceled nearly all its flights in Frankfurt and Munich, stranding some 130,000 travelers due to a one-day walkout by its ground staff who were on strike for better pay.  

London’s Heathrow Airport and Amsterdam’s Schiphol Airport — two of the largest travel hubs in Europe —slashed their passenger capacity and demanded that airlines cut flights in and out of their airports, which angered both travelers and airline managers.

Carriers in the U.S. have also canceled and delayed tens of thousands of flights due to staffing shortages and weather issues. 

Airlines are vocally laying the blame on airports and governments. On Monday, the chief financial officer of low-cost European carrier Ryanair, Neil Sorahan, complained that airports “had one job to do.”

But many of those working in the industry say airlines are partly responsible for staff shortages as well, and the situation is becoming dire enough that it could threaten safety. 

CNBC spoke to several pilots flying for major airlines, all of whom described fatigue due to long hours and what they said was opportunism and a desire to cut costs as part of a toxic “race to the bottom” culture pervading the industry and worsening the messy situation that travelers are facing today.

All the airline staff spoke anonymously because they were not authorized to speak to the press.   

‘Absolute carnage’

“From a passenger point of view, it’s an absolute nightmare,” a pilot for European low-cost carrier easyJet told CNBC. 

“Leading into the summer, it was absolute carnage because airlines didn’t know what they were doing. They didn’t have a proper plan in place. All they knew they wanted to do was try and fly as much as humanly possible – almost as if the pandemic had never happened,” the pilot said. 

“But they forgot that they’d cut all of their resources.”

The ensuing imbalance has “made our life an absolute mess, both cabin crew and pilots,” the pilot added, explaining how a shortage of ground staff since the pandemic layoffs — those who handle baggage, check-in, security and more — has created a domino effect that’s throwing a wrench into flying schedules.

“A bit of a toxic soup … the airports and the airlines share an equal level of blame” – Pilot – Emirates Airlines.

In a statement, easyJet said that the health and wellbeing of employees is “our highest priority,” stressing that “we take our responsibilities as an employer very seriously and employ our people on local contracts on competitive terms and in line with local legislation.”

The industry is now hobbled by a combination of factors: not having enough resources for retraining, former staff not wanting to return, and poor pay that has largely remained suppressed since pandemic-era cuts, despite significantly improved revenue for airlines. 

“They’ve told us pilots we are on pay cuts until at least 2030 — except all the managers are back on full pay plus pay rises for inflation,” a pilot for British Airways said. 

“Various governments with their restrictions and no support for the aviation sector” as well as airport companies are in large part to blame for the current chaos, the pilot said, adding that “some airlines took advantage of the situation to cut salaries, make new contracts and lay people off, and now that things are back to normal they can’t cope.”

While many airports and airlines are now recruiting and offering better pay, the required training programs and security clearance processors are also severely cut back and overwhelmed, further hobbling the sector.  

‘They are shocked, which is incredible’

British Airways ground staff were set to strike in August over the fact that their full pay had still not been reinstated — something especially stinging at a time when the CEO of BA’s parent company, IAG, was given a £250,000 ($303,000) gross living allowance for the year. 

But this week, the airline and workers’ union agreed on a salary increase to call off the planned strike, though some staff say it’s still not a full return to their pre-pandemic pay.  

In a statement, British Airways said, “The last two years have been devastating for the entire aviation industry. We took action to restructure our business to survive and to save jobs.”

The company also said “the vast majority of redundancies during this time period were voluntary.”

“We’re completely focused on building resilience into our operation to give customers the certainty they deserve,” the airline said.

IAG CEO Luis Gallego, whose company owns BA, forfeited his £900,000 bonus in 2021 and took voluntary salary reductions in 2020 and 2021, and did not receive his 2020 bonus.

“They just want the cheapest labor to produce their own big bonuses and keep shareholders happy” – Pilot, British Airways

One pilot flying for Dubai’s flagship Emirates Airline said that a short-term mindset that took employees for granted had for years been laying the groundwork for today’s situation.

The airlines “were happy to try and depress wages for lots of people in the industry for years, on the assumption that nobody had anywhere else to go,” the pilot said. “And now that people are exercising their right to go somewhere else, they are shocked, which is incredible. I’m shocked that they’re shocked.”

A safety risk?

All this stress for airline staff comes on top of the often-ignored issue of pilot fatigue, all the pilots interviewed by CNBC said.

The legal maximum limit for a pilot’s flying time is 900 hours per year. But for many airlines, “that wasn’t seen as the absolute maximum, it was seen as the target to try and make everybody’s workload as efficient as possible,” the easyJet pilot said.

“That’s the big worry with us is that we’ve got a fairly toxic culture, an inordinate amount of work,” the Emirates pilot echoed. “That all adds up to potentially reducing the safety margin. And that’s a big concern.”

All this has been combined with low pay and less attractive contracts, the pilots say, many of which were rewritten when the pandemic turned air travel on its head.

“A bit of a toxic soup of all of those, the airports and the airlines share an equal level of blame. It’s been a race to the bottom for years,” the Emirates pilot said. “They’re only going to ever try and pay as little as they can get away with paying.”

Emirates Airline did not reply to a CNBC request for comment. 

‘Race to the bottom’

“Crony capitalists. Rat race to the bottom. No respect for skilled workforce now,” the BA pilot said of the industry’s corporate leadership. “They just want the cheapest labor to produce their own big bonuses and keep shareholders happy.”

The International Air Transport Association said in response to these criticisms that “the airline industry is ramping up resources as quickly as possible to safely and efficiently meet the needs of travelers.” It acknowledged that “there is no doubt that these are tough times for the industry’s workers, particularly where they are in short supply.”

The trade group has issued recommendations “to attract and retain talent in the ground handling sector,” and said in a statement that “securing additional resources where deficiencies exist is among the top priorities of industry management teams around the world.”

“And in the meantime,” it added, “the patience of travelers.”

Source: CNBC Travel

Dubai Police have warned people of the dangers of buying last-minute airline tickets for just a fraction of the usual price after arresting a man who booked several tickets for people using a stolen credit card.

The man, from an Asian country, defrauded dozens of people and bought airline tickets by creating a fake online travel agency and using a stolen credit card.

Dubai Police did not specify how many tickets were bought or their value.

Col Saeed Al Hajiri, director of the Cybercrime Department at Dubai Police, said airline ticket fraud usually flourishes in the summer and holiday seasons, but the number of cases in the emirate has dropped significantly.

Dubai Police recorded 36 cases of airline ticket fraud between 2009 and June of this year.

The Asian suspect has been the only case so far this year, compared with eight cases last year. Dubai Police recorded two cases in 2020, amid the Covid-19 pandemic and subsequent drop in overall travel.

“Fake airline ticket scammers are usually active during the summer season but there has been a dramatic drop in the number of cases in Dubai. This year we recorded one case,” Col Al Hajiri told The National.

Dubai Police said the arrest was part of an continuing operation called “Bats Hunt”, which is in co-operation with Interpol, airline companies and global airports.

Col Al Hajiri urged the public to book their airline tickets through verified airline companies and agents.

“Be careful before you buy or you could wind up with no ticket and losing your money to criminals,” he said.

“Always buy the ticket from official channels. Sometimes scammers make a fake website posing as an official agent or airline company.”

He advised travellers to check the approved list of travel agents in the UAE with the Economic Development Department, as well as the travel agent’s permission or licences.

Social media advert for tickets

Fatima Jameel, an Egyptian resident in the UAE, said her friend was a victim of an airline ticket swindle after buying tickets through an advert on a social media platform.

“She contacted the number to buy a ticket to an Arab country and wired the money to an unknown woman. Upon receiving the tickets, my friend discovered it was fake,” said Fatima.

The fraudster, who was living outside the UAE, blocked the woman’s number and did not reply to her messages. The victim filed a case — which is still under investigation — but her travel plans were ruined.

Dubai Police said criminals have also targeted people staying illegally in the country by promising a work visa for a country outside the UAE and airline tickets in exchange for money.

“Despite the awareness campaigns, some people fall prey while searching for low-cost tickets. We recorded 390 cases in the last three years where violators were conned by scammers,” Col Al Hajiri said.

Police advise the public to report any fraud via the Dubai Police E-crime platform on Dubai Police’s website, the Smart Police Station or the Dubai Police application on smartphones.

Source: The National News

The US Embassy in Nairobi has suspended appointments for visa interviews until June 2024 owing to high demand and Covid-linked backlogs.

In a statement released on Monday, the embassy acknowledged the frustrations that Kenyans travelling to the US are going through.

“Currently, the first available dates for a visitor visa appointment in Nairobi are in June 2024. U.S. Embassy Nairobi recognizes the significant challenges and frustrations this poses for Kenyans planning to visit the United States for business and tourism,” read the statement seen by Business Daily.

Kenyans on social media have expressed their frustrations in recent days over what they have termed as unfair visa rules. Others have been forced to cancel travel plans over delays in processing the critical document.

The embassy said that non-immigrant visa interviews at the Nairobi office ceased for over a year due to Covid-19 safety measures.

“As we work through the backlog of applications and address the high demand for services, we recognize that some applicants may face extended visa interview wait times. This is a worldwide problem that US embassies are diligently striving to address,” the embassy said.

However, the embassy has committed to expediting appointments for emergencies such as the death of an immediate family member and people travelling for urgent medical care.

Students whose programmes start in less than 30 days and are likely to lose their scholarships will also be given priority. 

Further, the embassy has committed to doubling the number of interviews to clear the current backlog. 

“We instituted a visa renewal process that does not require an in-person interview for certain applicants. Kenyans renewing visitor (B1/B2 category) or student visas (F category) whose visas expired less than one year ago may be eligible to renew without an interview,” said the embassy.

Source: Business Daily

Kamil Alawadhi, IATA’s Regional Vice President, Africa & Middle East, says governments must walk the walk and support African aviation.

Aviation’s post-pandemic recovery was predicted to be uneven across markets and dependent on financial and economic factors, government policies, and the relaxation of travel restrictions and requirements.

Partly, this was caused by the aviation industry grounding to a halt worldwide in 2020. To stay afloat, airlines, airports, ground handlers, and other services suppliers accumulated debt in various shapes and forms, which they now must repay.

At the same time, across the board, in industry and governments, hundreds of thousands of staff were retrenched, retired, or furloughed to cut costs and preserve cash. Many industry players are now trying to rehire or hire new people, but for various reasons—such as the slow pace of security vetting of new airport-based workers in the United Kingdom—many entities are ill-equipped to take full advantage of the surges in demand that are being seen as markets reopen. Instead, we have entered the surreal, where airlines are forced to cancel thousands of flights. And London-Heathrow, an iconic global hub, has capped traffic at 100,000 passengers a day to prevent operational gridlock.

Traffic flows

Although Africa’s airlines and airports are not experiencing the same chaos as many of the big northern hemisphere gateways, their recovery and sustainability are affected as they are heavily dependent on north-south traffic flows. They are struggling to find a sure footing in the face of numerous other factors facing them too.

For most African carriers, this is an arduous journey with no relief or support from any of the continent’s governments, despite public acknowledgement of the vital social and economic contributions airlines make. And so, those African airlines that have survived COVID are once again being pushed to the brink, with at least one carrier, Comair, going into bankruptcy.

These factors include rising charges for infrastructure and other services, as airports, air navigation service providers, regulatory bodies, and other suppliers look to recoup foregone revenues and cover their inflationary costs. 

In some countries, notably Nigeria, Zimbabwe, Ethiopia, and Eritrea, the situation has exacerbated shortages of foreign exchange, prompting central banks to block or severely limit the repatriation of more than $800 million of foreign airlines’ revenues derived from sales in those territories.

On top of this are increasing demands and pressure to invest in and adopt environmentally sustainable technologies and processes.

Fuel prices

By far the biggest headache for every airline is the sharp increase in fuel prices.  Even though Africa only accounts for 1.9% of the global air travel market, the continent’s carriers are not immune to this geopolitical shock.

According to IATA’s most recent analysis, the global average jet fuel price in mid-July was $146.4/barrel. At this level, airlines worldwide will incur an extra $134.3 billion to their combined total fuel bill for 2022.

Although fuel prices have come off their June 2022 peak, in Africa, jet kerosene sells at a premium and averaged $160.63/barrel for the first ten days of July. This was 79.8% higher than it had been over the same period last year. 

To put this in perspective, aviation fuel historically accounted for between 20%– 25% of most African airlines’ cost base. Today, it can be as much as half, if not more, and is their biggest single line item. Although airlines are trying to mitigate the combined impact of jet fuel prices and other inflationary costs, they are running out of headroom. 

Jet fuel usually trades at a $20 premium over crude oil, but this gap has widened to more than $50 since March.

This compounds the challenge many African carriers face. They generate most of their revenues in weaker home currencies but incur their input costs, often including fuel, in US dollars and euros.  Every time the dollar price of fuel goes up or the dollar strengthens against softer local currencies, the revenue-cost gap widens.

It may seem incongruous that jet fuel in Africa, which boasts several oil-producing nations, should sell at such a premium. A large component of the additional cost relates to transport and logistics. Because jet fuel is no longer refined in Africa, it must be imported, shipped by sea, and transported from harbors to inland storage depots and airports, often far from the coast. In some places, it is carried by rail or pipeline, but for the most part, it is transported by road. 

In addition to the logistics and associated costs, recent events, such as the trucking blockades on South Africa’s motorway between Durban and Johannesburg and the floods that swept away sections of the rail tracks linking the two cities underscored the vulnerability of these supply lines.

The floods around Durban triggered a jet fuel supply crisis at Johannesburg’s O.R. Tambo International Airport, which is unlikely to be resolved before Q4 this year. At its onset, this caused some airlines to cancel flights, with others incurring additional expenses as they diverted flights to refuel at other airports or carried extra fuel (if they could do so). Recently, pressure on fuel supplies intensified with the National Refinery (NATREF) in South Africa shutting down. It operates the dedicated jet fuel pipeline to the airport.

Political will

With so much of Africa’s fortunes dependent on safe, efficient, and affordable air transport, the sustainability of its airlines—both state and privately owned—is crucial.   It is time for governments to do more than pay lip service.

The industry does not require state bailouts. Relief from rising statutory charges and taxes on fuel and aviation would be far more effective. The release of blocked funds is crucial, as is the guarantee of secure, reliable, and efficient fuel supplies. Lifting caps on foreign investment and equity in African airlines would also bring much-needed liquidity.

At an intra-Africa level, the biggest and most achievable wins require all African governments to demonstrate their political will by removing the barriers to market entry and ensuring fair and equal treatment for all carriers in each market. This is the basis for the African Union’s Single Africa Air Transport Market (SAATM). Africa’s leaders have been talking about it and signing solemn undertakings since 1988. Having talked the talk, now it is time to walk the walk!

Source: Airlines.

The current labour shortage could have serious implications on the recovery of Europe’s travel and tourism sector, according to the World Travel & Tourism Council (WTTC) and the European Travel Commission (ETC).

According to the industry bodies, close to 1.2 million jobs across Europe will remain unfilled during the summer period, with travel agencies forecasted to be the hardest hit with a 30 per cent shortfall of workers.

Meanwhile, the air transport and accommodation segments are likely to suffer one in five unfilled vacancies, representing 21 per cent and 22 per cent staff shortage respectively.

WTTC president and CEO, Julia Simpson said: “Europe showed one of the strongest recoveries in 2021, ahead of the global average. However, current shortages of labour can delay this trend and put additional pressure on an already embattled sector.

“Governments and the private sector need to come together to provide the best opportunities for people looking for the great career opportunities that the travel sector offers,” she added.

In 2020, at the peak of the pandemic, close to 1.7 million jobs (direct employment) were lost across Europe’s travel sector. As governments eased restrictions and borders reopened in 2021, the sector’s direct contribution to the region’s economy recovered by 30.4 per cent and recovered 571,000 jobs, according to WTTC.

This year, WTTC projects the sector’s recovery will continue to accelerate and almost reach pre-pandemic levels, but only if “urgent action” is taken to address the labour shortfall.

Together with ETC, the council urged governments to implement new policies to facilitate labour mobility across borders. 

The industry bodies also called upon the private sector to offer comprehensive training to upskill workers and adopt digital solutions to improve daily operations.

ETC president, Luis Araujo, said attracting and retaining new talent is one of the sector’s “biggest challenges” and requires a “coordinated, multi-layered and joint (public and private)” response. 

Source: BTN Europe

Air fares are rising but traveler numbers keep increasing. At what point will people say enough is enough and wait for air fares to settle?

We all know air fares are going up. It’s a function of too many passengers and not enough seats. We all know how that happened, with the aviation industry underestimating the speed of the recovery and getting caught on the hop. It’s still possible to jag a bargain, particularly if you are flying short haul domestic and not fussed about which airline you fly. But if you are flying further afield and pickier about your carrier, then these days, you are likely to pay considerably more than you once did.

When will passengers say enough is enough regarding fare rises?

But how much is enough? At what price point will travelers put their credit card away and not fly. Airline analytics business OAG surveyed 1,442 passengers using their app in May and came up with some figures. Now, 1,442 people isn’t a huge sample size and if you’ve downloaded their app you are probably already a bit of an airline industry stalker and keen on a plane ride, but let’s take a look at the results with this in mind.

According to OAG, 79% of respondents said a US$50 fare increase wouldn’t make any difference to their travel plans. Increase the fare by $100 and 43% of travelers would go ahead with the trip. Increase the fare by $200 and the proportion of travelers still keen to fly drops to 17%. A $300 fare increase would reduce the number of respondents still willing to fly to just 9%.

Context is everything with air fare rises

Of course, context is everything. If I’m paying $150 to fly five hundred miles on a low-cost carrier, then a $50 fare rise might sting. It’s not a lot of money, but a 33% fare increase seems like an opportunistic sting. If I’m paying $10,000 to fly business class from Los Angeles to Bangkok the long way around, a $1,000 fare increase probably wouldn’t sway the purchase decision. It’s much more money than the low-cost-carrier sting, but as a proportion of the overall fare it is less so (only 10%) and more agreeable to my headspace that is already (apparently) ready to part with $10,000.

“Most travelers are eager to get to their destinations as quickly as possible. Few are willing to wait three to four hours during a layover, even if it means they can save $100-$200 on ticket prices,” says OAG. “More are willing to wait three to four hours to save $300 to $400 on ticket prices. The willingness to wait five hours plus during layovers drops no matter the ticket price.” What OAG didn’t say, and probably should, is what was the baseline ticket price quoted when surveying the respondents. Acceptance (or non-acceptance) of price rises and other travel pains is usually all about percentages of the fare rather than raw dollar values.

People are mostly happy to pay a premium to fly

The survey respondents lived in North America where OAG notes ticket prices jumped 18.6% in April alone (based on Bureau of Labor statistics).

Other than fare rises, what else gets up North American travelers noses and deters travel. 52% of respondents cited scheduling problems like delays and cancelations. 19% of respondents have issues with customer service in the airline industry and 14% mentioned the lack of flight options to where they wanted to go.

The airline industry in the North America and many other parts of the world is pretty messed up right now. Logically, most people would avoid non-essential air travel just to dodge the chaos. But perfectly sane humans are buying expensive flight tickets by the millions to undertake non-essential travel and get caught up in the mess. OAG reckons 300 million North Americans and 1.6 billion people worldwide plan to fly within the next three months. That’s a lot of gluttons for punishment – me included.

Source: Simple Flying