Airlines see `oasis' in certain industries
Airlines eager to fill premium seats left empty by the coronavirus crisis are making a beeline for the entertainment and energy industries, which still must get their workers to far-off places.
Most companies have slashed spending on corporate travel, leaving airlines without a crucial source of revenue. Business traffic remains at least 85 per cent down from pre-crisis levels.
While travel groups expect new COVID-19 vaccines to help revive business traffic, sectors like sporting events, streaming and content creation are a rare bright spot for airlines in the hard-hit travel sector. “It is at least somewhat of an oasis,” said Glenn Hollister, vice-president of sales strategy and effectiveness at United Airlines Holdings Inc.
“Certainly the entertainment industry is not back travelling anywhere close to normal. But there are certain aspects of the entertainment industry that just cannot happen without travel,” he said, referencing content production.
The U.S. carrier introduced new sector incentives this fall, including access to a 24/7 support desk, for production crews, actors, entertainment executives and other passengers who are still travelling.
Activity in some production hubs, like Vancouver, is bouncing back to pre-pandemic levels.
Carriers are using a similar strategy with other industries, such as oil and gas.
To help navigate logistical challenges like quarantines, American Airlines Group Inc allows specific energy-sector clients to purchase outbound segments from the United States to oilfields abroad, instead of buying an obligatory round-trip ticket, said Hank Benedetti, who leads the carrier's global corporate sales team.
Customizing travel aims to begin to repair coronavirus-battered corporate demand sector by sector, rather than just waiting years for a broad recovery in confidence and GDP, which typically dictate premium demand.
Brad Krevoy, chief executive of Motion Picture Corporation of America, said by email the U.S. company's travel has been focused on Canada and Scotland due to their COVID protocols.
“Canada has a uniform two-week quarantine, so actors feel safe and COVID infection is minimal with productions,” said Krevoy.
In Vancouver, where Netflix Inc recently announced the expansion of a production hub, activity has roared back since spring COVID-19 shutdowns, jumping to 60 entertainment projects from 41 in March, according to data from the city's economic commission.
Although some business travellers still book economy seats, corporate travel is crucial for carriers because of demand from frequent flyers and appetite for higher-margin premium fares.