BUSINESS FORECAST
European business travel set to ‘thrive’
BUSINESS TRAVEL IN WESTERN EUROPE is set to grow strongly in both 2016 and 2017, according to a forecast from GBTA. It predicts that spending on corporate travel will rise to US$211.2 billion this year, which would be a 6.3 per cent increase on 2015, and then grow by another 6.8 per cent next year to US$225.6 billion. GBTA said the
main reasons for this projected growth in spending included low oil prices and interest rates, improved employment prospects and higher consumer spending.
GBTA is predicting a 7.9 per cent rise in UK business travel spending in 2016, which would make the market worth US$47.1 billion. GBTA is also predicting that international business travel from the UK will increase by 9.8 per cent this year and then by 8.9 per cent in 2017. Domestic travel is set to grow more slowly: increasing by 6.9 per cent this year and then 5.8 per cent in 2017. The report added that domestic travel accounts for around 65 per cent of all the UK corporate market.
MEETINGS
Star Alliance bosses board a new Swiss Bombardier CS100 aircraft Special Report Star Alliance
Paul Revel reports from the Chief Executive Board meeting in Zurich
AIRLINES
STAR ALLIANCE HAS NAMED JEFFREY GOH as its new chief executive. The global airline alliance announced the appointment at its annual Chief Executive Board (CEB) gathering in Zurich in June, attended by member airline bosses and international media. Goh, currently chief operating officer and general counsel at
Star, will take up the role in January 2017. Current CEO Mark Schwab reported that the Star Alliance
Airline profits soar due to low oil prices
AIRLINES ARE EXPECTED TO MAKE A RECORD-BREAKING PROFIT of US$39.4 billion in 2016, according to the latest financial forecast from the International Air Transport Association. This year, airlines are expected to generate revenues of US$709 billion, with a net profit margin of 5.6 per cent. 2016 is predicted to be the fifth consecutive year of profit growth. IATA said more than half of the industry profits will be generated in North America (US$22.9 billion) while African carriers are forecast to generate an overall loss (-US$0.5 billion). The large profits are being generated through low oil prices, sparking warnings airlines are failing to pass on savings to passengers.
14 BBT JULY/AUGUST 2016
board had approved a multimillion-dollar investment in an ‘IT hub’ for baggage. This, he said, “will enable us to much more closely co-ordinate the hundreds of millions of messages being transmitted across the Alliance” and improve baggage handling throughout the network, in areas such as short connection times, priority bags and reuniting mishandled luggage with passengers. He also announced the board had agreed to develop a set of universal standards for airport automation processes, such as off-airport and self-service check-in, self-baggage tagging and automated document validation. Schwab said the standards will reduce infrastructure requirements and handling costs at the 1,300 airports used by Alliance member airlines. Asked about the impact of airline joint ventures (JVs), Goh said: “We believe JVs have a place in the alliance – and vice-versa. Many of the JV partnerships come out of alliances. We have a role to play, particularly the technology support we can provide – there is a future and continuing relevance for us to support our JV partners.” Schwab also said work is progressing on Star’s Connecting
Partner scheme – where low-cost carriers (LCCs) that feed full-service airlines can sign up for individual Star Alliance agree- ments, which include passenger and baggage through check-in services. The deals will also include benefits for Star Gold-status passengers, dependent on what privileges those LCCs offer. Schwab didn’t reveal numbers, but said “more than a handful” of budget and hybrid airlines are actively interested. South African low-cost airline Mango is due to become the first partner later this year.
BUYINGBUSINESSTRAVEL.COM
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