‘We expect India’s international market to continue to grow’
Alex McEwan, Country Manager – South Asia, Virgin Atlantic, explains why India is important for the airline, predicts travel trends for 2023 and touches upon sustainability strategy of the organisation
“We broke some of our own internal monthly revenue records this summer even though globally we were flying fewer seats than we did in 2019,” says Alex McEwan, Country Manager – South Asia, Virgin Atlantic on how the airline fared in the last two quarters. For the British airline, the demand surged when international borders began to reopen, with passengers taking advantage of minimal travel restrictions for the first time in two years. “We saw strong recovery across all customer segments, in particular for premium leisure demand, which really helped to support our revenue performance,” he shares.
However, this demand didn’t arrive on its own. A lot went at the backend, such as outreach programmes and campaigns, especially around the festive period. “We’ve run promotional campaigns such as Black Friday Sales and Winter Sale to offer special festive fares during the period. Our operations teams ensure we have all our people whom we need on-ground, on-board and behind the scenes to assist customers to make their holidays hassle-free and uniquely Virgin. Our customers have enjoyed special Christmas themed meals and our crew has been donning special Virgin-branded Christmas jumpers to get everyone into the festive spirit,” adds McEwan.
Importance of Indian market
For Virgin Atlantic, India is a growth story. “With three daily services and with our codeshare partnership with our incredible partner IndiGo now, we have a compelling proposition for Indian customers. The country has been one of the quickest markets to recover following Covid19. The demand for passengers visiting their friends and relatives was resilient throughout the pandemic and as travel restrictions were unlocked, we saw a surge in pent-up demand from all other segments,” he reveals, adding that up to 30 per cent of the airline’s Indian passengers use the flights from India to Heathrow to connect onto its extensive US network, with Delhi to San Francisco being its largest connecting traffic flow presently.
“Corporate demand is recovering strongly. Our figures show that this is only 10 per cent short of 2019 levels on Delhi flights. We expected this to be the last segment to recover in full, but we hope to be back to pre-pandemic levels by the end of this year. We expect India’s international market to continue to grow and most estimates are forecasting that the country will soon be the world’s third largest aviation market,” says the Country Manager.
Challenges for aviation industry
However, while he is bullish on India’s aviation market, a real challenge for the airlines is rising travel costs which surged in 2022 and as per forecasts are likely to rise again this year on account of increasing fuel prices. This can impact international travel. “We have seen a trend of high global inflation across many sectors this year and aviation is no exception. With the price of aviation turbine fuel spiking and with a strong dollar, airlines’ costs, including ours, have increased significantly. This, combined with demand outstripping supply for flights due to the unprecedented level of pent-up demand, has led to higher fares on average. We expect to see high demand continue in 2023 and are hopeful that the reopening of e-visas for UK travellers to India will unlock further demand growth and lead to the full recovery of international tourism in India. The UK has also sped up its visa processing time significantly, delivering on its target to deliver most visas within 15 days of application.”
The importance of sustainability can’t be undermined and it is required to be in focus more than ever. This becomes even more imperative for industries and players involved in traditionally non-eco-friendly sectors, aviation being one of them. To overcome this shortcoming and contribute towards environment conservation, various airlines are coming with innovative solutions to offset their carbon emissions and operate at net-zero carbon emission levels.
McEwan, on the sustainability strategy of Virgin Atlantic, says, “We have a history of more than 15 years of sustainability leadership, driving meaningful change through collaboration with our supply chain, innovation partners and industry experts which has helped to reduce our CO2/RTK by 17 per cent (2007 baseline). We have executed multi-billion-dollar investments in our fleet, giving us one of the youngest, greenest fleets in the sky, with our aircraft averaging an age of just six years. All of our aircraft are twin engine, maximising our fuel efficiency. It is our ambition to achieve net zero by 2050, and we have set ourselves clear milestones on the path to delivering that goal, including using 10 per cent of our fuel as Sustainable Aviation Fuel by 2030.”
Travel trends in 2023
McEwan has high hopes from 2023. “We can expect demand to continue to be buoyant with a large volume of pent-up demand from the Covid19 period having still not travelled but having a strong desire to do so, assuming that the pandemic doesn’t play spoilsport. This will be particularly true for India which seems to be bucking the global trend with strong economic growth forecasts. I think we’ll also see a blurring of business and leisure travel, with people extending their business trips for a few days to enjoy some leisure time at their destination,” he explains.
The rise in remote working as a long-term trend, despite easing of Covid19 restrictions is a positive aspect that will help in boosting travel, he says. “Many people and their employers are finding that work can be done effectively anywhere there is a good wi-fi connection. When the heat gets too much in India in the summer, guests can fly to London and work from one of the many co-working spaces in the city,” McEwan shares.
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