Skift Take
It’s too early to tell if travelers will flock to the U.S. after the Biden administration alleviated entry requirements for European visitors to the U.S., Air France-KLM CEO Ben Smith said. Rather, next summer might be when travel across the Atlantic resurges.
Skift
When the Biden administration last week revealed it would relax rigid requirements for Europeans to come to the U.S., it took Air France-KLM Group CEO Ben Smith by surprise.
“It was an enjoyable shock to get that news,” Smith stated Wednesday at the Skift Global Forum in New York City. The U.S. is by far Air France-KLM’s biggest market, creating 40 percent of the group’s profits. Before the pandemic, Air France and KLM together flew 64 flights each day to the U.S.; during the depths of the crisis, that was up to four daily flights, all bring freight. “We are still far from our peak,” he said.
However it wasn’t unqualified excellent news for Smith. “We were hoping this type of announcement would come out earlier in the summertime,” he said. The concern in Paris was that the European travel restriction would extend into fall and potentially next year, resulting in another lost summer. Political factors to consider were an element too, Smith stated, with the concern that the U.S. midterm Congressional elections in 2022 might cause more delays, Smith said.
It’s still too soon to say if bookings have increased as a result of the U.S. border resuming, however Smith is enthusiastic that the yearend vacations will be strong for the group. Next summertime might see a rise in travel. Air France bookings to Greece in August exceeded 2019 levels, he said, and this could augur well for transatlantic demand next year.
“There is a substantial pent-up demand for travel to locations that are open,” Smith stated. However whether that surge is sustainable in the near- to medium-term is “unclear,” he said.
Regionally, intra-European travel is growing again, with high vaccination rates sustaining need. “Africa has actually stayed resilient,” regardless of screening and entry requirements being confusing to guests. Australia could resume by the end of the year. However South America and Asia remain the biggest challenges, Smith stated. The scheduling curve remains much shorter than it was prior to the pandemic, so how need will hold up for the balance of this year and into 2022 is hard to predict. “I can’t offer you the clarity that I would have liked to have actually offered you,” he said.
No mandates
KLM recently made news when it said it would not mandate its workers be immunized against Covid-19. Smith stated Air France would not do so, either. “No one likes to be mandated to do anything,” he said. “Our position on mandates is a controversial one.”
The company rather is putting its trust in the adoption of an universally accepted vaccine passport and the continued use of masks on board. “This combination gives people convenience,” he stated.
A greener Future
Air France has committed to halving its greenhouse gas emissions by 2030 for its international operations, and by 2024 for its domestic flights. A law passed previously this year in France prohibits flights if the path can be run by a train in under 2 hours. As a result, Air France cut down its French network, which will assist it meet its domestic sustainability objectives, Smith stated.
The group remains in the process of adding newer, more efficient airplane to its fleet and retiring less effective planes, like the four-engine Airplane A340 and Jet A380. “We have made big choices to buy brand-new airplane,” Smith stated. “This is within our control.”
What is not in Air France-KLM’s control is the advancement of new kinds of propulsion, like electrical aircraft, or larger adoption of economically feasible sustainable aviation fuel. “We support alternate methods of powering airplanes,” Smith said. “However this is not something we can totally control.”