Virgin Australia boss Jayne Hrdlicka speaking at the Tourism and Transport Forum’s Outlook 2021 Tourism Industry Conference last week said that business travel will not return to what it was before COVID-19, but she added that will mean cheaper fares for holidaymakers.
Hrdlicka said what many of us have also said and was really inevitable with corporate accountants surely considering how much money they have saved form travel budgets, that is the rise of video conferencing as a replacement for travelling for business meetings and conferences.
Hrdlicka added that it will be cheaper, per seat, on board an aircraft to travel than it has been for a long time and that there is a structural change that will come to the way that people have travelled in the past and we have to be prepared for it.
Hrdlicka said that this is likely to be bad news for airlines, which rely heavily on business travellers for revenue, with Hrdlicka’s business model on the acquisition of Virgin Australia by Bain Capital, while very much focussed on economy, was also focussed on higher revenue business passengers, with the opening of new lounges and new business inflight meals and other products and also higher priced short notice business and economy class fares, which from her comments appears are not eventuating
It also appears from Hrdlicka’s comments that the focus for the higher priced business class seats will now shift to leisure travellers seeking a better quality domestic flying experience, but the issue for Virgin Australia will be that those leisure travellers may well be reticent to pay the high fares which business travellers were paying, so it looks like, hitting Virgin Australia’s bottom line!
A report by John Alwyn-Jones, Special Correspondent, Aviation
