GBTA Canada Convention: Execs Trade Views On Radical Pace Of Change

Open Jaw

Senior representatives of Canada's 2 largest airlines were in the spotlight at the Global Business Travel Association Canada gathering in Toronto yesterday.

Air Canada V.P. Global Sales Duncan Bureau and WestJet Vice President Sales and Business Development Lyell Farquharson were among the panelists in a format styled after the television show 'The View.'

There were no tears or histrionics, however, just serious players in business travel sharing opinions on 'Hot Topics' impacting the industry. The other panelists were Dorothy Dowling, Sr. V.P. Marketing & Sales, Best Western International; Mike Guadagnoli, Assistant V.P., Canadian Operations, Enterprise Holdings and Charles Sultan, Sr. V.P. Supplier Services, Concur.

A major theme of the discussion was the fast-changing dynamic of the travel industry, with a focus on disruptive new entrants and rapidly evolving consumer behaviour.

On that topic, Bureau and Farquharson were pretty much in lock-step – neither is worried about 'upstarts' shaking their foundations, no matter how many wannabe 'ultra-LCCs' capture headlines.

“In our best year we made $14 per passenger," said WestJet's Farquharson. “It's a very small opportunity." Bureau agreed: “It's an incredibly capital intensive industry. The planes cost USD – it would be a tough go to come into this market."

Both airline execs said this is a pretty good time for their business, with Bureau saying “no-one is behaving irrationally" with regards to capacity and that Canadians are fortunate with the quality of product and availability of non-stop flights to many destinations.

Farquharson agreed that Canada has “2 great airlines," but he doesn't see things remaining quite as positive going forward. “I think we'll see some volatility and some excess capacity in the future." He also fears that the fallout from lower oil prices hasn't yet been fully realized.

“We had a seat sale this week with prices we haven't seen in a long time. And I believe other airlines followed our lead," he said, with a look toward Bureau. “We are seeing a slowdown. It's real. There's a pretty sharp downturn in employment in the west."

Bureau said that it is an exciting time at Air Canada, with an expanding international network and a $9 billion fleet renewal program that will give it one of the world's youngest fleets by 2020. But he acknowledged that trouble is never too far off in a tight-margin business.

“The biggest risk right now is that the USD stays high and the price of oil goes up," Bureau said. “There is risk but our international network does give some flexibility."

The rapidly changing distribution environment, the use of big data to personalize marketing messages and the rise in usage of mobile technology are 3 other issues that the GBTA panelists say are occupying large amounts of time and resources within their organizations.

On distribution, for now at least, the consensus is that travel suppliers need to be everywhere. “We want to be agnostic," said Best Western's Dowling. “We need to be on every shelf the customer wants us to be."

Regarding 'direct connects' vs. GDS relationships, Farquharson and Bureau echoed Dowling's agnosticism. “Our commitment to GDS is there," said Farquharson. “It will continue but we will also continue working with 3rd parties. None of them are going away."

With over 50% of Best Western website traffic coming via mobile devices, Dowling says providing an efficient, robust mobile environment is a key focus, and the airline panelists agreed – on a momentous day when Google changed its algorithm to reward mobile-proficient sites with higher search results.

'Big data' was another big topic for the panelists, who all see the ability to more accurately target consumers with relevant messages as somewhat of a Holy Grail. The process is complicated and resource-intensive, but strides are being made, panelists said. “It's finally becoming more than just a buzzword," said Concur's Sultan.

“There's been a major leap forward in the last 12 to 18 months," Dowling said. “Big data is becoming much more understandable. Facebook's acquisition of (online advertising platform provider) Atlas Solutions has changed the face of marketing."

Bureau agreed. “We're getting much better at creating relevant offers. Why would we offer a Tango fare to someone with a history of flying business class?"

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