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Short versus Long Haul

Former Chief Strategy and Planning Officer at Etihad Airways

IP Interview
Published on May 23, 2020

Why is this interview interesting?

  • Outlook on short versus long-haul travel demand post-covid-19
Executive Bio

Wayne Pearce

Former Chief Strategy and Planning Officer at Etihad Airways

Wayne has over 40 years working in the airline industry. He spent over 27 years working for Qantas Airways, Australia’s flagship carrier, where he worked his way up as a leading revenue management executive. He then led a turnaround at online travel company Gold Medal Group in the UK before joining Etihad as Chief Strategy and Planning Officer where he was responsible for pricing, capacity and fleet management for the group. In 2012, Wayne joined as CEO of Oman’s flagship carrier before moving on to advise the CEO of Thai Airways on a turnaround plan.

Interview Transcript

I’m curious about your views of how the market structure will change. As you said, commuter flights are likely to remain. Short, local flights; less long haul. Do you see the overall market structure changing, in terms of the total demand decreasing and then more local flights, more business relative to leisure?

Every time we’ve gone through this, in the past, everybody has said, the world will be different. Every time we’ve bounced out of it much, much more quickly than anyone has ever anticipated. The recovery mechanism has always been, airlines, hoteliers and everybody, dropping their prices, having enormous stimulations and a lot of the market thinking, I can’t afford not to go. People have been prepared to take more risks than they ever would, in a situation like that.

This is different, in that they’re not going to take that risk if they think there is a true risk to their health. Of the industries involved in travel and tourism, the one that has got the greatest danger, is undoubtedly the shipping. The stories of cruise ships and being cooped up with 5,000 people have been heart-rendering. However, air travel, a lot of people are going to say, look, if I go to the airport and I get through it pretty quickly, on a short haul and I only fly for an hour, an hour and a half, I can sit there with my face mask on, not eat and drink and then run away at the other end; I should be okay. I think that’s where people will start to take a lot of risk, early on. The element of risk is too small.

The long haul is the danger. That’s going to really make a lot of people think twice. I do think we’re going to have to get to a point where the government is coming out and saying, we think this has completely receded and you can all go back to travel and the incidence of illness has been reported as very low, or we get a vaccine.

Do you think that will hurt the Gulf airlines or the larger carriers, more than the smaller LCCs?

It’s a good point you’re raising, because what would you do now, if you were going to go to Bangkok, which is one of the greatest tourist destinations in the world? The Gulf carriers carry an enormous amount of traffic there. How would you feel about flying from London to a Gulf point, getting off, having a two and a half, three-hour transit, with massive volumes of people, from all over the world, milling around, getting on another airplane and going to Bangkok? Or would you rather get on BA or Thai Airways and fly directly there and, maybe, pay £30 or £40 more? What would you do?

Yes; you want to minimize all interactions, at this point.

I think that’s right; I think you do. I think you want to say, I want to make sure that I can come back out of this and still be alive and well and be with my family and workmates.

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