Airlines are ending flights into mainland China, even Hong Kong, where Cathay Pacific is now asking its employees to take three weeks of unpaid leave between Mar-2020 and Jun-2020 in the face of falling traffic demand. It is clear that the coronavirus outbreak is having a profound impact on air travel and will continue to do so in the short-term, potentially into the medium-term too.
We may only be one month into the calendar year, but have potentially already hit the biggest hurdle for corporate travel programmes. The economic rise of China as a global force means a high majority of travel managers are directly impacted by the current events, and are managing concerns from travellers on the spread of coronavirus around the world.
A recent survey showed that a majority of travel managers are concerned about the international spread of the virus, with around one in four showing real concern. There are also increasing concerns among senior management as staff well-being becomes an increasingly important piece of the business travel framework.
But, while the coronavirus outbreak is in the spotlight, there is another major issue on the horizon that could cause similar concerns among business travellers. The return to the air of the Boeing 737MAX may have slipped to the middle of the year at the earliest, extending its grounding beyond a year, but it has the potential to cause significant disruption to travel managers.
It is clear that the aircraft will not return to the air unless regulatory authorities are 100% confident in Boeing’s solutions to the issues that resulted in two fatal accidents with the aircraft and resulted to an unprecedented grounding. But, that confidence will not necessarily translate into the trust of travellers. That is much harder.
In fact risk management solutions expert WorldAware has warned companies that they should consider “adjusting corporate travel policies” to accommodate travellers concerned with the 737MAX’s safety. Despite efforts to make improvements, WorldAware remains concerned about the aircraft’s safety as “the safeguards that were designed to detect and eliminate design flaws clearly failed in the design and certification of the 737 MAX”.
As such, it warns in its Global Forecast 2020 report, which breaks down key global threats for businesses and organisations seeking to protect their people and operations, that “the Boeing 737MAX may not be safe despite return to service”.
It is obvious that there remains much concern over whether passengers would accept flights on the 737MAX once it is recertificated. In fact, the WorldAware report recommends travellers “consider avoid flying on the 737MAX for one year after it returns to service”.
This could mean travellers having to change itineraries on a case-by-case basis when booked on a MAX. For many airlines this would be ahead of time once they confirm their MAX schedules, but if passengers act on the report’s recommendations, it could ultimately see them cancelling their travel as the departure gate.
Airlines like Ryanair have said they will not show the Boeing 737 ‘MAX’ designation on its booking system or website. “We’re not doing that now and we don’t plan to it… We just call them 737. We call all our planes 737,“ its chief marketing officer, Kenny Jacobs, has been quoted as saying. Acknowledging that while Ryanair may not be a first choice for corporates, its strong schedules and point-to-point connectivity means they are increasingly appealing to business clientele.
Any issues would be multiplied by a mass return of 737MAX jets to service once approved, but that seems to have now shrunk in threat with it appearing it will take the shape of a funnel with limited inspectors available to Boeing may have suspended production of the aircraft, but almost a year’s production – at a rate of 52 a month – now sits on the ground ready for delivery once certificated.
A month ago, the return of the MAX could easily have been the biggest threat for corporate travel programmes in 2020, but now it appears that risk has reduced and the aircraft’s return may be much smoother than anticipated for corporate travel managers. What it does show though is how fast the landscape can change, travel managers will be watching closely for the next hurdle.