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Published on Thursday, February 18, 2021

Video chats here to stay as Loganair warns of business travel slump

Video chats will replace face-to-face business meetings for years to come, the boss of Loganair has said, as he warned against 'piling capacity' into the domestic skies once Covid is beaten.

The airline's Chief Executive, Jonathan Hinkles, predicted the pre-Covid business corporate market will never return. 

He also said that no evidence was emerging of the much-vaunted boom in staycations.

Speaking at the Aviation Club of the UK, Hinkles said the majority of businesses and industries have become accustomed to remote meetings. 

"What is noticeable by its absence is talk of the future size and shape of the business travel market - which is, of course, hugely important to so many airlines,"he said.

"Our view is that this will be changed for good. We recently completed Loganair's annual financial audit - without a single face-to-face meeting with our auditors, which would have been unthinkable in years past.

"But why-ever will such functions now revert to the way they were?"

They won't, he predicted, adding that in a post-Covid world, business travellers will be more wary of safety and swerve long trips away from home.

"It means that we'll see a smaller market for business travel in future, but the need for frequency, connectivity and day return capability will be just as important," Hinkles said.

"So we see a business travel market which will be smaller in future.

"Of course, you can't build a submarine from home, and industries like construction, healthcare and manufacturing industry must still depend on hands-on capability that will drive travel patterns.

"But for the likes of consultancy, and accountancy, IT, retail and insurance, a significant portion of business has shifted to on-line platforms and it's going to stay there."

Hinkles said the signals should be a 'wake-up call to anyone seeking to pile capacity into the UK regional market'.

But he warned the industry is 'always in the grip of its dumbest competitor' - a quote he attributed to former American Airlines President and Chairman Bob Crandall.

"There may be reasons to replay that, look to the future and think "here we go again"," he said.

The airlines boss said Loganair would operate aircraft with a 70-seat capacity to reflect reduced business traffic.

That would enable Loganair to 'maintain the span and frequency of our route network'.

"We rapidly expect to see far fewer big aeroplanes flying UK domestic routes, particularly between the regions - they simply won't be able to do this at the frequency levels needed to sustain the markets," he added.

Meanwhile, Hinkles said he was seeing no signs that the much-hyped UK holiday boom was a reality.

"Much is said of the staycation effect, pent-up demand for leisure travel and how UK domestic tourism will lead the recovery from the pandemic," he said.

"At present, there's no clear sign of that happening, despite what look to me to be some fairly optimistic headlines. It's just too early to tell."

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