Tuesday, June 25, 2024

Summer travel boom: La Compagnie CEO talks European demand

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The Transportation Security Administration (TSA) expects a significant travel boom this summer as the 2024 Paris Olympic Games are just on the horizon, a catalyst for international travel this season.

La Compagnie CEO Christian Vernet — a Paris-based boutique airline — sits down with Brad Smith in-studio to talk about business and leisure travel drivers, aircraft manufacturing headwinds, and price pressures for the operator’s airfare costs.

“For [the] time being, we only have two airplanes flying to, from New York to Paris, Nice, and Milan. And we are currently these days working at securing a third airplane and more to come after that from 2026… but that’s the dynamic of the aircraft manufacturing industry, which is a bit at difficulty at this time,” Vernet explains. “But we want to add more capacity because what we offer to the public is very highly demanded, and… we do offer a very specific, welcoming environment for passengers. And they do like it very much, so demand is picking up and our goal is to serve that as best as we can for the years to come.”

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Luke Carberry Mogan.

Catch more of Yahoo Finance’s coverage on travel demand and trends ahead of the summer:

Sec. Buttigieg: Know your rights ahead of summer travel plans

Group bookings still a big growth driver for Marriott in 2024

Summer travel to Europe is about to get pricier. Here’s why.

How to avoid travel scams ahead of your summer vacation

Choosing the best travel credit cards for summer 2024

Video Transcript

Let’s stay with the travelling theme.

Well, TS A.

They’re preparing for the busiest summer travel season ever.

And according to Hopper, 87% of their users plan to take a trip this summer, with 13 million of those travellers heading to Europe.

The Paris Olympics, one of the big draws for travellers this summer.

So what are we seeing in the US to Paris travel this year?

During now, with the insight into summer travel trends, we’ve got Christian Verne, who is the CEO of the company.

Great to have you here with us today.

It’s a business class airline operating regularly scheduled transatlantic flights between New York and Europe.

Here, break down the trends that you’re seeing for us and the demand, especially for business travel to some of the routes that you go to.

So for this year for the summer 24 globally, our load fighters seems to be to be very well oriented.

We are going to reach at least 90% factor for the summer, which is a representation of a very good year.

So demand to Europe is very strong in the US, and it has been strong since the outset of Covid 22 2022.

Travel Revenge was the first exercise where we have seen a massive amount of passengers flying back to Europe.

2023 was a bit similar.

And 2024 we Olympics, which is, uh, somehow, uh, of a dynamic factor for for Paris routes in particular.

Uh, we do see very significant demand.

OK, so with that in mind, I mean, you’re primarily focused on that business class experience here.

So as you’re thinking about the type of traveller that’s flying with LA Company, where are you expecting to see these trains?

Trends remain intact over the longer term.

Well, if you talk about the summer, time is essentially leisure traveller, including in the business class travel that we we have.

We have We are full business class airline.

Um, obviously, the corporate travel is is a bit different and or a different period of the time.

What do we see?

The tendency is that the trend is that the leisure travel is very strong.

It is keeping stronger than it was in 2019.

For instance, the copper travel is not as significant as strong as it was pre covid for sure.

I believe that it is going to take another two or three years before we get to the pre pandemic factors.

But globally we see an overhaul.

Business travel demand very, very significantly higher than it was before, Which is which is good news for the industry.

It is good news for, for for the economy in general.

And, uh, well, we do everything we we we made to serve that, uh, that excursion in into demand.

I mean, look, this looks like a very swanky excursion here.

I’m taking a look at the interiors of the plane itself.

I believe this is the a 321 neos that you’re operating.

Yes, it is.

Exactly.

Yes.

All right.

So excellent there.

When we think about the expansion plans, what’s that look like for the business?

Well, for the time being, we only have two aeroplanes flying from New York to Paris, Nice and Milan And we are currently these days working at securing a third aeroplane and more to come after that from 2026.

It’s a bit remote, I must admit, but that that’s the That’s the dynamic of the aircraft manufacturing industry, which is a bit difficulty at this time, but we want to add more capacity because what we offer to the public is very highly demanded.

And like you have seen on the screen now, we do offer a very specific welcoming environment for passengers, and they do like it very much.

So demand is picking up, and our goal is to serve that as best as we can for the years to come.

You mentioned the of the aircraft manufacturing equation right now and I, I wonder from your seat the pulse of CEO S as they think about the orders that they’re making either with Airbus or Boeing, given some of those difficulties right now, Yes, Well, uh, I mentioned the time to get an aeroplane.

I mean, uh, I remember back in late 17 took me 14 months to get, uh, the first a 3.

21 neo aeroplane.

Today it is required to me to provide at least two years and more to get an aeroplane.

And that situation has not evolved in a favourable manner over the last couple of months.

And it is expected that the Boeing and Airbus production level will not be able to capture with the increase in the level of demand that Aya sees for the years to come.

So we are facing some potential times as far as supply of aeroplanes is concerned.

Yeah, we actually, we’re breaking down some of what Aya had just put out in their own trends and expectations for the next few years.

Just a few weeks back, I believe that was, as you think, about the the way the consumer is looking like they want to spend on travel.

What should we expect in terms of price moderation?

Well, it price depends a lot on competition and and the supply of seats and the routes that we serve.

And I must say it is different according to different markets that are to be looked at on the routes we serve.

Competition is very intense, so the pressure to keep prices down is, is is very significant.

And, for instance, frankly, from Paris to New York in business class, for instance, the prices that you get in 24 are less than the one you get you got in 23.

So that is good for the consumer.

But that’s good in general, from competition.

Competition is putting prices down and quality high.

Yet there is a limit to that because obviously the escalation that we get from resources, aeroplanes, fuel services, airport services and others are putting pressure on the profitability of the airline.

So at one point time we may have some small hikes into the prices.

But globally we are all working hard to improve our efficiencies and make sure that we can offer the same level of service even better, at the same price or even better price in the future.

Christiane Vernet, who is the CEO of the company.

Thank you so much for taking your time here today to see you.

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