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Europe and Asia regional travel is forecast to outgrow long-haul travel

Asia is checking into a new era in air travel

Jan 22, 2011

David Brett, the Bangkok-based president of Amadeus, a technology partner of the global airline industry, believes that regional travel will expand dramatically in Asia and elsewhere in the coming years, thanks to the emerging markets' quick recovery from the 2008-2009 global economic crisis.

Responsible for 39 national markets in the Asia-Pacific region, Brett also points out that despite many technological advances over the past several decades, air travel time remains largely unchanged.

"It's a surprise that today's travel time [to get to a certain destination around the world] is just about the same as it was 20 or 30 years ago," said Brett.

In this context, regional travel is forecast to outgrow long-haul travel, especially in Asia and Europe.

In Asia, the region's fast economic recovery has boosted people's ability to fly. For example, Thailand has seen more incoming travelers from India, China, and elsewhere in the region, where it takes just a few hours to get to Bangkok and other popular Thai destinations.

A flight time of 4 to 5 hours is generally convenient and comfortable for most regional travelers, so more Indians, Chinese, and other Asians are coming here for leisure and shopping.

Thailand, which is about four hours from India by air, is also increasingly popular for Indian weddings, partly because of the shortage of luxury hotels in India.

According to Brett, there is also a big untapped potential market for regional trips, which take only 2-3 days, because there will not be jet lag, and shorter flights are more suitable for family travel.

Regarding low-cost airlines, which have been expanding their market share rapidly at the expense of full-service carriers, he suggests that the latter could also operate at low-cost by, for example, converting a section of their planes into low-cost seating.

"You could sell meals, like the low-cost carriers, or make your tickets non-refundable or offer different boarding services to make the products cheaper.

"In other words, you may keep the business class at the front, standard economy in the middle, and have a low-cost section at the end," he said, citing British Airways and Iberia as examples.

According to "Travel Gold Rush 2020," a new report on the global travel industry, the traditional cabin classes are coming to an end. Commissioned by Madrid-based Amadeus, which currently has a 33 percent share of the global distribution market for air travel, the report shows that "virtual" personalized cabin classes will soon replace the traditional cabin configuration.

It also predicts a demand for face-to-face travel agents who will evolve into "lifestyle managers" ready to meet the total needs of travelers. There will be also new business opportunities from richer, older travelers toward 2020, while business travel will recover, but the business class may wither.

Globally, the report predicts that Asia will dominate travel spending by 2020, accounting for one-third of all global travel expenditure, up from the current 21 percent.

To enjoy sustainable growth, the industry will have to deliver a total travel experience, which will require new business models. While such a goal remains elusive, the report suggests that airlines will have to become high-speed transport and communications brands aimed at connecting people whether through integration of high-speed rail or even video conferencing.

Face-to-face agents will also resurface because of new technologies and the need for more personalized services as people seek greater adventure and the demographics of travelers shift.

Brett says more airlines will also turn to a global community IT system, as hosted by Amadeus, to save on costs and benefit from increased flexibility.
In Asia, Cathay Pacific is joining the Amadeus system this year, while Singapore Airlines will migrate to the system next year. Thai Airways International has also signed a memorandum of understanding to join the system.

"Business confidentiality, cost saving, and more flexibility such as dynamic pricing of tickets and product differentiation are among the key benefits," said Brett.

Asia is checking into a new era in air travel
David Brett, Amadeus Thailand

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