Etihad’s Vincent Frascogna discusses:
- Working with UAE Covid-19 testing requirements
- Why corporate buyers are asking for business-class discounts
- New opportunities for direct service to Israel
The smallest of the Big Three Gulf carriers, Etihad Airways had a big start to 2020—on track to double earnings compared with last year, per its most recent earnings report—until, as with all carriers, Covid-19 brought it all to a screeching halt. Now, the carrier is cautiously rebuilding its network, including service from four of its five North American gateways. Etihad Americas VP Vincent Frascogna this month spoke with BTN transportation editor Michael B. Baker about Etihad’s path to recovery and how being a “small, nimble” carrier will be a benefit in a world of unstable demand and constantly shifting regulations.
BTN: What does Etihad’s network look like right now?
Vincent Frascogna: Like most carriers, toward the end of March, we had to completely ground everything. That was primarily dictated by the [United Arab Emirates] government closing the borders to all flights coming in. Since then, we’ve been operating a number of repatriation flights, from Chicago, from Toronto, from New York. We’ve been substituting some of our passenger flying with cargo flying. We still operate a pretty decent-size cargo freight operation into the U.S., but also, we’ve been using our passenger aircraft to put cargo into the belly and also in the passenger areas onboard. As borders have reopened and regulations have relaxed somewhat in certain countries, we’ve been able to restart our schedule. For the U.S., that is five times a week service out of [New York’s John F. Kennedy International Airport] and the same out of Chicago. From Washington, it’s three times a week, and from Toronto, five times a week as well. It’s just [Los Angeles] that’s really remaining. Right now, we don’t see enough demand to warrant restarting LAX from a commercial perspective.
BTN: How are you determining where to restart flights?
Frascogna: If we look at our core destinations out of North America, the UAE is obviously one of the biggest, but India and the Indian subcontinent is right up there in terms of our top 20 destinations. With India being closed to most passengers coming in right now and not likely to reopen until the beginning of September, that limits us in terms of demand passenger opportunity out of North America. [Note: After this interview, Etihad announced it would begin operating a series of special passenger flights to Bengaluru, Mumbai and Delhi on Aug. 21.] We’ve substituted the aircraft types that we normally operate to North America. We normally operate a mix of [Airbus] 380s, [Boeing] 777s and a [Boeing] 787 operation into Washington. We are now operating just a 787-9 into all those markets. That satisfies our requirements right now in terms of demand and the efficiency of those aircraft based on the fewer passengers we carry.
It’s a very fluid situation. It changes frequently. A border will reopen, then it closes, then it reopens, or there are regulations that different governments put in around 14-day quarantine periods or, similar with what the UAE government has introduced in the last 10 days, the requirement is to have a negative [polymerase chain reaction] test prior to getting onboard our aircraft. Any passenger who is flying into the UAE or transiting the UAE, whether it’s Abu Dhabi or Dubai, the passenger is required to present a negative PCR test no older than 96 hours prior to check-in. It’s an additional process that passengers flying on us now have to follow, but the feedback we receive is pretty positive when we’re checking guests in. They seem to have a lot more peace of mind that they’re getting on an aircraft where everyone has displayed a negative PCR test. With what’s going on right now, safety, security, hygiene and sanitization are all things first and foremost on passengers’ mind when they’re choosing which airlines to fly.
BTN: Are you conducting that testing?
Frascogna: We’re not testing. We’re obviously communicating with the guests to make sure they understand they need to do this prior to check-in. In the U.S., they can go to any accredited laboratory facility to get that PCR test done. Yes, there have been reported delays in terms of getting the results, but the 96-hour period starts from the time you get your result to the time you check in. It does leave people enough time to organize their plans and get to the airport.
BTN: What types of demand are you seeing? Any business travel?
Frascogna: There’s still some repatriation flying taking place. In terms of the UAE, we’ve repatriated several thousand passengers from the U.S. and Canada back to the UAE. We’ve also worked with other governments. We’ve operated charters for the Kuwaiti government out of Canada into Kuwait. We’ve worked with other organizations to repatriate Indian nationals from the U.S. and Canada to India, and also Canadian and U.S. nationals from India back to the U.S. and Canada as well. Friends, family and relatives is one segment we see some pent-up demand for, particularly for the Indian subcontinent. We believe that as soon as the Indian regulations on border entry are relaxed that we should see some increase in demand from that particular segment.
Business travel of course is slower than usual. A lot of companies have now put outright bans on any travel until they see what’s happening. A lot of people are talking about this being the end of business travel as we once knew it, but I don’t believe that. I think there’s always a place for business and corporate travel. It may rebound slightly slower than other customer segments, but it will rebound.
BTN: What is the best-case scenario you are looking at as far as demand growth?
Frascogna: Aircraft don’t make money when they’re sitting on the ground, so the goal is to get our aircraft up and running, in the air, with a load factor that makes sense to have that aircraft operating. But, we have to do this mindful of the fact that we’re in the midst of a pandemic. We have to do it safely and securely and in conjunction with the multiple different regulations that we’re seeing globally from different governments. We are a very small, nimble airline when it comes to making changes. We can do it quickly. When we grounded all our aircraft, we embarked on probably the biggest maintenance program we’ve ever done. We changed out every single carpet, every single seat cover, we fixed many minor technical issues onboard the aircraft and brought forward all the normal maintenance programs on the schedule of a specific aircraft. Not many airlines can embark on a program like that. In terms of outlook, travel will come back. It’s within the DNA of every human being right now to actually move, travel and experience new things, to have face-to-face communication. Nothing replaces face-to-face communication. Travel will bounce back, and business travel will bounce back, especially in those countries where it is a cultural influence to be face to face, whether to do a negotiation or in those industries, like construction or the medical industry, where you can’t actually function as a business unless you are in place.
BTN: What are you doing to build relationships with corporate customers at this time?
Frascogna: We’ve got a number of our corporate sales teams here in North America doing exactly that, not only looking at maintaining those relationships with existing corporate customers, looking at what they’re seeing within their industries, which then helps us make decisions on what we need to do with our network, but also establishing new relationships. There are new opportunities that come out of this. If you look at what the UAE government is doing throughout the pandemic, they are looking to establish new trade opportunities, new commercial opportunities. We might not be flying to do this, but the opportunities between the UAE and other countries still exist and are still growing. Some of our existing corporates, who have normal economy [class] policies, are coming to us and saying, “Look, we know our staff is going to be traveling. What can you do to give us a very good deal in your premium cabins? By virtue of your configuration, social distancing works for us in business class, but we need good rates and good deals, so how can we work together?” We’re seeing multiple conversations happening across the board and new markets opening up as well. The UAE and Israel just announced a pretty historic agreement between the two countries which should ultimately enable direct flights between the two countries, which we haven’t had before, and increase tourism, commercial activity and new relationships as well. Things don’t stop. We’re just dealing with them in a different way. When we come out of this, we believe particularly on the business and corporate side, we’re going to be in a much stronger position.
BTN: What measures have you put in place to reduce Covid-19 spread?
Frascogna: We have taken sort of a different step to this. We’ve looked at what does the consumer want to see, no matter if it’s a business traveler or a leisure traveler. They want to see that the airline actually cares about them as an individual, so we’ve introduced the Etihad Wellness Program. That starts even before you book your ticket. We’ve set up a 24/7 team in Abu Dhabi, multi-lingual, and they are trained in all of the protocols we have in place, not just what you see as a consumer but also what we’re doing behind the scenes. Our catering facilities, our food laboratory testing facilities, our baggage halls, they can give you that peace of mind, even before you book a ticket. In terms of booking the tickets, we have full flexibility on all ticket types right now. If you book and end up being in a position where there’s a border closure and we can’t operate, you have the flexibility to rebook at no cost. That in itself is important to do even before we get someone to a check-in desk. When someone does arrive, in the UAE all of our limos are sanitized after every journey. At the check-in facilities in Abu Dhabi, we have all the social distancing measures, plexiglass up in front of all check-in desks, staff all wearing gloves and masks. Sanitization stations are all over the airport, and we work hand-in-hand with the airport authority in Abu Dhabi to make sure the Etihad Wellness Program is mirrored with what the airport is offering guests, whether that be through the customer journey in the airport or at customs, immigration and some of those screening processes.
Onboard, one of our cabin crew has been designated as the wellness ambassador on board. He or she will be in designated [personal protective equipment], which allows them to stand out from the rest of the crew. They’re specially trained in all the protocols on board, both for guest purposes and for the rest of our crew, their main point of contact on board. They’re also in charge if any guests display symptoms of being unwell onboard. We have quarantine measures at the rear of the aircraft where these protocols get implemented.
BTN: What about at your other gateways?
Frascogna: Working with different airports around the world, we don’t have as much control over what happens as we do in our home airport in Abu Dhabi, but all our airport managers and regional managers are working with the relevant airports to ensure similar safety measures are in place. We don’t have any of our lounges open outside of Abu Dhabi right now. In Abu Dhabi, we do have our premium lounges open with social distancing protocols in place. The PCR testing in play right now gives you that added level of peace of mind when flying with us. We do temperature checks in addition to the PCR testing at the airport, so that’s an added process that gives added peace of mind.
BTN: Are you coordinating efforts with your airline partners as well?
Frascogna: In the U.S., we have interline agreements with American [Airlines] and codeshare agreements with JetBlue. We’re constantly talking with each other to understand what the processes are that are in place. Of course, different country regulations and different country government regulations put different slants on how we manage things, but we are working with different partners to understand how we can eventually bring a level to consistency to the industry as well. Like any major changes to aviation—take security measures implemented after 9/11—they become something new until they become something normal. Taking shoes off, going through X-ray machines were all new, and it became something normal, and I’m pretty sure we will see similar things implemented that will become normal when it comes to this pandemic.