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Etihad's Vincent Frascogna discusses:
Throughout the pandemic, Etihad Airways has been ahead of the curve with some of its health initiatives, including early moves to make Covid-19 testing mandatory for travelers. More recently, it moved to ensure rapid vaccination of its on-board employees, as its home country, the United Arab Emirates, boasts one of the world's highest vaccination rates. With a "complete turnaround" a few years away, the carrier now is building back capacity while trying to adapt quickly to ever-changing travel restrictions, border closings and quarantine requirements. Etihad Americas VP Vincent Frascogna recently spoke with BTN transportation editor Michael B. Baker about the carrier's recovery strategy and signs of corporate demand's return.
BTN: How has Etihad fared during the pandemic so far?
Vincent Frascogna: We're more or less one year on from when we had to ground our entire fleet at the end of March last year. Heartbreaking as it was to see our aircraft parked on the runway, engines covered up, it also gave us a good opportunity to take a step back and look at how this fits into the strategy we already had in place for the redesign of our airline going forward, which was already two years in the making. We'd already made significant changes to our business, our operations, our network and fleet, so it almost put us in a better position than most airlines when the pandemic hit.
Of course, the whole aviation industry has witnessed unthinkable challenges over the past year. While it gave us an opportunity to look at bringing forward heavy maintenance on our aircraft while they were on the ground, we also had to cope and contend with every day something new taking place: a border reopening, a border closing down, new restrictions being put in or new requirements regarding testing put into place. What we've been able to do is work hand in hand with our home market, with the UAE and Abu Dhabi, on what those processes look like and try to look ahead. We were the first airline to implement the requirement for PCR testing for all passengers flying with Etihad. Back in August last year when we did that, we were the outlier, but as time has progressed a lot of destinations have required this sort of testing just to enter a country. We put ourselves in a very strong position not just from a testing perspective but also [regarding] what the future of travel will look like.
BTN: What about the various health passport initiatives in the works?
Frascogna: Health passports are something we've been looking at for some time. It's still difficult at this stage to determine exactly how Covid is going to play out. We know from previous experiences when things happen within aviation, whether it's a pandemic or a security issue, there are certain things we need to harmonize on when it comes to transportation standards, working with governments, working with industry partners and working with destinations to understand what that new transportation standard is going to look like going forward. We've been working with a variety of different companies, some within the industry and some outside, to develop technology required for a global health certification system. One of the most recent we announced was our partnership with [the International Air Transport Association] to launch the IATA Travel Pass, which is going to help passengers easily and securely manage their travel in line with whatever the government requirements will be with Covid tests and vaccines. Those trials will begin on selected routes this month, and then we can see what the future looks like with the rollout of health passports going forward. We definitely want to be at the forefront of making this happen and accelerate this process, because that's where we see that demand is going to be stimulated, by having that level of confidence in the market across all traveler segments.
BTN: What will it take beyond that to stimulate demand?
Frascogna: It's not just about the travel experience. It's about where you're going, and how safe is the destination? What's the vaccine rollout program? What are the policies and requirements for entry from countries that have not had a great vaccination program? If I look at the UAE as a whole right now, it has come leaps and bounds in terms of its own vaccination progress, and if I take that down to an Etihad level, the majority of Etihad staff in the UAE has been vaccinated, and 100 percent of our cabin crew and flight crew have been vaccinated. A guest can be sure that they're getting on an aircraft that at a minimum everyone has had a negative PCR but also that all the crew on board is fully vaccinated. Abu Dhabi has been the leader in sports, if you look at how they've been able to put on a lot of the [Ultimate Fighting Championship] fights that traditionally take place in the U.S. but have been held offshore in Abu Dhabi with fully quarantined areas. With Dubai, you have Expo 2020, which has been delayed until October 2021, and the goal is to continue the UAE's development from the vaccination perspective but also monitoring the entry requirements from other countries to ensure that all people within the UAE, whether it's residents or visitors, are kept as safe as possible.
BTN: Are you seeing signs that corporate customers are getting ready to travel?
Frascogna: We're already in discussions with some of the large corporates about adding new destinations, amending deals and identifying opportunities to save costs going forward. It is not just about traveler safety, but also a lot of companies have been hurt over the past year financially. So, how can we work with those organizations in terms of what travel budgets they see themselves having? And how we can work within those budgets to ensure they are choosing Etihad as their preferred carrier for the networks they need covered?
BTN: Where are things as far as network recovery?
Frascogna: An airline is only as good as the network it has, and we're very much in the hands of governments and government policies and procedures, whether it's borders being open in general or open to select origins and nationalities. These green lists and red lists change on a daily basis, with countries or specific cities going into lockdowns or countries being added and removed from lists. In the North American market, the U.S. largely has remained open to international passengers, especially from destinations where we've been taking passengers from via the UAE into the U.S. Our North American schedules are actually starting to bounce back to pre-pandemic frequencies. [New York's John F. Kennedy International Airport] and Chicago are seven days a week, Washington is back up to three or four days a week and [Los Angeles] is on the horizon to start very soon. Even with Toronto, pre-pandemic we were five days a week, and going forward we're going to be six days a week. We had to change our aircraft and fleet strategy for North America. Instead of operating [Boeing] 777s and the 380s, the larger aircraft in our fleet, we focus more on the 787-9 into the markets. We have a good balance of still being able to take cargo on some of these aircraft. Traditionally, we've been very passenger-focused, and on the passenger flights we've been operating, cargo has been a complementary asset. Going forward, cargo becomes a lot more of a strategic consideration alongside passenger flights, at least for the short term, so we can continue to have the right frequencies for certain destinations. Cargo is growing leaps and bounds, which is why from an Abu Dhabi perspective, we've tied up with the Hope Consortium, which has regionally been launched with Abu Dhabi, Etihad and some other entities about the distribution of the Covid vaccine. Etihad is one of the only Middle Eastern carriers with the certification for pharma logistics aboard aircraft.
BTN: Where are you seeing demand at the moment?
Frascogna: If we look at where are these North American passengers flying to, the UAE Is open. Abu Dhabi does have some quarantine measures in place, but we're able to take passengers beyond into destinations like Bangladesh, Pakistan, the Maldives, the Seychelles and even Thailand. Thailand is probably going to be one of the first destinations that puts in place an acceptance program based on whether you've been vaccinated or not. The UAE and Israel over the last week have announced that based on each country's vaccination program, and how well they've been rolled out, there's not quarantine requirements between the two countries. That's what you're going to start seeing, in parallel with health passports, is countries coming to an agreement between themselves based on their own vaccination rollout programs.
BTN: What impact will last year's agreements between the UAE and Israel have?
Frascogna: The Abraham Accords were a momentous occasion. [April 6 was] our first flight form Abu Dhabi to Tel Aviv. There are strategic discussions going on between the UAE and Israel—not just from a leisure perspective but from a business perspective—and there are untold opportunities, now not just government to government but also private enterprise and organizations working very well together. Israeli companies are now approved to have the ability to set up branch offices or regional offices in the UAE and vice versa, so it opens up a whole new world for us. As things start to open up, if we look at North America to Israel, having the UAE as a transit point into Israel is going to give more North American organizations that ability to do business in the UAE and Israel as well. It also opens up that whole region in terms of Jordan, Egypt and Lebanon as well, for which Etihad is a fantastic vehicle for business travelers.
BTN: How are you adjusting service levels as demand returns?
Frascogna: Etihad has always been known for its high levels of service, high-touch service in all cabins. The feature of the guest experience has been an area of focus for the airline from the beginning. We were the first airline to launch a full wellness program from start to finish, whether it's the booking process and the information that's available to the web chats that are available, the call center staff fully trained in all of those processes and procedures, and on board the aircraft having fully trained wellness ambassadors to support customers through that journey. For the foreseeable future, we're going to continue to see masks aboard the aircraft, and our crew will remain in [personal protective equipment]. It's very important that our high-touch service is maintained as much as possible, so when we look at meal service and how it's presented, it's been re-evaluated. Our cabin crew isn’t having to interact as much, but it's still keeping the higher standards of hospitality that people expect. Not much has changed on board, just the level of interaction between the crew and passengers. Looking ahead, we've started incorporating touchless features in the lavatories and on windows, and you will start to see premium seats with additional privacy and separation put in place as we go forward.
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