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Business travel isn't expected to return to pre-pandemic levels anytime soon – CBC.ca

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Kacey Siskind recently took her first business trip to the U.S. since the pandemic began. 

The vice-president of business development at Honk Mobile, a parking app, attended an industry conference in Texas. 

“Our team was fully vaccinated and we felt that we could probably make our way and see how it went… we just wanted to take a chance and really be back out in the world,” said Siskind.

But in Dallas, you’d barely know there had ever been a global pandemic. Panel discussions and networking sessions at the conference happened indoors with no masks in sight — just lots of people eager to re-connect.

Siskind said she found the environment unnerving at first, but soon began to appreciate the experience.

“There is really nothing like being in person with somebody,” Siskind said. “There’s nothing like physically seeing them and talking to them.”

Canadian Kacey Siskind, vice-president of business development at Honk Mobile, recently travelled to Texas to attend her first in-person industry conference since the pandemic began. (Submitted by Kacey Siskind)

Only essential business travel has continued throughout the pandemic; for example, trips related to healthcare issues or critical infrastructure. Work trips related to maintaining or building relationships, making sales or attending conferences had been shut down.

In an online survey of 640 industry professionals, a June poll from the Global Business Travel Association, a U.S.-based industry group, found 91 per cent of companies say they’ve cancelled or suspended most or all international business travel — a huge hit for the industry. 

Slow return for business travel in Canada

In Canada, virtual, online gatherings are expected to be the norm at least until the end of the year, event planners said.

“Our friends down in the states are moving a little bit quicker than us,” said Anh Nguyen, an event planner in Calgary. “In Canada, we’re seeing a little bit of a more conservative approach.”

Event manager Anh Nguyen of Calgary thinks that in-person events will continue to have a virtual presence for the forseeable future as many companies seek to reach a wider audience. (Dave Rae/CBC)

Nguyen’s company, Spark Event Management, organized a number of virtual events over the past year. She believes many organizations — here and in the U.S. — won’t be willing to give up all the benefits that come with going online. 

“There’s no such thing as sold out, right? So if you’re a 300-person event you can now reach 5,000-6,000 people if you wanted it to.”

Nguyen adds that with avatars, networking and breakout room software, industry is getting close to being able to replicate much of a real-life event experience online  — though it’ll never be quite the same.

“The technology has grown and there’s a lot of money and investments being put into event technology right now,” Nguyen said.

Ontario-based TK Events is one of several event management companies replicating some aspects of real-life conferences virtually. (TK Events)

Virtual gatherings may be great in some ways, but industry insiders note that they do next-to-nothing for local economies. Business travellers are often big spenders. They’re often on expense accounts, which benefit hotels, restaurants, taxis, airlines and more. 

“Business travel contributes over $40 billion towards our Canadian economy in pre-pandemic numbers,” said Nancy Tudorach, who works with the Global Business Travel Association. “It’s about 2.5 to 3 per cent of our typical pre-pandemic GDP.”

Airlines are hurting

Vik Krishnan, a consultant with McKinsey & Company, said airlines in particular depend on expensive business class tickets.

“The business traveler tends to book late, they tend to travel with higher frequency, and they tend to also buy some of the more expensive fares,” he said. “Business travel for some airlines comprises 50 to 75 per cent of profits.”

A recent report from McKinsey noted that it took six years for airlines to recover from the impact of the Sept. 11 attacks, and that the industry still hadn’t fully recovered from the 2008 global financial crisis when the pandemic hit.  

The COVID-19 pandemic has been larger in scale and deeper than any of those prior crises, Krisnan said. But if corporate travel remains curtailed, he said airlines probably won’t make up the difference by charging regular consumers more.

“This is an industry that has faced a lot of competition, has faced fairly relentless pricing pressure and cost pressure, and therefore, it’s no stranger to having to deal with an environment where you don’t have a lot of leeway and flexibility to raise prices.”

The recent emergence of new discount airlines in Canada, such as Flair and Canada Jetlines, could make it difficult for WestJet or Air Canada to charge more. 

Business travel may stay depressed

Many of the companies that depend heavily on business travellers are expected to continue to struggle. McKinsey’s report on the airline industry forecasts pre-pandemic travel levels won’t be reached until 2024, and even then will only be at 80 per cent.

Others say the pandemic may have changed the approach to corporate travel forever. 

Kacey Siskind suspects all business trips will now be evaluated differently.

“Is it efficient for us to go to a conference? Yes, if we’re going to see hundreds of people, it’s going to make sense for us to be there,” she said. “Is it smart for me to go off to New York for a night to have one meeting? Maybe not so much.”

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28 Percent Of Gulf Of Mexico Oil Production Still Offline Following Ida – OilPrice.com

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28 Percent Of Gulf Of Mexico Oil Production Still Offline Following Ida | OilPrice.com


Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

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Crude oil production in the United States had fallen sharply over the last two weeks in the wake of Hurricane Ida, but production for the next reporting period is on track to be down as well, as 28% of all crude oil production in the Gulf of Mexico still remains shut-in after the hurricane.

Meanwhile, WTI prices have risen from $69.21 per barrel as the hurricane hit, to $72.62 today—a nearly 5% rise.

Initially, the hurricane wiped out nearly all of the oil production in the Gulf of Mexico. Today—weeks later—28.24% of Gulf of Mexico oil production is still shut in, according to BSEE, along with 39.4% of all gas production on the Gulf. 

For oil, this is still more than 500,000 bpd shut in.

According to the EIA, US oil production fell from 11.5 million bpd before the hurricane to 10 million bpd for week ending September 3. Production rose a mere 100,000 bpd in the next week, ending September 10. But the next reporting period, which ends tomorrow, will also be depressed, with half a million barrels per day still offline as of Thursday.

As for when production should be back in full swing, the Energy Department anticipates that this won’t be until October—with refinery resumption taking even longer.

The supply problems are creating upward pressure on oil prices, which until very recently were concerned more with demand problems due to the coronavirus pandemic—and this fear of a lack of demand has dogged oil prices for over a year.

It seems, however, that Hurricane Ida has cured that problem for the industry—at least for now.

According to the IEA, oil supplies won’t be high enough until early next year to replenish what has recently been depleted.

By Julianne Geiger for Oilprice.com

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Opinion: Activist shareholder's bid to oust CN Rail executive, board members is misguided – The Globe and Mail

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Founder of TCI Fund Management and activist investor Christopher Hohn is ramping up a bid to oust Canadian National Railway’s executive after the company’s failed acquisition of Kansas City Southern Railway.

Darryl Dyck/The Associated Press

Imagine for a moment that activist investor Christopher Hohn owned the Montreal Canadiens.

Picture the billionaire British founder of TCI Fund Management telling hockey fans he is firing the Habs’ general manager and coach, and sending the NHL team’s three best players to the Calgary Flames. And Mr. Hohn also owns the Flames.

That’s the sort of misalignment that exists with fellow shareholders in Canadian National Railway Co. as Mr. Hohn presses ahead with a proxy fight at the Montreal-based railway.

TCI owns 5.2 per cent of CN Rail. TCI also owns eight per cent of Calgary-based Canadian Pacific Railway Ltd.

Over the past four months, Mr. Hohn steadily ramped up a campaign against CN executives. He wanted them to end the pursuit of Kansas City Southern (KCS), the U.S. railway that ranks as the corporate equivalent of the Canadiens’ Hall of Fame goalie and two young forwards who lit it up in last year’s Stanley Cup run. Mr. Hohn now wants four of 14 directors replaced, including chair Robert Pace, and chief executive Jean-Jacques Ruest ousted.

Mr. Hohn’s approach since May effectively has conceded KCS and its coveted southwestern U.S. and Mexican network to CP Rail.

The fact that Mr. Hohn has two horses in the race for KCS, one of which is his clear favourite, means his goals differ from those of fellow CN Rail shareholders. His bare-knuckles approach to such fights has been labelled as “poison,” and Mr. Hohn has been compared to a “locust” by executives at past targets, which include Deutsche Boerse and railway CSX Corp.

Activist investor TCI turns up heat on CN Rail, proposes slate of directors

Kansas City Southern formally scraps CN takeover agreement, backs rival CP offer

Mr. Hohn makes two arguments to support TCI’s activist campaign. In letters and presentations to the CN Rail board, he showed the railway’s results lag those of rivals. Mr. Hohn also said: “The bid for KCS exposed a basic misunderstanding of the railroad industry and regulatory environment.”

The first point is true. For a number of reasons, some outside the railway’s control, CN Rail currently trails other North American railways in efficiency. However, CN Rail executives have made it clear they are on top of the problems. Operations are going to improve, no matter who is on the board.

Mr. Hohn’s second argument is self-serving nonsense. If anything, the CN Rail board and CEO should have been canned if they lost their nerve and failed to take a shot at KCS, the smallest of North America’s seven large railways, and the player with the strongest growth prospects.

For two decades, U.S. regulators at the Surface Transportation Board (STB) made it clear that any consolidation among major railways would face intense scrutiny on competition concerns. In March, when CP Rail kicked off the battle for KCS by striking a friendly, US$29-billion deal, it was universally acknowledged that if the STB was going to approve any takeover, KCS would be the target and no further deals were likely.

KCS represented a once-in-a-generation opportunity to build a network that seamlessly links Mexico’s industrial and agricultural centers to U.S. and Canadian markets. In April, CN Rail tabled a richer offer, and for a few weeks, seemed likely to win KCS.

In early July, U.S. President Joe Biden effectively changed the rules of the takeover game by signing an executive order aimed at limiting corporate concentration across all sectors. The next month, the STB nixed a key element of CN Rail’s takeover strategy on competition issues, while CP Rail raised its offer.

With CP Rail now poised to win KCS – the STB still needs to give final approval – consider what CN Rail accomplished.

Mr. Ruest came close to building the dominant player in an industry that rewards scale. He saw the landscape shift mid-deal, yet still will walk away with US$1.4-billion in termination fees – a hefty consolation prize – and the satisfaction of forcing an arch rival to pay more on an acquisition.

It’s not the outcome CN Rail’s CEO wanted. However, it’s no reason to replace Mr. Ruest and four directors. Unless you are TCI’s Chris Hohn, and your nose is out of joint because the Montreal team ignored your advice, and the Calgary team had to pay a higher price to win the prize.

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Summer travel surge has WestJet and Air Canada asking for volunteer help – CBC.ca

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A surge in summer travel across the country has forced Canada’s two biggest airlines to ask staff to help volunteer at airports to overcome staffing challenges — a move that is creating pushback from unions.

In an email to all employees, WestJet described how the rapid growth in passenger numbers is causing operational problems at several airports, including its flagship airport in Calgary.

The “growing pains of recovery requires all-hands-on-deck,” read the message, which included an open call for any staff members to sign up to volunteer to help guests requiring wheelchair assistance at the Calgary International Airport.

Meanwhile, Air Canada has needed extra personnel at Toronto’s Pearson airport since “airport partners are stretched beyond their capacity, which led to significant flight cancellations and missed connections,” read an internal memo.

In late August and early September, air passenger traffic reached its highest point since the pandemic began. The increase in business is critical to the aviation industry, which was devastated early on in the crisis as many countries restricted international travel.

The industry is not immune to the staffing challenges faced by many sectors as lockdowns started to lift; airlines continue to cope with changing government restrictions, while also following a variety of COVID-19 protocols at domestic and international airports.

In the U.S., American Airlines and Delta Air Lines also asked staff to volunteer at airports this summer.

At Toronto’s Pearson, the international arrival process can take up to three hours, as passengers are screened by Canada Border Services Agency and Public Health Agency of Canada agents, collect bags and possibly take a COVID-19 test.

“As the technology for sharing and displaying vaccine documents improves, passengers become more comfortable with the new process and vaccine-driven changes in border protections take effect, we hope to see further improvement in wait-time conditions in the terminals,” a Pearson spokesperson said in an email statement, which highlighted other steps to reduce delays.

Union objections

But several unions have advised their members to avoid volunteering for a variety of reasons.

CUPE, which represents flight attendants at WestJet, declined to comment. However, in a letter, it told members that “the company is imploring you to provide free, volunteer and zero-cost labour. THIS IS UNACCEPTABLE.”

The Air Line Pilots Association, which represents WestJet’s pilots, also declined to comment. But in a message to members, it highlighted how “if you are injured doing this work, you may not be covered by our disability insurer.”

Unifor, which represents customer service agents at both of Canada’s major airlines, said its members were upset about the call for volunteers and the union wasn’t happy that there wasn’t any advanced warning or conversation.

“Take a group of workers that is already very stressed by the kind of operation that’s going on, the quantity of passengers, the amount of extra processes that are in place because of COVID in order to travel — and then adding these pieces on is not helpful,” said Leslie Dias, Unifor’s director of airlines.

During the pandemic, WestJet decided to outsource the work of guest-service agents, who would help passengers that require wheelchairs, assist with check-in kiosks and co-ordinate lineups.

But the contractor is struggling to provide enough workers, said Dias, and that’s why there was a call for volunteers.

After flying more than 700 flights daily in 2019, WestJet flew as few as 30 some days during the pandemic. Currently, there are more than 400 flights each day.

“WestJet, as is the case across Canada and across many industries, faces continued issues due to labour hiring challenges as a result of COVID-19,” said spokesperson Morgan Bell in an emailed statement.

“As WestJet looks ahead to recovery, we continue to work toward actively recalling and hiring company-wide, with the current expectation we will reach 9,000 fully trained WestJetters by the end of the year, which is more than twice as many WestJetters as we had at our lowest point in the pandemic some five months ago,” she said.

Air Canada said it only asked salaried management to help volunteer at Pearson airport. 

Unifor said the airline was short of workers because the company didn’t have enough training capacity to accommodate recalled employees and couldn’t arrange restricted-area passes on time.

Thousands of airline workers lost their jobs, were furloughed or faced wage reductions last year, although the carriers are bringing back workers as travel activity increases.

Officials at Toronto’s Pearson airport say they are trying to reduce delays and wait times by bringing back the international-to-domestic connection process, which helps some arriving international passengers that are connecting onward in Canada to complete the customs process faster and go directly to their next flight. (Evan Mitsui/CBC)

Returning staff

At WestJet, its customer service agents have been recalled, according to Unifor. Many employees in other positions, though, remain out of work, including about 500 furloughed pilots.

Air Canada said it has been continually recalling employees since last spring, including more than 5,000 in July and August.

Asking for volunteers is an “unusual” occurrence in the industry, said Rick Erickson, an independent airline analyst based in Calgary. But he said it’s not surprising since cutting a workforce is much easier than building it back up.

Airlines have to retrain staff, secure valid certification and security passes, and find new hires as well.

Erickson said he even spotted WestJet CEO Ed Sims helping at the check-in counter in Calgary in recent weeks, as passenger activity was at its peak so far this year.

“This has been the most challenging time, honestly, in civil aviation history; we’ve never, ever seen anything approaching 90 per cent of your revenues drying up,” said Erickson, noting that airlines still have to watch their finances closely.

WestJet CEO Ed Sims is shown at the airline’s headquarters in Calgary. He’s been helping at the check-in counter at the Calgary airport in recent weeks. (Kyle Bakx/CBC)

Asking employees to volunteer isn’t illegal, but it does raise some questions, said Sarah Coderre, a labour lawyer with Bow River Law LLP in Calgary. 

“Whether or not it’s fair, and the sort of position it puts the employees in, if they choose not to volunteer, that would be concerning for me from a legal standpoint,” said Coderre.

Air Canada is currently operating at about 35 to 40 per cent of its 2019 flying capacity, but said one bright spot on the horizon is bookings for winter getaways toward the end of this year and the beginning of 2022.

“When looking to the sun leisure markets, we are very optimistic about our recovery,” a spokesperson said by email. “We are currently observing demand growth that is above 2019 levels.”

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