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How Covid-19's Made Flying Business Class Feel More Like Economy – BNN

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(Bloomberg) — Forget the flute of chilled Moet & Chandon before takeoff, mid-flight gin and tonics and a roaming dessert trolley after dinner. Flying business class isn’t what it used to be.

Efforts to minimize human interaction and reduce the risk of infection are taking the shine off the most expensive seats onboard commercial aircraft. Gone are the multi-course banquets and warm personal service, once the hallmarks of carriers like Singapore Airlines Ltd. and Cathay Pacific Airways Ltd. These days, what’s left of premium-grade travel is functional, hygienic and closer to cattle class — only with more legroom.

The limitations are one more headache for an industry grappling with a near-total collapse in demand and follow years of luxury oneupmanship among carriers in a contest for the most profitable passengers.

Suddenly, it’s harder to tell airlines apart when you’re up the pointy end. That’s making it tougher to win top-paying customers, and risks pushing some to the back of the plane.

‘Feels Like Economy’

“There’s nobody to help you with your bag, you’re not escorted to your seat, and there’s definitely no pre-flight champagne,” said Sandra Lim, who flew business class to Singapore from Los Angeles with Singapore Air late last month. “It feels like it’s reverted back to economy class.”

Crew wore face masks and eye shields, and avoided contact and shared touch points where possible, Lim said. While passengers could ask for a drink, they weren’t freely offered, and there were no menus. Meals came with everything on one tray, just like in economy, rather than in separate courses.

“When you strip away the food and service, it’s just a mode of transport to get from point A to B,” said Lim, a 38-year-old food and beverage consultant.

Some overseas routes have resumed, but traffic worldwide has barely started to creep back. International passenger demand was down 92% in July. The planes that were flying were typically about half full, according to the International Air Transport Association.

‘Structural Change’

It’s also not clear to what extent the premium market, which IATA says generated 30% of airlines’ international revenues in 2019, can recover. Many grounded business travelers have become accustomed to video conferencing rather than making visits in person, and a global recession threatens corporate budgets.

IAG SA, owner of British Airways and Iberia, said in July that leisure demand will recover before corporate travel, and this “structural change” in the market will lead to new cabin layouts. On a conference call, IAG Chief Financial Officer Stephen Gunning said British Airways retired its Boeing Co. 747s early partly because they had so many premium seats.

Virgin Australia Holdings Ltd. Chief Executive Officer Paul Scurrah said at a conference this month that business travel would rebound slower than the overall market as some companies maintain work-from-home policies. Qantas Airways Ltd. CEO Alan Joyce was optimistic that demand would fully recover, but not until 2023 or 2024.

Low-cost airlines such as Ryanair Holdings Plc and EasyJet Plc, largely catering to short-haul leisure travelers, are likely to bounce back faster than airlines with a bigger international focus, UBS Group AG analysts led by Jarrod Castle said in an Aug. 21 report.

Paying Up?

The appeal of a larger, more comfortable seat that extends fully flat may be enough to keep business class passengers coming back, said Volodymyr Bilotkach, a lecturer in air-transport management at the Singapore Institute of Technology. But it might be different for those in premium economy.

“On the airlines where I have experienced it, this product was more ‘economy’ than ‘premium’ to begin with,” said Bilotkach. “I don’t know if passengers would be willing to pay that price differential now.”

Yet airlines somehow need to keep filling premium seats, or get rid of them. According to Bilotkach, a single business class seat that lies flat needs to generate at least four times the profit of an economy seat to justify all the space it takes up in the plane.

Some airlines will use the pandemic to permanently downgrade their offerings in premium cabins to save money, said Jeremy Clark, who runs Malaysia-based JC Consulting, which advises carriers on catering and service. That means many airline-dependent suppliers will shut, limiting the scope for on-board dining and service to bounce back to pre-pandemic levels when travel recovers, he said.

That said, “there will still be airlines that recognize the value good food and service bring to their brand in return for the relatively small cost of providing it,” said Clark. “We’re human beings. We like to be spoiled.”

While Covid-19 has reduced the frequency of service onboard, when safe, airlines will return to a fuller culinary service with premium cabins leading the way, according to David Loft, chief commercial officer of Emirates unit dnata catering.

Safety Show

Until then, business- and first-class passengers should expect scaled-back service and more modest meals, said Michelin-starred chef Vineet Bhatia, who has worked with British Airways and Qatar Airways for almost two decades.

He said travelers needn’t worry about the risk of infection from the food or even a tipple — “having a scotch in a plane with 40% alcohol is safer than having a glass of tap water” — but they want to see some Covid-19 precautions.

“The safety aspect has to be very visual,“ said Bhatia. “The passenger wants to see crew maintaining distance, greeting him fully covered, giving him his meal in a wrapped up box and leave. That looks like science fiction, but that’s how it is.”

Even that wasn’t quite enough for Graziela Guludjian, who took a 12 1/2 hour flight to Barcelona from Singapore in business class last month. The Singapore Air crew gave her a bag with a facemask, hand sanitizer and disinfectant wipes.

“I didn’t feel comfortable,” said Guludjian, who was moving back to Spain with her husband and three children. “I didn’t want to fly, but I had no option. I don’t want to travel any time soon.”

©2020 Bloomberg L.P.

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Economy

Canada’s unemployment rate holds steady at 6.5% in October, economy adds 15,000 jobs

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OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.

Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.

Business, building and support services saw the largest gain in employment.

Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.

Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.

Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.

Friday’s report also shed some light on the financial health of households.

According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.

That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.

People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.

That compares with just under a quarter of those living in an owned home by a household member.

Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.

That compares with about three in 10 more established immigrants and one in four of people born in Canada.

This report by The Canadian Press was first published Nov. 8, 2024.

The Canadian Press. All rights reserved.

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Economy

Health-care spending expected to outpace economy and reach $372 billion in 2024: CIHI

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The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.

The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.

CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.

This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.

While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.

Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.

The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.

This report by The Canadian Press was first published Nov. 7, 2024.

Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.

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Trump’s victory sparks concerns over ripple effect on Canadian economy

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As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.

Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.

A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.

More than 77 per cent of Canadian exports go to the U.S.

Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.

“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.

“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”

American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.

It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.

“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.

“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”

A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.

Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.

“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.

Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.

With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”

“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.

“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”

This report by The Canadian Press was first published Nov. 6, 2024.

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