Daily Podcast: A High-Speed European Merger

Today’s edition of Skift’s daily podcast discusses the merger of two marquee European rail lines, Delta Air Lines’ bet on premium flyers, and China’s internal tourism boom.

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Episode Notes

Airline executives were uncertain at the start of the pandemic about how Covid would affect customer expectations. But even as cases continue to surge worldwide, a Delta Air Lines executive believes customer concerns are back to normal, and with a new emphasis on premium traveling, reports Skift Editor-At-Large Brian Sumers.

Ranjan Goswami, Delta’s senior vice president for customer experience, said that at least two trends are boosting premium leisure travel. First, he said, people are engaging in “revenge travel,” as they seek to make more trips and spend more money to make up for lost journeys during the worst of the pandemic. And second, some of Delta’s customers are increasingly nomadic and take advantage of corporate policies allowing them to work from anywhere.

As a result, Delta is seeing an enormous boost from premium leisure travel. President Glen Hauenstein told analysts at a recent investor conference that margins for premium seat sales are significantly higher than those for economy class.

We go to China next. Although dozens of destinations have eased travel restrictions in recent months, they’ve been unable to welcome Chinese tourists who are essentially prohibited by Beijing from traveling abroad. But as domestic travel is boosting China’s economy, a new profile of a Chinese tourist is emerging, writes Asia Editor Peden Doma Bhutia.

A report from consulting firm McKinsey predicting key trends in its tourism market found that Chinese travelers would be more likely to visit domestic destinations focused on providing deeper local experiences and outdoors activities like skiing. Steve Saxon, a partner at the firm, said as many in China are wary about going to congested places, Chinese tourists will probably opt for experience-based tourism. The country is home to more than 800 ski facilities.

Finally, Airlines Reporter Edward Russell writes that European rail travel is about to get a little easier. How so? The long-planned merger of rail operators Eurostar and Thalys has been approved, which will create a single company connecting some of Europe’s largest cities.

European Commission officials approved the merger without conditions on Tuesday, saying it would do very little to change the structure of the market. The merged company, which would carry as many as 19 million passengers according to 2019 figures, will use the Eurostar name and be based in Belgium.

Eurostar and Thalys have said their merger would lead to easier bookings, streamlined schedules, and a new unified loyalty program. A single high-rail network connecting Belgium, France, Germany, the Netherlands, and the UK is a major part of the commission’s goal of increasing cross-border rail travel on the continent. Only 7 percent of cross-border trips in Europe are made by rail.