Three CAs on what the future holds for aviation and travel
This article was written before the coronavirus pandemic had escalated in the UK, Europe and the USA and first appears in the April 2020 issue of CA magazine.
It’s been a difficult time for the airline industry and this year looks likely to become increasingly challenging. Ryan Herman speaks to three CAs involved in different wings of the sector to find out what the future holds for aviation and travel beyond 2020.
If there is one aspect of modern life in which Britain leads the world, it’s international air travel.
The most recent figures from the International Air Travel Association show British air passengers boarded 126.2 million overseas flights in 2018, more than people from the US (111.5 million) and China (97 million).
Travel and tourism is the fastest growing sector of the UK economy, outstripping financial services. But it has been a turbulent and challenging period with the collapse of Thomas Cook and Flybe and growing scrutiny of air travel’s environment impact – the third runway at Heathrow was recently rejected by the Court of Appeal, citing the government’s failure to consider its Paris Agreement commitments on climate change.
Then there is coronavirus, which could seriously impact the global economy and attitudes to travel for the foreseeable future. We speak to three CAs about the challenges facing the sector.
Sumati Sharma CA
VP Product & Commercial, Virgin Holidays, Graduated in 2001
When Sumati Sharma appeared in The CA back in 2018, she had just helped to launch the Women in Aviation and Aerospace Charter in the UK. “We only had 40 signatories, of which Virgin Atlantic was one. Now we’ve reached 200,” says Sharma.
“I spoke at the House of Commons last year and we’re influencing government in this area. I know that I’m in a really privileged position to take it forward as a CA for the next generation.”
That’s not the only area where she and Virgin are seeking to drive change. In the same year, Virgin Atlantic became the first airline to fly long haul using sustainable fuel, going from Orlando to Heathrow with fuel developed by LanzaTech that recycles waste gases that would otherwise be burnt into the atmosphere, halving carbon emissions.
It is paramount we remain at the forefront of sustainability
The flight prompted Virgin founder Richard Branson to call on the UK government to commit to making this fuel a commercial reality in the UK. LanzaTech stated that it could have three UK plants running by 2025, producing up to 125 million gallons of sustainable fuel per year – enough to fly all of Virgin Atlantic’s UK outbound flights (as a 50:50 mix).
Sharma adds, “It is paramount we remain at the forefront of sustainability. Customers are becoming more thoughtful about their impact on the environment and we want to make sure we are their first choice. We truly believe travel is a force for good – it broadens people’s horizons, creates relationships around the world and drives new opportunities. But we also have strict rules with our suppliers, hoteliers and other partners so they are operating in the most effective way. That is something for which I’m accountable on the holidays side.
“Wildlife conversation is also really important. In July, we announced that we would no longer sell excursions to anywhere that had captive whales and dolphins at places like Seaworld and Discovery Cove – that decision was directly linked to the feedback we had from our customers.”
Last year, Sharma moved back to Virgin Holidays as its VP of Product and Commercial and she now runs a team of 130. She was destined to work in travel, she believes: born in Essex, she moved to Holland, France, and Scotland before starting university aged 16, then working for EY while studying to become a CA.
“Outside of the outstanding professional and technical skills you develop as a CA there are two areas that really stand out for me. One is curiosity. I started out in the audit office at EY in Scotland, later moving to its London offices. In audit you have to ask a lot of questions, but also consider how to recommend and influence change. As a CA you have to ask questions of people at board level even though you’ve just come through the door. The second area is ethics. I’m delighted it’s now part of the curriculum. Putting trust at the centre of what you do is critical – trust is integral to everything we do as CAs.”
This year she achieved a personal milestone by winning the 30% Club scholarship to the London Business School for the 2020 Senior Executive programme, something awarded to one woman each year. “The foundation the CA role gives is priceless,” she adds. “You develop strong skills in the strategy space around stakeholder management and leadership. It’s the perfect platform for a business career.”
John Watson CA
CEO, Crosswind Developments, Graduated 2001
US academic and airport consultant John Kasarda coined the phrase “aerotropolis” for a future in which airports would be hubs for economic development and urban growth. As they grow they will become more like cities, he argues. Take Frankfurt, where KPMG moved some of its operations. Or Dallas, Fort Worth, which counts four Fortune 500 companies located close to the airport.
In Edinburgh, plans are afoot to build a digital quarter, social housing and educational facilities on a 65-acre plot of land that used to be the airport’s second runway. Entrusted with this project is ICAS member John Watson CA. Having started out an engineer, he was “very keen to understand business and when I did the research about the quickest way to get experience, the CA qualification came up. I was able to learn while also working for PwC.”
He went on to 3i and Lloyds Bank before being headhunted for the role of Chief Commercial Officer at Edinburgh Airport in 2013, shortly after Global Infrastructure Partners bought it from BAA.
“The opportunity for Edinburgh was in people coming to, rather than going from, Scotland. When we looked at the data of passenger flow, international in-bound customer flights offered the real growth prospects,” he says.
Passenger numbers grew from 9.2 million in 2012 to 14.9 million in 2019, largely due to an increase in direct flights. Watson says the future growth of British airports should be centred on utilising excess capacity at regional airports rather than the restricted London hubs, thus reducing the need for connecting flights and concomitant fuel and environmental impact.
A healthy city equals a healthy airport and vice-versa
In 2017, Watson was made CEO of Crosswind Developments to deliver a major infrastructure project at the airport that will extend its importance to Edinburgh’s economy.
“It’s symbiotic: a healthy city equals a healthy airport and vice versa,” he says. “At Edinburgh, there was an opportunity to develop the land to support a growing city in some key sectors of the future including digital. Crosswind has bought 65 acres that the airport doesn’t need and we are going through a planning process with the city council to build a sustainable, inclusive digital quarter.
“A lot of airports were built in the 1940s with excess land capacity. You can choose what you do with it: the value of international connectivity is wasted if you put industrial units there, especially in Edinburgh where traffic is business-led. Crosswinds is the point where air, road and rail networks come together. We have a train station at the bottom of our land. By building a road through this land we can save more than a million bus miles a year.”
Watson adds, “Digital is a very inclusive industry. The only barrier is education, so our plan is to integrate education with working and living and have the right balance of social housing to enable people to find work in the digital world.”
He rejects concerns about noise pollution; “Aircraft have a very direct noise channel, so you can stand on our land and hear birds singing, the stream burbling and the traffic of the M8 a mile away, even when the noisiest of aircraft are coming in to land. You can see it but you can’t hear it.”
He credits two aspects of his CA training with playing pivotal parts in his career development. “I can look at any business and get a window into how it works through its financial statements. Second, and more important, is the ethical training. That has been a constant.”
Colleen Welsh CA
UK Accountant, Skyscanner, Graduated in 2016
Skyscanner launched in 2004 after its founders struggled to find cheap flights to ski resorts. It rapidly turned into the leading search engine for flights around the world. In 2016, the Edinburgh-based company was bought by Trip.com, the largest travel firm in China, for $1.75bn (£1.4bn).
So it’s unsurprising that when Colleen Welsh graduated as a CA in 2016, she set her sights on one day working for the firm.
Last year, she achieved that ambition. “I had my eye on Skyscanner as an employer since I qualified, but didn’t feel any of the open roles suited my skillset. I met our FD through an ICAS engagement and we had some interesting conversations about what my dream role would look like. It so happened there was a role about to open that ticked a lot of my boxes.
“I’m UK Accountant for Skyscanner, so I’m responsible for the reporting side of things for the UK entities. I’m heavily involved in month-end activities and reporting. During quieter spells, I get involved with project work – today, for instance, I spent time researching accounting standards to ensure correct treatment of balance sheet items. There’s no time to get bored, and there are always opportunities to do new things,” she says.
Welsh represents the new generation of CAs, who view their role very differently to their predecessors. “Twenty years ago, a CA was someone who prepared compliance work. Now, with so much technology around we need to become their advisers rather than just accountants. We absolutely need to keep on top of changes in technology and embrace them, or we risk becoming obsolete.”
We need to embrace changes in technology
To this end, she believes the opportunity for Skyscanner is around mobile. “The travel sector is still lagging when it comes to complete mobile adoption. Travellers will often use their mobile device to research, then revert to a laptop to book. We strive to bring our travellers the best experience on their mobile device, providing choice and information, with the minimum of friction from research to booking.
We invest heavily in our tech to support this, with features such as direct booking where the traveller can book directly with the hotel, flight or car provider without leaving the Skyscanner app, creating a much more seamless experience.”
Looking at broader challenges, Welsh says, “Sustainability is a trend that is going to become more prevalent over the coming years. In September last year we launched our mission to lead the global transformation to modern and sustainable travel. This is a bold mission, but we have already invested heavily in sustainable aviation fuel through SkyNRG’s programme, launched greener choice labels on all our flight search results and are one of the founding partners of Travalyst a global initiative to change the impact of travel for good.”
Last year, Welsh won the ICAS Top 100 Young CAs Trust Award and she recently became a member of the ICAS ethics board. “The award recognises work which helps restore trust in the profession. A big part of my career has involved working with management and leadership teams in the practices I worked for to build and improve their mental health policies. This ranged from information days to helping train mental health first-aiders, to working with HR to build the policies themselves.
It was humbling to be recognised. It goes to show ICAS and CAs don’t simply care about numbers or money – we care for our members and colleagues.”
This article first appeared in the April 2020 issue of CA magazine.