The first Boeing 787 Dreamliner was delivered to All Nippon Airways yesterday, 26th September.
Its first commercial service with passengers is scheduled to be just a month later on 26th October on a charter from Tokyo to Hong Kong. Normal scheduled domestic services begin on 1st November.
Meanwhile down on British soil, today's Evening Standard reveals that the first of Boris Johnson's new Routemaster buses for London will be delivered in December but not in service until late March despite the fact that a prototype has been running since last May.
The same pattern is repeated on the rails. New trains, even of existing designs already operated by another company, take months from delivery to being in service.
In addition training drivers how to cope with even minor differences in operating techniques is nothing like as quick and straightforward as for example a differences course between different models/generations of Boeing 737s or between 757s and 767s. Even learning what would appear to be simple things like how to operate the doors in selective door operating mode (ie when some are kept closed when short platforms are being used) seems to take for ever. Even at the outset of their careers, UK train driver training takes longer,-18 months,-than the 14 months minimum for an ab initio pilot's frozen ATPL. Incidentally ,once qualified, their starting pay of £40k upwards, often involving inflexible shift lengths and,-incredibly,-not making Sunday working compulsory, is higher than for many new First Officers, particularly on turboprops.
Whether ground transportation's problems are international v domestic, aviation being highly competitive and the earthlings not very, union influence, domestic legislation including the infamous tripall "Health and Safety" or other factors is not clear .On the face of it it does though say something favourable about the highly complex, high technology based, aviation industry compared with its earthbound cousins,- at least in the UK.
Wednesday, 28 September 2011
Saturday, 24 September 2011
Emirates,- Clever Moves in Africa,- and Ireland,
Emirates' announcement of a 5 x weekly Dubai/Lusaka/Harare A330 service from 1st February is another good one by the Gulf carrier. It fills in a central African gap in their African network and offers Zimbabwe and Zambia useful high quality, high frequency links to China for the substantial numbers of worker and business traffic originating there. Tourism by the fast growing numbers of relatively affluent Chinese and other Asian professionals will be an added bonus. The one-stop routing to the UK and Europe's secondary cities via Dubai will also take some business away from existing flows via London,Johannesburg, Nairobi and Addis Ababa. There will also be some traffic to the Indian subcontinent and even Russia. Together these hubbing possibilities should give Emirates a more than satisfactory result. It would also benefit Zimbabwe and Zambia if they give the Gulf carrier local rights on the short sector between Lusaka and Harare as every additional frequency by any airline stimulates local business. Traditionally such sectors have been "blinded " to protect local carriers which is always to the detriment of other businesses which thrive on frequent air links so rare in most of sub Saharan Africa other than within South Africa.
The five frequencies of this operation leave Emirates with another gap which would logically be plugged by adding two more frequencies from Dubai to Lusaka but continuing to or triangulating with Lilongwe, which has no direct long haul services of its own and is a natural for attention from the Gulf airlines. Landlocked Malawi is often desparate for inbound cargo capacity while outbound it needs regular reliable outlets for its vegetable products. A connection to the world's air routes via the Gulf would be a significant benefit for the country and its economy.
In line with the simple hub formula that every new spoke needs another balancing one, Emirates is following Etihad and Qatar in starting a daily Dubai/Dublin service in January. This will not only appeal to travellers from the Irish Republic but also those to and from Northern Ireland who will use it to bypass the UK's prohibitive and still rising Air Passenger Duty charges. Dublin Airport is an easy drive from Belfast. An hourly coach link through most of the day takes 2hrs 5 mins for a fare of £17.50 return (£12.40 single). With that option available for travel to points east or south of the Gulf why would any cost conscious customer travel via the traditional routes from Belfast via London? It is surprising that the usually canny KLM is not already in Dublin chasing even wider hubbing opportunites both beyond the Gulf and between there, most of Europe, and points south (eg Africa) to which it could offer faster, more direct routings.
The five frequencies of this operation leave Emirates with another gap which would logically be plugged by adding two more frequencies from Dubai to Lusaka but continuing to or triangulating with Lilongwe, which has no direct long haul services of its own and is a natural for attention from the Gulf airlines. Landlocked Malawi is often desparate for inbound cargo capacity while outbound it needs regular reliable outlets for its vegetable products. A connection to the world's air routes via the Gulf would be a significant benefit for the country and its economy.
In line with the simple hub formula that every new spoke needs another balancing one, Emirates is following Etihad and Qatar in starting a daily Dubai/Dublin service in January. This will not only appeal to travellers from the Irish Republic but also those to and from Northern Ireland who will use it to bypass the UK's prohibitive and still rising Air Passenger Duty charges. Dublin Airport is an easy drive from Belfast. An hourly coach link through most of the day takes 2hrs 5 mins for a fare of £17.50 return (£12.40 single). With that option available for travel to points east or south of the Gulf why would any cost conscious customer travel via the traditional routes from Belfast via London? It is surprising that the usually canny KLM is not already in Dublin chasing even wider hubbing opportunites both beyond the Gulf and between there, most of Europe, and points south (eg Africa) to which it could offer faster, more direct routings.
Tuesday, 6 September 2011
Turkish Delight or Hard Rock?
THY-Turkish Airlines' recent half year figures have raised eyebrows and led to mutters about the airline's borrowings being too high. In the meantime the company is pushing ahead with adding more desitinations to its network. What is really going on and is the three dimensional reality as bad as it looks at first sight?
The half year result shows a swing from a 115 million Euro profit last year to a 248 million loss this year. That's a 363 million Euro difference to the worse. So far, so bad. Total liabilities have also grown by 50% in the same period and short term bank borrowing (usually expensive) by 40% . Again that doesn't look good. "Analysts" don't like debt and don't define between its good and bad forms. Turkish has quite a lot of both.
Again, how did all this red ink get there? Being squeezed between European legacy carriers with long and shorthaul networks to the west, new European including other Turkish low cost entrants all around, and the fast growing dominance of the Gulf carriers to the east ,Turkish Airlines has had to think seriously about its future strategy. To remain static wasn't an exciting option.
The conclusion was clearly for the airline to fight its way out of its traditional corner and take on the Gulf airlines by adopting their recipe and high levels of investment. The Turkish network has therefore rapidly expanded to 145 international and 41 domestic destinations. Like the Gulf bretheren, it reaches deep into Europe's secondary cities which home based national carriers always find difficult to serve profitably as domestic to international connections are never as seamless as the best international to international. The operating costs have therefore risen sharply and the figures tell us that the revenue has not yet caught up. Those losses are serious as they cost interest payments and cumulatively can become crippling. They may be a necessary sort term pain barrier to be gone through to fund the expansion but they can not be allowed to continue for long. Revenue must catch up quickly. The level of apparent liabilities, although high is less worrying. Much of it is self liquidating so long as the airline continues in business. Modern purist accounting insists that amounts outstanding on future leases are shown as debt. The actuality is that, provided the scheduled payments are made throughout their duration the amount outstanding reduces year by year to zero on the day of the final payment. "Wonderful,- well done" exclaim the analysts. "But we've no fleet left" say the airlines... Operating leases could reasonably be seen as an operating cost and it appears that the Gulf airlines, unworried by private shareholders, take this view. If so, it is one factor that has enabled them to grow way beyond the capability of their long established rivals who have looked on with their financial hands more or less tied behind their backs.
Turkish's problem is that it is neither a large legacy carrier nor a new Gulf one. It is trying the straddle the gap between the two. Its origins, structure , financing and accounting are similar to the former, whilst for its expansionist strategy to work it has to emulate the latter. Its network gets more comprehensive by the day and it is geographically well placed to add both long and short spokes. Only nonstops to Australasia are beyond its reach, the Gulf being better located for those, but otherwise it can do pretty much all they do and a bit more in the eastern Mediterranean area. It needs to enhance its ground and air service offerings and style and invest even more in international brand marketing . The tough bit is that while those will bring in the revenue there is always a lag between the investment and the rewards. Also the investment has to be ongoing, not a one-off. Bridging the time gap between investment and the returns flowing into the bank is the difficult one. It has to be as short as possible or there is a danger of doing the financial splits, the risk and need for ongoing additional funds just getting too great for the backers to bear. On the other hand once the potential effects on backers and creditors of a collapse becomes catastrophic the debtor regains the upper hand. It's going to be an interesting one to watch.
The half year result shows a swing from a 115 million Euro profit last year to a 248 million loss this year. That's a 363 million Euro difference to the worse. So far, so bad. Total liabilities have also grown by 50% in the same period and short term bank borrowing (usually expensive) by 40% . Again that doesn't look good. "Analysts" don't like debt and don't define between its good and bad forms. Turkish has quite a lot of both.
Again, how did all this red ink get there? Being squeezed between European legacy carriers with long and shorthaul networks to the west, new European including other Turkish low cost entrants all around, and the fast growing dominance of the Gulf carriers to the east ,Turkish Airlines has had to think seriously about its future strategy. To remain static wasn't an exciting option.
The conclusion was clearly for the airline to fight its way out of its traditional corner and take on the Gulf airlines by adopting their recipe and high levels of investment. The Turkish network has therefore rapidly expanded to 145 international and 41 domestic destinations. Like the Gulf bretheren, it reaches deep into Europe's secondary cities which home based national carriers always find difficult to serve profitably as domestic to international connections are never as seamless as the best international to international. The operating costs have therefore risen sharply and the figures tell us that the revenue has not yet caught up. Those losses are serious as they cost interest payments and cumulatively can become crippling. They may be a necessary sort term pain barrier to be gone through to fund the expansion but they can not be allowed to continue for long. Revenue must catch up quickly. The level of apparent liabilities, although high is less worrying. Much of it is self liquidating so long as the airline continues in business. Modern purist accounting insists that amounts outstanding on future leases are shown as debt. The actuality is that, provided the scheduled payments are made throughout their duration the amount outstanding reduces year by year to zero on the day of the final payment. "Wonderful,- well done" exclaim the analysts. "But we've no fleet left" say the airlines... Operating leases could reasonably be seen as an operating cost and it appears that the Gulf airlines, unworried by private shareholders, take this view. If so, it is one factor that has enabled them to grow way beyond the capability of their long established rivals who have looked on with their financial hands more or less tied behind their backs.
Turkish's problem is that it is neither a large legacy carrier nor a new Gulf one. It is trying the straddle the gap between the two. Its origins, structure , financing and accounting are similar to the former, whilst for its expansionist strategy to work it has to emulate the latter. Its network gets more comprehensive by the day and it is geographically well placed to add both long and short spokes. Only nonstops to Australasia are beyond its reach, the Gulf being better located for those, but otherwise it can do pretty much all they do and a bit more in the eastern Mediterranean area. It needs to enhance its ground and air service offerings and style and invest even more in international brand marketing . The tough bit is that while those will bring in the revenue there is always a lag between the investment and the rewards. Also the investment has to be ongoing, not a one-off. Bridging the time gap between investment and the returns flowing into the bank is the difficult one. It has to be as short as possible or there is a danger of doing the financial splits, the risk and need for ongoing additional funds just getting too great for the backers to bear. On the other hand once the potential effects on backers and creditors of a collapse becomes catastrophic the debtor regains the upper hand. It's going to be an interesting one to watch.
Thursday, 1 September 2011
Malaysia Airlines look again at A380 and A330 product. The customer wins.
A refreshing piece of news from Malaysia is that, ahead of its first A380 delivery next year, MAS is to look again at its onboard product particularly on its new flagship and on its A330s. The aim, says Air Transport, is simply to ensure that it is "the best in class".
From this we can assume that MAS will seek to maximise the attraction particularly of their A380s in line with the approach taken from the outset by its neighbour Singapore Airlines and the Gulf airlines led by Emirates. They have redesigned particularly the premium class hard and soft offerings from cabin layout and design of furnishings to catering style and routines. Thereby they have offered the customers something new, refreshingly different and very stylish.
Qantas, Air France and Lufthansa have taken an alternative tack. Although their cabins are also pleasant and service and catering reasonable, they are not spectacular but more traditional and don't move the game on at all. Their First cabins in particular are much more open and less compartmentalised than those of the eastern group and their catering is generally less interesting. IFE systems are state of the art amongst all the A380 operators. Perhaps the traditional group rely more on IFE and frequent flyer programmes rather than service and cabin environmemt "wow" factors to keep the customers loyal? If so it's a missed opportunity and once again demonstrates the more progressive and customer focused thinking of the Asian and Middle Eastern airlines compared to their older legacy" competitors. It leads on to the question as to whether the power of the major frequent flyer programmes is now really in the customers interests or whether in fact these schemes seriously distort and reduce rather than sharpen competition. We will return to this one on another occasion.
From this we can assume that MAS will seek to maximise the attraction particularly of their A380s in line with the approach taken from the outset by its neighbour Singapore Airlines and the Gulf airlines led by Emirates. They have redesigned particularly the premium class hard and soft offerings from cabin layout and design of furnishings to catering style and routines. Thereby they have offered the customers something new, refreshingly different and very stylish.
Qantas, Air France and Lufthansa have taken an alternative tack. Although their cabins are also pleasant and service and catering reasonable, they are not spectacular but more traditional and don't move the game on at all. Their First cabins in particular are much more open and less compartmentalised than those of the eastern group and their catering is generally less interesting. IFE systems are state of the art amongst all the A380 operators. Perhaps the traditional group rely more on IFE and frequent flyer programmes rather than service and cabin environmemt "wow" factors to keep the customers loyal? If so it's a missed opportunity and once again demonstrates the more progressive and customer focused thinking of the Asian and Middle Eastern airlines compared to their older legacy" competitors. It leads on to the question as to whether the power of the major frequent flyer programmes is now really in the customers interests or whether in fact these schemes seriously distort and reduce rather than sharpen competition. We will return to this one on another occasion.
UK Railways,- Overcrowded stations identified but do we sense inertia here?
Network Rail has according to the BBC identified eleven stations which need action to ease overcrowding. Note the use of the word "ease" rather than "solve".
Those listed include the predictable suspects, London's Victoria, Charing Cross, Clapham Junction along with Basingstoke, Liverpool Lime Street and Preston.
In what looks like a frightening demonstration of its corporate culture, customer orientation and sense of urgency it says that measures to reduce the problem "should be identified by 2019". Note here the words "should be" and "identified" rather than "will be" and "fixed". If those are the words of Network Rail rather than the interpretation of the BBC we should be shaking our heads with disbelief.
No signs of a sense of frantic activity, the quick summoning of an action orientated group of its young graduates to come up with quick commonsense solutions which can then be implimented and followed through to completion. How on earth can eight years be considered reasonable and what is preoccupying Network Rail for all those years? What goes on in their offices after,-or even before,-lunch? Maybe there is a good answer but on the face of it it looks awfully like that great bugbear of monopoly businesses, particularly those in or formerly in the public sector,- inertia. If that is so, what chances have they got of keeping the brightest and best of particularly the younger brains who should be their future?
Those listed include the predictable suspects, London's Victoria, Charing Cross, Clapham Junction along with Basingstoke, Liverpool Lime Street and Preston.
In what looks like a frightening demonstration of its corporate culture, customer orientation and sense of urgency it says that measures to reduce the problem "should be identified by 2019". Note here the words "should be" and "identified" rather than "will be" and "fixed". If those are the words of Network Rail rather than the interpretation of the BBC we should be shaking our heads with disbelief.
No signs of a sense of frantic activity, the quick summoning of an action orientated group of its young graduates to come up with quick commonsense solutions which can then be implimented and followed through to completion. How on earth can eight years be considered reasonable and what is preoccupying Network Rail for all those years? What goes on in their offices after,-or even before,-lunch? Maybe there is a good answer but on the face of it it looks awfully like that great bugbear of monopoly businesses, particularly those in or formerly in the public sector,- inertia. If that is so, what chances have they got of keeping the brightest and best of particularly the younger brains who should be their future?
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