Thursday 21 June 2012

BA's new ad excites and perplexes.

Yes it does!

It excites and is memorable by being the first to employ the handiwork of Google's "spy car cameras" to personalise the ads right down to the street or even house where you live. UK residents can just ping in their postcodes and there is a big, shiny 777 coming along the street past their front door.  So far, so great and it will be an ad industry award winner for that reason alone. Courageously breaking moulds is what this and many other businesses should be all about. Visually this ad certainly does that.

It perplexes though because the message is strange and sounds a bit strangulated. Viewers will scratch their heads wondering if they've missed something in what they will want to assume is very clever, leading edge, advertising psychology. Nobody wants to appear dumb. This one is still scatching.

The UK version seemingly urges viewers to be patriotic and stay at home to support the British team rather than treacherously buying a ticket to go and watch the events on wide screens in sports bars dotted around the world. "Don't fly. Support team GB " it says. The non UK version even more brow furrowingly urges "Don't fly,- Stick with the Olympics", presumably in the worldwide wide screen sports bars now to be devoid of Brits. If all this urging were succssful, presumably BA's flights to and from anywhere would be empty. It's all very well taking one's responsibilty as a corporate sponsor seriously but when that means trying to persuade people to lay off one's own products for several weeks is it really sensible?

Possibly some clever talking by the ad folk while presenting the notion of "You must be the first,- the world leader in using Google's latest cleverness for advertising" managed to obstruct the now salivating client from focusing on the small problem that to use it meant in this case risking a highly unorthadox, even convoluted, proposition. Maybe nothing else fitted so it was a case of use the hi tech first or lose it. Maybe the "Wow, yahs" drowned out any nervous voices of reason. The latter tend not to do well in the heady world of ad agencies and marketing departments once an idea like this takes wing . They risk being noted down be advised on the merits of possibly "seeking new opportunities" at their next performance review.  It's something all but the very brave seek to avoid.

The marketing and financial outcomes will be interesting to watch but for now BA must be seeing very high hit rates on its websites and the ad folk will be saying that's what matters and that the brilliance will be remembered long after questions about why the planes could have flown fuller during the games have been forgotten. There will be lots of awards for the former and plenty of other excuses for the latter.

Footnote: Maybe there is something in the notion that people pay almost no attention to the content of an ad. They just remember the brand or product name if the way it in which it is presented is spectacular or even just good. The rest they auto discard and delete from memory.

Wednesday 13 June 2012

African Roundup April - May 2012


Ethiopian and Kenya Airways continue to forge ahead with network expansions with both stressing the growing importance of Asian destinations.  Titus Naikuni, CEO, Kenya Airways,  publicly states  that ‘India and China have special significance in our future strategy’. 

Of the two, Ethiopian with its earlier delivery of 787s and 777s and it’s vastly superior hub terminal at Addis Ababa which eclipses the crowded unattractive relative shambles of Nairobi’s Jomo Kenyatta International is much better placed in the short term. Ethiopian is also keeping its business simple and avoiding managment and resource distractions. Kenya Airways aims to set up an new low cost subsidiary and at some point to again separate out its freight operations go in the opposite direction. Previous experiences of both have not been happy ones for KQ and although times change many would think they have more pressing and remunerative things for their management to do. Why complicate the structure rather than concentate and simplify it?

In the past few weeks Ethiopian has added Guangzhou and Kenya Airways has added Delhi. More destinations are planned by both.  (See below for more on this) . The potential growth of traffic to and from the east probably exceeds combined expansion elsewhere.  Significantly the business is at both ends of the route. Asia/Africa trade grows at 10% plus a year, African traders throng to all points from Dubai eastwards  and newly wealthy Chinese nationals begin to appear as tourists adding to the growing volume of their campatriots travelling as labourers.

There is some optimism too in West Africa. Not a lot, but some. A re-born Air Cote d’Ivoire prepares for July operations.  As a fragile political stability returns, business confidence is growing and external investment is again starting to flow.  Tradition and opportunity are at play.  Air France with a 40% shareholding is the tradition and has freely admitted its defensive intent as it fights to retain market share in the face of the increasing presence of Emirates, Brussels and Turkish Airlines.  The new opportunities spring from the 14% shareholding in Air Cote d’Ivoire by the Aga Khan Fund for Economic Development (AKFED).  AKFED has similar holdings in neighbouring Air Burkina and Air Mali and talks of ‘commercial and operational synergies’.  It is rare in Africa for direct cross-border cooperation to be successful but non-political AKFED achieves it by parachuting in shared equipment and people from above/outside . It already has experience of ‘shared’ A319 operations in the region and more seem logical. There has been no mention yet of Paris operations for the new airline.  If Air France is in defensive mode the revived Ivoirian airline may be held back from losing money by flying to Europe. If it does fly to Europe the  new company will struggle on long haul against the well defined and very long standing Air France product and underlying, if not openly admitted, brand loyalty just as BA does in English speaking Africa. Even Virgin found this embedded loyalty to the former colonial carrier too difficult to hack in East Africa and as result is giving up that struggle in September.

Where the State continues to be the sole shareholder business growth and operational efficiencies are very difficult to achieve. ‘Government drag’ manifests itself in many ways including inertia on capital expenditure decision making, eve- increasing debt and persistent financial crises. Bright talent is thereby dissuaded from seeking work in such an afflicted business.  By sacking the entire Board of Air Namibia for ‘failing to recognise persistent organisational and financial failure’ the Government has shown a spark of life but has treated the symptom, not the disease.  It is little wonder that for two years it has been found impossible to attract a new CEO from the private sector.

Encouragingly the new President of Malawi, Joyce Banda, has announced in her first budget speech, efforts to ‘determine the future of (state-owned) cash-strapped Air Malawi’.  The simple choices are to sell it off or to close it down. Either choice would stop it draining Government funds. If closed down either foreign carriers would fill the gap or a private enterprise would emerge to take its place.

Meanwhile all is not well just to the north of Malawi, …. the Tanzanian Minister of Transport has been sacked on charges of corruption and government has opened an inquiry into the recent multi-million dollar lease of an A320 by the Air Tanzania CEO. The aircraft flew only for a matter of weeks.

Unfortunately while there are some bright spots of optimism and growth on the continent there are balancing less bright ones and network contractions. Both United and Delta have trimmed Accra services, and as noted above Virgin Atlantic is throwing in the sponge in Nairobi while India’s Jet Airways is jettisioning Johannesburg. Unusually, KLM is also giving up a destination, -this time Kano where it has been a continuous player through thick and thin, clocking up over 60 years of continuous service.

As will be evident from the news items below, the number of useful 5th freedom sectors being offered by airlines as part of multi sector routings is growing. Each one, whether it adds to existing frequencies or opens up a new city pairing helps the growth of business travel in particular and is to be warmly welcomed. Hopefully no governments will stand in the way of it and insist on the old fashioned blinding of sectors flown by foreign carriers whether African or not.

Finally another bright spot and a small triumph for the world of facilitation.  As travellers face the ever increasing hassle of visas and their costs coupled with immigration delays on arrival, Rwanda has done something very good.  Returning residents at Kigali now enjoy self-clearance bio-metric entry.





1   EAST AFRICA


Air Tanzania More misery . A runway over-run after engine failure on take-off at Kigoma wrote off the Dash8, their sole aircraft. As result operations ceased until the (expensive) relieving cavalry came over the hill in the form of a leased B737-500 (Apr2012)

Daallo Airlines (Djibouti) purchased single BAe 146-200, from Falko.  (May2012)
Eritrean Airlines is reappearing with A319s doing a 3 x weekly A319 service from Asmara to Frankfurt and 4 x weekly  to Johannesburg via Entebbe. (May 2012)
Ethiopian Airlines will in June 2012  start Addis Ababa to Sao Paulo and Addis Ababa to Cotonou and then follow this by adding Guangzhou. (May 2012). That isn’t the end of the story and they plan to add Toronto in July and are evaluating a stronger presence in Asia by opening to Singapore, Seoul, Kuala Lumpur and “more destinations in China”. 
If the first 787s materialise in time, they will be introduced on the Dubai and Johannesburg routes on August before going further afield. Statistically at some time in the next year or so the first major meeting between carbon fibre fuselage and catering truck should occur.
The last comment aside, there will be furrowed brows in Kenya Airways who must be wanting their 787s NOW.
Closer to home, Ethiopian will on 12th June restart daily Q400 services to Hargeisa. (May 2012)
Jubba Airways (Somalia) Fleet reduction: An AN24 burst tyres on landing and broke its back.  In the best of old Russian traditions the AN 24 has  a robust structure and there were no injuries  (May 2012)

Kenya Airways: The IFC has granted a USD80mn loan to fund expansion capital expenditure (Apr12)
Kenya Airways,  is as mentioned above  to have another go at producing a low cost airline. The previous 2002 effort, Flamingo, with the constraints imposed by 2 Saab 340s , a very limited network and a standalone reservations system which didn’t talk to the Kenya Airways system and didn’t accept its tickets did not fare well . The new venture, Jambo Jet, should benefit from a lot of Flamingo learning but is it really worth taking the focus off developing Kenya Airways’ own hub  network which needs more frequencies and spokes?  If expanding the air travel market to lower priced travellers is the aim , there are plenty of opportunities to do this via the normal pricing system and remaindering likely unsold seats either early or very late in the sales cycle. Jambo Jet is seen as a regional operator in eastern Africa , probably using EMB-170s. Kenya Airways is itself in the same market.(Apr 2012)
Jambo apart, Kenya Airways is to launch 4 weekly  B767-300  services to Delhi as part of its increased India and China focus.  Regionally 2 other spokes will be added,- E170s to Kilimanjaro and 767-300s to Capetown ( a relaunch) (May 2012)
Precision Air of Tanzania, (49% Kenya Airways owned) is on 18 May launching  B733 services from  Dar es alaam to  to Lubumbashi via Lusaka. Flights to Harare and Angola are planned by November   (May 2012)
Rwandair will from July operate Kigali – Mwanza (Lake Victoria,Tanzania) with a DHC8 (May 2012)

2  SOUTH / CENTRAL AFRICA

1Time of South Africa announced a dive into a USD17m loss in 2011.  The airline plans to renew leases and add fuel efficient aircraft to return to profitability in 2015. That’s a long time to go on making losses.  (May 2012)
Air Botswana plans a June 2012 launch of BAe146-300 daily flights from Maun to Cape Town. (May 2012)

Air Madagascar is planning nonstop services from Antananarivo to Bangkok and Guangzhou on 28 October 2012 with A340-300 and B767-300ER, respectively. (Apr 2012)

Air Malawi , notwithstanding renewed questions about its future, has resumed  4 weekly  Blantyre-Johannesburg flights with a  leased B732. Lilongwe-Nairobi is currently flown by a  leased CRJ100 (Apr 2012)

Air Namibia The search for a new MD is being ‘hampered’ by the carrier’s poor performance history says Transport Minister.  Previous MD Kosmas Egumbo resigned in 2010. Its poor performance includes its abilty to hold on to people it has recruited for very long. These things get around and eventually people would prefer to” spend more time with their families” without the interim period of corporate or governmental hassle. Some other carriers should also take note. If you don’t offer a happy place to be for contract management or flying staff or don’t expect to be a magnet for the best talent.(Apr 2012).
Continuing that theme, the Government has sacked the full Board of Directors for ‘failing to recognize continuous financial and organizational failings’. A recent KPMG report cited ‘incompetence’. A new ‘vibrant board with business acumen’ was appointed on 1April. Let’s hope that’s true and if so that  they stay. (Apr2012) 
Air Zimbabwe , in line with our previous predictions, was hoping to be back in the air in May 2012 with ERJ145 or E190s (Apr 2012). The fate of accumulated debts from former incarnations is not mentioned.
Korongo Airlines (DRC) on 16 Apr started flying  to Kinshasa and 19 April to Johannesburg. This is a new Lubumbashi-based business controlled by 80% holding company of which SN Brussels owns 51%.  2 BAE146-200s and a B737-300 are  ACMI leases from,- here’s a surprise,- SN Brussels. That will make sure they get some guaranteed return as they go along .(May 2012)

LAM is to lease a  single E190 for ‘2012 delivery’ (May 2012) 
MGC Aviation a Lesotho operator is taking delivery of  2 CRJ200s for scheduled services to Johannesburg and Durban (Apr 2012)
SAA has agreed to pay a USD2.4m cargo price-fixing fine imposed by South Africa regulators. (Apr 2012)

SAA Johannesburg is the home for a CAE owned A330 simulator to provide training for SAA pilots and technicians plus third party work.  This is the first CAE installation in Africa and continues the development of South Africa as the continent’s prime training supplier  (May2012)   

SAA from 16 May, Johannesburg – Pointe Noire services were extended to Cotonou.  (May 2012)

SAA says the USD745m being sought from government is not a “bail-out”, but is to strengthen the balance sheet for fleet renewal plus other upgrades. What one might call a Spanish solution.  Included in the upgrades are continued deliveries of A320s which by May 2017 will see off the last of the 737-800s. (May 2012)

SA Airlink: Is to launch on 15June daily ERJ135 flights from Johannesburg to Maun for SAA. On 12th July it will add 3 weekly CRJ 200 services from Durban to Lusaka. Another new line on the map. (Apr 2012)

Swift Air (Malawi) is launching 5pw DC9 ops Lilongwe-Blantyre-Johannesburg. The increase in international links returning to Blantyre is welcome and an economic necessity for the country’s businesses after originally being banned when Lilongwe’s new international airport opened in the 1970s. Having to arrive in and depart from the country via Lilongwe and travel between there and Blantye on low frequency domestic flights was a major disincentive to foreign business travellers to visit the country’s business capital which is Blantrye. Even now the frequencies of the air link between the two cities is woefully inadequate  The  one time high quality and very scenic fast coach service has also gone. Getting around Malawi isn't easy for visiting business people and tourists.  (Apr 2012)

Velvet Sky of South Africa has been placed under provisional liquidation by a court. It was grounded in Feb 2012 (May 2012)

Zambezi Airlines’ re-start with a CRJ 200 is imminent. The ‘safety concerns’ that resulted in Govt grounding since Nov 2011 have now now resolved and on-line reservations re-opened.  (May2012)

3  WEST AFRICA

Air Cote d’Ivoire .The new company is established. It is 51% government  owned with 35% also held by a local company formed jointly by Air France/Aga Khan Fund for Economic Development (AKFED) and 14% in other private hands. .2 A319s are to start regional services in July 2012 followed later by domestic routes.  Air France’s CEO says this a  “Defensive move against increasing foreign operator presence – Turkish, SN Brussels,and Emirates” . France has always considered its former territories to be its rightful domain and although this view is not universally popular amongst nationals of the countries concerned it does have a strong historically based loyal following. Being French speaking is also a great advantage against the newcomers or interlopers as Air France no doubt sees them.  (May 2012)
Air Cote d’Ivoire has joined Air Burkina and Air Mali in the AKFED Group of airlines.  The three will work together to develop ‘technical, operational and commercial synergies’.  (May 2012)
Air Mauritania: Mauritania and Tunis Governments have entered talks on the future of the company.  Its ownership is: Tunisair 49%, Mauritania Government  10% . It ceased operations and was declared bankrupt in December 2010 (Apr 2012)
Air Nigeria (the former Virgin Nigeria) is to acquire 2x B737NG for Paris and Rome services from  June 2012. It will be interesting to see how these narrowbodies fare against competing widebodies. Kinshasa, Freetown, Ouagadougo, Point Noire and Malabo are to follow . In mid May the company launched a daily Lagos-Gatwick route and in June will launch Lagos to Johannesburg with 2 A330-200s leased from Egyptair. Looking further ahead it has ordered  B787-8s, with delivery in the third quarter of 2014, for the London, Dubai, Beijing routes. No doubt, like all 787 customers, they would have preferred earlier deliveries.
 The Chairman is very confident about the future ,plans an IPO in 2014 and services to ‘5 continents’ within 5 years.  (May 2012)

Arik Air is  seeking to lease 4 A330-300s for first delivery Sep 2012  (Apr 2012)
Camair-Co is reporting a USD42m first year loss and hopes to break even quickly-in 2013. For now it will  increase network its network adding thrice weekly services to both Kinshasa and to Lagos. Even then there will only be ten weekly flights between these 2 cities which could do with at least two daily and probably four, all at common departure times. (May 2012). In the future they may add turbo-props/regional jets to current fleet of 1 B762,and  2 B737-700s (May2012)

Chanchangi Airlines (Nigeria) resumed flying between Abuja, Kaduna and Lagos on 27 March following NCAA suspension due to B727 maintenance irregularities.  (Apr 2012)

ECAir – Equatorial Congo Airlines has added a  Privatair- operated B757 to the fleet (May12)
Starbow Airlines (Ghana) has taken delivery of first of two additional BAe146 to launch regional flights from Accra to Abidjan, Ouagadougou, Cotonou and Monrovia. The established Ghanian independent, Antrak Air ,has done surprisingly little to seize such cross border opportunities despite having a headstart if it wished to do so. (Apr 2012)



4   NORTH AFRICA

Afriqiyah and Libyan Airlines   EU has blocked all Libyan carriers from EU airspace until at least November  pending clarity on safety concerns.  Libyan Airlines is seeking a wet-lease to maintain EU services  (Apr 2012)
Afriqiyah has firmed up an order with Airbus for three A330-300s, with first delivery in the second quarter of 2013. (Apr 2012)
Royal Air Maroc is seeking a strategic partner. Its profitability is being hit hard by the recent arrival EU Low Cost  airlines .4 A320s are being sold and there are to be staff reductions.  (Apr 2012)

Syphax Airlines (Tunisia) was to start operations in April  with 2 leased A319s flying Sfax to Morocco, Turkey and France.They were however forced to halt the Paris route due to spat with Tunisair  (May 2012)



5   NON-AFRICAN AIRLINES

Air Malta is to restart Benghazi flights in May  (May 2012)

Air France is adding Abuja to its Lagos and Port Harcourt Nigerian network from 1st June (Apr 2012)

Bahrain Air aims to open in Khartoum in  June 2012  (Apr 2012)

Brussels Airlines is planning a June start of a JFK link to feed its Africa network of which 15% is USA sold. Very much in line with its predecessor Sabena’s makeup, West/Central African routes are 53% of total network ASKs and its specialist niche market  (May 2012)

Delta is to end its 3  weekly  Atlanta– Accra in June and increase its Accra frequency from JFK to twice weekly B767-300s. Especially in view of United pulling out of Accra this seems a very conservative approach to the West Africa-USA market . The US carriers somehow seem to struggle in West Africa. Maybe they find the market and how to successfully operate in it  just too difficult? (May 2012)

Etihad,  will join Emirates and Qatar Airways in Nairobi with daily A320s in June, while at the same time withdrawing from Alexandria. (Apr 2012)

Iberia will in July start operating separately to Nouakchott  and Accra and their Lagos A319 frequencies will grow from 3 to 4 weekly in June (May 2012)    

Jet Airways (India) Will from Jun12 cease flying from Mumbai to Johannesburg due to” route restructuring”. That’s probably called retrenchment in other places. (May 2012)

KLM- after 60 years in Kano is out of it on June 1. Political and other problems in Northern Nigeria must have made it no longer worth the candle. They will not have taken the decision lightly. (Apr 2012)

Korean Airlines, the first non Chinese Oriental carrier to start passenger services into East Africa is starting Seoul-Nairobi flights in June. This is a long stretch for A330-200s but nevertheless practical presumably via a trans-Himalaya routing. Despite the congestion and general unattractiveness of Naorobi’s Jomo Kenyatta International, the fact is that Nairobi is geographically better placed than Addis Ababa for onward connections throughout Africa and is served by more operators.(May2012).

Royal Jordanian finding the presence of the Gulf airlines, Turkish and others perhaps just a bit too much ,is to abandon Nairobi after its brief 6 month presence.(May 2012)
Turkish Airlines marches on with network expansion and is to launch Istanbul-Entebbe-Kigali B738 services in May. It does not appear to have the bonus of Entebbe-Kigali rights. Turkish is active in West Africa too and starts Istanbul—Accra—Abijan in July . Again it does not seem to have local rights on the end sector.(April 2012)
United Airlines as mentioned above doesn’t seem happy with its Washington-Accra services so is withdrawing them in June despite this being its first African route. Their Chicago service however continues. Chicago is a far better US hub than Washington’s Dulles which has nothing like the range of domestic connections and frequencies, most of these being a good hour's road transfer away at Washington's downtown airport. This  restricted connectivity is likely to have been the crucial factor.   (Apr 2012)

Virgin Atlantic will withdraw from Nairobi on 23rd September due to ‘high fuel prices and low demand’. Somehow, sandwiched between the national airline, Kenya Airways and the long established BA  the airline never quite established its niche in Kenya. Its service was not regarded as outstandingly different and generally no better than these two nonstop competitors. The Gulf airlines did bring something new  and for those looking for a lower fare often a better deal , albeit via a longer way round to the UK and Europe. Virgin was therefore in a challenging position and had presumably decided it can make more from the resources, spend and Heathrow slots by doing something else. (May 2012)



6 MISCELLANEOUS

AFRAA  is planning the introduction of joint route network development and joint ground handling initiatives as part of a new drive to ‘add value’ for member airlines . This could be very useful for smaller carriers if genuine cooperation can be secured.
Meanwhile the organisation has added new members, namely: Starbow (Ghana), Camair-Co (Cameroon), ECAir (Congo) and FLYHT Aerospace Solutions of Canada  (May 2012)

ATR is in talks with GE and PW on engine possibilities for a 90 seat turbo-prop development. Currently there are 85 ATRs in Africa with mainly small numbers spread amongst 35 companies in 20 countries. (May 2012)

Mali- Bamako Airport’s  redevelopment has been halted following the March military coup.  USA  Millenium funding has been withdrawn and expatriate contract personnel have left.  (Apr2012)

Nigeria  The Ministry of Transport, which doesn’t generally seem to have  a great liking for foreign carriers and is ever vigilant for anything which may disadvantage Nigeria and Nigerians gave a number of them including BA and Virgin Atlantic 30 days until 25 April to dismantle anti-Nigeria ‘regional fare imbalances’ or face an operating ban. Regional fare imbalances or directional fares are a wordwide feature so are not unique to Nigeria. In the event the threat was not carried out.(May 2012)

The Ministry of Finance has signed a contract with ‘Chinese investors’ for new terminals at Lagos, Abuja, Port Harcourt and Kano. It is not clear whether there are ready-to-go designs for these projects .Abuja is also to have new runway.(May 2012)

Tanzania’s  Minister of Transport and 5 other ministers have been sacked on corruption charges (May 2012) 

John Williams

Once a day or Four Times a day?- A question of playing safe and or going with the vision.

Singapore Airlines has announced an increase in its London flights from 3 daily A380s to 4 by adding a 777-300ER service to its tally.

On the face of it this just brings SQ up to the same total as the combined BA/Qantas codeshared joint service operation. (The two share management, staff and facilities in Singapore and Bangkok).

The reality though is different.

Singapore Airlines and most other Oriental carriers have long seen life very clearly. They identify their challenges, design how best to deal with them and then go for it.  Right now their competition comes from the rising Middle East carriers, including Turkish, with large shiny new fleets, ever multiplying spokes and frequencies from their conveniently located home hubs and bold approach to investment.  The Orientals are less worried by the much less aggressive and focused European carriers who have much less market dominating thrust . Dealing with the Middle Eastern threat has to be top of their priorities .In the new world governments are not going to step in to protect their home carriers. There is far too much for countries to lose economically for them to do that. SQ and other Far East based airlines can't economically add as many nonstop spokes into European provincial points as the Middle Easterns can . The distances are too great.  Possibly the relatively small size and economics of the 787 will change that,- but that's not yet proven.  For now the airlines have to rack up the capacity and frequency to the major cities which they can serve well.  The next necessity is to spread these throughout the day.  Traditionally right back to the 1960s ,overnight flights between Asia and Europe have sold better than daylights. As result although airlines have since the earliest jets tended to dabble occasionally with the daylight flights westbound and early departures eastbound (giving morning rather than late afternoon arrivals) most stuck to the tried and tested formula of late nights westbound and afternoon through to late night departures eastbound.  When they have tried breaking away from this pattern they have very quickly abandoned the experiment in the face accountants scowls at lower margins or initial losses. They simply lost their nerve and didn't stick with the daylights long enough to get them established and make them work. Lufthansa in Hong Kong was an exception as were Finnair and SAS in other Asian cities.

In recent years the picture has begun to change and give passengers   between Asia and Europe a better choice. Business travellers in particular have welcomed the  greater flexibility to change plans and avoid wasting time if their meetings ended earlier than expected or something urgent cropped up back home. Getting on a plane quickly was better than kicking their heels in a hotel waiting for dark.

The change has been down to three main factors:

-Better aircraft utilisation of aircraft by avoiding the day long layovers at the European end.
-Slot availabity in Europe, particularly Heathrow.
-Genuine desire to gain market share by offering more choice.
-To counter the high quality Middle East based 6th Freedom carriers offering multiple departures in each direction, albeit via an intermediate change of flight.

Singapore, Cathay Pacific,Malaysia and Thai have all taken the frequency and choice approach. Cathay are now up to 4 daily well spaced London flights while Malaysia and Thai with two each offer midday and late evening departures westbound and overnight and daylight eastbound.

The BA/Qantas approach on the Singapore,Bangkok and Hong Kong routes is entirely different. It is traditional/conservative. The only exception has been this summer's short term toe- in- the- water thrice weekly 777  Hong Kong services .These are not shared with Qantas who have withdrawn from Hong Kong-London as well as Bangkok-London. (Back home Australians are beginning to get vociferous about what they see as a national icon of a brand in retreat).The BA/Qantas combine have stuck with the overnight formula avoiding a wide spread of eastbound timings and clumping all westbounds to within a very short late night timeframe. From the passengers'  point of view these simply merge together into one very high capacity flight offering around 1,400 seats.

As result of these different philosophies the competing products this summer before Singapore Airlines introduce their 4th service in October look like:

SINGAPORE AND LONDON ROUTE:

SQ:                Eastbound  : 1130/1830/2205. Longest gap 11hrs 25 m.
                      Westbound : 0905/1245/2230. Longest gap 10hrs 35 m.

BA/QF:         Eastbound   :  2025/2115/2130/2230. Gap: 21hrs 55 m.
                      Westbound  : 2255/2305/2325/2357. Gap: 22hrs 56 m.

Notes:  BA/QF Eastbound services all operate within a 2 hrs 5 mins band.
                         Westbound services all operate within a  1hr 1 min band.

            Singapore Airlines' additional service from October will depart at 0045 westbound and 1515 eastbound.

BANGKOK AND LONDON ROUTE:

Thai:              Eastbound:    1230/2130. Gap 14hrs 30 m.
                      Westbound:  1225/0025.  Gap 12 hrs.

BA/QF:         Eastbound :   2205 only    Gap 24 hrs.
                      Westbound:  0025 only     Gap 24 hrs

KUALA LUMPUR AND LONDON ROUTE:

Malaysia:    Eastbound:    1200/2200     Gap 14 hrs.
                   Westbound:   1005/2340     Gap 13hrs 35 m.

BA/QF       No service since 1998.

HONG KONG AND LONDON ROUTE:

Cathay : Eastbound:  
              Westbound:  0035/1005/1440/2355

BA:         Eastbound:   *1200/1830/2200    Gap *14hrs or 20hrs 30m.
               Westbound:  * 0910/2315/2345   Gap  *14hrs 50 or 23hrs 30m.

Note: *=3 x weekly Currently Summer 2012 only.

The differences in approach could not be clearer........

Asian v British/ European. Investment/ innovation/ schedule choice v sticking with the proven recipe.

The short term financial pressures are clearly to go with the latter  up to the point where lines on a graph cross and then switch nimbly to the latter. Let other people try to generate an all-day market and watch and wait until you get to the point where aircraft utilisation savings cover any revenue gap.

Ultimately the longer term visionaries and innovators tend to benefit. For many years BA flew 3 Hong Kong flights a day,  closely bunched westbound though with better spreads eastbound. Cathay had the same frequency but with a better spread in both directions. Cathay are now up to four and BA's core schedule is down to two. An added factor was BA reducing its Economy class configurations to boost premium capacity. This meant spilling high volume low yield business to Cathay who have used it as bedrock revenue with which to underpin their frequency increase and in doing so make themselves more attractive to the premium market. Who is winning?

European airlines (and those include Qantas in ethos despite its unique and robust differences)  have in general been struggling on Oriental and Australasian routes. Their service , including catering (which indicates hospitality in eastern cultures) has been visibly thrifted and their crews have not been consistently good in their understanding of or attention to Oriental passengers. As result, coupled with the enormous investment in new and enlarged fleets by high quality eastern competitors  originally in Asia and now in the Gulf , they have mostly been outplayed although their immediate revenue/costs/profit ratios have probably been better than had they come out fighting. Their planners tend to struggle with finance people who take hard nosed but narrow short term views about where the best margins are to be obtained with existing equipment and other resources.  Talk about "Long term global strategy" and the westerners eyes tend to glaze over. Hence adding to existing successes,-eg long haul overnight services and London Heathrow ,- is almost always preferred over the speculative deployment of an aircraft to another route pattern, schedule or route. For example for BA another flight out of Heathrow will always win against one out of Manchester while Gatwick will always struggle to get the commitment and investment it has to have to thrive long term. Lufthansa decided several years ago to break out of that mindset and straitjacket and went for it in developing a second major hub in Munich. It's been expensive and they could have done better in the short term by sticking with just Frankfurt but in long term it will strengthen them. In fact they were thinking more like an Asian business.

Perhaps more western airlines should be asking themselves the question:"What would we do if we were Asian?" Come to think of it, some of their home country governments and other businesses would do well to ask the same thing.

Wednesday 6 June 2012

"Malaysia Airlines brings joy to the nation......."

Today's Air Transport News brings this heartwarming headline to its readers. Malaysia has been showing off its brand new A380 and clearly winning hearts and minds.

In a statement attributed to the airline ATN goes on to explain how.

"Many others took the opportunity to capture themselves on Polaroid photographs with cabin crew members of Malaysia Airlines given away with the compliments of the national airline."

Wow, beat that Mr Branson.