Monday 3 September 2012

Quick roundup to start September.

- Britain's interminable debate about  future Heathrow, London and South East England looks set to continue not to the decision and do-it phase but, yes, more debate for several unproductive years to come. Everyone knows, the need is now. They also know that " now"  is impossible even with a following wind. The UK's planning laws and processes coupled with slow 5 day week,daylight hours only, building rates mean that a "Go for it " decision would take at least 7 years to see the job done. That means a conclusion is even more urgent .Competing airports are moving ahead by the day. Disappointingly, but predicatably, the coalition government is kicking the ball further on and way into the long grass. An independent commission of enquiry is likely to be set up, thereby pushing any decision safely beyond the 2015 General Election. Not everybody's idea of political courage.
If of course the Conservative Party really wanted to put the cat amongst its own pidgeons it could just dust off the last Commission on the subject of where the 3rd London Airport should be. In 1971 seven out of eight Commisioners recommended Cublington, north of Aylesbury in Buckinghamshire. The eighth dissented on environmental grounds as did most of the mainly Conservative population of the county. Cublington was then rejected by the Government and Maplin Sands on the Essex coast selected instead. Eventually in the face of the bird lobby and the military who didn't want to lose their firing range that too was abandoned . Instead Stansted was partly developed, and given a modern terminal and good rail link to London but it's never quite been the success it might have been. The wrong place the wrong side of London . The Cublington site is much more central , is still there and the area around it relatively undeveloped............

-There are many very good arguments for building the third runway at Heathrow, not least of which is the simple fact that it's almost full now and that being the UK's only major hub airport  it's where the airlines and their passengers want to go. One bad arguement is that the slot problem is currently costing UK Plc £ billions because businesspeople can't fly easily by BA or Virgin to several Chinese mega-cities and other Asian and South American business centres. That simply isn't true. London based businesspeople can easily commute to practically anywhere in the world via high quality near seamless transfers in the Middle East or Asia. From provincial UK, anyone living within easy reach of Glasgow,Newcastle,Manchester or Birmingham is probably better off using those alternatives anyway.
Despite the  Heathrow squeeze BA and Virgin have recently decided to use up to 4 (BA) and 3 (Virgin) slots a day to fly to Leeds and Manchester respectively. Where's this problem with slots for Chongquing , Kuala Lumpur, Jakarta, Manila and the rest then?

- For those looking for another quieter and hassle free way in addition to London City to fly out of the UK's London area,a quick visit to London (Southend)  has left a favourable impression. With Easyjet's A319s serving Belfast,Amsterdam,Geneva, Barcelona,Jersey, Mallorca, Ibiza and Malaga, Aer Lingus ATRs flying to Dublin and Waterford and Air Arran said to be next in , the new simple, straightforward ,terminal building is a far cry from its down at heel barely used predecessor. With a (mostly) covered walkway to the adjacent station which offers trains every 15 minutes taking 50 minutes to London's Liverpool Street it's easy. There is even a nice lawn in front of the building upon which the customers, wellwishers and airport staff can while away any flight delays while enjoying the Essex experience of watching  successive hen and stag groups, attractively and eccentrically clad or not, arrive in their stretched limos. It's an education as well as an experience. The atmosphere is of a place out to enjoy itself .Any queues are tiny.

- Away from the UK, the Kenya Government is also having a few problems getting airport expansion and construction done. A new terminal , separate from the present semi circle of 3, is planned for Kenya Airways and its Skyteam partners. Nairobi airport is out of terminal capacity and that's a threat both to Kenya Airways' ambitious and so far very successful expansion agenda, to the tourism industry and to Nairobi continuing to have the network edge over its neighbours and rivals, Ethiopian and Addis Ababa. The contract was about to be signed  by the Minister of Transport with a Chinese construction company  when the country's Procurement Commission stepped in, ordered it to be halted and the Airport Director to take some unplanned leave. A few days later that order has been overruled elsewhere in the country's political establishment and the signing of the contract can now go ahead. More to come on this one?

- Ethiopian, now the very proud possessor of Africa's first and at the moment only, Boeing 787 is doing what any PR savvy business would and flaunting it all over the continent, initially one off scheduled substitutions for 757s ,767s, and 777s . Brazzaville, Kinshasa, Malabo, Douala, -the list grows daily. When that's complete the aircraft will settle down to operate to Washington. In the meantime it will have justified claims to be Africa's first 787 and also first scheduled 787 to almost anywhere on the continent, thereby shortcircuiting possible later claims by rivals , especially the one next door. "First regular 787" just doesn't sound the same. Smiles all round at the moment in Addis.

-On the subject of the 787,the plans of early recipients , including Delta and Qatar ,are interesting. Most see an early need to showcase it on their busiest routes.  London therefore features strongly. However as  seriously slot limited Heathrow usually requires the largest aircraft in the fleet, -hence Emirates moving to an all A380 service on the route, -it is doubtful whether the 787, at least in the -200 version,- will last long on routes between slot constrained primary cities.
In the meantime airlines everywhere will be eager to learn the 787's actual in-service fuel burn and other economics so as to weigh it against its nearest and probably cheaper- to- own A330 series of which some airlines-eg Singapore and Thai,- have ordered more , almost certainly on very favourable terms, as an interim measure until more is known about 787 and , later, A350 real performance.

-The grapevine including the UK's Sunday Times has been saying that IAG may buy into loss making US heavyweight (and that's just labour agreements) and trans Atlantic partner, American Airlines which could also merge with US Air. Some would say that risks a serious bout of corporate indigestion. Buying into  American would be consistent with an apparent IAG view that the best way to make money is to invest in dusty, inefficient legacy businesses and boost the group bottom line by stripping out costs until , in theory anyway, they and the group are hugely profitable. All well and good as an idea but politics, labour laws, unreconstituted unions and serious long standing and deeply embedded structural inefficiencies, can make it a race against time to get the costs down before they threaten the whole group. We have talked before about the fate of former BA shareholders now holding IAG paper . Once again they might well ask why and for what benefit to themselves they were they led, albeit like trusting lambs, into a "merger" which was actually a sellout to a new offshore overall holding company, the losses and problems of whose other constituents they now have to fund by using the profits of their former and still successful brand. If IAG resources were diverted into a shareholding in American, the date of any significant dividend would likely fade  into the future and the money needed to revitalise and expand BA long haul in particular would be even harder to find than it is now.

-Nothing more has been heard of Qantas/Emirates discussions although some indicate an early announcement .A codeshare or other agreement would be a major change for Emirates who are extremely protective of their brand and would worry about the differences between the two in hard product, catering and ground and air customer service and perceived staff attitudes. They might though just feel a link could be a useful strategic counterbalance to Etihad's involvement with Virgin Australia.

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