Thursday, 31 January 2013

London Heathrow, -Bypassed by new rail line,- and northern air passengers.

Why no commitment to a Heathrow link for Britain's proposed first purely domestic high speed railway (HS2) ask some of the critics of the scheme? Some even want the whole thing routed via the airport in the first place, thereby adding a costly and time wasting detour to the jouney of the vast majority of HS 2 's passengers who have no need or desire to go anywhere near the airport.

The reason for HS 2 not going to Heathrow is actually simple. An answer could be given now rather than having to wait four more years for the 4 year long study of future airport needs in the south east, atask worthy of an undergraduate's weekend essay. To save even that amount of time and effort, here it is:

The hard fact is that Heathrow is becoming less and less relevant as a gateway to the world for people living from at least Birmingham northwards. Even the smallest regional airport has long had (mainly KLM )connections to the world via Amsterdam and these get better all the time. Now Birmingham,Manchester,Newcastle and Glasgow all have direct long haul services to at least one of the attractive, passenger friendly, minimum hassle Middle East and/or Turkish hubs which offer one stop connections to almost everywhere in their area and on to Australasia, Asia, the Indian sub continent and Africa. Manchester also has Cathay Pacific and Singapore Airlines services to their home airports and beyond.
Why then go via London with its awkward often multi-terminal domestic to international and vice versa connections?

So, forget about diverting HS 2 to Heathrow for northern business and instead concentrate on the areas which the airport still does serve,- namely London, southern and western England and Wales. That's until the all or any of the above carriers decide to add Bristol to their networks . A short loop from the nearby Great Western mainline which runs between Paddington, Reading, the west of England, Wales, is easy to construct and should have been built decades ago but wasn't because the UK was very slow to electrify most of its railways. Home produced diesel fuel was cheap and didn't require power lines and other expensive infrastructure. Now the main line is being electrified this link is to be built, but only as a low priority . It is pencilled in for around ten years hence ,in 2020.  Until then, as for the previous 50 years, passengers heading west are invited to queue up in the cold for the coach link to Reading.

The reality is that HS 2 has little or nothing to do with Heathrow.  Arguments for it going there are a convenient distraction from the real task of getting it,- and a third runway for Heathrow,- built as soon as possible. Many of those raising the question know that but see it as a way to at least achieve that most British of things,- a delay, ideally until someone else is responsible or has to pay for it,- or they are dead.

Friday, 25 January 2013

Snowed under,- Heathrow,- the World's not so busy busiest international airport.

It's happened again. The best laid plans of mice, if not men, have failed to cope with a well forecast dusting of snow at London's Heathrow airport during the past week. OK, it fell steadily for most of a day, settled where it lay, amounted to a few inches in places but  it didn't drift or do anything unpredictable. The airport itself was much better prepared for it than in former years and amon gst other things now has an effective, fully trained army of paid part timers who can be called in at short notice to operate the heavy snow clearing equipment on an ad hoc basis. Runways were cleared when necessary, a process which means each has to be closed for around 45 minutes, not the end of the world. The overall verdict us that apart from being lacking a dynamic rather than a conservative approach, the BAA didn't do as badly as many of the media portrayed. They tend to get blamed for the shortcomings of others including National Air Traffic Services who were also at times very cautious especially on the most  problematical evening.(see next paragraph)

 The wheels did at times came spectacularly off the operation, particularly in Terminal 5 where on the first night which followed a day of widespread short haul cancellations but the BA long haul programme had proceeded almost intact. Quite suddenly almost all of the late evening long haul and ultra long haul departures, ten in all, failed to get away even after passengers were boarded . Sandwiched between de-icing and slot problems, they eventually nightstopped as the crews ran into Flight Time Limitations. By this time many of the ramp, passenger services and (re) ticketing staff had gone home so real problems set in and passengers were kept on board for several hours, that being the best place to be. Once disembarked most had no alternative but to accept the BAA's offer of floor mats and bottles of water. Hotel rooms and means of getting to them are not thick on the ground in the small hours and for around five hours  every night there are no rail or underground services. The inevitable media photographs of what looked like a refugee camp followed. All concerned were fortunate that media headlines were primarily focused on events in Algeria and Mali.

What went wrong and why was the largest home based carrier and its primary terminal disproportionately affected and why after a reasonable day did the substantial tail end of their long haul programme fall over?

First up is that with the best of intentions both the airport and BA have in recent tears abandoned the policy of setting out to operate as much of the schedule as possible and take the knocks as they come. The former philosophy of "Fly the plan", partly by instilling a "Go for it" culture on the day generally saw more flights get away than the current one of a precautionary cull which results in a different mindset. Not pre-cancelling also allowed for flexibility if conditions or the ability to deal with them turned out to be better than forecast , as is often the case.

BA's next problem is that due to different union agreements it is extremely limited in its ability to keep aircraft, pilots and cabin crew transiting Heathrow together. Everywhere else they can, but "minimum base turnaround" deals which allow most crews to come off the  aircraft for a break. This means that an aircraft may have arrived and be ready to go but pilots may be awaited from one inbound flight and the cabin crew from another. The rest of the day's short haul schedule is therefore extremely fragile and sorting it out highly complex even  under disruption agreements. As result, descheduling is the easiest way to go and also to protect the next day's operation. Thanks to the commercial need to nightstop aircraft away from London so that they can operate early morning high yield business and connecting flights back, the whole BA short haul operation is much more complex,- and expensive,- that the low cost carriers general policy of no nightstops and keeping the aircraft, pilots and cabin crew together through a complete 2 , 4 or even 6 sector shift. These airlines also treat their base airports just as any other with no need for am extended rest break on the ground. Their crew rosters are also self contained within 24 hours and do not involve several continuous days with nightstops away from home as BA's can. Complexity as well as union agreements is a feature of BA's short haul operation and this adds to its fragility.  The whole situation is worse for the airline than or any other as it is compounded by its aircraft having to transit Heathrow three or even four times in a day.

Another area of difficulty for BA is that the decisions on which flights to cancel appear not to be based on strategic commercial factors. As result domestics go first and with them many connections onto long haul flights. The Gulf, Asian and American airlines operating out of the provinces must be delighted to receive this free contribution to their marketing efforts. Furthest north, the regular traveller rotation workers on rigs off Aberdeen seem to get hit particularly badly with their BA flights being cancelled while others fly in and out with much less disruption. These look like avoidable own goals and need more thought.

Conclusion? Most at Heathrow actually achieved much of what they set out to do. The fact is though that in some major cases that wasn't good enough. The ambition simply was not set sufficiently high to satisfy the passengers . To them "We are doing our best" was inadequate.

Verdict: More thinking, planning and a more dynamic approach are required, along with some more de-icing kit and people.  Lots more people and information and curculating amongst the passengers too.  Volunteer,- directed if need be, -managers from the nearby headquarters buildings need to be trained in the arts of giving empathetic and supportive customer service and helping people with problems. That's what service businesses should be all aboutand any that are not should fail. Every available person needs to rally and help man the front line pumps and jump from their beds if required. Managements can not afford not to be seen to be sharing the pain of staff and passengers alike (and bin the awful and inappropriate word "customer" once and for all) . They need to be seen to care passionately about those who have chosen to buy their product. "Ring this number" or "Write in" is an unacceptable answer to people to whom the promise of being safely, courteously and punctually transported from A to B is already not being met. The managements of the key players at Heathrow need to heed Anthony Jenkins, the new CEO of Barclays Bank who said in a message to staff on 17th January: "There might be some who don't feel they can fully buy into an approach which so squarely links (our)performance to the upholding of our values. My message to them is (this) is not the place for you" . Follow that Heathrow.

Footnote: The quick switching to other flights or airlines of passengers whose flights have been cancelled has become much more difficult with the abandonment of paper tickets, the grouping of many airlines into alliances and the loss of many overall or local interline agreements.  In most cases in the bad old days of IATA paper tickets anybody rushing up to a competitors' checkin desk in situations like these could be accepted if there were seats available and the paperwork sorted out later. With no piece of paper to wave about ,the answer will now too often be "Computer says No". Not what anyone in a hurry wants to hear on a snowy night.

Wednesday, 9 January 2013

2013,- Some green shoots.

A characteristic of the transport and aviation industries which makes them so addictive to many working in them (the non addicted are missing a lot) is that normally they are constantly changing, moving forward and new and exciting things are around the corner. Into the mix come unresolved old problems, baggage of the past ,and unforseen new ones all demanding energy and new solutions (eg 787 construction integration, A380 wings).There are some business failures and some triumphs. It is a dynamic industry where standing still is seldom an option. The American and European legacy airlines and their emulators have too often deluded themselves that it is. Then along have come new attacks on old perceived wisdoms and ways of doing business. Aircraft develop, get lighter, cleverer, longer range. Geography suddenly shifts. That's not new. Ever since at least 1946 aircraft ranges and capabilities have periodically seen big step changes.  Many African routes in the early 1950s demanded fuel stops at for Rome, Cairo, Khartoum and then in East Africa. Then along came longer range Constellation 749s and DC 6s . Khartoum suddenly found itself falling off the world airline map. The process has continued particularly behind the American east coast gateways and between  Europe and the south and east . South Africa and all of Asia came within nonstop range with the 747-400. The most recent seismic shift has has a different cause,-the arrival of the big new Gulf giants , unafraid particularly of aircraft  leasing costs (They tend to see these as self extinguishing operating costs rather than a dead weight debt) . Dubai, Abu Dhabi and Qatar have  soared into hubbing dominance. European and Asian airlines and dominant airports have looked on aghast and struggled for new responses. Ironically the European majors, by exhuberantly embracing alliances have helped the process along and and dug their own pits by undermining their own strength and the power of their home hubs .  See under Airlines alliances below for more.

What then does 2013 look like at the start of the year?


-The A380 continues to sell slowly. The wing production problem persists and all new aircraft until at least well into 2013 will still require substantial downtime for modification and reworking later. This occurs after only 500 flight cycles so encourages operators to keep the average sector time as high as possible despite the need for some shorter haul use for crew training and recency. BA is the main new operator in 2013 but it is only expecting a slow drip of 3 deliveries during the year . The first is dues in July. There is no announcement yet of which routes they will be deployed on after initial training orientated appearances around Europe but the betting has to be initially a prestige orientated daily New York service followed by a daily Hong Kong.

    Airbus would like to see new customers for the aircraft in 2013. The US majors, only just buying a handful of B 777-300ERs (American) ,are likely to be a step too far at the moment despite slowly increasing appearances of European and Asian 380s on high demand services at primary east and west coast airports. In the absence of immediate interest from them the primary targets have to be Cathay Pacific (who, like Emirates would prefer the -900 stretch version) , Japan Airlines,and All Nippon. IAG might be persuaded to buy a handful ,- maybe 3 or 4,-of BA  spec aircraft for Iberia. In Africa only SAA looks a possible but again only for 3 or 4 aircraft. Beyond that Airbus will have to rely on existing customers increasing their fleets but they will struggle to match increasing delivery rates with the inflow of new orders.

-A350 The first flight is now scheduled for 2013 and the aircraft will then start aquire real credibility.
The real question is what can it offer that an equivalent or bigger 777, particularly the 300ER doesn't do more of or better? Is its claimed 25% fuel consumption reduction fuel consumption really going to come good and tip the balance, especially if it comes with a higher initial price tag and therefore ongoing cosy of ownership. Its delay has resulted in the upward drift of orders from the -800 to the -900 version so as to meet projected midlife capacity requirements. Despite offering a slightly wider (by 5 inches) cabin ,the -800 is threatened by the 787-8 and the -900 competes with the  787-9 where ultimates in range are not required and the 777-200. Boeing can also offer, albeit spanning  2 aircraft types (777 and 787) a wider spread of range and capacity. The A350-1000 looks as if it will come close to the 777-300 ER but not quite match it. A further tweak therefore seems likely to offer a single aircraft type that blankets in all respects the complementary two type the 787 and 777 range .

-Boeing 777 and 787: Boeing has faced a dilemma in deciding how much they want these two types to overlap on range and capacity. Their finances and cash flow, badly hit by the 4 year delay in 787 deliveries have benefitted enormously from the extended production life of the 777 and to a much lesser extent the 767. They have been reluctant for the 787 to grow to a point where it was cannibalising 777 orders although they had to accept this would hapopen at some stage. For those who are prepared to join a 4-5 year queue the -900 now does that and the -100 will complete the job. That then leaves the still fast selling-300ER out in a range/capacity calls of its own. Boeing have two options here. One is to extend the 787 still further (needing a new wing?) and theother is to develop a lighter weight construction version of the 777-300ER using more carbon fibre panels so as to get it closer to A350 size/weight ratios and thereby reduce its fuel consumption. The battle and the questions will continue through 2013 but expect 777 orders to gradually slide towards the 787-900 and urgings from the airlines to take  one of the above options to cover the future very largest big twin market.  The long term bet has to be on the offering of not only the 787-1000 but a -1100 and the winding up of 777 production.  As we note above Airbus' logical response would to tweak the A350 upwards into a -1100  version. In the meantime Boeing will enjoy the inclome benefits of the extended 767 production life coutesy of having won back the USAF transport/tanker contract from a version of the A330-200.

-Boeing 747-8i. This is a pleasant aircraft to fly on but is likely to remain a slow selling niche product for a small number of 747 addicted airlines, notably Lufthansa. Squeezed between the A380 which is capable of considerable further stretch, this ultimate lengthening , updating and uprating of the 1960's based 747 is its last fling. Even with its long pedigree its introduction into service has been slow and painful with Flight Management Systems reportedly being particularly problematical.

-Lower down the product range but very significant in its own right is the smaller twinjet EMB 170/190 series (likely to be updated/upgraded) v the new Bombardier C series v the smaller 737/A320 series models. Each overlaps with the other, the Boeing and Airbus offerings giving fleet commonality right through from 100-180 seats but with some serious weight disadvantages at the lower end. Will EMB creep upwards, Bombardier upwards and downwards and will be fleet commonality crewing and engineering benefits still keep the big two safe from these lighter, less fuel thirsty, predators? The Russian Sukhoi Superjet 100 is also in there, along with one or two other possibles . They will find their own niches but  are unlikely to have enormous international impact on the main contenders.

-Longevity in service: An issue which is worrying many non US airlines, leasing companies, financiers and manufacturers and spares suppliers for whom an aircraft's time in service is important is a trend to shorter front line and even total flying years. In the 1950's,- probably the decade of the greatest and fastest changes and developments ever for aircraft and airlines, - the front line in service span was around 5 years and sometimes even less.  Unpressurised piston airliners (DC4s) gave way to enlarged pressurised versions (DC-6s, then DC7s and Constellations followed by Super Constellations.) .The first jet , the Comet 1, came and went between 1952 and 1954 and then in 1957 the first long haul turboprop, the Britannia arrived only to be overtaken little more than a year later by the Comet 4, Boeing 707, Convair 880 and DC-8. These had a reasonable innings of 10+ years until from the early 70s the first 747s began to elbow them . The big widebodies lifetimes moved towards the 20+ year mark where they have largely remained ever since. Quite suddenly all this is changing. Some A330s and 777s have already gone for conversion into spares in less than 10 years and with 787s and A350s likely to push big fleets of young 777s and A330s out of the way in the next ten years. The picture is more stable in the USA where the large legacy carriers have much more successfuly spun out the lifetime of airliners which would be considered veterans elsewhere but it could change even there.


-The growth of the "new" Gulf trio , Emirates, Etihad and Qatar Airways looks like continuing unabated. Every new spoke added to their home hubs adds to the synergy and strength of the rest and being within 8 or so hours of most points in Europe, the Middle East, Asia and Africa puts them in the geograaphical centre of vast and growing markets. Two pilot operations with 24 hour downline flight and cabin crew layovers give them significant cost savings over European and Asian carriers as do the aircraft utilisation benefits of being able to avoid most long layovers by operating out of 24/7 bases where middle of the night departures and arrivals have long been accepted as the norm.
The trio have also strengthened their position by offering higher quality ground and air and service and catering than most of their non Asian rivals, especially the American and European legacy contingent who have tended to sheer away almost everything they can on the basis that every mouthful, every chocolate "given away", takes six figure sums off the balance sheets. Unfortunately these things also reduce perceptions of reduced service and caring and an unquantifiable percentage of revenue walks away as result. As these so not show up in any accounts, many airlines accept them as a worthwhile loss, although they have little idea of what the figures really are. If they stood at the Gulf and Asian carriers' boarding gates they might begin to get some sort of idea, but finance people tend not to go near airports or customers.

-There is talk of Alitalia again offering itself to Air France/KLM and some indications they might just buy. Not every proposition is a good one and this looks like a dead cert for that catageory. Some airlines can damage your health and Alitalia has long looked like one. Another largely unreformed state owned legacy carrier, getting the Italian flag carrier overhauled, modernised, slimmed down and firmly and consistently into profit looks like a long haul. Air France/KLM , master of  two out of three (the other being Frankfurt) continental Europe's has enough on its hands without the severe migrane that controlling or digesting Alitalis is likely to cause. The task is in IAG's Wille Walsh league (see below) but for most other people it is one opportunity best passed up.

-IAG. Against many predictions, IAG CEO Willie Walsh was able to enjoy his Christmas turkey,- if he takes time off for such things,- knowing all of Iberia's unions other than the pilots had, against all past form, signed up to go along with his package of routes, fleet and staff reductions. Even the pilots seem to be edging towards constructive discussions. They are though, reasonably enough,  seeking details of how and where the airline, once trimmed back, would resume longer term growth. They will have identified from Walsh's history in Aer Lingus and BA that he is good at slash and burn to make businesses viable my matching resources including working practices to output but has a much less clear view of how to develop the airline once that is. BA has had a virtual moritorium on overall  growth of its long haul fleet for the best part of 15 years and its orders for 12 A380s and 24 787s do no more than replace similar numbers of 747-400s and 767s. Its staff look in vain for any big plan for the future. Iberias's pilots are right to ask for one for their part of IAG as managed decline isn't attractive for anyone and talk of growth via more "mergers into" aka "aquisitions by" IAG doesn't answer the question. They and other strategically aware staff and sharehilders will want to know the plans for each of the owned brands as if they were at least semi-separate businesses.

-Alliances all three major alliances will continue to mop up strategic stragglers and unless very careful and very demanding in doing so probably continue to dilute their core quality. Competitively alliances have always been presenred by their supporters as offering enormous public benefits. In reality they have reduced rather than increased competition. They have also reduced the significance of the world's major international hubs. Before alliances passengers would connect from any airline to any other via interline or IATA ticketing agreements. They would receive through tickets, be able to check their bags through to destination and do all the things alliances claim only came in under their regimes. Special fares were also avaliable between two or more carriers via a host of different multi carrier round-the-world and other deals.  Hubwise, at  London  for example all incoming passengers on any airline could and would connect to almost any flight by any outbound carrier. Now most interlining is restricted to connections only between alliance members. At a stroke therefore Heathrow the airport and BA, the hub master, have lost a good chunk of their connectivity.
Alliances have enabled collections of smaller carriers to mimic the reach of the formerly world dominant majors. They were therefore not strategically a good thing for the majors to back and yet , unlike the so far far very independent Emirates, none of them saw it and instead engaged in a headlong scramble to sweep as many smaller airlines under their alliance wings as possible. Collectively not very clever.

-African airlines have settled into a Big Three,-SAA, Kenya Airways and Ethiopian, each very different and unlikely to integrate with any of the others despite Kenya Airways' CEO Titus Naikuni saying it would be a good idea. Better for the continent's customers would be continued and developing competition between the three, usefully spurred on by the need to compete with the product of the other Big Three spreading out across Africa from the Gulf.  Kenya Airways' achilles heel is the glacial progress in bringing their home base, Nairobi's Jomo Kenyatta Airport into the 21st century. West African airlines and airports meanwhile struggle for identity as substantial players.


-The arrival of long range low fuel burn 787s with capacities in the 220- 280 range it makes it easier for more primary city to secondary city pairs and even some secondaries to secondaries to bypass major hubs. This, as Boeing has intended, really opens up the 787 v A380 argument and battle and is one factor limitingo predictions for A380 sales at least in the short term. It could also cause come anxiety in the Gulf.

-Despite the above, the A380 with over 60 now delivered and a solution to its wing problems in sight, and the Boeing 787-8i are carving their own niche and spreading onto more high density routes around the world . In the end the US majors will have to respond, even if on a lomited number of very high demad and slot restricted routes. The A380 in particular is winning public approval and has become the preferred aircraft wherever it flies. In several of its configurations the premium cabins do have a genuine "wow" factor although many of the same characteristics are now being replicated on smaller aircraft . Which US major will blink first?

Happy New Year!

Sunday, 6 January 2013

UK Railways,- HS 2. More Conservatives across the line.

Today's Sunday Times has published what it claims will be the twin Y shaped routes of Britain's proposed high speed line north of the first London-Birmingham stage. The official government announcement is expected shortly.

Just as stage one continues to face highly emotional and state funded opposition from the mainly (very) Conservative and conservative constituencies lying along its route, the essential northern extensions are facing the same sort of noise wherever faced with similar well heeled constituencies and constituents further north. This is despite different "we want it here" clamouring from points further north . The divergence of approach illuminates well the north/south divide. In the affluent Chilterns any talk of the national interest or the needs of the north cuts little ice. There is simply little interest in anywhere much further up the country than the fashionable Cotswolds. Even the wealthy rural Cheshire enclave, the home of much northern brass and pretty much the furthest outpost of the Tory party, is considered not quite "one of us".

No surprise then that the Sunday Times reports the Conservative Mayor of Cheshire East as declaring "We don't want HS 2 coming through our part of Cheshire. We would very strongly resist it". No doubt they will but  hopefully for the future of British rail capacity and ease of travel to, through and within the midlands and north and ultimately Scotland, the robust Transport Secretary Patrick McLoughlin will listen but continue to hold his course and drive his bulldozer forwards so that actual construction can begin. Ideally that should be earlier than the currently planned 2016 date.

The UK's air, rail and road transport systems have suffered from political paralysis for decades .Wasted opportunities (expansion of London airport capacity) and road and rail congestion pile up by the year. Air traffic diverts away to Amsterdam and Paris and, more distantly, to the newly dynamic Gulf. Labour's Lord Adonis, ironically a former Liberal Democrat, had at last got a grip on things between 2008 and the 2010 General Election.  Unusually enthusiastic about his portfolio, something seldom appreciated in a Minister, he was firmly pushing ahead on Heathrow's third runway. He  had also launched HS 2 as well as kicking off the beginnings of what is now a major programme of rail electrification. The latter is the easiest to deliver as with few exceptions it can be done without the laborious process of getting planning permission. Building work and hardware are already beginning to appear.

There is much to be done to make all areas of UK's transport infrastructure fit for at least the 25-50 year timescale future, a thing itself may well be beyond the lifetime of many of the "Say No To...." campaigners. Sadly this may explain their lack of interest in it.  "Localism" and the devolution of the ability to stop anything down to the level of a local coffee shop happening is all very well but there are times when it has to be put and even pushed aside. Fortunately by the look of it, Mr McLouglin will listen to everyone , make a few costly alterations, and then drive on.