Sunday, 27 November 2016

Fastjet's parrot asks for more nuts,- and time.

FastJet ,the one with the cheerful parrot on their tails, the intended importer of low cost air travel across the African continent, is looking for money again. The Chairman has joined a number of former executives in heading for the exit.

What's going on here? 

It's a long story and deserves a full writeup but for the moment here are a few points to ponder:

- Although launched with pan-African ambitions to swiftly spread EasyJet type low cost air travel across the continent, Fastjet has never been and has never been seen as an African airline. Hence to established carriers and many governments it has been viewed as a threat with few offsetting benefits. Even Tanzania, the main beneficiary so far, has cautiously kept its national airline, Air Tanzania. on life support just in case.

-One has to wonder if, prior to launch, its people ranged the continent far and wide, not on escorted besuited visits but as ordinary people and businessmen to take in what they saw and understand some of the realities. Did they walk the streets, explore what was for sale and at what prices in shops, sit in cafes and restaurants ,looking at and listening to what was going on around them? Did they sample local transport, see where people were going. why and what prices, try out airline products and airports, talk to a wide range of local business people of all races and knock on the doors of transport ministers? Did they get to understand who and what they would be dealing with and develop the strategies and tactics of how to approach each? Did they get to grips with local distribution and banking channels (Kenya's mobile phone based banking system is the world leader. Elsewhere credit cards can be rarity.). Did they then visit key decision makers regularly and often? (One offs are pointless. People like to deal with others they get to know and see often). Did they identify the right people to trust and to guide them through the complexities of getting established? 

- We don't know the answers to the above questions but some signs are not encouraging. Having a HQ in UK's leafy Surrey didn't exactly say "We are an African airline". Johannesburg is better but South Africa isn't seen by countries north of its borders as being really part of Africa. Maybe the airline's aspirations will shrink for a time mainly into the South African market and then  re-emerge with more thrusts northward, but that's a far cry from the bold original vision and timescales.They were right in saying that the continent has huge untapped markets but maybe they misunderstood what form these come in, where they are and how to fully access them? ( With a few exceptions a multiplicity of small pockets is more likely than a plethora of high volume several times a day operations).  They have been highly innovative in many ways but new CEO Nico Bezuidenhout has a huge task in stabalising the business and getting it moving forward again. He needs the next cash injection to get the headroom and time to do that. We wish him well.

Saturday, 19 November 2016

Emirates v Qatar. An Economy Comparaison.

Andrew Woodrow writes....

I was recently the lucky winner of a  business week in Cape Town, travelling in Economy and via the Gulf as follows:

Copenhagen – Doha, Qatar Airways 787-8
Doha – Cape Town, Qatar Airways 777-300ER
Cape Town – Dubai, Emirates 777-300ER
Dubai – Copenhagen, Emirates A380

Back in the 1980's a Malaysian newspaper cartoon parodied their national carrier's advertising. An Economy passenger was asked the familiar question "Chicken or Beef?" "Lobster" he replied, gaining a sympathetic smirk in reply. "I'm sure I saw it in their ads" was his thought.

Fast forward thirty years and it's still happening. The Gulfies make a great deal about their business class, often to the point where economy class passengers can feel a little duped. On my previous EK A380 flight, I overheard a fellow economy class passenger asking where the famous bar was. ‘Well it’s a very full flight,’ said the stewardess tactfully, ‘so we are asking everyone to stay in their own area of the aircraft today’. And every other day, she might have added.

Anyway on this trip I got to compare the less-highly advertised economy class of each airline, and a few different aircraft types. Here's how it looked.

-          As a window seat man (see other articles), the 787 wins hands down. What windows! They are huge and, if on the sunny side of the aircraft (something I try to avoid), you can dim them electronically, as if the entire window had sunglasses on. Great! This contrasts particularly with the A380, where I have an overwing window seat on the lower deck. Next time you see an A380, take a look at the wing root. Designed for a potentially much stretched model, it is massive – both in terms of a much longer chord than any other airliner, and an initial steep dihedral. So the broad wing sticks up as well as out, and flattens out towards the engines. Add to that the thickness of the hull, which is at least twice as deep as on a ‘normal’ aircraft and the window feels like a bigger version of the time you were 6 and made a toilet roll telescope. Anyway I can pretty much see wing only from seat 62A. Every now and then a tantalizing sliver of mountain is visible between the leading edge and the horizon but that’s about it. And no, it’s not the same looking at the outside camera view on TV.

-          Seat next. You have more space on Emirates, and the seats are more comfortable. Even the 3 – 4 – 3 configured 777 beats the 3 – 3 - 3 787. Seats are also wider on the A380 than the 777, and on both the Emirates aircraft you get more legroom that the Qatar ones,– and better IFE.

-          Service – Emirates wins on that too. Both airlines are pretty good, with multi-national cabin crew delivering a pleasant service, but Qatar’s just feels a little more forced, and Emirates seem to come round a little more often in the gaps between meals with drinks and nibbles.

-          General note ,– the A380 is massive, and proportionately stable. Both the A380 and 787 are noticeably quieter than the 777, the A380 in particular. The A380 is let down by its tunnel-like windows (everywhere) and massive wing (if you are a window seat person sitting near the wing). The 787 has great windows and a very impressive, curving wing that doesn't  block the view too much. Overall though I like the 777 best. It’s big enough to iron out the bumps, you can see out nicely, and maybe it’s just because I have spent so many days in the back of one, they just feel right.

-          Internet ,– pretty slow on both, even if you pay the US$1 for an upgrade on Emirates. Just as well all I had to do was send a single, text only email.

-          Hub. Both Dubai and Doha are modern, well equipped, fairly soul-less terminals (It is rare to find a modern airport terminal with soul) with loads of shopping and few places to eat. Of the two, Doha gets my vote, although its layout is moderately confusing. Dubai has a simple layout, being effectively long and thin once you are airside, and if you don’t mind taking the efficient shuttles between zones it’s fine. But the walkways are too narrow for the volume of passengers, and there are too many seemingly conflicting flows of people. You are forever bumping into migration-like crowds going the other way. And as at any airport where there is consistently a queue for the gents,  a few more of them would be more than welcome.

-          Schedule. Copenhagen is one of Emirates’ relatively few ‘single daily service’ destinations, while Qatar does a double daily. That means Emirates’ downside is the connection in Dubai always being at an anti-social time. Southbound it’s about midnight and northbound you need to be in Dubai by 6am. On Qatar the double daily does at least give a choice of schedules and transfer times, depending on the final destination.

So who wins? Overall Emirates, though Qatar has a better hub, a better schedule from Copenhagen, – though this doesn’t apply to many of their common  destinations where Emirates has the frequency.  For window gazers Qatar’s 787s are the best. 


Thursday, 17 November 2016

World Travel Market -London November 2016

 The dogs have barked and the caravan has moved on…  London’s World Travel Market 2016 is over.  Exhibitors and visitors have returned home to Aruba and Zanzibar and everywhere in between. Silence has descended on the vast exhibition space of the Excel Centre in London’s docklands area.

We have been going for many years but somewhere in the back of the mind there’s been a growing sense of unease recently. Something to worry about..or not?

The numbers are impressive.  50,000 attendees and 5,000 exhibitors is more than a village fete.  Nearly 200 countries represented makes it a truly global rather than regional happening.  And to argue that the £2.5 billion of generated business immaterial would be mean-spirited.

But is everything quite as it seems?  The 2016 statistics have yet to be tallied and circulated but were the crowds slightly less this year? – and were they the key decision makers and buyers? Were the exhibitors on their stands experiencing unfamiliar quiet periods during the day?  This year the opening days were reduced by 25%, to just 3 days, apparently at the request of exhibitors.  There is no doubt that the old 4th day was very much a ‘preparing to fly home day’.  2014 is quoted as being the busiest year.

In the 34 years since WTM London opened its doors in 1982 the travel world and its means of marketing and distribution has changed enormously.  Global travel, in its many forms, has blossomed.  The nature of today’s travel business and the enabling technology was unimaginable all those years ago.  WTM 1982 was initiated to bring tour companies and ground operators together in a world dependent on telex communications.

The question now is whether WTM has peaked and entered a slow but steady decline?   Are the costs now causing small operators from, say, Malawi to stay away?  Such exhibitors are also faced with an escalating number of similar events.  There is WTM Africa in Cape Town, Ndaba in Durban and the grand-daddy ITB in Berlin all to be considered.  The costs for each are high in terms of stand rental, travel, accommodation and time away from the business.  Perhaps larger operators are now asking the same question in readiness for a similar decision.  In earlier years British Airways and many major airlines were well represented but now apart from the Gulf contingent most have gone.  Glitzy Etihad is the latest departee.

But don’t expect the Excel Centre to look empty next year. The reasons for exhibiting and attending are many. Not least is to check out new niche arrivals. For the first time in 14 years, Sudan returned to exhibit this year. The industry is dynamic and new products are always there to be launched.  And however instantaneous digital communication has become traditional face to face meetings are a powerful business generator. WTM is also an impressive shop window on the world and the travel opportunities on offer.  

The peak may have been 2014 but demand is likely to remain high for a few years yet even if it is becoming more UK centric. Having said that, the UK is and will remain a very large, growing and competitive market with its own distinctive characteristics. WTM is therefore far from a spent force but it does need to take stock of where it’s going and revitalise some of the formula and how it presents itself. It can’t afford to become the equivalent of a funfair in the age of the theme park.


14 Nov 2016

Sunday, 13 November 2016

Trumps-for who?

America's big three legacy airlines may be rubbing their hands in anticipation. Could Mr Trump's arrival mean that their dreams of heavy governmental protectionism be about to come good?  President Obama had made it clear he wasn't interested in their pleas of woe about the Gulf airlines and others. Their demands that the intruders be cut back so "to establish a level playing field" had  produced only stifled yawns from the White House. They just weren't interesting. The dusty legacies' aspirations for foreign airlines' to be cut back to operating  only the routes, frequencies and capacities identical to those flown by US carriers cut no ice. For many routes,- and US airports that would have meant zero long haul international flights. Americans and foreigners alike would have to go back to hubbing over the major US international airports and connecting at the other end  to any points (ie most of the world) not served by a US carrier. There will now be hopes among the big three that a protectionist Trump will be more sympathetic to them, disruptive though it would be business and leisure travel.

The brighter reality is that lobbying against this would be Boeing, especially with its hub busting 787 and new 777x aircraft to sell, and the US airports who would lose their prized direct international links to the world. There would also be significant American job losses and local economic downturns, things the new President would find politically difficult. It was after all the historic destruction of blue collar jobs that swung a lot of votes for him.

It is not all over for the current fairly liberal traffic rights regime. Panic,-and celebrations by the big three,- can be delayed. Wakeful watching and well targeted and argued lobbying focusing on the benefits for ALL of America will be the key battlegrounds.

Tuesday, 8 November 2016

Flying kites of doom muddy Brexit.

Politicians, business people with vested interests, media pundits and others catching the mood of the moment are flying more speculative kites about possible effects of Brexit than there are aircraft in the European skies.

The latest bit of alarmism comes in doom laden warnings that with the end of the European open sky air services between the UK and Europe could collapse. The Times relates " outside of open skies Britain would have to negotiate new complicated bilateral arrangements in which UK airlines can fly to Europe and vice versa. Complicated?.Really? Bilateral air service agreements are the general norm worldwide. They were in place between the UK and European countries for years before open skies and  largely worked well, despite some inbuilt protectionist tendencies.  No agreements?  Back to pre World War 2 and the ferries? We really don't think so. Routes to the UK and London in particular are the most profitable in most EU airlines' shorthaul portfolios They aren't going to let their governments sever the links in a game of political fisticuffs. New point to point bilaterals between the UK and European countries if kept simple should be easy enough to establish in days or at most weeks, not months. The UK for its part could ,- and should,-just declare open skies.

There could be a problem for British airlines which fly within the EU but solving the legality of that should not be difficult either by the establishment of  European subsidiaries or by reciprocal agreements. Easyjet is the big British player in this market and will have the most furrowed brows. IAG, whose cash cow BA is already a Spanish registered company despite its Head Office being in the UK, only flies intra European services with its Spanish based Vueling brand. To keep BA's UK rights legal IAG may have to spin it off again as a UK company but again that should be manageable without taking it totally out of the group.

Meanwhile a certain ardently Europhile Irishman, was yesterday lamenting the possible complications of Brexit and calling the whole affair "a shambles". That's easy enough to say especially as these are very early days in a two+ year process. It gets the headlines but the time might be better spent for all businesses, especially airlines and the tourism industry, to stop wailing about disaster scenarios and get on with plans to extract the best from what is after all only a return to the status quo ante. Let's not forget that the UK already had Europe's strongest and most diverse airline industry well before it joined the EU on January 1st 1973. Time for calm on the boardroom flight decks.