African Snippets December 2012 –February 2013

Just how long will it take before the 787 produces good news for its African operators ? Both Ethiopian and Kenya Airways have already suffered more than 3 years of delayed deliveries.  Ethiopian was starting to smile having taken delivery of 4 whilst Kenya Airways remains in the queue for its first aircraft.  And now … regulators have grounded the worldwide fleet.

The Turks are coming,- everywhere .Turkish Airlines is currently driving the pace of African network expansion by non-African carriers.  With the addition of Kilimanjaro and Mombasa  and now Libreville, Gabon the airline  now serves 34 of its targeted 50 destinations in Africa . It already outpoints its foreign rivals other than on intra-African trafffic which the Turks  say is too difficult to capacity manage and in which they therefore have no interest. It is growing the hub synergies by doing the same everywhere else as well.  For example Edinburgh is joining their UK network. Ever heard of Aalborg in northern Denmark? Turkish have and are in there. Secondary destinations are well covered and very much their territory. Now the tertiaries are also appearing on the route maps.

As an Africa based carrier, Kenya Airways takes a very different view of  5^th freedom rights within it and as result provides a number of useful and  incrementally profitable city pairs particularly on the western side of the continent.

Ethiopian continues to strengthen its influence in African markets beyond simply providing frequency.  Encouraged by the success of its West African subsidiary ASky of Lome, Togo, it is eyeing both Zambia and Malawi as opportunities.  It continues as a major bidder for control of Air Malawi ,- including the imminent launch of Blantyre operations - and is deep in discussion with the Government of Zambia for the creation of a new joint-venture national carrier. Neither Ethiopian nor Kenya Airways can ‘out-fleet’ Emirates, Qatar and Turkish but they can exploit their unrivalled local market knowledge and experience and by using the smaller EMB 170/190 series make money where widebodies fear to tread.

The growing choice of routings north and east out of Africa is beginning to generate casualties amongst the European legacy brethern.  In contrast to the newcomers they are in retreat . In recent weeks Virgin has withdrawn from Nairobi and KLM from Kano.  Ethiopian is about to reduce frequencies to Paris, Brussels and Milan and British Airways is shortly to withdraw from Dar es Salaam and to reduce frequency to Entebbe. See more below.

Fastjet continues to be a fascinating game to watch and the story changes by the day. Allegedly inbound and outbound law suits are flying about and the company doesn’t seem yet to have blended with the African landscape. There is a myth sometimes held that African warriors survive by their ability to slay full grown wild animals with one thrust of a spear. This actually isn’t true. The spear is usually the last resort. Survival and advancement is much more often achieved by blending in with the background and not attracting or at least circumventing the unhelpful attention of predators in the first place.

Regardless of all that , Fastjet has chalked up an impressive start to its Low Cost operations between Dar es Salaam, Mwanza and Kilimanjaro – nearly 30,000 passengers and 80% load factors were achieved in the first month. Yields though look low and once the airline has got the passengers hooked from the competing surface alternatives it will presumably seek to force the average upward.

That it is facing unexpected challenges is not too difficult to spot.  Dar es Salaam was never mentioned as the launch operating base but somehow it replaced the original choices of Accra or Nairobi. Becoming involved with Fly540 as the source for AOCs has produced unwanted legal action by FLY540 creditors, the latest arising from Uganda.  Its action to secure an Operating Licence in South Africa has uncovered a presumably unexpected, requirement for licence holders to have 75% local shareholding. Then there are understandable hostile objections from SAA, Mango and Comair.  All this diverts management time and effort from the equally challenging task of developing a profitable new business based initially on USD20 one-way fares.

Here’s a competitors’  dilemma. So far the competing, 49% Kenya Airways owned Precision Air, appears to be trying to ride out the storm by not adjusting its prices. Brave and tough when that means being undercut by a factor of 10 so where should they go from here to avoid losing  their current domestic Tanzania dominance ? In round terms FastJet’s fare to Mwanza is USD20 while Precison Air’s current lowest fare is 10 times as high at USD220.  Cutting by 50% would need 100% volume growth to maintain total revenue ,– and the fare would still be 5 times higher than Fastjet flying an A319 against your new ATR72.  Or should Precision just sit tight gambling that Fastjet will go away or find a better use for its aircraft?  Whatever Precision’s decision ,pain is inevitable.

See more on Fastjet below.

EAST AFRICA

Air Tanzania: Good news stories are rare for this airline. Another bad news one is that following protracted maintenance the Dash8-300 returned to service only for a cracked windscreen  to ground the aircraft at Kigoma on the inaugural flight. (Jan 2013)

Air Uganda has achieved IOSA renewal and launched a CRJ200 ‘premium economy class’ (Jan 2013)

Ethiopian Airlines dropped Bangui from the network and in March is launching Addis-N’dola flights as part of the current Lubumbashi routing routing with B737-700  (Dec 2012)

Ethiopian Airlines. Malawi is a long country north to south but narrow east to west. When it became independent in 1964 large scale business was concentrated in Blantyre in the south and government in Zomba, just 50 milesaway.

The visionary President Banda sought to establish a more even spread of activity by building a new capital city for government at Lilongwe, some 200 miles further north. He also ordered the building of a new and more modern international airport there. Airlines showed little interest in it so he forced their hand by banning all international flights from all other airports including Blantyre , the business centre of the country. This has been eroded to a very small extent, but the Lilongwe first policy has strangled Malawi’s position in central African aviation for the past 40 years.

Thanks no doubt to Malawi’s pragmatic new President , Joyce Banda, Blantyre with its narrow 100ft wide runway, appears to be available to more international operators again. As result, Ethiopian is to introduce Addis-Lilongwe-Blantyre-Addis services with B737-800s. The runway width bars aircraft with engines further outboard so widebodies can not be employed.  That rules out Emirates but there could be opportunities for Turkish , Etihad and Qatar in particular.(Jan 2013)

Ethiopian Airlines , now dogged by the FAA grounding of its 4 recently delivered and well received B787s ,is retiming its  6 weekly  B767-300ER services on the  Addis-Lome- Rio-Sao Paulo route until to Jun 2013 pending granting of slot times friendly to ASKY feed connections in Lome.  It is also planning to reduce capacity to Paris and Brussells via Rome by substituting 767s with 757s on some summer 2013 services. (Jan 2013)

FastJet  is never far from the news as its African grey parrot ( a species native to west rather than east, central or southern Africa) liveried aircraft take to the air. The airline’s first task is to assemble its multi-base portfolio. Although South Africa was not announced as one of its prime targets, the demise of domestic low cost carrier 1 Time presented it with an opportunity to secure a base and AOC in the country via an option agreement to purchase 100% of liquidated 1Time shares. South Africa’s airline market is very different to those north of the Limpopo. Well run, well liked ,low cost/low fare airlines with their own customer bases and strong followings are already part of the landscape so another one is going to have to fight to wrest market share from them rather than create an entirely new one. None of the existing players is going to move over to make room for a newcomer so the fight to break in and then stay there will be tough.

As Fastjet is a foreign company, South African government approval would be required for the takeover of 1Time and there are likely to be strong objections from SAA/Mango and Comair/Kulula. This is a frequent problem experienced by parrots. People try to clip their wings and put them in cages.

 It was hoped to get 1Time back into the air, presumably in Fastjet guise, on 28th January but this appears to have slipped to 1^st March . Initially 3 existing 1Time MD83s would be employed before replacement with A319s

Next up for the Dar es Salaam base are meant to be flights to Nairobi, Entebbe, Johannesburg and the Comores . No dates have yet been announced.(Jan2013)

Kenya Airways  has signed a  ‘Cooperation Agreement ‘ withRwandair including cargo, maintenance and crew training development (Dec 2012)

Kenya Airways is putting a tentative toe into the northern Zambia market with a single weekly Nairobi-Ndola E190 service from  March 2013 . This bypass of Lusaka by an international service should sell well and an increase in frequencies is likely to follow before long. The airline has recently taken delivery of the 6^th of 10 E190s it has on order. (Jan 2013)

On the industrial relations front a Nairobi court has ordered the immediate reinstatement of some 450 retrenched staff. The airline has appealed against the ruling which could seriously affect the ability of any Kenyan company to trim its workforce but has in the meantime out those affected back on the payroll. Messy. While possibly good news to existing employees , the inability to trim the workforce would be very bad news for possible future employees as it would discourage the airline from adding more than the absolute minimum. (Jan 2013)

Massawa Airways (Eritrea)This  start-up carrier has taken delivery of new Avic MA60. Its cusomers must be less fussy than those of Air Zimbabwe. (see below).(Dec 2012)

Precision Air on 16^th January  launched 4 weekly Dar es Salaam – Mbeya services using the  recently upgraded Songa Airport . Their domestic network is more comprehensive than anything Tanzania has seen since the demise of East African Airways. Nationally it would be worrying if their viablity were undermined on key routes such as Dar es Salaam to Mwanza and Kilimanjaro by FastJet’s extremely low fares.(Dec 2012)

Rwandair  has leased a Dash 8-100 from ALS, Nairobi. (Jan 2013)

SOUTH / CENTRAL AFRICA

1Time  The liquidator is seekinh an extension for final liquidation until February presumably to allow Fastjet talks to continue (Dec 2012)

Afric Aviation (Gabon), a  private operatorhas added an ATR72-200 to its single ATR42-300. The company plans network expansion to Brazzaville, Pointe Noire and Luanda (Jan 2013)

Air Cemac (Congo  Brazaville) is planning to launch in January.  Air France-KLM holds a 34% share. (Dec 2012)

Air Namibia has cut its flagship Windhoek-Frankfurt route from 7 to 5 flights a week.  It continues to tack up operating losses and  fuel supplier, Engen Namibia, is tightening the screw There are hints of lack of confidence between Minister of Transport and carrier’s MD.  Meanwhile the company has taken delivery of 2 A319s from Airbus bringing its total of the type to 4.   (Jan 2013)

Air Zimbabwe has renewed itsGDS Worldspan contract. An IOSA inspection was scheduled for 17 December  (Dec 2012)
Air Zimbabwe is leasing a B767-200 from InterAir of South Africa to operate Harare- Johannesburg.  The company has ceased MA60 operations due to ‘customer dissatisfaction’.  No surprises there. (Jan 2013)
Air Zimbabwe, ever confident ,is talking of Lagos and Accra services from March 2013 as well as reviving the London route (Jan 2013)

Fly Congo and CAA (both DRC) have  formed  an alliance with view of eventual merger.  Their combined fleet totals 11 aircraft including 3 A320s and 1 B767-200.  Domestic routes and and international services to Johannesburg and Entebbe are planned. Interesting in this is the reminder that Entebbe, so long overshadowed by Nairobi, is gradually building more useful links into adjacent countries and is a good uncluttered connecting airport to these for long haul international passengers. (Jan 2013)

LAM is  planning to add 2 EMB145s to its fleet shortly. (Jan 2013)

SAA has  received a USD64mn ‘bank facility’ from the long suffering governmemt  to meet outstanding fuel bills.  SAA Board has delayed its submission to the government of the demanded ‘Turnround Strategy’ from 15 Dec 2012 to March 2013 (Jan 2013) 

SkyWise (South Africa)is another South African proposed startup proposed by Rodney James and other founders of collapsed , 1Time.  A launch by the end of  March was the aim , using  2 737-300s between Capetown and Johannesburg . The money is reportedly from Dubai and local BEE investors.  The aquisition of an Air Service License  though isn’t going smoothly and it has reportedly been rejected by the Licencing Council (Jan 2013)

WEST AFRICA

Air Cote d’Ivoire is to lease an E170 from 15% shareholder Air France from January  (Dec 2012)

Air Mali has suspended all services  due national unrest .(Dec2 012)

ASKY is adding twice weekly  Lome-Bamako-Dakar B737-700 services and twice weekly Lagos-Abijan with  Q400s  (Dec 2012)

Camair-Co  of Cameroon has had an eventful 2 months. It was suspended from IATA Clearing House due to unpaid settlements  but nevertheless is considering the acquisition of 3Embraers or Bombardier C Series. COO MatthijsBoertien has been appointed CEO. As the previous CEO Alex van Elk’s contract was not renewed in July 2012. (Jan 2013)

Chanchangi(Nigeria) is flying again after a single B737-300 returned from maintenance (Dec 2012)

Cronus Airlines (Eq Guinea) is wet leasing  an MD87 adding to its 2 BAe146s fleet.  (Dec 2012)

Dana Air (Nigeria) has had its AOC renewed and services resumed on 4^th  January using 5 MD83s. This  follows  the June 2012 MD83 crash on aproach to Lagos airport.(Dec 2012)

Med-View Airlines (Nigeria) has been granted an AOC and on 8^th November 2012 started scheduled domestic ops with 4x B737-400/800 linking LOS/ABV/PHC plus Yola and Owerri (Jan13)

Starbow  has added a fourth BAe146-200and now has Ghana’s largest fleet  (Dec 2012)

Toumai Air Chad is planning to restart flying using wet-leased B737-300.  Its own AOC has been suspended (Jan 2013)

Westair Benin (Benin) has added a leased B737-400 to its CRJ200 and plans network expansion from Cotonou to 12 regional points.  (Jan 2013)

NORTH AFRICA

EgyptAir has defered a decision on 49% purchase in grounded CTK Aviation Ghana.Maybe it thinks the Ghana skies are getting a but crowded with new operators? (Dec 2012)

Egyptair Group :EgyptairAir Express is to be liquidated and its staff and 12 E170s are  to be integrated into mainline Egyptair.Its domestic network unprofitable since its 2006 formation.  Here is another example of a legacy airline trying to reduce cost via a separate low cost subsidiary and finding that in reality it is very difficult to shake off all the costs of its parent.(Dec 2012)

Egyptair,an airline with a long history in eastern Africa stretching back to Comet 4Cs in the early 1960s is to resume services to Harare via Dar es Salaam  in June .

Elsewhere it will join the increasing number of airlines attacking the UK by bypassing Heathrow by launching  five weekly Cairo – Manchester  B737-800 services. This aircraft is proving very useful to a number of carriers in opening hub-busting/bypassing services at a lower capital expense/ownership cost than would be involved in buying an addtional 40 or so seats with the smallest widebodies (A330-200 and B787-800). There was a belief in the 1970s and 80s that a narrow body would be increasingly unsaleable on sectors above 4 hours.  That is increasingly being disproved on direct routes between primary and secondary or between two secondary points.  Passengers are showing increasing preference for a smaller and possibly less comfortable aircraft if using them means they can avoid the larger transfer points which are often an obstacle course than a pleasure. See also item on Nairobi Airport under Turkish Airlines below.(Jan 2013)

Libyan Wings is planning to launch scheduled services out of Tripoli during 2013. No target date is specified.(Jan 2013)

Royal Air Maroc plans to revive 5  B737-500s currently parked. It also aims to resume of Casablanca – Las Palmas flights in April 2013  (Dec 2012)

Syphax Airlines (Tunisia) eff Apr2013 to introduction 1^stof two A330. It has also  signed a  deal for 10 A320s (Jan 2013)

Tunisair islooking for a 1,700  staff cut and African network increrase from 4 to 16 points in search for profitability. Competitive pressure will intensify with the imminent EU open-skies deal. (Jan 2013)

NON – AFRICAN AIRLINES

Binter Canarias (Gran Canaria) launched Banjul services with an Air Nostrum CRJ200 on 11^th January. The airline also serves Marrakech, Agadir, Casablanca, Praia and as well as Laayoune in Westen Sahara.  (Jan 2013)

IAG/British Airways. Having , with a few gaps, been in Dar es Salaam since at least 1947 when it operated with Solent flying boats , BA is to withdraw services at the end of March . Lack of profitability is given as the reason. At the same time Entebbe will drop from 5 weekly services to a less attractive 3, a move which could be self eliminating .Uncompetitive frequency has been one of the airline’s problems in Dar es Salaam where it faced daily KLM and Emirates, twice daily Ethiopian and Qatar Airways and five weekly Swiss flights as well as Kenya Airways’ high frequency links to the world via Nairobi.

                               Apart from poor frequencies and increases by competitors, especially the Gulf duo ,other contributors to BA’s woes will include perceived variable cabin service and an unremarkable on board product compared particularly to the Gulf airlines, its relatively poor personal sales contact in the UK and its lack of a visible overall geographical route strategy. The final nail in the route’s coffin may well be that the ownership costs of the new 787s which will progressively replace the 767 are higher than those of the well written down and virtually unique Rolls Royce powered 767s.  BA and its new owner IAG are very focused on individual route profitabilty and other factors are , for all kinds of very good short term financial reasons, very much secondary to that .  In the long term however  the decison to further shrink the network may not be so well advised.(Jan 2013)

IAG/Iberia  Bearing in mind the last sentence of  the previous paragraph it is no surprise that Iberia’s  ‘Transformation Plan’ calls for concentration on profitable routes. Driven by this, frequency increases are to include Casablanca, Dakar, Algiers, Nouakchott and Malabo while services to Cairo will cease.  (Dec 2012)

KLM is also trimming and adjusting its African network and will withdraw from Khartoum and Addis Ababa . Here Ethiopian and the Gulf airlines are making big inroads to points east while traffic from Khartoum to Europe is reduced thanks to a combination of politics and economics and the independence of the south of the country from the north. (Jan 2012)

Ryanair is expanding its presence in North Africa by opening 2 new bases in Morocco: Fez with a single aircraft  and Marrakech with two.  (Jan 2013)

Turkish Airlines . While the legacy high cost European carriers shrink in Africa, the relentless onward march by Turkish continues. In December Kilimanjaro and  Mombasa, and were added, the latter bypassing  the hassle of domestic to international connections at Nairobi where in particular a nocturnal walk amongst the traffic with a recalcitrant baggage trolley along  the poorly lit roadway between the two “units”,between the domestic and international units is no fun at all. Battling through the throng outside to get back into the building via the first of several security checks before actually boarding is not for the feint hearted or those in a hurry either .

Elswheer on the Turkish network, thrice weekly services to Libreville via Douala commenced in January. 

Unlike the Europeans but like the Gulf airlines, Turkish has a very definate geographical strategy and sees the multiplicty of points served in an area as key to its overall competitive position and ultimately profitabilty. Their target is 50 points in Africa. They have now 33. BA will have less than 10. Turkish’s CEO Kotil, says says that unlike Ethiopian, Kenya Airways , SAA and Emirates they are not interested  in incremental jam on the cake intra-Africa traffic. For one thing capacity management of these usually shortish sectors is just  too complicated and getting it wrong risks long haul business to and from Istanbul and beyond.   (Dec 2012)

MISCELLANEOUS

AFRAA’s  Joint fuel-buying agreement now includes 13 carriers. 2013 volume negotiations are underway for 1 million litres of JetA1; up by 50%.  Kenya Airways quotes US$2 of savings in 2012.  AFRAA negotiates with suppliers on a pooled volume basis; carriers contract individually.  (Jan13)

Comoros  There are new government talks of resurrecting Air Comores which last ceased operating in 1997 . The airline has been around a long time and in the late 1960s was operating Nord 262 turboprops as far as Dar es Salaam. The crew roundtripped via lunch on the ground in Dar where a bottle of Coast Lager or IPA was part of the day out (Jan 2013)

European Commission has removed Mauritania from the Ban List.  Eritrea has taken its place. (Dec 2012)

Kenya US FAA Cat1 status has  moved a step nearer with the signing into law of the new 2013 Civil Aviation Act (Jan 2013)

Malawi Min of Transport has said that the rehabilitation of Blantyre and Lilongwe airports  is imminent. Unfortunately in a display of old fashioned priories, t he refurbishment of Lilongwe’s VVIP terminal has so far taken priority  (Dec 2012)

Malawi Government is mulling the creation of a Malawi Aiports Authority separating airports management from the CAA’s safety and regulatory responsibility (Jan 2013) 

Nigeria Not one of the nation’s 22 airports, including Lagos, is ICAO certified . Few pilots in particular would be surprised.(Dec 2012)

Togo:  The new terminal building at Lome Airport is nearing completion. It is funded by USD150million  from China’s Exim Bank and unsurprisingly is therefore being built by a Chinese construction contract.  A new airport is planned for 2020 (Jan 2013)

John Williams,  29 January 2013.

European Court of Justice's ruling on disruption liability flies in the face of reason.

The European Court of Justice's verdict that RyanAir must compensate all passengers booked on its cancelled flights during the Icelandic volcano episode appears to fly in the face of all reason and common sense. How did they reach their verdict?

Under normal principles of English and Scottish (yes, they are different) jurisprudence, there are things which are nobody's fault and therefore come under the undeserved heading of " Act of God". They do occur. No earthly person could have intervened to make them happen or to prevent them. Volcanos would reasonably fall into that catageory.  Nobody therefore is liable for the consequences. Under this heading therefore Mr O'Leary and others should have been able to sleep soundly.

The airlines were not resposible for the volcanic activity . The next question is whether that having happened, they did or did not do anything to make its effects worse.Clearly not.Far from voluntarily stopping flying through areas which might be affected by airborne ash ,they were specifically prohibited from doing so by the UK and European aeronautical authorities. If there was any error of judgement which made the grounding unnecessary or too restrictive, then that should logically be the responsibility of those who made the decision, not the airlines,who complied with it at least until it  clear that much of the ban was unnecessary and threatened to fly anyway unless the authorities reconsidered their position,- which they then did.  If anyone was responsible for the lengthy period of flight cancellations it was the therefore the authorities,not the airlines.

It should therefore have been game, set and match to Mr O ' Leary. But it wasn't . The claimants then took their case to the European Court of Justice, the sump for all cases and claims which have failed in the national courts of any EU member state. As each of the nations has its own legal system developed over centuries and many are very different from each other there is no overall European law other than such has been created by the EU beaurocracy itself.  Much of this is about human rights which means that any case before ECJ will primarily be held up against the light for conflicts between the original state verdicts and the demands of these .The verdicts of individual state laws are therefore tested against others created above and outside. Anyone who talks about the supremacy of the laws and parliaments of the sovereign member states of the EU has not understood the reality.

Here is where the divergence and opportunity for the supremacy of a different concept occurs. EU laws, such as they are, lean heavily towards the concept that somebody must be responsible for almost anything and that as result somebody else must be eligible for compensation if things go wrong for them. Accidents don't happen.

That meant that someone other than the deity had to be responsible for the passengers being "stranded" ( As we noted at the time, many British residents actually weren't. They appear to have been unaware that they were somewhere in Europe through which ran roads and railways to English Channel ports whence ferries shuttled to their home island). The aviation authorities of Europe, being organs of governments of member states , were not expected to own or pay up so who else other than the airlines could carry the can?

That then appears to be how the decision was reached and to that's how the logic , even though fundamentally flawed, went. People have been inconvenienced. Someone, other than the state or states, has to be held responsible and pay. No wonder Mr O'Leary was shaking his head at being landed with the bill while the organsation(s) which told the airlines not to fly were absolved of blame or responsibity for the results of their acts or omissions.

Footnote: A UK government official on TV news shrugged off the liability of airlines for delays regardless of circumstances , describing the cost to the airlines  (already over £20 million to RyanAir alone even before the court case) in this particular instance as being "small beer" in the overall context of their revenue/profits. He clearly had no idea how narrow the margins, if any in many cases, of the industry are and how the ruling could put some carriers, small and large,"customers"of his department, out of business. 

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.

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.

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?


1) AIRCRAFT:

-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.

2) AIRLINES:

-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.

ROUTES:

-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!

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.

UK rail industrial disputes: The dead man's handle strikes again.

According the the 1950s' "Wonder Book of Trains" the dead man's handle was the one electric train drivers had to keep depressed. If released the system would assume he (it was almost invariably he) had become incapacitated and the train would automatically be brought to a halt. Presumably all were taught that in the event of a heart attack or stroke they must not fall in top of it.

The current dead man's handle, also a throwback to the 1950s and 60s ,seems to be the everlasting succession of strike calls particularly by the RMT, itself also  It is a brave man or woman who goes to work in defiance of these.

The past week has seen the now almost traditional Boxing Day walkout by many London tube drivers thereby depriving themselves of a day's good bank holiday wages. Today, New Year's Eve and tomorrow New Year's Day see a strike by cleaners in support of a wage demand which it has already been agreed will be paid from March. If anyone is seeking a definition of pointless this has to be a good one. Again these good folk will pay for their two days off by losing their wages. The well paid union leadership who called them out will not lose a penny. As ever the footsoldiers will pay out of their allegedly meagre earnings.

Less than pointless. Employees of and contractors to legacy businesses, notably ex nationalised ones, in particular would do well to consider how to vote, -and indeed to vote at all,- in ballots for industrial action.  Currently too many feel they must follow their union whatever it dictates and they thereby fall upon that fatal handle of self destruction.