5 OCTOBER 2009
The Business Travel News
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AIR ASTANA is to expand its Asian network with a new service to Kuala Lumpur from the beginning of the winter season (31 October). The weekly service will be operated every Saturday by Boeing 767 aircraft, with a flight time of eight hours. Kuala Lumpur will become Air Astana’s seventh international destination in Asia and the Gulf, with existing schedules operating between Almaty and Bangkok (3 times a week), Beijing (5), Delhi (3), Dubai (9), Seoul (2) and Urumqi (2). Passengers on the weekly service will be able to return via Bangkok using the through fares of Air Astana and its partner airlines. The airline flies to Heathrow twice weekly using Boeing 757 equipment and is a joint venture between a quasi-government investment fund (51%) and BAE Systems (49%). www.airastana.com
ALITALIA, now merged with Air One and with a 25% shareholding by Air France – KLM, is pressing on with an airport lounge refurbishment programme. Latest on the schedule is the Le Navi VIP lounge located at Rome Fiumicino Terminal C, host to Freccia Alata Club members, Magnifica and Business passengers, and SkyTeam Elite Plus members, travelling to extra-Schengen destinations. This project has already seen the complete renovation of the Alfieri lounge at Turin airport, Bellini at Catania, Bramante and Canova at Rome Fiumicino and Parini and Manzoni at Milan Linate. By the end of the year two further international lounges, Borromini and Giotto, will be renovated at Rome Fiumicino. www.alitalia.com
CLASSIC AIRCRAFT enthusiasts might like to know that Air Atlantique will again this autumn be engaged in a UK tour with both de Havilland Dove and Dragon Rapide available at certain venues. On offer this year is Cambridge next weekend (10-11 October), Doncaster 17-18 October, Swansea 24-25 October, Blackpool 30 October-1 November, and Coventry on 14-15 November and 12 December. If you have never flown on a vintage aircraft before it is a remarkable experience to fly at 1500ft, 140mph, and actually see the pilot working. It makes for a good present too. www.classicflight.com
EUROPCAR has launched a mobile phone service following research indicating that over 8m adults in the UK can access the internet via their mobile phone, a growth of 42% on 2008. Clients can now make an online booking from any web enabled mobile phone or any extras such as sat nav and child seats and find the nearest hire location when they are on the move, say at a railway station. An integrated search engine makes it easy to find a convenient car hire location, and for iPhone users, it automatically selects the nearest branch to the customer’s current location. Once booked, the confirmation is sent immediately by text and email. Available in seven languages (English, Dutch, French, German, Italian, Portuguese and Spanish) and for all Europcar vehicle hire locations around the world, the innovative service is compatible with all mobile phones that have internet access (including Blackberries, iPhones and other smart phones). www.europcar.com
GULF AIR has confirmed that it will commence connecting services from London to Najaf and Erbil (Iraq) from 26 October. From its hub at Bahrain the airline will fly a daily service to Najaf, in the south of the country using an A320 aircraft. It will operate a three times per week to Erbil, in the north, on Monday, Wednesday and Thursday, which will also become a daily service in due course. Both flights have excellent connections in Bahrain with just a 45-minute transfer to Erbil and 120 minutes to Najaf. The launch of the schedules follows the successful start of flights to Iraq's capital Baghdad on 1 September. Erbil is Iraq's third largest city as well as the capital of the Kurdistan region and an important commercial centre. The holy city of Najaf is a site of great religious significance to Muslims and a centre of pilgrimage. www.gulfair.com
MANHATTAN has lost its scheduled helicopter services to the two New York international airports. We quote from the US Helicopter website “Notice of Temporary Service Interruption – We are temporarily halting all service as we regroup to add aircraft to our fleet and introduce new routes. This 'standown' of service applies to our scheduled flights as well as our charter service. We plan to return to the skies of New York – a bigger and better airline – by late November. We apologize for any inconvenience this may cause and we look forward to serving you again very soon with our 8 Minute Airport Shuttle”. The New York helicopter service has had a chequered history including the legendary Pan Am operation from near Grand Central Station. US Helicopter has been in operation since 2006. www.flyush.com
RYANAIR boss Michael O’Leary was in London on Friday (2 October) to brief his shareholders and used the opportunity later in the day to secure valuable column inches with the media. Michael was in fine form, his act (thankfully) toned down, haranguing British Airways and easyJet in about equal quantities and forecasting that Aer Lingus would be handed to him on a plate by the Irish government within 18 months. He intended to hold on to his cash pile on the assumption of buying new aircraft for 2013 delivery onwards and made out a case for the introduction of passports as part of the boarding requirement. See next story. Readers might not be aware that when buying Ryanair promotional tickets they need not necessarily have to pay a debit card charge. Michael then rushed off to vote for Europe in the Irish referendum, claiming not to have changed his mind, and saying for the first time in his life he was supporting the government with a YES! www.ryanair.com
Alison Chambers reports from Barcelona.
The talk at last week’s World Low Cost Airlines Congress in Barcelona was evolution. For while low operating costs is the religion of this fraternity, it seems the industry is increasingly moving toward the hybrid low cost carrier (LCC) – with a few exceptions. Ancillaries are trumpeted as a successful way of generating revenue as legacy carriers move to adopt some of the practices of the LCCs. “Even British Airways is now selling a seat twice,” quipped Flybe Chief Commercial Officer Mike Rutter. easyJet is working with GDS Amadeus to appeal to the corporate travel departments and LAN Peru has evolved from a legacy carrier to a low cost model to adapt to market demands, becoming profitable in the process too.
“We have to find ways of doing things that have not been done before, without compromising on cost. There is no uniform low cost model like there was 15 years ago,” opined Vueling CEO Alex Cruz (formerly Click). “Corporate travellers want a punctual service, loyalty schemes and lounges – but we as an industry we are shy of these things because they create cost. But we are in a different world now,” he said.
Azran Osman Rani, CEO of Air AsiaX, concurred that the lines are blurring between the traditional airline and low fare offering. The Kuala Lumpur based airline has started to introduce lie flat seats on its long haul flights – without gourmet food, champagne and red carpet check in, he said. These tickets are half the price of the typical business fare charged by the legacy carriers.
Paying for checked baggage fee is a good thing, delegates agreed – it is tangible. Passengers understand fluctuating fuel prices and the taxes the airlines have no control over. Yet when it was first introduced, by Flybe, there was an outcry. Now both LCCs and legacy carriers, including BA and United are doing it. Last week Ryanair abolished airport check-in and for those who have the misfortune of not checking in on line the penalty is £40 per person.
Asking passengers to pay to use the toilet is, however, a step too far, said Stelios Haji Ioannou, serial entrepreneur of the easyGroup, adding that he hopes Michael O’Leary does do it.
Alex Cruz said that now is the ideal time to find the Holy Grail in terms of airline ancillaries, but there is a limit. “We need to find the right balance,” agreed Flybe’s Mike Rutter, because if we don’t we will find ourselves thwarted by regulations. “The tablet of stone that bear the commandments of what is the low cost model have been chiselled along the way,” he said.
“Aish to Bish routes”
How far can the LCCs in Europe grow? Alex Cruz suggested that there will be more activity between secondary airports (Aish to Bish routes, he calls them). There are probably 450 major cities in Europe which do not have connections yet, many cities in Spain that don’t have links to Europe and this is where we at Vueling will explore. We realise we cannot stand still in this industry.
Russia remains a largely untapped market in the low cost airline arena, principally because of Russians’ fear of flying and the government’s monopoly on aviation, explained Maxim Poberezhnik, Marketing Director of the country’s first LCC Sky Express. Only 7% of Russian people fly, he said. They are put off by the safety record in the country and they need educating on the term ‘low cost airline', believing there is only one carrier – Aeroflot. Hefty import taxes on new aircraft (40%) is also stifling growth, he said. Sky Express, which has been operating for three years now, is flying domestically to ten destinations including Moscow-Perm. Even raising its fares by 25% last summer, it is still some 10 to 15% lower than Aeroflot.
Half standing seats – advocates China’s Spring Airlines
Spring Airlines, China’s first and only low cost airline was in force in Barcelona with a 14-strong delegation. They arrived with an interesting proposition – standing only seats – that would enable 40% more passengers to fly aboard its Airbus A320 jets and provide a considerably lower ticket price. The motivation is that 70% of people in China cannot afford to fly, ‘our so-called grass root people,’ said airline representative Zhang Wuan, who reports to the airline’s CEO. Passengers would be accommodated on bar stools with a safety strap, fastened around the waist. China and India are prime markets and this would catch on he said, taking the opportunity to call on airlines in the low fare community to embrace the concept. Ryanair, which will take out washrooms to create more seats, has already mooted the idea – to mixed reaction.
Shanghai-based Spring, which operates 13 A320 aircraft has met with Airbus about the idea with the endorsement of China’s Vice Premier Zhang Dejiang. Wuan suggested that such an aircraft, which Spring is dubbing X322, would need a redesigned cabin floor. Wuan highlighted that half standing seats could help airlines cut a further 20% of their costs. He noted that EASA, FAA and China’s CAAC do not have regulations on half standing seats. They would need to be satisfied on the safety aspect, especially take off and landing.
Will the long haul low cost sector be as successful as the short haul model? Yes, said a bullish Azran Osman Rani, CEO of Malaysia’s Air AsiaX, but the key to that success will be connectivity. The airline which recently launched flights from Kuala Lumpur to Stansted highlighted that 30% of its passengers arriving in Stansted were jumping on flights of other LCCs to go to destinations such as Ireland or Spain. It is not the traditional, interlining way, but they can save £300 on a family of four travelling this way. Osman Rani disclosed the airline was looking at starting services to Barcelona. It starts Abu Dhabi services in November with A340 aircraft.
Walter Prenzler, CEO of Saudi Arabia’s Nasair, highlighted that the low cost model continues to evolve in the Middle East as air travellers are becoming far more price sensitive. Legacy carriers are aligning their short haul economy class prices and because passengers do not like paying for extras it has opted not to charge for inflight refreshments and checked baggage. “Accordingly, we are more of a low fares airline,” he said.
And there was some good news for the operators from the leading OEMs, Airbus and Boeing. Financing for aircraft purchases, albeit more expensive, is coming back, from sources including Exim Bank, they observed in Barcelona. The global crisis is affecting everyone, it is not specific to the aviation industry unlike 2002 when the airlines could not get hull insurance for example, noted Drew Magill, Boeing’s Director Marketing. He pointed out, however, that the US low cost airlines are going to be disadvantaged when the market upturn comes, as they have not invested for the future in their fleets the way that European and Asian airlines have done. There will be some 400 single aisle aircraft in the replacement wave for them, said Andy Shankland, VP Marketing at Airbus.
Next year the World Low Cost Airlines Congress is back in London. For more information www.lowcostairlinesworld.com
Eryl Crump supplied the pictures
Andy Cosslett is Chief Executive of IHG (InterContinental Hotels Group), the world's largest hotel group. IHG owns, manages, leases or franchises over 4,300 hotels and almost 630,000 guest rooms in nearly 100 countries and territories around the world. The Group owns a portfolio of well recognised and respected hotel brands including InterContinental Hotels & Resorts, Hotel Indigo, Crowne Plaza, Holiday Inn, Holiday Inn Express, Staybridge Suites and Candlewood Suites and also manages the world's largest hotel loyalty programme, Priority Club Rewards with 44m members worldwide. IHG has nearly 1,600 hotels in its development pipeline, which will create 140,000 jobs worldwide over the next few years.
“The hotel and tourism industry is the fifth largest industry in the country – bigger than the oil and gas sector and all the manufacturing sectors, including motor manufacturing. Yet in the UK, we’re generally overlooked as an economic driver.
Tourism is tucked away, and largely forgotten about, as part of the Department for Culture, Media and Sport. And in the last 11 years we’ve had eight different Tourism Ministers come and go. For an industry worth £86bn a year and responsible for 2.7m jobs (more than twice the number employed by the NHS) this doesn’t seem right.
Travel and tourism, and the infrastructure it requires, can be a great catalyst for economic development. This year, across IHG’s brands, we’re opening a hotel a day around the world. We’ll be employing people to work in these hotels, buying goods and services and promoting the hotels around the world.
2009 has been challenging so far for travel and tourism. Initially we saw less people travelling – as they waited to see how the economic crisis would unfold. Now, in a bid to encourage more people to make trips, hotel companies are offering some great deals and promotions. Combined with the current exchange rate it’s actually a great time to be travelling to the UK.
But the UK needs to remain attractive, and competitive, as a tourist destination over the long term. So we urge the Government to extend their support of the growing tourism industry.
Encouraging travellers to visit the UK is just one part of the challenge we’re facing – there are also operational business issues that our franchisees are grappling with. The hotel industry has long been a stable for the small business owner. Many of our franchisees are small and medium sized businesses. They are entrepreneurs, who have decided to partner with us because they want to be in business for themselves, but not by themselves.
Our franchisees are facing more than the impact of the current downturn. The impact of the Carbon Reduction Commitment, rates revaluation and capital allowances are just some examples of the demands our hotel owners are going to have to tackle over the coming year or two.
This is a lot of pressure on any business, particularly a smaller one. We work as partners with our franchisees to support them and their business, but we’re calling on the UK Government to work with us. We’re asking the Government to put their weight behind the tourism industry and the small business owners within it – giving it the focus and support needed to develop and thrive.”
AIR CHINA is now only operating the Airbus A330-200 on its daily Beijing – Heathrow route, the airline having disposed of its Boeing 747-400 combis, these proving to be “unsatisfactory”. One of the few profitable airlines at the current time (it made $490 net January – June 2009), the airline says that its two-class operation on the London route clearly satisfies passenger requirements on a mixture of business, leisure and ethnic traffic. Economy is provided with 8.4” LCD screens and Business Class offers a shell seat with 10.6” screens and a 168 degree semi-flat seat. In Europe Frankfurt, Paris and Rome are also served from Beijing. China Eastern no longer flies between London and Shanghai. www.air-china.co.uk
CROWNE PLAZA AMSTERDAM CITY CENTRE, located in the heart of the city close by the central station, has re-opened following a seven-month renovation. Essentially the 270-room hotel has been gutted in order to bring it up to the latest international standards including a media hub, wi-fi and wired internet, flat screen TVs and a laptop safe in every room. Facilities include Club Lounge with complementary refreshments and continental breakfast, work stations and private check-in service. Crown Plaza hotels include a coffee/tea maker and ironing board in every room. www.crowneplaza.com
DUBAI'S biennial Airshow takes place 15-19 November at the Airport Expo site, part of existing Dubai International Airport. It is both a commercial and military show and is organised by F&E Aerospace, a specialist exhibition company. Visitors to the show will hear about the exciting development plans for the Aerion supersonic business jet, which will fly executives at twice the speed of today’s conventional business jets. A scale model will be on display on the Aerion stand. In the exhibition halls, the EADS stand will showcase an array of the group’s exhibits, including two impressive full-scale mock-ups – the Airbus A350 XWB cabin, in which visitors can watch the “Shaping Efficiency” audio-visual presentation, and Eurocopter’s 16-seat civilian helicopter, the EC175. In order to cope with the unprecedented growth of this year’s airshow, floor-space has been increased by over 7,000sqm, with the addition of a new hall, and the number of hospitality chalets has risen to 114. Much of the discussion will be about the Boeing 787 Dreamliner. What happens over the next ten weeks is likely to be crucial to how the aircraft is considered. www.dubaiairshow.aero
OXFORD AIRPORT has gained Department for Environment, Food and Rural Affairs (DEFRA) approval as only the second business/general aviation airport in the UK (after Biggin Hill to the south east of London) to be approved for the importation of domestic pets. Owners of dogs, cats and ferrets can now, for the first time, transport their pets on flights into the airport from overseas under the Pet Travel Scheme (PETS). The news will be popular with certain executive travellers who until now have had to use scheduled flights. Flights with pets onboard can also be cleared through Oxford for onwards travel elsewhere into the UK. Following the announcement of this new capability, several aircraft operators, including helicopter charter companies, have already filed for route approvals to Oxford with the Animal Health Office, an Executive Agency of DEFRA. www.oxfordairport.co.uk
LIVE LUGGAGE is launching a new powered triple bag sports luggage system specifically designed for sports men and women on the move, whether going from home to the local sports ground or travelling to sporting activities around the world. The new 2012 Sports Bag is a multi-functional luggage system which includes a large weekend bag for heavy-duty items like ski boots, a multi-purpose rucksack and a capacious main case, which all zip together and apart for complete flexibility. Featuring patented Live Luggage powered wheels and the very clever anti-gravity handle seen on the Hybrid model this new piece of kit is ideal for the stylish amateur or professional sportsperson. The 2012 Sports Bag will be previewing at the Metro Ski and Snow Board Show, Olympia London from 21-25 October (Stand 210) and priced at £445. www.liveluggage.com
OLYMPIC AIR is the new name for the reincarnated Olympic Airways, purchased by the Marfin Investment Group, a Dubai-backed Greek investment holding company which paid €177.2m for the assets of the former state-controlled airline. The new carrier plans to operate a fleet of 16 Airbus A319s and A320s on European and near routes, together with 15 Bombardier Q400 aircraft to be used on domestic and island services. As things stand the long haul North American operations have been dropped but code-sharing agreements with Delta Air Lines and Etihad Airways will give Olympic passengers access to US and Gulf destinations. www.olympicair.com
SCOTTISH TRAVELLERS (that is all people departing from Scotland) will now need passports if they wish to fly on Ryanair to England. The same goes from Northern Ireland to both England and Scotland. From England you do not escape because you also need a passport. That is the latest ruse (for which there is no charge) by the Irish airline in the determined attempts to defeat logic and attack passengers. People wishing to fly must be in possession of a valid passport or a government issued National Identity card which has been issued solely for the purpose of identification (ie driver’s licence, electoral register cards etc are not included). Clients who arrive at an airport without a valid form of identification, as advised and agreed to at the time of their booking, will not be able to travel. It would seem that if you booked say six months ago, when it is assumed this rule was not in place, and now turned up without a passport, that would be OK, although, knowing the Ryanair method of dealing with its clients, ill advised. Spur of the moment trips, unless you have your passport on you, are now not on. The UK government will be pleased with this move as everyone travelling on the routes will require an (expensive) passport. www.ryanair.com
RIO DE JANEIRO has won the bid to host the 2016 Olympic Games, easily defeating the hot favourite Chicago. Surprisingly it is not that well connected by air to the world’s major capitals and it was only earlier this year that typically British Airways returned with a three times per week non-stop service. For a very long time BA flights to the city routed via Sao Paulo. TAM offers a direct flight seven days per week and Virgin Atlantic has been known to be considering a service. Brasilia is the purpose-built capital of Brazil, becoming the seat of power in 1960. In 2014 Brazil will host the FIFA soccer World Cup, an exciting prelude for the events two years later. www.rio2016.org
IATA (International Air Transport Association) and OAG (Official Airline Guide) have both published traffic figures which tend to show we may have reached near the bottom as far air travel is concerned. IATA statistics are for member airlines, which do not include some of the larger low cost carriers, and is for actual passengers flown. Compared to August 2008, passenger demand was down 1.1%, (an improvement compared to the 2.9% decline in July), and freight demand fell by 9.6% (also an improvement compared to the 11.3% drop in July). Compared to August 2008, passenger load factors improved by 1.2 percentage points to 80.9%. Despite the tighter supply and demand conditions, average fares continue to be depressed and are down by 22% for premium. OAG offers the actual seat availability for all airlines and these show a rise of 1.4% (4,130,744 more seats) over September 2008 levels. David Beckerman, Vice-President OAG Market Intelligence, said: “As the summer season winds down, the steady upward trend we have seen since May is continuing. After 11 straight months of capacity cutbacks, these figures indicate a growing confidence within the industry that demand for air travel is starting to pick up.” www.oagaviation.com www.oag.com www.iata.com
BRITISH AIRWAYS faces an interesting three months with confirmation that it is reviewing what morsels Lufthansa might have on offer when it decides the future of bmi. On the Iberia front CEO Willie Walsh said that talks with Iberia have gone on too long, that progress was being made and a deal by year-end was possible, but that BA would not accept a stake of less than 53% in any merged company. And the issue of a 400-page confidential legal document called “a Statement of Objections" delivered last Thursday by the European Commission regarding its views on the proposed American Airlines, Iberia and BA North Atlantic tie-up. Also due before Christmas is the launch of the new First Class product plus decisions are required on certain routes and projects including Open Skies. www.ba.com
EASYJET is to expand its services to Dusseldorf, with a new daily service from Gatwick and also daily flights to Rome Fuminchino, starting on 2 and 1 February 2010, respectively. It will compete directly with Flybe also from Gatwick, both British Airways and Lufthansa out of Heathrow and Air Berlin from Stansted, and also from Stansted Ryanair who fly to the nearby Nuremburg Airport (as do Air Berlin). Air Berlin and Lufthansa compete on the Fuminchino route. On 2 November easyJet introduces operations to Basel, its first operation out of Dusseldorf using an Airbus A319. www.easjet.com
FLYBE is reporting a healthy upsurge in bookings for its Gatwick services which operate out of the south terminal and are not affected by the temporary closure of the transit trains to the north terminal. This work is not expected to be completed until July 2010. The special bus transfer can take up to 20 minutes. Flybe ranks behind easyJet and British Airways as the third largest user of the airport with 466 flights per week. In another measure to overcome the problems associated with the suspension easyBus is heavily promoting its every 20-minute services from the north terminal to Fulham Broadway in West London. www.flybe.com www.gatwickairport.com
LUFTHANSA will become the 100% owner of bmi, the former British Midland Airways, effective 1 November 2009. The German airline, established in 1926 has purchased the 20% of the carrier owned by SAS for a total of £38m. Should Lufthansa decide, on the background of its strategic analysis, to sell bmi completely or parts of the company SAS will under certain conditions receive an additional payment, but only within the next two years. On 1 July 2009 following an out of court settlement Lufthansa purchased a majority shareholding of bmi from Sir Michael Bishop (technically BBW Partnership Ltd), for a total of £223m (€265m). See AERBT 29 June 2009 www.flybmi.com www.lufthansa.com www.flysas.com
VON ESSEN has acquired the Forbury Hotel, Reading, a boutique property, situated in the town centre halfway between the station and the Oracle shopping complex. The property will be the first in the Metropolitan set of von Essen hotels, to be followed early next year with the launch of Hotel Verta at the London Heliport, Battersea. The building, built in 1911, is the former Berkshire Shire Hall and is a grand and imposing listed building that effortlessly lends itself to its current status as a luxury hotel, which has 23 rooms and suites arranged over four floors. In addition von Essen has also purchased the 16 self-contained apartments and penthouse adjacent to the hotel. It has a 30-seat private cinema – ideal for both private and corporate use. www.vonessenhotels.com
VIRGIN TRAINS is introducing a new autumn/winter weekday menu heavily based on seasonal fresh produce. The west coast operator says the new menu demonstrates the continued commitment to ensure the produce is supplied from British sources – many of which are near its routes. The food is hand-selected from a choice of suppliers with taste, quality and sustainability as key criteria. Popular on the London to Glasgow menu is the Great British Breakfast featuring British Cumberland sausages from Russell Hume’s farms in Norfolk and Suffolk. On the North Wales route passengers may be able to spot Rhug Estate Organic Farm from the train. Joseph Heler Cheese, based in Nantwich, features its Wensleydale and caramelised carrot roll and Welsh lamb from Williams of Flint are on the menu too. The evening menu includes many classics. Chilli con carne, vegetable hot pot, roast pork, stroganoff or chicken and asparagus pie slice are just a few. Those with a sweet tooth are not forgotten with Cheesecakes, crumble slices, profiteroles and even sticky toffee and vanilla custard to tempt them. Also available is the cheese board featuring a range of British cheeses served with Scottish oatcakes and fruit bread. www.virgintrains.com