XL Airways and the Cycle of Aviation

The airline business is cyclical, always has been always will be. It's why airlines like Court Line went down in the 70s, Laker in the 80s, Air Europe in 1991… and many others in between.
According to what I've been reading on the web the head of XL believes there are dark forces at work, but since the airline industry was deregulated this is what you get because aircraft manufacturers need to sell more and more aircraft. It causes over capacity, which needs a growing or at the very least a stable-ish market to survive. As soon as things start to turn down then the inevitable happens...airlines and tour operators go bust - those that are vertically integrated are especially vulnerable.

The fact is that forward bookings are now the biggest issue. Airlines have survived the summer because advance bookings were not affected by the loss of confidence coupled with the realities of the credit crunch. This is not now the case; people are not booking travel like they were. Watch over the coming weeks as we start to get a rash of advertising from easyjet, Ryanair et al as they attempt to buy market share.

How Massive is Massive? Very according to Ryanair...

You have to hand it to Ryanair they certainly make a little go a very long way. Back in December they announced “massive expansion” at Edinburgh. In the words of Michael Winner, "Calm down dear." Ryanair's expansion is hardly that exciting. None of the routes are to operated daily, making them of limited use to business travellers. Starting in April the weekly frequencies are.

Alicante 4
Bremen 2
Frankfurt 3
Marseilles 2
Pisa 3

So it amounts, in total, to two extra flights a day from Edinburgh. All this is in addition to their flights from Edinburgh to Dublin (3 per day) and Shannon (4 per week).

Today we have Ryanair announcing “massive expansion” that will, according to Ryanair, indirectly create up to 1,200 jobs in Edinburgh and the east of Scotland. How so? Well they’ll employ another 100 people, jobs from other airport based companies will employ 100 people and the extra 1000 will be employed in tourism and hotel industries. They’ve announced the following services

Berlin 4 per week
Billund 3 x week
Bournemouth 13 x week
Bratislava 4 x week
Dusseldorf 2 x week
Krakow 3 x week
Lodz 2 x week
Malaga 4 week
Palma 3 x week
Poznan 3 x week
Stockholm 4 x wek
Wroclaw 2 x week

Before we all get over excited of the seventeen new Ryanair destinations nine are already served from Edinburgh

Alicante Easyjet & Flyglobespan
Billund – Cimber Air & Sun air
Frankfurt – Lufthansa
Krakow – Easyjet
Malaga – Flyglobespan
Palma – Air europa, First choice, Monarch, Mytravel, ThomsonFly, Easyjet & Flyglobespan
Pisa – Jet2com
Poznan – Centralwings
Stockholm – SAS

What’s all this going to achieve – not a lot. It’s very likely that on some of the routes there will be a bloodbath and one or another of the carriers will cease operating. It will not be, as the daft BAA spokesman said on the BBC, be great news for business travelers to Berlin and Stockholm. A four times a week service is next to useless.

Why the media and particularly the BBC pander to this tripe I’m not sure. It was the second item on the BBC Scotland TV News – they are guilty of being sold a dummy. And there’s a lot of water to go under the bridge before next September when the majority of these new Ryanair flights are scheduled to commence. I’d watch this space very closely…

How Low Can You Go?

A British pilot has been fired by Catahy Pacific for this low flying stunt during the delivery flight of this Boeing 777. Captain Ian Wilkinson apparently "astonished passengers" by taking et to within 28ft (8.5m) of the ground shortly after take-off from Boeing’s US manufacturing plant in Seattle according to reports. Check the dodgy video footage but it looks higher than 28ft to me..

The 322mph fly-by was cheered by onlookers, and the pilot, who is said to be one of the most senior pilots with the airline. Ray Middleton, his British co-pilot, who had been unaware that the fly-by was performed without official permission, was suspended from training duties for six months. Chris Pratt, the chairman of Cathay Pacific wasamong the VIP passengers who were on board the £100 million plane.

Is Big Best?

According to the Atlanta Journal-Constitution Northwest and Delta airlines might merge. Apparently representatives of the two sides reached an agreement regarding a “conceptual” outline, which might possibly combine the pilot ranks of the two companies. If the merger between the two companies takes place it would create the world’s largest airline, as both of the airlines would apparently employ as much as 79.000 people in their major hubs in Atlanta, Detroit and Minneapolis.

And they think this will make for a good and well run airline? It's got more to do with individuals getting their hands on bonuses and such as it has to do with creating a great airline.

When is an Airline Not an Airline?

According to the Indoneasian government when it only has one aircraft. Their Transportation Ministry is drafting a revision to a ministerial decree on airline services, that will require domestic airlines to own at least two planes "Initially the new regulation will apply only to new companies applying for permits, but after a year, it will also apply to all domestic airline companies," said Hemi Pamuraharjo, the domestic flights section-head at the Ministry. According to the singer Harry Nilsson.

One is the loneliest number that you'll ever do
Two can be as bad as one
It's the loneliest number since the number one.

How long before they start on those 'airlines' with two aircraft? I'd be looking for a new marketing slogan, Not the 'world's favourite airline' but the world' smallest airline'. We all know small is beautiful

Mayor Behaving Badly

Silverjet, the transatlantic ‘business class only’ airline has apparently banned London Mayor Ken Livingstone from its flights. The airline's chief executive, Lawrence Hunt, claims the mayor, formerly known as Red, has "undermined" the London-based airline - which has invested £50m and created 300 jobs in the capital.

Last May, the Red Menace went to a conference on climate change in New York when his Silverjet flight from Luton was delayed for two hours when an air traffic control computer failed. When London's finest finally got to New York he said, "It was the worst flight of my life". Having been asked to explain the circumstances of his delay by Silverjet the mayor failed to do any such thing. Then just this week Livingstone tried to mend the broken fences by saying his remarks referred only to severe air turbulence above Newark going on to praise Silverjet for its "excellent" service.

Lawrence Hunt came back saying "To come up with this explanation nine months later just isn't good enough. I can't stop him booking with me but if I find he's on one of our flights, I'm going to cancel it." Now this may not be the smartest piece of marketing ever, it smacks of Gerald Ratner, in that passengers will have to check in advance to see if the Mayor has a booking on their flight.

Oh Heady, Happy Days

Photo courtesy of Maurice Wickstead's father

This picture was taken at Gatwick, probably in the late 1960s , just as I was starting out in what can loosely be described as my airline career. It's instead of a more meaningful or funny post as things seems to be a tad quiet on the airline front - other of course than the fantastic news of the BA Boeing 777 'landing' at Heathrow

Flybe Practically For Free

Flybe are another of those low cost airlines that's looking for ever more creative ways to get you onboard....and all by spending very little. They've just introduced a new credit card - a Mastercard no less. The deal is simple, spend on your card just once and they'll give you a free flight to Europe. As they say this can be " anything from a pint of milk to your weekly shop." All you pay are the taxes and charges. I hope it's not like that offer of a few years ago when you bought a vacuum cleaner and got a free flight. The liabilities for the operator just kept on mounting and the whole thing collapsed like a pack of cards. Now admittedly there's always daft offers from carriers for just a £1 a seat plus taxes, but this one might turn round to bight them where it hurts.

A case of great load factors, shame about the profits.

Not So Quiet Riot....

A strike by airline staff does not normally lead to a riot but that's precisely what happened in Buenos Aires over the weekend after Aerolineas Argentinas babbage handlers and ticket desk staff demanded more money and refused to work. The passengers reportedly broke ticket counters and threw objects at the airline employees , after learning that their international flights were cancelled for the second day running.

The strike left several thousand passengers were stranded, including a woman who was scheduled to fly to Venezuela (can you imagine, all the way to Venezuela? - Ed)

The Wonder of Air Travel

US Domestic air travel, like many other areas of the world, sees a continuing growth in demand. Ever wondered why? It's partly because it's getting less expensive according to the Air Transport Association.

In 1978, the cost of U.S. airline travel was 8.49 cents per mile, by 2006, without adjusting for inflation, domestic U.S. airline travel costs had risen to 13 cents a mile, 1.5 times the 1978 rate.

By comparison, the Consumer Price Index rose 3.1 times in the same period. The price of a gallon of unleaded fuel increased by 3.9 times from 1978 to 2006; and the cost of a first-class US stamp increased 2.6 times.

It all adds up to the fact that fares have fallen by around half in real terms

The Battle for the Atlantic

The news that United Airlines are spending $165m on their business-class and first-class cabin refurbishment that will include 15in flat-screen televisions, lie-flat beds, and the capability to use iPods with the on-board entertainment system is going to bring about some deep thinking in the boardrooms of their rivals and none more so than Silverjet and EOS. While this upgrade has been a long time coming it will also mean that British Airways and Virgin Atlantic, who have long enjoyed a critical advantage over the American carriers' offerings for transatlantic premium passengers, will also have to look to their own products. The fact is the both UK airlines derive considerable profits from their transatlantic first and business class cabins and so it's bound to get bloody.

Bad Day for bmi

Not content with upsetting a member of parliament bmi have now upset the ex-wife of a British diplomat serving at the British Embassy in Moscow - they probably upset him a bit too. They 'lost' the couples son at Heathrow while he was connecting from a Moscow to London flight and then to one bound for Manchester. Heather Beal, from Wythenshawe, paid bmi a £130 fee to look after her 13-year-old son Nathan. bmi staff escorted Nathan from Terminal 3 to Terminal 1 at Heathrow, but then `forgot' about him - and he was left all alone in the airport. Apparently he only had Russian money with him and had no power on his mobile phone. His 'frantic' mother raised the alarm as she waited for him at Manchester. BMI staff finally tracked him down after he had been left alone for nearly five hours. A bmi spokesman said they are investigating.

It's Just not Fair

According to MP Danny Alexander said it is a "disgraceful decision" to close the Inverness - Heathrow service by bmi - it's the only route to Heathrow from the Highland city. The airline has taken the decision because of insufficient passengers to make it viable. Now quite what the Liberal Democrat MP expects BMI to do I'm not sure. The service will cease on March 29. According to Mr Alexander, bmi had repaid the loyalty of its Inverness customer base with "a slap in the face".

The Liberal Democrat MP also claimed the suspension was a direct result of European Union transport ministers' unanimous backing for an "open skies" aviation deal with the US. Why? The fact is that 'open skies' policy for airline services throughout Europe makes it harder and harder to just keep flying more and more routes. The expansion planned at Edinburgh by Ryanair is likely to cause at least one other carrier to drop its service to the same cities that Ryanair is to serve. It could be that that carrier may well be Ryanair.

20o8 will be a very tricky year for the airline business. We're about to enter the rough end of the cycle of airline business

An American Tale

Not everyone it seems is so happy to be travelling in Arctic conditions. Two passengers who were stranded for more than eight hours aboard an American Airlines flight are suing the airline after their plane was diverted during a major storm over North Texas. They are accusing American of false imprisonment (are they barking mad? - Ed), fraud and negligence.

The two, Kate Hanni of California and Catherine Ray of Arkansas were on flights diverted from Dallas-Fort Worth Airport to Austin on December 30, 2006. After landing the passengers were kept on the plane for more than eight hours, apparently they were unable to leave despite overflowing toilets and little food or water.

You Couldn't Make It Up No.17

The aptly named NatureAir has dubbed itself the 'world's first and only zero emissions airline'. According to them they've been carbon neutral since 2004 (most people hadn't even heard of carbon nutural back then!). In the past four years the Costa Rican airline has offset 20,000 tons of carbon dioxide by saving about 500 acres in the country's lush jungle by paying local landowners to preserve threatened portions of the jungle from deforestation.

Flying No More

Over at the Cranky Flier there's a great piece about airlines that ceased rotating in 2007. Amongst those that closed their overhead lockers for that very last time are MAXjet who finaly ceased trading on Christmas Eve. The CF thinks there's something in this model of up market one class carrier. I'm not sure, in fact I'm certain it's a duff idea. Although with MAXjet going down it will help the two transatlantic airlines still offering a similar service. If you're going to do it at least make it first class and not business.

Virgin's Undervalued - Apparently....

Apparently Virgin Atlantic crews are underpaid; so much so that they are planning to strike in the New Year. Their will in fact be two strikes of 48 hours each, starting at 0600 on Wednesday 9 January and from 0600 on Wednesday 16 January. Union members voted 71% in favour of taking the first industrial action in the airline's history, although the airline pointed out that only 31% of its total cabin crew workforce voted in favour of the action. This is one of those situations that they may come to regret. It's hardly an industry that is in the rudest of health. The outlook is not fantastic with rising fuel costs, albeit helped by a strong pound, but at the same time with a weak dollar UK bound travel is under threat.

The union balloted 3,100 workers of whom 2,102 voted, with 1,497 voting in favour of strike action. This will prove divisive and damaging all around

Muffin The Mule or It's That BA Humbug Time of Year

Has the world gone mad? Apparently British Airways have suspended a steward for eating a discarded muffin. According to a fellow worker "The cabin crew member on a long-haul flight took a muffin destined for the bin." According to news reports BA are treating the incident as theft after he was reported at Heathrow airport on Monday. The man's colleagues are furious with the decision, branding the airline 'heavy handed' and accused them of acting like a 'police state'.

Update

Already requests are flooding in from around the globe asking what kind of muffin it was. After extensive research we think it maybe this kind of muffin.

The Indian Airline Name Game

India's largest low fare airline, Deccan, will merge with Kingfisher Airlines to create the nation's biggest domestic airline. The airline formed by the merger will keep the name Kingfisher, the flagship beer brand of Mallya's UB Group and parent company of the airline, officials from the two carriers said after a four-hour meeting yesterday. I wonder if they considered Kingfisher in a Can Airways?

More is Less?

In the interests of fairness it seems only right to bring you news of another US start-up carrier who is not yet enjoying the 'P' word. Skybus, the 'ultra-low fares' airline lost a little $16 million in the quarter that ended 30 September. Well you might be thinking, they are new and there's plenty of room for improvement. Not quite the case as their revenue for the same period was $22 million. Add to this the fact that their load factor was 79% and it's clear that they are in a bit of tight one. Given that some of their fares start at $10 it could be a case of the more people they carry the more money they lose.