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July / August 2014 Newsletter

Editorial

The first half of the year for the aviation industry has been a fairly memorable one; if only for the wrong reasons. As we issue our summer July and August Newsletter yet more aviation disasters with planes from Taiwan and Algeria are leading the fatality numbers to almost 1000.  This comes on the back of several years when deaths globally resulting from accidents in the commercial aviation sector were relatively miniscule and certainly less than the fatalities found annually on Bulgarian roads. Despite this recent run of bad luck, flying is still the safest form of transport and one would suggest infinitely safer than driving down the Trakia motorway on a Friday evening in summer. Cars are not meant to travel at the speed of sound despite numerous drivers challenging the theory.

Malaysian Airlines have taken the brunt of people’s attention thus far this year and it’s more than likely that neither accident was of their own making. That an airline of this stature – they are a significant global player with a sizeable fleet – can lose not one but two large planes in such mystifying circumstances beggars belief. The chances of such would be akin to winning a European lottery twice in a row where millions play the same game. If logic is turned on its head then also think about the family that had relatives on both the Malaysian planes that went down and also the chances of that happening!

If the odds of such events are millions to one, then the odds of a stray rocket hitting a Tel Aviv bound flight are probably significantly less than this. That the American Authorities banned their own flights operating to Tel Aviv comes after they did the same with flights over the Ukraine, a move European Airlines did not follow. On this occasion many European Airline also stopped flying to Tel Aviv; at least temporarily. Both the USA and the European air safety bodies have now lifted their recommendation, Europe following the USA’s move,   though this should not have come as a big surprise considering Israel’s influence in North America. Europe’s body noticeably refrained from saying that it was safe to fly in the area, instead saying each airline can make their own decision. The distance from hostilities in the Gaza to Tel Aviv’s main airport is about the same as from half way to Plovdiv. If you were taking off in a plane at Sofia and you knew rockets were possibly being fired 30 mins drive away, might you just be tad worried based on recent experiences? We are, so we are told, that any such threats will be dealt with by the safety mechanisms around Tel Aviv Airport; which is probably true, though the free entertainment might not be for those with a fear of flying or those of a nervous disposition.

However, terrorism should never stop the travel industry and whatever the challenges there are, top marks to those who don’t let such threats grind the world to a halt.

 

Mark Thomas

Managing Director

HRG Bulgaria

 

 

The complaints never stop

Even though they have one of the worlds most sophisticated high speed rail networks, France is not immune from criticism about the conditions of its network of tracks.

A recent crash in south west France with a Paris bound TGV resulted in numerous injuries and prompted French TV to report that France’s rail network was starting to suffer from lack of investment and maintenance neglect.

So even whilst many countries merely aspire to have the same level of high speed rail network as France, that in itself does not make country’s rail network immune from  controversy.

 

The numbers game

The high profile Farnborough Air Show is always followed by PR spin from plane manufacturers Airbus and Boeing who each try to win their own personal battle i.e. who has supposedly gained the most sales orders.

Just for record this year, Airbus claimed 496 new plane orders whilst Boeing penned 201.

In the year to date however the tables are turned with Boeing showing 783 and Airbus 638.

 

The most stupid tax ever?

Venezuela has just introduced arguably the world’s most stupid air tax.  Officials at Caracas Airport have introduced a “breathing tax’’ which is levied on people flying out of the airport.

The tax supposedly covers the cost of a new ozone air filtration system.

The actual cost of the tax is 20 USD per person.

 

 

A first

Canada’s Halifax Airport has just become the first airport in the America’s to offer fully automated check in facilities.

This means that all passengers are able to select their own seats and tag their own luggage regardless of the airline they are using. In Europe, it’s always the case that some airlines offer this capability and others do not; often creating confusion for the actual traveller.

Whatever process is employed in North America always finds its way across the pond to Europe.

 

The maths says it all

Remember the Costa Concordia which sank off the Italian coast back in January 2102? The past month saw the latest phase of the salvage operation which will precede the final phase with the ship being taken to the port of Genoa and then scrapped.

The ship cost 570 million USD to build back in 2005/6 and the original cost for the salvage operation was estimated to be 300 million USD. The final revised cost of this has now escalated to 2 billion USD.

Wouldn’t leaving it where it is be a better proposition as not only will it save money but it will also likely generate black tourism revenue!

 

Roll out the red carpet

The list of the world’s biggest tourism spenders per head is topped by the Chinese followed by the Russians and Indonesians. Americans come in at number 4 followed by the Japanese. As far as the countries where these big spenders like to spend their money goes; France receives the most followed by the UK, Italy and then Germany.

The tourism chiefs of many countries, aware of such figures, face uphill battles with their own governments as many of these ‘big spending’ countries are on the ‘visa required’’ list for those countries who aspire to take their money. Whilst people with money usually have the means and the resources to obtain such visas, they will only do so if they have the time and also have the inclination to do so.

America, for example, loses out massively as it requires visas for entry for most of those countries inhabitants who make up the worlds top 10 spenders, whilst at the same time, having an almost porous southern border whereby illegal migrant labour can virtually walk into the country unchallenged. Bulgaria, through its membership of the European Union faced a similar issue with its lucrative tourism industry which was and is heavily dependent on the Russian market. A solution was found that satisfies Bulgaria, the EU and the Russian tourists; thus it’s a win win win scenario, surely then if countries want a slice of the tourism revenue that the Chinese, Russians et al can bring in, then why not facilitate this?

 

Deathly increase

It’s said the aviation is the safest form of travel; whilst that may be, so the current list of confirmed fatalities caused by air plane crashes so far in 2014 is an incredible 794 with the figure likely to reach 952 with fatal accidents in Taiwan and Algeria having taken place in the past hours.  For the whole of 2013 by comparison, they totaled 188.

 

The meaning of flight

The idea of the huge superjumbo A 380 was to move a lot of people at once between long distance points. That said, this rule is not set in stone as Emirates has just launched the worlds shortest A380 route from its base in Dubai to Kuwait: a journey time of just 1 hr 45 mins.

The route already has a five times daily schedule so one guesses that the rule is that if there is the demand, then put on a big plane.

 

Follow up

Following its hugely successful hosting of the 2014 Football World Cup, the Brazil Travel Association is striking whilst the iron is hot and has launched a marketing initiative with European travellers very much in their sights.

The Association wants to capitalize on the positive image that the country created as well as on the feel good factor that the tournament created. This is a smart move as the cost of hosting such an event can only reap financial dividends in the longer term through increased visitor numbers as opposed to being based on the short term revenue such an event generates.

 

Grab Back

The issue of state aid to European Airports has always been a tetchy subject; the gist of EU law being that state aid cannot be provided by state controlled airports to encourage airlines to fly to it. Airports, seeking to promote either tourism or business activities in its geographic area are always keen to increase airline foot fall and one typical way, for example, is to waive landing fees or to greatly reduce them for new airlines. This however contravenes EU law; it also is a constant issue for traditional airlines like Lufthansa and Air France who may have supported such airports through thick and thin. Ryanair have constantly been accused of benefiting from  a too cosy relationship with airports and the European Commission has just ordered them to pay back 9.6 million Euro in illegal state aid received from three French Airports: Angouleme, Pau and Nimes.

Ryanair obviously disagree but when there is so much money at stake they will obviously disagree.

 

26 and rising

Airlines such as BA and Lufthansa operate from a relatively small number of airports, even when one considers their sister companies. Their general policy is to fly out and back from main hubs and whilst this structure is evolving slowly e.g. Gemanwings now runs the Lufthansa operations from secondary German Airports, it is a tried and tested model that reflects the way things have always worked.

On the other side of the fence are the likes of Easyjet who know no national boundaries and who now have a so called base at 26 airports across much of Europe. This means they have aircraft that are based or located at such airports. They are in no way a national carrier of country X but more like a national carrier for Europe.

One wonders if, just like the national carriers that the likes of the UK, France and Germany have, then Easyjet becomes the national carrier of Europe complete with the EU flag adorning its tailfins?