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January 2015 Newsletter

Editorial

A rather mixed start to the year for the travel sector. Firstly comes the news that Cyprus Airways are effectively ‘”no more”. The Cypriot Government, who are the airlines main shareholder, were forced to close the airline down after financially supporting it for several years, a move which, not for the first time, has incurred the wrath of the pen pushers in the European Commission. Under EU rules, struggling companies can be given aid under what the commission terms ’one time last time”  principle. Governments may grant a one off tranche of aid to support a restructuring process once within a period of ten years. One however can’t help but think ”Alitalia!’ The Italian flag carrier has received aid package after aid package, though obviously re-dressed in a manner that the Cypriot government couldn’t emulate. Maybe the Cypriot Airline executives or their Ministerial masters should have sought ‘”consultancy’ from the obviously more experienced Italian colleagues. Indeed a similar scenario ensued with Malev who were also forced to cease operations several years ago for the same reasons. However, just to complicate matters. Polish carrier LOT was allowed to carry on despite it receiving state aid. The argument thus seems to be that the bigger you are the more difficult it is for the EU to shut you down. Malev and Cyprus Airways were small airlines from relatively small countries. Alitalia and LOT are bigger airlines from bigger countries.

The Air Asia crash in the Java Sea in the last days of December almost beggars belief. Not that on this occasion there was anything mysterious about why the plane crashed or indeed where it could be located; as the plane was fairly quickly located at the bottom of the rather shallow sea. What many people missed was that Air Asia are essentially a Malaysian based airline and that this therefore is the third big catastrophe for a Malaysian owned entity inside one year. In our part of the world, the expression goes that to lose one plane is unfortunate; to lose two becomes a strange co-incidence, to lose three – that needs some explanation! It’s a Hollywood mystery in the making. It was also interesting to note that this Air Asia plane was tracked by radar making a (too) steep climb and disappearing from trace. The planes wreckage was found more or less where it was lost. Obviously the radar in this part of the world is effective and reliable. Strange then that the same radar couldn’t track a Malaysian plane for several hours early last year before it was dumped, sorry lost, in the Indian Ocean. Wait, how then do we know it’s in the Indian Ocean?

 

Mark Thomas

Managing Director

HRG Bulgaria

 

 

No more Cyprus Airlines

The year started badly for Cyprus as its national airline, Cyprus Airways, was forced to close after the EU ruled its owners i.e. the Cypriot Government, must repay over 65m Euro’s in illegal state aid. The aid had been paid repeatedly between 2007 – 2013 as the airline entered into a series of loss making years. Despite outside investors being sought, none were forthcoming.

The EU commission undertook an in depth investigation into the airline that yielded some highly critical results; namely that the Cyprus Governments restructuring plans were based on totally unrealistic assumptions and they failed to address the route causes of the airline’s difficulties and additionally, equally, they were taking longer to implement changes than EU rules allowed.

No doubt other airlines will step into the breach that has been left by Cyprus Airways, that notwithstanding, this reflects negatively on both the islands tourist and business industries. Being a rather remote part of Europe, the island relies exclusively on air travel for its connections to the outside world.

 

Information overload expected

The recent terrorist attacks in France has had the desired effect in forcing people to either pretend to take action or actually ‘to’  take action to try restrict the movement of potential no-gooders.

EU countries are now keen to force air passengers to provide 42 pieces of information in every reservation they make. Information would include which travel agent they used, their credit card details, meal preferences (i.e. halal or not) as well as their addresses.

Under the proposal any airline operating in, to and around Europe would have to supply this information to a collective body that distributes the data to all 28 EU countries.
Maybe the policy deciders have not realized that people can lie!

 

 

What wifi

An interesting new report has just been published showing how hotels wifi systems compare across the world. With different countries having reached all sorts of different levels of standards with regards technology generally, it is interesting to note where progress has really been made and who simply pays lip service to it.

The country in the world rated as best for hotel wifi capability is South Korea, followed by Japan, Ukraine, Switzerland and Romania. The worst of the 50 country list was Cambodia followed by Greece, Indonesia, Philippines and Portugal. Obviously Greece didn’t use the EU money for wifi over the past decade.

Just for the record Bulgaria came in a creditable 18th, one place behind Germany but way above the UK which came 29th and massively ahead of the USA which ranked 40th!

 

 

Marriott pushing the wrong boundaries

The relentless stride to look for any sort of income is not confined to the airline industry. In the USA, the Marriott Hotel group scored a spectacular own goal and incurred countless negative brownie points when it applied for regulatory permission to block personal wi fi hotspots so that it could apply internet charges in its hotels.

The issue sprang to light when clients attending a conference in a Marriott Hotel were forced to pay up to 1000 USD to access the internet. The hotel chain was landed with a fine of 600.000 USD but applied to use ‘’jamming technology’’ in the future.

The power of the media however had other ideas and on seeing this was a spectacular own goal, the hotel group rescinded its request and said ‘’Marriott International listens to its customers and will not block guests from using their personal wi fi devices at any of their managed hotels’”.

 

The winner is

In the annual battle between the world’s two major aircraft producers, it looks like Boeing has again taken last years honours.

Boeing received 1432 plane orders although Airbus received 1456 orders. However in the figures that count i.e. plane deliveries, Boeing delivered 723 new planes compared to Airbus’s 629.

 

American Nuts

American logic struck again when a British family advised the crew of an American Airlines flight that their son had a nut allergy and could passengers refrain from eating nuts on the short domestic flight prior to their BA flight from Florida to the UK.

The American Airlines crew removed the family from the flight stating ‘”Americans have the right to eat nuts”.

No comments please about American service.

 

Delhi belly rage

Air rage caused a flight to be delayed in India recently but it wasn’t the passengers creating the rumpus but the actual pilot of the plane due to fly between Chennai and Delhi.

The Air India pilot allegedly punched a ground engineer inside the cockpit prior to take off prompting the pilot to then lock himself inside the plane and the other airline engineers to threaten to go on strike.

Apparently disorderly behaviour by Indian airline crews is not unusual though little appears to be done to confront it by the authorities.

 

If you can’t beat ‘em

The biggest threat to the big players in the car hire sector is car sharing; a fashion that appears to be catching on the world over. Global car hire giant Europcar may have the answer; it has just bought Ubeeqo, a French start up specializing in car sharing, for 4 million Euros.

Europacar in a statement said that the move was part of its strategy to ‘extend its mobility offering in response to its customers challenges, with simple turnkey solutions.’

Put simply; if you can beat them, join them!  Or in this case ‘”buy them’.

 

As safe as houses

Cathay Pacific has just been voted the words safest airline. The award is based on data concerning airline accidents and losses over the past 60 years. Following hard on the heals of Cathay was Emirates (though they haven’t been around for 60 years), EVA Air from Taiwan and Air Canada.

The best placed European airline was KLM.

Also noted was the death rate from aviation accidents in 2014 was four times more than it was in 2013 making it the second worst in a decade.

 

 

Qatar direct

The onward rise in connectivity with Asia and beyond continues for Bulgarian travellers. Hot on the heels of increased direct flights to Dubai with Wizz Air and Fly Dubai comes Qatar who will now make the Sofia – Doha flight a direct one.

Previously the flight touched down in Bucharest in both directions but from March, the flight will operate to and from Belgrade meaning with a touch down in Sofia giving the local passengers the benefit of a direct flight. The flight frequency will be five times weekly.

 

 

Just cruising

Fancy something different when you retire? How about living on a luxury cruise ship? That’s what one 86 year old senior citizen has done and has now spent the last seven years on board the Crystal Cruises ‘Serenity’.

The bill for such a lifestyle is 164,.000 USD per annum and covers a seventh floor stateroom, all meals and beverages, nightly ballroom dancing, Broadway style shows, captains cocktail parties, movies and lectures from celebrities.

Not bad if you can afford it.