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November 2015 Newsletter

Editorial

Terror fatigue?

The recent events in Paris were shocking to many of us though perhaps not totally surprising. Whilst the notion that the events were not a surprise might sound contentious to many with their heads stuck in their own insular world, it should not be forgotten, though many will have indeed neglected the fact,  that it was only a months ago that everyone was talking about Charlie Hebdo. It was said then as it is said now that ‘this’ event will not be the last; in the case of Charlie Hebdo, it clearly wasn’t. That these events are happening in France is also hardly surprising, one needs to look at the make up of the country’s population and their historic background and speak to generations of French people to know that it was a matter of  ’when and not ‘if’ the lid would be taken off the boiling pot. France is also a part of Europe and what happens in France today can also happen elsewhere tomorrow, even Bulgaria though few would argue that we are (luckily) at the back of the queue when it comes to terrorist threats.

How is this going to affect the travel industry and indeed will it affect it?

After any major terrorist attack there is an immediate fall off in business; 9/11, the London bombings, Charlie Hebdo; you name it, what tends to happen though in a relatively short period of time is that the travel patterns return to normal and indeed, just as some people shy away from any theoretical hotspot, as many people deliberately make the effort to ‘get on with life’ because a disruption to our lives is seen as a victory to those perpetrating the crimes.

Whilst Paris and Brussels are suffering in the short term, they are both prime European cities and people will return to them. Aviation and travellers are being disrupted more in their daily lives by Lufthansa and their repetitive strikes than by terrorists. People just want to get on with their lives, not out of dis-respect for those who have lost theirs, far from it, but just as the IRA failed to disrupt the UK in the 1970/80’s with their killing of innocent people, Europeans will not let terrorists destroy Europe. That’s not a bad thing for the travel industry on which hundreds of thousands of people livelihoods depend on it.

 

Mark Thomas

Managing Director

HRG Bulgaria

 

 

Easy to make money

As airlines such as Air France and Lufthansa, beset with ageing business models and unruly workforces struggle to give their shareholders their expected returns, its curious therefore that Easyjet has just announced record annual profits. The ‘record’ is such for the fifth year in a row with the profit record bar now set at 686 million GBP (980 m Euro’s).

The airline carried 68.6 million passengers during the year and the actual cost per seat to the airline decreased by 3.4%, helped in no small way by lower fuel costs.

The bottom line one is thus that whilst some airlines can ‘”do it”, others seems not to be able to – make a decent profit that is.

 

Mega hotel tie up

In what must be the biggest hotel news for years, the Marriott Hotel Chain is to acquire the Starwood Chain of hotels for 12.2 billion USD. The Starwood group is better known by many for its Sheraton brand and other high profile lifestyle brands including St. Regis, Westin and W Hotels.

Marriott apparently fought off rival bids from Hyatt and three Chinese companies to seize Starwood. The combined company will own or franchise 1.1 million hotel rooms between them in more than 5,500 hotels across 108 countries. The actual brand portfolio will total 30.

 

NYC via Belgrade

The shortest route from Sofia to North America may soon become via Belgrade. Air Serbia is planning to start a four times weekly flight between Belgrade and NYC from June 2016.

This will be the first direct non stop flight between Serbia and the USA since 1992.

Presently, Bulgaria based travellers use a multitude of connecting flights via for example, Frankfurt, Paris, London and nowadays even Istanbul to get to the USA. Thus the Belgrade option may possibly become the preferred option assuming flight connecting times, yet to be announced, are favourable.

 

Eurostar in the world of Disney

In the aftermath of the terrorist attacks in Paris, it was sad to see the insensitivity or just plain profiteering of rail operator Eurostar who refused to refund tickets for passengers who had planned to travel to Disneyland. Not only did the park close for several days but the authorities were discouraging people from travelling anyway, particularly around Paris.

Eurostar stuck two fingers up at the travelling public by saying people could re-book but they wouldn’t get a refund even if the rest of their holiday had been cancelled.

In situations like this its hard to see what positive publicity Eurostar could gain from such an approach. Maybe once the dust has settled social media will make the train operator regret its poor management decisions.

 

It’s a Bumpy Job anyway

In what might be the closest thing yet to American type litigation stupidity, an Aer Lingus flight attendant is suing her employers for a bumpy landing!

Her problem is that a flight she was working on landed in “blustery’’ conditions at Dublin Airport and somehow she suffered back and shoulder injuries (shouldn’t she have been seated and strapped?).

Any sane minded judge would probably tell the lady concerned to go take a long walk on a very short pier.

An airport pier that is.

 

The end of tranquility in the air is nigh

British Airways plans to have the dreaded wifi installed in both its long and short haul fleets by early 2019 with the first aircraft having the systems installed by 2017. This is part of the strategy of BA parent company IAG who plan to install wifi in over 300 of the groups aircraft (including Iberia etc.,).

BA had been trialing such systems during 2014 and early 2015 on selected routes. The only route of BA currently with the wifi offering is the all business London City – New York flight.

 

Rail link delayed

Last weeks terror attacks might possibly be behind the news that rail operator Eurostar has delayed the launch of its London – Amsterdam direct service from the end of 2016 until sometime in 2017: ‘sometime’ in 2017 might eventually be translated to ‘never’.

The reason behind the delay has not been forthcoming and regardless of the official ‘line’’,  just like the supposed UK – Germany direct rail connections that seems to have been buried without trace, the real reasons these delays, postponements and cancellation occur are seldom made public.

One potential reason might be that passengers on any such rail connection between the UK and mainland Europe have to go through immigration procedures as the UK is not part of the EU wide schengen system. This process would have to be done perhaps in Lille, France and would require the passengers from the 900 capacity train to disembark and clear immigration; a lengthy and inconvenient as well as costly process by anyones measure. So inconvenient the question on peoples lips may well be ‘is it worth the hassle?

 

A Gem of Stupidity

Anyone who places 95,000 USD’s worthy of jewellery in their suitcases and then checks the bags into the  hold of an aircraft must be either plain stupid or an eternal optimist if they expect to see the jewellery again. However that’s what (apparently) a US couple did recently.

The couple claim they checked then  jewels in the form of eight rings, one being worth 80,000 USD, onto flight flying from NYC to Los Angeles but when the bags arrived at their destination the valuables were (surprisingly) missing.

No doubt with the USA litigation system, stupidity will be compensated adequately.

 

How to make money in aviation

The aviation business is a funny old business and whilst making money from the simple act of moving people between point A and point B seems beyond many airlines capability, that doesn’t mean to say there aren’t other ways for airlines to make a profit (besides stitching up its own travellers).

Take Air France/KLM, as they struggle to come to terms with the fact that the trade unions actually control affairs and as long as this situation prevails they will continue to struggle to make money, that hasn’t stopped them from seizing the chance to sell six take off and landing slots they own at London’s Heathrow Airport to alliance partner Delta for (a mere) 276m USD! In fact Delta already use the slots anyway and have been renting them from Air France/KLM for several years.

For any prospective MBA Business graduate, the aviation business must appear like an iceberg: what you see on the top is only a small part of what really exists.

 

Its all about the money

In yet another backward step for Lufthansa, the German airline has scrapped its popular but obviously ‘cost-ineffective’ First Class ‘seat and bed’ concept whereby passengers got both a seat and an adjacent bed in their Boeing 747 – 400 series planes. Obviously its all about cost cost cost at the moment and these have now been removed and replaced with the airlines standard offering of Business/ Economy and Premium Economy. To make the financial emphasis even greater, Lufthansa are even squeezing in an extra business class seat across its cabin in these  747 -400 series machines to make the layout 2-3-2 whereas most rivals have the more spacious 2-2-2 layout,

Time are indeed ‘challenging’ for the Germans.

 

Top of the Pops

Quite amazing really; Osaka Kansai International Airport in Japan has not lost a single piece of luggage since it opened in 1994.

Obviously the baggage handlers are well paid (sic).