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April 2016 Newsletter

Editorial

Transparency only when required

We are force fed the virtues of transparency by the good and the great of the commercial world, transparency though is something fictional that only the deluded and those who seek some sort of a true utopia actually believe in. For the rest, transparency is something additional on the corporate speak list that homage or lip service merely be paid to it; you dont actually have to believe in it in the real world. Take the new  perhaps the word new is in-appropriate but it will suffice for now  yet to be opened airport in Berlin that will be the new flagship gateway to the re-instated German capital: or it should be except that its still closed. Not only is it still closed, it seems destined never to open! The facility was due to be functional by 2010 and advocates of German engineering and organization sensed little fear that this would not actually happen. When initially the opening was delayed due to (quote) safety concerns, the world at large thought that this was due maybe to a lack of fire extinguishers or badly fitted fire doors! No, the real reason, six years later and still no opening has still not officially been announced though the whisper is that the design itself of the airport terminal is the issue. This most certainly is not German! Now we are being told that despite the PR blurb that the facility may (note the word may)  open in the third quarter of 2017, the real truth is that it wont be before 2019 when its doors may finally be ready to open. Funnily enough, despite the billions it cost to build the new airport, clever people are suggesting that if in 2010 or even shortly afterwards, the Germans would have thrown their hands in the air and admitted they had made a mistake and dismantled the new but unused facility and re-built a new one that actually works; it would have been cheaper and faster and would now be operable, So much for transparency.

In the same mold as Berlins new unworkable airport, High Speed rail services between London and Europesorry..mainland Europe (think Brexit) have been promised now for some time. London to Cologne was promised for 2013 but never materialized and seems to have been forgotten about. Now the launch of the London  Amsterdam route which was promised for November 2015 but never appeared, has been put back to sometime in 2017; the reason why  no-one knows! Or perhaps they do know, just like the Berlin Airport operators but its not something they wish to share with the rest of the world. The plausible excuse for the rail operations not starting as yet is security, that magic word that acts like a get out of jail card in a game of Monopoly. The train of thinking  if you pardon the pun – for the real reason why London is not yet connected to other European cities other than Brussels and Paris (and secondary French cities) is that someone forgot the issue of passport control and the costs that are associated with it. Or rather they did but they dont want it to be so transparent.

Mark Thomas

Managing Director

HRG Bulgaria

Chinese buying power

The relentless march of Chinese companies buying up top drawer international enterprises continues with the acquisition of Carlson Hotels by Chinese company HRA. The Carlson hotel group is more famously known through its Radisson brand.

The Carlson group operates a portfolio of 1400 hotels and Sofia will also see the effects of this move as the Park Inn is a part of the portfolio. The more famous Sofia landmark, the Radisson Blu is soon to be transferred and will become an Intercontinental hotel, itself part of the global IHC group.

 

It’s a bargain

Belgian rail Operator Thalys is to offer tickets for 20 Euros on the 20th May for travel on all its routes between 20th May  20th September.

Dont miss it.

 

Bags of improvement

The airline industrys focus and investment on bag tracking technology over the past few years seems to be paying off. The rate of mishandled baggage is now a mere 6.5% bags per thousand passengers which is less than half of the amount in 2003. This is despite an 85% rise in overall passengers since 2003 with more than 3.5 billion passengers travelling by air.

By 2018 all bags will be able to be tracked on their journey, just like a parcel can be tracked nowadays.

 

The free market arrives

The island of Cuba, so long isolated by America for some obscure reason that pre-dates most of us (almost), seems to be gaining favour with its nemesis. At the same time that Mr Obama became the first US president to visit the island since year dot; the Starwood Hotel Group announced it is to open two hotels on the island.

The Hotel Quinta Avenida will join Starwoods Four Points brand whilst the Hotel Santa Isabel will become a Luxury Collection Hotel.  Starwood is soon to be bought out by rival Marriott who claim the US government has OK’d the group to develop a hospitality relationship with potential partners in Cuba.

Starwood and Marriott need to be quick as Airbnb also announced it had been given the go ahead to open up its 4000 listings of home rentals to the global market. Previously the accommodation booking site was only ‘allowed’ to distribute its products within the USA.

 

Ban strikes

The French Trade Unions are starting to get even more under peoples skin, if indeed that was possible. So much so that after the recent and ongoing bout of union strikes aimed at preventing the French business sector from entering the 20th century (yes we mean 20th and not 21st century), European airlines have pressed the EU to intervene to at least prevent air traffic control workers from striking and thus temporary collapsing the European skies.

The latest strike will be France’s 43rd national strike day since 2009!

The proposal is for the EU to introduce measures  that will force French Air traffic controllers to arbitrate rather than strike and to allow Europe’s other air traffic control centre’s to oversee flights that operate over France as opposed to flights which operate ‘’to and from’ France whilst disputes disputes are in progress.

It should also ne noted that European airlines have long championed the idea of a central Euro Air Traffic control centre to manage all flights throughout Europe. The French are opposed to this concept as this would deprive them of the possibility to strike several times per annum…… and get paid for it in the meantime.

 

If you can’t beat them, join them!

Most people would simply add a ‘”so what’’ to the news that American airline JetBlue had taken delivery of its latest Airbus A321 airplane; indeed that’s not news – is it? The answer is that it is indeed very big news because this is the first plane to have been assembled by airbus in the USA.

Airbus has now an assembly plant in Alabama which will allow ‘European’’ airline Airbus to qualify for US based export financing, just like its American rival Boeing.

Commercial rivalry in a strange world!

 

The free market eastwards

It’s not the fact that Emirates are to start with their 10th daily direct flight to London that makes the news story, the story behind the story is more what this fact translates to? The translation is that for rival British Airways – though BA might dispute that any of the Gulf based airlines are indeed its rival – this means that 10 flights pre day from London x 350 passengers per plane = 3500 lost clients….per day!

Wait, there’s more. This is just applicable to a) London and b) Emirates! London is not just served by Emirates; there are also scores of flights from Etihad, Qatar and indeed Turkish, each tapping into the London region source market. Oh, one should also not forget that London is not Britain in its entirety, the UK has vibrant commercial centre’s in Manchester, Birmingham, Newcastle and Edinburgh and guess what…..the other aforementioned airlines all fly to these regions; BA do not operate any international flights from outside London.

In short, one could reasonably assume that the Gulf (and Turkish carriers are stealing 10,000 potential BA passengers per day, that’s comparable to over 3m passengers per year.

Lufthansa have also fallen into the same ‘trap’. Its international hubs are limited to Munich and Frankfurt when it comes to Long haul travel and the Gulf carriers and Turkish are happily taking German based travellers directly from their home city airports such as Hamburg, Berlin, Stuttgart and Dusseldorf and feeding them through Dubai, Abu Dhabi, Istanbul and Doha etc to their final destinations at all points east.

Whether its simply geographic fortune or having a better grasp on what the ‘”traveller actually wants’’ (or having deeper pickets), the new kids on the block and making life a misery for some of the old timers of the aviation world.

 

BA fares make life simple

BA has implemented their new pricing or fare types which are a hybrid fare structure or a cross breed of Low Cost Carrier / Lufthansa fare structure set up.

In many respects however the new fare types are simplistic and one could argue are simpler to understand than the scores of fares which one could traditionally book at all price ranges for the same seat.

The fare types can best be summarized as:-

  • Basic fare …..hand baggage only, seating allocated at check in or can be booked in advance by pre-payment, flight changes allowed by extra payment.
  • Plus fare……23kgs baggage allowance, free seat selection from 48 hours before departure, free flight changes on day of departure and before (though fare differences may apply)
  • Plus Flex fare……fully refundable fare, 23kgs of baggage allowance, free flight changes on day of departure, no change fee and free seat selection at time of booking.

The Business class fare structure is not altered. The fare differential between Basic and Plus fares is about 20 Euro per way on average.

Now America puts it boot into Turkey

We have, for several months, noted the issues the travel industry in Turkey is facing and will continue to face for the foreseeable future. The problem was highlighted further this month when the USA put out a travel bulletin warning that further terrorism attacks are likely within the Turkey and that areas frequented by tourists are the likely target.

As if to drive the point home further, American carrier Delta has also suspended its flights between New York and Istanbul due to ‘security concerns’.

Things aint looking good for the Ankara based regime.

 

All washed up

In case anyone forgot, there has still been no credible explanation as to what happened to the Malaysian Airlines flight that disappeared two years ago, somewhere – we are led to believe – over the Indian Ocean. This month, more debris, apparently from the planes bulkhead section, was discovered at Rodriguez Island near Mauritius.

 

Top of the cheapo’s

A British report has named Bulgaria as this summers ‘’cheapest’” destination. The report by the Post Office selected Sunny Beach as the Bulgarian benchmark (for better or for worse) and the resort came top – or bottom depending how you look at it – for the third year running.

A shopping basket of essential items was costed at 41.55 GBP whilst the Algarve, Cyprus and Costa Del Sol came joint second with the same basket costing 52.65 GBP.

 

Plovdiv up for grabs

The concession for Plovdiv Airport is out for tender and if we believe the reports, interest has so far come in from China, Hong Kong and Turkey, though not yet from Varna!

The airport is mainly used for cargo although its location makes it ideal in many respects for Low Cost Carriers. Ryanair has been using the airport as its first foray into Bulgaria. A foray that proved so successful they have now expanded into Sofia.

The bigger carrot in the airport concession game is Sofia Airport which is reportedly going to appear shortly on the government ‘to do’ list.

 

If you’d like to subscribe your friends or colleagues and for all your travel requirements, reservations or for more information about any of the items mentioned in the newsletter, please contact us:

Tel:+ 359 (2) 943 3011;
Fax:+ 359 (2) 946 1261;
e-mail:mark@bg.hrgworldwide.com