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October 2016 Newsletter

Editorial

Aviation History in Bulgaria

Aviation history was made on Sunday 16th October when the first ever Airbus A380 landed in Sofia in what turned out to be a win win situation for everyone involved in the PR event. The idea to bring the world’s largest passenger aircraft to Bulgaria apparently stemmed as an idea by a Bulgarian pilot employed by Lufthansa who also just happens to be the only Bulgarian pilot in the world qualified to fly the A380. As the months ticked by the concept became reality and with the help of the local Lufthansa office a PR opportunity was seized by the collar.It wasn’t however just a select few who, specially invited by Lufthansa, flew back into Sofia on the Sunday morning that found themselves a part of a memorable day, the Bulgarian Air Force also played a pivotal role. Three MiGfighter aircraft joined in the fun as the passenger plane entered Bulgarian air space and conducted a ‘”visual exercise’” with the A380. The exercise replicated the procedures EU countries have now to initiate if radio contact fails with an aircraft or in the event of a hijacking; the military planes have to fly adjacent to the passenger plane with their wings almost touching each other. This allows the fighter pilots to see into the passenger cockpit and make a visual report to the ground. For this, the pilots not only need good eyesight but nerves of steel. Such exercises are usually difficult to realise with real life passenger planes and hence Lufthansa invited the military along to share their day and the MiG’s duly obliged before escorting the A380 to Sofia Airport and waved goodbye with a fly past.

As for the A 380 itself, this particular machine is the fourth of the airlines fourteen ‘”big birds’’ and came into operation in 2010. It usually carries 508 passengers. The plane returned later in the day back to Hamburg where it was to undergo a regular service complete with the Senior Lufthansa executives who came in with the flight that same morning.PR events like that do have sentiment and judging by the plane spotters who braved the weather on the perimeter of Sofia Airport, even they appreciated this moment in history. What was also amusing was the number of airport employees who lined the runway and who must all have taken a lunch break at the same time just as the plane was due to land; 1.05pm was not the time to be waiting for the baggage handlers to get your bags back to you if you had just arrived on another flight.

Mark Thomas

Managing Director HRG Bulgaria  

No beer today

If a similar situation had been found in Australia as opposed to in the USA then there may have been riots; imagine the doomsday scenario  the pub without beer! At New Yorks Newark Airport recently two of United Airlines lounges were forced to stop selling beer not because the apprentice had forgot to order any (or indeed any type of alcohol), but rather because someone forgot to renew their liquor licence, which actually had expired at the end of June……it was now the end of September!So much for an airlines ‘attention to their high value client’s comfort’. 

 

From across the pond

The proliferation across Europe of Low Cost Carriers has had the supposed benefit of enticing travellers who would normally traverse much of Europe by rail to instead, switch to the skies.  To support this notion, Ryanair recently stated that during the past summer it took over 1m bookings in America for travel across its European network. One assumes that other Low Cost Carriers that operate in Europe would also see such increases.Of course it could also be people being smart and buying in USD via the USA as the currency rate was in their favour – though perhaps best not mention that suggestion to any airline.

 

Merger approved

The take over of Starwood Hotels by rival Marriott has gone through what seems to be the final regulatory approval and has now been rubber stamped. The ”merger’ will see the combined entity operate a staggering 30 different hotel brands ranging from the luxury Ritz-Carlton, JW Marriott and St.Regis Hotel through to the likes of Four Points, Westin and Renaissance and on to the anchor brands of Marriott and Sheraton. Whilst the PR speak is that all the brands will remain intact, it’s hard to see the logic in keeping all 30 in operation when mergers of like or similar brands seems logical.Just for the record, the new entity will have a combined total of 5700 hotels, 1.1 million rooms in 110 countries.It will also be interesting to discover what the plans are for Sofia or indeed Bulgaria as aside of the affiliation to the Starwood Guest Programme of the Sofia Hotel Balkan, formerly a Sheraton Luxury Brand Hotel before it was de-branded, there will be no direct operated hotel in the country of the new entity. We would expect in the near term that this will change though just when and how a separate question is, but the Marriott group has had Sofia in its sights for a long time.

Has the new revolution arrived

The notion or threat, as the traditional airlines like ‘not’ to think about it, of Low Cost air travel between Europe and North America has been bubbling along for many years. The theory about whether as a concept it might or might not be commercially viable has rumbled on within the travel trade almost constantly and especially when there was nothing else to talk about. The impression as to whether it will/will not start has often been clouded by the fact that to many people, the concept of a ‘Low Cost” Airline  the expression itself being a misnomer  is often shaped by the names Ryanair or Easyjet and in our particular part of the world by Wizz Air. The fact that these airlines don’t, as yet, operate flights across the pond leads us usually to believe that Low Cost travel has not yet started on Atlantic flights ,the fact of the matter however maybe very different in reality.In Europe the names of airlines such as Norwegian and Iceland based Wow Air may not resonate very much in some countries and especially in our region, but they have probably started the Low Cost transatlantic revolution whilst remaining under the radar to most. Both airlines core business is connecting people between Europe and North America. Norwegian has just ordered 30 new narrow bodied (single aisle) Airbus A321 with a seat capacity of 165 and a nine hour flying range that will allow it to reach East coast USA. Additionally it will also add 30 Boeing 787’s, the first of which are already in service. Little wonder then that with these sort of orders in the pipeline, the USA authorities, under pressure from USA based airlines were delaying Norwegians flight operating licence for as long as possible as the threat to what is now almost a monopoly of USA airlines is obvious; USA airlines will simply not be able to compete on cost.Meanwhile Iceland’s Wow has ordered another 4 of the long range A321’s and has also added 3 Long range A330’s to its fleet which will total 17 aircraft by the end of this year.From the other side of the water, US based Jet Blue is thinking about getting in on the game and has ordered 15 of the A321 which it says will allow it to start ‘cheap’ flights to Europe from the US East coast by 2020.Finally, whilst on the Long Haul angle, another ‘”first’” will reach us by mid 2017 when Singapore Airlines budget offshoot Scoot starts its ‘Low Cost’ flights between Athens and Singapore.So the bottom line is that the landscape in air travel has already started to change; there will be winners and there will be losers but the people under the biggest threat are the likes of British Airways, Air France and Lufthansa and there bed mates American, Delta and United Airlines. Between them they control one of the last bastions of profit left in the aviation industry: the transatlantic route. This sector might ultimately remain a profit centre for the aforementioned players but during the battle that looms, it may also turn out to be a cost centre for them if they choose to defend their turf.

London to Amsterdam trains nearing reality

The promised Eurostar train service between London and Amsterdam is coming close to reality with the news that the launch is on track to start in December 2017. The original date for the operations to commence was the end of the current year but in the overall frame of travel infrastructure targets; this is decent.

Whilst no official announcement or indeed decision has yet been made as to where the train may stop en route, Antwerp, Rotterdam and Amsterdam Schiphol Airport have been mentioned. The journey time will be 4 hours.

What may yet throw a spanner into the works is just where and how passengers will be screened prior to entry to the UK; a subject perhaps made potentially more complicated with the UK’s Brexit decision.

Food for thought

British Airways has recently announced that it will be dispensing with ”free food or snacks’’ on board its short haul network (that includes Sofia) and instead be replacing the offering with good old Marks & Spencer sandwiches.

The rights and wrongs of this are debatable but food is one of those costs that accountants find easy to dispense with and that decision is made even easier by the Ryanair’s of this world having already set the benchmark of onboard services by stripping out such luxury’s as food which has now made the path easier for others to follow.

To that end, the UK Travel Trade asked its members if they thought that ‘BA are destroying their own brand and are becoming just another Low Cost carrier?’’ 59% of the travel the trade agreed with this and 41% disagreed.

Whether or not the airline or indeed anyone pays attention to the findings is irrelevant as the airlines will do whatever they want to do, but negative feedback from ones home market is never a positive start. What was also interesting was that in the BA Press Release to the trade, they announced that the move was an “upgrade to their food offering”. Upgrade by definition means ‘’to improve’’ so does this mean that the current food offering is not good enough?

Profits held back

The world’s airlines are expected to generate combined gross revenues of around 709 billion USD in 2016 with a net profit margin of some 5.6%. This will be the fifth consecutive year that profits have shown black ink.

Much of this profit is brought about by the low price of oil which also leads to the conclusion that these cost savings are not being passed onto the consumer!

Small is big

Doha based Qatar Airways is buying big. It has announced a 18.6 billion USD deal to buy 100 aircraft from American manufacturer Boeing comprising of 60 x 737 short haul planes, 30 x 787 Dreamliners and 10 longer Extended Range 777’s (ER). That’s a lot of planes and a lot of people required to fill them daily.

Just for the record the 787 has a typical seat capacity of between 242 – 335 and a range of around 14,000 kms whilst the 777 ER can seat between 314 – 451 passengers and has a range of some 17,000 kms.

Minor no go

Indian airline IndiGo has created a stir in its home country by banning children under 12 from certain areas of their aircraft. The ‘”quiet’ zones are in the first four rows which are traditionally for business class passengers as well as rows 11 – 14.

The concept has its detractors, obviously, but for anyone who has sat adjacent to or close to a screaming child for any period of time whilst airborne will know that no book or personal headphones can shelter you from the distraction.

Forest Hilton

The licence for owners and architects to let their imagination run wild seems to have no boundaries in Dubai as anyone who has visited the Emirate will testify. Hotels in particular provide a source for architectural licence and that tradition seems to be continuing as news of a new Hilton Hotel is released.

The new 5 star facility (what else) will have its own rainforest (the first in any hotel in the world), rooftop aquarium and infinity sky pool with a glass bottom.

The hotel will also feature exotic plants, mist sprays and an artificial beach.

Apparently the ‘”hotel’’ will also have bedrooms but no mention is made of these yet!

British making Spanish hotel owners sick

Alternative ways of doing something that challenge conformity or standards of normality often seem to have their origins in this part of the world; take the wheel and people try and make it better; take a simple and universal way of moving your head to say yes and people do just the opposite. The ability to make something when there is nothing to be made is a skill that sometimes has to be admired. Such skills though are not always a local trait and holiday makers from the UK seem to be ahead of their European (soon to be ’former”) brothers when it comes to being able to take advantage of something that doesn’t actually exist.

In short, the Brits have become infamous with Spanish hoteliers in claiming fictitious illnesses with the hotel owners saying the problem has reached epidemic proportions. The claims by holidaymakers which the hotels claim are usually fraudulent also take advantage of a UK judicial system allows financial claims against a hotel based on the EU Travel Package Directive, to be heard when there is no evidence to support the claim. In otherwords the hotels are assumed guilty unless they can prove their innocence! The ability to pursue such claims in other countries such as Holland, Belgium and Portugal whose holidaymakers also make up a large percentage of visitors to Spain is much more rigid with innocence assumed until guilt is proven. Equally, the Spanish hoteliers also note that claims from Brits who book independently and not with a Tour Operator are also minimal. The problem therefore is attached to those who take a package holiday and who use the good old EU laws to give them a nice pay back.

The hotels are discussing implementing traceability systems for guests so they can continuously track the meals and drinks the guests have consumed and allow the hotels to check if the patterns are compatible with the causes alleged in the complaints.

Who would have thought it would be the British who would be scamming a system?

 

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e-mail:mark@bg.hrgworldwide.com