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July / August 2017

Editorial

Imagine the scene; the local inhabitants of Bourgas and Varna parading in the streets, smashing hotel windows and daubing graffiti on restaurants filled with throngs of tourists from across the globe, their message – go home tourists we don’t want you! Such a scenario is about as likely as Martians landing in Kaspichan and ordering a bottle of Rakia, yet believe it or not in Venice and in parts of Spain this is starting to be a regular occurrence.

Starting with Venice a city with 391 bridges and that had a post war population of around 175,000 inhabitants but which finds that number now shrunk to just 55,000 locals, its gripe is that the city is totally over ran with tourists making it impossible for any sort of permanent life to exist there. Venice will often welcome 4 and even 5 cruise ships per day, each of which steams into harbor in the morning and steams out at night. Then, depending on who you believe, the cruise goers either don’t spend anything in monetary terms but do leave lots of litter and pollution behind, or on the other side of the argument is the claim from the cruise lines that cruise goers spend around 150 USD per head in the city. Added to this are the stacks of entrepreneur driven B&B accommodations now joined by Airbnb properties which play happy host to thousands of people arriving by Low Cost airlines. This has resulted in a reduction in possible places to live for normal people which then means the simple solution is to up sticks and move somewhere else that’s affordable to live. A short term boom and a long term blip. The bottom line is that Venetians can’t live with tourism yet they can’t live (now) without it 22.000 people leave the city every year to live elsewhere, a fact that should send warning signals to any city, region or country that becomes overly dependent on tourism.

Then we have Spain: that haven for party lovers and beach goers alike. A country that has both directly and indirectly benefited massively thanks to its climate and relatively low costs. Except that is that as in any country there will always be the ‘nutters”’. These are the 5 or 10% of people who could have everything in life but they will still complain, demonstrate and create mayhem. The word extremists are more usually associated with a beard wearing religious fanatic but a Spanish Group called Arran Paisos Catalans, which as the name suggests, is based around the Catalonia region (Barcelona) and has recently been kicking off in Barcelona, Valencia and the Balearic Island. Their gripe is that tourism hotspots are becoming overcrowded and forcing locals out of their habitat. Tourist buses in Barcelona have been targeted along with slashed tyres on tourist bikes and hotel windows smashed. Restaurants have also been daubed with paint and flare guns fired.

With Barcelona, the ‘”nutters’” might want to think about what and how their city has prospered thanks to tourism and without it, the city would be an irrelevance in Spain. Tourism does bring prosperity and yes it needs to be managed. There is also the point that no matter what great things any city does, it’s never going to please all of the people all of the time; people are however free to move elsewhere to other cities where like-minded people exist (if at all they do). Sadly, events of the past week in Barcelona might even give this group the result they have been striving for: will Arran Paisos Catalans treat this as a blessing of will they realise suddenly how they and the region need tourism to carry on their ever day lives. Barcelona needs tourists and tourists need Barcelona; neither need this extremist group of idiots.

Mark Thomas

Managing Director

HRG Bulgaria

Different rules for different people

German airline Air Berlin has filed for bankruptcy and it would appear that the end is nigh for the Berlin based carrier that not so long ago was operating flights to Sofia. The demise of the airline will not be a huge surprise to many within the industry. The airline has been propped up with financial support from the German government until the German elections, support that was put together after 30% shareholder Etihad refused to inject any more cash into the perennial loss maker. Along with Alitalia, Air Berlin is the second basket case European airline now in liquidation and dependent on government help that Etihad has invested in when common logic would have been to “’steer clear’”.

What however is intriguing is that according to reports. Fellow German airline Lufthansa is already in talks to take over Air Berlins operations. The benefits for Lufthansa are obvious as it will give them a position of power in the German market and help them fight back against Gulf carriers such as Emirates and Etihad plus Turkish Airlines who have already stolen a huge chunk of the German market. Who though decided that Lufthansa can be the sole beneficiary? Is it not a fact that this together with a financial bailout by the German government breaks just about every EU law there is? Or is at, as many already know, that there is one law for the big and one law for the small. Malev and Cyprus Airways were forced to die, why not Air Berlin?  Ryanair certainly agree with this popular line of thinking and have already appealed to the EU Competition Commission to block Lufthansa from taking over Air Berlin. They argue that this is a manufactured insolvency and that allowing Lufthansa to take over a debt free Air Berlin is in breach of every known German and EU competition rule.

Ryanair are probably correct but there are enough lawyers around to make black from white and white from black and anyway, the politicians in the EU will do whatever they and especially whatever the German government wants regardless of whether its legal or not.

Now, who was asking why the UK wants to leave Europe?

 

Big bird cutbacks

Plane manufacturer Airbus is cutting production on its A380 superjumbo from 15 per annum to 12 per annum. The plane which, in certain respects has ‘” revolutionized ‘” air travel both directly and indirectly, is not having an easy time of it and sales of the plane since its first inception have been disappointing.

Only a relatively small number of airlines have the plane in their fleet in any great numbers i.e. Emirates and Etihad, whilst the European big boys such as BA, Air France and Lufthansa do have them but they can hardly claim to be the main stay of their fleets. Also what will happen shortly is that the first batches of these planes will soon hit the second hand market and no-one is quite sure if there will be any resale value in them or not. This then may affect an airlines future decision as to whether to replace old with new or not! It’s likely that the existing Gulf Carriers will wish to take on new A380’s to replace older fleet members of the same type as their business model is built around the A380 but what Airbus really needs are more airlines taking the plane.

Other interested bystanders will of course be the airports who themselves have incurred significant investment costs as they reconfigure their airports to handle the A380.

 

The disappearing Virgin

Richard Branson’s business portfolio is about to reduce as he sells one third of his shares in Virgin Atlantic to Air France-KLM who are taking a 31% share in the carrier in what will be a four way venture as American carrier Delta is already a shareholder with 49%. This in effect leaves bed mates Air France – KLM and Delta in control of the carrier and reduces Richard Branson’s Virgin shareholding to just 20%.

BA and indeed Lufthansa may have indeed raised more than an eyebrow at the move. Meanwhile Virgin, which arguably was Branson’s most high profile investment, may well finally end up like many of the Richard Branson investments which have had varying degrees of success (or otherwise) i.e. dead and buried.

 

TAP the stupid button

It’s hard to think of any industry where more “” bull”” originates and yet that industry expects people to believe them than what emanates from the airline industry. The latest gem comes from Portuguese Airline TAP who told its clients that ‘”in its desire to provide a better service it will no longer take telephone calls ‘” and then demands that all communication has to be done via email which in turn has a complicated coding system!

How it works (!!!!!!!)- a client sends the airline an email with a question or query and the airline responds with a case number, the client must always in future emails quote this case number and a failure to do so means the case goes back to square one again! Equally when emailing them in the first instance you have to use certain (listed) key words which will help the airline identify your problem e.g. TKT for ticket assistance; IRREG for special changes and CKIN for check in issues etc etc etc.

If anyone was setting out to win an award for stupidity, then they will need to work (very) hard to beat TAP!

Where will it all end?

 

A modern history lesson

Apparently it’s a true story: at the stately Windsor Castle as a tour guide was enthralling his American Tour Group with stories about how Prince Philip would often get upset about the planes flying overhead (Windsor Castle is in the flight path to Heathrow Airport) and call air traffic control to ‘” demand’ they change the plane’s flight path, an American tourist asked ‘” why were they so stupid to build   their castle so close to Heathrow anyway?”

True? Probably!

 

Big losses for Etihad

Money bags airline Etihad has just reported a massive and indeed unthinkable loss of 1.9 billion USD! The airline who, together with rival Emirates seemed to make everything it touched turn to gold blamed losses on fuel hedging as well as financial exposure to Air Berlin and Alitalia, both loss making and now in insolvency proceedings and with whom Etihad has equity investments.

The policy of investing in other airlines which Etihad drove forward was questioned by many as too was its choices of partners!  Expect both Air Berlin and Alitalia to join Malev, Sabena and Cyprus Airlines in their coffins. Additionally, other airlines will fall off their chairs at the fuel hedging comment as the remainder of the world’s airlines have long argued that the gulf carriers don’t pay their full whack for fuel anyway!

Would you fly pilotless?

A long standing idea is for the commercial airplanes we fly in to be pilotless. In theory this is possible already as for much of the time a plane is in the air, the auto pilot is switched on and the pilot and co-pilot can sit with a coffee and read the latest HRG Bulgaria newsletter. On the other hand, we are told that the reason pilots exist in the first place is for safety and (now) security reasons. Would the auto pilot have been able to land the Ukrainian plane last month whose windscreen had been smashed in a violent storm and the electronics rendered almost useless? Probably not. It seems that most regular flyers think the same despite the airline industry claiming pilotless planes could save the industry 35 million USD per annum; presumably through reduced wage bills. According to initial research only 17% of people would fly on a pilotless plane! The longer term strategy by the aircraft manufacturers may however be too slowly bring in autonomous planes in the cargo business and hope they become accepted by a wider audience,

Note: it is estimated that 600,000 new pilots will be needed through 2035 globally to meet the growing demand for air travel.

Airline to go

Another well-known airline is in danger of disappearing from our skies soon with South African Airways begging the country’s government to loan/lend/give/donate it 970 million USD to allow it to continue operating. The airline has been losing money for the past seven years and had to borrow a further 350 million USD last year to stay alive.

Sometimes it might be wise to say enough is enough, especially if you are a South African Tax payer, however such a move to effectively liquidate a nations flag carrier is never taken likely albeit often for ego’s sake only and it would also be true to say that for a country as isolated like South Africa, its airline is its connection or lifeline to the outside world. Unlike Europe with examples like Malev in Hungary and Cyprus Airways which the EU were happy to sacrifice in full knowledge that some other airline would quickly fill the gap these airlines left, such alternatives tend not to be around in Africa.

Cruise to disapper

Back in 2004 a woman travelling alone on a cruise to Alaska mysteriously disappeared and when advised by the cabin steward, instead of notifying the authorities, the captain pretended she had not been on board and emptied her cabin. Several weeks later relatives worried about her whereabouts found a credit card statement showing she had been on the cruise and started an unsuccessful attempt to find out what happened to her; a fact that remains a mystery even to this day.

The plot of a book? Far from it as since the year 2000, some 300 passengers have gone” overboard” on cruises and a further 49 are unaccounted for! This year so far 13 people have gone overboard with just 3 rescued. The cruise lines, whilst not avoiding the law, find themselves in a grey area between the jurisdictions of where the ships are registered, the countries they are sailing between and the waters they are in fact presently sailing in. Maliciously one could also say they use this to ensure the least convenience is incurred by them and their passengers.

 

Bumper year, but from where?

The Black Sea and indeed the Bulgarian Tourist industry may well be enjoying a record year but this is perhaps down to the number of foreign tourists who are coming to this part of the world as opposed to tourists from domestic sources.  Apparently 56.4% of Bulgarians do not have the financial means to go on holiday for a week.  This however is an improvement on the figures which date back to 2010 when 62.4% of the population were in the same position. Across the EU, 32.9% cannot afford a holiday. If Bulgarian hotels are looking for the sources of their revenue, then they had better steer away (in theory at least) from Romania and Croatia where 66.6% and 62.8% respectively cannot afford to travel. These were followed perhaps surprisingly by Greece 53.6%, Cyprus 53.5% and Hungary 50.7%.

Of course theory is theory and practice is practice and certainly from our own local perspective, much of the Black Sea area and also the ski resorts could not survive without the vast numbers of Romanian visitors; obviously due our proximity to Romania.

What really happens at 33,000ft

Due to the holiday season we are in the midst of, many will have missed the story about the lady who gave birth last month mid air whilst on a flight from Colombia to Frankfurt. This in itself is quite rare as pregnant women have to get medical approval to fly and can only fly up to a certain period before their ‘” due date’”. However, surprises do happen and this particular lady went into labour during the flight. Thankfully the Lufthansa crew have all been trained in such eventualities and after clearing passengers away from the back of the plane and setting up a dividing partition, they,  together with three doctors who were onboard, helped deliver a baby boy.

The captain landed the plane as soon as he reached Europe at Manchester to allow the baby and its mother to be taken to hospital before the plane carried onto Frankfurt.

What we have not mentioned was that the baby is Bulgarian and was born to a Bulgarian mother. The baby was the 11th to be born on a Lufthansa plane since 1965 and traditionally, all such babies are allowed to travel free for the rest of their lives; or so it was! Such a privilege is unlikely to be granted these days and its more likely an airline would charge the mother retroactively for their ‘ancillary services”’.

Kempinski Grand Arena Bansko welcomes you with new meeting rooms

Kempinski Hotel Grand Arena Bansko is delighted to present its renovated conference centre. Now our meeting rooms are more comfortable and better equipped than ever and with their​ natural daylight are a perfect venue for your corporate event.

From the spacious Pirin Meeting Room now suitable for even bigger events  to the exclusive Rila Boardroom, they can guarantee the sophistication and privacy needed for your success. Our dedicated team of professionals will be at your constant disposal to ensure you deliver a special event that extends beyond your expectations.

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