September 2019 Newsletter
178 years and out
Arguably the most iconic of travel brands, Thomas Cook has collapsed after 178 years of business leaving a train of debris and much recrimination behind it. The end came on September 22nd when the Tour Operator failed to come up with an additional 250M Euro of investment to satisfy the banks after already coming up with 900m from its existing investors in a bid to stay solvent.
As the dust still settles, some 22,000 people worldwide are set to lose their jobs with up to 450,000 holidaymakers across the globe who are already on holiday set to be impacted. Hundreds of thousands more with holidays booked for the future will also face the same scenario.
For many, including Thomas Cook clients from its home market of the UK, the fact that it is standard practice for Tour Operators to offer protection for such a situation means that at least the vast majority won’t be financially impacted too severely but most will be inconvenienced in some way or other. Replacement aircraft and crews will operate the flights Thomas Cook’s own aircraft were due to fly and passengers will return back to their home countries as close to their scheduled time as is possible.
The Tour Operator announced a massive 1.6 billion GBP loss this past winter and from that moment on, the writing was on the wall. Just why a firm with 178 years’ experience in travel should meet such a sad end is an altogether different question with no single answer, but plenty of warning lights appeared over the years that were not properly addressed.
One travel expert said that Thomas Cook was “not equipped for the 21stcentury”. A brash statement but not one without substance. Much of the company expense was in the High Street in bricks, mortar and retail staff whilst the rest of the competition was going ‘online’. Whilst it is still true that the package holiday has a significant following in numerous markets, including the UK, the way people research their travel and then book it is something that Thomas Cook could not find a happy balance with. Additionally, the last few years has seen the company impacted by the “withdrawal” of capacity due to terrorist threats in Turkey and North Africa, both regions Thomas Cook had invested heavily in with its products. Indeed, the Bulgarian Black Sea was also an area of focus for the Company in the Short Haul European Market and no doubt many hotels in the country will face a challenge to grab contracts for summer 2020 with other Operators, the majority of which will already have been signed by their rivals.
Talk also abounds of excessive Director salaries and bonuses, rank bad business decisions and a Coup D’état in 2014 when the then CEO, Harriet Green, a travel business outsider, was ousted. She had begun to successfully turn around the ailing business during her two years in situ, taking it from a worth of 148 m GBP to 2 billion GBP. She had though upset someone as apparently an all-male Management Board met in secret and ousted her! It was downhill at breakneck speed from that moment on. This particular story is set to gain more media coverage as the failure unfolds and the finger of blame starts to be pointed.
So the moral of the story once again is you are never too big or too historic to fail. Thomas Cook founded in 1841 and an icon in the world of travel joins Hogg Robinson, founded in 1845 as victims of the modern world where bad decisions and personal interest resign them to the graveyard of travel.
Park the planes
It’s obviously not rosy at the moment at mega buck’s airline Etihad as rather than take delivery of their brand new state of the art, fresh off the line A350 -1000 aircraft and use them to good effect; they are being put straight into storage!
So far three of the new Etihad fleet has been “parked” in Bordeaux close to the Airbus factory and a further two will join them soon. The fact that Etihad also cancelled an order for 42 of the aforementioned aircraft in March might point to a bigger issue at the Gulf-based carrier.
It’s also worth reminding that Etihad also had a 24% investment in now bankrupt Indian Airline Jet Airways as well as 29% in Air Berlin which also went bankrupt in 2017. Some decisions that might be returning to haunt Etihad!
Green clean in New York
New York lawmakers are planning legislation that will ban hotels from using toiletries from single-use plastic containers. The move would cover all hotels as well as long-stay facilities.
Hotels, in turn, would be allowed to use wall-mounted dispenser, multi-use bottles or recyclable non-plastic single-use containers.
It’s hard to see what separates a multi-use and single-use container and how that process would be put into action!
It’s not a new idea but it seems to be one that’s gaining traction these days: “upcycling” a redundant aircrafts spare parts! That’s the approach Lufthansa have taken by producing a collection of furniture, accessories and sculptures from an old A340 plane.
Examples include clocks made from window fronts, rucksacks made from old safety cards, blankets and headrest covers as well as coffee tables made from the aircraft’s side panels.
Some may recall old Concorde parts being sold off but this latest idea is more about fashion and re-cycling parts into desirable and indeed collectable, useable items.
Quick sand for French couple
A French couple discovered the strength of the Italian law in August when they took a fancy to the white sands of Sardinia. The couple thought that 40kgs of it, divided into 14 plastic bottles and placed in the back of their car, would look nice in their home back in France. Except they didn’t realise that taking the sand was in fact illegal and when confronted, they were promptly arrested.
In theory, the couple may serve up to six years in jail for their crime which was made punishable back in 2017 as so much of the island’s sand was “disappearing” in tourist’s suitcases.
The long taxi ride
Istanbul’s new airport is already on stream and the activity there is being ramped up but thus far, the facility has gained mixed reviews.
Regular travellers through Istanbul have commented on the somewhat lengthy taxiing on the new runways and to prove a point, it’s noticeable that the flight time between Sofia and Istanbul is now timed longer to factor in the amount of time the plane spends crawling along the runways to/from the terminal. The airport is certainly a work in progress and the same travellers also note the somewhat haphazard service issues.
Additionally, the new airport has been built adjacent to one of the world’s largest areas for migratory birds; around 1 million storks pass through this area on their way to sunnier climates in autumn and the risk of a bird strike on a plane (not the French type of strike we hasten to add) should not be underestimated.
Anyone that has ever travelled with children will warn of the almost inevitable spilling of a drink no matter how much you tell the kids to be careful. The same apparently applies to airline pilots. A Condor flight en route from Frankfurt to Cancun had to make an unscheduled stop in Ireland after the pilot spilt coffee over the cockpit controls.
The pilot placed the coffee cup on the planes tray table where items are vulnerable to “being knocked over”, despite the airline recommending the table not be used for such drinks. Which is exactly what happened.
The cost of the spillage cost the airline around 90,000 Euro: an expensive cup of coffee no doubt.
A LOT of bull
The operations director for LOT Polish Airlines was accused of “cyber bullying” after travelling between the UK and Poland with BA recently. She posted somewhat derogatory remarks about the BA cabin crew’s appearance whom she said had “unpolished shoes, holes in tights, too tight uniform, double chins, rotten and uneven teeth and messy hairstyles”.
The remarks rebounded big time as she was promptly fired for them.
Liquid limits to go soon
The days of not being able to take liquids through airport security may be numbered with the UK leading the way. The UK government has set a requirement of December 1st2022 for all UK airports to have 3D cabin baggage scanners in place.
Once in place, the 100ml liquid bottle limit will no longer apply and passengers will be able to take items such as bottles of water through security.
The current status quo with liquids has been in place since November 2006 following the foiling of a terrorist plot to detonate liquid explosives on several flights between the UK and North America.
The sight of electric scooters is commonplace in many European cities and Sofia recently has been added to that list. The appearance of the electric scooters though has not gone down well in all quarters. The head of Sofia’s traffic police even went as far as saying that such modes of transport were illegal although one might find that claim to be something of a stretch.
What is certain though is that electric scooters are a contentious commodity in many cities as the speeds they can be driven at are akin to a small motorbike. To make safety considerations worse, whilst a motorbike rider has to wear adequate and clearly defined safety clothing, you can ride an electric scooter without any such regulation.
It is claimed that accidents have already occurred in Sofia with such scooters and there have also been deaths in other European cities. Even in Sofia, no-one was quite sure whether driving them on the pavement was legal or illegal!
For sure the days of unregulated electric scooters will not last forever and whilst they may be a convenient and fun way to get from A to B, the safety of both the users and pedestrians is far more important.
Carry on regardless
The will they or won’t they saga of Brexit may be boring the pants off most people but it still gives news content to the media. The scaremongers and doom and gloom merchants spreading fear about European travel after the UK leaves the European Union will have suffered a blow after it was announced that flights between the UK and the EU will carry on the same at least until October 2020.
The news comes after the European Commission extended the deadline for a deal to be made concerning air travel.
The original deadline was March 2020 but the extension until October is designed to give travellers the confidence to book travel for the next twelve months.
Cut jobs: save money. A standard corporate position, though when it comes to Ryanair, the insinuation from investors is that the move to cut between 500 – 700 jobs is to fund Chief Executive Michael O’Leary’s remuneration which could see him pocket 99m Euro’s over the next five years.
O’Leary is due to stay at the helm of Ryanair until 2024 but his remuneration package is starting to rile a large percentage of the shareholders.
The controversial airline boss garnered 50.5% of the investors support at its AGM in Dublin leaving a sizeable and influential 49.5% significantly angered. This might rumble on!
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