October 2022 Newsletter
Burning the facts
In the less democratic parts of the world, to go against the narrative is hardly likely to boost your career prospects and it may well be said that it may also be life threatening. We live in a democratic world (supposedly) where each of us has a freedom of speech and the ability to asses the facts as we see them; as long as we do actually see them that is. To help us along, people make a living out of helping us shape our thinking to ensure we follow the clearly defined path set out in the narrative. The world is getting hotter – that’s a likely fact, we need to help our planet thrive – another fact, we need to restrict certain things that we currently do – we can agree with that. So, we are all on the same page more or less, but then comes the problem; as humans it is felt we need to be directed to make the right decisions, a bit like a vote in a dictatorial society where there is only one person standing.
Politicians are experts in obtaining maximum benefit from the theory that if you say something often enough and loudly enough, people will eventually confuse the message with the facts. The Covid experience might tick some of those boxes, but let’s not go down that path as the narrative there was clearly defined. Here we are taking about travel and tourism, climate change and sustainability, areas where there are lots of new media experts battling eagerly to have their voices heard and to hell with truth, facts and logic. As is often the case though, there are two sides to the coin.
A study by The Journal of Transport Geography has taken facts and data and presented these in a way that challenges the narrative. The data used is widely available and not some carefully crafted Market research undertaken to satisfy a hidden agenda. The study looked at all commercial flights from 31 European Countries and found that “Short Haul” flights of under 500kms (310 miles), accounted for 28% of all flights but just 5.9% of all fuel burned. Conversely, they found that 6.2% of departures are for Long Haul flights of over 4000 kms (2585 miles) which burns 47% of the total of aviation fuel burned. So translated that means that 28 flights in every 100 burn less fuel than the 16 Long Haul flights. Whilst this may to some extent be obvious because the long-haul flights travel further and so use more fuel, the message is that banning or restricting short haul flights contributes very little to reducing the impact that aviation has on the climate. Indeed, between 1996 – 2018, the growth in aviation emissions came about due to the provision of air services on both existing and new routes which are longer than 1,000 km( 621 miles). So why is the narrative from all and sundry on trying to stop people flying domestically or on short haul flights?
The answer to this is simple; its politics! Banning or sending out the right “message” by politicians and activist greens is simply the first step in a wider plan. That message is not going to admit that banning short haul flights will do nothing to reduce emissions and nor is the impact of long-haul travel ever brought to the political table in a serious manner. Taxes have to be collected and votes have to be won to maintain employment for the drivers of the narrative. Targeting short haul flights is a soft target that upsets very few.
The journal is not providing answers or aiming to dictate policy, it is merely pointing out the facts with the addendum that in the wider picture of travel and tourism, the only possible solutions to reduce the footprint of flying by any tangible amounts would appear to be through technical innovations improving aviation efficiency; something difficult in the short and medium term and even if it was possible, it will be via small margins. The real message they give though is that ultimately Long-Haul travel has to reduced in order for aviation carbon emissions to be reduced by any seriously measurable margin.
In this newsletter we also write about future predictions for the numbers of new aircraft. One wonders if those making the predications together with those supporting business and peoples jobs have the ear of lobbyists in governments across the world, to the detriment to those with a Environmental agenda.
Jamadvice Travel | BCD Bulgaria
Another membership on the horizon
Bulgaria’s desire to join each and every member club has been focused in recent years on gaining admission to the EU Schengen group of countries. That wish recently took a turn for the better when, after years of battling, representatives of the European Commission this month voted for the country to be admitted with 547 votes in favour and just 49 against with 43 abstentions. The next step under the current Czech Presidency is for the proposal to be put to a EU MP vote in December of this year.
There are currently 26 member countries in the Schengen zone including 22 European Union countries and whilst the garden looks rosy for the country and its European ambitions, its also worth noting that Bulgaria has been trying to gain Schengen membership since 2011; to no avail. Also, the elephant in the corner is the Netherlands, who are vehemently opposing the move for whatever reason. It makes for an interesting last couple of months of the year on the political front.
Just think if the country is accepted, the border with Greece will be a white line in the road!
Bulgaria has maintained its position for 2021 as the EU’s second worst when it comes to deaths on the road. The average deaths on Bulgarian roads was 81 per million inhabitants, placing it second behind Romania who have 92 deaths per million inhabitants. Sweden has Europe’s saftest drivers with 20 deaths per million inhabitants.
Anyone who has driven in Greece will hardly be surprised that Romania holds top spot as the worst drivers in the EU, clearly the cars sold there are designed to travel 50km per hour faster than any other car. From a local perspective, its interesting to observe that around 10% of cars on Sofia’s roads are from outside of the city yet these same cars seem to appear in 90% of all road accidents: or is this purely perception? As everyone knows, getting a driving licence in the province is hardly a challenge for most people with the right contacts.
Facts and Figures support the bounce
Europe’s tourism industry seems to be picking up from where it left in pre pandemic terms with figures for the first half of this year mirroring the first half of 2019. Compared with the first half of 2019, the total number of nights spent in tourist accommodation in 2022 was 1.01 billion compared with the slightly higher figure of 1.18 billion in 2019. This is a 14% decrease but it should also be remembered that the first two months of this year, January and February were the months when travel started to pick up but it was March before real momentum was gained.
The UK has announced it is to reverse plans to re-introduce tax-free shopping which the previous short-lived government had announced would make a comeback after Brexit. The move was stimulated by a cross party group of MP’s and independent consultants who (rightly) predicted that such a move could increase UK visitor spend by between 20 – 30% and would prove a stimulus to the travel and retail industry in the UK.
However, logic was dispensed with and the new Government, obviously driven by a combination of non-private sector thinking and the voices of accountants said that not introducing the plan would save the country 2 billion GB pounds per year. This is indeed likely to be true; 2 billion GBP pounds will not escape the UK financial system but a Junior School Maths test would show that 20% of 1of the 133 billion GBP tourists spend in the UK would equate to a potentially extra 26 billion GBP of income to “UK Inc”! How many jobs does that also equate to?
There “is” a reason why politicians don’t make it in life as business people. The problem is, running a country is like running a business and it requires people of the same mindset.
Virgin in the sky
UK’s Virgin Airlines is to join the Skyteam alliance from January 2023. The move will allow passengers of Virgin to connect onwards to other flights with fellow Skyteam airlines such as Delta, Air France-KLM and Korean Air, as well as allowing passengers from fellow Skyteam member to connect onto Virgin flights.
The Skyteam Alliance currently has 18 members covering most parts of the globe and the move by Virgin will be particularly interesting on the transatlantic flights where it already operates flights to 12 destinations in the USA in partnership with Delta and AF-KLM and who will also shortly start flights to Tampa.
Further proof, if indeed it was necessary, that the world of travel is returning to normality comes with figures that the percentage of hotel booking across Europe made for business travel purposes has reached 43% in the third quarter of 2022, that compares with 44% back in the same period 2019. Equally comparable is the average lead time these bookings were made in advance of the stay which is 17 days which is the same as in 2019.
One other point to note is that the surge in hotel rates seems to have levelled off and may indeed be falling as supply matches’ demand. The average daily rate in London has fallen from 313 USD in June to 276 USD in September (although recent exchange rate fluctuations might hamper comparisons in GBP). By the same comparison, Paris rates have dipped from 231 USD to 211 USD in the same months.
The other new factor in the equation is what will be the future impact on travel now that many employees work on a hybrid model of working; ie. partly from home and partly from the office. 88% of such people who also travel feel that this type of work model will not impact travel whilst 14% both equally predicted that they expect it to lead to more travel with an equal percentage saying it will lead to less travel.
The message is lost
The relentless pressure on society to get (another) flu jab continues unabated and to that end, the authorities in Bulgaria are keeping their end of the bargain. Every year the annual flu wave starts in the Southern Hemisphere and thanks to our ability to travel, literally wings its way west in a matter of weeks, this is the way of the world and how the world has worked for decades, indeed ever since air travel increased the speed by which viruses spread. So, it should come as no surprise that this winter we will see another batch of flu arriving on our doorsteps, indeed from a local perspective that even equates into an official unofficial flu holiday for kids in January, that whilst its not actually scheduled, happens yearly with the same regularity as the snowfalls in January.
These viruses vary (so we are led to believe) in their potency and indeed many have been killers, but without the recognition of such. This years scheduled variant, we are being warned, will be a nasty one (isn’t that the same every year), but the amusing thing is that because the Covid flu variant (a contentious statement in itself) has prevailed for around two years and the fact that people were encouraged (forced) into getting an inoculation against covid, means that peoples immune systems are probably not prepared to fight the standard evolutionary flu variant that’s about to arrive The solution, we are told, is get an inoculation. At what point do the general public start to block such messages because they sound stupid?
Shutting one’s immune system down and the bodies ability to fight normal illness goes against the grain of nature. If you have not heard of the Sentinelese tribe found off the coast of India, read up about them and what is the impact on them created by shutting yourself away from life and nature as we know it.
USA still tops
The USA has held onto its spot as the worlds biggest and most powerful travel market according to analysis from the World Travel and Tourism Council (WTTC). The sector contributed 1.3 trillion USD to the US economy in 2021 although this figure is down some 700 m USD compared with 2019. China and Germany remain in second and third place with contributions of 814 billion USD and 251 billion USD respectively; a massive difference between second and third place.
However, as ever, the devil is in the detail with statistics as these numbers also include domestic spend, a factor which will obviously skew in favour of larger countries. If you look purely at spend generated from international travellers, France is in top position with China falling to eleventh place as Asian countries in general suffered from universal lockdowns throughout 2021.
Generally, business travel alone is expected to grow by 41% this year, albeit from a low 2021 base and this figure will continue to grow at around 5.5% annually for the next ten years. One longer term forecast of the WTTC is that potential, travel and tourism in China could potentially generate 3.9 trillion USD to the Chinese economy in ten years’ time and the sector could also provide 457 billion USD to India which would place these two countries first and third in the overall rankings.
Business planning is often cited as being the key element in defining whether a business is successful or not in the longer term. Even in the short term, getting the business plan wrong can be cataclysmic: think Heathrow and Schiphol Airports where wrong decisions cost not only millions to the bottom line, but also weakened the brand reputation that may have taken an eternity to build up. So when it comes to planning how many aircraft will be needed in the years to come in order to satisfy global demand, getting it wrong is not an option. Thus, the green brigade will not be amused when they read aircraft manufacturer Boeings forecasts.
Boeing predicts that the worlds commercial fleet of aircraft will double over the next twenty years with the numbers of aircraft needed rising to 47, 080 from todays number of 25,900. This would in fact equate to a demand for 41,170 new planes in this period. By 2041, 42% of planes are predicted to be delivered to the Asia-Pacific region with 23% earmarked for North America and 21% for Europe.
The key market is of course China where Boeing predicts that the Chinese total fleet size will increase to 9,600 planes up from 3,900 today. In turn, this will equate to 8,485 new aircraft entering into service in China.
Of course the thinking for most people becomes that this therefore is a huge opportunity for the likes of Airbus and Boeing, which of course it is, but there is on element missing from this equation and that is the new players in the aircraft manufacturing market. Both China and Russia have been fairly active in this respect over recent years and together with their commonality in being the adversaries’ to anything western, it may be that the road is not so smooth for both Airbus and Boeing in certain markets.
A tale of two airports
London Heathrow and Amsterdam Schiphol airports; a tale of two airports with both having suffered from rank bad management decisions and indeed still suffering. For one, it looks like their self-inflicted chaos is coming to some sort of climax, for the other there seems to be no end in sight.
London Heathrow is the better story with news that from the end of October it is removing the cap on passengers which it had to implement due to bad management planning during Covid. The net result being that when the obvious upturn in travel started, it didn’t have the staff in place to manage the situation. The airport was then forced to restrict the activities of its clients i.e. the airlines, who obviously in turn could not meet the requirements on them that the travelling public now demanded. By the year end the airport forecasts that it will have handled some 60-62 million passengers for 2022, a figure some 25% down on 2019. Anyone wishing for a career change should note that businesses across the airport have a total of 25,000 job vacancies available!
Initial speculative journalism in the UK pointed the finger at Brexit for the issues surrounding London Heathrow Airport, a theory quickly debunked when it was realised that most major European Airports were in the same boat! Amsterdam though wins the basket case prize by a considerable margin. Its capacity cuts on the operations of its clients (airlines) has been extended until March 2023. Even Dutch national airline KLM has called the situation unacceptable with its own operations being requested to be trimmed back by 22% for the winter period. The legal question connected with this is whether the airport operators would be financially liable for the losses incurred by airlines using Schiphol? In otherwards the airports are not providing the services their clients contracted them to fulfil.
However, just to prove that its not just the airports that are demented, KLM itself raised more than a few eyebrows at the end of September when it came up with its own idea to restrict demand for its own flights: it added a 250 Euro surcharge onto tickets! The reasoning given was “’in a bid to mitigate congestion at the airport by stifling demand….”. Just think, all those Economic and Business Management theory text books regarding supply and demand and how to stimulate business, particularly after a downturn – thrown out of the window. Of course, it didn’t take long before the negative press and ridiculing of the move saw KLM withdraw the charge but not before the damage had been done to its reputation and no doubt damage to the careers of those who introduced the surcharge in the first place.
The next big destination
Could Saudi Arabia be the next Dubai? Stranger things have happened perhaps (though we cant think of any). The reason for the question/comment is that the country clearly is trying to improve its image via numerous vehicles and one of these is via its leisure infrastructure which has improved no end and it is clearly designed to attract international tourists as well as satisfying the demand from its relatively affluent 35 million population. Anyone who has visited Dubai over the past decade or so will have noticed that a huge number of visitors came from Saudi Arabia. Clearly the Saudi government realised that too but also realised that it too could get in on the act and attract a wider range of international visitors. Indeed, regular visitors to the country already note the huge changes the country has undergone both with its developments but also in its attitudes. To make any progress in presenting oneself as an attractive destination, one vital element is required: air connectivity. To that end, a surprising catalyst has emerged.
Wizz Air is that catalyst and it has announced 20 new routes to Saudi which also includes flights from Sofia. Also in the list are Bucharest, Budapest Milan, Naples and Vienna. The destinations inside Saudi are Riyadh, Jeddah and Dammam. Its also worth pointing out that if one airline plans something new, others quickly emulate. It will be interesting to see how Saudi Arabia develops not only as a destination, but also how it evolves in people’s perceptions.
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