Editorial This is the time of year when we look back at some of the…
A sense of perspective required
There was almost a sense of resignation detected in the Bulgarian Ministry of Tourism’s press release in August that the Black Sea summer season will end up at around 80% of 2019 levels (the last “normal” year). Which then begs the question as to what on earth were they expecting the numbers to be? At the start of 2022 and even at the start of the summer season at the beginning of May, many people with vested financial interests in tourism on the coast would have snapped your hand off at a result of 80%. The absence of the Russian market alone could reasonably explain up to 10% of this shortfall and this, added with the chaos surrounding airports and airlines who have failed to manage a return to business, in reality means that 80% is not a bad performance at all considering. Just where and how the Ministry of Tourism expected to get back to the same figures as 2019 is slightly mystifying but as we know, politicians live in their own world.
At the same time, figures for passenger numbers using Sofia Airport were also announced to be 10% down on 2019 levels. Without taking a deep analytic study of the flights arriving and departing from the capital’s airport, any regular traveller knows that there has been a serious trimming in daily flights by airlines such as BA and the Lufthansa Group (Lufthansa, Austrian and Swiss) as well as several others means that immediately the number of seats available is significantly reduced when compared with 2019 even if all the flights operating are full: which often they are. The airport added that they have a negative outlook for the whole of 2022 with a 23% reduction predicted. Which, seeing that for the months of January and February, the world of travel had barely re-started and this accounts for 16% of the year then yes 23% would be a pretty obvious figure. A figure that can be blasted out of the water if only airports and airlines got to grips with their own operational performance. People want to travel but seem to have un-natural barriers placed before them, which after the Covid farce becomes slightly annoying to the public at large.
Whilst on the subject of both the summer tourism figures and the numbers using Sofia Airports, is there “devil in the detail” of what is being presented? It’s a fact that the largest number of visitors to the Black Sea are of course from Bulgaria. At the same time, for Sofia Airport, the loss of daily flights from traditional airlines has been partly compensated by an apparent increase in flights to leisure destinations, many for the first time and these are aimed purely at the Bulgarian market. Flights to the likes of Mykonos, Crete, Corfu, Majorca, Rhodes, Majorca, Zadar and others are now a part and parcel of the tourist offerings and this is excluding the well-established exodus of flights to the Turkish Coastline that actually give the feeling that there are nowadays more flights than ever before during the summer months. This then leads along another path and a path that seems to becoming more and more familiar; the understanding that it can be as cheap to take a holiday outside Bulgaria and that this holiday will certainly offer better standards.
In spring many people commented that for the price that 4-star hotels were charging on the Black Sea for a two-week holiday, it was in fact cheaper by as much as 50% to take a package holiday to Turkey which included flights and accommodation; the comments was far from being in isolation. Come the peak months of July and August and the regular traffic heading south to Greece noted that it was in fact cheaper to holiday there than at home in Bulgaria. Whilst its always difficult to compare apples with oranges, some simple comparisons do exist such as the cost of accommodation and food. For food particular the verdict is absolutely unanimous that not only is it cheaper to eat in Greece but the quality comparison doesn’t even get out of the starting blocks; no matter what the protectors of the Black Sea interests will try have you believe. Why pay for a Lada when you can get a Mercedes for the same price!
This latter point noting the perceived value for money one is getting for his/her tourist spend is something that should be borne in mind in the longer term. Fact: more local people now travel overseas for their holidays than ever before and they can form their own opinions on what they want, when they want it and whether this is value for money or not. When, as is being suggested, the Euro becomes the currency of the country, comparisons are even easier. If you go with X Euro in your pocket to buy a new Lada and the new Mercedes is the same price; which will you buy?
Jamadvice Travel | BCD Bulgaria
A Pension Dilemma
An interesting dilemma is facing aircraft manufacturer Boeing and hundreds of its most senior engineers. A change in interest rates in the USA will come into effect from next year which will mean that those engineers who are approaching retirement age will lose around one quarter of any lump sum pension they take: the sums of each engineer’s pension is around 1M USD! That means a potential loss of around 250,000 USD per person unless, here’s the catch, they retire now and take the lump sum now!
Boeing of course does not want to nor can it afford to lose so many of its senior engineers at once, particularly as many are involved in R&D. Cost cutting measures over the years has meant that, employing young apprentice engineers was over looked and add this to the fact that Boeing laid off some 2,900 engineers during the pandemic means that the net result will be a serious shortfall in skilled workers just at the time you need them. Further evidence of the impact of CFO based decisions.
The actual engineers approaching retirement are not desperate to retire, but they may be forced to for pure financial reasons. So, will the manufacturer thus go cap in hand to the 2,900 it laid off with a massive signing back on offer?
What this also shows is the disparity in pensions between employees in some countries, what would a Bulgarian engineer make of his (state) pension and the Boeing pensions!
The Not So Low Cost
The end of the “cheaper than cheap” air fare may already be here according to Ryanair boss Michael O’Leary. He made the comments at the same time as acknowledging that the rise in living costs worldwide drove potential passengers onto Low-Cost Airlines like his own Ryanair. His comments were that “at the lower end of the market place, our really cheap promotional fares, the one Euro fares and even the 9.99 Euro fares – I think you will not see those fares for a number of years”.
Ryanair has been a shining beacon of light in the aviation recently and is arguably Europe’s best performing airline in terms of numbers of flights it has been forced to cancel (due to in adequate operational capabilities of airports) with just 0,3% cancellations in the first six months of this year compared with say Easyjet who cancelled 2.8% and BA who binned 3.5%. The airline has also just reported record passenger numbers with 16.8 million passengers carried in July, beating its previous record of 14.9 million set in August 2019. The key factor behind this success is the fact that unlike other airlines such as BA and Lufthansa’s CFO driven cost reducing exercises, Ryanair did not cull its workforce and realised that it would need them to be in a position to ramp up services as soon as the opportunity arose. You don’t have to be a rocket scientist to grasp that fact, but its surprising how many got it wrong.
The New EU “Visa” Delayed
The launch of the new European visa that’s not called a visa in public, but rather the ETIAS (European Travel Information and Authorisation System) which was due to start in May 2023, has been pushed back to November 2023. Anyone aged between 18 and 70 from outside the EU who currently has visa waiver status, including travellers from the UK and the USA will have to apply for an ETIAS to visit any of the EU countries in the Schengen zone.
The cost of the new, er, visa, will be 7 Euro and the EU in its true hilarious self are promising a reply within 4 weeks! Only the paper pushers at the EU wont see the funny side of this. The system itself is modelled on the USA ESTA system which, when launched was deliberately avoided being referred to as a Visa. Its also worth noting that the USA variant has just increased in price from 14 USD to 21 USD; expect the European one to follow suit.
How Much for the Egg Muffin
How much does a McDonald’s Egg Muffin Cost? The answer is 1,862 USD if you try bring one into Australia from Bali, as one passenger discovered. In fact, the passenger tried to carry into Darwin Airport two McMuffins and a ham croissant. The food was detected by a biosecurity detector dog.
Funnily enough the same products could have been bought in one of the McDonalds stores in Darwin much cheaper than the resultant fine that was paid for the attempted customs violation!
Bulgaria – An MD 80 Plane Spotter’s Dream
This is one for the aviation anoraks but interesting nonetheless. The USA based McDonnell Douglas aircraft manufacturer was one of the major players in the global aviation industry for many decades and its flag ship MD -80 series were the back bone of many a airlines fleet. Affectionately known as the ’Mad Dog’, the 20 year production run of the MD 80 series saw some 1200 of the five abreast jets plane produced. Sight of these across Europe is becoming increasingly rare, expect that is in guess where – Bulgaria, where 11 out of the remaining 13 operational planes reside. Indeed the 11 in question are all the MD82 variant.
The first MD 82 flew in January 1981 and there was a total of 539 of this particular variant produced. Of the 11 that are found here in Bulgaria, the vast majority, 9 to be precise, belong to European Air Charter, who were previously known as Bulgarian Air Charter prior to their re-brand last year. 2 of these are currently out of service with one in storage and one being undergoing maintenance work. The average age of these planes is 30.5 years. Just for the record, these MD’s operate alongside a fleet of 9 more modern A320 – 200 aircraft who are a mere 27.8 years old.
The operator of the other 2 MD 82 is ALK Airlines and their planes are an average of 32.4 years old. ALK’s two strong Boeing 737 fleet are 30.1 years old.
Plane Less Airlines
Borrowing planes and flight crews has suddenly become a fashion as several major airlines discover they haven’t the capability to operate their own flights. The latest move in this field sees Lufthansa owned airline Swiss, leasing six A220-300 Short Haul aircraft from Latvian Company airBaltic. The process is usually referred to as a “Wet Lease”.
airBaltic will operate flights throughout the European route network of Swiss with its six planes, each with a capacity of 145 seats. Interestingly enough, Swiss also wet leases six aircraft from Helvetic Airways who operate some 604 weekly flights on behalf of Swiss, a figure that equates to 25% of all Swiss flights.
The question begs if whether or not airlines are moving to a “Uber” car ride model! Uber don’t own cars but they do present themselves as taxi type car ride service. Is the plane less airline coming ever closer? Though in theory we may already be there as most planes are leased or rented by airlines from third party leasing companies as opposed to airlines physically buying their own planes. Renting crews though is a step further but not so long ago so was renting cleaners for office housekeeping.
The Cost of a Roof Over our Heads
The media focus on boom or gloom when it comes to travel, tends to focus more on aviation that it does others sectors. It would be more than reasonable to assume that a large percentage of people taking a flight also stay in a hotel at their destination. However, whilst we seem inundated with news about the aviation part of this equation, news about how the hotel sector is performing often goes unnoticed. So how are the hotels fairing these days?
One thing that has fast become apparent is that the room rates for hotels has sky rocketed in just about every city. Leisure focussed hotels situated on the beach are a different story and we are only half way through the summer but the feeling there also is that this sector has also seen a significant hike in room rates. To support the notion that city hotel rates have gone through unprecedented increases, hotel giant Marriott recently announced a “notably strong” recovery particularly in Europe. The use of the word “notably”, whilst being a mere adverb masks the real meaning of its true meaning which is actually more akin to “remarkable”. The revenue it received per available room for the second quarter of the year out stripped the boom year of 2019 with a roughly 7% increase. Itself a significant and impressive figure in the hotel trade. Possibly more eye catching is the average daily rate across Europe in its properties which reached 200.79 USD per night. Finally, perhaps buoyed by the explosion, the Marriott Group also revealed that it had 2950 hotels in its pipeline and 203,000 hotel rooms already under construction.
Meanwhile French based hotel group Accor also said that its first half year activity was more or less at 2019 occupancy levels with the actual revenue increased. It too was opening 85 hotels in the first six months of this year, one of which is in Plovdiv.
What will the Green Brigade and the Environmentalist’s think! Ones assumes the hotel chains don’t take seriously their attempt to stop people travelling.
Business dealings with certain parts of the world are often shrouded in risk despite the potential for huge gains. For airlines, operating to some countries has often not been worth the effort or risk associated with it think Afghanistan, Zimbabwe and even Venezuela, where in the latter the government effectively banned the repatriation of money the airlines generated in the country, effectively stopping airlines flying to it. The same fate has now befallen mega Gulf airline Emirates in Nigeria with the Nigerian state blocking 85 m USD in profits being returned to the airlines home country. Emirates is not alone in facing this issue as it is estimated that in total, Nigeria has blocked some 450 m USD in payments to airlines globally.
In response, the airline said it would cut back services to Nigeria with the Nigerian state then having the audacity of saying that the move in blocking the funds repatriation is so that it can better sustain its own economy. Usually this is referred to as theft.
Fellow African country Zimbabwe has also already blocked 100m USD in money being returned to airlines.
A notable local hotel opening has recently occurred in Plovdiv with the Accor Group opening its first M Gallery branded hotel in the country. The hotel is located within a former department store with the interior resembling the shape of an ancient Forum; homage to the ancient Roman Forum in Plovdiv which is situated 700 metres away.
The hotel has 61 “smart rooms” as well as a fitness and wellness area, a Champagne and Cocktail bar, three conference rooms and the Torro Premio restaurant is due to open shortly.
The Accor Group has some 100 M Gallery properties in 30 countries across the world.
Preparing to Fail
The blame game can make amusing reading at times and London’s Heathrow Airport has certainly cornered a chunk of the travel world’s attention these past months as it attempts to divert its own ineptness onto anything and anyone; especially passengers. As a quick catch up: Heathrow – not so long ago the world’s busiest airport and key connector of the UK to Europe (sic) and the outside world – was taken aback that the public at large would actually want to travel again when provided with the opportunity, a stance obviously attained by listening to the wrong advice from the wrong sources. They were forced to cancel flights, much to airlines own annoyance and then set a daily cap on the number of passengers it could handle, a cap which has now been extended until October. The initial excuse (as opposed to reason) provided by Heathrow was not that they were inept generally but rather but because of a lack of general ground handling capability. OK so far. Then, Ryanair, an airline not backward at sniping at Heathrow, waded in to say that Heathrow and other airports were guilty of not thinking ahead and not recruiting enough baggage handlers and staff generally. The Heathrow response was then that actually airports don’t actually provide baggage handlers, that is the responsibility of the airlines (actually it’s the ground Handling Services the airlines contract). Confused yet? You should be.
However not to dwell too much on what was said in the past, a new excuse from Heathrow seeks to divert a clash of heads amongst its B2B clients, so why not blame the passengers! Heathrow’s latest target to shift responsibility to is the actual passengers, whom it says, “have forgotten what liquids they can and cannot take onto a plane and now their over worked and hard pressed security teams are taking longer to sift through the bags that are flagged at the scanners.” Would it therefore not be better then for them to ban passengers altogether!
The conversation about the threat a 10ml tube of toothpaste poses is a different one and one that actually died a death a decade ago, but the narrative behind the threat allows or creates significant employment, so let’s not mention that. What could be mentioned though is that during the pandemic, the opportunity was there for any business orientated leader to install the so called CT scanners that allow people to carry liquids on board a plane. Such are already in place at many airports such as Amsterdam, Zurich and even London City. These scanners can assess potential harmful liquids and flag these up as a potential issue as opposed to allowing old technology to try guess what something might be. The down turn in business would have been a perfect time to get the new security technology working and in place thus positioning Heathrow at the forefront of the resurgence of air travel and being capable of matching demand with supply and thus returning the airport to (greater) profits faster than they otherwise would. Nope. The accountants must have held sway and cut, cull and chop were their response.
Failing to prepare was not what Heathrow is guilty of; it is guilty of preparing to fail. The airport and its management have attracted zero sympathy from anyone within the travel industry and indeed comparisons are being made with Manchester United (for footballing aficionado’s): both are being run by people who have no idea what they are doing. Sic.
Amsterdam Pays the Price
Amsterdam’s Schiphol Airport is only a half-step behind Heathrow with its inability to get its operations going in an efficient manner after the Covid mess. Like Heathrow, it too capped passenger numbers and even banned arrival passengers one weekend in July as it couldn’t cope with any arrivals! Too bad if you were stuck in Spain, Greece or anywhere for that matter and had to be at work on Monday. The cap is 67,500 passengers in September and 69,500 in October. However, unlike their rivals, it seems the airport is not hiding behind the facts nor playing the blame game like Heathrow.
Schiphol has launched a scheme to compensate passengers who have missed a flight as a result of long queues at security control. This wil be valid for those who were due to travel between April 23rd and August 11th. The costs that can be re-claimed are for rebooking a replacement flight, extra travel costs accommodation costs including expenses for non-refundable accommodation bookings.
One wishes all airports and particularly airlines – no names mentioned – would take a much more human approach to their business.
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