January 2023 Newsletter
Friday Moved to Thursday
Whilst having a conversation with a Zurich based friend recently, the point was made that a new norm now prevailed in the world of travel and whilst it is true that over the past couple of years many new norms have appeared, this “new norm” came without intention or design and itself derived from another new norm that now prevails in the work place. It is a norm that doesn’t so much inconvenience the passenger rather it is something that impacts airlines and airports. Rather than have you guess what it is we are talking about it is perhaps better to explain in lay speak.
The workplace would appear to have changed for good; home working is the new rule for many people whilst for others, a hybrid working structure is the new norm where the working week is divided between a visit to the office and a visit to the spare bedroom or wherever the home office is located. It might be argued, rightly or wrongly that the workforce now falls into three sectors ie, permanent home workers, hybrid workers or traditional office-based workers. For the airlines and airports, the busy periods traditionally were Monday mornings and Friday evenings. Airline schedules were designed with this Friday/Monday pattern in mind with plane types chosen for busy routes to match the demand e.g. London to Zurich or Milan to Frankfurt. Airlines tweaked their own yield management systems to reflect this, in other words they weren’t shy in hiking fares for these busy Monday morning and Friday evening flights as a person desperate to get home will pay whatever he or she is asked. Airports would also staff up accordingly to meet these surges in demand. The problem now is that no-one I have spoken to knows anyone who works either full or part time from home, that ventures into their office HQ on a Monday let alone on a Friday! Therefore, not only are they themselves not travelling to and from work on a Monday or Friday but their potential visitors (clients) will not be travelling also. The net effect is that it may be true to say that Monday’s and Fridays are now two of the best days (quietest) of the week to travel! Translated, this means that a Tuesday morning may now be the old Monday morning and quite categorically a Thursday night is the old busy chaotic Friday night. The ironic point here is that for some reason, historically both an airline and airport view was that Thursday was the quietest day of the week to travel and their schedules/operations reflected this in that invariably they would operate smaller planes on routes or operate less flights than usual on a Thursday.
It will take some time before big data appears that will either refute the theory that Tuesday is the old Monday and Thursday is the old Friday, but my well-travelled friend’s observations of several key European airport hubs would indicate this theory has merit. It’s certainly a case of cause and effect and perhaps one that had not ever been considered when the new flu virus kicked in a few years ago and people took the opportunity to design a better life for themselves. Just what this means to the world of travel is another question! It may mean less business travel as the working “office days” are less but it may equally mean more leisure travel as people have a more balanced lifestyle that allows more time for travel. Equally if you are working from home does it matter where that home is and might it be on a beach somewhere?
The changing work environment will throw down yet another challenge to airlines and airports and no doubt eventually they will come to terms with this particular new norm. That is, assuming they can actually get staff to work when they are required.
Jamadvice Travel | BCD Bulgaria
EU’s new Visa pushed back
The implementation of the EU’s new entry/exit system (EES) has been pushed back from May this year until sometime towards the end of it! Translated, it means the reality of designing and implementing the system is different from the theory behind what it would take to become operational. Clearly an EU trait.
For those unclear of what we are talking about, the EU, primarily in the interests of security and the wellbeing and safety of its citizens (sic) are introducing a visa (ETIAS) that all citizens from third countries, i.e. non-European Union, will have to obtain before they can enter a European Union country. The EES is the process that will end the stamping of passports as all entry and exit points will become automated as travellers scan their passports at self-service kiosks. The EES is tied in with the EITAS.
It is also worth noting that it is estimated that some 1.4 billion nationals from over 60 visa – free countries will need to apply for ETIAS before they can enter the EU. At 7 Euro a visa that’s a lot of unearned income for the EU coffers!
Lufthansa on the hunt
Lufthansa has submitted an offer to acquire a minority stake in new Italian Carrier ITA, a phoenix that emerged as Alitalia was buried. The airline views Italy as a key strategic market and particularly a potentially lucrative source market and the offer made sets out their desire to take an initial minority stake with an option to purchase the remaining shares at a later date.
To echo a Star Trek theme, Lufthansa plans to boldly go where no man (airline) has gone (dared go) before. One assumes there are zips on their pockets.
Dubai based airline Emirates is synonymous for its fleet of the A380 Superjumbo and they have just bought another one. The difference this time is that their new acquisition is not a new machine, in fact it was already leased by them on a 12-year lease that expired in December 2022. At the end of the lease, they agreed to buy the plane for an eye wateringly low price of 30.5 million USD. The reason they bought the plane at such a low price from the lessor; there is virtually no second had market for such planes and the plane will in fact be used for spare parts to supply the rest of the A380 fleet as and when spare parts are required.
Why buy a new windscreen wiper or seat pan to replace a broken one when there is a perfectly good one on the plane parked over in the corner?
Who dares wins
Wi-fi probably sits in the same bracket as water and electricity in that much of the civilised world takes it for granted. Life as we have grown to know it today would hit a brick wall if wi-fi didn’t exist, we expect to be connected 24/7 wherever we are and that increasingly means when we are travelling. Airlines have been (as usual) very good at maxing revenue stream opportunities with the offer of wi-fi whilst in the air but at a price and that price was not always affordable for most who are not running expense accounts. That is changing.
Delta in the USA may or may not be the first major airline to announce that by the end of 2024 they will have free wi-fi on all flights. The point being that this will soon become the norm for air passengers regardless of where you are in the world, what class you sit in and who you fly with. For those airlines, like Delta, in the initial sprint to roll out this free service, it will become a unique selling point and one that can differentiate it from rivals. That means increased market share and the potential to increase revenue that’s sent to the bottom line.
Who dares wins?
On more than one occasion we have made note of the increasing lack of price differentials between tourism services at home here in Bulgaria and rivals in more established parts of Europe. Bulgaria has long been considered a cheap destination, whilst at the same time offering good value for money. The question on people’s minds is whether that is still the case.
Dinner chat recently had an amusing theme that several people were commenting on and that was the question of why it was cheaper at New Year to go to Dubai for 5 days than to Velingrad! Of course, not every hotel in Velingrad was charging stupid prices over New Year but it was plain to see that the rates being touted were eye watering and indeed holidays with flights and hotels in Dubai were being offered at similar prices! It was even mentioned that a week in Bali wasn’t massively more expensive than doing the New Year with all the buttons attached in Velingrad! Of course, many people perhaps don’t like flying or are ill at ease outside their home environment and let’s face it, it’s harder to take your flash car to Dubai or Bali isn’t it.
Prior to the last year end the fact had not gone unnoticed that the “forthcoming” ski season saw the cost of ski passes in the main Bulgarian resorts to be at similar rates to Europe’s main ski resorts. Ignoring special offers designed to temp people to don ski boots when there is no snow, the actual daily ski pass cost now in Bansko and Borovets is listed as 90 Leva and 85 Leva respectively. These two resorts have developed admirably in recent years and are more than adequate for many skiers. Taking two random resorts in Austria and Italy by comparison, Kitzbuhel in Austria is 105 Leva and Val Gardena in Italy is 115 Leva. The question though is this comparison comparing apples with apples.
Bansko and Borovets offers circa 70km of ski piste area; Kitzbuhel offers 233 km and Val Gardena over 1000 kms! So, when it’s looked at more closely with regards to what one is getting for their money, the Austrian and Italian prices indicate better value Euro for Euro. That is also without going into comparisons of actual ski infrastructure. Of course, the local resorts will retort by saying that the extra costs associated with skiing such as accommodation, ski hire and food and drink are cheaper here than elsewhere in Europe. The answer to that is; probably, debateable and probably not.
Accommodation in European ski resorts, if you stay in main resort centres can indeed be higher, but many skiers in Europe and including those who travel from Bulgaria travel by car, thus the accommodation does not have to be walking distance from the ski lifts. Staying a 5-minute drive away from the lifts is significantly cheaper and this is what the vast majority of ski tourists do. Ski equipment in Bulgaria is probably best described as catering for the beginner and there is nothing wrong with that as this is its core market, whether hiring top of the range new ski gear (if it can be found at all) is cheaper here than elsewhere in Europe is an open question and the key component here is “new”, as good skiers don’t want to hire old equipment. European resorts usually have all the latest gear for hire. Finally, as for food and drink comparison this is a subject kept well clear of. Food and drink in the ski areas of Austria and Italy are about the same price as here and possibly cheaper, but the comparison in quality is the same as comparing a Lada with a Mercedes. You can guess which is which.
If and when Bulgaria joins the Eurozone, the price of apples is easily compared and shoppers are not afraid of shopping elsewhere.
Up and down
The visible growth of Wizz Air across Europe is echoed in its recently released figures for 2022 where it carried 45.6 million passengers. This compares with the number of 39.8 million it carried in 2019. Its actual seat capacity (seats available) reached 52.7 million in 2022 with a load factor (bums on seats) of 86.7%. Interestingly enough the load factor in 2019 was 93.6% with 42.5 million seats available.
The airline currently has a fleet of 177 aircraft with more additions planned. However, it’s not all positive for Wizz as they have recently been criticised by authorities for excessive volumes of complaints and delays in paying refunds, something that people who work with Wizz on a regular basis will testify to.
Covid was the scourge of not just the travel industry but the world as a whole during 2020 and 2021 and it would not be unreasonable to say that here in Bulgaria as well as across Europe, people are totally fed up with any mention of the virus that in real terms was just another flu virus – albeit a nasty one. So why do some media outlets give weekly and even daily figures for the thing> For example “last week 14 people died from Covid etc etc”. Firstly, how does that compare with the numbers who died from cancer, cardiac issues or Dementia and indeed how many people usually die in a week from the flu anyway at this time of year when its usually recorded generically as pneumonia? Probably more than 14. Even the people bothering to get another vaccination in numerical terms is laughable, for example 639 during one week! That’s out of a population approaching 7m.
The travel industry and the world generally has had enough of the covid game and the economies of the world cannot support another session. Some even credit the idiot from Russia with diverting the world’s attention away from covid, so that last thing people of sane mind and thought want is media outlets filling content with spurious nonsense. Enough of the population have already been mentally affected by the covid episode and still wear masks whilst alone in their cars or out walking in parks, let’s not provide encourage more futile stupidity.
Spain breaks rank
The intention of the European Union is that all member countries are on the same page and read the same script. As we have seen through the years though, nationalism and arrogance sometimes get in the way of this concept and at the end of the day, countries will do whatever they wish regardless of what the EU says or threatens. Threats made to countries to avert individualism are rarely followed through and this only encourages further individualism. The latest example comes from Spain where the Government there has just enforced a new set of requirements that impacts travel and tourism there.
“Real Decreto” 933/2021 requires accommodation and car rental providers in Spain to collect and submit to the authorities, comprehensive details of customer information including sensitive payment data. Whilst collecting data like this is not new in Europe, the EU data collection laws allow for around 8 lines of personal data to be collected by authorities, the new Spanish law asks for 30 lines of information including total itineraries of those travelling. The issue doesn’t end there though, the Spanish intend to keep this information indefinitely, a further breach of EU guidelines.
For the majority of innocent people who travel regularly this means very little, the onus though will be on the hospitality industry to gather this information from their clients and the question begs whether people will volunteer this information. Also, how will this be collected if someone books an AirBnb or books directly via an airline website? Will the airline be responsible for this data collection and what happens if they are unable to gather it all?
It’s one thing coming up with the idea of a questionable unworkable project, but such items from a operational perspective are well beyond the processing capabilities of the average civil servant.
Never take anything at face value as there is almost always a narrative behind it This is very much the case in many travel headlines, though at times its difficult guessing what the actual narrative is meant to be. A couple of good examples comes from airports where London Heathrow has announced that its passenger figures for 2022 are down to 76.6% of what they were pre covid (2019). These are Year v Year figures, but why Year v Year? For the world of travel nothing really started until April 2022, so comparing a three-quarter year of real activity in 2022 with a full year of normal activity in 2019 is like comparing apples with bananas. If we compare the period April – December for both years, then the actual number is 82%. This indeed is a reduction of 18% but not 24% as suggested. The number may well still be a reduction but one of the chief reasons it is down is because of the poor management of the Heathrow airport itself, the management making the decision to fire too many people at the start of the pandemic and thus couldn’t satisfy the demand from airlines and their passengers when the world re-started. Airlines were instructed to reduce flight frequencies which means less passengers were able to travel which also means the airport earned less revenue. The demand was there but as a part of the supply chain the airport failed dismally. So, one could reasonably argue the numbers for the same period would have been pretty similar if like for like circumstances prevailed. Or put another way, it was they who largely were responsible for warping the figures!
Sofia Airport is claiming that its passenger numbers are down 17% on 20119 but again, here they are citing Year v Year. What they also omit to say is that the actual number of flights decreased by 12.5% so again, logic would say that if more flights were available then more people would travel. Certainly, from a local perspective, the demand for travel after March 2022 was huge and from our perspective, as busy and even busier than the same period in 2019. The narrative here though may be the fact that the concession to operate Sofia Airport could not have been done at a worse time and the actual winners may be those who lost the tender! The pressure to re-negotiate details of this concession are no doubt prevailing for the new operator who, thank goodness, appear to know something about running an airport, something past operators seemed shy of.
The other world
We often hear about the annual meeting of the great and good in the Swiss ski resort of Davos each year but the goings on there often remain as opaque as the people who attend and shape our world. One of the more visible people in attendance is the CEO of London’s Heathrow Airport, visible perhaps because the airport became synonymous with ineptness immediately post pandemic. The societal point he made which is apparently based on Government research is that the great and good of our world who travel in First and Business Class when flying, don’t care about their Carbon Footprint! Backing this up with figures he cited 51% as citing they “don’t care” about their carbon footprint with just 18% actually caring. Is this a surprise? Not really as despite media attempts to up the ante on such matters, many more affluent people in private don’t give a damn about their carbon debris and not if it hits their pocket; the problem is someone else’s.
The funny aside of this is that if the same research was done on the people who “don’t matter’’ i.e. normal economy class passengers, the figures may show a more sympathetic approach to the question. However, its unlikely many participants at Davos will have flown economy class.
Brussels surprised by reality
The European Union’s tourism sector “seems” to have rebounded strongly after the Covid pandemic that’s according to the Eu itself. The word that’s most striking is “seems” as to anyone who works for a living in the private sector and who values their ability to have the freedom to travel, this is a somewhat obvious deduction even if it is a surprise to those divorced from reality in Brussels.
The actual figures show that in 2022 some 2.72 billion nights were spent in Tourism accommodation in Europe compared with 2.88 billion in 2019. The key element now though is that as 2022 progressed, the growth in tourism numbers gathered considerable momentum as bureaucratic shackles were removed. In the last six months of 2022 the figures were almost identical to 2019 which merely emphasises the pent-up demand for travel. Other figures also support this opinion and tie in with our other article re the “’Numbers Game”’.
Amazingly in Denmark (+12.3%), the Netherlands (+3.9%) and Belgium (+0.5%) the actual volume of tourism in 2022 exceeded 2019. Others such as Latvia and Slovakia were well below 2019 levels with reductions of 29.6% and 28.3% respectively.
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;