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March 2024 Newsletter


Green Opaqueness

The Corporate World is hell bent on ensuring that it is seen to be doing the right things at the right time. By doing so, their mission statements, Press Releases and Shareholder Reports are designed to have a feel-good factor that boosts the reputation and respectability of their enterprise. Oh, yes, it will also hopefully help them to make more money for said shareholders. Just how much of what is being said actually stands up under scrutiny is a totally different question, but organisations get away with it as people generally these days are not encouraged to question the narrative: think Electric Cars and Covid. However, in the Netherlands, the Green Marketing messages put out by national airline KLM were challenged in court by environmental groups with the argument that what KLM was saying was pretty much nonsense! The courts agreed.

The episode revolves around SAF (Sustainable Airline Fuels) which KLM, like several other righteous airlines, infer is the best thing we have seen since sliced bread. Airlines earn good media exposure (aka ‘’free exposure”) with their supposed use of SAF in test flights et al. The route of all this is of course the attempt to reduce carbon emissions and Governments around the world are tasked with reducing these by 5% by 2030. Aviation is part of this deal. At this juncture it should be noted that aviation counts for a whopping (not!) 2% of the worlds carbon emissions whereas, for example, cows account for 14,5%.  However, two points to note here:1) cows are harder to tax and the EU who operates at the beck and call of (French) farmers will not be happy at a Cow tax and 2) news articles about cows and carbon emissions are not interesting and do not earn journalists a pay cheque.

Going back to the Dutch Court ruling on why KLM were talking nonsense, the court said that the use of the word sustainable by the airline was “mis-leading as sustainable is something that may be achieved in the future so its use of the word now was misleading’”. Just out of interest, in a survey of people who handle travel for their own (large) organisations, 71% said they had ‘serious concerns” about the Green and sustainable efforts airlines were claiming to be operating. i.e They don’t believe them.

Going back to SAF, airlines are unbelievably making money out of asking passengers to pay extra for their air fares so that SAF fuels can be used in part, when the fly! Of course the people volunteering to pay extra from their ( or their business’s pockets) will feel good about what they do, but what they are doing would perhaps be best descried as very little other than provide another revenue stream for the airlines. SAF, it is claimed can reduce carbon emissions globally by 80%; that’s 80% of the 2% of the global emissions creates. Meanwhile, SAF currently accounts for about 0.2% of aviation fuel globally. So yes, in theory we can reduce global emissions by 80% so that aviation causes 0.4% of the world’s total emissions, but sell that to airlines who operate in from less affluent countries and who depend on domestic populations to fill planes and who do not have a high disposable income. It all comes down to economics.

There is also another factor to consider in the save the planet v make more money game, virtually every airline in the world is ramping up its fleet in order to carry more passengers in the not so distant future. 19.3 million passengers are forecasted to fly annually by 2042. A figure that’s more than double of the numbers now. The very last thing they want to do is fly empty planes, so cost control is essential. Buying more expensive fuel and asking passengers to pay more will have a short shelf life in economic terms whatever the greens from rich western countries think. The aviation industry, like other industries, is making rapid progress on making its operations more efficient. Planes are now considerably more fuel efficient than even 10 years ago. Even the A380 superjumbo is considered dated technology hence its lack of uptake by most airlines globally. Through improved technology in aircraft manufacture, to air traffic control simplification across Europe, a 5% reduction in carbon emissions globally in aviation is an easy ask and indeed is an ask that is not so much a target as it is a given. High priced SAF is not required nor is the Green Marketing accompanying it.

Mark Thomas

Managing Director

Jamadvice Travel  |  BCD Bulgaria

Told you so

It takes a brave man to go against the flow but looking back at a travel article dated March 2021, a mere three years ago, that’s what United Airlines CEO Scott Kirby did and whose logic and common sense has put the airline in a strong position post Covid farce. He went against the fashionable narrative and applied the same logic as most rational and logical thinking homo sapiens assumed in that that travel will bounce back as people have an inherent desire to travel. Whilst this may not have been a popular concept as article writers scrambled to get their pay cheques through doom and gloom stories, remember, good news articles don’t sell and certainly don’t pay the mortgage.

When it came to the world of business and travel, Kirby hit the nail on the head when he said that “’Business Travel is not transactional; it’s about relationships. Going to an event, socialising and having drinks, that’s where you get to know people whom you can pick up the phone and call them if you need them.  We’re not going to get that from virtual events. It’s a question if human nature and human nature has not changed”’.

The doom monsters out there would, with the benefit of hindsight, have quickly been erased from our conscience and sometimes, you need a high-profile person like the United CEO to tell the King he isn’t actually wearing any clothes whilst the rest simply go with the flow. As for those companies who were slow to get their road warriors back into gear or who banned or continue to restrict travel in favour of virtual calls, it will be interesting to see how they are faring commercially vis a vis their rivals whose staff are travelling the world to conclude deals.

In preparation

As Bulgaria gears up to (partially) join the pan European Schengen System from the end of March, Sofia Airport will be busier than most in gearing up to meet the needs of Schengen Compliance. A part of these requirements has already been implemented with the introduction on March 6th of a new automated boarding pass checking system. Six smart gates allow for east and fast passage of passengers which have a capacity of 10 -1 2 passengers per minute. The gates are linked into software that connects to other airport and airline systems.

At the same time, anyone who has used Sofia Airport Terminal 2 recently will have noted extensive work taking place air side within the terminal. This is no doubt part of the airport operator SOF Connect’s attempt to provide a better passenger experience for users as well as to again, satisfy the separation of passengers travelling to and from Schengen countries and those to and from non-Schengen countries. From the 31st March people travelling  to and from Schengen countries will not be required to pass through passport control when leaving or entering the country.


Lufthansa logo

It’s official – Friday cancelled

The debate about the advantages and dis-advantages of working from home vis a vis the office is one that seems unlikely to be resolved anytime soon. The logical compromise answer is that some sort of hybrid working practice will prevail for the majority of organisations whether they like it or not. One interesting spin off from this is something that we touched one a year or so ago is that Thursday is the new Friday and Tuesday is the new Monday. Or blatantly put, no-one wants to slap it to the office on a Monday or a Friday. This then is impacting transport infrastructure such as airports and railways where the Monday and Friday rush has moved to Tuesday and Thursday. A very good example of how tradition is being forced to change also appears on London’s Underground.

To meet the demands of the new world order, Transport for London is trialling the impact of making Friday totally “off-peak”. Historically, all weekdays are deemed peak between the hours of 06,30 – 09.30 and 16.00 – 19.00. A part of the experiment is to gauge whether people can be tempted back into the office with cheaper fares.  However, it would be surprising of people thought saving a couple of GB pounds would tempt them to travel an hour each way to the office!

What also needs to be considered is that transport providers such as Transport for London will earn less revenue with people working from home and making fares “off peak” would seem to indicate desperation in trying to balance the books rather than anything else.


Safer than ever

2023 was the safest year to fly according to IATA (International Air Transport Association). Data shows that there was no hull losses or fatal accidents involving passenger jet aircraft in the year, with the one fatal accident being a turbo prop plane incident in Nepal which resulted in 72 fatalities in January. This compares with five fatal accidents in 2022. The accident rate on 2023 was 0.80 per million sectors which equates to one accident for every 1.26 million flights

IATA said that this meant that on average, a person would have to travel by air every day for 103,239 years to experience a fatal accident. Europe has had a fatality risk of zero since 2018 with the largest number of accidents related to the landing gear on an aircraft.

Electric Blues

Car rental giant Sixt recently posted its financials which showed record revenues for 2024 of 3.6 billion Euro’s, with profits of 464.3 billion, itself the second best performance behind 2022 profits. What is interesting is looking at some of the reasons why record turnovers didn’t equate to record profits with a substantial part of that answer being Electric Vehicles.

The falling value of Electric Vehicles (EV’s) led to increased depreciation and losses from vehicle sales (people don’t want them).  Added to this, demand from renters for EV’s slowed substantially against demand for petrol and diesel vehicles. The company has responded by bringing forward the phasing out of electric “’risk’” vehicles which are deemed to be those with no buy back or leasing agreements. The comments by Sixt mirror those by Hertz who recently announced they were getting rid of 20,000 EV’s in the USA whilst our BCD Global Consultancy colleagues ran a survey that found only 20% of business travellers who rented cars regularly rent EV’s.

Taking the conversation one step further, road users here in Sofia may have noticed the sudden and massive increase in EV’s on the roads in the past twelve months and in particular second hand EV’s with Tesla prominent. There may be several reasons for this as people follow the theoretical narrative in helping planet earth and driving an electric car, but where have all these cars appeared from? It seems that one line of thought is that financial support for buyers of EV’s across Europe and in particular in Germany has now ceased, or is being significantly reduced. The only criteria to obtain financial benefit was to keep the cars twelve months; which is what owners may be doing and then they sell them! Rudimentary research indicates that the number of EV’s registered in Germany reduced by around 50% between 2022 and 2023 to around 500,000 vehicles from 1 million. This means 500,000 vehicles have to find a new home somewhere and Germany is not the only country in Europe in the same situation with Electric Vehicles. Somewhere hidden away there may well be a plot of land where unwanted EV’s find their maker: or they come to Bulgaria.


Back to the top

According to preliminary figures released from the EU, Bulgaria has returned to the top of the pile as the worst drivers in Europe in 2023. Deaths on Bulgarian roads reached 82 per million inhabitants compared with previous holder of the dubious record, Romania who had 81 per million inhabitants. The actual number of deaths on Bulgarian roads fell compared with 2022 but the population number fell at a faster rate leading the increased fatality percentage.

Across the EU, roads deaths in 2023 fell by 1% compared with the previous year and has fallen by 19% since 2019. The safest roads are found in Sweden with 22 deaths per one million inhabitants, followed by Denmark with 27. Actually, there was no deaths in Liechtenstein in 2023 but of course the population is only 39,000!

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Bags of money

The revenue earned from baggage charges by non-Low-Cost Airlines globally topped 33.3 billion USD in 2023, the first time it has surpassed 30 billion since 2019 when the figure of 32.9 billion USD was attained. This figure now represents 4.1% of all airline revenues. The practice of airlines charging for carrying your suitcases and even cabin baggage first started following the 2007-2008 recession and being slightly cynical, the airlines have never looked back since! This also reflects the acceptance of travellers of the new norm, a norm that sits alongside charges for booking a seat and even getting on the aircraft first. If we were able to turn the clock forward 10 years it would be interesting to see what charges the airlines will conjure up between now and then.

A room with(out) a view

Articles about new hotel openings would get very boring very soon as hotels appear to profligate in our towns and cities with regular monotony. Many cities however have a shortage of space on which to build any sort of new property so a hotel group in London has come up with a plan to build a new facility underneath an existing hotel.  Some 6500 Sqm of predominantly subterranean space underneath the Park Plaza Victoria Hotel in London is about to be converted into a 179 room mid-scale hotel.

One can only hope the foundations on the existing hotel are solid or that costly ancient Roman ruins are not discovered as this would seriously throw a (expensive) spanner into the works. One also hopes that guests of the new hotel don’t suffer from claustrophobia.


It’s good to be wrong

It takes guts and a degree of humility to admit you were wrong, a facet sadly lacking in this part of the world, thus one has to applaud the admission by Accor Hotels Group Chairman and CEO that he “got it wrong”. Two years ago, he followed the prescribed narrative and boldly stated that Corporate Travel would never return to 2019 levels in the wake of the pandemic. He suggested that (quote) ’international business would remain at least 20% below pre-pandemic levels and this could possibly last forever”’. A classic case of experts making predictions about something they have no experience in. He was not alone in this prediction as others such as Bill Gates were making similar predictions. Luckily for everyone involved in travel, such doomsday forecasts are reminiscent of those who sang the virtues of communism: they don’t take into account human behaviour. The Accor Group were just announcing their 2023 financials which revealed full year record EBITDA of just over 1 billion Euro on revenue of 5.05 billion Euro. The average daily rate across its portfolio of hotels was 110 Euro per night with occupancy at 66%. Again, as we have mentioned in past articles, hotels focus these days is less on getting their rooms full as it is in maximising revenues per night. During the year Accor opened 291 hotels equating to 41,000 rooms.

Fellow global Hotel company IHG (Intercontinental Hotels Group) also wallowed in its own success as it revealed a doubling year on year of Net Profit to 750 million USD. its own average daily rate was 5% higher than the previous year but is also up 13% compared with 2019.  This helped the groups revenues to reach 4.6 billion USD up from 3.9 billion the previous year. IHG opened 275 hotels in 2023 and has double that amount in its future pipeline.


On the up

Just as a proof that planet Earth is totally round once again as people with sense knew it always was, international passenger air traffic in January 2024 reached the levels of 2019, the least year of normality before experts tried to convince us that earth was not round and never would be again (sic). The tell-tale signs of this existed in 2023 when European Airports reported combined figures of 2.3 billion passengers for the year, a mere 5.4% down on 2019. The trend or indeed demand for travel is unrelenting and has been since the Covid era.

What is also interesting is that forecasts from the industry predict that globally, total passenger traffic will reach 9.7 billion by the end of 2024 and will continue to accelerate to reach 19.3 billion by 2042. China is forecasted to overtake the USA at the top spot for airline traffic with India remaining third and Indonesia rising from 13th to 4th place as the trend for growth focusses on emerging and developing markets as their own population increases and attains greater economic wealth and the willingness to travel. The fashion of attempted flight shaming is likely to have little impact on such markets and hopefully at the same time, receive little sympathy in Europe as shame fatigue kicks in.

Room rates soar

Something that’s been touched on before is the noticeable rise in the cost of staying at hotels, particularly in key city hotels. The average room rate per night in USD across Europe’s cities in 2019 was 158 USD, this dropped during covid in 2020 to 143 USD and dropped further to 128 USD in 2021. A rebound started in 2022 when rates averaged 164 USD and in 2023 reached 169 USD. That increase is expected to reach 174 USD in 2024.

Note that these are average rates from across a range of hotels from cities across Europe and not just key or major cities. If only major cities were considered, London’s rate per night for example would reach 268 USD in 2023, though if you want to go further afield for a cheap weekend, then the last place to consider would likely be New York where the average room rate for the fourth quarter 2023 was a mere 336 USD per night!

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