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May 2024 Newsletter

Editorial

Being Seen to be Green

Being seen to follow the trend is a must in many walks of life as not doing so would likely mean those not choosing this option being castigated by those with the loudest voices. An excellent case in question comes within the travel industry where the battle seems less about being seen to be the best in class, but more about showing how green your organisations credentials are in a case of potential one upmanship via a vis your rivals. Most people these days care about their environment and each does their own little bit to help try make things better. Hotels and airlines are and will always be a soft target for the green brigade, as well as governments who can impose more taxes on them without fear of too much recrimination. Hotels are stripping back on the services they offer and hence the cost to them of providing these services, yet hotel rates continue to increase. Airlines on the other hand seem to be adopting a siege mentality to prove how much they are doing to save the world whilst media rhetoric tries to convey the opposite. What has become annoying to most normal people is the incessant noise airlines are making about how “green’’ they are; the reality is, it’s largely a lot of nonsense. So much so that the European Commission and the EU consumer protection authorities have contacted 20 airlines about “misleading environmental claims”. In short, the accusation is that airlines are making things up”.

The 20 airlines include Air France, Austrian, KLM, Lufthansa, Ryanair and of course Wizz and the argument is based on  claims by airlines that CO2 emissions could be offset by climate projects or through the use of sustainable fuels to which consumers could contribute by paying an additional amount. The EU considers such claims to be misleading. Without sounding overly pedantic, the list of questionable actions cited by the EU make amusing reading and travellers should perhaps stop for a moment and think how many times they have been almost bombarded and even duped by such claims that are perhaps designed more to touch the conscience or even worse, touch the human guilt strings for simply wanting or being able to travel. Perhaps more cynically they are also an excellent Marketing job designed to make even more money:-

Greenwashing by airlines: what the EU identified

  • Creating the incorrect impression that paying an additional fee to finance climate projects with less environmental impact or to support the use of alternative aviation fuels can reduce or counterbalance CO2 emissions
  • Using the term “’sustainable Aviation fuels” (SAF) without clearly justifying the environmental impact of such fuels
  • Using the term “green”, “sustainable’ or ‘” responsible” in an absolute way or the use of other implicit green claims
  • Claiming the airline is moving towards net-zero greenhouse gas emissions without any clear and justifiable commitments, targets or monitoring system
  • Presenting consumers with a calculator for CO2 emissions of a specific flight without providing scientific proof on whether such calculations are reliable and without providing the information on the elements used for such calculations
  • Providing consumers with a comparison of flights regarding their CO2 emissions without providing sufficient or accurate information on the elements the comparison was based on.

At this point many readers will resonate with the above and start to reflect how many times they themselves have been duped and even worse, start to consider how much emphasis their own organisation places on such fantasy. In short, the EU are saying is that airlines are making things up as they go along knowing full well that the gullible public will not challenge them, as being seen to challenge the narrative is once again not good for the retirement pension. The King is not wearing any clothes again but this time it’s the EU doing the finger pointing.

Mark Thomas

Managing Director

Jamadvice Travel  |  BCD Bulgaria

Judge, Jury & Prosecutor

The quest for more profits is enhanced considerably when opaqueness prevails; at least that is a reasonable comment when applied to the airline industry. In the USA, several airlines have joined together to sue the government for: trying to enforce clarity! To be exact, the Biden administration recently announced that a bill to protect consumer rights would contain an article which would force airlines to disclose all fees upfront. This would include advising passengers the charge for checked bags, reservation changes and cancellations. However, this clearly didn’t go down well with several airlines who argued against (quote) “’the DOT (Department of Transport) attempt to regulate private business in a thriving marketplace is beyond the DOT’s authority”.

So, who exactly is responsible one would ask, to ensure fair and ethical business practices in the democratic world? Clearly the airlines in the USA think they are better positioned than the government, then again, unlike in Europe where airlines are forced to pay compensation for cancelled or delayed flights, the USA has no such consumer protection and it would appear that is how the airlines want the world to work.

Training for a Revenue Stream

How many readers can recall their youth when going to a night club meant dressing smart i.e. no jeans, shirt and maybe even a tie and definitely no trainers! At this point we may well be exposing which generation we belong to. Trainers, in that era would never ever be used together with the word “smart”. However, the fact of the matter is that many “younger” people today do not own a pair of shoes, but they may have numerous types and indeed brands of trainers, the price of each is likely more expensive than a traditional pair of shoes. Trainers are now an accepted part of daily wear in most, if not all walks of life. Thus, the news that Dutch national carrier KLM has updated its uniform policy to allow both pilots and cabin crew to wear trainers as an alternative to traditional shoes should not come as a surprise. Of course, the trainers have to meet certain criteria or staff can opt to buy ones designed specifically for the airline by a Dutch company.

KLM are not the first airline to allow crews to wear trainers, Aerolinas Argentinas adopted the policy last year and here in Europe, Brussels Airlines also have trainers in their policy alongside vegan-leather shoes.

Thinking ahead, how long will it be before we start to see commercial deals between airlines and training shoe brands akin to how we see famous sports people today wear sponsored gear?

 

Lufthansa logo

Dubai Prepares Big

When they do things in Dubai, they do it big with no expense spared and this mantra would appear to prevail with the news that designs have been approved for a futuristic new passenger terminal at Dubai Al Maktoum Airport. The plan is for the new facility to handle 260 million passengers per annum together with 12 million tonnes of cargo. The site will stretch to over 70 square kilometres to the South of Dubai and it will have the knock-on effect of creating a new city adjacent to it with housing for one million people.

Unlike many projects in Western Europe that are talked about for decades but never materialise due to public pressure from minority groups, such hindrances tend not to exist in the UAE as people pull in one direction. That direction will also result in employment for one million people when the project is completed, with the first phase due to be completed inside ten years. The new facility will be five times the size of the current main airport on completion.

The Famous LZ

Travelling from point A to B these days is invariably undertaken in what could often be described as the exact opposite of luxury. Whilst its true some people are lucky enough to travel regularly at the front of a plane, others even by private jet, the majority fly economy class with ever decreasing levels of comfort and service as airlines focus on profit margins. Not so very long ago a very different type of air travel had appeared and one that with its opulence looked like it was here to stay.

The German built Zeppelin’s were re-shaping the world in the early 1930’s and were already making routine flights across the pond – that’s the Atlantic for the erosion of doubt – between Europe and the USA. One of those, the Hindenburg was about to etch itself into the history books.

On May 6th 1937, the Hindenburg, having already made 17 trips across the Atlantic, exploded and crashed to the ground in New Jersey USA, killing 36 people though 62 passengers and crew survived. This signalled the end of the era of Zeppelins, a machine that was triple the length of a modern-day Airbus A 380 Double Decker. What is also curious is the machine was numbered LZ 129; LZ being the old abbreviation of Balkan Airlines, the predecessor of Bulgaria Air.

Anyone ever flown more recently on LZ 129?

Change for Good

Anyone using Sofia Airport recently will have noticed significant changes both inside and outside the main Terminal 2. Outside, the green areas on both sides of the Terminal approach road are undergoing work to turn them into temporary car parks before work starts on refurbishing or perhaps that should be the “re-building” of the existing car park that visually looks like it is about to collapse. Just why they couldn’t build a proper car park when the airport opened a mere 18 years ago is another question. Inside the “new”’ Terminal 2 a seismic transformation has occurred in the past months which coincides with the country’s (part) accession to the Schengen zone. New Duty-Free areas have appeared together with more and indeed better (expensive) places to eat and drink. The passport control has been pushed back down the terminal as now only passengers on flights to non-Schengen countries need present their passports.

What perhaps this also reveals is that if you get the right people into the right jobs, then progress can happen. The people now running Sofia Airport are specialised in the operations of airports and are not, political appointees with zero experience on the subject. Nepotism eventually gets exposed, though no doubt whilst the running of Sofia Airport over the past decade and more was not overly successful from a user’s perspective, it was indeed very successful for those governing it.

Bags of Trouble

Waiting for your bags to arrive on the carousel at your destination is always akin to a game of chance; fortunately, the past years has seen a significant improvement in the reduction in numbers of bags who don’t make it on time to their intended destination. Latest surveys show that out of 155 airlines, 44% had already implemented IATA resolution 753, which requires the tracking of baggage from acceptance at check in, loading onto the plane, transfer at a connecting airport and arrival at the destination airport. 88% of airlines have adopted this in China and North Asia, 60% in the Americas, 40% in Europe and Asia – Pacific and 27% in Africa.

Getting technical, the dominant tracking technology used at airports was barcode scanning with 73% adoption, followed by the more efficient RFID tracking implemented at 27%. Of the worlds larger airports i.e those handling more than 40 million passengers, 54% used the RFID technology.

The bottom line thus being the lottery faced at the destination carousel is starting to slant in your favour!

Lufthansa Swiss logo

More Rooms with a View

Europe is set to see the opening of 326 new hotels in 2024 which will amount to some 45,000 rooms being added to the total room stock, of these, 45 have already opened, 2025 is set to see even more hotel openings with estimates that some 367 new facilities with 53,000 rooms will come into the market. In total across Europe, there are 1705 hotel projects at various stages of the pipeline, a figure that will see 250,000 new hotel rooms added.

The UK continues to lead the way in new hotel developments with 321 projects at varying stages of build, followed by Germany with 189, France with 130, Portugal with 120 and Turkey with 116. In terms of cities, London leads the way with 80 projects in the pipeline followed by Istanbul with 51 and Lisbon with 37.

Just Don’t Get Caught

The world of travel and in particular the aviation part seems to successfully re-write Business Studies Text Books with the ways in which it (unethically) operates. The latest wheeze should be applauded for its audacity; Qantas in Australia was caught selling tickets for flights that had already been cancelled. At the end of the day, this is a fantastic way to generate cash without asking your friendly (or unfriendly) bank manager for a loan and paying interest on it.

Sadly, for Qantas they got caught and have now to fork out 74 million Euro in compensation to settle the lawsuit against them. The size of the “attempt’ has also to be admired as the allegation was that tickets were sold for some 8000 cancelled flights between May and July 2022, just as the airlines needed cash quickly after the Covid era.

Affected customers will receive an extra 137 Euro for domestic flights and 275 Euro per international flight as compensation.

eatstaylovebulgariaCaveat Emptor

Wizz Air like to see their name in the news and indeed it often is in the spotlight; not always for positive reasons. They have also recently garnered interest with news of their new MultiPass Flight subscription which in short, is a pass that allows passengers, for a monthly fee, to fly once per month between countries that are found in the scheme. This includes the UK, Albania, Italy and Poland. So far so good one would assume, which is true until you read the small print.

The pass is valid for one year and cannot be cancelled within that 12-month period and indeed, looking at the cancellation policy to ensure the subscription is not extended by a further year will not be straightforward – dealing with any Wizz Air call centre never is. Then there are the blackout dates for each country per annum which, on closer inspection seem to be almost monthly and it must also be remembered that different countries have different national holidays. It gets better (SIC), the scheme can only be used on flights that do not have more than 10% of seats already booked by travellers using the same subscription pass. So, the more of such passes are sold, the more people try to use them, the more likely the seats will not be available so you have to buy a new ticket anyway. Another question is – who controls and monitors this usage?

Wizz have grown massively in recent years and are particularly important on the local Bulgarian market, however buyer beware (Caveat Emptor) is a very appropriate legal expression for this offer from an airline already on the watch list of the UK’s CAA (Civil Aviation Authority) for past indiscretions.

 

Hotel Beds In

The hotel sector is a very good bell weather for economic sentiment and also arguably as a general sentiment when facing off to those who try and restrict people from traveling. Last month we noted how the garden is rosy for the IHG and Accor hotel groups, this month it’s the turn of Hyatt and Marriott.

Hyatt is saying that business is currently “extraordinarily encouraging”, which is probably an understatement. Their average room rate globally increased to 202.33 USD per night with occupancy up to 65.2% (remember that these days hotels don’t necessarily want their rooms to be fully booked!), net income increased to 522 Million USD on revenue of 1.71 billion USD. the group now have 323,000 rooms in operation with 129,000 more in the pipeline.

The Marriott Group also saw their average room rate increase to 179.99 USD per night with revenue increasing to almost 6 billion USD with income at 564 million USD on occupancy rates of 65.6%.

Seems like getting involved in the hotel business is not such a bad move after all post Covid.

AI

The topical subject of AI will either have people rolling their eyes or drooling about its perceived potential in the sphere of travel. Whilst we are not yet at the point where AI is actively forcing the hands of how we book and manage travel, the techie nerds continue to at least talk about enabling AI to enter into the travel world and are chomping at the bit. One clear potential impact of AI is the depersonalisation of business relationships within travel, where traditionally this is one of areas why people actually work in travel and why indeed people do travel. That said, those seeking to depersonalise it will see this as an advantage as they work remotely in between walking the dog, shopping and playing their computer games.

Technology does have the power to enhance processes rather than replace them and AI will have some sort of impact on travel both negatively and positively. How that is managed becomes a totally different question.

On a serious note, one area though that is likely to hold back AI within travel in the larger corporate world is in the area of data privacy, a subject not on the table a decade ago but very much centre stage nowadays. This will present business’s and indeed individuals with serious concerns about where their own and their company data is ending up, though perhaps cynically, it’s already in China.

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;
e-mail:mark @jamadvice.eu

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