Editorial

Fuelling the Cost

This month’s edition certainly seems to be full of rants and is heavily airline focussed, for which no apologies will be forthcoming. Along with a conspiracy theory that these days seems to be attached to every action or reaction connected with each Government action, the latest threat would simply feed fuel to the notion that the ruling classes objective is to restrict or limit the ability of the normal man and woman to be able to travel, particularly by plane. Usually, any such intention is construed to be achieved via pricing and thus forcing the cost of the product (travel) beyond the wallets of normal people. Whilst we don’t (!) necessarily subscribe to this particular theory any more than Covid 19 starting in a lab in China, the EU’s desire to force airlines to use SAF (Sustainable Aviation Fuel) will, just as sure as the sun rises in the east and sets in the west, mean airfares increase substantially. Which in turn then begs the question who will indeed be able to afford to travel in the future?

Just as a brief outline, the EU has decreed that SAF has to make up 2% of aviation fuel by 2025 and this figure will rise to 70% by 2050 (politicians kicking that can down the road again).  This applies to airlines within Europe and airlines who are Europe domiciled, but non- European airlines can operate in and out of Europe without having to buy the proposed new expensive fuel. Thus, travelling long haul via a Non-European hub will likely result in a considerable cost saving on the cost of the ticket! It’s almost akin to Europe providing a subsidy to non- European airlines which ironically in any case have significantly worse environmental and social standards than those of Europe! It would also simply mean a shift in carbon emissions from Europe to elsewhere. Whether this would be considered a success by Europe becomes another question.

It’s hard to put oneself in the shoes of those who work within the European Union but the bureaucrats that fill their pensions from it, appear to be more and more disconnected from the real world. Unless of course it really is all smoke and mirrors and they know exactly what they are doing, however unlikely that may seem to the normal man or woman in the street who simply wants a few weeks in the sun each year or who want to visit friends and family who more and more are spreading their wings further afield.

Going back to the conspiracy theory again, Covid, it was suggested, was a test to see how people would react to having certain liberties taken away from them. How will people sit – in Europe anyway – if, in attempt to save the planet, they were severely restricted in their ability to travel as travel is considered a “dirty” pastime. Another article in this edition details how certain flights are now banned in France; what happened to freedom of choice? Will France be the test bed and similar restrictions will become the norm across Europe?

Air travel in reality contributes a very small amount to total carbon emissions in our planet, yet as we know in today’s world, he or she (or them/they/it (sic) to be politically correct) who shouts the loudest gets their way. In a democracy in which we live, minorities have a right to be heard, they are shouting louder than ever and destroying the very concept of democracy.

On The Local Front

So What!

It’s not usual to start an article, paragraph or sentence with the expression “So what” but that’s the only expression or comment that springs to mind with the latest piece of EU nonsense that has no doubt kept the wheels of bureaucracy turning, as well no doubt of the bank balances of those lawyers involved in it. In short; the European Court of Justice has overturned the 6 billion EU bailout of Lufthansa provided by the German government in early 2020. That catch; firstly, is that the bailout was approved by the European Commission! The second catch is that the Lufthansa has already repaid the State Aid: back in 2021 to be exact.

So, the black comedy looks like an EU department can sue another EU department for something they did but which has incurred no direct financial consequence. Might it be a suggestion that one EU department speak with another EU department before signing off the deal in the first place. Unless of course they speak a different language and can’t make themselves understood.

The winners are: firstly Lufthansa who appear to have done nothing wrong in this process as asking to borrow money is not an offence; The German Government who kept its flag carrier alive and got its money back; the staff of the airline who kept their jobs in a time of crisis;  Ryanair and Condor who brought the case before the EU courts citing that this was illegal state aid, a fact proven to be correct and finally the Lawyers and FTE’s of the EU who kept their current accounts ticking over by creating more work; plus anyone else who was involved.

The losers – no-one actually. So why bother?

Lost Bags Increase

Pre-pandemic one of the great potential frustrations of air travel was the fear of standing at the baggage carousel at your destination airport and watching as the last bags were claimed and the realisation kicked in that your bags hadn’t made it. Nowadays technology such as the apple air tags helps you track where your suitcases are, at all times, so that you have a good idea where the bags actually are e.g.  Behind the screen in front of you in the baggage sorting area or 2000kms away at the departure airport. This is of course a head start as invariably the lost and found counter have no idea where they are.

Returning back to the era pre covid, the incidence of lost baggage was decreasing consistently as airports got to grips with their use of technology to manage the baggage handling process. However, post covid and we are seeing a different story with a 75% increase in lost bags to a figure of around 7.6 bags per 1000.

The main area where bags are lost is on international flights where 80% are simply delayed, but a staggering 20% are lost totally, stolen or damaged. The blame is being put roundly on a shortage of baggage handlers as well as a shortage of staff generally at airports.

As the industry strives to return to normality, a journey it is fast achieving, the plan is that by 2025, some 67% of airlines will provide real time tracking of baggage compared to just 25% who have the capability of doing this at the moment. This will of course help track and monitor those bags who have the baggage tag still attached to them, if someone were to deliberately remove those tags, then it’s another situation and in which case its back to the air tags.

It’s a Record

The Asia region has been the slowest region globally to get its travel sector back up to 2019 levels. That however has not stopped Five-star airline Singapore form recording an eye watering profit of 1.61 billion USD for the year ending March 2023! That comes despite passenger levels reaching just 85.4% of their pre-pandemic levels as the available total seats were down 79% compared with 2019. Compared with this, the airlines loss in the previous financial year to March 2022 was 714 million USD. That is impressive management that other airlines must be envious of particularly when, as we mention, the Asia region has struggled to get back on track when it comes to opening up for travel. When things do gain traction in that area, one wonders what the profits might be then for Singapore.

Not to be outdone, indeed beating the impressive figures of Singapore Airlines are the financial results from Emirates where, surprise surprise, it has recorded record annual profits of a mere 3 billion USD. This compares with a loss of 1 billion the previous year. Just in case any reader needs some spare cash, Emirates state they have cash of 11.6 billion USD in their accounts. One thing that was mentioned in the financial results of Emirates is the role it plays in UAE Inc: “’with our growth plans we expect to significantly increase our contribution to the UAE’s GDP over the next decade through direct and indirect employment, supply chain spending, tourism spend and trader and commerce benefits”. Many people have long taken Emirates as a stand-alone entity that gained state preferences in the way some get state aid in Europe. The reality is that Emirates, as an airline are part of a bigger picture and that bigger picture is Dubai Inc and UAE Inc. Politicians across Europe should take note.

Room Rates Soar

More evidence that the world is indeed returning to normality as far as the world of travel is concerned is seen in the average revenue hotels are reportedly getting per room in their ADR (the average daily rate). That figure is 216 USD per room per night according to one report which seems to echo the sentiment of those involved in hospitality. The same period in 2019 (first quarter) was 184 USD.

Aside of this, travellers are also booking earlier and in line with 2019 figures; during the pandemic, travellers tended to book very last minute as travel plans were never guaranteed due to numerous factors. The increase in the daily rate hotels are charging has been noted by many who travel to more popular destinations such as London, Paris and Rome, where anything decent for less than 150 EUR per night is almost impossible and anything less than 200 EUR a night is a bonus!

The Green Rule

Law has now been implemented in France that will mean many people are now forced to take the train rather than a plane for domestic travel. Flights under 150 minutes are banned where a suitable alternative rail option exists. The ban comes into force two years after lawmakers voted to impose the ban, the concept being seized upon during Covid times by the Green Brigade who attached strings to airlines getting state handouts. This effectively rules out air travel between Paris and the French cities of Nantes, Lyon and Bordeaux. P.S.

Private jets are also being targeted!

However, there is an opaqueness about this as some connecting flights are unaffected by the new laws! So, with Lyon, trains do not exist that allow passengers to connect onto early morning flights out of Paris CDG or from Paris Orly, nor from flights that arriving late in the evening. So, Lyon seems to have a “’get out”. It’s also noticeable thar Marseille, which is three hours by train away from Paris, is excluded in the rule but perhaps this is why diplomatically, the 150 mins or 2 ½ hour threshold has been set. The Greens initially wanted flights to be scrapped which could be undertaken in under 4 hours by train to be outlawed.

From a logic standpoint, the term “connecting flights are unaffected by the new laws” is curious as typically flights between Paris and anywhere in France will be comprised of 50% of passengers in transit to an onward destination and 50% who will terminate their travel in Paris and as such in theory are “point to point” travellers. However, with these point-to-point travellers, how many might actually have further onward travel with a separate ticket with a Low-Cost airline etc or even an additional rail journey? There is also a commercial angle to this and that is that if ‘’French Airlines” are restricted in doing what they have always done (no, not strike) and that is to transport people, then rivals from across Europe will step into the space vacated by the French carriers and move passengers from French cities via their own hubs. Think Lufthansa and Frankfurt. This creates the potential for financial loss to French Airlines, but who cares anyway as the EU/French Government will have to bail them out with the knock-on effect of increased taxes in France in what is already the “highest taxed country in Europe”. Clearly the thinking is amiss but is the issue now that the Green brigade are now becoming the “Travel Police” and are train passengers going camping and eating vegan sandwiches the only ones to be allowed to do what they want and how they want?

Short haul flights contribute virtually nothing to Global Carbon emissions but it’s a soft target that governments can use as an appeasement tool to appear to be doing the right thing in the eyes of the minority and thus not lose their vote. Meanwhile the can is kicked further down the road but it will be under someone else watch that real decisions are taken and that’s way in the future.

London Tops for Meetings

London is top of the tree when it comes to destinations for hosting Meetings and Events, so says a report from Meetings technology provider, Cvent. London was also top in 2019 which was the last time the report was published. London finished ahead of rivals Barcelona, Paris, Madrid and Lisbon but interestingly, no London hotel figured in the top 10 of Europe’s most popular hotels for hosting such Meetings and Events.

The most popular hotel is the Barcelona W Hotel followed by the Madrid Marriott Auditorium and Conference, the Hyatt Regency Etoile Paris, Melia Castilla in Madrid and the Hilton Prague. These aforementioned hotels are not new to the Meetings and Events world and have featured many times but new to the top 10 list are the Corinthia Lisbon, the InterContinental Athenaeum Athens and Four Seasons Ritz in Lisbon in places 7 – 10 respectively.

Newark Number One To Europe

Which USA airport operates flights to the largest number of European destinations? The quick-fire thought process would no doubt assume JFK in New York or maybe Miami or Los Angeles. The answer however is somewhat surprisingly, Newark.

Newark is considered the second airport of New York and there is even a third major one in La Guardia. The key to the initial question though is in the wording, as whilst there are flights to 39 European destinations from Newark compared with 35 from JFK, there are actually double the number of flights in total from JFK, it’s just that the flights from there tend to operate to other key gateways multiple times per day e.g., to London Heathrow, Paris and Frankfurt.

The Shape of Things to Come

When e-tickets replaced paper tickets years ago on the pretext that it was both a cost saving (to airlines) and it was more environmentally friendly, two studies that came out of the USA estimated that the amount of paper actually used by passengers who had to print off their tickets was between double and four times more than was used by the airlines in printing paper tickets in the first place. So much for saving the rain forest. It was however a cost saving and one of many such that passed the cost of operation from the airlines onto people further down the chain. Boarding passes also fall into the same category and its now normal to see people showing their boarding passes from their phones at the boarding gate etc. Emirates are taking this evolution one step further.

From May 15^th all Emirates passengers departing Dubai have to use a mobile boarding pass instead of printed paper. Passengers checking in at the airport will receive their mobile boarding pass via SMS or email whilst those who check in online will receive theirs via Apple Wallet or Google Wallet.

Passengers flying to the USA and those with connecting flights on other airlines will still require a physical boarding pass as will passengers travelling with infants, unaccompanied minors and anyone requiring special assistance.

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