September 2023 Newsletter
- September 28, 2023
- Posted by: MarkThomas
- Category: 2023
Editorial
The UK and France are not the only deciding influence across Europe when it comes to trade, commerce and politics. However, what the UK and France actually do in these spheres invariably tends to hold sway across much of European life. Metaphorically, this can also be translated to mean “whatever those country’s politicians say or do” and as most of the general public these days are fully aware, many politicians appear to be a sandwich short of a lunchbox. A case in question would seem to be appearing in France where the Country’s Transport Minister wants to impose penalties on airlines and in particular Low-Cost Airlines because they are cheaper than trains! On the face of it, travelling by rail is supposedly more environmentally friendly; a statement that is probably true but not necessarily entirely if you factor in the cost and impact of rail infrastructure and remembering that trains don’t run on fresh air. However, without wishing to dwell on that theory and counter theory, a fact that can’t be ignored is that aviation accounts for just 2.8% of the worlds total carbon emissions; so maybe more time and effort should be spent on bigger ticket issues? A private business facing the necessity to reduce its costs by 10% isn’t going to spend too much time on something that generates 2.8% of its total costs, is it? Running a country these days is akin to running a business, except that the people running the business’s called countries, have almost no experience in commercial matters. Punishing success and efficiency by increasing taxes on them and giving those rewards to enterprises that are loss making and in-efficient smacks of extreme socialism verging on communism in a centrally planned economy; that has not and will never, work. France recently tried to bin short haul domestic flights in an attempt to move people onto rail; the actual impact of this has been almost non-existent and is considered a dud. Trying to ban domestic flights in France wouldn’t move the dial on any environmental measure, the attempt though may have all about winning floating votes at a time of elections!
On a similar theme but with a slant in the opposite direction, the UK Prime Minister has vetoed increases in Air Passenger Duty, this is one of the anonymous taxes that appear on each air ticket. The UK has the highest such taxes in the world, which is strange when you consider that the UK is an island and requires connectivity with the rest of Europe to allow two-way trade and commerce to flourish. Aviation would, one assumes, play a large factor in this connectivity – so why tax it to oblivion? The revised stance by the Prime Minister would indicate he is putting both trade and people at the top of the consideration. What is also interesting is that the UK media have almost unanimously agreed that such taxes were “designed to discourage air travel and encourage other modes of transportation”. Perhaps previous policy decision makers forgot the UK is an island and taking the train to Berlin, Malta and Athens doesn’t quite work! This move however has angered the Green brigade who wouldn’t leave the UK anyway, but as the expression goes “you can’t please all of the people all of the time”. Putting the majority’s interests at the heart of decisions is not common so it will be interesting how this pans out. The UK Government also have a usual ace card: they are ahead of the game in slashing carbon emissions, they have yielded a 48% reduction compared with 41% in Germany and, wait for it, 23%in France!
Permanent opponents to air travel will however still be able to take comfort in the Dutch Governments continuing battle to reduce flights in and out of Amsterdam Schiphol Airport despite the questionable legality of such a move. Again, this is quite blatantly designed to “restrict air travel” using noise as the excuse. If noise is the issue why not stop cars on motorways between midnight and 6am across Europe; oh, by the way, the main source of pollution in Europe comes from cars (not aviation), so banning cars would a) reduce noise and b) reduce pollution. A Simple environmental solution really, except that will not win any votes and will indeed have just the opposite effect. Of course, if the EU slides into central command mode; anything is possible in the future.
Mark Thomas
Managing Director
Jamadvice Travel | BCD Bulgaria
A Brand New Game
The hotel world can be confusing at the best of times with apparently over 1000 different hotel brands owned by an array of hotel groups. It should be remembered that as a general rule, hotels are managed and owned by two totally separate entities and household names we all know like Marriott and Hilton, usually don’t own the properties they manage. Each hotel group tries to segment their hotels into various categories so that they have coverage in the luxury sector, midscale sector and budget sectors etc. These days it is also fashionable to have “Lifestyle” brands, long or extended stay facilities (apartments) and resorts, be they beach resorts or country resorts, such as for spa and wellness or even housing golf courses. Every year more and more brands appear even though we always think that each hotel group has reached its peak in plugging the market segment gaps. Just as a guide to what we are talking about, hotel management groups such as Accor has 41 brands attached to it, Marriott Group 31 brands, IHG (Intercontinental) 19 brands and Hilton 18 brands. The names of these brands usually give no indication as to which family they belong to. For example, would you who operates a Moxy Hotel, a Pullman or a Le Meridien Hotel? Probably not. Its almost as if the job of the new employee graduates or interns is to identify a segment in the market that has not yet been targeted and find a brand name to sit in that segment. Thus, here are the latest ten new hotel brands that we will likely see appearing in our towns and cities in the future. It is also quite noticeable how the focus currently is on extended stay/apartment offerings to satisfy the clear demand from many travellers who wish to have a degree of independence whilst on the road, as well as for people travelling on business for longer durations who do not want to be stuck in a box hotel room for weeks on end. One caveat though is that its nor surprising that a new brand roll-out invariably starts in the USA and gradually spreads to other regions of the world. Thus, it can be quite some time before we will see some of these brands in Europe.
The IHG Group is launching the Garner brand which is aimed at hotel conversions that will be operated under franchise. The aim is to have 500 of these properties in the next 10 years but initially only in the USA.
Marriott plans a new “affordable midscale extended stay brand” aimed at people staying 20 night and more. The brand is initially called Project MidX Studios and again is aimed at the US and Canadian markets. This will presumably sit slightly below its other new venture the Marriott Apartments which launched in November 2022. Again, this is firmly targeted at the US and Canadian markets.
Hilton’s first is called Project H3 and will be its 20th brand. It’s aimed at the lower midscale market and again targets extended stay guests wishing to stay for 20 nights and more. Additionally, it has the new “Spark by Hilton”” brand aimed at the Premium Economy hotel segment
Hyatt is getting in on the extended stay game with its Hyatt Studios but this brand is aimed at the upper midscale market. Contracts have already been signed for 100 such properties in the America’s.
Accor has a new Handwritten Collection which launched in early 2023 and is aimed at independent and bespoke hotels in the midscale sector that are likely to be conversions rather than new builds. 12 new hotels are already signed up and aims to grow the brand to 250 hotels by 2030.
Langham Hospitality unveiled its Ying’nFlo lifestyle brand at the end of 2022 which is aimed at Millennial and Generation Z travellers (!). Two such already exist in Hong Kong with more planned in China.
Wyndham is slightly less known in Europe but not wishing to be outdone, its Echo Suites Extended Stay was also launched in November 2022 and it currently has 120 properties under development, again in the America’s
Melia Hotels has launched its Falcon Resorts by Melia which will be found in prime leisure resorts around the world. Melia is predominantly a resort brand and its first opening is in two re-developed hotels in Punta Cana in the Dominican Republic.
Should I Stay or Should I Go
What would you do if you knew full well that your checked luggage wasn’t going to arrive at your flight destination whilst you were still at the departure gate? We are sure that many people would disembark with such prior knowledge but it may be that this exact thinking is the reason why passengers on a recent Swiss Air flight from Zurich to Bilbao weren’t told that their bags had not been loaded onto the plane. The reason for this was not accidental but simply down to the fact that there were no baggage handlers at Zurich Airport to do the loading. The captain then had to make a decision as to whether to take off or not whilst also taking into account that the plane was already one hour late as they waited patiently for staff and bags to appear. In this instance the captain decided to fly but perhaps astutely didn’t tell the passengers their bags wouldn’t be joining them. The passengers eventually discovering the truth after waiting two hours at the baggage carousel in Bilbao Airport. Swiss Air did however feel vindicated as they did put a positive spin on the farce by saying that the ’Majority’ (note the word “Majority”) of bags would probably be delivered the following day! As for what happened to the minority; that’s another question.
This episode is perhaps further proof that carrying anything other than hand luggage these days is viewed as a lottery and the reason why people pack all they can into their wheelie bags, if its winter they wear three sweaters and two coats in the cabin and hope the planes air con is working adequately.
Just as a point of note, the aviation sector has lost more than 2.3 million staff globally since 2019. Its little wonder then those bags don’t reach their destination and airports can’t manage flights. That’s aside the battle airline companies have in trying to recruit crews and back-office staff which explains why their Customer Service operations are nothing short of embarrassing.
Digital Passports Coming Soon
The future is digital. Or so we have been told for what seems like an eternity. This move to anything and everything being digitalised looks like it is going to soon encompass passports. An EU initiative is currently in the test phase using Finnish passport holders as the test base with Finnish nationals being able to voluntarily register as a DTC user (Digital Traveller User) for the next six months when departing from Helsinki Airport. Upon registering the passengers can download their digital passports and travel on a test basis between Finland and the UK. Testing is also about to start in Croatia at Zagreb Airport.
The management of companies who print International Passports must be feeling twitchy whilst on the other hand, hackers who found fun in copying Covid certificates during the pandemic must be chomping at the bit at the perceived potential new business opportunities. Security, we are told, is at the top of every government in the free world’s agenda, how safe digital passports really will be becomes a totally different conversation.
It Pays To Be Busy
The whole idea of airport lounges – we perceive – is that for a price, travellers can escape the madding crowds in an airport terminal and get some peace and quiet in a dedicated area where even doing some office work is possible. As many lounge users will know however, the lounges often seem to be the busiest part of an airport, thus destroying the concept for which they were intended. London Heathrow’s BA lounge recently was so busy they were offering to pay people not to enter their lounge!
Whilst fee paying lounges are more vulnerable to sudden surges in demand, its unusual that an airlines own lounge reaches bursting point, but like any establishment, building regulations and safety issues impact airline lounges just as they do other facilities in every day life.
The bottom line of this episode is either more and more people are travelling in “premium classes” that facilitate free lounge access, or that flight delays are becoming more commonplace that they create a backup with passengers decamping into a lounge as they wait for their flights.
Railing The Savings
By fair means or foul, the push across the EU to get people onto the rail network gathers momentum. Whilst some methods of coercion are questionable with a populist though often ill garnered sentiment, some initiatives are plain logical. France has always been one of the pioneers of rail travel and they have followed Germany in introducing a 49 Euro per month rail pass that will allow unlimited rail travel on Regional and Inter-city trains. Germany did the same earlier in the year and their offering also includes rail, tram and buses.
So, the next time you are travelling to Germany or France, forget the hire car and get a rail pass.
Where The Big Bucks Are
You probably don’t need to be a rocket scientist to guess which airlines make up the Global top 10 in revenue. That aside, it still makes interesting reading to see the numbers that are attached to each of them. In ascending order here then are the world’s top 10 airlines: –
10. Air Canada – Revenue of 12.7 billion USD and assets of 21.8 billion USD. Last financials show a loss of 1.3 billion USD for the financial year. Fleet of 350 aircraft and 20,000 people employed.
9. China Southern Airlines – Revenue of 12.9 billion USD and assets of 44.9 billion USD. Lost 4.8 billion USD in last financial year. Fleet of 900 aircraft and employs 100,000 people.
8. Turkish Airlines – Revenue of 19.7 billion USD with assets of 32 billion USD. Made a profit last financial year of 2.8 billion USD. Fleet of over 400 aircraft and employs 40,000 people.
7. IAG – Revenue of group 24.3 billion USD and assets of 42 billion USD. Profit of 470 million USD made last financial year. Multi airline group includes BA and Iberia and employs 66,000 across the whole group.
6. Southwest Airlines – Revenue of 24.8 billion USD and assets of 35.6 billion USD. Profit of 650 million USD last financial year. Has fleet of over 800 Boeing 737 aircraft and employs 66,000 people.
5. Air France – KLM Group – Revenue of 29.4 billion USD and assets of 34.8 billion USD. 970 million USD profit in last financial year and employs 80,000 people.
4. Lufthansa Group – Revenue of 35.8 billion USD with assets of 48.8 billion USD. Profit of 940 million USD in last financial year. 275 aircraft and employs 110,000 people.
3. United Airlines – Revenue of 48.8 billion USD with assets of 70.4 billion USD. Profit of 1.9 billion in last financial year. Fleet of over 900 aircraft and employs almost 93,000 people.
2. American Airlines – Revenue of 52.3 billion USD and assets of 66.8 billion USD. Profit of 1.8 billion USD last financial year. Fleet of over 950 aircraft and employs 130.000 people.
1. Delta Air Lines – Revenue of 54 billion USD and assets of 73.1 billion USD. Profit of 1.9 billion last financial year. Fleet of over 950 aircraft and employs 95,000 people.
New Route To Sofia
More and More destinations appear on the board at Sofia Airport which continues to give people the chance to explore new destinations and likewise, people from other countries the chance to visit Sofia and Bulgaria. The latest announcement sees AirBaltic about to join this list with flights from Sofia to Riga, the capital of Latvia.
Flights commence May 2024 and will operate three times per week.
This is very much a point-to-point route but then again, may of the newer routes in and out of Sofia are also point to point destinations ie they tend not to cater for connecting passengers.
A Voyage Of Discovery
Lufthansa has unveiled the new name for its leisure arm originally launched in 2021 as Eurowings Discover; it is – wait for it – Discover Airlines. One wonders how much was paid to a brand management company for that?
Anyhow, the “new” operation will have a fleet of 28 aircraft for summer 2024 with 10 A320s and 13 A330’s being based at Frankfurt for a mix of short and long-haul flights, plus 5 A320’s will be based at Munich Airport for short haul flights. A long-haul operation is also planned later for Munich.
In line with kitsch press releases, the blurb with the announcement says that Discover Airlines stands for “the joy of travelling, discovering and rediscovering beautiful experiences and experiences”. The Green Parties of the EU won’t like that one little bit!
Mega Rebound
If further proof were needed that the World is indeed back in travel mode again it comes with news that London Heathrow has returned to the top “Mega hub” spot. A “Mega hub” airport is deemed to one that connects international airports and the ranking are calculated by comparing the number of scheduled connections of international flights with the number destinations served from the airport.
Heathrow had slipped to 22nd place last year but has returned to the top spot and is followed by New York JFK Airport and Amsterdam Schiphol. Other European Airports to feature were Frankfurt in 6th place, Istanbul in 7th and Paris CDG in 9th. Out of the top 20 “mega hubs”, Europe had six airports in the list, North America also had six whilst Asia- Pacific had 7. Kuala Lumpur was the most connected in Asia -Pacific whilst Dubai stayed in top spot in the Middle East and Africa table.
Cat & Mouse On Charges
Hidden fees that appear at the very end of the process when booking both airlines, in particularly Low-Cost Airlines, as well as when booking hotels, have long been a source of frustration for travellers and indeed any sort of travel booker. One would have hoped or assumed that the defender of the European Consumer i.e., the EU would be the ones to take the initiative in this field and clamp down on this act that whilst currently is not illegal, it is most definitely un-ethical. It is though the UK that has taken the first steps with its announcement that it intends to boost transparency when booking flights and hotels.
The UK’s own investigations found that 72% of transport companies had what it deemed “hidden charges” in their fares whilst the hotel sector revealed 56% had hidden charges. The research also confirmed the so called “drip pricing” was evident in such cases. Drip pricing is where the price paid at check out is more than originally advertised due to extra, though obligatory, fees.
As well as the investigation into opaque fees, the remit of the investigation will also target fake reviews; a facet that is nowadays almost impossible to differentiate between real and unreal posts.
The Return Cometh
As the summer season reaches its last lap here in Europe, the figures for the airline world start to appear, the intent being to clarify whether its business as usual or whether the Covid effect still prevails. If you look at the figures for July, when the peak season was just starting, traffic was around 97% of ‘’the norm” ie of 2019. Here, it needs to be mentioned that the impact of the war in Ukraine and the loss of these numbers needs to be factored in. So, Europe is doing very well thank you, which in simple terms means one thing; people want and need air connectivity. That’s not to say that the environment needs to be ignored for it shouldn’t. King Canute tried to stop mother nature, people travelling may not be mother nature, but to travel is human nature.
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