Travel: Of potty politicians, airports and airlines and ‘low cost’ profits

Written by on November 28, 2012 in Bulgaria, Leisure, News, Perspectives - No comments

Anyone who has flown into or out of Sofia’s relatively new airport will almost certainly applaud its efficiency and simplicity, especially when compared with many rivals. One might argue that it reflects the new image of the country. While for people in Sofia particularly, the airport is ideal to satisfy either or both of their business and leisure needs, one can’t help but think that the rapidly developing road infrastructure around the country is becoming a threat to Sofia Airport.

This doesn’t mean that the car is the rival to the plane, but rather that as more and better highways get built linking Bulgaria with our neighbours; this simply makes it easier for the populations from many regions of the country to use other airports outside of Bulgaria.

Already many people in the North and North East of the country, which includes major cities like Varna and Rousse, use Bucharest as their main airport. When the new bridge at Vidin opens will this mean the population in the North East find the Romanian capital easier to access than Sofia?

In the South East we know of many who now use Istanbul as their preferred airport, not that it’s massively closer to them, although it is closer in distance, the choice of flights and their lower fares due to increased competition makes it more of an attractive proposition to fly from.

Whenever the highway to Greece is completed, will this also mean that people living in the south of the country find it as easy to travel to Thessaloniki as they do Sofia?

Such cross border airport utilization is nothing new and if one looks at, for example, Munich Airport, it acts as the main airport for the West of Austria, Frankfurt services the needs of people living in the East of France as do Geneva and Basle Airports. Even Paris draws in many travellers from Belgium.

It seems like Sofia Airport has a lot to lose and little to gain from highway infrastructure and if this happens then a downward spiral commences; flights are cut due to less passengers and as an indirect consequence, investment slows down as connecting to Bulgaria is made harder.

Politicians’ noxious emissions

Politicians are what they are, which is fortunate, as with their way of thinking, one would hate them to be in a position in which they were managing a business. Unfortunately, the fact that some of them reach a level whereby their actions can make or break commerce, leaves one ruing the fact that anyone ever invented politics. One though should be pragmatic and realise that for decision-making politicians, their prime concern is their own pay packet at the end of the month, their career prospects and their own self esteem: that they may have to be selfish and sacrifice others along the way is probably seen as being the same in politics as it is in the scramble up the corporate ladder.

So much for the preaching, but what have the political nerds done to incur our editorial wrath? The answer is nothing that any business or indeed layperson couldn’t have foreseen coming a million miles away: subject the “European Union emissions trading scheme’. Or put into short, the fact that some (politicians and non-business-orientated) idiots at the EU thought they could get away with taxing non-European airlines for entering European airspace. After years of planning and warning the world about it, the world bit back and held the European Union to task, forcing the EU to back down – albeit temporarily.

In truth the EU could get away with it, but the repercussions on European airlines, European business and the knock-on effect on European companies such as Airbus and the consequent financial damage a trade war would reap, makes any tax collected by the EU dwarf into insignificance with the losses Europe would incur.

A blatantly obvious business scenario for any logical person: logical people, though, are never going to cut it as a politician at the EU. The power of an EU technocrat is no match for the commercial might of the Americas, China and Russia. America made it illegal for its airlines to pay such taxes and China and Russia suggested to the EU that if their airlines were banned from flying due to non payment of eco taxes, then they could expect all EU-based airlines to be banned not just from flying to their shores but also over their air space. You could imagine the comments made by the CE’s of EU airlines directed at the politicians!

As a P.S. the excuse for the tax is the two per cent of global pollution the aviation industry contributes to global warming. Farm animals produce about nine times this amount of pollution with the gases they emit from their rears. Taxing farm animals and battling with the agriculture policy of the European Union is sacred ground for the European Union.

Madrid or bust

Spain may have 50 per cent youth unemployment and 24 per cent unemployment overall but tourism still features high on the country’s agenda. The latest project aimed at increasing the tourist inflow is a “Las Vegas’’ style project dubbed ‘Euro Vegas’ comprising of 12 high-end hotels, six casinos, three golf courses and an exhibition centre.

The whole project, close to Madrid, is valued at 17 billion euro and would support 260 000 jobs!

Stand up and be counted

It’s not a new idea but rather a different slant on an old suggestion; or just another PR stunt, either way it’s unlikely to work. What are we referring to? Ryanair’s suggestion that planes should have standing room only at the back as, in their opinion, seat belts are useless anyway.

Ryanair boss Michael O’Leary also suggested that on take off or landing people should just hold on like they do in the Underground or when standing on a bus.

The problem is, European air safety law dictates that all planes must have seat belts and passengers must be seated plus knowing the EU’s apparent love (not) of Ryanair, the idea is already filed – in the bin.

No longer longest

Singapore Airlines currently operates the world’s two longest non stop flights: Singapore to Newark (8300 nautical miles) and Singapore – Los Angeles (7400 nautical miles). However the planes they use to service these flights – ultra long A340s – are about to be retired and replaced by the Superjumbo A380. At the same time on these routes they will start to introduce intermediary stops in Seoul, Tokyo and Hong Kong along the way.

This will leave the title of the worlds longest flights in the hands of Qantas and their flight between Sydney and Dallas (7400 nautical miles) and Delta with their Atlanta – Johannesburg flight (7300 nautical miles).

Forget cheap hotels

Despite the global recession, regular travellers can forget any hope of getting cheap hotels in many of Europe’s key cities. Hotel occupancy figures for September show just how much demand is outstripping supply across many cities and in so doing, keeps hotel managers happy with resultant high room rates. Occupancy across key European cities for September was:

London 90 per cent Paris 88 per cent Zurich 91 per cent

Amsterdam 88 per cent Dublin 93 per cent Vienna 88 per cent

Moscow 85 per cent.

The plot thickens

Private Bulgarian charter airline BH Air, better known for running seasonal charters bringing tourists into Bulgaria, has applied to the US Department of Transportation to operate three weekly flights to the American cities of New York and Chicago from November 2013.

The plot, though, may only just be starting.

While it is possible to be wrong, almost certainly the charter airline will not operate these routes itself so it is either making the application as an EU airline on behalf of a third party non -European airline whom it will then “appoint” to operate the route on its behalf. Or, like registering a much sought-after dot.com name, the value is in the possession of the rights to fly, which it can then sell on to an airline who really wants to operate the route.

Take your bets and before making them look which airlines are taking delivery of new long fuel efficient aircraft late 2013 and who already fly to Sofia.

Bulgaria’s sporting prowess

It wasn’t too long ago when Bulgaria would have been incapable of hosting any high profile main line sports event. That Sofia recently hosted the WTA Tournament of Champions for women at the superb new Arena Armeec and the dramatic layout of the Thracian Cliffs Golf Course will host the highly prestigious 2013 Volvo World Golf Matchplay Championship, is perhaps not attracting the applaud the efforts deserve.

Granted, whilst the WTA event will raise the profile of the stadia hosting it as well as show casing the city, it is the Golf event which might have the bigger ’wow’ factor. Tennis generally tends not to be stimulus for tourism but golf does.

Locations like Southern Turkey and the Algarve in Portugal are a Mecca for golfers who flock there in their thousands throughout the year and in so doing add hundreds of millions of Euros to the GDP of that country through tourism spend.

Can Bulgaria achieve the same? In theory yes but the two problems that Bulgarian golf has is that of the six excellent courses that exist, three are clustered on the Northern Black Sea Coast whilst two are in or around Sofia and one in Bansko. Thus the cluster of three of which the Thracian Cliffs is a truly World Class venue, is of the most interest to potential golf visitors. There is a problem however and that is until Varna (or Bourgas) has a serious choice of airline servicing it, attracting golfers will be hard. The golf season is not July and August but rather spring and autumn; scheduled flights are almost non existent and golfers don’t like charter flights. Solve the issue of flights and the battle for golf tourism will be won.

Profitless growth

Airlines in Europe are, as we well know, having a tough time of things. While airlines in China, Latin America and the Middle East see strong growth and decent profits, their European counterparts have load factors of 80 per cent with a passenger increase of four per cent year on year but many still cant make a profit! Ryanair and Easyjet excepted.

The reason is high fixed overheads and taxes which combined have the effect of strangling the European aviation industry. Who would invest in an airline?

China to overtake US in business travel

The US, for long the largest corporate business travel market, will soon lose its mantle to China according to predictions by our colleagues at HRG.

This will come despite a slowdown in the speed of economic growth in China. Business Travel spend by China was $18 billion in 2000, $62 billion in 2010 and is expected to be $277 billion in 2020.

Business Class with Ryanair!

Just as the likes of Easyjet morph themselves into a mainstream offering, the long time rebels of the aviation world, Ryanair, are showing signs of being less rebellious. As well as wanting to buy a mainstream rival (Aer Lingus) and start long haul flights to the US, they now have a quasi business class offering to clients – though one is unlikely ever to hear them admit it.

The airline now offers six rows of extra leg room seats including those rows at the front and over the emergency exits for 10 euro. Seats are pre-allocated and the fee also includes priority boarding.

Most definitely a case of Ryanair entering into mainstream airline traditional business offers. What next?

Black cabs to disappear?

One of London’s most iconic landmarks is under threat: the company who makes the famous black cabs has entered into administration and lay of over half of its employees.

The administrators are urgently looking for a buyer for the Coventry-based operations before time runs out.

Around 22 000 black cabs are to be found in London with a further 18 000 in use across other parts of the country. Cab drivers though have been turning to new hybrid taxi cabs such as those produced by Mercedes which they claim are more reliable and more cost efficient.

A case of tradition v cost perhaps?

Cab that

London has been crowned the “cab capital” of the world in a competition to find the world’s best cab city. Questions based on cleanliness, value, quality if driving, Knowledge of area, friendliness, safety and availability where the criteria in the decision making process.

To be a London cabbie, a driver must first pass a rigorous test..

One hopes they can continue to ply their trade in their landmark black cabs.

Just for interest’s sake, second and third spot in the battle of the cabbies was taken by New York and Tokyo.

Cheap again

Bansko has come out tops again of the UK’s Post Office Travel best value ski resort survey. The resort was 25 per cent cheaper than second placed Kranjksa Gora in Slovenia. The Slovenian resort is cheapest of the euro zone countries.

The survey did however point out that while some resorts has cheap food and drink, sometimes the cost of skiing itself was high. Also Bansko only has 70km of ski area; a relatively small area compared with others in Europe. Thus it is important to establish what are the priorities when booking a ski holiday.

Nervous? You should be

It must be refreshing (not) to read that a survey by the British Pilots Association on 6000 pilots revealed that four in 10 had fallen asleep whilst flying an aircraft. It gets worse; one-third awoke to find their co-pilots also asleep.

More than 50 per cent also said their ability to fly had, on occasions, been hampered by fatigue.

Sure is a refreshing survey that ought to be presented to every nervous flyer.

Easy to make a profit

So-called low-cost airline Easyjet has reported record profits of 317 million in the last financial year and that is despite fuel costs rising by 182 million pounds.

Total revenue generated was 3.85 billion pounds of which fuel costs totaled 1.15 billion pounds.

No doubt the shareholders of other airlines will be asking how Easyjet can make such profits when others can’t!

(Photo: Pablo Barrios)

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About the Author

Mark Thomas is Managing Director of Jamadvice HRG Bulgaria, one of Bulgaria’s leading Travel Management Companies with a 20 years market leading presence on the Bulgarian market.