Category Archives: Uncategorized

Economy class, Air New Zealand style

For flying geeks Air New Zealand has always been a winner in the style stakes and it looks like it’s just dealt another winner.

It has just introduced the Skycouch in its economy class. These are three seats reconfigured to be purchased and used by two people. The seat has been engineered to allow it to go completely flat, stretching to the seat in front (although at 4 ½ feet, it isn’t quite the same as what 6-footers might be experiencing in business class). It’s the closest that any economy class product has come to replicating the big draw of business class, the lie-flat bed.

It offers the ability for two people to sleep together (although ceo Rob Fyfe did go out of his way to say “just keep your clothes on, thanks”!) on the arduous long-haul routes into New Zealand. And all at a very affordable price – the cost for the specially adapted three seats is the fare for two economy seats plus approximately half of the third.

The specially configures ANZ 777s will have 22 of these Skycouchs – the first 11 window rows of economy on both sides of the plane. Air New Zealand will also be enhancing its other two cabins, business class and premier economy.

The first routes to be affected will be the Auckland-Los Angeles services.

Why, of why, do we have to fly all the way to New Zealand to experience an economy class which has some, errr, class?

Resting labour

The travel industry has experienced its fair share of restructuring since the economic downturn. Many colleagues have lost their jobs. So it is indeed heartening to see that InterContinental Hotels is doing its best to employ resting members of the travel fraternity by employing them to, err, rest.

Holiday Inn is apparently making use of “human bed warmers” to warm up guests’ beds before they (the guests, that is) climb in. The bed warmers have special foot-to-toe sleep suits and do their stuff for five minutes. The idea behind this is that warm beds help a guest not only get to sleep but have a good night’s sleep.

The gimmick – oops, concept – will be tested out in Holiday Inns in London and Manchester, according to the Telegraph.

As much as I, like everyone else ever associated with the travel industry, wants to see as much employment as possible, we all too want to see financially viable, robust businesses. Wouldn’t hot water bottles achieve the same effect for less cost?

Air France: the more you weigh, the more you pay

It was only a matter of time. Air France-KLM have now made it official. Passengers who cannot fit into one seat will be charged for two seats. The actual cost, however, will not be quite double as taxes and surcharges will apply only to the first seat. The carrier adds that the fee is refundable on flights that are not fully booked. “By paying for both, the overweight passenger will be assured that two seats will be available next to each other,” it said.

The new pricing applies to any bookings from 1 February (the beginning of next month) for all flights from 1 April.

I suppose that it is only logical. My tall sons are not automatically allocated the seats with extra leg room. If they want to sit in an exit row seat or to fly in a premium cabin, they pay extra.

So the more you weigh, the more you pay. You pay for the excess baggage you carry and now you will, errr, pay for the excess baggage you carry. The fuel needed to propel the aircraft to its final destination is calculated on weight, so the larger you are, the more you cost the airline.

Many years ago John and I were booked to fly from Gatwick to JFK. I can’ remember if we were asked if we had packed the bags ourselves, but I do remember that we were asked how much we weighed.

I’ve often wondered if that was why it took that flight two days (another story) to land at its final destination.

British Airways’ cabin crew – true or false?

If the Telegraph is to be believed “Disaffected British Airways cabin crew have resorted to pouring vintage wine down the sink on planes and throwing away unused washbags in protest at what they claim is the airline’s ‘disregard’ for their working agreements.”

This sounds strange. I always understood that any wine remaining in opened bottles had to be poured down the sink because open bottles could not be saved and re-used on the next flight for several reasons including issues of international customs. I, for one, have had the good fortune of sitting next to someone who’s been offered the remains of a fine bottle because “it would otherwise go to waste”. So either passengers – or sinks – which have been beneficiaries of the remains of bottles for a long time are seeing a standard working procedure being relaunched as a method of protest or some of us have been misinformed.

Because, however, it is likely that we’ve been misinformed and the Telegraph is right, you might ask “what is going on?” To all of the rest of us – even investment bankers – who have had to adjust our lives to the new economic realities, such antics, if they are the case, look an anachronism. No one wants anyone to have to lose their job or work more for the same money, but to swim against a current looks like a puerile tactic.

Eurostar – perception and reality

Can any of us believe what is happening to Eurostar?

This is the travel product, mode of transportation, whatever you want to call it that has not only most affected the landscape of business travel but also our expectations. For more than a decade we’ve heard nothing but praise, and more praise, for this quick, comfortable, reliable way of getting from the heart of London to the heart of Paris and Brussels. It’s been an easy, convenient, productive and stylish way to travel. And we’ve all loved it. We’ve loved how easy it’s become to connect with the Continent.

And it’s changed forever our perceptions of the train. We stopped thinking of rail as something slow and dowdy; Eurostar made travelling by train become something sleek, stylish and suitable for business travel.

How can a love affair that’s lasted for 15 years start to unravel so?

I travelled on Eurostar to Paris on Thursday the 17th of December with the only worry that the industrial action planned for the Friday might delay my return journey. In fact my journey out was delayed, and delayed and by the time I got to Paris industrial action, which only the French can still do in the style of the 1960s, was in full swing and between that and snow and ice in the French capital, taxis were in short supply. In fact they were non-existent. Just as well because that prompted me to change my Friday return to an earlier train which was delayed and delayed and yes, I moaned, but when I woke up to the news on Saturday morning I stopped moaning. I felt embarrassed to be moaning about an hour and a half delay when I heard what passengers on later trains had had to endure.

But Eurostar, oh Eurostar, I’m confused. What has happened to all the brilliant service and customer care that we’ve loved you for? Even on my train, which unexplainably ground to a halt in the middle of a snow covered field in northern France, the announcement was “I don’t know why we’ve stopped but when I find out, I’ll let you know”. Announcements like that don’t fill you with confidence but, eh, they’re better than no announcements.

One plausible blip is manageable. Several send out warning signals. Please, Eurostar, give us those strong, positive messages we used to get. We love you but we miss what you were.

Security – comfort blanket or safety net?

December can be strangely predictable. I catch a cold . I sniffle. And I keep pretending I’m not sniffling til I slow down to a full stop. And then I stop sniffling. It’s a pattern with which many of you can identify. But sometimes December can be unpredictable. How many of us thought there would be a potential terrorist attack on Christmas Day? Even though previous attacks have been on dates prominent in western calendars – 9/11, 7/7, we chose to ignore 25/12, a date made significant by the Christian calendar even if many of us now pay more attention to St Michael than to St Nick.

What’s sad is the predictability of the response of western governments. The US – and the UK and other European governments – seem more interested in the illusion of security than security itself.

Since Richard Reid demonstrated that shoes had more functions than protecting our feet, more pairs have been removed at airports round the world than we care to think about. We don’t know for sure that no explosion ingredients have been found as a result of such searches, but I, for one, would be quite surprised. We still go through metal scanners despite a decade of knowing that terrorists do not need metal to achieve their objectives. We are routinely asked the same questions by bored check-in staff every time we check baggage before flying. We respond in similarly bored voices. We know very well that no one with genuine ill intentions would stare back and say they had been asked by the leader of a cell to carry a package which was now duly tucked between the socks and the shirts.

Why are we so process driven? If it were not such a serious issue with such unbelievably horrific consequences we would laugh at the pathetic silliness of modern airport security. As many of you know, flying into or out of Israel can be an unpleasant experience. You are asked any kind of question from what language you speak at home to how many years you have lived with your partner. This is because Israeli security is not aimed at gaining public approval; it is aimed at keeping you safe. Questions and profiling is unpredictable and far from politically correct but it achieves the objective. I can remember reading about thwarted terrorist attempts. I would have to search google to remember the last successful attempt.

And maybe that’s the problem. Governments aren’t actually taking the measures they should to deal with terrorism. They’re taking the measures which they think will win public approval and achieve a public perception that security measures are in force.

As the French would say, Oo la la.

No Accounting for BA

According to a report on Bloomberg today British Airways is maintaining that its new business class only service between LCY and JFK is already profitable. I know Waterside is basking in a good news – and a good share price rise – week but this just stretches credulity.

Even if there is no overhead charge, no charge from marketing, the press office, the sales team, maintenance, etc. Even if there are no airport fees. Even if there are 100% loads and all 32 of those seats are yielding the full published London-New York business class fare, can there really be a profit???? By my maths it might be possible if the only costs were the direct marginal operating costs, eg food, fuel and crew and items such as the lease payments on the two specially configured Airbuses were not considered.

All of us in the industry truly wish BA well on this venture and indeed hope that it is meeting budget (there’s a lot of positive feedback on the quality of the service) but c’mon. Meeting budget is not the same as being profitable within 10 weeks.

Or does someone have a plausible explanation for BA’s claim?

Money and mirrors

Adam Smith said, “The tax which each individual is bound to pay ought to be certain, and not arbitrary.” Add to that common thinking that an effective tax is generally judged to be one that is easily understood and enforceable and you could be forgiven for scratching your head this morning.

Between the UK government wanting to be seen to deal with this year’s demons – the bankers – and the Copenhagen Summit determined to be seen to deal with the environment’s demons – the airlines – we seem to be morphing to using tax as a popularity instrument rather than as a means of obtaining revenue to fund government activities.

The UK government is said to want to levy a windfall tax on the bonuses of bankers. Windfall taxes are not without precedent in the UK. Taxes on a category of employment rather than specific businesses are a different matter. How would you define a bank? How do you define which of a bank’s employees are bankers? How would you define a UK bank? American Express is a bank and it has a large UK operation. Will all bonuses paid by American Express be subject to this windfall tax? In reality how much tax could a tax on individuals’ bonuses raise? Several hundred million pounds might be a generous estimate. Will this cure the UK’s underlying ills? A short-term political gain by punishing the universally unpopular “bankers” could create long-term economic problems for the UK, a country which long ago abandoned any manufacturing for services, financial services being at the top of the list.

Similarly, the UN’s Summit on Climate Change in Copenhagen is thought to be seriously looking at a global aviation tax on international flights as the means to fund developing countries’ plans to deal with global warming. Just as banking practices are not wholly absent from the list of causes of the current economic downturn, airlines are acknowledged polluters. But airlines are taking more than their fair share of responsibility because they have become a politically acceptable target. Cars, energy and pets are not carbon neutral but these would be too unpopular a target. Methane is causing as much warming as carbon but no one has yet started taxing meat and dairy.

As with the banks, airlines, for better or worse, are an enabler of global business. Whereas leisure travellers have a choice about where to go on holiday and how to travel, business travellers have no choice about what destination they must visit and when. Virtual meetings are as often as not a complement rather than a substitute for corporate travel.

Optional extras

iPlayer is wonderful. How else could you catch up on everything you never knew you wanted to know? I never listen to Radio 4’s Money Box because I always end up depressed after being reminded how negligent I’ve been in the area of financial management but I’ve just caught up with Saturday’s edition which had an item on the escalating practice of airlines’ surcharging for use of credit and and debit cards to pay for flights booked on their websites.

Hmph. We’ve been paying extra for online bookings for ever. Airlines have always justified this as a cost of distribution and a sort of equivalent to the credit card companies’ merchant fee that they are absorbing. So why is everyone getting excited now?

Probably because, like BA’s new policy of charging for reserving a seat, it’s a visible and prominent example of the growing trend of disaggregating air fares and its new cousin, ancillary charges. Ancillary charges may be a nuisance but so long as they are flagged before a booking, or are deemed to be “optional”, they are legal. Ryanair could always justify its credit and debit charges on the basis that you avoided such fees if you chose to pay by Visa Electron. As Visa Electron is issued by only a handful of banks and is not a full service card but something more suitable for students, Ryanair could do this safe in the knowledge that most of its customers did not possess such a card and therefore would be paying the debit and credit card fee. It has now announced that from the first of January Electron will cease to be free but there will still be a payment-free-of-surcharge option, namely Mastercard’s new cash prepay card. Oy vey.

The bigger issue, of course, is transparency for customers. These practices may be irritating but they are legal and so long as consumers don’t vote with their chequebooks and take their business to suppliers that do not surcharge, these “extras” – and all the irritation that comes with them – are here to stay.

 

Hello world!

Ancillary airline charges – a storm in a teacup?

An ACTE survey of its US travel buyers reveals some managerial unease on the issue of airlines charging for extras. 29% of the survey’s 300 respondents said they did not manage ancillary charges well while another 51% said they managed them only “somewhat well”. In other words the kind of answers you don’t want to hear at an annual performance review.

The associations report a veritable fury among buyers. In fact the UK’s Institute of Travel and Meetings and the US’s Business Travel Coalition announced plans to create an Industry Solutions Group to develop and build consensus around standards and policies for airline product unbundling. The international industry group will comprise corporate travel managers, airlines, global distribution system representatives, airline alliance representatives, travel association executives and other industry stakeholders.

So. The airlines are a struggling industry. One reason they’re struggling is that there’s depressed demand from business: businesses see travel as an easy place to cut costs whether by merely cutting the cost of a trip or cutting out a trip. So travel buyers – to show more effective startegic sourcing – start incorporating low-cost airlines into their model and some prominent low-cost airlines are still turning a profit while some very big and established legacy carriers post record losses. So those in the sector not doing so well – legacy carriers – look at those that are doing better – low-costs – and low and behold, they decide to adopt some of their policies, namely adding on for “optional” extras.

The result? An international task force to find a solution. Did the airlines create an international industry solutions group to help them when Brent crude nudged $150 a barrel? Why do some segments of the industry cry “partnership” when they strike difficulties while others just go off to find solutions?