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Last week it started with a analysis by the German Association for Environment and Nature (BUND), hitting the headline news claiming that seven of the 14 regional airports in Germany would be expendable. Which was a welcome story for the media. While I still hope that they come to senses, I am afraid that history shows their sole focus on populism (next election) and hypocrisy. Including their attempts to distract from their failures managing the ongoing Corona crisis.
More articles and posts surfaced this week that airports should be privatized.
Focus on votes reminds me too much on “shareholder value”, being accused to have a sole short-term profit-maximization interest and none for long-term success, sustainability or social responsibility. Same stupid.
Today the headline news is about the Thuringian president of their Court of Auditors recommending the closure of Erfurt-Weimar Airport, building on the above analysis.
Closing Erfurt-Weimar Airport? And others Regionals?
As you may recall, 2009/10, I’ve been managing Marketing, Press/P.R. and Corporate Communications at the Erfurt Airport, one of the seven now questioned. Which is my example of why German airports fail thanks to populistic airport bashing by the local politicos and most of the media. And an idiotic, short-sighted focus on “outgoing” holiday charter flights. I am adamant about my justified opinion that given a positive support and strategy, the airport would be worth a million passengers and an economic operation. If they’d cash in on incoming.
Back 10 years ago that was the reason I made the name change from Erfurt to Erfurt-Weimar possible from Marketing budget. Just before the shortsighted politicos – lead by then Minister for Traffic (“C.C.”) who saw it more important to invest into streets and highways – decided to “strategically” end all support for scheduled flights, which I had recommended to replace Munich-service with a sole Lufthansa- but without Star Alliance codesharing, with a KLM-service to Amsterdam to be connected to the world. With having compiled justification and statistical data supporting the case.
As I wrote three years ago, airports must embrace their changing role – which many airport managers and owners fail upon. And that is simply another example where the Corona crisis highlights the shortcomings. These shortcomings have been there before. We have too many “good weather managers” that keep running a company (beyond just airline, airport) and have no vision for it, no strategy. They handle day-to-day work and live inside their microverse without understanding or concern about the bigger picture.
Should they now close Erfurt-Weimar (or either of the other questioned airports), it is a direct result of the local stakeholders failing to envision, demand and support a long-term sustainable strategy for the airport. And giving the public airport bashing by the stakeholders, I wouldn’t justify scheduled flights to Erfurt-Weimar either. It’s an example how short-sighted stakeholders run an economic driver into the ground. And just an example how politicos don’t think and guide, but brainlessly worship an implied public (voters) opinion and not act but only react to developments (incl. Corona).
CYA in action: Cover Your Ass. Don’t think, don’t move, don’t risk.
Strategic Indecision and Short Sight
As I’ve written in the two Food for Thoughts in December, there is the Financial Impact of Air Travel for the regions and their economy. If you understand and focus on the need for “incoming”, passengers coming into the region, bringing money to the region. Instead of the sole “outgoing” focus we see with most airports in the “developed countries”. And without this, there is no valid argument to invest into the airport, is there? But with a strategy, it makes sense to invest. Not to subsidize!
The other post in December was about Why Airlines Keep Failing, which is mostly the same reason why airports keep failing to live up to their expectations. No strategy, no stakeholder management (politicos, industry, media, public opinion, etc.). Erfurt-based Thuringian state development agency funding travel for delegations from Berlin, instead supporting the subsidized flights from and to Erfurt. Politicos publicly promoting to travel to Erfurt and Thuringia flying from Frankfurt, Berlin or Leipzig, then taking the train. And even with a Biathlon World Cup taking place in Thuringian Oberhof, places like Weimar, Eisenach and the Thuringian Forrest recreation are, travel to Thuringia not coming through Erfurt in their empty heads.
Scheduled Incoming vs. Charter Outgoing
Again ,there is no reasoning to invest into an airport that only looks at outgoing summer charter flights. The money leaves the region and benefits the destination. Why would I subsidize that?
Without a strategic vision to use an airport incoming as an asset to connect the world to the region and cash in on the incoming air travel, it is a logical consequence to shut down an airport and write it off. In turn, you write off an asset for your region. If I call anything short sighted, this is a very good use case.
I keep explaining “seasoned airport managers” that airports need three foci.
- Connection with the global hubs and connectivity there
At Erfurt, it was a barrel burst to have a flight into Munich by Cirrus Airlines as “partner of Lufthansa”, but with only some Lufthansa code-share, but not even Star Alliance. It was why I very quickly promoted to replace that one with a KLM-Amsterdam-service. With very promising talks ongoing until the political stakeholders decided to shelve all support for scheduled flights. A good reason to end my work there. Aside me being told later that the discussions ceased as they called my number, reaching someone not able to communicate in English.
So connectivity to global hubs with code-sharing and/or interlining must be prime on any regional airport’s agenda. - Strategic Point-to-Point travel
Depending on commercial and strategic regional relations, direct flights between economic partner regions can and should be established. - Local Support
With “airport bashing” being too common, it is vital to promote the airport as a partner for the region. As a vital infrastructure to improve commerce and industry, incl. but not limited to tourism!
And yes. Summer charter flights are nice to have, and may contribute to the revenue, but they are commercially and strategically not a priority.
The Kolibri Offer
KOLIBRI.aero is looking for funding of the development of first and further bases. With seven aircraft, maintenance, infrastructure and several hundred jobs a € 15 million funding is needed. No subsidies but a bold investment with minimized residual risk, to be paid back with interest. Investment into local infrastructure will reflect long-term commitment. Further development of profit centers being part of the plans. Should you know airports being interested in such a joint development having regional funds to provide the capital but also demand for the new routes, we are happy to discuss details.
Food for Thought
Comments welcome!
Today I had a conference call and a major topic was Spain and how our (German) governments banned travel again. And publicly justifies under gross neglect of their own rules. Those “development” showing persistence to deny change. And the “Wag the Dog” syndrome, pointing the fingers at others to distract from own mistakes.
Is it really “new thinking”? Last December, pre-Corona, I outlined 
Recent developments and posts really bug me. Don’t the writers of those posts recognize the cognitive dissonance? Yes, we must think positive. But there is a clear distinction between thinking positive and whitewashing or daydreaming. We have a crisis at hand and the “positive signals” aren’t as “positive” as those posts try to make them look like. They look at the marketing messages on the surface but fail to look the slightest bit deeper.
Yes, as you can see in the archive of my 
I know, being a German and having taken residence with the family in Germany for the pandemic, I am somewhat biased on what happens here and especially Lufthansa. And that makes me puke. No, I can’t say that nicely.!["We are Listening. And We're Not Blind. This is Your Life. This is Your Time!" [Snow Patrol - Calling in the Dark]](https://foodforthought.barthel.eu/wp-content/uploads/2020/01/CallingintheDark.jpg)
Call Quality, Disruptions
What it does keep reminding me is that for 2002, in the wake of 9/11, we had the very same discussion. And I brought in a video-conferencing-specialist to speak at ITB Travel Technology Congress. And while the big players added video conference rooms to their portfolio, they turned to dust-bins quickly. I know, c’mon, that was 20 years ago. And we simply don’t tend to learn from history. There’s all the young smart-asses leaving university. They have no experience with extensive travel, their live has been virtual, they are still to learn the lessons.
The last issue is emotional, psychological. Which we found out post-9/11 already. There is the factor of “importance” when you are send to travel to meet your client. And I do not speak about the true importance to show your flag at your client. But the perceived importance for the traveler.
Naaaw. No it won’t. I have video calls with my family when traveling, my mom living 600 km away, friends around the world. And especially during the lock-down I keep with my network attending webinars, video and voice-only conference and one-on-one calls. And can’t wait to see all my counterparts in person either on conferences, on business trips and visits. Video-calls replace phone calls. But they don’t have what it takes to replace the real face-to-face.
A few days ago someone on the media compared Corona to the “new measles. Ever since I use the analogy and sure gave it some thoughts how that will impact our industry.
To date, the PTBs communicate in the sense to stop the virus. That is crap and they should know it. The time of containment has been missed, see above. So it is not about stopping it, but to 
To which he replied: “I couldn’t agree more. I have seen the same firsthand when it came to [product] engineering. Initially we were going to work with an established manufacturer and have them make modifications for us. That was quite the trip down the rabbit hole, and more trouble than it’s worth. Now we’ll get [products] that were custom engineered for us, from the ground up.”
In direct conversation, one of the later board members of Air Berlin told me, the airline would not kick the bucket because the new CEOs wouldn’t have good ideas, but because they failed on the heritage. The existing “networks”, afraid of the change, afraid to loose their job, torpedizing the management.
As addressed in 
Dinosaurs …
Doing a staged setup and focusing to stake our own claims, select strategic bases aggressively outselves, we can establish the company for a mere €30 million. € 15 million per additional base with seven aircraft and hundreds of (secure) jobs. A fraction of the food the dinosaurs demand to survive. Condor now half a billion? What evolutionary wonders we could achieve with that money.
Freight Use + Repatriation Flights
Very visible is the mass grounding of large aircraft. The Airbus A380 is already no longer built, now airlines retire, decommission that aircraft in large numbers. Flightradar showed quite some of those aircraft being flown to the scrap-yards, also called aircraft graveyards. The same applies to many 747s, not being “parked”, but decommissioned. The same fate even seems to hit the Boeing 777. Coronavirus also seems to seal the fate of many Boeing 767. For all those aircraft, more than 80% are grounded – many of which are being decommissioned for good.
What stroke me odd was the Embraer E195, showing 75% grounded, as well as 65% of the E190s. Both very good aircraft. But very few, large operators grounding their Embraer fleet in favor or their Boeing/Airbus operations seem to have resulted in their large groundings.
Optimists outlook is a two-year return to “normal” (AF/KL). Flightglobal headlines 
As outlines in my Corona Papers, IMF Managing Director Kristalina Georgieva warns of the 
Now Flightglobal headlines that 
In a recent conference call, two attending tour operators flight purchasing managers emphasized a recovery on the basis of previously high density high volume routes. They emphasized that while VFR (visiting friends and relatives) will recover a bit faster, the “normal” traveler will be busy recovering their jobs and lives and income – they expect only very little demand for the typical vacation for 2020. And they, as tour operator flight experts raised a question: “Who will want to spend some hours in an airplane having the reputation of being a sardine can?” This will even impact the vacation travel in 2021 and beyond. There will be a revival of ground-based and localized travel at the expense of air travel. It will take time to recover from that blow.
Business Travel
An exception the BTMs mentioned: Travelers who went through the infection and are such immune and noncontagious may be the first to start traveling again. But it was also consensus that a comparison to flu vaccination would be not comparable, after all the hysterics we went through.
All this lead to the expectation that even on former high density routes, the use of B757, A321LR and such smaller airplanes may be the first routes to recover on long haul. Some very high density routes may recover using larger aircraft such as the remaining B747s or B777s. Where I see Emirates likely to stake their claims quickly, possibly even basing some of their aircraft out of country to serve remote routes.
As for the anticipated return in passenger numbers, except for the very high density routes like New York-London, airlines will start with shorter hub-to-hub-routes, like back in the 80s the availability of two-leg-connections between any two cities will be limited, three-leg connections again becoming quite normal. Expectation was also voiced that most operators will shelve most, if not all twin-aisle aircraft.
Given the expectation of questionable safety regarding load factors and demand for 150-240-seat aircraft, this will be a turning point for the low-cost industry. For a long time, I considered “low-cost” carriers (LCC) as a cost-sensitive regional aviation player. Connecting point-to-point without a focus on connecting traffic. As the fleets grew, the routes got longer, the LCCs started experimenting with classic concepts like GDS-sales, hub-services and connecting flights, etc., etc. As the classic airlines learned to adapt to the new competition. It was long questioned on conferences and other discussions, if you can still group LCCs, that dates back even to fierce discussions about the status of Air Berlin as a LCC.
In most of the webinars, calls and discussions of the past weeks, the expectation was expressed that as regional flights were the last to be cancelled, they will be the first ones to recover. 150-240 seats are the domain of the former LCCs. There problem will be the very slow growth of passenger numbers post-crisis. Suddenly their “more seats” turn from benefit at full load into a severe challenge. Similar to tour operators, they will focus their recovery on the former high density routes. In a perfect scenario, they would slowly pick up speed. Realistically, they will rush it, risking a lot, flying below cost. How long they can sustain that must be seen. If aviation truly cuts back to traffic of the 1990s, the demand for flights served by 150-240 seat aircraft will be rather limited. A lot of Airbus-320- and Boeing-737-families’ aircraft will be grounded for time to come. With a devastating impact to aircraft leasing companies focusing on those aircraft.
Pending question was if there will be enough consolidation to leave enough niches for the survivors. Or if the stabbing and fighting for routes will continue – with the pre-crisis effect on revenues and commercial sustainability of the air carriers. While we all expressed hope for the first, we all fear that airline managers will fall back into their old modus-operandi to focus on marked share and loads instead of revenue and profit.
The recovery will be slowed down as “low-cost” models at the beginning will such pose high risk – low return, airlines will need to focus initially on low load factors but the need to create profit after the drought.
With 
Now, surprise surprise, the current crisis proves that this is the very same with aircraft investors. If you just look at aircraft but have no idea how to use it, you’re doomed. It will work a while, it did work a while. But even before Corona, this model was doomed and I addressed it. If an investor invests into the aircraft but outsources (the risk of) the operation. Then those small failing airlines return the aircraft after not paying the bills for several months.
Since starting to turn the idea that turned out to become 
Reading the 
If you focus on shareholder value, human resources and only your own, personal profit, you end up in a deep, dark pit. Sometimes, like Boeing’s Muilenburg and others who have been on the Olymp, just for that much deeper a fall. Examples aplenty.
Corporate Social Responsibility starts with your immediate environment: Your own organisation!
Aside the example i used on the different approaches between 
It might be surprising to the bean counters (accountant-mindset “managers”) that all of our related “cost centers” turned out to be no just driving loyalty, but to be true profit centers and vital in our attempt to melt the cost factors to competitive levels. As a start-up, investing into all the company’s assets, you must be competitive against all those large, established companies like easyJet owning around 70% of their fleet, cost down to maintenance, with roughly 25% being paid off and around 5% being leased to cover ad hoc opportunities (like taking over Air Berlin routes). And while now being a “burden” in Corona times, airlines cannot drop out of leasing either, so the cost still is there. But those airlines can secure credits based on their (aircraft) assets. To develop profit centers that allow to cut down the cost to competitive levels such ain’t a mere strategy, but a vital need.
Computer Literacy
Cloud Computing
Faith in The Computer
Fly by Wire, Drones and Air Taxis
A similar case is the automated drones as envisioned by Amazon, DHL and others, for automatic passenger delivery. As the air taxis, they will rely on a fully-automated flight planning and flight plan filing with the authorities’ computers. Simply to avoid in-air-collisions.