04.08.2019 Aviation, Management, Values

#flygskam (FlyShame) Reality Check

All the industry discusses #flygskam (flyshame), but even given sound studies disqualifying the topic, our own lobbyists fail to organize a concerted response to the case. Let’s have a reality check…

There were some reports recently on German television and in the media. German “Welt” (TV + newspaper) reported “Green (party) Demands: Climate Sin Domestic Flight? Abolition Hardly Saves CO₂“.

The use of ships to travel from Scandinavia or Britain to Europe or crossing the Mediterranean I think I don’t need to remind of the extreme emissions of cruise and other ships?

Rail Greenwashing

But there was another article even more to the point: “Where there is a will there is not always a train“. But there are some issues that are unrealistic. The numbers of German Rail are biased and greenwashed. They claim to use only “Green Power”. But in fact, published by the German Federal Environmental Agency, their power comes from the public grid and no matter what “deals” they do, it is grid power. And on the grid, in 2018 only 16.6% has been “Green” (Source). The energy industry accounts for 85% of all Greenhouse Gases of which 98% CO₂, the remainder being mostly Methane (CH₄) and nitrous oxide (N₂O) (Source).

The Myth about Green German Rail — [Image with Link added Oct.21]

So in fact, the amount of greenhouse emissions by German Rail are considerably higher than advertised. As a report from 2018 shows, we talk about up to 83% “dirty energy” on the “green” energy companies… So if we increase the “public” German Rail assumption of 36g per km (greenwashed) and adjust it to reality, we talk about +200 g/km. Suddenly the published 201 g for flights is not so bad at all!

But what also needs to be taken into account is the emission per passenger. Be it rail, in average used 22% only, whereas those passengers are mostly commuters, filling up the trains above their limits in the rush hours. That is not only true for the commuter but also the long-haul routes. This year, the long-haul trains’ punctuality was only 69.8%. For 2018, German Rail reported 16 routes operating above capacity – passengers finding no seat being just another annoyance, half of the delays are a result of those overused routes. That 20% of the trains are in (often unscheduled) repairs, toilets and air condition known to be out of service just being others. Just a reminder, the average load factor of flights according to IATA is about 85%.

e-Mobility: Battery Greenwashing

Given the devastating destruction of the natural environment in Lithium mining, I do not understand that politicians push forward battery-based e-Mobility. Using fuel-cell technology we can use the existing gas stations infrastructure. Refueling takes only about five minutes! And given a broad use will lower the prices and make the technology available on smaller cars too. They can even power scooters, so don’t tell me it doesn’t work for a compact car!

Instead they promote an ecologically catastrophic technology with a completely missing loading infrastructure…?

More information I addressed in September 2021 in the post The e-Mobility Lie. Inspired by a documentary by German ZDF’s Planet(e): Mythos Elektroauto (naturally German). [Added Oct.21]

Ground Sealing

There is an important advantage of air travel to both rail and road that is frequently not addressed. The issue of ground sealing!

Airport

For an airport, about 2,500 x 45m are typically “sealed for the runway, in total about 3,000 by 400 m are required for a regional airport, of which only 25-30% of the ground are “sealed” by infrastructure, 70-75% being grass areas. So we talk about 400,000 m² of an average regional airport being “sealed.

Highway

A highway with four lanes is about 31 m wide with about 24 m being sealed. A 50 km highway such seals about 1.2 million m², so three times as much as a single airport. Highways are known to be an insurmountable obstacle for wildlife.

Rail

For Rail we talk about a minimum of 12 meters sealed width for 2 tracks, up to 20 meters on high speed train routes and and average of about 15 meters. So on 50 km of rail we talk about 600,000 m² of sealed ground. Before we start talking about the railway stations…

Ground Sealing Summary

I don’t have the number, not even for Germany, but it might be an interesting comparison for the aviation industry to compare the total ground sealed for highways (not talking about cities) and rail, compared to airports. I think that will be a devastating result for the ground transportation modes.

My hope on rail is that hyperloop we will not seal more ground, but will be established underground.

Bio-/SynKerosene

Yes, I am a big fan of the CO₂-tax. If it is used to compensate for bio- or better SynKerosene! So far, all eco-taxes are abused to cover up for growing demands of the policos for their “other agendas”. But did you know that the German air traffic accounts for less than 0.3% of the CO₂-emissions in Germany? (Source)

National Geographic last year reported about a development by Canadian Carbon Engineering, using CO₂ with hydrogen (H₂) to create artificial kerosene (and gasoline). Whereas there are industry sources to provide excessive CO₂, hydrogen can be created using solar parks. The resulting bio-kerosene is an independent power storage. As the CO₂ from burning that bio-kerosene equals the amount that was used from the environment, it is a completely climate neutral solution. And using solar energy for the electrolysis and the power needed for the processing, there is a power loss, but that is ecologically irrelevant.

But… Why do the media and politicos actively neglect those developments? Why do they go for dirty Lithium?

Summary

So what is the reality check for #flygskam (flight shame) vs. the “green rail”? Green rail is a myth, the power consumption not close as “green” as they say. Considering the ground sealing also favors aviation. And should we in aviation invest large scale into bio-kerosene, lowering the prices to competitive cost levels, replacing crude-oil-based fuel… A CO₂-tax such might be an enabler for the conversion. If our lobbyists would show balls, which I’m afraid from experience, they don’t have.

But sustainable transport, including air transport is acknowledged as an important factor in the United Nations Sustainable Development Goals to develop regions, counterbalancing inequalities and disparities!

I think it should not be aviation bashing, nor should we greenwash rail, but we should develop a sustainable transport network for everyone. Connect individual transport to rail, hyperloop or flight. It is the mix we need, not enemy stereotypes! And we need funds to support strategic projects selected, not the ones having the biggest lobbies. And “batteries” are no solution but a pest! Lithium mining destroys the planet!

#flyshame is out! Flying is a vital service for a global world. To disqualify it with false facts does not help to make our world a better place.

#railshame is my new buzzword!

Food for Thought!
Comments welcome…

21.06.2019 Aviation, Low Cost

Quo Vadis Aviation

Side Note

Dear Readers. I’ve spend a quite large amount of my “free” time on qualifying myself on online-PR, -marketing, SEO, SEM, SEA. All those buzzwords that I summarized a bit in the new SEO-optimized page Unhyping Online Marketing (SEO SEM SEA). So I didn’t have spare time to focus on the topics but made note, what to address in the upcoming blog posts.

As I told a friend, it mostly scratches on the surface only, where I could pour some salt into open wounds. Most fun for me was to make that article SEO-perfect, though it does make it a bit hard to read… And it became so much, that I decided to put it in a page, not a blog article (post). If you didn’t read it yet, if you’re in marketing or online, you might want to after reading this post.

What did trigger is the statistics on active users vs. leechers. I know a lot of you read, though most of you I don’t know who you are. I sure do appreciate anyone “outing” themselves to me that they read my blog. Send me a mail to juergen at barthel eu if you don’t want to comment in the blog.

Quo Vadis Virtual Airlines?

Many new airlines come without business concept. What is the business model? What is the USP? Have you made a sincere SWOT analysis? Know your internal and external strenghts, opportunities, weaknesses and threats? Or do you believe with a small, leased fleet, paid maintenance, some commercial off-the-shelf software and some flights in summer to the secondary holiday destinations you can stand up to the existing big airlines? What’s your niche and is it safe and sufficient enough? Else, you simply build up a market for the big ones and find yourself pushed aside – another “victim” to the ongoing consolidation. Nothing new. Nothing unexpected.

There is the saying about how to make a million in aviation. Start with a billion. While I believe with a billion you can achieve something, the usual “airline startup” is 2-20 million. One or two leased A320 or B737. I call them mayflies. They fly one (high) season, maybe two. Then they have no more funds to sustain another low season and “fail”. A failure with prior announcement.

Regional Airlines vs. Low-Cost

Discussing “Regional Airlines” and “Low-Cost Airlines”, all the “experts” keep separating the two models. What they fail to see is the role of low-cost airlines in the regional aviation market.

“Regional Airlines”

The common “definition” of regional airline is to fly small aircraft, up to 100 seats. Often in a mixed fleet. Always at a high cost per seat. So the tickets by nature are and must be more expensive.

“Low Cost Airlines”

Different from Regional Airlines, the Low Cost airlines fly Airbus A320- or Boeing B737- family aircraft with 150 to 200, recently implementing even larger A321 and B737-9/900 with up to 240 seats.

Regional + Low Cost

Both airline types have something in common. Both fly point-to-point. Both classically focus on short and medium haul.

Both also establish some connecting services as their hubs. And airlines like FlyBE try to reduce the cost by using a single-type-aircraft fleet like FlyBE’s 54 Dash 8 Q400, though they have some other aircraft too. Air Baltic converts to a single-type A220-300, their CEO expressed even adding the A220-100 would complicate and increase the cost base. But the choice of aircraft defines the choice of airports and routes. Which leads to the next topic of this article:

The Passenger Airline Food Chain

30+ years ago, when I started in aviation, there was a very clear “food chain”. First came general aviation and holiday charter flights, feeding the demand for certain commercial routes or holiday destinations. When those flights became successful enough, they lost to regional airlines providing scheduled services at fixed times between A and B. The larger holiday charters lost to scheduled airlines and network carriers, taking over those lucrative routes. At the end of the food chain were the large network carriers, connecting smaller cities to their hubs and through the hubs connecting to the world.

Then came the Low-Cost carriers. And everything changed.
… Everything? Really?

The Rise of the Low Cost

So the model of the Low Cost Airlines was to use a single type aircraft fleet, such minimizing the complexity to operate the fleet. Be it exchange of broken aircraft, be it flight crew training (cabin and cockpit), maintenance, etc. Using the highly effective new Boeing 737 models, later also the A320, they focused on one thing. To provide the lowest cost per seat and such undercut the prices that the network carriers with their far higher complexities asked for.

They did not bother about the complexity of hub-services or – god beware – “interlining”, requiring baggage transfer, the need to secure the connection for the passengers, they connected secondary airports point-to-point. Just like the regional airlines, but at lower cost. All they did in fact, they cannibalized the upper end of the regional airlines and also competed with many regional flights of the network airlines. Given their USP of a very, very low cost per available seat kilometer (CASK) or mile (CASM), they covered their niche well and ate away from the profits of both small regional airlines, as well as the large network carriers.

Regional Airports vs. large Hubs

In the past, there was a clear distinction. Regional airports were small airports that were connected to the global air traffic networks by being connected to the hubs. So a regional airport only served a few scheduled flights, plus vacation charter. I had this concept also at the Erfurt-Weimar airport (ERF) 2009/10. Where they did not even understand their Munich flight they subsidized would connect them via Munich to the world. Cirrus Airlines as the operator was “Lufthansa Partner” without code-share into Star Alliance, not even with other airlines in the Lufthansa Group, so all the airport looked at was the few “Lufthansa connections” they could offer from their airport via Munich. Of which some even didn’t connect. In consequence, the locals did not look at those few connections, but focused to fly from Berlin or Frankfurt, both three hours travel time by train. Or they even took the train to Munich. If you know the added time you need in Berlin and Munich to get from the train station to the airport, you understand why I got upset. Simply to date my example of a gross misperception and belittlement of the airport’s value. Even worse, on my first day at the airport, I had to read an article in the main local newspaper that one political stakeholder promoted Arab stakeholders to come to Thuringia. By flying to Frankfurt and taking a bus (four hours minimum). Instead of flying via Munich…

Working with regional airports, my experience is a very strong tendency to short-sell themselves, belittle the own region. It is not made any easier that there are virtually no regional statistics about travel demand and the IT “solutions” are being biased to make big airports bigger and neglect the small airports. As I explained in the December 2017 article about the bias of route viability analyses.

Evolution of regional hubs

Especially in Europe, the political strategy about aviation is “thinking small”, new airports like Berlin are planned too small from the beginning. Airports that were planned for growth, like Munich when moved from “Riem” to “Erding” face political opposition to execute the expansion, adding the originally planned runways. Even London, instead of a bold move to establish a new airport, decided to just add a new Runway to London-Heathrow. A move that will quickly face the same problems Heathrow has today, of inheritance in terminal structures, slot constraints, a limit to the expansion. Should Boris Johnson in the recent turmoil follow Theresa May, there are some hopes that he revitalizes the “new airport” idea for London.

A necessary step to compete with the new “global hubs” in Istanbul, Dubai, etc., build to size of about 150 million passengers. Berlin? Build to 27 million passengers, when finally ready one day. Current news questions the next opening data in October 2020… As German “Postillon24” satire site published 2015: Archaeologists discover historical ruins of unimaginable dimensions in the south of Berlin (link to Google translated page in English)…

With the large hubs increasingly slot constrained, i.e. Amsterdam simply “out of slots”, the only way is to bypass those airports and increasingly fly to smaller cities. An example can be American Airlines, adding Dubrovnik on the Balkan Adria to their destinations. Sure, the low-cost airlines have a history understanding the value of point-to-point services between smaller, “regional” airports. Basel, as a first base of easyJet evolved into a major hub for the low-cost airline. Business case given, the operation of a regional hub can make sense… And didn’t we joke about easyX when Air Asia X flew to London-Gatwick with majority of travelers connecting onto easyJet…

So far, many of the “low cost airlines” (i.e. Eurowings, Norwegian) focus on larger airports as their hubs; Düsseldorf, Cologne, Barcelona and the likes. Their decision makers obviously are not bold enough to leave the beaten path and go new ways. Ryanair moved into Frankfurt, but it’s said they are not doing well there. Wizz and others establish small bases in regional airports and then grow them, benefiting both the airport, the region and commerce in the regions. Given the slot constraints on the “mega hubs”, we will see a lot more development of regional airports, point-to-point services and hubs. For those airports and their regional development stakeholders, one of the main tasks is to change the perception from “feeder airport” to a bold understanding of their own values and needs – which directly served regional routes make sense? I know, this is a recurring topic on this blog…

The Future of Airports

My friends at Passenger Terminal World, also doing the Passenger Terminal Expo, recently collected views on the future of airports. Personally, I found those views rather conservative. Very focused on the adjusting the status quo, no bold jumps at all. But for several years, some bold ideas keep resurfacing of which I’d like to address two.

The Circular Runway

The Circular Runway on first sight is an intruiging concept. You could land anywhere, never a “runway overrun”, never the wrong wind direction and while one plane takes off on the one side, another lands on the other. But.

There are some questions that I believe this idea will never make it to reality. Usually, there is a given wind direction and airplanes take off and land against the wind. So instead of a straight runway you have a circular one that allows to take off and land exactly against the wind. While the remainder of the runway remains unused. A nice to have? Or a lot of sealed ground for no gain?

The other setback is if you exceed the capacity. Adding another circular runway? If need be crossing runways use less space and allow parallel operations. # And they can be started with one runway, adding as demand requires.

Given both those issues, I think will be good reason to stick to the existing straight runways.

Drive Through Airport Terminal

The Drive Through Terminal is also an interesting concept that the designers invented for large airports. But in fact, there are a lot of setbacks from such a terminal that make it less ideal for such airports, but more ideal for regional airports. What I like is the possibility of weather independent operation thanks to the roof, as well as the guide rail system to transport the aircraft from arrival to departure.

The first problem is on large airports that there are airline using differently sized aircraft. So you have classic terminals and drive-through ones only for certain aircraft? On regional airports and low-cost airports, the terminal could be optimized for standard aircraft from 70 seats up to A320/B737 families with up to 240 passengers. Should there be a larger aircraft, it can be handled on the apron.

The other problem with the proposed design is the ignorance of what any airport operations manager can sing of: Disruptions during the turnaround. Once the airplane enters the process, there are now ways to replace the aircraft (see image left). On a small, regional airport, that can be overcome rather easily using one or two lanes only, allowing the aircraft on any stop to be “extracted” or “added” into the “line”.

The third issue is the issue of parallel handling, supporting connecting flights. While the first aircraft boards, the other just comes in. But what I think can be a practical approach is to have drive through in a two step process. Disembarking, embarking – go. If there is a problem, on both “stations”, the airplane can be pulled out backwards or front. Several airplanes could be managed in parallel.

The last issue is the passenger facilities, including and not limited to contemporary airport cities

Summary

There are a lot of ideas out there, but the main hurdle is the conservatism. Airplanes to date are serviced on the left, boarded on the right. A relic. But to change such requires not only different airports but also different airplanes. I doubt I will live to see such a change. Other issues can and should come. So I see the rise of the regionals, also the drive through terminal.

Food for Thought
Comments welcome

Back to the introduction. I’d love to hear from you. You can out yourself on mail, WhatsApp, Viber, here in the comments, that you’re one of the frequent readers of my blogs. It is motivational, believe me. And if you haven’t read it yet, you might want to smile about my SEO-optimized summary of three months studies: Unhyping Online Marketing (SEO SEM SEA)

06.02.2019 Aviation, Europe, Low Cost, Management, Values

Aircraft-on-Ground, Disruption Management …

… and the Ongoing Demise of Small and Mid-Sized Airlines

P.S.: While I wrote this article, Germania, an airline that I know from the beginning of my career, who’s team I booked at American Airlines to Seattle to pick up their first 737s, an airline I have had a personal attachment to, went into insolvency grounding all aircraft after many years of financial losses. The demise of Air Berlin 2017 brought easyJet on their home-apron in Berlin in force, no longer some competition, but clear one-on-one. Such the chance to establish lucrative routes in Berlin evaporated. Instead of benefiting from the demise of their largest local competitor, Germania had to sit aside, watching the threat growing.

Germania did, what they had to do, they focused on niches. Niches that were too small, to fragile to give them safety. Routes they developed well always threatened to be taken over by their competitors operating with lower cost. Erbil, under threat of war, Beirut, …? They announced a base in Pristina (Kosovo). They ordered A320neo, in an attempt to stay somewhat competitive to their competitors like easyJet also introducing the modernized aircraft. Else they operated tourism charter flights – which are in great demand in summer, but one after another airline in that market files for bankruptcy at the end of the season. And Germania published financial troubles as early as August 1st, 2018. So they could not do what needed to be done: Generate enough money in summer to succeed across the harsh winter.

You cannot succeed if you play it small, if your cost is not competitive to your competitors. Not the small virtual airline competitors, the other “day flies” lasting one summer season, two at best, but the big ones. The easyJets, Ryanairs, Wizzes, etc. It’s not fuel cost development that kills you. It’s bad management. It’s a strategy without USPs or with very weak ones – there’s reason, the other airlines don’t bother the routes Germania did.
And as I outlined in an article I published on LinkedIn, this was no sudden issue, they lost money for years!

As it is being said, the unexpected increase on EU261-expenses, the “EU passenger rights” also had it’s impact on the financial situation. If you sell a ticket for € 100 and you must compensate € 300, it does impact your revenue. So back to the topic – flight disruptions.

Having worked last year on the business plan for KOLIBRI.aero as well as on projects related to Airport and Airline Operations Control Centers, flight disruptions have reappeared as an ongoing topic of increasing concern. And my experience doing a study a few years ago at delair together with Zürich Airport (ZRH) about the impact of the deicing forecasting and management tool on Swiss (airline) operations at Zürich became a strong source for my advise to airport operations managers.

When working with ZRH “Ice Man” Urs Haldimann on the study, I also got some feedback from Swiss. While managing the deicing in winter is not that much a problem, neither airports, nor passengers understand the rippling effect to the schedule. And often enough, not the airline’s own managers. That in the evening in warm Mallorca, the flight may be late, because of a deicing delay in the morning. So while higher force is accepted for the flight cancelled in Zürich, very often, the airline is required to pay EU Passenger “compensation” multiple the price for the ticket. So a major delay can be far more costly than just related to the immediate flight.

The harsh winter 2013/14 in North America (as likely this recent one) became known in the deicing industry as the Polar Vortex. The accumulating delays forced JetBlue into a “two day network reset”. Crews and airplanes were anywhere but where according to schedule and crew planning they were suppose to be. It took the better part of two days to relocate aircraft and crews back to the planned position, also to make sure the crews received their legally due rest, to then start the new day with a fresh start. As needed as that decision was, imagine the impact to passengers on flights that are booked usually 80-90%.

Disruptions can also be thanks to airport closures for other reasons, delays can be caused by as trivial as a broken baggage belt, a common thunderstorm or a ground handling crew doing a coffee break in the wrong time window – all things I experienced in my professional life. Flight crew duty times and technical delays are more common. Did you know that the Top 10 of “punctual” airlines have 15-20% of their flights delayed? That means 1 out of 5 flights is late. To “celebrate” such achievement is beyond me, I honestly feel embarrassed that our industry cannot do better! Don’t come with the typical “explanations” covering for the incompetence to do better. Needless to mention that this is about “departure delay”, whereas passengers truly don’t care about those as long as the flight arrives on time, right? I was recently on a flight that left “on time”. Doors were close, the aircraft was sitting at the gate, waiting for it’s slot in the deicing and departure.

More recently, Primera Air, Azur Air or Small Planet Airlines closed down. Cobalt Air followed shortly after I published the blog post. At least for two of those airlines the cause was said by their respective CEOs to have been “unexpected” cost for delays and disruptions. Though not reconfirmed, rumors have it such were also the cause for the financial troubles Germania faced in Mid-January 2019, filing insolvency early February (see P.S. above). “Refund portals” organizing refunds for delayed passengers result in higher number of refunds. Small fleets with no spare aircraft causes the ripple-effect to sometimes swap over into the next day(s).

Lesson learned from my research about Zürich delays: It very often is cheaper for the airline to cancel the flight to make sure the further aircraft “rotation” (planned flights for the remaining day/week) are not impacted. Especially if i.e. winter operations allow for “higher force” reasoning of the cancellation. While the airline can show goodwill and help the stranded passengers, in such situation they are not legally forced to add the legal, excessive passenger compensation for delays. It also in fact reduces the overall passenger upset. And Zürich can predict the delays!
What I expected quite a while ago is the information of upcoming delay situation to the inbound planned airlines. The example I keep using: Once Zürich (or any other airport) learns about arrival-, turnaround- or departure-delays would inform KLM before their flight leaves, that it would likely develop delays in Zürich and may have an excessive delay departure, maybe KLM would cancel the flight?
The concern: But if those airlines cancel their flights, then the flights will leave early, so KLM could operate on-time…?
Ain’t that shortsighted? Oh holy dear Saint Florian – don’t burn my house, take the neighbor’s one…
So what would be needed would be a bonus/malus system. If an airline “volunteers” for the sake of the overall operation, to cancel a flight in such a situation, maybe it’s relatively empty, could be merged with the following flight – the airline gets a priority the next time, so the full flight gets an on-time departure. An airline deciding not to join that system will never get prioritized and take what they get – including the delays.

Another ongoing discussion is the promotion of the big players for “SaaS”, Software-as-a-Service, more commonly known as “Cloud Computing”. What in my experience lacks of one vital thing, the fallback for a “line down”. There have been three cases that I (just me) know of last year, where line-down caused major flight delays. Because there is no fall-back in place.

Delta takes weather seriously, with a team of 20+ in-house meteorologists (Photo by Darren Murph / The Points Guy) . Taken from Daniel Stechers LinkedIn article.

That problem is multiplied by data silos. As Daniel, VP at IBS points out, there are too many screens an operations manager in the typical airline Operations Control Center (OCC) or also in the AirPort Operations Center (APOC) have on their desk, using old-style Gantt-charts, weather maps and other “sophisticated tools” that show them what happens out there. Very little tools that analyse the data automatically, giving you decision support on a disruption. Or warning you of potential disruptions giving you decision support how to avoid them.

While we do need to replace those multiple screens with dashboards, highlighting what to look at, I disagree to some extend with Daniel’s implications, as I believe we will need to be able to expand from the problem, onto the relevant Gantt charts, graphs, tables and maps. Worse in my eyes is the underlying reason for those screens, as they are clearly attributed to data silos. And if the left tool does not know what the right does, if the airport, the ground handler, the airline have different “realities”, no wonder we have friction that results in ineffective operation causing “issues” and delays. As I mentioned in my article about APOC, OCC, NMOC five years ago. And if I ask about interfaces and am told “XML” or “ASCII”, we talk about triggered “push” or “pull”, but not about a live interface. Another data silo.

Coming back, to close this FoodForThought-article, let’s come back to Germania and other airlines which we have lost recently. If you have no assets (aircraft leased or sold/leased-back which is the same), if you outsourced everything (to which I include “cloud”), if you don’t have “spares” for covering up disruptions, you make a very good business case on the old joke: “How do I become a millionaire in aviation? I start with a billion.” Or the other one: “Saving, no matter the cost”. It’s called a “virtual airline”. And I predict we see increasingly those virtual airlines to fail, as they lack size, assets and revenue (RASK) to compete with their competitors.

Food for Thought
Feedback welcome

14.09.2018 Aviation, Management, Values

“Our Heads Are Round so our Thoughts Can Change Direction” [Francis Picabia]

“Juergen is one of the very few people, I really mean, ***very few***, people that understand both airlines and airports.”
[Ned Macesic, former VP SITA.aero]

02.05.2018 Aviation, Low Cost, Management, Values

Long-Haul Low-Cost? Supersonic? Quo Vadis?

While we work here on a business plan for a new airline, we did discuss and disqualified many of the existing airline models. Is that negative? Or realistic?

These days some news hit me in short succession, that make me rethink the assessment my friend Ndrec and I made when discussing possible, viable business models for a new airline.

I did the picture above a mere year ago. Meanwhile Niki is gone too, as is Virgin America. Mighty Norwegian being said to be likely acquired by IAG shortly. We have “new” players like Blue Air. But the question for any new business case must be:

What is Your (E-)USP?

Now Ray Webster, former CEO of easyJet opened the Routes Europe Conference with a keynote:

“I don’t see long-haul low-cost as a viable model. Operating a small aircraft across the Atlantic is not efficient, and low-cost carriers aren’t going to fill a 787 or an A380”

Ray Webster, former CEO easyJet

Even students traveling on longer flights do want more services the longer the flight gets.

In contradiction to that assessment, Eurowings now opens up New York-services, taken over from the late Air Berlin operating from Düsseldorf. We all looked at Norwegian, though their “success story” also seemingly was bought on the cost of revenue, the airline now is said to be acquired rather shortly by British Airways/Iberia holding IAG (also owning Aer Lingus).

Whereas I simply do not understand the “brand strategy” of either Lufthansa or IAG…

IAG: Aer Lingus, British Airways, Iberia, Level, Vueling … Now Norwegian adding to the mix of “it’s not me”?
Lufthansa Group: Air Dolomiti, Austrian, Brussels, Eurowings, LGW, CityLine, Swiss, Sun Express. Also “it’s not me”?

The work on a business plan for a new airline was triggered last year initially by some investors, going down the same “me-too”-dead end using old, inefficient Boeing 737-aircraft. Cheap to get, but their fuel consumptions renders them virtually useless.

BlueSwanDaily believes in the future of Supersonic… Are you kidding me? Yes, I believe supersonic will come, but expensive niche for the rich and wealthy. No real change to the Concorde business model.

I myself worked out a “green” concept a few years ago, but we’re neither getting there… The project got grounded in the wake of Lehmann Brother’s and a world financial crisis and the original interested investors gone never took up speed again. [Update: The Korean Wingship seems a ready-to-go WIG, though using conventional fuel, no green hydrogen or battery powered e-engines]

So we looked at models that differ from the existing ones. Where are unservered or underserved markets and why are they not served well? One issue sure is the airline analysis tools misleading their users to “established routes” and airports.

So we started with the original intent of a small scale operation. And recognized why so many such projects are doomed. There is a pilot shortage hovering on the horizon, Ryanair running pilot acquisition as far as South America and Asia. Most airlines do not value their workers but drain them.

And having discussed the very same issue again yesterday with friends who must relocate in the automotive industry as a direct consequence of overpaid managers, back again, using old images:

Maybe. Just maybe. I believe Ndrec and I came up with a sound business idea, which requires far higher investment than we originally envisioned. Coming with a round and sound business plan paying off that major investment in 10 years safe. Because we do have a unique selling proposition (USP). Because we do have an emotional USP. Because we thought it through and instead of failing at the first obstacle, we save cost from day one and make this a company to work for?

And working on that, we learned a big deal about the faults of the airlines we see in the market. And it boils down to the normal questions: What’s your (emotional) USP? What makes you different, why should the intended consumer decide to use your product. We see too much “me too” in the market. Buy your market share in the B737/A320 shark pond?

30+ years ago, my training officer told me that joke:

A man starts a business selling screws.
His friends questions him: “You buy
the screws for 1 €, you sell them for 95c?
How do you want to make money?”
“Oh, the quantity does it!”

My training officer told me to look after yours. Not only in the company, also your supply chain. Make sure you have long-term suppliers selling you the quality you need for a good reputation.

Later I learned the same lesson from space shuttle Challenger, management ignoring their own experts warning them of the temperature being below safety specifications. Shuttle Columbia dying of a piece of foam worth a few cent perforating the heat shield. Of Concorde crashing from a “minor” piece of scrap metal.

I’ve paid very high (in hard Euro) for another lesson. Starting with a sound idea (regional airlines’ franchise concept to share cost and operate a larger scale of operations), it turned out later that the stakeholders did not look for a franchise, but a means to start their own small operation and “share” the cost with the other small players. Clearly understanding the small operations to face obstacles they cannot overcome on their own. Could not. Cannot. Will not. A costly mistake I made. But lesson learned!

Then at delair I learned about airline disruptions and how our industry uses historic processes to “manage” somehow. How airlines use manpower instead of intelligence to cope i.e. with a winter storm.

With Ndrec, I found a seasoned manager understanding the need to either do it right – or don’t do it. And we got surprised how much money we save if we do it right! Not short term, there we need more to invest. But then very shortly, within less than 10 years. Now we reached the point of the reality check: Will we find solvent institutional investors helping us to pull this off? Cross your fingers.

For all those other airlines out there… Do your homework. First and foremost: What’s your USP? What’s the business case?

Food for Thought
Comments welcome

01.12.2017 Aviation, Europe

The Bias of Route Viability Analyses

The last months we worked with two regional airport operators on a route viability analysis both airports see as a exceptionally promising: Saarbrücken (SCN) to Reggio Calabria (REG).

Their problem is that it is rather difficult to get the hard-facts on it. Based on our work with ~~CheckIn.com~~ Airportinfo, they thought we might be the right people to look into this.

At first, talking to airline network planners, I was referred to the analysis tool providers. Though interesting, I got the “results” from four of those tools, three “disqualifying” the route, the third one (more correctly) failing with the information of insufficient data. The problem is, that the route in question has never been served before. There are some “comparable” routes, we found the two tools returning results used, from airports in the vicinity of Saarbrücken to Catania (CTA) on Sicily or to Lamezia Terme (SUF) in Calabria.
Then we were referred to the ACI “standard” QSI (Quality Service Indicator), specifying how a route potential is being calculated. There is a very nice introduction to QSI on the website of the North American chapter of ACI Airports Council International. But if you read that introduction, you are going to get very quickly to “factors” and “coefficients”. And that they are variables, subject to interpretation and weighting, they are “relative values”. And while I found my usually very open sources at IATA, OAG and FlightGlobal distinctly tight-lipped, when I called and asked about QSI, they quickly confirmed that their tool follows those principles and how much and why their tool is better than their competitors.

One airline network planning director clearly told me those tools they use, but they are useful only on existing (or to some extend historically existing) routes. As he had provided me his initial impression on that route, I questioned his initial response and he confirmed that they use those tools with an “almost religious” faith. So if they look into a new route, knowing their tools to have a bias towards existing routes, if their tool returns “not viable”, it builds a major obstacle to get them to look into such route.

So we also had a look ourselves into the “route data”, getting statistical data from those other routes from Eurostat (avia_par), the airports, two of the tool providers, as well as three airlines. As discussed in The Numbers Game, we once more were confronted with conflicting data. Public data on Eurostat shows different numbers for outgoing HHN-SUF compared to incoming SUF-HHN. All numbers “close by”, but in most cases, the numbers did not correspond to the other sources! So what “quality” do we talk, if we in a single industry cannot agree to a fixed value?

Okay, so we decided we take the average of the different values we received. Then we compared to the various catchment areas from our ~~CheckIn.com~~ Airportinfo analyses, both the pure isochrone-populations as well as our competitive analysis. Where we found once more that the drive-time zones themselves resulted in major offsets, rendering any attempt to interpret the results as useless. On the competitive reach, we found some “trends”, though it showed clearly that the more routes an airport has, the more choice such is given to the traveler, the lower the average choice of a traveler for a specific route. But even with those constraints, looking at the catchment area confirmed potential interest in the route.

More interesting, I found that aside of Eurowings with about 75-80% load factor on their flights, all other airlines operated with load factors of around 80-85% and up to 90% on an annual basis. Such, it seems that overall, there is very high demand for travel between the regions. But the tools disqualify flights. Hmm.

Working on a viability study, other approaches are to look at the regional demand. Where we got confirmed, what we knew before. There are no reasonable statistics on a regional level. Yes, you get all the statistics on a small scale from Saarbrücken to Italy. Or from Reggio Calabria to Germany. Okay on Luxemburg. But is Italy Northern Italy with higher purchasing power, commerce and industry? Or Calabria? Is Germany Munich, Berlin, Hamburg, Düsseldorf, Stuttgart, Frankfurt – or Saarland or Saarbrücken? You. Got. To. Be. Kidding. Me.

So yes, we can see how much of the industry is where (percentages), how many “Italians” live in the Saarbrücken region, but without there local research (they have done), we could not know that their “Italians” are mostly from not just Calabria (state) but Reggio Calabria (city)… Whereas we talk about many “2nd generation”, having German passports, not showing up in those “statistics”.

So yes, we did the numbers crunching, but those numbers are to be taking with a big grain of salt. Discussing this with my friend, that afore-mentioned airline network planning director, I could “see” his smile. “You check some basics, to get a feeling and have some numbers to confront the Powers-That-Be (PTBs) in those regions with. Then you travel there and confront them and learn that all you learned is useless and why. Then you talk to the PTBs and learn if and why they believe it makes sense, you question them from your experience and then you decide if it makes sense to take the risk and fly – or not.” And he referred to my 2012 post on the Crystal Ball and told me that he liked my conclusion in it: “I take a big long stick and grope in the dark. It requires expertise, experience and good guesswork to do something with all that information you get. Good luck is part of the business.”

Hmmm… It confirms what I recently told the Minister President of Thuringia, discussing on Facebook about population emigration they suffer. Emphasizing the need to better support the airport to attract incoming business and the necessity for scheduled flights, I told him, it is not the airport acquiring airlines, it is the region. As soon as an airline network planner researches Erfurt and finds all the negative buzz about that small airport there, if they hear the PTBs having promoted bus service from Frankfurt when they had a flight connecting them to Munich, when they learn that the state officials and commercial (state-paid) delegations traveled from Berlin or Frankfurt instead, they understand that the people in the region do not support flight services. They’ll look at the story behind the closure of Altenburg. Then they likely look for locations where the PTBs support flights. Politicians, local industry, tour operators, the people and the media. Discounts on landing fees are a minor factor on the cost and risk of an airline operation. (Except for Ryanair?). They are an indicator, if the region is willing to support the flights.
I am afraid, that Minister President did not understand that, he instantly fell back into the “airport bashing”, questioning, why in the past the airport’s subsidized flight services did not succeed. No, he did not heed my words. In fact, he was prejudiced and simply did not listen but took his “instinctive” fall-back position on “airport”.

Working with small regional airports over the past years, I know many airports heeding such words, their PTBs in strong and unquestioning support of “their” (regional) airport. Who publicly want their airport and want it to succeed. Who fight for it and take a stand in discussions for their airport. And yes, Connect or Routes Europe are places where you can meet and talk to them. Though there I also heard just recently (again) that many airlines are showing interest in the big airports only and the small have trouble getting a time slot to make their case. Where Connect° had the advantage on the small airports.

Coming back to the issue of this post. My airline friend and I discussed for several hours (thank you!). And rather at the end, he emphasized, why he invests only little time in “analyses”. Because all those analyses will promote the big buddies. They will confirm business potential on the large airports with data silos full of supporting statistics. But they will disqualify any of the small airports solely based on the fact that there are no “supportive statistics”. Following our discussion, he wrote me a very short message: “Jürgen, the game is rigged. Your catchment area stuff is the first thing I saw to give me a somewhat unbiased view on smaller airports in years. Those [other] analysis tools are sold to sell us statistics. Stupid network planners and the ones trying to play it safe and by the books, requesting the QSI. It’s why mostly the small airlines, who can’t afford those tools start new routes.” And why he emphasized to me that he and anyone in his team wouldn’t bother about any route viability studies based on the statistical history of the airport, except for an indicator. “If you play it safe, you just follow the crowd.”

Food for Thought
Comments welcome

12.09.2017 Aviation, Low Cost, Values

Changing Roles

As many of the readers of this blog know, I am somewhat personally attached to that little airport in Central Germany, Erfurt-Weimar.

Last week I was taken into a discussion by Thuringia’s Minister President Bodo Ramelow, about how to stop the down-spiral of emigrating Thuringians. Which reminded me about the likewise discussion we had in 2009 shortly before I joined Erfurt Airport with the task to stop their downward-spiral on their passengers.

Real Life Example

What I was faced with was an extremely negative image of the airport within the region. And a lot of demands on how to do business from amateurs in the industry, politicians, tourist offices, etc.

First day at work, the GM of Tourism Thuringia, Bärbel Grönegres was quoted in the local newspaper (TA, 02Mar09), having visited the United Arab Emirates to promote medical tourism to Thuringia. Having a Munich-Erfurt flight by Lufthansa-Partner Cirrus Airlines at the time, she recommended the Arabs to take a flight to Frankfurt, to be picked up with a bus for a +3 hour tour to Thuringia. Tourism material did not contain reference to the airport. Questioned about the reason, her reply was “Who knows, how much longer we will have that flight”. Ever since, that became a prime example I use for “negative thinking” or “calling for disaster”.

The next winter, the Thuringian Olympic athletes brought home a record number of medals. But at the following ITB, it was more important to promote Franz Liszt, who lived a dozen years in Weimar. The fact that the Russian-Orthodox chapel, Grand Dutchess Maria Pavlovna who’s invitation brought him to Weimar has built and got buried in is under direct protectorate of the Russion Orthodox “pope”, the Patriarch, such making it a pilgrimage site for the Russian Orthodox church has completely failed to trigger any support by Weimar or Thuringia Tourism. Air Berlin reported it to be a “known reason” for a substantial part of their Russian Berlin-passengers to add Weimar to their travel plans.

In order to promote the government-funded route, after fierce discussions, Cirrus Airlines agreed to offer a low-cost ticket at 99€ return, having only about 6€ after the high taxes on the ticket. That offer was made available especially to the Thuringian government offices and the state development agency (LEG). Nevertheless, LEG planned and executed delegations traveling with the train to Berlin to take flights from Berlin, instead of promoting the route. The same also for the ministries and ministers. Even the responsible minister taking flights from Frankfurt and Munich instead of using the PSO-route he signed responsible for. During the months we’ve actively promoted that 99€-fare also to the industry and the travel agencies and also had it largely available, not one of the flights used up the 99€ tickets allocated to them. Being at the verge of a bankruptcy, Cirrus Airlines finally ceased to operate that route in December 2010.

By the time, working with the local industry associations, political parties I have been able to increase the passenger numbers by about 20 percent. In fact, to date, the airport is far from the 320 thousand passengers I left them with. With Weimar being the neighboring but historically better known city internationally, I pushed forward the renaming to Erfurt-Weimar with the attempt to improve the incoming for the airport. Paid almost completely from the limited marketing budget. A strategic decision executed after our parting-of-ways in December 2010 after my two-year contract was not extended in the wake of the retreat of Cirrus Airlines. A strategic decision though made obsolete by the “political” decision by traffic minister Christian Carius to not replace the route as I recommended with an Amsterdam-service. Sad decision indeed, as with our parting ways, the discussions with KLM were simply discontinued (KLM calling my number reached someone speaking German only, I was gone) and despite their interest in a PSO (public service obligation) financial route support, we had discussed flights based on mere startup incentives and marketing support.

Opposing myself ongoing subsidies, to demand a route but to leave the (substantial) risk completely with the airline is neither the answer. Whereas comparing the CheckIn.com-data about airport catchment areas with the data provided by airports we found that data to be completely off-set in a majority of cases. It caused us to make basic data available for free. But if the data provided by the airport is not hard, but guesstimates or outright lies, when the airline starts a flight based on that data, the airline takes the risk. To not only does the airport sneak out of the responsibility, they increase the airlines’ risk – is that a game? Or serious business?

Fraport Bulgaria’s more than doubled “population within two hours” can not result from the “drive time off-sets implied by Fraport Bulgaria investigating the discrepancy.

Changing Roles

Now since I started in aviation 30 years ago, the market has drastically changed. In the good old days, there were (often highly subsidized) “national airlines”, used to promote the country. Back in my early days, the airlines were the executive for the tourist offices and also worked closely with commercial development agencies. But ever since, those national airlines have either adapted or went out of business. The emerging “low cost” airlines virtually evaporated the income of the airlines, competition becoming fierce.

As I keep emphasizing with my updated image of Purchasing Power and Airports, there is a relation between a strong airport and the regional purchasing power. It is indeed a hen/egg issue, but if you are a small airport in a weak region, maybe it makes sense to consider how to attract travel (tourism, commerce) to your region. Not how to drain your region of the money by sending the population to the Mediterranean for vacation, but by having incoming, scheduled services, by adding point-to-point routes and to attract low cost airlines.

If we do not talk about PSO (Public Service Obligation) where the government pays for basic flight services, if you build an airport and wait for airlines to find you, keep on sleeping (and burning money). So if you are a small airport and you have little to no money, what can you do?

Having an airport is not enough any more.

The airport is part of the region’s infrastructure. As such, it needs to be integrated into a political and commercial strategy. Whereas in the example of Erfurt-Weimar, the airport is being kept as a scapegoat, being challenged in one sentence for the aviation noise (a good joke with so few flights) and for not having flights. A political punch-ball.

Other, successful airports like Memmingen in Southern Germany are integrated into and understood as a strategic value for the regional development. In fact, Memmingen is not politico-owned but owned by more than 60 co-owners from the region’s industry. Such, instead of being a scapegoat for political power games, everyone in the region understands the need to actively support the airport. Anyone harassing the airport confronts everyone in the region. A political suicide!

At Erfurt, I was asked to establish flights to Moscow. One company. 10 employees. Even with a small (expensive) 50-seat aircraft and weekly flights only (which are usually not sufficient for commercial demand), we talk about 40 seats by 52 weeks in two directions or 4.160 tickets to sell every year. But for a decent offer that is useful to the industry, you need at least twice weekly flights.

Leaving that task to attract airlines to the airport alone, at the same time running blame games and scapegoating, the airport cannot justify such flight. But what if the state development agency and the chambers of commerce, on demand by the political PTBs (powers-that-be) qualify the demand from all those small and midsized companies? Not on a low-cost, but with reasonable ticket prices. Not at prime time at the maximum risk for the airline. Maybe instead of a weekly, can the region sustain a double or even triple-weekly flight making it interesting for the companies in the region? Are those companies willing to support the launch period by committing to use the flight, even if slightly more expensive than a flight from Frankfurt or Berlin? Keep in mind, the people have to get there, you also pay for gasoline/parking or rail. Transport to those hubs is not free either. And the longer check-in times make them even less attractive, right?

Interesting approach. I’ve talked to several smaller airports where they agreed that their chamber of commerce and regional development agencies “pre-purchased” tickets at the cost of the average ticket price needed to cover the operational cost. Then they to sell it to their members. Not covering the full cost of operations, but simply taking their share of the risk! Why should they not, if they believe in the numbers and data they provide to the airline to promote their business case?

Then talk about Tourism. Given such flight, are the local tourism PTBs ready to promote such flight in the outlying region? What about other promotion? Don’t leave it to the airport! Is there a joint concept by the political PTBs, the state development and commerce PTBs, the tourism PTBs on what flight they want, how they will promote the flights?

“We have an airport”. That’s nice. But not enough.

And for a Minister President even only on a state level? You better think about a strategy. Or close down the airport. Having flight to summer vacation is not enough. It drains money from your region into those destinations. What’s in it for you? Why do you fund an airport? No scheduled services? No incoming? Do your homework.

Changing Roles

It’s no longer the job of the airline to promote your region! They simply don’t have the funds to do that. It’s not their business case.

It is the job of the political, commercial and tourism PTBs to qualify what they finance an airport for and come up with ideas and business cases for airlines to take the risk to fly there. And no, a “business case” is not necessarily paying subsidies. If you have a good business case that the airline will make money on the route by flying paying passengers, I can rest assure you that the airline will prefer that over subsidies that are usually associated to political nightmares.

Compiling sound numbers is a good start… And yeah, I might be willing to help you with that.

Food for Thought!
Feedback welcome…

16.07.2017 Aviation, Europe, Low Cost, Management

Carolyn McCall + easyJet Vienna

Three news this week I find noteworthy about easyJet.

Where I have learned early to have the greatest respect for Dame Carolyn McCall, she now resigned at easyJet to join the TV industry. And the same time, easyJet is in the process to acquire an Austrian AOC (air operators certificate) to prepare for a post-Brexit world. Third, they celebrated their delivery of the first A320neo (new engine option) and converted A320-orders to A321.

While the first may be a career move for Dame Carolyn McCall (and that is all that counts from any employee view), it is a tragic loss to our industry. And I might be wrong, but I believe this will be similar to the loss of Steve Jobs at Apple.
Carolyn McCall has understood that “service” and “behavior” are not that expensive but important difference-makers. easyJet customers’ loyalty is substantially stronger than Ryanair’s or British Airways’. How you treat your customer not only if legally required (Ryanair continually failing even on that) makes a difference. I learned back in my early days with American, that friendliness and a smile are the spoonful of sugar the traveler needs. And they understand things can go wrong, even more than our industry pretends.
Her successor is rumored to be likely easyJet Christine Browne, the management remains to keep it’s female touch. But does she understand, live and provide the role model for “her” airline about “customer focus”? Or will she fall into the trap American did in the days when Bob Crandall left, to focus on money, money, money?

easyJet on the Move?

About the process to obtain an Austrian AOC, there are several pitfalls and hurdles I see in that decision.
Austria is not truly a “low cost country”. Which is similar true for the U.K. or Switzerland, but where the U.K. enjoys two strong source and destination market with London, Switzerland enjoys a very strong economy. And they are rather flexible on taxes (Wizzair is in Geneva for good reason).

If and how the Brexit impacts the U.K. market remains to be seen. But Austria and Vienna do not have that strong a market. And while Basel has been underserved by classic airlines, at Vienna easyJet will face potentially fierce competition from Lufthansa group, whereas they might hope to benefit from the retreat of Niki from the Vienna scheduled flights market.

The flying part though is not the issue of my concerns, I’m sure easyJet will do okay on that end. But establishing a “sub-HQ” in town comes with a price tag. And there are other European cities that might have been cheaper and bureaucratically more efficient than Austria.

A320/321neo. A Change-Maker?

The third news that “hit the media” was about the delivery of the latest Airbus A320neo, as well that they convert A320-orders to A321s. Such they upscale the fleet to the 250-seat A321s, I have concerns.

While the A320neo comes with 12% better performance, by 2022, when all orders are delivered, the aircraft will reflect about 1/3rd of the easyJet fleet. And as Airbus changed the structure, the “old” ones can not simply be “upgraded”. So on a fleet level, that will account for a 4% benefit. Or to give a common example: For a 100 Euro ticket, you then might pay 96 Euro. Though I happen to believe that this will be simply accumulated to improve the ROI of the airline.

Further, on the “work horse” A320, it’s only 25%, the others are A321neo’s. Whereas I believe the A321 will simply cannibalize routes that are currently operated by A320s. Whereas, will larger aircraft and the “better economics” per seat equal the lower possible frequency? And frequency is something business travelers like. Is the cost advantage that high that it will exceed the advantages of a higher frequency? I have my doubts.

Quo Vadis easyJet?

How will those two decisions impact on easyJet?

Get me right. I love easyJet for many years. Their inflight product is as good as their overall friendliness and efficiencies. They focus on business case but keep customer-centric in mind. But as Ryanair, they try to sell aircraft they ordered, finding it hard to place the large aircraft in Europe. Now they face a Brexit and size-up the aircraft, cannibalizing their existing routes at that.

For Carolyn McCall it is a good time to leave the company at the peak of “her” success. The successor will phase some repercussions out of his/her control, as well as some tough decisions to make.

Food for Thought!
Comments welcome

18.03.2017 Aviation, Low Cost, Management, Values

The End of the Airport Passenger Fees?

As I outlined in my summary on the Hamburg Aviation Conference, my friend Daniel expressed his believe that within 20 years, there will be no more passengers fees.
At the same time, Michael O’Leary was recently quoted that he expects in very short time they will offer the flights for free.
But flying costs money, no matter how good the aircraft engines become, terminal construction and maintenance, ground handling, air traffic control, gasoline, pilots, cabin crews, aircraft, insurance, it all needs to be paid. And no matter how effective you calculate …

… someone has to pay the bill.

Airlines lower their ticket prices, covering the “loss” with “ancillary revenues”. While those “ancillaries” have been understood as services previously bundled (inflight meal, baggage, flight insurance), they meanwhile extend quite into “inflight shopping”.

At the same time, traditionally airport landing fees, split into the landing and passengers, covered for the airports’ cost of operations and development. This basic, sensible model is now threatened. It will change. But how. When the airline and airports fight for the revenue of the passenger – I believe both will loose.

Airport Duty Free, Picture courtesy Gebr. Heinemann — Airport Duty Free

So currently it is a fight between airport and airline for the money of the traveler. I hear airlines expressing their anger about the airports increasingly draining the pockets of the passengers pre- and post-flight. And the airports upset about architectural changes enforced by the evaporating aviation income, forcing them to add shopping in arrivals halls and rebuilding terminals for improved shopping, i.e. forcing the passenger through the duty free store. Or how to speed up the check-in process to increase the dwell time of the traveler to spend more money shopping. And the shop owners about the increasing pressure to cash in on the passenger in order to pay the expensive rental deals with the airports. And, and, and…

And no, it does not help to imply that the politicos should provide airports similar to train stations. Yes, it is true, airlines bring business to the regions. Airports are important infrastructure. But in the end … someone has to pay the bill.

What we will need is a serious, joint discussion about the future business model in aviation. At the moment there is no discussion. There’s the airlines, the airports and business models that cannot work. And we need to have the politicos and the usually government-controlled ATC (and border control, security, etc.), we have to have the ground handlers, the shops and all other players on the table. You can’t reconstruct all the small airports. We don’t need a fight. We got to work together for a sustainable business model. ERA, AAAE, IATA, ICAO, this is your call.

Food for Thought
Comments welcome

25.09.2016 Aviation, Europe

Route Planning Events

While “the world” meets at World Routes, we received inquiries, why CheckIn.com is not there.

Sure, there are “obvious” reasons, but when it boils down, you need to prioritize where your money comes from. So while World Routes is an important event, I believe in the reasoning behind the split into multiple Routes events.

World Routes for the global players, regional routes for the regional players. Whereas at Routes Europe earlier this year, the “regional focus” is blurred already, attracting “foreign” long-haul airlines. As CheckIn.com currently focuses on Europe, Routes Europe is a must go for us. So we will be in Ireland next April. As an airline client requested Russia before North America, we won’t be ready for Routes Americas in Vegas in February.
If we get North America up in time, it may make sense to look at World Routes 2017. May make sense.

Likely still not, as the focus of the event is the networking between airlines and airports. As close as we are related to the aviation network development industry, we are secondary, we are supplier. World Routes is simply too busy, too packed, to give us a lot of opportunity to promote our services. That’s much more focused and such reasonable at the smaller (and targeted) events.

Right after Routes Americas, there’s the second (annually first) European event which we now have as a “must go” on the agenda: Connect°

Which motivated the question, why or how that event differs from Routes Europe and why I believe this is even more valuable…? The answer is rather easy. Where Routes attracts all those big shots, it is already becoming a “major player event”. Many small airports and airlines expressed towards us that they feel uncomfortable at Routes, even on the Routes Europe. Too big. Too big-focused.
Connect° and Karin Butot focus the event to the small and mid-sized players. So if you look for big traffic and big routes, go to Belfast. But if you focus on small airports, regional airlines and more local business, you’re very likely better off at Connect°.

So if you want to meet us…

22.-24. Feb 2017: Connect°, Ajaccio, Corsica, France
23.-25. Apr 2017: Routes Europe, Belfast, Ireland

Or call us to make an appointment elsewhere.

P.S.: Have you registered for CheckIn.com access? Registered users enjoy free access to basic airport data for more than 570 airports in Europe, including an isochrones map and the population in it! Free as in “no charge” and “free to use” (as is).

Food for Thought
Comments (and Likes) welcome!