Europe
The ever entertaining Dr VJ Mallya, founder and chairman of Kingfisher Airlines, was in London yesterday giving an address to the Aviation Club.
His first task was to explode a misconception about his home country that it is a poor, emerging nation. Not quite true, says Mallya, typically talking without notes. India is "incredible", he says. "India has always been an exceptionally wealthy country," he says, with huge natural resources and a long history of royal dynasties where huge wealth was taken for granted.
Per capita income for millions is also not as low as some might think. There are some 100 million people that have the earning power equivalent to those in Europe or the US, says Mallya.
Now India is forging ahead. "What is new is that we have broken loose of the shackles of our socialist economy to free and global market integration," says Mallya. "This is unleashing a power always resident in that economy but never allowed to flourish."
It is against this background that Mallya launched Kingfisher Airlines 21 months ago. Now it flys 24 aircraft on 156 flights a day, with another 20 arriving in 2007. This Indian entreprenuer, millionaire and member of parliament, did not take the low-cost airline route for his airline. Mallya believes low-cost and India do not sit well. He believes that high fuel taxes and airport parking charges, along with airport and air traffic control congestion that makes short turnarounds difficult, means following a low-cost model in India is tough. “That’s why I say there is no room for a low-cost carrier in India because there is nothing low cost about running an airline in India."
Mallya went for a premium airline brand. There is a two class cabin, business class has a 42in seat pitch, there is television in each seat and passengers are described as guests. "From the beginning we created Kingfisher as a true consumer product and as a true consumer experience," says Mallya. "What I say to my people is that we are not in the airline business, we are in the aviation hospitality business."
Despite what must be a massive call on his time from other parts of his empire, Mallya appears to be extremely hands on at Kingfisher Airlines. He interviews every single guest facing employee personally. He receives an SMS message every time an aircraft takes off from the airport manager. This helps focus staff as they must explain every departure that is late by over five minutes. "That's playing on their mind," he says, as the manager wonders what the chairman's reaction might be to a late departing aircraft. "That's playing on their mind big time."
Mallya is also a great ideas man. After visiting his optician in San Francisco he noticed him using a small bottle of liquid to clean glasses. "How much does that cost?" asked Mallya. "75 cents" was the reply. Mallya bought a box and got them onto his aircraft. Cabin crew offer to clean the glasses of surprised guests.
Mallya also carries a steamer on his private jet to press his creased trousers when arriving at a destination. Hang on, thought Mallya, this is a good thing, so each aircraft has one too. "When guests see this done in front of their eyes it blows their mind. It's a small thing but with such a humongous impression."
As the bidders lined up for Alitalia on Monday - there were 11 in total - an intrepid journalist at Reuters digging into their backgrounds found to his surprise that a humble Italian school teacher had sneaked his way onto the shortlist.
The teacher, Fabio Scaccia, described his fake plan to buy Alitalia as a "citizen's protest". "I've followed the Alitalia crisis for the past 20 years," the 46-year-old told Reuters. "I wanted to show that a company like Alitalia should not be allowed to remain in a state of crisis for so long," he said.
Scaccia joined the list with bidders like Texas Pacific and leading Italian bank UniCredit.
I think it is safe to predict that this will not be the last left field story to emerge from the Alitalia sale process. Some would say the entire Alitalia saga has more than a touch of a Feydeau farce about it.
In every interview they conduct at the moment, airline chiefs are being asked with monotonous regularity who they would like to buy, team up with, or be acquired by. But the ever thoughtful
Wolfgang Mayrhuber, head of Germany's
Lufthansa, has sounded a cautious word: "The damage a wrong decision can cause is greater than the damage of a missed opportunity," he told the
Financial Times.
Such thinking is not uncommon among senior industry figures. And such wise words will be being heeded by those peering into the murky books of Italy's flag carrier
Alitalia.
The country's government is searching for a white-knight for its beleagured airline. Now that is a tough job. Saddled with debt, terrible labour relations and antiquated working practices, as well as a fiercely competitive domestic market, Alitalia has all the makings of Europe's next network carrier failure. It expects to make a
huge loss of €380 million ($490 million) in 2006.
Rome is determined not to let Alitalia collapse, and has backed it up with state cash in the past. It is asked for bidders interested in a taking a 30% stake in Alitalia. They have until today (Monday 29th January) to make an offer
But recent calls by potential suitors to have a
free hand in restructuring the airline will fall on deaf ears. Government will to allow any management team over the past decade to take the drastic action needed to reshape Alitalia for the 21st Century has been sorely lacking. What is different now I wonder?
With little fanfare, and only after a small delay, the European Commission has released its long-awaited proposal on airport regulations.
It was partly prompted by IATA's rantings on airport charges, which grew in volume in recent years.
Airline Business will analyse the proposal in its March issue, but you will see the February issue first, with Cathay Pacific chief Philip Chen on the cover.
So, in the meantime, here are the first reactions to the proposal from ACI Europe, the Association of European Airlines and IATA.
Hardly a day seems to go by without some member of the Flight Group editorial stable of Airline Business, Flight International, Air Transport Intelligence or Flightglobal.com being asked to provide "expert" comment on an aviation industry issue.
Our journalists do as many as can reasonable can, if hand-on-heart we know enough about the subject to comment sensibly.
I did a show this week made by a UK-based consumer TV programme called Watchdog. It was probing the baggage chaos at London Heathrow over the Christmas period - some 25,000+ bags were lost, and British Airways, once again, was in the firing line.
BA didn't want to put someone up on the programme, so they go for the next best thing, kind of, a journo.
Thing is, yours truly felt in the firing line himself as presenter Nicky Campbell, in the pre-interview chat to get the questions straight in my head booms: "So why has BA made such a mess?"
Well, but, mumble, I stutter. Remember it's a just-in-time system, not designed to hold bags etc etc, I haltingly try and educate Campbell on the realities of baggage handling systems. "C'mon," rants Campbell, who struts around his studio, "I represent the consumer, I don't care about BA."
So, we came to an accommodation I suppose. I wasn't going to diss BA outright. Clearly the bag mountain and dealing with it was a mess. Did BA deal with it as best they could? Probably not, but from what I know repatriating bags is a hellish job, not one airlines generally throw money at and typically an area where communication with customers is poor.
I cannot link the clip because it is not on the BBC site, but what I said was all airports and all airlines lose bags, no surprise there. This volume of bags was remarkable, and BA clearly has found it tough to deal with the backlog.
Message - either take the train, or if you have to fly make sure you put labels inside and outside your bag. Otherwise your bag could end up being auctioned off, contents and all.
Yes contents and all. Please, please check out this auction house which sells off unidentified bags. A typical lot: No. 268. Large black expanding trolley case cont ladies assorted clothing.
Hurry, other people's clothes to buy.
Airline trade union negotiations conducted live, on air and in public are a rare thing. But that is just what British Airways chief executive Willie Walsh and Jack Dromey, deputy general secretary of the T&G trade union did this morning on UK BBC Radio 4's Today programme.
The airline's cabin crew have voted overwhelming to take strike action over pay and working conditions at the end of January. Walsh is adamant that the airline is willing to negotiate but insists the union must come back to the negotiating table.
I urge you to listen to this clip to hear the full interview for yourself (you'll need to download RealPlayer which is a bit of a hassle but there you go). It says a lot for the engaging personality of Walsh that he is not only prepared to take the risk of going live on such issues, but appears to relish the task. And he is good at it, a natural in fact. Fellow airline executives should listen and learn.
The interventions of Walsh were effective and strong, his calm and assured manner gave the impression of a leader who has a clear grasp of what he wants.
But his management style, which by implication is more aggressive said presenter Jim Naughtie, has come under scrutiny. "I would reject that," said Walsh simply.
However, Dromey was equally firm: "The company needs to listen and stop lecturing."
But did this debate help?
At the end of interview both agreed to try and move forward with negotiation, with Walsh suggesting arbitration. We'll know in a few days if this radio spot made any contribution to averting the strike.
Every year, around this time, British Airways hosts a press gathering at London's
Langans restaurant to mark
Burns night (the presumed birthday of Scottish icon Robert Burns). "We've provided you with more than our fair share of column inches," said the airline's chief executive Willie Walsh, addressing the press corps. More often than not, these column inches came from high profile stories that BA rarely prompted or had any control over.
Walsh listed what his management team has had to deal with over the past year:
*
The foiled UK terrorism plot*
Security rules changes*
The polonium 210 issue*
Unprecedented interest in our uniform regulations*
The worst fog in a generation, and to wrap it all up,
*
One aircraft broke a light on a runway in Miami.
Walsh recounted a comment from his press chief Paul Marston: "We're no longer the world's favourite airline, we're the world's favourite headline."
And Walsh's latest challenge is to avert a
cabin crew strike after unions voted just the day before to take strike action over changes to working conditions and pensions.
The Irishman was in typically combative mood over this development. "We operate in a brutally competitive industry," he said. That environment means BA must lower costs to keep competitive.
"Nobody looks to BA as a benchmark for costs and efficiency," he said. "I cannot accept anybody in this business who says we cannot talk to you about change." Unions "have to accept the way to address these issues is to sit down and negotiate".
SkyTeam's Air France-KLM will probably be moving to its new London Heathrow home at the airport's Terminal 4 at the end of 2008, around nine months after British Airways occupies Terminal 5.
Air France will move from its current location at Terminal 2 to join merger partner KLM at T4. So what is Air France-KLM expecting to get for its money at T4 and by when? For Air France-KLM the "main question is do they share our priority of giving us a competitive tool at T4?" says Air France general manager UK & Ireland Christine Ourmieres. The they in question is BAA.
What Air France-KLM, and indeed any carrier at Heathrow that is not in the sparkling new T5 wants is not to be stuck with the airport's dingy old terminals for too long. They want to see solid and swift plans for revamping and refurbishing the lower number terminals.
Indeed, this is the commitment the SkyTeam Alliance partners obtained from BAA when they signed a memorandum of understanding to occupy T4 last June, says Ourmieres.
She is however, well aware of the tough task BAA faces in delivering T5 and then getting its Heathrow East rebuilding of Terminals 1 and 2 off the ground. "The challenge is to do all this at the same time," she says. In addition there is the added pressure of delivering an all-new Heathrow in time for London's Olympic Games that take place in the UK capital in 2012.
Air France-KLM is in on-going discussions with BAA over its investment plans for T4. There is "open communication" between the two sides. "They know what we want and I'm confident," she says of the hoped for outcome.
However, her view that "there is no time to relax" is no understatement.
It is becoming something of a tradition for Lufthansa to announce major recruitment drives at the turn of the year. This year is no exception and proves once again the resilience of the German flag carrier and its determination to expand even as the industry's growth globally begins to brake.
It is taking on 3,000 new staff this year. This is on top of the 2,500 new employees it recruited in 2006, and will take its global workforce to some 94,000 people, with a staggering 34,000 of them outside Germany.
The jobs suit a wide range of professions - and are advised and promoted via its impressive careers website - from 2,000 airport jobs at its Frankfurt and Munich hubs and including 1,200 flight attendants. Another 240 trainee pilots are to book into its Flight Training Centre in Bremen.
Lufthansa is proud of its attractiveness as an employer. It says that in a recent study conducted for the US business magazine Forbes by the New York Reputation Institute, more than 30,000 respondents from 25 countries voted Lufthansa among the top three most popular employers from 600 globally active companies.
Lufthansa takes recruiting very seriously and boasts of its flexibility with a variety of working-time models. For example, a seasonal job for flight attendants between March and October. Staff in passenger service jobs at the airports can also opt to work part-time for three or four days a week.
To find out if Lufthansa is the place for you, or simply to pinch some good ideas of how to attract new staff check out that careers portal.
Today, Wednesday 20th December, after much leaking, the European Commission (EC) has released its proposals to bring airlines into its Emissions Trading Scheme. It has received a cautious welcome across the airline and airport sector, with IATA, the Association of European Airlines, ACI Europe and easyJet all commenting swiftly on the proposal.
As advocated by Airline Business, the scheme will not apply from the outset to non-European Union carriers. In fact not until 2012. This is a year after the scheme applies to carriers flying inside the EU. After that those flying to and from the continental will have to trade their carbon. This is a pragmatic move, but may still not be enough time for some states, such as the US, to stomach.
The EC's move is an important step in a scheme that surely is the only sustainable way for airlines to play their part in addressing climate change - ie paying for their polluting effect - and still offering the ability to grow.
The recent pain felt by travellers leaving from London’s major airports should make premium start-up carrier Silverjet’s proposal sound particularly tempting. It is offering passengers a service whereby they can arrive at the carrier’s planned dedicated terminal at London Luton Airport just 30 minutes before departure, leave their baggage with a concierge and relax in the lounge where an official armed with a laptop will check them in for the flight.
The carrier will be flying a Boeing 767 fitted out with 100 lie-flat business-class seats. Other enhancements to the regular flying experience being offered by Silverjet include ladies-only toilets on its aircraft, as well as no overhead lights or trolley service to ensure minimum disturbance to passengers during the flight.
It also promises dedicated security at the airport and offers helicopter transfer from downtown London.
The service is scheduled to start on 25 January between Luton and Newark, with introductory fares from £799 ($1,560).
Silverjet is entering a crowded market, with competition from existing US-based premium carriers Eos and Maxjet, as well as UK mainline carriers such as British Airways and Virgin Atlantic, all keen to attract the lucative business-class traveller.
Silverjet’s dedicated terminal is part of a trend towards pampering the premium-class passenger. Lufthansa has a dedicated terminal at Frankfurt for its first-class passengers, while in the Middle East Qatar Airways has a terminal for its premium passengers at Doha and Etihad has one for its passengers at Abu Dhabi.
Iain Burns, the British Airways public relations chief who resigned in early October in the wake of the still on-going UK/US probe into price-fixing, has swapped chilly Waterside for sunny Abu Dhabi. Burns, a highly experience PR operator, has been named as the head of corporate communications at Etihad Airways, the fast growing Middle East carrier that is vying to give Emirates a run for its money.
It is a remarkable and swift renaissance for Burns and he will be looking to put the price-fixing issue behind him very quickly. Etihad will be getting a seasoned airline PR operator. Etihad's new chief executive, James Hogan, says that the experience Burns has in the aviation sector "is ideally suited in telling the story of our expansive agenda to the media and our own employees".
Burns, 48, left BA after five years as its head of corporate communications. He had joined from PR consultancy Bell Pottinger where, in a neat twist, he handled European and North American PR for Emriates. Burns had two spells at BA, and managed the PR for American Airlines in the UK. In his first public words since leaving BA, Burns said: "This is an exciting time to join Etihad which has come a long way in a short period of time and has great plans for the future. I am very much looking forward to playing my part in articulating the airline's formidable strategy to a growing audience around the globe."
Burns is expected to begin work at Etihad in 2007.
Expect appointment news from the other BA official who resigned in after the price-fixing probe - commercial director Martin George - shortly as well. Word on the street is that, not surprisingly for this well-regarding executive, offers have been coming his way.
“As the director general of IATA I am a bit like a catholic priest – I can’t disclose what I know,” says Giovanni Bisignani, responding to a press question at the association’s annual press briefing over what he thinks will happen to his former employer Alitalia.
Bisignani, who ran the ailing flag carrier when it wasn’t ailing in the 1990s, says he has talked to several of the airline chief executives mentioned in the media as potential suitors for Alitalia in the past few weeks. “I do not see any developing an interest in the deal,” he reveals.
Alitalia and Olympic remain the two difficult and outstanding cases in Europe when it comes to profound restructuring. And it should be hands-off as far as their respective governments are concerned when it comes to sorting these carriers out, he says. The Swiss government’s attitude of it's now time to sink-or-swim towards the resurrection of the country's flag carrier after its collapse is the stance to take, he says.
Flying out of London Heathrow
Terminal 4 yesterday, my first visit to this outlying home for
British Airways and assorted others, brought it home how much the carriers that are left in this terminal and terminals 1,2 and 3 will be at a disadvantage when BA moves to the glittering new Terminal 5.
Terminal 4 is horrible. The interior is dark and grim, the check-in zone is narrow and cramped, the boarding and shopping areas are dense and crowded.
Now I'm unlikely to