10.31.2007 | 10:37 pm | Flight Comparison
In a move which was a little unexpected, it seems that UK based airline Thomas Cook will be introducing extended leg room on some of its planes from May 2008 onwards. While this is not the first time that a well known airline has tried such a move, there are hopes that it could be the beginning of a trend, but who will follow?
The arguments regarding leg room have been ongoing for many years with many airlines only offering a total of 30 inches per seat. Thomas Cook Airlines will be extending this to 33 inches, and although this may not sound a lot, it will effectively take away up to 10% of seating on each flight. When you consider the tight margins that many operators trade upon, this really is a bold move. But why have they decided to change?
The fact that the extension of leg room will only happen on the company’s Airbus A330 long haul flights, could maybe hold a clue to the reason for the change. Over the last few years we have seen an increase in reported instances of Deep Vein Thrombosis (DVT), something which is linked to long haul flights and can be fatal. As with any potential for harm while in the care of a corporate entity, many are expecting a wave of law suits claiming damages for the growing number of cases of DVT, and the fact that leg room is often very cramped on board today’s jets.
While the changes will obviously be well received by Thomas Cook’s customers, it seems that maybe the potential loss of revenue may be a small price to pay when considering potential future compensation payments. As with any competitive industry, it all comes down to numbers, the amount of money they can bring in, compared to the amount of money they may have to pay out. Has commercial sense prevailed, or will Thomas Cook be forced to revert to cramped seating in the future?
Who knows………
10.30.2007 | 10:05 pm | Flight Comparison
While the Hawaiian Islands are not normally associated without he under belly of aggressive competition in the airline industry, this is exactly what happened this week when two former partners went head to head in the US courts. Mesa Air Group had once been in talks with the now bankrupt Hawaiian Airlines group about putting together a joint venture, after Hawaiian Airlines hit a spot of bother.
As it transpires, this was just prior to Mesa Air Group’s launch of their own cut price airline, Go! which began operating in the Hawaiian islands. It now turns out that during the partnership talks, Mesa Air Group may have taken, and used, confidential information about the operations of Hawaiian Airlines to create budget airline Go!.
While Go! has been a great success in the area, it was the final nail in the coffin for any potential recovery in Hawaiian Airlines. Bearing in mind the situation, claims and counter-claims, a US Judge was brought in to issue a ruling on the accusations. Despite Mesa Air Group being adamant that they had done nothing wrong and they would win the case, they were shocked by an award of some $80 million in compensation to Hawaiian Airlines - far higher than estimates of between $10 million and $20 million at the very most.
As well as showing the aggressive competition which is very visible in the airline industry, it also highlights the amount of money at stake. Even though Mesa Air Group have some $200 millon in liquid funds (more than enough to cover the compensation ruling), they are taking the ruling to appeal, something which could take years to resolve, allowing Mesa Air Group to retain the $80 million for the time being.
This is no isolated story in the airline industry, with rumours and stories of double dealing and industrial espionage. However, when you consider the amount of money at stake, it is hardly surprising that some companies may decide to take drastic measures to protect their interests.
10.29.2007 | 5:21 am | Flight Comparison
Despite spending millions of dollars on new technology to bring mobile phones to the airline industry, a new survey has found that 78% of passengers are actually against the idea. It seems that many still feel that the last bastion of solitude should be maintained, but why?
It seems that many passengers value the current in-flight atmosphere, and while many complain about noisy children and babies, imagine what they might say if there was a teenager on the phone for the whole flight! But what about the business market?
It seems unlikely that the business market will not be appreciative of the new found technology, which will surely allow internet access in-flight as well. The true twenty four office will now be extended to the skies, and their will be no hiding place or rest time for the top executives. Quite when the mobile phone systems will be in place across all airlines remains to be seen, but none will want any competitors to have too much of a free run - while initially sitting back to see how the systems are received.
There were some interesting comments regarding in-flight security, and the potential for problems, with mobile phones often used by terrorists to prime and engage their armoury. Will this be a consideration? How will the airlines ensure security at all times?
While the airlines have received clearance from the majority of the worlds aviation authorities, the first few months of online mobiles will be monitored very carefully. The old wives tale about interfering with the aircraft radar system was something of a “red herring”, with the main problem being locating and focusing on one mobile land base at a time.
Air France will be the first major airline to bring mobile phones to the skies, but others are sure to follow if the service receives universal approval - something which is not certain at this moment in time.
10.26.2007 | 10:27 pm | Flight Comparison
While there are very few areas of business which have not been touched by the internet, how has the impact upon the airline industry developed? Is it good for the industry? Is it good for the consumer? Has the industry changed permanently?
For many people who book their flights online, it may be impossible to actually remember what it was like before the internet came along. There is no doubt that it has had a major impact upon the travel agents who are now struggling to attract new business, as consumers demand more for their money. The travel agents are now being forced to offer more, offer a better all around service and they have also been forced into a period of transparency often missing in the past.
It is not only the process of actually booking your tickets, it is the overall process of finding the best places to go, the best times and the best package prices. We are seeing the stronger of the airline companies increasing their exposure while the smaller one suffer - often opting for niche markets to try and chisel out an area of the market for themselves.
The emergence of the budget airlines, assisted massively by the internet and the variety of automated systems now available, has brought the airline industry to the masses. How many people would have even considered weekend trips to overseas lands before the emergence of Easyjet, Ryanair and the like?
The internet has enabled a number of peripheral costs to be shaved from the traditional airline industry practices, resulting in more savings which can be passed on to the consumer. This is why even the slightest rise in taxes or fuel prices can have such a detrimental effect on profitability. Margins are lower, traffic is much higher, and competition is as intense as it ever has been before.
It seems that the consumer is really the one true beneficiary of the airline online revolution…..well, for now…..
10.25.2007 | 3:06 am | Flight Comparison
Over the last few weeks we have seen a number of budget airlines announce plans to take advantage of the Open Skies agreement which comes into effect next year, opening up the transatlantic market to new entrants. Many are now starting to ask whether the budget airlines are taking one step too far, or can they really compete with the traditional long haul airlines?
Experts all agree that there is a major a difference between cutting back costs on short haul flights and long haul flights. There is no problem going without the luxuries for a short flight, but could you put up with cramped spaces and less in-flight services on a flight to the US?
There is no doubt that the transatlantic market is going to get more competitive with the introduction of Open Skies, but there are still many obstacles for new entrants to over come. We recently saw the announcement of reduced flight capacity at JFK Airport, and there are concerns that the skies in the US are already over crowded. Against this back drop it will be difficult for any new entrant, never mind a budget airline, to make a significant impact.
Whatever happens it looks as though the consumer will be the long term winner, although we may well see new entrants come and go in the long haul market. It is probably the likes of British Airways and the main US airlines that will be more worried in the short term. We will either see a change in the overall pricing structure of the market, or we will see marked polarisation with budget airlines at one extreme, and the business class players at the other. Whatever does happen, it is sure to be an interesting time in 2008
10.24.2007 | 9:01 am | Flight Comparison
After a period of uncertainly, controversy and seemingly delay after delay, we finally saw the first commercial flight of the new Airbus A380 take to the air. The Singapore Airlines commercial flight touched down at Sydney airport, after a journey from Singapore. Finally the Airbus A380 has come of age, and it seems that all of the worlds major airlines are now looking to get their hands on the new superjumbo.
The lucky 471 passengers who were on board had bid for their tickets on an array of online auctions, where prices pushed ahead into the thousands of pounds. The whole airbus venture has been beset with problems, and even accusations of insider trading by senior managers of parent company EADS. Perhaps now that the venture is airborne, we will see a return to the real story, the worlds largest passenger jet.
So what has the A380 actually got to offer?
Those rich enough to afford a first class seat will have the luxury of a double bed each, 23 inch screen televisions and an array of film projectors dotted around the cabin. Those in business class will also receive much expanded leg room - something which is coming under more and more scrutiny with the increase in reported cases of DVT.
Those in the “cheap seats” will receive a slightly less luxuries service, but will still have TV screens on the seat backs as well as much expanded leg room. It will be interesting to see the take up of these new planes, with rumours that British Airways have ordered 12 of the new aircraft (to be delivered in 2012), and Virgin Airlines have ordered 6 aircraft (for delivery in 2013).
At a time when air travel is still increasing, it will be interesting to see if consumers are willing to pay the higher prices to travel in luxury, or whether the continued move towards the budget airlines will continue.
10.23.2007 | 6:09 pm | Flight Comparison
The so called Open Skies agreement comes into place in March 2008, and already we are seeing a differing view of the potential for budget airlines. Are long haul flights viable for the budget airline business model? Will they attract the same level of customer interest? While time will tell, the leading lights behind Ryanair and Eastjet are firmly planted in different camps.
Easyjet founder Stelios Haji-Ioannou, common credited with bringing the budget travel industry to the masses, is of the opinion that the budget airline business model does not work with long haul flights. He also insists that there is so much more to go for within the short haul market, with many more of Europe’s popular cities under consideration. He is firmly of the opinion that if it is not broken, why fix it.
On the other side of the road we have the ever vocal chief executive of bitter rival Ryanair, Michael O’Leary, the man who is never out of the press, whether complaining about green taxes, or government policy, or both! He firmly believes that there is scope for a low cost transatlantic airline, and is looking at bringing in a separate division to cover the low cost transatlantic market - perhaps a sign that he believes there is risk associated with such a venture?
It is interesting to see the differing views of two of the larger than life names in the industry, people who have been there, done it and bought the T-shirt. There is no doubt that Ryanair are the more aggressive of the two companies, although both have had to tread on a few toes to get where they are today.
Both have investors to keep happy, and ambitious noises are often well received by city investors. Whether the thoughts of Ryanair will ever actually make it out of the planing stage remain to be seen, but Open Skies does offer potential for others to step in and fight the like of British Airways, etc.
10.22.2007 | 8:33 pm | Flight Comparison
In a move which was not wholly unexpected the Federal Aviation Authority (FAA) have announced proposals to cut capacity at New York’s John F Kennedy Airport (JFK) by some 20 percent, reducing flights from the current 100 per hour to some 80 to 81 per hour. At a time when international and local travel are continuing to grow, it is surprising that there are no other alternatives to solve the chronic problems at JFK. So why have the FAA taken such a decisive step?
Official FAA figures show that in August this year some 41 percent of incoming and 37 percent of outgoing flights were delayed. This seems to have been the trigger for today’s announcement, although it does seem that the authorities have been looking at alternatives in the meantime. The likes of Delta airlines have joined the argument, expressing their surprise at the proposals announced and suggesting that there are other ways of alleviating the pressure. So what next for one of America’s most famous airports?
While there has been much concern expressed about the comments made by the FAA, in truth this situation has been ongoing for sometime and anyone visiting the airport will no doubt have some first hand experience. The proposals to cut traffic by some 20 percent might be considered a blunt instrument by many, but there seem to be issues regarding safety with the skies around JFK which is often cluttered with planes waiting to land.
Unfortunately, JFK has one of the worst records of any major airport around the world and something does need to be done as soon as possible. Never mind the fact that direct flights are often late, the authorities need to consider those catching connections which are often missed due to delays. The situation is in danger of getting out of hand, although it will be interesting to see what counter proposals are put forward in order to retain both the flight numbers, and the level of income which goes with this level of traffic.
10.19.2007 | 6:26 pm | Flight Comparison
Ex-music executive Tony Fernandes will tell anyone who listens that he had no experience of the aviation industry, prior to rescuing near bankrupt AirAsia in 2001 - for 25c and a mountain of debt. The success story of this company is truly breath taking, as is the fact that the company have never posted a quarter loss since Tony Fernandes took charge. So what does AirAsia offer?
The airline is basically leading the Asia market in budget travel, having stripped away every conceivable cost which you could think of. Passengers do not have fancy departure lounges, no silver service and no plush seats to lean back on. Customers of AirAsia are literally ushered into a large hanger prior to takeoff, with only a detailed departure board for company. Even 6 years on Tony Fernandes is still a regular visitor to the departure lounge, often leading passengers aboard their flights. So how has he succeeded where so many have failed, and despite having no knowledge of the industry?
In hindsight it seems that Tony Fernandes’ refreshing view of the industry, from a total outsiders viewpoint, has given him access to a different train of thought than most. While even the more prominent European budget airlines will try to squeeze that last penny out of their customers, AirAsia do not offer any frills at all, preferring to cut luxuries to the bone, and offer cheaper seat prices.
In the company year 2007, AirAsia made a whopping $79 million, and with revenue and profitability still on the increase, analysts are expecting more good news for 2008. While the company’s flight lists take in the majority of major venues in and around Asia, they are looking to expand in to Europe soon, and hope to announce a London service in due course.
From music to the skies, what a way to go!
10.18.2007 | 7:34 pm | Flight Comparison
Who would have thought when Sir Freddie Laker first introduced the idea of budget flights that we would get to a situation in today’s market where the taxi to the airport can cost more than your flight! This thought would have be absurd back in the days of Laker Airways, at a time when the industry was very much in its infancy. While the industry of today is almost unrecognisable from the early days, the philosophy and ideals are still the same - somethings don’t change!
So how has the budget airline industry grown so much?
It has to be said that the main reason for the increase in the number of budget flights and budget airlines is simply down to demand, and new technology, which in many cases has cut costs back to the bone. There are many small costs associated with flying, but when you take out each small cost for every passenger, for every flight, the numbers can soon add up.
A free radio here, a free set of head phones there all add up, as do complimentary drinks, foods, etc, but if you strip out these costs, the savings across one company, and across the industry are significant. As the budget airline industry has developed we have seen a definite polarisation of the industry, with the budget airlines in one corner and the long haul airlines in another. However, even this is set to change with the onset of the Open Skies agreement, due to come into play in March 2008.
While there are those who claim that the budget airline industry is saturated and some companies will go under in due course, the strong just keep getting stronger. Such is their position now that the likes of Ryanair are even contemplating taking on British Airways in the transatlantic flight market - something unheard of even 12 months ago!
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