April 2008 Archives

Further to my blog on Monday commenting on Silverjet's prospects of staying alive, these seem to have improved greatly with the announcement that it has signed an MOU with an investor from the United Arab Emirates.

The UK-based all-business carrier says the unnamed investor will pump in $25 million (£12.7 million) right away and up to another $75 million to help take the brand to other places like Africa, the Middle East and the Far East.

Amid all the current doom and gloom, today's comment from Lufthansa chairman and CEO Wolfgang Mayrhuber is interesting: "The record-breaking year 2007 will not be a one-hit wonder."

After annoucing a record profit and dividend for the year, Mayrhuber is determined the group will not flop back in 2008.

“We have enough thrust for another ascent and we have the flexibility to slow down in case of downwash. We have made provisions – with regards to the balance, strategy and operations...We are concentrating on continuity," said Mr Mayrhuber.

Silverjet will be profitable in a "couple of months", I heard Silverjet CEO Lawrence Hunt say on the UK's breakfast business programme on Radio 4 this morning. Cynics might say "if you are still around!".

He was commenting on the survival prospects for all-business class carriers following the demise this weekend of EOS Airlines. So far Hunt's Silverjet, the London Luton Airport UK outfit, has outlasted its US-based competitors. MaxJet of course went pop on Christmas Eve. In Europe only French carrier L-Avion remains alongside Silverjet.

The clip can be found on the Listen Again section of the Today programme between 0600 and 0700.

Blogging here from Kuala Lumpur at the close of the Airline Business/UATP Airline Distribution conference where the rather inspirational Malaysia Airlines chief executive Idris Jala has this morning waxed lyrical about the carrier's turnaround plan and it's vision for a sustainable profitable future.

He has also been talking about industry consolidation.

Below is the story I have written for our 24-hour news wire service Air Transport Intelligence on what he said:

When JAL's Eco Jet press release popped into my inbox this week my interest was piqued. Are our friends in Japan promoting a new green jetliner design - a la easyJet with its "ecojet" - giving a gentle shove to the airframers and engine manufacturers on coming up with the next generation of more environmentally friendly aircraft?

Sadly no. This is a PR exercise. A demonstration of JAL's green credentials and efforts.

Aircraft and engine manufacturers, airports, airline bodies and airlines have joined together to sign a declaration outlining their commitment to tackling climate change .

The declaration was signed during the Aviation and Environment Summit, which is currently underway in Geneva. Those that have signed up to the declaration do solemnly swear that they are "committed to a pathway to carbon-neutral growth" and "aspire to a carbon-free future".

These are lofty ambitions, particularly the bit about the airline industry being completely carbon-free in the future. Greenpeace chief scientist Doug Parr recently penned a Feedback piece in Airline Business outlining his concerns about biofuels, saying there was not enough arable land on the planet to grow the necessary crops.

So what's the answer? How will airlines stop emitting carbon dioxide in the future? Just over a year ago I wrote a piece for Flight International following an interview I did with a NASA scientist, who claimed aircraft could be powered using a type of biofuel derived from saltwater plants grown in the desert.

I'm not quite sure how this plan has developed - I should probably follow it up - but maybe, just maybe a carbon-free future isn't beyond the realms of possibility. Who knows? It would take a much more scientific brain than mine to work that one out.

The UK Competition Commission will this week issue the initial findings of its investigation into BAA's ownership of seven UK airports, according to The Times and The Financial Times.

The findings could eventually lead to a break-up of BAA's ownership of three of London's major airports: Heathrow, Gatwick and Stansted.

The FT quotes sources as saying the Competition Commission will not conclude that "everything is fine", which may be a slight understatement if the views expressed by easyJet, Ryanair, Virgin Atlantic and bmi during a recent hastily-called press conference to protest airport charge increases are anything to go by.

Now anyone with any heart has a soft spot for Alitalia, but surely the time has finally, finally come to let this venerable old girl of European airline history bow out of the game with dignity?

Try telling that to Italy's new hierarchy.

If the miracle workers now in charge in Italy get their way this wilting carrier will be save. But just what are they smoking?

The latest story from the Financial Times has the government ready to lend Alitalia another Euro 100-150 million ($160-240 million). The European Commission and everyone else in this continent will look most dimly on this prospect - the last cash injection from the state of a cool Euro 1.2 billion was supposed to be the last.

Then there is the suggestion that a recent meeting between new Italian prime minister-elect Silvio Berlusconi and the Russian president Vladimir Putin had Alitalia on the agenda. The thinking is that Aeroflot could come back into the Alitalia frame - far-feached isn't it.

At a time when US airlines are dropping like flies into the ointment of Chapter 11 bankruptcy protection, a sun-tanned (perhaps a little too sun-tanned) Sir Richard Branson has graced the pages of Time magazine to tell the Americans that Virgin America will "shake up the market".

In an article spawned from an interview with the "rebel billionaire" at the Sunset Marquis hotel in Hollywood (where else?), Time describes how Branson has "hope for air travel in the US, where poor service and perpetual bankruptcies have turned the industry into a sick national joke".

The article goes on to say that to order food on a Virgin America flight, passengers just have to select what they want on a touch screen and pay for it using their credit card, and then the food is brought to their seat.

I've got to hand it to him, this is a great idea and hopefully other carriers will follow suit.

No more impatient waits for the cumbersome food trolley to slowly make its way down to the back of the plane, where I always seem to get stuck and where, with stomach growling, I'm often told that "we've run out of sandwiches".

Time will tell whether Virgin America does live up to Branson's high hopes for it, but innovations like that certainly seem to be a step in the right direction.

Almost as if it were a note to self, Japan Airlines sent the media this note this week:

JAL Memo: JAL International Enters Into Plea Agreement with the US Department of Justice Concerning International Air Cargo Business.

The announcement by the Japanese flag carrier is the latest in an on-going string of investigations and plea bargains into price-fixing in the airline business. We've been following them closely here at Airline Business - links to all we've done so far follow at the end of this story.

Well that's the website address for the new Delta - which is after all going to absorb Northwest Airlines creating a second mega-carrier. The first being Air France-KLM. Both will have similar revenues, of some $30 billion annually.

Since the turn of the year it's been on, off, on, off for the proposed merger between Delta Air Lines and Northwest Airlines. Getting those pesky pilots to agree on a merged seniority contract appeared to be the toughest part. Now they've sorted their differences out the deal is on.

And, if the effort that's gone into the website is any demonstration of the conviction in Atlanta and Minneapolis that the deal would eventually be done - and there are plenty of obstacles still to be cleared - then it's as clear a sign as any of their confidence.

Over at The Arrow - Classic Rock 93.7FM in Houston they are having a little dig at the recent woes of American Airlines via the medium of music.

Take a listen to this ditty from the station's rather famous Dean and Rog, who seem to like getting up to all sorts of capers and pranks. Here are the morning show hosts.

A new book entitled "Terminal chaos: Why US air travel is broken and how to fix it" is about to hit the shelves.

Penned by two transport analysts, George Donohue and Russell Shaver, the book aims to "arm the flying public with the truth about flight delays" and suggest solutions to air transport woes in the USA, according to a press release that landed in my inbox today.

The book comes out in May, but if you can't wait that long you can read Chapter One here.

Call me pedantic but I couldn't help noticing on the first page that the authors refer to Delta Airlines instead of Delta Air Lines and Jet Blue Airlines instead of JetBlue Airways. Surely when writing a book about airlines, you'd make the effort to get their names right!

I haven't got beyond page one yet but if you spot any further errors - or if you just want to tell me to stop being so pedantic - feel free to leave a comment below.

In my couple of decades reporting about this business one thing there is never any shortage of is news. No, never a dull moment in the airline industry.

My colleagues at Flight, Air Transport Intelligence and Flightglobal.com bring you news all the time, whether it is instantly, hourly or weekly. It's a fantastic resource you should use and quite a bit of it is free.

In a news rich world where does a monthly title like Airline Business fit? Of course, we bring you the context, the strategy behind the headlines, the anaylsis, the data, etc in the pages of the magazine. Our dedication to that mission is unwavering.

But what about the world of the web? As someone who's reading this you already know we've been blogging for nearly two years now and Americas Editor David Field has branched out with his own blog LeftField.

And we've added bells and whistles to Airline Business dot com like our web chief executive interviews, of which there is now over 150, and an archive enabling you to see all of our articles for the past 10 years.

But we want to do more, which is where the cartoon comes in.

Over the coming couple of months we are going to be producing "fast-reacting" news analysis stories as the month unfolds and publishing them directly to Flightglobal, the highly successful web platform for the Flight/Airline Business group.

These are trademark Airline Business articles, the only difference is we will write them 24-48 hours after an event that requires deeper examination over and above a straight news story (in our view!).

The ability to enter an Emirates airport lounge is indeed a perk worth having in my limited experience. Over the past few years the Dubai-based carrier has been spending over $10 million on opening new lounges around its network.

The latest lounge the carrier has opened in Brisbane, Australia has an added bonus - direct boarding from the lounge (including the upper deck of the A380). Now that is worth having - no more route marches from lounge to gate.

So Alitalia has lost yet another chairman and its would-be saviour, Air France-KLM, has walked away in exasperation. I've got to say this has been an exasperating story to cover as a journalist, so I can only imagine the frustration that must have been felt in that negotiating room last night.

The Financial Times quotes outgoing chairman Maurizio Prato as saying to a union official: "This airline is cursed. Only an exorcist can save it." Maybe he's right - with no other bids on the table, bankruptcy is seeming like a very real option.

As sad and painful as job cuts are, by refusing to accept a business plan that would have involved 2,100 job losses Alitalia's unions may have made a decision that will leave the entire workforce without an airline to work for at all.

Or maybe I'm wrong. With the way this story keeps rumbling on and on, I wouldn't be entirely surprised if Air One or someone completely unexpected came out of the woodwork to try and breathe some life into the dying carrier. Who knows? I'm certainly not making any firm bets.

If you haven't seen this yet and you have a few spare minutes to kill, click here to play a game devised by a company called T-Enterprise entitled "Wee Willie Walsh in Terminal Panic".

T-Enterprise has, um, enterprisingly cashed in on British Airways' mounting baggage problems at London Heathrow's new Terminal 5 to design a game portraying BA chief executive Willie Walsh frantically running around trying to clear the baggage mountain.

News from Ryanair that it is to launch a saucy in-flight website ryanbare.com won't raise too many eyebrows amongst seasoned Ryanair watchers. Every marketing move they make seems to either involve Leprechauns or semi-clad women.
The website promises X-rated calendars, screen savers and saucy pics.
And they sort of delivered, with this: