July 2008 Archives

Is anyone bored of reading about the Alitalia "will it or won't it be rescued" saga yet?

For those of you who aren't, the latest appears to be that ANOTHER list of investors brave/stupid enough to be interested in taking over the ailing carrier is to be unveiled in September. I can hardly wait.

Italian Prime Minister Silvio Berlusconi is reported to have said this week that the latest rescue plan for Alitalia would involve 5,000 job cuts. 

This represents more layoffs than those put forward in Air France-KLM's takeover plan, which was shot down in flames by Alitalia's unions earlier this year. Bet they're kicking themselves now.

Well, it's happening - that predicted wave of European airline consolidation as a response to record oil prices and economic slowdown took another step forward today with the news that British Airways and Iberia are holding merger talks.

The two carriers plan an all-share merger that would see them both retain their brands as a combined group.

This follows another recent merger announcement - again involving Spain - that Clickair and Vueling have agreed to join forces.

Who'll be next? Anyone care to hazard a guess?

Today's news that Jetstar chief executive Alan Joyce has been named CEO of Qantas marks another example of a former Aer Lingus executive hitting the big time by getting the top job at a major airline at a relatively young age.

Fellow Irishman Willie Walsh started his career at Aer Lingus before being named chief executive of British Airways at the age of 43.

For more on Walsh, see our cover interview with him from earlier this year.

Likewise, Joyce, who spent eight years of his early career at Aer Lingus, has been given the top job at Qantas at the age of 42.

Joyce was a winner at this year's Airline Business Airline Strategy Awards, where we presented him with the award for Low-Cost Airline Leadership.

Aero California and ExpressJet have found themselves in trouble with the Mexican government for failing to pay bills relating to the use of Mexican airspace.

Mexico's communications and transport ministry publicly named and shamed the two carriers during a press conference yesterday, which announced that both airlines had been suspended from Mexican airspace pending receipt of their unpaid bills.

The SCT says Aero California - which was temporarily grounded in 2006 for safety reasons - owes almost Ps260 million ($26 million), while the USA's ExpressJet has found itself in debt to the tune of almost Ps45 million.

That's one way of getting your bills paid! 

You might not expect to see a beach volleyball tournament at an airport, but that's exactly what's going on at Munich airport in Germany.

The airport has shipped in 750 tonnes of fine sand and turned itself into a beach arena in preparation for hosting the tournament in early August.

As a little aside, I was given two choices of photograph to illustrate this blog - a scantily clad man or a scantily clad woman, and I went for the former.

There have been several bikini shots decorating the flightglobal website lately, particularly on this blog from web editor Michael Targett, so I think I've scored one back for the girls with this one.

Vijay Mallya made a quick stop at the Farnborough air show last week to unveil Kingfisher Airlines' new long-haul product but it was hardly a high profile media soirée which one would expect from the flamboyant Mallya.

Kingfisher decided to have a very low-key event with a small group of journalists at the same time Etihad Airway's announced its mega order for 55 Airbus aircraft. Only a handful of Indian journalists and a few European-based aviation journalists got the privilege of a personal tour from Mallya while a few hundred of the other journalists covering the show packed in at the media centre to see Etihad chief executive James Hogan sign a contract with Airbus chief executive Tom Enders.

Struggling Argentine flag carrier Aerolíneas Argentinas has been re-nationalised, with majority owner Grupo Marsans of Spain having agreed to sell the airline and its subsidiary Austral back to the government for an undisclosed sum.

In a celebratory statement on its website the Argentine government, led by President Cristina Fernández de Kirchner, says the re-nationalisation is aimed at quickly making Aerolíneas Argentinas a successful operation.

And that will be no easy feat at a debt-laden carrier with a history of uneasy labour relations and strikes, which is reputed to be losing about $1 million a day!

Argentina's President says in the statement: "The key thing is to have a flag carrier and to have a high quality and efficient service so as not to lose all that we have gained as a tourist destination."

So things have changed quite rapidly since I accosted Aerolíneas Argentinas director of corporate affairs, Jorge Molina, at the IATA AGM in Istanbul and practiced my rusty Spanish on him.

At the time he told me and I reported that the government planned to increase its stake to 20%, with most of the carrier's shares going to local businessman Juan Carlos Lopez Mena. 

News stories are often moving targets, but at least I got to practice my Spanish with this one!

One of the airline industry's best interviews is Qatar Airways chairman and chief executive Akbar Al Baker. I caught up with him in a joint interview with Max Kingsley-Jones, the deputy editor of Flight International, at the Farnborough Air Show on Tuesday at his chalet.

The video we grabbed doesn't do justice to a very entertaining and insightful discussion, but it does give you a flavour of the subjects over which our interview ranged.

Topics covered in the interview included what he will do in Doha if challenged by a low-cost player; and what he understands Boeing might have to do to meet its production rate challenges on the much-delayed 787 Dreamliner.

For others interviews Max and I have done with Mr Al Baker check out these links:

Max interviews the Qatar chief in Doha in December 2007 and talks money and orders,

Mark interviews Mr Al Baker for an Airline Business cover interview in early 2006 and talks about his management style.

The gloves are firmly on as Ryanair and the Dublin Airport Authority circle each other in a spat that both sides have turned into a PR battle.

I was alerted to the difference of opinion between the two sides by a press release the DAA emailed to me entitled "DAA rains some facts on Ryanair's latest colouful parade". 

The DAA uses the press release to defend the charges at Dublin Airport that have got Ryanair in a tizzy and caused it to slash its winter schedule at the airport by 18%. 

The DAA's retorts to the Irish budget carrier include: "The combination of a sharp economic slowdown in many of [Ryanair's] key markets, its own failure to provide hedge against historically high oil prices and its heavily loss-making investment in Aer Lingus are the key factors driving this decision to consolidate seasonal schedules and not airport charges, which are paid fully by the airline's passengers."

That's fighting talk where I come from. And sure enough, Ryanair has hit back with all guns blazing with its own press release, in which it says: "The DAA is a high cost State monopoly, which doesn't care about consumers or tourism, they are more interested in increasing charges to airlines and for car parking, and producing useless and irrelevant so-called Fact Sheets."

And so the ball passes back into DAA's court: the question is, will they keep up this tit-for-tat argument or just sigh and agree to disagree? 

This is my last day at Farnborough as I've got to get back to Airline Business headquarters to finish off the August issue with the team.

So here are a few final quotes from my notebook picked up during the day.

1. Boeing 787 programme manager Pat Shanahan during his media briefing on the status of the Dreamliner programme:

"I feel a bit like Brad Pitt," he chuckles, as the cameras flash, somewhat in awe of being so much the centre of attention. "They don't let me out a lot," he adds good humouredly.

Here is my story from Flight Daily News where Pat told me all about where the 787 stands today.

2. Pat Shanahan Quote Number 2:

"I'm a little busy," he says of his workload getting the 787 ready for first flight later this year.

Watch the video here of my colleague at Flight, Max Kingsley-Jones interviewing Etihad Airways CEO James Hogan at the Farnborough Air Show just minutes after he'd completed a day of mega-order announcements.

James was in a good mood as his Abu Dhabi-based carrier had only the night before had won the Marketing Award at the Airline Business magazine Airline Strategy Awards.

Also see the video of Kingfisher Airlines chairman VJ Mallya talking about his new cabin interior from on board his new Airbus A330-200 at the show.

Posted by Harry Schneider

So it's business as usual then at Farnborough 2008. The traffic to get into the show was torrid. The temperature gauge is rising. And it is carriers from the Middle East that are splashing the cash.

It's now mid-afternoon and main attraction for the next hour is the only flight here of the US Air Force Raptor F-22 fast military jet. That is until Etihad Airways makes its second monster order of the day at Airbus at 1600.

You would be forgiven for wondering just what is the problem with the airline industry at the moment. Oil may be at over $140 a barrel, but FlyDubai with their 54 737 orders and Etihad with its 35 787s and 10 777s are ploughing on regardless.

This week, The Flight Group gathered up the leading editors for a very rare, important meeting to determine how the vital coverage of the largest and most important event in aviation should be documented.

I had exclusive access into the editor's meeting on Tuesday morning, and I can tell you what they are planning in the build up to Farnborough.

Seen above, from left to right, Andrew Doyle of the Flight Group, Mark Pilling of Airline Business, Alan Peaford of Flight Daily News, and Max Kingsley-Jones and Murdo Morrison of Flight International.

Low-cost carriers have often led the way when it comes to cheeky advertising, and AirAsia has got about as cheeky as it gets with this advert promoting its service to the Thai resort of Phuket.

For other cheeky advertising ploys, many featuring low-cost carriers, read Flightglobal editor Mike Targett's blog on his top 10 most blatant uses of sex for an aviation-related marketing purpose.

Like many low-fare players the world over the Malaysian carrier is in the middle of a big sale at the moment. If you want to down tools and take off for Phuket it has two flights a day from its Kuala Lumpur base. Go for it.

We've got a new recruit this week here at Airline Business - Safi Khan, who is here to learn a little bit of how Airline Business goes about its business in a typical week. Well this is hardly a typical week as we are preparing for the 2008 Airline Strategy Awards, and getting ready for the Farnborough Air Show.

Anyhow, here are his first words as an Airline Business scribe:

"Here's a little something about myself. I have come to work at Airline Business for my work experience for a week. I got a work placement here by knowing an editor, through his son and asking him for a placement.

Within a remarkable six months and eight days all four transatlantic all-premium carriers have bowed out, closing the chapter on a new niche which just a year ago seemed so promising.

Yesterday the last remaining transatlantic all-premium carrier, Paris-based L'Avion, was sold to British Airways for €68 million ($107 million). L'Avion follows Maxjet, Eos and Silverjet in being confined to the history book. L'Avion clearly was in better shape than the other three, which all ceased operations permanently after filing for bankruptcy, as it sill had €33 million in cash at hand. Given that it launched with only €20 million, L'Avion impressively had made a profit in its first year and a half of operations.

But in today's environment of record high oil prices and intense competition across the North Atlantic, L'Avion's future as an independent was far from certain. So L'Avion's owners decided selling to BA, which will integrate L'Avion into its new transatlantic subsidiary OpenSkies, was in their best interest.

Here's an amusing little read. UK newspaper The Observer has taken the time to put together a load of quotes from Ryanair chief executive Michael O'Leary.

Some of them are pretty funny - even when you've heard them before it's still entertaining to read them again. At least he speaks his mind - I respect that.

My personal favourites are: "I am not a cloud bunny. I am not an aerosexual. I don't like aeroplanes. I never wanted to be a pilot like those other goons that populate the air industry", and "I'm probably just an obnoxious little bollocks. Who cares?"

Keep 'em coming Michael.