Recently in Europe Category

The answer as always is "it depends".

For instance, if the island's flag carrier Air Malta didn't exist would this tiny island off the coast of Italy in the Mediterranean find itself cut off (the photo shows Valletta the rather stunning capital of Malta)? Probably not: there are plenty of airlines willing to serve Malta with connections to the wider world via London, Paris and Frankfurt.

But the government of Malta, like those in many other island states, would always be worried that it had little control over these connections.

That worry comes at a cost. The joy for airline chief executives like Joe Cappello is to try and minimise this cost, and in an ideal world make a bit of money.

See the video interview with Joe Cappello here.

As he told Airline Business last week: "I don't need to have to be a highly profitable carrier, but my shareholder does want an airline that provides sufficient capacity for an island nation [passenger and cargo]." It is seen as a "strategic asset", says Joe.

Making Air Malta profitable is Joe's current task and it involves a three-year restructuring plan that features new working arrangements with staff, including possible out-sourcing, and selling off various things like hotels, its duty free operation and its office buildings in London.

The target is to get Air Malta to a breakeven or small profit in two years.

Along the way Joe hopes this small carrier, which has 11 Airbus A320 family aircraft (all leased from ILFC), will not have to ask the government for more cash. "We have never been subsidised in 35 years," he says, and the aim is to continue that tradition.

FOR MORE AIRLINE CEO INTERVIEWS FROM AIRLINE BUSINESS CLICK HERE

Who would have thought selling slots at London's congested Heathrow airport could be this hard?

A few years back, as US, Middle Eastern and Indian carriers piled into Heathrow, slot prices boomed.

Now, as this interesting story from The Times says, the recession means shifting these once priceless assets is no easy matter, at least for anything approaching a decent price assuming a buyer is around.

For loss-making bmi, which is essentially built around the value of its Heathrow slot portfolio, and desperately needs cash in the next year, this is a body blow.

The fall in slot values is however only going to be a temporary measure, but it looks as if temporary could be a couple of years rather than months, and that is not good news for bmi or parent Lufthansa as they seek to revive the ailing UK carrier.

Interesting insight from Willie Walsh today into the possible future of BA's operations at Gatwick airport, as he indicated the days of it operating two-class cabins on short-haul flights from the airport could be numbered.

After BA posted first half losses today, the carrier reiterated its belief there were structural changes taking place in the industry, particularly relevent to its short-haul premium business where yields have been hard hit. Asked during a conference call with analysts today about the long-term future for premium in short-haul, Walsh outlined the robust future role he envisages at Heathrow.

"We believe we can continue to justify two-class service at Heathrow for some considerable time. Ten years from now I would expect we will still be operating a two-class service at Heathrow," he says. "I think the nature of the change we've seen primarily relates to point-to-point short-haul premium. I think that is structural. We see that where the short-haul leg is part of a combined short-haul/long-haul product, there is still demand for that product. So even with the most pessimistic outlook on this, we still believe this is a viable proposition for us, though it will be at a lower level and so the revenue stream will reduce, so we need to say a structural change."

But he acknowledges Gatwick provides a different challenge."I'm not convinced we can continue to provide it at Gatwick, because I think the demand at Gatwick is very different to the demand at Heathrow. We don't get as much transfer from short-haul to long-haul, so I think its probably a question of time, and sooner rather than later that we would address the issue of potentially moving to a single cabin configuration for short-haul at Gatwick."

Talking of Gatwick, Walsh said he had already spoken to the new owners of the south London airport. "I still see Gatwick as an opportunity for us," he says. "We've head early discussions with the new owners. We see the change of ownership as an opportunity," he says, noting this was not a criticism of previous management, but his believe Gatwick would benefit from more focused management.

We've not seen the words 'Alitalia' and 'profit' in the same sentence for a while, but owners of the new look, combined Alitalia/Air One operation have at least lodged their first profitable quarter since relaunching the carrier at the start of the year - the airline announcing a €15 million operating profit for its third quarter for three months ending 30 September.

Direct comparison with 2008 is nigh on impossible, given the complexities of trying to come up a with a like-for-like comparison of this year against a combination of slimmed down versions of Air One and Alitalia, even if figures for Alitalia in 2008 were readily available - which they are not. But the profit follows losses of €210 million and €63 million incurred in the first and second quarters respectively and outstrips its own target of reaching breakeven for the third quarter.

And while it might only be a modest profit, it must be a boost to the carrier given the tough market conditions and bearing in mind the old Alitalia racked of net losses in excess $3 billion between 2003-07 alone.

"The ability which Alitalia is demonstrating to be able to deal with a scenario of a market in great difficulty proves the validity of the industrial operation and of the investment made by the stockholders," says Alitalia chairman Robert Colaninno, who led the group of Italian investors which formally took control of the carrier early this year "The challenges that lie ahead are again many and complex, but today we know that we have the means to face them."

Virgin Atlantic Airways has got into the act on mobile phone applications with the launch of its "highly acclaimed" Flying Without Fear course as an app for iPhone or iPod.

Virgin says the app, which features an introduction by Richard Branson, is designed to help people cope with the anxiety at the prospect of flying and overcome their personal fears.

The app explains questions that people commonly have like "what happens if all the engines fail" or "what are all the onboard noises".

It has a video-based explanation of a flight from start to finish, relaxation exercises and fear therapy and a fear attack button for emergencies with breathing exercises.

It's a nice idea to make this mobile from Virgin, and comes with a small price tag of £2.99 (not sure if there is a US$ or € price?)

Now I want someone to invent an app that can tell you if you are sitting near someone was has this app so you can move seat accordingly.

Amid all the gloom in the European airline sector right now, Ryanair's increased first half profits published yesterday showed further signs that at least some of the region's budget carriers are not only surviving, but seeing profit growth.

Ryanair increased first half net profits to €387 million from €225 million at the same stage last year, and while it expects to lose money over the second half of its financial year, is still targeting increased full-year profits net profits at the lower end of its €200 million to €300 million target range. This comes on top of Spanish budget carrier Vueling - recently merged with fellow Barcelona carrier Clickair - which has just announced a trebling of it third quarter operating profits to just under €70 million, while growing Scandinavian budget carrier Norwegian more than doubled its third quarter operating profit to NKr475 million ($85 million).

While Ryanair's yields have been sharply hit by the recession - average fares down 17% in the first half and the carrier is projecting yields falling by up to 20% over the second half - its unit costs were down 27% in the first half driven by the sharp reduction in fuel costs (down from €422 million in the third quarter last year to €246 million this time around).

A further sign of the carrier's growth - the long-term future of which O'Leary has raised a question mark over in relation to his attempts to secure a new aircraft deal with Boeing - is shown by his belief it will shortly become the number one carrier in three of Europe's most important markets. This he says is a result of the carrier's own growth and the short-haul capacity cuts of major European carriers.

"We really are growing very rapidly in some of the big markets," he says, in particularly of its position in the UK, Italy and Spain. "We will shortly be the number one airline in the UK, Italy and Spain," he predicts.

Picture credit: Billypix 

Flightglobal's Dan Thisdell was lucky enough to sample Air France's first Airbus A380 the other day, and there's lots of coverage all about it on Flightglobal (see links below).

But I am puzzled by one little area, which I assume is top deck front, at the entrance to the stairs. Air France calls this the gallery. I would call it a dead zone. There is no room for proper seats so it has become a kind of hanging about area.

Can anybody think of a better use for this area?

A few suggestions:

* Another loo - there are never enough on an aircraft are there?

* A shower

* An arcade area - a couple of playstation type games or a slot machine could be a good ancillary revenue source

* Table football / hockey etc

Here are those links:

Air France A380 will get fourth class later on

Air France rolls out first A380

The Air France A380 website with lots of photos, video and press kit

All change at CSA Czech Airlines as seven of its eight board members, including CEO Radomir Lasak, have resigned. CSA supervisory board chairman Vaclav Novak has also quit.

It comes after Lasak's long efforts to push through wage cuts.CSA's board had in August offered to resign if unions would a agree to a wage cut deal. While CSA's statement does not mention the reason for the resignation, Lasak is quoted in the Czech press as saying the board agreed to resign after an agreement with unions on wage cuts saving the company around $35 million. These wage cuts, including a 15% cut by pilots, still fall short of those originally sought by the company. You can read plenty more about this here in a detailed article in the Prague Daily Monitor.

Lasak took the helm of CSA nearly four years ago at a particularly dire time for the carrier. He first stabilised the carrier, in part through the sale of a number of assets, before setting out on restoring its profitability. I interviewed Lasak three or four times during his time at CSA, latterly early this year for a cover interview for Airline Business. I asked him just how close they were to the edge when he took the helm. "Close," he said. "I started to read about bankruptcy law." You can read the article here.

But market conditions have turned against the carrier - the airline is expecting losses this year - just as the state has been attempting to privatise the airline. A consortium, including Czech airline Travel Service, is the only bidder still in contention.

In the meantime, new board chairman Miroslav Zámečník says the existing restructuring projecSt are continuing as before.

And in an unusual sign of airport and airline harmony, new man at the helm of CSA is Miroslav Dvorak - who is and will remain head of another Czech privatisation target, Prague Airport. "The appointment of Dvořák, until now the CEO of Prague Airport, does not constitute a conflict of interest.  Both companies are controlled entities according to the applicable legislation, whose common shareholder is the State," says Zámečník.

The BBC broadcast its Panorama programme about Ryanair yesterday - please feel free to comment about it here as we'd love to know what you thought of it. For me the whole programme was overshadowed by the sideshow around Michael O'Leary's terms for doing an interview (live or uncut) - which the BBC would not agree to for the 30-minute pre-recorded Panorama broadcast. Last night's show did include some clips from when Panorama reporter Vivien White approached O'Leary after the carrier's AGM in Dublin last month and the BBC have put the full interview (unedited) on their website - all nine and half glorious minutes of it (that's about a third of a Panorama programme) - so judge for yourself whether it was cut to meet "Panorama's agenda" as O'Leary suggests it would be.

My two favourite bits are:

1. When O'Leary says he can't do the interview now as he has to go and defend the airline in an interview (live) he is doing for another BBC programme (You and yours).

2. The casual, but slightly puzzled look of the guy with the moustache standing in the background - he doesn't look like he is with Ryanair or the BBC to me, so just who is? And I love the way at one point he actually moves to his right, just to make sure he is still in shot. 

Anyway expect O'Leary, who had his say last week before the programme aired, to give the BBC somre more feedback during a press conference in London this morning.

Here's the link, enjoy:

Uncut: Ryanair's Michael O'Leary

Read what happens when one simple computer glitch turns a $40 increase in British Airways fares from the US to India, to a $40 bargain fare. A couple of detailed reports on the how and the fallout here from the NY Daily News and The Guardian:

Oops! British Airways offers $40 round-trip from U.S. to India - by accident

BA sells $40 plane tickets from US to India - by accident