Europe: February 2007 Archives

Remember back in 1997 when British Airways opened its new Waterside headquarters in Harmondsworth near London Heathrow airport? Back then, it cost a cool £17 million (equivalent to £22 million today) to develop and was one of the UK's largest building projects, featuring a health centre, hairdressing salon, florist, travel centre, supermarket, bank, restaurants and an auditorium.
Fast forward to today, when low-cost carrier easyJet has just opened its new headquarters. Compare and contrast: refurbished at a cost of £3.1 million, Hangar 89 at London Luton airport (see bottom picture) was built in 1974 and retains what easyJet calls its "traditional" 1970s office style. But it has also been customised to fit easyJet's "open culture and principles of simplicity". Hangar 89 features 300,000 sq ft of office space and though it doesn't have a supermarket or bank, it can house three Airbus 319s or Boeing 737s.
But even the modest surroundings of easyJet's new headquarters are luxurious compared with "easyLand" (see top picture) - the rented Portakabin that until now has served as easyJet's base.
Hangar 89 and easyLand are just 150 metres apart, making relocation relatively easy - just as easyJet likes its operations.

Thank goodness for that, Air Berlin has made a profit.

After an initial public offering last May that, to put it mildly, didn't get off to a flying start, amid some financials that revealed the German scheduled/charter hybrid was somewhat lacking on the profitability front, Air Berlin is feeling rather pleased with itself, reporting that it is now in the black: To the tune of €50 million ($66 million) at the net level.
This is on revenues of €1.57 billion in 2006, a tidy rise of 28.6% over 2005. Operating profit was €64.1 million.
Some critics are already pointing to some clever treatment of tax to create the positive result. More on this will come out after the airline's annual general meeting at the end of March.
Following that, Airline Business will examine the airline's past, present and future with its founder and chairman Joachim Hunold. Most probably in our May issue.

On the face of it Spanish low-cost carrier Vueling Airlines (pronounced "welling" I am reliably informed) is doing pretty well, turning in an operating profit of €28 million ($36.8 million) for last year.

Not bad for only the carrier's second full year of operations, and a big improvement on a €1.6 million operating profit in 2005. This is a creditable performance for a start-up of any kind. It's also not bad in a country that has seen low-fare competition go from a cosy Iberia dominated scene just a few years ago to one of Europe's most fiercely competitive markets. EasyJet is a big player in Spain and Ryanair is bolstering its presence too.
Close watchers of airline financials will be keen to see the hear and see the full picture from Vueling. It was hoping to more than double its revenues to €260 million in 2006, but fell short by €25 million. Perhaps that tough competition is beginning to bite?
Barcelona-based Vueling says it has a cash in the bank of €136 million after a successful initial public offering in Spain in December. Some of this cash will be used to open a base outside Spain (its third) and to buy up to 40 aircraft.
The carrier carried 3.5 million passengers in 2006 to 41 destinations with 16 aircraft. Revenues are forecast to rise to €425 million plus.

Those northern raiders from Iceland are at it again. Fresh from forays into the shareholdings of Finnair, easyJet, Icelandair and Sterling Airlines, FL Group is now setting its sights on America.
American Airlines to be precise. The Icelandic investment company has revealed that its shareholding in the US major has jumped to a significant 8.63%. That makes it the biggest single shareholder in the company it believes.
"We have been following the airline industry in the United States and we believe AMR Corporation (the parent of American Airlines) presents strong prospects for 2007," said FL Group chief executive Hannes Smarason yesterday at its annual general meeting.
The strong recovery strategy being pursued by American, led by its award-winning CEO Gerard Arpey, is clearly being closely watched by the investment community. Only a few days agorumours surfaced that another group, supposedly including Goldman Sachs and British Airways was sniffing around American.
There will be some sharp eyes on American's stock price over the coming days and weeks.

Personnel Today magazine described it as one of the most challenging human resources jobs in the UK. The position to be filled: HR director of British Airways.
In the most normal of times, whatever counts for normal in airline business, this is not only a big role in UK terms, but a big role in industry terms.
In today's high-octane business climate, and with the many challenges BA faces in its industrial relations, it is a hugely important appointment for the carrier.

Deep breathes and the odd snicker at Airline Business with the announcement that Ryanair will be making German airport Weeze its next base.
It might sound like a breathing difficulty, but Weeze Airport has been open for commercial airline services since 2003 and Ryanair has served it throughout.
From June 2007, Ryanair will invest €140 million in two new aircraft and 10 routes from Weeze: Alghero, Alicante, Barcelona, Glasgow, London, Palma, Rome, Shannon, Stockholm and Venice.
Weeze - originally known as Niederrhein Airport - will be Ryanair's third base in Germany. The carrier already has a base at Frankfurt Hahn and plans to use Bremen as a base from April.
The airline expects to carry 1 million passengers in its first full year operating to and from the base, rising to 2 million from 2008.
In 2003, a German court blocked Ryanair from referring to the airport as Dusseldorf Niederrhein. Niederrhein, which is 70km outside of Dusseldorf, rests of the Dutch/German border. The decision meant Ryanair could only refer to Niederrhein in relation to the closest town, Weeze.
Please tell us your favourite airport with a name that has a double-meaning.

2006 was a good year for Copenhagen Airport with overall passenger growth up 4.4% on the previous year. And good news for Copenhagen Airport is good news for the airlines that fly from there.
Copenhagen Airport has just paid the airlines a cash bonus under a deal that rewards passenger growth. The bonus is calculated as one half of the aggregate traffic growth, measured in per cent (i.e. 4.4%), multiplied by the amount that each airline has paid to Copenhagen Airport in passenger charges during the year. Copenhagen Airport would not reveal what that amount was for the airlines.

The majority of airlines at Copenhagen Airport recorded growth in their passenger numbers in 2006, and more than half the 20 largest airlines by passenger number reported double-digit growth rates.

Scandinavian Airlines retained its position as the largest airline at Copenhagen Airport. Half of all the passengers who travelled through Copenhagen Airport last year flew Scandinavian Airlines. Sterling came in second, flying 10% of all passengers through the airport. Of the network carriers, KLM recorded 14% growth and Air France 22%.
With total passenger growth at Copenhagen Airport up 4.4% overall, all airlines that used the airport in 2006 will receive a cash bonus. The scheme was introduced to promote traffic growth at the airport.

Normally reserved easyJet chief executive Andy Harrison does not usually go for the sort of publicity stunt favoured by Virgin's Richard Branson or Ryanair's Michael O'Leary. Such is the strength of his carrier's antipathy to the doubling of the UK's air passenger duty, however, that he is obviously prepared to ham it up to make a point.
Passengers arriving at London's Gatwick Airport today would have seen the head of easyJet dressed as a "Man from the Ministry" and clutching a briefcase labelled "Tax Collector". 

Travellers at airports all over the UK have been faced with demands for payment for the additional tax - levied without Parliamentary approval to boost Chancellor Gordon Brown's treasury coffers in the guise of a "Green tax" on flights that they had already booked and paid for.
"As the government has, in effect, made easyJet the tax collector, this is exactly what the airline has done today," says easyJet.
So well done Andy, for letting your hair down and getting stuck into the publicity merry-go-round.