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AirAsia premier dishes out the red cards

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Niall O'Keeffe, managing editor of sister title Flight International, sends this report:

Few were spared when jovially combative AirAsia chief Tony Fernandes addressed Airbus's Innovation Days event in Toulouse yesterday.

Once Fernandes had exhausted his reserves of magnanimity with a fulsome tribute to outgoing EADS chief Louis Gallois - after whom AirAsia has named its 100th A320 -no one was safe. First to get it in the neck during the special guest's wide-ranging speech was no less a luminary than Germany's Chancellor. "The [A320 delivery] ceremony was suppose to be in the evening but Louis had a meeting with this woman. Her name is Angela Merkel. I don't know why he dumped her for me. I'm much better looking... But I suppose the German Chancellor is more important than someone who's bought 375 planes." Cue much squirming among the Airbus contingent, and much guffawing elsewhere in the room.

At least one Liverpool-supporting journalist in the audience was highly gratified when the soccer-obsessed Fernandes trained his sights on a certain rival club. "As a small brand, we sponsored Manchester United," he recalled. "Very painful for me to sponsor Manchester United because I hate that football club. But you have to be a prostitute once in a while."

Or, as he put it more diplomatically: "We only had seven planes, but we went out there and sponsored Manchester United, and we were there with huge brands: Vodafone, Budweiser. But we were never afraid. Many airlines don't see the value of branding and we wouldn't have grown from 200,000 passengers to 32 million without the branding we did."

Still on the soccer theme, a more self-deprecatory note was struck when the low-cost airline supremo - who owns London club Queen's Park Rangers - spoke about AirAsia's decision to sponsor the UK's Premier League referees. "This has haunted me, because my club's had the most people sent off," he lamented. "I will be stopping sponsoring the referees. But it's been fantastic."


Tony Fernandes.jpg
How did he land the deal in the first place? "I went to the Premier League, and it was me versus Emirates, and Emirates had a gazillion dollars, and I had about 10. So I made a big presentation and said, 'Listen, you've got to support us. There's about two people in Dubai who watch football, and in Malaysia we've been watching football for a hundred years - plus, we've been fixing all your games. All the bookies come from Malaysia.' Finally, I think I got it because I said, 'I want to sponsor the red card.' And they looked at me and said, 'What do you mean?' I said, 'When you send a player off, I want to see airasia.com - and on the other side it says: now you're suspended, have a holiday with AirAsia.'"

Involvement in soccer allows AirAsia to brand itself "the airline with balls", Fernandes explained, noting, needlessly: "In Asia you don't do these things, but we do it."

Naturally, the former music-industry executive found time to tear into local competitor Singapore Airlines: "If you really look closely at Singapore stewardesses, they all look the same. They have the same bun in their hair, the same lipstick, the same nail polish, and the same fake smile. I'm sure they're manufactured in Lee Kuan Yew's back garden."

The taunting didn't stop there, "When we went to Singapore, we decided to be a bit cheeky, and we took this ad out and we put four of our girls there, and we said, 'There's a new girl in town. She's twice the fun and half the price.' Instantaneously, everyone in Singapore knew us, and I received 50,000 letters from Singaporeans who said, 'Whatever we do we will fly AirAsia.'" Later, he had another dig. "Singapore Airlines is a confused puppy," he declared, citing the "ridiculously named" subsidiary Scoot. And he sounded a warning: "One day I'm going to buy Singapore Airlines."

With tongue firmly in cheek, Fernandes availed of the Q&A session to deliver an analysis of flight-crew compensation. "Pilots are paid too much. All they do is taxi to the runway, take off, switch on autopilot and then bitch about the company for the next two hours."

All in all, this was a rant to remember. Michael O'Leary and Akbar Al Baker will have to go some way to top it.

For hard news from Airbus's Innovations Day event, visit flightglobal.com/pro

Liberté, égalité, fraternité and Air France-KLM

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Like his predecessors, newly-elected French president Francois Hollande has the right to free business-class travel on Air France-KLM flights.

However the durability of this arrangement could be tested not only by Hollande's unwillingness as a socialist to be seen as exploiting the privileges of his office, but by his level of interference with the group's attempts to restructure.

Hollande has been quoted in the French media as saying French companies had taken decisions to make redundancies, but had been told to refrain from cuts until after the election, something denied by Sarkozy's team.

During his campaigning in which jobs were a key issue, Hollande was quoted as saying: "I won't allow this cortege of redundancy plans to take place."

Now it remains to be seen which companies the victorious Hollande was referring to, with a number of France's biggest companies looking to restructure including banks, car manufacturers and telecoms companies.

With Air France-KLM due to implement the second stage of its Transform 2015 later this month or in June, it could be first to test how Hollande will react if it decides to make large number of redundancies or substantially cut salaries. With the French government owning around 15% of Air France-KLM shares and having representatives on Air France's board of directors, Hollande could certainly make life difficult for both the group and the airline if he wished.

However analyst Neil Glynn of Credit Suisse who follows Air France-KLM feels it is unlikely that Hollande will radically interfere with its plans "given the extremely challenging financial condition of the company".  With the government representatives having backed the group's management in its plans so far, Glynn sees no reason why this would differ. 

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Air France-KLM's chief financial officer, Philippe Calavia, also stated the group's determination not to back down in its negotiations with unions over wage cuts as it seeks to achieve a 20% reduction in operating costs.

Speaking in a conference call reporting Air France-KLM's 2012 first quarter results, he emphasises the need for "higher productivity and flexibility". Describing these as an "absolute necessity", he says: "We won't back down, personally I won't back down."

Calavia's words were interpreted by some observers as a statement not only to the unions, but to Hollande.

Perhaps the fact that Hollande is alleged to have flown into Paris on a Dassault Falcon 900 private jet after his election victory, rather than with the French flag carrier, could indicate what is to come?

Kenya Airways set for gear change

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This month's cover interview for Airline Business was Titus Naikuni - Kenya Airways' long-serving chief executive. Now nine years into the job, this marks the second time he's been on the cover of Airline Business (you can read our cover interview with him from December 2005 here).

kenya cover close.JPGIn a wide-ranging interview at the carrier's Nairobi headquarters, Naikuni talked about the growth opportunities for the airline - notably within Africa and longer-haul towards Asia. It comes as the airline is embarking on a major expansion - this could see Kenya Airways nearly double passenger numbers to 6 million over the next five years and take delivery of its first (and much awaited) Boeing 787 at the turn of 2013/14.

Read more on this, plus Naikuni's take on the challenge of Africa's stalled aviation liberalistion and the carrier's plan to develop its cargo and regional businesses in the FULL INTERVIEW HERE, together with photos and data about the airline.

It was a bit a cloudy day when we were in Nairobi, but the sun finally appeared in time for the photoshoot and the great pictures from our friends at Billypix gave us something of a nice headache for which picture to use on the cover. We love the striking image we ultimately went for, but it was a close run thing between that and this equally good shot below (only finally decided a couple of hours before we went to print!!!)

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Word up: Tyler's change in tone at IATA

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IATA held its annual global media day yesterday in Geneva, its first under the leadership of former Cathay Pacific boss Tony Tyler. There has been a shfit in tone at IATA since long-time director general Giovanni Bisignani stepped down in the summer. Bisginani did much to transfrom IATA and in the process became known for "shouting politely" at governments, regulators and suppliers as he pressed airlines' case. But Tyler, evident in recent addresses to airports and regional airline bodies, is keen to stress the importance of co-operation.

"In the spirit of looking at the industry from a holistic perspective, you might have noticed that I have been emphasising the need for co-operation among industry players," he said in his opening address at the global media day. "I plan to keep up our good co-operation with the regional airline associations and to enhance our co-operation with those representing our partners in the value chain.

"This is not a new concept. Co-operation is behind the industry's superb record on safety and it is guiding our approach to climate change as well. I will certainly be a forceful advocate for airlines when that is needed - with our partners in the value chain and with governments."

You can read much more about the changing tone at IATA with this interview Airline Business did with the IATA director general during ALTA Airline Leaders forum last month. Read it here.

But for something less scientific, but a bit more colouful, judge the change in tone for yourself with these two word-clouds - one representing Tyler's speech to journalists yesterday and the other from Giovanni Bisignani to the same audience a year ago. Aptly enough, while co-operation may not be the biggest of the words, it is pretty much centre stage in Tyler's word-cloud - but absent (as far as I can tell) from the word-cloud of Bisignani's speech a year ago.

Tony Tyler speech: 7 December 2011

Tony Tyler wordle.pngGiovanni Bisignani speech: 14 December 2010

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More rugby crazy airline chiefs

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Talking to more airline chief executives at the Airline Business World Air Forum it emerged that Nico Bezuidenhout of Mango and Peter Davies of Air Malta are also keen followers of the oval ball game. During his playing days as a number 8 for Twickenham rugby club, Davies even lined up against the All-Blacks!

In another rugby-aviation connection, Etihad has received a marketing boost by the start to the season made by its sponsored-team Harlequins, who have won all ten of their competitive games so far and are runaway leaders of the English rugby Premiership.

In return three of this year's mightiest Quins, captain Chris Robshaw, Nick Evans and Mark Lambert have been pulling their considerable weight in helping promote Etihad at the World Travel Market in London.

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Malaysian carriers go home and away with QPR

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Interesting deployment of dual brand management now low-cost carrier guru Tony Fernandes has a foot in both airline camps following the ground-breaking tie-up between AirAsia and network carrier Malaysian Airlines.

The AirAsia name has made regular sponsorship appearances within sport in the past, including the shirt sleeves of the ever-popular English Premiership referees. And with Fernandes newly-acquired Queens Park Rangers being shirt sponsor-less after its deal with Gulf Air ended this summer, there was an obvious opportunity. But what name to put on the shirt? AirAsia or Malaysia Airlines...

...the answer of course is both. Malaysia Airlines for the home kit, AirAsia for the away kits. You can see the look in the picture below (QPR manager Neil Warnock, centre left, ponders which of the new signings to play in midfield with Joey Barton on Saturday)

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I can't think of another example of different home/away sponsorship - but could this set a new trend? Could we see Arsenal playing away from the Emirates with FlyDubai adorned across their shirts?

And why stop there. With airlines operating premium and low-cost airlines, and football clubs spending varying transfer fees on different players, why not tailor the airline sponsor's name for each player to their individual transfer fee? Though I guess you would know if you come in one day and find you suddenly have Ryanair on your shirt that your dream multi-million pound move to Barcelona isn't happening. 

Fernandes joins the Premiership jet-set with QPR

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Fresh from his company's high profile link-up with Malaysia Airlines, AirAsia founder, Lotus F1 team principle and all-round entreprenur Tony Fernandes has joined the English football premiership jet-set by today formally completing a deal to buy west London football club Queens Park Rangers. Fernandes has taken a 66% stake in the club, which returned to the top tier of English football (at least for now) after a 15-year absence last week - with a less than encouraging 4-0 home defeat to Bolton.

Undeterred (and maybe having knocked a pound or two off the purchase price after that result), Fernandes completed the deal for the majority stake in the club today. Here he is enjoying manager Neil Warnock's autobiography and with his new QPR shirt hanging in the background - we'll ignore the fact that number one should really have been the goalkeeper's shirt.

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Keen followers of Fernandes might be surprised to see him turn up at Loftus Road rather than his beloved West Ham - who he was previously linked to buying. "Everyone knows I've followed West Ham all my life," he says, "but I've always had a soft spot for QPR."

The deal keeps up the airline connection at QPR - Gulf Air having only just ended its three-year shirt sponsorship of the club - indeed QPR kicked off the new season without a shirt sponsor.

It joins a string of airline connections with English football clubs - ranging from Etihad at free-spending Manchester City, the Emirates name for Arsenal's home ground to EasyJet's sponsorship of English conference league team Luton Town.

It remains to be seen whether Fernandes has as much success guiding QPR - whom he describes as a raw diamond -  to success as he has AirAsia. 

Low-cost innovator Fernandes set to join the establishment

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Even for a man who has made a habit of being an industry trend-setter, today's coming together between Tony Fernandes' AirAsia and Malaysia Airlines marks something of another first for this industry. The proposed co-operation between AirAsia, its long-haul unit AirAsia X and Malaysia Airlines, including minority cross-shareholdings, could bring network carrier and low-cost rivals together in a way seldom seen in this industry before.

fernandes.jpgExactly how the partnership unfolds between Malaysia's biggest airlines remains to be seen. It will initially focus on initial synergies between the two with limited impact on each party's operations, but envisages deeper co-operation once an anti-trust review is completed by the companies. Certainly the aim appears to be to enable Malaysia Airlines to focus on its network business, and the AirAsia units to grow in the low-cost sector - a move evident in the intention to reposition MAS' low-cost unit Firefly as a full-service regional operation.

Co-operation between network and low-cost carriers within Asia has become increasingly prominent - note for example ANA's move to work with AirAsia on its Japanese low-cost operation and Thai Airways turning to Tiger Airways to develop a low-fares presence. 

Similarly a dual approach operating model is not new. Indeed the positioning of Malaysia Airlines and AirAsia as partners in some ways mirrors the combination at Qantas with its Jetstar short and long-haul operations (a further twist is provided here as Malaysia Airlines is a new partner of Qantas having recently opted to join it in Oneworld, while AirAsia struck a loose partnership with JetStar last year).

But there are few examples poacher and game-keeper coming together. In Belgium, Brussels Airlines was born out of a merger between SN Brussels and low-fares carrier Virgin Express - though the latter had already moved towards the business middle ground by then - while Brazilian low-cost giant GOL's acquisition of national icon Varig out of administration was pretty much in name only.

One interesting comparison is with Ireland. Malaysia Airline has, like Aer Lingus, had to grow up with one of the region's dominant low-cost operators on its doorstep. Both have had to do so with larger than life leaders, Fernandes at AirAsia and Micheal O'Leary at Ryanair, driving their rivals forward. And, once the planned share swap is completed, Malaysia Airlines will like Aer Lingus find itself minority-owned by its low-cost rival.

The similarities though end there. Aer Lingus, the Irish government, Irish unions and European regulators continue to resist a future life as part of Ryanair. But with Tony Fernandes joining the Malaysia Airlines board as non-executive, non-independent director, and part of the team overseeing management of the company, the low-cost innovator is set to be embraced by the establishment.

For more on AirAsia and Tony Fernandes, read the Airline Business cover interview with him from May 2009 here.

Stelios creates uneasiness on board

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Stelios Haji-Ioannou, has been making things very uneasy for executives at the airline he founded by calling for a shareholders' meeting to vote on the removal of Easyjet deputy chairman Sir David Michels.
  
Michels, who is the airline's senior independent director, is to step down anyway at the end of 2011, but EasyGroup is calling for him to be removed sooner.
Easyjet responded that it was disappointed that EasyGroup had taken this step, which it "views as an unnecessary distraction".

This is the latest dispute in a long running battle, between the airline and Stelios who now heads investment vehicle Easygroup which licences 'Easy' branded businesses such as pizza delivery and car hire.

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On 10 Febraury Haji-Ioannou wrote a letter to the company to express his "dissatisfaction with issues that have become evident over the past year relating to the previous chief executive's remuneration at EasyJet". In the letter, he took issue with a £1 million ($1.6 million) payment made to Harrison for the period between 1 April and 30 September 2010.

Haji-Ioannou has also conflicted with EasyJet several times over its fleet strategy, with a recent broadside centring on the exercising of 15 Airbus A320 options in early January.

Tim Clark and 3 Airline Business editors

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Emirates Airline president Tim Clark was presented with the 2011 Airline Business Achievement Award at the magazine's annual Airline Strategy Awards on Sunday night.

From left to right: Max Kingsley-Jones (Aug 2010-present); Tim Clark; Mark Pilling (July 2005-Aug 2010; Kevin O'Toole (1998-July 2005).

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Airline Business editor Max Kingsley-Jones outlined the reasons why the three editors of the magazine over the past decade had chosen Tim as the most influential airline head over that decade.

His citation is in full here.

The full list of the Airline Strategy Award winners and photos from the night is found here

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