Friday, 25 June 2010

Barcelona to Tokyo anytime soon?

In my previous post I mentioned the international expansion plans of All Nippon Airways (ANA). Today this article in Business Traveller confirms that the, at least until now, second-largest Japanese carrier is onto something...The expansion is now in Asia, but is there a chance that we are going to see ANA operating at BCN alongside its Star Alliance partner Spanair some day in the future? Let's hope that the upcoming entry into service of the Boeing 787, with its improved operational economics and ANA as the launch customer, would make this prospect a little bit more possible...

Sunday, 13 June 2010

What airlines does Barcelona need in order to become a truly global airport?

As a continuation to my post about the arrival of Qatar Airways to Barcelona I am going to do an exercise on airline fiction and try to imagine what airlines could best complement Barcelona's airport current network and put it in the league of the major global airports. In short, if I was Barcelona airport's manager which airlines I would like to fly into my airport in order to maximize my travelers' options?

As in real life resources are limited, and in order to make this exercise look a bit more real, and, thus, more interesting, we are going to set some constraints. The airport manager will only be able to choose one airline per continent (well, actually Asia will have two, but it's ok as we are not considering Australia for technical reasons: to far away for direct flights), the choices would also need to be realistic and take into account the market realities at BCN (for example, a route to the Maldives might be nice, but there might not be enough realistic demand for it or the connections to feed it).

These constraints would likely tip the balance in favour of Star Alliance airlines. Why? because of Spanair, the only network airline that is currently intent on building a hub at BCN while working together with one of the major alliances. This is not to say that the other airlines at BCN are not doing a good job, but frankly, I think that their current operational model would make it difficult to reach the type of coordination and code-share agreements that Spanair's membership of Star Alliance could facilitate. Moreover, it looks like Star Alliance's networks really fills the gaps at BCN quite are the choices, in no particular order:

United Airlines to Chicago

The American carrier's hub at Chicago O'Hare (ORD) would be a good complement to Barcelona's current connections with the East Coast of the US, particularly with, recently merged, Continental's service to New York-Newark (other direct routes BCN-US are New York-JFK served by Delta and American Airlines, Philadelphia, PHL, served by US Airways and Atlanta, ATL, served by Delta). Flying into Chicago will open the door to the Mid-West and Western states for the Barcelona travelers, and Barcelona's tourist sector would surely benefit from having a direct connection to one of America's biggest and more prosperous cities.

All Nippon Airlines to Tokyo

A connection with Japan would be very important for BCN. Many Japanese companies are based in Catalonia, such as Nissan and Sony, and, as anyone visiting Barcelona's famous Gaudí monuments might have noticed, Barcelona remains a very popular destination among Japanese tourists. All Nippon Airways has a relatively small international network, but does fly to cities where it can code-share with Star Alliance partners, such as Lufthansa in Frankfurt, why not Barcelona then?

TAM to Sao Paulo

A regular and frequent connection with Latin America is missing at BCN despite the strong business links and the large Latin American community in Barcelona (there are some weekly flights to Buenos Aires and Bogota but with very sporadic frequencies) and where else to start other than Sao Paulo, the largest city and economic capital of up-and-coming Brazil, with its growing economy and large population? It's geographic position would also enable travelers to connect with TAM's regional network to access the rest of the continent. Moreover this route could fit well in the European expansion plans of TAM, also a Star Alliance member.

Air China to Beijing

No need to repeat what everyone has already heard about China, the World's new economic giant. A direct connection to China, with an airline that can give access to a large domestic and regional network is a must for any airport with aspirations. Air China is a member of Star Alliance as well and, like its home country, is also in a period of expansion. Great potential for this route that could handle a mix of business and leisure traffic both ways.

South African Airways to Johannesburg

This is not just a World Cup-related stunt...because of its geographic position Barcelona could be a good connection point for Europe-Africa traffic. At the moment many travelers in the Western Mediterranean area go North to Paris, Brussels or Frankfurt in order to then travel South again, a direct flight from Barcelona would save time to travelers in Barcelona's catchment area and could also feed flights to other parts of Europe with South African Airways' Star Alliance partners. This route and the possible regional onward connections at Johannesburg would also facilitate new business and tourism opportunities in the Southern part of Africa.

Emirates to Dubai

This is the only one of the lot that it is not a Star Alliance member, but Emirates has shown that it can do it Emirates is becoming so big that I think any self-respecting airport would like to have it on-board...If Emirates came to Barcelona it would be competing with Qatar Airways on all routes to the Middle East and beyond: Australia, India and South Asia, East Africa, the Far East. In short, a global super-connector.

What else?

Well, given that this post is about wishful thinking, if Singapore Airlines' (another Star Alliance member) current Barcelona-Milan-Singapore route could become nonstop another portion of the World would be much better covered from BCN!

I would also keep an eye on two other Star Alliance members: Air Canada and Asiana of South Korea. I have not included them, in part to keep with the self-imposed constraint regarding the number of choices available. Their local markets are relatively small compared with their giant neighbors but both countries are economically doing well and there might be interesting opportunities ahead!

The absents

I would have liked to include an Indian airline in the lot, specially considering the dynamism of the Indian economy and its aviation sector. I haven't because I had the feeling that business and tourist flows between the two markets are not big enough yet, particularly given the lack of alliance partners that might help feed the flights at both ends. Moreover, the Gulf carriers Qatar Airways and Emirates already cover most of the major and even secondary destinations in India. I have no doubt that if the Indian economy continues to grow, it won't be long until we see Indian airliners at BCN, in fact, last year it was rumored that Kingfisher Airlines had some interest in operating the Barcelona-Mumbai route (it might help that its owner is regular visitor to the Catalan capital).

Given the complicated political situation in Thailand and the fact that there already is a Singapore Airlines flight to Barcelona that provides connections to South-East Asia, I have decided not to include Star Alliance member Thai Airways in this list this time. Once the political issues are sorted out I am sure that Thailand will remain a popular tourist destination as ever and hopefully we will see the Thai Airways's orchid livery at BCN some day!

Fiction or reality?

So this is it! You just add six carriers and practically the whole globe is within one stop of BCN...

I admit there was a lot of wishful thinking in this post, but, who knows? on one hand, I think there is a latent demand for long-haul flights at Barcelona, that is now using other alternatives, on the other hand there are emerging markets and airlines that are fast expanding into new and under-served markets. There is plenty of capacity now at BCN...I know there are people working hard to make things happen...we might not become a super-hub but we can certainly be a spoke of many interesting hubs, providing convenient access to a vast number of destinations across the globe and this might happen sooner than we think!

Saturday, 12 June 2010

MEA: the resilient airline

A MEA A320 at Beirut airport

How resilient can an airline be in the face of adversity? Well, someone at Middle East Airlines (MEA), Lebanon's flag carrier, could possibly answer this question. The MEA of today is a modern airline serving a resurgent travel market (Beirut is one of the main tourist destinations in the Middle East and Eastern Mediterranean region) however during it's more than sixty years of existence MEA has had to fly through extreme turbulence...

The recent halt in traffic as a result of the volcanic ash cloud has put some European airlines in a difficult situation...but try keeping an airline operating with its main base intermitently closed for over 15 years! This is what happened during Lebanon's long civil war (1975-1990), when MEA survived by leasing aircraft and seconding staff to international companies. Once the war was over it quickly rebuilt itself, however the political situation has remained extremely unstable in that region and this has repeatedly affected its capacity to operate. As recently as 2006, war forced again MEA to move its operations abroad, this time to Damascus and Amman, until the situation was normalized.

Despite all these problems MEA has kept its expansions plans and building a young all-Airbus fleet: 4 Airbus A320, 6 Airbus A321 and 4 Airbus A330, serving destinations in Europe, the Middle East and West Africa, where there is an important Lebanese community.

One of the things that have caught my attention is that MEA operates its aircraft with a very low-density seating layout compared to European airlines and well below the capacity of these aircraft types. For example, its A320 has 24 seats in business class and 102 and only in economy, 126 in total (as a reference, BA's A320s have between 149 and 156 seats), the A321 features 31 business seats and 118 in economy, 149 in total! (to make the comparison, BMI, that competes with MEA on the London (LHR)-Beirut route has a 183-seat layout, 40 seats more than MEA) I have never flown MEA, but I guess that passengers enjoy quite a lot of space on-board!

A MEA A321 with the Lebanese mountains in the background

Thursday, 10 June 2010

Planespotting at Larnaca airport, Cyprus

I recently made a stopover at Larnaca's new airport, in Cyprus. I was positively impressed by the new terminal, that opened recently next to the old Larnaca airport facilities. The airport is currently handling over 5 million passengers a year, and there are plans to expand capacity to 9 million, it is managed by a French-led consortium, Hermes Airports, made up of Bouygues Batiment International (22%) Egis Projects (20%), the Cyprus Trading Corporation (a local retail group-10%), Iacovou Brothers (a local contractor-10%), Hellenic Mining (10%), Vancouver Airport Services (10%), Ireland's Dublin Airport Authority (Aer Rianta International) (10%), Charilaos Apostolides (a local construction company-5%) and Nice Côte d'Azur Airport (3%). This group also manages Cyprus' other airport at Paphos,

Besides its amplitude and luminosity, one of the things I liked is that at the tip of the terminal there is a large glass wall that lets you keep track of all the planes that land and take off. It is not a high-traffic airport but nevertheless you could do some interesting plane-spotting.

A colourful A-320 of Swiss charter company Edelweiss Air, getting ready to return a load of tan Swiss holidaymakers to Zurich

An Aeroflot A-320 arriving from Moscow. Aeroflot serves the large Russian community in Cyprus, which is also an important holiday destination for Russians.

A Eurocypria Boeing 737, see our previous entry on this Cypriot charter company

Aegean A-320 departing for Thessaloniki, Greece

A Cyprus Airways A-330, the company uses these aircraft in its London Heathrow route

A British Airways Boeing 767 departing for London Heathrow. Besides being a former British possession, Cyprus is a traditional holiday destination for British tourists

Wednesday, 9 June 2010

Vueling vs. Ryanair: the battle for Barcelona has started!

The arrival of low-cost airline Ryanair to Barcelona has got the incumbent airlines up in arms. The Irish airline has designated BCN to be its 42nd base in Europe and is going to start 20 routes from the Catalan capital this September (Ryanair already serves "Barcelona" through two of its bases: Girona, GRO, and Reus, REU, both about an hour away from the city) . One of the airlines presumed to be most affected is local carrier Vueling, that although operating on a low-cost model, prides itself on a superior level of service, including flexible tickets and a frequent flier programme, that would make it more similar to a full-service network airline (it will soon start offering connection flights too).

In a pre-emptive marketing move, and while not a single Ryanair plane has yet been spotted at BCN, Vueling has launched an online campaign,"We love clouds", that offers everyone that bought a ticket with Ryanair on the 27th of May (the day after Ryanair announced the new routes) to make the outbound leg of the trip with Vueling, free of charge. Vueling is playing on its strength in customer service, with the obvious goal to make people notice the difference in service and comfort between the two legs of the trip: outbound with Vueling and inbound with Ryanair.

I have flown with both airlines and, in what comes to the "travel experience", I share Vueling's conviction that they will win hands down, however, and now more than ever, short-haul air passengers have proven to be quite price-sensitive and here Vueling is going to have a more difficult challenge ahead...

Tuesday, 8 June 2010

Why Qatar Airways new flight Barcelona-Doha is such an important qualitative step forward for BCN

As I read on the latest edition of The Economist an excellent report on how the major Gulf carriers (Emirates, Etihad and Qatar Airways) are changing the global aviation market ("Rulers of the new Silk Road"), Qatar Airways is starting its new Doha-Barcelona direct flight (as I already mentioned a few months ago).

If the emergence of the Gulf "super-connecting" airlines (I am borrowing some terms from The Economist here) has had a profound effect on the World's air traffic, the new Qatar Airways Doha-Barcelona, although of small quantitative significance with regard to Barcelona's volume of passengers, is also a very important qualitative change for the Catalan airport.

If there is one thing that BCN lacks, it is long-haul routes, which are almost non-existent in an Eastward direction. This deficiency is, partly, compensated with the frequent connections that Barcelona has with main European hubs. As BCN has traditionally lacked a flag carrier of its own, the likes of Air France, KLM, Lufthansa have viewed BCN and its influence area as a large feeder market (the absence of flag carrier factor might be key in explaining why BCN's number of long-haul connection is much smaller than that in airports of similar size with catchment areas of a similar level of economic and demographic development). This was ok (if obviously not ideal) if you wished to travel to major cities in other continents: Beijing, Shanghai, Tokyo, Bangkok...they are all just one stopover away from BCN.

However, and as The Economist also notes, one of the strengths of the Gulf carriers is that they have diversified their networks to cover multiple secondary markets in the Middle East-Africa-South Asia region. The importance of the Qatar Airways connection can then be understood in this way: it not only adds a new destination in a previously undercovered region (the Persian Gulf), and an additional East-West connection route for Barcelona, but it also puts a large number of secondary markets within one stopover of BCN. Getting from BCN to places like Melbourne (Australia), Kochi (India), Dammam (Saudi Arabia), Dhaka (Bangladesh), Kathmandu (Nepal)...or even the Maldives, could involve complicated and costly route plans with multiple transfers.

The significance of this new route for the Barcelona market is not only that it gains access to a prestige airline renowned for its excellent service, but that the size of the globe has shrinked overnight in an Eastward direction.

Wednesday, 2 June 2010

Why is Turkish Airlines sponsoring F.C. Barcelona?

Turkey's flag carrier made the headlines of the Spanish sports press by announcing an sponsorship deal with F.C. Barcelona. As detailed in this press release, and without having more details about it, it seems that the Turkish carrier will not only airlift the team to all its away international games but will also pay 7.7 million euros as part of the sponsorship agreement, the airline's logo will, inn turn, feature prominently in the club's website and marketing material, joining the likes of Nike and Audi to become one of the club's international sponsors.

The airline has struck a similar deal with another of Europe's most prominent football teams, Manchester United.

Why would Turkish Airlines pay so much to sponsor two football teams so far from home?

This strategy makes sense if we look at the extensive intercontinental network that Turkish Airlines (THY) has been building and its future expansion plans. As Hmadi Topçu, the company chairman explains in the airline's own in-flight magazine, the company has grown from 10 million to 26 million passengers since the year 2003 , the fleet has expanded from 65 to 135 and the number of destinations from 104 to 156 (the route map looks certainly impressive at includes destinations where not many international airlines go, such as the Central Asian capitals).

Turkish Airlines must attract lots of transfer passengers to its Istanbul hub in order to sustain this expansion strategy and fill all this capacity. Istanbul's location might make sense for passengers connecting from Western Europe to Asia and the middle East, after all, Istanbul has been since its foundation an important trading entrêpot. This strategy would mimic that implemented by the Gulf airlines, such as Emirates and Etihad, that are challenging long-established Western hubs such as Paris and Frankfurt in providing West to East connections.

One of the obstacles to succeed in such an strategy is that Turkish Airlines is not a name that comes naturally to the mind of many European travelers when researching travel options. Gaining visibility and reputation by associating itself with well known and successful sports brands, together with competitive pricing, might help overcome this situation.

In the case of the Barcelona deal, it also does help that Turkish Airlines is seeking to get a more important presence at the Barcelona-El Prat (BCN), where it now flies twice daily. Turkish Airlines originally planned to increase to three its daily frequencies between Barcelona and Istanbul and even base one of its aircraft at BCN. There was the obstacle that, as an airline from a non-EU country, Turkish Airlines was already covering the number of frequencies allowed by bilateral agreements, but we believe this obstacle has been removed with the liberalization of air traffic between the EU and Turkey.

Additionally, fellow Star Alliance partner, Barcelona-based Spanair has also started flights to Istanbul in code share with Turkish Airlines. One more F.C.Barcelona connection here: Spanair's executive chairman, Ferran Soriano, used to be a member of F.C.Barcelona's board and is now on one of the electoral tickets contesting the upcoming F.C. Barcelona election.