Saturday, 19 March 2011

Zaragoza (ZAZ): an airport below potential?

Zaragoza has a opportunity to become strong in cargo
(photo: a Lufthansa Cargo MD-11F at Frankfurt International airport)

I my recent series about "Spain's empty airports", I wrote about the amount of public money that has been devoted to create or upgrade airports in a number of cities that are unlikely to ever generate enough traffic to justify this investment.

However, I came across a case that might be just the opposite: Zaragoza airport (ZAZ) has little activity, which is a bit striking when taking into account the size of the city it serves. If you look at the 2009 ranking of Spanish airports by number of passengers, ZAZ ranked 28th (out of 48), only above airports with very little traffic, such as Leon or Logrono, or those devoted to private aviation. However, Zaragoza is the 4th largest metropolitan area in Spain with a population of around 700,000. The city is also home to a major logistics center, that takes advantage of its position at a crossroads between the Ebro Valley and the Barcelona-Madrid route.

But it is precisely this strategic geographical position, at the intersection of major overland transport routes, including high-speed railway lines, that might have prevent the city from developing a larger airport. The problem is simply that it is too well connected with Barcelona and Madrid and it is also just close enough to these two cities for air travel not to be competitive (there is admittedly a ZAZ-MAD daily flight operated by Air Nostrum, but this is an almost exclusively connection flight targeting a really niche market). It is this availability of good rail and road links where the opportunity lies: it is already the third airport in Spain in volume of cargo, still far from the top two, but growing strongly.

It must also be taken into account that ZAZ is an airport with a mixed civilian and military use (it is also designated as one of the alternative landing places for the Space Shuttle). The Spanish Air Force keeps a strong presence at ZAZ and air traffic and some other service remain in military hands.

I wonder to what extent military use has acted as a constraint on the airport's civilian development. Surprisingly, at a time of exuberant spending at many Spanish airports, including in nearby Huesca, it seems that ZAZ was left out of the party...

Saturday, 12 March 2011

How Air New Zealand drives innovation in the airline industry: lie flat in economy class

In this video you can see how Air New Zealand's Skycouch works

Great innovations often come from small things, and this is what Air New Zealand has achieved with its Skycouch for economy class. This idea, that emerged from within the company, is going to make the very long flights to and from New Zealand significantly more comfortable for many travelers that can not afford the luxuries of business class (or even those of premium economy).

On the kiwi-airline's new Boeing 777-300ER you can turn a row of three seats into a comfortable couch.

How this is done?

Very simple. The seats come with totally retractable armrest, while the leg-rest can go up to fill the gap between your own seats and the seat in front. Each row of three becomes a single, almost flat, surface and there are even specially adapted seat-belts. Add some real pillows and you are all set!

This innovation is ideal for couples and families with children...the only if is that you have to buy the three seats together. Pricing can be a delicate thing, specially if you do not want to devalue your premium products (premium economy and business class), but it seems that Air NZ has finally gone for a pricing structure where you can buy two seats at full price and the third one at half price. According to this article, this could result on an extra cost of $1,400 on a typical trip from Auckland to London (based on base fares), however it will still be considerably lower than premium economy or business class seats, that go for about $6,000 and $10,000 each (let alone buying two of them!).

This is in fact one of several imaginative solutions that Air New Zealand has devised to improve its passenger's in-flight is not a coincidence that when designated the World's 10 most innovative airlines, Air New Zealand came on top!

You just need to look on a map where New Zealand is located to understand a lot of things...necessity is the mother of invention!

Wednesday, 2 March 2011

What next for Girona airport?

Transavia is currently the only airline other than Ryanair operating at GRO

Girona has been possibly the fastest growing in Spain during the last decade. From a sleepy charter-only airport, GRO has gone on to become one of Ryanair's major bases in the continent...or was it?

In fact, GRO is now going through a delicate moment, and the responsible is none other than the same airline that helped it get out of obscurity: Ryanair. The Irish airline started operating from Barcelona last September and it has been opening new routes since then, most of Ryanair's traffic at GRO are actually originating or have as final destination the city of Barcelona, an airport that has now plenty of spare capacity for the Irish airline to grow.

Ryanair's base at Girona will go from 11 to 6 aircraft permanently-based aircraft

In a recent post at AirObserver's blog I already mentioned how its arrival to Barcelona has strengthen considerably Ryanair's bargaining power at Girona. And the Irish airline has put all this market power to work: a new agreement has supposedly been reached with the Catalan authorities, providing €7.5M to keep Ryanair at Girona until. But the recent government change in Catalonia has changed spending priorities and now is uncertain whether the agreement is going to be implemented or not.

According to some reports, Spanair is being asked by the Catalan government (that has been supporting it through direct capital injections) to take over some of the routes previously operated by Ryanair, namely the Girona-Madrid one. This move would not make any sense to me.

For a start, I doubt it would work without heavy public subsidies. Spanair already tried operating this route a few years ago and it did not work. Why should it be different this time? and if subsidies are to be paid, why then all the fuss about paying them to Ryanair? the Irish airline was at least capable of bringing to Girona a volume of traffic that no one else in the industry can match.

But if we then look at the relationship between Spanair and Catalan public institutions we have that public money has been used to support this ailing airline on the grounds that it intends to develop a hub-and-spoke operation at Barcelona El Prat (BCN) that might, in the long run, make of BCN a major European airport. Making Spanair fill the gap at Girona while Ryanair is itself increasing its presence at BCN would be a total departure from this strategy!

This situation might be mitigated if Girona airport had the autonomy to set its own fees and pursue a more aggresive commercial policy (Mr.O'Leary himself said recently that Girona's fees were too high to compete effectively with Barcelona El Prat. If we are to judge from the fact that Ryanair is currently expanding at BCN despite not getting any subsidy) that includes actively looking for new routes and airlines.

At this point in time the only non-Ryanair regular route at GRO is Transavia's to Rotterdam. Have the airport managers any other option on the table? It would be a good idea to start looking for some...