Tuesday, 31 January 2012

A tribute to Spanair, in pictures...

I travel often through Spanish airports, where Spanair aircraft were a common sight. They came in different sizes and colours, the result of a convulse corporate history. Spanair, we will miss you! 

Here is my photo-tribute:

The old livery, here a Spanair Airbus at Madrid-Barajas

And the new livery...this one spotted at BCN

 Spanair was a proud Star Alliance partner

A Boeing 717, we'll see some more of these in the European skies soon!

 Spanair was positioning itself as "the Barcelona airline": here a map of its network in a commercial advert

A Spanair MD-83 with the city of Barcelona in the background

Spanair EC-GVO taxiing at BCN

Spanair's fleet was initially made of MD-83s, some of these have remained with the carrier until the end

The old and new liveries side by side at BCN

Despite management efforts, the outlook had always been really foggy for Spanair...

Monday, 30 January 2012

Spanair's collapse: a few notes

When I wrote my latest post a few days ago, I was not expecting to write again so soon about the Spanish aviation industry, but the events of last Friday, despite not being entirely unexpected, have shaken to the core the Spanish airline industry, nothing less than the collapse of Spanair.

I have been following the Spanair saga almost since the day I started this blog and a lot has been said already about Spanair's demise (the Spanish and, particularly, the Catalan press are packed with news, reports and comments about the Spanair case), so this won't be a long post...

The fact is that Spanair was fighting an uphill battle from the very start (by "start" I refer to the date when Spanair was acquired and re-founded by a consortium of government-back Catalan institutions after its near bankruptcy in 2008):

1) When it was acquired by its current owners, Spanair was already in a difficult financial situation and under-capitalized

2) The financial crisis has hit very hard its main markets

3) It was a not-particularly-efficient airline that had to face formidable competitors such as Vueling and Ryanair at its own home base

4) It lacked any significant source of differentiation, it was neither strong enough to develop a viable network or superior service, nor efficient enough to deliver value, plus it lacked a strong brand.

5) It was acquired with government-backed funds because it was expected to help in the development of a long-haul hub at Barcelona airport, a mission that it was totally uncapable to fulfil since it lacked the fleet or the feeder routes to do it. Governments and business do not usually mix very well, but it becomes even more difficult to justify such support when there aren't any tangible results in the form of a greater return to the overall economy and the government itself is going through a round of public spending cuts.

Then there is Spanair's membership of Star Alliance: there was the expectation, that, if not alone, at least with the support of its partners, Spanair would be able to consolidate some sort of hub at BCN, while giving Star Alliance a solid foothold in South-Western Europe.

None of this is going to happen, no Qatar Airways last minute rescue either, although judging by Vueling's quick reaction, I think this supply shock will be quickly absorbed by other carriers (I have written already about the adaptability and resilience of air travel markets).

Vueling is, indeed, the airline that benefits the most from Spanair's demise and emerges from this situation undisputedly as Barcelona's home airline, with an expanding network and a product that has been evolving from the pure low-cost model to that of an hybrid carrier, able to appeal to both business and leisure passengers.

Saturday, 14 January 2012

The Spanish airline industry, in a state of flux

A constant flow of news is coming out of the Spanish airline industry, making it one of the hotspots of the industry in Europe, so I thought about writing this post to summarize what is going on...

One of the most amazing things is that the deep economic crisis that Spain is currently going  thorugh is not enough to deter Spanish airline of the most exciting developments we have seen in last few months is the set-up of "stealthy" Barcelona-based airline startup, Volotea. Little is known about this project so far, except the identity of the founders, the fact that it is going to operate in the short-haul market and that its fleet is going to be composed of Boeing 717s. All these details, that were already advanced in the post I wrote a few weeks ago, have now been confirmed. Some reports in the press pointed also to the fact that it might not restrict its operations to the Spanish market only.

This is certainly an interesting timing to get into Spain's regional market, as the main incumbent in this segment, Air Nostrum is grounding up to 15 aircraft, reducing the number of staff and considering to move its headquarters from crisis-hit Valencia, on the Mediterranean coast, to the Basque city of Bilbao.

Air Nostrum operates many regional routes within Spain on behalf of Iberia

At the same time Vueling has announced an investment of €325 million and a major expansion at its Barcelona base, with 5 new Airbus A320 based there and the launch of 23 new routes. This will bring Vueling's total number of cities served from Barcelona to 70, which makes it one of the largest short-haul networks in Europe.

Vueling's recent network expansion strategy is also worth of note, not only from a quantitative but also from a qualitative point of view...I wrote not long ago about how Barcelona could fulfill its hub ambitions by having an airline develop a network linking it to second and third-tier cities around the Western Mediterranean. The aim would be to become the reference hub for this region, in a way similar to what KLM does with its links between Amsterdam and British and Scandinavian regional airports. When I wrote this what I had in mind was more of a regional type of operation (as KLM does) and I still have serious doubts about whether the Airbus A320 is the right aircraft for this type of operation based on thin routes, but Vueling's route map, particularly in France, with additions such as Bordeaux, Lourdes, Marseille, Nantes and Brest, and Italy, with Genoa, Pisa, Verona, its new "connection flight" service seem to fit well with this strategy. Whether this will ultimately lead to the materialization of the much-awaited long-haul hub at Barcelona remains to be seen...

It is also noteworthy that Vueling is finally launching its first UK routes out of Barcelona (it flies already between the UK and several Spanish regional airports), a territory that, until now seemed reserved to the likes of Easyjet and Ryanair (by the way, the Irish airline has finally closed a deal with the Catalan government that will provide for 19 routes being launched or reinstated at Girona airport (GRO), just one hour drive North of Barcelona, BCN).

In the meantime, Barcelona's other carrier, Spanair, is languishing while awaiting its possible acquisition by Qatar Airways. Senior officials from the Catalan government and Barcelona City Council flew to Doha a few days ago to discuss the sale of Spanair to the Gulf carrier. As pointed out in this post, it will be interesting to see how petro-dollars affect the competitive landscape in the European airline industry. These negotiations, however, have not been obstacle for Qatar Airways to cooperate closely with Spanair's rival Iberia, to the point that it will be the only non-Oneworld airline to use Madrid's gigantic T4 terminal. Qatar Airways' passengers will also be able to use Iberia's domestic network for onward flight connections.

And I finish this post, precisely, with Iberia, as it is preparing the launch of its new low-cost airline Iberia Express. In reality, I think this move will be hardly noticeable to the average passenger: Iberia Express will be using the same aircraft and fly the same routes that Iberia already does, plus it will also offer business class. Iberia's on-board service on short-haul economy is already barely different to that of low cost airlines so not much of a change here either. So Iberia Express is more of a way to end a bitter labour dispute and lower operating costs in its short haul operations, a necessity for Iberia considering how entrenched Ryanair and Easyjet have become in the Spanish market, rather than the launch of a truly "new" airline.

Friday, 13 January 2012

Airline social seating is stay

If the previous post was featuring three great airline blogs, today is the turn of four new services that bring the principles of social shopping to one of the most important aspects of the airline passenger experience: seat allocation.

Once upon a time airline passengers were always asked whether they prefered window or aisle (not many people seem to like the middle seat!), the not so young might even remember when they had the choice of smokers/non-smokers...well, to be fair, many passengers still get the choice, but then came the low cost carriers and the era of unassigned seating, and the pay-to-choose-your-seat model...

And now a bunch of tech startups and a few airlines are starting to bring some zest back to seat by applying the principles of social shopping and leveraging the power of social networks: when on a flight, wouldn't it be better to seat next to those you are more likely to have an affinity with you and have a more enjoyable flight?

Here are four initiatives in this field that have popped up recently, two are driven by specific airlines that seem to have developed it in-house, whether the other two are solutions provided by independent technology startups, and, therefore, not tied to any specific carrier.

1) Planely integrates with other platforms and applications, such as Tripit, Facebook and Linkedin, you disclose where are you flying to and Planely tells you who are you going to be travelling with, you can then connect and try to seat next to those you would like to speak with during the flight.

2) Satisfly is based on the concept of "intelligent seating", when you sign up you are asked a number of details about yourself, part of this can be filed automatically through integration with your existing social networks, additionally Satisfly also asks you for your flight mood (business talk, easy chat, work, relax) and neighbour profile (a number of questions about your preferences about potential seat neighbours, such as age or language spoken), Satisfly also collects information such as meal preferences or frequent flier programmes. The key element here is that Satisfly works alongside airlines, so once all these information is processed through its own patent-pending technology, the airline is going to be able to assign you a seat neighbour based on your preferences.

3) Malaysia airlines made the headlines a few months ago when it released the first airline Facebook app that allows booking directly on Facebook, without leaving the app. One of the interesting aspects of this app is the ability to see whether  your Facebook friends are on the same flight and select seats accordingly (the system is opt-in only, so no risk of unsolicited encounters if you do not wish to be found)

4) KLM, once more a pioneer in the use of social media, is planning to release a service that looks for similarities and potential compatibilities in the passenger's social media profiles and activity and then allocates seating accordingly. Whereas not many details are available about this new initiative it sounds like an interesting idea, although, obviosuly not for everbody (it will need to be opt-in only), a project worth keeping an eye on!

Wednesday, 11 January 2012

Three airline blogs that stand out

Every social media manual will tell you that having a corporate blog is a must. Opening a blog is actually not that difficult (this blog is proof of this :-)) but doing it in a nice and engaging way is another story, particularly when we are talking about "corporate" blogs...this is why I would like to highlight a few examples I came across of airline blogs that, in my opinion, are really outstanding:

1) KLM
The Dutch carrier has been a pioneer in the use of social media tools and its corporate blog could not be less. KLM's blog has a nice personal touch, presenting stories from all corners of KLM's network, and their Facebook page is also a must for any aviation history enthusiast, capitalizing on the airline's long history as the Dutch flag carrier and a real commercial aviation pioneer (KLM was founded in 1919, which makes it the oldest airline in the World still operating!). You can find some great pictures that will help you imagine how the passenger experience was in those early days of aviation!

2) Air New Zealand
Air NZ has been delighting observers of airline marketing for quite some time, with simple product innovations that have, nevertheless, the potential to improve considerably the passenger experience, funny aircraft safety videos and cute furry mascots...and Air New Zealands blog is up to what you would expect of such as creative airline...The Flying Social Network does not look like one more corporate blog, it's got a clean design, interesting articles and nice visuals...I do not tend to follow corporate accounts, but I made an exception with this one!

3) Finnair
Well, this is a classical one, and the Quality Hunters initiative got already its space in this blog, so I will point you towards my post of 2010: "Finnair, rethinking quality"

Saturday, 7 January 2012

Is there a lack of innovation in the aviation industry?

Ready to take another leap?

The other day a tweet from aviation social media expert Shashank, from Simpliflying caught my attention, it contained a quote from Splatf, a tehcnology blog that I also follow, it stated "The airplane industry needs its iPhone".

If you go to the article in question you will see what this means: there has been little radical innovation in the aircraft industry in the last few decades, with the two main manufacturers (plus some smaller ones) basically delivering incremental improvements of aircraft types that, in their basic form, have been in service for a really long time. The first Boeing 737 first flew in 1967!

Of course, the Boeing 737s that are being built today are superior in many ways to those earlier versions, but it could be argued that they are not "revolutionarily different". There has not been a leap as significant as the one that, for example, the Boeing 707 represented over the previous piston-engined planes!

This is not the only voice I hear recently warning that the rate of technological innovation has slowed downed over the last few decades, not only in aviation but in other industries too.

You could say the composite materials that make most of the recently released Boeing 787 Dreamliner certainly qualify as an important innovation, but, despite all these improvements, which I, as an aviation enthusiast, appreciate, might be far from evident to the average airline passenger and, to the non-expert eye, a Boeing 787 looks unremarkably similar to a 1970s airliner. 

A number of revolutionary concepts have been put forward in the last few years but the chances of them becoming a relity in the foreseeable future are, a priory, very slim. And it is understandable why: developing a new generation of airliners is such a complex, risky and capital-intensive task (we have got a taste of what this means with the A380 and Boeing 787 production delays) that it is no wonder that Boeing and Airbus prefer to squeeze further all improvements they can from their existing aircraft portfolio, and this is why we have the Airbus 320 Neo and the Boeing 737 Max, which I am sure are superb airplanes, but delivering just marginal improvements over the current family of aircraft. 

Plus, why would you create an entirely new aircraft that renders most of your client's fleets obsolete in one go when you have a comfortable hold of this market? remember what happen when the Royal Navy introduced the first Dreadnought? Almost all its fleet became obsolete overnight and startup navies (Germany) spotted the chance to catch up fast.

Well, they risk being disrupted, such as Nokia got disrupted by Apple. and any such breakthrough is likely to come from outsiders...Will it be mass-market hypersonic flight? or the flying car?

Source: Wikipedia

Who knows? definition, breakthroughs are impossible to predict...

What do you think? Where is aviation's next big leap going to come from?

Friday, 6 January 2012

The long-awaited European long-haul low cost revolution

Are low cost long-haul airlines finally coming to Europe (to stay)?

Well, to be fair, long-haul low cost airlines have operated in Europe before, but for a number of reasons they have never been able to consolidate.

From the early days of pioneering Laker Airways, back in the seventies, to the more recent Oasis Hong Kong (not to be mistaken for Oasis Airlines, a Spanish charter airline that ceased operations in the mid-nineties!), that flew Boeing 747s between London and Hong Kong, and Air Madrid, that collapsed in the run up to a Christmas holiday leaving thousands of passengers stranded, all attempts to establish the low cost long haul model in Europe have been met by failure so far...No wonder that with this track record Ryanair's rumored long haul expansion, expected to start with flights to New York Islip, hasn't materialized yet! And it is not only Europe, we find a similar situation in the US (I do not count transcontinential routes as long-haul).

The economics of long haul low cost aviation are certainly more challenging than those of the short haul variant: aircraft can not do multiple rotations, there are few long haul markets whose traffic is dense enough to support point-to-point operations without the support of a feeder, it is more difficult to take part of the market from alternative modes of transportation such as road or train (basically most of those that can or would fly are already doing so) and also most routes outside Europe are governed by a strict framework of bilateral agreements that provide little flexibility to new entrants.

However, there is a region og the World where long haul low cost carriers are not only well consolidated but also expanding fast. Air Asia X and Jetstar, that from their respective bases in Malaysia and Australia are currently competing to establish subsidiaries across the region. Singapore Airlines is also launching its own low cost airline, Scoot. And Australia's Strategic Airlines has also joined the fray after rebranding itself as Air Australia.

But in such a global industry, it is rare to see a trend confined to a single region and I think we are going to see long haul low cost airlines take hold in Europe really soon, with airlines from the Asia-Pacific region leading the way: Air Asia X is already at London Stansted and some more routes are being planned. Jetstar has also announced plans to enter the European market.

 Norwegian plans to go long-haul as soon as it gets its new Boeing 787s

And we are starting to see some movement among European airlines too, with Norwegian leading the way, and XL Airways in France are also pondering whether to make the move (Air Berlin is also offering long haul but I would count them more as a hybrid airline rather than low cost). Delays in the production of the Boeing 787 might be delaying some long haul plans (its, in theory, superior economics might help overcome some of the obstacles mentioned above), but looks like the long haul low cost carrier is coming soon to an airport near you!

Thursday, 5 January 2012

Interesting marketing approach for executive aviation

I know executive aviation is not my usual blogging topic, but when I come across something in the aviation industry that I find interesting from a marketing or business point of view I like to share it here...and this is what happened when I came across Blink, a small British executive jet operator with bases at London Blackbushe (BBS), Surrey, Geneva and the Channel Islands.

Something caught my eye in their website: the user interface looks incredibly similar to that you can find in a regular "mass-market" commercial airline and so is the feel you get when checking routes and prices...even the "last minute deals" section...executive aviation is not my field, so this might not be unusual, after all, and maybe there are some other operators providing a similar booking process and taking the same marketing approach.

I do not think I am flying with them anytime soon, but I found it interesting to see some marketing innovation in the aviation executive segment!