Qatar Airways to sponsor FC Barcelona, advertise on team's shirt

 Today we get into the fascinating World of football sponsorship, because it has been announced that Qatar Airways is going to become an sponsor of one of the World's top football ("soccer" for American readers!) sides: FC Barcelona. So we are going to see Qatar Airways on the FC Barcelona's shirt next season!

This deal consolidates the relationship between FC Barcelona and the emirate of Qatar (whose Qatar Foundation already sponsors the team) and mirrors similar sponsorship deals that top European football teams have sealed with the emerging airlines of the Gulf (the so called "MEB3"): Emirates is currently sponsoring English team Arsenal, Italy's AC Milan and is also adding FC Barcelona's arch-rival Real Madrid in the coming season, while Etihad Airways, of Abu Dhabi, and Qatar Airways are sponsoring Manchester City and Paris St.Germain, both owned by investors of their respective emirates.

The official accouncement, that can be found on FC Barcelona's website, does not disclose financial details, although sports daily El Mundo Deportivo reports that Qatar Sports Investments would pay €170 million for a six year sponsorship. Qatar Airways logo will then replace Qatar Foundation's one on the FC Barcelona shirts and merchandising. Apparently the possibility of replacing the sponsor's name was included in a clause of the original contract between FC Barcelona and Qatar Foundation.

Another point this announcement does not disclose is what is going to happen with FC Barcelona's current sponsorhip deal with Turkish Airlines. The Turkish flag carrier has invested heavily in sports sponsorship in its quest to position itself as a global super-connector and a competitor with the Gulf carriers and was, until now, the "official airline" of FC Barcelona. This relationship might be now "in the air" (if you allow me the bad joke).

By the way, all these airlines sponsoring several teams at the same time are starting to produce some slightly embarrassing situations: for example, a specially-painted Turkish Airlines aircraft flew FC Barcelona to the 2011 Champions League final, that the Catalan side played against non other than...Manchester United, a team that happens to have a similar sponsorhip agreement with the Turkish airline!

However, in this occasion, the final was conveniently played at Wembley stadium, in London, which made it unnecessary for Manchester United to fly...and, made a bit less blatant Turkish Airlines' alleged support for both teams!

IAG to bid for Vueling?

To bid or not to bid?

The news was out this evening that IAG is considering a bid for the share of Vueling it does not yet control (here is the official communication on the website of the Spanish stock-market regulator).

We will have to wait until Friday to know the details, but it makes sense...IAG is heading to an attrition war with Iberia's unions over the creation of its new low cost subsidiary, Iberia Express (and after this week's court ruling, there is no solution in sight anytime soon). The "new" carrier is IAG's attempt to stem losses at Iberia, particularly in the short and medium haul network.

And while Iberia is in turmoil, and as I already noted here a few days ago, Vueling (that is 40% owned by Iberia) appears to be in good shape. Such an irony, because Vueling is already exploiting successfully the sort of hybrid model that Iberia Express was trying to bring to Iberia's short and medium haul network!

What next then? 

As I said, it's early to say, the offer has not even been formalized, but things are getting interesting...

Could Vueling take progressively take over the Iberia Express project while Iberia focuses on the long-haul routes? After all, Iberia already had a "sister" company until the 90s, Aviaco, that was doing most of the domestic flights in Spain.

This option might not be good news for Barcelona airport, since there might be a risk, if Vueling "becomes Iberia" that the carrier will shift its focus away from its current base, where a major expansion is currently under way (or alternatively that it will split its fleet and network between Barcelona and Madrid).

Could the goal be merely financial, to consolidated the profitable Vueling operation in the not-so-good Iberia's accounts?

Is IAG planning to keep it as it is now, a stand-alone operation, while trying to extract more synergies and know-how from Vueling's experience in running a successful low-cost (or we should better say "hybrid") operation?

Let's wait until Friday to see whether anything new comes out of Iberia's results presentation!

Barcelona airport to open a beach club

Customers are expected to benefit from increased market competition, this is evident when it comes to airlines (despite some missing the "golden age" of aviation where hardly anyone could afford to fly), but what about airports?

Airports do compete too and one of the ways to do so is trying to provide the best passenger experience. In this blog I have already expressed my preference for Amsterdam Schiphol (and I have not even tried the amphibious vehicle tour or the virtual butterfly garden), but now another airport I know well is entering the fray: Barcelona airport has just unveiled plans to build a golf course and...a beach club!

The story caught my attention, maybe because  I have just come back from a trip to Bergen, Norway, where, taking advantage of the airport location (see picture below) and of the amazing spell of warm weather (yes, it can be warm and sunny in Norway too!)

 My favourite bathing spot on the far side of the runway!

I managed to have a bath in the sea while awaiting my flight. I must say it was not an easy task to find a spot with open access to the sea since most of the seafront is taken up by private houses with gardens, but, hey!...here is where I got...(and yes, it feels great to swim a bit before your flight!)

I am sure being able to spend some time on the beach before boarding your flight home at BCN, could prove popular with the millions of tourists that use the airport every year (although the Catalan capital is not a "pure" beach and sand destination, it is not unusual to find people wearing little more than sandals and shorts on flights to BCN during the summer season!)

Sources at the airport confirmed that the idea is to have a private company run both facilities, the golf and beach club, that will be located on airport-owned land next to the terminals, although not physically connected to it (so some sort of shuttle service would need to be set up too) and, both the beach club and the golf club are also going to be open to the general public, not only airport users.

 Making the best out of location!

The beach club might be ready for next year's summer season, while the golf course is expected to be completed by 2014. In a way, it is a sort of "come-back" since there was already a golf club years ago (it was actually the oldest in Catalonia) in the space where now the sea-side airport runway is located.

This is also a perfect example of an airport embracing the idea of treating passengers, not only airlines, as "clients" and making of the airport not just a transit point but an enjoyable part of the whole travel experience.

I can think of some other airports next to the sea...who will be next?

Volotea opens for business!

Europe's youngest airline (Picture: Volotea)

Lots of speculation has surrounded the launch of a the new startup airline Volotea (in case you missed it, this blog was one of the first to report it back in December!) but the veil has finally been lifted...

 It's not every day that you can witness the birth of a new airline, but this is exactly what happened last Friday: Volotea is now open for business!

Volotea, taking off on 5th April (Picture: Volotea)

Volotea won't be flying until 5th April, but it is already possible to book flights on its website, which went into count-down mode last Friday before finally being unveiled (a few minutes ahead of the scheduled time actually!)

If the website is the ultimate reflection of the value of a business, Volotea's is stylish but nimble, cosmopolitan and with a touch of minimalism (its designers haven't even missed the Pinterest phenomenon)

By the way, in case you missed the news, despite being headquartered in Barcelona, Volotea is going to start with a base in Venice-Marco Polo and from there it is going to fly to 14 medium-sized cities across Europe, plus some routes that do not go through Venice (I imagine as a way to optimize its Boeing 717s rotations). It is going to offer single class seating and pricing, seems to be really competitive with the low cost carriers, although it has deliberately chosen to focus on routes that currently see little or no competition from other low cost or network carriers...this means more options for European air travellers, particularly those that do not live in big metropolitan areas, and more alternatives also for managers at secondary airports, that had become increasingly dependent on Ryanair to maintain traffic numbers up...and it looks like Venice is just the start, Volotea might be soon coming to an airport near you!

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 entrepreneurs...one 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,...plus 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.

Qatar Airways about to invest in Spanair and why this is good news for Barcelona airport (and II)

As a continuation of my previous post on Qatar Airways possible acquisition of a stake in Spanair, here are some interesting questions that come to my mind when thinking about the possible consequences of this deal:

1) What is going to happen with Spanair's current Star Alliance membership and how is this going to affect the agreements Spanair had with Star partners on several routes, some of were of strategic importance to the carrier, such as Singapore-Barcelona-Sao Paulo.

2) What designs has Qatar Airways for the new Spanair and what degree of control would be able to exert? Is this a purely financial operation, with Qatar Airways limiting itself to turn the company around and making it a stronger stand-alone carrier?  Or are we witnessing the first act of a much more ambitious project aimed at building a presence in Europe (possibly by acquiring other troubled European airlines). If the latter turns out to be the case, it would be interesting to know what is Qatar Airways plan: a feeder operation involving a transit through Barcelona from Southern Europe regional airports and onto the Gulf does not seem to fit into the global-connector strategy Qatar Airways is developing through its Doha hub. Or maybe using Spanair to code-share on flights beyond Europe, as Singapore Airlines is already doing with Spanair? or build a base in Barcelona to fly from there to destinations in America, along the lines of what Indian carrier Jet Airways tried to do in Brussels?

In any case, Qatar Airways is gaining access to a large and recently renovated airport, with plenty of spare capacity and a geographical position that makes it a suitable gateway to Europe and beyond when flying from the Gulf.

3) Another interesting question that comes up these days is: will Spanair keep its name? rumours are its name is going to be changed to Air Barcelona or Barcelona Airlines. I am, personally, not a big fan of airlines named after cities, but this change would possibly make sense, since the Spanair brand does not enjoy a particularly strong recognition, whereas "Barcelona" is certainly a powerful brand (coincidentally or not, the Emirate of Qatar is also sponsoring FC Barcelona and another of the World's emerging airlines kicked off its European brand building campaign by associating itself with Barcelona's name)

In any case, I will be posting more analysis as soon as more news will come out soon, as Spanair's current situation is hardly sustainable...watch this space!

Qatar Airways about to invest in Spanair and why this is good news for Barcelona airport (I)

I just learned that Qatar Airways might be about to acquire a 49% stake in Barcelona-based troubled airline Spanair. While I do not know the details of the deal, I can think of a few reasons why this could be a good move for all parties involved, as well as for Barcelona's airport.

First of all, is a matter of financial necessity and of urgency. Spanair is in a critical financial situation and, despite strong backing from the Catalan government, is quickly running out of cash. Since I wrote this note a few months back it seems Spanair's cash-flow position has only got worse.

An investor with deep pockets is needed in order to keep the airline flying and allow the Catalan government to save face and disentagle itself from an operation that is difficult to justify at a time of tough budget cuts, while claiming a partial success at keeping Barcelona's long-haul hub aspirations alive.

And this takes us to the next factor that I think it makes a tie-up with Qatar Airways a potentially interesting proposition and this is none other than opening a window to the East and to the globe's currently most dynamic economies. On June 2010 I commented on this blog how commercial aviation's center of gravity is moving East and any carrier and airport with aspirations should try to ride this trend. A link with Qatar would certainly help Spanair and Barcelona airport gain this intercontinental dimension they have been so much longing for.

A side effect of a re-capitalized Spanair is that it will put pressure on Vueling, Barcelona's other airline, that is already being squeezed by Ryanair's increasing presence at BCN. Having to face renewed competition from a stronger Spanair will certainly not help recover its margins. It will also prevent Vueling from becoming the only carrier able to build some sort of air hub at Barcelona. Although Vueling has been developing some flight connectivity at BCN there are serious doubts about Vueling's capacity to build a fully fledged hub at the shadow of Iberia, that remains its main shareholder, since any such move would risk cannibalizing Iberia's operations in its main Madrid hub.

In my next post I am going to present some interesting strategic questions that arise from the possible imminent completion of this deal...

Airline commercials: route networks and tube maps

Maybe because I pay more attention now that I am busy with my new map-based venture, GourmetOrigins.com, but I have been coming across many airline commercials in the tube that use cool ways to display route networks and use them as a marketing tool.

Here is the first one from Easyjet, found in the London tube, displaying the main ski resorts that can be reached from different Easyjet destinations. I found this to be an elegant way to show useful information and a good way to suggest winter travel ideas.



Here another one, by Spanair, at the Barcelona Metro. Here the focus and the message is different, although the visual concept is similar. Spanair wants to highlight the scope of its network (including some destinations that are actually served by its Star Alliance partners, like Singapore), at a time when it is trying to position itself as Barcelona's main network airline, after it recent takeover by Catalan institutions.

More on Barcelona's empty airport terminal

Foto: an evening at BCN's T2

When I mentioned a few weeks ago that the recent inauguration of Barcelona's T1 terminal had left the old terminals empty, well... I really meant it! I was there a few days ago and it was almost sad, not to say surreal to walk along the deserted aisles.

What happens when a major airport loses all of its traffic overnight?

Foto by Flickr user Berto Garcia under a Creative Commons Attribution Generic 2.0 License.

Last week I landed at the old terminal (T2) of Barcelona airport for the first time since the new terminal (T1) became operational at the end of last summer. Both terminals are actually part of the same airport (BCN), but they are physically separated, and they actually look like two separate airports, with the new terminal duplicating the capacity of the old one (see this story I wrote a few months ago)...and this is the problem! All three major airline alliances have moved to the new terminal, and the old one, that used to handle over 30 million passengers a year, is now virtually empty...well, not totally, a handful of airlines, with Easyjet and Air Berlin the largest of them, and some charter flights still use it, but the drop has been dramatic (the night that I landed, my Easyjet flight was the only one on sight). This is not totally bad for the passenger, that can enjoy plenty of space and no hassle, but it must have required a strong readjustment to the many shops and businesses that used to operate (or that still are) in the old terminal, and, most important of all, it sets a challenge upon the airport managers to find new traffic to fill the void.

Is Ryanair the solution?


Foto by Flickr user Andy_Mitchell_UK under a Creative Commons Attribution Generic 2.0 License.

The Irish airline has been quick to grab some of the extra available capacity and it has already announced its landing at BCN. Ryanair has already proven it can do well in the Catalan market, that already hosts two of its bases (Girona and Reus), both within one hour drive of Barcelona and I have no doubts that it will also do well in BCN. The airport authorities deny that Ryanair will enjoy any discount on its operating fees (a previous request that the Irish airline seems to have finally dropped), but one of the concerns remain: will Ryanair grab market-share up to the point where BCN becomes, over the long term, a Ryanair-dominated airport? this thought surely worries all those local stakeholders that over recent years have been working to make Barcelona a real contender in the European aviation scene (the lack of intercontinental routes is still BCN's main weakness). A precedent exists and it is positive, Ryanair also moved to take spare capacity after the T-4 terminal at Madrid-Barajas was inaugurated and its presence in that airport has contributed to a more competitive scenario that has benefited travelers. However, it must be said that whereas Madrid could count with the solid presence of Iberia as the dominant carrier, the situation at BCN is a bit more volatile, and the situation of the two main carriers currently operating out of BCN, Spanair in the full-service segment and Vueling as low-cost, looks (at least on paper) a bit more fragile...They have reasons to worry when seeing Ryanair at the gates...

New airport in Catalonia

The brand-new Lleida-Alguaire airport (ILD) was inaugurated last Sunday. This is the fourth operational commercial airport in Catalonia, the others being Barcelona-El Prat (BCN), Girona (GRO) and Reus (REU) and is expected to serve a large area of Western Catalonia , whose capital is the city of Lleida (Alguaire being the town were the airport is actually located)and the Pyrenees that until now were quite distant to any of the nearest airports (Barcelona, Reus and Zaragoza (ZAZ) being the obvious alternatives).Lleida-Alguaire is also the first airport that is entirely managed by the Catalan Government through its fully-owned company Aeroports de Catalunya (the other Catalan airports are managed by the Spanish government through AENA). From the design point of view it is interesting to remark how the the facilities have been designed and painted to blend with the surrounding landscape of cereal fields (see fotos).


Foto: Wikipedia

A Vueling A320 carried authorities and journalists for the historical (and short!) inaugural flight between Barcelona and Lleida (a route that will be flown only for the occasion), where a crowd was waiting and the firemen were ready to give them the traditional honour reception, showering the aircraft with their water-hoses.


Foto by Flickr user Malkav (Adrià Ariste Santacreu) under a Creative Commons Attribution Generic 2.0 License.

Some doubts remain about the capacity of the local economy to generate enough traffic to justify the investment, specially after the fiasco of the brand-new privately owned airport at Ciudad Real (CQM), that has barely managed to attract any traffic after its inauguration (despite the availability of a high-speed rail connection and some airlines' loose approach to airport names, the 230km that separate it from the centre of Madrid made the possibility of marketing it as "Madrid-South" a bit awkward).

However, there are reasons to be optimistic about the future of the airport: to start with, the Lleida region has a high income per capita and many companies with international activities call it home, secondly, the airport can become the gateway to a vast area of the Central and Western Pyrenees, including Andorra, with a large tourism potential, becoming an interesting and less congested alternative to both Barcelona and Toulouse (TLS) (the distance to the ski slopes is roughly the same from all these three airports).

The issue of the Pyrenean airport has a long story behind. There is an airport at La Seu d'Urgell, next to the border with Andorra, that despite some talk of it being reopened, has not been used by commercial aviation since the 80s due to low profitability and operational difficulties. The opening of Lleida airport might trouble the prospects of La Seu's airport...or maybe not (if more people start flying to the Pyrenees and overall demand grows)...however this will be the topic of another future post...

In any case, ILD starts with two airlines operating four different routes:
Vueling to Paris (ORY) and Palma de Mallorca (PMI)
Ryanair to Milan-Bergamo (BGY) and Frankfurt-Hahn (HHN)

From this blog we wish you all the best to the new airport Lleida-Alguaire and hope we will writing soon about new route openings...!

Barcelona airport (BCN) or how to cope with simultaneous demand and offer shocks

foto: Terminal 1 by Ricardo Bofill (from Creative Commons)

Barcelona airport got its new terminal last month, almost doubling its capacity overnight, this would be alright was it not for the simultaneous demand and offer shocks the airport is facing.

Although designed in times of double digit growth the new terminal opens when the airport is experiencing its first decrease in passenger numbers in a very long time (-15% in the first quarter of 2009 compared with the same period last year). Europe is in the midst of one of the worst economic crisis in living memory and this would be worrying enough for an airport that relies almost exclusively on short and medium haul traffic, but is even worse when considering that the Spanish economy is among the hardest hit by the crisis. Tourist numbers are plummeting and some airlines have been cutting services (Easyjet has reduced capacity, British Airways is axing its Gatwick services). Other factors are contributing to the fall in numbers, the new high speed train link between Barcelona and Madrid has taken half of the market of the densest and most profitable route from BCN.

The recent merger between Clickair and Vueling, with the resulting company controlled by Iberia, is expect to bring some rationalization on some routes where the two companies had overlapping services. In the long term this might result in a stronger company able to maintain its base at Barcelona (Mr.O'Leary would probably disagree...).

And talking about Ryanair, the offer glut has not prevented Ryanair from opening a new base at Reus (REU), about one hour drive south of the center of Barcelona, to add to its current base at Girona (GRO), about one hour north. It seems that Ryanair is doing well in Barcelona (surely helped by the popularity of the city among the European city-breakers and young travelers). there was even talk of Ryanair eyeing slots at BCN...we do not know whether has there been a firm offer but it seems that the company expected some concessions that Aena was not ready to grant.

There is certainly the concern in certain sectors of Barcelona business and political spheres about BCN becoming an almost exclusively low cost airport. Hence, the takeover of the the troubled airline Spanair, engineered by a Barcelona-based consortium with the support of Catalan institutions, with the objective of making it the "Barcelona airline" (Vueling might also have some claim to the title). The hope is that its membership of Star Alliance will help Barcelona to become an alternative Iberian hub (although smaller than Iberia and Oneworld's at MAD). A challenging task indeed!
The reality in the short term is that Spanair does not have any long range plane in its fleet, so the long haul hub might have to wait, however the recent success of some Star Alliance partners at BCN (like the Singapore Airlines connection) allow for some optimism. Maybe Spanair could be a regional distributor, in the South-West of Europe for its long-haul Star Alliance partners? or will it continue to be a feeder for Lufthansa (a sort of Air Dolomiti)? time will say...the truth is that if it is currently difficult for BCN to become a hub, it has never had it better, since it is the first time that BCN is the base of two airlines of a respectable size.

Therefore, and despite the crisis, I am bullish on the long run prospects of BCN. It is the gateway to a densely populated and relatively rich area, with a diversified economy and some of the top tourist destinations in Europe. The airport itself is very close to the urban center (although could be better connected by public transportation with its hinterland)and there might well be a latent under served demand for direct long haul travel that is currently flowing through other airports (mainly MAD).

The 747s of the image might never materialize (smaller planes like the 787 might stand a better chance at BCN) but as Ryanair has proven at Girona (from nearly 0 regular traffic to 5,5M passengers in just over 5 years) sometimes offer can create its own demand...