Pages

Showing posts with label Singapore Airlines. Show all posts
Showing posts with label Singapore Airlines. Show all posts

Monday, 31 October 2011

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!

Sunday, 30 October 2011

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...




Wednesday, 23 February 2011

Allplane quoted at AirObserver blog: commenting the new scenario at Girona airport after Ryanair's massive route cancellation

In this blog I speak often about the constantly evolving situation at Barcelona and Girona airports. It is a very interesting case of interaction, in one single metropolitan market (Barcelona-Girona-Reus) of pure low cost players (Ryanair), airlines developing an hybrid model (Vueling), an airline trying to develop a hub-and-spoke operation (Spanair), a retreating flag-carrier (Iberia) and all of this while it is becoming an emerging destination for major global carriers (Singapore Airlines, Qatar Airways, Delta Airlines).

This environment has not gone unnoticed to other European bloggers and AirObserver has just written a piece where it quotes me and presents my point of view about an hypothetic post-Ryanair Girona airport. This is a topic on which I am going to write a piece soon...In the meantime, great thanks to AirObserver for presenting my thoughts on the issue to its readers!

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 nicely...here 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 alone...plus 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, 26 September 2009

What airlines go for an all wide-body fleet?


Photo: Japan Airlines Boeing 747 taking off, by Yamaguchi Yoshiaki from Japan under a Creative Commons Attribution ShareAlike 2.0 License.

The typical European or American network carrier has a mix of narrow and wide-body aircraft. The goal is to serve an heterogeneous mix of destinations, long and short haul, that have different densities of traffic. However, there are a few major airlines in the world that have opted for the all wide-body, long haul fleet. In what is their model different with respect to the mixed fleet carriers?

The only European one of the lot, Virgin Atlantic, is a rare bird, it is not a network carrier, but a long haul point to point carrier. It is remarkable that, although it has a network of partner airlines, Virgin Atlantic does not have feeder operations of its own. It is difficult to think of a city other than London that could currently generate enough international traffic to support such business model. Singapore? Dubai? Well, these are different stories...Singapore Airlines and Emirates are actually network carriers, we could call them global network carriers, because, whereas most European network carriers operate a short-haul to long-haul network, these two airlines operate primarily a long-haul to long-haul one, connecting people across continents. A wide-body fleet is a necessity for them, and although they also fly to some destinations that are close to their bases, the savings that arise from having a more homogeneous fleet probably more than compensate for having a long-range plane making short hops. This business model has got a tremendous impulse with the increase in global commerce and international traffic of the last decade, and other airlines, particularly in the Gulf have also gone this way (Etihad of Abu Dhabi, Qatar Airways,...). Building such an intercontinental network requires a huge capital investment (a brand new Airbus A380 can cost up to $275M)...and then you need to fill lots of seats! so it shouldn't come as a surprise that most of the airlines following this model have been set up by investors with deep pockets for whom building a hub is part of a grander economic and financial strategy for their respective territories.

And now we turn our attention to Japan, because to the European observer it is simply amazing to see an entire fleet of jumbos serving only the domestic market. Japan is not a huge country in terms of landmass and it is also well served by an efficient high speed rail network...high population density must have been the main reason behind the fact that some short domestic routes in Japan being served by Boeing 747s, that in other parts of the world would be reserved for the densest long-haul routes. If capacity (some Japanese jumbos can carry up to 550 passengers) is the main factor, why then this model has not been adopted elsewhere in high density routes, for example in China or India or in the busiest European and American routes (London-Amsterdam, Barcelona-Madrid, NY-LA)? Also, and surprisingly enough, no Japanese airline seems to have shown interest in the A380, maybe it has to do with the critical financial situation of Japan Airlines? or with Japanese airlines having a historical preference for Boeing?