Good news, bad news

How nice to see the 787 Dreamliner finally take to the skies, two years late but carrying the fortunes of Boeing with it. No airframe manufacturer seems immune from programme development delays, of course, so it was also good to finally see the Airbus A400M also make its debut recently.

In fact December has seen other good news. United's order for a mixed bag of A350s and 787s makes perfect sense. Splitting the order keeps the suppliers on their toes, and proves the point that scale economies of aircraft operation evaporate at some point as fleet size increases. All this is balanced, needless to say, with an announcement from that customary purveyor of dismal news, IATA. We are told (yet again) that the industry will lose US$11bn in 2009, and that things will be only slightly better in 2010, with a forecast loss of US$5.6bn. Talk about rubbing it in.... And how could we possibly enjoy Christmas without a strike? We can look forward to more than the usual chaos at UK airports as British Airways braces itself for a stoppage of 12 500 cabin crew from 22 December until 2 January.

On that note, I wish all readers a Merry Christmas and Happy New Year.

What goes around, comes around

I offer my congratulations to Airbus for achieving EASA approval for the full A330 family to fly 240 minute ETOPS. I know, from my days in that company, that it has been a long and arduous road for those involved. The Airbus press release (available on their website) curiously suggests that this is the first aircraft approval for 'beyond 180 minutes'. Actually, this is not the case. The Boeing 777 has enjoyed limited 207 minute operation for over ten years, and 240 minutes has also been available on specific routes, subject to very special conditions. Airbus also refers to International Civil Aviation Organisation 'rules'. Again, not so. ICAO issues recommendations, not rules.

This should not take the gloss of the achievement. But It was not always like that. I well remember being shouted at by an angry John Leahy, Airbus's petulant chief salesman. I had suggested to John that applying for 180 minutes ETOPS for the A330 would be a good strategy. "We don't want it!" he yelled at me. At the time, Leahy went on record as saying that the FAA's 240 minute proposals were a serious mistake.

Well, he's singing a very different tune now. But somehow I doubt whether he will ever tame his notorious short fuse.

Pardon me, but will you please take care of my CO2 emissions?

I've always been sceptical about carbon offset schemes. Buying offsets is rather like jumping on a kind of carbon carousel, which bounces the emissions responsibility elsewhere. I spoke with Richard Dyer, transport and climate change campaigner for Friends Of The Earth earlier this week and he told me that carbon offsetting is just an excuse to carry on usual behaviour because you've 'done your bit'.

It transpires that one of the very first travel agencies to introduce a carbon offsetting programme, Responsible Travel in the UK, has now become one of the first to discontinue such a scheme. In announcing their decision, they said that offsetting was distracting tourists from a need to act responsibly and amounted to nothing more than a kind of medieval pardon.

I couldn't agree more. Paying for offsets will never be anything other than a mechanism for either the wealthy or the guilty to sign cheques for someone else to undertake 'green' projects on their behalf. Bravo to Responsible Travel.

Rumours of Ryanair's demise are exaggerated

So, the CEO of Germanwings, Thomas Winkelmann, believes that Ryanair will ultimately fail as it does not attract the corporate market (interviewed in Travelmole on 28 October).

I am sorry, Herr Winkelmann, you are wrong! If Ryanair ever fails, it will either be due to an accident or a total collapse of customer service. The Germanwings chief implies that failure to attract the corporate market is the Achilles Heel of the strategy. Frankly, it the the corporate market that has been shaky in the crisis.

Herr Winkelmann states, "taxpayers in destinations should not have to bear the brunt of Ryanair's business model." OK, I can see the point that taxpayers do apparently foot the bill for subsidies allegedly paid to Ryanair at certain destinations, but this ignores the point that Ryanair's presence has had an enormous positive impact on local economies throughout Europe.

Let's consider this: Germanwings is owned by Lufthansa, and I seem to recall that Juergen Weber, a former CEO of the German national carrier, was convinced that travellers prefer to pay extra for better service. Well, that proved to be completely wrong too. It may be the case that Ryanair is the airline that everyone likes to hate, but their CEO, Michael O'Leary, hit the spot when he declared that Europeans are prepared to crawl naked over broken glass for cheap fares.

Green report card: Making progress but could do better

Last week ICAO staged a 'High Level Meeting' in Montreal in an attempt to get some ducks in order before the long-awaited climate conference in Copenhagen in December. There was no particular surprise that delegates rubber-stamped a 2% per annum fuel efficiency improvement target, which effectively means an extrapolation of what the industry has already been doing for many years. But at least this is more stringent than the airline industry's self-imposed efficiency target of 1.5%. However, beyond that, there was some disappointment. The ICAO delegates' Declaration talked about a further 'aspirational' goal of 2% from 2021 to 2050, plus some weak talk about supporting the use of biofuels and a need to develop an economic framework. There was no mention of carbon neutral growth from 2020, or a 50% reduction in carbon emissions by 2050 compared to 2005, which is what the industry has imposed upon itself.

So, in summary, we have a situation where the industry has set tougher targets than their regulating states, who appear content to see the airlines forge ahead with a net growth in CO2 emissions.

ICAO will have another go at debating the issue at their Assembly in September 2010. Meanwhile, the spectre of a fragmenting patchwork of regional and national schemes still hangs over the industry.

As always, it's hard to be green these days.

Make sure you 'go' before you go

Here's the pottiest story I've heard for a long time. All Nippon Airways is hoping that half of its passengers on Singapore and domestic flights will spend a penny before boarding their flight. Passengers are being asked to pay a visit to the bathroom in order to (how can I put this?) lighten the load. The airline has worked out that the fuel savings due to lighter passengers would reduce CO2 emissions by 4.2 tonnes per month. An experiment is under way this month and, if successful, may be extended. Japanese culture comes into play here. There is no mention of the word 'bathroom'. Instead, an announcement is made before boarding which merely suggests that passengers spend a moment to think about planet Earth. How subtle.

But let's see this in context. Japan is the world's fifth largest CO2 contributor, the total generated in 2007 amounting to 1.37 billion tonnes. So, it would take a mere 27 million years of flying for All Nippon Airways to single-handedly turn Japan into a carbon neutral country.

Back to the drawing board, I fear....

Will that be Sardine Class, Sir?

We’ve seen a lot of nonsense about how far the low-cost airlines will go in extracting money from the pockets of their customers. I think everyone’s fed up with Ryanair’s proposal that people should pay to use the toilets on board an aircraft. Let’s admit it; Michael O’Leary has a great sense of humour. But I am still amazed at how the low-cost airlines are still talking about standing passengers. Unsurprisingly, Ryanair is on the bandwagon but, more surprisingly, Spring Airlines of China is seriously proposing so-called half-standing seats, which would take the capacity of an A320 from 180 to a whopping 258. Spring is now urging low-cost airlines to club together and address the industrialisation challenges.

Now, it’s good to dream, but has anyone stopped to think about emergency evacuation constraints? Or the impact of the increased payload on the design weights? And where do you put the extra baggage anyway? But wait! Sardine seating is perfect for the military, so maybe the designers will equip passengers with parachutes too, so then at least we can forget about the 16g load limit.

We are already being tortured by oppressive security checks, huge congestion at overcrowded airports, problems with delayed and lost baggage. No-one can convince me that 'standing room only' aircraft is progress.

The power of one

The other day I was speaking to Dave Carroll, the musician who famously had his guitar broken by United Airlines baggage handlers. Dave had just come back from Washington, where he had been giving testimony at a hearing on passenger rights. He had been asked to attend the hearing by Kate Hanni, who leads flyersrights.org. That organisation is lobbying for a maximum amount of time that an airline can keep people 'hostage' in delayed aircraft before giving them the opportunity to get off. One of the issues is that airlines should provide basic amenities, such as potable water, for passengers in such a situation. Dave Carroll wants airlines to allow musicians to take their instruments on board aircraft. Isn't it good to see individuals getting the opportunity to challenge the airlines like this?

You would think that airlines would be taking these matters somewhat more seriously, especially after the embarrassment that United suffered after Dave's song United Breaks Guitars captured over five million YouTube views. But Dave is adamant that airlines still have a long way to go in understanding that their market is made up by a collection of individuals. Says Dave, "I'm not sure the airlines are learning anything". Meanwhile, the second United Breaks Guitars song has been uploaded onto YouTube. Will Dave see through his promise to issue a third song? "I said I would do three and I'm going to do three," he told me.

Dave Carroll has a good piece of advice if you happen to checking in a delicate item. Never ask for a 'Fragile' sticker. "It's a target," he says. "I know of baggage handlers who look for items with 'Fragile' stickers so they can break them."

You have been warned....

Cloudy ball gazing

I find it fascinating how the two major manufacturers occasionally come up with deviating opinions. A few months ago, Boeing revised their twenty-year forecast in a downward direction, reducing the number of newly delivered aircraft by 1%. If you think about it, this seems entirely plausible, given the severe impact of the current recession and the obvious fallout in terms of reductions in capacity.

However, Airbus is taking a different view. Their updated Global Market Forecast reveals a 3% increase in the numbers of aircraft expected to be delivered in the next twenty years. The reason for this characteristically upbeat message is that higher fuel prices will encourage airlines to bring forward their fleet replacement decisions in order to get the most efficient aircraft into operation at the earliest opportunity, and thereby reduce their fuel bills.

Now, that sounds all well and good. But fuel prices are impossible to predict with any accuracy whatsoever. We all feel that fuel price is going to rise, but by how much? One of the primary agencies forecasting fuel is the US Energy Information Administration, and their current forecast reveals that the price of oil per barrel could be anywhere between $50 and $200 by 2030. If future aircraft orders are indeed so closely linked to the price of oil, then predicting the number of aircraft deliveries in such a highly volatile situation is just not possible. You may as well just toss a coin.

It's a numbers game

I have yet to meet a forecaster who is prepared to admit that he got it wrong. Even the very best analysts can be wrong footed. The respected J P Morgan analyst Jamie Baker spoke of US airlines turning in a 2009 profit of $9.2bn back in January this year. Merrill Lynch were somewhat more pessimistic in calling a profit of a mere $2bn. Nine months later and Wall Street should be blushing a rich red. IATA is fond of reminding us of the doom and gloom in the industry, and is now talking of a global industry loss of $11bn for the year. Yes, it's easy to be wise after the event, but isn't it just a little worrying that our best economists failed to notice that the world was about to fall off the edge of a cliff?

Earlier this month UNCTAD (United Nations Conference on Trade and Development) predicted that global Gross Domestic Product would decline by 2.5% in 2009. To put that into perspective, that's another way of saying that the world will have lost economic activity equivalent to the size of India. Ouch.

We're in the wrong business, folks

The international firm of lawyers Norton Rose has quizzed 154 members of the aviation community around the globe about short-term prospects for the airline industry. The results confirm what we keep hearing from aviation pundits. Just over one half of the respondents believe that some sort of recovery will take root within the next 12 months, for example. However, the survey does throw up some worrisome opinions. A whopping 90% expect 'significant' deferrals or cancellations of aircraft orders until the end of 2010. And 58% of respondents consider that their organisations are ripe for some sort of cooperation or alliance agreement with a strategic partner in the next 12 to 18 months.

If you listen carefully, you may just be able to make out the unmistakeable sound of the smacking of lips. Well, no lawyer will deny that failure to execute a contract or structuring of partnership agreements are wonderful opportunities to make money when everyone else is hanging on by fingertips.

The fat of India

Spare a thought for India's airlines. They've had a hard time in the economic slowdown, with falling demand, excess capacity and increasingly angry employees.

Today, around 500 Jet Airways pilots called in sick to protest about the forced retirement of two pilots. Last year, in an effort to reduce a bloated work force and its costs, Jet Airways, which is India's largest private carrier, simply laid-off 1,900 cabin staff overnight - equivalent to 15% of the total staff. Within a day, there was a public outcry and even a threat from militants to prevent Jet Airways aircraft landing in Mumbai. Management backtracked and the staff were quickly reinstated.

But Air India did manage to dismiss 10 cabin crew last Christmas, for being overweight! They had been grounded the previous June for failing to meet the company's weight restrictions, but had been unable to slim down in order to keep their jobs.

And just the other week, 20,000 Air India staff staged a three-day hunger strike after the airline said it would delay the payment of wages.

Now let me get this straight. Jet Airways pilots are apparently all sick, and Air India's ground staff have been refusing to eat. So why was it so difficult for those 10 cabin crew to slim down?

Got to pick a pocket or two....

The long running spat between the US and EU over government subsidies to Boeing and Airbus looks ready to come to the boil yet again. Reports have emerged suggesting that the World Trade Organisation has informally declared Airbus as being the illegal recipient of billions of dollars of financial aid. The accusation is that preferential government loans amounted to an illegal subsidy. As a counterpunch, the WTO will doubtless be investigating Boeing subsidies. There is nothing particularly new in the accusations, which have been going on for many years. What makes the saga interesting is speculation on the possible dramatic effect on both Airbus and Boeing if money has to be repaid. Airbus is already unashamedly seeking European government aid to help launch the A350. I wonder whether the WTO has the temerity to impose sanctions that would have a material effect on the ability of the two major manufacturers to conduct their business?

On a smaller scale, a collection of current and former Airbus senior executives have been publicly named as having benefitted financially from the sale of shares immediately prior to the first announcement of A380 development delays. The final ruling on penalties is still some way off, but French investigators are recommending fines that run into millions of dollars.

"I can raise no money by vile means," said Shakespeare.

With A Little Help From My Friends

I had a delightful chat yesterday with Southwest Airlines' irrepressible specialist and spokesperson in charge of social media, Christi Day. In case you do not already know, Southwest is one of the few airlines (along with JetBlue and Virgin America) to have capitalised on the Twitter phenomenon. Southwest has over half a million followers and anything between four and six thousand new followers sign up every day. Christi told me that Southwest's customers are very receptive to this form of communication.

So why, may I humbly ask, does easyJet boast a total number of Twitter followers of around 1300? That represents 0.003% of annual passengers carried - a drop in the ocean. Don't get me wrong; the person in easyJet managing social media is certainly doing a great job, but it's hard to believe that US and European customers are so different in terms of how they would like to communicate with their airlines. The difference in the numbers does suggest that making social media work does not happen automatically and, listening to Christi, Southwest Airlines have dedicated the right amount of resources to make it work. Christi believes that it's all part of the new rhythm of life and that within five years, using social media like Facebook and Twitter will be second nature for all us. The message for airlines? Get cracking and jump on that bandwagon while you can. Having a social media strategy is fast becoming a competitive necessity.

Wheels that turn a full circle

Frontier Airlines is reportedly scrapping a barely two-year old A318. Yet, in the last week Airbus proudly announced the delivery of the 4000th A320 family member. The fanfare did not mention that a disappointing 68 of those 4000 aircraft are A318s, according to the Airbus website.

At least British Airways has not given up on the A318. The airline plans to launch a new A318 service from London City to New York on 29 September. BA has come up with a nice little marketing touch for the new service. They have decided to resurrect the old Concorde flight number "BA001". This sacrilege is the aviation equivalent of Britney Spears releasing "Yesterday" as a single.

There is one thing that British Airways will never be able to resurrect. And that, of course, is Concorde's speed. The A318 will chug its way over the Atlantic Ocean by way of a technical stop to take on fuel in Shannon. Plus ça change?

Will the train take the strain...?

The UK has a suspiciously pro-rail Secretary of State for Transport in the Cabinet. His name is Lord Adonis and he wants to spend ₤20 billion on a new high-speed rail line from London to Scotland. The good Lord is a kind of Lord Beeching in reverse, if you like. (For readers born after 1963, Beeching was the man who closed down large chunks of Britain's rail network). Some aviation pundits have said over the last week that a high speed rail line would be bad news for the nation's airlines. I disagree. They may whinge a bit, but secretly I suspect that they will be relieved to see the domestic travel market become rooted to the rails. The payback is that lots of domestic airport slots will be freed up for more lucrative long-haul services. This is what happened when the Channel Tunnel rail link opened up, leading to the collapse of the London to Paris air market. So why wouldn't the same thing happen again?

But rail projects of this magnitude can only succeed if their supporters, and critically, their financiers, are in it for the long haul. But, as we all know, political cycles are somewhat - shall we say - frequent. So, Lord Adonis ought to get his skates on and wrap everything up before an election throws him out of a job. I'd say he has until Christmas.

Requiem for SkyEurope

Today, SkyEurope, unable to pay its bills and saddled with significant debt, suspended all operations. How sad to see another airline bite the dust. Passengers are unlikely to receive compensation I would guess, given the depth of SkyEurope's financial difficulties. But the writing has been on the wall for most of 2009 and, despite attempts to restructure, the inevitable has happened. It is typical of our industry to see an airline cling onto the edge of the cliff in the vain hope that, by some magic, things will suddenly change.

SkyEurope suffered the ignominy of seeing large chunks of their fleet repossessed by the lessor, and were forced to seek bankruptcy protection earlier this year. Things went from bad to worse as the market ebbed away and the debts mounted. In fact, they never made a profit in their seven-year history. SkyEurope will nevertheless be remembered for some rather racy aircraft liveries and for being the first airline to announce that it would actually pay passengers to fly with them. Yes, a couple of years ago they actually offered 'negative fares' of about minus 44 cents; plus all the taxes of course! This tactic may have grabbed the headlines, but it did smack of desperation.

History repeats itself

News broke last week that the 787 first delivery is again delayed (to the fourth quarter of 2010). So, at 28 months, the 787 will hold the unenviable record for the longest delay of a large aircraft first delivery. Yet the aircraft will doubtless be a huge success and the programme's troubles will eventually fade from our thoughts. Turn the clock back just a couple of years and it was the A380 delays that filled the headlines. When Singapore Airlines took delivery of their first A380 in October 2007, the aircraft was almost two years late. Consequently, most of the early deliveries of the A380 have taken place against the backdrop of the worst economic environment the airline industry has ever suffered. But if Boeing can stick to the current plan, the 787 will be delivered at the very moment the global economy will (hopefully) be climbing high again.

How different things might have been if both aircraft programmes had been on time! The impact of the global economic crisis would have been felt very differently by Airbus and Boeing, and indeed the customers of these aircraft.

Airport musical chairs

Britain's low-cost carriers are in a spat with airports yet again over fees. Firstly, Ryanair announced that it would cancel 90% of its Manchester flights and, just a few days later, easyJet followed suit by saying it would relocate from Luton to Gatwick and Stansted. Also, Ryanair is threatening to reduce its flights from Dublin and Stansted.

It's all very well to get huffy about airport fees, but changing flying patterns means shifting aircraft as well. And that means extra cost in terms of staffing changes and maybe changes in the overall efficiency of the aircraft and crew assignments. In addition, in Ryanair's case, such a substantial reduction in activity at a single airport is likely to affect their market. It all rather begs the question whether the costs of redeploying big chunks of capacity offset the reductions in fees.

And what about the strange situation where Ryanair is unhappy with Stansted's fees whereas easyJet appear happy to actually move to Stansted?

The old expression, "throwing the baby out with the bath water" springs to mind.

So, it's made of cheese after all

The Dutch are laughing off the discovery that a piece of moon rock, donated by a US Ambassador following a visit to the Netherlands of the Apollo 11 crew many moons ago, turns out to be nothing more than a piece of petrified wood. It makes you wonder how many other countries around the world were similarly fobbed off with fake moon rock.

My father was convinced that the moon landings never took place. So, maybe he was right after all......