Roundup

Forgive the lack of writing dear readers… pressure of real work and – well also some time out has caused the absence from the blogosphere.

So here is a quick round up of some happenings and a few comments:

The 2 sick carriers of Europe could possibly be entering their final moments. Olympic needs to – well just be left to die. Alitalia will enter into a very tense few weeks as the auction (#2 for those who are counting) enters its final moments. From our experience point of view we know what it takes to recover orderly from bankruptcy – our experience with Varig and cleaning up the mess was invaluable. It isn’t easy but its possible. Clearly the scale of the problems at both these carriers will take many months even years to cleanup. BUT it can be done.

Heathrow is still a third world airport. For all you fans of London’s gateway – I can assure you that LHR is still no better. Recently I have been able to avail myself of its charms in three different modes: Arrival, Transfer and departure. In ALL 3 situations (T4, T4-T1 and T2 respectively) the experience was thoroughly awful. Contrast this with MUC (Transfer) STN (arrival) TXL (Arrival and Departure) It is nothing short of a national disgrace. T5 however does look REALLY ready.

Air Berlin – not bad! I had an opportunity to try its services. Air Berlin is not really an LCC. We have written before that it is indeed a new generation of HVC – Hybrid Value Carriers. Recently I have flown on almost the entire inventory of the airline’s narrow body fleet – F100s, B733, B738, A320. They are now a very large carrier. It is creaking in some areas but they do seem to be bringing cohesion pretty quickly to their operating units. Interestingly when I flew on one sector (TXL-STN) the listed carrier was LTU!

Tiger vs Jetstar. I was privileged to host a panel at the recent WebinTravel conference in Singapore late last month. (Note to the Boot – you missed a cracker show). In the continuing theme of LCCs that are not really LCCs I had both CEOs of Jetstar Asia and Tiger Airways. We had too little time but there are a few things I learned.

1. Tamesek Holdings is letting these guys duke it out in the market without any help from SQ. Whether this condition is allowed to stay remains interesting and an open verdict
2. Both airlines are determined to follow different paths. Jetstar is reverting more and more to its traditional parentage (nee Qantas). Tiger will seem to remain more like Ryanair and the purest LCC model.
3. Both airlines are reluctant – unlike Ryanair – to release figures like average fares or percentage of fares under a certain number. Interestingly we had an audience question (the composition was actually a good mix with just under 300 people) – What is your price definition of a LCC sector fare? Answer – SG$100 – only 1 or 2 hands went up. Less than SG$50 and everyone raised their hands.
4. Tiger and Jetstar will have a hard time in Korea as they progress there. It will be a local blood bath when next year Domestic LCCs are allowed – all of whom must operate for 2 years before the market opens up to international LCC activity.
5. Open Skies in Asean is coming slowly. But the largely Singaporean audience was highly enthusiastic about the Feb launch of 4 LCC frequencies on the SIN-KL Sector. Full deregulation however wont happen until Dec 2008. Then open season on one of the last regulated commuter city pairs will be a model for the rest of Asia. All Asean markets (intra region and domestic) are supposed to be deregulated fully at that time. However we think this will not be fully implemented.

More later and talk soon…