Greening of travel. Progress.

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FOXTROTS  

Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

 

2008 February 27

Greening of travel. Progress.

 

  • B747-lite.

 

Air New Zealand, Boeing, and Rolls-Royce plan a B747-400 biofuel demonstration flight in the second half of the year. The idea is to speed the development of viable and sustainable alternative fuels for commercial aviation. 

The flight, probably from Auckland and without passengers, will have only one engine running on a blended bio fuel/kerosene mix. The other three will be powered by regular fuel.     

  • ACTE (Association of Corporate Travel Executives) is matching IATA with its probably-doomed drive to stop governments introducing so-called ‘green taxes’.

 

 “None of the money from ‘green taxes’ has been reinvested in infrastructure and the travel industry is being targeted,” says ACTE. We did not know that but are ready to believe it. 

ACTE plans some specific moves to counter this trend – to be announced before year-end. This may be endorsing certain environmentally-sensitive hotels and airlines such as Virgin Atlantic and Air New Zealand, which have been vocal about biofuels. 

“Weak air traffic control systems are taxing people for the privilege of flying around in circles,” it adds.     

  • AEA (Association of European Airlines), has attacked the Netherlands’ decision to impose a travel tax on air passengers – US$16 (at US$1 to €0.70) for intra-Europe flights and a hefty US$64 for intercontinental.

 

The measure is expected to raise around US$500mn annually for the government. The government has presented the tax as an environmental measure, but the revenue will not be used for environmental purposes, or for infrastructure projects which could reduce aviation’s impact on the environment.     

  • The German Convention Bureau claims its first carbon-neutral general meeting, in July 2007. And the World Tourism Organization boasts that its upcoming meeting in Switzerland on travel and climate control will also be carbon-neutral.

 

The greenhouse gases caused by the events – by local energy consumption, delegate travel, catering, literature, etc – are offset by GCB with investments in a wind park project, and WTO with tree-planting. 

‘Live-bad, go-green’? Purists will note that these perceived environmentally-friendly activities are not actually that. The greenhouse gases are still created. What needs to be done is to reduce greenhouse gases, not create them and then pay something like a fine for having created them. 

Tree-planting etc is a cop-out guilt-relief measure, not a solution for global warming.     

  • The WTO is also warming to the challenges of climate change – if that is the right term. So we look at what the WTO has done.

 

Its head, Francesco Frangialli, says the world must “respond in a holistic way to…climate change [which requires an] innovative and changed behaviour to effectively respond in a timely way”. Although we suspect others may not understand what this means either, he continues: “We have to adapt. We have to mitigate. And we have to lead not simply react”. 

A WTO report entitled “Tourism faces up to the impact of climate change” lists the threats – rising sea waters, receding ice, etc. But WTO’s achievements to counter these problems are only meetings about what to do, and how serious the problem is. And a list of more meetings planned indicates that is what WTO regards as achievements. 

Sadly, the only conclusion can be that the WTO has done nothing but talk about the problem. Once again, we look to the WTO for leadership for the travel business. Once again, we have been disillusioned.

  • Virgin’s light footprint:

 

  • Virgin Trains in the UK is running one of its trains on a 20% bio-diesel blend for a six-month trial.

 

  • Virgin says it invests all its airline profits into developing alternative fuels. It is working with General Electric and Boeing to develop a clean fuel capable of flying B747s sometime in 2008.(Information Washington Aviation Summary; comment Travel Business Analyst.)

 

  • Virgin CEO Richard Branson hopes that within his lifetime, the company will develop aircraft capable of flying UK-Australia in 30 minutes by flying out of Earth’s atmosphere and back again – with almost no pollution. Note however, that this is not relative; UK-France would take 30 minutes as well. (Information WAS; comment TBA.)

 

  • UK-based Virgin Atlantic, at the launch of its London-Nairobi flights, announced plans to help protect 2000 elephants threatened by the encroachment of small farms north of Mount Kenya. The airline will build a safe passage for the animals to follow a path in and out of their land.

  

The Fox

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Both Ryanair and European Commission wrong.

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FOXTROTS  

 Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

 

2008 February 25

Both Ryanair and European Commission wrong.

Sometimes we feel only us, Ryanair staff, and most of the near-50mn passengers that bought seats on the airline in 2007, support the company. 

Another recent-but-significant example came when the European Commission blocked Ryanair’s proposed takeover of what was the main Ireland-based airline, Aer Lingus. 

The reasons given by EC are startling in that they clearly indicate that the EC does not follow its own policy in treating the European Union as a single market. 

“Monopolies are bad for consumers because they reduce choice, lower quality and give rise to higher prices. Low-cost carriers like Ryanair are no exception to this rule,” said competition commissioner, Neelie Kroes. “Unfortunately, the remedies proposed by Ryanair were not sufficient to remove the competition concerns.” 

But…what monopoly? Ryanair/AL’s competition would be EU airlines such as Air France, British Airways, Lufthansa, etc. Has the EC forgotten that the EU should be a single market? Or that in other parts of Europe, the main locally-based competitor to Alitalia is Ryanair, the main locally-based airline at non-EU Geneva airport is Easyjet? 

In fact, Ryanair missed this point as well, complaining about the EC decision only on the basis that the EC had earlier approved bigger mergers such as Air France/KLM and Lufthansa/Swiss. And that their traffic shares at their home airports were bigger than the combined Ryanair/AL share would have been at Dublin airport. A valid point, but not the core legal one.  

The Fox

Club Med. Henri speaks.

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FOXTROTS  

Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

 

2008 February 18

Club Med. Henri speaks.

Following paraphrased comments based on a meeting with Henri Giscard d’Estaing, head of Club Med:

·         We were first with inclusive tourism, sexual freedom. We faced something like a ‘mid-life crisis’ in our 50s. We want to be a pioneer again. So we have set a simple objective – to be the worldwide specialist in all-inclusive, upmarket, friendly, multi-cultural vacations.

·         Company’s downturn followed 9/11. We are now a ‘New Club Med’.

·         Our new economic model is based on value and profitability, not volume and mass market.

·         We spent more than [US$1.3bn, at US$1 to €0.75] on renovation. In 2008 our resorts will be split 50/50 between 3- and 4-trident [star]. In Mauritius, we are building our most luxurious, to be followed by ones in Oman, Vietnam, and South Africa.

·         Our new real estate strategy is to manage resorts, rather than owning them. But we still have [US$1.3bn] of real estate.    

The Fox

Hotels. Forecasting fun.

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FOXTROTS  

Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

 

2008 February 15

Hotels. Forecasting fun.

‘Trends’ in the current issue of Travel Business Analyst (my daytime job) has made some forecasts on the travel industry, which it calls ‘projictions’ (more projection and prediction) that may shock. The hotel part includes: 

[] Further product segmentation. Biggest (five?) groups will have at least 25 brand names. 

[] Consolidation. Today’s top 10 will become six in three years. But innumerable ‘niche’ groups will be formed, many to quickly become one of 25 brands – as above. 

[] Creation of international ‘low-rate-hotel*’ group within three years. Will provoke wide-scale imitation within five years. The leader will have 1000 hotels in 30 months. 

(*TBA’s term. Meaning group that offers today’s $100 room for $10 when booked and no-refund-bought 12 months in advance, paying extra for name-change, rental of towel, soap, etc.)    

The Fox

Joachim Hunold. Air Berlin.

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FOXTROTS  

Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

 

2008 February 12

Joachim Hunold. Air Berlin.

I asked the CEO of Germany’s second-largest airline: 

Q: Will you change the company’s name (on the basis that today only 8% of its business is to/from Berlin)? 

A: “No, because when people hear the name ‘Berlin’ they think of ‘Germany’.” 

(He is wrong; I believe most people think of Air Berlin only when they are flying to/from Berlin.) 

Q: Will longhaul low-fare-airlines make profits? 

A: “Only if they have their own oil well. Current longhaul economy passengers are already getting low fares, because their flights are subsidised by business class.”  

The Fox

Writing wrongs. More.

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FOXTROTS  

Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

 

2008 February 08

Writing wrongs. More.

-The promotional blurb for the new Peninsula hotel in Tokyo says it is “Introducing A New Legendary Landmark”. 

“Introducing” means it is “New”, so one of those words is superfluous. 

“Legendary” means it is the stuff of legends, so obviously this cannot be true for a new hotel. 

-The ministry of tourism for Queensland (yes, even Australia’s states have ministers), when talking of her meeting with her counterpart in India, said “we had a strong meeting”. 

I can’t even begin to guess what that means, but I admit it sounds better than “we had a meeting”. 

-On the road, this time in Australia. 

“Speeding Laws Are Enforceable”, said the sign. Well, I would hope so, but I presume the authorities really mean “Speeding Laws Are Enforced”. But surely that advice is superfluous, as another one saying “Truck Drivers Must Obey Speeding Laws”. I look forward to someone challenging another interpretation of this – that other types of drivers need not obey speeding laws.   

The Fox

Qantas. New top-2.

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FOXTROTS  

Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

 

2008 February 06

Qantas. New top-2.

The chairman and CEO of Qantas have left/are leaving. 

Margaret Jackson has been replaced as chairman by Leigh Clifford. And CEO Geoff Dixon says he will leave when his contract expires in 2009. Both are assumed to be victims of the failed plan at end-2006 for Texas Pacific to buy Qantas. Both Jackson and Dixon supported the bid. 

Clifford was head of the mining conglomerate Rio Tinto, another big Australian company. This is too early to find a replacement for Dixon, although we expect the search has started, and that Dixon will go sooner once a replacement is found. 

Dixon has brought great change at Qantas – including creating a separate domestic operation, a failed subsidiary airline Australian, and two Jetstar operations (at least one of which, the Singapore-based operation, was lossmaking). 

But he has also brought dysfunction – in effect three different Qantas airlines on domestic Australia routes (Qantas, Qantas Link, Jetstar). Under Dixon, the group also bought a share of Singapore-based low-fare-airline Jetstar Asia; in profit terms it was a failure, but that did not stop Dixon from buying the rest of the airline early in 2007. 

These moves leave the name ‘Jetstar’ with LFA-type flights in domestic Australia and its Singapore-based airline, and regular-airline type international flights from Australia. Dixon’s replacement will have to reconcile this marketing dysfunction.  

A favourite for replacement would be Rod Eddington, the Australian former head of Ansett, British Airways, and No 2 at Cathay Pacific, no less. Although he failed at Ansett, and took BA nowhere (and sold two, no less, LFAs that BA had created), a good CV and the right passport are crucial.  

The Fox

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