TROTTINGS = Trip Jottings

The Fox Trots: Travel Stories from The Fox’s Friends.

 

August 9 2011

 

Trottings: London Airports, Cipriani, Air France.

 

I

N this holiday month, some fun with news:

 

 

 

 

London Airports

 

The UK Competition Commission cannot see the forest for the trees. It is not qualified to judge on competition between airports with the limitation on its area of activity – ie, the UK.

 

The CC has just upheld a March 2009 decision requiring London Heathrow operator BAA, now owned by Spain’s Ferrovial, to divest three airports. It says “passengers and airlines would still benefit from greater competition with the airports under separate ownership, despite the current government’s decision to rule out new runways at any of the London airports.”

 

I believe that either an airport is in competition with no other airport, or with all other airports. Heathrow is in competition more with Amsterdam, Brussels, and Paris than with London Stansted. And Stansted is more in competition with Luton, Gatwick, and East Midlands than with Heathrow.

 

If the CC cannot see that, then it does not have the market knowledge to make a fair decision.

 

BAA sold Gatwick in December 2009 to a consortium led by Global Infrastructure Partners, probably in a (vain) attempt to head off further negative CC decisions, such as the one just given.

 

The decision is bad enough, but the CC says Stansted airport must be sold within three months. It is difficult to sell a used car in that period let alone an airport, so this seems to be a clear financial punishment of BAA.

 

Ferrovial is considering a review of the decision, but has probably concluded that this is political, and so it may not stand much chance of a change in decision.

 

 

 

 

Funnies From Cipriani

 

Taking the fun out of statements from Cipriani, a US restaurant group, that opened its first hotel, the ‘Mr C’ (sic; that is not a funny) opened earlier this summer in Los Angeles:

 

-The hotel opened “to a crowd of stylish guests”. Would love to get C’s mailing list of those people with style.

 

-The hotel has a Cipriani restaurant, “which will serve its signature international dishes such as pizza”. I can’t imagine stylish guests eating pizza, although I presume a signature international pizza is different.

 

-The hotel’s decor is “an ode to old Hollywood, with vintage black and white film photography throughout”. An ode is generally a poem, so I am not quite sure how this plays out.

 

-The hotel has “a private event space on the 12th floor, complete with a private glass elevator”. I thought all event spaces were private, unless opened to the public. And a glass elevator does not seem very private.

 

-“The Italian brand Cipriani” Er, it’s a US company with restaurants and now a hotel in the US – but with bars in London and Venice. Does that make it an ‘Italian brand’?

 

-Known for restaurants and others in “up-market locations” around the world. Not quite sure how a location becomes ‘up-market’ – possibly Venice to Angelinos, but not to Italians.

 

 

 

Air France Chance

 

The Air France announcement on its plans for a low-fare ‘service’ are so vague that it is difficult to make reasonable comment on the matter. However, that has not held me back in the past; no need to start now.

 

Firstly, faults with what is known already.

 

-The first flights will be from Marseille to cities including Beirut, Biarritz, Casablanca, Milan, Moscow, Prague. These are hardly key routes, and so indicate protection for regular AF routes – for instance, why not MRS-Marrakech rather and Casablanca?

-Will cut costs by using a single type of aircraft – the A320. If only life were that simple. Yes, it helps (but does not really matter in that the new service is using AF aircraft, so the costs are already there, so best to use the best plane for the route). But the key is turnaround time. Should be not more than 30 minutes; if AF knows this, it is not sure its unions will allow staff to work that fast.

 

-Will cut costs by basing its crew in the hub cities. Yes, but much more important is the costs of those crews in the first place, how many there are per aircraft, how many hours they work, and what work do they do? Can you imagine an AF hostess cleaning out seat pockets?

 

 

Mix-ups. AF is trying to cut it all ways:

 

-‘passengers would receive the same level of service as on any other Air France flight.’ So will this be low-cost or just low-fare profitless competition for the Ryanairs?

-‘…low-cost model, like Easyjet and Ryanair, but passengers can expect much more than on a budget flight operator.’ But ‘low-cost’, ‘Ryanair’ are not compatible with providing ‘much more’ for passengers. Either it is a low-cost model, or it isn’t.

The whole venture will be decided not by AF or passengers, but by unions. Probably the main reason for the vagueness is not to upset the unions. However, they will be upset whatever is decided, and whenever it is decided.

 

It really would be better for AF to convert its foreign-based Cityjet airline for this new service, or create another similar foreign-based airline.

 

 

Facts:

 

-Due to start October, with fares lowest fares at US$70 including taxes. This is a publicity-seeking fare. Yes there will be fares at that level, but for booking four months in advance, in low season, and on a minor route.

 

-First Marseille, then others, possibly Nice and Toulouse, from early 2012.

 

-AF says this new venture will increase the group’s seat sales by 4mn/year. But no date given, so this is a PR soundbite. As is the turnover, put at US$560-700mn/year. (However, put these together and the average fare is US$140-175 excluding taxes – much higher than that US$70 including taxes.)

 

 

The Fox’s Friends

 

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