Double WYSKs. UK’s inbound & outbound travel.

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FOXTROTS*

 

Double WYSKs. UK’s inbound & outbound travel.

WYSK = What You Should Know.

 

Funny, that. Experts (I’m a Trainee-Expert) presumed UK outbound travel would fall after the value of the UK currency fell – following the mid-2016 referendum in favour of quitting the European Union. And inbound travel would grow, spurred by that cheaper currency.

 

Some of the following figures are two months old, but I have just looked at them again – this time with my brain switched on.

 

Outbound, the segment that should be at risk. Up +2.1% for all-2017, and slightly faster, +2.7%, to the main (80%) destination region, the rest of Europe. The total fell in six months, including the last three. To the rest of Europe in fewer, just five, months.

 

Inbound, the segment that should be doing well. The total did indeed grow, but that +3.4% is hardly special; in fact, it is worse than its closest competitors in Europe. In order of total size, France (allegedly; data release varies between secretive and puzzling) grew +9%, Spain +9%, Italy +10%, Germany +5%.

 

There were falls in five months, but including the last four.

 

UK from the rest of Europe (a 72% share) was worse than the total, just +0.8%. And prospects do not look so good – there were falls in six months, also including the last four. In December the fall was big, -11%.

 

 

From all this I calculate the UK’s overall travel business grew +3% in 2017, and that related to the rest of Europe, +2%. Although that looks weak, it is better than the UK’s GDP growth in 2017. Time to break-out the last of the tariff-free champagne?

 

 

Notes:

-Something else is happening. The government usually reveals this type of data on a monthly basis. It has said nothing over the past three months.

 

-All this excerpted from our WYSK – What You Should Know. WYSK is available as a subscription service. We provide about 10 brief (usually 2/3 sentences), broadly world-based with emphasis on the region of the subscriber. A subscriber can contract for up to three special subjects.

 

The Fox. Remember, I’m an industry expert in the parallel world.

 

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WYSK: ITB Asia’s misleading data

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FOXTROTS*

 

WYSK: ITB Asia’s misleading data

WYSK = What You Should Know.

Messe Berlin (MB) continues its practice of using misleading and/or incorrect data for its events, the latest one for the 11th ITB Asia (ITBA), due in Singapore this October.

 

However, most of these appear to be due more to ineptitude than duplicity.

 

MB reports:

-Exhibitor numbers expected to be +21.8%, which would make 1136. ‘Presence’ from Europe (which we presume means exhibitor numbers) +13.8%; previous data not given.

 

-85% of exhibition space booked. But if there is 22% growth in exhibitors, how can booked space be down – surely exhibitors are not reducing their booth sizes?

 

-MB describes the 2017 ITBA as an ‘enormous success’ with ‘record-breaking numbers with 113 countries’ at the event. ‘Record-breaking’ has occurred on most measures in most of the nine years. Not many figures were released for the 2017 event but attendance grew only +0.2% and countries +2.7% – although exhibitor growth was good, +11.1%. We interpreted some of these small growths as a relative loss due to the start of ITB China – when China is the biggest single part of growth in Asia’s traffic growth.

 

-MB reported worldwide outbound trips as growing +3.9% in 2017. In fact*, that was 2016 data, and for only Jan-Aug.

 

-Likewise the +11% growth given as Asia outbound growth* in 2017 – data was for Jan-Aug 2016 only.

 

-In addition, those figures MB uses include data for China, yet China should now be excluded from the ITBA prospectus, because China now has its own stand-alone event.

 

-Blatant misuse continued, with MB forecasting +4-5% growth in worldwide outbound travel ‘over the next year’. In fact*, this was a forecast for 2017!

 

*Notes:

-MB (mis)-uses its own ITB Berlin World Travel Trends for its data.

-A report on this topic in our Travel Business Analyst newsletter contains some important additional information, qualification, and analysis.

-At press time, MB had not answered our request for clarifications.

 

The Fox. Remember, I’m an industry expert in the parallel world.

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

 

Double WYSKs. What’s working, what’s not – airlines in Asia Pacific, Europe.

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FOXTROTS*

 

Double WYSKs. What’s working, what’s not – airlines in Asia Pacific, Europe.

WYSK = What You Should Know.

 

Asia Pacific Q1

Our summary of traffic results for the leading airlines in Asia Pacific, excerpts from the current editions of the Travel Business Analyst newsletter, over January-March.

 

Seat sales at biggest FSAs (full-service-airlines) in Asia Pacific (whole-group results for all), in alphabetical order: Air China +8%; Cathay +3%; China Eastern +8%; China Southern +10%; Japan +2%; Singapore +5%.

 

Notes (on notable details):

 

Air China. International still growing faster than domestic, +11%. AC has usually been slower than its two control-freer rivals, China Eastern and Southern. Times are changing?

 

Cathay. That’s the two airlines. Which one is doing badly? What needs to change? Why do investors let the company get away with this deception?

 

Cathay says it wants to match the no-frills-airlines challenge without creating an NFA – a modernised version of its old phrase “intelligent misuse of our B747s”. That would mean low-low no-options fares and no-frills service in the same cabin. This won’t work. One passenger would say “I paid $1000 for this seat, and my neighbour paid $200 just for missing the dinner” – even if not completely true. And then the $200 passenger will demand a wine, because his $1000 neighbour got one. And so on. The Cathay Group has already made a mistake with having two airlines with the same level of service, just different routes. As at the Singapore Airlines Group (Silk folding into SIA) Cathay will eventually fold CDragon into CPacific. But, better, it should convert CDragon what we call a low-cost-airline, and create another airline as an NFA.

 

China Eastern. Rarely do CE’s figures match with the period one-year-earlier. Unusual in that international is slower than domestic.

 

China Southern. The biggest, and the fastest, of China’s top-3. And international is growing faster.

 

Japan. International growing twice as fast.

 

Singapore. Parent airline just +1%. Its NFA division, Scoot, +12%, taking it to half the size of SIA itself.

 

 

Europe Q1

Our summary of traffic results for the leading airlines (not, where relevant, airline groups) in Europe, excerpts from the current editions of the Travel Business Analyst newsletter, over January-March.

 

Seat sales (RPKs for British; our estimates for Ryan), in alphabetical order: Air France+KLM (from this year, no longer separated) +4%; British +2%; Easyjet +5%; Lufthansa +8%; Ryanair +6%.

 

Notes (on notable details; on whole-group for Air France, British (=ICAG), Lufthansa):

 

Air France. Group +5%, which looks good, although we believe AF itself is well below that – +2-3%, with KLM possibly around +8%, and Transavia +14%. Transavia has an impressive seat factor – 94% for the month, 92% YTD.

 

-British (=ICAG). British is still the weak partner; Iberia, the group’s other FSA (full-service-airline), is at +8%. ICAG’s two NFAs (no-frills-airlines) are doing well – our estimates, AerLingus +13%, Vueling +18%.

 

Easyjet. Signs of concern? YTD at +5%, but March at +3% – is that the lowest-seen for an NFA in Europe?

 

Lufthansa is the region’s star performer; +13% and even +15% in March. But most of that is Eurowings; +41% YTD, +46% March. As we have noted before, EW is already bigger than most of other airlines in the group such as Austrian and Brussels. And now it has overtaken Swiss to become 2nd-largest. Its capacity is now about-20% the size of mighty Lufthansa.

 

Ryanair. Slowing growth, but seat factor 94%, squeezed up 1pt.

 

Others of note: Wizz, which gets fawning press coverage, is doing well, +24%. And growing faster than that fading-fawnee, Norwegian, +12%. By mid-year Wizz should overtake Norwegian in seats sold.

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

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

 

May travel stocks’ ups and downs

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FOXTROTS*

 

May travel stocks’ ups and downs

Travel stocks (US, Asia Pacific, Europe) in May.

 

Airlines: biggest growth, United +21%; biggest fall, Jet AW -36%.

Hotels: Belmond +12%, Millennium & Copthorne -6%.

Tech: Amadeus +12%, Last Minute -16%.

Others: China Travel Service +18%, Hertz -31%.

 

Comments:

The threats from the US – of many types – have understandably had an effect on some travel stock prices, mostly in the negative direction, and not only in the US.

 

For airlines, even if Etihad’s India-based Jet was the worst performer, others were almost as bad. Air Asia, for instance, fell -20%. AA made a big error in getting into politics, and worse, making the wrong choice. AA’s head, Tony Fernandes, supported the previous government, and even repainted one AA aircraft with a pro-(now-ex-)government message. This is unlikely to spoil prospects for the airline, even in the short-term. But Fernandes himself may have problems the next time he wants something from the new government.

 

Also a big fall was -16% for Air France-KLM – mostly punishment for an AF strike. Notwithstanding any public statements, KL must be looking for a way out of its link with AF. The problem will be cost. The value of the company has fallen since the strikes, and so KL would lose on selling its shares in the company.

 

We worry about Hertz, not only down -31% in the past month, but also down -32% this year. However, it could also be partly the business model, as Avis-Budget also fell heavily, -21%.

 

Previous month: Airlines: biggest growth, China Eastern +15%; biggest fall, American -14%. Hotels: Dusit +8%, MGM -8%. Tech: Travelport +7%, Trivago -34%. Others: ILG +12%, HNA -10%.

 

TBA Travel Stocks Index:

World 248, Asia Pacific 114, Europe 217, US 412. Index previous month: World 248, Asia Pacific 123, Europe 204, US 407.

 

NVTT (Net Value Travel Tech) Stocks Index: 136; previous month 130.

 

Stockmarkets:

Biggest growth Dublin +5%; biggest fall Kuala Lumpur -6%. Previous month: biggest growth Paris +7%; biggest fall Istanbul -9%.

 

Info from the Travel Business Analyst newsletters. Details in next month’s newsletters.

 

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

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