Double WYSKs. Airlines in Asia Pacific, Europe; what’s working, what’s not.

Leave a comment

FOXTROTS*

 

Double WYSKs. Airlines in Asia Pacific, Europe; what’s working, what’s not.

WYSK = What You Should Know.

Airlines in Asia Pacific

Our summary of traffic results for the leading airlines in Asia Pacific, excerpts from the current editions of the Travel Business Analyst newsletter, in January. Seat sales at biggest FSAs (full-service-airlines) in Asia Pacific (whole-group results for all) , in alphabetical order: Air China +2%; Cathay -2%; China Eastern +13%; China Southern +3%; Japan +1%; Singapore flat.

 

Notes (on notable details):

 

-Air China. And the same for international. Looks slow (for China) but this is mainly a Lunar New Year factor. The LNY holiday was in January in 2017, but February this year.

 

-Cathay. When will it realise its businessplan must change? Cathay Pacific should stay as full-service-airline, but Cathay Dragon should become a low-cost-airline or no-frills-airline (our definitions). Then create a third airline as LCA or NFA.

 

-China Eastern. Funny figures, which we are surprised the stock market accepts. For the past two years, calculated growth does not match the figures given earlier – sometimes by sizeable amounts. We cannot get an explanation.

 

-China Southern. As for Air China, mainly a LNY factor .

 

-Japan. As is becoming usual, growth around +1-3%. International, for instance, was only +2%. Poor results considering growths in the visitor business +19%, and even outbound +5%.

 

-Singapore. Oops. Silk was also flat, and seat factor at a probably-lossmaking 71%, and -3pts. We have long proposed a reworked strategy for Silk. The group followed our ideas for its no-frills-airline Scoot (merging with Tiger, although we actually said Scoot should not have been created, and Tiger expanded instead). We propose Silk becomes the group’s low-cost-airline (according to our definitions) . But Scoot not doing well either; just +9%, not good for an NFA.

 

 

Airlines in Europe

Our summary of traffic results for the leading airlines (not airline groups, where relevant) in Europe, excerpts from the current editions of the Travel Business Analyst newsletter, in January. Seat sales (RPKs for British; our estimates for Ryan), in alphabetical order: Air France+Hop +3%; British -2%; Easyjet +9%; Lufthansa +6%; Ryanair +6%.

 

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

 

-Air France. KLM growing fast, +9%; on this basis it will be two-thirds the size of AF this year. Transavia back to fair-growth (for a no-frills-airline), +13%, and seat factor almost touching 90% – which is the minimum we reckon it needs. But transparency at the group is reducing, see https://wp.me/pTv9-lI

 

-British (=ICAG). The group’s growth coming from Iberia – whose +10% compares with BA’s -2%, although BA is still 60% of all-ICAG. Barcelona-based Vueling’s seat sales (our estimate) is now back to good growth, +17%, and although seat factor is still a low 79%, that is for January and a +2pt improvement. Not so encouraging at AerLingus – seat sales only (our estimate) +6%, seat factor a lossmaking 71%, only +1pt better. Needs to do better. No figures for its new subsidiary Level (sic). As the group always hid the results of its now-to-be-closed failure Open Skies (sic; an airline, despite that name), will it do the same for Level – unless traffic is good?

 

-Easyjet. Managed to get seat factor up +2pt to 88% – good for January.

 

-Lufthansa. Most is looking good; only Swiss’s +4% looks weak. The star is still Eurowings, +33% although seat factor is still only 75% even though that was +2pt growth. We thought EW would take growth from Lufthansa, but the parent still managed +6%, although SF was -2pt. The group’s Austrian and Brussels also doing well.

 

-Ryanair. Is that +6% a worry because low (for Ryan)? Growth in the past three Januarys was +17% +25% +31%. But seat factor up +1pt to 91% – at that level SF is hard to grow, but Ryan is doing it.

 

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.

Advertisements

Air France Group’s Joon plot

Leave a comment

FOXTROTS*

 

Air France Group’s Joon plot

In the beginning:

-Air France strike attracts media attention.

 

-Joon starts Paris-Cairo flights.

 

-The Air France Group (AFG) stopped separating AF and KLM traffic stats.

 

 

So where’s the plot?

-Joon was billed and launched as a longhaul no-frills-airline for AFG – Air France, Hop, Joon, KLM, Transavia.

 

-*See our airline-type definitions below to better understand.

 

-Cairo is not an NFA operation. Joon’s A340 has three cabin classes and therefore can be considered a lower-cost replacement for costly Air France. *See LCA (low-cost-airline) in the definitions below.

 

-En passant, Cairo is a medium-haul route, not longhaul as AFG names it.

 

-Starting February, AFG reverted to its practise of publishing combined traffic results for AF and KLM after a 2-year period of transparency. During that period, we noted that KLM, broadly, was growing twice as fast as AF. Today, KLM is about 67% the size of AF; five years ago it was closer to 50%.

 

-So initially we thought the move to hiding traffic results was to reduce the awkwardness (in image and in management – AF still manages AFG) for AF that its KL junior partner is becoming an equal partner.

 

-But perhaps not. Is the move to hide the coming fall in AF traffic as Joon takes over some flights that before would be AF’s? (Note that in our scenario, an LCA can operate on the same routes as the parent airline. In such a case, Joon could simply be providing extra capacity to fill demand on the route.)

 

-If the plan is indeed to make Joon an LCA, it is a smart business move. This is how a sizeable (above 75mn seats sold?) airline group should be constructed. In the AF case, difficulties with staff (actually a France problem) would require hidden moves like this.

 

-But in a more transparent liberal business world, it makes good business/service sense to offer a range of services and fares on some routes. Thus the AFG needs to offer some FSA flights on, say, Paris-Berlin early-morning and end-of-business-day, then perhaps one LCA flight mid-day, and NFA flights at weekends.

 

-Under our definitions, AFG has two FSAs (AF and KLM), one LCA (Joon), and one NFA (Transavia). And Hop.

 

-Hop? If Joon is a smart move, Hop was dumb. It operates on regional routes with smaller aircraft, both higher cost, and aims for FSA levels of service, so higher costs, on routes where the pressure for lower fares is strong. As this strategy must be a loss-maker (no separate figures, financial or traffic, are published), Hop will probably be shut down in the next two years, although that could mean a face-saving merge into AF or even Joon.

 

*Notes: Our airline-type definitions:

-FSA = full-service-airline. Offering first/business/economy, travel agency bookings, meals/bookings/baggage/cancellations included, etc. As its name indicates – full service.

 

-LCA = low-cost-airline. (Not a no-frills-airline; see next.) An FSA but with lower operating costs – cheaper longer-hours flight-deck crew, younger/new longer-hours cabin crew, tighter cost control (twinned 3-star hotel rooms, for example), fewer fare types, may have first and business cabins as well as economy, and which allows bookings through travel agencies etc. If relevant, usually similar to the parent airline, but a different name, and competition against parent airline allowed.

 

-NFA = no-frills-airline. We believe that among the many essential elements that make a successful NFA are: shorthaul point-to-point routes; market freedom in terms of fares, routes; single aircraft type; where relevant, competition against parent airline allowed; extremely-low fares when bought at least three months in advance, say US$25; one fare at one time (no wholesale rates, travel agency commissions, etc); no refunds; no (free) service frills; single economy-class cabin; no (free) seat selection; two toilets for 150-seat aircraft; 25-minute turnaround time; cabin crew do daytime cabin cleaning; name and flight change charged at least US$25 each; no trade shows; plenty of consumer advertising and promotion; and much more.

 

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.

 

Misleading WTTC reports

Leave a comment

FOXTROTS*

 

Misleading WTTC reports

WTTC (World Travel & Tourism Council), a lobby group for the travel business, has published a series of comprehensive reports* for selected markets – some measures comparable, some not.

 

Unfortunately, the group is so careless in its presentations that the professional observer is sometimes left to guess what WTTC’s research shows. We believe its presentations are in contrast with the professionalism of its research.

 

As a result, the following is our (abridged) list of WTTC’s findings, with comments where necessary.

 

(Note: WTTC mainly uses the awkward term ‘travel and tourism’*, which we change to the more-practical ‘travel business’*, abbreviated here to TB. Data for 2017, unless noted otherwise.)

 

[] World.

-TB turnover +4.6%. Visitor spend +4.3%. GDP growth a WTTC-rounded +3%.

 

[] North Africa.

-TB turnover (overall GDP, TB’s share of GDP): +22.6%; Egypt US$21.1bn +72.9% (+4.1%, 11.0%); Tunisia US$5.7bn +7.6% (WTTC-rounded +2%, 14.2%); Turkey US$98.4bn WTTC-rounded +17% (+7.0%, 11.6%). Note Turkey is part in Europe, part in Asia (Minor), which is sometimes a reason for including it in the Middle East. Including it in North Africa is incorrect.

-‘…well on track to return to pre-crisis levels’. Without a date, this is meaningless commentary; it was on that track the moment the TB stopped falling.

 

[] Australia.

-TB turnover (overall GDP): US$156bn/A$197.5bn +2.3% (+2.2%).

 

[] Canada.

-TB turnover (overall GDP): US$108bn/C$138.8bn +4.5% (a WTTC-rounded +3%). In a separate report, WTTC puts growth as +5.5%.

 

[] China.

-TB turnover +9.8%.

 

[] France.

-TB 50% faster than world average. Wrong? The same report showed that this was a comparison with the visitor business, not the overall TB.

-Visitors to France spent US$54.7bn (at US$1 to €0.81) +6.4%.

-TB turnover US$252.2bn, an 8.9% share.

 

[] Germany.

-TB turnover US$429.8bn +1.7%.

 

[] India.

-Forecast to overtake Germany as #3 by 2028.

 

[] Indonesia.

-TB turnover US$57bn/Rph787.1tn +6.4%; overall GDP +5.1%.

-Forecast +6.4% annual average growth rate 2018-27.

 

[] Italy.

-TB turnover (overall GDP): US$275.6bn +2.7%, a WTTC-rounded 13% share (+1.6%).

-Visitor spend US$48.9bn +6.5%.

 

[] Japan.

-TB turnover (overall GDP): US$350bn/¥37.1tn +3.4% (+1.6%).

-Forecasts 40mn visitors in 2020. Not clear if this is a WTTC forecast or a restatement of Japan’s government’s target.

 

[] Saudi Arabia.

-TB turnover (overall GDP): US$64bn/R240.9bn +4.6% (a WTTC-rounded +1%), a 9.4% share of GDP.

 

[] Spain.

-TB turnover a WTTC-rounded +7%.

 

[] UK.

-TB turnover (overall GDP): US$297bn/a-WTTC-rounded-£214bn +6.2% (+1.5%).

-Visitors +6.7%, outbound travellers +2.5% (+7.8% 2016, +9.9% 2015), domestic travellers +5.8%, spend by visitors to UK +7.9%, spend by domestic travellers +5.8%.

 

[] US.

 

-TB turnover (overall GDP): US$1.5tn +2.3% world’s largest (same, +2.3%).

*Notes:

-WTTC has its own methodology for calculating the turnover of the travel business including not just inbound, outbound, and domestic travel, but other industries involved in the business. For instance, if 0.5% of the world’s cars go into the car-rental business, that measure will be calculated into the turnover of the overall travel business.

 

Unfortunately, WTTC is not always clear that its data is related to this grand total, and often its commentary appears to be related to just one sector – often, the inbound visitor business. In addition, it sometimes uses the terms ‘travel’ or ‘tourism’ alone; we cannot always determine if these mean something different from ‘travel & tourism’.

 

WTTC’s name does not help – the ‘TT’ is ‘travel & tourism’, where we would define ‘travel’ as covering all segments of the travel business, with ‘tourism’ meaning ‘leisure travel’ to most observers – just one segment. This means that most people and bodies the WTTC lobbies may think they are discussing just inbound leisure travel.

 

-Most US$ figures are our conversions from WTTC figures.

 

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

 

 

WTTC Research Director Rochelle Turner responds:

The methodology that WTTC uses aligns to the UN a statistical Methodology for accounting for Travel & Tourism (TSA RMF:2008).  

The definition of the sector from the TSA RMF:2008 is as follows: ‘the activity of persons travelling to and staying in places outside of their usual environment for not more than one consecutive year for leisure, business and other purposes not remunerated from within the place visited’. 

Our approach has been independently audited and is fully available for view on our website, www.wttc.org. All country regions are fully explained on the final pages within each country report. 

 

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.

 

Bigger Trump slump in US visitors

Leave a comment

FOXTROTS*

 

Bigger Trump slump in US visitors

 

Trump Slump 1

Normally we would not analyse data for one month so thoroughly. But these are not normal times, thus this analysis – this one primarily on Jan-Sep.

 

There was slight improvement in Q3. Jan-Sep total visitors fell -3.8%, compared with Jan-Jun -3.9%, although September turned worse, -5.0%. The main reason for the worsening was results in the ‘overseas’ markets (all except Canada, Mexico) – -6.3% -5.7% but -8.7%.

 

Of the regions we track (calculations from US DMO’s data) indicate worsening for Europe -2.3 -2.6 but -4.0, and for Asia Pacific -1.7 -0.9 but -3.2.

 

Overall then, it appears the Trump Slump is worsening.

 

Other comments:

[] 11 markets in top-20 are getting better (faster growth or slower fall; Jan-Jun compared with Jan-Sep). Those getting worse (slower growth or faster fall) are (in size order): Canada, China, Korea, Germany, India, Italy, Colombia, Spain, Sweden.

 

[] Ignoring for a moment precise reporting, markets essentially unchanged (Sep compared with Jan-Sep) are Canada, Mexico, UK, Germany, India.

 

[] Biggest turns for the worst (Sep compared with Jan-Sep) are Japan (to -7% Sep from +0% Jan-Sep), China (-7 -6), Italy (-4 +3), Spain (-1 +3), Argentina (-36 -22), Netherlands (-6 +2), Colombia (-26 -12).

 

[] A rare Trump Bump. Korea soars forward at +18% Jan-Sep, same Jan-Jun, and +23% September.

 

 

 

Trump Slump 2

Forward Keys, a research company, tracks travel based on air bookings. Some of its findings on travel to the US:

[] For all-2017 air bookings were -2.0%. This year Jan/Feb was down fractionally, -0.02%.

 

[] FK reports that the fall in the value of the UK- against the US-currency, following the UK’s mid-2016 vote to leave the European Union, discouraged many UK would-be travellers. The UK is the US’s largest market after contiguous Canada and Mexico.

 

[] FK says visitors from China flattened in 2017 after substantial growth in 2016. Our database on actual arrivals shows something different – a -6% fall over Jan-Sep 17, but +15% Jan-Dec 16.

 

[] Outlook is better. FK reports international bookings to the US from within the Americas are +7%, and longhaul bookings from elsewhere are just +0.5% ahead. However, if ‘Americas includes the contiguous markets of Canada and Mexico, these two alone swing the total.

 

[] FK says Mexico forward bookings to August are +28.9%. Again, this contrasts our 2017 data, which shows -8% Jan-Sep 17.

 

[] Brazil forward bookings for the same period +24.8%.

 

[] US destinations. FK reports Florida as the biggest destination in the US, although we have New York City the largest single destination. FK reports Florida -1.0%.

 

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

 

 

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.

 

What worked; what didn’t. Airlines in Europe in 2017

Leave a comment

FOXTROTS*

What worked; what didn’t. Airlines in Europe in 2017

An excerpt from our monthly Travel Business Analyst newsletter.

 

Our summary of traffic results for the leading airlines (not airline groups, where relevant) in Europe, over January-December. Seat sales (RPKs for British; our estimates for Ryan): Air France+Hop +3%; British +1%; Easyjet +10%; Lufthansa +6%; Ryanair +10%.

 

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

 

-Air France. KLM’s +8% is about best among Europe’s biggest (above 30k seat sales). We thought Transavia would bring constant good news, but growth has been seriously slowing in recent months. Its all-year +11% is not good, particularly as it is still a small airline; its 15mn seat sales are only half those of, say, Wizz.

 

Is more effort going to launch Joon (yes, that’s its name)? When will the group follow the Singapore Airlines group and merge its two NFAs (no-frills-airlines)? Two years?

 

 

-British (=ICAG). All the group’s airlines finished the year strongly – except the biggest, British, just +1%! Barcelona-based Vueling had a bad year, +4%, but blame that on the city’s Catalan crisis; seat sales actually fell in two months, and were flat in two others. AerLingus growth is also slowing.

 

As at AF-KL, is ICAG focussing on its new medium-haul NFA (Level; yes, that’s its name)? As we have long forecast, ICAG’s Open Skies (yes; ICAG is good at giving weird names to some of its airlines) is shutting down. And it lost its bid for Niki, a failing Vienna-based NFA that original owner Niki Lauda will now make his third airline loss (Lauda Air, Niki 1, Niki 2). He was good at running F1 racing cars; no good at running airlines.

 

What’s next for ICAG’s rationalisation? Merger into one groupette (names will not be lost) of AerLingus, Level, Vueling?

 

 

-Easyjet. Same growth as Ryan! That’s Ryan’s relative slowdown , not just Easy’s growth; all-2016 was +7% for Easy, +15% Ryan .

 

 

-Lufthansa. All-group sales were +18%; stunning yes? Well no, because the group does not compare like with like; not including its new subsidiary Brussels in 2016, for instance. According to our apples-apples calculations, that +18% is actually a mundane +5%.

 

That said, its Eurowings is growing at super speeds – +28%. It was already bigger than Austrian; now it is also bigger than Swiss. And it is steadily becoming what we call a low-cost-airline (not an NFA), and taking-over or taking-on, routes from the FSAs (full-service-airlines) in the group at a lower cost .

 

 

-Ryanair. See Easy above. Note also that Easy improved its seat factor from 90% to 92%, and Ryan 95% to 96%. Despite the different numbers, these growths are equally impressive; Any growth above about-92% is hard.

 

However, we suspect Ryan finds a way to count everyone so that on some flights the paper seat factor would be above 100%. Indeed, we would not be surprised if it manages to count those from cancelled flights!

 

 

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: Trump Slump for US visitors, Travel stocks’ ups and downs

Leave a comment

FOXTROTS*

 

Double WYSKs: Trump Slump for US visitors, Travel stocks’ ups and downs

WYSK = What You Should Know

 

US visitors; Trump Slump

Again, normally we would not review so thoroughly data for one month. But these are not normal times, thus this analysis* – this one on Jan-Jul visitor arrivals.

 

Bad.

 

Most of the bigger markets (regions and markets) are down. There are no great surprises – except perhaps that some markets still grew. Some details:

 

[] Of the two contiguous markets in North America, the largest Canada is +4.6% YTD but with slowing growth in the latest month, July. Mexico is -8.5%, but with a reducing fall.

 

[] Overseas -6.4% and getting worse.

 

[] International -4.0% and getting worse.

 

[] Top-3 overseas. UK -6.2% but steady; Japan 0.4% and growing; China -5.8% and getting much worse.

 

[] Rest of top-5. Korea +17.2% but slowing growth; Germany -0.2% and getting worse.

 

[] Selected other bigger markets.

 

-The top-2 regions, Western Europe then Asia, take a near-80% share of the overseas markets, so what happens from those two regions decides a lot about the total. Europe is -1.9%, Asia -1.8%, but both are worsening.

 

-Not surprisingly, Africa and the Middle East are crashing – -28% and -32% – but their combined share is only 5%.

 

-South America is bigger, 13% share, so its fall – -14% and getting worse – is important.

 

-Perhaps it is a surprise that any in the top-20 are growing. That is the case for France, then Italy, Netherlands, Spain, Taiwan, Ireland. But for all except the Netherlands, growth is falling.

 

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

 

 

 

Travel stocks’ ups and downs

Travel stocks (US, AsPac, Eur) in December. Airlines: biggest growth, China Eastern +23%; biggest fall, SAS -17%. Hotels: InterContinental +8%, Mandarin Oriental -7%. Tech: eDreams +14%, cTrip -5%. Others: Fraport +12%, Royal Caribbean -5%.

 

Previous month: Airlines: biggest growth, Hawaiian +22%; biggest fall, Norwegian -22%. Hotels: Hyatt +16%, Peninsula -14%. Tech: eDreams +58%, Travelport -16%. Others: Walt Disney +8%, HNA -22%.

 

TBA Travel Stocks Index: World 242, AsPac 120, Eur 205, US 402. Index previous month: World World 236, AsPac 116, Eur 203, US 389.

 

NVTT (Net Value Travel Tech) Stocks Index: 136; previous month 132.

 

Stockmarkets. Biggest growth, Istanbul +11%; biggest fall, Singapore -1%. Previous month: Tokyo +4%; Istanbul -6%.

 

Info from Travel Business Analyst newsletters. Details in next month’s newsletters – which will include annual comparison, as well as 5-year, 10-year, and millennium comparisons.

 

 

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: We challenge Easyjet and WTTC farewell comments

Leave a comment

FOXTROTS*

Double WYSKs: We challenge Easyjet and WTTC farewell comments

WYSK = What You Should Know

Excerpts from our monthly People-in-Travel report. As this is a subscription report, the following items are not from the current edition.

 

Recently, the heads of airline Easyjet and the lobbyist WTTC, have moved on. The following are our contemporary comments.

 

Easyjet

Carolyn McCall*, 56, CEO of UK-based Easyjet is due near the end of this year to become CEO UK-based TV company, ITV, in early 2018. She joined Easy in 2010.

 

According to our database, Easy’s seat sales have shown a +7.0% average annual growth rate since she joined. That looks weak alongside some key competitors – +8.2% AAGR at arch-rival Ryanair, the world’s biggest NFA (no-frills-airline), +14.5% at (relative) newcomer Norwegian, although only +5.9% at US-based Southwest, overtaken two months ago as the world’s biggest NFA. And Air Berlin, which has now shut down, is negative, -1.6%.

 

The same for Easy’s share price. At current prices, Easy’s share AAGR over end-2010 was +18.3%, Ryan +24.6%, Southwest +24.4%. Only two years for Norwegian, -25.2%, and Air Berlin was not a quoted airline.

 

Easy’s chairman John Barton added a few accolades but without accompanying data. According to him, McCall:

 

-“…transformed Easyjet’s performance in every respect…” Wrong, although ‘transform’ and ‘every’ are meaningless hagiographic words in this sense.

-“…built a solid operational performance…” Wrong. Even this year, the airline had some scheduling problems, and is not a leader in, for instance, on-time performance, or baggage handling. So these are non-specific banalities.

-“…has seen…the number and loyalty of Easy’s passengers grow…” Right, of course. Seat sales have grown since 2010 (we calculate +49.7% since 2010, although Ryan has grown +60.6%, Norwegian +124.9%, but Southwest +40.9%). Loyalty has also grown, although this is almost a given as traffic grows – and Barton gives no data.

 

When McCall took over, we worried that she was too UK-centric for the largely-European Easy.

 

There are no specific figures to prove or disprove this, although in her farewell comments – as in her arrival comments – she uses ‘Europe’ to mean the continent outside the UK. Although that is not an uncommon sentiment among many UK nationals, it should not be for the head of a deeply European airline. We reckon around 65% of Easy’s business is from non-UK residents and from routes that do not touch the UK – Rome-Berlin, for instance.

 

Also, considering that Europe-outside-the-UK may become a reality as the UK prepares for Brexit – leaving the European Union – McCall appears to have done nothing to prepare the airline for that eventuality.

 

True there are so many unknowns about Brexit that it is difficult to make specific plans. But her silence on most relevant matters – for example Easy’s base in non-EU Switzerland, which in theory will have to shut – indicates McCall’s weakness. Contrast that with Ryanair’s CEO, who has spoken out strongly on the need for Brexit clarity – if only in economic plans.

 

Perhaps she is leaving partly because does not want to get involved in that messy politics/business of Brexit. She joined Easy from UK-only media companies GMG and the Guardian, and is joining ITV, a UK-only media group. Although born and partly educated outside the UK, she seems to see the world exclusively through British eyes.

 

That is not good for Easy as the March 2019 EU departure date gets closer. And so we would look for a CEO replacement with strong international experience, preferably European.

 

But perhaps Easy still thinks it is a British airline. Despite all the figures that show it is a European airline, and despite the fact that it has grown strong because of the liberal aviation policies introduced by the EU.

*Her last-known remuneration (2014): US$864,000 (at US$1 to £0.77) salary, US$1.49mn bonus, US$7.67mn in shares.

 

 

 

WTTC , (World Travel & Tourism Council)

David Scowsill, before his sudden departure as head of WTTC in June, made a sort-of valedictory – presented as an outlook for the future.

 

Although he personally did not move WTTC towards the future – just managed the present business – the WTTC and some of its partners are well informed on the travel business, and thus should have provide some good insight and foresight for Scowsill.

 

Given the elevated status of WTTC in the market, we expected better. Some (edited) comments (may have been paraphrased for editorial expediency):

 

[] Some developments since I joined WTTC in 2010 – Arab Spring; rising populism; rising-number/changing-nature of terrorist attacks; growing economic power of China and India; rise of the sharing economy; move to mobile; wide awareness-of and almost complete acceptance-of the urgency with which we need to address climate change. [Presumed reference to US President Trump’s climate scepticism.]

 

[] Despite uncertainty, vulnerability, unpredictability, travel growth has remained at around 4% a year. New business models such as [no-frills-airlines], Trip Advisor, online hotel aggregators, sharing economy, have changed travel.

 

[] No large brand name has gone bankrupt, even with competition and the global financial crisis. [Presumed 2008.] This ability to adapt to market forces, respond to consumer demand and adopt new technologies is what I believe ensures the future of the [travel business].

 

[Scowsill mostly uses the (meaningless) term ‘travel and tourism’, sometimes ‘tourism’ and occasionally ‘travel’. We do not know if these are different to him, but we have changed all to our preferred terminology, the ‘travel business’ abbreviated from hereon to TB.]

 

[] AI, machine-learning, robotics, will certainly affect TB jobs over time. Many jobs will become redundant, but others will be created. Service delivery in the TB relies on people contact. People ultimately define the travel experience.

 

[We would want something bolder in a valedictory presentation, not motivational notes suitable for someone applying for Scowsill’s job. When? What is ‘many’ – 10%, 90%? We can see 65% of jobs being replaced with technology. Although there can be no argument about people ‘ultimately defining’ the travel experience, what happens before the ‘ultimate’ – ie, the final? Is that 10% or 50% of the travel experience?]

 

VR and AR movement will be phenomenal, but it will enhance the TB not compete with it. The opportunities  are huge – training [travel] workers to spot potential terrorists, engineers to learn how to diagnose problems, a terminally-ill person to visit the world from their bed .

 

The debate on online communications wiping out business travel is 20-years-old. We see Skype, WhatsApp, WeChat, Twitter, Facebook, video conferencing communications, merging over time on communication devices, for business meetings and leisure experiences. But people will still travel to see the world, business travel will grow because the human contact required for deal making will never disappear.

 

Much of this is debatable. And ‘human contact required for deal making will never disappear’ is wrong. Already many deals are done without human contact – buying an airline ticket, for instance. Scowsill would doubtless argue this is not a ‘deal’, but we believe it is, and presume he means ‘big’ deals. If that is the case, he should provide a level.

 

[] Travel websites will be replaced by apps on mobile devices.

 

[] The [TB] needs to firmly establish its credentials as a force for good. The economic and social impact of the sector is significant everywhere. But a lot of work is needed to ensure that travel growth is inclusive and environmentally sustainable. The UN’s Sustainable Development Goals provide a framework for making and monitoring change. All participants should engage with the SDGs and show how their activities are aligned with them.

 

[This glosses over a lot. What is ‘significant’, ‘inclusive’, etc? How to measure ‘firmly establish’ – which has actually been one of Scowsill’s tasks – or that travel is ‘inclusive’ and the probably-impossible ‘environmentally sustainable’? The UN’s SDGs are a (huge) wish-list that are unlikely to be achieved, even if everyone were ready to pay for implementation. The SDGs are used by organisations such as WTTC to switch the responsibility to those rather than the culprits – in this case, travellers and the TB.]

[] Although government recognition of the TB has come a long way since WTTC was formed in the early 1990s, the TB is often too low down the list of priorities. Policymakers must understand that travel contributes to sustainable development, and is committed to growing this contribution.

 

[How to measure? What was government recognition then and what is it now? How can visitors scrambling over Angkor Wat and the Galapagos ‘contribute to sustainable development’? How can an inanimate ‘travel’ be committed?]

 

In these disruptive times, knee-jerk responses to threats – whether from terrorism , climate change or immigration – can impact travel disproportionately. This affects the bottom line of businesses, and has a direct and often devastating effect on the 292mn people  whose livelihoods depend on travel.

 

[Another anti-Trump comment. Earlier in this presentation, however, Scowsill says travel counts have been unaffected by disruptions. So which is it?]

 

[] The TB – from the CEOs I have represented to ministers I have worked with, to the 1.2bn people who travel each year – must together ensure that travel continues to improve lives, protects the planet and is a force for peace, security and understanding.

 

[We find it ironic that Scowsill’s last words as head of WTTC misinterpret the most basic data. There are not 1.2bn people who travel each year. That is the visitor-arrivals total, produced by at most 1bn travellers, but perhaps as few as 800mn. Even if this may not seem a great difference – although 1.2bn would be 20% – such a mistake from the head of such a body is surely a serious error? Is this what he told those ministers he presented to?]

 

 

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.

Older Entries