Is Singapore Airlines liable for misconnections?

sia-logoamericanemirates-logoetihad-logoturkish-airliens-logoSingapore Airlines (SIA) is among five major carriers taken to task by the British Civil Aviation Authority (BCAA) for not compensating their customers for flight delays that resulted in missed connections. Emirates Airlines is said to be the worst offender. The other three carriers are American Airlines, Etihad Airways and Turkish Airlines.

According to BCAA Director of Consumers and Markets, Richard Moriarty, the five carriers have “systematically” denied the passengers their rights. He said: “Airlines’ first responsibility should be looking after their passengers, not finding ways in which they can prevent passengers upholding their rights. So it’s disappointing to see a small number of airlines continuing to let a number of their passengers down by refusing to pay them the compensation they are entitled to.”

Under EU regulations, which apply to airlines even if they are not based in the EU, a delay of more than three hours becomes compensable, unless caused by “extraordinary circumstances”. An airline is off the hook if the delay is caused by factors outside their control, such as inclement weather, but not if it is due to poor performance resulting from, say, the lack of maintenance, procedural hiccups or staff negligence.

This is not the first time an airline has been charged with not giving their customers their dues. Protecting air passengers’ rights has been a long running battle between regulators and the airlines, and the matter is far from being satisfactorily concluded. Nor is it as widely pursued as in the EU, United States and Canada. Even then, monitoring is not an easy task, and as arduous is the arbitration to decide if an airline should be held accountable. Ever since the EU ruling came into force, many airlines have been fighting the cases in court, and this can mean unduly long delays of compensatory payments if ever they are ruled in favour of the passengers.

Singapore airlines is putting compensation claims “on hold” if they involve connecting flights. This is a contentious issue as the delivering carrier has no control over a passenger’s choice of onward journey if he or she makes separate bookings. The question hinges on what is considered a reasonable connecting time. If an airline arranges the entire journey including the connection, it is usually obliged to look after the passenger who misses the connection as a result of a flight delay. This may cover a stopover stay at a hotel, meals, rebooking on the next flight or an alternative flight, and other related expenses. Some airlines have leveraged on short-connecting times as a marketing strength.

Following the US Department of Transportation final ruling on protecting passengers’ rights, SIA published a customer service plan for tickets purchased in the US for flights to and from that country. The plan stipulates: “In the event that Singapore Airlines cancels, diverts or delays a flight, Singapore Airlines will, to the best of our ability, provide meals, accommodation, assistance in rebooking and transportation to the accommodation to mitigate inconveniences experienced by passengers resulting from such flight cancellations, delays and misconnections. Singapore Airlines will not be liable to carry out these mitigating efforts in cases where the flight cancellations, delays and misconnections arise due to factors beyond the airline’s control, for example, acts of God, acts of war, terrorism etc., but will do so on a best effort basis.”

While an airline like SIA is unlikely to put its reputation on the line (the airline has often been commended by its customers for going the extra mile), there is always the caveat that it can only do so much to the best of its ability and on a best effort basis. In response to BCAA, SIA pointed out “a lack of clarity in the law” which it hoped would be resolved in the ongoing discussion with the British authority.

Air New Zealand leads the pack

Courtesy Air New Zealand

Courtesy Air New Zealand

Air New Zealand is the world’s best airline according to AirlineRatings.com based on criteria that include fleet age, safety, profitability and leadership in innovation for passenger comfort. The agency’s Airline Excellence Awards program which lists the winning airlines is endorsed by the International Civil Aviation Organization.

Many travellers would recognize ANZ for its attention-grabbing in-flight safety video that takes them into Middle Earth, the kind of out-of-the-aircraft features that a few other airlines have tried to imitate but fared only poorly. AirlineRatings.com Editor-in-Chief Geoffrey Thomas said: “Air New Zealand came out number one in virtually all of our audit criteria, which is an exceptional performance.” The airline was favoured for its record-breaking financial performance, award-winning in-flight innovations, operational safety, environmental leadership and motivation of its staff.

Skycouch: Picture courtesy Air New Zealand

Skycouch: Picture courtesy Air New Zealand

But, of course, there are surveys and there are surveys that publish their own lists of favourites. Some airlines such as Singapore Airlines (SIA) and Cathay Pacific have a ubiquitous presence, and there also notable absences. This is where it is most telling, bearing in mind that the ranking is dependent on several factors such as the excellence-defining criteria and the population surveyed.

The other nine airlines ranked behind ANZ in the top ten list by AirlineRatings.com are in descending order: Qantas, SIA, Cathay, Virgin Atlantic, British Airways (BA), Etihad, All Nippon Airways, EVA Air and Lufthansa.

It is interesting to note that the top two airlines come from the remote Southwest Pacific. Qantas has in recent years been working on upgrading its product offerings, winning accolades for catering and airport lounges. Not surprisingly, innovation along with good service seem to be the driving winning streak going down the list – SIA and Cathay for their premium economy and revamped business classes, Virgin for its cabin ambience and friendly crew, BA for its leadership in in-flight entertainment, and Etihad for its equally impressive service in front and at the back of the aircraft.

Notable absences in the list are US carriers (no surprise there) and two of the big three Middle-East carriers (Emirates and Qatar).

Many survey rankings are skewed by the weight they place on service in the premium classes. However, Mr Thomas of AirlineRatings.com said: “We are looking for leadership and airlines that innovate to make a real difference to the passenger experience particularly in economy class.” Considering that the majority of travellers are seated in coach, it is time that airlines crowned with the halo of excellence pay more attention at the back of the aircraft, for this may well make the difference as the competition intensifies. And, it is where the differentiation becomes even more challenging. Perhaps too, this could be the reason why Emirates and Qatar, known for their lavish premium service, did not make it to the top ten of the list.

The race to operate the world’s longest non-stop flight

Courtesy Emirates Airlines

Courtesy Emirates Airlines


THE race is on to operate the world’s longest non-stop flight. Ever since Singapore Airlines (SIA) suspended its flight from Singapore to New York in 2013, nine years after it was launched, the honour has fallen to various airlines. Qantas was the last to hold the record for distance flown, operating between Sydney and Dallas Fort Worth, until Mar 2 when Emirates Airlines commenced scheduled flights from Dubai to Auckland.

The inaugural Emirates flight using an Airbus A380 aircraft (subsequent services will use the Boeing B777 aircraft) flew a distance of 14,200 km (8,824 miles), compared to 13,800 km covered by the Qantas flight. The scheduled flight time is 17 hours and 15 minutes, about half an hour longer than the Qantas flight of 16 hours and 55 minutes. However, the inaugural flight landed earlier than scheduled, clocking only 16 hours and 24 minutes.

Some of the other notable ultra long haul flights clocking more 16 hours and more are operated by Delta Air Lines (Atlanta/Johannesburg), Etihad Airways (Abu Dhabi/Los Angeles), Emirates (Dubai/Los Angeles), Saudi Arabian Airways (Jeddah/Los Angeles), Qatar Airways (Doha/Los Angeles), Emirates (Dubai/Houston), Etihad (Abu Dhabi/San Francisco), American Airlines (Dallas Fort Worth/Hong Kong), Emirates (Dubai/San Francisco), and Cathay Pacific (Hong Kong/New York).

While SIA had announced its intention to reintroduce its non-stop flight from Singapore to New York in 2017, Emirates looks determined to maintain the record for now. The Middle East carrier will be launching a non-stop service from Dubai to Panama City by the end of the month. The scheduled flight time is 17 hours and 35 minutes, shorter than the 19 hours of the erstwhile SIA flight.

As the industry heralds a return to the good times with the price of fuel at record low levels, airlines can afford a grab for prestigious attention. But surely, more than the prestige, the decision has to also make commercial sense.

Many of the ultra-long flights are operated by the big three of the Gulf region, namely Emirates, Etihad and Qatar. There is intense competition among these neighbouring carriers targeting the US markets, filling a gap left by the American carriers which are beginning to feel the pinch, leading to allegations by some of them of unfair competition. While the concentration may be a matter of the world geography as it is, it nevertheless shows how the Gulf carriers, taking advantage of improved technology that has continuously made flying a longer distance possible, are intent on driving a trend to reach the far corners of the world in a single hop.

What conclusions can you draw in an airlines survey?

SIA courtesy SIA

WE continue to be fascinated by rankings of the world`s best airlines, although the results of most surveys – take away some bias here and there – are quite predictable and almost similar across the board. The winners by and large boast excellent cabin service, great food, comprehensive in-flight entertainment and innumerable choices, more generous legroom than what their competitors offer, and frills such as complimentary champagne and brand name overnight kit. It is all about creature comforts. And the impressions are understandably almost always skewed by the luxuries of the upper classes.

Traveller magazine Conde Nast has just posted its list of the world’s best airlines, surveyed among some 128,000 readers. Of course this is not the definitive list of excellence to the detail, in the same way that no other list can be as definitive without considering factors such as the type of respondents involved, the scope of the survey and the criteria adopted, but there are nevertheless interesting conclusions to be drawn from them. So often it is more interesting to look at the omissions.

Long haul can impress or disappoint

Singapore Airlines (SIA) is a perennial favorite of Conde Nast readers, ranking top for 27 of 28 years. It is hardly surprising, which to be saying it seems even redundant. The airline has long earned the reputation as one of the world’s best airlines, and is frequently celebrated in other surveys as well. It was ranked second after Qatar Airways in the last Skytrax survey. It is hard to find a match that depicts consistency in excellence. The real clincher seems to be in its long haul operations – such flights that are likely to elicit the flaks when passengers are apt to become more stressed and demanding. Here is where SIA is able to make the difference by a well-trained crew that anticipates a passenger’s needs, always mindful the passenger’s comfort first and foremost in the service.

All the airlines in Conde Nast’s top ten are long haul operators, with the exception of Porter Airlines which is more a city shuttle that flies between Toronto in Canada and US destinations such as Boston, Charleston and Myrtle Beach.

While the long haul impresses, it can also take apart an airline’s reputation, which explains why some airlines are inundated with complaints about being handled like a can of sardines. Interestingly, the Conde Nast list of best American carriers is made up of short-haul operators to the exclusion of the big three of United Airlines, American Airlines and Delta Air Lines. Virgin America is ranked first followed by JetBlue, Hawaiian Airlines, Southwest Airlines and Alaska Airlines.

Dominance by Asian and Gulf Carriers

Again, it is not surprising that Conde Nast’s top ten ranks are dominated by Asian and Gulf carriers, which together were placed in not only in the top three ranks but also seven of the top ten positions. The Gulf big three of Emirates Airlines, Qatar Airways and Etihad Airways were second, third and fifth respectively. Qatar was tops in the earlier Skytrax survey, ahead of Emirates (5th) and Etihad (6th). Other Asian airlines in the Conde Nast list are Japan Airlines (6th), Korean Air (7th) and Cathay Pacific (10th). Both SIA and Cathay were also ranked among Skytrax’s top ten airlines.

Dominance by Asian and Gulf carriers means the stark exclusion of airlines of other regions. Only one European airline – Virgin Atlantic – was listed, and in fourth placing. One asks: Where are British Airways, Air France and Lufthansa although going further down the list you will find Swiss International Air Lines (17th) and Finnair (20th)?

That and the marked absence of US carriers demonstrate the superior service culture of Asian and Gulf carriers and their growing popularity that continue to put pressure on their rivals in the competition. The US big recently accused the Gulf big three of unfair competition supported by state subsidies. In truth, North American airlines are not inefficient, but they lack the soft pampering touches of their competitors. There is a host of pertinent questions. Can US carriers be as friendly or, to go one further, do better? And, ultimately, do they even see the need?

Luxury improves image

Etihad boasts the “residence” suite that comes with a bedroom, private bath with shower and lounge. That is for now the forerunner in the race for the ultimate luxury in the air, leaps ahead of SIA’s first class suites and all the other airlines’ flat bed allures. There are also the extras: Etihad provides a concierge service that will make a dinner reservation for you when you land, and some airlines offer door-to-airport limousine services. The slant towards premium classes is to be expected, for that is what makes news even as the perks are limited to a smaller but more lucrative market of the travelling population. If there is one airline that seems to be doing much more for coach than many others, it is Air New Zealand, which offers “Skycouch” in economy – seats that can be converted into a lie-flat double bed – but then again, this is limited to only three seats in the cabin, reminiscent of the days when EVA designates a small number of seats as the ill-defined premium economy before the subclass takes on an identity of its own today.

Comparison is the crux

In any survey, the crux is the comparison, particularly when they are all said to be providing good cabin service and excellent food amongst the creature comforts. The Conde Nast survey again surfaces the rivalry between SIA and Cathay Pacific in the top ten, favoring the former. Interestingly, Japan Airlines (6th) is ranked ahead of All Nippon Airways (11th), and Korean Air (7th) ahead of Asiana Airlines. That indicates a reversal of order that has been the reading of many past surveys, and may well portend how the competition may be trending.

In the case of Gulf carriers, the ranking rivalry among Emirates, Qatar and Etihad is very much a close call going by several international surveys. At the same time, we cannot ignore the inclusion of Turkish Airlines in Conde Nast’s top 20. Turkish was fourth in the Skytrax survey.

In the close rivalry between Qantas (15th) and Virgin Australia (19th), the former continues to enjoy an advantage over the latter.

What else matters? All the hype about going green as the world becomes increasingly conscious of the impact of climate change? That Korean Air prepares its food from humanely raised and organically grown produce. That El Al offers an iPad rental program. That Virgin Atlantic has a stand-up bar. That Qantas offers Select on Q-Eat that allows you to pre-order your meal. That Air New Zealand makes its safety presentation more entertaining than others. That British Airways allows you to log on to a movie as soon as you board and stay with it until the aircraft is docked at the gate on arrival. The list goes on. And one wonders.

This article was first published in Aspire Aviation.

US airlines vs Gulf carriers: Redefining Open Skies

THE new American mantra for aviation is fair skies, not open skies. With the rise of the Gulf carriers and their increased presence in the US, home carriers are banding to press the Department of Transportation (DOT) to review the long-standing Open Skies policy and the agreements executed thus far. Their grouse: Unfair competition because of large government subsidies received by Emirates Airlines, Etihad Airways and Qatar Airways that place US carriers at a disadvantage.

This is not a new argument presented by opposing airlines; even in the days of restrictive bilateral negotiations, it was a hurdle many airlines from the less developed countries in Asia faced as they expanded into the more lucrative markets of the western hemisphere. Their successes from delivering a product reputed for excellent customer service and operated on high productivity had been clouded by accusations of payouts by their home governments that enabled them to compete on cost.

Courtesy Airbus

Courtesy Airbus

Emirates president and CEO Tim Clark warned: “If you go down this minefield, you must ask yourself to what extent all the foreign carriers serving the US are subsidised. Take China, take Thailand, take Malaysia, take Japan, take New Zealand. I could go on forever.”

Mr Clark may have unwittingly in his defence roped in other carriers into the contentious ring. But the US is unlikely to be interested in the reference, at least not for now. Broad brush strokes do not work; just because one person is not censured does not guarantee immunity for another person in a similar situation. Having said that, this does not necessarily mean the US has a case. The issue is much more complex than that. For one thing, the success of the Gulf carriers makes them more noticeable.

Note, however, Mr Clark is not saying Emirates is similarly subsidised by the UAE government. On the contrary, he insisted the airline did not receive any, rejecting the report produced by the American carriers that the three named Gulf carriers received US$42 billion in subsidies. Mr Clark said: “The requirement from the government of Dubai has been and remains the same. There will be no support for your operations, you will be required to make money.”

All the arguments for and against in the debate – depending on which side of the wall you stand – seem to centre on the issue of government subsidies, complicated by political affiliation and extending beyond support for the airlines to other related businesses including the funding of home airport development that is viewed as directly benefitting them. Where do you draw the line when ownership of several projects is traced to a common designator? In many countries, airport development is undertaken by the government as a national project and the facilities are viewed as common to all users.

Refuting the American accusation, Gulf carriers are pointing out how American carriers have also received government support. All the major airlines have sought refuge in the bankruptcy laws at some point. There were government bailouts after the 911 attacks. In some ways the US aviation policy is protectionist: The domestic market is not widely open to foreign carriers, and the government’s approval of consolidation to create mega entities only serve to limit competition. Etihad chief executive James Hogan countered that American carriers have been granted antitrust immunity (ATI) to protect lucrative transatlantic routes operated jointly with European carriers: American Airlines with British Airways, Delta Airlines with Air France, and United Airlines with Lufthansa. Mr Hogan said: “I think this is a protectionist move to protect the ATI routes across the Atlantic; that’s the irony.
Etihad courtesy etihad

The debate must bring us back to the genesis of Open Skies. For more than twenty years, the US has been championing open and greater competition that has resulted in lower airfares and more choices for travellers of airlines and destinations. US airlines themselves have supported the push, benefitting from new markets outside the US. Since 1992, the US has signed more than 100 open skies agreements. But the playing field is changing as global competition intensifies with the growth of more successful foreign carriers reaching into the heart of the US. It is fair to expect a customary review when circumstances change, but any compromise on the principle of competition may be a step back.

Mr Clark warned that the agenda of the American carriers is threatening “the bedrock of the modern day aviation system. By challenging open skies, you are not just challenging the aero-political situation, you are challenging the very essence of economic liberalization the US has championed for decades.” He expressed hope that the US administration “will not stand for this nonsense.” The American carriers on the other hand insisted that they “welcome robust competition provided the playing field is level. A reopening of those open-skies agreements is the first step and the right step to ensure competition is preserved and enhanced.”

The crux of the matter appears to be what constitutes a level playing field. Will a revised Open Skies policy be qualified by an attempt to box it in? The thrust of the policy has been competition, but makes true competition? Is the US being anti-competition in opposing the entry of Norwegian Air Shuttle, even with nary a hint of government subsidy? As Mr Clark warned, “Once you talk about fair skies, you enter into a quagmire of definition, and you have to be very careful how you go.” Indeed, is there such a thing as truly fair skies? Even as more countries have declared their support of liberalisation, many of them are still protective of their turf, rightly or wrongly. A case in point: Singapore Airlines (SIA) has tried and failed to gain access across the Pacific from London Heathrow to the US east coast, and across the Pacific from Sydney to the US west coast. Yet other airlines that came lately were granted those rights, which is anomalous to the often cited fear of overcapacity that would hurt the industry.

In 2011, Emirates tussled with Canada which rejected its application to operate more flights to Toronto. The Canadian government was concerned that UAE carriers (including Etihad which was also applying for access to Canada) would enjoy an unfair advantage over Air Canada in tapping into its international traffic, the outcome of which would be the loss of Canadian jobs; the unfair advantage was similarly pinned down to subsidies Emirates received from the UAE government. In apparent retaliation, the UAE evicted Canada from its military base near Dubai and imposed a hefty visa fee for visiting Canadians. It is so easy for what is a commercial matter to be politicised, adding to its complexity.

The industry is divided. An organization known as Americans for Fair Skies is campaigning in support of the US government. It says: “This is an important first step towards restoring fairness to our skies and stopping the largest trade violation in history.” Outside the US, not surprisingly, Lufthansa had openly stated its support of the US carriers. When Carsten Spohr assumed appointment to helm the German carrier, he expressed concerns about encroachment by Gulf carriers in Europe and set himself the task of tackling that issue. Interestingly even Etihad, an affected party to the dispute, actually “applauds” the US government “for setting up a transparent process to deal fairly and responsibly with the claims. Etihad Airways is committed to setting the record straight regarding these unsubstantiated allegations.” While Emirates argues in defence, Etihad is issuing DOT a challenge.

Conversely, not everyone in the US is supporting the US carriers’ pressure on its administration to review its Open Skies policy, if not specifically the agreements executed with the Gulf carriers. US airlines may feel the pinch of competition by foreign carriers, but US airports are welcoming of the increased traffic that those carriers bring. Then there are consumer groups who are benefitting from lower airfares, better service and wider consumer choice. Business Travel Coalition chairman Kevin Mitchell wrote in a letter to the government: “Now that US airlines have secured antitrust immunity, industry consolidation and concomitantly rising airfares and ancillary fees, and are achieving record unprecedented profits, some carriers shamelessly seek to close off US markets to competition from foreign carriers.” JetBlue chief executive Robin Hayes for one is not joining the protesters.

Mr Clark would remind the US government how Gulf carriers have contributed to not only the growth of traffic but also providing access to markets not previously served by any US carrier. An example was the connection between Seattle and Hyderabab in India via Dubai. He said: “Look at where these people are going and ask yourself where was Delta, where was Untied, where was American when the world was becoming more globalized?”

While DOT said it would address the concerns raised by the US carriers, its spokesman Brian Farber qualified that the administration “remains committed to the open skies policy which has greatly benefitted the travelling public, the US aviation industry, American cities and the broader US economy through increased travel and trade, and job growth.” There will be wide ramifications, no doubt. Open Skies is not just about a specific airline’s bottom line. In defending the case for Gulf carriers, Mr Hogan had said: “We make no apologies for offering new competitive choice for travellers. Open skies should be about customer choice.” But is it really, one wonders, in practice?

It is unlikely that the US government will turn the Open Skies policy topsy turvy and go for a clean slate, renegotiating the agreements with the Gulf carriers. One can anticipate new restrictions in the road ahead, and tweaks where ambiguity permits. Its impact will be global. Some European parties are already watching closely moves by Gulf carriers to gain a bigger slice of the European pie, not just the competition in offering seats but also in the bold acquisition of stakes in European carriers. In Australia, Etihad is a co-owner of Virgin Australia. Emirates operates a mega alliance with Qantas. It would be interesting if the Australian government grants Emirates, but not SIA, rights to fly transpacific from its ports.

Unbeknownst to many, there may be a price to pay for success. The Gulf carriers may have become victims of their own successes, in the same way that it is once said of SIA in its heyday.

This article was first published in Aspire Aviation.

Qatar Airways nets a prized catch, expanding westwards

IT may seem somewhat crazy, but it is definitely not surprising in today’s aviation landscape of fast changing and crisscrossed relationships, some of them making most unlikely bedfellows. The ends justify the means.

Courtesy British Airways

Courtesy British Airways

Qatar Airways has acquired a 10% stake in International Airlines Group (IAG), better known as the owner of British Airways (BA) and Iberia. IAG also owns Spanish budget carrier Vueling. The act of acquisition itself by the cash-rich Middle East carrier does not surprise. Qatar lags behind rival Etihad Airways in this respect; Etihad already owns Alitalia (49%), Air Serbia (49%), Air Serbia (49%), Air Seychelles (40%), Etihad Regional (formerly Darwin Airlines) (33.3%), Air Berlin (29.21%), Jet Airways (24%), Virgin Australia (10%) and Aer Lingus (2.987%).

But coming lately, Qatar has bagged a prized acquisition, considering IAG’s bases at two major European hubs, in particular London Heathrow, and the strong transatlantic networks of BA and Iberia. Qatar chief executive Akbar Al Baker said: “IAG represents an excellent opportunity to further develop our westwards strategy.” It should be a strong partnership. Together, their networks cover Europe, North and South America, Africa, the Middle East, India and Southeast Asia.

In 2013 Qatar became a member of OneWorld, becoming the only one of the big three Gulf carriers to join a global airline alliance. More than an apparent Qatari interest in things British, this was a step forward to forge a closer relationship with BA. Qatar said it may increase its stake in IAG for which it paid £1.15 billion (US$1.73 billion). However, EU regulations have placed a cap on non-EU ownership at 49%.

Courtesy Qatar Airways

Courtesy Qatar Airways

Quite unlike Etihad, which has entered the arena as a white knight in many cases, Qatar is buying into one of Europe’s more profitable outfits. Clearly it is a strategic move. While European carriers are becoming wary of Gulf carriers making inroads in the EU market, the competition is at the same time a race among the big three Middle East carriers themselves- Qatar, Etihad and Emirates Airlines. This has become all the more prominent in recent years as they out-compete each other within their region and seek aggressively to push out their geographical boundaries, leveraging on the success of home bases such as Dubai, Abu Dhabi and Doha as hubs for international traffic connecting Asia Pacific, Europe, Africa and the Americas.

The rivalry for supremacy is clear in a jibe made by Mr Al Baker on the race to top the chart for extreme luxury in the air, something that carriers outside the Gulf are less disposed to think about at the same level. He said: “We always raise the bar for our dear friends around the area to try to copy us.” (The big deal about extreme luxury, Jan 19, 2015)

Courtesy PA

Courtesy PA


The timing could not have been better for Qatar as IAG looks likely to succeed in a new takeover bid of Irish carrier Aer Lingus after two failed attempts previously. This would gain IAG more take-off and landing slots at Heathrow. What is interesting is the composition of Aer Lingus partners, which include Ryanair (29.8%) and Etihad. Any opposition to the deal is likely to come from the Irish government which owns 25% of Aer Lingus, but it may be a price well worth paying for the crucial air links between cities in Ireland and Heathrow as the world’s largest hub (until topped by Dubai recently) and beyond. Ryanair has itself attempted unsuccessfully to take over Aer Lingus and objected vehemently to IAG’s proposal in the past for reasons that are not difficult to see. IAG’s chief executive officer Willie Walsh and Ryanair’s chief Michael O’Leary are not exactly the best of friends. But if money talks, the latest offer of €1.3billion (US$1.47 billion) by IAG may well carry the day.

Airline relationships in today’s industry are more complex, if not blatantly promiscuous. While global alliances offer the broad framework for cooperation, it is not uncommon to find rival airlines connected in some way through a third party. The numerous cross-border codeshare arrangements are testimony to the multi-faceted connections. Less than half the world’s airlines belong to any of the three global alliances: Star (27 members), SkyTeam (20 members), and OneWorld (15 members). Although many major carriers are already members, there are notable exclusions such Virgin Atlantic (although CEO Richard Branson who made an about turn in 2012 announcing Virgin might join one of the alliances soon) and the other two of the big three Gulf carriers Emirates and Etihad. While Aer Lingus itself is unaffiliated, and so are part owners Ryanair and Etihad, IAG’s influence cannot be precluded although it has said Aer Lingus would continue to operate independently.

It is best to adopt a detached view of the business. Alliance membership may but not necessarily suggest a like-mindedness that brings friends to the same table. There is no reason why friends and foes alike may not put their money in a common proposition that will help further their respective positions. OneWorld membership may have eased Qatar’s way into the IAG stable, making it easier for Mr Walsh to be “delighted to have Qatar Airways as a long term supportive shareholder.” Not sure if he would be any less delighted if it had been Emirates or Etihad. But for Qatar, as part owner of IAG which is set to take over Aer Lingus, it is stealing a march on rival Etihad.

This article was first published in Aspire Aviation.

The big deal about extreme luxury

IT is a big deal in the Middle East as the Gulf carriers, notably the Big 3 of Emirates Airlines, Etihad Airways and Qatar Airways, race to outdo each other in offering extreme luxury in the air. (See Extreme luxury: What price prestige? Jun 26, 2014)

Courtesy Qatar Airways

Courtesy Qatar Airways

Ever since Etihad introduced the Residence, a super-class three-room suite made up of a double bedroom, private bath and shower, and a lounge and bar area, the rivalry has intensified and become embittered somewhat with acrimony. While Emirates is working on a new bedroom concept to match, Qatar Airways is planning to introduce double beds in business class that, in the opinion of its chief executive officer Akbar Al Baker, will be better yet less costly than its rivals’ first class products.

Mr Al Baker said: “We always raise the bar for our dear friends around the area to try to copy us. We will have a double bed with only a business-class fare.”

While not choosing to go the Etihad route of offering the flying apartment, Qatar aims to turn the tables on its regional rivals by re-inventing the business class product to make it the ultimate marketable luxury that may even replace the so-called first class. Mr Al Baker added: “This will be a product that will be unrivalled in our industry. When you introduce that into the aeroplane, I really don’t think you need a first class.”

It is interesting how this actually reflects the erstwhile development of the business class following its emergence in the ‘70s while the first class was still a viable segment. As the product became more popular, some airlines began downsizing the first class cabin, even eliminating it altogether, in favour of enlarging and improving business class. So literally, the business class is as far up the status as you can go in the absence of first. What’s in a name anyway?

Then it was a case of the business class being good enough, better than coach but not that much lesser than first. Qatar is boasting that its new business class will be better than its rivals’ first class, so that’s where it will force the competition to shift its focus.

However, that does not necessarily detract from the fact that there may well be a niche market though limited for the flying apartment, as Etihad reported it has been fully booked out. But is it a market worth vying for, but for the reputation of leading the game in extreme luxury? There is a price for prestige. Major airlines outside the Middle East are probably grateful that the rivalry is confined to the Gulf region, even relieved that the Big 3 are engaged in outperforming each other to the extreme. Those airlines could do better focussing on the market at large, and for them, Qatar`s intention to fight the real battle in the business class arena instead poses a higher threat than Etihad`s Residence that comes complete with the desirable but dispensable services of a Savoy-trained butler as well as a chauffeur on ground.

There may be a parallel development in the international aviation scene. Premium travel suffered a major setback in the 2009 economic meltdown and continues to drag its feet in recovery. But major airlines that used to thrive on this segment remain hopeful. What prestigious airlines does not operate a first class cabin anyway? As if in like fashion, matching Etihad has become a clarion call for Gulf carriers. Singapore Airlines (SIA) for one has introduced Suites on its A380 jets. The cabin boasts what it calls an inner sanctum for privacy and features a double bed. But at 40% premium of the normal first class fare, a source said the product is not performing as well as expected. What SIA must have realized lately is how the crisis has caused more permanent changes to travel trends than hoped for, against a backdrop of budget operations that are beginning to eat into the legendary business that was once deemed to be exclusive.

The risen phoenix out of this muddle of ashes is the premium economy, which though not exactly a new concept has been given a new but more marketable identity by airlines such as Cathay Pacific. Airlines from Qantas to Air Canada are capitalising on the fast growing popularity of this not exactly mid-range product as you can tell by its branding, shifting up in an industry that has shifted down. Lufthansa in its plans for a more robust airline has identified as one of its goals the development of a new premium economy class that provides more exclusivity and personal space, aiming to complete implementation of 3,600 seats by the third quarter.

Now, if Qatar Airways succeeds in making its business class better than its rivals’ first class as envisioned by Mr Al Baker, then, far-fetched as it may seem, with the upward shift the premium economy may evolve into the new business class. That was how today’s business class evolved, from a few seats in the front of the economy cabin partitioned off by a curtain into a cabin of its own, That was how too the premium economy has evolved, from EVA Air’s six seats that were actually economy seats but with a wider pitch because of the structure of the aircraft to Cathay’s dedicated cabin with its own identity. There we go again: What’s in a name anyway?

As for extreme luxury, it is a game best left for the cash-rich Gulf carriers. But Qatar Airways is not playing. The real competition is a rung or more down. So Qatar shall instead attempt at re-writing the rules for business class travel. Economy class passengers will also enjoy new and better perks quite unlike any offered by other airlines, at the new Hamad International Airport in Doha, where Qatar Airways is based and which is scheduled to be fully opened by April. The terminal features “Airport Nodes” that provide a play area for children, a family sleeping area, and internet access. The mantra behind Qatar’s strategy is probably best rephrased as a question: Is there any reason to pay more?

This article was first published in Aspire Aviation.