The isolation of Qatar Airways

Courtesy Alamy

AT a time when its neighbours – Saudi Arabia, Egypt, Bahrain, the United Arab Emirates, Libya and Yemen – cut diplomatic ties with Qatar, winning the Skytrax world’s best airline award could not have tasted sweeter to the Qatari flag carrier. It displaced last year’s winner, Emirates Airlines, which fell to 4th ranking.(See Consistency defines Skytrax best airlines, Jun 21, 2017)

The Gulf countries are stopping flights between them and Qatar, and closing their airspace to Qatar Airways. According to Qatar’s chief executive Akbar Al Baker, this has resulted in the cancellation of 52 routes and adding flying routes to others. He was quoted as saying at the Paris Air Show where the award was announced: “At these difficult times of illegal bans on flights out of my country by big bullies, this is an award not to me, not to my airline, but to my country.”

Now Qatar Airways is setting eyes on getting a slice of OneWorld partner American Airlines. It is hoping to buy up to 10 per cent of the US carrier. Investing in foreign carriers is not something entirely new to Qatar Airways. In 2015, the Gulf carrier acquired 10 ten per cent of the International Airlines Group (IAG) which owns British Airways, Iberia, Vueling and Aer Lingus. This was subsequently increased to 20 per cent.

Qatar Airways also owns 10 per cent of South American carrier LATAM and is finalizing a deal to acquire 49 per cent stake of Italy’s Meridiana Fly. It has also expressed interest in Royal Air Maroc and setting up a joint venture in India.
Mr Al Baker has hinted at more acquisitions in the pipeline, but said the airline“is not going to collect crap.”

The timing of Qatar Airways’ interest in American Airlines smacks of more than just part of an expanding acquisition program although it is just as obvious being so. While other Gulf carriers may see the Trump’s restrictions on travel from the region and ban on in-flight carriage of electronic gadgets as a setback, Qatar Airways is keen to expand further into the United States. The isolation by the Gulf neighbours has made it all the more imperative for it to seek stronger relations elsewhere across the globe.

Air France to “boost” performance with new low-cost carrier

Legacy airlines in Europe have long been feeling the pinch from low-cost carriers such as Ryanair and Easyjet. Now it looks like Norwegian Air Shuttle and WOW Air are pushing them to look farther before they lose more ground.
Lufthansa already offers a low-cost trans-Atlantic option from Europe to Las Vegas, Orlando, Miami and Seattle in the United States.

The International Airlines Group which owns British Airways, Iberia, Aer Lingusm and Vueling has just added another low-cost carrier – Level – to its stable. Level, based in Barcelona, will fly to Los Angeles and Oakland in California USA, Punta Cana in the Dominican Republic, and Buenos Aires in Argentina. Fares start at the familiar €99 reminiscent of the Norwegian and WOW Air’s promotions.

Courtesy Air France

Following in their footsteps is Air France, which announces the formation of a new subsidiary low-cost airline – Boost as its working name – planned to commence operations in winter. The airline will fly from the main hubs of the Air France/KLM group to destinations in Italy, Spain and Turkey initially, and then farther to destinations in Asia. Norwegian is already flying to Bangkok and will in October connect London with Singapore.

But Boost will be taking on full-service airlines as well, such as the Middle East carriers of Emirates Airlines, Etihad Airways and Qatar Airways which are already ruffling the feathers of the regional big birds of Singapore Airlines and Cathay Pacific.

The developments point to a gradual convergence of the low-cost and full-service product perceived value wise. It’s the antithetical success of low-cost carriers pushing to bridge the gulf and the failure of legacy airlines not being able to maintain if not increase the differentiation. It looks like the European tug-of-war is pulling the legacy airlines towards the centre line.

For United Airlines, it never rains but it pours

Courtesy Getty Images

For United Airlines, it never rains but it pours. A passenger flying in business class from Houston in Texas to Calgary in Canada said a scorpion fell from the overhead bin onto his head during lunch service. He put it on his plate and was stung before flinging it to the floor. A crew member placed a cup over the insect, which was subsequently flushed down the toilet.

However, the passenger said he had no plants to sue United, which had offered him and his companion flying credit as compensation.

These days, all kinds of strange creatures are flying too. Last month a rat was found on a British Airways flight departing from London Heathrow for San Francisco. There were earlier stories about the rodent found on flights operated by Air India, Emirates Airlines and a Chinese carrier Loong Air. In March, a snake was found loose on a Ravn Alaska commuter flight, apparently a pet left behind by a passenger on an earlier flight. In January, Emirates cancelled a flight from Dbai to Muscat after a snake was spotted in the cargo hold. Earlier in November last year, a snake fell from an overhead storage compartment in first class on n Aeromexico flight.

So United is not alone, but it must be wondering when all the flak is going to stop raining down on it. Everything that happens subsequent to the David Dao incident could be another contentious issue to drag its name into the mud.

There was some good news for the airline though at the start of the week as it reported a profitable first quarter which exceeded expectations even though there was a sharp drop in profit of almost 70 per cent to US$96 million. And while one wonders how the Dao incident would affect profitability in the current quarter, United president Scott Kirby said: “We saw positive trends in the revenue environment in the quarter and are optimistic about the year ahead.”

Anyway, to repair its dented image, CEO Oscar Munoz vowed: “ We are more determined than ever to put our customers at the center of everything we do.” From now on, police personnel will not be called to remove passengers from a flight in an overbooked situation.

Time helps, if United stays competitive and shows it means what it promised.

US & UK ban laptops on board: Will this become the security standard?

Courtesy Emirates

SOON after the United States bars passengers on foreign airlines taking off at ten airports in Africa and the Middle East from carrying electronic devices larger than a cellphone, the United Kingdom announced a similar ban although the list of airlines and airports may be different.

The ban will affect items such as laptops, tablets, e-readers, cameras, printers, electronic games and portable DVD players. However, these articles may be carried in checked baggage.

Affected airlines and airports

The US restriction affects nine airlines: EgyptAir, Kuwait Airways, Royal Air Maroc, Royal Jordanian Airlines, Saudi Arabian Airlines, Turkish Airlines, and the Gulf big three of Emirates, Etihad Airways and Qatar Airways. The airports affected are sited in Amman (Jordan), Cairo (Egypt), Casablanca (Morocco), Doha (Qatar), Dubai and Abu Dhabi (United Arab Emirates), Istanbul (Turkey), Jeddah and Riyadh (Saudi Arabia), and Kuwait City (Kuwait). It is estimated about 50 flights daily would be affected.

The British ban affects 14 airlines arriving from Egypt, Jordan, Lebanon,Saudi Arabia, Tunisia and Turkey. While the US ruling exempts US carriers flying from the listed airports, the British restriction applies as well to home-based airlines British Airways and EasyJet.

Why the restrictions?

The reason for the bans is of course one of security, aimed at preventing terrorist attacks on commercial airlines. The US Department of Homeland Security said: “Terrorist groups continue to target commercial aviation and are aggressively pursuing innovative methods to undertake their attacks, to include smuggling explosive devices in various consumer items.”

The British government said it recognised the inconvenience these measures may cause but “our top priority will always be to maintain the safety of British nationals.”

Few air travellers, if any, will take issue with enhanced security measures since it means a safe flight. Any averse reaction is to be expected, as when full-body x-ray and search became mandatory at US airports. The inordinately long wait to clear security at US airports has since then become an accepted practice.

However, it will do well not to ignore the arguments put forth by experts who may not yet be fully convinced. Technology experts have questioned the premises which in their mind appear to be at odds with basic computer science.

What goes with the ban?

The ban on laptops means no one will be able to work during a flight, something that businessmen and women will sorely miss. Keeping yourself or your kids entertained with electronic games of your personal selection will be a thing of the past if you do not like what the airline offers in its system. What about that novel you thought you might at last be reading during the long journey, having loaded it in your e-book?

Sure, you can pack these (and your camera) in your checked baggage to loaded in the aircraft hold, but it defeats the purpose if they are intended for use during the flight. Also, if these are expensive equipment, passengers are often reluctant to pack them in checked baggage for fear of losing them or having them damaged. Some observers are predicting a rise in incidents of theft in the baggage holding area and cargo hold, and airlines will be confronted with the messy business of handling claims. Apparently baggage theft skyrocketed when Britain imposed a similar ban in 2006.

Laptops, tablets, cellphones and cameras are among the items that are already being subjected to additional security checks before they are cleared as carry-ons. It can only point to the suspicion that the current procedures are not robust enough.

Looking at the bigger picture, some experts fear the ban seems lopsided. First, if a laptop as an example may be used as an incendiary device, it is equally dangerous in the cabin as it is stowed in the baggage hold. Second, the ban targets named originating airports, but a terrorist suspect could always connect a flight from a presumed safe airport or fly on a presumed safe airline. Third, in the case of the US, to make exceptions for flights originating in the US is turning a blind eye to the possibility that mischief could also be traced to a home source.

Some airlines may benefit from the ban

It looks like an unexpected turn of events for the US big three of American Airlines, Delta Air Lines and United Airlines in their quest to get the US government to act against the perceived unfair competition by the Gulf big three (Emirates, Etihad and Qatar). The ban may well benefit the American trio as travellers are likely to want to travel with their electronic devices on board than to have them stowed in the baggage hold. A pertinent question would be how the US carriers would ensure the devices brought on board are safe the way that other carriers may not be able to do so?

Similarly, in the case of the UK ruling which covers also budget carriers, legacy airlines will have the edge if, unlike budget carriers, they do not charge for checked baggage. Easyjet, for example, will be challenged to think up an innovative approach to this issue.

And will airlines across the industry introduce loans of security-screened laptops on board for a fee?

The future

Although the ban is said to be temporary (as indicated by the US), will there be a change of mind to make it permanent, like the ban on liquid obtained before security clearance? Amuse yourself about a future when all you are allowed to bring on board are the clothes you are wearing and a wallet. Everything else needed or desired for the journey as determined by the authorities and the airlines may be purchased after take-off.

For now, some airlines may mull over the use or disuse of a happy passenger working on his or her laptop in their ads.

Rising budget tide: Alitalia unbundles, IAG launches budget long-haul

Courtesy Getty Images

YET another legacy airline is going budget. Italian flag carrier Alitalia will adopt the unbundling model of budget carriers by charging for what will now be considered perks – seat selection, luggage and in-flight meals and drinks. This will be implemented for flights of four hours or less.

Alitalia CEO Cramer Ball said the airline had “absolutely no alternative” but to follow suit, coming soon after British Airways started charging for meals. He said: “If we can’t compete throughout Italy and Europe against low-cost carriers, then we lose air travellers that connect into intercontinental flights.”

Ryanair, EasyJet, Norwegian Air Shuttle, WOW Air, Eurowings (owned by Lufthansa) and Vueling (owned by International Airlines Group – IAG – which also owns British Airways, Iberia and Aer Lingus) are among the budget carriers viewed as close competitors.

Unbundling is not new even among legacy airlines. US carriers such as Delta Air Lines and United Airlines are already offering “basic economy” whose low fare does not come with cabin baggage allowance and seat selection, and holders of such tickets will be boarded last.

Courtesy IAG

In the wake of the rising budget tide, IAG announces its decision to launch a long-haul budget carrier – Level – to complement Veuling’s short-haul. Level, which becomes the fifth brand within the group, will be based in Barcelona with flights to the Americas that include destinations such as Los Angeles, Oakland, Buenos Aires and Punta Cana.

IAG chief executive Willie Walsh said: “Barcelona is Vueling’s home base and this will allow customers to connect from Vueling’s extensive European network onto Level’s long-haul flights.”

Clearly, legacy airlines can no longer hide behind their pride of providing a service that is safe from the aggression of budget carriers. It is up to the consumers to decide, whether the extra dollars charged justify the perceived better standards. In today’s price-sensitive market, the bottom-line counts, and legacy airlines unbunding the fare package will make an easier comparison.

They will be faced with the challenge to convince the travellers of that something extra over and above price that they will continue to provide but which budget carriers may not have the capability or capacity to offer, such as mileage perks, compensation for flight delays and product shortcomings, ease of booking, schedule flexibility, and after-sale customer attention.

Many budget carriers, for example, do not have adequate Plan B when a flight is cancelled or delayed, and your chances of getting out of that situation soonest is better with legacy airlines in light of their frequency, connections and codeshare arrangements.

Things are getting better for Economy travel

Courtesy Getty Images

American Airlines is not going to let rival Delta Air Lines go it alone in bringing back free meals for their flights. (See Delta Air Lines ups the ante, reintroducing free meals in Economy, 19 Feb 2017) However, American will for a start reinstate the freebie only two domestic routes – New York to Los Angeles and New York to San Francisco. Nevertheless it is an indication of how the competition is heating up, and how the game has come a full circle. It is only to be expected that United Airlines (and others) will follow suit.

In the end, it is not a matter of the meals but one of being ahead in the game, doing something different. Interestingly, across the pond in Europe, British Airways (BA) is doing away with free meals and has announced plans to add more seats in Economy, thus reducing the pitch. (See British Airways is becoming more “budget” than Ryanair, 7 Mar 2017) Here the critical question is whether BA is a leader or a follower in the European context, although it appears it is somewhat of a Johnny-Come-Lately and what Delta and American are doing may force it to re-think its strategy.

At no time than now is coach travel getting more attention from the airlines, which understandably have been paying lots more attention to the premium product because of the higher yield. (See Cathay’s loss is a sign of the times, 16 Mar 2017) And that’s good news for the majority of travellers.

British Airways is becoming more “budget” than Ryanair

Courtesy Getty Images

NOT too long ago, British Airways (BA) did away with complimentary meals on short flights. (See No more free meals for BA short haul, Jan 16, 2017) Now, in yet another move to operate like a budget carrier, it is squeezing in more seats in its planes and that means less legroom.

According to some media reports, BA seat space will be the same as budget carrier Easyjet, even less than Ryanair.

A BA spokesman said the initiative would keep the fare low. But, of course, that’s to be expected. Air travellers will do better to recognise the new BA as belonging to the same category of low end operators when they are booking flights. And, sadly for BA, it can only mean it is facing tough competition.

BA’s partner airlines – Iberia, Vueling and Aer Lingus – under the International Airlines Group (IAG) are also offering the same seat space.

And, if you’re thinking of complaining about any aspect of BA’s service, think again. There is a £25 fee. If it makes you feel any better, that applies to Easyjet as well. Just don’t make the mistake of expecting more from a legacy-but-no-longer-full-service airline!