Big Mess at Ryanair

Courtesy Getty Images

The world’s biggest budget airline has found itself floundering in a big mess. An apaprent mistake in leave schedulign of pilots as it claimed has led the airline to cancel 2,100 flights over six weeks until November – 40 to 50 flights a day. That means inconveniencing some some 300,000 customers who would receive or had already received emails informing them of the cancellations.

Ryanair said it would arrange alternative flights or refund the fares. Under the European Passenger Rights legislation, passengers are entitled to compensation for flight cancellations. Ryanair estimates it will cost the carrier 20m euros (US$24m).

The unpredented slew of cancellations may also subject Ryanair to penalties imposed by the authorities. Italy’s competition regulator – Italian Competition and Market Authority – has started a probe into the matter, on whether the cancellations could have been prevented. It is hard to believe that Ryanair had nto anticipated the problem and, if found guilty, could be fined as much as 5m euros.

Ryanair chose to cancel flights first at its busiest airports so that it would be eassier to arrange alternative flights. But, of course, in the mess of events, this has a knock-on effect.

Ryanair chief Michael O’Leary denied the airline was experieicning a shortage of pilots, even as many as 140 of them have left to join new rival Norwegian Air Shuttle. Mr O’Leary insisted it was because the airline had “messed up” the rosters which left it without enough pilots to operate all the scheduled flights.

One thing for sure, Ryanair will certainly feel the heat of the competition brought on by Norwegian and other carriers such as EasyJet, if advanced bookings for October at 70 per cent comapred to September at 90 per cent are any indications.

Will this mess cause Ryanair any further loss of customers in the future? The airline has a dotted history of going from zero customer service to attempting improving that aspect in the face of rising competition. Much depends on how it handles the current crisis. In a price sensitive market, people’s memories tend to be short while most people are actually more forgiving than expected under the circumstances. The real threat for Ryanair remains the competition particularly if the rivals are seen to be more reliable.

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EasyJet to shake up market

Courtesy EasyJet

EasyJet “will shake up the market,” said the low-cost carrier’s chief commercial officer Peter Duffy. The airline operating out of London Gatwick has entered into an arrangement with Norwegian Air Shuttle and WestJet to allow booking of connecting flights to Singapore and destinations in North America that include New York, Los Angeles, Orlando and Toronto on its website.

This is another indication of how LCCs are no longer content with just the so-called niche market as they enter into the arena of the big boys. Such connections are usually forged among legacy airlines competing with each other, an advantage compared to stand-alone LCCs confined to point-to-point traffic. So EasyJet’s initiative – said to be the first global airline connections service by a European low fares carrier – is set to change the rules of the game.

Already Norwegian, encouraged by the prospect of an increased number of passengers through the partnership that will help it expand its wings, is talking about the possibility of linking up with Ryanair. EasyJet also said the tripartite arrangement will expand to include more airlines.

The agreement is not completely an LCC club as it includes WestJet, Canada’s second largest airline after Air Canada. This is breaking new ground, challenging the advantage enjoyed by legacy airlines which are supported by subsidiary or joint-venture LCCs, among them Lufthansa/Eurowings, British Airways/Level/Vueling, Qantas/JetStar, and Singapore Airlines/Scoot.

It is interesting how the modus operandi of the LCC keeps evolving, and consumers stand to benefit from the increased competition. For now, EasyJet customers connecting partner flights will have to collect their bags in transit, to be handled via the Gatwick Connects desk in the baggage reclaim area. No reason why this will not improve in time.

Does Air Berlin’s demise signal end of the road for budget carriers?

Courtesy Reuters

Air Berlin is folding up its wings, caused by falling pasxsenger numbers. Last month alone saw a dip of 25 per cent compared to July last year. Its biggest shareholder, Gulf carrier Etihad Airways which owns a 29.2 per cent stake, is not forthcoming with the needed financial support.

Does Air Berlin’s demise signal the end of the road for unaffiliated budget carriers, many of whom are benefitting from the currtent low price of jet fuel? Or that it is at least a forewarning of a more difficult time ahead for them in the continuing battle between them and legacy airlines which are at the same time supported by their own budget offhsoots?

That’s what Ryanair fears, accusing the German government and national carrier Lufthansa of conspiring to carve up Air Berlin. Ryanair said: “This manufactured insolvency is clearly beign set up to allow Lufthansa to take over a debt-free Air Berlin which will be in breach of all known German and EU competition rules.” A Lufthansa-led monopoly, it said, would drive up domestic fares.

How then will the game play out after Air Berlin?

Ryanair’s apprehension as a competitor is real. Air Berlin’s exit will mean a stronger Lufthansa and its budget offshoot Eurowings. Yet already Lufthansa is a dominant player with 76 per cent of its capacity focused on the German market. The Lufthansa Group posted record earnings for the first six months of 2017, increasing revenue by 12.7 per cent to €17 billion and net profit by 56.6 per cent to €672 million. Eurowings and other airlines in the Group including Austrian Airlines, Brussels Airlines and Swiss Interantional Airlines, also posted positive results. So as a group, Lufthansa has quite some msucle to flex in Europe, and the vacuum left by Air Berlin is likely to be filled by Eurowings.

On the other hand, it may be countered that competition is all but dead since airlines such as Ryanair and EasyJet also have access to the German market. However, comparatively, their market share is small; Germany represents only 7 per cent of Ryanair’s capacity and 9 per cent of EasyJet’s. There is possibility that Air berlin’s demise may mean more demand for seats on these carriers, if not opening up the market for more competition. Hence the German government has denied Ryanair’s accusation that it had breached anti-trust rules.

Clearly the competition will intensify, whether it is a battle between legacy airlines and unaffiliated low-cost carriers or one between budget airlines themselves is not any more a matter of note. The competition has levelled, with budget carriers attempting to do more and legacy airlines even adjusting down to match. Legacy airlines including Lufthansa, British Airways and Air France are fighting back, and the old strategy of doing it through a subsidiary equivalent is receivign a revival. Besides Lufthansa, British Airways (as part of the International Airlines Group which is already supported by Spanish low-cost carrier Vueling) has introduced Level, and Air France annoucned plans to launch Joon which, however, it says, is not a low-cost carrier.

The competition does not stay the same for long in the aviation business. Little surprise that Etihad has decided to step back from its acquisition spree.

Travelling across Europe in summer: Expect flight delays

Travelling across Europe during the summer can be a nightmare should anything happen to disrupt the flow of the peak traffic. It may be worse this summer, and travellers should expect delays. Already there are stories of a number people who have missed their flights.

British Airways, Ryanair and EasyJet have advised their customers to allow plenty of time to get through the airport because of enhanced immigration checks. Ryanair suggests that customers arrive at least three hours before departure time.

The European Commission said this is “the price of security”. It is not something most people want to argue about for their safety. New measures to check potential terrorist threats have been introduced, but it looks like some airports are not ready for the implementation. Passengers complained about inadequate border control booths and staff to handle the usual surge in summer travel.

The summer months in the past had also experienced disruptions caused by industrial action. For now, strike action by security workers at Barcelona Airport every Friday, Sunday and Monday since August 4 to last throughout the season has added to the woes of travellers. Let’s hope other disgruntled airport staff and airline crew do not see this as an opportune time to join them.

It may make sense to put off travel to outside the peak months, but for many people this just isn’t possible because of work, school and other commitments.

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.

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.

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!