A bleak year for airlines

It looks quite certainly a bleak year for airlines as Covid-19 keeps people away from travelling. The outbreak has become more extensive than anticipated, short of being classified as pandemic by the World Health Organization.

Cutting capacity

Many airlines are cutting back or suspending services not only to destinations in China where the outbreak started but also across the world.

Among them are:

Courtesy Singapore Airlines

Singapore Airlines, which has cancelled almost 700 flights across its network through to May. Its low-cost subsidiary Scoot has cancelled all flights to China.

Cathay Pacific, which so far has seen flights reduced by more than 75 per cent till the end of March, with hints of more to be scrapped.

Qantas, which has reduced capacity to Hong Kong and suspended flights to Shanghai and Beijing. It is also reporting weak demand for seats on flights to Singapore and Japan as well. Capacity to Asian destinations will be reduced by 15 per cent until the end of May. Its low-cost subsidiary Jetstar is also adjusting capacity as a result of the weaker domestic market.

Air France, which has taken out flights to China until the end of March.

British Airways, which has cancelled not only flights to China but also more than 200 flights from London to destinations in the United States, Italy, France, Austria, Belgium, Germany and Ireland in the latter half of March.

Ryanair, which will cut up to 25% of flights in and out of Italy from 17 March to 8 April..Ryanair chief Michael O’Leary said: “There has been a notable drop in forward bookings towards the end of March, into early April.”

EasyJet, which is cancelling some flights because of “a significant softening of demand and load factors into and out of our Northern Italian bases”.

United Airlines, which has suspended flights to China and axed flights to South Korea, Japan and Singapore as demand across the Pacific has fallen by as much as 75 per cent. Delta Air Lines has also cancelled flights to China.

Air Canada, which has cancelled all flights from Toronto to Hong Kong until the end of April.

Middle-east airlines, which are affected by action taken by the Gulf authorities. Iran as the epicentre of the outbreak in the region has seen flights to its airports cancelled by neighbouring United Arab Emirates (UAE), Bahrain, Oman, Jordan, Kuwait, Iraq and Saudi Arabia.

Events cancelled

The threat of the disease spreading easily at public events has led to many of them being cancelled, which in turn will affect the airlines which would have enjoyed a boon in carriage numbers.

Courtesy United Airlines

United Airlines for one has scaled back additional flights between San Francisco/Newark and Barcelona planned for the Mobile World Congress which has been cancelled.

Now all eyes are on the 2020 Summer Olympics to be staged in Tokyo.

Business travel, as noted by British Airways chief Willie Walsh, has been affected by the cancellation of large conferences. Some large corporations are also restricting executive travel.

International cruises, which pose a similar threat following the outbreak of the disease on the Diamond Princess docked at Yokohama, have also suffered from reduced patronage or cancellations, and this in turn reduces feeds from airlines from across the globe to the ports of call.

Reduced profitability

Expectedly airlines are predicting reduced profitability although some of them are optimistic about the impact as not being as drastic as it seems.

Air France-KLM warned its earnings would be affected by as much as €200 million (US$224 million).

Qantas said the COVID-19 outbreak would cost the airline up to A$150m (US$99m).

Air New Zealand expects the impact to be in the range from NZ$35 million (US$22 million) to NZ$75 million as travel demand to Asia drops.

Finnair is expecting a significant drop in operating profit this year.

Airlines which rely heavily on Asian traffic are naturally more affected, even more so budget carriers such as AirAsia and its long-haul arm AirAsiaX. Particularly vulnerable are airlines which are struggling to stay afloat, such as Norwegian Air Shuttle, which is cutting back on long-haul operations, and Hong Kong Airlines, which is 45 per cent owned by Hainan Airlines of the HNA Group, which itself is facing a sell-off by the Chinese government.

Cost cutting

Besides reducing or cutting capacity, expectedly many airlines are looking at cutting cost.

EasyJet is looking into reducing administrative budgets, offering unpaid leave, and freezing recruitment, promotion and pay rises.

Singapore Airlines is implementing paycuts of 10 to 15 per cent for senior executive management. General staff will be offered a voluntary no-pay leave scheme.

Cathay Pacific is asking employees to take unpaid leave.

Courtesy Airbus

Perhaps the impact is most felt at Hong Kong Airlines which has slashed in-flight services to a bare minimum and dismissed staff, targeting 400 of them.

What’s next?

While the industry contnues to grapple with the prolonged saga of the B737 Max jet predicament, the coronavirus outbreak could not have come at a worse time on its heels. In both cases, it is the uncertainty that poses the biggest problem. Soem airlines are pessimistic that the threat will blow over by the end of March, which is unlikely, while others are more cautious in their forecast, looking at the end of May. It is this uncertainty that makes one wonder if any of them might not survive the wait.

2019 Skytrax World Airline Awards: Who are the real winners?

It’s that time of the year when the airline industry is abuzz with the Skytrax World Airline Awards announced recently at the Paris Air Show.

There are surveys and there are surveys, if you know what I mean. Skytrax, which launched its survey back in 1999 (according to its website) is generally viewed with some regard. It is said that more than 21 million respondents participated in the 2019 survey.

But what can we read of the results?

Which is the real winner: Qatar Airways or Singapore Airlines?

Qatar Airways switched places with last year winner Singapore Airlines (SIA) to be the world’s best airline.

As far back as 2010 until now, the two airlines have been ranked one behind the other in the top three spots, except in 2012 when Asiana came in second place between Qatar the winner and SIA in third position. In the ten year period, SIA came behind Qatar in eight years, except in 2010 when SIA was second and Qatar third, and last year when the Singapore carrier became the world’s best ahead of Qatar in second placing.

It looks like a tight race between Qatar and SIA for the top spot, and going by the survey results, Qatar has outranked SIA. It has become the first airline to have won the award five times, one more in the history of the awards.

But SIA is still ranked ahead of Qatar for first class and economy class.

In the first class category, Qatar is not even a close second to SIA in first placing but fifth behind Lufthansa, Air France and Etihad as well

In the economy class category, Japan Airlines is tops followed by SIA and Qatar in second and third placing respectively.

Besides SIA has the best premium economy in Asia, second only to Virgin Atlantic worldwide. But,of course, Qatar does not offer that class of travel.

Additionally SIA tops for cabin crew, and Qatar is farther down the list in 9th position.

But Qatar wins for business class, followed by ANA and SIA in second and third placing respectively. So it seems there is heavier weightage for this segment which has become probably the fiercest battleground for the airlines. First class included, it also suggests the halo effect of the premium product, but it is the business class that is the primary focus in today’s business.

It also attests to the impact of the recency factor. Qatar obviously impresses with its cubicle-like Qsuite that comes with its own door to provide maximum privacy. Quad configurations allow businessmen to engage in conference as if they were in a meeting room and families to share their own private space. And there is a double bed option.

Which brings up the importance of having to continually innovate and upgrade the product to stay ahead in the race.

The top ten listing: Consistency equals excellence

The ranking does not shift much from year to year. Besides Qatar and SIA, there are some familiar names: All Nippon Airways (3rd this year), Cathay Pacific (4th), Emirates (5th), EVA Air (6th) and Lufthansa (9th). So there is not much of a big deal as airlines switch places so long as they remain in the premier list.

Hainan Airlines (7th) is making good progress, moving up one notch every year since 2017. Qantas (8th) is less consistent, moving in and out of the top ten list, Thai Airways retained its 10th spot for a second year.

It is no surprise that the list continues to be dominated by Asian carriers which are generally reputed for service. You only need to look at the winners for best cabin crew: Besides SIA, the list is made up of Garuda Indonesia, ANA, Thai Airways, EVA Air, Cathay Pacific, Hainan Airlines, Japan Airlines and China Airlines. With the exception of Qatar, no other airline outside Asia is listed.

If you to look to find out how the United States carriers are performing, scroll down the extended list of the 100 best and you will see JetBlue Airways (40th), Delta Air Lines (41st), Southwest Airlines (47th), Alaska Airlines (54th), United Airlines (68th) and American Airlines (74th).

Home and regional rivalry

Rivalry between major home airlines or among competing regional carriers is often closely watched.

Air Canada, placed 31st ahead of rival WestJet at 55th can boast it is the best in North America. That’s how you can work the survey results to your advantage.

ANA (3rd) has consistently outdone arch rival JAL (11th). In fact, ANA has been the favoured airline in the past decade till now. It has Japan’s best airline staff and best cabin crew. Across Asia, it provides the best business class. Internationally, it provides the best airport services and business class onboard catering.

Asiana (28th) is favoured over Korean Air (35th ).

The big three Gulf carriers are ranked Qatar first, followed by Emirates (5th) and Etihad (29th).

Among the European carriers, Lufthansa (9th) leads the field, followed by Swiss International Air Lines (13th), Austrian Airlines (15th), KLM (18th), British Airways (19th), Virgin Atlantic (21st), Aeroflot (22nd), Air France (23rd), Iberia (26th) and Finnair (32nd).

What about low-cost carriers?

Worthy of note is how some budget carriers are ranked not far behind legacy airlines. AirAsia (20th) is best among cohorts. EasyJet (37th) and Norwegian Air Shuttle (39th) are not far behind the big guys in Europe. Among US carriers, Southwest Airlines (47th) is third after JetBlue (40th) and Delta (41st).

Also, pedigree parents do not necessarily produce top-ranked offshoots. Placed farther down the list are SIA’s subsidiary Scoot (64th) and the two Jetstar subsidiaries of Qantas – Jetstar Airways (53rd) and Jetstar Asia (81st). So too may be said of so-called regional arms. Cathay Pacific’s Cathay Dragon is ranked 33rd, but SIA’s SilkAir is way down at 62nd.

Pioneer of the modern budget model Ryanair is ranked 59th.

Down the slippery road of decline: Aisana Airlines and Etihad Airways

If it is difficult to stay at the top, it is easy to slip down the slippery road of decline. Asiana and Etihad are two examples.

Asiana was ranked world’s best airline in 2010 and became a familiar name in the top ten list up to 2014, after which its ranking kept falling: 11th (2015), 16th (2016), 20th (2017), 24th (2018) and 28th (2019). Its erstwhile glory has been whittled down to being just best cabin crew in South Korea.

Etihad did reasonably well for eight years until 2018 when it was ranked 15th, and a year later suffered a dramatic decline to the 29th spot. That, despite beating Qatar to be this year’s best first class in the Middle East.

As I stated at the onset that there are surveys and there are surveys. Some are not specifically targeted , whether its interest is business or leisure for example. There is always an element of subjectivity and bias in the composition and weightage, and this renders no one reading as being definitive. At best, we can read across several creditable surveys to know with some conviction how the airlines really measure against each other.

Read also:

https://www.todayonline.com/commentary/can-singapore-airlines-overtake-qatar-worlds-best-airline

What defines a best airline?

What defines a best airline, considering the different surveys that rank them? Conde Nast Travel has just released its readers’ choice of the best in 2017, and it is no surprise the list is made up of Asian, Middle East, European and SW Pacific carriers.

Courtesy Air New Zealand

Of course, it depends on the readership, but recognizing that, it also points to what really makes these airlines stand out. It is clear that the premium class service weighs heavily – the seat comfort and the fine food.

Etihad Airways (ranked #16) offers “the future of first-class comfort: a three-room “residence” with a bedroom, private bath with shower, and lounge.” Emirates (#4) offers “posh perks for premium fliers – cocktail lounges, in-flight showers… part of the reason it scores so high among travellers.” And the suites on Singapore Airlines (#3) offer “a pair of fully flat recliners that can be combined into a double bed.”

Mention is made of the premium economy class in almost all the ranked airlines” KLM (#20), Lufthansa (#19), Japan Airlines (#17), All Nippon Airways (#13), Qantas (#12), Cathay Pacific (#10), Virgin Atlantic (#7), Virgin Australia (#6), Singapore Airlines (#3) and Air New Zealand (#1).

So it may appear to be the voice of the premium travellers that is being heard. Maybe coach travellers aren’t too concerned about the ranking, more driven by price and less frilly factors, although to be fair, the Conde Nast report did mention of at least one airline, i.e. Etihad Airways (#16), not ignoring “those sitting in the back.” While many travellers may resign to the belief that the economy class is about the same across the industry, it is reasonable to assume that an airline that strives to please its customers in the front cabins will most probably carry that culture or at least part of it to the rear.

Although you may draw consensus across many of the surveys, it is best best to treat each one of them in isolation. It is more meaningful to try and draw intra conclusions within the findings of the particular survey.

You will note in the Conde Nast findings, there is an absence of American (including Canadian) carriers, never mind that of African and South American carriers.

Asiana Airlines (#8) is ranked ahead of Korean Air (#11).

All Nippon Airways (#13) is ranked ahead of Japan Airlines (#17). V

Virgin Australia (#6) is ranked ahead of Qantas (#12).

The order of the “Big 3” Gulf carriers is as follows: Qatar Airways (#2), Emirates (#4) and Etihad Airways (#16).

Of European carriers, there is the conspicuous absence of the big names of British Airways (compare Virgin Atlantic #7) and Air France, and the pleasant surprise of Aegean Airlines (#9) while SWISS seems to be regaining its erstwhile status years ago as being the industry standard.

The best belongs to Air New Zealand as the quiet achiever.

Ultimately, the results also depend on the group of respondents whose experiences may be limited to certain airlines.

Other airlines ranked in the top 20 of the Conde Nast survey: Finnair (#14), Turkish Airlines (#15), EVA Air (#18).

What conclusions can you draw in an airlines survey?

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.

KLM advances green effort

Courtesy Boeing

KLM last week becomes the first airline to operate a regular weekly transatlantic flight, using an eco-friendly fuel mix of 25 per cent Dutch airline cooking oil and 75 per cent jet fuel.

The cooking oil, which comes from restaurant wastes, is able to reduce carbon emissions by up to 80 per cent. This is noteworthy, considering that aviation is responsible for 2 per cent of global emissions, and that number continues to grow.  

Captain Rick Shouten, who piloted KLM’s maiden transAtlantic biofuel flight from Amsterdam’s Schiphol to New York’s JFK, told the New York Post: “For pilots, it’s totally transparent. It’s as if you’re flying a normal aircraft.”

Back in Jun 2011, KLM too was the first airline to operate the world’s first commercial biofuel flight when it carried 171 passengers from Amsterdam to Paris, also using cooking oil. It was a major step forward in the green pursuit. Since then, a number of airlines have powered either test flights or commercial flights using a mix of jet fuel and plant alternatives that include jatropha, algae, camelina, carinata, coconut and babassu.

The list of airlines championing the green effort include Virgin Atlantic (which flew the first biofuel test flight from London to Amsterdam), AeroMexico, Air Canada, Air China, Air France, Air New Zealand, Alaska Airlines, Continental Airlines, Etihad Airways, Finnair, Brazil’s GOL, Iberia, Interjet, Japan Airlines, Lufthansa, Canada’s Porter Airlines, TAM, Thomson Airways and United Airlines.

However, still in its infancy stage, biofuel is expensive, and may cost as much as three times the price of regular jet fuel. “A lot still has to happen before biofuel will be available on a large scale and for it to be economically competitive in relation to fossil-fuel kerosene,” said KLM. “We cannot achieve this alone. We absolutely need the commitment and support of all the relevant parties: business, government and society.”

For it to be sustainable there has to be cheaper refining methods and widespread use across the industry. Support from national agencies at this stage is imperative, if only because saving the environment is everybody’s business.

Airlines must compensate passengers for post-strike delays

 

THE European Court of Justice has ruled that airlines must compensate passengers who suffer delays that occur more than a day after a strike.

Image courtesy Finnair

A case in point was a passenger whose Finnair flight was delayed, two days after a strike at Barcelona airport in 2006. Under the circumstances, the EU court ruled that the situation was comparable to a denied boarding even as the airline argued it was the result of a strike to clear the backlog. No compensation is applicable only if the delay occurred on the same day of the strike.

The Court said: “The occurrence of extraordinary circumstances – such as a strike – resulting in an air carrier rescheduling subsequent flights does not give grounds for denying boarding or for exempting that carrier from its obligation to compensate passengers denied boarding on those later flights,”

It is good news for passengers but bad news for airlines, particularly those which are prone to prolonged strike action by their staff or agencies. It is fair that airlines should be made aware that there is a cost to not delivering their contractual obligations as the EU continues to engage in an ongoing battle to promote the rights of passengers. But the challenge has always been one of interpretation and implementation.