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.

Porter Airlines to challenge Air Canada and WestJet

CANADA’s short-haul operator of two-hour flights, Porter Airlines, looks set to compete with the country’s largest two airlines – Air Canada and WestJet – for the longer haul across Canada and beyond to the United States and the Caribbean. Likely destinations include Los Angeles in the US and Vancouver, Edmonton, Calgary and Winnipeg in Canada, to be reached from its present base in Toronto – Billy Bishop Toronto City Airport.

Porter chief executive Robert Dekuce said: “It’s now time to spread our wings and look at some destinations that are little further out.”

Porter plans to acquire new and bigger jets – 12 Bombardier CS100 with options for 18 more – which are more powerful, quieter and have a longer range than its current fleet of turbo-props. The order cost C$2.29 billion (US$2.26 billion), and the first of these aircraft will only be available in 2017.

Courtesy Facebook

Courtesy Facebook/Porter Airlines

However, the plan is contingent upon approval by the federal government, the City of Toronto and the Toronto Port Authority to allow the new jets to land and take-off at Billy Bishop. This means extending the airport’s main runway by 168 metres at each end. Additionally, the terminal would have to be expanded to accommodate the new aircraft, and the increased frequencies and loads.

Air Canada and WestJet are enjoying good loads on the main trunk routes, and there is certainly room for increased competition which will provide air travellers with more options.

As for Air Canada, according to spokesman Peter Fitzpatrick, the national airline is seeking access to Billy Bishop as well. Further investments by the authorities should be premised upon opening its doors to other airlines as well.

KLM advances green effort

Courtesy Boeing

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.

Four more airlines go green – Porter, Air Canada, Aeromexico and GOL

IT is good news when yet another airline makes the effort to go green. This time, under the auspices of the International Civil Aviation Organization (ICAO), four airlines participated in four connecting flights from Montreal to Rio de Janeiro, each using different types of sustainable biofuels. Dubbed the Perfect Flight, operated by Porter Airlines, Air Canada, Aeromexico and GOL, it departed Montreal at 1130 hours on June 18 and arrived in Rio at 1400 hours a day after.

Picture courtesy The Vancouver Sun

Air Canada, which operated the second leg from Toronto to Mexico City, expected its flight to generate at least 40 percent fewer emissions by using jet fuel derived from recycled cooking oil and through other fuel-saving measures such as fuselage wash and wax to improve aerodynamics, installation of lightweight aisle carpet, streamlining push-back procedures to reduce fuel usage, taxiing aircraft to runway with one engine, minimizing taxi time to runway, reduced thrust takeoff, and optimized climb to optimal cruise altitude.

Air Canada executive vice-president and chief operating officer Duncan Lee said: “Air Canada fully accepts its responsibility to reduce its footprint and our first flight using biofuel tangibly demonstrates our ongoing commitment to the environment. Since 1990 our airline has become 30 percent more fuel efficient and we are determined to increase these gains through cutting-edge measures.”

Indeed with increasing pressure from environmental groups and following the controversy of the European Union’s carbon trading scheme which some nations and their airlines have voiced their objection to, there is an urgent need to find an acceptable global solution. Lest the industry becomes embroiled in messy disputes that could result in unnecessary and damaging retaliatory actions by the parties concerned, ICAO will have little choice but to play a more active role in pushing the agendaSo said Airbus President and CEO Fabrice Bregier: “To make this a day-to-day commercial reality, it now requires a political will to foster incentives to scale up the use of sustainable biofuels and to accelerate the modernization of the air traffic management system. We need a clear endorsement by governments and all aviation stakeholders to venture beyond today’s limitations.”

Canadian airlines report improved loads

CANADA’s largest two airlines – Air Canada and WestJet Airlines – reported better loads in June compared to a year ago.

Air Canada’s load factor rose to 85.6 per cent from 84.2 per cent a year ago when the airline suffered a strike by customer service agents. However, the improvement was also due to the increased passenger traffic by 1.5 per cent while at the same time the airline had trimmed capacity by 0.1 per cent.

In the same vein, WestJet’s improved load factor from 75.7 per cent to 79.0 per cent was the result of passenger traffic increase by 6.7 per cent outpacing capacity increase by 2.3 per cent.

Adjusting supply to better reflect the market’s demand has been a strategy that many airlines usually resort to in a sluggish market. As the industry continues to face uncertainty globally, the real stability test is in the months to come after the summer peak travel season. However, WestJet president and CEO Gregg Saretsky expressed confidence of the positive trend continuing. He said: “Advanced bookings for July and August remain strong.”

Air Canada president and chief executive Calin Rovinescu too was confident about the airline achieving its first profit in years, although the airline last reported a net loss for the quarter ending March 31 of C$210 million (US$207 million), which was 11 times higher than the C$19 million loss in 2011. He said the record load factor for June was the result of a “strategy to manage capacity to ensure high efficiency.” Indeed, the keyword is “efficiency”. Hopefully Air Canada’s labour problems are a thing of the past.

Canada’s regional carrier Porter Airlines, however, saw its June load factor dropping from 64.6 per cent to 62.0 per cent, but the airline maintained that the numbers “met our expectations”. This was because the higher number last year benefitted from a strike by workers at Air Canada. Also, while traffic grew 4.1 per cent, capacity went up higher by 8.5 per cent.

But all is not rosy for charter airline Air Transat, which posted a second quarterly loss of C$26.2 million. This would reduce the operator’s hope of returning to profitability this year, as the company’s president Jean-Marc Eustache admitted: “It doesn’t look like it’s happening, is it?” Mr Eustache is now eyeing Asia as the European market continues to lose its lustre. This would be in competition with Air Canada, which has already announced plans for a low-cost carrier to the region. But Mr Eustache insisted that Air Transat is a tour operator, not an airline.

Full airfare disclosure: Canadian airlines take the lead

CANADIAN carriers have taken the lead to disclose full airfare to make it easier for their customers to arrive at the full cost of flying – ahead of the government’s intention to make it mandatory, following in the footsteps of the European Union and United States.

Westjet Airlines was first to advertise fares that show the final cost payable, including all taxes and surcharges such as fuel surcharge, insurance and air security charges and airport improvement fee. This was followed by Air Canada occasioned by a seat sale to mark its 75th anniversary.

Canada’s third carrier Porter Airlines, which operates regional flights from its base at Toronto City Centre airport, said it would follow suit.

Credit to these airlines for not making an undue fuss over what can only be a fair and sensible move in their passengers’ interest. They now have every reason to demand that other airlines operating to and from Canada be not exempt when the rule comes into effect.

Air Canada levies baggage fee, risks losing customers

Travel light, which may be the message if you want to save bucks. But for Air Canada, it has come across as a matter of additional revenue to charge passengers who purchase tickets on Sept 7 and after for travel to the United States a fee of C$25 for the first checked bag. The current charge of C$30 for the second bag will also be raised to C$35. That makes a total of C$60 for two checked bags added to the fare.

Naturally, Air Canada customers are upset. Many of them see it as a money-grabbing move that is not only ill-timed when the market has become extremely price-sensitive but also deceptive. On the one hand, the airline may be advertising a cheap fare of, say, C$99, but it is collecting an additional fee in taxes and other ancillary charges – that can amount to as much as C$150. Only recently was Air Canada fined by the US Department of Transportation for deceptive price advertising online. The Canadian flag carrier did not disclose taxes and fees that would be added to the advertised fares.

US Transportation secretary Ray LaHood ruled: “When passengers buy an airline buy an airline ticket, they have a right to know how much they will have to pay.”

President of the Consumers’ Association of Canada Bruce Cran lampooned Air Canada’s new baggage fee as “another one of their schemes to drag a little more money out of us.”

In defence, Air Canada spokesman Peter Fitzpatrick said: “This new policy puts us in line with the majority of airlines flying in the transborder market, who have been charging for first bags for a long time.” He added; “Everyone understands that airlines are under tremendous cost pressures and I think they can appreciate that we need to take some steps to ensure our financial sustainability.”

Mr Fitzpatrick could be thinking about how US carriers collected US$5.7 billion last year from baggage and cancellation fees alone. But he would be sadly mistaken to think that doing as the US carriers do means better positioning for Air Canada and that its customers would remain loyal.

One, Air Canada would lose its differentiating advantage now that its customers have lost another reason to stick by it. And Air Canada is by no means cheaper to fly by comparison. Already, Canadians living in border towns and cities including the main hubs of Toronto and Vancouver are crossing the border on land and flying out of the US to take advantage of lower fares and taxes.

Air Canada also risks losing customers to compatriots Calgary-based WestJet and Toronto-based Porter Airlines, neither of which said it had plans for a similar first-bag fee. WestJet, which is Canada’s other major airline, charges C$20 for a second checked bag, plus C$50 each for a third and subsequent bag. Porter Airlines, which operates out of Billy Bishop Airport in downtown Toronto, is hopeful that some Air Canada customers may be encouraged to try its service.

Two, Air Canada cannot expect its customers to sympathize with its poor financial performance which best measures the efficacy of its management policies. In its latest financial report for the second quarter of 2011, the airline incurred a net loss of C$46 million, which was in fact an improvement of 85 per cent compared to a net loss of C$318 million year-on-year. It was a result that Air Canada President and CEO Calin Rovinescu said he was happy with, noting its achievement in spite of rising fuel prices and a 3-day strike by airport workers. Mr Rovinescu pledged the airline would “continue to explore additional cost reduction opportunities” and “to increase fares and fuel surcharges where competitively feasible, and to make adjustments to capacity as required.”

The question now is whether imposing a first-bag fee for US-bound and return flights is “competitively feasible.” And, next, whether this signals a levy of more such fees in the offing.

Presently, travellers flying on Air Canada to South America, Europe, Africa, the Middle-East, Asia and Australia do not pay a first-bag fee. But the fee for the second checked bag will be raised from C$50 to C$70 (which has already been in place for Europe and India). While some airlines, largely Asia-based, are still offering free carriage for up to two checked bags, it is unlikely Air Canada can push ahead with a first-bag fee for services beyond North America unless the fee structure is sufficiently changed to reflect the real cost of flying that may actually benefit some travellers without – or seeming to be – unreasonably overcharging others.

Charging for checked baggage carriage is apt to result in a spill-over of bags carried into the cabin although there are rules limiting its number, size and weight. If the situation becomes unmanageable, imposing a fee may be the best limiting measure. Already one American carrier – Spirit Airlines – is charging a fee for carry-on bags. The Detroit-based carrier, which prides itself as America’s first ultra-low-cost carrier, states on its website: “We empower you to save money on air travel by offering ultra low fares with a range of optional services – including bags – for a fee, allowing you the freedom to choose only the extras you value.”

You are what you do or not do. So too the corollary that you do or not do for what you are. Air Canada has to decide.

Interestingly, the move by Air Canada to levy a fee for the first checked bag for travellers to the US comes at a time when the airline is seeking approval from Canada’s Competition Bureau to enter into a partnership with Chicago-based United Continental, the world’s biggest airline. The two airlines would co-operate on a number of trans-border flights that would see a joint-monopoly for some routes. The Bureau has blocked the deal as it views it as a merger in disguise. Air Canada, on the other hand, warned that objection by the authorities would “impede Air Canada’s ability to compete, would have significant adverse effects on Canadian consumers and the development of Canada’s hub airports, and would relegate Canada and Canadian air carriers to a marginalised regional or local status in the international air transportation world.”

However, Canadians have become increasingly concerned about the Americanization of their country’s industries. The first-bag fee may well be trending towards a general practice that airlines, reluctant or unable to raise base fares, are seeking compensation in additional revenue derived from ancillary services. It is a lesson full-service airlines are humbly learning from low-cost carriers, except that it is only one side of the equation. For Air Canada, it is a worse problem of being seen to be carelessly and indiscriminately following a practice just to be in line with US carriers south of the border.