• BUSINESS FLYER PROGRAMME FOR SMALL ENTERPRISES
• AIRLINE INDUSTRY – DEEP RECESSION
• MORE OR LESS SEATS?
• BRUSSELS AIRLINES TO JOIN STAR ALLIANCE
• WORLDWIDE ENTERPRISE NEEDED TO COMBAT CRISIS
• EUROPEAN AIRLINES TO SUFFER HEAVY BLOWS
• JET AIRWAYS FULLY ACTIVE AT ITS BRUSSELS HUB
• SHORT NEWS
• PEOPLE ON THE MOVE

BUSINESS FLYER PROGRAMME FOR SMALL ENTERPRISES

Airline alliance oneworld has significantly upgraded its businessflyer website. The businessflyer programme is aimed at small and medium enterprises who book flights regularly but do not have the volume to negotiate corporate discounts. Entry is free, and any interested company can sign up on-line and have their membership approved within 24 hours.
Once you’re in, the benefits seem significant. You can enjoy discount air fares to more than a hundred cities in Europe, North America, South America, Asia and Australasia in return for a more regular relationship with oneworld. There is no minimum volume, you can choose from the full range of tickets and discounts are clearly displayed. Tickets also immediately qualify for frequent flyer points.

businessflyer only exists in 6 countries that oneworld regards as key markets; France, Germany, Italy, the Netherlands, Switzerland and Belgium. Before the revamp it had been running for 2 years in Belgium but without the same level of strong growth achieved in other countries. New Market Development Manager for oneworld Mairead Ryan wonders if the Belgians’ healthy scepticism may have something to do with it: “You’re right; it does sound too good to be true!” There genuinely doesn’t seem to be a catch, so surely it’s got to be worth a try? Interested companies can sign up on:

http://www.oneworld.com/ow/air-travel-options/business-travel/businessflyer/belgium

AIRLINE INDUSTRY – DEEP RECESSION

The credit crisis has hit the international airline industry hard. Companies find themselves facing ever decreasing plane seat occupancy rates and drops in profit. Manufacturers will almost certainly see less orders coming in.

On top of this are the extreme fluctuations in the price of oil: the sky high price last summer was followed by a sharp fall that was not necessarily good news for the sector. And if these external factors were not enough, discontented staff went on strike at Boeing, Air France and Alitalia, amongst others.

It’s amongst the low cost carriers that a change in the market is usually felt first, as rising costs have a relatively bigger impact on them than on the network carriers. For example, most low cost airlines do not charge fuel supplements and therefore have to absorb rising prices themselves. This was only too clear in easyJet’s net profits, which dipped by 45 percent in 2008 from 152 million pounds to 83 million pounds, and this despite a 17 percent increase in passenger numbers.

Competitor Ryanair had an even tougher time, with a 77 percent drop in profits from April-September 2008 despite a 19 percent increase in passenger volumes (only achieved by a price cut of 4 percent).
On the other side of the Atlantic, low cost carriers fared no better. American Southwest Airlines went into the red in November 2008 for the first time since 1991, an ironic victim of its own fuel price hedging policy.

 

Flag carriers
Of the network carriers, British Airways had by far the worst results: a half yearly loss of 58 million euros as opposed to a 584 million euro profit last year. Air France-KLM, the world’s largest airline (by turnover) saw its profits go up in smoke, with an 83 percent drop in profits in the first two quarters of 2008-2009. Lufthansa also saw a 75 percent drop in its net profits in the third quarter and has issued a profits warning for the whole year.

Amongst the middle-sized European airlines, Iberia booked the worst results, with an 80 percent drop in profits in the third quarter.

 

United States
US Airways blamed the rollercoastering oil prices for its 865 million dollar losses in the third quarter of 2008. Northwest Airlines, also made a huge third quarter net loss of 317 million dollars, whilst Delta Airlines lost 50 million dollars in the same period; not the ideal financial situation while the two airlines are fusing. Continental Airlines also lost 236 million dollars in the third quarter, as opposed to a 241 million dollar profit in the same quarter last year. In addition to the oil price, Continental and the other American airlines suffered from the after-effects of Hurricane Ike, that ravaged the south of the US at the beginning of September.

 

Emirates
Things fared no better in the Middle East.  Take Emirates, the Dubai-based airline that has managed to avoid previous crises and that has expanded aggressively in the last few years. Now even Emirates has succumbed to the high oil price fiasco and has seen both its profits and its occupancy rates fall.

MORE OR LESS SEATS?

The trend is repeating itself amongst airlines the world over: drastically reduced profits and lower occupancy. Most companies have reacted using the classic model of reducing capacity. But typically, Ryanair have bucked the trend by opting for the opposite approach. Ryanair boss Michael O’Leary announced that Ryanair would offer not less but more flights, and at a lower price, to increase its market share. ‘We love crises. The best thing that can happen to us this winter is a good, deep recession’ said O’Leary in newspaper The Scotsman. O’Leary’s reasoning is as follows: the market will repair itself at some point and profits will return. It is now the moment to ensure that the weakest airlines simply disappear from the picture. Ryanair also hopes to profit from over production by plane builders to pick up some bargains.

Whether this over-production will become reality is not yet clear.

Source: zakenreis

BRUSSELS AIRLINES TO JOIN STAR ALLIANCE

At their annual Board Meeting in December, the CEOs of the Star Alliance member airlines voted to accept the application of Brussels Airlines to become a future member of the alliance.

Brussels Airlines is the Belgian airline offering the widest choice of flights to and from the “capital” of Europe. With a fleet of 45 aircraft the airline operates some 300 daily flights to 55 European airports and 15 African destinations.

Glenn Tilton, Chairman, President and CEO of United, in his role as chairman of the meeting said, “Brussels Airlines further strengthens the Star Alliance by offering greater connectivity throughout Europe and Africa to better serve the international travel needs of all our customers.”

For the upcoming integration in Star Alliance, Brussels Airlines will be assisted by its sponsor Lufthansa. Through its membership in Star Alliance, Brussels Airlines will be able to offer its passengers a variety of benefits. On the network side for instance, the airline will be able to offer its passengers seamless travel across the Star Alliance network which will expand to cover 1,074 destinations in 174 countries*.

Frequent Flyers in the Brussels Airlines Privilege programme will be able to collect and redeem miles on all other Star Alliance member carriers.

WORLDWIDE ENTERPRISE NEEDED TO COMBAT CRISIS

Director General of IATA (International Air Transport Association) Giovanni Bisignani has said that the possibility of operate worldwide is of crucial importance to airlines as they attempt to combat the current recession. During a presentation in Geneva, Bisignani once again stressed that the Chicago agreement, in which the current bilateral agreement is anchored, is out of date. “The agreement denies airlines the basic freedoms that are necessary to enter markets, attract worldwide capital and to fuse and consolidate. The losses amongst airlines clearly show that airlines are feeling the recession, just like every other sector. But unlike other industries, we do not have the necessary commercial tools to manage the recession”. 

As a result of this, Bisigani believes that consolidations and partnerships are restricted to ‘internal’ markets. “Delta met Northwest and Lufthansa with bmi, Brussels Airlines and Austrian are the most recent examples of this,” says Bisignani. “The announcement of fusion talks between British Airways and Qantas could help to break this pattern and increase the playing field, but restrictions with regard to foreign ownership and political obstacles will undoubtedly complicate the fusion process. Travellers want safety and efficiency. No one cares who owns the airline. The flag on the aeroplane’s tail is throttling the industry.”

Source: Zakenreis

EUROPEAN AIRLINES TO SUFFER HEAVY BLOWS

The International Air Transport Association (IATA) expects that Europe and Asia will suffer heavy blows at the hands of the recession. The only region that will in any sense escape the is the US, according to IATA’s head economist Brian Pearce. "The losses will be greater in Europe and Asia. Fuel prices may have fallen, but because the airlines in this region have covered their fuel needs in advance (hedging) they will only start to profit from the cost benefits from next year. In addition, the dollar is strengthening, thus resulting in less cost advantage for European airlines. The US is better prepared, because many airlines had pre-emptively reduced capacity due to the expensive oil. In addition, the American airlines’ inability to hedge, due to lack of cashflow, will now be to their advantage.”

For 2008 IATA predicts a worldwide loss of 5 billion dollars for the airline industry. In 2009 there will be a loss of 2,5 billion dollars. According to Pearce, the current recession is the worst in 30 years. "Airlines are parking their old models. In September, 200 were grounded each month. New planes are being delivered, but the tempo is slower. The only positive thing about this is that the world fleet will become more efficient and CO2 emissions will fall."

Pearce expects the crisis to continue until 2011. "For 2009 we predict a decline of 3 percent in passenger kilometres and little growth in 2010. The industry will only recover in 2011.

In total, the airline industry will generate 35 billion dollars less income in 2009 as a result of the financial crisis. "This amount is greater than the cost savings from cheaper kerosene” according to Pearce. Business and first class are hardest hit, with 7 to 8 percent less tickets sold in the last few months as compared to 3 percent less in economy class. Pearce expects lower fuel prices and intensive competition will lead to a reduction ticket prices of about 5 percent in 2009.

Source: Zakenreis

JET AIRWAYS FULLY ACTIVE AT ITS BRUSSELS HUB

In contrast to recent reports in the Belgian press, the Indian airline Jet Airways will remain fully active at its Brussels hub. Despite the economic decision to temporarily stop direct flights between Brussels and Bangalore and the decision to bring in A330-200 models on all routes from Brussels, Jet Airways still serves six international destinations daily: Newark and JKF in the US, Toronto in Canada and Delhi, Mumbai en Chennai in India. Bangalore remains accessible via the airline’s internal flights.

In addition, the famous Jet Airways Lounge will not remain empty or shut down, as has been mistakenly reported. Jet Airways receives 180 business class passengers a day who use the lounge.

The Indian carrier therefore remains an important player at the airport and will continue to consolidate its European hub in Brussels.

SHORT NEWS

Switzerland to become 25th member of Schengen Zone
The EU’s 27 Home Secretaries have decided that Switzerland is now officially part of the Schengenzone. From December 12th 2008 there will no longer be person and passport controls at Swiss customs posts. There is not yet free transport of goods and baggage will be regularly checked. In Swiss airports, suppler passport controls will only come into place from 29th March 2009.

Dutch flight tax results in drop in passenger numbers
In the first six months since the introduction of the flight tax, 525.000 fewer passengers have departed from Schiphol. This converts to a billion euros of lost income. Passengers have moved to countries such as Belgium and Germany. Brussels has noticed a 74% rise in Dutch passengers.

Creation of Central European airspace agreed
During a European summit in Bordeaux, six countries (Belgium, Holland, Luxembourg, Germany, France and Germany) have signed a statement of intent to create a Central-European airspace. The disappearance of borders in the air prevents planes from having to make detours, which currently result in unnecessary detours and toxic emissions. The new airspace will be called FABEC (Functional Airspace Block Europe Central) and should be operational by 2012.

Zen at the airport
Frequent traveller Rattan Chadha, brain behind fashion brand Mexx has teamed up with architects Concrete to create CitizenM, a futuristic new hotel at Amsterdam’s Schiphol airport. The hotel’s small, modern and wallet-friendly rooms are ingeniously designed and cost from 69 euro per night.

www.citizenm.com

Luxury at Zaventem
Anyone flying to a European destination can now enjoy shopping in a brand new shopping centre on the second floor.  Shops include Samsonite, Massimo Dutti, Flamant and Starbucks, and there is even a hip new wine bar, Beaudeville.

www.brusselsairport.be

No body scanners yet at European airports
The European Commission has put the controversial plan to install body scanners at European airports in the deep freeze. The scanners enable you to see through passenger’s clothing and are already in use at Schipol. It has also been decided that the rules regarding the transport of liquids and gels in the cabin will remain in force.

Fat people have right to two plane seats
The Canadian high court has decided that fat people in Canada have the right to two seats on board planes. They therefore do not have to buy two tickets, as most airlines insist they should. The court characterises being extremely overweight as ‘functional invalidity’. If necessary, airlines must therefore allocate two seats.

Black list of airlines
Since March 2006, the European Commission has drawn up a black list of airlines. Airlines on the list are banned from landing in or flying over EU countries. Research carried out on behalf of Vliegwinkel.nl has shown that at least a quarter of Dutch people check the list when they book a flight. This doesn’t mean that Dutch people are scared of flying, however, with 83 percent saying that they are not afraid at all. The safety of airports is a different matter; extra safety measures since 11 September 2002 have actually made 30 percent Dutch people more anxious at airports.

Personalized in-flight magazines to be launched at Heathrow
Global bank HSBC will be offering passengers at Heathrow's Terminal 1 a chance to select magazine articles on topics they're interested in and have them bound into a hardback form they can take on their flight. The two-week pilot effort is part of a campaign to promote the HSBC Premier Card. If extended beyond the pilot phase, such an initiative could also be offered as a perk to Premier customers. Either way, it's just one more piece of evidence that the world is becoming thoroughly personalized— let consumers have it their way, or they'll have it somewhere else!
www.hsbc.com

Source: Springwise

Star Alliance – X-mas drink & lunch
The new restaurant & tapas bar Beaudeville in the Brussels Airport transit zone was the venue for the X-mas luncheon of the Star Alliance for its corporate clients. Much to announce during that lunch, first of all of course the joining of Brussels Airlines! Other new items: check-in and ticketing all under the one Star Alliance heading now. Brussels Airport is now home to 14 Star Alliance members with new members Air India, TAM (Brazil) and Continental Airlines.

Lost luggage volumes go down
The amount of lost luggage on European flights has dropped dramatically in the last few months, according to the Association of European Airlines. The improvement coincides with the increased punctuality of both inter-European and intercontinental flights.

Lufthansa launches Lufthansa Italia
Lufthansa has launched Lufthansa Italia for flights from Northern Italy to other Europen destinations. Six planes will begin operations in February. From March onwards there will also be flights to Brussels.

More and more airports offer self-service check-in
The number of airports to offer self-service check in for multiple airlines has increased from 10 in 2004 to 130 today, according to IATA. Around 30 percent of passengers uses the machines to check in.

Round-the-world tickets online
International airline alliance oneworld has announced that it will be the first airline to offer online round-the-world Explorer tickets. These will allow passengers to fly throughout the world using any of oneworld’s ten partner airlines along with their nearly twenty affiliates. Tickets can be booked using an interactive map system and are then issued by email.

www.oneworld.com

No European Airlines on blacklist
There are no European airlines on the revised black list of unsafe airlines. However, newcomers to the list are Siem Reap Airways from Cambodia en Angolan airlines. In addition, there is still a flight ban on all airlines from Indonesia, Equatorial Guinea, Kirgizia, Liberia, Sierra Leone, Swaziland, Gabon and the Congo.

http://ec.europa.eu/transport/air-ban/list_en.htm

New proposal should make European flights cheaper
The European parliament has taken up a proposal that should make flights within Europe cheaper. New European rules will be introduced to govern for example the way that landing rights and safety costs are priced. Currently, individual airports determine their own pricing. The new law will mean that each EU member country must appoint a body to police such tariffs, and will apply to all airports with more than five million passengers per year.

Moves to terminal five completed
British Airways has completed all moves of airlines to the new Terminal 5 by 22nd October 2008. There are now more than 500 daily flights departing from the terminal.

 

 

 

PEOPLE ON THE MOVE

Continental Airlines appoints Linn Verscheuren as Account Manager for Belgium and Luxembourg
Linn studied ‘Tourism and Recreational Management’ at the Erasmus Hogeschool in Brussels and has previously worked as a Travel Consultant and Sales Representative.

Leo Van Wijk leaves Air France-KLM
Former KLM-topman Leo van Wijk stepped down on 1st January as second in command at  Air-France-KLM. Airline tycoon Leo van Wijk merged KLM with Air France almost five years ago. He moved to lead the team at the Sky-team-flight alliance, a group of airlines around AF-KLM, Delta/Northwest  Airlines, Aeromexico, Aeroflot, China Southern, Alitalia and CSA.

Marcel Buelens: ‘Man of the year’
Marcel Buelens (CEO of Brussels South Charleroi Airport) has been chosen as ‘Man of the year 2008’ during the gala dinner of the Belgian trade magazine ‘Travel Magazine’.

Sergio Herman is new chef at KLM
Since December 1st; KLM has been serving its World Business Class passengers with menus designed by top Dutch chef Sergio Herman from the 3 Michelin-starred Oud Sluis restaurant in Zeeland.

Back to the top