The Sage of Necker Island nails it

We have said several times that the proposal by IAG to buy Aer Lingus makes perfect sense for all parties. It is certainly the best available option for the Irish government to ensure the stability and growth of Aer Lingus and its employees. The idea that IAG just wanted Aer Lingus for its Heathrow slots was silly because part of the appeal for the company was the opportunity to carry large numbers of passengers to and from Ireland via its hubs – and they could not do that if that stopped flying to Ireland. Anyway, the Irish government has now agreed to sell its shares so that leaves IAG the job of doing a deal with the two minority shareholders, Ryanair and Etihad, who will have to decide whether they want cash or would prefer to remain passive investors.

Whilst logic pointed to the deal being good for all parties, anyone unconvinced only had to read a letter Richard Branson wrote to the Irish government asking them not to sell because, according to him, such a sale “would not be in the public interest”.

You can guarantee that whenever old Beardie uses that phrase, he means “not in the interest of Virgin”. He trots out the same old phrase every time he thinks the Virgin group’s franchise fees might be hit. In fact, on this occasion, it is quite hard to see Virgin Atlantic losing much, if anything from the deal – though that, of course is beside the point because in the Branson universe, any move by British Airways or its parent, is bound to be “against the public interest”.

Anyone who still had not made up their mind by this stage would surely have been swayed by another letter from that well known philanthropist, Donald Trump. Even he joined in the bandwagon by saying a sale would “not be in the public interest” because he was worried about the provision of air services for golfers at a new course he was developing. No doubt if golfers come to play in sufficient numbers at the new course, IAG will be only too delighted to fly them in.

With both Branson and Trump against the deal, IAG must have known the sale was as good as done.

Why saying sorry is so difficult

Thomas Cook have found themselves in a furore over the death of two children at a hotel in Corfu. Their real sin – in the eyes of the parents and the tabloid press – seems to have been that they did not express much contrition at the time and have steadfastly refused to apologise since then. The fact that they received a substantial pay-out from the hotel to cover damage to their reputation and PR expenses has, quite understandably, just added to fuel to the fire.

At the time of the incident in Corfu, Thomas Cook was in the hands of an arrogant and incompetent management who were running the company into near bankruptcy and awarding themselves ever-increasing salaries and bonuses. Their poor behaviour in this case was simply part of an overall malaise in the company. These people departed a long time ago and the person brought in to bring the group back into shape has also left which, if judged by the stockmarket’s reaction, was a very positive move. The company is now, finally, in more sensible hands but the new management will really have their work cut out to rescue this particular situation.

The standard PR advice when a company is involved in an event where people are killed or injured is that the CEO should make a full and frank statement of contrition. CEO’s are human too; they have wives and children and have not set out to hurt their customers. In many cases, they will be genuinely shocked and upset at what has happened.

However, despite the PR advice, they will be firmly told by their company lawyers that they must not say anything that could be seen as accepting even a tiny bit of liability. The company’s insurers will probably back this up with a threat to suspend cover if the CEO says anything remotely prejudicial to a possible legal case.

In many instances, a CEO is tied. He knows what he should say – and probably want to say – but cannot.

I was actually rather shocked at the reaction of the CEO of Lufthansa to the Germanwings crash. Within days of the accident, and well before even a preliminary report had been prepared by official investigators, he appeared to be accepting some of the blame. In one way, his reaction was spot-on – it was quite clearly honest and heart-felt. He was as shocked and upset as anyone. The company’s sensitive behaviour was almost a text book example of how to behave in such an event. But had he cleared his comments with his insurers or did he just feel it was worth the risk?

Thomas Cook will have to pay for the sins of their previous management but properly-managed, honest companies have a huge problem balancing the opposing demands of their PR advisers and their insurers.

Route News Stop Press

• AeroMexico is launching a daily Mexico City–Vancouver service in December.

• British Airways is launching a thrice weekly Heathrow–Reykjavik service at the end of October and a twice weekly Heathrow–Salzburg service on 5th December.

• TAM Airlines is launching a four-times weekly service between Brasilia and Buenos Aires Ezeiza in 3rd July.

• Thomas Cook Airlines is launching twice weekly services from Manchester to Boston and Los Angeles in May 2016.

Turkish Airlines reveals too much

Airlines can try to reverse a  poor reputation by spending a fortune on new liveries, glossy advertising and new aircraft and then, rather too quickly, a chance remark reminds the world that not so much has changed.

Turkish Airlines had a shocking reputation for safety and service and, to its credit, it has improved though not as much as it needs to. They are definitely not an airline that should be handing out advice to Lufthansa on how to train pilots. 

The CEO of the airline, Temel Kotil, apparently has the Germanwings crash all sorted out. “The crash happened after the pilot broke up with his girlfriend” he said in an interview with a Turkish magazine, which is why Turkish Airlines “encourages” its pilots to marry. He also said that his airline was anxious to recruit more female pilots for the same reason.

He is clearly a man of many talents. Not only the CEO of an airline but a world-class psychiatrist as well. Those who have studied the issue of depression will no doubt be fascinated to hear Mr Kotil’s thesis that depression affects single men so much more more than married men or women.

Suggesting that pilots should be “encouraged” to marry has a slightly ominous tinge to it in the context of a country that is veering towards a form of Islamic dictatorship.

There has long been an understanding that airlines never comment publicly on the accidents of other companies. The CEO of Turkish Airlines needs to be forcibly reminded of this.

Meanwhile, these silly remarks are unlikely to make passengers travelling with Turkish Airlines feel any safer.

 

What has gone wrong with Virgin Atlantic?

The water cannon salute is a traditional gesture made by airports to mark the first, or sometimes, last flight by an airline or a type of aircraft. It happens several times a month around the world without incident. Unfortunately, the most recent salute went wrong when fire crews welcoming a new Virgin service from Atlanta to Manchester (which replaces flights by their shareholder, Delta) pressed the wrong button and covered the aircraft in foam rather than water.

Cue much amusement around the world. 

True, the incident was not funny for the passengers hoping to travel on the aircraft who were delayed overnight but it is hard not to see the funny side. It is like watching a man drive his brand new Mercedes into a car wash and having it flooded because he had forgotten to close the windows. You really shouldn’t laugh but…

In the old days, Virgin Atlantic’s over-active PR people would have been sure to join in the fun. When everyone else is laughing at you, the only sensible option is to join in. We would have expected a few witty one-liners at the very least.

Instead, the most Virgin Atlantic could do was to dispute the fact that the flight was cancelled. According to them, it was merely delayed overnight for the operating crew to take the legal minimum rest. And that simply begs the question as to why they did not immediately replace the aircraft and crew with another aircraft and crew from Heathrow.

In the same circumstances, we imagine even the normally straight-laced US airlines would have found something amusing to say. But Virgin, once the airline that was so eager to put the “fun” back into flying is a very different airline today. 

Ryanair have the last laugh

Last week Ryanair said that the Board had given agreement to start flights to the US within four years. Then, a few days later, Michael O’Leary stepped in and said it was all a mistake and the airline had no such plans.

Cue a long list of articles in travel business publications claiming that the airline had made fools of themselves.

Actually, the people who had made fools of themselves were these supposedly serious publications that had immediately followed Ryanair’s initial announcement with long, pontificating articles about how Ryanair would be able to shake up transatlantic flights and – even – threaten the future of current major airlines.

As we said when Ryanair made its original “announcement”, there was really very little that was new – just a vague remark that the airline could start flights within a few years. There was no commitment and, as we added, the airline did not have any current orders for suitable aircraft. Ryanair have tossed around this idea so many times. We are quite sure they have many thick files on the subject and periodically set feasibility teams to work. One day, they might well give it a go but there was nothing to suggest that a launch was in any way imminent or even that it was being planned.

As Michael O’Leary once said, you should never believe anything Ryanair say in public. All the so-called experts who broke that rule should feel suitably embarrassed.

Of course, there is one way that Ryanair might start transatlantic flights quite soon. There are vague whispers that they might make a bid for the struggling Norwegian. Ironically, part of the reason for that airline’s problems is its new longhaul network. Ryanair do not normally buy airlines – it is cheaper to watch them disappear and then pick up the routes they want – so we would not place much credence on these rumours. But you never know.

If that happened, the assembled mass of travel business journalists would probably hyperventilate. 

 

The new Greece?

A country where the flag-carrying airline has suffered a long series of on-off strikes from different employee groups. At the moment, the pilots are on the second day of a three-day strike called at short notice – the twelfth in the last couple of years.

Last week two of the country’s airports suffered serious delays as ground staff walked out. A number of other airports have also had similar strikes in the last few months, including one at the country’s leading airport which lasted several days.

A new airport has still not been opened leaving it years behind schedule and billions over budget. Now there are suggestions that some of the problems are not just down to technical ineptitude but corruption as well.

And the country’s currency is sinking on world markets.

But it is not all bad news. At least the trains are still running since last week’s strike was called off. The issues which have dogged the railway system for the last eighteen months have not been resolved, just pushed into the long grass and are almost certain to lead to further strikes or threats in the near future.

The country, of course, is Germany.

The Greeks have been striking much less in the last couple of years but, sadly, they seem to have exported that particular talent to Germany. Bild is known for its anti-Greece headlines – maybe it is time they did a comparison graph of strike days in Germany compared to Greece.

Sadly, at the moment, booking a ticket for future travel with Lufthansa is a lottery. If you want a reliable airline, maybe you would be better off travelling with Greece’s main airline, Aegean.

 

Ryanair to the US – why now?

Yesterday’s announcement that the Board of Ryanair had given provisional agreement to planning transatlantic services was actually rather meaningless. The timeframe of “four to five years” for starting flights is vague, they do not have aircraft on order and they would have to come to agreements with individual airports so the talk of “fourteen destinations” is rather premature.

Sooner or later, Ryanair will start services to the US. It is just too tempting. They might well lose money but will avoid making fools of themselves as Norwegian have done. I am sure they have been looking at the possibility of starting flights to the US for some years. One day they will but it might not be tomorrow, or even the day after.

So why the sudden announcement?

The Irish government appears to be very close to agreeing the sale of Aer Lingus to IAG. Ryanair remains a shareholder and has enjoyed being a thorn in the side of the Irish government. It looks as if it will finally be forced to sell its shareholding in the airline and will no doubt ensure it gets the best possible price. However, IAG wants Aer Lingus partly because of its transatlantic flights. 

Yesterday’s announcement sounds rather an unsubtle way of saying “OK IAG, you can have our shares in Aer Lingus. We don’t want them anyway because we are starting our own flights to the US”.

That will allow any forced sale of shares by Ryanair to be presented as yet another triumph.

 

India really, really does not want British tourists

Not content with deliberately snubbing British visitors by denying us the new electronic tourist visa which they have made available to citizens from some European countries and the US, the Indian government has now added a further barrier.

With almost no notice, they have announced that from 14th March any new applications for tourist visas will have to be made in person at one of the various regional centres. Appointments must be made in advance.

So, if you want to go to India, you have to pay around £100 in fees, make an appointment to go to one of the centres and then wait. The whole process could easily take a month and, of course, that depends on an appointment at one of the centres being available at a time that is convenient.

The Indian government really does not need to rub it in. We get the message – British visitors are not welcome in India.

Spare a thought for @tonyfernandes

If you are having a bad Monday morning, maybe you should spare a thought for Tony Fernandes who is not enjoying the best start to 2015.

His airline, Air Asia, is suffering from the still unexplained crash of an aircraft off Indonesia and his football club, QPR, is getting very close to being relegated from the English Premier League.

Throughout all his difficulties, Mr Fernandes has shown tremendous leadership. In Indonesia, he has had to contend with incompetent and corrupt government authorities combined with wild media speculation whilst keeping up the spirits of the airline’s staff and ensuring the company stays on track. He has done a remarkable job and the way he has handled the crash, showing genuine care, will become a text-book example of disaster management.

He has handled the problems of QPR smoothly as well. He took over a club in disarray and made some initial errors which have led to the current situation. Throughout, he has acknowledged his own part in the problem and remained thoroughly supportive of those around him.

He has been described as Asia’s Richard Branson but this is unfair. Whenever a Virgin company has a problem, the PR machine wades in to blame others. Virgin never blames itself. Crucially, Mr Fernandes takes personal responsibility and promises to learn from any mistakes.

Unfortunately, fighting so many fires might have left him feeling a little weary. His Air Asia twitter feed @tonyfernandes covers both the airline and the football club. Rather sadly, four consecutive tweets this morning could apply to either the airline or the football club and his followers have to guess which he is referring to.

“The enthusiasm, the genuine care, the hard work…” 

“Players have been incredible”

“I also want to thank all our guests. Bookings have been stronger than last year.”

“Not about money, not about contracts….”

One thing is sure, no one can doubt his personal involvement in both the airline and football club.