Airports and shopping

Some businesses might be struggling but consultants seem to be thriving. Whilst there are some who know what they are doing and understand the field they work in, there are too many who seem to think the more they complicate an issue, the cleverer they will appear.

I am just recovering from reading a tedious report on the sale of slots at Gatwick by flybe to easyJet. Lots of graphs, charts and complicated theories as to the the precise strategies of flybe, Gatwick and easyJet almost completely hide the real reason for the sale.

- Flybe has been losing money badly for several years. They have now embarked on a turn-around plan which is, almost, their last chance. Gatwick was not central to their route network and if someone is going to offer £20 million for the slots, you grab the cash with both hands.

- Flybe blamed Gatwick’s discriminatory pricing which hits smaller aircraft but other airports discriminate in a similar way. The simple fact is that flybe badly needed the cash – though obviously they could not say that.

- You might have thought that Gatwick, with its stated ambitions to be a rival to Heathrow, would actually want to keep flybe because of the domestic feeder traffic, but economics come before lofty ambition. Even ignoring the money they receive from each take off and landing, Gatwick wanted bigger aircraft because bigger aircraft have more passengers and more passengers means more business for the shops. Also, international passengers spend more than domestic passengers. Gatwick could surely have done a deal with flybe had they wanted to but their departure suits them very well – the choice between 80 passengers going to Newcastle and 180 going to Athens is a no-brainer. The airport will gain a little from increased landing fees with the bigger aircraft but it stands to gain much more from the additional retail revenue.

Simple – no graphs or pie-charts required.

Airport retail is hugely important to all travellers. Those who complain about the crowds of shops disturbing airport terminals really need to consider how much their tickets would cost without the income. No passenger is forced to shop – but we all enjoy the benefits.

And Heathrow has just announced a very interesting new benefit – free wi-fi. Once again, the press manage to miss the point. Almost every story I have read on the subject says the airport will be offering 45 minutes free wi-fi use each day. Some then pontificate about the aim of Heathrow to appear to be offering more, but they ignores the crucial part of the deal. You can actually get 90 minutes each day – all you need do is enter your Heathrow Rewards card number. Linking the free wi-fi to their shopping reward card is a very clever move. Anyone using the free wi-fi is going to be tempted to sign up to get the extra minutes – and if they sign up, the airport will have their email address and be able to hit them with lots of profitable add-ons.

Airports and shopping – the two are inextricably linked.

 

Has Etihad been very shrewd?

The announcement that Etihad had picked up a 24% share in India’s Jet Airways was generally seen as a coup for Etihad. Jet is probably the best of India’s airlines and the only one capable of being a credible international partner. The Indian government also agreed to an increase in the bilateral agreement which allows seats between India and Abu Dhabi to increase from 13,300 a year to 50,000 in the next three years.

India’s laws regarding foreign ownership of companies are hugely complicated. As part of the deal, and a way of ensuring their sway over Jet amounts to rather more than the stated 24%, Etihad have also purchased Jet’s Heathrow slots and leased them back to the airline. They have also taken a majority stake in the airline’s frequent flyer programme.

They did something rather similar with Air Berlin last year. When the German airline was running out of cash again, they generously bought a majority stake in their frequent flyer programme. Many people thought this was just a way of circumventing EU rules on overseas ownership and ignored Etihad’s comments that they were serious about building a worldwide loyalty programme based around their airline and its partners.

The Gulf airlines like to talk about the profit they make – or are close to making – but making a longterm profit in the airline industry is incredibly hard. On the other hand, the loyalty card business is booming and hugely profitable. Qantas was memorably described as a profitable loyalty scheme with an unprofitable airline attached and there are many other airlines where the same applies.

India is surely ripe for a massive growth in the general consumer loyalty business. AirBerlin’s loyalty scheme is already fairly strong and capable of much more. Add in a few more countries and some investment (a pittance compared with the cost of running an airline) and you could suddenly have a very powerful worldwide loyalty scheme.

Etihad have surely accepted that they will never beat their neighbours, Emirates, in the airline business but they might have the last laugh. Owning the world’s largest consumer loyalty programme is a much more attractive proposition than owning the world’s largest international airline.

In April’s Inside Traveller

The April edition of Inside Traveller is being mailed to subscribers today and will be available on-line from Friday 29th March.

Amongst the subjects covered this month are:

• British Airways’ plans for its new A380s – test flights start this summer.
• Why it’s useful to appreciate the differences between the major Gulf carriers.
• “The more rooms a hotel has the worse the service will be” – true or false?
• www.dealangel.com – a really useful hotel comparison website.
• What to look for in longhaul economy, AND
• What to look for in premium economy.
• Another way to judge airline safety.
• Collecting Avios demystified.

If you are not already a subscriber, visit insidetraveller.co.uk.

How to buy Avios at a big discount

It is fairly common for airlines to run promotions selling their Miles at a special discount – 20-25% is a pretty standard figure – so it is not so surprising to see that British Midland have just announced a special 20% bonus deal on all purchases. 

However, during the Summer, Diamond Club Miles will be converted to Avios at a rate of one to one – and Avios cost more.

The standard price for 20,000 British Midland Miles is £255 – the same number of Avios would cost £335. That is a big discount already but if you add in the bonus 4,000 you will get by purchasing through the British Midland promotion, you are getting a very good deal indeed.

I doubt you will be able to get Avios at anywhere near this rate in the future. The promotion runs until 30th June.

Deals too good to miss

Hotel frequent guest programmes are forever running special deals which encourage you to stay a certain number of nights to get extra points but by far our favourite offers are the simple ones – and it can’t get any simpler than the promotion just launched by Carlson (the company that operates the Radisson, Park Plaza and Park Inn brands).

To celebrate the re-launch of their programme as Club Carlson, all you have to do is join  (if you are not already a member), register for the promotion and then stay on two separate occasions between now and 15th June and you will get a free night certificate valid until the end of the year.

If you are clever, you can get away with just two individual nights in some of their cheaper hotels and redeem the reward at one of the more expensive ones. However, whichever way you do it, this is definitely a good deal. More details here.

Starwood are also about to launch their own promotion which – rather typically for Starwood – is good, but not as good as others. Stay three times between 1st May and 31st July and get one free night at a slection of hotels. Register here.

Finally, to celebrate the Royal Wedding (if that really is an excuse), Heathrow Express is offering tickets at a 50% discount up until 2nd May. Bookings can only be made on-line here – enter the code HEXB7P when prompted.

Naughty flybe

Good to see that the ASA have taken flybe to task over one of their ads. They were advertising “free flights” for those taking out their branded credit card but only mentioned in very small print that “taxes and charges” were  extra. This is important because a proportion of this figure is simply profit for the airline, rather than any statutory charge for security or government tax.

We have said several times that, despite their carefully crafted “country bumpkin” image, flybe are every bit as sharp with advertising and extra charges as Ryanair. You need to watch them like a hawk.

Also, they really do not seem to understand the way airlines use their frequent flyer programmes to both create customer loyalty and make money on their own account. Introducing an expiration date for points earned using the wrong excuse of new accounting legislation and blocking certain popular routes for redemption show an airline that has not got to grips with how to run a frequent flyer programme.

The Joy of Tweeting

Having a Twitter account is not just for internet junkies but can be a valuable additional tool for travellers. As we have said several times in Inside Traveller, it can be a little like knowing the Chairman’s secretary at a major airline or hotel chain. Travel companies are anxious to take advantage of the new social media and those in charge of Twitter and Facebook pages are generally fairly well-connected within their organisations. As well as interacting with customers, they are also anxious to ensure that their company’s reputation is maintained. During last December’s snowstorms many people took advantage of Twitter to contact their airline and get faster and more personalised help than would have been the case through a normal call centre.

The other day I had the opportunity to put our advice into action. I had a problem reserving a ticket through BMI’s Diamond Club so a quick tweet to @flybmi.com and my problem was passed on to a supervisor who called me and was able to resolve the issue without difficulty. In fairness, I could probably have phoned Diamond Club myself but, since the issue was a little complicated, I am sure it would have taken much longer to sort out.

BMI’s Social Media people are rather more active than some but I strongly suggest following all your regular airlines and hotel companies. Not only will you receive news of any special deals as they are made available, you will someone to call on if it all goes pear-shaped.

Meanwhile, a big thank you to @flybmi.com

Best Hotel Offer is Back

The Intercontinental/Holiday Inn group are running their “stay two, get one free” promotion again. This has to be one of the best free hotel deals ever offered.

You simply have to stay twice at any group property (which vary from Intercontinentals through to more modest Holiday Inn Express hotels) and you will get a voucher for one free night at any group hotel. That means two stays at a Holiday Inn Express (costing, say £65 each) can give you a night at an Intercontinental (worth maybe £290). Of course, you can stay twice at an Intercontinental and redeem your voucher at a Holiday Inn Express but the maths are not quite so appealing.

The last time this promotion was run, we had no problem finding availability for free nights at higher grade hotels so, hopefully, this will be the case again.

You need to be a member of their frequent guest programme, pay one of the chain’s standard rates (any rate on their website but not pre-paid agency rates) and the promotion is not available with hotels in the Asia/Pacific region. You can take the option of earning double points instead but, for most people, the free night deal will be much more attractive.

The offer expries at the end of December and you can earn up to five free nights.

www.ichotelsgroup.com

The World's Worst Airline Alliance?

SkyTeam has just celebrated its 10th anniversary and produced a number of self-congratulatory press releases designed to show they are the best of the three main alliances. Somehow, the fact that they are marking the anniversary with the induction of Tarom and Vietnam Airlines into the alliance does little for our confidence – though the alliances seem to have long since given up on only accepting “leading” or “quality” airlines in their rush to build their networks.

SkyTeam is not only the youngest of the three alliances but, in every category we can think of,  it would seem to be well behind Star Alliance and OneWorld.

At the heart of every alliance is connectivity – principally of member computer systems. SkyTeam is well behind the other two alliances in the connectivity of individual frequent flyer schemes. It also lags on products such as Round the World tickets as well as regional specials.

In terms of passenger approval, SkyTeam airlines are a fairly grim collection. US airlines rarely win prizes for passenger experience but, the SkyTeam member, Delta, has been one of the poorer US airlines for some time and its merger with the equally poor Northwest is unlikely to improve matters for some time. In Europe, Air France/KLM have  followed the competition for quality, rather than led it. In fact, out of their whole group, only Korean Airlines regularly wins praise for the quality of its service. Both OneWorld and Star Alliance have airlines that are genuinely at the top of their individual leagues such as Cathay, British Airways, Singapore Airlines, Air New Zealand and Qantas.

Sadly, the only area in which SkyTeam stands out is in safety. The combined accident record of three of its members, Air France, Aeroflot and Korean Airlines is very poor indeed. It is all very well for the three airlines concerned to say that they have taken measures to put matters right but, some issues can be improved quickly whilst other improvements can take much longer to work their way through the system.

Incredible though it might seem, one of the few airlines in the SkyTeam alliance that appears to have a combination of a reasonable safety record and good service is CSA Czech Airlines.

Best airline alliance? No, not by a long way.

The Best Free Deal

We do not normally comment here about airline and hotel chain promotions – there are simply too many and most of them are only of limited interest. However, we have to give a heavy plug to the promotion launched today by Hyatt. It is the best deal we have seen for a long time (well, actually, since last year when they ran the same promotion!).

All you have to do is make two stays at a Hyatt hotel before 30th June and you get one free night to use at any Hyatt hotel before 30th August. There are no black-out nights for the hotel redemptions.

Do note that this is two stays for a free night. A stay can be one night or one week – the reward is the same.

Similarly, the offer applies to any Hyatt so you can make two stays in the cheapest Hyatt you can find and redeem your voucher in the most expensive.

You should be able to see just how generous this offer is if used carefully.

You need to join Hyatt’s frequent guest programme if you are not already a member and you must register to participate.

More here.