COMMENT: Airlines and HSR - Uneasy Bedfriends?

In an article in the Evening Standard in June, Peter Dominiczac reports that Boris Johnson's aviation adviser, Daniel Moylan, believes that there is a better business case for the proposed Thames Estuary Airport (I'll call it TEA for now) than for the planned High Speed 2 (HS2) rail project. Johnson has long been one of the most outspoken proponents of the TEA project over a third runway at Heathrow.
Moylan quotes budget figures for the two projects, pointing out that TEA will have a much higher return-on-investment than HS2, owing to the business connections it can foster.

But why should these projects oppose each other? I mean, yes, a new "four-runway mega-hub" airport would bring more economic benefits than a domestic rail network (well, not even a network) but realistically there's hardly any reason to compare them to each other.
Firstly, a new mega-hub in the south-east of the United Kingdom would reduce congestion at the full-to-bursting London Heathrow, and provide those all-important business travellers with their beloved onward connections to the Middle East, Asia and North America, and would create jobs.


On the other hand, HS2 will give passengers a quick, easy and presumably affordable alternative to flying between the north and south of the UK. Not bring investment from abroad (apart, perhaps from sponsorships and advertising?). It will also create jobs, up and down the west of the country. I don't see how you can compare them.

Airlines and high-speed rail have a mixed history. Most people see rail as a 'green' alternative to flying, and the commonly held belief in the industries (yes, both of them) is that on overland journeys up to around 800km, aeroplanes are less efficient. Not necessarily so. Several articles from both the New Scientist and The Guardian show that, in fact, depending on how full they are running, the fuel used to power them, and the infrastructure needed to run them, they could as environmentally damaging or worse than flying. Now, I can't say for HS2 for certain as I don't know the exact details, but it is something to bear in mind.

Environment aside, I strongly believe there is the capacity for HS2 (and, indeed, other rail networks) to compliment airline route networks. In fact, it has been proven. In Germany, Deutsche-Bahn's Rail&Fly initiative allows passengers to board onward train connections using the same ticket as for the flight, for an extra fee. France has a similar, albeit more limited service with the subjects this time being Air France and SNCF, the French national rail company. They call it TGVair.

The tech-mag Wired also thinks collaboration is key. The opportunities are endless; codesharing, alliances, marketing opps, connections for passengers... However, at the moment it is dubious as to whether these opportunities will be grasped with HS2 as some are claiming that Heathrow might not even have its own station built after all, and if it is the trains would be leaving at a low frequency. No good for businessmen and women!

Regardless of the final decisions on HS2 and the Thames Estuary Airport projects, I see great scope for integrating rail networks with those of airlines, and I hope that those in charge of the planning of them will see it too.

Global Aviation Market Outlook 2012

Airbus today released its 20-year forecast for the civil aviation industry (Boeing's has already been released) and it predicts nothing short of continued growth. Here are some of the key figures:

• 27,350 new passenger aircraft are to be built which, with retirements taken into account, brings the total fleet  to over 32,500 (an increase of 109%).
• 850 new freighter aircraft, leading to a total fleet of 2,900 (+82%)
• This brings total new aircraft deliveries to 28,200.

But the really important figure to look is the third:

• Revenue Passenger Kilometres (RPK) to increase by a factor of 2.5, from 5.1 trillion to 12.8 trillion per year. Twelve-point-eight trillion seats. It's an increase of 150%, and it's not just seats available on aircraft (ASKs), it's the number of people paying for them.

Boeing's forecast is even more optimistic, seeing a demand for 34,000 new civil aircraft. Of these they believe that 68% will be narrowbodies, with widebodies and Very Large Aircraft (VLAs) making up 26%. 

Both companies give a total value for aircraft deliveries up to 2031 of around US$4 trillion. This is a tasty sum for whomever can get their hands on some of it. Of course the majority - around 60% - will be split between Boeing and Airbus (pretty much equally) with the remaining 40% split between the second-tier players such as Bombardier, Embraer, Comac etc.

Boeing notes some of the influences on the industry in the forthcoming two decades, including global economic growth of 3.2% leading to industry growth of around 5%, strategic aircraft utilisation to help offset fuel costs, emerging markets and business models.

These are mirrored by Airbus, who also add increasing population and internationalism. They say that "Aviation Mega-Cities" (those who handle more than 10,000 long-haul passengers per day) are driving demand for VLAs such as the A380. There are currently 42 classified as these by Airbus, and they predict this rising to over 90 by 2031.

Airbus' John Leahy, Chief Operating Officer Customers, who presented the 

market outlook in London today

Of course, all of this barely scratches the surface of the information provided by the two companies, but it demonstrates the continued faith that experts have in industry's recovery from the turbulent past few years.

I'll leave you with a quote from John Leahy, Airbus' Chief Operating Officer Customers; "...by 2031 four of the world’s biggest traffic flows will all be domestic - US, China, Intra Western Europe and India – and these account for a third of world traffic”

You can view the Boeing pages here, and the Airbus slideshow (in PDF format) here. 

You can also see the forecast from Bombardier here, and from Embraer here too.

COMMENT: Time to Polish the Silver

It was announced last week that AMR Corp. - parent of the antiquated, bankrupted US mega-carrier American Airlines (AA) - is starting a process of rebranding which may include a change of livery for their aircraft. The iconic (and that's a word I'm not using lightly here) red, blue and polished silver that has been used since 1967 may be painted over on future deliveries, and some analysts believe that it will start with the introduction of the Boeing 787. 
This is because the aircraft is made of composites and plastics, rather than aluminium so it would not be possible for a polished silver look. 

Personally, I believe that unless it is strictly necessary American should not lose the bare metal look. This is for two primary reasons.


1. Brand
Of the many attributes an airline can utilise, heritage is one of few that can't be created artificially: either you've been around a long time or you haven't. AA has heritage in buckets. It started becoming American Airlines in the sort of form we know it way back in 1929, and even has ties to Charles Lindbergh and the early airmail pilots, a fact not a lot of carriers can lay claim to. 


The bare, polished metal represents a lot about the way flying used to be, and I'm sure that for more than a few older travellers there is a certain nostalgia linked to the old-fashioned cheatlines and simple colours on AA's aircraft. It harks back to the heyday of civil aviation, that golden era between the 1950s and 1980s when flying was still a bit glamorous, and to throw that away would seem folly. 
It has been proven time after time that an airline with a strong brand identity and image can win new customers and keep existing ones much more effectively than those without, and American already have theirs, it may just need tweaking a bit.


2. Operational
As the company itself points out, leaving the fuselages of their aircraft three-quarters unpainted saves them money on fuel because of the weight reduction (even with the current livery, the paint on an AA Boeing 767 can weigh over 130lbs!). With jet fuel making up to a third of airlines' operational costs, this is more important than ever before.
It also saves them money on the paint, as they only spend something like a quarter of what other carriers might. When you consider that next year marks the beginning of deliveries of no less than 460 aircraft to replace their current fleet, that extra 75% of paint would be a bit harsh on the old wallet.  And even if they do decide to paint the whole aircraft (there has been talk of grey, or of white such as on their regional feeder subsidiary American Eagle), that still leaves 150 aircraft in the old livery, unless they decide to retire these. So AMR Corp. will either have to shell out to repaint them or put up with discrepancies within the fleet. 




American has had a troubled few years in terms of customer service - Skytrax gives it 3 out of five stars, and Skytrax users only give it a 3/10 rating - so it is obvious that an upgrade to the brand is in order. However, my suggestion would be this: where possible, keep the bare metal on the aircraft, and change the tail paint and cheatlines slightly to modernise them. That way they still will have the basis of the iconic brand image, but with tweaking round the edges, perhaps to go alongside improved customer services and products, and other aspects of the brand. 
This should be very possible in my eyes, as although the aircraft order includes a large number of Boeing 787s (42 to be exact) that come in those lovely new composite materials, it is nothing compared to the orders of narrow-bodies they have placed - all of which are still currently manufactured in traditional, polishable, wonderful aluminium...

FOCUS: Is LATAM a Game-Changer?

Like a computer on dial-up, the merger between LAN Group and TAM airlines had been ticking over for almost two years by the time it finally became reality on the 22nd June. The carriers, of Chile and Brazil respectively, are now called LATAM and it is estimated that their combined revenues amount to either $13bn or $14bn, depending on who you ask. In 2011 it had a combined fleet of 310 aircraft, which would put it well inside the top twenty in the world, as would their scheduled passenger numbers: last year they carried sixty-million.


But the big question now being asked is this: will this pave the way for other international mergers? Sure, we have KLM-Air France and BA-Iberia, but these carriers still have their separate identities and are controlled by holding groups, set up simply to avoid the archaic ownership and control rules established during the teething years of commercial aviation. 
But now LATAM plans to eventually become essentially one airline. The civil aviation industry is one of few that still abide by restrictive old laws like these; they were created to protect the sovereign rights of nations who felt the threat of airborne attacks were very tangible.


Theoretically, there is no longer any problem with Yippee Airlines from Argentina being owned by Belgians or Patriotic Airways from China being owned by Kazakhs. After all, it happens in the car manufacture industry, the shipping industry, the banking industry...the only barrier now is the law itself. 
Of course, anti-trust laws must be observed to ensure competition is fostered, but this has been honoured in the South American merger - the agreement, for example, includes rules on which alliance the new behemoth of a carrier can join - so there's no reason it couldn't in other mergers.


Which leads me onto the final thought of this post. Where will LATAM lay its allegiance? TAM was a member of Star Alliance but the agreement stipulated that it couldn't be in the same one as the other South American super-carrier, AviancaTaca, also a Star member.
LAN, on the other hand, has been in Oneworld since 2000. Of course, there are the options of Skyteam, or simply staying unaligned (although with all the benefits of alliances this doesn't look likely), but as Ghim-Lay Yeo of Flightglobal points out, there is much less incentive to change after twelve years. Besides, Oneworld provides the North American and European connections its chief executive, Enrique Cueto, wants in the form of American Airlines and IAG (BA-Iberia). 


A decision is expected imminently, and no doubt the potential alliances will be vying for LATAM's attention. Whichever way they go, it could prove to shake up the industry considerably.

A350 Nears Flightline

                                             A350-900 front section                 Photo Airbus

Airbus have brought the front section of their first flying A350-900 to their Toulouse factory from St Nazaire.