Short-hauling: Spanish regional airline Air Nostrum wants to operate high-speed rail routes

As short-haul flying is mostly a tedious, uncomfortable experience with lots of queuing and waiting, while at the same time a growing number of consumers have become more conscious about the environmental impact of air travel, the popularity of high-speed rail as an alternative to short-haul flying has steadily been growing.

Compared to air travel within a range of around 700 kilometer, high-speed rail means less hassle, because of direct connections between city centers, lighter security and luggage regulations, and a much more comfortable journey.

In Europe, for example Eurostar’s London-Amsterdam service – which was launched in April this year – has proved such a success that the train operator expects to operate a third and possibly even a fourth daily service from next year on.

And on many city pairs, high-speed rail now has a much higher market share than air travel. For example, between Madrid and Barcelona, 65 percent of the market has moved to high-speed rail, while ItaloTren has a market share of 75 percent between Milan and Rome. In Japan, the Shinkansen for a long time has a market share of over 85 percent on the routes between Tokyo and Osaka and between Kyoto/Osaka and Fukuoka.

And as Google Flights nows shows Deutsche Bahn as alternative to a flight when searching for a fare between for example Amsterdam and Frankfurt (a journey of over 400 km), ‘short-hauling’ via high-speed rail is on track for further growth.

High-speed rail as feeder
Several airlines and rail companies are already working together to provide travellers with a seamless ‘intermodal’ connection, effectively using high-speed rail as feeder service to long-haul flights.

For example, Lufthansa Express Rail is a collaboration between the airline and Deutsche Bahn and provides passengers with an integrated booking from 8 destinations throughout Germany to and from Frankfurt Airport. This means reserved seats on the train, remote baggage check-in, plus a guaranteed connection. Lufthansa will expand its Express Rail service to 20 German destinations by mid-2019. Read full article »

See AirlineTrends LIVE at FTE Asia, Kuala Lumpur 1-3 Dec

airlinetrends x FTEAsia_680x303

Besides reporting on the latest passenger experience trends and product & service innovations, AirlineTrends also frequently provides in-house ‘trends & innovations’ sessions at airlines and suppliers to the airline industry.

For those who would like to experience an AirlineTrends session «live», we have partnered with Future Travel Experience Asia – which will take place in Kuala Lumpur, Malaysia, on December 1-3 – to provide two working sessions as part of the Up In The Air conference stream.


MONDAY DECEMBER 1ST » 15.30 – 16.30  

In this interactive session facilitators Raymond Kollau, Founder AirlineTrends and Daniel Baron, Founder LIFT Strategic Design will first give a presentation about key consumer and passengers trends.

Then, in an “unconference” discussion, participants will discuss together all angles of passenger experience development and the challenges they face in product, service delivery and brand. Participants will gain insight into trends plus strategies for more effective concept development and implementation, in the context of their corporate goals. Learn more » 


TUESDAY DECEMBER 2ND » 09.45 – 10.45

How airlines are responding to consumer trends and technology with innovative products and service in order to differentiate the passenger experience.      

This fast-paced trend session, led by AirlineTrends founder Raymond Kollau, follows the so-called customer journey and combines the main macro, industry and consumer trends shaping the airline industry today with dozens of the latest airline product and service innovations and links them to the various elements of the onboard passenger experience: cabin, seats, IFE, catering, amenities, hospitality, etc. Learn more » Read full article »

BA to rightsize its short-haul fleet with slimline seats featuring tablet holders

BA_short haul seats_680x299

By Raymond Kollau,

Following earlier initiatives by major competitors Lufthansa (168 seats on its A320s) and Air France (178 seats on A320s) to install more slimline seats (from Recaro) on their short-haul aircraft in order to become more competitive with low-cost rivals such as Easyjet (180 seats on A320), British Airways has just unveiled its new short-haul interiors.

On the BA’s existing A320 fleet of more than 40 aircraft, there are various different seats and configurations and at a recent shareholder presentation by BA owner IAG, it revealed that it aims to increase capacity across BA’s Airbus fleet by 6 per cent.

BA executive chairman Keith Williams said: “The short-haul landscape has changed enormously in recent years. To stay competitive and keep offering customers choice, great fares and great service, we are giving our cabins a radical makeover.”

Leather headrests, tablet holder
The new charcoal grey leather seats (manufactured by B/E Aerospace) are slimmer and ergonomically designed to allow BA to squeeze in extra seats for its economy cabins, Euro Traveller. This, says the airline, will allow it to offer more low fares. The new Euro Traveller chairs will have backs designed give more knee space for the customer behind and new eye-level seatback tablet-holders, which are rapidly becoming a standard feature on the latest generation of Economy seats. Read full article »

The best cabin interior launches of premium airlines and hybrid LCCs in 2013

Best airline interior introductions of 2013_b680x302

By Raymond Kollau,

Passenger expectations continue to be raised by the cabin interior upgrade programs launched by airlines around the world, which sees them introducing more innovative or luxurious products and services, be it private suites in First Class, full-flat beds in Business, or the latest in in-flight entertainment and connectivity. Initially the upgraded product (and/or service) differentiates the airline from its competitors (as airline upgrade programs are out of sync with eachother), who then over the course of several years start matching – and often leapfrogging – the new standard, thereby initiating another ‘creative destruction’ cycle.

Shorter product cycles
Meanwhile, just like in other industries, these product cycles have become shorter. Witness the ‘fast fashion’ revolution created by H&M and Zara in the clothing industry. As Air New Zealand’s general manager international Ed Sims observed when the airline introduced its redesigned cabins a few years ago: “There was a time when airlines in our position could imagine six to seven years between product refurbishments, these days customers are so impatient for new developments that we think, realistically, that product cycles should be closer to three to fours years.”

New materials
At the same time, airlines have more ways than ever to differentiate their cabins as the cabin interior industry has made huge advances in the development of materials that look stunning and pass all regulations, although there still is a more formidable task left though of convincing top management to bring more ‘wow’ into the cabin.

Cabin interior launches in 2013
Written by the experts at TheDesignair, we have selected three of the best examples of how premium airlines have continued to raise the bar this year, with the likes of Singapore Airlines, Cathay Pacific and Emirates setting new standards in Business and First. At the same time, (hybrid) low-cost carriers are launching their own ‘smart’ Business Class cabins as part of their efforts to target the lucrative business traveller segment.


1. Singapore Airlines further upgrades its cabins

Investing nearly USD150 million in a cross-cabin refresh, Singapore Airlines has unveiled its new First, Business and Economy class seats, as well as Panasonic latest eX3 IFE system. The new design in September made its debut on the airline’s new B777-300ERs flying the competitive Singapore-London route, and will also be rolled out on Singapore Airlines’ upcoming A350s. Read article »

2. Cathay Pacific revamps First Class with some nice touches

Cathay Pacific is ensuring its cabin products stay at the forefront of people’s minds. As the airline’s First Class suite wasn’t in need of a full redesign, the airline partnered with Foster + Partners, the same architectural company that designed Cathay’s ‘The Wing‘ lounge, to look at the suite and see how it could be refreshed. Read article »

3. Emirates new ‘Executive A319’ features private jet lounge and First Class suites

For travellers seeking a step up from First Class, Emirates’ new private jet service aims to raise the bar. Dubbed ‘Emirates Executive‘, the airline has transformed an Airbus A319 into a private jet that features a lounge with chairs, sofa and a table, 10 private First Class suites, and a shower – once only available on its A380s. Read article »


4. JetBlue unveils new ‘transcontinental’ A321 interior featuring private suites

JetBlue in 2014 will launch a new transcontinental service between New York JFK, LA and San Francisco, featuring the airline’s new ‘Mint’ Business Class, which is described as “a stylish service minus all of the stuffiness often associated with the traditional front-of-the-cabin experience.” Read article »

5. Japan’s Skymark goes Premium Economy-only on new A330s

Hybrid low-cost carrier Skymark, Japan’s third largest airline, aims to differentiate itself in the high yield domestic market from full service airlines ANA and JAL and LCCs such as Jetstar Japan and Peach with a Premium Economy-only A330 featuring 271 seats with legrests and a 38 inch pitch. Read article »

6. Low-cost carrier FlyDubai goes chic with new Business Class cabin

Dubai-based ‘no-frills chic’ carrier FlyDubai has added a separate Business Class with wider seats and more legroom to its cabin. The airline’s fleet of 737-800s already features Boeing’s new Sky Interior and a high-definition inflight entertainment system. Read article »

JetBlue’s new transcontinental A321s to feature private suites and a ‘snack station’

JetBlue Mint_a680x430

By Jonny Clark, TheDesignAir

In order to attract premium yields from business travelers, competition on transcontinental routes between New York, Los Angeles and San Francisco is fierce with all major national carriers on the route trying to find their point of difference and fight for the heavy traffic between the three hubs.

New York-based JetBlue is also joining this transcontinental ‘arms race’ with dedicated sub-fleet of 11 brand new A321s. After a sneak peek of the airline’s new A321 cabin a few weeks back when they launched a first video, the airline has shared more details of its new transcontinental premium product, called Mint.

Starting at a mind-bending USD499 one way, JetBlue has managed to surpass our expectations yet again with the fare being yet another reason to fly with the airline. Said JetBlue Chief Executive Dave Barger in a statement: “Mint is stylish service minus all of the stuffiness often associated with the traditional front-of-the-cabin experience. JetBlue is truly all about serving the underserved, the customer who wants to enjoy first-rate service at an exceptional and affordable fare.”

The Mint seat
JetBlue has invested in both Business and Economy, with the coach section featuring slim-line seats, larger touch-screen TVs, as well as an extra legroom section. The big showpiece though is the ‘Mint’ Business Class product, a first for what is fundamentally a low-cost carrier. The Mint cabin features 16 fully lie-flat beds up to 6′ 8″ (203cm) long with rows 1 and 3 featuring a 2 x 2 seating and rows 2 and 4 having a more private 1 x 1 seating configuration with closing doors.

The private sliding door idea is a nice little touch, especially on the single solitary seats as it makes the 2nd and 4th rows much more appealing and sort after as a solitary traveller, although we feel the sliding doors are more a sales gimmick that practical elements a traveller really actually requires on a 5-6 hour flight.
Read full article »

Finnair bets on China with route to Chongqing, a.k.a. ‘Chicago on the Yangtze’

By Vivek Mayasandra

In the highly competitive aviation industry, airlines have to think differently to evolve and grow. The challenge has been especially strong for European carriers, whose base in the economically troubled Eurozone, coupled with strong competition from low-cost carriers and Gulf-based airlines, has required them to look to new markets for opportunities. As the global economic center of gravity is shifting from Europe and the USA towards Asia, with subsequent increases in income, many European carriers are looking East for growth.

Finnair’s Asia strategy
Along with megacarriers Air France-KLM and Lufthansa, Finnair is one of the most prominent players in the Europe to Asia market. The airline has built a niche strategy around “Asia’s growing market, the best flight connections and cost-competitiveness” and has invested significantly into expansion in the region and into developing its Helsinki base into a prime transit hub.

According to the Center for Aviation (CAPA), Finnair has a near 7 percent capacity share of one-way seats between South Korea and Western Europe, a 10 percent share of Japan to Western Europe (ahead of British Airways), and an approximate 6 percent share of the China to Western Europe.

Via Helsinki
By virtue of geography, Helsinki’s location makes it the closest European Union gateway for flights between Europe and Asia. Finnair has leveraged this fact by promoting its Helsinki hub as a transit hub for travellers between its 40 European and 11 Asian gateways. According to CAPA, Finnair in the second quarter of 2012 deployed about 51 percent of its capacity (in ASKs) on routes to Asia, and this segment represented 43 percent of passenger revenues.

According to the airline, some 40 million passengers travel between Europe and Asia annually, and about half of these passengers fly non-stop from a major hub like London Heathrow, Frankfurt and Paris Charles de Gaulle with the other half connecting via an intermediate airport in Europe or the Middle East. Finnair strives to be among the three largest operators in traffic between Europe and Asia involving transfers during the trip.
Read full article »

China Southern first Chinese airline to take delivery of A380

See our Facebook page for more images

China Southern on 14 October became the first Chinese airline to receive the A380, when Airbus handed over the first of five superjumbo ordered by the Chinese carrier. The double-decker planes will spearhead the state-controlled company’s drive to more than double the percentage of capacity deployed on overseas routes to 35 percent by 2015, said Yang Bo, the head of its planning department. “Flying A380s will put us in a completely different league. We hope to use the planes to build a good brand image and to raise our profile overseas.”

International expansion
China Southern has already boosted international capacity with 33 percent this year as it aims to develop Guangzhou airport in Guangdong province – China’s biggest region by economic output – into a global hub rivaling Hong Kong, which is located less than 200 kilometers (125 miles) away. China Southern plans to boost its total fleet to 645 aircraft by 2015 from 425 today. Says Si Xianmin, Chairman of China Southern, “The economics offered by the A380 will undoubtedly improve our competitiveness on international routes and it is the perfect asset to help China Southern Airlines achieve its goal of becoming a leading global carrier.”

Qantas is already noticing the increased competition from China Southern, as the Chinese airline has significantly grown its Australia services as part of its intercontinental push. Similar drives in Europe and North America will follow, partly to offset competition from high-speed trains on domestic routes in China. China Southern Airlines’ focus on domestic flights made it Asia’s largest carrier by passengers. As Qantas CEO Alan Joyce tells Bloomberg, “The Chinese carriers are in an amazing position. They have got the scale that will make them huge and I think they will be a big challenge for the Middle Eastern carriers as well as the Asian carriers.”

Pearl of the Skies’
China Southern has selected a three-cabin configuration for its new A380 flagship, which it has dubbed ‘Pearl of the Skies’. The airline’s superjumbo has 506 seats in total: Eight ‘Platinum’ suites in First Class, 70 lie-flat Business Class seats and 428 seats in Economy. The eight First Class suites are located at the front of the lower deck in a 1-2-1 layout and look like the ‘closed’ version  of the Acumen/Countour First Class seat, an ‘open’ version of which is also installed on Korean Air’s A380’s. Read full article »

How Lufthansa and British Airways are competing with Emirates on Indian routes

By Vivek Mayasandra

As the global economy dynamically changes, all major airlines are focusing on the rapidly growing middle class and business markets of the BRICs and the ‘Next 11’ as a new source of growth. According to Boeing’s latest outlook, these emerging economies will collectively occupy over 60 percent of passenger flows by the year 2030.

Last month we discussed how Emirates is capitalizing on new passenger flows, for example connecting Asia with Africa and with Latin America via its Dubai hub. A good showcase of the challenge that the rise of Emirates is posing to European legacy carriers is India, since the subcontinent is the second largest market for both British Airways (50 weekly flights to 5 destinations in India) and Lufthansa (52 weekly flights to 7 destinations), after the United States.

India is also Emirates’ largest operational market with 185 flights a week to 10 destinations. Says Orhan Abbas, vice president India and Nepal at Emirates, “The Indian market is a very important one for us as Indians have overtaken the British as the single largest tourist group on Emirates.” In the 2010-2011 fiscal year, Emirates’ revenues from India grew 24 per cent to USD1.7 billion, while traffic grew with 10 per cent.

Emirates’ aggressive approach has resulted in significant market shares on international flight routes from India; the airline currently holds 35 per cent on routes from India to Britain, 40 per cent to France, 20 per cent to Germany, and 31 per cent to New York. The airline’s low prices and large network in India make it an attractive option, and on the popular route between India and North America, Gulf airlines such as Emirates are virtually the only practical option for travellers from second-tier Indian cities. A passenger from New York on the way to, for example, Thiruvananthapuram, has to connect twice when flying via Europe (e.g, at Frankfurt and at Delhi), compared to a single connection at Dubai.

Besides the large number of Indians working in the Gulf states, “one of the reasons for Emirates’ success is that so many Indians love transiting via Dubai,’’ says Madhav Oza of Blue Star Travels, one of the biggest travel consolidators in Mumbai. “The shopping, easy visas and simply the familiarity with the city often makes them choose it over colder and more congested European hubs like Frankfurt, Paris or Brussels,” he says.
Read full article »

As it turns Dubai into a global hub, Emirates embraces a diverse passenger base

By Vivek Mayasandra

Over recent years, Gulf-based carriers Emirates, Qatar Airways and Etihad have dazzled the global airline industry with their aircraft orders, premium services and rapid expansion. Besides targetting traditional routes such as Europe – Australasia, Emirates, the leader of Gulf aviation growth, has aggressively capitalized on new passenger flows, connecting Asia with Africa and with Latin America via its Dubai hub – markets which will collectively occupy over 60 percent of passenger flows by the year 2030, according to Boeing’s latest market forecast.

As Emirates states in its latest annual report: “The future of our industry is being written not only in long-established air routes, but also in places like China, India and Africa – markets where the demand for air transport, both passenger and cargo, is growing at an incredible rate.” […] “Our strategic hub in Dubai plays a key role in establishing new trade routes by linking emerging markets to more developed ones, such as connecting Moscow to Durban, Beijing to Luanda or Hyderabad to Sao Paulo.”

This focus has enabled Emirates to position and brand itself to a newly global customer base – and more importantly – develop solutions in service, dining and entertainment for a wide array of diverse passenger tastes.

Cabin crew
In the air, Emirates’ diverse cabin crew is indicative of its global focus – the airline employs cabin crew from more than 130 nationalities. This lets Emirates typically staff their flights with speakers of Arabic, English and the local language of the flight’s destination. Being an Gulf-based carrier, Emirates’ crew are also trained for a variety of Arab and Muslim cultural situations – from being taken to mosques, learning how to serve the traditionally Arab meal of coffee and dates, to properly serving veiled Muslim passengers.

Read full article »

Latest high-speed trains in Asia offer airline-like business class cabins

The advantages of high-speed rail have been well documented. Compared with flying, travelling by fast train offers city-center to city-center connections, no need for checked baggage, or repeated queuing for security and boarding. Also, trains are not prone to delays caused by bad weather, slow baggage handling, crowded runways and air traffic. Research has shown that business travellers are willing to travel to destinations by rail for up to 4 hours, while leisure travellers are even prepared to use trains for journeys of up to 6 hours. 

In an effort to make rail travel even more attractive for business travellers, high-speed rail operators in China and Japan have recently introduced airline-like business class cabins on their latest fast trains. 

BeijingShanghai ‘Harmony Express’
China is in the process of building the world’s largest high-speed network in record time, with rapid passenger lines already criss-crossing much of the country. The recently opened Beijing to Shanghai high-speed railway is the latest portion of a network the government hopes will stretch 45,000 km (27,960 miles) by the end of 2015. Construction of the 1,318 kilometre (819 mile) high-speed rail connection between Beijing and Shanghai began in April 2008 and track laying was completed only 2,5 years later in November 2010. The USD33 billion rail line has been operating on a trial basis since mid-May and was officially opened at the end of June 2011. 

Onboard experience
Besides second and first class cars, the Beijing – Shanghai Harmony Express features a business class car with 24 lie-down seats with a nearly full recline. Each seat is equipped with a foldable LCD TV, a tray table, socket and reading lamp. Travellers are waited on by uniformed stewardesses and even the galley area and restroom have been upgraded. 
Read full article »

Virgin Blue rebrands as ‘no-frills chic’ Virgin Australia

More images at Australian Business Traveller

We have reported before on the plans by Australian hybrid low-cost airline Virgin Blue to reposition itself as a more direct competitor to Qantas and double its share of Australia’s corporate travel market from 10 to 20 percent. Virgin Blue has just officially unveiled its new name – Virgin Australia – and new livery. The rebranding completes 10-year old Virgin Blue’s revamp into a ‘no-frills chic’ airline. Says Virgin Australia CEO John Borghetti, “We will still offer low airfares, keeping the competition in the sky high.”

Virgin Australia
Virgin Blue and its associate airlines—V Australia and Pacific Blue—will be rebranded Virgin Australia after the Virgin Group reached an agreement with Singapore Airlines (SIA) regarding the use of the Virgin name on international services to/from Australia. As part of its acquisition of a 49 percent steke in Virgin Atlantic back in 2000, SIA was given a veto on the use of the Virgin brand in the Asia-Pacific region outside of Australia, forcing Virgin Blue to brand its international operations Pacific Blue for regional services and V Australia for long-haul operations. Virgin Australia (tagline “Now You Are Flying”) will replace the domestic Virgin Blue brand immediately and international brands V Australia and Pacific Blue by the end of 2011.

B737-800 Sky Interior
Virgin Austalia also showcased the widebody and narrow-body versions of its new product on an Airbus A330 and Boeing 737. The new makeover, both exterior and interior, is styled after the carrier’s U.S. sister airline Virgin America.

Virgin Austalia ‘s newest 737-800 comes in Boeing’s new Sky Interior, which features mood lighting, larger overhead lockers and sculpted sidewalls designed to provide a feeling of spaciousness. Virgin Australia’s 737-800 also debuts a new business class cabin with eight leather seats with a 37-inch seat pitch. A purple plexiglass dividing panel, also found on Virgin America’s jets, separates the business and economy sections and the LED lighting will be purple and white. The new Boeing 737-800 interiors will be rolled out across the majority of Virgin Australia’s current domestic fleet by the end of the year. Virgin Australia also said it will announce an innovative entertainment option shortly, which suggests it may be looking at iPads or similar devices.
Read full article »

Low-cost Virgin Blue transforms into a full-service airline

In a bid to become a more powerful, direct competitor to Qantas, Australia’s Virgin Blue is transforming itself from a cheerful low-cost carrier into a full-service business and leisure airline with a low cost base. With the remake, Virgin Blue wants to double its share of Australia’s corporate travel market from 10 to 20 percent and cut its reliance on leisure travel in the process, as competition from other low-cost airlines, such as Jetstar (part of Qantas) and Tiger (50% owned by Singapore Airlines), is driving down leisure fares. Virgin Blue’s earlier attempts to target the business market, with for example a premium economy class, has left the airline somewhat stuck in the middle. 

Strategic repositioning
As part of what Virgin Blue has dubbed a ‘Game Change Program’, the airline has recently announced a series of initiatives that seriously upgrades its product. As Australian Business Traveller nicely summarizes it: “There’s a seismic shift happening at Virgin Blue. A new name, new logo and new brand. New planes with new livery. New business class seats, new cabins and new lounges. New routes. New alliances with partner airlines. New uniforms”. The catalyst for the changes at Virgin Blue has been the appointment in May 2010 of John Borghetti, formerly Qantas’ executive general manager. 

First of all, Virgin Blue will reveil a new brand name by June 2011, which is expected to be either Virgin Australia or V Australia. The airline’s creative director Hans Hulsbosch recently told The Australian that while the Virgin brand would continue to anchor the airline, Blue would no longer be part of the brand. Research has found that as Virgin moved to capture the business-class market, its brand was being held back by perceptions among business travelers that it was purely a budget airline. Furthermore, Virgin Blue wants to consolidate its fragmented brands – Virgin Blue, Pacific Blue, Polynesian Blue and V Australia – which is the result of an agreement between Virgin Atlantic and Singapore Airlines (which owns 49 percent of Virgin Atlantic) that prevents the Virgin brand being used outside Australia. 

New uniforms
Virgin Blue’s new uniforms perhaps best illustrates the airline’s transformation from a cheerful low-cost airline into a full-service carrier targetting business travellers. Created by Project Runway Australia winner Juli Grbac, the new red, silver and purple unifoms are remarkably reminiscent of Virgin Atlantic’s chic and classy style, and replace Virgin Blue’s current more casual outfit
Read full article »

Turkish Airlines unveils new cabin interior as part of ambitious growth strategy

Turkish Airlines (THY), Europe’s fourth biggest airline and one of the fastest growing airlines in the world, has seen passengers soar as a result of an aggressive strategy to turn Istanbul’s Atatürk Airport into a hub for passengers between Europe, Asia and Africa. One third of THY’s passengers currently transits and the airline plans to double this in the near future. The airline operates direct flights to 128 international and 39 domestic destinations.

During 2010, THY has grown its fleet from 133 to 153 aircraft, added 15 new destinations and increased passenger numbers to 31 million (up from 25 million in 2009). In the first 9 months of 2010, THY’s revenues grew by 39 percent, passengers carried increased by 18 percent, and its load factor rose 3.4 points to 74.2 percent, despite the substantial capacity increase. THY says it aims to grow 15 to 20 percent annually in the coming years, just as it has for the past seven, and is on track to become Europe’s third-biggest full-service airline by passenger numbers soon, overtaking British Airways.

Doubling number of flights within 5 years
Turkish Airlines will increase its fleet to 196 aircraft within the next five years, as part of an order of 105 aircraft. With the new aircraft, the airline targets to double the number of flights it operates by 2015 and to become one of the 10 biggest carriers worldwide. Says THY’s CEO Temel Kotil. “The company grew twofold in recent years. Now we aim at competing with companies such as Luftansa and Air France. My personal aim is to raise the number of flights to 10,000 and make THY a world leader.” CEO Kotil also stated the Star Alliance carrier would focus on organic growth to boost market share, however THY is also looking to invest in other carriers, such as Serbia’s JAT Airways or LOT Polish Airlines. It already owns a 49% stake in B&H Airlines.
Read full article »

Low-cost carrier Virgin Blue transforms itself into a full-service airline, with lower costs

In a bid to become a more potent, direct competitor to Qantas, Australia’s Virgin Blue is planning to transform from a cheap and cheerful low-cost carrier to a serious business and leisure airline that has low costs. With the remake Virgin Blue wants to double its share of Australia’s domestic corporate travel market from 10 percent, cut its reliance on leisure travel in the process and limit investments in its network by creating international alliances. The carrier is targeting business flyers as competition from low-cost airlines Jetstar (part of Qantas) and Tiger (50% owned by Singapore Airlines) is driving down leisure fares. The catalyst for the changes at Virgin Blue has been the appointment in May 2010 of John Borghetti, formerly Qantas’ executive general manager.

Consolidating brands
The Virgin Blue Group has a number of substantial issues to resolve. The first one is consolidating its four disparate brands: Domestic carrier Virgin Blue, short-haul international airlines Pacific Blue and Polynesian Blue and long-haul carrier V Australia. Virgin just hired Hans Hulsbosch, who designed the Qantas flying Kangaroo logo, as creative director for the airline. While it is unlikely the Virgin Blue brand will be abandoned, it is possible a number of the sub-brands such as V-Australia and Polynesian Blue will be scrapped. An agreement between Virgin Atlantic and its 49% stakeholder Singapore Airlines however prevents the Virgin name from being used outside Australia. 

Business travelers
The second challenge is to position Virgin Blue for a head-to-head battle with Qantas for a significant stake in the Australian business passenger market. As of May 2011, Virgin Blue will introduce A330s on domestic trans-continental trunk routes such as Sydney to Melbourne, Brisbane and Perth. The A330s will have a separate business class cabin (details have yet to be announced), which may also bring a bit of V Australia’s ‘boutique experience’ to Virgin Blue. To compete with Qantas’ Business class cabin, Virgin Blue launched Premium Economy seating in 2007. It was not successful, however, because there was no clear distinction with the rest of the cabin, and it left Virgin Blue somewhat stuck in the middle. Read full article »

New long-haul low-cost airlines prepare for take-off in Scandinavia

So far, the only region where the low-cost, long-haul business model has truly taken off has been the Asia-Pacific. In Europe, airberlin is currently the sole low-cost carrier to have established a long-haul operation, operating 13 A330s (it also ordered 15 B787s). The airline uses its extensive domestic network to feed its long-haul flights from Dusseldorf to New York, LA, San Francisco, Vancouver, Dubai, Beijing, and holiday destinations in the Caribbean, Africa and Thailand. Airberlin also just entered the Oneworld alliance and, amongst others, will codeshare with American Airlines to feed/connect its passengers in the USA. Ryanair has been hinting to start trans-atlantic routes with a separate company (rumoured to be named Ryanair Atlantic), but has shelved these plans until 2015. 

Now, two airlines in Scandinavia aim to take advantage of the Nordic region’s geographic location between North America and Asia (as Finnair successfully does with its ‘Via Helsinki’ hub). Norwegian, the fourth-largest low-cost carrier in Europe has plans to established up to 20 long-haul routes from Scandinavia to Asia and the USA, capitalizing on its large regional network. The airline plans to start operations in 2011, in time for summer season, and eventually may order up to 15 widebodies, possibly B787’s. Norwegian has listed New York and Bangkok as initial destinations and has also mentioned Miami, the American west coast, New Delhi and Beijing. Flights will mainly be from its Oslo-hub, but also from Copenhagen and Stockholm. Norwegian plans to operate a 2-class configuration, with prices from Euro 200/400 return in Economy/Business to New York.
Read full article »