Feature: Airline Update ➔


is the primary reason for the construction of a brand new international airport in Doha due to open next year. The Emirates Group has posted its 23rd consecutive year of profit with the airline recording a $1.5billion profit in the 2010/11 financial year, with group profit up 42.9 per cent. A grandiose statement from the group’s chairman and chief executive, Sheikh Ahmed Bin Saeed Al Maktoum, surely sent shivers down the spine of its rivals: “This year’s record results represent our drive to push the boundaries of aviation, questioning the norms and advocating for open and fair competition. Despite unforeseen challenges in the shape of political instability and shocking natural disasters, we have managed, through sheer determination, nimbleness and quick thinking, to produce our best ever result.” But it’s not all plane sailing for Emirates. The airline’s fuel costs have shot up and account for over a third of its operating costs, which, as IATA stated, is now par for the course.


BOEING: SEEING IS BELIEVING “The price of oil is undoubtedly


the biggest challenge facing the industry right now – our average fuel costs grew 26.5 per cent in our last financial year,” says Richard Vaughan, divisional senior vice president, commercial operations worldwide, Emirates. Vaughan cites two further


areas of concern: “The political unrest in some areas of North Africa and the Middle East depressed passenger numbers for a short time, and another ongoing challenge is to ensure open and fair competition in aviation markets throughout the world, and to do away with the protectionism that we have to face in a number of the countries we serve.” Vaughan is also quick to point out that the carrier does not enjoy the competitive advantage that some might believe it does as a state-owned airline. “Our airline is run on a purely commercial basis and we receive no financial support, financial guarantees or protection from the Dubai Government. In short, we earn our profits the old fashioned way – by increasing revenues and keeping our costs under control.”


“Our airline is run on a purely commercial basis. We earn our profits the old fashioned way – by increasing revenues and keeping costs under control”


moonlight’ to help people nod off. It makes for good PR, but is there are any more substance to it than that? Of more interest to business travellers will be Lufthansa’s plans to add wifi internet across its entire intercontinental fleet by the year’s end. The service is available in all classes with prices starting from a somewhat steep 10.95 euros per hour. Oman Air was one of the pioneers of onboard connect- ivity, becoming the first airline


in the world to offer both mobile and broadband internet on its flights in March 2010. Indian carrier Jet Airways, which has recently posted a 21.4 per cent year on year increase in passengers numbers, has also been playing with its cutlery. The airline’s UK and Ireland general manager, Lydia Nazareth, explains: “Growing our front-end traffic remains a key priority for us and as such we continually invest in and improve our products and technology.” She continues, “We recently unveiled a new


Can the eye be deceived? Of course it can! Particularly if you’re director of differentiation strategy at Boeing Commercial Airplanes. Gillian Upton speaks to Boeing’s Blake Emery. Based at Boeing’s vast Seattle factory, Emery is charged with ensuring Boeing develops commercial airplanes that people prefer. He’s been doing this particular job for 11 years so he


has a pretty good idea now of the predilections of the flying public. One example is the actual length your eye can see down the cabin before your view is broken up by something. If that view goes on for too long, travellers get a tube sensation. “It can be exacerbated by any architecture that emphasises the ribs covering the cabin frame; they give a sense of circles, what we call ’The whalebone effect’,” Emery explains. The same goes for the ceiling. Designers have to basically eradicate it. “We can’t have anything on the ceiling – like an air grill or speaker grill – that would make you look up and be made aware of the space above you,” he says. Many of these discoveries have been incorporated


into the design of the B787. For example, technical wizardry has created dimmable windows in the B787. A button controls the amount of light that comes through, similar to the effect of tinted sunglasses. They are also bigger and taller so that even in central seats passengers can see the tops of the windows. These design additions are airy fairy, you could


argue, as the primary way airlines are mitigating squashing more seats in is through the good films and activities found on the in-flight entertainment systems, but Emery argues: “My things don’t take up seat space and for airlines it’s not a simple formula of more seat equals more money. If a traveller has had a good experience then they’ll come back.”


PRICE VERSUS PRODUCT Emirates, like other airlines, also believes in the constant tweaking of its onboard product, whether it’s a new flatbed seat or, recently, a new range of Royal Doulton fine bone china crockery and Robert Welsh cutlery in First and Business Class. That’s a nice touch for travellers, but does it really come into play for a travel manager when they're sat round the negotiating table? “Our continued investment in our product –


both in the sky and on the ground – is a crucial part of our business strategy, and helps make us the carrier of choice for many business travellers,” says Vaughan. “We believe the views of the business traveller do have an influence on their travel managers when negotiating corporate deals, along with other key factors such as our extensive network and value for money fares.” Egencia’s Jonny Shingles concurs, suggesting


that a travel manager’s concerns don’t end with price, availability, safety and networks. “They do care about airline product changes because a travel policy is always a balance between price and traveller experience. A bad traveller experience entails some hidden costs.” Nevertheless, you can’t help questioning tweaks such as Virgin Atlantic’s introduction of mood lighting on its latest A330 Premium Economy cabins. The airlines says it is designed to ‘encourage relaxing, stress-free air travel for its passengers while also making them look more attractive’. A soft ‘rose champagne’ shade of lighting has been chosen for take-off, changing to ‘purple haze’, ‘amber warmth’ – which creates a candelight environment for passengers while dining – and then ‘silver


line of bespoke crockery from the house of William Edwards – one of Britain’s leading and awarded ceramic designers – as part of an ongoing drive to redefine the in-flight experience. Guests can also customise their meals to suit their individual tastes.” Portman’s Adrian Parkes adds weight to the argument that it’s not all about price as far as travel managers are concerned, and that these developments really can make a difference to a travel programme, especially when there’s strong competition on a particular route. “While price is undoubtedly a prime concern for travel and procurement managers, other issues certainly play their part as well,” he says. “There is an increased interest in areas that impact comfort, safety and reliability as duty of care simply cannot be ignored, so product enhancements, such as flatbeds, have to be factored in. An airline’s punctuality record is also important and plays a part in the decision- making process. We have seen an increase in interest in the premium economy offering, when available, as excellent value for money.” That interest in the ‘compromise cabin’ has


been fuelled by the need to tighten belts during the recession and get tough on travel policy. Travel spend, for many companies, was seen as a soft target and the first to go under the knife when the global economy slid into recession. But as the travel industry comes round, there


are few signs of companies relaxing again. “Travel managers learned how to optimise their budget and they still keep good practices in place such as restricted tickets, advanced purchase and reduced business class usage on shorter flights,” says Egencia’s Jonny Shingles. The fear that some travel managers have is


that with aviation returning to growth they’ll be unable to secure such good deals, as Portman’s


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