NEWS TRAVEL WEEKLY BUSINESS CONTINUED FROM THE BACK
direct connects with important sales partners.” However, Lufthansa’s deal
with Google Flights could be more significant, with Bischof hailing it as “an important step in realising Lufthansa’s new sales and distribution strategy”. Aimed primarily at mobile bookings, it allows US consumers to ‘Book on Google’. Bischof said: “Lufthansa is the first legacy carrier worldwide to which Google offers this direct-booking function.” Schindler confirmed: “Bookings will be fulfilled by Lufthansa, but consumers stay within the Google environment, booking directly in the Lufthansa booking engine. “We’re the first to do this
with Google. We want to see how it works. It’s very exciting – Google is 90% of what happens in the online world.” He added: “A web page is not
really local. We might extend this beyond the US.” Advantage corporate director
Ken McLeod said: “I imagine Google will charge heavily for it.” He dismissed direct connect as an option for business travel agents, saying: “This is not moving the corporate market at all. Why would you have a direct connect with one airline? Other airlines have to follow [Lufthansa] for this to work and there aren’t others in the mix at the moment. The people who want direct connect are the big online travel agencies, and the airlines don’t want to deal with the OTAs – carriers want consumers to go direct.” Schindler declined to comment on booking figures, but said: “We had a fantastic October. November will be massively impacted by the strike.” Amadeus, the leading GDS in Germany, made no mention of the DCC or its impact on third-quarter results announced last week.
Hogan slams regulations for stifling aviation sector
Phil Davies
phil.davies@travelweekly.co.uk
Air travel is stuck with a regulatory system that limits consolidation, competition and consumer choice, the boss of Etihad Airways declared in a speech in London.
The carrier’s president and chief
executive, James Hogan, said the global industry should learn from the UK, as one of the first markets to embrace true competition. Delivering the 2015 Brabazon
Lecture at the Royal Aeronautical Society, he said: “Air travel is the lifeblood of the modern economy. “But while the modern
globalised economy has seen trade and tourism jump forward in leaps and bounds, the structure of our industry has shuffled forward only a few tiny steps.
“This is an industry that cries out
for new competition, across many different markets. But it is one in which smaller operators can only operate in niche environments.” To become a competitive global network carrier today is incredibly
Vueling boss to succeed Williams at BA in spring
The boss of Spanish no-frills carrier Vueling is to become executive chairman of British Airways. Alex Crux, chairman and chief
executive of Vueling, will succeed Keith Williams, who is retiring, in April. The appointment was part of
a wider reshuffle announced by International Airlines Group last week.
70
travelweekly.co.uk 12 November 2015 JAMES HOGAN: ‘Air travel is the lifeblood of the modern economy’
“The structure of the airline industry has shuffled forward only a few tiny steps”
challenging, Hogan added. “More than ever, scale is the single defining factor behind success for a network carrier,” he said. “Scale means a network that can compete against the networks of legacy carriers, built up over decades. “Scale means the ability to reach consumers with a brand promise across many different markets
– profile and visibility that will deliver customers. “And scale means the ability to
strip down costs to competitive levels, through economies of scale throughout operations. “So this is an industry requiring
a massive cost of entry to compete.” He outlined Etihad’s model for
growth, which has supplemented investment in organic growth with strategic equity partnerships with partner airlines. But he claimed legacy carriers such as the “big three” in the US and Lufthansa were doing their best to stifle new competition.
BA chief financial officer Nick
Swift will also step down in April. He will be replaced by IAG Cargo chief executive Steve Gunning. The changes came as IAG held a
capital markets day, announcing a “considerable upgrade” to its long-term return and equity cashflow objectives. The group’s goals for 2016-20
include improving profit margins from 10%-14% to 12%-15% and increasing annual earnings before tax (Ebitda) from the €5 billion previously estimated to €5.6 billion. IAG reported that group traffic
ALEX CRUZ: Will take over at BA
in October increased by 16.6% year on year, with premium traffic up by 5.7%, as capacity rose by 13.2%.
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