This guest article is written by Oussama Salah, who is an aviation expert based in Abu Dhabi, UAE. Being a Jordanian who flies around the region a lot and works in the sector, he shares his thoughts how the proposed sale of two Gulf carriers may or may note be a good idea.
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In the last week two governments in the Middle East have declared their desire to sell their national carriers within a relatively short period, about one year. Well it ain’t gonna happen.
Gulf Air goes on sale
Twenty days after Mumtalakat (the investment arm of the Kingdom of Bahrain) returned the ownership of Gulf Air to the government, citing that an airline is a strategic asset that will yield very little return. The government on 25 February 2010 announced its intention to privatize the airline within one year. Well, I don’t think it will happen. Although Bahrain Air is not a major threat, carriers in the region are. Gulf Air has a few advantages:

It has a restructuring plan and a vision of where it is heading
It has a fleet renewal plan which is in progress
It has several code sharing agreements within the …

Last week, I wrote an article for CNBC, which talked about the agility of Qantas that keeps the airline in profitable territory. The article resulted in a lively debate with a number of Aussie aviation experts down under, and one of them kindly offered to write a detailed Guest Post on SimpliFlying on how it’s actually Jetstar that’s keeping Qantas afloat.

Grant McHerron (aka Falcon124) is an opinionated aviation enthusiast & co-host of Plane Crazy Down Under, Australia’s only aviation podcast. He is an online/digital project manager and perpetual student pilot who can often be found crewing hot air balloons, working airside at Avalon Airshow and plane spotting at airports around the world. He graciousouly hosted me when I visited Melbourne last year, and we almost watched the sunrise in his hot-air balloon Enjoy!

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The latest half-yearly results from QANTAS continue to show an airline that is hemorrhaging cash on its mainline, full service routes. While QANTAS are certainly showing signs of agility, the primary factor keeping the group afloat is the success of their Low Cost Carrier brand Jetstar.
The creation of Jetstar
Towards the end of the 1990’s, QANTAS saw …

Garuda Indonesia on a roll At the Singapore Airshow, I had to opportunity to interview the CEO of Garuda Indonesia – Emirsyah Satar at the CNBC studios and it was quite a revelation (see video below). After churning a healthy $66 million profit in 2008 (after years of losses!), going through a major re-branding effort and ordering brand new Boeing 777s,  Garuda Indonesia is set to start an LCC, CityLink, have an IPO this summer and re-launch flights to Europe at the same time. It’s certainly a brand on a roll, and kudos to Mr Satar for championing the turn-around. Though, work still needs to be done. A brand that needs to re-build trust As we discussed in the interview, the Garuda Indonesia brand suffered setbacks after a few of crashes between 1997-2007, resulting in a ban from the EU for all Indonesian airlines to fly to the continent. …

This article was first published on the CNBC blog———-Qantas announced today a net profit after tax of A$58 million for the first half of the financial year, down from $210 million a year earlier, although the airline did recover from a loss in the second-half of last financial year. This 72% dip in profits resulted in the shares falling by up to 7.2% in early morning trades. However, Alan Joyce, the CEO, says the carrier has done better than most of its rivals. And it has, indeed, thanks to its agility.Agility through smart cost-cuttingAlthough revenues dipped by 13.4%, costs were slashed by 16.2%, which shows Qantas’ diligence and discipline in reducing expenditure in the past year. The cutting of frequencies to unpopular routes and grounding of older aircrafts was key to these cost savings.Load-factors have been the highest in five years – at 82.4%, on flights that carried a lesser number of total passengers as compared to the past year.This simply means that flights were more full than in the past, despite the recession. Of course, the downside was that this was achieved by …

As promised at the start of the year, SimpliFlying will be bringing you more Guest Columns from leading aviation practitioners around the world. Our second guest article of the year is written by Oussama Salah, who is an aviation expert based in Abu Dhabi, UAE. Being a Jordanian who flies around the region a lot and works in the sector, he shares with us his thoughts on why the proposed checked-in bag fee by Etihad is not a good idea. —–—–—– “ETIHAD may charge for second piece of luggage” This  was a remark made by James Hogan Etihad’s CEO, otherwise I would have thought it was a joke. Why would an aspiring and highly branded airline with cash flushed owners want to do something like this? Etihad operates in a highly competitive and well connected market, whether it is the UAE, MENA or the Indian subcontinent. The traveling public (both Arabs and Indians) in the region is traditionally price sensitive and is used to weight and not number of bags. It is basically a visit friends and relatives (VFR) market used to carrying gifts and shopping across continents, …

Let me begin by clarifying that this article is not about whether Lufthansa’s MySkyStatus will take off or not. It has already taken off. Because the amount of discussion I’ve had about it with my friends from around the world, online and offline, is phenomenal. Just today, my status updates on Facebook by this app generated over 30 comments by friends from Dubai to Chicago (check out the screenshot below for a sample set). It’s thanks to these friends that I’ve been inspired to write this article.
MySkyStatus – what’s the fuss about?
For the unaware, MySkyStatus is a tool that posts your flight info (altitude, location and arrival updates) automatically to Facebook and/or Twitter while you fly. And you guessed it, it’s the real-time nature of this app that’s making it go viral. And as you can see below, the updates can generate quite a discussion.

At first glance,  MySkyStatus is true value add for the customer. But the application is not perfect – and it need not be perfect in its first release anyway. However, there are some small tweaks that can be made, as …

Image via Wikipedia

Note: This is a Guest Post by Kat. She enjoys everything about airlines and works for their worst enemy: an airport.

Great brands have emerged amidst doom and gloom of economic recessions. Is this time for Singapore Airlines (SIA) to reinvent itself?

True enough, all these years, a Singapore Girl and premium class travel image were the selling points of the brand. But this economic crisis appears to have shaken and changed the landscapes of air travel industry quite significantly. More businessmen are taking budget carriers these days, premium class load factors show no signs of stopping decline, SIA business-class-only services had to be cut.

Market experts have been pointing out that even with the economic recovery premium class travel might not recover. After all, these low-cost-carriers (LCCs) get you there for a fraction of a price. At busier airports, LCCs have been snatching up slots, vacated by full-service carriers, which the latter might have a hard time getting back.

SIA appears to have been burning the candle from both ends. During …

Image by caribb via Flickr

Air India is losing about $1 billion, on revenues of $3 billion. What’s more alarming is that Air India contributes 10% of global airline losses with just 0.35% of global traffic (stat. from Bangalore Aviation). And the Indian national carrier is still struggling with its merger with the domestic Indian Airlines a couple of years back. Couple that with the global economic crises and a bloated payroll, and you know how much trouble the airline is in.

Being an Indian at heart, I couldn’t help but come up with some ideas to save this once well-regarded Maharaja brand. In fact, I know that when Singapore Airlines began operations, they heavily hired the best from Air India! I’m not sure if Air India can return to its former glory anytime soon, but these ideas should certainly help it get back on track. Or at least, I hope so.
Getting the business plan in order
I frankly feel that Air India has only survived as long as it has due to two …

Note: This is a cross-post from Steven Frischling’s Flying with Fish blog. Steven Frischling, aka: Fish, is a self employed photographer, and founder of The Travel Strategist, who has flown approximately 1,000,000 miles since he began to track his mileage 2005.
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Throughout the past year airlines have suffered massive financial losses due to record high fuel prices, a weakening global economy and declining demand for airline seats.

In an attempt to increase their financial stability many airlines in the United States, and around the world, turned to the ancillary revenue generated by charging passengers for their baggage.   As angered as passenger have been regarding the checked baggage fees they have helped major airlines in the United States collect more than US$1,145,385,850 in revenue during 2008…and baggage fees weren’t even initiated by most airlines in the United States until the middle of the second fiscal quarter of 2008.

The fourth fiscal quarter of 2008 saw airlines pull in US$498,600,000 alone!

Checked baggage fees have always provided a significant revenue source for airlines, however prior to the past year this revenue was for excess baggage and overweight baggage. Airlines that do not allow any free-checked baggage, such as American Airlines, now consider all …

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Recently, the Centre for Asia-Pacific Aviation (CAPA) published a report which concluded that the “full-service airline model break down in the new-world order“.

“Worldwide, the number of passengers travelling on First or Business class tickets fell by 16.7% in Jan-2009, a further substantial fall from Dec-2008 levels, which were 13.3% down on the year.”

That means that legacy airlines, which made a majority of their money from premium passengers, are struggling, even as low-cost carriers see greater traffic from people downgrading and new people taking to the skies.
What does the future full service airline model look like?
Here’s my prediction.
It will consist of airlines charging for providing value added services, rather than those un-bundling their products. Moreover, customer service will become a key brand distinction for the full-service airline, as prices would generally be competitive and so would most of the in-flight products too. The savvy traveler of the future will not only hunt the lowest prices, but be loyal to the airline that treats him well. Lastly and most importantly, employees of the full service airline will be part of the family, and share the love with customers at every touch point too (up to 16 …