A fiery debate has entered the opinion column of local Queensland newspapers, as residents of Brisbane’s inner suburbs continue to lobby against excessive aircraft noise pollution.
Last week saw residents of Brisbane’s inner suburbs protest outside Brisbane Airport Corporation’s head office over “constant” noise pollution due to the new flight paths, which are a direct result of the airport’s newly-opened parallel runway.
Protestors were ultimately locked out of the BAC building, which only brought more buzz to the situation.
The issue essentially stems from residents being fed incorrect information about how often flights would be taking off and landing in the direction over their homes, when public consultation periods were active.
According to local Green’s candidate Max Chandler-Mather, residents near the airport were told that the addition of the new parallel runway would see more flights taking off and landing over Moreton Bay, giving off the impression that following the opening of the new runway, additional aircraft noise would not be a huge concern.
“But instead, what we’ve seen is an unprecedented amount of flight traffic over some of the most densely populated areas of Brisbane,” Chandler-Mather said.
In the days since the protest, national chief operating officer of the Australian Industry Group Shane Rodgers penned an opinion piece in the Courier Mail arguing that Brisbane residents must get used to their new reality of living under a busy, noisy flight path, and “embrace the reality of becoming a large, internationally significant city”.
He argued that if residents wish to benefit from Brisbane’s expansion, in welcoming the G20 summit or the Olympic Games, they simply need to toughen up.
“This big thinking will require us to stop acting like a country town and acting surprised when the trappings of growth come with growing pains and side effects,” Rodgers said.
“If you live in an inner suburb in a city lucky enough to have an airport within 20 minutes of the CBD, noise is part of your life.”
It should be noted that Brisbane Airport Corporation (BAC) is a member of the Australian Industry Group (Ai Group), of which Rogers is the COO.
“Frankly, if you have a particular problem with airport noise, or any other noise that comes with living in a busy city, you really should move somewhere quiet,” he added.
“Short of junking a $1.1 billion asset, it is hard to see any outcome from the current protests that would solve the noise issue to the satisfaction of the loudest protesters.”
The article was met with criticism, and in response, the Courier Mail columnist Mike O’Connor provided an opinion piece of his own in defence of the protestors.
O’Connor said Rodger’s “defence of [BAC’s] position” was “hardly surprising”, given his role at AIG, of which BAC is a member.
“The AIG argument is that the airport is essential to the economic prosperity of the city and if those who question its modus operandi are allowed, by weight of public opinion and political pressure to change the way it works, then the whole state will retreat into an economic Ice Age,” O’Connor penned.
“This is a laughable scare tactic to be treated with the derision it deserves.”
O’Connor argued that none of the protestors outside of BAC are advocating for the “junking” of the airport, as Rodgers suggested, and said “no good purpose is served by attempting to portray the residents as latter-day Luddites”.
“Their concerns are with flight paths and there are a number of retired and currently employed airline pilots who have made intelligent, considered suggestions as to how the air traffic control could be better managed,” O’Connor said.
“Whether this was by design is unknown, but people were lulled into the belief that there would be minimal impact on their quality of life.
“They believed the assurances contained in the glossy brochures and were ill-prepared for the ugly reality of aircraft rattling their windows as they roar a few hundred metres overhead, rendering conversation impossible.”
Australian Aviation reported in May 2020 that Brisbane’s new flight paths were coming into effect, following the opening of its new $1.1 billion runway.
It was reported at the time that under the new flight paths, aircraft would be able to take off over the bay at night, rather than across the city, reducing noise for locals.
It is likely that improving domestic traffic conditions has seen the noise pollution issue for local residents exacerbated in recent months.
KLM CEO Sees More Efficient Planes as the Fastest Way to Hit Climate Goals
After a steady drumbeat of rising aviation emissions — and a growing public backlash — carbon output plummeted dramatically in 2020. European aviation authority Eurocontrol estimated that the industry’s emissions fell 57 percent year-over-year. But the drop came with a price: the coronavirus pandemic took a steep economic and human toll on the continent, claiming lives and closing businesses.
Now, with the travel recovery seemingly at hand, airlines are renewing their efforts to meet industry targets for net zero emissions by 2050. But it’s more than that; where sustainability was oft a final, frequently forgotten bullet in many earnings calls before the crisis, they are now key talking points — both of airline management and investors.
KLM is one airline that has pushed ahead with its sustainability initiatives, pandemic or not. The carrier flew the first synthetic kerosene demonstration flight ever between Amsterdam and Madrid in February, an event that went off without a hitch CEO Peter Elbers said in a recent interview. But with just 500 liters of synthetic kerosene used, it was just a drop in the bucket on a plane that can carry as much as 26,000 liters of fuel.
“It’s impossible today to replace 100 percent of fuel by 100 percent, or even 50 percent, of biofuel,” said Elbers.
Synthetic aviation fuels are all the buzz in airline circles. Numerous airlines have made public commitments or flown similar demonstration flights like KLM. However, most projects face high implementation costs — prompting a push in many places for government support — and, for biofuels, issues finding scalable feedstock supplies.
“We should be ambitious but also realistic at the same time about what we can do,” said Elbers.
In addition to sustainable aviation fuel, KLM is looking at fleet renewal and shifting short-haul flights to trains where possible as part of what Elbers called a “cluster” of climate initiatives. The carrier aims to cut its 2005 emissions per passenger in half by 2030 after achieving a roughly 30 percent reduction by the end of 2019. And parent Air France-KLM has joined other airlines in a broad pledge to achieve net zero carbon emissions by 2050.
Lowering Emissions with New Aircraft
“Fleet renewal is the quickest, most feasible thing to do,” said Elbers when asked how KLM aims to meet its targets.
The pandemic allowed KLM to speed up efficiency improvements across its fleet. The airline retired its last Boeing 747 early last October in what was a sad day too many aviation enthusiasts but also an important move to reduce fuel burn. The jumbo jets were KLM’s last passenger aircraft with four engines, allowing it to move entirely to more efficient twin-jets like the Boeing 787 on long-haul routes.
This move was not lost on group management with Air France-KLM Chief Financial Officer Frederick Gagey highlighting it during an earnings call in February. “Basically all the aircraft with four engines, have now left the group fleet,” he said.
Renewal is also about adding new, more efficient jets. KLM took delivery of its first re-engined Embraer E195-E2 in February. The jets burn nearly 10 percent less fuel than the E190s they replace and, with 32 more seats, emit nearly a third less carbon per passenger. KLM has 25 of the aircraft on order.
The airline has also restarted its analysis of the Airbus A320neo and Boeing 737 Max families for a possible order, said Elbers. Both jets would further reduce the fuel burn and carbon emissions of KLM’s fleet in the future.
Limited Shift to Trains
Shifting flights to trains is one area where airlines, at least in Europe, have made some some visible strides during the pandemic. Air France dropped domestic flights between Paris Orly and Bordeaux, Lyon and Nantes in favor of the country’s TGV high-speed trains as a condition to of its Covid-19 relief package in 2020. And pending climate legislation could see at least three more routes suspended in a similar fashion.
KLM, with no domestic network to speak of, does not face the possibility of a similar government edict. But that does not mean it is not looking for opportunities to put passengers on trains. Early last year just before the pandemic, the airline replaced one of its then-five daily Amsterdam-Brussels flights with a connection to a train operated by Thalys.
“Other than Brussels, it will remain very challenging by the simple fact that it will cost an enormous amount of money” to build the necessary rail infrastructure, said Elbers. He cited London, which is a roughly 3-3.5 hour train ride from Amsterdam, as somewhere that train connections could work but that Berlin, which is an 8 hour train trip despite being only 130 miles farther than Heathrow from Schiphol, where they could not.
“I really wouldn’t see on a large scale the ability to replace [flights],” he said.
Europe On The Verge
All of KLM’s sustainability initiatives come amid the historic slowdown in travel during the pandemic. The carrier was hit hard when each EU member state was allowed to set its own border rules to keep the Covid-19 in check, thus making what was supposed to be a single airline market into a morass of 27 different travel regimes. KLM lacks a domestic market and relies on the EU bloc to feed its Amsterdam hub.
The SkyTeam Alliance carrier did its best to maintain connectivity across its vast network even when demand was at historic lows. At the end of last year and before the last round of Covid-19 lockdowns in Europe, KLM was flying roughly 90 percent of its route map with only about 50 percent of its pre-crisis capacity.
“[Now], I’d say we’re at the verge of a more structural recovery rather than another bump,” said Elbers. “I’m not a doctor, I’m not a specialist but looking at what we see in other countries, I think — I hope — that we’re on the verge of a more structural recovery.”
Elbers estimated that travel in Europe will rebound roughly three months behind the U.S., which surpassed 2 million daily travelers on June 11 for the first time since March 2020. KLM — like others — has already seen a jump in bookings to markets that have already reopened, including Greece, Portugal and parts of Northern Europe. While its overall European capacity is scheduled to be down nearly 15 percent during the peak summer travel months of July and August compared to 2019, Greece will be up 45 percent and Portugal 22 percent, according to Cirium schedule data.
“It’s important that we get a harmonization of some of the European travel regimes,” Elbers said when asked what was need to further the recovery in Europe. That comment proved prescient, coming days before EU ambassadors agreed to reopen borders to vaccinated travelers. Travel by those without their jabs will be limited based on the level of Covid-19 infections in the country they are coming from.
The recovery in long-haul international travel remains an unknown. When transatlantic travelers return — nearly 27 percent of KLM’s long-haul capacity in 2019 — is a “big question mark,” said Elbers. The airline is part of an expansive transatlantic joint business with Air France, Delta Air Lines and Virgin Atlantic Airways.
And as for business travel, Elbers is confident that it will return in some form. What he is not sure of is by how much or what flows will come back.
KLM has slimmed its business to adapt to this uncertain future. At the end of 2020, it had achieved most of the cost cuts that it agreed to in exchange for state relief. Nearly one in six staff members had left the airline as it sought to cut employee full-time equivalents by 6,000. And in the first quarter, costs across Air France-KLM were down more than 45 percent compared to a year earlier.
“There’s going to still be some places in the organization where we have a mismatch between supply and demand,” said Elbers on staffing. “But overall, I think the present organization is adequate for what we need to do and also allows us to [be ready for] the first stage of recovery.”
Photo Credit: KLM is moving forward with its fleet renewal plans even amid the slow European travel recovery. KLM
Wow: Over 15,000 Passengers Fly On South Korean Flights To Nowhere
Flights to nowhere have taken South Korea by storm, with thousands of passengers taking scores of flights since travel restrictions and border closures thwarted more conventional travel plans. With flights to nowhere to continue in South Korea throughout 2021, the already impressive statistics will keep rising.
Over 150 flights to nowhere have flown in South Korea
According to data recently released by the Korea Customs Service, 15,983 passengers have taken a ride on 152 flights to nowhere. Seven South Korean airlines have offered the flights. Whether passengers were keen for the ride or just needed to spend some money, Simple Flying isn’t sure. But between them, those 15,983 passengers spent US$20 million on duty-free shopping. Nearly half, or 7,266 passengers, spent more than $600 on duty-free booze.
Of the seven airlines operating flights to nowhere, Asiana Airlines low-cost subsidiary Air Busan operated the most, with 35 flights. Jeju Air has run 34 flights to nowhere, followed by Jin Air with 33 flights. Trailing but still active in the flights to nowhere space are T’way Air, Air Seoul, Asiana, and Korean Air.
Retail therapy drives the demand for flights to nowhere
These South Korean flights to nowhere are particularly interesting because of their strong focus on duty-free shopping. The South Korean Government allows the flights to happen to help prop up both local airlines and the local duty-free industry. That’s fair enough – airport retailers are frequently among the forgotten amid the travel downturn.
But what was a tightly controlled sideline for airlines and the other players in the industry has exploded in South Korea. The South Korean Government has allowed more airlines and more airports to get involved over the last year. Over that time, the rationale for the flights has also shifted.
While flights to nowhere or scenic flights in many other countries are about recapturing the flying experience, that doesn’t seem to be the case in South Korea. A recent Bloomberg report provides an interesting insight into these flights. Bloomberg detailed a two-hour flight to nowhere on Air Busan.
Global duty-free retailer Lotte organized the flight for 130 of its best customers. Those customers paid nothing for the flight. But they were expected to spend up big on Lotte duty-free. This flight was one of six flights to nowhere organized by Lotte in May alone.
The flights briefly enter Japanese airspace, thus legitimizing duty-free purchases. South Korea’s second-biggest duty-free operator, Hotel Shilla, offered two similar flights in May to its customers. Each of those flights could accommodate 114 passengers.
Flights to nowhere passengers spend up big on duty-free
The Korean Customs Service says that in addition to alcohol, these passengers were spending up big on cosmetics, perfumes, and pricey bags.
“I saw a lot of people with bags full of duty-free items,” one Air Busan duty-free shopper told Bloomberg. This particular shopper left her flight on the low-cost airline armed with a new Chanel handbag – not the type of arm candy you see on your typical low-cost airline passenger. These flights don’t cover the losses incurred by duty-free operators since the travel downturn began, but they do help.
“The contribution from the flights to nowhere is small, but it’s better than having nothing,” an analyst told Bloomberg.
The full-service airlines aren’t above getting their hands dirty mixing flying with retail. Flag carrier Korean Air is among the seven airlines offering flights to nowhere. But unlike the low-cost carriers, Korean Air provides a more refined duty-free flight. Passengers pay from US$142 to $490 (depending on where you prefer to sit) and pick up their pre-ordered duty-free on the way through the airport before boarding one of the short flights out of Seoul’s Incheon International Airport. Still, it’s all about retail therapy. Says one Korean Air passenger;
“A flight to nowhere is a refreshing concept, but honestly, I don’t think I would have booked if there were no duty-free shopping benefits.”
Passengers Learn To Adapt As Airlines Adopt Dynamic Pricing
With airlines keener than ever to maximize revenues, dynamic pricing is making inroads into the industry. Not everyone is welcoming the trend, but industry insiders say dynamic pricing can benefit both passengers and airlines.
Airlines know a lot about their passengers, dynamic pricing harnesses that knowledge
Dynamic pricing is a process whereby an airline will pitch a fare at you based on what they know about you or think they know about you. Airlines are masters at gathering data. They harvest your frequent flyer data and track your searches and interests online via cookies. Hand over your Amex details to buy a drink inflight or a case of wine from the airline’s wine store and that airline gets an insight into your drinking preferences. Hundreds or thousands of these tracked behaviors all add up.
Airlines already know a lot about their passengers – we’ve largely lost or surrendered that privacy battle. Now, many airlines are harnessing that data and learning to use it to boost revenues. On an individual passenger level, dynamic pricing tries to determine what a passenger is willing to pay to fly from Madrid to Heathrow next Sunday.
Just how much will a passenger pay to fly at a certain time on a certain day?
Justin Jander, Director of Product Management at digital commerce platform PROS says airlines are trying harder than ever to create a sticky end-to-end passenger journey. One way they can do that is to use artificial intelligence (AI) to learn from the past behavior of a passenger. The airline can then attempt to predict what they will do next – including what they are willing to pay for an airline ticket.
“Dynamic pricing is extremely relevant to the airline industry as it allows airlines to break away from the barriers of fare classes with fixed price points,” says Jander. “Imagine a scenario where there are two filled fares, one at $100 and the other at $200. If a passenger is willing to pay $150, the airline either offers that passenger the $100 fare and loses $50 in incremental income. Or the airline can offer the $200 fare and lose the entire $150. Having this flexibility to identify an optimal price point allows airlines to be more effective in capturing revenue.”
We know airlines adjust fares according to broad seasonal factors. We also know an airline will adjust fares to a particular destination at a certain time if a big event is on in that city, say a football final. Equally, airlines will drop fares at off-peak times to stimulate travel demand. Dynamic pricing is about taking this to a more granular, individual passenger level.
Dynamic pricing can work for passengers
Justin Jander says dynamic pricing can work for passengers as well as airlines. At a basic level, interested passengers can learn how dynamic pricing works and is applied. It’s like learning how frequent flyer, hotel loyalty, or shopping programs work. Once you understand the nuts and bolts of dynamic pricing, passengers can potentially work dynamic pricing to their advantage.
“It is more expensive to acquire a new customer than to retain one,” says the PROS Director. “It makes sense for airlines to prioritize getting to know their existing customers.
“For passengers that are brand loyal customers of a particular airline, they will benefit from receiving personalized flight packages based on the AI that the airline has been able to leverage to understand them and their preferences.”
Most airline insiders agree dynamic pricing is here to stay. As the AI behind it gets smarter, so to will dynamic pricing. It will become more subtle and less driven by sometimes clunky algorithms. There always has been and always will be some tension between buyer and seller. Dynamic pricing in the airline industry won’t take that away> But over time, dynamic pricing may become better at fixing the median price that satisfies both airline and passengers.
Do you agree with dynamic pricing in the airline industry? Is it here to stay? Post a comment and let us know.
Spirit Airlines Details Major Capacity Increases For Rest Of 2021
American ultra-low-cost carrier (ULCC) Spirit Airlines has detailed capacity plans for the rest of the year. Heading into the third quarter, which starts in just a couple of weeks, Spirit Airlines is planning double-digit growth compared to the same quarter in 2019 and only plans to grow that come the fourth quarter. This will lead the airline to a modest capacity increase for the year compared to 2019, emphasizing the continuing improvement of the air travel industry.
Spirit Airlines plans third and fourth quarter capacity increases
Spirit Airlines had planned significant growth for 2020 and 2021 before the crisis hit. That led the airline to hit pause on its growth plans. Now, the carrier is coming back to business. After a year in recovery mode, the airline is back on its growth trajectory and is betting big on leisure travelers.
Just looking at data from 2021, the airline recorded capacity down 18.9% in the first quarter compared to the same time in 2019. In the second quarter, Spirit expects its final flown capacity to be down around 5.2% from the same quarter in 2019. However, from the third quarter, things start to change.
In the third quarter, which stretches from July through September, Spirit expects its capacity to be up 10% from the same quarter of 2019. If that is not impressive enough, come the fourth quarter, the airline expects its capacity to be up 21% compared to the fourth quarter of 2019.
Altogether, the capacity increases will see Spirit fly about 2.0% more capacity in 2021 than in 2019. While a relatively modest increase, this represents the start of the airline’s return to its growth trajectory.
An improving airline environment
The environment has gotten significantly better for airlines. As a ULCC, Spirit has an advantage in the recovery, as it is already suited to fly leisure and visiting friends and relatives (VFR) traffic at low, unbundled fares and turn a profit. While it has yet to turn a quarterly profit since the start of the crisis, the airline is getting closer to that goal each day.
In fact, Spirit now expects, based on an improvement in operating yields, its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) to be “modestly positive.” Yields have been helped by returning leisure travelers.
Spirit Airlines has seen an impressive recovery in leisure demand both in domestic and international markets. The continued improvement through the second quarter leads the airline to expect its load factor to hit 84% for the second quarter, with many flights going out well over that load factor. Even more, this is in line with the airline’s performance in the second quarter of 2019.
Spirit Airlines is willing to put up a fight
With most business travelers still waiting on the sidelines, Spirit Airlines is competing with plenty of other airlines for leisure traffic, and it is not willing to back down. The airline has continued its growth in 2021, including returning and adding new cities in Latin America and the Caribbean.
As Spirit targets double-digit growth, this will be driven by a mix of new routes and growing frequencies. As the airline has accelerated deliveries of new Airbus A320neo aircraft, with 16 total new aircraft planned to arrive this year, it will add more frequencies and grow its route network.
Much of Spirit’s growth is also targeting new routes. While plenty of already started in advance of the summer, including a daring transcontinental flight from LaGuardia, there are more new routes on the horizon. One of the biggest splashes expected in the fourth quarter will be the airline’s entrance at Miami International Airport (MIA), with 30 new routes planned. Plus, there will be growth in other markets like St. Louis and Louisville.
All in all, Spirit Airlines has a lot of runway left in the US, and it is accelerating for takeoff. The carrier has no dearth of options for new routes. The constraints on that growth will be limitations in the pace of Airbus deliveries, the hiring of enough crew to sustain the new routes, and access to both gate space and takeoff and landing rights wherever they want to fly.
Are you excited to see Spirit Airlines plan double-digit capacity increases later this year? Where do you want to see Spirit expand? Let us know in the comments!
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