Amon Cohen wonders whether another airline alliance would give the market a much-needed kick up the business end…
IF THERE IS ONE EVENT guaranteed to brighten my day, it is the arrival of a press release from Iberia. For reasons clear only to itself, the airline’s public relations department prefaces every headline with the phrase “New News”. In vain have I waited for one entitled “Old News”, but I live in hope.
It is, indeed, an item of old news that I have been wondering about just recently. Do you recall Sir Richard Branson hiring Deutsche Bank in 2010 to review the future of Virgin Atlantic? It followed British Airways obtaining approval to merge with Iberia and form a transatlantic joint-venture with American Airlines. At the time, we were led to believe, Sir Richard was considering either selling up or moving Virgin into one of the three global airline alliances, or both, because he no longer saw a sustainable future as an independent carrier.
Fast forward to summer 2012 and neither of those threatened developments has happened. Why not? One plausible argument is that the wily Branson was simply raising the stakes to pressurise UK and European regulators into blocking BA’s deal-making. There could be another reason, though, which is that perhaps Sir Richard has a new rabbit up his sleeve.
Many travel managers agree with Virgin that consolidation of much of the airline market to three global supplier groups, particularly on long-haul routes, reduces competitive choice. I even suggested in my last column that travel managers might eventually find their jobs under threat if the supplier base continues to rationalise in this way.
However, it is important to be realistic. The global entities coalescing around the most powerful members of Oneworld, Skyteam and Star Alliance are not going to go away. But what if we had a fourth alliance? It would not be a Utopian solution, but it might at least partially re-invigorate competition in the marketplace.
Could Virgin Atlantic be thinking this way, too? The airline is expected to learn in August whether it has won the rights to some of the domestic and European routes BA’s owner, International Airlines Group, is relinquishing as part of its acquisition of British Midland. Introducing feeder routes and new aircraft types would inevitably require some strategic changes at Virgin, so what about extending its reach through a new alliance in which it is a key player? Virgin Atlantic is already co-operating more closely with Virgin Australia and Virgin America, in which the Virgin group also has stakes.
Clearly, these three airlines working together still do not represent a top-division global force, but if you throw in one of the three major Middle Eastern airlines – Emirates, Etihad or Qatar Airways – as well, then it starts to get interesting. Of that trio, Etihad is the one showing most enthusiasm for partnerships. Indeed, it already has one with Virgin Australia. On top of that, word has it that not all members of the three existing alliances are happy with current arrangements, feeling they are very much junior partners whose interests are subordinated to those of the dominant carriers. If a few of those dissatisfied parties were to throw in their lot with a fourth alliance, too, then the idea really might start to acquire legs. It would certainly be good news for corporate buyers.
ONCE AGAIN, I feel I have committed an act of monumental hypocrisy by writing a feature for this magazine on how travel managers can encourage healthier business travel within their organisations (p50), because you’ll never find me in a hotel gym, that’s for sure. This is because I already have the perfect wedge-shaped torso. The fact that in my case the thin end is at the top and the thick end is around my waist is neither here nor there. It reminds me of an observation once made by Stephen Fry that his stomach was beginning to resemble a Tesco carrier bag filled with yoghurt.
Elsewhere in this issue (News, p13) is the announcement that Intercontinental Hotels Group is launching a brand called Even. Coincidentally, my previous column praised Intercontinental for unveiling another brand, Hualuxe Hotels & Resorts, specifically for Chinese guests. This new one I’m not so sure about, at least not for me, because everything at Even is geared toward the fitness-first traveller, with low-fat menus, state-of-the-art gyms and even bedrooms specially designed for guests to exercise in them.
No doubt it’s all very worthy, but I fear one’s fellow guests could be excruciating company. Imagine the conversations at the bar, assuming there actually is one, with emaciated, haunted-looking executive types earnestly comparing body-mass indices and Dukan dieting tips while nursing their carrot juices. A few years ago, the brewery Fuller’s opened a hotel in London. Now that’s a chain I would rather see.
I HAVE READ SEVERAL stories in the US trade press recently about an official report on the great 2010 Western Regions Conference scandal in Las Vegas. Not having heard of it before, I thought I should find out what was so shocking about this particular event.
Organised by the Public Buildings Service of the General Services Administration, a federal agency, the service’s regional administrator was foolish enough to specify he wanted an “over the top” event, and that is what he got. The final spend per delegate, when all costs were included, was $2,700 per head, which is not completely outlandish for a four-day conference. However, much of what happened was not justifiable, including blowing 15 per cent of the $823,000 budget on two ‘scouting trips’, five off-site planning meetings and a ‘dry run’ for 30 people. Then there were the $44-per-head breakfasts.
Perhaps the biggest mistake, though, was the collective failure of those concerned to remember that what happens in Vegas really ought to stay there. It wasn’t such a good idea for one delegate to provide incriminating evidence by filming a colleague rapping enthusiastically about how much money was being spent at the taxpayer’s expense.
My recommended punishment? Order them to hold all future conferences at Even hotels. I’d like to see them make a jolly out of that.