Posts in category Gulliver


Business and financeGulliver

Qatar Airways wants a 10% stake in American Airlines

IT SEEMED, at first blush, to be a masterclass in how to bait a rival. For years, American Airlines, along with other big American carriers, has complained of “unfair” competition from Middle Eastern operators, which stand accused of taking state subsidies. On June 22nd one of those accused, Qatar Airways, said it planned to take an unsolicited 10% stake in the firm.

In a regulatory filing, it was revealed that Qatar, which reported a profit of $540m in 2016, wants to buy at least $808m of American’s shares. The move has not gone down well with some. Doug Parker, American’s boss, described it as “puzzling”. One airline union accused Qatar of “using enormous government subsidies to gain a greater foothold in US markets”. Adding “They’re coming after our routes, which means the jobs of our members are at stake.”

Politicking from America, in turn, has been making life tough for Qatar’s national carrier. This month Donald Trump backed the decision of several Gulf states to cut diplomatic ties with…Continue reading

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Business and financeGulliver

“Basic economy” class is winning over flyers

GULLIVER wrote last week about American Airlines handing indignant flyers a notable victory. The carrier rescinded a plan to take away an inch of legroom from economy-class seats on new planes, following a public outcry. Such concessions are rare. Airlines generally worry about how customers vote with their wallets not how they grumble with their words. Hence, they cut comforts to offer the low fares that people demand.

Anyone hoping that American Airlines’ climbdown might signal a reversal of that trend should think again. Earlier this year, United Airlines introduced a new class of fare, “basic economy”. Such tickets, which strip out those few remaining comforts that economy passengers enjoy, have been derided as “last class”. But, like it or not, cost-conscious passengers are showing their approval.

The airline expanded the programme to all domestic markets last month. Andrew Levy, United’s CFO, said last week that about…Continue reading

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Business and financeGulliver

Complaints against America’s airlines are rising

LAST year, Bob Fornaro, the boss of Spirit Airlines, talked of the effort his firm had made to reduce the number of customer complaints. The ultra-low-cost carrier, dubbed the most hated airline in America by Bloomberg, had long been ranked as a primary purveyor of passenger pain, regularly propping up lists that rate airline service. Alas, Mr Fornaro’s efforts seem to have gone unrewarded. Complaints per passenger remain easily the highest of any of the big American operators. In fact, as our chart shows, things seem to be getting worse.

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Business and financeGulliver

American Airlines reverses a pledge to squeeze legroom further

SOME rare good news for anyone planning to fly economy class on American Airlines: the carrier has scrapped plans to shrink the distance between rows on new planes it is purchasing. The Texas-based airline had said it would reduce the seat pitch on its new Boeing 737 Max planes to a knee-aching 29 inches in certain rows, down from its typical 30 inches (or 31 inches on its current 737-800 fleet). Now it says it will install those rows 30 inches apart.

An inch may not sound like much, but its significance is broader. The airline made the change in response to public outcry. American said it received copious feedback from customers and employees and that “it is clear that today, airline customers feel increasingly frustrated by their experiences and less valued when they fly.” People complained, and American listened.

In fact, the pressure came from more than just ordinary Joes. A member of Congress, bemoaning the ever-shrinking seat pitch, introduced Continue reading

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Business and financeGulliver

Sanctions in the Middle East are bad for airlines, worse for travellers

PEACE in the Middle East, Donald Trump announced last month, is “not as difficult as people have thought over the years”. History will have to judge the president’s geopolitical impact on the region, but when it comes to air travel his influence is already being felt. And many business travellers might find themselves flying on inferior airlines as a result.

Mr Trump recently took credit for efforts to isolate Qatar. Last week, Saudi Arabia and five other countries in the region cut diplomatic ties with the tiny nation, which wields disproportionate influence through its oil wealth and international aviation. As a result of the sanctions, much of the airspace surrounding Qatar was closed. That blow follows the Trump administration’s earlier actions to ban nationals of several majority-Muslim countries from entering the United States—an order that has been put on hold by the courts—and to prevent…Continue reading

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Business and financeGulliver

Younger business travellers are more likely to extend trips for fun

ACCENTURE, advertorial, jeggings. The competition for ugliest portmanteau is fierce. Few constructions, though, can match “bleisure” for barbarousness. For the uninitiated, the word is a blend of business and leisure. But ugly as it is, it exists for a reason: the practice of adding a few days of pleasure to a work trip is becoming increasingly popular.

The latest research to bear this out was released this week by The Global Business Travel Association. Its survey of North American business travellers found that 37% had extended a work trip to include some leisure within the past year. This, typically, might mean stetching a break in a city into the weekend, possibly shipping in the family to join the fun. Often, such travellers will stay in the same hotel for the duration, making up the extra cost themselves.

Interestingly, the older the traveller…Continue reading

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Business and financeGulliver

Should animals be allowed to roam freely on jets?

FLYING can be a stressful and nerve-wracking experience. For those with mental-health issues it must be doubly so. One way in which vulnerable travellers deal with their anxiety on a plane is to take on board an “emotional support animal” (ESA). Such creatures provide succour for their owners. Unlike guide dogs, they “do not require any kind of specialised training,”  according to CertaPet, an organisation that provides such services. “In fact,” reckons CertaPet, “very little training is required at all, provided that the animal in question is reasonably well behaved by normal standards.”

That sounds like an easy and effective way to help sufferers. It was distressing to read, therefore, of the emotional support dog that mauled a passenger on Delta flight from Atlanta to San Diego earlier this week. Reports suggest that the dog, a labrador-pointer cross-breed, was accompanying a military…Continue reading

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Business and financeGulliver

Don’t trust an airline with your instrument

B.B. KING was famous for being inseparable from Lucille, his Gibson guitar. So much so that when taking a plane, he would book his six-string its own seat, often under the unimaginative nom de guerre of “Mr Guitar”. It is understandable that musicians prefer not to check their precious instruments into the hold. Airlines do not have a history of treating them so gently. Even a steel guitar can be made to weep.

Perhaps the most infamous horror story resulted in “United Breaks Guitars” a series of revenge songs recorded by Dave Caroll that went viral in 2009. Mr Carroll watched aghast from his plane window as ground handlers tossed about his $3,500 axe, after retrieving it from the hold. Though the neck of his guitar was plainly broken, it took nine months and the release of three mocking songs before the airline coughed up $1,200 for the repairs.

That incident may have been on…Continue reading

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Business and financeGulliver

Political ostracism means more woe for Qatar Airways

AFTER years of ascension, the three Gulf superconnectors, Emirates, Etihad and Qatar Airways, have recently suffered a bad spell. The low price of oil—usually a boon for airlines—has reduced spending power in oil-rich states, which has dampened demand for flights from the region. Terrorist attacks throughout the Middle East, too, have proved a deterrent. Then came Donald Trump. The president’s attempts to ban travel from some Muslim-majority countries put many off flying to America, which is a big market for these long-haul carriers. American restrictions on electronic devices on flights from the three carriers’ home airports to America made things even worse.

Qatar Airways must have hoped that the only way from here on in was upwards. Those hopes were dashed on July 5th when Qatar’s neighbours, Saudi Arabia, the UAE and Bahrain, decided to sever diplomatic relations with the country, followed swiftly by others, including Egypt. The Continue reading

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Business and financeGulliver

Britain needs a second flag-carrier

AIRLINES, like all firms, have a duty to shareholders to cut costs, if it makes them more competitive and more profitable in the long term. British Airways has been zealous in this regard. Over the past few years, the airline, under the stewardship of Willie Walsh and Alex Cruz, has cut staff, outsourced IT, and removed complimentary goodies from passengers.

They have their reasons. Not so long ago, some questioned whether British Airways could survive the combination of low-cost carriers devouring its short-haul route and upscale Middle Eastern rivals dominating the long-haul connecting market. Both of those challenges remain real (indeed a third previously unforeseen threat has arisen in the form of low-cost long-haul competitors such as Norwegian Air). Still, no one now questions British Airways’ immediate future. Partly as a result of cost-cutting, and a bit of luck in the form of low oil prices, the airline’s finances are rosy. In 2016, IAG, the carrier’s parent firm, reported a profit of €2.36bn…Continue reading

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Business and financeGulliver

Why flying in the summer is so hellish

HERE in America, we recently celebrated Memorial Day, when barbecues and pool openings mark the beginning of summer, astronomers be damned. For leisure travellers, that means sun, surf and spritzes. For business travellers, it can mean headaches, as airport lines grow ever longer and flight delays more common.

Who is to blame for the annoyances of flying in the summer? Partly, it is those aforementioned leisure travellers. Longer waits in security lines are largely a question of volume. Airlines for America (A4A), an industry group, forecasts that more than 234m passengers will use America’s carriers from June through to August. That would represent a new record, topping last year’s number by 4%. A4A attributes the expected increase to a growing economy and “historically low airfares”. But really, this is a familiar pattern. In 2016 the group also predicted a record-high number of summer…Continue reading

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Business and financeGulliver

The threat of a laptop ban resurfaces

MODERN air travel has become less tolerable in many ways. Seats are narrower, legroom more cramped and luggage space elusive. But in one way it has vastly improved. Keeping yourself amused on a flight once meant squinting at a flickering movie on a distant screen. Today flyers can travel with a library of films, music and books on a small electronic device. On-board Wi-Fi also means business folk can work uninterrupted. 

That may change. On May 28th, John Kelly, America’s homeland security secretary, said that the country was considering extending a ban on large electronic devices in cabins to cover all international flights to and from the country. Currently only passengers on planes taking off from eight mostly-Muslim countries are forced to place their laptops, tablets and the like into the hold. 

The idea has not come out of the blue. Officials have hinted for months that they were considering introducing such a ban. Earlier this…Continue reading

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Business and financeGulliver

An inglorious return to Austin for Uber and Lyft

UBER and Lyft will make their triumphant return to Austin on Monday. Whether the Texas capital will welcome them back is another matter.

The ride-hailing giants left in a huff a year ago, after Austinites had the temerity to vote in favour of maintaining the city’s requirement that the firms perform fingerprint checks on their drivers, as traditional taxi companies must. The pair have long resisted being held to the same standards as taxis, with an insistence bordering on arrogance. They have also tended to assume that customers had their backs. So it was a rude awakening when, after forcing a city-wide ballot on the issue, and spending close to $9m on their campaign, Uber and Lyft found themselves on the wrong side of the progressive Austin population, which didn’t want to be pushed around by big companies from out of town.

Even so, the city had become reliant on the ride-hailing firms, due to a combination of hedonistic nightlife,…Continue reading

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Business and financeGulliver

Donald Trump considers congestion pricing for American cities

DONALD TRUMP made a splash during the American presidential campaign when he called for a trillion-dollar investment in infrastructure. But when he actually released his first major budget proposal this week, funds for roads and bridges hardly attracted notice. Though the document does lay out a target of $200bn in direct federal spending, to be augmented by private investments, it provides only $5bn in 2018. “President Trump’s campaign promises on infrastructure are crumbling faster than our roads and bridges,” said one senior Democrat.

Yet tucked away in the proposal is one short paragraph that ought to intrigue the country’s city-dwellers, who overwhelmingly vote Democratic, as well as business travellers who often find themselves visiting American cities.

In a paragraph titled “Incentivize Innovative Approaches to Congestion Mitigation”, there is a proposal to “provide valuable incentives for localities to think outside of the box in solving long-standing congestion challenges,” modeled after…Continue reading

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