Tag Archives: airline

December 11, 2010 · 4:49 pm

Special assistance vs. free ride

This morning, at Cairo airport I found something I hadn’t seen since 2007 when I went to Moscow sometimes: passion for wheelchairs.

During the last week in Egypt, Luca and I have seen just 2 wheelchairs (in fact, she saw 2, I can only recall having seen one at Giza).

How many thousands of people we may have seen during this week? 1,000, 2,000, 10,000? No idea. But having been all day in the streets, museums, temples, etc., where there were crowds, I guess they were many. Let me use 2-3 thousands for simplification.

I know, this may be not a statistically relevant sample, but let me say there is a user of wheelchair per 1,000 inhabitants (there may be published stats on this out there; I didn’t check).

As you know, airline companies offer special assistance to get on board their aircraft. Yesterday, we found at the boarding gate 10 wheelchairs. We flew aboard a B777-200 with no more than 50-60% seats occupied, about 200-250 passengers. That is, 4-5% of passengers required special assistance in the form of a wheelchair.

As, I said, these are not statistically relevant samples, but these numbers bring to me some (provocative) thoughts:

  • At the airport we found 50 times more wheelchairs than in the outside world! That is what I call passion for them.
  • What is it so attractive in wheelchairs at airports? It’s a free ride (some body actually pushes it!), you get to avoid long queues and board first
  • Why don’t they all use wheelchair outside the airport? Nobody pushes it! The fact that streets and facilities are not adequately prepared might be a deterrent as well (just for people who can walk despite some difficulty).
  • It could happen that those flying are not the ones we found in touristic places and streets in Egypt… however, the factor of 50 is strikingly high to be explained only because of that, plus it would be strange for them to venture taking international flights and not wandering through the city.

Having said that, I’m totally in favour that this special assistance is provided because there will always be people who do need it. I wrote this post just out of surprise of seeing a queue of 10 wheelchairs, something I hadn’t seen in 3 years.

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May 15, 2010 · 11:00 am

Starting up an airline?

Some days ago I came across a post in the blog of Randy Tinseth, VP Marketing  for Boeing Commercial Airplanes, where he explains the concept of StartupBoeing and invites entrepreneurs to take up the opportunity. StartupBoeing is a website which offers information to entrepreneurs in order to help them build their business plan or run their operations. As it is stated in the web itself:

“The StartupBoeing team assists entrepreneurs in launching new airlines. From concept through launch, StartupBoeing offers guidance, review, analysis, data, resources, contacts, and referrals to qualified startup airlines.”

The first thing I thought was “yes, there is the opportunity to lose your investment”. To be fair, Tinseth points at different moments the difficulty of the business and that it is tough to start-up an airline. Airbus does also have the same concept available to entrepreneurs, in this case is called: Start Me Up.

I looked for the last industry outlook from the International Air Transport Association (IATA), the industry association. The figures are appalling (see the table below):

IATA Financial results of the last decade.

Airlines around the world have lost during the last decade 50 billion dollars, with only 2 out of ten years with profits. On average the net profit, loss in this case, was -1.4% of the revenues (over 4 trillion dollars in the decade). Of course, there are airlines making profits, but the industry is not doing well (just remember the last achievements of G. Díaz Ferrán).

I then remembered this other comment from Warren Buffet about the airline industry since its inception:

“I made the comment that if a capitalist had been present at Kittyhawk back in the early 1900s, he should have shot Orville Wright. He would have saved his progeny money.

But seriously, the airline business has been extraordinary. It has eaten up capital over the past century like almost no other business because people seem to keep coming back to it and putting fresh money in.

You’ve got huge fixed costs, you’ve got strong labour unions and you’ve got commodity pricing. That is not a great recipe for success.

I have an 800 (free call) number now that I call if I get the urge to buy an airline stock. I call at two in the morning and I say: “My name is Warren and I’m an aeroholic.” And then they talk me down.”

So, yes, if you are considering whether to start-up an airline, do yourself a favour: call that 800 number, and put your cash somewhere else where it returns more than -1.4%…

The one thing we should definitely praise from these initiatives is the information resources available to the general public, something commented by readers of Randy’s blog and a purpose expressed in the Startup website as well:

“StartupBoeing.com also has a wider purpose as a resource to pass on information to our customers – and also as a resource for existing airlines, financial institutions, consultants and the leasing community. It’s a place for neutral industry data. We want to help make the industry healthy and make airlines safe, reliable and profitable.”

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