Routes News Magazine, Issue 4, 2014

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routesnews

The world air service development magazine

Donetsk Airport’s Kirill Osypov

Airlines: Ethiopian, Fastjet & Kenya Airways Airports: Donetsk, Cairo & Moscow Domodedovo Destination reports: Uganda & South Africa Issue 4 Volume 9 2013 www.routesonline.com

Special report: The Silk Road Plus: All the highlights from Routes Europe

routesnews

The world air service development magazine

Kenya Airways’ Titus Naikuni Airlines: Ethiopian, Fastjet & Kenya Airways Airports: Donetsk, Cairo & Moscow Domodedovo Destination reports: Uganda & South Africa Issue 4 Volume 9 2013 www.routesonline.com

Special report: The Silk Road Plus: All the highlights from Routes Europe

Foreword A

s befitting events that focus on the opportunities offered by key emerging markets, Routes CIS and Routes Africa will move to Ukraine and Uganda this year, two countries that have a lot to offer the airline route planner.

As part of preparations to host the Euro 2012 football tournament, Donetsk’s Sergey Prokofiev International Airport underwent a major modernisation programme, and now boasts a brand new terminal and modern facilities that it hopes will attract a host of international airlines. And there are positive signs that the country will join the EU’s Common Aviation Area, which could unlock unrestricted access to the country for European carriers.

With an abundance of wildlife, national parks and the picturesque Great Lakes region, Uganda has one of East Africa’s major tourism markets, with critically endangered mountain gorillas one of its greatest attractions. Today, tourism is estimated to represent some 7.6% of Uganda’s total GDP. But Uganda is far from just a tourism market. The recent discovery of some 3.5 billion barrels of oil reserves in the east of the country, and a deal with three international companies to build a pipeline to exploit them, could provide Uganda with a huge new source of revenue, and airlines a nascent energy industry to serve.

Editorial

Editor Oliver Clark +44 (0)208 831 7514 oliver.clark@routes-news.com Deputy Editor Piers Evans +44 (0)208 831 7508 piers.evans@routes-news.com Group Editor Joe Bates +44 (0)208 831 7507 joe@aviationmedia.aero Reporter Steven Thompson +44 (0)208 831 7560 steven.thompson@routes-news.com

Sales

We explore both these markets in more detail through in-depth interviews with senior aviation and tourism executives in this issue.

We also take a look at the African and Russian aviation markets and the Silk Road tourism market, and we profile Moscow’s Domodedovo International Airport.

The routes industry is, of course, all about arrivals and departures, and, after two years in the editor’s chair, it is time for me to move on to pastures new. However, I leave you in the capable hands of Lucy Siebert, who will be returning to the hot seat from July.

Editor Oliver Clark

R™ is a registered Trade Mark of UBM Aviation Routes and is used under licence. © Copyright 2013.

The content of this publication is the copyright of UBM Aviation Routes Ltd and shall not be copied or stored in digital format without the written permission of the Copyright holder. Content is correct at time of printing. UBM Aviation Routes shall not be liable for any errors or omissions contained herein.

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Advertising Manager Rebecca Randall +44 (0)208 831 7513 rebecca.randall@routes-news.com Sales Manager David McCauley +44 (0)208 831 7515 david.mccauley@routes-news.com

Production

Design, Layout & Production Andrew Montgomery andrew.montgomery@routes-news.com Elaine Harris elaine.harris@routes-news.com Mark Draper mark@aviationmedia.aero Erica Cooper erica@aviationmedia.aero Website Jose Cuenca jose@aviationmedia.aero

Publisher

Jonathan Lee +44 (0)208 831 7563 jonathan@aviationmedia.aero Published by Aviation Business Media Ltd Sovereign House, 26-30 London Road Twickenham, TW1 3RW, UK T: +44 (0)208 831 7500 F: +44 (0)208 831 7501 The opinions and views expressed in Routes News are those of the authors and do not necessarily reflect any policy or position of UBM Aviation Routes or Aviation Media.

Printed in the UK by The Magazine Printing Company using only paper from FSC/PEFC suppliers www.magprint.co.uk

Routes News 4, 2013

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Contents 22

26

30

3 Foreword

8 World news

34 26 Moscow times Oliver Clark looks at the evolution of Moscow Domodedovo International Airport’s global network.

13 Cargo news

30 Open borders

15 On the move

Mark Smulian talks to South African Tourism Minister, Marthinus van Schalkwyk, about his dream of making an African e-visa regime a reality.

16 Airline one2one Christophe Vette, executive director, network planning and revenue management, Czech Airlines.

34 Raising its game

19 Airport one2one

In the wake of Ukraine’s hosting the Euro 2012 tournament, a new team is driving an ambitious traffic expansion at Donetsk Airport, writes Piers Evans.

Joachim von Winning, chief commercial officer, Cairo Airport Company.

39 A route in focus

22 African promise

Routes News spoke to Zhihang Chi, VP and general manager Air China in North America, ahead of the launch of its new Beijing–Houston service.

Africa’s aviation landscape is being transformed by the ambitious growth plans of Kenya Airways, Ethiopian and Fastjet, reports John Strickland.

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Contents

40 44

50

40 African pearl

57 Game on

Uganda is increasingly eager to realise its vast untapped tourism potential, while a milestone oil deal looks set to further brighten its economic prospects, finds Piers Evans.

Africa learnt more about the airport city phenomenon at the recent Airport Cities World Conference and Exhibition (ACE) in Ekurhuleni, writes Steven Thompson.

44 Off the beaten track

58 Routes Europe report back

While it remains at an early stage of development, the Silk Road tourism market offers many opportunities for airlines, writes Oliver Clark.

64 Routes update

48 Being social

Routes News takes a look at the latest innovative ways airlines and airports are using social media.

66 View from the top Routes News speaks to Monette Pasher, executive director of the Atlantic Canada Airports Association (ACAA).

50 Time to change?

Despite impressive levels of traffic growth, regulatory and market challenges mean Russia still lacks home-grown low-cost carriers, writes Steven Thompson.

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World news US and saudi arabia ink open skies The US and Saudi Arabia have signed an Open Skies agreement, paving the way for unrestricted air services between the two states.

US Ambassador James B Smith and Saudi Arabia’s Deputy Director of the General Authority of Civil Aviation, Dr Faisal bin Hamad Al-Sugair, signed the agreement in Jeddah in May, eliminating all previous bilateral restraints on air services.

“This agreement will allow for the strengthening and expansion of our strong trade and tourism links with Saudi Arabia, benefiting US and Saudi Arabian businesses and travellers by expanding opportunities for air services and encouraging vigorous price competition by airlines, while preserving our commitments to aviation safety and security,” the US State Department said in a statement.

Piece of the big apple Nowegian’s first long-haul flight took off from Oslo’s Gardermoen Airport on May 30, heralding the latest attempt to make low-cost transatlantic travel a viable option.

Speaking at the ribbon-cutting ceremony, Norwegian CEO, Bjorn Kjos, said: “The market for intercontinental flights has long been characterised by artificially high fares and limited flexibility. The reception of our new long-haul routes shows that many want to fly inexpensively and comfortably to New York, Bangkok and Fort Lauderdale.”

Scots rally to save London flights A campaign backed by businesses, residents and politicians has been launched by a local newspaper in Inverness to maintain air links with London Gatwick following Flybe’s decision to pull out of the route next year.

The Highland Press and Journal is spearheading the initiative, backed by

business groups and local government bodies, which aims to convince easyJet to maintain current levels of service between Inverness and Gatwick.

Flybe has agreed to sell all its slots at the London gateway to Luton-based easyJet for €23.5 million, which could impact Inverness’s air links from March 2014. “Flybe has timings that are

very convenient for getting to London for a meeting, while easyJet’s flights to London go in the middle of the day,” a local reporter told Routes News.

Local organisations such as the Highland Council, local chambers of commerce and the Scottish Council of Development and Industry are backing the campaign.

TUI has confirmed it is ordering 60 B737 MAX jets with a price tag of €4.68 billion. The deal, which is subject to shareholder approval, would see the new aircraft delivered between January 2018 and March 2023.

28 A320s in 2013 and 2014. Aircraft imports and airline expansion are strictly controlled in India.

Etihad Airways has upgraded its Abu Dhabi–Minsk service from three flights per week to a daily schedule as of June 15. The UAE-based carrier will also now offer onward connections from Minsk to the cities of Kiev, Moscow and Saint Petersburg, thanks to a new codeshare agreement with Belavia, the national airline of Belarus.

IndiGo has been granted permission by the Indian government to import

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Routes News 4, 2013

Qatar Airways is to launch direct flights to Tripoli, as well as to Casablanca.

Tripoli was previously served via Alexandria, while Casablanca is now being routed via Tunis.

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News EasyJet to launch Rome–Tel Aviv service EasyJet is to fly twice a week from Rome Fiumicino to Tel Aviv from September 24.

Rome is the fifth city that easyJet is linking with Tel Aviv, alongside London, Manchester, Geneva and Basel.

EasyJet, which entered the Israeli market in November 2009, will become the country’s second-largest non-Israeli carrier with the new operation, said commercial manager Hugh Aitken.

“We are committed to working alongside the Israeli tourism and business community to continue to make flying easy and affordable on routes across Europe,” he said.

The new easyJet A320 service will fly on Tuesdays and Saturdays.

Alitalia, El Al and Israir already operate competing Rome–Tel Aviv flights.

Earlier this year the Israeli parliament passed a motion allowing the country to enter the EU’s liberalised common aviation area and allowing unrestricted access to its aviation market from Europe and vice versa.

Azul plans to GO public As early as July, Azul could seek to raise $500 million by listing in both US and Brazil.

Azul Linhas Aereas Brasileiras aims to make a simultaneous primary share offering in Brazil and the US with a target of 1 billion reais ($500 million), according to media reports.

In its filing for the initial public offering (IPO), the airline said the funds would be used to buy planes, add routes and cut working capital.

Since its launch in 2008, the carrier has grown rapidly to become Brazil’s third-largest carrier, behind Gol and Tam. Last year, Azul took over its smaller rival Trip to expand its market share.

Azul was founded by entrepreneur David Neeleman, who also set up the US carrier JetBlue.

The airline has targeted routes between Brazil’s smaller cities as the country’s consumers use their rising incomes to swap bus travel for flights.

Yet an economic slowdown in the country could now cut its growth.

the world’s Dreamliner fleet Returns to the skies after battery repairs.

Virgin Australia Regulators clear path to buy 60% of Tiger Airways Australia.

LOT Polish Airlines Introduces Warsaw–New York B787 services.

Turkish Airlines Reported to be looking at the first non-stop Istanbul–Sydney route.

Take off, NOT

airline profits Tony Tyler tells IATA that airlines are only making €4 per passenger.

BA A320 Forced to make an emergency landing at Heathrow after an engine fire.

Flybe Announces plans to quit London Gatwick next year.

Kingfisher executives Several flee the troubled airline.

Air Tanzania has resumed services between Dar es Salaam and Tabora a year after reportedly suspending the route to allow maintenance of Tabora Airport’s runway.

Vietnamese low-cost carrier VietJet Air has launched a new Hanoi–Bangkok route. It faces stiff competition from

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Vietnam Airlines, Qatar, Thai AirAsia and Thai Airways, which all operate the route.

From June 8, Delta Air Lines has added a new service between New York JFK and Quebec via its Delta Connection partner Chautauqua.

The airline will operate a 50-seat Embraer E145 on the route.

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Piece of cake This imaginative cake in the shape of a wine box was baked to celebrate Monarch’s new routes to Bordeaux and Split from Birmingham Airport, which launched in May. Bordeaux is perhaps best known for the full bodied red wine of the same name and the city is a popular destination for wine tours.

News Thai joins Heathrow A380 club Thai Airways has announced that it will deploy an A380 on its daily London service from December 1.

Under the planned schedule, an A380 will fly between Heathrow and Bangkok’s Suvarnabhumi Airport, leaving London at 11.50am and Bangkok at 1.10am. However, a second daily service will operate by A340-600, taking off from London at 9.35pm and Bangkok at 12.50pm.

In March, Thai Airways UK and Ireland general manager Khun Wit Kitchathorn told Bloomberg that the airline aimed to fly an A380 on the route once it received the fifth and sixth aircraft.

“Frequencies are the most important thing, and from that point of view I’d rather have three 747s serving London,” said Kitchathorn.

“But the A380 is also a prestige aircraft so we’d welcome it of course.”

Twinning an A380 with an A340-600 on the route gives a capacity of 874 seats, while the two B747s provide a total of 778 seats, according to OAG.

EgyptAir launched new services to Toronto, Manchester, Abidjan and Harare and upgraded its London services from June 1. Elsewhere the carrier has suspended flights to Damascus and Aleppo because of the poor security situation.

Korean Air has begun a codeshare agreement with Czech Airlines on the

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Routes News 4, 2013

Etihad’s São Paulo headache Etihad entered the South American market for the first time in June with the launch of a new service to São Paulo, but it won’t serve the route daily until ‘capacity restrictions’ at Guarulhos Airport are resolved.

Etihad is operating an A340-500 on the route and becomes the last of the big three Gulf carriers after Qatar and Emirates to join the market.

But its original plans to operate daily on the route are to be put off until later in the year by unspecified capacity restrictions at the gateway.

Guarulhos was one of three airports that was privatised by the Brazilian government last year in an agreement that binds its new operators to modernise and expand its facilities.

Emirates already flies daily to São Paulo from Dubai (DXB) by B777-300ER and Qatar operates a daily service to São Paulo from Doha (DOH) by B777-200LR. From Dubai, Emirates also flies daily to Rio de Janeiro by B777-200L.

Going to Miami American Airlines (AA) will fly daily between Miami International Airport (MIA) and Milan Malpensa (MXP) from November 21.

With the new service, travellers from Milan can access more than 100 destinations throughout the US, Caribbean and Latin America, said the airline.

Due to its growing Italian population and fashion industry, Miami is a popular destination for Milan, said Marilyn DeVoe, American’s vice president – Miami.

“This new route enhances our expanding global network and provides our European customers a gateway to many Caribbean and Latin America destinations from our Miami hub,” she said.

From Miami, the B767-300 service takes off at 5.55pm to touch down at 9.35am.

Flights from Milan depart at 11.25am and land at 4.40pm.

The new service will operate under American’s joint business agreement with British Airways and Iberia.

Incheon–Prague route. Korean and Czech now operate daily services on the route between them.

United Airlines has announced a new service between Austin-Bergstrom International Airport and Cleveland Hopkins International Airport from September 25. With the launch of the new service, Austin will become one of

only seven airports with year-round service to all eight United hubs.

China Southern has received the first of 10 B787 Dreamliners. The mid-sized aircraft is designed to fly long-haul, point-to-point services and will fly to international destinations after being launched on domestic routes, said the carrier.

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Cargo news Cargolux flies weekly Munich service Cargolux has launched a weekly B747-400F flight between Atlanta and Munich via Luxembourg.

German freight forwarder Senator International Spedition will be the main customer, for import tonnage mainly from the US and Asia, said Cargolux interim president and CEO Richard Forson.

While Cargolux has flown charter flights from Munich, this is the airline’s first regular airfreight service to and from the Bavarian capital.

Etihad launches round the world freighter route Etihad Cargo has started a jointly operated route with Atlas Air Worldwide connecting Abu Dhabi with destinations in Asia, the US, South America and Europe.

An Etihad Cargo-liveried B747-8 freighter is now flying Abu Dhabi–Hong Kong–Chicago–Miami–Viracopos–Quito– Amsterdam–Abu Dhabi.

Etihad Cargo signed a multi-year aircraft, crew, maintenance and insurance agreement with Atlas Air to provide the B747-8 freighter with 125-tonne cargo capacity.

Three new destinations in the Americas – Miami, Viracopos and Quito – extend Etihad Cargo’s network to 92 points. The carrier’s own eight freighters serve 28 of these destinations.

The B747-8 freighter is the largest plane in Etihad Cargo’s current freighter fleet. The airline also operates three B777Fs, one B747-400ERF, one B747-400F and two A330-200Fs. Etihad Cargo will take delivery of two more A330-200F freighters in 2013 and 2014.

Air Incheon, the Korean start-up cargo carrier, is now offering interline flights to Taipei, Hong Kong and US destinations including Cincinnati, Houston and Los Angeles through an agreement with Polar Air Cargo (PO). Air Incheon operates scheduled flights to Haneda and Sakhalin but also includes Ulan Bator and Qingdao on its route map.

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CAA joins SkyTeam China Cargo Airlines (CCA), a subsidiary of China Eastern Airlines, has joined the SkyTeam Cargo Alliance as its 11th member carrier.

Shan Chuanbo, China Eastern’s senior vice president, said joining the alliance would bring the carrier economy of scale benefits while enlarging its flight network and enhancing its international competitiveness.

“SkyTeam Cargo is a unique global cargo alliance with high growth and vibrancy and is highly recognised by its customer-focused freight products with uniform standards as well as its unique one roof programme,” said Chuanbo.

Chong Choy, vice president of alliances at Air France-KLM Cargo and chairman of SkyTeam Cargo, welcomed CCA to the alliance.

“With the entry of China Cargo Airlines into the alliance, we have an unrivalled presence in the Greater China region, having already welcomed China Southern and China Airlines in the past few years.”

Norwegian Cargo, a new venture from low-cost carrier Norwegian, will not aim to undercut freight rates on belly-hold capacity on B787s, due to fly to JFK, Bangkok and Fort Lauderdale this year.

Bjørn Erik Barman-Jenssen told the media that the cargo operation will not “give it away”. The operation has been contacted by salmon exporters, he added.

Singapore Airlines Cargo is to store a second B747-400F because of faltering demand. The freighter will be parked at Victorville, California, from June 2013 until May 2014, leaving the carrier with 11 B747-400s. SIA Cargo put another freighter in storage in December 2012.

SIA Cargo had an operating loss of $167 million in its 2012/2013 financial year.

Routes News 4, 2013

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ON THE MOVE

Virgin Australia has appointed Judith Crompton (pictured) to the newly created role of chief commercial officer (CCO). Previously group executive of sales, Crompton is responsible for alliances, network, revenue management and sales, covering Virgin Australia’s domestic and international network.

Jan Moeller is now head of business development at Cologne Bonn Airport.

Moeller was previously head of business development at FrankfurtHahn and his replacement is Christoph Goetzmann.

Heike Fölster has been appointed to the newly created position of CFO of Berlin Brandenburg Airport and its operating company. Her previous roles included management positions at Mobil Oil AG, Airbus and Hamburg Airport.

William Pearson has left his position as Birmingham Airport’s aviation development director. He will take up the position of head of commercial airport partnerships with Jetstar Airways based in Melbourne, Australia, from October 2013. Tom Screen, currently aviation development and strategy manager at Birmingham Airport, will cover for Pearson in the interim period.

David Lenigas, Fastjet’s executive chairman, has stepped down and will replaced by CEO Ed Winter on an interim basis. A search process is now under way for a non-executive chairman, said the carrier.

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The Greater Fort Lauderdale Convention & Visitors Bureau has announced the promotion of Fernando Harb (pictured) to vice president of tourism sales. Harb, who has been with the bureau since 2007, takes over from Alfredo Gonzalez, who has joined Brand USA. Former Liverpool John Lennon Airport managing director Neil Pakey has been announced as the new CEO of Shannon Airport Authority. Pakey has more than 30 years’ experience in the industry, with a strong track record in delivering airport passenger and revenue growth. From 2010, he was the senior director of network marketing for the Vantage Airports Group, with responsibility for 18 airports worldwide.

The Atlantic Canada Airports Association has elected Doug Newson, CEO of Charlottetown Airport Authority, as its new president. Newson oversaw a 12% rise in annual passenger numbers in 2012 to 285,000.

He takes over from Keith Collins, CEO of St John’s International Airport.

Lithuanian holiday charter carrier Small Planet Airlines has announced the appointment of Halldor Sigurdarson as its new chief financial officer. Sigurdarson, who previously worked for Viking Airlines and XL Airways, will be responsible for the company’s continued expansion in international markets as well as all of its financial affairs.

AirAsia has appointed management recruiter Mittu Chandilya (pictured) as the CEO of its new AirAsia India subsidiary. Chandilya, who comes from professional headhunting firm Egon Zehnder’s Asia-Pacific office, will lead the joint venture airline as it prepares to launch operations in June.

Falk Durm has been appointed to the new position of head of airport relations for Germanwings. Durm will be based in Cologne and joined the company on April 1, 2013. He will report to Robert Jahn, senior vice president of airports and ground services.

Korean Air has appointed Jason Kim as its new regional manager for the UK and Ireland, taking over from James Park, who returns to the airline’s head office in Seoul. Kim was previously the airline’s general manager for Australia, and based in Melbourne.

With the resignation of Jet Airways CEO Nikos Kardassis following the sale of a 24% stake to Etihad, COO Hameed Ali will lead the airline until the board picks a replacement.

Kardassis helmed Jet also in 1994–1999 then returned to the carrier in 2009.

John Batten is to take over as managing director of cargo carrier Coyne Airways from September, based at its Dubai hub. He moves from Swissport Cargo Services, where he was senior vice president – cargo worldwide.

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How many passengers are you aiming to fly in 2013?

What are the core elements of your network strategy?

With the introduction of Airbus A330 aircraft into the fleet we implemented some significant changes in our hub structure at Prague Václav Havel Airport. Specifically, we added more flights in the midday wave mainly to Germany, Italy and Switzerland.

Also, we are opening five new destinations this year: Nice, Zurich, Florence and Perm, which we started in April, followed by Munich and Seoul at the beginning of June. All together with these changes, we are planning to carry slightly more than three million passengers this year.

We had an important press conference last December in which we presented the main axis of our future development.

Our flights to Russia and the CIS will remain an important part of our network strategy. By adding Airbus A330s to the fleet, we are taking an important step to reinforce Prague’s position as a significant gateway between Europe and Russia, CIS and also Asia with the launch of our own operation to Seoul in June.

What are the opportunities for expanding business or leisure travel into Prague?

Like most European countries, the Czech Republic’s economy has been impacted by the euro crisis.

Therefore, we prefer to keep a conservative approach on potential growth for premium traffic to and from Prague this year. In the meantime, we can see very good developing trends originating from the ‘niche’ markets we operate in other regions.

On the leisure side, Prague is ranked in the top list of popular European destinations, together with Paris, London, Rome and Barcelona.

Therefore, Prague is one of the best places in Europe to develop as a top destination for incoming tourists. Many travellers (especially long-haul) are already choosing Prague as the second or third place to visit when making their travel plans throughout Europe. We think there is a really interesting potential to explore and develop this further.

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How rapidly will Korean Air’s minority holding in Czech Airlines be reflected in new routes?

Name:

Christophe Vette

Company: Czech

Airlines

Job title: Executive

director, network planning and revenue management

Hometown: Prague, Czech Republic

What is the current mix of business and leisure traffic?

Europe is experiencing a very challenging economic environment these days, especially for airlines. Not only are traditional carriers facing fierce competition from growing LCCs, but they also have to adapt to continuously changing customer behaviour. Over the last three years Czech Airlines also went through an important restructuring process. This was a tough time for the airline, but we have been able to somehow redefine our network, schedule and commercial strategy, resulting in a better and more balanced passenger mix.

For the time being, the collaboration between our two companies is mainly focused on the Seoul–Prague route.

We have been working with our Korean Air colleagues in fine-tuning the current codeshare agreement for the trunk route as well as beyond points. From this summer, Korean Air will have access to more European destinations via Prague on flights operated by Czech Airlines. Likewise, Czech Airlines is currently evaluating access to some unique destinations in the Asia-Pacific region served by Korean Air via Seoul.

What routes are Czech Airlines’ A330s likely to fly on in addition to Seoul?

The introduction of the Airbus A330 to the fleet is mainly to operate flights between Prague and Seoul. Together with Korean Air, the service will increase to seven weekly frequencies this year in July compared with four a year ago.

In addition, during the summer timetable, we plan to rotate the aircraft on our most demanded destinations in

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Airline one2one

Russia, CIS and Middle East. This will enable us to grab additional traffic in the summer peak period which we couldn’t get otherwise by using narrowbody aircrafts (A319/A320).

What factors do you expect to drive traffic between Prague and Asia?

South Korea is the 15th largest economy

by GDP in the world and is one of the G20 major economies. There are many important Korean companies (cars, electronics and shipping, for example) currently operating businesses in Central and Eastern Europe, especially in the Czech Republic and Slovakia. This represents significant premium traffic that we expect to build on. Also, leisure traffic between South Korea and Europe increased by more than 54% over the last three years and this is definitely a market which we want to step into and develop.

How did you choose a career in aviation?

As a child in Switzerland, I often dreamt of becoming a pilot, but then all schoolboys do! I actually ended up doing management studies. After university, I was lucky enough to get a job in the aviation industry. I have never looked back or regretted my decision.

How well is Prague understood as a destination or a hub around the world?

As mentioned, Prague is in the top five destinations in Europe for incoming visitors. However, Prague Václav Havel Airport is still considered as a very small hub in comparison to mega airports such as London Heathrow, Paris Charles de Gaulle or Frankfurt.

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This was a tough time for the airline but we have been able to somehow redefine our network, schedule and commercial strategy, resulting in a better and more balanced passenger mix So the perception of Prague as a touristic destination is today much more important than its hub operation.

This is also why we believe there is a strong potential to explore. Our airport is very functional, conveniently located in the heart of Europe and quite fast to transfer (30 minutes for Schengen and 40 minutes international).

Do you have a favourite Czech Airlines route?

You have described routes to Russia and the CIS states as the ‘backbone’ of Czech Airlines’ operations – do you expect them to retain this central role?

What are your interests outside work?

We are currently operating to eight destinations in Russia: Moscow, St Petersburg, Rostov, Samara, Nizhny Novgorod, Ufa, Yekaterinburg and Perm. In the CIS states, we fly to Almaty, Tashkent, Yerevan and Tbilisi. There are strong historical ties between this region and the Czech Republic. Prague is (and will remain) an important gateway for Russian investors and tourists in Europe.

In our current operation, I would say Abu Dhabi. I love the approach over the Persian Gulf in the early morning with the rising sun in a light mist rising over sand and water. But I am definitely looking forward to our first Airbus A330 flight to Seoul!

I like sports and it is important for my work/life balance. I especially love skiing in winter and hiking in the summer. I am also an adventurous traveller and always like to discover new exotic places.

GET INVOLVED! Do you want the global route development community to hear what you have to say?

Let us know at: oliver.clark@routes-news.com

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How hopeful are you of an Open Skies deal with the EU?

– CAI offers carriers the biggest O&D market in the Middle East and North Africa. The Egyptian economy is expected to grow dynamically once again and the middle class is continuing to expand.

The chances of increasing traffic between the EU and Egypt through an Open Skies agreement are very good.

No-frills carriers also operating on seventh freedom rights could open up new market segments, which would benefit Egypt’s struggling tourism industry. Airline fifth freedom rights would expand existing routes between Cairo and Europe: for O&D traffic from/to Cairo as well as for transfer traffic. Furthermore, these routes could probably attract remote-hub services.

Has Cairo Airport recovered from the Arab Spring?

What are your biggest markets currently?

Our biggest markets are located within the Middle East and North Africa, topped by Jeddah, with 828,500 departing passengers in 2012, Riyadh with 363,228 and Dubai with 322,848.

The top 10 destinations also include Kuwait, Sharm El Sheikh, Abu Dhabi, Khartoum, Luxor, London and Istanbul.

What key destinations are you targeting?

On the traffic side, our main goal is to resume flights by North American carriers and to stabilise and improve services to Europe. Dynamic new market opportunities are emerging from the growing interest of East Asian visitors in Egypt’s cultural, archaeological, natural and leisure attractions.

Which routes and carriers has Cairo recently gained?

Egyptair started operating flights to Toronto and Manchester last year in June. We also are pleased to gain FlyGeorgia for the Cairo–Tbilisi route with a weekly flight.

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Name:

Joachim von Winning

Company: Cairo Airport Company Job title: Chief

commercial officer

Hometown: Cairo

We have seen a steady recovery since February 2011. The first quarter of 2013 was still down 7% compared to 2010, but up 5% compared to last year and up 8% compared to 2009.

We are mainly missing cultural tourists, who are unfortunately still worried about Egypt’s security situation. The number of travellers wishing to spend their beach resort holidays in Hurghada or Sharm El Sheikh is also still weak.

But there are glimmering signs of recovery and the Egyptian government is taking a more proactive stance to reassure international tourists and to promote the amazing attractions of this country.

Are you targeting low-cost carriers?

What are Cairo’s advantages as a hub?

In comparison to other African competitors, Cairo has the best existing route network with the most international passengers and a strong home-base hub carrier, which happens to be a member of the huge Star Alliance. Cairo Airport’s Terminal 3 represents a new era in the region in terms of operational excellence and hub connectivity. Terminal 2, right next to Terminal 3, will open in 2015, offering seamless transfer options between all network carriers. Egypt has a large domestic market and – with 22 million people living in Greater Cairo

Currently, Cairo International Airport is reserved exclusively for full-service and charter airlines. However, we have received several offers from no-frills carriers interested in serving Cairo.

One of those airlines even wants to set up a base at CAI.

Are you already talking with carriers about capacity at Terminal 2?

Terminal 2 is currently scheduled to open in 2015. At the moment, we are revising our relocation plan in terms of operational and commercial improvements to the terminal design.

Our goal is to offer capacity in Terminal 2 to all international full-service

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Airport one2one

I am a ‘lean thinker’. In other words, I don’t like to waste resources – whether of material, time or manpower – and I’m always striving for perfection operators now located in Terminal 1, so that their passengers can enjoy modern facilities and a wide selection of shops, restaurants and other amenities. This will allow for product differentiation between charter/low-cost in Terminal 1 and full service in Terminals 2 and 3.

How has cargo traffic been performing?

Last year’s cargo volume of 278,877 tonnes is at about the same level as we had in 2008. While exports are recovering and are up 7% on 2011, imports are still weak and down 11.6%.

The decline in imports is mainly due to reduced foreign direct investment (FDI) after the Arab Spring and Egypt’s diminished foreign reserves. With FDI returning after the political stabilisation and the expected approval of loans from the IMF, we expect imports to recover again. Exports are mainly driven by perishables (especially beans, strawberries, grapes, herbs and fish) to the Middle East and the European Union.

How has your role as CCO at Cairo Airport affected your management style?

Working in a cultural context so different from my own has been both challenging and rewarding. Communication skills and flexibility, mutual respect and understanding are the daily tools needed to achieve success with both small and large projects. One has to appreciate the differences between cultures and continents and recognise the synergies that can be leveraged. Visits to FRA by

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my co-workers have also proved valuable for developing this close working relationship.

What aspects of life in Egypt appeal most to you and your family?

Living near a large number of astonishing historic and natural sites is a great experience that you cannot have in any country in the world.

Besides, Cairo has a lively expatriate community where – in contrast to other major cities – all nationalities mix.

Is Cairo destined to remain Africa’s key hub?

We do not have to fear the competition from the Middle East, considering that Abu Dhabi has about the same number of passengers as we did last year. If the impact from the Arab Spring had not been so intense, Cairo Airport would have been busier than Abu Dhabi.

In any case, CAI has some very strong natural assets in demographics and market size, as well as a rich mixture of history and culture that has evolved over several millennia and not been created overnight.

What factors underpin future growth?

African growth rates are increasing significantly and will even surpass East Asia’s. Africa is taking a step towards opening up economically, bringing greater demand for traffic within Africa as well as to markets in Europe, the Americas and Asia. Low-cost airlines will contribute strongly to the growth in

air traffic within and to/from Africa.

Growing middle classes and rising disposable incomes will continue to drive local demand for quality travel offers in the coming years. One should not forget the sizeable population of Egypt.

What are your key guiding principles?

I believe in cooperation. Relationships – in business and in private life – should be mutually beneficial and based on transparency and trust. It is a central task of top managers to find alternative solutions that create more value through cooperation for all stakeholders. I am a ‘lean thinker’. In other words, I don’t like to waste resources – whether of material, time or manpower – and I’m always striving for perfection.

What career would you have followed if you had not chosen aviation?

When I received the offer from Fraport, I was also offered a job at Deutsche Bahn. So probably I would have ended up in the railway sector or stayed within the transportation and logistics industry.

From today’s perspective, it was the right choice. Once you are in aviation for a few years, you will never leave.

GET INVOLVED! Do you want the global route development community to hear what you have to say?

Let us know at: oliver.clark@routes-news.com

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African promise Africa’s aviation landscape is being transformed by the ambitious growth plans of Kenya Airways, Ethiopian and Fastjet, reports John Strickland.

O

f all the world’s major air transport markets, the continent of Africa is perhaps the one which has presented most challenges to stable, safe and consistent development of air services.

These barriers are a combination of natural factors, including geography and natural disasters, but perhaps more importantly man-made, ranging from lack of infrastructure to corruption and safety oversight.

Yet to make such one-sided observations would be to underestimate the enormous potential which Africa offers and which an increasing number of home-grown quality airlines are beginning to exploit ever more successfully.

According to preliminary data from ACI, Africa registered an 11% increase in passenger traffic in 2012, the second-highest in the world after the Middle East, while IATA figures reveal African carriers carried 7.5% more passengers in 2012 than 2011.

But as new south–south trading flows have grown between Africa and China and other parts of Asia, it has been the dynamic and powerful Gulf carriers that have moved in with sizeable capacity to exploit the growth opportunities.

Ethiopian Airlines CEO, Tewolde GebreMariam, expresses concern that

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the African Civil Aviation Commission (an institution designed to represent the interests of African carriers) has achieved “mixed effectiveness” with 82% of the market being non-African.

“This has to change. African air space is more open to non-African than African carriers. As long as there is a level playing field, this is not a major concern, but if not then it becomes unfair,” he adds.

He highlights the complexities of national, regional and inter-regional regulatory frameworks and believes that African countries should work together to negotiate more effectively, citing the EU’s broad remit as an example, with the EU and US being “balanced partners”.

GebreMariam also points out that a poor safety record in a small number of African countries should not be used as an excuse to tar others with the same brush when in fact the vast majority adhere to international standards.

With a population of over 1 billion people, the opportunity for route development in Africa is vast. Income levels are growing, fed by economic growth. The massive take-up of mobile phones for communication and banking is a barometer indicating a willingness to embrace new technology, rising

prosperity and latent untapped demand for accessible air travel.

Projected absolute traffic growth is, in isolation, impressive: around 60 million people flew in Africa in 2010 and this is expected to rise to 150 million people by 2030.

However, the statistics should be put in context. Boeing’s 2012 market forecast predicts African annual GDP growth to 2031 at 4.4% per annum, ahead of the global average of 3.3%.

Yet in terms of aircraft, Boeing expects to deliver just 900 new aircraft over this period to African carriers, less than 3% of forecast total global demand for 34,000 aircraft. Looked at from a different perspective, Airbus puts African RPK growth at 5% for the same period, but accounting for just 3% of global RPKs and for 4% of global demand for new aircraft.

The African market still struggles under the weight of government bureaucracy and high taxation levels on the sector. In 1999, African carriers signed up to the Yamoussoukro Decision, which was designed to bring air service liberalisation and Open Skies to intra-African air markets. However, the reality has not lived up to expectation and the market remains fragmented and poorly regulated.

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Despite the hurdles, there are a number of companies native to the continent that are leading the way in successful route and network development. These airlines are proving that it is possible to follow different but disciplined business models and to deliver both service and financial results to world-class standards.

So who are these leaders? South African Airlines, long regarded as one of the best on the continent, has recently been going through tough times with instability of management and financial problems. But elsewhere, Ethiopian Airlines and Kenya Airways, two airlines with lengthy pedigrees, are flourishing.

Ethiopian Airlines Ethiopian Airlines has been in business for 67 years. It is government owned but has to stand on its own two feet, internally funded and self-financing its activities. Fast, profitable and sustainable growth has been delivered over the last eight years.

The airline recorded 25% passenger traffic growth in 2012 to 4.6 million passengers, while freight grew by 16%.

Twelve-month growth to June 2013 is expected to be 20%.

“African economic development will be the biggest opportunity as it will allow us to grow. Africa will be one of the fastest-growing regions,” says GebreMariam.

Ethiopian has developed a very effective hub at its home base of Addis Ababa. An early morning wave operates to points across Africa, followed by early evening departures to Europe, the Middle East and Asia. China is the largest single market with 26 flights per week.

Ethiopian was one of the first airlines globally to receive the B787 Dreamliner,

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with four delivered by June 2013.

After the recent worldwide grounding all are now back in service. This aircraft’s long range and operating efficiencies are key to the company’s ‘Vision 2025’ growth strategy.

The objective is to become “the leading aviation group in Africa”, expanding the network to 90 international and 26 domestic destinations, increasing the fleet to 120 aircraft and passenger volumes to 18 million.

Kenya Airways Kenya Airways was privatised in 1996 and has worked closely in its development with shareholder Air France-KLM. In 2005, it received globally recognised IOSA safety certification.

The airline, led by CEO, Titus Naikuni, is recognised as being one of the best managed in the industry but still has to combat barriers in its home country when taking tough commercial decisions necessary to improve efficiency.

There have been strikes and questions in the Kenyan parliament concerning the company’s recent efforts to slim down its workforce: “We see a lot of opportunity for improvements in productivity,” says COO, Mbuvi Ngunzi, an accountant by training, who comes from outside the airline industry having worked at Bamburi Cement.

His approach is: “Can we do this more simply?” It is this business mindset and willingness to challenge the status quo that help explain Kenya Airways’ success where others have failed.

The airline is more focused on the African market than Ethiopian, but it still operates extensive transcontinental services to Europe, the Middle East and Asia, using a fleet of B767s and B777s. The airline has just

Pictured top: Tewolde GebreMariam, CEO, Ethiopian Airlines.

Middle: Titus Naikuni, CEO, Kenya Airways.

Bottom: Ed Winter, CEO, Fastjet.

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Africa’s carriers

entered a codeshare with Etihad and launches direct services to Abu Dhabi this summer.

B787s are on order and there are plans to widen the long-haul network to North and South America, including services to Brazil. A sizeable presence will also be built up in the key Chinese market.

Currently only Guangzhou is served

by Kenya. Highlighting the strong growth in African economies, Ngunzi points out the importance of meeting the requirements of the growing number of African traders who need to travel to an increasing number of markets across the world.

There are numerous arguments stacked against the likely success of low-cost carriers in Africa and yet there is an overwhelming market dynamic in favour: large populations, long distances, difficult surface transport and a desire for affordable, safe and reliable travel.

Fastjet Newcomer Fastjet, which began services at the end of 2012, looks to have a better chance of succeeding. Stelios Haji-Ioannou, founder of easyJet, is a minority investor and consultant to the

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airline. CEO, Ed Winter, also ex-easyJet, has extensive operational experience of flying in Africa as a pilot, dating back to British Airways and BOAC. Noting that “Africa is not an easy place to do business”, Fastjet can draw on easyGroup’s “expertise in running low-cost airlines” says Winter. It also has the advantage that its largest shareholder is Lonrho Plc which has long experience in trading across multiple business sectors in Africa. “It has a huge reputation,” Winter explains.

Winter spent six months working on the project with Stelios and literally “Googled Africa”, recognising that there was huge potential opportunity.

Lonrho already held four AOCs with its regional airline Fly540, which have been used to facilitate the start-up of Fastjet.

There have been some well-publicised legal spats with the management of Fly540, but it appears that an amicable solution has now been found to these.

The airline’s initial operations started in Tanzania and plans are in hand for a roll-out to Kenya, Ghana and Angola, using the pre-existing AOCs. “Load factors up to March averaged 78%, great for a start-up, and really validated the

ability to stimulate the market,” explains Winter, while “approximately 35% of our passengers were first-time flyers”.

There have been frustrations along the way. “Getting designated on international routes has been our biggest problem, with protectionism and corruption being a huge issue,” but Winter is optimistic that they will succeed in breaking through these barriers.

One indication of the delicate path to achieving acceptable cost levels for airlines in Africa and the attendant political sensitivities was Fastjet’s success in obtaining the support of the former Ghanaian President to reduce international departure tax. However, when he died, they had to restart the process.

Nevertheless, things look to be moving in the right direction. Plans were recently announced to move into the South African domestic market, taking advantage of the failure of local LCC 1time.

There will be more bumps along the road as the African market continues its growth path, but these three airlines are proving that, with persistence and good management, the opportunities certainly outweigh the challenges.

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Moscow times Oliver Clark looks at the evolution of Moscow Domodedovo International Airport’s global network.

I

t’s become a bit of a cliché to compare everything about the Russia of today with its dreary state-run Soviet past, but in the case of Moscow Domodedovo International Airport (DME), there probably is no better way to illustrate the major changes that have allowed it to become a global gateway.

That is because the airport is arguably one of the major aviation success stories of post-Soviet Russia, going from being a small state-owned domestic airport to one of Europe’s fastest-growing international gateways.

Going from handling just 3 million passengers in 2001, the gateway’s traffic mushroomed to 7.9 million in 2003 and 28 million in 2012, with a growth rate of

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9.6%, putting it just one place below the top 10 busiest airports in Europe.

From a modest network connecting the Soviet satellite states, Domodedovo now has extensive links with Europe and Asia.

The transformation began in 1991 with the collapse of the Soviet Union, says Daniel Burkard, director of external and international relations at Moscow Domodedovo Airport.

“The markets changed dramatically,” he tells Routes News. “This was a domestic airport in Soviet times, but then they became international destinations as the CIS countries.

Overnight we went from domestic to international.”

Until that time, Domodedovo had been a domestic gateway, overshadowed by its neighbours, Sheremetyevo and Vnukovo, which had the honour of serving international clients.

But under Yeltsin’s new government, barriers to competition were broken

down and private enterprise and profit were encouraged, which gave the Moscow airport the chance to compete with its neighbours.

In 1997, the airport was privatised and the new operator, the East Line Group, initiated a major overhaul of the facilities, including modernising its main terminal, baggage handling and check-in areas.

International network From that point on, the airport began attracting international airlines. In 2003, British Airways (BA) moved over to Domodedovo, followed by Japan Airlines in 2007, Lufthansa in 2008 and Cathay Pacific in 2010, to name but a few.

Today there are some 225 destinations offered worldwide, of which 102 are exclusively available from DME. On the fifth anniversary of the transfer of its flights to Domodedovo, BA’s commercial manager for Northeast Europe, Andrew Hammans, explains his

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reasons for their move. “The airport team delivers efficient, friendly service and they are so receptive to change and innovation – these are the major factors of our common success,” he says.

According to Burkard, the steadily increasing spending power of the average Muscovite and their widening aspirations have also helped to boost the airport’s network, especially via its home Russian carriers Transero and S7.

“First Europe came on line and then beyond it the US, then in 2005 Emirates started a trend of operating a daily business flight. Eight years later it’s become a twice-daily A380 and B777 service and they have been joined by Etihad and Qatar. We have three Israeli carriers and our domestic base is made up of Transaero and S7 and now also Ural Airlines, which has more aircraft at Domodedovo than at its home base of Ekaterinburg,” he adds.

“After the Middle East opened up, which was eight years ago, it was

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followed by Asia which showed that the radius of Russians travelling had grown, first Europe then ME and now Asia, which is an 11-hour flight from Moscow,” says Burkard.

One of the most interesting routes operating from DME is Singapore’s popular Singapore–Moscow–Houston service, which is also a highly lucrative market “connecting oil and oil” as Burkard describes it.

With many of the world’s capitals now connected to Moscow via Domodedovo, the gateway is now seeing a trend of airlines increasingly introducing routes to smaller, secondary cities, especially in Europe.

In the first five months of 2013, eight new routes were launched from Domodedovo: Bremen (Germany), Palermo (Italy), Manchester (UK), Nha Trang (Vietnam), Kalamata (Greece) and also three charter flights – Montego Bay (Jamaican), Krabi (Thailand) and Puerto Plata (Dominican Republic).

“The business is going out more and more into the regions of Europe. Russian carriers are flying more and more long haul in their own right so passengers can go non-stop. About 15 years ago if someone had said a Russian B747, in this case Transaero, would be operating to Bali, people would not believe this, and now it operates every week.”

So can Domodedovo be described as a hub? Well, Burkard says the anecdotal evidence shows its hub role is increasing.

“There are growing markets behind Moscow. We hear from some of the European carriers that 20% of their passengers are connecting, which doesn’t sound much when you think about BA connecting through Heathrow, but it’s still promising.”

EasyJet A new chapter began for Domodedovo earlier this year when UK-based easyJet launched new services from London and

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Moscow

Manchester, marking the first time a European low-cost carrier has operated to DME. According to both easyJet and Burkard, the new route is already proving very popular and makes the Luton-based carrier the biggest LCC currently operating in Russia.

“It was a hard fight for them to get it.

We see changes in the passenger structure, thanks to this easyJet service.

It’s what happened in Western Europe 10 years ago when low-cost carriers came onto routes and people would fly to destinations that formerly they would never have considered.”

Indeed, when interviewed by Moscow Domodedovo staff, many of the passengers on that inaugural flight stated that cheap fares had been a key motivator for them.

Russian aviation still faces a heavily regulated market and a strict visa regime, but Burkard believes the government is keen to liberalise the market (see our Russian aviation article for more).

“We see the air service agreements are getting softer because the Russian side is ready to allow more competition onto the routes,” he says.

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His hopes now are for liberalisation of Russia’s bilaterals with Eastern Europe.

“We see finally the air services agreement are being changed and we expect additional carriers to start flying to several destinations in Poland. Also Helsinki, Finland, is opening up.”

Airport expansion Domodedovo has one terminal complex within which international and domestic operations are divided.

This facility is in the process of being modernised and expanded to cope with 2,000 to 2,500 passengers per hour.

“We are putting the final touches now to our Terminal 1 expansion work. At the end of the summer we will open the new international/domestic facility, which will include a new international arrival zone, which will be very impressive.

“We will put in more baggage belts.

There will be more customs check points on arrival. We have opened up 20 new check-in desks for the summer season, now at 160 check-in desks.

“We have tripled the number of check-in self-service kiosks. We

have put in more self-service kiosks.

Because the airlines don’t provide them, we see it as part of our service obligation.

“Finally, we have started construction of Terminal 2, which to the general passenger will look like an extension of our terminal, which will give us space for an additional 8 million passengers a year – that’s international capacity,” explains Burkard.

Other projects due to begin this year include phases 3 and 4 of the construction of a new cargo terminal.

Meanwhile, a new third runway is also to be constructed, the first in Russian aviation history to be built by a private company.

“We will do it ourselves, the first time in Russia a private entity will build a runway in the state.

“We already can operate any aircraft that exists, with simultaneous approach on two parallel runways. One was reconstructed a few years back and the other one will be reconstructed when the new one is completed as we don’t want to limit capacity.”

There is certainly plenty to show for 16 years of private operation.

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Open borders Mark Smulian talks to South African Tourism Minister, Marthinus van Schalkwyk, about his dream of making an African e-visa regime a reality.

Marthinus van Schalkwyk.

A

t the tip of the African continent, South Africa is a long way from most of the rest of the world, and it is therefore not really surprising that it does not function as a major regional hub.

But Tourism Minister, Marthinus van Schalkwyk, wants to change that by encouraging carriers to look on Johannesburg’s OR Tambo International Airport as the key ‘south–south’ hub for the southern hemisphere, linking up the rest of Africa, South America and parts of Asia and Australia.

What is more, Minister van Schalkwyk has a big idea to encourage a leap forward in tourism volumes in South Africa and its neighbours – a panAfrican e-visa.

If he can bring about a common e-visa area for southern Africa, the

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increased flows through Johannesburg could make the hub idea more viable.

The country has increased in popularity as a tourism destination since the end of apartheid.

In 2011, according to Statistics South Africa, it received some 3 million foreign visitors arriving by air, mainly at OR Tambo, with a peak in December and January.

The most common points of origin for foreign visitors were the UK (420,483), followed by the US (287,614) and Germany (235,774).

No surprises there perhaps, but in seventh place was India on 90,367, followed by China with 84,862 arrivals, which suggests South Africa can expect more as those economies grow.

Of total visitors, 94.3% came as tourists, with business journeys accounting for only 2.2% of traffic,

and transit passengers and students making up the remainder.

Traffic is dominated by resident carrier South African Airways (SAA) and to a lesser extent by its low-cost subsidiary Mango, followed by carriers such as British Airways.

But what South Africa and southern Africa continues to lack is a central hub for intra-regional travel, to foster tourism and business between the African states bordering South Africa, and van Schalkwyk hopes e-visas and the hub idea may break down this barrier.

His objective is to get rid of much of the bureaucratic hassle of travelling in southern Africa by having a common travel region for all its countries – rather like the European Union’s Schengen agreement. Van Schalkwyk says agreement is near on this becoming a reality.

First the good news. Van Schalkwyk, who has been Tourism Minister since 2004, says more than 50 carriers now fly to South Africa, against only 26 in the late 1990s, and that while “obviously a nation such as ours is a long-haul destination from almost everywhere in the world”, a managed liberalisation process has attracted airlines.

“It may sound an old-style philosophy, but we believe that more competition will drive down prices and provide more choices, which are good for a destination,” he tells Routes News.

Tourist arrivals increased by 10.5% in the first six months of this year and South Africa attracts some 4.25 million tourists a year, including those arriving by land, he says.

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Van Schalkwyk thinks southern Africa as a whole could attract more visitors than it does and that complex visa rules imposed by most countries are a deterrent to this if people wish to visit more than one country.

“We believe the world should move to e-visas, and at the G20 heads of state meeting in Mexico all of them committed themselves to travel facilitation, but not everybody is there exactly at this moment,” he explains.

Van Schalkwyk says the process of getting a single visa for the southern part of the continent agreed upon is “only two countries away from it, and if we can convince them we are there”, he says.

“I’d hoped we could have been there already, but it has to do with local political considerations and we hope to get consensus.”

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Diplomacy prevents him naming the two countries holding out against the idea, but the intention is that the single visa area will cover South Africa and its neighbours up the west coast of Africa to Angola, and up the east coast to include Tanzania, although not Kenya or DR Congo.

“There are issues around e-visas: safety, technology and income,” he says.

“Many countries still regard visas as a source of income but, quite honestly, probably in most cases it’s negligible, so I don’t know that that can be regarded as a valid argument.

“The technology is there. So the only real debate is around security, and e-visas will be no less secure, and can be more secure, than traditional ones.”

If the plan takes off, an e-visa for one country will be valid for all of them. “It will be like Schengen, you just turn up at the border,” he says.

Indeed, Van Schalkwyk’s ambitions don’t stop there. He sees e-visas before long giving way to “m-visas, on our cell phone or tablets”.

The variety of potential tourism in the region is such that the idea of relieving visitors of the burden of securing multiple visas – which for some require sending passports by post to embassies – has obvious attractions.

South Africa is noted for its beaches, wildlife and wine country as well as Cape Town, its scenic second city. Further north, safaris are big business with the travel industry in Namibia, Botswana, Zambia and Tanzania. Malawi is beginning to enter the game-viewing market and Zimbabwe’s once-successful tourist industry is getting back on its feet after more than a decade of political turmoil.

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View of Mouille Point with the Cape Town Stadium from Signal Hill.

South Africa

Mozambique is pushing itself as a beach and cultural destination and while Angola is not particularly well-known for tourism, its growing oil industry attracts business travellers.

He also sees the common visa area as a means to attract more international flights to both Cape Town and Durban’s new King Shaka International Airport, whose only international service at present is provided by Emirates.

“I have no doubt over time that more airlines will use those hubs,” he says.

Van Schalkwyk’s other project to bring more airlines to South Africa by using OR Tambo as a southern hemisphere hub is based on the idea that the burgeoning economies of southern Asia and Brazil – and, to an extent, Argentina – will want more air links and that Johannesburg offers a more convenient midpoint than do either the Gulf states or Europe.

OR Tambo had an upgrade when South Africa hosted the FIFA World Cup in 2010 and can now handle the Airbus A380 on runways of 3,300m and 4,400m.

Other planned developments mean that, by 2015, the airport is expected to reach a capacity of around 24 million passengers a year.

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“Most flights go up north, so anyone travelling south–south has to travel up north then down again, so we firmly believe that Johannesburg has potential to be a hub for south–south travel,” the minister explains.

He predicts that the rapidly growing middle classes in Asia and Brazil will want to travel “the cheapest, shortest, route, which in all probability is through South Africa, rather than via the Middle East”.

Few airlines have as yet shared this view of Johannesburg, van Schalkwyk admits. “We are not there yet though we have the capacity and as a hub it makes economic sense; it’s simply that people don’t understand it would entail much easier, cheaper flights,” the minister says.

“Up to now, tourism volumes have all been in the north, but it’s going to happen [in the south] as that is the way the world is developing and there is lots of potential. It just needs one or two carriers to demonstrate it. It does not take a genius to understand the potential.”

Johannesburg also has hub potential for passengers from South America, Asia and Australia who want to reach what may be the next generation of emerging markets in sub-Saharan Africa, to which it is well connected through SAA’s

network linking to the capital cities of most of east and west Africa.

SAA also flies to Buenos Aires and São Paulo and to Beijing and Australia “so hopefully other carriers will do so”.

The main precedent for the ‘south– south hub’ concept is, though, not entirely a happy one from South Africa’s viewpoint.

Malaysian Airlines once flew from Kuala Lumpur via Johannesburg to Buenos Aires, but the route was short-lived.

A Malaysian Airlines spokeswoman said: “We had the route via Johannesburg but ended it due to aircraft deployment as we have decided to concentrate on destinations in Asia.

“The flight was not a failure, but we could use the aircraft better. There was no problem with Johannesburg, but we now have no flights to South America.”

No South American airline is as yet shown as serving OR Tambo, but it does have flights on Jet to Mumbai, Cathay Pacific to Hong Kong, Singapore Airlines to Singapore and Qantas to Perth, Sydney and Melbourne, so the makings of van Schalkwyk’s hub idea may be there.

If the visa-free area attracts strong flows of tourists from economies that are growing rapidly, it could be that this will encourage the hub concept.

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Raising its game In the wake of Ukraine’s hosting the Euro 2012 tournament, a new team is driving an ambitious traffic expansion at Donetsk Airport, writes Piers Evans.

K

irill Osypov, the youthful CEO of Donetsk Airport, is one of the few Ukrainians whose attention was definitely elsewhere during the Euro 2012 football tournament.

“Just two weeks before the beginning of the Euros, I became the general manager of the airport,” Osypov tells Routes News.

Yet within the space of that fortnight, he had already hired 200 staff to meet the influx of football fans, demonstrating a dynamism that continues to transform the airport’s network as well as its culture.

Rapid overhaul This summer, as Osypov reaches the first anniversary of his appointment, he can point to some successes to justify his reforms.

“Last year, for the first time since Soviet times, the airport crossed the 1 million threshold in traffic. Passenger flow in Ukraine grew 13.5%, while it increased at Donetsk by 21%. This year we are

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also aiming to increase the passenger flow again, if the market will respond, by about 15%–17%,” he enthuses.

Preparations for the Euro tournament endowed Donetsk with a new 4km runway, large enough to have already hosted the colossal Antonov An-225 Mriya, along with a new seven-storey 58,000sqm terminal able to cater for up to 5 million passengers a year.

An exhibition centre is also planned at the airport, which is located just 10km from the city centre.

But revamped facilities are just one side of the story, for Osypov has also introduced a new culture to the management team, which is more open, more cosmopolitan and literally speaks the airlines’ language.

“We have started the process of changing the airport’s structure, and it’s running well,” he says. “All the people I have hired speak English fluently, as it is the aviation language, and I have tried to make a European and absolutely transparent and profitable organisation.”

Osypov’s own background includes 13 years studying in the UK, where he took a master’s degree, before he returned to his native Ukraine to work as a project manager/consultant at Scott Wilson, a strategic international management consulting company.

He then headed public relations, marketing and infrastructure for the national agency that prepared for Euro 2012 and implemented infrastructure projects. At the beginning of May 2012, while working as director of an international consulting company, he was recruited to run Donetsk airport.

Targeting LCCs In the opening phase of building capacity and connectivity, Donetsk is targeting low-cost carriers (LCCs), explains airport CCO Oleksiy Dubrevskyy.

“Low-cost carriers can build the market and compete with other means of transportation such as railways, cars or minibuses.”

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It’s already attracted four – Air Arabia, flydubai, Pegasus and Wizz Air Ukraine – which are meeting the leisure and business demand afforded by Donetsk’s growing middle class and its strong manufacturing base.

“It’s an industrial area, with a very strong corporate sector and lots of companies in sectors such as metallurgy, chemicals, machinery – that’s why we are quite a sustainable market,” says Dubrevskyy.

In fact, as the leading city in the Donets Basin, Donetsk is at the heart of Ukraine’s most densely populated region outside Kiev.

Last year, Forbes ranked Donetsk as the best city in Ukraine for doing business.

Donetsk itself has a population of about 1 million, but it also forms part of a wider region, which includes the nearby industrial city of Makiivka with almost 400,000 citizens.

In addition, Donetsk’s catchment includes a sizeable Russian segment coming from nearby Rostov-on-Don, and now “about 15% of our customers are Russian”, he explains.

He calculates its catchment area covers 6.5 million inhabitants, from a region that generates a fifth of Ukraine’s GDP.

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New routes Routes from Donetsk are mainly propelled by outbound demand, which is largely for travel to Europe for business and to the warmer climates of the Middle East and South Asia for holidays, says Osypov.

In leisure travel, the latest development is a Chinese destination poised to start soon as a weekly charter from July, while Dubai is already a popular destination, from which many holidaymakers transit to Thailand and Sri Lanka.

A surge in charter flights reflects the potential of further developing vacation travel, adds Dubrevskyy.

“In our summer charter programme last year the airport had about 220 charter flights. This year it will be about 480 or 500 flights,” he says.

Donbassaero Donetsk’s route map was hit hard by the collapse of its home carrier Donbassaero in January 2013, but the airport is now filling out with charter and scheduled flights from 12 carriers.

Wizz Air Ukraine is a recent arrival, with flights to Dortmund and Kutaisi, while Air Arabia, flydubai and Pegasus serve Sharjah, Dubai and Istanbul’s Sabiha Gökçen.

Meanwhile, Aeroflot, Transaero and UTair provide links to Moscow’s

Sheremetyevo, Domodedovo and Vnukovo airports, respectively.

UTair also serves Kiev Zhulyany, Larnaca, St Petersburg and Surgut.

Lufhansa flies to Munich and Turkish Airlines connects with Istanbul Atatürk.

Ukraine International Airlines flies to Kiev and operates seasonal routes to Baku, Tel Aviv and Yerevan, along with charter flights to Antalya, Barcelona, Burgas, Dubrovnik, Heraklion and Tunis.

Charter airline Wind Rose flies from Donetsk to Antalya, Burgas, Dalaman, Heraklion, Kiev, Sharm El Sheikh and Tivat, while Astra Airlines operates to Thessaloniki.

City attractions For inbound traffic, the draw of Donetsk’s industrial activity is bolstered by its experience of event hosting, says Dubrevskyy.

“We have good experience in MICE [meetings, incentives, conferences and events] – in addition to the 2012 Euros, we have hosted Champions League matches as well as a recent World Ice Hockey Championship. In July, the World Field and Track championship will be held here.”

Donetsk’s visitor attractions include the Donbass Palace Hotel, one of Ukraine’s two representatives among

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35

Donetsk

the Leading Hotels of the World, as picked by the World Travel Awards.

Reflecting the city’s origins as a centre for the iron industry, its several parks feature a host of iron sculptures, including a 19th century palm tree that became a symbol for the city.

Along with some scars from heavy industry, Donetsk’s surrounding area includes the Khomutovskaya steppe as well as the picturesque Sviatohirsk Cave Monastery.

In 2012, some 240,000 travellers stayed in hotels in the Donetsk region, a rise of more than 24.4% on the previous year. About 50,000 of these travellers came from abroad, mainly from Russia and Germany.

While football was the main draw, a series of other events spurred business travel to the city. The ExpoDonbass centre hosts about 20 exhibitions a year, drawing delegates last year from sectors including energy, ecology, furniture and education.

Open Skies While Donetsk sees its potential as unique within Ukraine, the gateway benefits from a nationwide goal of expanding the aviation sector, as well as investment in infrastructure such as railways.

“The government started two years ago to work very aggressively on developing infrastructure and a transport network,” says Dubrevskyy.

Meanwhile, Europe is aiming to clinch an Open Skies agreement to

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bring Ukraine within its Common Aviation Area (CAA).

“I couldn’t comment on exactly when it will happen, but as a regional airport we would benefit, getting the traffic that we can’t get right now,” says Osypov.

For Donetsk, the dividends of a deal with the European Commission, which some officials anticipate could happen this year, could be substantial, believes Dubrevskyy. “The open sky project will enable us to reach another threshold, like the Polish experience,” he says.

“In Poland, when they implemented Open Skies, the airport passenger flow doubled and this effect lasted for three or four years.”

Meanwhile, Ukrainian Infrastructure Minister Volodymyr Kozak told a recent International Transport Forum in Leipzig that Ukraine wants to open air routes to Germany from Donetsk without restrictions.

Euro 2012 legacy While Open Skies may not be an imminent prospect, airlines are upbeat about the opportunities at Donetsk.

At Routes Europe in May, Wizz Air CEO, József Váradi, pointed out that investment in Euro 2012 infrastructure is combining with the collapse of Ukraine’s national carriers to accelerate liberalisation.

“Behind the Euro 2012, they developed infrastructure – lots of airports, new terminals, new runways, etc. That capacity must be put to work and they need airlines to utilise that investment,

so I think that at the moment that’s a primary driver of the changes we are experiencing,” he says.

The football tournament also helped to put Donetsk, along with Ukraine, on the map as a destination, says Osypov.

“I wish they understood a bit more than they do right now,” he says. “But thanks to Euro 2012, people are now more and more aware of the region.”

Routes CIS For now, though, Osypov sees his immediate challenge as grabbing the attention of the international aviation industry.

“Our task is to appear on the airlines’ radar,” he says.

He recalls the recent surprise of a team from Emirates that visited Donetsk to establish the gateway as a relief airport for an A380 flight to Moscow.

“They were so impressed – they didn’t even know we had an airport,” he quips.

But Donetsk’s hosting of the Routes CIS event in July is poised to build on the legacy of the Euros to give the airport a higher international profile.

“The government and the state government are supporting us in holding this event because they know it will bring awareness and show the full potential of our region,” he says.

“Just two years ago, one year ago, it was a completely different situation.

Now, with liberalisation, and the support of government and the authorities, we can achieve these goals.”

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A route

in f

cus

Beijing–Houston

Routes News spoke to Zhihang Chi, VP and general manager Air China in North America, ahead of the launch of its new Beijing–Houston service.

O

n July 11, Air China will launch a new route connecting the Chinese capital of Beijing and the Texan city of Houston with a four times weekly B777 service.

Routes News sat down with Zhihang Chi, VP and general manager Air China, to discuss the route in more detail.

city’s population is growing by some 100,000–110,000 people per year.

We see a certain amount of oil traffic and expertise going to China so there should be significant inbound and outbound opportunities.

Why did you choose Houston?

Allowing the same model, i.e. working in cooperation with an alliance partner, we will see where it makes sense strategically. An important thing to consider is that we need to fill 200 seats so when much of the market is local, you really need partners to fill those planes with feeder services, so having an alliance partner presence is an important consideration for us.

It is both a strategic and an opportunistic move for us. United Airlines are there and United is one of our partners in the Star Alliance so they can help with connecting traffic and support to bolster the service.

I personally think Houston is underserved. We have watched the city closely in terms of traffic from China, which has been growing, and we want to serve the opportunity we see there.

What kind of traffic are you expecting to handle?

The oil or more precisely the energy industry is a big part of it. But the economy of Houston is also more diverse than some may imagine. It has the world’s biggest medical centre and also there is a significant aerospace industry there. Remember NASA is there, along with some high-tech clusters. The ethnic Chinese community in Houston is increasing and the

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Where could Air China fly to next in the US?

Are there opportunities to operate to Southern America via the US? South America is too far away from China to operate directly. It is fair to say there isn’t efficient enough demand to operate between them, so flights have to connect somewhere in the US or Europe.

After 9/11, transit visas were required in the US but not in Europe. That didn’t used to be case. If you are a US citizen, you can fly via Beijing. You do not need a transit visa – you can have a 72-hour visa to connect. That is something China put in in recent months.

Are you interested in opening up secondary Chinese cities to the US? Yes and no. The challenge there is using the right aircraft. Right now, we are operating between the big city hubs with B747s and B777s and these are typically only supported by such hubs. In our case, we fly to New York JFK, which is a high load factor destination. But we will also fly Beijing–San Francisco, because San Francisco is a United hub. Nextgeneration aircraft such as the B787 could help to make these markets more viable.

President Obama has said he wants to promote tourism. What do you think his priorities should be?

He has announced he plans to reduce visa restrictions, but transit visas are another thing. He should address this issue. If you allow carriers to fly more flights to the US, that’s good for the US and for South American destinations.

They are going to eat at the airport, they are going to shop. Would you rather take that money or let the Europeans have it?

At the time the reason for introducing visa restrictions and scrapping transit visa was to prevent terrorism. But if you think back over the last 20 years and the terrorist attacks that have occurred, most of the terrorists had the right of residence in the US, so it is a superfluous argument.

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African pearl Uganda is increasingly eager to realise its vast untapped tourism potential, while a milestone oil deal looks set to further brighten its economic prospects, finds Piers Evans.

B

y unbroken tradition, no article on Uganda is complete without a familiar quote from Winston Churchill.

So here goes. In 1908, Britain’s future prime minister rounded off his account of a tour of Africa with the advice: “Concentrate on Uganda”.

“For magnificence, for variety of form and colour, for profusion of brilliant life – bird, insect, reptile, beast – for vast scale – Uganda is truly the pearl of Africa.”

Luckily, the Ugandans now striving to regain the world’s attention can find no shortage of contemporary enthusiasm for the East African nation’s landscape, wildlife and people.

In 2012, in fact, the Lonely Planet picked Uganda as its top travel destination: “Uganda is Africa condensed, with the best of everything the continent has to offer packed into one small but stunning destination.”

The National Geographic further cemented the country’s return to global travel itineraries by featuring Uganda among its top destinations for 2013.

“Uganda’s parade of animals is amazingly diverse. Hippos graze along the shores of Lake Edward in Bwindi Impenetrable National Park, while lions lounge in the trees of Ishasha, in Queen Elizabeth National Park.

The star in Bwindi is the mountain gorilla, a species down to about 720 animals visible in their tiny habitat.”

CNN gave the nation’s image an additional fillip by picking its Kidepo Reserve as one of Africa’s top national park.

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The big five plus two While political turmoil kept Uganda off the tourist map for many years, the country now hopes to woo back visitors with what Geoffrey Baluku, secretary to the board of the Association of Uganda Tour Operators (AUTO), calls the “big five” and the “unique two”.

On top of game parks with lions, leopards, elephants, Cape buffalo and rhinos, Uganda’s distinctive offer includes chimpanzees and mountain gorillas, he tells Routes News.

“None of our neighbours are exactly like us,” he says. “Uganda may lack a beach, which is a huge attraction for western tourists, but we have the gorillas as well as all the aspects that won the country its recent accolades.”

Amos Wekesa Masaba, managing director of Great Lakes Safaris and a former president of the Uganda Tourism Association, who is driving an initiative to ramp up Uganda tourism’s marketing investment, confidently places Uganda among the world’s top 10 nations for biodiversity.

“Uganda has more inland water bodies than any other country on the African continent,” he says.

“Its rivers and lakes include the longest river in the world, the Nile, and we have part of the world’s secondlargest freshwater lake – Lake Victoria,” he explains.

Crucially, the Nile offers year-round rafting, he adds.

“It is only on the Nile that you can raft throughout the year. A lot of the rivers are four-month or five-month,” he says.

The spectacular Rwenzori Mountains offer travellers a host of alternative, or additional, thrills with their snow-capped peaks and a welter of bizarre vegetation such as six-metre-tall heather and giant lobelias as well as forest elephants.

Back on the map For the Lonely Planet, a trek in these mountains forms one of Uganda’s five unmissable experiences, along with whitewater rafting on the Nile at Jinja, visiting Murchison Falls – “the world’s most powerful waterfall” – and marvelling at the beauty of Lake Bunyonyi.

The top experience, of course, is a trek into the forests of Bwindi National Park to visit the mountain gorillas.

“It’s known as the world’s capital of primates,” says Masaba. “There is no place on earth that has the concentration of primates that Uganda has.”

An unmatched cultural diversity – with a different style of dancing “every 80km” – further polishes the pearl’s lustre, he says.

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Entebbe International Airport, Uganda.

“A lot of tribes arrived in Uganda.

There were farmers. Then you also had hunters… All those guys had different traditions and a lot of them stayed within Uganda,” he says.

So why is Uganda still off the beaten track?

In fact, the country had a tourism inflow in line with its attractions until its politics turned toxic. In the phrase of the National Geographic, “the cornerstone of Africa’s Grand Tour” became “bypassed” by visitors, who switched to Kenya and Tanzania.

For Masaba, Uganda’s tourism prospects were scuppered when the notorious dictator Idi Amin took charge.

“Uganda was the number-one tourism destination until Idi Amin took power. Then we had wars and challenges within the political system and clearly tourism died. Tourism cannot coexist with instability.”

Now, however, tourism figures are on a steady upward track. In 2011, the last year for which statistics are available, the country attracted 1,150,000 tourists, up from 946,000

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the previous year, according to figures from the United Nations World Tourism Organization (UNWTO).

Tourism receipts follow the same trend, rising by 21.2% in local currency terms from 2010 to 2011 and then by 18.8% the following year. In dollar terms, receipts hit $1.1 billion in 2012, up from $950 million in 2011 and $784 million in 2010, according to UNWTO. In its latest yearbook, the Uganda Bureau of Statistics reports an almost unbroken rise in arrivals over 2007 to 2011, with resident arrivals up 57% and non-resident arrivals up 79%.

In 2011, arrivals totalled about 1.5 million, of which about 1.2 million were non-resident travellers. About 780,000 of travellers were recorded as coming by road and about 370,000 by air.

An International Trade Centre study also reveals a rise in travel from all world regions, with Africa as the origin for 680,000 travellers in 2010, the Americas for 65,000, Asia for 41,000 and Europe for 113,000.

Air links Arrivals at Entebbe International Airport confirm the trend. Between 1991 and 2012, the numbers grew every year except for 2001 and 2009.

From 61,162 travellers in 1991, the total had hit 171,656 by 2000. Over the next decade the climb continued up to 518,791 in 2010, followed by 551,904 in 2011 and 626,509 last year.

Meanwhile, the country has enjoyed the kind of economic growth that is now a fading memory for the developed world. Over 2012-2013, the governor of Uganda’s central bank predicts the economy will swell by 6–7%, a figure on a par with those from the World Bank and the International Monetary Fund.

And the outlook could brighten further with recent developments in mining and the oil industry.

Among the most promising developments concerns a dispute over revenue from oil that firms such as Tullow Oil are eager to start extracting.

President Museveni recently declared the country is poised to conclude an oil and gas extraction plan that will

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41

Uganda be “equitable to Uganda and the oil companies”.

Meanwhile, China’s Gingko Energy Company has revealed its plans to invest $100 million over five years to revive production at the Kilembe copper mines, estimated to contain 4 million tonnes of ore.

As in much of resource-rich Africa, China and India are vying for opportunities to contribute to Uganda’s development.

Chinese investment in Uganda has been put at $596 million, ranking the Asian giant second only to the UK as a foreign investor in the country.

India has meanwhile declared its goal of contributing to Ugandan industry in sectors such as oil and gas, IT, agriculture, food processing and security.

Symbols of India’s commitment to the country include a $450 million loan towards building a 180MW hydropower plant. India is also working to set up an India-Africa Institute of Foreign Trade in Uganda as well as a food processing industry incubation centre.

New demand For Kyle Haywood, an ex-CEO of Air Uganda who is now heading Fastjet’s South African operations, developments in the oil industry could trigger a swift expansion in Uganda’s air traffic.

“Once they start to gain some traction, I think that business travel through Uganda will see quite a spike quite quickly,” he tells Routes News.

But he warns that a take-off in the country’s economic activity

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may not be imminent. A lot of oil industry activity is still at the exploratory stage, although the new agreement lifts a hurdle to development, he adds.

“It is a good thing that it is coming to a conclusion on the terms of that arrangement and now it’s a case of bringing it all to life and passenger traffic will flow automatically on the back of that,” he says.

On tourism traffic, he also sounds a similar note of caution. “The Uganda market certainly has an opportunity,” he says. But roads are often in poor repair and the country needs more airports. “It’s a big country but it’s just difficult to get around,” he says.

What’s more, promotional efforts need greater urgency, he says.

“Uganda needs to push its promotion a little bit harder in my view. It was a view I publicly shared when I was in Uganda. It’s a beautiful country and it has a lot to offer.”

While he sees Uganda as doing “some good work” in promoting its attractions, its message risks being drowned out by its neighbours such as Kenya and Rwanda.

It is a criticism that Masaba would accept. In his recent launch of a Seven Wonders promotional campaign, he spotlighted how Uganda invested only $300,000 in tourism, in contrast with $23 million by Kenya and $5 million

by Rwanda.

With a campaign backed by USAID, Uganda Wildlife Authority and Uganda

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Uganda

A great Mountain Gorilla, in the Bwindi National Park in Uganda.

Board, he has set a goal of quadrupling inbound tourist numbers to 2 million each year while lifting tourism revenue from $650 million to $2.5 billion.

For Fastjet, a base in Uganda is not on the horizon, although the carrier aims to link Entebbe with its operation in Tanzania, says Haywood.

“We’re talking about fundamentally a Dar es Salaam service operated by aircraft that sit within the Tanzanian operations,” he says.

“Obviously, as we develop the Fastjet concept in other countries at a later date, such as Kenya, then we’ll be looking at the connectivity between those markets and Uganda as well.”

Fastjet sees a market for the Entebbe–Dar es Salaam connection in

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traders moving back and forth from the coast as well as students and tourists, he says.

New routes Air connectivity is also high on Masaba’s agenda. “I would like to see us have something from the Far East. We should fly to Japan. We should fly to China, Singapore,” he says.

“Then you need slightly shorter connections with the US. Right now, for instance, if you are flying from Seattle, it’s a 10-hour flight to Amsterdam, then an eight-hour flight to Entebbe. That’s a little bit of a stretch.”

For Uganda, a prospective Delta service between Washington and Nairobi was seen as a godsend, although the

airline now has no plans to launch the route, he adds.

Baluku echoes the call for a radical expansion of Entebbe’s departure board.

“I believe we still have to reach the MENA region, which has not quite explored Uganda, and the same goes for Australia, Japan and China,” he says.

North and South America are also untapped markets, with Brazil and Canada as notable exclusions, he adds.

Currently, Entebbe has direct overseas flights to Amsterdam, Brussels, Doha, Dubai, Istanbul and London.

Within Africa, its services operate to Addis Ababa, Arua, Asmara, Bujumbura, Cairo, Dar es Salaam, Johannesburg, Juba, Kigali, Mombasa, Mount Kilimanjaro and Nairobi.

Masaba also sees plenty of room for growth, through leveraging a mid-way location between the grasslands of East Africa and the tropical rain forests of the Congo.

“In terms of aviation, you have probably the best location for most of Africa in Entebbe. If you fly from Entebbe to Johannesburg, it’s four hours. If you fly from Entebbe to Cairo, it’s four hours… So, it’s a really central part. That should make it a good connecting point for any airline.”

For now, though, the route map is yet to reflect these opportunities, he adds.

“I think every market is untapped,” he says.

While nobody would deny that Uganda’s infrastructure lags its ambitions, the country’s growth potential is equally beyond dispute.

For Africa’s pearl, the time to shine is surely close.

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43

Off the

beaten track While it remains at an early stage of development, the Silk Road tourism market offers many opportunities for airlines, writes Oliver Clark.

T

oday, every corner of the globe is interconnected by thousands of road, rail, sea and air links, but 2,200 years ago there was one trade route that truly mattered – the Silk Road.

Stretching for some 12,000km between China and Central Asia and the Middle East, Africa and Europe, the ancient Silk Road was the world’s first truly global trade route, allowing traders to transport lucrative commodities such as silk, spices and precious metals between East and West.

Today, the trade that fed the Silk Road has long since disappeared, but the centuries of contact between peoples and cultures, which inspired an exchange of dialogue, art, religion and ideas have left an indelible cultural heritage whose potential as a visitor attraction has not been lost on the region’s tourism authorities.

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Routes News 4, 2013

Crossing multiple borders, languages and cultures, the Silk Road is becoming recognised as a unique tourism product in its own right, an international destination that could provide a huge boost to the tourism markets of countries as diverse as China, Uzbekistan, Mongolia, Tajikistan and Georgia.

Spearheading this international effort is the United Nations World Tourism Organization (UNWTO), which has set up a dedicated Silk Road programme, which seeks to establish the Silk Road as a distinct brand and foster cooperation between public and private sectors to market and promote it.

“At present, UNWTO is actively working alongside 29 states towards establishing a multi-destination, collaborative initiative along the Silk Road, designed to enhance sustainable, responsible and internationally competitive tourism,” says Alla

Peressolova, head of the UNWTO’s Silk Road Programme.

Established in 2010, the programme is supported by public organisations such as UNESCO and the UNDP and all parties are now trying to get private package companies on board by taking Silk Road tourism to major international shows such as ITB Berlin, WTM London and FITUR Madrid.

“By fostering greater collaboration between the countries and regions, UNWTO aims to establish a seamless and highly distinctive travel experience by offering visitors the opportunity to delve into and enjoy mesmerising natural landscapes, innumerable heritage sites and cultural attractions,” explains Peressolova.

The Silk Road traveller Because it covers such a vast area in an under-developed region, Silk

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Road tourism is highly bespoke, with a small number of tour operators offering package tours suited to the hardy traveller.

For example, one UK-based tour operator offers trips that include a visit to Tash Rabat, a caravanserai located in the mountains of Kyrgyzstan, (a traveller’s inn) or the Uzbeki city of Samarkand, a major Silk Road hub.

So how large is Silk Road tourism?

Data is scanty according to Peressolova, and detailed market research is desperately needed to establish the size of the market, but there is evidence it is popular and becoming more popular.

“Little is known about the profile of the Silk Road traveller. Our social media research of over 300,000 blogs, chatrooms and forums shows that the largest interest in travelling along the Silk Road comes from the youth and backpacker market (74.61%).

“Independent travel (16.02%) holds the second largest portion of interest, illustrating that, when combined, independent travellers, including the youth and backpacker markets, make up over 90% of online travel discussions with regards to the Silk Road,” she says.

Network opportunities The critical need for more air services to foster silk road tourism was highlighted

by Khalid Malik, the UN coordinator and UNDP resident representative for China during the second Silk Road Mayors’ Forum in Lanzhou in 2007, who stated:

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“The air links between cities in Central Asia and those in China (that are located on the Silk Road) are not many.”

While good air links exist along sections of the Silk Road – south eastern Europe, Egypt and Beijing – within Central Asia the market is still concentrated on capital cities.

Samarkand, for example, only has access to near neighbours and to Russian and German cities via charter operators.

According to data from OAG, in June 2013 Air Astana was the dominant carrier in Central Asia with 39.02% of total capacity, followed by Uzbekistan Airways with 24.33% and SCAT Airlines with just under 8%.

Air Astana is the dominant player on routes to Russia, just ahead of Ural Airlines, and to the Middle East and South East Asia, ahead of Turkmenistan Airlines. On routes to Western Europe, the picture is slightly different.

Uzbekistan Airways is the dominant carrier, with just under 30% of market share, followed by Turkish Airlines. Air Astana comes third.

Turkish Airlines has been active in the region, with routes to Ashgabat, Dushanbe, Almaty, Bishkek and Osh from its base at Istanbul Ataturk.

One of the big challenges of fostering a Silk Road tourism market is security, with Afghanistan, Syria and Iran all virtually off limits to tourists, while other countries suffer from poor infrastructure and hotel development. However, Peressolova sees this as another

justification for developing this sector as a means of boosting local economies.

There is a pressing need for greater cooperation between countries for cross-marketing, says Peressolova. Plenty of opportunity remains for expansion, not least thanks to the relaxing of visa procedures, she adds.

“The Silk Road certainly has an enormous untapped potential for airline businesses to grow while improving connectivity among the rich mosaic of its destinations. The potential benefits for airlines are huge: for example, airlines and related industries are already benefiting immensely from new visa procedures and strategies as well as a growing number of countries implementing open-sky policies,” she says.

The ‘new’ Silk Road While the original Silk Road has long since decayed, the economic opportunities of connecting East and West with new modern trade routes, and connecting both to resource-rich Central Asian economies, are giving rise to new modern versions of the Silk Road such as the International North South Transport Corridor.

The envisioned corridor will see cargo flows from Asia bound for Europe travel via sea from Mumbai to Iran, where a logistics hub at Bandar Abbas Port is being developed. From there, air and rail links will ship them on to Europe, cutting journey times by two thirds.

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45

Being social

Routes News takes a look at the latest innovative ways airlines and airports are using social media.

@IndonesiaGaruda Brisbane is calling you!

Now Garuda Indonesia offers a new route to Brisbane.

@monarch Celebrating our new routes flying from @bhx_official to Bordeaux & Split today!

Like a slice? http://bit.ly/FlyMayJune

News Malaysia appoints social media ambassador Malaysia Airlines has appointed a social media ambassador to help it reach a new audience and increase its brand awareness across social media sites.

National singer/songwriter and frequent traveller Yuna is now posting updates and speaking to the airline’s fan base via Malaysia Airline’s media channels, the biggest of which is its newly refreshed YouTube Brand Channel.

As well as featuring in several videos on the YouTube page, Yuna’s status as a

frequent traveller will also see her sharing her journeys throughout the world.

Malaysia Airlines’ head of advertising and promotions Khairul Syahar Khalid said: “Yuna embodies what we want to achieve for Malaysia Airlines’ social media endeavour. By sharing her journeys with us and her fans, we believe it will inspire her fans and followers to follow in her footsteps and emulate her successes that have opened many doors for her to travel the world and experience new surroundings.”

Music to their ears Passengers waiting for their flights at Birmingham Airport on May 13 were greeted by the sounds of Maurice Ravel’s Boléro as the City of Birmingham Symphony Orchestra performed as part of an impromptu smart mob to welcome bmi regional.

Arriving one by one, the orchestra built up to a crescendo to celebrate the UK carrier’s decision to launch services to Lyon, Toulouse, Gothenburg and Billund.

Pictures and video of the launch and inaugural cake were published by both Birmingham Airport @bhx_official and bmi regional @bmiregional on Twitter.

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To celebrate the launch of bmi regional at Birmingham Airport, the City of Birmingham Symphony Orchestra (CBSO) perform live in front of surprised passengers inside the departure lounge! www.youtube.com/ watch?v=WjGGVY_DW5U

@Cork_Airport 35m Dutch airline, ArkeFly has launched new sun charter services from Cork Airport to a number of Mediterranean destinations this summer.

Abu Dhabi Airport @AUH This summer, our airlines will be increasing their weekly number of flights departing from & arriving at AUH to 1,065! http://bit.ly/189hhKk

@TurkishAirlines Today, we take-off to our new Spanish destination Santiago de Compostela for the first time!

Come and join us! http://bit.ly/16I3j4N

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Social media with questions or comments are responded to in a timely and accurate manner is essential.

Beyond that, we try to ensure our ‘general’ tweets strike a balance of operational updates (new routes, travel news, etc.), interesting articles that talk around the subject of travel and of course our latest offers and deals. That way, our followers are given a range of updates from us that we believe make following BA worthwhile.

ONLINE WITH:

Routes News talks to Nick Jones, digital community relationship lead at British Airways, about the flag carrier’s social media strategy.

What is British Airways’ distinctive social media brand?

We try to ensure that we come across as approachable, knowledgeable and as the experts in our fields – whether that is flights or holidays.

We want to give our customers the support they need when they need it, whilst bringing to life all the exciting things that are happening across British Airways (BA), such as our new aircraft joining us, our investment in products and services across our fleet, and telling the story of the brand in exciting and innovative ways across social media.

Does BA blog?

Our Business Life and High Life websites (online reflections of our popular inflight magazines) contain blogs that are regularly updated with articles we hope our readers will find interesting, covering topics such as destination guides, celebrity travel tips and business-focused articles.

How would you define too much or not enough in tweeting and other interaction?

I think in terms of tweeting, ensuring those customers who come to us

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Are there any risks from engaging in social media?

None that come anywhere close to those risks associated with not engaging in social media. Our customers are having conversations about BA online and choosing not to engage with them and providing the information and support they want is unthinkable.

How has BA’s participation in social media developed?

We’ve been growing our social media presence for a number of years. Whilst Facebook and Twitter have always been the main pillars of our social media communications, we have always looked out for other opportunities to engage with our customers, wherever they may be online.

So we have developed presences on LinkedIn, Google+, Pinterest, etc.

As well as growing into other channels, we continue to learn and develop our activities – whether this is looking at how we provide our followers with the type of content they want from us as a brand to ensuring our customer service provision is helping our customers enjoy their travelling experience with us as much as possible. There’s always something new to try!

What have been BA’s main social media campaigns and key successes?

We were proud to play our part during our successful, award-winning support of the London 2012 Olympic and Paralympic Games, letting people take one of our planes down their street in

our popular online tool and helping drive over 6 million views of our ‘Don’t Fly’ advert on YouTube, as well as driving a real sense of support and involvement in the Games with our #HomeAdvantage content.

We’re also very proud of our Perfect Day Live initiative, where we are guided around a destination city by our Twitter followers live on the day. So far we have been to Rome and plan to visit lots more cities soon, allowing our social media fans to share their favourite places to visit.

How many people follow BA on Facebook and Twitter?

On Facebook we have over 870,000 fans, and on Twitter 560,000 across our global and North American accounts.

Is social media just another part of marketing or does it require a distinct approach or strategy?

Whilst what we do needs to be part of British Airways’ wider marketing strategy, I think it’s important to understand that people consume social media in a different way to how they do in other areas. We have to ensure that we are sharing updates that they find interesting, fun and informative and that are presented in ways that complement the platform.

Something that looks great in a newspaper or magazine may not be appropriate for Facebook, for example, so we work hard to present our stories in ways our followers will enjoy.

How many staff does BA dedicate to social media?

Our core team runs to four people, but we have input and support from people from across the business to help us develop and deliver great content.

GET INVOLVED! Do you want the global route development community to hear what you have to say? Let us know at: oliver.clark@routes-news.com

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Time to

change?

Despite impressive levels of traffic growth, regulatory and market challenges mean Russia still lacks homegrown low-cost carriers, writes Steven Thompson.

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he Russian aviation market has been steadily growing since 2000. Following a turbulent decade in the 1990s, the industry saw a compound annual growth rate (CAGR) of 10%, with the Moscow Airport System (MAS) experiencing even growth at 12%. A brief decline in 2009 has been followed by a fast recovery.

That is according to a recent report from Lufthansa Consulting, which revealed that MAS, which comprises Domodedovo, Sheremetyevo and Vnukovo airports, is today the 10th largest airport system in the world in terms of air passengers.

Lufthansa Consulting believes Russia will reach close to the same levels of air mobility enjoyed by states in Western European, such as Germany, the UK, France and Italy, by 2030.

“Growth rates are likely to slow down, correlated to the economy, yet will remain above Western Europe or North America,” explains Stanislav Solomko, Lufthansa Consulting’s associate partner responsible for Russia. “We are forecasting a CAGR of minimum 6% over the next 20 years.”

In Moscow, Russia’s major carriers tend to base themselves at one airport with a focus on point-to-point travel, although Aeroflot bucks that trend by steadily turning Sheremetyevo into a hub.

In the last three years, passenger traffic between regional cities in Russia has grown at a faster pace than Moscow, demonstrating a vigorous intra-regional market. But despite growth, the majority of regional gateways are still experiencing financial difficulties.

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In fact, the number of airports is steadily decreasing, shrinking from more than 500 in 2000 to about 300 last year.

Meanwhile, the number of passengers transported by Russian airlines has grown from 20 million passengers in 2000 to more than 70 million in 12 years.

But one part of the aviation market which is ubiquitous elsewhere, but notably absent in Russia, is low-cost carriers (LCCs).

The disappearance of Sky Express and collapse of Avianova in 2011 effectively left the world’s secondlargest country with no home-grown, no-frills airlines.

While the reasons for each carrier’s demise vary, Russia’s strict regulatory environment has been widely blamed for making it tremendously challenging for low-cost airlines to thrive.

Currently, every ticket sold by a Russian airline is fully refundable up to 24 hours before departure, and carriers are also obliged to offer a full meal service to all passengers.

This simple clause undermines the ability of the low-cost carrier to operate a flexible fares model and effectively stifles competition based on prices, argues Daniel Burkard, external and international relations director at Moscow’s Domodedovo Airport.

“Anybody setting up a low fares airline on the standard global model, it wouldn’t work, because you would most probably do the same pricing distribution strategy as the other carriers around the world.

So you opened up the carrier for booking well in advance at a very low fare, when

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Russian aviation

you get to the departure date, the fares will increase if the seats are filling,” he says.

“Now that only works if you don’t run the risk that 48 hours before departure anyone can cancel and take their money back. It doesn’t work.

“This is why Russian carriers are not trying to compete on price but on product. They have frequent flyer schemes, they have add-ons, limo services and taxi services, some of which are very attractive.

“Schedule plays a much greater role.

If you look at all Russian airlines compared to Europe, schedule plays a greater role because price plays a smaller role. So airlines try to get passengers into the aircraft by offering the right schedule at a reasonable price, whereas in Europe you can get a very, very cheap ticket if you just fly at a very inconvenient time.”

There is evidence that the Russian government is waking up to the difficulties, with media reporting government officials are considering opening up domestic markets to foreign carriers, while CAPA reports it is considering amending consumer legislation, including last-minute refunds and reducing the mandatory minimum fleet size to encourage new Russian LCCs. But Burkard and Solomko remain unconvinced.

“Aeroflot announced a plan to launch an in-house LCC by latest 2014,” comments Solomko. “There is also certain interest from other airlines among the top four to venture into the LCC business model.

“It is unlikely that the Russian government would allow foreign carriers to gain cabotage traffic rights. The most likely change is to allow foreign pilots to fly for Russian airlines, which would address the current challenge of airlines seeking new pilots.”

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Russian aviation

Transaero Transaero operates 164 international routes and 32 domestic services and, uniquely, offers flights from Domodedovo, Sheremetyevo and Vnukovo airports. It has a fleet of 98 aircraft, mostly Boeing, and has 35 on order, including four B787 Dreamliners and four A380s.

“The airline has been thinking of launching a low-cost carrier. However, after careful consideration, we have made the conclusion that, at the current stage, the Russian laws regarding airlines are insufficient for low-cost operations,” says Dmitry Stolyarov, first deputy general director of Transaero Airlines.

“Despite the declarations of some airlines of their intention to launch low-cost operations, there have been no changes in the Russian aviation market.

There is no legal basis that could ensure efficient implementation of a low-cost service model.

“The existing airport infrastructure does not allow for the level of handling services necessary for them. A contributing factor is the sub-standard travel infrastructure in Russian regions – specifically a lack of cheap and affordable hotels and hostels.”

He says there are several measures the government could introduce to stimulate further growth. However, he also poured cold water on media

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speculation that the Russian authorities are considering allowing foreign carriers to operate in the domestic market.

“There are a number of measures that could be brought in,” he says.

“Anti-monopoly measures; allowing foreign pilots to work on the domestic market; access to affordable loans to develop and maintain airlines’ aircraft; exemption from VAT and import taxes on foreign-made aircraft; and enhancement of ground infrastructure.”

Aeroflot Aeroflot, meanwhile, flies to 122 destinations in 52 countries. It has 36 destinations in Russia, as well as seven cargo destinations. The carrier is also a member of SkyTeam and operates codeshares with 29 Russian and foreign airlines. It has a fleet of 137 aircraft, consisting of A320s, A330s and Sukhoi Superjet 100 airliners.

It has 22 B787 Dreamliners and 22 A350s on order, with deliveries starting in 2018. Deliveries of a further 16 B777s, ordered in 2011, will start this year.

Aeroflot’s own figures show that the airline is the market leader in Russia, with a market share of 37% in terms of passenger numbers. Breaking those figures down, internationally, its market share is 41.3% and, domestically, 32.5%.

It is perhaps for this reason that people believe it will be the first of the main carriers to establish an LCC.

“Aeroflot has declared its willingness to establish a low-cost operator, but there are certain legislative obstacles in this process,” explains Alexander Lukashin, head of International Relations. “To make sure a future low-cost carrier can operate in a proper way, we need legislative amendments to be introduced.”

EasyJet EasyJet, one of Europe’s leading low-cost carriers, recently succeeded in entering the Russian market. In March, it launched flights from London and Manchester to Moscow Domodedevo after winning bmi’s rights to operate from the UK to Russia.

“We are focused on Manchester and London to Moscow for now,” explains Paul Moore, easyJet’s communications director. “We’ve only been running the service for eight weeks and we have our hands full building two new routes in a new country. On the London route, in particular, the inbound passengers are comfortably outselling those from the UK. “It shows that our business model works well in Russia and that our brand awareness is also high.”

Moore says the airline has no immediate plans to expand in Russia.

However, bilateral arrangements could allow the UK carrier to launch flights from Geneva. There are also no restrictions between St Petersburg and Manchester.

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Russian aviation

However, the strict bilateral framework within which easyJet and other carriers have to work does represent another regulatory challenge to expanding low-cost services any further.

St Petersburg St Petersburg’s Pulkovo Airport is seeking to become the Russian airport of choice for long-haul and low-cost carriers. Footfall at the airport grew by 16.1% last year to 11.2 million, and director general Sergey Emdin recently told Routes News he was confident that figure would reach 12.5 million in 2013.

Moscow’s three main airports account for 27% of seat capacity from Pulkovo. Germany is the next largest destination, with Lufthansa, Rossiya Airlines and airberlin collectively operating 300 flights per month – equivalent to 8.8% of capacity.

Rossiya presently operates 38.9% of flights at the airport, dwarfing nearest rivals Aeroflot (9.7%), UTair (4.7%), S7 (4.3%) and Transaero (4.2%), according to the airport.

Emdin says there is “huge interest” among Chinese companies in developing trade with Russia. Pulkovo is already served by Hainan Airlines and Korean Air, but the gateway “would like to expand this”. A direct link to a major US hub, such as New York, is also actively being sought.

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There are hopes that easyJet’s recent entry into the London–Moscow market could be a catalyst for change.

“There is a good possibility that easyJet will start operating from St Petersburg,” he says. “It might be not just London but also some other destinations as well.

We are in talks about Manchester flights, and Geneva flights too, because they have a company registered in Switzerland.

Bilaterals definitely create a problem, but they are trying to work around them.”

Regional airports The picture at regional airports is somewhat different from the capital with some struggling to survive, and domestic flights suffering at the hands of international routes.

With Russian carriers still pursuing hub operations out of the main city airports, the country’s smaller airports are crying out for connectivity, and given the vast distances within Russia it seems they would make fertile ground for regional carriers or LCCs. “Restoration of regional air services has been constantly discussed in recent years at all levels of government and in the industry too,” says Sergey Dotsenko, director for aviation commerce at Airports of Regions Management Company, which operates Koltsovo Airport.

“It is a very multifaceted problem, which involves both aircraft production here in Russia, staff training and [other factors].

“Since the mid-2000s, with national borders opened, the trend has consisted increasing international services from regional airports. It is this growth of international flights from regions that continues to oust regional traffic. As a result, the share of regional services is shrinking and was expected to be around 11% in 2012.”

Dotsenko adds that “the big four airlines” take up 75% of the market.

With the addition of Ural Airlines, Nordwind and VIM Airlines, 85% of civil aviation services are provided by seven carriers. Apart from UTair, all these airlines are focused on either Moscow or the international market, he says.

He concludes by suggesting that the authorities incentivise regional services by linking the provision of domestic flights with permits for international operations.

Currently, government legislation makes a low-cost operation nearimpossible, while less profitable domestic routes are suffering at the hands of international operations.

However, the market is still growing in Russia, and this shows that there are opportunities to be had. Bilateral agreements are slowly being liberalised and as soon as the Russian government sees fit to throw off some of the shackles that are preventing home-grown LCCs, there could be another explosion in growth. Only time will tell.

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Game on Africa learnt more about the airport city phenomenon at the recent Airport Cities World Conference and Exhibition (ACE) in Ekurhuleni, writes Steven Thompson.

I

t is surely a sign of the increasing importance of emerging markets that the 14th Airport Cities World Conference and Exhibition (ACE) was held, for the first time, in Africa.

The annual event was hosted by the City of Ekurhuleni, known as South Africa’s workshop and home to the continent’s busiest gateway, Johannesburg’s OR Tambo International Airport.

The city, just to the east of Johannesburg, already has bold plans to become Africa’s first ‘aerotropolis’, and more than 700 delegates from 45 countries, representing over 100 airports or airport authorities, were in Ekurhuleni to hear more about its ambitions.

The conference was also given updates and progress reports from some of the most significant airport city projects across the globe.

Following sightseeing tours, including a trip to the Apartheid Museum, Nelson Mandela’s family home, Desmond Tutu’s home and the Oliver Reginald Tambo cultural precinct, delegates were taken on an Airport City Tour and then attended pre-conference masterclasses run by event chairman Professor John Kasarda.

The conference, held at the Emperors Palace Hotel, saw Deputy Minister of Transport for South Africa, Sindisiwe Chikunga, deliver the welcome address.

She noted that ACI’s most recent forecast predicts that global passenger numbers will grow to 12 billion in the next 20 years and said that, despite the current economic climate, this positive outlook should “encourage us to address

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the long-term aviation needs of our respective countries”.

“Developing airports remains a priority for this South African government. We must deliver airport infrastructure to deliver economic growth,” added Chikunga.

She said South Africa had a network of 135 civil aviation airports, which played a significant part in the 2010 FIFA Football World Cup. Chikunga also commended the City of Ekurhuleni for its vision in developing the Ekurhuleni Aerotropolis, concluding: “The Department of Transport embraces the concept of the airport city and aerotropolis to meet the social and economic goals of this country.”

The first day of the conference culminated in the Gala Evening at the nearby Germiston Lake.

On day two, delegates split into two streams and attended sessions on topics including governance and strategic roadmaps, investment and infrastructure management, commercial development and real estate, airport design and non-aeronautical revenue development.

The emerging markets session saw Kasarda introduce speakers such as Sanjay Khanna, of GVK, who talked about Mumbai’s ambitious SkyCity project. He revealed GVK was on the brink of gaining government approval for the development.

Khanna said: “It has been a threeyear planning process and we are just about to get approval from the government. I think it will be a nice development for the city of Mumbai.”

Graham Bolton, of ARUP, then painted an encouraging picture of the scene in emerging markets. He said there was “fertile ground for aerotropolis developments”, adding that they already form an integral part in master planning for new airports.

ACE was brought to a close with the Farewell Reception held by Malaysia Airports Holdings Berhad (MAHB), the host for next year’s event in Kuala Lumpur.

The farewell event saw the unveiling of the new Airport Cities Excellence Awards, which will take place for the first time in 12 months’ time. With so many promising airport city and aerotropolis projects on show this year, there is bound to be plenty of competition for the top awards in 2014.

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routes europe report back

! e p o r u E w Ne

Fast-growing airlines from Central and Eastern Europe rubbed shoulders with big-name network carriers in Budapest at this year’s record-breaking Routes Europe.

A

record 1,080 delegates assembled in Budapest in May for Routes Europe, with carriers from the fast-emerging economies of Central and Eastern Europe joining their western neighbours for what was to be the biggest regional Routes event ever organised.

Almost 110 airlines, 350 airports and 50 tourism authorities attended the event, with a varied mix of airlines, from big network carriers such as British Airways, Air France and Lufthansa, to regional players such as Volotea and SkyWork and several of the region’s biggest low-cost carriers such as easyJet and Ryanair and, of course, Wizz Air. There were also several out-of-region carriers, including Qatar Airways, Oman Air and American Airlines.

And with over 4,000 face-to-face meetings taking place across three days of talks between airports and airlines,

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plus industry briefings and a full programme of networking events, Routes Europe really has become a must-attend event for the continent’s aviation network planners.

Some 346 airports were represented at the show, among them the major gateways of Athens, Vienna, Dallas/Fort Worth, Frankfurt and Amsterdam Schiphol.

Along with the Routes Europe programme of airline briefings and press conferences, there were also a number of announcements during the show: Budapest Airport CEO Jost Lammers announced the launch of a new ‘thin’ route incentive scheme, SkyWork CEO Tomislav Lang announced the Bernbased carrier would establish a second base in Germany, and aviation consultancy ASM announced a new partnership with award-winning industry analyst George Karamanos.

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Budapest Airport proved a fitting host for the event in more ways than one; following the closure of its Terminal 1 last year, the facility has been turned into an event centre, which proved a fitting venue for a stunning networking evening and night of entertainment.

As befitting a major event in the aviation event calendar, social media sites were also buzzing with news from Routes Europe, with @routesonline Twitter account tweeting 136 times to reach 37,450 people and the Routes community sending 730 tweets to more than 430,000 followers across the globe.

The event also gave the airport the chance to tell its story of recovery from the collapse of the national airline Malév, to reach a new high of 8.3 million O&D passengers in 2012 – a fitting record for a record-breaking Routes Europe event.

Keynote speaker Jószef Váradi, CEO of Wizz Air.

The big issues Cyprus, the EU ETS, airline mergers and consolidations and the evolution of the low-cost model were major topics at the Routes Europe Strategy Summit.

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urope’s debt crisis and an almost flat economic outlook across much of the EU, and how airlines are handling that challenge, was a major theme of this year’s Routes Europe Strategy Summit.

In his welcome address, Jost Lammers, CEO of Budapest Airport, detailed the enormous challenges that faced the gateway following the loss of Hungary’s national carrier – Malév.

“2012 was an extremely difficult year with the collapse of our national carrier, but it was an amazing achievement to carry 8.5 million passengers here last year, a mere 5% drop despite the demise of Malév,” he said.

So can a capital airport really survive without a home carrier? Absolutely, said keynote speaker Jószef Váradi, the CEO of Wizz Air. And Váradi should know.

Wizz Air has been one of the prime agents in rebuilding traffic at the Hungarian gateway, but the low-cost carrier (LCC) boss sees this as part of a wider European trend, in which national carriers give way to their no-frills rivals.

“Budapest just said that it has recovered from Malév 18 months ago. At the time it was claimed that a country can’t survive the demise of its national carrier.

As Hungary’s new national carrier, we stepped up and filled the vacuum that Malév left. The tourism industry has

flourished since then and tourism numbers are up to new heights. There is life beyond national airlines,” he said.

The controversial inclusion of aviation in the EU Emissions Trading Scheme (ETS) was the topic for a heated session in which Christian Holzleitner, DG Climate Action at the European Commission, defended the EU’s climate action record from a barrage of criticism from John Hanlon, secretary general of ELFAA. “The Commission’s justification for ETS was that it had the most environmental effectiveness at the lowest cost to society, not just a burden on European airlines but on European citizens whose ability to travel freely will be adversely affected because the airlines are competing on a very uneven playing field with carriers of which 80% of their operations and most profitable routes are exempt from it,” he said.

A recent victim of Europe’s debt crisis is the Greek island of Cyprus, but how will this impact the tourism market? Seeking to calm fears, Yiorgos Lakkotrypis, Cypriot Minister of Commerce, Industry and Tourism, said Cyprus remained “open for business” and despite its problems, the country is expecting to see a small increase in arrivals this year.

In the next session, panellists explored consolidation, mergers and acquisitions within the industry.

Budapest Airport’s Kam Jandu said there was evidence of increasing

consolidations in Europe, but the big issue to watch is the radical restructuring of established alliances.

Meanwhile, analyst George Karamanos said the impact was also being felt by the airports themselves: “It is no longer a crisis but day-to-day operations. Each airport has to become much more flexible, just as airlines had to become more flexible when low-cost carriers entered the scene.”

The third and final session focused on one of the major trends currently affecting European aviation, the increasing moves towards low-cost and hybrid business models.

Commenting on his airline’s takeover of Lufthansa’s short-haul network outside the big hub airports, Dirk V Kokott, director of business development, Germanwings, said: “Lufthansa needed to come up with a better idea. This is where Germanwings has proved to the group we can be the solution. The big problem is how do you keep the Germanwings low-cost DNA while harvesting the advantages of the Lufthansa Group. This is what we are trying to work out.”

Fernando Estrada, Strategy & Alliance director, Vueling, said: “We suffer from overcapacity in Europe, that’s why lowest cost always wins, at least so far.”

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s t h g i s n i y r t s u d In

Delegates had the opportunity to learn more about the network plans of a number of airlines in the Routes Europe Airline Briefings.

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his year Routes delegates were spoilt for choice for airline briefings, with network, regional and low-cost carriers all in attendance.

Air France delivered an in-depth presentation detailing the network and operations of its new offshoot HOP! and how it will dovetail with its own operations and improve productivity through its hubs of Paris’ Charles de Gaulle and Orly airports.

Lufthansa’s director of network planning, Dr Sebastian Hollmeier, explained to delegates the recent changes introduced to the German flag carrier’s network.

Also speaking was Gregor Schlueter, senior vice president of ancillary revenues, corporate strategy and public affairs for Germanwings, who explained how the low-cost carrier will evolve over the coming years.

In its presentation, Darwin Airline shared its focus on unserved niche markets. With a fleet of nine Saab2000s, the airline aims to add two planes a year, along with two new bases each year over the next 36 months. Primary targets for expansion are Eastern Europe, France, Germany, Scandinavia and the UK.

Air Nostrum’s network development and scheduling deputy director, Miguel Oliver, outlined how one of Europe’s largest regional airlines plans to grow its international presence.

SkyWork CEO Tomislav Lang discussed his carrier’s plan to increase its fleet of Dornier 328 and Q400s and his intention to establish a second base in Germany.

Alan McIntyre, easyJet’s head of network and scheduling, delivered a briefing discussing its plans and requirements for 2013 and beyond.

Out and about A choice of wine tasting trips, city tours and a competitive football tournament marked out a varied hospitality programme for delegates at Routes Europe.

Delegates arriving at the Hungarian capital of Budapest had plenty of opportunities to network outside of the official meetings, thanks to a variety of social events laid on by host, Budapest Airport.

These included the opportunity to view some of the sights of the ‘Pearl of the Danube’, where 2,000-year-old Roman ruins and 400-year-old Turkish baths, and numerous grand palaces and churches, hark back to Hungary’s royal and imperial past.

A number of tours were organised by host Budapest Airport and its partner Hungarian Tourism, which took in sights around the historic city and its restaurants, bars and cafes, alongside classy boutiques and striking 19th-century mansions. There were also trips along the Danube and wine tasting excursions.

Thirty Routes Europe delegates also took part in Budapest Airport’s fivea-side football tournament on Sunday, with Budapest Airport’s Green Team

clinching a victory in the final with a 1-0 score line against the White Team.

Delegates could also mingle at the official Routes Europe Welcome Reception, organised by Budapest Airport and Hungarian Tourism in the Budapest Marriott Hotel on the Saturday night.

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routes airport marketing awards

Award winning

Munich Munich Airport was crowned the overall winner of the European heat of this year’s Routes Marketing Awards during a spectacular networking evening at Budapest Airport’s Terminal 1.

The gateway’s innovative route development strategy ensured it was picked as the overall winner in the over 20 million passengers category, beating off stiff competition from Rome and Vienna.

“We keep our marketing promises and deliver internationally!”

Alexander Schroll, director of traffic development, told Routes News.

“We are very happy to receive this award and very excited because the competition in Europe is becoming very fierce between the airports so it’s great to be number one again after a couple of years!” he added.

Munich Airport will be automatically shortlisted for the World Routes Airport Marketing Awards, which will take place in Las Vegas, from October 5 to 8.

In 2013, the award featured a number of innovations where the airports were shortlisted not only by airlines using the routesonline voting button but also a panel of industry experts from the airline network planning community, alongside the introduction of the best destination marketing campaign award.

This year the awards were split into three categories based on the size of the airport and also a new tourism award for best destination marketing campaign by a tourism authority, in which category Turismo de Tenerife was named the first-ever winner.

Over 20 million passengers Winner: Munich Airport Highly commended: Rome Fiumicino Leonardo da Vinci International Airport Vienna International Airport

4–20 million passengers Winner: Athens International Airport Highly commended: Dublin Airport Marseille Provence Airport

under 4 million passengers Winner: Aberdeen International Airport Highly commended: Kraków Airport Tallinn Airport

Destination marketing award Winner: Turismo de Tenerife Highly commended: Malta Tourism Valencia Tourism

MARSEILLE CALLING

Routes Europe heads to European Capital of Culture in 2014 Routes Europe will head to France’s second city of Marseille in 2014. Known for its Mediterranean climate and lively cafe culture, Marseille is already a popular destination for tourists, but its profile has risen with becoming a European Capital of Culture for 2013.

With a population of over 1 million inhabitants, the city of Marseille is the

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regional capital of southern France and a major cruise destination, with over 1 million passengers expected to visit in 2013.

Commenting on the handover of the event in Budapest, Pierre Régis, managing director of Marseille Provence Airport, left delegates in no doubt that the city would prove a

m

worthy host of the 2014 event.

“Marseille Provence Airport is proud and honoured to host the Routes Europe event in 2014, and to share all of the new opportunities that are being unveiled at this very moment, as the new Marseille is also this year’s European Capital of Culture!” he said.

eventsupdate

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orld Routes heads to the USA for the first time this year. The event, held this October in Las Vegas, is set to be the largest to date with over 3,000 delegates expected. Organisers have developed the programme to include more opportunities for attendees to meet and do business and have also packed the programme with Face-toFace Meeting opportunities; their unique Route Exchange Airline Briefings; a dedicated and spectacular hospitality programme developed in conjunction with the event hosts, the Las Vegas Convention and Visitors Authority; and an unrivalled Conference and Talks programme.

Airline participation At the time of writing, over 150 airlines (more than this time last year) had already confirmed their attendance at the event; that is set to double by October. Already confirmed are: all the major American carriers, including first time attendee Virgin America; the major European low-cost carriers Germanwings, easyJet,

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Jet2, Norwegian and Vueling; and the Asian full service carriers such as Air China, China Airlines, Malaysia Airlines and Vietnam Airlines. In addition to this, airlines such as Etihad and Emirates will be taking longer meetings in their private chalets and there is strong alliance participation from oneworld and SkyTeam.

According to the team, interline meetings at the event are a growing requirement and these are now actively facilitated by the Routes’ scheduling team. The Route Exchange Briefings continue to be a popular and integral part of the programme, with 30 briefings set to be held. Airlines continue to bring larger teams in order to cover all the opportunities to meet and do business, and the seniority of delegates continues to increase also.

Conference and Talks Programme Another key development for World Routes in Las Vegas is the introduction of conference streams, which are proving extremely popular with attendees at the event. The streams include the Strategy Summit and the

World Tourism Summit, which are held in partnership with ICAO and the World Bank and with IATA, PATA, ICTP and TTG respectively. They also include the Invest & Manage briefings. This addition encourages teams to bring their CEOs and key stakeholders to the event so that, whilst the marketing and business development teams are in meetings, their CEOs have their own dedicated programme of conference sessions.

Listen to key speakers including: James Hogan, CEO, Etihad Airways; Akbar al Baker, CEO, Qatar Airways; Estuardo Ortiz, Executive Vice President & CCO, AviancaTaca; Andrew Levy, President, Allegiant; and Stephen Attenborough, Commercial Director, Virgin Galactic.

They can also listen to the outcome of the ICAO general assembly, where Dr Djibto, Director of the Air Transport Bureau, will give his first address following the assembly and where we expect an update on carbon trading and the EU ETS. The World Tourism Summit will include keynote addresses from Brand USA and Facebook, and panel participation from the likes of Roger Dow,

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Events update

upcoming events

World Routes October 5–8, 2013 Las Vegas, USA The global meeting place for every airline and airport

Speakers (top left to right): James Hogan, CEO, Etihad Airways; Akbar al Baker, CEO, Qatar Airways; Estuardo Ortiz, Executive Vice President & CCO, AviancaTaca; Angela Gittens, Director General of Airports Council International (ACI); (bottom left to right): David Scowsill, the President and CEO of the World Travel & Tourism Council; Stephen Attenborough, Commercial Director, Virgin Galactic; Lee McCabe, Head of Travel, Global Vertical Marketing at Facebook; Martin Craigs, CEO, PATA.

the President and CEO of the US Travel Association, and David Scowsill, the President and CEO of the World Travel & Tourism Council. Some of the issues discussed will include how regional and national governments can align their tourism economic development and aviation strategies.

As a result of feedback from last year’s event in Abu Dhabi, these elements are now integrated into the main event programme and are included in the delegate fee. Attendees can select which conferences and talks sessions they wish to attend, and request them via the Routesonline online scheduling system, just the same as they do for their meeting requests.

Tourism authorities’ increased presence There continues to be an increased and growing attendance from tourism authorities, which are backing their

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airports with vital stakeholder support and key data and analysis, something airlines are increasingly requiring when evaluating new route opportunities.

“The Routes events allow Tourism Australia and its airport and State Tourism partners to strengthen ties between Australia and the World, ultimately facilitating additional aviation capacity between the two countries,” says Craig Davidson, General Manager, Destination Development at Tourism Australia. The presence of tourism authorities is not only growing in terms of attendees but also in terms of seniority, with a large number of Ministers for Tourism already attending.

Routes has developed a dedicated programme for them, which includes the inaugural World Tourism Summit and a Ministerial Dinner during the event. We are expecting over 250 tourism authorities to be in attendance in Las Vegas.

Routes Africa July 7–9, 2013 Kampala, Uganda Routes CIS July 21–23, 2013 Donetsk, Ukraine

Routes Americas February 23–25, 2014 El Salvador

Routes Asia March 9–11, 2014 Kuching, Sarawak, Malaysia Routes Europe April 6–8, 2014 Marseille, France

Routes News 4, 2013

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Monette Pasher, executive ada director of the Atlantic Can ), Airports Association (ACAA tells Routes News how her organisation is working for ays.

Canada’s East Coast gatew

. competitive cargo opportunity tional rna Inte on nct Mo r ate Gre Both Airport and Halifax Stanfield ignated International Airport are des nsTra go as International Air Car an adi Can so , shipment Centres ry and foreign carriers can car ents ipm s-sh tran go car international ada Can side out nts poi to and from even though the rights are not l air provided in Canada’s bilatera orts airp transport agreements. Our no with 7 24/ are open for business s. tion tric res se congestion or noi

g facilities and improve landin ent lem inc ing capabilities dur s weather. Many of these project and way er und or ted ple are com to grow they will serve as a catalyst . ion traffic and trade in our reg

How is the economy in the region and how is it impacting air travel?

A lot can change in 10 years. ld We couldn’t imagine there wou ng rati ope s ject pro um role pet be five a offshore in Atlantic Canada y decade ago. Now our econom ng stro a by ? is booming, driven What is the role of the ACAA What do you see as the ated orts airp of up energy sector. The energy-rel gro a ent We repres n’s main successes atio oci Ass are nt me elop dev ick, projects and in Nova Scotia, New Brunsw ertise so far? ard Edw ce Prin creating a need for skilled exp and rs, and yea ndl fou five New king back over the past in Loo wth gro ing te driv is oca it adv and to abroad Island that work together cesses stand out. We suc in ma the two l, airports international air travel. As wel on common issues. The 13 of the insufficient ess ren awa ed her rais hig a g atin reness SA) strong economy is cre also work together to grow awa ada Border Service Agency (CB ’s ion Can reg our propensity to travel for of the region’s air service hours in our region. A study ice serv .

2.3 million residents the development opportunities. showed our region was lagging rs hou t rest of the country in service es?

Does the Association connec by an s me What are your current prioriti volu fic traf ger sen pas for as ll we as s lic nes pub with the Improving the cost competitive 40%! We raised awareness is the top enormous policymakers? ir the had orts of Canada’s aviation system raise of the issue and four airp nt me ern gov Our goal with the public is to priority. The Canadian hours doubled, creating ice serv A CBS ic out of the awareness of the econom ately takes nearly C$300 million cost savings for airlines and ultim orts in our region. t. ren ort airp ugh thro airports importance of airp aviation system passengers. More recently, our billion to Our airports are worth $2.6

together to leverage funding ked 700 wor 16, ing ent res our economy, rep What can airports in the are We support for airport economic . ent ym plo em of person years Association offer? ment projects. Our airports g elop stin dev boo in y pla we ch whi role , the proud of raged a leve Given our geographic location and ion mill $50 te sted bra inve nt to our region’s economy and cele ls of is North America’s closest poi l of $50 million from both leve tota nity. at gre the s, expand it at every opportu Europe and directly on government to extend runway a vide pro orts circle route, our airp

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Routes News 4, 2013

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