FLUG REVUE May 2006: ITB aviaition forum

May 2006

TRAVEL INDUSTRIE OPTIMISTIC

By Sebastian Steinke

The latest ITB Berlin was a spectacular success with a rise in visitor numbers and a contented travel industry. 4 percent more exhibitors, 13 percent more trade visitors, 17 percent more private visitors and 20 percent more business deals signed: such was the final tally for International Tourism Exchange 2006 (ITE), the biggest travel fair in the world, which took place in the middle of March. As well as serving as a global meeting place for the travel industry, the presence of representatives of numerous big names in the airline and airport worlds once again turned ITE into a kind of “secret” airshow in advance of the Berlin Air Show, with many backstage meetings taking place.

Messe Berlin, the fair organiser, recognised this additional sales point and on 8 March it staged the second official “ITE Aviation Day” devoted to public podium discussions between industry representatives and management consultants and journalists, among them FLUG REVUE in the role of media partner. However, the critical organisational and laborious hard work was performed, very successfully, by students of Tourism and Transport from the University of Worms under Professor Roland Conrady.

Amongst the visitors taking part in discussions was Boeing's marketing director Randy Tinseth, who was interviewed by Avitas finance expert Adam Pilarski on the subject of future trends in aircraft. As one would expect, Tinseth predicted high demand for medium-sized twinjets, but conceded that production of the 747-8 might continue for 20 years.

The next discussion revolved around the question of whether the no-frills boom in the airline market would soon come to an end. The experts taking part from IATA, Germanwings and easyJet did not think so; instead, they predicted that all short-haul traffic would move into the low-price segment. Sometimes a supposed low-fares market moves the other way. Thus, Vijay Mallya, CEO of Kingfisher from India, is about to introduce a First Class on his domestic flights. The well-to-do Indian middle class, which numbers some 400 million people, is apparently asking for more comfort, for which they are prepared to pay. Kingfisher is no longer targeting the Indian railway public. However, its growth plans are currently constrained by a shortage of pilots.

The next topic was the present airline gold rush in the Gulf. Etihad and, even more so, Emirates have grown to the point where they are coming up against the organisational pain threshold, and they are now perceived by the major European scheduled airlines as main competitors. Many European passengers bound for Asia and Australia prefer to change planes in the duty-free palaces on the Gulf rather than using the traditional hub systems as they exist today.

The airports took part in the next discussion which considered whether, with almost 500 commercial airports, there are not too many destinations in the EU. Caroline Baldwin, sales director of Ryanair in Germany, defended the supposedly provincial airfields as the only ones where a 25 minutes turnaround was possible, and indicated a long-term interest in continuing to use Niederrhein airport to the west of Düsseldorf, which is under legal threat. BARIG Secretary General Gaebgens called on the politicians not to subsidise any more airports and not to interfere in the competition. Hanover's airport director Hille recalled that the only profitable airports in Germany are Hamburg, Hanover, Düsseldorf and Frankfurt. Cologne's airport director Garvens predicted that the advent of the Boeing 787 would change the long-haul market more than that of the Airbus A380.

It was appropriate that there should then be a discussion on fuel efficiency and engine technology, in which Norbert Arndt, Director Engineering at Rolls-Royce Deutschland, was available for a question and answer session. Lower fuel emissions would mean slightly higher fuel consumption. Given that the fuel consumption of passenger aircraft is expected to decline by 50% by the year 2020, the engine manufacturers intend to contribute 20 percent of this. To this end they are toying with the idea of using novel turboprop engines with many blades and possibly even with counter-rotating propellers. A new generation of engines takes 15 years to develop.

The Aviation Day concluded with a podium discussion on the subject of market consolidation led by Swiss CEO Christoph Franz. He said that the survival of Swiss was no longer in doubt, but synergy effects with Lufthansa would only begin to pay off from 2006. In the long-term, Franz expects to see as much competitive pressure on long-haul routes as is already found today on short-haul routes. The next ITE is scheduled for 7-11 March 2007 in Berlin.

From FLUG REVUE 5/2006

Last updated 10 April 2006

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