Low-Cost Pejorative Or Imperative?

A pejorative is a word or term that carries negative connotations and is used to criticise, belittle and express a low opinion of an individual or a group of people. it can therefore be deployed, and is, to convey a lack of respect or hostility towards social classes or specific groups which share common characteristics. Depending on how they are expressed and on the context, certain words can assume the status of a pejorative. Expats is a good example.

A further one that is highly germane to Mallorca's socioeconomic circumstances is "low cost". Normally used as an adjective, it has become a substantive in its own right. Low cost as a concept is ipso facto a "bad thing", as it assumes a negative consequence by the very fact that cost is low.

We currently have a great deal of low cost to contend with, all of it business-related and, by implication, also associated with social class. Low Cost Travel Group is an obvious case in point. The name itself, which would have been looked upon in a pejorative manner by many even prior to its collapse, always had an inherent marketing conflict. Attractive to some, it would not have been to others. Because of the collapse, the naysayers will now claim that they were right all along. The business model, regardless of cover from bondholders or not, was flawed on account of the low-cost philosophy.

This isn't and shouldn't be the only conclusion to be drawn. Low cost doesn't have to mean an in-built business weakness. Indeed, the online travel agency would have been inspired by the very success of companies which have made a virtue (and lots of money) out of being low cost. Ryanair is one such.

Airlines like Ryanair have of course been condemned for a variety of reasons: sharp practice, not being as low cost as they might appear and rotten service. But the low-cost model for airlines has become so pervasive that it has overtaken regular airlines in terms of passenger numbers coming in and out of Palma's Son Sant Joan. To the ranks of Ryanair, easyJet, Norwegian, Vueling and others are to be added Air Europa Express, a belated attempt by Globalia to enter the low-cost market, and one which was met with the threat of pilot strike action.

It is informative that statistics are regularly released which indicate the level of this low-cost travel. This is informative not just because of the factual data but also because there is a sense that the data are presented with a pejorative in mind. There is a great deal of resistance to "low cost" in Mallorca of whatever kind it might be. It is a "bad thing".

The assumption, a totally false one, is that if a service is marketed as low cost it will automatically attract a class of traveller castigated by the unthinking pejorative of "low quality". We all know that some travellers are far from well-off, but the folly of this assumption was no better exposed than when the former president of the Majorca Tourist Board expressed it. The response was one of outrage from those who are perfectly well-off, thank you, but who still use low-cost airlines.

The assumption has been shot to pieces even more by an understanding of markets which reveals that consumers - filthy rich, better-off or on their uppers - are now so savvy that they seek out deals. The internet and social media have made this ever easier. Consumers, regardless of circumstance, aren't stupid. If they can spend less, if convenience is satisfied, then they'll make decisions based on these factors. There are naturally those whose aspirations and self-esteem (as well as money) would mean never willingly opting for the pejorative of low cost, but even they might have to if competition has made low cost the main or only option.

It's this word - competition - which says a lot about the antagonism towards low cost in Mallorca. For a tourist destination built on cost that wasn't just cheap as chips but cheaper, it is now payback time, and this comes in the form - it is hoped - of elevated hotel prices with improved quality attracting a tourism class which is the antithesis of what gave the island its wealth in the first place.

But while hoteliers might attempt to sew things up to their RevPar and bottom-line advantage, there is a whole other economy where the competitive forces of low cost are having field days. Airlines are just one example. There are also coach transfer services, car-hire agencies, shops. The list can go on. Hairdressers are another.

Defending local business and economic interests is valid enough, but it is a defence too often predicated on a demonising of operations which have disrupted one-time uncompetitive markets. Low cost is no pejorative, it has become an imperative.

More On Vueling And The Chaotic Spanish Air Industry

This has been a wretched week for the Spanish air industry. The problems at Vueling have been well chronicled, but they have also been overplayed by the media being fed a diet of political machismo. This is one version of events. Another has it that Vueling's problems are symptomatic of an industry that is run by power-mad executives, seeking to extract every last euro and caring little or nothing for customer service. Comparisons with the levels and types of service in the US and Asia have been made in pointing to an industry that obeys only one rule: profit.

The politicians have been having a field day, not least the national ministry for development, the one with responsibilities for air transport. Its threat to withdraw Vueling's operating licence was looked upon with shock by other airlines. The minister, Ana Pastor, generally considered to be a "serious" politician, has lately been caught up in the machismo tendency, presenting the government as some form of saviour of the air industry.

On Monday, Pastor called a meeting. The presence of all airlines operating in Spain was required, such as Air Europa, Air Nostrum, Binter Canarias, Iberia and of course Vueling. Most sent deputy executives rather than top bosses. They were to be read the riot act. About what exactly? Air Europa's pilots are planning on striking, this we knew, but apart from Vueling what grounds were there for hauling managers up before the ministry? The airlines believed it was all a political show, a demonstration of the ministry being on top of a situation that isn't necessarily the case.

The airline industry berates the government for different reasons, among them being the issuing of licensing demands that exceed accepted levels of safety and firing off threats of fines and other punishments. The past is littered with failure, such as the ghost airports like Ciudad Real. There is now also the potential disaster of Madrid airport having to close one runway because of noise. Such has been government aviation policy that Spain is left with only one home-grown player of any note, Air Europa. The rest have been swallowed up or operate as a franchisee, as is the case with Air Nostrum.

The government has failed to implant a satisfactory and swift mechanism for compensating passengers who are the victims of airline failures. Instead it calls airlines in, reads the riot act and lets the media know that it is doing so, thus demonstrating its credentials to the public while at the same time doing little or nothing about consumer protection. The ministry for development is not the only branch of government playing the media for what it's worth. The Balearic government has joined the showboating, insisting that it will be taking proceedings against Vueling and demanding compensation. Where will that lead? Either nowhere or to the courts. And that's because there isn't a satisfactory, consumer-oriented system. The one saving grace, institutionally, in all this may be the European Commission: Vueling should be made to abide by consumer rights.  

The fact is that the problems at Vueling are not being overplayed. It can be argued, as it has been, that French industrial action has been a principal cause of delays and cancellations, but the controllers have not been walking out at weekends. Vueling has had to issue a statement that there won't be cancellations this weekend because there have been on previous weekends.

This is the third successive summer that Vueling has had issues, and they point, therefore, to management failure. The airline is stretched beyond its limit, now hoping that the drafting in of more aircraft will solve the problem, assuming there is personnel to fly them. It was this, an inability to satisfy demand, which lay behind Pastor's meeting. Might other airlines be unable to meet demand at the height of summer?

There is one airline, Norwegian, that has been sending out emails to staff asking them to "sell" days off. "We are having difficulties in covering sectors at the moment," the emails have read.

Against this background, one notes latest figures for passenger growth at Spanish airports. Vueling is one airline to have experienced more than ten per cent growth up to June - 15% up in fact and crossing the ten million passengers barrier for the first time. Norwegian was up by over 21%. There's demand, but can they meet it?

The Rotten State Of Spanish Airlines: Vueling

There is something fanciful, comical even, with the suggestion that has been advanced for the Balearic government to somehow conjure up an airline for Mallorca. This is not because the idea is wrong per se, but because of the inability of Mallorca-based and Spanish airlines to operate efficiently and effectively.

Spanair is of course an airline of the past. It collapsed at the start of 2012, having limped along for several years. It was a bankruptcy disaster waiting to happen, enormous losses having been incurred in previous years. A public-private consortium, which had acquired it from Scandinavian Airlines for one euro, finally threw in the towel, a reliance on public money post-acquisition having been the thing that really killed it. The timing was awful - what with crisis and a then rise in the cost of fuel - while Ryanair was not alone in having challenged the legality of its funding.

Vueling is a different matter. It isn't about to go bust. As part of the IAG group (together, therefore, with British Airways, Iberia and Aer Lingus), its recent performance in terms of passenger carrying has been highly impressive: growth of 18% in the first half of this year, three times as much as Iberia. But this growth is part of the problem, because Vueling has found itself in the midst of one almighty mess.

The French air traffic controllers' actions haven't helped, but they are not the reason for delays and cancellations of a level that has taken on scandalous proportions. Whilst other airlines are functioning - French industrial action notwithstanding - without impacts on their schedules, Vueling is chaotic. Based in Barcelona, the Catalonian government is taking it to task, as is the national aviation authority (Aesa) and even the equivalent authority in Italy.

The airline's CEO, David García Blanca, issued an apology to passengers affected by delays and cancellations last weekend. Nevertheless, Vueling cancelled fourteen flights out of its some 700 last Sunday. The reasons for these service problems are not wholly clear. There has been speculation that there is some form of covert strike going on - workers' representatives have denied this. The most likely explanation is that an ambitious scheduling programme simply cannot be complied with because of inadequate staffing levels.

The national government is threatening Vueling with punishment (presumably hitting it hard in the pocket or worse, i.e. having its licence to operate withdrawn), while Catalonia is demanding a "change of attitude" in addressing "serious deficiencies". That's a quite telling remark: it's as if the airline doesn't really care about its clients. García has admitted that there needs to be greater staffing for customer service (among other things).

If it is a case that recruitment has been lacking, then how does such a situation arise? Any business, let alone an airline, has to staff accordingly in order to comply with service levels that are being planned. The whole thing smacks of either incompetence or of a wilful neglect of passengers by arranging schedules and then not having the personnel to implement them.

The particularly unfortunate part of all this is that Vueling was showing itself to be a decent enough airline. Its reputation isn't now totally in tatters but it is fast going down the pan. Remedial action is desperately required, or it will become another byword for Spanish airline inefficiency. Spanair, even before it got into trouble, was known as "Spanner" because of its lousy record.

And then there is the Mallorca-based Air Europa, the only Spanish-owned airline anywhere near capable of being a market leader but one which fails to make genuine inroads into the dominance of IAG, Ryanair and others. Its pilots are voting on strike action, the background to this being the creation of a low-cost division - Air Europa Express - to compete with the likes of Vueling. More possible misery lies ahead for the travelling public.

A curious aspect of the Spanish airline industry's inability to function well is that it is in great contrast to the world-leading nature of other parts of the travel sector, notably the country's hotel chains, led mainly by the Mallorcan hoteliers. For a country so dependent on travel and tourism, this failing is truly odd.

We're Més. Fly Us?

There was a time, pre-Podemos, when Més was making a very good case for becoming a strong, third political force in Mallorca. Set against the repeated nonsenses emanating from the PP and the irrelevance of PSOE, here was an alternative, and it was doing quite nicely in opinion polls and being treated nicely by a media which was discovering that it might actually have something to offer. Then Podemos came along, feasted modestly on right-wing PP support and gorged themselves on a smorgasbord of preferences for leftist parties. As an example of how the left are consequently being squeezed around the political dining-table, a poll for the Council of Mallorca elections has Més losing at least one councillor, while Podemos are matching PSOE. Alas poor Més.

Responding to Podemos has not been easy for any party, but for one which might be considered to be similar ideologically it is a tough task. Perception is of course everything. Podemos differ in many ways to Més, but the public will find it hard to see where clear blue water of the Mediterranean might exist between them. For Més, with its environmentalist agenda, it will lie in making the water bluer still, but then aren't Podemos signed up to this as well? Probably, possibly, who knows for sure.

Més is its own range of tapas within that leftist smorgasbord buffet, though maybe, in keeping with the "new Europe" that has been born in Greece, it should be a meze. With dishes of Greens and of Mallorcan tradition, here is a feast of leftism but one in which the largest platter is that of the PSM: the Mallorcan socialists with their Mallorcan nationalist philosophy. This nationalism is a button for Més to press but good old Podemos (in the Balearics) seem to also believe in the same sort of self-government and Catalan linguistic immersion that Més espouses. No, it really isn't easy when some other lot come along and nick your reasons for being.

Undeterred, Més has announced various proposals which, rather than being bogged down in nationalist ideology, are more pragmatic. They are to do with generating employment and would, one presumes, be included in an election manifesto, and among them are a couple of proposals which are different (for the moment at any rate). One is that the regional government should establish an online system for the commercialisation of private holiday accommodation. This would naturally go down like a lead balloon with the hoteliers, but then Més believes that the PP "has governed for the hoteliers". It's hard to disagree.

Another proposal is the one that Més flagged up last November; that the Balearics should have its own airline. The proposal has been misinterpreted as it was originally (probably still is) not one for international flights. The principal reasoning behind it was in fact for inter-island flights plus perhaps some flights to Madrid and Barcelona. As such, it is now more difficult to make a case for such an airline than it was in November; Air Europa will enter the inter-island flights market in May and has announced that it will be competing hard on price with Air Nostrum. Més now says that an airline would lengthen the tourist season and would mean less dependency upon a few principal markets. Which is a pretty vague statement. Does it refer to existing, overseas airlines, to the current limited amount of off-season tourism from these principal markets, to domestic tourism, or what exactly?

Whatever it is that Més has in mind, it is the suggestion that public funds might go towards such an airline that probably renders the proposal a non-starter. There are several pitfalls with such a proposal. Would it exceed powers under the statute of autonomy? Would the national competition commission not block it? Would Air Europa and Air Nostrum see them in court? And, ultimately, would Europe say no?

The EU does permit state aid to airlines but normally only in return for restructuring if an airline is in difficulty. Air Malta is a case in point. It may be government-owned (though there is a move to partially privatise it) but government money it has received has come with the strings of cuts being made to personnel (and routes) in order to establish profitability. But even rescue aid can fall foul of Europe. Cyprus Airways has been shut down because EU rules on aid were broken. Consequently, it's hard to see how a start-up, publicly-funded airline in the Balearics could be allowed.

I noted above that Més was making pragmatic proposals rather than ones driven by nationalist ideology. Mainly so, but is it nationalism driving a dubious vanity airline project? It might appeal to nationalist sentiment and be an attempt at making Més seem different, but the proposal will surely never fly.

Talk, Talk: Airlines

There has been talk, you may be aware, of the Balearics forming its own airline. Talk is likely to be all it ever is, whether such a venture might be viable or not, whatever routes such an airline might serve or not. One established airline that would probably be against the idea is Ryanair, whose commercial director David O'Brien, you will recall, was doing the rounds last week in the Balearics and the Canaries, celebrating thirty years of the airline. The Balearic Islands are not unique in there being talk of an airline. They're talking in much the same manner in the Canaries, and Mr O'Brien has added to the talk. It would not be a good idea, he said the other day. Not a good idea to open the market, which in a sense is a rather odd thing for a representative of an airline that has long trumpeted the need for open markets to say. He was, after all and on a different subject, raising an objection last week to the monopoly that AENA has on Spanish airports. But when it comes to the Canaries having their own airline, he is against the idea. He went on to say that Ryanair do what others claim they will do, inferring that such an airline wouldn't work, and then to highlight ways in which Ryanair has been successful: "the key to success is in treating the passenger well, and this is what we have been doing for thirty years".

Mr O'Brien's comments haven't been greeted with universal support. A contributor to "Preferente" magazine, for example, referred to the "hypocrisy" of the "Anglo-Saxons" when talking about customer service (the Irish, it might be said, are more Anglo-Celtic, but be this as it may) and to the Spanish air industry being "in the hands of villains". So, not a lot of sympathy for the Ryanair position there, but the same contributor went on to imply that he didn't have a great deal of sympathy for Spanish airlines either: "Im not going to defend the Spanish air industry". And this industry has seen its position whittled away to the point that it has lost any previous domination of the market and is mostly owned by foreign companies (those villainous Anglo-Saxons, or Anglo-Celts in the case of Willie Walsh).

Because it remains a significant, Spanish-owned player, Air Europa does stand out, and it has reinforced its position in the Balearics by announcing that it will start operating inter-island flights from May, so creating competition to Air Nostrum. Fares should therefore come down, though they are already subject to a form of capping because they are considered to be flights that are a "public service obligation". There had been a great deal of huffing and puffing by Air Europa, which at one point appeared to be going to pull out of any future inter-island service, but presumably the arguments it had with the national ministry for development regarding scheduling have been resolved.

Over on the mainland, Air Nostrum was helping to make history by providing the first flight to take off from the white elephant airport of Castellón in the Valencia region. It was a flight with 88 passengers, all of them supporters of Villarreal football club who were off to the match against Real Sociedad. The club expects to use the airport, as it will save time and money to do so. Whether Castellón does now become a fully operational airport, we will have to wait and see. Ryanair might take note. The airport fees will probably be very favourable.

Reliving Mallorca's Sea Of Experiences

Being an observer of matters Mallorcan can be potentially damaging to one's psychological well-being. One feels that one is constantly reliving a previous life or several lives. Haven't I, we, been here before? Once, twice or several times? What experiences have we had on the way that now come to be experienced once more? Can it be that we are tossed forever on a sea of experiences, washed ashore momentarily, only to be pulled back into the infinity of the sea and recycled by the waves of unrelenting repetition?

Right, well, enough of this flowery stuff. Let's get to the point. Hands up those of you who remember something called the "Sea of Experiences" (or "Mar de Experiencias" to give it its Spanish title)? You don't remember? Then let me remind you. This sea was launched in June last year. Mallorca's hoteliers were pretty pleased with it, as it was their idea. Along came the odd member of the regional government (though I'm unsure if the tourism minister was able to make it) and mayors from towns with a particular interest in tourism plus of course a whole load of hotel sorts. They all gathered at a golf club, were engrossed by the launch of the sea, had something to eat and then ... went home I suppose.

The "Sea of Experiences" is a document in which all aspects of off-season tourism activities are detailed. And it is a very detailed document, covering the usual suspects of golf, cycling, hiking, gastronomy, etc. At the time that the sea was launched, my reaction was ... "And?". I had rather hoped that the sea would contain some insights as to how it was going to break the vicious cycle of seasonality. It didn't. It was a document bursting with activities, names and addresses, routes for this and routes for that, and we are now being reminded of its existence.

The hoteliers had clearly found this document lurking in a drawer somewhere and thought it might be a good idea to bring it out in order to wave it in front of some other hoteliers and the man from Air Berlin who's now in charge of Spain and Portugal, Paul Verhagen. So, life was relived the other day. The sea of experiences was being experienced once again.

To be strictly accurate, the sea wasn't just sprung on the man from Air Berlin. He did have prior warning. So much so that Air Berlin will be participating in promoting the sea ("Ein Meer von Erfahrungen", one guesses), which is very nice of Air Berlin. It has shedloads of passengers who pore over the contents of its in-flight magazine plus further shedloads who subscribe to its e-magazine in addition to those who follow it on social media. Well over three million people, it would seem, and all of them likely targets for this array of out-of-season experiences in Mallorca.

Air Berlin may have been tinkering with its routes but it does account for some 50% of passenger traffic through Son Sant Joan in winter. It has had a special relationship with Mallorca that goes back to when it was founded in 1978 and it is the only airline which appears to be willing to make a great effort to bring people to Mallorca in winter.

Talking with the hoteliers and embarking on a campaign with them (the "Sea of Experiences") is intended, it is hoped, to address the all-too-familiar chicken and egg of airlines don't fly because hotels aren't open or hotels don't open because airlines don't fly. So the campaign would seem to be a positive step in the right direction, if only for German visitors.

The airlines do hold the key. But if they fly (and there is a wish to get other airlines on-board in a similar way to Air Berlin), they have to know that passengers will be flying to somewhere that is fully prepared to accommodate them.

The campaign sounds good, but are there not some fairly obvious points to be made? Air Berlin has been flying in winter to Mallorca for years. Yes, it has cut some of its winter routes but its flights have been and are numerous and regular. Has Air Berlin not been been promoting Mallorca previously? Where have those passengers who have been flying in winter been staying? In other words, for all the good intentions of the campaign, what will it achieve that Air Berlin hasn't already been achieving? Bring more German tourists is doubtless the answer. More but how many more? I wish them well.

The Years Of Flying Dangerously

Aviation history is littered with the wreckage of crashed airplanes and crashed airlines, a wreckage that was and still is a feature of the tourism industry (fortunately nowadays, the wreckage is from failed companies and not from planes smashing into mountainsides).

The growth in tourism from the sixties owed much to the arrival of the charter airline. Though not new in the sixties, the charter nevertheless became synonymous with the transporting of thousands and millions of Britons to sunny Spain so that they could indulge in the new-found fad of the fortnight's holiday in the sun.  

The charter also became synonymous with bad publicity. It was the butt of jokes for poor service and unreliable aircraft, some of which never made it to their destinations or, if they did, failed to return. The airline victim of many of those jokes was Dan-Air, which ended its life known as the airline that was sold for a quid. And some would maintain that BA paid over the odds.

Though the British holidaymaker will recall flights with Dan-Air with a certain amount of horror, tourism was not solely reliant on British carriers. Mallorca's first charter airline was Spantax. Not exclusively a charter, Spantax moved from its original base in Gran Canaria to Palma because of the greater tourist traffic that Mallorca offered. Founded by a one-time Iberia pilot called Rodolfo Bay Wright, a figure in aviation history who has been placed alongside Freddie Laker for his pioneering ways, Spantax was in existence for almost 29 years. It collapsed a quarter of a century ago. On 29 March 1988.

Spantax had, to say the least, a chequered history. In December 1972, a Convair CV990 crashed in Tenerife. All 155 occupants were killed. A year later another CV990 had a mid-air collision with an Iberia DC9. Miraculously, the CV990 was able to make an emergency landing. The DC9 was not able to. All 68 on board were dead. Three years on and there was another disaster, of a different sort. Three passengers died as a result of food poisoning from mayonnaise. In 1980, a Spantax Learjet crashed into hills eight kilometres outside Palma, killing four people.

Rodolfo (Rudy) Bay was certainly a character. The most famous tale that is told of him is of a flight in 1967 to Hamburg with members of the German press that was to demonstrate the safety of Spantax planes. Bay, who was piloting the CV990, displayed great skill in managing to stop the plane only a few metres before it would have smacked into an office building on landing. It was great skill, especially as he had landed at the wrong airport. Needless to say, the German press were not overly impressed.

It is said of Bay, which may or may not be true, that he was on good terms with Franco and that Spantax didn't pay landing fees. It is also said that Franco's government paid for the Spantax hangar at Palma. Whatever the truth of these claims, it has further been suggested that Spantax was not quite the same airline after Franco died. Nevertheless, it lasted another thirteen years, having, in 1986, been bailed out by the González government because it was, to all intents and purposes, bankrupt. Two years later, a five million US dollar loss having been made, rescue financing was not forthcoming and the airline did this time go bust, putting over 800 people out of work.

If this year marks the 25th anniversary of the Spantax collapse, next year will be the 40th anniversary of the crash of a company with which British tourists would have been far more familiar. In August 1974 the Clarksons Travel Group folded, as did its owners, Court Line. It was the most spectacular failure to have affected the holiday industry. At the time, Clarksons was offering a fortnight's full board plus flight in Mallorca for fifty quid. It wasn't a bad price, but unfortunately, and so it was to emerge, most flights were sold at a loss.

At least Clarksons didn't have the same accident record as Spantax but it did have an accident. The company chartered a Dan-Air Comet that, in July 1970, crashed in  Gerona en route to Barcelona. 112 people died.

Going on holiday in the sixties and seventies was more of an adventure than it is today. It was a journey, for many, into the unknown. It could also be a journey that came with a certain amount of danger. There may still be risks of airlines and tour operators going belly-up, but, thanks God, the chances of the aircraft doing belly-flops are far, far lower. 


Any comments to andrew@thealcudiaguide.com please.

MALLORCA TODAY - Iberia unions call off strikes

The various unions representing different groups of workers at Iberia have decided to call off the strikes planned for six days between 14 and 21 December; this, despite not having arrived at any agreement with the company. The unions say that they may call new strikes in the new year, however.

MALLORCA TODAY - Iberia unions plan strikes in December

Unions representing different groups of worker at Iberia are planning to strike for six  days between 14 and 21 December. The strike action has yet to be ratified and it would not, at this stage, include pilots. The action is against restructuring that could lead to the loss of 4,500 jobs, according to union estimates.

See more: Ultima Hora

MALLORCA TODAY - Vueling to introduce Palma-Moscow route

A direct air route between Palma and Moscow is to operate three times a week this summer. Vueling will provide the first direct air link with the Russian capital and will also offer a weekly service between Moscow and Ibiza.

See more: Hosteltur

MALLORCA TODAY - Iberia pilots' strikes back on

The Iberia Express low-cost airline was launched on Sunday, but the protests against it by pilots from Iberia continue. Previous strikes planned by pilots and cabin crew were called off, but no agreement has been reached through the mediation proposed by the national government, and so there will now be strikes every Monday from 9 April until 20 July.

MALLORCA TODAY - Iberia slams pilots over strikes

24 days of strikes during March, April and May announced, the airline Iberia has accused the pilots union (Sepla) of strike action that will cause "irreversible losses to the Spanish economy" as well as damage to Spanish tourism, credibility, image and solvency.

MALLORCA TODAY - Iberia pilots plan 24 days of strikes

The Spanish pilots union has announced that pilots with the airline Iberia plan to strike on 24 separate days until May. The strike dates include 4 April, the Wednesday before Easter, and 9 April, i.e. Easter Monday. The strikes are over the creation of the low-cost Iberia Express and the possible loss of up to 8,000 jobs.

The full list of days are:
March 16, 19, 23, 25, 26, 30
April 2, 4, 9, 13, 16, 20, 23, 27, 30
May 2, 4, 7, 11, 14, 18, 21, 25, 28

Flying High: Ryanair in Spain

Which airline takes more passengers to Spain than any other? It isn't Iberia, it isn't Vueling, it wasn't Spanair. It is Ryanair. The Irish airline doesn't simply carry more passengers than other airlines, it does so by a staggering margin of five million over its closest rival (Iberia). Over 17 million travellers used Ryanair in 2011. And the airline still manages to get it in the neck.

To the let's-give-O'Leary-a-lashing tedium that emanates from the UK now comes a strain of Spanish xenophobia. O'Leary, and it is as well, possesses a thick skin. He seems not to give a toss, and nor should he. Take away the passengers that Ryanair carries, and there would soon be howls of complaint way more vocal than any directed at the Irish airline.

There are all sorts of reasons why Ryanair is reviled and they boil down to an impression (if not always a reality) of playing fast and loose with rules, be they to do with subsidies, charges or industrial relations. Whatever the truth of the accusations that are constantly levelled at the airline, the fact is that it works, and works well. And it's this that many people can't stomach.

Former Spanair workers who gave O'Leary a hostile reception in Bilbao, one which, in true O'Leary fashion, he turned to his advantage, were protesting at a perception that their loss of employment is all down to Ryanair. It is a perception that has been whipped up from various sources, not just Spanish, but the whiff of xenophobia is unmistakable, and O'Leary's triumphalism hardly did anything to make it go away.

Attempts to somehow implicate Ryanair in Spanair's collapse are fallacious. Yes, it represented competition that Spanair found difficult to counter, but Spanair's fall was, as I have said before, the consequence of weak financing. It was also a consequence of having failed to apply an adequate strategy to take on Ryanair, unlike Vueling, which has. O'Leary didn't need to do anything, other than just wait in the wings for Spanair to go belly-up and then come to the rescue by adding ever more wings of his own flying around Spanish air space.

Spanair's demise was indicative of two issues which go wider than the airline industry, as they are indicative of Spain as a whole. One was industrial relations and the role of the unions; the other, a lack of competitiveness.

Ryanair has not exactly won a lot of friends with its fiercely anti-union stance. It is known, of course, that there is discontent among some Ryanair personnel, but the fact is that the airline has not been diverted by industrial action, which is more than can be said for some Spanish airlines.

There is uncertainty surrounding at least two of these airlines. Air Europa has been caught up in strikes. It would like to shift to a low-cost operation, but it is struggling to do so. Air Nostrum, taken head-on by Ryanair on some routes, simply can't compete on price. And then there's Iberia, which has had its share of unrest, brought about by what will be the launch of the low-cost Iberia Express at the end of March and by another hint of xenophobia directed at a supposed devil from the Emerald Isle, Willie Walsh, the boss of IAG, Iberia and British Airways' parent company.

The Spanish air industry needs more of a shake-up. O'Leary's comments about Spanair not deserving to survive because its prices were too high again didn't go down too well with some, but he was not wrong. As he has also not been wrong in pointing the finger, along with other airlines, at AENA's airport charges. It is encouraging, therefore, that Ryanair is in discussion with the Balearic Government and Palma airport over charges in winter and what actually constitutes the winter.

Whether this would result in more UK flights in winter is anybody's guess. For now, Ryanair, together with Vueling, are gobbling up what was left over from Spanair.

But with Spanair's disappearance comes the possibility of new players whose business models will be more attuned to the low-cost era. They will have to be in order to compete, and there is one existing airline which in 2011 flew under a third the number of passengers to Spain than Ryanair that might make a move and grow its traffic. And that's Easyjet. If it does though, watch out for a few more outbursts of xenophobia - the Spanish air industry is becoming less and less Spanish, which may be no bad thing.


Any comments to andrew@thealcudiaguide.com please.

Spanner In The Works: Spanair's collapse

In August 2008, following the crash of flight JK5022 at Madrid airport and the death of 155 on board, I asked whether Spanair could recover or whether the flames of Barajas would come to engulf it.

At the time of the crash Spanair was in a dire financial position. Its major shareholder, Scandinavian Airlines, which had founded the airline together with the travel division of the now bust Grupo Marsans, was desperate to find a buyer. It eventually did. A consortium from Catalonia handed over one euro.

The problems at Spanair forced the closure of its operations at Palma airport, leaving behind only call-centre staff and some ground crew, now out of a job. Everything was shifted to Barcelona, and the newly reconstituted airline hoped for better days.

The better days didn't materialise, however. A year ago, almost to the day of the announcement on Friday that the airline would be suspending activities and filing for bankruptcy protection, its future was placed on notice, owing to its financial situation.

The sale of Spanair, though for a nominal amount and for which Scandinavian Airlines retained a minority shareholding, was ill-conceived. The Catalonian government and Barcelona's El Prat airport were keen for the kudos of an airline which had Barcelona as an international hub, and so public money, along with investment from private sources was put into the airline. It wasn't, though, totally clear who owned what. Qatar Airways, which had been looked upon as a white knight, thought better about pumping money into the mish-mash of a corporation (at one stage Qatar Airways was set to become a 49% shareholder), and it was this decision which ultimately brought Spanair to its knees and to the suspension of activities.

The Qatari refusal to inject funds into the airline was the nail in the coffin, the lid of which had been closing because of the withdrawal of public funds. Spanair had been massively reliant on money from the Catalonian government and Barcelona town hall which had revelled in Spanair being the airline of the flag of the city. Reality finally caught up with the Catalonian public authorities, and Spanair, without a white knight or public finance, was doomed.

In truth Spanair has been a bankruptcy disaster waiting to happen. Economic crisis certainly didn't help, but its losses were unsustainable - 116 million euros in 2010, 186 million in 2009. Its main shareholder, Iniciativas Empresarials Aeronàutiques (IEASA), the mish-mash of various public and private organisations which held 85.6% of the airline, finally accepted that a combination of economic crisis, the rise in the price of fuel, competition and pure lack of finance, meant that the shortlived revival of Spanair, following the sale by Scandinavian Airlines, had been shorter than might have been wished.

The reliance on public money has been the thing that has really killed Spanair. Its reconstitution was always, especially at the time that it was being pieced together in 2009, a highly risky proposition, given the depth of the economic crisis. Moreover, the huge amounts of public money were distinctly questionable in a way other than their having been wise use of such finance. Ryanair was one airline to argue that this was a form of illegal subsidy. This was denied on the grounds that payments were investments and not subsidies, but the distinction seemed to be one of semantics. Qatar Airways would have been uncomfortably aware of potential retrospective action by Brussels biting them later on.

Five years of uncertainty have now come to an end. These have been five years during which Marsans, before it faced its own financial death, had at one time sought to take over Spanair completely. In a way it would have been better if it had. "Spanner", as it was sometimes sarcastically referred to, might then have had to close earlier than it has. Arguably, it should have been allowed to go to the wall in 2008 anyway. Instead, it was picked up as partly a vanity project which has cost taxpayers in Catalonia a small fortune.

It is instructive that the Spanish minister for industry and tourism, José Manuel Soria, while lamenting the closure of Spanair, has said that it should also cause there to be "very serious reflection" as to public funds to airlines, be they investments or subsidies. Soria is dead against subsidies, and however the funds to Spanair were described, they still amounted to subsidies.

In the end, it wasn't the flames of Barajas that engulfed Spanair but the absence of an adequate financial base. It has spent the past three years on borrowed time, and now the time has run out.


Any comments to andrew@thealcudiaguide.com please.

MALLORCA TODAY - Spanair stops flying

Following yesterday's earlier suggestion that Spanair might suspend activities, it was officially announced that at 22:00 yesterday evening the airline would stop flying. The cause is a lack of finance, and the airline looks likely to file for bankruptcy. There is information on the Spanair website and a telephone information service - 902 13 14 15. In Palma, 110 workers will be affected by the suspension of activities. Spanair, in 2011, operated over 14,500 flights to and from the three airports in the Balearics (Palma, Menorca and Ibiza).

Without Spanair, the Balearics stand to lose around 20% of the total number of flights into and out of the islands.

MALLORCA TODAY - Spanair might suspend activity

Spanair, the Barcelona-based airline which closed down its Palma operations a couple of years ago because of financial difficulties, is experiencing ever more financial problems. Reports that the airline has applied to the equivalent of the Civil Aviation Authority to suspend activities are confused; the airline suggesting that no official approach to the authority has been made. The latest troubles at Spanair, which was badly affected by the accident at Madrid airport in 2008 when 154 people lost their lives, have been exacerbated because of withdrawal of funding from the Catalonian regional government and Qatar Airlines. The airline is currently operating flights as normal.

MALLORCA TODAY - Iberia pilots to strike

Pilots with Iberia have announced that they intend to strike on 18 and 29 December. The action is mainly to do with the launch of Iberia Express, planned for next March, a low-cost operation within IAG, the merged British Airways-Iberia holding company.

MALLORCA TODAY - British airlines call for lower airport taxes

Tour operators and airlines from the UK met yesterday with regional president Bauzá and tourism minister Delgado to discuss the need for lower airport taxes in order to stimulate more flights into Palma in the low season. Notwithstanding this, the airlines also pointed out that more needed to be done to ensure that establishments on Mallorca were open in winter.

Subsidies And Winter Flights To Mallorca

The wailing and gnashing of teeth regarding flights between the UK and Mallorca in winter is understandable, as are also understandable the beliefs and thoughts that demand exists to make more flights viable. However, believing and thinking do not make a business case.

One aspect of the airline industry that has flown under the radar in all this discussion is not unimportant. A few days ago, the Spanish National Competition Commission (NCC) issued a report in which it complained that there was a "competitive distortion" in respect of airports in Spain. What it was specifically referring to was the varying levels of subsidies granted by regional governments to airlines.

In the past five years, the Balearics have issued subsidies to the tune of just under six million euros. This may sound a lot, but it isn't when you consider that Castille-León gave 84 million or that Aragón stumped up 34 million. Of the Balearics' six million, just slightly more than two million was allocated to routes into and out of Palma's Son Sant Joan airport.

Finding out what subsidies go to which airlines from which regions or which airports would be almost impossible, but where subsidies have been used, they have favoured the low-cost airlines. Ryanair, for example, has been known to extract enormous reductions on landing charges, paying way less every year than competitors.

Ryanair sparked off a row with Thomas Cook last year over what the tour and charter operator claimed were unfair subsidies for the airline to fly to the Canaries. These were subsidies, lobbied for by the Canaries Government, approved by national government and channelled through AENA, the airports authority. The scheme - discounts on airport charges - has helped off-peak travel, with the island of Fuerteventura having returned to the Ryanair winter schedule.

Thomas Cook may have had a point in being miffed by the scheme, but Ryanair comes in for all manner of criticism, and, subsidies or no subsidies, there are plenty of airports and plenty of passengers who would suffer without them, including those to Palma. If subsidies there are, then so be it.

The problem lies, as the NCC emphasises, with their unevenness and potential to distort competition. The point is that where subsidies are that significant, they can divert capacity from other routes, even ones which may have greater demand but which, because of the lack of subsidy and/or high landing fees etc., can prove to be less profitable.

Given the amount spent by the Balearics on subsidies, by comparison with some other parts of Spain (and in other countries), one would have to conclude that this may just have some bearing on off-peak flight scheduling.

The growth of traffic into Palma over the past few years has been hugely reliant on low-cost airlines, with UK passengers being arguably the greatest beneficiaries, but this low-cost market has itself created a distortion; it is one based on an expectation of cheap flights, the sustainability of which is now open to question. Douglas McWilliams at the ABTA convention argued that the day of the super cheap flight is all but over; even Michael O'Leary has questioned the future of low cost, though with O'Leary you can never be quite sure.

To maintain low cost requires all the right constituents to be in place, and one of them can be the subsidy. Offer a carrier alternative routes which may turn out to be more profitable even if they have lower demand, then it will take them.

Competitor airlines have been critical of subsidies, especially those that Ryanair receives. Spanair is one, and it has closed its Palma base. Air Berlin is another. Yet the Air Berlin case is significant. Though it is reducing capacity this winter, it was flying daily from several German airports last winter, and its flights were generally well booked, if not full. But the cost of an Air Berlin flight is typically substantially higher than that which you would expect of a UK carrier.

Should we conclude, therefore, that price has caused its own market distortion? It has created an expectation as to what it should cost to fly to and from Mallorca, certainly amongst the British. A carrier such as BA can't compete with such an expectation. Though it would be wrong to suggest that subsidies are all that counts, they are not unimportant, especially for low-cost airlines.

Just under six million euros. Here may be part of the answer, because, and I quote from the "AirObserver Blog", "subsidies are such a lucrative business ... (that they are) the sole reason routes exist".


Any comments to andrew@thealcudiaguide.com please.