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.

Taking The Flak: Airlines and winter flights

A canard can mean different things. It is a misleading story or it is an added-stability surface on an aircraft. It is also, in French, a duck. Get ready to duck, everyone; the flak being fired at aircraft and airlines is flying.

The story of flights to Mallorca during the winter is not a canard. There may be more of a plot to the story than the simple “tourist authorities must do something” narrative, but it is not essentially misleading. Hence the rumblings of discontent expressed in “The Bulletin”, as opposed to the rumblings of engines as aircraft land in Palma; rumblings coming, in particular, from all points northwards in the UK.

The assertion that “there are plenty of winter connections to Faro, Alicante and Malaga” (from Scotland) is not wrong. Nor is the suggestion that Palma is badly served. Take, for example, easyJet and Ryanair. Over a period from 15 to 26 February, there are, from Glasgow, six easyJet flights to Faro and four with Ryanair. For Alicante, seven easyJet connections, five Ryanair. Malaga? Nine and five respectively. The picture is rather different, when it comes to Palma. The number of flights is zero and zero.

These are just two airlines from one city, so the story is not complete, but you can get a flavour of the story by looking at these numbers.

It is hard to compare like with like, but let’s just consider what happens with flights from Germany. Take a city such as Nuremberg, a fair-sized place but smaller by about 60,000 people than Glasgow. Air Berlin, over the same February period, is flying from Nuremberg 18 times to Faro, 17 times to Alicante, 31 times to Malaga and 23 times to Palma.

I make this, therefore, 23 more flights over a twelve-day stretch than from a larger UK city. Moreover, Air Berlin’s flights to Palma cost way more than do those of easyJet and Ryanair to the three Iberian destinations: 250 euros one way is about its Palma average. EasyJet’s basic charge across the three averages out at 85 euros; Ryanair’s at 49 euros.

Notwithstanding differences in airline markets in the two countries, the comparison is stark. It is that stark that you are entitled to ask what the hell’s going on. You could put it down to stronger business links between Germany and Mallorca and to there being a larger German presence on the island than that from the UK. But the greater German population, roughly double the size of the British, is still not 23 flights worth greater. And these are Air Berlin flights from only one airport; it flies from many others with similar regularity through the winter.

The example of Air Berlin and its Nuremberg flights has to be treated with one caveat, and that is that, apart from a hugely expensive and circuitous trip to Palma with Lufthansa, it has sown up this connection. Which probably explains its prices. Nevertheless, it still manages, if you believe the availability information on its website, to more or less fill these flights. But the sowing-up of the route is itself instructive. Air Berlin’s relationship with Mallorca goes way beyond its flights. Its director in Spain and Portugal is the former president of Mallorca’s tourism board. The island and the airline are pretty much joined at the hip. Contrast this amicable arrangement with, for example, Ryanair’s often frosty relationship with both the Spanish and Balearic governments.

If you go back to the easyJet and Ryanair flights to the peninsula, why are they going there and not to Palma? Much of the explanation has to do with population. In the Alicante province, the official number of UK residents is 127,561. In Mallorca, it is in the region of 16,000. In Malaga province, the number is 40,700. Only in the Algarve is the official figure lower than in Mallorca. So why the flights to Faro? Maybe they’re all to do with golf. Mallorca may want a winter golfing tourist, but it does not have the Algarve’s reputation for winter golf.

In terms of tourism, Malaga serves not only the Costa del Sol. There are also the mountains of the Sierra Nevada and the ski resort. In Alicante, where the winter climate is much like Mallorca’s, there are concerns that the Costa Blanca is losing its winter trade. Yet in the province as a whole (50% or so larger than the area of Mallorca), 392 hotels have been open this winter. Mallorca doesn’t come close.

Despite Alicante’s UK population and more of a winter tourism tradition, compare Air Berlin’s Nuremberg flights and easyJet and Ryanair’s combined Glasgow flights. There are five more Air Berlin flights. But what is the German population in Alicante? Nothing like that of the British. Just short of 30% of the size at 36,000.

All of this leads one to conclude that both in Mallorca and on the peninsula, Air Berlin is either out of step with other airlines or that it has been highly proactive in forging markets. Its traffic to Mallorca cannot solely be explained by business travellers or property owners. So there have to be tourists, and German tourists face the same issues as to hotels, restaurants and attractions not being open and face the same weather as their British counterparts.

One reason why Air Berlin is able to generate business is that cycling tourism from Germany is so popular. But it has become popular because of the tripartite efforts of tour operators, airline and tourism officials, co-operation that is vital. The airline may well enjoy more than just amicable relationships with the regional government (and other governments), but whatever agreements it has, something is working – to everyone’s benefit.

The story of the lack of flights to Palma from Scotland, and indeed other parts of the UK, is not a canard. But the story is never quite as black and white as it might seem and never as simple as just blaming tourism authorities for inertia. However, the experiences of Air Berlin suggest that greater opportunities for British airlines exist than might be realised. This said, if British airlines started charging the prices Air Berlin does, then just wait for the flak to start flying.

Any comments to andrew@thealcudiaguide.com please.

Pieces Of Eight: Airports, airlines and taxes

A group of German MPs has been enjoying a late-season break in Mallorca. In between taking in the Peguera Oktoberfest and strolling along the proms with their lederhosen on, the MPs have been having a word or two in President Antich’s shell-like. “We don’t think much to the rise in your airport charges, Francesc, old boy.”

I suspect that they expressed this rather differently, much as I also suspect that I have completely invented their trip to the Bierfest and their leather garments, but express concern as to the charges they most certainly did. Carriers estimate that increased tariffs for security, passengers and landing, planned for next year, could bump up prices by around 12%.

Klaus Brähmig, for it was he, gave the president something of a veiled threat. Put your prices up, and tourists, German ones that is, will decide to go somewhere else. Turkey, Greece and Malta. (Since when has Malta come into the German tourist competitive destination radar? Someone should warn the Maltese and put Alec Guinness on stand-by.)

If Antich was on the ball he might well have responded by pointing out that the Germans are establishing an eco-tax, as from the start of 2011. Eight euros a pop. Doesn’t matter where you fly to in Europe. Eight euros it will be. He might also have pointed out that these charges aren’t his. “Nothing to do with me, Klaus. You’ll need to have a word with Mr. Bean in Madrid.” Not such a bad suggestion as the Germans find Mr. Bean corset-burstingly hilarious, even, one imagines, a doppelgänger such as Herr Schumacher, i.e. President Zapatero.

Herr Brähmig had pre-empted the eco-tax riposte. German tourism in Mallorca will not be affected by the pieces of eight, he parroted. In other words, the German tax is ok, but the Spanish charges aren’t. Of course, he may well be right about the German air tax. It is universal, so it affects every destination, be it Mallorca or Turkey. An issue for Spain and therefore Mallorca is what happens with charges elsewhere. Athens International Airport, for instance, froze its charges this year.

But do these taxes, be they tax to fly or airport charges, really have any great impact? The evidence from the UK would suggest that they don’t, not where Mallorca is concerned at any rate; the air passenger duty is set to rise to twelve pounds next month. British travellers don’t, though, have much alternative. German ones do. Lufthansa’s Germanwings subsidiary, responding to the eight euro tax, has looked at moving flights from Cologne/Bonn to Maastricht, just over the Dutch border. The Dutch, having scrapped their own tax because it apparently did have an effect, might stand to benefit from a German airline’s patronage. Air Berlin’s director-general for Spain and Portugal, the former president of the Mallorca Tourism Board Álvaro Middelmann, has described the German tax as “totally absurd”.

Nevertheless, unless you happen to live within easy reach of Maastricht, the eight euro tax is one you would be likely to accept. Why pay far more to get to an airport, so that you might just be able to save a euro or so overall? It wouldn’t make much sense. The real issue with taxes and charges, where they are transparent to the traveller, lies with how much they are in proportion to the cost of the flight alone. The often excessive criticism of Ryanair is that they apply “hidden” charges. They don’t. The additional fees, such as one for tax, seem high because the initial price is so low.

While not everything that emanates from Ryanair is always believable, everyone’s favourite airline chief executive, Michael O’Leary, has spoken about changes to the airline’s strategy. He has stated that the low-cost model is unsustainable. If Ryanair is paying serious attention to its pricing and product policy, and it is, then whither other low-cost airlines? Palma airport has a high dependence upon low-cost carriers. It is their pricing models which are important, not the taxes or charges. The challenge for Ryanair, which is likely to be one for other airlines, is to grow the business. And to do so requires generating higher yields from passengers. Which means higher prices.

Even if increased taxes and charges become lower as a proportion of the initial price, the overall price of the flight increases significantly. For Ryanair, Air Berlin, Germanwings and any other airline desperate to improve margins, any additional cost element imposed by governments is unwelcome. As they are unwelcome to politicians, when it’s someone’s else taxes rather than your own. Herr Brähmig does protest too much. He has a German airline industry unhappy at its own government’s tax to keep onside, so he takes a broadside at Spanish air charges to try and show he is on the side of the German tourist and the German airline industry. It is a bit rich, and it also obscures the more important issue – that of future air prices.

Any comments to andrew@thealcudiaguide.com please.

The German Air Force: Tourist and air taxes

The Germans are creating a stink. From next year there will be an air tax applied to all tickets for outgoing flights from German airports; the levy will amount to eight euros for a flight to Mallorca. German airlines are none too impressed with the Merkel government’s decision, Lufthansa saying that it will have to pass on the tax, the director general of Air Berlin in Spain and Portugal, the former head of the Mallorca Tourism Board (Fomento del Turismo), describing it as totally absurd, and  Balearics president Antich also condemning the measure.

This is not exactly the first time that a major market for Mallorca has introduced such a tax. Who else? The UK, for one. The air passenger duty is set to rise to twelve pounds in November this year. Has it had a negative impact? Well, has it?

The Dutch are ones who would argue that this type of tax can be harmful. They abandoned theirs a year or so after it had been introduced. One drawback to the Dutch scheme was that passengers nipped over the border to Germany where there was no tax. Then. Or at least that’s what they said. Add on the costs of getting to a German airport, and the saving was probably marginal at best. Nevertheless, the Dutch did apparently experience an overall loss on the deal.

Air taxes, tourist taxes, call them as you will, are easily justified – by governments and the environment lobby – as ways of saving the planet, a justification that has more than the hint of dissemblance, to say nothing of hypocrisy. Build another runway here or there, crank the number of flights up, haul in the tax cash. The environment is served better by improved aircraft efficiency, which is why the British government toys with the idea of a levy on older, less-efficient planes.

The taxes are a system of revenue generation, why not come clean? The airlines believe this to be so and that they are viewed as cash cows to be milked by bankrupt governments.

Into this argument, locally, comes a comparison being drawn between the German decision and the abandoned eco-tax. If you don’t recall the fuss that caused … the plan was to levy a tax of one euro per night on tourists. It was a crap scheme, not because there wasn’t some sense behind it, but because it was highly discriminatory: the tax was to be gathered by hotels and other providers of accommodation. It took no account of other types of visitor.

The then socialist-led government, presided over by the current president, was quite clear as to the purpose of the tax; it was to be used, in effect, to clear up the mess years of tourism had created. Whether the money would ever have been used wisely, who can tell? And we were to never find out because the Partido Popular came into power a year after its introduction and scrapped it, the tourism minister of the time claiming that it had caused a reduction in tourism, something which the UK travel industry, for one, didn’t necessarily agree with. His predecessor, who is now the head of the dreaded Costas authority, said in 2001 that the tax was a consequence of the Balearics “tiring of cheap, destructive tourism”.

Things have changed since 2001, one change being the more rapid growth in low-cost airlines: from the UK and from Germany. As “The Bulletin” has asked, it is legitimate to question how President Antich squares his opposition to the German tax with the abandoned eco-tax. Does Mallorca now wish to carry on with “cheap and destructive tourism”, contrary to the view nine years ago, keeping flights from Germany as cheap as possible?

Another thing that has changed of course is the increase in competition to Mallorca, hence, one supposes, Antich’s opposition. But the tax would be universal in terms of destination; it wouldn’t just be Mallorca. So where, really, is the problem? The British have lived with it, the Germans, generally more eco-conscious than the British anyway, would probably stomach it, and German treasury coffers would swell. Where a problem would lie, potentially, would be if the eco-tax were to be revisited. There is support for such a thing. For example, there is a group calling itself “Mallorca Goes Green”. This advocates a ten euro tax on any visitor coming into the island via ports or the airport. A double-whammy tax might just make people think twice about flying to Mallorca. Or it might not. And even were it to, as I pointed out a couple of days ago, Mallorca can afford to lose tourists – cheap and destructive ones, if you like.

Any comments to andrew@thealcudiaguide.com please.

The End Of The World As We Know It: The volcano and Mallorca

Sunday. Two in the afternoon. The Mile in Alcúdia.

Competing attractions there may be – the fairs in the port and the wine do in Pollensa – but this seems unusual. It is two o’clock. There is barely a soul to be seen. Barely anything is open. The Chinese, ever the Chinese, wave their leaflets around. Well they would, were anyone passing. The fairs aren’t really competition to the Mile. Mile-ists tend not to do fairs.

Sunday at two o’clock in the afternoon. The airport in Palma has been closed for two hours. It is the latest one to suspend operations. Barcelona did likewise on Saturday. Nothing is coming in. The Mile might not be expected to be busy in April, but there is not busy and there is nothing, or barely anything.

A reps evening was due to take place later. It still will have done, but with vastly reduced numbers. The rest are stuck in England. No one is coming in.

This is serious. Not because some reps can’t make it, but because it has the feel of the last straw. The saving grace is that this is April, when there are only limited numbers. But April isn’t the point. What is, is if the volcano keeps on erupting. It almost doesn’t bear thinking about. All those last-minutes that are meant to be booking. They won’t be if flights keep being suspended. Or if travellers reckon that there might be a risk of Iceland wreaking its vengeance again. Last-minute, booked well in advance; neither here nor there if flight paranoia invades the traveller’s psychology. The bombs didn’t stop the visitors and nor were they going to, but an exploding volcano, miles and miles away … ? It doesn’t bear thinking about.

Just imagine it for one moment. A terrible act of God puts paid to flights. No one coming in. For weeks or months. Who can be sure this won’t happen? This is not serious, it is tourism apocalypse. The end of the world as we know it. On the mainland of Europe it would be bad enough, but on an island in the middle of the Mediterranean, it would be even worse. Ferry connections there are, but disruptions to flights on anything like a prolonged basis would be nothing short of disastrous. Even if there were periods of clear skies, the uncertainty, the possibility of the skies darkening again with ash could create mayhem.

We’ve become used to the idea of, the possibility of man-made interventions, such as terrorism, but we’ve forgotten about the capability of nature. Worry there may be about climate change and the havoc this might cause on a tourism future, but volcanoes? Who would ever have thought about volcanoes?

When the strategists do their plans, create their scenarios, they should always take into account “threats”. Natural events are threats, as much as sudden economic shocks. But which of the strategists would have written on their brainstorming-session flip-charts the word volcano? Perhaps they will in future. For now though, the biggest question is what might happen next. According to a scientist writing in “The Sunday Times”, there “remains a very real possibility that the volcano will continue to erupt on-and-off for months to come”. Weather will play a part if there are indeed further eruptions – as in wind directions would influence the ability to fly – but there is also the possibility that a bigger volcano in Iceland will go off. It did so on both the previous occasions that Eyjafjallajökull erupted in 1612 and then in 1821-1823. Just look at those dates, and then add 2010. The strategists might, actually, have been wise to have referred to patterns of volcano eruptions. This bigger volcano, Katla, also once erupted in a truly catastrophic fashion, on a worse scale than yet another volcano in the late eighteenth century which caused a three degree reduction in temperatures, bringing extreme cold and record rainfalls as far south as northern Africa.

Apocalypse.

Any comments to andrew@thealcudiaguide.com please.

Ash Wednesday: Volcanoes and smoking

“Here come further hurricanes.”

When I said this a couple of days ago, in the context of the new corruption cases, little did I know that a major natural event had occurred – on the Wednesday. Hurricanes, well very strong winds and storms, have been known to hit Mallorca, but the fallout – if not literally, then metaphorically – from a volcano blowing its top is the last thing you expect. As though things couldn’t get worse – cree-sis, cree-sis still persisting – along comes an event on a biblical scale. Act of God, as the insurance companies will be insisting. One should appeal to a Higher authority. Please, God, don’t give the locals any more excuse to reach for the blades. “Un desastre.” When isn’t it “un desastre”? Actually it isn’t un desastre – in Mallorca. What would be, would be a volcano suddenly erupting in the centre of Palma. That would be a disaster. But un desastre it is, because flights have been grounded across northern Europe. And this means that tourists have been grounded – in other countries. For one car-hire agency at least, the volcano has been un desastre. That was how the boss described it to me, at any rate. No tourists arriving, no vastly inflated hire-car charges to be made – allegedly. Un desastre.

What could though be a greater desastre would be if this damned volcano decides to carry on exploding. Iceland has form in this regard. Long it may have been since the last great outpouring of ash, but it continued to do so for a couple of years. The Mr. Spocks, the vulcanologists, cannot be sure if the pattern will be the same this time around, but if it were to be and were those shards to be knocking around in airspace, then regular “desastres” might just be on the cards.

Poor old Iceland. Cod war. Lousy weather. Bloody big blokes who haul cars. Bank failures. Frozen foods. Not a lot going for it, other than Björk. So they take it out on everyone else.

Volcano – all that’s needed.

Meanwhile … more ash. The Spanish health minister has said that a total ban on smoking in public places will be implemented “from June”. No precise date, just from June (so maybe, say maybe, that 22 June date was right after all). This, at any rate, was how “The Diario” had it, referring to the fact that the ban would come in prior to the completion of other “sessions”, meaning … who knows. Elsewhere though, it is said that there will be a period prior before the full introduction of the ban, i.e. after June. Yet again, smoke rings of confusion waft into the air. The reporting is contradictory, but this is probably because the messages coming out of government are. There needs to be a clear announcement about this, but you wouldn’t bank on there being one. I’m sorry to have to say this, but this confusion is typical of Spanish legislation. Badly communicated, unclear, added on to something previous that may or may not still apply. Poor. Very, very poor.

Any comments to andrew@thealcudiaguide.com please.

Come Fly With Me – Or Not

Come fly with me. Just as I get an email about the Sinatra show and its lift-off for the coming season, so I also hear about flights grounded. Or rather, flights not flying. Don’t fly with me.

The availability of flights has been an issue throughout the winter. There have been fewer flights and what there have been have not always been as convenient as previously. Stansted with Ryanair. I’d rather not have, but that was how it was. “The problem’s the lack of flights. Look, there’s hardly anyone walking past.” I did look. The street outside the estate agency in Pollensa. No, I suppose there weren’t that many people walking past. And the problem is, even at the luxury end of the property market (which is the end occupied by this particular estate agency), that the lack of flights means less potential for sales. The luxury end, which is meant to have remained buoyant. “Mike Oldfield has dropped the price of his place by a million,” I say. Might not be representative of the market, they say. The celebs whack on a premium in the belief that someone will pay it in order to wallow in the reflected kudos. Casa Tubular Bells. Getting an extra million for your gaff. Like chasing moonlight shadows. At another agency at the luxury, luxury end of the market, there are a number of showings. I guess a number of showings is a euphemism.

Having been told about the sorry state of the airline industry, I find further support in “The Bulletin”. “Majorca pays the price for a lack of flights,” it front pages. Easter may not be that good if there aren’t the flights. The paper’s got its tourism insider at it again. The chap from Cosmos etc. etc. Talk about downbeat. Talk also about what we knew wouldn’t be the case and the bleeding obvious. What did we know wouldn’t be the case? That all the hotels in Mallorca would be open on 1 April. Thus reckoned the head of the hotel federation some while back. It was a daft statement, an April Fool. It was never going to happen. And isn’t.

What do we know that is the bleeding obvious? That there will be a hiatus between Easter and when the season really kicks in some time in May. Hence, hotels – and airlines – schedule accordingly. We know all this. Why should it even be worthy of comment? Because someone – the hoteliers’ boss – made the statement. And it seemed to be taken as fact. By some. Not by me. You just had to ask one or two hotels to get the answer and paint a more accurate picture. The press though. Ah yes, the press, as in The Bulletin. Never seems to question the statements. Taken as fact. And then there’s the promotion. The tourism promotion for the islands. The Rafael Nadal adverts. They have not been screened in the UK and Germany. We know all this. And we know why the ads haven’t been screened. Because of the upheavals at the tourism ministry and because one of the various tourism ministers, Ferrer, seemed to want to cut costs.

Just like Sky can put up some dolt of a footballer to say nothing or to say the bleeding obvious with no insight or no originality – and presumably pay handsomely – so the default position of the press is to front up with a so-called “name”, be it the head of a tourism organisation or company, who offers a similar lack of originality or lack of anything challenging or controversial. It’s mediocre. At best.

Tourism insiding. Same old, same old. The press’s treatment is as depressingly familiar, repetitious, undemanding as the messages themselves can be depressing. But wait. This does not accord with other messages. That some hotels are reporting almost solid bookings through the season – already; that some businesses are feeling very optimistic and are going for new approaches and new ideas. I feel that old song by Allan Sherman coming on. “Camp Granada.” The depressing refrain of “take me home, oh muddah, fadduh”. Then suddenly, guys are swimming, guys are sailing. It’s never as bad as you think, everyone, or as the press might portray it, or as depressingly familiar, repetitious and undemanding as the treatment.

Kindly disregard this letter.

Captain Chris Mackintosh
I’m extremely grateful to John Maclean for sending an obituary for a friend, someone who was well-known to many in Alcúdia. Captain Chris has died suddenly. I’m holding the obit back as it will go into “Talk Of The North” next week. But thanks, John, and for the lovely touch at the end:

“Farewell, my friend and fair winds. Fair winds.”

Any comments to andrew@thealcudiaguide.com please.

FAC-You: Spain’s worst companies

The Spanish equivalent of the Consumers’ Association is an organisation called FACUA. It would be interesting to know if FACUA has contracts with any of the leading mobile operators, as they are all nominated as worst company of the year and get dishonourable mentions in the two other main categories of the organisation’s newly instituted annual “awards”, worst business practice and worst advert.

This is cracking stuff and is evidence of growing consumerist muscle in Mallorca and Spain. Our chums Ryanair have been on the receiving end of various groups’ criticisms – and the airline is also nominated as one of the five worst companies, along with Air Comet – while Palma town hall has recently become the first local authority to start proceedings against a whole host of mobile operators, including the “big three” nominated by FACUA – Orange, Vodafone and Movistar – for what it claims are “abusive clauses” relating to their contracts and practices. Movistar has also recently been fined, albeit with a low penalty, for some misdemeanour.

FACUA is inviting consumers to vote for one of the five nominees in its three categories. One presumes that there is unlikely to be an awards ceremony, replete with gushing recipients, thanking God and their entire family or sending their fridge. There will be no separate appraisal of the fashion sense of the recipients as there was for the BAFTAs (sponsored of course by Orange) in “The Sunday Times”, an article that brought forth a brilliant comment on the paper’s website to the effect of who are all these people (mentioned in the article) and why am I reading the article, one that was outstanding in its fatuity and references to obscure fashionistas. Shame that there might not be such an appraisal, certainly where one of the nominees of worst advert is concerned – the wonderfully named bread company, Bimbo.

Among the categories of worst business practice are “irregularities in electricity invoices” – no prizes for knowing which company might be the happy recipient of this turkey or rotten tomato – and telephonic “spam”, for which, take a bow, Movistar (aka Telefonica) and its miserable, puerile and counterproductive mobile bombardment with the “1485” number. Spam or cold-calling is not the problem that it is in the UK, and is generally confined to the whole telecoms sector – mobile, landlines and internet providers. FACUA might also have fingered these providers. They are part of an industry, internet provision, that is one of the worst in Europe. Slow, expensive and unreliable. Other than this, it’s quite good. At a time when it has just been reported that your average Spaniard spends longer on the internet than watching television, it beggars belief just how lousy broadband can be.

If FACUA succeeds in shaming the mobile (and internet) operators into sharpening up their acts, becoming less “abusive”, becoming more service-oriented, then it will have done well. Whether it does is of course another matter.

To vote on the worst companies, the worst business practices and the worst adverts, go to http://facua.org/lapeorempresa. Acknowledgement is due to the article in yesterday’s “Diario”.

National Lampoon threatened to kill the dog, as you can see.

Any comments to andrew@thealcudiaguide.com please.

Ryan’s Laughter – “El Mundo” And Ryanair

In inviting passengers to vote on ways that Michael O’Leary could settle a dispute with Stelios, Ryanair refer to themselves as “the world’s favourite airline”. You can’t fault them for brassneck, though at a time when British Airways are looking at training even pilots to act as stand-in cabin crew as the former world’s favourite airline plunges ever earthward on its collision course with staff, you can perhaps forgive the Irish operator a touch of hubris, to say nothing of taking the piss. And that’s it with Ryanair – piss-taking. There is more than just a sense of knockabout, humour and “having a laugh” with Ryanair. How else can one treat the notions of passengers standing or paying to use the loo? They’re jokes, aren’t they? Anything for publicity. O’Leary is from the same school as Stelios and Branson in this respect.

But there is the other form of “having a laugh”, one at the passenger’s expense; the passenger who sees the expense of his flight clocking up as he has to add on the “fees” that the airline charges. “El Mundo”* has been having a go at the low-cost operator. It seems to take paying for a pee and standing in the aisles seriously, as it does examples of lax security, treatment of staff, receipt of subventions from Spanish regional governments and those added charges.
*(http://www.elmundo.es/mundodinero/2010/02/19/economia/1266605114.html)

Ryanair has a love-hate relationship with Spain, and not just because of its unauthorised use of a photo of Queen Sofia in its advertising. The regions love the business the airline brings, even if they are often forced to make certain accommodations. If not, the airline is quite willing to pack its bags and go elsewhere, though one might wonder who gets left to pay the fee for the bags. There is considerable disquiet in Spain, and even among those at governmental level, as to Ryanair’s practices. The Balearic Government is meant to be pursuing legal action against the airline. Various ministries at national level have been written to by union leaders with demands to investigate the airline’s labour relations and tax basis. For Ryanair, though, Spain is good business, with numerous airports, many willing to meet the airline’s demand. For the passenger, believe it or not, Ryanair is also good business. Despite the negativity that flies its way, it has broadened options for the traveller.

It is those charges that do of course create the most criticism, and working one’s way around Ryanair’s hideous-looking website doesn’t necessarily make it any easier to fathom them all out. The charges for online check-in and baggage are a nonsense. They are not included in the original price for two reasons: one, to show as low a price as possible and two, because – in the case of baggage – it is always possible to avoid the charge, assuming one can get everything into the required hand luggage size. But other airlines are in on the act. Ryanair is not unique in this regard.

One supposes that the add-ons are all about extracting as much “customer worth” as possible. This is 101 marketing for the new age. Like banks have so-called relationship managers who are ostensibly the customer’s point of contact and service yet who are there to try and sell more product, so the airlines look to squeeze whatever else they can out of the customer. Unlike banks though, it is highly debatable whether Ryanair creates a relationship. Most passengers would happily go elsewhere. The airline should worry. The add-ons amount to some 20% of total revenue.

Ryanair can seem as if it is “having a laugh”, but it is also disingenuous. It claims lowest-cost fares to ski resorts. Probably so, but sports equipment is levied at 40 euros a pop. Its environmental credentials include a “substantial reduction in the amount of waste” by comparison with airlines which give free meals and newspapers. This line of argument could have come from the Alastair Campbell guide to spin. The policy of a maximum weight allowance of 15kgs may be intended as a means of fuel-saving, but it also brings in extra dosh, so long as the passenger is willing to go along with it. And not all are. At Palma before Christmas, a couple weighed in with one bag at 17kgs. Rather than pay the excess, they called a relative who works in the airport and left with him some contents that brought the weight down. Ryanair’s “having a laugh” is that loud that there is a whole website devoted to it – http://www.ryanaircampaign.org.

“El Mundo” is at pains to prove that Ryanair is not the cheapest of the low-costers. The paper draws comparisons with Vueling and EasyJet and also refers to the additional costs associated with booking in ways other than online, e.g. at the airport or via an agency, and to which one can add a call centre (more cost). The paper is though rather missing the point, which is that Ryanair is essentially an internet company. Automation of its processes is one aspect which allows it to be low-cost. The customer is at a distance, and that’s where the airlines wants the customer, in front of a computer monitor, accessing only its website preferably. The customer is made to do some of the work, like printing out boarding passes. So much for relationship management (echoing a point I made yesterday), and any notion that the airline may wish to forge a close bond with the customer. The bond lies in the price, and the unpalatable truth for those who might want to give Ryanair a kicking, including “El Mundo”, is that the prices are low, very low, even once you add on the basic add-ons for baggage and check-in. Ultimately, it’s all about changing habits and expectations. Flying is far from the pleasure it once was, and all the security and faffing about that is now required has seen to that, alongside the low-cost service. Flying is now a pain in the neck, so the cheaper the better, and Ryanair knows this. Yes, its charges can seem unfair and yes, it can seem disingenuous, but play the game – rather as airports and authorities have to play the Ryanair game – and the prices are still good. At Christmas it cost, with the add-ons, sixty euros to go from Palma to Stansted. Sixty euros. You might spend that on a couple of weeks worth of petrol – and not go very far. There should perhaps be some perspective.

Any comments to andrew@thealcudiaguide.com please.