The new 19th Knesset has been sworn in, bringing with it not only new parties,
but brand new faces. For several new Knesset members, it will mean giving up
their foreign passports.
The Knesset requires any citizen with dual
citizenship to cancel his or her additional nationalities before being sworn in.
Similar to airlines being forced to change their identities; six MKs have shed
and shredded their foreign passports.
Both the head of the Bayit Yehudi
party, Naftali Bennett, and his fellow party member Dov Lipman are no longer
Bennett was born in Israel, but received US
citizenship because his parents were Americans. Lipman only made aliyah nine
years ago, so the forfeiture of his US citizenship was probably harder for him.
For their next visits to the United States, they will need to use their
diplomatic passport to gain entry or apply for a visa from the US Embassy or
Consulate in Israel, like all the other Israeli citizens.
The question is
how often they, along with millions of other Israelis, will decide to fly to
With all the headwinds that plague our industry, I have
been advising clients to keep patient, risk-manage your strategy on the buy
side, and take advantage of the off-market and special sales when they present
themselves. Air fares to the US have risen over 10 percent during the past year,
and this increase should continue throughout the next 12
Increased competition on flights to the US has been met by
increased demand, allowing the airlines to follow the path of least resistance –
El Al’s new ownership is pumping in some money, but will
only increase investment if the workers at El Al agree to a new collective
The First Israel Mezzanine Investors Fund, run by Ishay
Davidi, has agreed to inject up to $60 million into the airline. Davidi has come
a long way since he worked as a security guard at El Al. His initial outlay was
a mere $5m. to obtain almost 6% of the shares. Later this will be increased to
25% and, if a miracle occurs and the union comes to its senses, over 40%
With El Al’s shares plunging by more than 72%, it doesn’t take
much insight to predict that the days of charismatic El Al CEO Eliezer Shkedi
are coming to an end in 2013. The vast majority of new ownership is usually
coupled with new management.
More telling was the ringing voice of the
head of El Al’s union, Asher Edri, who proudly opined: “It doesn’t matter who
the new owners are, we will do everything to look after the workers and their
Flying non-stop to only four cities in North America – Toronto,
Newark, JFK & LAX – has resulted in El Al losing market share, and this
trend will most likely continue in 2013. Her inability to find credible
long-term partners inside North America, coupled with a severe lack of modern
aircraft, doesn’t bode well.
Even if Davidi puts in his $60m. investment,
it will take several years for new aircraft to be procured and upgrades in both
economy and business class to be completed.
This is the year of
connectivity. The millennials are coming! Or rather, they’re going, hitting the
road in increasing numbers.
These independent-minded, digital-savvy
twenty and thirtysomethings are eager to see the aftermath of the economic
recovery throughout the Western World. Be it social networks, mobile apps, or
in-flight Wi-Fi, travel providers and software developers are scurrying to meet
their needs. Hotels that don’t offer internet service, preferably complimentary,
will no longer receive reservations; airlines that offer in-flight Wi-Fi find
more reservations as well as increased revenue.
Travelling can be tiring,
which is why holiday- makers have long welcomed services that make logistics
that little bit more manageable, or make unfamiliar experiences more relatable.
At the same time, technology has made travelers increasingly expectant of a
certain level of personalization, from hotel recommendations to endlessly
customizable holiday packages.
These two elements will come together in
2013, as travel services increasingly start to take full advantage of all the
data available to deliver a truly bespoke experience, effortlessly.
at British Airways will be using iPads to access information on passengers’
previous experiences with BA, meal preferences and onward travel plans, all to
help to tailor the passenger experience.
Alongside increased connectivity
United is joining American Airlines in offering
travelers the option of having their checked bags delivered directly to their
final destinations, allowing customers to skip baggage claim upon arrival.
United says baggage delivery will initially be available to customers departing
from any US domestic airport and arriving in Boston, Chicago, Honolulu, Houston,
Los Angeles and Orlando.
The airline plans to expand the service to more
than 190 domestic airports.
“United’s new baggage delivery service offers
an alternative for travelers who prefer the convenience of having their checked
bags delivered directly to their homes, offices or hotels,” said Tom O’Toole,
United’s senior vice president of marketing and loyalty, in a statement. “Our
customers have told us this type of option adds value to their travel
(Now while United Airlines may be trying to revamp the whole
concept of checked bags, this perk comes with a price. The cost for delivery
within a 40-mile radius of the airport starts at $29.99.) EUROPE IN 2013
presents a completely different forecast. Like Labor MK Miki Rosenthal, who was
forced to give up his German citizenship, that behemoth of an airline,
Lufthansa, has several challenges awaiting her.
Europe’s major airlines
are investing in first-class cabins, outdoing each other to create ambiance akin
to five-star hotels and boosting their image as premium carriers while expanding
their cheap-fare units to combat no-frills rivals.
While most US airlines
have already dumped first class, those in Europe are navigating through the
economic slump by adopting a dual-brand strategy – one appealing to the frugal
mood and another that screams glamor and luxury.
Keep in mind that in
Europe, first-class cabins are there for pure prestige. With a lot of low-cost
airlines popping up, the major European airlines have to showcase their luxury
brand. Lufthansa is closing its European short-haul operations this year,
excluding those in and out of its Munich and Frankfurt hubs, and bundling them
into discount brand Germanwings in its attempt to find an answer to the
challenge from lowcost rivals such as Ryanair and EasyJet.
is increasing its use of Transavia and British Airways parent IAG plans to
convert most of Iberia’s short-haul operation to low-cost arm Iberia
The dual brand strategy also explains a scaling up of business
class, which now offers amenities first class had a decade ago – such as flatbed
seats – a cheaper option for corporate clients who can head straight to a
business meeting without spending a few hours to freshen up at a
Premium cabins – first and business class – contribute a little
more than 50% of passenger revenues at Lufthansa and BA, while for Air
France-KLM they make up a little under 50 percent.
The airlines want the
latest trend – be it the most sumptuous bedding, the longest flat bed,
high-resolution TV screens, fast Internet connection and on-board phones – with
features oozing opulence and exclusivity, such as private suites, mini-bars,
freeflowing vintage wines, in-air showers and noise-absorbing curtains that mask
the sound of the cappuccino maker somewhere behind your seat.
But it is
on the ground where passengers can best experience being in the sanctuary of the
high and mighty: Spas, day beds, bathrooms with the fluffiest towels, branded
amenity kits, a personal assistant and a limousine.
Air France will
invest several hundred million euros in the next two years to renew its premium
cabins and lounges. British Airways is spending over 5 billion pounds in the
next five years, not just for new aircraft but also for more elegant lounges and
Lufthansa is investing almost three billion euros by
the end of 2014 for its product, including first class and business class, and
has spent 42m. euros on five Frankfurt lounges, including its biggest first
class terminal worldwide to cope with the heavy inflow of travelers from Asia
and Latin America.
Lufthansa is also in the midst of refurbishing its
fleet of 30 Boeing 747-400s, with special emphasis on first-class seats, the
configuration of which was halved to eight so that passengers can have both a
bed and a seat.
With major European airlines upping the ante in first
class, believing the economic recovery will see payback time, it’s my humble
opinion that the issue should be reviewed carefully. The reality is that often
you find first-class seats on flights are empty, and instead carry passengers
upgraded from business class. When will airlines start asking: why are we
investing so much to mainly upgrade business class passengers? Yes, passengers
appreciate a well-endowed business or first class lounge. Yes, flyers enjoy the
perks that these lounges have, but the vast majority of business and first class
passengers choose their airlines by the service they receive in the air and not
inside a lounge. Whether it’s a three-hour flight or a trans-Atlantic flight,
the discerning customer wants his comfort onboard.
parliamentarians will succeed just fine, with their second nationality clipped,
and the travel industry in 2013 would do well to remember another timehonored
homily: less is more.
Mark Feldman is the CEO of Ziontours Jerusalem
questions & comments, email him at email@example.com
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