The Travel Advisor: I don’t like Fridays

Last week, 3 airlines’ actions and a very angry CEO created confusion for all involved in the airline industry.

By
February 18, 2012 22:00
Spanair workers protest in front of ticket counter

Spanair workers protest in front of ticket counter 390 R. (photo credit: REUTERS)

 
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The 2004 film Crash, which won the Oscar for Best Picture, wove together several disparate stories, bringing them together in the quasi-satisfying conclusion.

Last week, three airlines’ actions and a very angry CEO created confusion and challenges for all involved in the airline industry.

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It was on a cold and blustery Friday night that Spanair, the Barcelona-based airline, grounded all its airplanes. Citing the country’s economic crisis, its owner said it would not sink any more money into the company. Earlier in the day, a potential rescue plan for Spanair fell apart when Qatar Airways pulled out of talks to buy a stake in the airline.

One of their busiest routes was between Tel Aviv and Barcelona, and thousands of passengers were left stranded. Part of the largest airline alliance in the world, the Star Alliance, led by such heavyweights as Lufthansa and United Airlines, their fellow partners elected to not lift a finger.

Airline alliances are the lifeblood of the airline industry, allowing passengers to earn frequent flier miles, access business lounges and fly on a variety of code-shared flights. When there’s bad weather or an airport strike, the other airlines in the alliance gladly pick up the slack, allowing passengers to be rebooked on another airline. But when one of their members goes belly-up, no such sympathy is shown.

In response to the Spanair move, their “ethical” response was to allow stranded passengers to pay up to $300 to switch their flights.

Of greater concern, however, are the future passengers. One of the largest conferences in Europe, the Mobile World Congress, is held each year in Barcelona in late February. Annually attended by over 60,000 people, Israeli companies such as CatchMedia and Vringo have planned a large presence at the Congress. Spanair had offered an entire plane to fly in these businesspeople, who then woke up to discover their tickets were now worthless.



Travel agents throughout Israel quickly rebooked their clients on El Al, Iberia and Vueling flights, with the additional cost falling firmly on the shoulders of the passengers. The reasonable travel agencies did all in their power to credit each client in full for the price of their Spanair ticket, taking the responsibility upon themselves to somehow get the prepaid tickets refunded.

Those that purchased online were told by Spanair representatives to write or fax the airline’s headquarters in Barcelona in the feeble hope they could get some type of refund. Rest assured any such refund will take months, if not years, to receive, and nobody can give a straight answer as to what percentage of what was paid will ever be refunded.

One week later, a Friday morning with the sun trying to peek through the clouds, a Malev plane was attempting to fill up her fuel tanks at Ben-Gurion airport when airport authorities requested payment of outstanding debts. The Hungarian-based airline, with over 66 years of service, had a similar request made by the authorities in Dublin.

Fearful that local authorities would seize the aircraft as a guarantee, cash-strapped Malev balked, fearing it would set a precedent and the airline would be unable to finance future requests.

She simply stopped operating, cancelling all Malev flights, leaving more than 7,000 passengers stranded. Although part of another airline alliance, One World, led by BA and American airlines, their partner airlines also chose to turn away and offered no assistance to the stranded passengers.

Where was our Transportation Minister or other government officials throughout these airlines’ shutdowns? Nowhere to be seen or heard. Their vaunted Open Skies policy, encouraging many airlines to fly to Israel in the hope of increase tourism, never concerned itself with any bank guarantees to protect consumers.

Then to add salt to the wounds of sleepdeprived travel professionals, French trade unions called for a four-day strike. The main pilots’ union and Air France’s top unions asked all staff on Friday (yes, another Friday) to stage a walkout from February 6-9. Luckily, the French parliament had previously approved a bill to force workers in the air transport sector to give 48 hours’ notice of any such action.

Spurred into action, Air France quickly released a statement and encouraged passengers to rebook their flights during these four days. Air France personnel in cooperation with their travel professionals worked around the clock finding solutions for most passengers with alternative flights.

This brings us to our very angry El Al CEO, Mr. Eliezer Shkedi, who spoke recently at the Annual Conference of Israeli travel agents. Although he heads up El Al, he pointedly requested to speak as an Israeli citizen. Enraged and engaged, he told the tortuous tale of El Al’s attempts to join any of the three airline alliances. It wasn’t an issue of El Al’s stringent security conditions, or the fact that she flew only six days a week thus forgoing potential revenue.

It was, pure and simple, due to the fact that El Al is an Israeli airline and, more to the point he asserted, a “Jewish” company. Rarely discussed in public, he told hundreds of travel professionals, airline executives and seasoned journalists that there was simply no way El Al would ever be permitted to join an alliance.

Railing at the government, whose representatives from the Ministry of Tourism sat stony-faced in the audience, that the policy of Open Skies, left unfettered, could one day lead to the demise of an Israeli airline. Why, he asked, didn’t the government demand reciprocity? If the Israeli government encourages, indeed often subsidizes, foreign airlines to fly to Israel, why can’t they demand that Israeli airlines have that same right?

We have one international airport, Ben-Gurion, with one landing strip. That’s it! For years governments have discussed building a second international airport and expanding Ben- Gurion. Resolutions have been passed, committees have been formed. One can only hope that by the time a fast train connects Tel Aviv and Jerusalem later this decade, there will be some advancement.

I didn’t agree with everything Shkedi said. Professionally, I’ve found senior management at both Arkia and Israir seriously lacking in any forward thinking. Too often, routes are opened up without any market research and then quickly cancelled. Personally, while I applaud the success of EasyJet, achieving 30 percent market share on flights between Tel Aviv and London, the Zionist in me wonders why our two Israeli low-cost carriers could never duplicate EasyJet’s success.

The “start-up nation” that is Israel sorely needs entrepreneurs and creative thinkers in these companies. While I have no problem criticizing government policy, I fervently believe that cogent, cohesive and comprehensive private companies are our best path.

Mark Feldman is the CEO of Ziontours, Jerusalem.

For questions & comments, email him at mark.feldman@ziontours.co.il

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