It would be nice to write a cheery little Friday blog. Perhaps looking at an upturn in the market, some little boost for the weekend.
But it’s not going to be. Sadly, despite the announcement that Atlas Air and Emirates are doing pretty well, things are really tough elsewhere. (There’s a good blog from Cargo Facts about it here.) Cathay has just issued a warning about ‘disappointing results’. European carriers in particular are making heavy weather of it. And they are not being helped by government or EU policy.
One Middle Eastern carrier recently revealed to the Loadstar that, with 25% of its business in Europe, the annual bill for the EU’s ETS scheme is $40 million. So not only are the European carriers facing stiff competition from around the world, and each other, but they are also having to cope with massive ETS charges, which they cannot escape in any market.
Of course in the UK, carriers must also contend with the infamous Air Passenger Duty, a tax that has gone up by as much as 333% since 2005. (The amusingly outspoken Mr Al Baker, Qatar Airways CEO, recently suggested that this was related to the UK government attempting to cover up a mismanagement of funds.) AirFrance KLM in part blamed cargo for its $483 million first quarter loss, and is no doubt gearing up for a fight as it tries to reduce labour costs under its new Socialist government part-owner.
And the Europeans are facing airport problems too – Heathrow can’t expand, Frankfurt has its night flight ban. (Apparently, Michael Vorwerk’s new role is to involve lobbying, something much needed in Europe right now.) And the political (and economic) landscape is volatile.
To top it all, for much of northern Europe it has been raining for more than a month. It’s truly depressing.
One of the saddest things is the redundancies. Perhaps Dave Brooks was ready and happy to go. It’s a tough job. But it’s not just the airline industry – the publishing industry is seeing a shake-up too, and the long-standing air cargo stalwart Ian Martin Jones is also leaving his post after some 14 years.
The net result is that those who are left must work harder and harder. The industry is driving through more efficiencies, trying to create low cost strategies. Trying to make some money. But the worrying thing is that although everyone is working harder, it’s not certain that they are working smarter.
One top cargo chief recently said all he wanted was to sit on a beach, looking at a palm tree. He had just flown a six-hour flight to spend a couple of hours, at a weekend, with local journalists, and was off again straight afterwards. During an interview The Loadstar had with Dave Brooks, a year or two ago, he was so exhausted after a gruelling week of flying around the world that at points he struggled to speak.
The point is this: just because you have access to an airline, doesn’t mean you should always use it. It’s not healthy. There’s no fresh air, horrible time zone changes, airport stress. Other industries use the phone, skype, conference calls, and let their local managers deal with the local issues. A permanent sense of fatigue, from working too hard, does the industry and your business no good at all. Yes, everyone must work hard, but it’s time to start seeing where you can work smarter. You wouldn’t let your business suffer this way. So why let yourselves?
