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You are now free to pollute about the country

The climate clamor over flying doesn’t stop with environmental activists. One British bishop denounced flying on a vacation as a “sin.” Even publishers of travel books lament the climate impact of their wanderlust guides and are advising travelers to “fly less and stay longer.” Mark Ellingham, founder of Rough Guides, and Tony Wheeler, founder of Lonely Planet, have decried the growth of what they call “binge flying,” and urged air travelers to take to the skies less often. “In Europe, and especially Britain, we have become addicted to cheap flights, heading off to Rome for the day or Prague for the weekend,” writes Ellingham in e-mail. “Many people buy these as casually as booking a restaurant. I consider this ‘binge flying’ and I don’t think it’s sustainable behavior.”

How worried should air travelers be about contributing to global warming? Flying still makes up a very small percentage of greenhouse gas emissions. Globally, just 1.5 percent of greenhouse gas emissions caused by human activity each year come from air travel, according to Tim Herzog, a climate policy analyst for the World Resources Institute. In the U.S., that number’s about 3.5 percent. Yet those numbers are projected to rise sharply, making air travel one of the fastest growing contributors to global warming, while the world is struggling to reduce emissions. Over the next 20 years, more than 27,000 new aircraft will take flight, and the number of air travelers will double to 9 billion during the same period, according to the Hodgkinson Group, an aviation consulting firm. Here in the United States in the next two decades, demand for air travel will grow 150 percent, according to the Department of Energy.

Some governments are stepping in to curb the rising tide of emissions. By 2011, airplanes traveling within the European Union will be subject to a carbon trading scheme. But debate about such regulations inspired the unrepentant boss of one low-cost airline, Ryanair, to pledge to increase his company’s carbon emissions, saying if his customers are worried about the environment, he had some advice for them: “Sell your car and walk.”

Hopping a commercial flight sure feels like an airborne form of carpooling, especially when the blowhard sitting next to you won’t close his yapping trap for six hours. And, sure, fine, it’s unquestionably better for the environment than owning a private jet, which one horrified activist compared to buying a whole coal-fired power plant to power a single mobile phone. Yet even on today’s full flights with passengers crammed into small seats, flying packs a big climate punch. For a long trip, like a transatlantic flight on an average-size plane, each passenger is responsible for sending .39 pounds of CO2 per mile into the atmosphere, according to the World Resources Institute’s Greenhouse Gas Protocol Initiative. By that measure, flying direct from Denver to London and back puts about 3,600 pounds of CO2 into the atmosphere, equivalent to driving a Toyota Prius hybrid 10,000 miles.

While most Americans still emit more by driving than flying, simply because they spend so many hours in the car, frequent fliers can spew a lot more emissions than daily commuters. Take the doting grandmother, recently profiled in the New York Times, who flies 500 miles a week, jetting from her home in Houston to Dallas and back to care for her grandkids, a tale the paper dubbed “The Incredible Flying Granny Nanny.” A year of this high-flying childcare arrangement will pump almost 16,500 pounds of C02 into the atmosphere, more than the average driver of a four-wheel-drive Ford Ranger emits in a year.

It may be a short flight from Houston to Dallas, but shorter flights have a larger impact per mile than longer ones, since the takeoff and landing are the most fuel-hungry part of the journey. “These regional flights are not efficient because they don’t have time to get up into the atmosphere and cruise, where jets are most efficient,” says Luke Tonachel, a vehicles and fuels analyst for the Natural Resources Defense Council. That means the Incredible Flying Granny emits .63 pounds per mile every time she jumps on a jet to see the grandkids. She could reduce her emissions by hopping behind the wheel of a Honda Civic by herself and driving from Houston to Dallas and back.

But why pick on one grandma, when business travel accounts for 65 percent of all flights in the United States, according to PhoCusWright, a travel research firm. It’s the management consultants jetting from New York to Kansas City, and the tech executives winging it from Silicon Valley to the Bangalore outpost, who are really racking up those airborne emissions. Just ask Tom Arnold, chief environmental officer for TerraPass, a Silicon Valley company that sells carbon offsets: “The overwhelming majority of my personal carbon footprint is flights,” he says. Arnold says he cuts down by consolidating trips, and staying four or five days when he goes on a cross-country trip to New York, instead of just flying in for a meeting or two.

Flying also has another warming effect, beyond the greenhouse gas emissions. Planes leave behind contrails, thin wisps of condensation in their wake, which act like high, thin ice clouds producing an effect called “radiative forcing.” The contrails trap heat that’s radiating off the earth’s surface, contributing to global warming. During the day, they also reflect sunlight, which has a counterbalancing cooling effect. At night, and during the winter, when its darker, there’s less sunlight for the clouds to block. “The warming effect goes on 24 hours,” says Don Wuebbles, a professor of atmospheric science and director of the School of Earth, Society and Environment at the University of Illinois. “It’s generally thought that the warming effect wins out. The cooling effect is only during the day.” Right after 9/11, when most planes were grounded in the United States for days, scientists were able to measure a change in the temperature.

A purist might argue that if you’re really worried about global warming, any recreational flying is unsustainable. As with so much else with global warming, the emissions math is not that straightforward. Deforestation is a major contributor to global warming — second only to power generation as a source around the world — accounting for some 18 percent of annual human-induced greenhouse gas emissions. Tourism is one of the key industries that makes it economically viable for poorer countries to avoid clear-cutting rain forests for cattle ranching or agriculture. If visitors from richer countries suddenly stopped flying, more rain forests would fall, creating more emissions.

“I don’t think it would be a great thing for the world — and the developing world especially — if we all stopped flying entirely,” writes Ellingham from Rough Guides. “What is crucial, however, is that aviation doesn’t continue to grow at present rates — 10 percent in the U.K. and more than 5 percent globally. We don’t have a God-given right to cheap flights that overrides our responsibility to the planet and its people, most of whom, of course, never get on an aeroplane.”

It may come as a surprise to learn the airline industry itself is talking green. In June, Giovanni Bisignani, director general and CEO of the International Air Transport Association, threw down the gauntlet to his colleagues in the airline industry at their annual meeting. “Air transport must become an industry that does not pollute. Zero emissions,” he said. How to get there? “I don’t have all the answers, but our industry started with a vision that we could fly. The Wright brothers turned that dream into reality and look at where we are now.b

The association issued a challenge to its members to replace 10 percent of their polluting fossil fuel with low-carbon alternatives within the decade, and called on the airline manufacturers to build a zero-emissions aircraft within the next 50 years. The U.S. Air Force has set an even more ambitious goal, challenging fuel refiners and alternative energy companies to move the Air Force’s entire fleet to fuel that’s only 50 percent petroleum-based within the next decade. In the meantime, there’s an air travel industry-based Web site to soothe public fears about climate change and flying.

Richard Branson, maverick founder of Virgin Atlantic, has pledged $3 billion to search for alternative fuels. Biofuels don’t pack as much energy per unit as fossil fuels, which makes it challenging to use them aloft. There’s also some concern about them freezing or gumming up at high altitudes. Nevertheless, Virgin claims that it will be ready to test an alternative fuel on a commercial jet in 2008. In the meantime, the race is on to be more efficient with conventional fuels. Boeing boasts that its forthcoming 787 Dreamliner will use 20 percent less fuel than similar-size planes flying today. And one low-cost carrier, EasyJet, has a prototype for a short-haul jet that will reduce CO2 emissions by half.

To conserve fuel, Virgin Airways has experimented with towing airplanes to the runway to avoid turning their engines on until the last possible second. In fact, many planes now taxi with just one engine on, instead of using both, according to Steve Lott, a spokesman for the International Air Transport Association. Better air traffic management to ensure that planes take the shortest routes to their destinations and spend less time circling above airports waiting to land could also yield significant efficiency savings, according to Lott.

Yet these glimmers of conservation don’t appease Joel Makower, executive editor of Greenbiz.com, an environmental consultant to Fortune 500 companies. He recently mused on his blog about whether air travel will ever be green. “I don’t see anything that’s being done by the industry that suggests that airplane travel is going to be climate-friendly within my lifetime,” says Makower, who flew 51 times in the first half of 2007. He argues that the projected growth of the industry and current state of technology mean that airline emissions simply will get worse before they get better.

Still, without an obvious technology fix for air travel, inspiring passengers to give up flying is like trying to toss a paper airplane through a hurricane. Sure, a business traveler can replace a shuttle flight from New York to Boston with a more efficient train ride, but most trips, at least in the U.S., don’t offer such an obvious, efficient and convenient alternative to flying. “If you’re traveling on business between Atlanta and Chicago, what else are you going to do?” asks Herzog from the World Resources Institute. Makower says he hasn’t seen companies voluntarily replacing far-flung meetings with videoconferencing to curtail flying. “Some companies recognize that air travel is the biggest part of their carbon footprint, and the typical response is to offset it, not to reduce it,” he says. Even Ellingham from Rough Guides admits that asking people to cut back on flying won’t achieve much. “I think that a lot of people are moderating their flying habits, and many more will do so as the facts and urgency of acting on climate change become clear. But, no, I don’t think that it will be enough unless governments intervene.” Currently, the European Union’s plans to implement a carbon emissions trading scheme for airlines in 2011 is the only such action.

If you’re trying to figure out the impact of your own flight, you can use many online calculators, mostly presented by companies selling carbon offsets. Be forewarned that the results represent rough approximations. Also, each calculator makes somewhat different assumptions about how big the average plane is, how efficient it is and how full of passengers it is, and so your results will vary. Most online calculators don’t attempt to include the added impact of contrails.

The best way to reduce air travel emissions is, of course, not to fly. If a train is available and efficient, it’s always a better option, according to Jennifer Hattam, green lifestyles expert for the Sierra Club. She also recommends limiting shorter vacations to spots close to home, while saving flying for longer journeys. Another tip: Horde all your vacation days to take one long holiday instead of several shorter vacations throughout the year, involving flying.

Although you won’t catch anyone at the Sierra Club telling you to jump in a car, driving can produce fewer emissions per passenger mile than flying, especially if you have a fuel-efficient car. Trying to decide if you should drive or fly from, say, San Francisco to Los Angeles, adding people to your car who would have flown can easily tip the scales in favor of driving. Flying in the summer, when there’s more light, is also better for the atmosphere than flying in the winter, when it’s darker. And now that you know it’s better to fly in the day, you have a perfect excuse, should your eco-savvy boss want you to be in your transcontinental office the next morning, not to take the red-eye.

cost of crisis at Terminal 5

LONDON, England (CNN) — No two ways about it, it has been a catastrophic week for British Airways.

More than 400 flights have been cancelled since Terminal 5’s launch on March 27.

Since the opening of Terminal 5, BA’s new home at Heathrow on March 27, around 430 flights have been cancelled and more than 20,000 bags separated from passengers. Questions were raised in the House of Commons, the lower house of British Parliament; environmental protestors descended; and even the Olympics torch is being bypassed to more reliable port of entry when it arrives at Heathrow on Sunday.

One week on, BA says it is gaining control. But looking further ahead, does the Terminal 5 debacle spell long-term damage for the BA brand? Or is this just another, in a catalogue of troubles that the airline will overcome?

A combination of issues threw the system into chaos last week, including staff not being able to get into the car park, problems passing security areas and malfunctions in the baggage system. Some of these problems were the fault of BAA, the airport operator. But most of the blame falls to BA for its poor preparation of staff.

Commentators added more concerns including inadequate organizational structures at BAA and BA; poor management of BA’s disaffected workforce and Britain’s regrettable record of delivering major projects.

Heathrow and BA are my last choice combination and I used to be a Gold Cardholder,” says one UK aviation analyst, who asked to remain unnamed.

The problem, he adds, is that BA over promised and then failed to deliver.

One week before T5’s opening, Willie Walsh, BA’s chief executive boasted to British paper, The Sunday Times: “we have done as much as we possibly can and we are ready.” And on the morning of the launch, he marched around the gleaming new terminal promising state-of-the-art travel.

“If there had been a more measured approach, it would have been fine,” says the analyst.

But it was not. Citibank has estimated that disruptions and flight cancellations could cost British Airways up to $50 million (£25 million).

And even when T5 is at full strength, the problems will continue, says Chris Avery, airline analyst at JP Morgan. “Heathrow will remain arguably the worst of the European hub airports for punctuality and delays because of the two-runway layout rather than anything to do with terminals and infrastructure.”

Others are more hopeful. As Jamie Bowden, aviation industry expert and former BA customer service manager says, whilst the fiasco is clearly damaging in the short term, it doesn’t spell long-term harm for BA and its brand. “Anybody who has worked in the operational side of an airline knows that when you move terminals things rarely go smoothly at the outset.”

The unveiling of Denver International Airport was delayed by over a year. When it finally opened in 1995, its new automated baggage handling system had to be ripped out and replaced with the original manual system.

In Bangkok, cracks started to appear on the taxiways of the new Suvarnabhumi International Airport within weeks of its 2006 launch.

Hong Kong’s old Kai Tak airport had to remain open for an extra six months whilst the new at Chek Lap Kok Airport overcame teething problems.

And it took Madrid Barajas Airport weeks to deal with the backlog of luggage built up following opening of its Richard Rogers-designed Terminal 4 in 2006.

“Inevitably the most complex part of the transition will be the electrical and mechanical parts,” says Gareth Evans, aerospace and defense expert at A T Kearney. “But Terminal 5 was delivered on time and to budget. And whilst it’s clearly an overwhelming embarrassment now, I have no doubt that in a relatively short period of time it will be working and people will forget it.”

And business travelers will be the first to forgive and forget, says Bowden. “Business travelers are not sentimental about travel,” he points out.

Yet the timing of the debacle was not ideal. Firstly the failures have put BA and BAA in an unflattering light as they push for a third runway at Heathrow.

Terminal 5’s launch also coincides with opening of the “Open Skies” agreement, that puts an end to the exclusive arrangement granted to British Airways, Virgin Atlantic, United Airlines and American Airlines to fly transatlantic out of Heathrow.

Delta Air Lines, Continental Airlines, Northwest Airlines and Air France-KLM all began U.S. flights into Heathrow this week, heralding for many a new era in air travel.

But despite even this week’s disasters, Bowden believes BA will continue to prevail for flights across the Atlantic. “For business travelers transferring from Continental Europe through Heathrow to the States, BA will still have the best product. This is a brand new, state-of-the-art terminal and the lounges are great.

“If they fix it quickly, and by quickly I mean within two to three weeks, there is no reason why BA shouldn’t be able to take on newcomers at Heathrow.” E-mail to a friend

All About British Airways plcLondon Heathrow Airport

Delta to cut more flights in 2009

Jet-fuel prices soar 79%Jet-fuel prices soar 79%

NEW YORK (CNNMoney.com) — Delta Air Lines said it plans to cut overall flight capacity by 6% to 8% next year due to “the global economic recession and weaker demand for air travel.” As result, passengers can expect flights to be crowded and fare deals to be scarce.

Delta (DAL, Fortune 500), an Atlanta-based carrier that merged with Northwest Airlines in October, said it will eliminate its least fuel-efficient flights in order to meet that goal. Delta intends to trim domestic capacity by 8% to 10% while only paring international seats by 3% to 5%.

“I think the action taken by Delta is a clarion call for the others to reduce their capacity,” said Harlan Platt, a finance professor and airline expert at Northeastern University College of Business Administration.

This summer, the other leading U.S.-based carriers, including AMR Corp.’s (AMR, Fortune 500) American Airlines, UAL Corp.’s (UAUA, Fortune 500) United Airlines, Continental Airlines (CAL, Fortune 500) and US Airways (LCC, Fortune 500), all said they would reduce capacity in 2008. Since then, the airlines have all discussed extending those cuts into 2009, but Delta was the among the first to give specifics, according to Ray Neidl, airline analyst for Calyon Securities.

He anticipates industry-wide capacity cuts of 4% to 5% for 2009, compared to industry-wide cuts of 10% to 11% in 2008. His estimates include domestic and international flights for the major U.S.-based carriers.

Neidl expects American Airlines to be the next company to announce cuts resulting from the recession that has dogged the economy since December 2007.

Platt agreed: “I think that American, as a consequence of never going into bankruptcy, never cut quite as deep into the bone [as competing airlines].

American Airlines chief Gerard Arpey outlined some of the company’s 2009 plans in its most recent earnings teleconference. Arpey said that domestic capacity is expected to decline about 8.5% in 2009, compared to the prior year; international capacity is expected to slip less than 1% in 2009.

A spokesman for American called the 2009 cuts an extension of cuts that began in 2008.

For 2008, Delta has said it would cut 8% to 10% of domestic flight capacity, but it would add 14% to 16% capacity for international flights, which are considered more profitable. In fact, Delta said it was continuing to invest in the Pacific Ocean, Africa, India and the Middle East.

Platt estimated that industry-wide domestic capacity cuts for 2008 could reach 20%, while Neidl believes they will be capped at 12%.

The airlines blamed soaring fuel prices for the 2008 cuts. They also added a plethora of new fees for extra luggage, pet handling, over-the-phone ticket purchases, frequent flier mile redemptions, and other services that were once included in the ticket price. Fuel costs have since dropped, though the fees remain in place.

Airlines are also cutting jobs. Delta, which employs about 75,000 workers, previously announced it would eliminate 4,000 jobs through voluntary severance packages. American Airlines announced in July that it was cutting 7,000 jobs, or 8% of its total staff, through the end of 2008. To top of page

How Expedition Tours Can Turn “Someday” into Today

 

Is there someplace you’ve dreamed about since childhood? A country you’ve read about and thought, “Someday…”?

What if you could visit one of the world’s most exceptional places and have personal encounters with the world’s wonders? What if you could travel accompanied by veteran expedition teams, with the expertise to guide, offer insights and impart knowledge along the way? What if your journey were shared with like-minded travelers and adventure seekers?

Maybe you should be considering an expedition tour.  But what IS an expedition tour?
Expedition Tours

The Expedition Tour Explained

Expedition tours are all about experience and participation – connecting with a different country, culture or region through hands-on participation and in-depth knowledge, lead by an experienced guide. There are a wide variety of expedition tours to suit every age, personality and need; from comfort-driven expeditions to physically active expeditions to family-friendly expeditions to private, small group expeditions…the possibilities are endless.

Examples of What You Can Do and See

What if you could…

Bike the back roads of China, experiencing the lush countryside first-hand?

Tour a rolling vineyard in Tuscany and stay in a rustic, converted farmhouse?

Take a jaw-dropping railway journey through the Swiss Alps, comfortably ensconced in a private car?

Track big game in Kenya and enjoy sumptuous meal prepared in a local home?

Kayak alongside humpback whales and stunning icebergs in Alaska?Expedition Tour

These are just a few of the life-altering experiences you can enjoy on an expedition tour.  And with guides who can interpret and share their intimate knowledge, you will come away enriched and forever changed – perhaps with some of the best photographs of your life.  Some expedition tours even include a videographer, so your entire adventure is captured to share and enjoy at home.

So, Where Can You Go On An Expedition Tour?

Expedition tours can be found the world over and in some instances, are offered as a cruise, such as Alaska.  Here are just some of the places where expedition trips are offered:

  • Africa; Kenya, Tanzania, Madagascar
  • Asia; India, China, Thailand
  • Australia and New Zealand
  • Central America; Cuba, Costa Rica, Mexico
  • Europe; Italy, Turkey, Belgium, Bosnia, Lithuania
  • The Middle East; Egypt, Jordan, Morocco
  • South America; Ecuador, Peru, Argentina
  • The US; California, The Grand Canyon, The Deep South

What Travelers Have Said About Expedition Tours

I’ve had many clients over the years choose this type of vacation, seeing all parts of the world.  Here’s what two recent customers had to say about their trip to Machu Picchu:

“Since first encountering the Inca civilization in sixth grade, my wife had dreamed of exploring Machu Picchu.  Her 65th birthday seemed like the right event to transform dream into reality.  Although we normally wander by ourselves, Diane highly recommended National Geographic/Lindblad Expeditions. How right she was!  Accommodations ranged from our own flower-covered cottage at Sol y Luna to the world-class Hotel Monasterio and the exclusive Sanctuary Lodge on the flank of Machu Picchu.  While all other visitors caught the last transport to the valley floor, we joined our travelling companions on the lodge patio to reflect and refresh as evening descended among the high peaks.”Expedition Tours

It’s time to turn “Someday” into “Today”.  Make that long-held dream a reality.  Call me today to discuss an expedition tour for your next travel adventure. I’d love to share my experiences and expertise with you.  Or, to watch videos and read more about expeditions trips, you can visit:

 

 

 

The Ultimate Baby Boomer Vacation – Guided Tours

Among baby boomers, the desire to seek out rich, meaningful life experiences is a marker of vitality and enthusiasm for life.  But how does one balance the desire for adventure against the relative scarcity of vacation time?  Many feel an internal pressure to make the most of these precious weeks, to create lasting memories while immersed in a one-of-a-kind vacation.  For these adventure seekers, guided tours offer the ultimate baby boomer vacation.  Here are 5 great reasons to choose a guided tour for your next vacation.

guided tours

1.    Time

Time spent planning, time spent researching, time spent traveling between destinations, time spent navigating unfamiliar cities.  A guided tour with a reputable tour company can allow you to see so much more than independent travel.  Routes and destinations have been worked out precisely to maximize your sightseeing and leisure time.

2.    Comfort and Safety

Traveling to a new city or country usually involves a certain level of nervousness and, for some, anxiety.  In a new country where you don’t speak the language, this feeling is compounded.  A tour guide who is familiar with the local customs, language and culture will provide you with a sense of comfort and will also keep the group in safe areas, avoiding potentially dangerous ones.

guided tours

3.    Sociability

Meeting like-minded travelers and experiencing new cities or countries together is one of the great pleasures of guided tours.  Extroverts will enjoy the energy of a shared experience while introverts need not feel the pressure of meeting people on their own.

4.    In-Depth Knowledge

With an experienced tour guide, you will not only have the benefit of in-depth knowledge, but will also gain access to special events, exhibits and sites that only an experienced guide will know of.  You can stroll through the various sites without flipping through a guidebook, and need only listen to absorb the history and details of what you are seeing.

5.    The Details

Let’s face it.  The least enjoyable facet of a vacation is managing the myriad of details which it requires.  In a guided tour, all the details – how to exchange money, where to stay, how long to stay, how to get around, what to see, what to eat – these will all be managed for you.  In addition, any snafus will be addressed and handled by the guided tour company.

 

Here is what one of our customers had to say about her guided tour experience:

 My daughter Erin and I had the chance to visit Beijing this past May.  Once again, Diane came through!  We had a personal tour guide and driver to help us through the language and cultural differences in China.   Our guide, Linda, was truly wonderful – she helped decipher, bargain and recommend!  Since it was a personal tour we also had some flexibility in scheduling. This allowed us to avoid crowds at some of the venues.  We were able to see two parts of the Great Wall: The Badaling and less touristy Mutianyu.  The Great Wall was magnificent!!   The entire trip could not have gone smoother.  Thanks again for making this once in a lifetime trip possible.

 

guided toursIf you’d like to learn more about guided tours, please give me a call.  I have favorites around the world that I’d love to tell you about.  Or if you’d like to do a bit more reading, the following are guided tour companies I regularly recommend;

 

 

Next Month: Expedition Tours

All Lufthansa long-haul flights from Frankfurt to depart on September 16th despite the strike

 

Lufthansa Boeing 747 parked at Frankfurt Airpo...

Lufthansa Boeing 747 parked at Frankfurt Airport (2004) (Photo credit: Wikipedia)

 

After announcement from the Vereinigung Cockpit pilots’ union that they will boycott the long-haul flights from Frankfurt on September 16th, Lufthansa published a special flight plan this afternoon. The plan is for all 40 long-haul flights scheduled to depart during the strike to take place. It is thus expected that the strike will not lead to any flight cancellations, rather just to a change in the departure times of 24 long-haul flights from Frankfurt.Passengers booked on to a long-haul flight from Frankfurt on September 16th are kindly requested to check the status of their flight prior to departure. Lufthansa is sending text messages and emails to all passengers registered for these services.

 

Affected passengers please check the status of their booking prior to departure at My bookings.
Passengers holding a Lufthansa/SWISS/Austrian Airlines or Brussels Ticket for flights still operating from/to/via Frankfurt on September 16th can rebook their flight free of charge once.
The following conditions have to apply:
Rebooking within same booking class:

– Tickets must be issue on/before 15.9.2014
– New date of travel must be on/before 16.12.2014
– Change of origin/destination and class of service/compartment is not permitted
– All other ticket conditions must be observed as per original ticket

Lufthansa will do everything in their power to inform and advise their passengers to the best of their ability during these trying times.

 

UPDATE 1-Emirates executive says airline is not interested in Qantas investment


English: Uploaded from Flickr courtesy of User...

English: Uploaded from Flickr courtesy of User:Hartlandmartin (Photo credit: Wikipedia)


* Emirates invests in planes, not shares, says CCO

 

* Would order more A380s if Airbus revamps plane, he says

* Says has redeployed planes after route suspensions

(Adds comments on flight suspensions, A380 revamp)

FRANKFURT, Sept 1 (Reuters) – Airline Emirates is not interested in investing in the international operations of Qantas, the Dubai-based carrier’s chief commercial officer (CCO) said on Monday.

In the biggest restructuring step since Qantas was privatised two decades ago, the airline is hiving off its international arm from its domestic business.

The move will allow a foreign airline to take as much as a 49 percent stake – a major change from the previous 35 percent limit – and analysts had suggested that alliance partner Emirates could be interested.

But Emirates’ CCO Thierry Antinori said that doesn’t fit with the airline’s strategy.

“We buy planes and invest in products; we do not buy shares,” he told Reuters in an interview during an event in Frankfurt to celebrate the airline putting an A380 jumbo jet on the Dubai-Frankfurt route.

Under its partnership with Qantas, through which the companies share some revenue, Qantas has moved its European operations base from Singapore to Dubai and Emirates is letting Qantas share its new terminal, which was for the exclusive use of its Airbus A380.

Emirates, though, has shied away from traditional airlines alliances One World, Star Alliance and Sky Team, saying it prefers to go it alone.

The rapid expansion of Gulf carriers such as Emirates, Qatar and Etihad has posed a particular problem for European legacy airlines. Lufthansa and Air France are both planning to expand their low-cost units to respond to competition from Gulf airlines and budget rivals.

Antinori, a former Lufthansa manager, said this kind of thinking was the wrong path to take.

“If you, as an airline, and there are unfortunately a lot of examples of this in Europe, begin to calibrate your strategy as ‘what can I do against this airline or this airline’, you will fail,” he said.

 

SECURITY RISKS

Antinori also said that recent suspensions of routes to places such as Arbil, Syria and Tripoli because of fighting in those countries were not good news for Emirates but that the company had been able to redeploy planes on routes such as to Casablanca and Budapest. Emirates has also suspended flights to Guinea because of the Ebola virus.

“It’s not good news, but we are able to redeploy the aircraft and to limit the damage,” he said of the suspensions. In particular, the suspension of flights to Arbil, northern Iraq, is damaging to its cargo operations, Antinori said.

Load factors are still running above last year’s levels, he said when asked whether the route changes were having an impact on how full its planes were.

He also confirmed that Emirates is still interested in ordering more A380s from Airbus if the plane maker revamps the jumbo jet with new engines, and that the airline is in continuous discussions with Airbus.

Emirates is the world’s biggest operator of the A380, with 51 in service and another 89 on order, but Antinori said further orders would have to be for the more fuel-efficient neo version of the aircraft.

He also said Emirates will remain patient as it waits for Germany to rework the air traffic agreement that allows Emirates to fly to only to four airports in the country.

The airline is keen to fly to Berlin and Stuttgart but says it does not want to give up its services to Hamburg, Frankfurt, Munich and Duesseldorf. It had previously lobbied hard for the right to fly to more airports.

“One day it will come,” Antinori said.

(Reporting by Victoria Bryan and Peter Maushagen; Editing by
Harro ten Wolde and David Goodman)

Delta Air Lines: Targeting Operational Efficiency (DAL)

(click to enlarge)

Source: Yahoo Finance

Delta Air Lines’ (NYSE:DAL) stock produced an outstanding return in one year. If we look at the return produced by Delta Air Lines compared to the SP 500 and two other airlines, Ryan Air Holdings (RYA. L) and Easy Jet (EZJ.L), we see that DAL outperformed by a great margin. DAL produced an outstanding return of 107.16% while the SP 500produceda significantly lower return of 20%. The shares of Ryan Air Holdings and Easy Jet produced poor returns that were near to zero. This outstanding return is a reflection of DAL’s zeal towards bringing efficiency in all aspects of its business.

(click to enlarge)

The Huge Global Network is Positioned for Long-Term Growth

Each year DAL serves about 165 million customers worldwide. Air Transport World magazine named DAL the “2014 Airline of the Year”. It also won a place in Fortune magazine’s “50 Most Admired Companies” list. Through its 700 aircraft main fleet and nearly 80,000 employees, DAL offers superior services to about 333 destinations, in 64 countries, in all 6 habitable continents. This huge global presence allows DAL to capitalize on the healthy growth in air travel that is forecasted by economists. Economists forecast the emerging markets will lead the growth in the coming years.

Long Term Sustained Growth in Focus

Delta Air Lines brought the same momentum from 2013′s excellent financial performance to 2014. DAL is expected to grow its bottom line and free cash flow and to expand its profit margins. DAL has enacted a number of initiatives to maintain the momentum of excellent financial performance in both the medium and long terms. DAL is working to strengthen its balance sheet by reducing the debt and funding the pension.

Outperforming The Airline Industry

The airline industry is becoming increasingly competitive. In an effort to survive airline companies are evolving the way they operate. DAL is the leader of the pack that is very proactive in bringing efficiency to its business in order to produce excellent financial performance. In the first quarter of 2014 the company outperformed the industry with a record high pretax profit. Its secured the highest customer satisfaction score among network carriers.

Strong Operational and Financial Performance in the 2ndQuarter of 2014

On the operational side DAL continues to deliver reliable services by satisfying its customers. DAL managed to increase traffic by 5% during the quarter compared to the figure reported last year. DAL also achieved a 3.2% increase in capacity during the same period. DAL improved its worldwide network by connecting the DAL hub in New York and Seattle to London-Heathrow, Rome Zurich, Seoul and Hong Kong. These are crucial business destinations and with its improved service DAL will be able to benefit from these key routes. Following the domestic fleet restructuring, which is aiming at replacing less-efficient domestic aircrafts, DAL ordered 15 A321 aircrafts.

On the financial side, DAL managed to attain 9% topline growth earning an additional $914 million compared to the revenue DAL produced during the same quarter last year. DAL also managed to expand its operating margin to 14.9% reflecting an increase of 4% compared to last year’s figure.

DAL is working on an aggressive plan to improve all aspects of its operations that will result in a reduction in costs and an increase in income. Its pre-tax income for the quarter reached $1.4 billion with an increase of $593 million compared to the pre-tax income level of same quarter last year reflecting a 73% increase in pre-tax income. DAL managed to generate over $2 billion of operating cash flow and about $1.5 billion free cash flow in the 2nd quarter of 2014.DAL shares its success with its shareholders. In the second quarter of the current year DAL rewarded shareholders with $550 million through share repurchases and dividend payments.

Aiming at an Optimal Capital Structure to Improve Valuation

DAL is working on a multi-year plan to change its capital structure in order to attain optimum capital structure. DAL has been consistently reducing its debt through strong cash generation. Reducing the debt is creating value for shareholders since reducing debt is resulting in reduced funding costs and earnings are improving thanks to the lower interest expense. This strategy is reducing the risk and DLA’s cost of capital resulting in improved valuation. Following this long-term plan for debt reduction, DAL used its 2nd quarter cash flow to reduce its net debt to below $8 billion. DAL is targeting at a debt level of $5 billion by 2016.

Source: Investor Presentation

Strong Financial Performance Expected for DAL’s Third Quarter

DAL expects the September quarter to produce even better financial results. DAL expects that its initiatives will result in increased operational efficiency and translate into an expanded operating margin. The operating margin is expected to increase to 15-17% and that would contribute to growth in the bottom line. DAL is targeting system capacity expansion of 2-3% compared to the figure reported in the same quarter last year.

The Target Price Estimate Makes DAL a Must-Own Stock

Target price estimates polled by Thomson/First Call from 16 brokers covering DAL show attractive upside at the current price. The mean target price is $50.28 and presents an upward potential of 24% at the current price level of about $40.52.The median target price is $50 and presents an upward potential of 23% at the current price level. The most optimistic price estimate is $57and if materialized it presents an upside of 40%. The lowest target price estimate is $45 and presents an 11% upside. This is a very enticing valuation estimate where even the most pessimistic estimate presents an attractive upside at the current price. DAL’s stock is a must own for investors that are interested in gaining exposure in the growing airline industry.

Source: Yahoo Finance

Relative Valuation Supports The Target Price Estimate

DAL’s P/E ratio stands at an attractive level of 12.54 times (shown in the figure below). The P/E ratio shows that the company is undervalued compared to the industry and the sector but overvalued compared to the average comparison category of the SP 500. Adding expected growth to the P/E analysis, the PEG ratio of 1.10 shows that DAL is undervalued compared to the comparison category of the sector and the SP 500. The price multiples reveal that DAL’s stock is relatively undervalued at its current price level and presents itself as a very attractive investment opportunity.

Source: Yahoo Finance

Conclusion

Delta is well positioned to capitalize on the growth in the air travel forecasted by economists. Emerging markets are expected to lead the growth and DAL’s global presence is expected to help it capitalize on the growth. DAL is aggressively working to bring operational efficiency to all aspects of its operations and this effort is translating into excellent financial performance. The consensus target price and relative valuation reveal that DAL is underappreciated by the market and presents itself as a very attractive upside at its current price.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article. (More…)

 

Baby Boomers: 7 Reasons To Book A Luxury River Cruise

This is part one in a three-part series on my top picks for vacations for baby boomers.

Luxury River CruiseAs summer comes to a close and cooler nights begin to emerge, many of you may be turning your thoughts to Winter and Spring travel.  If you’re ready to plan a vacation, but are feeling overwhelmed at the prospect of planning something memorable, a river cruise offers the perfect solution.  Here are seven reasons you should book a luxury river cruise today:

1. On a luxury River Cruise, you will experience multiple cities, cultures and landscapes without many of the hassles of travel and luggage.   

You will unpack once and enjoy historic cities, stunning landscapes, local guides and excursions from your ship.  No need to worry about language barriers, moving hotels or driving.

2. You can make all of your travel arrangements with a single call.  

Our expertise in planning River Cruises around the globe means that you can leave all the worrying and logistical details to us.  In addition, if you book a luxury river cruise through Luxury Travel, any unforeseen hiccups in your vacation can be handled and resolved by us.  And you may not realize this, but there is no additional expense for booking through Luxury Travel.

3. For foodies, a River Cruise offers a daily splendor of riches.

luxury river cruisesLocal specialties and International cuisine are offered daily on board the ships, while trips to area markets and renowned restaurants provide an authentic experience.

4. There are wide array of River Cruises available around the US and world;

Europe, Asia, Egypt, Russia and South America offer many starting points and destinations travelers can visit. Not sure where to go? Travel and Leisure magazine has a great

 5. The intimacy and relaxed ambiance of a smaller ship is a treat.

Lines such as Viking, Avalon and Tauck offer ships with between 50 and 200 cabins, affording a much more personal experience, with like-minded travellers.  And unlike bigger ocean-bound ships, River Cruise ships do not contain interior rooms, so every room has a view.

6. Special Interest Cruises are offered on many lines, such as Avalon.

Here’s just a sampling; Art and Impressionist River Cruise, Beer Tasting River Cruise, Music River Cruise, Wine River Cruise, Golf River Cruise.

7. And speaking of views, they are outstanding.

The views are an ever-changing panorama of natural beauty and architectural wonders. Whether cruising down the Seine River in France or the Nile in Egypt, spectacular sights await.  

Here’s what one of my customers had to say about her experience on a River Cruise:

River cruising is a wonderful way to travel. You board the ship, unpack your things and begin. Land tours are provided in clean, comfortable buses with excellent guides who tell you the history of the place you are seeing. You walk around on cobblestone streets while listening to the history of that place. Before leaving, there is always free time to tour on your own. On board ship you are fed delicious food and the staff almost anticipates any need you might have. Since there were only 188
passengers, you really develop camaraderie with the other passengers. Each night in the lounge there was a different program pertinent to the country you are passing through. The ship itself is a grand place to spend time. I am trying to decide my favorite thing and I find that I can’t. I loved every aspect of the cruise: food, tours, guides, ship, camaraderie, and just traveling 1200 miles up magnificent rivers.

So if a luxury river cruise sounds like the right kind of vacation for you, give me a call to explore options.  It’s never too early to start planning – and having a vacation on the calendar to look forward to may be just the thing to get you through the cold winter months!

 

Next month: “Guided and Private Tours” and “Expedition Tours”.