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Old 23rd Feb 2011, 11:19
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Talking about east: Any news/updates on CX HKG-ZRH-MAN starting next winter?
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Old 23rd Feb 2011, 12:01
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What happened to AA's new service as well?
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Old 23rd Feb 2011, 17:38
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Happy Days Are Here Again!

Happy Smiles, Everybody!

WOW! Well, we do appear to have an infectious outbreak of optimism on this thread once again. Other threads are buzzing too. What new services are starting? How much growth will there be? So I guess it is time for me to pitch in again with another healthy dose of gloom and doom (which I annoyingly like to refer to as reality!).

Seriously, I am delighted that MAN has been able to announce additional long-haul services lately. As has been pointed out, the eastbound offerings of EK / EY / QR / SQ are developing positively. On the Atlantic scheduled services, all four US Transatlantic majors are represented at MAN in their own colours, along with Virgin Atlantic on the British side. A modest portfolio of new European schedules have been announced too, including TAP to Lisbon and assorted sunshine destinations by RYR.

Despite the above, I believe the emphasis for MAN (and UK airports generally) must remain focused on the retention of existing business rather than the carefree pursuit of expansion. The pursuit of new tails is great fun, but a successful business must always focus primarily on economic realities. MAN is facing another very difficult year with no sustained upturn in sight.

So why am I reluctant to join the party? (Apart from being a miserable git). Well, TV news reports offer some clues but they don't tell the real story. You will have noted coverage of upheaval across the Arab world, including several key markets for Manchester Airport. More on affected air services later. We are told that after 30 - 40 years of tolerating the vagaries of their respective "Dear Leaders", the downtrodden masses are finally emerging from their shanty towns to demand something called "Democracy". Apparently, it is a panacea which cures all ills and which is at the forefront of polite dinner conversation in every deprived slum. Or perhaps not. No form of government is perfect, but democracy can be disastrous in countries which vote along purely ethnic or tribal lines. One group will dominate indefinitely, another will be oppressed indefinitely. No doubt folks in the dominant group would love "democracy". But in reality, most ordinary bods give little thought to different types of governments, and few would actually be aware of the options. All media spin aside, what exactly is motivating large diverse populations to simultaneous insurrection? Allow me to list ten big reasons for starters:

COMMODITY: PERCENTAGE 12 MONTH PRICE RISE TO 23-02-2011 [F.T.]

OIL [Brent Crude] + 38.1%
CORN + 78.9%
WHEAT + 48.9%
FEEDER CATTLE + 28.04%
LEAN HOGS + 32.36%
COTTON + 126.25%
LUMBER + 19.05%
COPPER + 35.08%
SILVER + 104.61%
PALLADIUM + 206.25%

That's right. The real reason why unrest is surfacing simultaneously in so many countries is that the cost of living is rapidly becoming unaffordable. All countries are subject to the international market price of commodities. However many nasty dictators are ousted because of this, it is naive to suppose that unrest will disappear unless the populace can find a miracle worker to take charge and defeat global food shortages. The nasty dictators primarily stand accused of failing to feed and clothe the masses. Many people will tolerate years of political thuggery and oppression as the norm, but they will not stand by as their kids go hungry. In the West, we must recognize that for as long as the basic essentials of life are priced beyond the means of ordinary citizens, upheaval and instability will remain an issue in poorer societies.

How has this happened? Well, in the wake of the 2008 banking crisis, western governments embarked on an orgy of money-printing ("QE") to bankroll the unfathomably enormous sums required to bail out that elite group of "masters of the universe" bankers. The general public still has no concept of the scale of the sums involved in keeping these "too big to fail" institutions afloat. Now, we are gradually seeing a series of sovereign debt crises as a result ... Iceland, Greece, Ireland, Portugal. Austerity measures imposed to postpone further crises elsewhere. And "QE" ... the effect of which is manifesting itself in soaring global commodities prices as we see above. Whole countries are being priced into poverty and starvation as a result of all this.

"QE" is not the only culprit here, although it is a dominant factor. In terms of corn prices, well-intentioned mandates by unwitting politicians (pandering to the green lobby) require fixed quotas of vehicle fuels to be derived from corn (ethanol) in certain territories. Vehicle fuel demand is now competing with food agencies for the corn harvest. The latter half of 2010 also saw a 'La Nina' climate event which impeded global harvests. The Russian and Ukrainian cereal harvests were decimated (exports curtailed), Australia has suffered devastating floods. There are other examples out there.

So - bottom line - popular unrest is not going away.

TUNISIA [median age of population 29.7 years, youth unemployment 30.4% - BBC] - the Bogeyman Ben Ali has gone!!! (Hurrah!). Will the new guy be able to outmanoeuvre global commodities prices? NO? Will the crowds remain disenchanted? YEP? Outlook for tourism? POOR. Prospects for MAN's planned new TUNISAIR services to Tunis and Enfidha? Anybody know if these are still expected to happen? And the outlook for tour operators' programmes to Tunisia? Cutbacks at best?

EGYPT [median age of population 24 years, youth unemployment 42.8% - BBC] - the Bogeyman Mubarak has gone!!! (Hurrah!). The new guy is the former head of the secret police assisted by the Armed Forces Supreme Council. Lovely. Gatherings have been banned. I'll bet these guys will be real aces at bringing world commodities prices under control. The mob will love 'em. Egypt already has to import 40% of its food requirements to feed its unwieldy population growth, and it has recently become a net importer of oil (disastrous). Tourism is vital to the economy, but many amongst the indigenous population demonstrate open loathing for ("infidel") tourists. Red Sea resorts such as Sharm are effectively gated communities, heavily guarded by the police and military to keep hostiles at bay. Tourist excursions to ancient historic sites are protected by armed guards. And that was before revolution took hold, with westerners viewed as enforcers of the hated Mubarak regime. Outlook for IT programmes to Egypt? You book them if you want to!

LIBYA [median age of population 24.2 years, youth unemployment no stats - BBC]. The Bogeyman of 42 years is just clinging on. If he falls (following civil war?), will the country fracture along tribal lines? Will the new regime be able to control global commodities prices to appease the masses? In view of the atrocities taking place in Libya it seems almost disrespectful to speculate about the future of a scheduled air service, but that is the underlying point of this thread so pardon me if I do allude to it. Prospects for LAA106/7 anybody?

MOROCCO [median age of population 26.5 years, youth unemployment 17.1%]. Established government still in control, but protests calling for reform and strikes are endemic. The government is promising subsidies for key commodities. Will Morocco hold it together? The jury is out. Tour programmes to Morocco anybody?

ALGERIA, JORDAN, SYRIA, YEMEN, IRAN. All troubled to varying degrees. Offline for Manchester Airport services, but unrest in these countries destabilizes the region in general. Note that countries of all political leanings are affected; an unsupportable cost of living is a common enemy.

IRAQ, AFGHANISTAN, PAKISTAN. Enough said.

BAHRAIN. [median age of population 30.4 years, youth unemployment 19.6% - BBC]. Protests rife, governments promising a "national dialogue". Key US military air and naval bases at stake in Bahrain. Population split along religious lines 30% Sunni ("elite"), 70% Shia ("oppressed"). A very worrying state of affairs here, not least because just across the causeway lies the elephant in the room ...

SAUDI ARABIA. [median age of population 24.9 years, youth unemployment no stats - BBC]. 87-year old King Abdullah and his elderly Crown Prince are both considered to be in poor health. The succession is a source of great international concern. Oil-rich Saudi Arabia is home to certain radical religious elements, including the Wahabi group which spawned Bin Laden and the 9/11 hijackers. Saudi oil reserves are widely accepted to be 40% lower than official figures claim; some key fields are in decline and despite claims to the contrary, Saudi has little ability to increase output. The Saudi regime appeases its population by subsidizing key commodity prices to a generous extent. Nevertheless, this is seen as a repressive regime and it does have internal enemies. Any hint of major demonstrations or upheaval taking hold here will be catastrophic for global oil prices. If Bahrain or Saudi Arabia yield to revolution, airlines watch out!

But ... maybe you are getting the impression that problems exist only in the Arab World. Not so, though they are most widely reported for obvious reasons. South Korea is currently enduring a historic banking panic - 8 banks have closed their doors in recent days; financial institutions are under siege. Only bigger stories coming out of Egypt, Libya and NZ have excluded them from the headlines. Meanwhile, across the border to the north, that nice Mr. Kim is in advanced preparations for a third nuclear test. China is battling inflation. The Communist Party must keep its vast population happy (affordable food) or else. Big time state intervention in Chinese banking too.

Across in the Americas, Communist hero cocaine baron Evo Morales (Bolivia) fled an angry demonstration in Oruro on February 11th as protestors threw dynamite at him. Back in December, he tried to remove crippling government subsidies on gasoline, flour and sugar. He backed down on two of those, but the sugar subsidy was axed. The sugar price has now doubled and the natives are chucking dynamite around. And of course, it goes without saying that chaos continues in Chavez's Venezuela where the currency has just been devalued yet again (inflation 27%). Chavez is at least a colourful character. He distracts attention with his weekly TV show ("Hello President") on which he sings, dances and makes bizarre political speeches. Most recently: "Queen of England, I'm talking to you!" (about the Falklands). And last year he accused the US of causing the Haiti earthquake using a secret weapon.

OK, so lots of trouble around the world with commodities prices fueled by rampant "QE" primarily to blame. High oil prices, lower living standards, geopolitical upheaval. All terrible news for airlines generally.

Here in the UK, much of this passes us by. At least at a conscious level. Our official inflation is quoted as 4%. This will be affected as commodity prices feed through here (and some would argue that the figure is deliberately understated anyway!). However, in the UK only 10% of the average wage is required for food spending; in many countries more than 50% of the average wage goes on food. And in "developed" countries, food prices are distorted by packaging, labour and transportation costs which will rise at different rates than the underlying commodity price. Sophisticated major food companies also hedge their commodity prices by purchasing futures contracts months in advance which smooth out rising costs. But for less developed economies, shock rises in commodity prices quickly become ruinous (as we are seeing on TV).

Back to topic at last! The outlook for Manchester Airport, our regular airlines and the aviation industry generally is still very difficult. We simply can't look at this airport in a little cocoon and disregard global realities. Favoured tourist destinations are in meltdown. Oil prices are soaring, and if Bahrain and Saudi Arabia really kick off ... watch out! Airline customers are finding their disposable incomes squeezed by inflation, debt, recession and austerity measures. The aviation industry generally remains "public enemy number one" for climate change zealots (so was climate ever a constant then?) who urge yet more onerous taxation and disincentives against air travel.

So make the most of those new air service announcements. Let's hope the new services do turn up. And lets hope we can hold on to a good proportion of our existing business. Don't make the assumption that the good times are back just yet. And as for the default 'safe' tourist destinations such as Spain and Greece which stand to benefit from upheaval elsewhere? What's the betting that anti-austerity protests and strikes will have a role to play again this summer? Tourists are such easy prey. Pity poor Thomas Cook and TUI!

Right, over to you lot. I'll just duck for cover!

SHED.
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Old 23rd Feb 2011, 19:49
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Bloody hell, Shed must be Cameron in disguise.
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Old 23rd Feb 2011, 19:54
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i wont bother watching the news now, after reading all that...lol
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Old 23rd Feb 2011, 20:25
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Shed - I don't post often on anything, but I don't think anyone could have wrote that better.

The Middle East is a melting pot that is on the brink of a boil that will spill over and scald us all.

Best case scenario is aviation in the region will suffer.

Worst case scenario, the last thing we will be worrying about is aviation.
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Old 23rd Feb 2011, 20:55
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Worst case scenario, the last thing we will be worrying about is aviation.
For some of the Middle East - yes; for others not.

Fund Rankings | Sovereign Wealth Fund Institute

Look at the major players - most countries that don't even know what 'democracy' means.

Oil is a major player - but there are other commodities in there too and these funds are now investing in other areas to, as people have said, dversify their product.

I doubt we'll see UAE/China's bubble burst. Others are a different story...
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Old 23rd Feb 2011, 21:04
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The Middle East is a melting pot that is on the brink of a boil that will spill over and scald us all.

Best case scenario is aviation in the region will suffer.

Worst case scenario, the last thing we will be worrying about is aviation.


well at least "Skating On Ice" is still on !
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Old 23rd Feb 2011, 21:44
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I am sorry MUFC, Shed's post outlined the issues well in the Middle East, however the issues that face China over the next few years should be equally of concern and not dismissed lightly.
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Old 23rd Feb 2011, 21:56
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Talking Indeed, East is East...but West is also West!

In my view, QR twice daily is fab news for MAN, This, added to the already advertised 10X weekly by EY plus the EK and Singapore flights prove that there is a long-haul market from N England that isn't / doesn't want to route from LHR.

This, added to the onward connections via FRA, AMS, ZRH, CDG etc exposes BA's misguided view that all long haul from the UK has to go from LHR / LGW.

Can they not see that their current policy is just alienating the majority of travellers North of Birmingham?

But, as I suspect, maybe they and BAA just don't care.

Myopic if you ask me, but hey, what do I know?

Across the pond from MAN is different. Again, you get the feeling that if MAN can support long haul to the east, then it should be able to do to the west to places like Boston, Vancouver, Washington, Montreal, Dallas etc.

But these destinations are a subject to a great deal more - dare I say it? - "regulation" than the non Trans Altlantic routes.

It's just good to know that yet again - and despite the cabal against it - MAN continues to grow its business.
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Old 23rd Feb 2011, 22:11
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I am sorry MUFC, Shed's post outlined the issues well in the Middle East, however the issues that face China over the next few years should be equally of concern and not dismissed lightly.
What do you mean? I completely agree with Shed. The Arab World crisis is going to cause serious problems but I'm on about economic strategy in two countries: UAE and China. If there was to be an 'uprising' or whatever in either of these two states, especially in UAE they own a significant amount of the world's markets; whether it be oil, corn, buildings, land etc etc. This will still be owned by the state or whatever that may be. Many of those billions are invested in the west where as Shed rightly says, suffers less from food price increases.

Sovereign funds do fail as we have seen - but not those worth in the '000s of billions. Just like banks - they're too big to fail.

In my view, QR twice daily is fab news for MAN, This, added to the already advertised 10X weekly by EY plus the EK and Singapore flights prove that there is a long-haul market from N England that isn't / doesn't want to route from LHR.

This, added to the onward connections via FRA, AMS, ZRH, CDG etc exposes BA's misguided view that all long haul from the UK has to go from LHR / LGW.
Where the hell does BA and LHR come into this?! I'd consider transferring at LHR similar to that of CDG; AMS or FRA - from MAN it is little different!

Why don't we just put LHR in that category of European megaports. Why do we have to single LHR out? It's not spite is it?
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Old 23rd Feb 2011, 22:12
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MAN-LDY

Rumours are really rife not just on the forum but in general here in Derry about a BE announcement next week regarding LDY-MAN. Has anyone heard anything at the Manchester end?
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Old 24th Feb 2011, 07:27
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Sorry to veer away from the consensus re SHED's post, but all his facts and eloquence then turn into opinion and speculation. There is much contradictory evidence to the effects of QE and a push to democracy could (and should) increase air travel from these regions. The removal of sanctions and trade restrictions to Libya, Iran and so on would benefit aviation for a start. I think SHED admits it is a gloomy outlook he presents and although very well argued, not necessarily the path that will emerge.
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Old 24th Feb 2011, 08:09
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Shed - have you considered a role as an economist

Well said Shed. Now re post this on every other airport thread substuting the name of the aerodrome as appropriate - An icy blast of reality injected into pprune - The politico's should be reading this. Turtle yes, but all judgement is subjective in part. Its the old question ? -Is air travel an indicator of ecomomic activity or does it in its self create ecomomic activity. - Hence MAN's success.

Excellent posting

CAT III

Last edited by Guest 112233; 24th Feb 2011 at 08:17. Reason: Follow on
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Old 24th Feb 2011, 13:51
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MAN vs.LHR long haul

Recent developments prove the market demand at MAN for long-haul east and west. Yet MAN still leaks a good deal of market-share, and price is a factor which skews the market. We often hear about MAN long-haul traffic not generating enough revenues, yet the paradox is that long-haul ex-MAN is often expensive to book compared to high-revenue LHR.
Example: A colleague of mine has just booked a trip to Vietnam. Tried to get on SQ ex-MAN, no seats available. EK and EY wanted c.£1500 ex-MAN, and so she ended up on Thai out of LHR for less than £1000. That sort of saving blows all the convenience / loyality to local airport sentiments out of the water. So-called 'low revenue' MAN is top-drawer for the punter. I'm sure the airline economists amongst PPRUNErs will explain.
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Old 24th Feb 2011, 14:07
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Example: A colleague of mine has just booked a trip to Vietnam. Tried to get on SQ ex-MAN, no seats available. EK and EY wanted c.£1500 ex-MAN, and so she ended up on Thai out of LHR for less than £1000. That sort of saving blows all the convenience / loyality to local airport sentiments out of the water. So-called 'low revenue' MAN is top-drawer for the punter. I'm sure the airline economists amongst PPRUNErs will explain.
A perfect example of supply and demand. LHR has dozens of routes going east via dozens of hubs or non-stop. Hence far more supply. It's also the reason why the fares are often similar or less from LHR - more supply from more carriers = more competition = more passenger friendly fares.

Often EK will have higher fares from MAN than LHR.
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Old 24th Feb 2011, 14:16
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Across the pond from MAN is different. Again, you get the feeling that if MAN can support long haul to the east, then it should be able to do to the west to places like Boston, Vancouver, Washington, Montreal, Dallas etc.
You are quite right. It is different. The east bound routes are all to massive airline hubs, where traffic gets redistributed to points North, South, East (and a little west). It is much easier to make this kind of network sustainable and that is what we see to the West as well, with the American carriers. I don't believe there would be enough demand for those cities alone to justify daily service on a 'legacy' carrier. The only places with significant service that are not hubs are places with massive leisure demand, like Las Vegas and Orlando.
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Old 24th Feb 2011, 14:37
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Looking to west, I can understand the lack of Vancouver, San Fran & LAX, but I am surprised that Boston has not been re-intoduced as it's a relatively short t/a sector.
With all the woes at Aer Lingus, I am surprised that they don't promote more,their BOS, IAD services via DUB or even originate some from here.
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Old 24th Feb 2011, 14:45
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With all the woes at Aer Lingus, I am surprised that they don't promote more,their BOS, IAD services via DUB or even originate some from here.
IAD was dropped from Dublin due EI problems
BOS is doing quiet well now. EI have added 3 direct weekly flights instead of going via SNN.
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Old 24th Feb 2011, 15:59
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Originally Posted by MUFC_fan
A perfect example of supply and demand. LHR has dozens of routes going east via dozens of hubs or non-stop. Hence far more supply. It's also the reason why the fares are often similar or less from LHR - more supply from more carriers = more competition = more passenger friendly fares.

Often EK will have higher fares from MAN than LHR.
True to a degree, but a factor is also that with less capacity from MAN (compared to LHR) the airlines don't have to offer such cheap fares to get decent loads. It will be interesting to see if the picture changes with the planned capacity increases by QR/EY, and the rumoured one from EK.
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