When Qantas Airways (QF) announced a new 10-year alliance with Emirates (EK) (TTG Asia e-Daily, September 6, 2012), no one was surprised, as the two airlines had been in talks since mid this year.

What was surprising was QF’s move to end the joint service agreement (JSA) it had with British Airways (BA) for almost two decades.

QF needed to stop the bleeding in its international operations, while EK wanted to grow its footprint in Australia.

Most significantly, the new alliance, which will kick in April 2013, subject to regulatory approval, will bring about a realignment of the famous Kangaroo Route.

QF first flew from Sydney to London via Singapore on December 1, 1947 and, after straying to Bangkok and Hong Kong for several years, re-established Singapore as its mid-point hub on the Kangaroo Route in August 2011. So did British Airways, which upgraded the aircraft used on its London-Singapore-Sydney route from a Boeing 777-200ER to a B747-400.

For point-to-point travellers between Sydney and London, not much will change beyond the scenery at the transit airport. Passengers who currently fly from Brisbane, Adelaide and Perth to Singapore to connect to QF’s London-bound A380s will now either have to backtrack to Sydney or Melbourne if they wish to travel exclusively on QF-operated flights (resulting in a two-stop itinerary instead of a single stop in Singapore), or travel exclusively on EK if they prefer a single stop itinerary.

QF has also confirmed its withdrawal from the Frankfurt route that currently operates daily with a stop in Singapore.

Australian travel consultants believe the alliance will positively impact many of their clients travelling to Europe.

Sydney-based Mary Rossi Travel’s Claudia Rossi Hudson said: “Our clients can go to places other than Singapore or Frankfurt…It’s a one-stop flight to many more destinations in Europe with more flexibility: you can change flights at Dubai and QF customers can decide to fly to Spain or Italy.”

Graham Chisholm of Brisbane-based Milton Travel & Cruise believed the partnership would be good for clients, but lamented the end of the Frankfurt flights. “A lot of people flying from Brisbane to Europe often stop over in Singapore on the return flight, and travellers like a good stopover, such as Singapore or Dubai,” Chisholm said.

‘Constructive’
Standard & Poor’s editorial director Shukor Yusof, described the new alliance as “constructive” for QF and EK in the long run.

“From EK’s perspective, it is purely to get a larger foothold into Australia as well as siphon off those passengers that would otherwise be hopping onto Singapore Airlines (SQ) or other European carriers,” said Shukor.

“This alliance is tipped in EK’s favour because Dubai, its home base, will get a higher profile.”

Singapore Changi Airport will lose four QF A380 and two B747-400 movements each day, but as QF is expected to focus on more flights between Australia and Asia through Singapore and Hong Kong, the airport’s passenger throughput may not suffer too drastically.

Centre of Asia Pacific Aviation (CAPA) chief analyst and South-east Asia chief representative, Brendan Sobie, said: “The potential upside for Changi is the Australia-Singapore flights are going to be retimed so they connect with more Jetstar Asia Airways’ flights to connecting destinations in Asia.

“QF’s Australia-Singapore flights have predominately arrived late in the evening in Singapore, when flights to Europe depart but when options for connecting with Asia are limited. Changi will become an even more important hub in the growing Australia-Asia market although it will lose its lustre as a hub for kangaroo traffic, continuing a trend that has been going on for the last decade as Middle East hubs (and carriers) emerge.”

The same cannot be said, however, for groundhandling agent, SATS. It is conceivable that QF may send its groundhandling needs to DNATA, partly-owned by EK and the second ground-handling agent in Singapore.

Chairman of Australia-wide House of Travel group, Barry Mayo, believed a non-loss making and financially stronger QF international network had to benefit passengers.

“Nothing less than this EK partnership or an equivalent partnership with a hub airline having Europe penetration, such as SQ, could achieve the results QF needs,” Mayo said.

“Many passengers do not want to travel via London to the extent they have done in the past and prefer more convenient access to continental Europe and even regional Britain via Dubai, Singapore or Bangkok.

“Qantas has claimed its partnership with EK will enable it to delink its Singapore, Bangkok and Hong Kong flights to UK/Europe and provide more customer- friendly schedules to these ports with better connections to other points in Asia, which presumably means linking into Jetstar Asia.”

Speculation
Meanwhile, BA said there was no impact to its current flights into and out of Singapore and Sydney. Speculation is rife however, that it may take its Sydney-bound passengers to Hong Kong and let Cathay Pacific Airways fly them to Australia. Similar speculation involves Kuala Lumpur and soon-to-join-Oneworld Malaysia Airlines (MAS), but this will require BA to launch flights to Kuala Lumpur.

CEO of the International Aviation Group (IAG), BA’s parent company, Willie Walsh, reiterated that “Asia has become a key market focus for IAG and we’re talking to a number of airlines about alternative options for us”.

Will Horton, CAPA’s senior analyst-North Asia, noted: “BA is clearly impacted by the ending of the JSA, but it’s of the view that Australia is no longer the key market it once was. It also has been considering other scenarios to reach Australia.

“It is a dynamic time at BA with possible new partners in the mix, new types of aircraft arriving and additional slots being obtained from its acquisition of bmi. These will influence its thinking on the future of its Sydney service.”

Shukor said: “BA remains a strong entity, financially and competitively. It has an extensive international network and a good track record of cutting costs and (maintaining) operational efficiency. Its revenue concentration on premium leaves BA more vulnerable to some of its competitors, especially the Gulf carriers. Operations in Asia-Pacific will likely be reassessed if the EK-QF deal goes through.”

Other partners ditched by QF include Cathay (resulting in the end of codeshare services between Hong Kong and Rome) and Air France, which has a successful codeshare to carry QF’s passengers between Singapore and Paris. QF’s Paris-bound passengers – and indeed most heading to other European capitals and secondary cities – will now most likely travel on EK.

The QF-EK alliance will open all of EK’s destinations in Europe, the Middle East and Africa to QF via the Dubai hub. QF currently routes passengers heading to continental Europe via Heathrow Airport in London or Frankfurt Main Airport. Over the past decade, Heathrow has become increasingly unpopular.

While passengers in premium classes will certainly not begrudge travelling in EK’s well-appointed premium cabins – which from April 2013 will include a chauffeur service if the flight duration is longer than 12 hours – economy passengers getting off at Dubai and connecting onto EK’s B777s heading to Europe, the Middle East and Africa may not be elated about squeezing into a narrower seat. EK’s B777s have 10 seats in each row in economy, compared to nine seats in most airlines. Also, depending on where they are heading, those getting off QF’s London-bound flights in Dubai will have various lengths of transit times.

It remains to be seen if QF passengers in Singapore booked on its non-stop flights to London will be persuaded to accept a new itinerary on EK with a stopover in Dubai. Or if QF’s customers bound for destinations beyond Dubai will agree to fly on its London-bound flight to Dubai to connect onto EK’s services (giving QF a bigger share of the revenue) or fly all the way from Australia to Dubai and beyond on EK, a move which will bring less revenue to QF.

The alliance also throws various other questions, for instance, what changes will happen at BA, which has previously indicated that its Australian services were sustainable only because of the JSA?

Will EK leverage on QF’s unused traffic rights into Germany to launch new services? EK has met with strong resistance from Lufthansa as it tries to increase its footprint in Germany. Will EK operate across the Pacific from Australia to North and South America, thereby ensuring its networks embrace the entire globe?

Only time will tell.

This article was first published in TTG Asia, October 5, 2012 on page 6. To read more, please view our digital edition or click here to subscribe.

Additional reporting from Warren Beaumont

As more customers demand personalised itineraries, travel agencies across the region are rushing to cut the cloth to fit, with many finding the effort worth the sweat, TTG Asia reports

Be it a private tour to the Antarctica or an audience with Santa in Lapland, Apple Vacations & Conventions’ Lee (above, right) is happy to oblige

Apple Vacations & Conventions – Private corporate arrangement becomes the apple of Apple’s eye, bringing in huge incremental revenues within just two years 

WHO Kuala Lumpur-based Apple Vacations & Conventions started operations in 1996. Until 2010, it did only series tours and incentives. The company expanded last year with a special division catering to private tours, called private corporate arrangement.

WHY Apple Vacations & Conventions group managing director, Desmond Lee, set up the division after seeing increased demand for private tours.

Demand came from repeat clients who have been on series tours and from groups of like-minded people wanting to holiday together on a customised itinerary.

Private tours were also requested by individuals who wished to build a better working relationship with partners and did not want outsiders to be with them, said Lee.

HOW There are 10 staff working in this division.

Lee said popular destinations for private tours included Japan (Hokkaido), China (Kunming and Xi’an), Italy, Germany and Switzerland. But the company does not limit private tours to just these destinations and will do tours to any part of the world.

Some interesting requests the company has received include trips to Kenya to see the animal migration; to the Antarctica; to Egypt to visit the Great Pyramid Cave; and to Santa Claus Village in Rovaniemi, Lapland. In May next year, the company is leading a private tour for a group of 10 wanting to visit 90° north latitude for an adventure.

Most private tours are requested by professionals and those in the upper middle income bracket.
“Private tours cost at least 50 per cent more than the usual series tours,” said Lee.

TARGETS Last year the company made RM10 million (US$3.25 million) on private tours and RM150 million on group series, said Lee.
This year, Apple Vacations is targeting a 10 per cent increase in revenue from both segments.

Lee also plans to double the staff force of the private corporate arrangement division next year as he foresees demand increasing further. – S Puvaneswary

Quotient TravelPlanner – Now everyone can benefit from a tailor-made holiday as Quotient TravelPlanner’s brings these programmes to the masses

WHO Established in May 2007 by Javiny Lim and Lim Hui-Juan, Singapore-based Quotient TravelPlanner specialises in bespoke travel. The firm consults clients to uncover their needs and wants before developing unique, personalised itineraries.

Javiny Lim said: “There is no set formula on how we plan itineraries. We want our clients to have experiences beyond the traditional tourist offerings.”

WHY Quotient became a reality after its founders decided to follow their instincts.

Lim said: “I have always been interested in travel and started planning my own holidays from quite an early age. Through the years, numerous friends have requested my help in planning their holidays. This led me to thinking that there was a real gap in the market for customised travel planners.”

HOW Quotient focuses on developing highly bespoke itineraries that incorporate soft adventure, cultural and gastronomic elements, such as vintage car drives, temple visits, cooking classes, farm and market visits as well as exclusive access to vineyards. Itinerary lengths vary from as short as a week to up to a month.

Western and Eastern Europe have been the most popular destinations for Quotient since its inception, although the company does receive enquiries for numerous other destinations around the world, particularly Japan and Latin America.

As part of its strategic plans to expand its presence in the digital realm, Quotient is set to launch a portal that will enable users to build, customise and purchase trips online.

Lim said: “There’s a whole host of trip planning sites and many online travel agencies out there. But I think we will be the first to bridge the two.”

According to Quotient’s head of media and marketing, Rufus Tan, the new site will consist of 100 base itineraries which users will be able to tweak to match their needs and interests. “On top of choosing a category of accommodation – be it comfortable, indulgence or luxury – users can book private or group tours, purchase sightseeing passes and extend trips or alter itineraries,” he explained.

The site, which will officially launch in March 2013, will showcase itineraries for Europe, South Africa, the Middle East, Australia, Japan, South Korea, India, Sri Lanka, Bhutan, Nepal, China, Tibet and Mongolia.

Tan said the online travel site had been in development since the company was founded. However, it only took off in the last 12 months.

“When it launches, customers can build a holiday which will be more customised than those offered by brick-and-mortar agencies. It will not be as bespoke as those developed on a case-by-case basis by our travel consultants, but it will sell at a reduced price point. We hope to bring customised travel to the masses,” he said.

TARGETS Business has been robust. In 2011, the number of customised travel programmes jumped 35 per cent over 2010. From January to-date, Quotient has seen a 30 per cent year-on-year increase in revenue, according to Lim.

She said: “We hope to keep the momentum going with the launch of our new online portal, which is designed to accommodate different travel styles. We are also hiring more staff this year as we expand our product portfolio.

“On a broader perspective, Quotient TravelPlanner will continuously develop and design new products and services that can cater to as broad a spectrum of customers as possible.

“The purchasing power and requirements may differ from individual to individual, but we believe that everyone can definitely benefit from a tailor-made holiday.” – Linda Haden

A balsamico special with Quotient TravelPlanner

Asian Overland Services Tours & Travel – Going deeper into cultures and doing good for communities is great for business, discovers Asian Overland Services Tours & Travel

WHO Kuala Lumpur-based Asian Overland Services (AOS) Tours & Travel has operated inbound tours since 1976. Beginning in 2008, the company started offering experiential, customised tours and corporate social responsibility (CSR) programmes to meet demand from a new segment of travellers.

WHY “Travellers have changed. People are not content with just sitting in a bus and sightseeing. They want to be part of the local community, experience the local culture and, wherever possible, give back to the local communities,” said AOS managing director, Yap Sook Ling.

The new tours are in line with the company’s philosophy of making a difference. “It also enriches the customer’s holiday experience, which is very satisfying,” said Yap.

HOW AOS’ new itineraries include CSR elements. For instance, it has adopted Kiau Village in the foothills of Mt Kinabalu in Sabah, where visitors can participate in programmes to improve the lives of the locals. The company also encourages its guides to give deeper explanations and to include real-life experiences at destinations.

Yap said these tours appealed to mature travellers who were looking for more than the “sit down and listen” type of holidays.

AOS has created a product and research department which is not just involved in finding new products and providing value-addedness, but also engages locals to see how the company can work with them better and meet international service standards.

TARGETS Business has grown 30 per cent year-on-year. “Our customised itineraries and experiential programmes are well received and through word-of-mouth, our clientele is also growing,” said Yap.

“To further grow the business, we have to identify the right kind of agencies that also appreciate what we do.” – S Puvaneswary

Smailing Tour – Smailing creates Signature Products and Special Interest Products as competition intensifies within the series tour market

WHO Group series used to be Smailing Tour Indonesia’s strong suit. While it is still an important part of the business, the travel company has created Signature Products and Special Interest Products programmes to diversify its business.

WHY Smailing Tour’s vice president-marketing & business development, Bernard Akili, said: “The competition is getting more intense in the series group tour market, therefore it is important to create new products to capture specific markets, products which other players have not explored but show promise.”

HOW Signature Products cater to those who want a luxurious travel experience, with unique destinations and itineraries, from learning tai-chi in China to enjoying a sunset camel safari in India. Unlike series tours, a Signature Product gives clients plenty of free time to explore the destination and flexibility in departure dates and number of travellers in the group.

Special Interest Products are focused on specific interests in connection to current lifestyle trends, be it culinary, sports or photography. Clients can learn to cook with celebrity chefs such as Indonesian renowned chef William Wongso, or be mentored by professional photographers such as Darwis Triadi during the tour. Destinations can be within Indonesia or abroad.

Smailing Tour creates a sample product, and travellers have the chance to meet a staff member and a mentor to customise the programme even further.

Products are targeted at niche markets with higher disposable incomes, i.e. people who have “been there, done that”, and travellers with special interests.

TARGETS The business is growing with a considerably higher profit margin. “We launched these programmes about a year ago and the response has been very good,” Akili said.

Smailing Tour is developing partnerships with niche communities such as Bike2Work, photography schools and credit card issuing banks to create joint programmes for their members. – Mimi Hudoyo

Smailing Tour takes clients to a specialty restaurant that serves only the angler fish  (Photo by William Wongso)

Dove Travels – Dove soars higher by listening to repeat clients who are no longer content with same old programmes and want more options

WHO Amritsar-based Dove Travels is a tour operator handling FIT and leisure group itineraries that are aimed at budget (or marginally higher) clients, primarily catering to incentive groups of FMCG (fast-moving consumer goods) manufacturers which offer annual trips to high performing dealers, retailers and stockists.

In 2009, the company started receiving requests from repeat clients for additions and options to itineraries.

WHY Internet searches and word-of-mouth from friends and colleagues are creating a new genre of Indian outbound travellers. Clients have bigger purses but more personal preferences.

HOW Dove began offering individualised itineraries, including hot-air ballooning in Australia and South Africa, whale-watching in Alaska, and scuba-diving in the Philippines and Indonesia, but always customised to the client’s needs and budget.

TARGETS Dove Travels had 8,000 outbound clients in 2011 and claims to have had 5,400 customers in the first half of this year.

The company intends to devote its energy to researching new products and itineraries in new destinations so that these programmes are ready when the increasingly well-informed client requests or asks for advice on exciting new options. It attends tradeshows globally and is often on familiarisation trips to all parts of the world. It is also looking at high-end corporate meetings and incentive groups to offer them once-in-a-lifetime adventure and luxury travel experiences. – Shekhar Niyogi

Carnation Travel Services – From selling air tickets, Carnation sells dreams to affluent Indian travellers with insatiable appetites for unique experiences

WHO Carnation Travel Services New Delhi began operations in 1995 as a ticketing agency and sold airline seats until 2003.

In 2004, owner Rajesh Sethi, an entrepreneur with a successful tenure in the construction business, started operating series tours with fixed departures to destinations such as Thailand, Hong Kong/Macau, Singapore and Malaysia. Although Carnation accepts that these would continue to be sold, it notes that in the age of the Internet, well-informed clients are demanding better service and that profits are also much higher in this segment, even during economic downturns. So it has reinvented itself as a specialty travel solutions provider.

WHY As the demographic profile of the Indian tourist transforms into affluent, upwardly mobile professionals who work hard and play hard, budgets have become less restrictive while demands have become limitless.

HOW The company has hired more experienced travel consultants, expanded the number of destinations and acquired a larger office space in a posh south Delhi locality.

It developed itineraries that include helicopter rides from Cape Town to vineyards in Cape Winelands for wine-tasting and culinary experiences, safaris in the Masai Mara, helicopter rides over Niagara Falls, Ferrari rides in Emilia Romagna, gastronomy tours in Tuscany and Sicily, swimming with sharks and scuba-diving in Lakshwadeep Islands, honeymooning in New Zealand and trips to Mount Fuji and onsens in Shizuoka.

TARGETS In 2011, the company claimed a 100 per cent year-on-year growth. Its target for 2012 is to grow at least 30 per cent year-on-year. – Shekhar Niyogi

Tour Flair – A flair for survival sees Tour Flair branching into food safaris to mitigate a drop in business from its traditional Australia and US markets

WHO Tour Flair Philippines is a luxury and bespoke concierge services tour operator that brings groups and FITs from Australia and the US to the Philippines (Manila, followed by luxury resorts in Boracay, Bohol and Palawan). It has ventured into food safaris – tours that showcase the cuisine of heritage locations in Luzon such as Laguna, Pampanga and Vigan – which have been successful with the domestic and local expat markets.

WHY Business was affected by the August 2010 tour bus hostage crisis that took place in Manila. “Whole groups cancelled their tours with us. People were afraid to come. They felt it was not safe,” said Lory-Vi Valdes, Tour Flair’s director.

HOW Tours of heritage churches, museums and historical sites are included, but the meals are the cherry on the cake. For its latest food safari to Ilocos, it brought along accomplished chef Sau del Rosario, who has worked with Michelin-starred chefs abroad and operates a number of restaurants of his own, to interpret the cuisine of each region.

“We don’t do buffets. Our guests get a feel of the area and the food, with sit-down plated meals, and the history of the food (is explained to them),” said Valdes. Group sizes are limited to 30 people to maximise the experience.

TARGETS Several tour companies operate culinary tours but Tour Flair’s knowledgeable guides, customised touches and the presence of a renowned chef cooking private meals appear to be the tipping point, giving Tour Flair the edge in this premium niche.

Tour Flair continues offering its concierge luxury travel services, but culinary tours are now its focus.

With success in the domestic and local expat market, it plans to attract a wider foreign market in the coming year. – Marianne Carandang

Tour Flair’s clients learn pottery-making in Vigan (photo by Marianne Carandang)

This article was first published in TTG Asia, October 5, 2012 on page 9. To read more, please view our digital edition or click here to subscribe.