Wednesday, 10 January 2018

The Amazing Race 30, Episode 2

Reykjavik (Iceland) - Amsterdam (Netherlands) - Antwerp (Belgium)

This episode of The Amazing Race, like the previous one, featured helicopter shots of spectacular Icelandic scenery. They helped show why Icelandic tourism marketers have been so successful in recent years in changing perceptions of the country as an aviation hub. Flying between America and Europe via Iceland has changed from a perceived drawback to an asset: from an unwanted interruption of the journey and change of planes to a desirable stopover opportunity.

Foreigners visiting Iceland as a stopover en route to or from somewhere else still far outnumber those for whom Iceland is the primary destination, but that is changing. I know some people who've gone to Iceland and back recently from the U.S., without continuing on to Europe.

Despite these changes, Iceland's its role as a transatlantic budget airline hub remains an interesting case study in the history of discounted airline ticket pricing and routes and the ways it has been controlled by politics and oligopoly rather than competition.

Why was it that Icelandic airlines offered lower prices between North America and Europe than any other airlines to a generation of backpackers?

Until recently, international aviation treaties generally restricted airlines to operating flights to, from, or within the countries where they were incorporated. Airlines were forbidden from operating flights between third countries without permission from those countries. National governments agreed to these treaties to protect the profits of their national airlines. Traffic between countries A and B would be divided between the airlines of countries A and B. Why would the government of country A or of country B authorize an airline of country C to get a share of this business?

So an airline based in Iceland couldn't get permission to operate direct flights between North America and Europe. Icelandair and its Icelandic predecessors could only carry passengers between countries other than Iceland by exercising Sixth Freedom rights to carry passengers from one country to Iceland, and then from Iceland to another country.

In the 1960s, '70s, and '80s, Iceland wasn't yet perceived as a desirable tourist destination. Icelandic airlines tried to minimize the inconvenience inherent in having to fly via Iceland. In many cases, what were technically separate New York-Iceland and Iceland-Luxembourg flights were actually operated by the same plane. But these flights still had to land in Reykjavik, a time-consuming nuisance from the point of view of most passengers. Airlines offering connecting flights were never going to be able to compete for the business of passengers who could afford to pay more to avoid unnecessary connections.

To put it another way, Icelandic airlines could only make slower, less convenient connecting flights via Iceland competitive with direct flights by offering lower prices that North American or European airlines.

The rules of the international airline cartel, IATA, forbade selling through tickets on connecting flights for lower prices than the cartel-approved prices for direct flights. To avoid those restrictions, Icelandair didn't belong to IATA (and still doesn't today) -- a precedent for budget airlines opting out of IATA, or simply ignoring IATA, followed by most subsequent low-fare airlines, perhaps most notably by Southwest Airlines.

Landing rights in any country, and airfares between any two countries are subject to approval by those governments. So there was still a problem for Icelandic airlines in getting landing and traffic rights in Europe and approval from European governments for sufficiently low fares between Europe and Iceland to allow selling combined tickets to and from North America at prices undercutting those of direct flights.

European countries knew that most of the passengers on flights to and from Iceland would actually be connecting to and from North America, on tickets sold at prices undercutting the IATA fares for direct flights and the profits of their national airlines. To protect their national aviation industries and airlines, European countries with their own major international airlines either (a) denied Icelandic airlines landing rights entirely, or (b) allowed them to operate flights between Europe and Iceland but refused to approve fares to and from Iceland that would allow the prices for combinations of America-Iceland and Iceland-Europe tickets to undercut the IATA fares on direct flights.

This is why Luxembourg was so significant to Icelandic airlines. Luxembourg has an airport centrally located between France, Germany, and Belgium and thus well-suited for use as a gateway to continental Europe. But Luxembourg has only a very small national airline with no transatlantic flights. The government of Luxembourg saw more potential benefit to the national economy in allowing its airport to be used as a hub for flights to and from America via Iceland than in trying to develop a national airline capable of competing with Air France, British Airways, Lufthansa, or U.S.-based airlines on direct transatlantic routes.

Because Luxembourg was the only city on the continent that would allow flights carrying cut-price transatlantic passengers to land, Icelandair was forced to develop one of the first hub-and-spoke multimodal air-ground route systems. Most passengers on Icelandair flights had little more interest in lingering in Luxembourg than in Iceland. A fleet of buses awaited each Icelandair flight at Luxembourg airport, with express service to Paris, Amsterdam, Frankfurt, and other destinations. Tickets for these bus connections were included with Icelandair flight tickets.

IATA no longer describes itself, as it once did, as a price-fixing cartel, and many of the treaties governing transatlantic flights have been revised to remove requirements for government approval of fares. Icelandair no longer serves Luxembourg, and Icelandair and WOW Air now fly between Reykjavik and London, Paris, Amsterdam, Frankfurt, and other European destinations.

In spite of these changes, the multimodal hub-and-spoke system pioneered by Icelandair is alive and well, thanks to growing airline consolidation, growing domination of long-haul air service by a few of the largest airlines and their hubs, and the expansion of high-speed rail service including direct intercity high-speed rail services to and from train stations located at international airports.

Within France, which was the first country in Europe to build a national network of high-speed trains, it's easier and often faster to take direct trains from Charles de Gaulle Airport (CDG) in Paris rather than connecting domestic flights to and from destinations in the provinces.

Next month I'm representing the National Writers Union at meetings in Brussels and Geneva. There are no direct flights between the U.S. West Coast and either Brussels or Geneva. So I'm flying in and out of Paris, and taking trains from the Paris airport to Brussels to Geneva and back to the airport in Paris. The connections between trains and planes at CDG are easier than connections between flights, and I won't need to go into central Paris unless I have extra time and want to do so.

We saw something similar on The Amazing Race 30 in this episode, when the racers flew from Keflavik Airport (Reykjavik) to Schiphol Airport (Amsterdam) in the Netherlands, then took a train across the border into Belgium to get to Antwerp.

Antwerp is a cosmopolitan city that generates a disproportionate amount of long-haul business air traffic for its small population. Its economy is driven by the diamond trade and the port. In Europe, Antwerp's inland seaport is second only to nearby Rotterdam in cargo volume. And most of the world's diamonds pass through Antwerp's diamond district on their way to and from cutting and polishing in India. The Antwerp diamond center that was the locale for one of the challenges on The Amazing Race was the site of the largest theft in world history in 2003, when more than US$100 million and possibly as much as US$400 million in jewels, cash, and other valuables -- only about US$20 million of which was recovered -- were stolen from safe deposit boxes rented by diamond dealers.

Like Rotterdam, Antwerp has only a small airport with only a few scheduled flights to places within the region. Most intercontinental travellers use larger airports farther from Antwerp. There are direct trains to Antwerp from train stations located directly under the airline terminals at Schiphol Airport (Amsterdam), some with KLM codeshare "flight" numbers, and Charles de Gaulle Airport (Paris). In addition to direct buses between Antwerp and Zaventem Airport (Brussels National Airport), there are express buses, jointly operated by the Dutch and German railways, between Antwerp and Dusseldorf, which has the nearest major airport in Germany. Travellers to or from Antwerp can, and routinely do, choose between airports in any of four countries: AMS (Netherlands), BRU (Belgium), CDG (France), or DUS (Germany).

Customs and immigration checkpoints, inspections, and the attendant possibility of delays that might make you miss your flight have been largely eliminated within much of Europe. Unless right-wing and anti-immigrant political parties are successful in efforts to rescind or nullify the Schengen Agreement and other European treaties on freedom of movement, there's little reason to go out of the way to use an airport in the same country if there is more convenient or cheaper air service from an airport on the other side of an open border.

The winners and losers of this leg of The Amazing Race 30 were decided by the final challenge: a footrace pushing handcarts loaded with bags of Belgian "frites" ("French" fries) across the Belgian block rough-cut paving stones of the "Grote Markt" plaza in front of the city hall.

A "frites race" is, of course, a made-for-TV event. But the racers' difficulties in pushing hand trucks across the uneven pavés should be an object lesson for real-world travellers about how difficult it can be to push or drag "rolling" luggage (with wheels much smaller than those on the racers' handcarts) across paving stones or cobbles. Paving stones are quaint and atmospheric, and serve as a (noisy) form of traffic "calming". But in many older cities and towns in Europe and Latin America, they are a reason to have luggage that you can pick up and carry with a shoulder strap or as a backpack when the pavement is too bumpy.

Link | Posted by Edward on Wednesday, 10 January 2018, 23:59 (11:59 PM) | TrackBack (0)
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