The World of Alliances

I have made a guest post in airBaltic blog. Find out:
1. When and why alliances were founded;
2. What benefits they bring to airlines and passengers;
3. What is the hub coverage by each alliance.
http://blog.airbaltic.com/2011/08/11/all-you-ever-wanted-to-know-about-alliances/

Gondola Line for Ventspils

Ventspils is a mayor port town in Latvia known for its developed infrastructure, good public landscaping and ambitious projects. Though many things has been done to attract both tourists and industry and to raise the life standards for citizens, one problem is still evident. River mouth of Venta not only provides a natural harbor but also splits the town into two. Historic centre and all mayor tourist attractions are on the left bank while port facilities and a large residential district (Pārventa) on the right bank. There are two bridges upstream from the centre yet the detour is about 4 km so travel from Pārventa to the centre can be done only by car, bus or bike. Gondola line is the most reasonable technology for connecting the banks directly, ferry would be alternative but there is no place for terminal on right bank and the catchment area of such station would be significantly smaller compared to one located further inland.

So how would town life change is such gondola crossing is built? First of all – Pārventa would become as easily reachable district as any other neighborhood on the left bank and would finally start to enjoy all services the town centre offer. Secondly – the road traffic connecting the banks will decrease. Bus network could be substantially simplified and focused on feeding the gondola line on both sides of the river. Lot more O&D pairs would become walkable and cyclable (if gondola is bicycle-friendly). And finally – gondola would be a popular attraction among tourists searching for interesting perspectives above the old town.

There is currently similar project called Thames Cable Car under construction in London with estimated costs of €60m but expenses for Ventspils gondola line most probably would be lower. Depending on technology (monocable, bicable or 3S) the line could operate in winds up to 14-27m/s. In practice the system could not be used during strong storms but usually no more than one or two storms happen in a year. Anyway I believe that such gondola line would finally unite the town, strongly encourage people using eco-friendly modes of transport and – as importantly – make a distinct feature in town’s urban landscape to be proud of.

Long Distance Coaches From Riga

Long distance coaches are rather developed and popular mode of passenger transportation in the Baltic States. Last year I wrote how coaches dominate the public transport market within Baltic States so now it’s time to look what are the possibilities for travel from Riga to destinations beyond borders of Latvia, Lithuania and Estonia. There also are several long distance coach routes not involving Riga but these are not taken into account here.

Altogether 131 unique cities and towns outside the Baltic States can be identified with direct service from Riga. As the map shows – all routes can be divided in two large groups based on their geography:

1) The closest destinations – Russia (excluding Moscow), Belarus and northern part of Poland. This group includes frequent services to the large cities as Warsaw, St Petersburg and Minsk and far less frequent services to regional destinations like Gomel and Baranavichy in Belarus or Velikiy Novgorod and Smolensk in Russia. Services in this group see competition from car travel and in lesser extent from air travel (limited number of destinations focused on feeding Riga hub) and trains (service being limited to St Petersburg, Minsk and few more stops on the way). Routes in this group have many stops in the Baltic States and further abroad and they are operated by various companies often strongly cooperating and, in some occasions, competing.  

2) Routes to more distant destinations in Ukraine, Germany, Netherlands, Belgium, Russia (Moscow) and other countries. All of them (except few in Ukraine) are operated by carrier Norma-A under Ecolines brand. These routes face strong competition from airlines (airBaltic and Ryanair) that outperform Ecolines by frequency and seat capacity, and of course – by travel time.

Nevertheless there are reasons why some costumers choose 31-hour bus ride instead of less than 3-hour flight to Düsseldorf. First of all - coaches serve many more cities and towns than air travel can offer. Almost all of West-heading coaches from Riga make a detour to pick more passengers at Vilnius and stop at all mayor towns all the way to Warsaw. In Germany and the Netherlands coaches stop at large number of medium-sized towns. So being closer to the origin and destination of passenger is a cornerstone in this service. This positively effects the overall travel costs as ground transport in Germany is monopolized and expensive.

Secondly, coach travel is generally cheaper than air travel for close departure bookings, yet directly comparison is hard as airlines use fare level system and extensive sales but Eurolines – flat fares. In the example of Düsseldorf, flat Eurolines fare of €110 is undercut by airBaltic for travel 7-8 weeks from today and by Ryanair – within a week from today. As Ryanair has recently restricted online bookings for travels from Latvia and Lithuania for departures within a week due to credit card fraud risk, choosing a coach is an alternative also in urgent cases.

And the last, but not the least reason is luggage allowance. While charging for checked-in luggage is a mayor revenue source for almost all airlines operating from Riga, Eurolines don’t charge for luggage at all and the luggage size regulations are less strict. This is a large travel cost saver for those passengers intending for a longer stay – guest workers and students for example.

Passengers loading luggage for their trip from Riga to Kiev at Riga coach station. Operated by Ukrlines under Ecolines brand. The €50 service is popular despite the more than 16-hour ride and need of Belorussian transit visa.  

Norma-A has publicly admitted that after the opening of German labor market their sales has strongly increased and some capacity will be added. But what are other development opportunities in the market? As top priority for Ecolines I see more complicated fare system that guaranties lower fare than air travel also for more distant departure dates and allows benefit from elements of yield management. If the number of departures is going to increase - the number of destinations per route should be decreased to reduce the travel times (similar to current route to Paris that skip all German destinations). The role of frequency seems to less important in this type of service, though I believe no destination should be served less than twice weekly anyway. If the market grows, different route structure of developed transfer opportunities and high route frequencies may be applied. From one side - long distance coach market is strongly linked to situation in air travel so increased airfares must increase the passenger number for bus travels, but from the other side - many of the potential passengers may choose not to travel at all because of the unacceptable travel time by coach or choose to make the journey by car to benefit from grater flexibility. 

airBaltic Riga Base 2011

Two years ago I took a close look how airBaltic had transformed its Riga base from point-to-point strategy in 2007 to a genuine hub in 2009. Now it’s time to find out how things have evolved since then.

It’s clear that the hub strategy has not changed. Almost all aircraft operations can be divided in 5 groups: group 1 in morning, group 2 in afternoon, group 3 in evening, group 4 late at night, group 5 also at night but with earlier departure and later arrival than group 4.

Anyway there are some details that have changed:

1. Almost all Nordic routes have gathered in group 5. In 2009 Oulu was operated in group 2, Alesund in group 3 while now both of them and also some new destinations are in group 5.
2. Billund - previously group 3 destination - now have altering group 1 and 3 operations.
3. Group 2 – the important daytime operations to mayor European cities – has sprawled. Both backwash and uprush windows are longer due to the new service to Madrid and rearranged timings for some Baltic flights. Berlin and Stockholm daytime operations are no longer in group 2. Instead two flights are made.
4. Second daily flights to Paris and Amsterdam have joined London in group 3.
5. Some clustering has happened in departure times for flights within one geographic region. For example – group 5 flights to Kalinigrad, Palanga, Tartu and Kaunas all depart at 8.20pm.

Overall the hub operation strategy is little bit clearer and still is the lifeline of airBaltic. Unfortunately flights to Visby to be cut this month, yet not really a surprise as they did not fit in any flight group so transfer possibilities were too limited. As for future – the arrival and departure times for group 2 should be kept under control – no more too far destinations like Madrid. It would actually make sense to swap Dublin and Madrid flight times. Long arrival and departure frames make transfer longer if traveling between close cities where majority of the traffic lies. There should not be routes operated only in group 1 or in group 3 – they rather must be operated in some other group or using altering pattern like Billund does. It’s similar to the mixed-up schedule pattern for p2p carriers I proposed earlier. And there should not be new routes from weak destinations operated out of hub pattern. In contrast - there may be strong routes with high frequencies that go out of the hub frame - like many current departures to Helsinki, Vilnius and Tallinn.

Riga to Moscow Fare Watch

Moscow is one the busiest route from Riga airport, the traffic is strongly supported by the large Russian community in Latvia but also reflecting the booming tourism, business and transferring passenger numbers.

Up to summer 2010 Riga to Moscow market was served only by joint 3-daily Air Baltic and Aeroflot product to Moscow’s Sheremetyevo airport (SVO) but in August last year things got more diverse. UTair started their own daily flight from Vnukovo airport (VKO) using 50-seat CRJ200 and also offering connections to their vast domestic network. In November 2010 another Russian airline Transaero started twice weekly Boing 737-500 flights to Moscov’s Domodedovo (DME) airport followed by Air Baltic’s supplementary two weekly flights on that exact route. On the other hand – RIX-SVO airport pair is still the dominant as are the two flag-carriers – Air Baltic and Aeroflot.

Aeroflot, Transaero and UTair typically charge more for one-way tickets than for corresponding segment on return ticket. For this analysis one-way prices are determined as those available for return tickets though they can’t be booked without buying also Moscow-Riga flight.

As seen in the graph, all airlines have set their base levels around 90€ mark, but only Air Baltic and Aeroflot manage to sell tickets more expensive than 200€. In the examined 2-month period average ticket prices are as follows: Aeroflot - 157€, Air Baltic - 125€, Transaero - 117€, UTair - 109€. Note that Air Baltic is the only airline charging for luggage on this route. The prices for all airlines make peaks also for well-ahead dates suggesting that lots of travelers on the route are date-inflexible.

Last year I analyzed Riga-Oslo route in a similar manner. The Riga-Oslo and Riga-Moscow routes have several common features – they are comparable in passenger flow and offered capacity, booth served by four airlines and three airports (in Oslo or Moscow) and are almost the same in lenght. The overall average available fare for Riga-Oslo in two month period was 71€ (including credit card fee) while for Riga-Moscow it is 128€. The higher price for Riga-Moscow flights seems to be a result of governmental control yet factors like different costumer groups and seasonality may have played a role.

Car rental schemes to reduce number of car trips?

When thinking about use of mass transit versus private car in the urban environment it is often believed that people use cars because they are more convenient, more stylish and give more freedom. But main reason – the expanses – is wrongly considered secondary.

If we look at car ownership cost report it is obvious that variable costs (fuel) on average make only 26% of total car ownership expanses while fixed costs (depreciation, interest, insurance, maintenance, repair, taxes) accounts for the rest.

Car ownership costs break down over five years. Source.

One doesn't need to be a genius to understand that using the car more gives significantly smaller per-km cost. In a situation when public transport can’t provide service for small number of trips (e.g. visiting countryside, traveling, deliveries) and consequently citizen needs a car, he will almost certainly use the private car on trips otherwise done by public transport and even not done at all just to reduce the per-km expanses of riding. Meanwhile mass transit – obviously having readership fees – turns out to be more expansive because keeps the car in standstill.

My idea is that government (or private investors) should prevent people from acquiring a car by introducing extensive and affordable car rental. It’s nothing new as some cities already have electric car hire schemes (similar to the widespread bike hire systems) but the main idea of these projects is increase usage of electric cars. If the goal is to reduce the car ownership than any type of engine will do. Those car rent stations should be in easily accessible sites near mass transit stations, P&R and mayor shopping malls; they should provide reliable and cheap 24/7 service, also offering vans and trailers for delivery purposes. 

Experience of urban farming

Ilgvars is a spacial planning student from Riga and has kindly made a guest post about allotment gardening in Riga. No advice on lettuce and radish this time, but - even better - discussion about the social and economic benefits from urban agriculture. Ilgvars is running his own blog http://ilgvarsjansons.blogspot.com/ about urban issues.

During the last decade the popularity of urban farming has increased. Not only in cities in developing countries like Cairo, Mumbai, Havana, but also in cities like New York and Detroit.

In developing countries urban farming is practised for income-earning or food producing but in developed countries urban farming may be undertaken for the physical and/or psychological relaxation it provides, rather than for food production. Because urban farming promotes energy-saving local food production, urban and peri-urban farming are generally seen as sustainable practices. Local production of food also allows savings in transportation costs, storage, and in product loss, what results in food cost reduction.

Social benefits that have emerged from urban farming practices are; better health and nutrition, increased income, employment, food security within the household, and community social life. Some researchers indicate that unemployed populations in large cities and suburban towns would decrease if put to work by local food movements.

I won’t question or deny the benefits of urban farming. I will briefly compare the situation in Latvia. To my opinion urban farming is nothing new in Latvia. For 50 years Latvia was part of USSR. This was time when urban farming took a serious role in each citizen’s life. So called community gardens took place in every city and surrounding area. These community gardens were made and supported by biggest factories and enterprises and provided recreational activities and extra food for their workers. The problem is that most of these areas are partly abandoned and are considered as degraded. Municipalities don’t know what to do with them. Remove or not, because these community gardens take a serious role in lives of old and poor people. Many of them are located in precious land like Lucavsala, Torņakalns in Riga and surrounding municipalities in Riga region. In many of these areas building of living houses has occurred during last years what makes the situation even more complicated. So what to do with this heritage?

Community gardens at Skanstes Street. Photo by Flickr user Kaspars Funts.

Another issue is that, because of the history how the community gardens were made, it is not prestigious to take part in it. That’s why when somebody mentions urban farming as a new practice people in Latvia are very sceptical. We might say that we have bad experience! Although ''the new economic situation'' and the experience of New York and Detroit has shattered this opinion a little.

Also we have a lot of vacant urban areas in cities where urban farming might take place. The question is - are people ready for reanimation of urban farming in Latvia? And if we look at example of Riga - is it reasonable to turn vacant urban places into agricultural land while surrounding agricultural land in Riga region is turned into suburbs?

High-speed rail Riga-Jēkabplis

In December 2010 Latvian Transport Minister Uldis Augulis came with a sensational proposal about High-speed rail (HSR) connecting Riga and Moscow. Instead of listing all reasons why Riga-Moscow HSR in unreasonable, I developed a new proposal – Latgale HSR stretching from Riga to Jēkabpils. French LGV Est has demonstrated that HSR can work not only with multi-million cities at booth ends but also as a trunk line with several branches to smaller cities all around the region - similar to the situation in Latgale. The primary use of Latgale HSR would be providing passenger transport from Riga to Jēkabpils and further east on three branches – to Daugavpils Rēzekne and Madona. And the secondary use – an additional freight capacity to Riga port. Though ‘classic’ HSR are passenger-only, several HSR in Germany and at least one in France have/will have mix of freight and passenger trains.

  

Where is the problem?

The existing railway between Riga and Jēkabpils was finished in 1861, since then dozen of towns and villages have emerged near the stops. It is the busiest railway in Latvia carrying big number of freight, suburban and bit smaller number of regional and intercity trains. If traffic will continue to grow, it will become very difficult to sustain so big variety of services on one railway so a need for alternative tracks may emerge. Furthermore – in favor to road transport, the construction of highway replacing the old and inconvenient road trough the towns and villages has already started. If no significant improvement is done to increase the intercity services on the railway, road traffic may steel significant part of passengers.

How this HSR to improve situation?

If a new rail line is considered, it must be build according to modern standards – e.g. the high speed no less then 300km/h. This would allow removing the slot-hungry intercity express service from the old railway. As passenger transport alone could not justify construction of new railway, it must be used also for freight traffic – especially the one heading to docks on the left bank of Daugava in Riga (supposed to be built soon) thus avoiding crossing of the busy Railway Bridge in Riga. The HSR should be routed south of river Daugava because the area is sparsely populated, flat and have vast state forest properties. The whole length of the new railway is approximately 130km; on average speed of 230km/h travel time would drop to 40minutes from Riga Central to Jēkabpils South so cutting the travel time to Daugavpils, Jēkabpils and Rēzekne by more then 1 hour.

A capacity increase by doubling the last single track sections is underway on the old railway so the slot problem will be solved at least for 20 years. But if politicians truly want to make passenger trains the mayor transportation mode in the state, the frequencies and operational speeds for intercity trains should be increased and that also leads to considerably smaller overall capacity of the railway. Latgale HSR is not a project desperately needed right now, but it should be carefully considered by planners. Riga to Daugavpils and Riga to Rēzekne are two of most developed intercity train routes in Latvia and market for passenger transport is bigger than for Rail Baltica or Riga-Moscow HSR project, meanwhile the 130km stretch require far less investments then the other two proposals.