31 March 2007


World Exclusive to the T2IMPACT BLOG – EMBARGOED until April 1st 2007 0001 AM

On assuming control of the Sabre Business, TPG – Texas Pacific Group - has great pleasure in announcing the retirement of the SABRE name in favor of a more modern and appropriate branding. NEW COMPANY NAME FABLE. Formally the new company will be known as FABLE Holdings LLC.

Asked why the sudden change in name after over 20 years – commenting - a spokesperson close to the company said

“ We were really tired of the acronym that comprises SABRE, IE SEMI-AUTOMATED BUSINESS RESEARCH ENVIRONMENT. You can only imagine the jokes have made over the years about our brand.”

“ So we just had to come up with a new brand name. The embarrassment of having <> was pretty galling for a high tech IT based company such as us, but worse to be regarded as a <> when we had been an operational company for so long just didn’t make sense – so we had to find something more appropriate. Besides – it wasn’t even our own brand name – it was originally coined by IBM of all people.”

“ We are really proud of the new name. We paid a sizeable fee to the leading eBusiness Global Travel Consulting firm (we cannot divulge here due to confidentiality) to come up with the name. “

We believe, and the spokesperson has confirm it, that the new name should be FABLE. Again speaking on the condition of anonymity…

“The new name had to be cutting edge and be representative of the company post the buyout. We also wanted to be memorable and long lasting. The new name FABLE we believe does just that. ” So what does FABLE stand for ? or is it just another trendy name from Madison Avenue?

“On the contrary it – like the prior name of SABRE, the new name actually stands for something.
FULLY AUTOMATED BUSINESS LIABILITY COMPANY”. So what does this mean and what is its relevance. Again the Spokesperson

“That’s easy:

FULLY - we don’t want the company to do things in halves do we?
AUTOMATED - lets keep this IT flavor going
BUSINESS - well let’s face it - it is a commercial entity
LIABILITY - OK so this is a tough one but since we have seen how much debt Blackstone has loaded up to Travelport we can only assume that our new owners TPG and Silver Lake wanted to do the same to Sabre - er - I mean FABLE.
ENTERPRISE - lets think BIG here, not just a simple company we want to be a HUGE enterprise with Global ambitions. “

So there you have it... the new company, a new brand and a new identity. We anticipate over time that we will be renaming most of the product subgroups. For example we understand that the consumer brand will be renamed to reflect the growing emphasis on Desert Tourism. It will henceforth be known as CAMELOCITY with the Joe Camel brand brought back to life in a positive setting and a new role model for the next generation of travelers while still resonating with a sizeable portion of Baby Boomers who are ex-smokers.

Further details will be available from the new FABLE website in due course www.Fable.Global


This is officially a spoof, just in case you didn’t know.

30 March 2007

Great Piece on Fare Strategy from Fare Compare

I am a huge fan of the "reverse yield management" tools that we predicted would emerge over time. The leading two are Fare Compare and Farecase.

Here is a great piece from Fare Compare on the insider column.



Insider Tip of the Week

Traveling 4 months or more in the future?

Be very careful purchasing U.S. domestic airline tickets.

Airlines manage their revenue in 4 month windows, and raise prices for travel outside this departure time window.
They will gladly sell you a mid-tier price outside of that window.

Many people have been told to buy very early, which can be the worst possible time to buy.

The most dramatic examples are prices in Southwest Airlines' markets. Southwest does not sell tickets for departure after a shrinking 4 1/2 month window (currently August 24th). Southwest usually increases the departure time window every few months.

The classic example is shown at the following link:


Notice how the major airlines raise their lowest prices by $148 (over 60%) on August 25th -- exactly on the last departure date that Southwest sells tickets.

Baseball Season's here again - banning transfats

This has very little to do with Travel and Distribution in particular but I could not resist.

Being a somewhat occasional US resident (heck I do more than the required IRS days out of the country to be officially regarded as Stateless!) I really enjoy spending a few relaxing hours at the ballpark. My home team is nothing to write home about and let’s hope that this "rebuilding" year is more productive than the last 2.

They have just banned Transfats at my local stadium. Great. But that got me thinking how much the airlines could do to ban the evil stuff. Suffering (genetically AND from a so-so diet) from high cholesterol I have to say that airlines could do a lot more about banning the stuff. So here is what I want you to do airlines. BAN TRANSFATS and all snacks containing them. Yes that means Southwest will probably need to find a new peanut vendor.



Sabre goes Private control passes to TPG and Silver Lake Partners for $5 Billion

So its official - while only 62% voted for it - they represented over 85% of the stock so yes Sabre is now part of Mr Brondeman's empire. Interesting to think that the company is now in the same stable as ... Ryanair! Not to mention other memorable current and former inhabitants of TPG:

America West (Now the NEW US Airways)
Continental Airlines
Gate Gourmet
Burger King

Soon to be joined by Qantas (well that’s a definite maybe) Iberia (that’s a remote possibility- what the heck is he doing – buying all of OneWorld?) , and Harrah’s Casinos not to mention Matsushita (JVC and Panasonic).

We can only assume that they will load up the company with debt and offload it after cashing out their chips and pocketing a bunch of money. The likelihood is that Travelocity will be spun out separately from Sabre thus allowing all 3 of the major online brands to be floating freely AND creating a unique category in the process. (Analysts do love it when industry segments do this sort of thing). I once lamented that this would bring focus on our little corner of the world and this would disrupt the business of people like us at T2Impact. But on the other hand – well welcome chaps this makes for a great ride.



29 March 2007

Flying High in a Competitive Industry - Book Review

Cost-effective service excellence at Singapore Airlines.

Loizos Heracleous, Jochen Wirtz Nitin Pangarkar
Published by McGraw Hill 2006

With both a title and subject matter of immense potential this book is a bit of a let down. Sadly it doesn’t even start well. Rather is reads like a management consultant's tome that seeks to justify a business case through an over abundance of fact with little insight. I was in Singapore at the airport changing planes (actually from United to Tiger!) when I spied this book for sale and immediately bought it.

it is clear that the writers had insider access to SQ's people and documents. For this they should have been able to write a real cracker of a book. What makes SQ tick? Why is SQ so good at what it does? Perhaps it sadly personifies the whiter than white world of Singapore Airlines and the city nation itself without any constructive and objective criticism of what is has done wrong and where things have not gone well for SQ. All of us (me included for sure!) can learn from our mistakes. Not illustrating and then examining failures makes the successes seem more routine and perhaps less interesting. Clearly for me it lessens the value of the underlying story that despite the presentation I still find compelling. For example the disastrous partnership with Air New Zealand and the participation by SQ in the demise of Ansett Australia is not even mentioned.

Much of the early data indeed over 25 % of the book is spent on a flawed analysis of the airline industry. Nice useful data but both the facts are somewhat dated and the analysis far too simplistic for meaningful application and background to the rest of the book. You are left feeling unsatisfied.

Still Singapore Airlines is arguably a great airline. Driven by the notion of cost effective service excellence - they have risen to the top of the heap. SQ - you deserve better than this


Boeing vs Airbus - Book Review

Subtitled The Inside Story of the Greatest International Competition in Business

John Newhouse - published by Knopf

For those of us who follow the epic battle between Airbus and Boeing this is a great read. It covers a lot of territory most of which is public information. Essentially drawing a lot on his previous book "The Sporty Game" this is a story that is written about pride and fall from both sides.

Newhouse takes the view from the protagonists as individuals - disappointingly he doesn’t dwell much on the one player who has had as much to do with the downfall of Airbus namely Noel Forgeard. The book probably spends way too much time laying the blame for Boeing's fumble on Phil Condit who comes off very badly. Neither does he spend much time on the complex multi-national management structure that has hampered Airbus' decision making for so long. So if there is bias in the book it is in the lauding of Boeing's recovery and the success of the 787 vs. the (now) well documented issues of the A380.

Still for those who are on the periphery of the business this is a solid tale - really about people. For those on the inside there is much that is new. The insights from the perspective of Harry Stonecipher and Jean Pierson is especially appealing. Highly recommended to get a second hand copy or read it at the library or Borders ;-)



28 March 2007

All that glitters... the sad market for Canada

Canadian Flyers - listen up... you WILL be paying more for your tickets.

The notoriously fickle Canadian market claimed another victim. Harmony Airlines will end all scheduled traffic on April 9th. While not a bankruptcy like CanJet or some of the other players in recent years - you can be assured that the prices in Canada will edge higher in the coming months. Sadly for border passengers on both the north and south sides - there is no real relief from hopping over the border to a nearby airport either. The restrictions at border crossings such as the Peace Arch in Blaine Washington mean that it is no easy deal to use a nearby airport.

Surely the duopoly enjoyed by WestJet and Air Canada should encourage the opportunity for another airline to make it - at least in niches. Sadly not so.

Even on the competitive transatlantic market we see little local competition.

For the Summer 2007 both Zoom Airlines and Globespan offer prices significantly below that of behemoth Air Canada or Charter favorite Air Transat. In our brief search we found prices 40-50% below for comparable routings YVR-LON/AMS/MAN/CDG.

Well - you could emigrate to another duopoly market like Australia. At least the cents per mile are a little cheaper. And of course its a tad warmer



Troogle-ettes - arriving at a mobile near you?

More evidence that Troogle may be a myth. Here is a new partnership established with FlightStats: Just text 466453 for flight status. Enter code and flight number and itsends you back the status for any US departing flight.

At the same time on Google Base search box users can enter an airline name and flight number and check the status via links to Travelocity, Expedia or Fboweb.com.

But never say never



27 March 2007

Ah the sweet smell of Slots in the morning

Indulge me a little with speculation. I am sure that someone is REALLY kicking themselves at BA right now that they didnt pick up BMED when they had the chance. BMI paid GBP30 million for BMED. Lets assume that this includes assets and leases etc etc. But what of the slots?

Welcome to the world's most expensive 2 minute experience. A slot at London's Heathrow Airport.

Currently at LHR BMED has 73 listed slots a week. (Source BMED website). The current valuation for slots at LHR ranges from GBP 10 million per slot (paid by Qantas for 2 slots in 2004) and GBP 5 million at the low end. So lets just say its in the middle then the value of BMED for slots alone at just under GBP 80 Million. Can you hear the weeping wailing and gnashing of teeth from Waterside. But this was before the US - EU Open Skies agreement. So added to this that there are going to be some very interested parties in acquiring at least some of those slots and you can see that the actual value could - well - DOUBLE. This puts BMI itself in a very commanding position as the #2 slot holder at LHR. And do we expect that HM Government will step in and regulate this process? probably not - although BAA remember is controlled by the Spanish and we all know what the Brits think about Spaniards invading our shores!

So the have not legacy airlines - from the USA - DL, NW, CO (all Skyteam members) and US (Star Alliance) are going to be anxious to fill the holes in their networks at a premium price. DL paid $21 million for the JFK-LGW route authority in 2006. So you know DL will pay a pretty penny. CO already filed for the route. DL would like to buy at least 4 slots initially - (2 for JFK-LHR and 2 for ATL-LHR) Over time they would like to buy at least 4 more - additional slots for JFK and ATL plus a slot each at CVG and SLC. Even horse trading with its Skyteam partners AF and AZ wont solve that problem.

Well folks roll up for the show - this is going to be one of the most expensive shopping sales in history. Lets sit back and enjoy it.



Travelocity India

Tsk Tsk - Sabre heads need to take a lesson in geography. Bombay is not the name of the city - Mumbai is. Or at least be consistent with your errors.

In the new Travelocity India website www.travelocity.co.in when you do a search for a city using the rather convoluted search function (just like that awful global weather search on CNN.com) you will find there is no city called Mumbai. Although, there is a city called Bombay. However the display of hotels comes back with the correct name.

So Travelocity - which is it - Bombay city or Mumbai?

While we are on the subject of the new website - does the use of the name "Travelocity" spell the end of Zuji? Zuji which is now controlled by Sabre has never been a huge success. In fact its performance has and is rather dismal. Traffic at the other websites for travel in many Asian markets, particularly the branded supplier sites, report much better returns.

Get with the program Sabre. Wasting the value of a global brand by having a poor cousin in Asia makes no sense at all. Given the rather embarassing failure of the Japanese website Tabini - carefully hushed up mind you - its time to get the house in order. Perhaps those nice people at TPG will put some sense into the Sabre management. Or at least they can book some considerable savings from supporting a single brand.

Heck if AT&T can flip flop its brand presence in wireless AT&T Wireless --> Cingular (or is that Xingular) --> AT&T Wireless again in the space of 3 years, Travelocity can put Zuji out to pasture now.



Ryanair Ad after UK Budget announced increase levy