25 December 2008

2008 in Review Part 2

Awards, Brickbats, Comments etc

2008 was yet another year of turmoil in the Aviation, Travel and Tourism space.

We kissed goodbye to the dedicated Biz Class airline concept with Silverjet, Eos and Maxjet Sadly we also saw Aloha disappear the result of bad management and a predatory competitor in the form of Jonathan Ornstein. LCCs were also not immune from failure – Zoom, Skybus, ATA and XL Airways collapsed. The landscape was littered with airline corpses. The price of oil and its dependent fuel prices soared to such a high level that some were predicting $200/ppl. It stopped at just under $150 but the impact stayed with us with several airlines STILL charging fuel surcharges. The GDS world got a little uglier with the unbundled model taking hold. ITA Software still hasn’t delivered Polaris (its new PSS), Altea some will say is still not delivered either but what ever the state – it is not getting installed at any decent rate except in the minds of some PR Hacks. Lufthansa’s PFP set the cat amongst the pigeons. There are many airlines waiting to see if it works. So far it has survived court challenges. The real challenge comes when Amadeus stops picking up the tab at the end of January. Travel has fallen deeper and faster than anyone could predict. Its reduction is impacted everyone. No one is immune. The only bright spot with growth is LATAM with some continued stimulus from the GCC upstarts. Tourism’s decline was faster than anyone predicted. The impact of the global recession coupled with the terrorism acts in India and the unrest of Thailand has had a huge dampening impact. The engine of growth that was China sputtered.

Airlines – Who gets the Golden Arrow? Who gets the Broken Wing Award?

The issues affecting airlines are now well understood. Perhaps not so well contemplated is the impact on the airlines brand of the various changes and fees. Airline loyalty has gone into the toilet. This will be a story in a year’s time where the airlines will be scratching their heads asking why are people not responding to the usual stimulus. There will be tears.

So nominees for the Golden Arrow were – Delta, Ryanair, Lufthansa, Virgin America and Turkish Airways. I have selected Lufthansa. Their innovation is still not legendary.. their product however is the archetype of the FNC. What sets them apart is their focus on winning the bigger battle for dominance. LH will be a contender for World’s largest airline. It will have a seat at the big boys table. With their stakes in Swiss, Austrian, German Wings, BMI and Brussels Airlines together with LH Italia and/or AZ the spread of yellow across Europe strikes a huge footprint. The chaps at Star Alliance better be on their best behavior or LH will be exiting the Alliance in favor of their own operated entities. The footprint in the USA with JetBlue is not to be sneezed at. Several carriers have made a pilgrimage to Frankfurt to see if they can have access to the LH pot of gold and magic.

So who gets the Broken Wing Award? Our nominees are United Airlines (for lots of things) , Skybus (for not listening), SilverJet (for sheer hubris), Alitalia (for opera) British Airways (for giant cockups). Our choice just has to be Alitalia. It was a close thing. Until the middle of the month they were a shoe in… then they managed to complete the re-org, then at the end of December they were back to their old tricks with 3 days of strikes. Gotta love those guys! (Thanks to BA for the view of their broken 777).

I have decided not to award Airport of the year (although BAA/Ferrovial definitely deserves the Old Tarmac award). Nor is there a GDS of the year. I am saving that for 2009.

So what was the seminal event or happening of the year? The Professor’s Flying Fickle Finger Award goes to the Recession. It will have the biggest impact on all of us – more than any other influence.

So stay tuned for my prognostications for 2009 which will be coming up shortly


No comments: