21 February 2008

The World is going crazy...

I swear that there are forces causing mass craziness to occur in the Universe.
Consider the evidence:

1. Qantas Holidays will be now part of Jetset Group
2. Virgin Blue is for sale (Again!!!)
3. Reed Trade Magazines which includes everything from Variety to Flight to Travel Weekly is for sale.

What is the world coming to....

I think I need to take a deep breath and sit this one out.

UPDATE: British Airways +m Virgin Price Fixing Lawsuit

Looks like I gave you all bad information.

So here is the good info.

The esteemed law firm of Cohen Milstein Hausfeld & Toll () represented the plaintiffs on both sides of the Atlantic. There are separate websites for the UK () and the USA ()

Each of these sites will give you what you need to register your claim and see the official documentation.

I am busy collecting all my BA segments....



20 February 2008

Unbundled Pricing Everyone is doing it! MORE INSIDE

But wait - don't order yet - there are more fees and taxes we can charge you....

Many people (HM Government in particular via the OFT) have been railing on the Low Cost Carriers about their pricing practices. In their defense I provide evidence exhibits A and B both concern British Airways.

Exhibit A. British Airways has been fined on both sides of the Atlantic for Price Fixing on Fuel Surcharges. The fact that they get charged at all rather than put into the ticket should be reason enough to demonstrate my point - but there is more.

Exhibit B. British Airways offer of discounted Business Class. (Email dated 2/20/08)

Here is the fine print:

Terms and conditions
* New Club World is available on most flights from IAD, JFK, LAX, MIA, ORD, PHX, SEA, SFO and currently rolling out across the rest of the long-haul fleet. Fares shown are each way based on round-trip 42-day advance business class purchase for outbound travel June 1 — August 31, 2008 from select US gateways to London on British Airways only. Higher fares apply for other travel dates and from other US departure gateways. All fares subject to government approval and do not include government fees and taxes of approx. $265 plus $2.50 September 11th Security Fee. Minimum stay Saturday night. Maximum stay of 11 months. Valid for new bookings only made February 12 — March 13, 2008. Subject to availability. Other significant restrictions apply. Full terms and conditions (click).

Ah but I thought I would check and see what other airlines charge on their special business class. I checked with Delta (who just also happen to be having a biz class sale). Here is Delta's fine print:

Fares do not include a $3.40 ($3.50 for tickets issued on or after January 1, 2008) Federal Excise Tax, Passenger Facility Charge(s) of up to $4.50 for each flight segment, or the September 11th Security Fee of up to $2.50 for each flight segment. A flight segment is defined as a takeoff and a landing. International fares do not include U.S. International Air Transportation Tax of up to $30.20 ($30.80 for tickets issued on or after January 1, 2008) and U.S. and foreign user, inspection, security or other similarly based charges, fees or taxes of up to $280, depending on itinerary. These taxes and fees are the responsibility of the passenger and must be paid at the time the ticket is purchased.

So - its the same for everyone. It makes the LCCs look not so bad.

So anyone who complains about the LCCs in future - please look at the whole trend.

I thank you for reading


It's Official G-YMMM is headed for the Knackers Yard

As we predicted on January 18th - The B737-200ER that had a lucky escape at LHR - is going to be headed for the scrap heap.

BA and the CAA have announced that the aircraft is beyond economic repair.

Interestingly - and I hope no one is superstitious... this aircraft is only the second 777 to be written off. The first one was a GE powered example that when returned to the Lessors by (old) Varig was so clapped out that they decided to declare it a write off and call for Steptoe. G-YMMM also spent a little time with (old) Varig. Let's hope this is not a trend



IF you are so inclined... Send your comments to the EC Parliament on the new Code

The EC Code of Conduct has been prepared by Jacques Barrot and his team. Despite a lot of opposition to the plan and new code from the broad spectrum of the industry, the new code seems to favor European based GDS companies.

Since there is only one of these animals - it would seem to focus on the benefit to them.

Regular readers know that I am against half hearted regulation. Either manage or don't. As Ted Turner used to have on his desk a sign that said "Either lead, follow or get out of my way", this is a good place to pay attention to that advice.

If you would like to add your voice to this poorly defined legislation - then I suggest going here:

While I have a lot of respect for M Barrot - I believe that here he has been misled. At least they could have joined the rest of the world and called the class GDS... rather than CRS which still persists in the legislative text.

19 February 2008

GDS are the most cost effective distribution Channel?

This is a thread from Travelmole.

Sorry - I am having a hard time with this idea. They are still the largest individual channel for all travel but I just cannot get my head into the cost component.

So I am going to challenge Brett Henry and see if he responds.

Stay tuned



Meet The New Profit Champ - Air Arabia

Move over Ryanair, Easyjet, Air Asia and Gol. Say hello to the new king.

OK so my mathematical skills are not always the best but I think I can use a spreadsheet. (Should anyone be able to prove me wrong I will immediately retract this story!)

It looks like we have a new Champion in the airline yield stakes. Its one that most people in Europe and the US - probably Asia have never even heard of let alone flown on.

Its Air Arabia.

For its 2007 results go here: http://www.airarabia.com/Air%20Arabia%20Net%20Profit%20Soars%20to%20AED%20376%20million.html

Frankly the numbers really shocked me. I was expecting a good result but this was very good. So net yield is 29.3% vs 13.5% last year. That is pretty much at the highest I have seen in any carrier. Higher even than Ryanair (2006 FR's numbers put them at the top of the Airline Business profitability league with 21.1% yield). With fares at about the right level for a Low Cost Carrier ($130 each way) they are doing a lot right.

Congrats to Adel Ali and his team.



British Airways and Virgin pay the price of Price Fixing

Lest anyone think that price fixing and signalling in the airlines is a closed shop affair - BA and VS will both have to fork out $200,000,000 to ticket holders of Long Haul seats from Aug. 11, 2004, through March 23, 2006. And yes folks I sat on quite a few of those seats. During that time BA flew a total of 50 million passengers short and long haul but the fuel surcharge only affects "long haul" seats whose passengers will get up to 10 pounds. Virgin flew about 7.5 million passengers during that time of which 100% was long haul. Virgin passengers get the same amount and of the fund BA pays 2/3rds the balance is Virgin.

This makes an interesting formula as it implies that Virgin is now 1/2 the size of BA long haul.

This is a sorry story as it resulted in casualties on all sides. There are no heroes in this story except perhaps the honesty of Virgin to come clean about the affair and spill the beans. I would be there are either other airlines quaking in their boots about this or others thanking their lucky stars they didn't get caught.

Strangely enough the alliances are one of the best places for refuge. You have to be SO careful not to talk about collusion that in any major discussion on the topic they have a lawyer present!

So anyway - I will be filling out my forms and claiming back my money.

When it comes up this is supposed to be the website to file:


It is showing under construction or a 400 error at the moment.


18 February 2008

21 787s now in assembly in Everett... when will we see the first one fly?

They are still burning the midnight oil in Everett.

Formally Aircraft number 2 is in final assembly. See here for an image released Feb 15th. http://boeingmedia.com/imageDetail.cfm?id=15106&clr=release. Altogether there are 4 ships on the line.

Contrast this with the image released earlier showing the first aircraft Ship #1 and the 2 static test aircraft. LN2 now joins them.
Since this one was widely circulated earlier - I am going to risk the wrath of Boeing and reprint it here.

Altogether there are 21 aircraft (mostly in pieces out of sight of both these photos) now in Everett. Four are now officially on the line itself. Still it has been a mild winter so far so not much chance of any weather related problems with the aircraft.

The prognosis is getting better but things are still not looking rosy for the schedule. Despite several statements from Carson and Co, it really doesn't look good for 109 Aircraft delivered by end of 2009. The biggest problem will be full certification. To all intents and purposes the LN1 (First aircraft) is not really a representative sample of the aircraft. While the design in now "100%" complete there is a lot of work to be done to bring the current line delivered structures as well as parts in the supply chain already that will have to be re"travelled". Certification will be extremely tight. The biggest obstacle being the Cold Soak test. There is now just a short window every year when such a test can be accommodated. The consensus from what can see is that first flight will now slip into Q4. Delivery for May 09 to ANA looks reasonable if you are an optimist.

Boeing... do it right. Take the time. And best of luck to you

17 February 2008

Stop the Madness - I think I want to get off... thoughts on Merger Mania

The increasingly shrill noise of Airline Mergers is one that is not new to readers of this blog.

But lets consider the realities of the situation. Lets say that DL and NW announce their intended nuptials this week. Getting the proposition ready to take to the alter is going to take at least another 3 months. If during that time another airline pair who have been secretly dating and now decide to announce that they too intend to get hitched, then the US Congress will demand hearings - most likely in both houses. So lets add another month for that. By now it will be summer and there will be lots of focus on electioneering. There are a heck of a lot of seats up for grabs not just the presidency. It is highly likely that there will be an effective standstill. No one is going to be keen to approve this. So I would put the chances of a regulatory decision before the election as about 50:50. If it is more than one pair - sorry but Japanese style weddings in industries do not go down well, so expect a full round of investigations pushing the decision even further out. But as we know there are others who would want to put in their oar on regulatory approval. Consider for example any protest that may be filed in say Europe. As any one of these deals will have an impact on the transatlantic runs - dominance could be the order of the day. An AF-KL-DL-NW joint venture could be a pretty juicy prospect for Monsieur Barrot to look at.

Oh and just one thought. One of the earliest casualties in a DL+NW merger would be the CVG hub. CVG is technically in Kentucky but it serves Ohio's biggest city. That means for those of us young enough to remember is a crucial state in a closely fought general election. In the case of a CO-UA merger Columbus would be an early victim. Also in Ohio.

Oh and just another thought. Chairman of the Aviation oversight committee in the US Congress is one Mr Jim Oberstar (17th Term congressman) who happens to hail from Minnesota. If the NW deal goes through - Delta isn't leaving Atlanta so I guess its Sayonara Egan (aka MSP). That is not going to happen without a fight.

The list could go on....

Point being don't expect this to happen fast. It faces huge regulatory hurdles and legal challenges. This is highly likely to be a hot cup of Sake that will be passed to the New Administration of McCabee or Clintama.

But there again it does provide lots of cannon fodder for pundits.