07 June 2008

So why is Olympic the worst airline in Europe?

I recently had the honour of Flying the airline that is universally acknowledged to be the sickest in the world.

Having flown it - I can see why.

Despite having the same equipment as other airlines, Olympic Airlines (not Airways any more), just cannot get anything right.

The usual things are forgivable. Bad food - etc. But the staff at both ends (LHR and ATH) were just barely doing their jobs. But the best was clearly reserved for In flight service. If you ever want to see how not to serve your customers this is it. These chaps make Alitalia look like a top flight carrier.

After literally ignoring the passengers, the service was appalling. And once completed with inadequate and unintelligible announcements delivered with all the aplomb of a wet dead fish, the entire cabin crew in economy retired to the galley and then closed the curtain so they would not be bothered by the passengers. Ignoring personal requests in Greek and in English and completely ignoring the call button.

Someone in Brussels should listen to Michael O'Leary for once and put this carrier out of its misery.



PS Thank god I am returning on BA.

05 June 2008

Now it's a full scale rout - Continental joins the cuts

One of the industries best performers (well at least in the USA market), Continental has decided to join the cutback guys and will slash over 3,000 jobs according to the Wall Street Journal. This will include sending out pink slips pretty soon, retiring some of their gaz guzzlers in its fleet (note CO already has one of the youngest fleets) and slashing domestic capacity 16%. Kilner and Smisek will forgo their salaries this year. (Kilner is starring in an ad campaign appearing in the WSJ promoting Houston).

Formally, of the big boys, this leaves only Southwest and Northwest to announce their cuts.

We anticipate that there will be further cutbacks coming from Frontier and Alaska who already announced retiring the RJs. Spirit air already announced its intention to ax at least 400 jobs in Florida.

Used 737-300s anyone?



International Low Cost - a True Mixed Bag

AirOne today signified it was going to be a big player in International Low Cost Air Travel by signing a big order for Airbus long range widebodies.

At the same time - Air Berlin is contemplating pulling out of all Long Haul flights. Wait a minute didn't they just buy LTU just for the Long Haul routes?

Jet2 is expanding into Long Haul with its 757s.

So this sounds like a very mixed bag at the moment. Much of the uncertainty is clearly being driven by the fuel cost but the maturing of the LCC model indicates that LCCs are now thinking beyond the box. However as my other post of today indicates, beware the siren call of the FSC Model.



US Airlines get ready to dump capacity on International Routes

The major US airlines - yup that's about all of them have applied to invoke one of those nice little short hand regulatory instruments. This one goes by the name of Dormancy Rights.

Alaska Airways, American Airlines, Continental Airlines, United Airlines, Delta Air Lines, Northwest Airlines, US Airways and United Airlines requested a wavier from the US Department of Transportation on ‘dormancy rights’, permitting them to reduce capacity or suspend operations on international routes over the next two years without losing rights. A blanket wavier means carriers would not be required to apply for individual waivers on each route they wish to cut.

For the non-government brains among us - this means - they can dump a route at will and yet hold onto it for up to 2 years without any advance warning. Neat Trick huh!

United will be among the first.



04 June 2008

More bad news at the US Trunk Carriers - United this time

United finally decided it needed to do some serious cutting.

After watching Delwest, then AMR's American cut way back and at the same time seeing its hopes for a marriage dashed at Match.com (she didn't even make it to the Alter!), United is finally being a bit sensible and cutting capacity. Consigned to the dustbin of history will be a further 6-744s and ALL of the 737s will be gone by 2009.

Also being consigned to that same garbage location is TED. The pointless excuse for a LCC look alike. In the same manner as SONG (Delta's also poor excuse) TED will expire and be replaced with UNIT (just kidding) - mainline United. Seems that this is not a good time to be investing in yellow paint.

Altogether 70+ planes will go.

It should be noted that United has no new planes on order at this time.



Virgin Blue gets punished for straying from the fold

Virgin Blue was one of the original Low Cost Carriers. However it has strayed from the model and today - it is probably beginning to regret that.

In the last 3 years it has bloated up with the usual accouterments of the Full Service model to wit:

1. Lounges
2. Assigned Seating
3. GDS Participation
4. Multiple aircraft types
5. Interlining

There are more

And to cap it all - it has an MOU with Air Asia to develop a new LCC (conveniently called an ULTRA Low Cost Carrier.)

Well today it seems that this is now coming home to bite badly. JP Morgan has issued a pretty nasty coverage analysis that has been widely picked up down under. There is talk of the airline not surviving.

With Qantas cutting back significantly on both major brands (Jetstar and QF Mainline) Virgin Blue will have no choice but to follow suit.

It may just be me - but it seems that if you have the word Blue in your name, you start as a LCC and then order Embraer E-Jets you end up in trouble. But then this could just be coincidence.



The Professor will be off for 10 Days.

Dearly beloved...

I shall be away from a computer for about 10 days returning on June 16th. This means I shall not be writing for a while.

Wish me luck - I shall be in Greece admiring truly durable technologies.



03 June 2008

Just because Gio says so doesn't make it so. Paper Tickets the Saga continues

OK so at a sweep of the electronic pen - paper tickets were consigned to history.

Politely BS.

As we are now seeing they are very much alive. Further the lack of full interline e-ticket is causing all manner of problems. For example if you are an external airline serving a single airport in one country without the interline etix of the national or dominant carrier in that market you are screwed. Specifically if you are in Germany and the long haul airline doesn't have an etix agreement with Lufthansa EVEN THOUGH THEY HAVE JOINT FARES. You are now in deep dog poop.

This is causing lots of issues for vendors of software and I am sure that even the GDSs don't have it all fixed yet.

But Don't worry Gio says its OK. And you believe him!!!!

Good luck if you are travelling any time soon on a cheapie consolidator ticket.



02 June 2008

IATA takes a swipe at "Monopoly Suppliers"

IATA at the 64th AGM in Istanbul has been having fun celebrating the end of its paper trail. However it what it describes as "Historic Declaration it makes 6 points. I wont bore you with all of them except one.

• Business partners, in particular monopoly service providers, must become as efficient as airlines are now. If not, regulators must restrain their appetite with tougher regulation.

Now most of you will think this applies to Airports. But I think this is a hidden swipe at Amadeus. Notice I did not say GDSs. Amadeus' monopoly position in several areas is becoming a cause for concern. Without a shadow of a doubt they wield market maker power in both large swaths of the planet and in significant sectors.

I interpret the airlines' 4th point as a challenge.

However this is somewhat of a toothless tiger approach. Who else are they going to turn to?

At least we still have two large scale airframe manufacturers.



Travelport follows Sabre in a "Fee-less" deal with Lufthansa

So then there was just one.

Sabre was first with a new distribution deal in fortress Lufthansa markets of DE, OS, CH and please let's not forget airportless Lichtenstein. In the new deal - LH will not charge the 4.90 (plus VAT) distribution "fee" to subscribers. Well now Travelport has cut the same deal with LH for its distribution.

This leaves just LH part owned Amadeus as having to accept the fee which comes into effect on July 1st.

But before you all start feeling sorry for Amadeus - remember that they are doing just OK. I am sure that there will be a compromise reached.

One word of caution. Take the following statement with a pinch of salt and a lot of skepticism. " Lufthansa vice president for sales and marketing Thierry Antinori added: "This will give all travel agencies using Galileo or Worldspan long-term peace of mind."

You have been warned

Ayling to BAA - Don't expand LHR

Robert Ayling who was ousted from BA in 2000 as its head, has entered the fray on the BAA breakup and expansion of LHR.

His alternative proposal is to expand either Gatwick or Stansted.

His logic is based on the supposition that the Hub and Spoke model is dead. He may have a point. However the UK needs Heathrow no matter what and the airport is at overcapacity. So unless someone comes up with an idea that will anchor a new airport in the Thames in 15 years at the same landing fees as LHR then I don't think this is going to be anything more than a pipe dream.

The LHR airport expansion with a new third runway is vital to the UK. In 15 years time (the minimum time to build it) the problems of the UK will be severe without the runway.

Just my 2 cents.

Lawrence Hunt lashes out at Analysts over Silverjet failure

Lawrence Hunt has decided that it is all the fault of the Analysts and not anything that he had done which resulted in the fall of his pet airline Silverjet. Since we have the benefit of Monday Morning Quarterbacking, here goes.

In Saturday's Daily Telegraph he is quoted as saying "..."It's not the oil price, it's confidence," said Mr Hunt. "When you have analysts who know nothing about our business writing what they write, it becomes self-fulfilling. It's the analysts that have killed us. " Further he goes on and insisted "Our business model is resilient to oil. We have been able to lift our prices by 20pc in the past few weeks."

Well I have to differ with the apparently still affable Mr Hunt. Oil AND your business model - not to mention a number of what I would call "missteps" by your Silverjet management are the root causes. As one famous person once expressed it "It's the economy stupid!!!" The analysts are not stupid and he would be surprised at how much they actually do know. Apparently more than him - with this benefit of hindsight.

If we follow his logic that the model is "resilient" to oil then surely he would have been able to increase his fares by at a minimum of 50% over the last year to cover the cost of oil. That did not happen by any measurement.

I am sorry to see the model fail. I actually flew Maxjet once (for less than the regular advance purchase coach fare on a US Network carrier). There are lessons for everyone here. I just hope for Larry's sake that when anyone looks up the word "hubris" in the dictionary his picture isn't near it.

Sadly biz class standalone model RIP

01 June 2008

Pssst Buddy wanna a get early delivery on a narrow body?

Seems like there are some prize slots opening up on the Production Lines in Toulouse and Renton.

Despite ramping up production - both aircraft manufacturers are facing some down turn. Air Tran is the latest to defer 18 737-700s. Last Week it was Jetblue with deferring A320s. There will be more.



It's BAAAAK - Cites now go after OTAs over Unpaid Taxes

This week on May 27th the city of San Antonio (its in Texas in case you are - like me - occasionally geographically challenged) won class action status for a Suit against 16 companies including the heavyweight online travel agencies such as Expedia, Orbitz, Priceline and Travelocity.

Not to be out done, on Thursday fellow Texas city Houston also filed a similar lawsuit that probably included a lot of cut and paste from San Antonio's suit.

So while the current State battle on the subject has been a set of battles that have been won and lost by both sides, this represents a new battle ground for all concerned.

Now that the tide has turned aay from tax free Internet Commerce as Cities and other tax authorities struggle with falling revenues, you can expect to see this fight run for quite some time.

Perhaps they can outsource the collection to India.