30 December 2009

The Professor's 2010 Crystal Ball Gazing

As the old decade draws to a close now I have to dust off the old cloak and the all rusty ball and decide what is going to happen next year.

General Travel Trends: Modest growth of both traffic and yields. Leisure will move ahead even further. This has significant impact on airline and hotel product offerings. One surprising trend will be that Intermediaries will gain market share vs Direct which will benefit GDSs in the short term. Increased use of corp video and personal video conferencing tools will be finally proved to reduce airline traffic. I predict someone will publish a study on this effect. Google will continue to make more money out of Travel category than any other player. Green wont be a big deal in 2010 as the recriminations from Copenhagen (aka Hopelesshagen) continue. Some countries will now apply unilateral green policies. Fuel will rise. Inflation will start to bite. Travel Industry employment will remain low. Airline deliveries will continue to see deferments.

Winners and Losers in airlines. surprisingly Southwest will struggle with its business model. It has reached the end of the current low cost model and it will morph into a hybrid airline. One US major will unveil a lower cost "simplified" domestic product and will be instantly matched by the others which will stimulate traffic probably in first quarter. UA and CO will move even closer together. US will start to look around feeling a little out in the cold. Look for perhaps a relationship with part LH owned jetBlue. DL will further consolidate and shrink a little further but will complete its partnership with JAL after the venerable carrier goes through its bankruptcy re-org. FR will have a moderated growth year - U2 will see a major challenge on some of its turf by a (former) legacy carrier. Look for one LCC based merger to take place in Europe. Consolidation will continue in India with another carrier losing its corporate identity. China will recover. Virgin Blue will continue to struggle. All LATAM carriers will continue to grow - look for at least one carrier their to switch allegiance in 2010. Trend of the year will be Merchandising although some airlines will get this wrong in spectacular fashion.

In Hotels. Pegasus will continue to struggle Synxis will continue to grow. PCLN will further solidify its growth. Look for a major merger in hotel distribution coming from an Asian base. Expedia will try to clean up its act in hotels and improve yield which will upset some of the major chains at least one of whom will have a major spat with the Bellevue travel giant. Look for Expedia to become the world's largest agency in 2010-2011. Orbitz will improve but corporate parent Travelport will offload a dismembered GTA.

In Distribution the big news will be the Q2/3 IPOs which will go out with modest success. The Money Venture Men will be happy. The poor debt ridden rumps left behind will continue to be unhappy. The allure of the cash flow will continue to seduce the uncanny investors all of whom will regret their buy in after about 6 months. The Term Full Content will have new meaning. Most major carriers will have adopted Opt-in content deals which will compromise the legacy GDS model. A lot of people will focus on replumbing XML based infrastructure. Merchandising at the point of sale will be a major trend. The Term OpenGDS will come to have more meaning. Look for major players to build bilateral relationships as opposed to traditional multilateral based links. Financial fulfillment will emerge as a major trend with EMD becoming a household word. Look for a degree of consolidation among corporate agencies. There will also be continued failings among smaller/mid size players as the shakeout grows. Search will continue to drive everyone crazy but teams will start to look to address the high cost of search. Twitter's light will grow dim as more commercialization and ghost/fraudulent usage grows.

Cool Stuff? The new iTablet (and clones) will start with an instant following. It will be the product of the year. Someone will finally do a mashup of all the "There's an App for that" different applications to create a viable first generation Personal Travel Assistant. Look for "Virtual Extension Reality". We have already had time shifting now we will have reality shifting with "Augmented Reality" being but a version 1.0 of this stuff.

So what will the end of the year look like... better than this one.

Happy New Decade from the Professor.

With special thanks to CBS, Demi, and the old guy for the image use.

29 December 2009

Is Merchandising Anarchy?

According to Chris Elliott it just might be if you read his headline catching post on MSNBC's blog.

So I think this should be a wake up call to everyone associated with merchandising to ensure that some of the advise is taken to heart AND accommodated.

Specifically if I can synthesize it down - I would say that everyone has to be crystal clear in the process of what is included and what is not.

The EC is likely to develop a set of rules that differentiate FEES and TAXES as I noted on an earlier post.

So before anyone starts going off the deep end and creating merchandising opportunities that are convoluted, please remember to think about the customer.


Second Decade of the Millenium Review

Dateline: Tuesday December 31st 2019. No one would have believed you if one could have predicted 20 years ago what we have seen this past decade when we were pre-occupied with Y2K and the millennium?

Sir Tony Blair was rehabilitated and elected the Head of the United Nations. He was a surprise compromise choice after the two term Al Gore whose tenure was historic in a global climate agreement in 2017, the first Caucasian Secretary General since the disgraced Kurt Waldheim. After 16 rounds of deadlock – Blair was elected in 2019.

The final round of GATT - known as the Havana Round after the Havana conference in 2017 – resulted in true harmonization and real teeth in worldwide global commerce. The most significant accomplishment was achieved last year 2019 with the Worldwide Agreement on Tax. Known commonly as WAX.

2020 next year will be a leap year which means also an Olympic Year – to be held in Mumbai. After much controversy over the selection of Mumbai over hotly favoured Cape Town

The Microsoft company was split into 4 separate companies early in the decade marking the then biggest company breakup in US corporate history. Of the So Called Teen Bills (after the late Philanthropist and Microsoft Founder Bill Gates) only three survive. The Operating System business became free ware in 2015 and is now mostly a standards and maintenance organization. Office Solutions and Corp Systems were re-merged into Corp Services Corp. The Universal Arts Company (after its merger with Electronic Arts and Universal-NBC) became the largest Entertainment Content Company in the world. Google Electric itself a merger of Google and the former GE has become the leading infrastructure company after the forced divestiture of their media interests.

Airframers: The Boeing Power Series engined 797 Narrow Body Family finally appeared and has been met with universal acclaim as the last in the conventional start of the art in aircraft design. The corresponding Airbus Bombardier A500 Series narrow body aircraft which first flew in 2018 is still hotly favoured to be the aircraft of the next decade with its controversial design and advanced technologies particularly in the use of hydrogen fuels. Airliners are now threatened as a species with the adoption of CommLink (see below). The heavy burden of environmental and security charges as well as the continued milking of the travel business made it the cigarette revenue source of its time. The last of the fewer than 50 Airbus A380s built will be retired as gas guzzlers sometime in the next 2 years despite having such few hours on their airframes. With most having been converted to freighters after the oil crisis in 2012. The two year delay in redesigning the 787 after the delamination incidents early in the mid sized Boeing model was matched by a corresponding delay in A350 which had a rather serious overweight problem. Both Boeing And Airbus Bombardier now have essentially just two product lines – the narrow body and the wide body. The last 777 rolled off the line in 2015.

For Airlines – the two Global Airline Alliances remain the focus of the regulators. Skyteam and Star now comprise more than 60% of the world’s total passengers. The Term GAA becomes a common term for all that is wrong in customer service. With the merger of Singapore Airline, Emirates and Virgin Atlantic into the Virgin Airline Group under one common brand – they are now the largest single airline brand worldwide. Ryanair finally softened its stance after Michael O’Leary retired his chairmanship in 2018 he had left the day to day running of the European arm in 2014. Its long haul operation was not a success and it was abandoned in 2016. The long haul part was finally merged into a revived Aer Lingus. Southwest and Easyjet merged their infrastructure businesses but retained the individual brands. Air Asia’s spree of buying second tier airlines worldwide seems to continue unabated but is seen as a bottom feeding exercise in a declining market.

In hospitality after a hotly contested merger battle for the hand of Intercontinental Hotel Group – they merged with Hilton. In Quick Succession Marriott acquired Hyatt and then at the low end the Choice Group. The JW Marriott Group is still vying with Hilton. The third member of the Troika is Carlson Accor Group.

In Distribution Jim Davidson finally retired after 8 years of running mega corp AmaLogix. John Martin an industry unknown from Banking is the youngest head of an Open Distribution Company (ODC which moniker replaced the archaic term GDS in the early part of the decade). He heads the multi-faceted Sabreport group.

With the huge adoption of CommLink – the virtual meeting business – and the high cost of fuel, total travel finally peaked in 2017 and has fallen 2 % in the last 2 years of the decade. The Travant Group which emerged from the spin out of Google’s once secret Troogle project and the merger with the hotel switch company and the remnants of the non-content components of the largest Travel Company in the world Expedia. The largest second largest travel company famous for its kiosks and tour operating business is now the Thomas Cook company (formed from a merger of Thomas Cook, American Express Travel and JTB).

In Travel Tools – the OTP – Open Travel Platform and its subsequent offspring UTP – Universal Travel Platform standard (itself built on the OML standard) was widely adopted as the master standard by which all players in the value chain would communicate. With the adoption of the Havana Round and UN mandated via IATA on WAX (see above) simplifying global government revenue harmonization processes – financial fulfillment has been vastly simplified. The abolition of the financial clearing houses of BSP and ARC (remember them!) further reduced the cost and simplified the way in which consumers purchased travel. The sunset of the use of non-electronic money in 2018 has also further simplified process. Fraud however remains a constant problem particularly after the global bank clearing brownout that occurred in 2013.

And that’s the way it is on December 31st 2019. Have a good new decade. This will be Professor Sabena’s final posting – he has pleasure in announcing his retirement this day.

Enjoy and Cheers

With thanks and acknowledgement to GreenAviation and Design Q for the images.

28 December 2009

Its Official!

The Professor is NOT on the no fly list (well at least today) and as far as he can tell is not on any watch list.

I am a newly certified Global Entry participant. So for the next few years I can use those new fangled machines. this means I am held to a higher standard than regular travellers.

Let's see how good this gets

However for the rest of you who want to join - pay your dues (its not cheap) and click here: (Hint they don't make it easy!!!)

What The Secretary Really Meant

I have taken the liberty of putting in thought bubbles into the US Dept of Homeland Secretary's Official Statement:

Statement by Department of Homeland Security Secretary Janet Napolitano

Release Date: December 26, 2009
For Immediate Release
Office of the Press Secretary
Contact: 202-282-8010

"I am grateful to the passengers and crew aboard Northwest Flight 253 who reacted quickly and heroically to an incident that could have had tragic results. PHEW WE DODGED THAT BULLET THANK GOD THE PASSENGERS WERE ON THE PLANE - LORD HELP US IF THEY HADN'T BEEN THERE The Department of Homeland Security immediately put additional screening measures WE THINK THEY ARE SECURITY MEASURES BUT JUDGING FROM OUR HISTORICAL PERFORMANCE ANYTHING GOES AT DHS into place—for all domestic and international flights—to ensure the continued safety of the traveling public I AM NOT RESPONSIBLE WHEN PLANES FALL OUT OF THE SKY SO PEOPLE'S HOUSES ARE EXEMPT FROM THESE NEW MEASURES. We are also working AND THIS IS A FIRST FOLKS closely with federal, state and local law enforcement on additional security measures, as well as our international partners AL QUAEDA HAS RECENTLY BEEN AWARDED GOLD STATUS ON OUR LIST OF PARTNERS on enhanced security at SOME airports and on flights OR AT LEAST THE ONES WE THINK WE KNOW ABOUT BUT WE DO HAVE A TENDENCY TO LOSE A FEW LIKE THAT NORTHWEST FLIGHT THAT OVERFLEW MSP.

The American people should continue their planned holiday travel and, as always, be observant and aware of their surroundings and report any suspicious behavior or activity to law enforcement officials. IF YOU ARE NOT AN AMERICAN THEN TOUGH COOKIES I DON'T GIVE A DAMN AND I HAVE NO RESPONSIBILITY FOR YOU WHATSOEVER.

Passengers flying from international locations to U.S. destinations may notice additional security measures in place BUT ONLY IF YOU HAVE BEEN SLEEP WALKING OR IN A COMA FOR THE PAST 10 YEARS WILL THIS ACTUALLY MATTER. These measures are designed to be unpredictable YUP LIKE EVERYTHING ELSE HERE AT THE DHS - EVERYDAY IS SOMETHING NEW. HECK I CANT EVEN FIND MY OFFICE ON SOME DAYS, so passengers should not expect to see the same thing everywhere INCONSISTENCY IS A HALLMARK OF MY ADMINISTRATION I DONT INTEND LETTING ANYONE HAVE A PREDICTABLE TRIP PERIOD. Due to the busy holiday travel season, both domestic and international travelers should allot extra time for check-in. OH YES AND THAT INCLUDES YOU MOTHER"


... After The Horse Has Bolten

So This week's Stupid Airline Tricks award goes to the DHS and the TSA.

Their knee jerk response includes such wonderful things as no inflight maps and no announcements of landmarks and anything that could be used to give the passengers on the aircraft some reference point of where they might be.

A possible source of the official instructions can be found here. It is allegedly signed by Gale Rossides.

Er excuse me - i think on my itinerary it tells me when I am due to arrive. Also last time I checked we are surrounded by time pieces. But I didn't see anything in these instructions about giving up watches or banning watches from flights. I can just see the goons at various airports around the world removing Googlemaps, Google Earth, Atlases and maps from people's computers and carryons. Does the word cras come to mind?

So thinking like a conspiracy theorist - I think this is a sinister plot by the AFA to enforce passenger behavior on airliners. But I digress. I further think its possibly an attempt to not point out things that are obvious.

These rules (which carry an expiration date of Dec 30th), don't seem to offer much in the way of additional security. About the only thing it is going to do is to limit the spread of H1N1 or other communicable diseases as most US airlines don't bother to have clean blankets on board these days.

The TSA needs to get back into the game of thinking what is wrong with their elaborate schemes. They have developed a solution which has fundamental flaws in it. That needs to be rethought.

Oh and one more thing. At Schiphol they have the Air Blown Scanners are designed to detect PETN. However they are set up so that there is only one per gate. Thus if you leave from the H (low cost terminal) gates there are 3 scanners and the PETN based scanner is only on one. Not sure that is really a good idea.

If the US was truly interested in solving the issue of bringing chemicals onto the plane then it would would have long ago mandated a system of either 100% manual search or 100% scanner inspection.

But don't get me started on the multiple layers of the so called security that this chap passed through. This was exactly the same as the situation on 9/11. There was the ability to link the terrorists to at least one bench warrant for them. This shows that the central plank of the security namely not just identifying the real or potential bad guys but not letting them onto the plane is still a failure.

This breakdown means that this weeks Professor's Stupid Airline Tricks Award goes to the ladies Administrator Rossides (TSA acting) and Secretary Napolitano (DHS Secretary).

Now don't just sit there - do something!


You Are Only As Safe As......

In what must be a stunning admission of the obvious US Dept of Homeland Security Secretary Janet Napolitano said “No one is happy or satisfied with that. An extensive review is under way.”

If you go to the TSA website and read the complete guff that is there (I particularly like their Myth Busters section - it is rather inadequate I would say).

Of course after more than 8 years since 9/11 and countless pointers and incidents that have occurred before and since - we still do not have a secure system.

I recently travelled to 5 airports in South America. Liquids BTW are allowed through domestic flights and still between some countries. Over the past year I must have been through an airport over two hundred times or probably more. I have watched innumerable security devices that don't work and staff who either don't have a clue or are remarkably disinterested. The TSA is probably no worse but decidedly not best in class in this respect. There are many others who are better at doing this kind of work.

One statistic I would like to see is the amount of absenteeism for whatever reason for TSA employees. Saying (as the website does) you have improved considerably from prior years only shows how bad it was before. We must accept that the government is not going to be good at doing this any better than anyone else. So we are somewhat condemned to a mediocre system. We however as system users must fight for a better level of quality. It is not a temporary situation - we have to fight for it on every trip at every stage.

The current US Government solution has been based on a layered approach to the issue of security. This approach is still probably the best we have. However you have to ask yourself is it adequate? More importantly are all the elements for a formal layered system in place? In my opinion it is clearly neither. I liken the approach of the management (by the Dept Of Homeland Security) of this layered approach to that of the US financial ratings agencies. They only realize there is a problem when someone else points it out to them, even though to the common man it is blatantly obvious.

So I will (probably misquote in words but the context is clear) quote Rafi Ron who was the head of Tel Aviv Airport security - he now runs his own security firm in the DC area. He stated on a panel I ran in 2002 - "You are only as safe as your fellow passengers are alert and will let you be safe".

Judging by the events of the past few days on NW253 this was the case.

So ask yourself the one question. What would you have done? Clearly a lot of other people on the NW flight just sat in their seats petrified. Only a few passengers decided to take action. If you can believe the news reports, the crew were not the people to take the terrorist to the secure seat. It was the passenger who jumped him. That shows that we still have a lot of issues as to how the system could work.

Next time you listen to that pre-flight briefing announcement consider that one phrase actually rings very hollow. It goes something like this "... Remember the Flight Attendants are here for your safety".

Safe travels everyone.


25 December 2009

Christmas Giving

As its Christmas day and the dog woke me up - I have decided that this Christmas I will give to the usual round of charities that my family supports. I thought I would share with you what they are and suggest that you do the same.

Our interest has always been in supporting 4 basic principles:

Free Speech
Helping those to help themselves

To this end here are the ones I recommend you join me in supporting:

1. NPR - National Public Radio in the USA.

2. TerraPass (headed by my former colleague Erik Blackford). This is a paid form of guilt but I recommend you do it anyway.

3. Animals. I am a dog person. So there are three that I support. All of them are in the UK. These were favorites of my Mother so I do it in her name. The Dog Trust, the Guide Dogs for the Blind and German Shepherd Rescue. I particularly like this one because the initials are GSD (not GDS get it!!!)

4. Finally my favorite for bang for the buck is Kiva.org. So far I have seen a 100% return on my donations. So please give generously and get involved in your giving.

I have made it easy for you so all you have to do is to click on the links and you can gift in less than 30 secs. How easy is that!!!!

Cheers and Merry Crimble

24 December 2009

Whose On The Favorite List At American?

I just went to see "Up In The Air" its a great movie. While I am not quite of the same league as George, I can empathize with a lot of this. I recognize many people I have met in the story, and apart from George may even resemble one or two of them. However it is rather a long advert for American! Even Sam Elliott's appearance is a little over the top. But its a great fun watch.

Recently I have written a fair amount about American Airlines and its new direct distribution approach.

So now its probably appropriate for all of us to look at the list of who is "approved" so far. While I have had the list for nearly two months - I think now is a good time to share.

So for those of you who are really keen to see this you can find the link here:




The Oughts Trend of The Decade

So as we enter the holiday season - I have been reflecting on what would be the trend of the decade.

Wow what a decade it has been. Consider all the good and not so good things that have occurred over the past 10 years. Remember that this time ten years ago people were preparing for the IT meltdown of all time - Y2K. Remember that?

So what has been the Trend of the Decade. Some might argue that Social Networking is the trend. I would agree it has been tremendous and the boom occurring late in the decade coming to the fore largely in the last quarter has radically changed the collective consciousness. Nope that is not quite my nominee.

How about mobile. As the decade opened - I was heavily involved in mobile apps with the promise of geo-location. Nope Mobile didn't quite make it as the killer app for the oughts. However the general adoption of advanced devices is astounding. Now if ONLY THE CARRIERS would let us have reasonable annual contracts...

How about Google? This has certainly been their decade. Look how they have managed to replace Microsoft as the guardian of the IT flame. In doing so they have avoided the hatred of MS. However they now exert more power and control, and they know more about our innermost thoughts than anyone ever has. Their power is frightening. If you are not in real fear by now of the allegedly benign giant - then you should be. But no not these guys.

So Give UP???

The answer in my humble opinion is Digital Junk - The Trend of the Decade is eTrash. The mindless pushing of digital bits of data into the ether. This is truly the decade when the ability of our puny brains to comprehend the amount of data out there finally ran out.


23 December 2009

The Professor's Christmas Greetings

Christmas is coming,
The GDSs are getting fat,
Please put some XML
In the old legacy hat.
If you haven't got any XML,
HTML will do,
If you haven't got HTML,
Then let's hope God'll bless you.

Christmas is coming,
The markets are going free,
Spruce up your marketing for everyone to see.
If you you haven't got merchandising,
Some selling will do;
If you haven't got any clue,
I'm really sorry 4 U!

Christmas is coming,
The season of good cheer,
Let's all sing about our open new year!
If you are happy to sing,
Then a little practice will do;
If you haven't got a jolly song,
Then May God... bless... you...!

The Professor, his Elves and fellow Professors around the world would like to wish you wherever you are peace hope and understanding. May this spirit of hope and good cheer last all through the year. Please keep your emails, comments (and yes even Tweets) coming. I promise to do my best to keep providing you with some insight and information. Hopefully we will all be a little wiser and richer in mind by this time next year. So thank you for reading and may you and your families have a great one.

Cheers, and may your God go with you

The REAL 2009 Travel Awards Show

Don't listen to cheap imitations - for the real scoop listen to Professors, Braniff, Sabena and Mrs O'Leary dish the real dirt on 2009


Enjoy our annual roast


LH and Amadeus FINALLY Come To Terms

So the deed is done. Effective March 1st 2010 LH and Amadeus have a full content 3 year deal.

So behind all the backslapping and other wonderful words that will be spoken - there is a clear set of expectations of what can only be described as "huh?"

Most people reading the Press Releases will just gloss over a few terms. But there is enough here to drive a truck through. LH has clearly won some major concessions in both price and conditions.

Gentlemen (airlines and ladies) - start your engines - time to re-examine your GDS contracts!


Grupo Marsans Should Probably Stick To Buses

Another Grupo Marsans Airline bites the dust. This time its Air Comet its Spanish based company that was grounded by Spanish Regulators after a court gave permission for a German bank to seize the fleet for non-payment of loans.

This marks the second time a Grupo Marsans airline has gone out of business or been taken over by the Government as was the case with Aerolineas Argentinas.

According to Wikipedia: Grupo Marsans operates as a tour operator in Spain. It has operations in Spain, France, Italy, Brazil, Mexico, Venezuela, and Argentina, as well as representations in Latin America. The company was founded in 1910 and is based in Madrid, Spain. Grupo Marsans is a subsidiary of Autobuses Urbanos del Sur, SA.

So perhaps in future they should stick to buses.

This is also bad news for Airbus as Grupo Marsans had many Airbus products on order including 10 A350s and 4 A380s. Earlier this year some of the white tails at Toulouse were revealed to be A330s originally destined for Air Comet.


22 December 2009

Not A Great Day For AA/OneWorld

All humour aside, OneWorld received two bits of bad news yesterday.

Firstly from Asia came the news that the Japanese Government is unlikely to provide a full bailout for JAL. JAL's stock in recent days has risen on reports that Delta has won the dance card of the old lady JAL.

Then today the US Dept. Of Justice nixed the BAAABI (BA, AA, Iberia) Alliance. However this is last one may not be that bad. The DoJ also tried to nix the CO/Star Alliance partnership. The DoT is the ruling authority in the case. They could well do the same and rule in American's favour.

Finally our hope is that the injuries sustained in the accident to AA 331 are minimal - so far there are reports of injuries but no fatalities. The aircraft (Boeing 737-800) whose route was DCA-MIA-KIN, broke in three pieces after a landing overrun tonight in what was pretty foul weather. So far 40 injuries have been reported and 3 possibly serious. The aircraft has been reported to be one of the older 738s in AA's fleet.


787 #2 flies


3 Hour Rule: Is It Enough & Will It Work?

With much heralding the US DoT has implemented effective April 2010 a new rule that limits tarmac delays of more than 3 hours. While itself a victory for Kate Hanni and her FlyersRights group, it doesn't do a lot of things.

Firstly it is not a law. Let's hope the Boxer/Snowe Bill becomes law this session. Secondly international is not subject to this. Effectively letting JFK and the Transatlantic carriers off the hook. Thirdly this is far from a comprehensive Passenger Bill of Rights that many (me included) have been seeking. The Boxer/Snowe bill from the fine Senators from California and Maine must pass. Event then it is not as comprehensive as the EU legislation.

Being a frequent flyer and at the same time working within the industry, I have perhaps a more heightened awareness to the issues of operational nature that affect flight operations. The US Air Transportation System is a finely tuned animal moving 3/4 of a billion people annually on its scheduled apparatus. Europe's traffic (as represented by the ECAC countries) is now approaching a similar size and has a far more complex infrastructure due to the national jurisdictions that it covers. However the EC has been able to pass and implement a far more comprehensive set of rules than the USA. For which successive Administrations must accept responsibility.

For a comprehensive set of rules and how to implement them as an example - I suggest dear readers you go and visit the Relevant European Community Transport Website - Passenger Rights

As to whether it will work, I am somewhat skeptical due to the nature of some airports and the ways in which some airlines have the peaks and hub banks. Like all services - there needs to be a better way to manage these peaks and the onus needs to go back to the airports to implement this. Today they have a vehicle for collecting a passenger head tax - PFCs some of which are used to line City Coffers rather than directly related to services provided. Each airport has the right to charge a peak slot time price. What the DoT has failed to do here is to make the policy have greater teeth by only putting the onus on the airlines. The airports too must be part of this equation as indeed must the DoT itself through its management of the FAA.

For regular readers of this column - I am still angry (make that livid) at Secretary LaHood's recent screw up over the BA India Fare debacle. Perhaps he is trying to deflect attention away from that by announcing this "Rule" now.

In the long run there is no substitute for a comprehensive set of rights and rules that can be justly applied. There are no arguments that can be levied by any of the supply side players (Airports, Airlines, FAA etc) as the EU's code has been implemented and has shown a materially improved level of service to the travelling public.

So to answer my own question. The answer is No and No. But it is a move in the right direction. Let's hope it is not the only move.


With thanks to the Brisbane Times for the most appropriate picture.

767: I'm Not Dead Yet!

While the 787 has been stealing a lot of the limelight (and not all of it complementary) the 767 the plane that the Dreamliner was supposed to replace had garnered only 2 orders and 5 cancellations for a net of -3 orders on the year. But today ANA (the launch customer for the 787) redressed the insult and put the 767 back into positive territory. (Unlike the other Seattle Team - the Seahawks who had a disgraceful showing yesterday).

With the certification process now underway for the 787 and a target of nearly 9 months to obtain approval - the Chicago based plane maker needs to keep things positive. The 787 after one of the most aggressive sales programs in history and a very healthy order book actually experienced a net loss of 70 orders this year. Airbus correspondingly gained 22 orders for the year for its A350 family.

I suspect we may see a resurgence in orders for the 767 as a stopgap to replace existing short falls of 787. But the likely continued winner will be the A330. The Airbus wide twins (OK and the smattering of 240s) have a backlog of nearly 900 aircraft.

And with an acknowledgement to Mr Idle and Company for the image and quote.


21 December 2009

Stansted Sale Halted On Technicality

In March the UK Competition Authority ruled that the UK major airports authority should divest itself of two of its three London Area airports.

As a result Gatwick has been sold and Stansted has become the battle ground for BAA vs the authorities.

The technicality is that one of the members of the investigation team was also an advisor to a group of pension funds who owned a chunk of Manchester Airport one of the bidders in the Gatwick sale. As a result of this "bias" the divestiture process has been halted.

For a full report on the Tribunal's assessment and ruling click this link.

Clearly this has disappointed at least one of Stansted's tenants. Its largest is Ryanair whose CEO was quick to blast the decision.

So this is another story that will play and play


Who Blinked? BA or Amadeus?

BA and Amadeus have signed a three year extension to their existing contract which will now expire in 2013.

Both parties seem pleased with the deal which BA's John Mornement, head of selling and distribution at British Airways, said the agreement reduces the airline’s distribution costs. Amadeus was also pleased as it extended the ability of the GDS subscribers to have access to full content.

So the answer is they probably both blinked. Let's hope that they all read the fine print carefully. Look for increased costs for the intermediaries as a result of this agreement.


Travel Weekly's Nadine Finally Retires

Perhaps not the most flattering of headline I could write - but Nadine Godwin, long time Travel Weekly (US) Editor and staffer has finally hung up her formal pad and pen for the last time. TW has done a nice piece on her. Have a read although it hardly does justice to her career.

Knowing Nadine for more than 20 years - I am sure she and the cats will not go quietly.

I had the chance to say good bye earlier this month at the Farelogix SPRK symposium. I hope we gave her a good send off.

Cheers Nadine. Best of luck and keep writing.

EC Investigates Taxes and Fees. Doesn't Like What It Sees - Likely To Legislate

One thing you can say about the European Commission (EC) when it doesn't like something - it acts pretty quickly. With the powers of judge jury and executioner, the EC has broader powers than those of the usual sovereign state authorities.

The Commission formed a committee to investigate airline fees and taxes. his Project Study group has just released their findings. The 25 page report is clear and concise.

"The investigations that were conducted in relation to this Common Activity involved an examination of 281 flights and contact with 34 airports and 24 airlines. These investigations and contacts form the basis for the conclusions reached in this report."

The conclusion of the report should give a clue as to how the EC will act in the future:

"The practical knowledge gained by the participants during the course of the Common Activity has fostered a new understanding of the airline industry within the respective consumer authorities. As such, the completion of this report represents a starting point for increased consumer protection cooperation across Europe, clearer guidelines for airlines on how to present air fares to consumers and, most importantly, more transparent transactions for consumers purchasing flights."

The study itself surprisingly had small amounts of representation. only 10 of the 29 EU nations were included. Under the direction of Norway's Consumer Ombudsman, the group did not include participation from the two major travel markets of UK or Germany.

The carriers investigated were:
*Aer Arann
*Aer Lingus
*Air Berlin
*Air France
Austrian Airlines
British Airways
Brussels Airlines
Czech Airlines
Estonian Air
Iceland Express
Malmö Aviation
Polish Airlines LOT
Travel Service/Smart Wings
Note those with the * chose not to cooperate.
34 Airports were also evaluated.

Ths study showed that of the Fees and Taxes charged (TFCs in the EC's speak) only 41% were directly levied by a government body or airport. Of the remainder more than half was attributed to Fuel Surcharges. Given that the study was done at the end of 2008 - it is likely that the percentage of TFCs has grown since then and the proportion of non Tax levied charges has also increased.

The Study group found that many of the airlines were not in compliance with EC rules. It specifically states that to be in compliance an airline has to ensure that its charges as represented on the website should be:

To be in accordance with Article 23, government taxes and airport charges must be:

clearly distinguished from other charges and
correspond with the actual amounts levied by airports and governments.

A follow up of the airlines in June and July this year showed that several airlines are still not in compliance. Also a noticeable exception - "Optional services – for example food/beverages, seat reservations, insurance or luggage – have not been scrutinized in this project."

The project study group made a number of direct recommendations. Here are the main two:

"The project group therefore recommends that all air fares should be comprised of the following elements: the basic air fare, airport charges and government taxes which are levied per passenger and the total price. All other unavoidable TFCs should be included in the basic air fare.
Further fees should only be added to the ticket price provided these are genuine optional fees and not mandatory costs all passengers are obliged to pay."

"The project group consequently recommends that passengers travelling in Europe should have a clear legal right to be refunded all airport fees and government charges which are not due. If the ticket for air transport is not used we believe that passengers should be entitled to repayment of all prepaid taxes and charges imposed on passengers by airports and governments and collected by airlines."

I believe that Article 23 regulation will be revised soon to address these issues. This will make the display of information simpler but will impose a set of conditions on airlines that will be hard for their systems to comply. The study while applauding the ability of the consumer to shop (presumably via the Search and OTA sites) did not address how they may also be required to display this information.

So chaps you have been warned. Offer airline products for sale and you will need to be pretty explicit.


PS If you want a copy of the study - please ping me.

20 December 2009

Airline Traffic Nov 2009 Figures Reveals Interesting Dilemma for US Carriers

We have two pieces of interesting data from sources that normally match.

The data sources are the US ATA - Air Transport Association, and the Airlines Reporting Corporation - ARC.

ATA measures total traffic for US airlines. So taking like for like - there are two sets of metrics. The table looks like this

November 2009 year vs year previous activity.

ARC Transactions up 8.64%
ARC Sales up 6.86%

ATA Passengers down 1%
ATA Sales down 7%

Even accounting for approx a 21 day advance purchase average and some date skewing due to Thanksgiving - this shows us that there is perhaps an interesting phenomenon emerging. I believe be that the percentage of travel booked via Intermediaries is actually rising and significantly.

PhocusWright and others have been predicting this for some time. The Professor believes this to be the case. We have seen that the effect of the Fee removal on OTA sales has been pronounced, with significant revenue increases since September - most recently in November the Y/Y growth was 20%. In addition even the TMCs are reporting better at 6% growth. The remaining category of "other" namely retail and tour operator/wholesaler based sales were flat in November. While it will be some months before we see formal numbers out of the GDS companies - we can be sure that the big 3 are showing increases that seem to counter the airlines continued downward trend.

It will be some months yet until the BTS (official government stats) are reported but we have a pretty good proxy now with the numbers we see from ARC and the ATA.

For the airlines this trend represents an interesting dilemma, and perhaps a clue to their recent behavior. With all the positive talk of airlines enabling Intermediaries to sell ancillary products via new tools this can only be positive. However there is a lurking issue. The legacy GDSs will also benefit from this swing in sales from Direct to Indirect.

Thus the airlines will need to look to the agency community as a class to swing them away from the legacy GDSs if they are to be successful in reducing distribution costs. If not then there is a risk that the GDSs will gain power and force concessions (and therefore higher costs) from the airlines. As we have seen even in the recession gripped down market - the GDSs have been able to boost yields.

As I have noted before - this is a war with many battles.


Legacy GDSs Promote Fragmented Pricing Schemes

The recent distribution arrangement between Travelport and British Airways should come as no shock to anyone. As widely reported several weeks ago – BA is determined to adjust its distribution mode – the UK airline has re-signed with Travelport. It is also reported to be near an agreement with Amadeus (who also hosts the British Carrier). Despite being somewhat battered in the recent downturn – the British Carrier is driving to a beat where it lowers its costs for distribution. So lets briefly examine what is has agreed to with Travelport and what it wants to get from the other GDS companies.

Based on the current 3rd quarter Travelport numbers its (TP) average revenue per segment it gets largely from the airlines is near to its record highs of $6.00 (actually $5.82). While there has been an unbundling of the GDS segment fee lets use this number as a way to illustrate the relative deal with BA.

With approximately 60% of its revenue coming from the home market of the British Isles (again rounded for the sake of this illustration) the arrangement with BA is that BA will charge an opt in fee of three pounds per segment. In Dollar terms this is $ 4.50 per segment, which means that BA has set a price of net $1.32 per segment it will pay for distribution. In Ticket terms that translates into $3.04 per ticket (using 2.3 segments per ticket an industry norm). BA is of course not the only airline to charge a home vs away market model. A few years ago Amadeus announced a home vs away market pricing scheme in an effort to stem opt in contracts. The differential it proposed was vastly different with a home market discount of approx 50 cents per segment. A far cry from BA’s $4.50 opt in charge.

However this is not all. BA in the UK home market uses the service of Lime Management to issue discounted tickets (typically the lowest yielding fares in the market) at a per ticket charge of 13 pounds. That translates into a fee (note this is paid by the agent) of $19.50. Given BA’s recent losses – the achievement of this revenue for its discounted tickets can and does have an impact on its bottom line.

British Airways is not alone. KLM is quietly introducing a 6 Euro ticketing fee via the legacy GDSs in January in many markets.

The push pull of the legacy GDSs and the network carriers on the issue of the fee continues to be a battle royal. The war is only in its early days. Many battles will be fought. The outcome however has a certain degree of inevitability about it.


Great signs we have missed since we gave up smoking...

A Public Service Message at Rio de Janeiro International (GIG) Airport

Rational Thinking - An Oxymoron Concept For Airlines

The conventional wisdom says that brand accounts for something. Indeed there is a signicant amount of balance sheet value attached to brands.

Not just for today but in the future and definitely in the past. Yet brands have a habit of going away fast.

Hands up those who remember PC Travel, Preview Travel and Pointcast? Three major brands with some reference to Travel in early days of the web. Or more interestingly great consumer brands like Sam Goody, Tower Records and Photomat. Brands that are now consigned to the scrapheap of history.

My point here is that airlines have always tried to get you to make irrational decisions about their products.

Have a read of Gerry McGovern's blog this week.

While he makes two incorrect assertions - Ryanair is not yet charging for toilets and it is not the world's largest single branded airline yet (that honor goes to Southwest), he makes the point that rational people will pay for the extras and put up with the crap from Ryanair. They wont do that for airlines that promise more charge more and fail to deliver the greater "value". this is akin to the David Ogilvy's classic ad about the Rolls Royce loud clock. In that instance a RR owner is going to make a lot more noise about the clock not working than a Pinto Owner worrying about his door opening.

Southwest set expectations low and over delivered for years. Ryanair sets expectations low and consistently delivers the fundementals - IE low cost transportation.

Is that rational behavior? I don't know - just ask the people who complain about no seat assignments when they paid the average fare of 32 Euros that FR charges.

Think about it.


The Red Bag Story

Or How I got home on Friday despite all the odds.

On Friday (December 18th) I had a salutory lesson on travel. What ever could have gone wrong went wrong. But also its a lesson in how knowing the system and actually the generosity of customer service people can thwart the obstacles and get you what you want.

The ingredients are simple. An expensive coach ticket Berlin to Seattle. DL flight numbers AF operated metal (code share). Bad weather across Europe. Incompatible systems AF and DL.

Knowing in advance that things were going to be bad (last friday of the year for travel) I decided to go to the airport early. Just before leaving - I checked my itinerary on DL and found that they had changed my flight to a connection over NYC on DL rather than the AF code share over Paris. OK - I accepted that. (ESP since I received an upgrade). But it meant hanging around for 6 hours at Tegel Airport. Surely there was a better way. Arriving at the airport - I was met with at least 100 people who had the same idea. After a 90 minute wait in line - I made it to the front of the queue. Sorry your AF flight is cancelled and I cannot help you. Go to DL (Who opens in another 30 mins). Schlepping between gates in the snow became a fun exercise.

DL said great yes you are confirmed but no we cannot issue the boarding passes because we need the ticket. Eventually after much tooing and froing - back I go to AF. Cutting in line (it was still about 100 people long) I managed to get them to write a FIM (these are great - its essentially a get out of jail free card). Back to DL who then issued my ticket.

The rest of the journey was very fraught as it was late and there was a huge storm headed to NYC. But with 45 mins to spare at JFK - I managed to get my bags - check in for the next leg and then race across the 2 DL terminals just as the last few passengers were boarding the connection flight to Seattle.

I knew my bags would not make it despite the smiles of the JFK baggage team. Sure enough arriving in Seattle they didn't. And yes the possibility of bags showing up became remote as the day went on. With the East Coast largely shuttered by the storm - the thought of my bags not making it because more and more a fear. However yes - my bags were on the van on its way over. Hurray!!! And yes there were 2 bags and yes the second one was red. Disappointment. The assumption that the second red bag was mine was just too easy.

However by 9PM (now 24 hours later) my trusty red bag showed up.

So no morals here other than some advice.

Here goes:

1. Hardcopy EVERYTHING!!!
2. Be polite and nice and get the person's name at each stage. AND YES THEIR INTERNAL PHONE NUMBER.
3. Always thank them
4. Trust them to know their jobs.
5. A FIM (when your trip is interrupted) is a wonderful thing. Get one no matter what.

And above all...

Be PERSISTENT - it is a required skill in Travel

As a special thanks - I would like to thank Daniela (DL Customer service in Tegel). Her counterpart at AF - Anita. The DL team in NYC for protecting me. And also to DL's baggage service and their contractor in Seattle Bags Inc.

I am now home and the Xmas presents made it also


The 2009 ITM Study On Use Of Technology - Some Observations

The Beat recently did a piece on the UK based ITM's study on the Use of Technology in the travel process. The report is wide ranging and contains a lot of trend information.

However picking through the data to obtain valuable nuggets on what lessons can be learned is not that easy. So allow me the indulgence of picking on one area. IE the need for broader content availability.

If by now you have not surmised that the Professor is clearly biased in favor of multi-content platforms - then you have not been paying much attention. But it is not my bias really - rather it is an acknowledgement that fragmented content has existed for a very long time. The options for access to fragmented content were few and far between. Now that is changing and changing fast.

With the airlines starting to flee the one-size fits everything (aka via the GDS) they join the other sectors such as hotels and ground transportation that have had this issue for years. The acknowledgement that content is full fragmented and that the aggregation of content is a valuable service, players are changing how they source and what they source.

it should never be underestimated that Travel Technology vendors tend to accentuate the positives, there is now a general acceptance that the current generation of technology has indeed improved the lot of the user community as represented by the ITM members. I would guess that the vast majority (ie in excess of 95%) of all the PNRs generated by ITM members are indeed touched by a third party (read non-GDS) system. The ITM study states that the most commonly used type of technology among those polled was online self-booking, at 70 percent.

But more interesting for me was the demand for access to Non-GDS content with over 60% of ITM members stating this as a requirement. This is a pointer to the changes coming. The term full content is already a misnomer. The legacy GDSs can no longer provide full content. Not that actually they ever did. The caveats in the definition in GDS contracts are wide enough to drive a truck through.

Use this information wisely.

You can purchase the study from the ITM directly. Members will get free copies in about May 2010.


BA Quietly Compensates Loyalty During Strike Threat

BA has quietly compensated those people who didn't cancel or rebook their flights during the recent strike threat.

As the Professor understands it from several people the grading is as follows:

Per passenger
Per number of legs on BA
Per leg type
Per status of membership

So a family of 4 would receive for a European leg 2500 miles each resulting in 10,000 miles bonus that is automatically added to the account.

This seems very generous and sets a dangerous precedent for BA in the future. Oh yes and if you didn't get the offer perhaps you should ask for it.


Deep Breath - Office 2010 Beta

After some initial hicoughs I am now using Office 2010. So far its faster and has more functionality. I am getting used to all the features.
I can say that it is indeed very interesting and probably will be worth the upgrade.

check it out


19 December 2009

Norwegian Helicopter Induces Rock Fall

Really impressive skills at work here.

Down To The Wire - JAL's Dancing Partner

The stakes are getting higher - JAL needs a dancing partner. Does the blushing but somewhat older mature (potential) bride go with the newly enriched king or the prince of the neighboring land she has known for so long?

I have opined already on the two potentials - AA and now being assisted by TPG or Delta and the rest of the Skyteam players particularly Air France/KLM.

I think the nod goes to the Atlanta Good Old Boys rather than the Texas Mafia. My reasoning is not based on any insider knowledge other than an assessment of the situation. Delta has more to gain the American has to lose. Although at this point there is a big loser here. OneWorld as an alliance.

American rather weakly offered to up the ante last week with saying that JAL would be its only Far Eastern partner. That was rather stating the obvious since most of the rest are already taken by either Star or Skyteam. But significantly it doesn't improve matters for JAL who needs a lot of help and indeed new feed to boost its flagging fortunes. So in fact in my opinion this was a negative not a positive.

In the mean time - JAL's position continues to deteriorate. So the decision is getting more and more urgent.

This one is far from over but I do think that the choice is become a lot clearer.


MOL Has Lunch - Occasionally

I missed the paper edition but knew it was coming - so this morning I logged on to the FT and read the Lunch with Michael O'Leary Column.

Sadly it doesn't reveal any insight into the chap. It is more of a rehash of a conversation that leaves you wishing you had a bit more than the Reporter's Bagel.

Anyway - have a read - its good toilet reading.


The French Legal Reasoning System

So 2 decisions from the French legal system should leave people in the rest of the world scratching their heads. I love France and the French people. The French system of law stemming from Napoleon is incorporated into many different legal systems around the world including one could argue the USA. However these decisions will leave a lot of people wondering how they are able to operate.

Decision 1 – Let off the EADS and 17 of its current and former staffers and let them go scott free. A great piece can be found in the Financial Times:
Essentially the AMF (French Stock Market Regulator) found 7 of the group including former Co-CEO (and Frenchman) Noel Forgeard and recommended to the enforcement agency fines of 12 million Euros and various other enforcement actions. The final committee of mandarins however disagreed and on a very flimsy set of reasoning and excuses let everyone off. (mind you and an aside – this form of behavior is a mere pittance compared to the likes of some of the more recent US based fraudsters).

Decision 2 – Convict Google of Copyright infringement. According to various media reports a French court found Google Inc. guilty of copyright infringement for scanning books and putting extracts online without a publisher's consent. This will likely put a dent into the Web Giant’s plans for a library for all online. Google said it will comply for now while it appeals. The court awarded Euros 300K to a French Publisher and ordered the content removed.

So you watch yourself when you do business in France. It would appear they do tend to favor themselves. And to all Peoples around the world (including the French) Joyeux Noel!

18 December 2009

Amadeus Ancillary Revenue for Germany - Not till Q3 2010

I dont normally like to pick on the GDSs individually but my focus on Ancillary Revenues keeps uncovering issues where the legacy GDSs are dragging their feet.

Case in Point.


Here is a cut of 2 slides from a presentation of one Mr Thomas Gruber.

My issue is that it is touting delivery of the Ancillary Revenue services in Germany by 2010. THIRD QUARTER.

This is not soon enough. It is critically important that greater pressure on these aggressive deadlines is paid.

So Amadeus time to get on the program - please do it sooner so we can all benefit.


The TNooz Elves

... have been busy preparing for the Holidays.

As part of this they/we are doing a predictions list. Click on the link to see them.

The Professor will be doing his Xmas show this week so click back often to see it - or sign up for the RSS feed


Are You REALLY Ready For Merchandising?

So listen up boys and girls – in case you think that Merchandising is coming down the pipe sometime – maybe never… guess again. The days of speculation are over. UA alone is at a run rate of $5 Billion per year. American I would say is already higher. Thus the estimate by Ideaworks that this is a $10Billion business is already on the low side.

The Beat recently sad down with the honchos of AA’s New Direct Connect platform. One quote really caught my eye.

Cory Garner: “We have an XML direct connection in production today for use. We envision that an XML pipe will exist in parallel with legacy pipes for some period of time; it's just that the XML pipe is where that additional merchandizing capability will be. Our legacy pipes will not have that. We are not interested in putting development dollars in a standard that will be going away at some point. It will be just a matter of when GDSs cut over, when agencies cut over--at which point we will decide when the legacy technology is no longer necessary.”

Over the past few weeks I have been working directly with merchandising players both on the supply side and the intermediary side. We have developed solutions for merchandising on a wide variety of levels. These range from seats to bags to non-air. While there are still holes in the infrastructure – most of them are now covered. The missing pieces I am not waiting for – we will work those out.

What amazes me is that after so much talk about how important ancillary revenues are to airlines – how little engagement there has been in the process from the Intermediary side. I have been trying to analyze why this would be the case. I believe it is because they are “waiting” for the GDSs to come up with the answer. What I see in the statement above is that the airlines are clearly ahead of the GDSs. Now the GDSs must play catch up. If I look at the recent press on Amadeus’s efforts – one could be easily forced to interpret that they are slowing things down waiting for some magical industry standard. Again – I would say get over it.

Ancillary Revenue and its companion Merchandising are clear differentiators for an airline. Intermediaries better get on board with the airlines or there will be a period of difficulty when the two are not partners. As noted above – there are many people not waiting. If your teams are not heavily engaged in integrating merchandising functionality at your point of sale then you are already late. Smart players are already building tools for bundled and unbundled products. Early adopters will be winners. Late adopters will be road kill.

So fair warning – better get out there… Your number 1 New Year’s resolution better be to be ready for this. Smart players will figure out this is a great revenue opportunity with Airline product. Dumb people will be waiting again this time next year for the GDS to give them what they think will be easy. And even then – they wont know what to do with it….

Do you want seats with that?


15 December 2009

Happy to Lose This Bet

So I owe a certain Doctor a dinner because the 787 finally took to the air today.

Boeing should be proud. At least it didn't misbehave as far as the viewing public is concerned.

Congrats to Boeing for getting the Dreamliner into the air.

Now the real hard part starts. Getting it certified for passenger services and ramping up production.

To the thousands of workers from Japan to Italy - today is your day.


787 Flies

Travelport Retains Flight Centre... and....

Against a lot of odds - TP retained FCL in Australia. Or at least part of the business.

The odds were definitely against Travelport. Amadeus had mounted a very strong campaign as had Sabre. Heavyweights went a courting in Brisbane.

In the end it probably came down to the cost of transition rather than anything else. I suspect that the canny people at FCL knew that there were certain concessions that they wanted from Travelport to stay on Galileo. These would have included:

Full GDS incentive fees for all bookings
Access to LCC content
Powershopper entries at no charge

Etc etc

So congrats to the Travelport team (yes even Gordon went visiting) the impact of losing FCL in Oz would have been devastating to Travelport so it really was a life and death struggle.

Look for Flight Centre however to become more aggressive in its technology process. With the Datalex debacle now a matter for the courts rather than implementation - they need a new tech base to move forward. Could it be that Travelport agreed to fund some of that?

At the very least it evens the playing field and sends a clear signal to Madrid that Travelport will not be a pushover on any customer.

Interestingly there is a post on Gordo's blog:

"There’s no question that the GDSs need to up their game. But there also needs to be a well-thought through “technology framework” for the travel industry if we are to put the customer at the centre of everything we do."

I think what he misses is that the concept that the GDS is no longer at the centre of this triangle. While trying to hold out an olive branch to both sides of the GDS centric value chain - he misses the point. It is no longer a linear or even triangular world. It is a completely open world. Interestingly the only time the word Open appears in this blog is when in the context of Open Travel Alliance. Something that Travelport has not exactly been actively supportive of in cash and people time. I share his stated view that there is a need for standards. But I do not subscribe to those who are determined to subvert the process to their own ends as others have done before. Travelport has in the past been guilty of this either through neglect or active efforts.

Where I do agree with him is one of his final statements.

"The challenge for the GDS in the new distribution model I’m proposing is that we have to disrupt the status quo."

Let's see if he really does have the moxie to put that into reality. That also includes blowing up the segment fee model.

How will history judge this?


14 December 2009

Open GDS

The Professor opines on open GDS systems on a Tnooz podcast - click

13 December 2009

Don't Want To Be A Tiger Anymore?

Well it seems that the first defection from the Tiger camp was Gatorade who "didn't renew". Now it seems that the one we all see so regularly (if you are a frequent flyer) in airports around the world - IE Accenture - has dropped Tiger from their campaign and will unveil shortly a new global ad campaign.

So I think this is to be expected. While everyone rushed to the golfer's defense, Accenture was noticeably quiet.

Moral of the story is... be careful what happens. It may come back to bite you. In that case you may have a Tiger in your tank.

(OK so its been a quiet news weekend)


12 December 2009

Faites Vos Jeux M'sieurs, Dames!

Place your bets.

We have a pool going at the moment on the date of the 787 flight. Given that the invites have gone out from Boeing, rooms around Everett (particularly at the Hilton Garden Inn right there) are fully booked out for the nights of Dec 14 and 15 - you can be pretty sure that this is going to happen.

Just in case you are a betting person for to Paddy's for a quote.

And my nomination... December 21st. Will this be the first time the Professor is actually late rather than early?


10 December 2009

TSA Screening Document Gaff

The TSA announced that it had suspended 5 employees for the screw up in which the TSA's screening guidelines were posted on the web.

The story is now pretty much out there. But what I found interesting is that the TSA seems to have made no attempt to get the document withdrawn. I believe a simple request would have sufficed.

I was able to find copies of the document on multiple sites. However the total instances of the document source was actually very few. It remains the original server that did the unredacting (undeleting of the so called sensitive information) is still holding the document in plain view for all to see. And no I wont be posting a link because I dont wont to perpetuate the actual document. Besides I think I would be in violation of US Code:49 C.F.R. PARTS 15 AND 1520.

For more details on this go to Wikipedia.

The TSA says this is an out of date document. True! But then it remains the majority of the screening guidelines in place are contained within the document that was posted. The publication date was mid 2008 so it cannot be that old.

So our stupid airline tricks award this week goes to ....

The TSA. Some how I believe that the TSA will be a future winner as well.


Easyjet V4,0 = V1.5?

Andy Harrison the Third leader for U2 is to leave in June 2010. Since taking over from Ray Websterin 2005 he has presided over the transition of the airline from pure startup to mature hybrid airline.

However the long running battle between Founder Stelios and first the board and more recently the senior management over expansion plans has probably contributed to what many will consider Andy's early exit.

So the critical question is who the new chap will be and what will this signify to the airline's future direction. Will the next leader go back to the future?

It would seem that the more conservative approach adopted by Harrison will be replaced by an aggressive market footprint expansion. With Ryanair having grown significantly since 2005, Easyjet has pursued profitability over pure growth. There is however an opportunity to grow the airline with over 100 planes on order over the next few years. Y2 has shown its ability to compete as a hybrid carrier and optimize yields better than its Irish larger "LCC Cousin".

I would probably think we are going to see a more aggressive stance to new markets with U2 and even the opportunity to export the business model to other markets.

Stay tuned


No longer Bumping Along The Bottom

The US airline market has finally started to trend upwards.

ARC numbers confirm that that the recovery is under way. I want to caution that this is a slow recovery but it does seem people are getting back on the planes and flying. For the first time this year total ticket prices actually rose Y/Y,

BUT it is very fragile. For example in the run up to the holiday season - some flights particularly across the Atlantic started to trend upwards in yield. The airlines piled on the prices with average available prices on some routes exceeding the magic $1,000 mark. This collapsed with the 21 day advance purchase milestone passing the rates dropped radically.

The airlines and the intermediary community can start to rebuild.

The stock market has responded by boosting airline stocks. United for example has rised from lows in the $2 range to highs in the $9.It will go higher.

Christmas anyone?


08 December 2009

United's Plastic Order

I realize that United has gone through some hard times lately but really only buying plastic planes????

United Airlines is ordering both the A350XWB and the 787 to replace its 747 and 767 fleets respectively. Seriously this is a welcome fillip to the airline industry both for the airline side and the airframe side.

It is also an interesting order that signifies that United will be focused on flying the best plane for the job.

While the order flies in the face of conventional wisdom perhaps this will be the death knell of the single manufacturer model that seemed to be all pervasive in the US Market.

Congrats to the UA team for making the bold decision now.


07 December 2009

ATOL replacement Charge - All or Nothing

The Battle in the UK has raged for some time over the issue of when is a package not a package. it relates to the charges for ATOL protection administered by a legal quango called the CAA who also happens to be the Aviation Regulatory body for the United Kingdom.

With the recent win (now being appealed) by Travel Republic that effectively put a ring fence around dynamic packaging and enabled such dynamic products to be exempt the charge - the formal authorities are faced with a dilemma. What to do about customer protection and how to pay for it?

This seems logical enough. If the UK insists on having a scheme that protects consumers then surely it should implement a straight forward one size fits all protection scheme. Either flat fee or some scale based on the value of the product purchased.

Not so fast. The UK government already did that - its called the APD - the air passenger duty. A somewhat sneaky and clearly unpopular aviation head tax.

As the UK is an island and it is almost impossible to get from the country to another without some form of public transportation (although many have tried!) a comprehensive solution would seem to be the best way forward.

The UK Government will have to come clean and make it a once size fits all - recognizing the vast differences in pricing of the products. And that the APD issues need to be resolved. or they should pull both and put a commercial operation in place to replace ATOL.

There is going to be some head scratching in Whitehall


06 December 2009

New Travel Planning Tools

Amadeus won the Innovators Award at the recent PCW Innovation Summit. So I thought I would also look at some other possible invocations in planning.

I like Yapta's tools for sliding the nuance of travel request. I love Skyscanner's month display - even though they have hidden it where as it used to be so easy to get to.

The vast majority of the world doesn't have English as the native language. I can tell you that there are certain countries where the adoption of English as the second language is sorely tested. Thus the assumption that English is the universal lingua franca is flawed. So are there any tools to help this work?

For some time - Google has had the "free" service of Google translate. Now it has become mainstream. I didn't notice it until I started to surf from a foreign entry point (I have been in several markets where Google's home language is not English) and it works quite well so my friends tell me.

I did a search and came up with this little article from WebNews that points out the possible challenge that Bing Travel will have with Google's Translate features.

There is good news and bad here.

First the bad news. There will be a lot of these tools emerging in recent time. And this could not happen too soon as the consumer loses patience with the current version 1.0 travel planning tools. But there is little consistency and it still requires a lot of customer explicit interaction. What I would like to see is the more lean back type of solution as espoused by Google's translate. IE where the amount of work to be done is less and you dont have to overly involve yourself in the process. Further bad news is that the tools at the back are still sorely lacking.

The good news? These are coming. As soon as someone effectively cracks the L2B problem then we can see a better solution for everything.

Watch out people in the middle - if you dont wise up then you will be toast.

Perhaps this is why Amadeus is investing so much money in these new tools.


Stupid Airline Trick #752

Like many Frequent Flyers - I spend a lot of time boarding aircraft and exiting aircraft. It is a somewhat stressful time (or maybe I am just a worry wart).

So this award goes to the whole industry for their arcane policies on boarding aircraft.

I have several examples so I am not going to pick on anyone in particular because I am just using these as examples of time and effort wasted.
Air France's small boarding gates in Terminal F at CDG. Also the way they board. With special boarding pass readers where someone actually puts the paper into a self service machine.

Lufthansa's forcing you to use self service machines in smaller airports without any corresponding availability of trouble shooter people. Its hard enough for me as a FF - for a little old lady from Pasadena it could be quite intimidating.

Delta's in and out of the Red Coats at ATL. Some times they are there - many times they are not. When things get tough (both dynamically and procedurally) they seem to disappear.

Certain airports premium paid early boarding for LCC carriers. For example CIA in Rome where you pay then get on a bus ... along with the other passengers who didn't pay for it!

Air Asia's boarding herd process. I am sure someone is going to get killed at BKK.

And my favorite one above all - is the stupid boarding from back to front. All the studies show this is not the best way to board. So why do they still do it.

If you would like to trawl through this blog you can actually find a story I did on the most efficient form of boarding.

So for this reason the industry - airports and airlines get the Stupid Airline Trick award.


Stupid Airline Trick #402

So as I am in Brazil this week - I thought I would open the file of the odd, the weird and the downright not quite sane Airline tricks.

Today's award goes to British Airways (why am I always picking on them???) for their Policy at LHR on arrivals lounge.

So I am Silver (thank you I qualified again) on BA's FF Program. As a verry frequent traveler - according to Tripit - I lead my network on the number of miles flown this year. (211,000) And I still have 3 long haul flights to go!!!!

So I chose my airlines carefully based predominately on time and location. Thus schedule and certain amenities are very important to me. I like BA because they provide a service on departure and arrival. They have been pretty innovative in the middle of the legacy carrier pack to customer services. T5 after nearly 2 years is a pretty good product - it still has some quirks. The Showers finally work properly and the service while somewhat indifferent is still a cut above the majority of US airlines.

At the moment I am working with a startup so I have to set an example of flying in the back of the bus when it works. So I was surprised to learn that the Executive Silver allows me the departure privileges BUT NOT ARRIVAL.

One of the keys to airline service is to provide a consistent level of service across the board. This shows how somewhat silly BA is for this policy. Oh BTW to make it even more bizarre - QF will allow you to do this on BA's coach ticket.

So much for the seamless service.

Now consider in context my post on BA's new seating policy and I think you get the picture.

Some customer czar is needed at BA to drive a consistent customer face.

If not then I will continue to hammer BA in this blog.


05 December 2009

British Airways's New (Paid) Seating Policy VERY COMPLICATED

I have written before that BA's new seating policy was way too complicated. So one of the Professors sent me the ACTUAL BA Travel Agent Guide for the new seating policy.

Brace yourself....


What are they thinking? I like BA's services in general but they do tend to give me a lot of fodder for this blog because they tend to do some rather silly things.

This is another example of why things need to be simpler. If this is the official guide for the agent - imagine how complicated and confusing it could be for a consumer.

I am absolutely amazed at this. if you would like a copy - email me and I will send it privately to you.

This is a public service of the Professor Sabena Blog.


04 December 2009

So Who The Heck Is it?

Airbus snuck in (a little unsubtly) an unnounced order for 52 A320 class aircraft.

Speculation is rife.

So here is a short list of my candidates!


I probably have it wrong but its nice to purely speculate.
When its revealed who it is - then I will give you my reasons

BTW there is a caveat. I am assuming these are firm orders. Airbus tends to have a habit of having somewhat flexible orders.


When Is A Guaranteed Fare Not One? Ask BA

During the past week we have seen what can happen when an iconic brand is severely damaged by a single event - intentional or not.

One of the integral parts of the Air Transportation system is that the contractual relationship between the airline and its customers is firm and hard.

The customer is required to perform and the agent in the middle (should there be one) is required to ensure enforcement of many complex and in quite a few cases seemingly arcane rules.

This is the basis of the passenger airline system. So it comes as a big surprise to find out that the product you buy as a consumer from the airline is not in fact guaranteed.

The case I am specifically pointing to is British Airways and the infamous $40 fare from the US to India. The details are not in dispute - but 2200 people bought the fare. Can you say Viral!!!!

BA canceled the bookings and offered a $300 compensation credit. Then the DOT stepped in. At which point BA upped the ante and provided additionally compensation for the impact of the canceled reservations with hotels cars etc.

if you would like to read BA's statement on the matter (its quite buried below the fold) click here. But do it quickly I doubt it will be there long.

When the DoT stepped in the Secretary was happy to report:"We are pleased to see that British Airways has accepted responsibility for the fares it published," Ray LaHood said.

I think that both BA and the DOT were fundamentally wrong here. BA for the initial mistake and not honouring its fares and the DOT for creating a precedent and effectively a get out of jail free card for any airline who doesn't like the fares they have contracted for. Chaps this is not good at a time when Congress is agitating for a Passenger Bill of Rights - you have collectively undermined the whole basis of the contract between any airline and the general public with the DOT's blessing.

So Go On Be A .... Tiger

02 December 2009

A380 takes another hit. The Impact EK’s "Hiatus "

The largest customer of the Airbus Behemoth has announced it is taking a breather in A380 deliveries at the end of 2010.

Whether this is a function of the troubles in the Emirate of Dubai is to be seen – however there is one thing for sure – EK is now a pawn in a larger game. The reverberation of the collapse of the Dubai bubble is going to be felt in Toulouse and it is unlikely that Seattle will escape unharmed either.

There is more than the initial list of casualties in the current Dubai World troubles. The issue is going to be the pipeline of future commitments. Consider this – the UAE’s order book of aircraft has been predicated on cheap cash backed by AAA securities. With Dubai’s ability to continue to sustain such ratings it means that there is going to be a significant rise in the cost of money to EK and probably to other entities such as Dubai Aerospace and its various leasing arms. Looking at the disproportionate amount of orders outstanding it will have a long term impact.

Oh yes and another thing – because EK is a healthy business the chances are that it will become a pawn and possibly become collateral for some of the real estate debts is not an unrealistic possibility. In turn this could bring down EK's high value.

Hmm – seems there is going to be tough times all round. The GCC is going to reverberate with this for some time.

30 November 2009

Is TripAdvisor getting sloppy?

Expedia’s TripAdvisor business has come in for a lot of stick lately. Some of which is deserved. Some of which – well it just goes with the territory. But I am going to chastise them for failing to do something that in my mind should be relatively easy and straightforward and thus provide a good service to their customers. I am speaking here about SeatGuru.com

As a frequent flyer (OK so I am not George Clooney) – I depend on the network of committed flyers for information. So I was actually applauding Expedia’s trip advisor when they purchased one of my favorite tools – seatguru.com.

However of late I have noticed that there has been little upgrading of the core content. Sure there is now a lot more digital junk on the site – I can hardly see the real content for the distracting and in my opinion thoroughly unnecessary “stuff” that surrounds it. In the past month I have flown or booked on G3, FR, New RG, AF, U2, AA, BA, DL and CO. in each case I have seen that the Seatguru seat maps frequently do not match either the aircraft or the airlines website version of the aircraft product. When doing the searches the discrepancy widens with some aircraft types not present etc etc.

In fairness to Seatguru – the plethora of seat configurations within each airline is astounding. The airlines are not good at standardizing their aircraft. However this is no excuse for Expedia’s subsidiary for getting sloppy and lazy and not giving more and better information to its users. At the very least the chaps at Seatguru should be on the ball working with the airlines to get valid seat maps out there. If I can see this then they can figure out how to get better quality and be useful to their audience.

In my most recent round of searches here are the statistics:

Total flight segments actually booked – 27 (9 plus 1 where I had to change and throw away a segment, 17 segments that I have to do before the end of the year). Total flight seat maps researched 58. Total mismatch in searches between airline seat maps and Seatguru – 24 (note this included absence of seat maps – 11. . Total mismatch between flights selected and actual aircraft configuration seats 8. Note I didn’t check on the airlines seat maps to actual configuration but I recall just one in which case it was a substituted equipment and I was upgraded (thank you Delta). As you can see these stats are not good.

Mind you I am not a normal flyer…. But these are representative of the airlines that I fly and I am sure that there are many other frustrated FFs out there who share the same opinion. Get with the Program Expedia. If not there will be a lot of people moving to other websites. And yes Virginia there are others. Like ExpertFlyer or seatplans.


29 November 2009

O'Leary to Retire.... Say It Ain't So!

Once again MOL is threatening to retire to the Irish Countryside if media reports are to be believed.

This time he sets a 3 year time threshold. It used to be less... but I digress.

The airline is now mature enough to survive without his positive/negative impact. However there is no doubt that MOL will be a figure in history in the LCC phenomenon.

If he does - what's the betting he stays on to create FR - Long haul


Former Fulfilment Powerhouse TRX Downsizes

It started out life as OFS - Online Fulfillment Services. its first major customer was Expedia. On the first day of operation there were more managers than there were call center agents. Winning the Expedia (Microsoft) business for fulfillment was the launchpad.

It became TRX and had a pretty colourful life. Basically doing the messy part of the travel process for Expedia and the airlines.

It has now morphed into a much smaller organization. Not quite sure what its core mission is but it still is able to make a profit as its last quarter's results show. However how long it should remain public is a huge question. Parent BCD (who also owns the giant BCD Travel) needs to let the business continue in private hands rather than be distracted by the demands of the public scrutiny as a listed company.

As an Online pioneer - let them emerge without the baggage.

Best of luck to them


EasyJet Boosts Yields on Ancillaries, Corporate Travel Increasing

Orange smiles all round it would seem.

Easyjet has been making some headway in the fight on driving yield on their flights. The average flight is yielding more and the Orange Crew seem to be beating the Blue/Yellow crew in this respect.

From the conference call 10 days ago - EZ was able to report the following:

Ancillaries are up 22%, excluding baggage charges.
Baggage charges are up a whopping 62.3%
Business travel accounts for just over 20% of revenue

It is probably the latter that needs to catch the eye of the other LCCs particularly Ryanair.

The take up of Biz Travel can be attributed (and has been) to the availability in the GDS. And this is an important lesson for any LCC. While the GDSs may be an anathema there is logic to providing a well established and simple tool which the TMCs and their corporate clients have access to.

I have made the point before that TMCs tend to be process driven and often at the expense of increased yield. EZ seems to be confirming this. On the heels of improved yields by Southwest as a result of their reappearance in the GDS,

Lest anyone thinks the Professor has gone soft - I firmly believe that the LCCs need to get in front of the standard sources of booking for the Corporate business. But the value of the GDS needs to be weighed carefully. Unless of course you take the extreme view like LH and start charging for access to content.

Yield can be improved by increasing the footprint in front of the TMCs and the Corporate Travel Depts. (CTD)s. Ignore this group at your peril.


Results of the AA Distribution Survey

Well you have an interesting point of view! The absolute majority of you agreed that you believe its about time. Which outweighs the nay sayers 2:1, so thank you all for voting.

Here are the results.

Yes - it's about time


No - what are they thinking


Hmmm - Time will Tell


I really cannot make up my mind now



Stupid Software Tricks - Quickbooks and Windows7

OK - like many people I use Quickbooks. I am not terribly keen to upgrade every year because it seems insane to have to upgrade for this type of service.

So BEWARE if you use Quickbooks - they do NOT support Windows 7 in ANY VERSION other than the latest versions 2010.

I think someone should sue Intuit for being so cavalier in this regard.