07 February 2009

Virgin Vents at Boeing

Slamming both Boeing's management and its Unions, Sir Richard Branson let them have it with both barrels yesterday at formal acceptance of the V Australia first 777.

Accompanied by a motley crew of V staff and senior management with Steven Udvar-Hazy in tow (V is leasing its first 2 777s from ILFC) Branson wasted no time in letting Boeing feel his vent of rage.

With the delay of the aircraft essentially about 5 months late - it is clear that the 58 day strike at Boeing did a heck of a lot more damage than Boeing has let on. This has affected customers down the line and Boeing has lost more than just 2 months of delivery capability.

Boeing needs to pull up its socks and get back to work much faster.

06 February 2009

No Airtime?

No Planes
No License
No Airport Space
Maybe no brand
Probably no way




Version 4 is terrible

Don't upgrade

Looks pretty but loses one heck of a lot of utility

Trillian - I may just come back to you


05 February 2009

The Breakup of the Holistic Airline Model

For many years people have balked at the prospect of fragmentation - that fear has kept the "Air Transportation System" - well - as a integral holistic service, at least in some people's minds. Much of this stemmed from the good old days when domestic US airlines didn't fight with each other and took each others' tickets in a very gentlemanly fashion. For International travel the only players on effective international routes all swapped tickets because - well International bilateral agreements superseded all other rules.

Fast forward about 30 years and the impact of de-regulation across the spectrum, the growth of ad hoc and even permenant alliances and the pervasiveness of web based technologies and those nice old holistic legislated or commercially constrained systems look decidedly long in the tooth. There really is no such thing as airline neutrality and a holistic system where we live in Utopian cooperation. It is everyone for himself.

Despite this reality some components of these "systems" are still living in the world of yesterday. On the other hand some progressive airlines have decided to blow right through those arcane models and form strong commercial bonds that go outside that nice old holistic model. For example LH buying into JetBlue and then integrating some of their operations. The Volaris/Southwest/WestJet relationship. The new United/Aer Lingus partnership and the announcement today of WestJet and AF/KL tie up. I can cite many more instances but you get my drift here.

It is interesting that on the very day that Westjet/AF+KL announcement is made that you have a senior GDS official getting up and saying that (and I am synthesizng out of context aggressively here to make my point) "...fragmentation ......fundamentally different from our (GDS's) philosophy on content..."

My point is that there is an inevitability now that fragmentation (as The Professor has oft opined) is not a new fleeting thing - it is here to stay and anyone who gets in the way of the unbundled and the fragmentation processes will in my humble opinion become road kill.

I liken this to the break up of Ma Bell (aka the old AT&T). People bemoan the loss of guaranteed dial tone. However they love the development of technology and the lowering of price and the plethora of options. Well so too the airline system model and the IT systems that constrained it that way. Before calm was restored in the telephony market there was a lot of disruption. I think there will be that occurring for a while in distribution.

You have been warned... that noise you hear is not just the wind...

Will They or Wont They? BA/IB

The debate of BA+IB seems to be heating up. And I for one think it just isn't going to happen at the prices that people think.

The volatility of airline stocks of late make this even more difficult than usual. Couple with with the pound's collapse we have a rather toxic recipe at Waterside and its opposite number.

Willie's boys (and girls) must be feeling that they are playing wallflower especially at this week's celebrations in Madrid for the One World 10th.

I really find it too hard to justify both logically, emotionally and fiscally.

So I vote no unless its a really great deal for BA around 65:35 in the new company.


Olympic Back on Deathwatch

The Professor's deathwatch list has a repeat customer - Olympic is back. Here is what ATW Online reported

Greek government's effort to privatize Olympic Airlines has failed (ATWOnline, Nov. 25, 2008). Development Minister Costis Hatzidakis told reporters that "the bids that were submitted do not meet our demands" and that the government is "addressing an open proposal to Greek business groups for the sale of Olympic through immediate negotiations." The government had split OA into flight, ground handling and maintenance units for privatization (ATWOnline, Nov. 3, 2008).

They are nuts...

However sooner or later the government may get realistic and we might get someone biting on the poison apple.

I hope so. But as you may have read before - their service sucks and Aegean is eating them for lunch


US Inbound Traffic drop off gets dramatic

The US TIA recently published their number for November inbound to the USA and the first 11 months for the whole of 2008.

While traffic for the year was still way up (6%) this was despite the fact that November inbound visitations plummeted 9%. Judging by the other proxy figures we have seen (LHR departures, BA traffic etc) for December, we can be sure that US inbound numbers will be significantly down on even this number.

Plumbing the numbers for some nuggets - here are the highlights from Europe. The first months through September reflect the weakness of the dollar against the Pound and the Euro. However after September there is now a significant drop off particularly from the UK where the number of visitors make up a substantial portion of the US inbound. With Mexico and Canada both declining - this does not bode well for the USA Tourism market.

• Visitation from Western Europe was down six percent for November and up 14 percent year-to-date, accounting for 48 percent of overseas arrivals.
• Arrivals from the United Kingdom were down 14 percent in November but up three percent year-to-date. Visitors from the United Kingdom accounted for 37 percent of all Western European arrivals.
• Year-to-date, German arrivals increased 18 percent, French arrivals grew 26 percent, and Italian arrivals were up 25 percent, continuing growth trends from 2007. For the first eleven months of 2008, visitation from the Netherlands grew 22 percent. At the same time, visitors from Spain and Ireland grew 31 percent and nine percent, respectively. Arrivals from Sweden and Switzerland were up 19 percent and 17 percent, respectively, for the year.
• Visitation from Asia decreased two percent year-to-date. Japanese arrivals decreased eight percent year-to-date. Japan accounted for 52 percent of all Asian visitors for the year. Year-to-date, arrivals from South Korea decreased five percent. India and PR China grew seven percent and 25 percent, respectively. Taiwanese visitation decreased five percent in the first eleven months of 2008

Its Freddie's Time again

I know it will soon by Friday 13th but I don't mean Freddy Kroger.

I mean the Frequent Flyer Awards. Go vote for your favorite Airline, service etc.


It is actual quite a reasonable battle. So this year don't be passive - voice your opinions. With EOS, Silverjet, Maxjet and others now but a faint murmur of history - who is the best player in Biz Class. With 3 Airlines now flying the behemoth A380 - will that impact the market?

Go vote


02 February 2009

Libgo President Exits

Liberty GoGo President Cathy Palaez, who more than 28 years ago was hired as a receptionist at Liberty Travel and eventually climbed to become its president, has resigned, effective Feb. 6th 2009.

She presided over what seems to have been a smooth transition to the Flight Center ownership and can walk out the door knowing she did a great job during this time.

We wish her best wishes and a little time off.

Cheers Cathy

01 February 2009

A Sign of the Times - Retail Footfalls Plummet At BAA

Borders who itself is having problems in the down economy, is reportedly pulling out from all BAA outlets as visitors to those outlets fall.

Its UK affiliate - Borders UK is to pull out of BAA’s airports in the latest example of fraught negotiations between retailers and landlords. Guy Grainger, head of retail at Jones Lang LaSalle, said footfall had fallen in airport retail outlets by up to 25% because of the downturn in business travel according to the Financial Times.


Cathay to BA - Go Away!

Rebuffing any thought of a possible tie up between the declining valued BA and the greater value but smaller Cathay Pacific - its CEO - Tony Tyler wasted no time is telling Willie, Martin and the boys (via the article in the Telegraph)that they were welcome as OneWorlders but no more than that at Cathay City.

In a battle of the top dogs, Cathay Pacific chief executive Tony Tyler - a Swire man - said his airline has no intention of merging with British Airways, which is worth half as much as the Hong Kong-based carrier. In an interview in the Telegraph , he said he does not agree with BA chairman Martin Broughton who stated in early January that the Oneworld alliance will fall apart if the BA tie-up with American Airlines fails. while Cathay has been hit by the recession and has cut capacity growth for 2009 from 6-7% to broadly flat, it is seen as being more profitable than its London based Alliance partner.

British Airways hopes for a partnership now seem to be looking a tad thin. The Iberia merger is all but dead - killed by the free fall in the pound and the poor British Carrier's performance, Qantas and BA never made it past the first date despite having been engaged and almost married successfully before. With the new Obama Administration in power - the prospects for a tighter alignment between AA and BA don't look quite so good unless Gordon and Barack want to make nice and Fly Mandy wants it.

Here is the full article - worth a read.



Stop Treating Customers/Users like IDIOTS

Bravo and Kudos to Gerry McGovern - who has become somewhat of a Web Curmudgeon of late.

I am reprinting his post in full - this is a very timely piece given my notes from yesterday.I would just change the word to Idiots not fools....



One reason Google has been so successful is that it has shown a genuine respect for its customers.

"Google's fourth-quarter revenues were up 18% to $5.7 billion, a solid showing," Fortune reported in January 2009. The article goes on to state that "Google is transferring almost half a billion dollars in wealth from shareholders to employees," as a motivation and retention strategy.

Yahoo, on the other hand, "has frozen annual pay increases for its employees as the Internet company battles with a difficult online advertising market," Reuters reported in January 2009.

Google and Yahoo operate in the same online advertising marketplace. So, why is Google's revenue up 18 percent, while Yahoo continues to struggle?

I visited the Rolling Stone website recently. I saw a link for "Best albums of 2008" and clicked on it. The page I arrived at was totally dominated by a large ad flashing repeatedly in fluorescent green, screaming out at me: "THIS IS NOT A JOKE.
Congratulations you've won." There were two buttons underneath this statement. "Click here to join" and "Cancel".

How could a company like Rolling Stone put an ad like that on its website? To me, Rolling Stone is a reputable, trustworthy brand. On seeing that ad I was shocked that Rolling Stone would stoop so low, would treat its customers as such fools. It will be quite a while-if ever-when I go back to the Rolling Stone website.

The experience at Rolling Stone reminded of an excellent and shocking article I read by Benjamin Edelman called, "False and deceptive display ads at Yahoo's Right Media."

"Given limited enforcement of restrictions on deceptive online advertising, numerous banner advertisers are willing to resort to trickery to draw attention to their offerings," Benjamin writes. "And plenty of web site publishers stand ready to run deceptive ads. But widespread distribution of deceptive ads also requires another crucial input: intermediary ad networks to broker ad placement and tracking. Key among these
intermediaries: Yahoo, whose Right Media marketplace facilitates so much of this traffic that Right Media classifies advertisers'
deceptive tactics into dozens of detailed categories."

Not alone does Right Media condone deceptive advertising but it actually seems to encourage it. "Right Media encouraged publishers to accept ads tagged with negative categories,"
Benjamin states. "For example, in a 2006 message to Direct Media Exchange publishers, a Right Media staff person commented that ads in the "'free' and similar representations with NO disclosure language" category "can get a lot of clicks and conversions and should probably be allowed" -- completely ignoring the ads' tendency to deceive and their apparent violation of applicable FTC requirements.

"As to ads that are difficult to close or exit, the Right Media staff person encouraged publishers to ignore the problem since publishers get paid no matter users' experience: "It is something that may affect the user after they click the ad, but won't create undesirable behavior on your site."

Too much of old marketing saw the primary purpose of advertising as to deceive, manipulate and trick. But marketing doesn't have to be that way. Google is proving that the greatest and most profitable advertising of all is that which customers find useful.

False and Deceptive Display Ads at Yahoo's Right Media http://www.twine.com/item/11t0b5t7p-cp/false-and-deceptive-display-ads-at-yahoo-s-right-media

Gerry McGovern