14 March 2009

PhocusWright Sessions @ITB 2009

Sadly I could not spend as much time as I wanted to with the PCW crew. What I saw (and then cheated by watching the stream (Thanks Phil!) made it worth while. Another good show chaps. Seemed to be more subdued than last year. The whole ITB show seemed to be very busy on the first day but was dead by Friday Afternoon.

However I am seeing a disconnect between what I perceive as the real world and what some of the panelists were saying. Frankly I don't think its Mobile's year. Not for the way that Travel can make money out of it. Sure there are some VERY cool apps on iPhone and now even Crackberry has some interesting apps. But its not that useful. Now I need a kind of traffic cop on my iPhone view top. And even after playing with an iPhone for quite some time - I have gone back to the Crackberry - better for what I need - Email.

Where I am still very uncomfortable is in the persistence that the "cool" elements outweigh "smart" elements. Thus I still dont see a long term huge value in UGC, Mobile, Social Networks and the like. This doesn't mean that there cannot be good uses, but I find it hard to sift through the "noise". And I know customers do too.

One area I am absolutely in sync with is that Context is critical. (I just cannot quite bring myself to say its King though).

What people say on platforms and then what they say in backrooms and coffee places are once again clearly different.

What are clients and their business partners are saying are very different. Cut costs, preserve value and do way more with way less. Many projects involving UGC just quietly died. Social Networks... no time. Mobile - why?

I see a big 3 Cs emerging.

Consistent, Context and Cheap.

And you?

BA Swings A Soft Axe First (Eugene)

BA has swung its first round of cuts by sending out Voluntary Retirement Notices to all its European based staff. Much like Delta did at the end of 2008, BA's program promises little incentive to leave at the moment.

With BA's troubles mounting across the board, they need to reduce headcount even further and probably a lot faster. The drop off of premium traffic affects BA who is more vulnerable with less "cheap" seats in their inventory.

Having just flown in the back of BA and LH round trip in coach both ways - I can assure you that LH has many more cheap seats available - AND is filling them - than BA has and is not necessarily filling them.

They say perception is reality. In the case of the battle for survival, caution wins. BA's aggressive pursuit of profitability at the expense of the gross revenues is now starting to look a little thin.


AF/KL Charges To Be Eaten By Travelport

Travelport has elected to eat the surcharges that will be imposed by AF/KL in France and NL starting this summer.

While both parties admit they are far apart - Travelport is trying to take the pressure out of the system by covering the overage at least for the short term. Just like Amadeus initially did for LH bookings in Germany.

The full impact has not yet hit Germany yet. LH is collecting its fee (4.90 Euros) for LX and LH via an ADM process. Those ADMs should be hitting people's desks in a few days. Then you will see some shift in the market.

We can be pretty sure that there are other carriers considering doing exactly the same thing. So in essence there are at least 4 airlines in Europe charging some form of GDS surcharge fee for content sold via the GDS. (The other 2 players currently doing this are Norwegian Air Shuttle and EasyJet).

Having spent the last week in Berlin at ITB, this is a hot topic for all kinds of Intermediaries, GDSs and Airlines.

With Travelport showing canned demos of its G2 developed product for Multi-Access GDS and LUTE Technologies CommandPRO already in production with several hundred agencies, there are going to be some interesting times ahead.


12 March 2009

ARC Sales - Stay down

January my friends was not a blip.

But lets be clear here - we are accounting for some aberration.

While total $ value sales were down 26% you have to really look at the number of tickets and the number of days.

So the extra day accounts for 3.6% extra activity. There are other considerations if you want to split hairs such as the number of work days. But in all we should expect that transactions are off a net 15% Y/Y. The falling off in yield is another example of the issues facing everyone. The airlines and the hotels are experiencing some pretty heft yield drops.

This is now exposing a soft underbelly of politicians. IE that the taxation model comes out pretty clearly. Taxes can make up a large chunk of the price now. We have fares across the Atlantic for nearly close to what RyanAir has been proposing. We have fares on legacy carriers between European Capitals for less than Ryanair (just have a look FRA-LON).

So still not healthy. But read between the lines.


ITB2009 - What's it like?

From the Professor's perch - it looks pretty much the same.

The mad scrum to get into the building, at least this year you can print your entry badges but its still a mad dash. The halls seem just as full of carrier bag toting students and people from all countries. The organizers are saying its the biggest thus far. And it remains certainly very big.

From a Technology point of view there is clearly a lot less going on. The GDSs per se are not there. Travelport has a generic stand, Sabre is not there as a GDS and Amadeus is putting its Traveltainment best foot forward. Thus hall 6.1 is somewhat bereft of the usual players. No Tom Dillon this year to sparkle us with his Irish wit!

I attended quite a few meetings on day 1 and spoke to many people. Even made it to one party. I think I could categorize people into 2 possibly 3 groups. The possible third is the Denials. There are still a few out there. Fortunately only a very few now. So the other groups I will call the Pragmatists and the Deer.

The Pragmatists are hunkering down - chopping vere they can and making plans for the upturn. Survival is a word you hear frequently. Caution is another watchword. Adjusting to the new reality seems to be the focus. Further i think we can see that there are few who believe that this is a short term thing.

The Deer are what a good friend of mine described as those beyond denial. The are not just frozen in the headlights but actually looking for salvation in them. Unfortunately there are still quite of a lot of these.

One element I find interesting is the contrasting views from the geography of the participants. I have not spoken to many from Asia/Pacific but there is a clear contrast from Europe and the USA. More pertinent is that the USA collapse in confidence is not shared so broadly in Europe.

So for now I will keep on observing. There are some wonderful things going on that will make for a fascinating view of the new world order when confidence and the economies return from hiatus.

And what do you think?


09 March 2009

Use of ACH as Debt Collection Works in Reverse for SABRE


NW decided it didnt like getting billed by Sabre for what were interline reservations (as opposed to GDS segments). So it threatened Sabre and eventually carried through on its threat and took a cool $1.5 million from Sabre via the ACH - Airline Clearing House.

Sabre sued and has now withdrawn its lawsuit.

The issue was code share segments on the struggling Midwest Express which NW owns now a share of.

What is fascinating about this is that Sabre pushed the issue a bit too far and Northwest stamped on them hard. It sets a clear precedent that in future any GDS who tries to do this will see the airlines push back - hard.

we have all been warned on this one