31 October 2009

Long Tail Getting Fatter ? Lets Look

I am not a fan of the Long Tail theory. Nor are some of my fellow bloggers.

PCW however has an interesting analysis out on the trend data. Have a look here at the summary information.

What I continue to worry about is that the model for OTA in any environment based on GDS searches results in a train wreck. I call the Online Search (aka the Look to Book) problem the Achilles Heal of our time.

Until something is done about search's interaction with the way that availability and pricing are linked then we will be at an impasse. The problem is defined as either the powershopper/masterpricer type entries vs the brute force transactions.

Neither is acceptable and both are problematic in both quality and practicality.

With the big 4 OTAs falling traffic now become more and more apparent - the demand for the second tier players to develop solutions that are competitive is apparent. These players need to deploy solutions that are smarter than the traditional GDS based search offerings.

Perhaps the next gen killer app is the combination of Facebook and Search. If one of these guys cracks it before the big players do - then we could definitely see a re-ordering.


Hitwise Global Travel Webinar

WOW - I must have been asleep for a long time...

I have just returned from a RTW trip that lasted 20 days. I travelled to Australia and Singapore ending up back in Europe. During this time - it was a pretty intense trip and I have ignored my usual reading material. I finally managed to catch up to it - courtesy of Delta's decision to let me fly in their new Biz Class product.

One of the things I got around to doing was catching up on my usual sources. One of which was Hitwise. As I write this I am at 36,000 feet and enjoying free wifi. I was therefore able to stream down the Hitwise Global Travel Webinar. Lots of good stuff there.

I highly recommend reading/viewing it. Some great stats also


The Web Vs Real Estate - It's All About...

In real estate it is often said that the only thing that matters is Location, Location, Location

On the web I am increasingly beginning to understand that there is just such an attribute.

Context Context Context!!!

After the WIT09 show I went back to my notes and found the number of times I wrote CONTEXT against speakers names was quite remarkable.

So I believe that we have to be very careful about how we present information. I always thought the ultimate statement of context was the famous quoted line from Mandy Ryse Davies

I note from Gerry McGovern's weekly mail last week - that he has the same issue about unrequited love and the use of Links.

I think this was a prelude to the World Series that finally got under way this week.


What Consumers Seek From Their Brands Online

As we move more and more away from the "access information superhighway" web to the semantic web - it is getting increasingly obvious that brands are not just about some Madison Avenue creation of brand value but what the consumer needs and expects from that brand.

No longer is it just important to create a vague image. The brand must have real value that in some cases can actually be measured. I like the work that Lightspeed is doing in this area and have commented on their stuff before.

Check out this presentation: at the European IAB last month.

Emarketer did a piece on their brand expectations study. What is interesting to see is that there is a growth of expectation on what they consumer will get from the brand. While discounts still trump all other attributes some of the others surprised me.

Read both reports - they should be required reading for anyone who is involved in any brand online.


WIT 2009 Over for another year

The always excellent WIT just wrapped up its 5th Year session in Singapore last week.

The show was excellent in quality of content and debate. For once the professor is going to show his real self in the attached picture. This was taken from the Roost. I sat through much of the sessions in the Roost with the young Tweeters.

Also congrats to Mario and Morris of Circos for the Tweet app they built for the questions.

On to next year. It promises to be just as challenging and just as informative. If you want to get a firehose of knowledge/opinion and have a great time - Sign up


Customer Data – IATA and Paxsys.

Here is an interesting conversation. Bad guys manipulating passenger information.

I wont comment other that to say this is an ongoing saga. However it is an important one and it should be debated in the open.


Business Travel Coalition
October 20, 2009
The International Air Transport Association (IATA) today announced that it “won a major court victory” in a dispute with global distribution system (GDS) Travelport over PaxIS, IATA’s Passenger Intelligence Services product. While BTC does not yet have the decision to review in detail, it would appear from publically available information that Travelport did not lose a case on the merits, but rather an early procedural request of the court for an injunction, in lieu of a trial. Such an injunction to enjoin a commercial party’s marketplace activities must ordinarily meet very high standards such as timeliness in seeking a court’s intervention. The PaxIS product has been in the marketplace for three or more years.
In contrast to this procedural loss for Travelport, Amadeus won its case against IATA earlier this year on the merits when the International Chamber of Commerce Court of Arbitration ruled in favor of the GDS and ordered IATA to cease and desist using Amadeus’ data in its PaxIS product. Amadeus won resounding victories on two arbitrated claims. The first successful claim related to IATA’s breach of a commercial confidentiality agreement governing the transmission of Amadeus’ billing and settlement plan (BSP) information to BSP data processing centers. The arbitrator also ruled that IATA’s use of Amadeus BSP data for PaxIS violated the EU Database Directive. Sabre’s suit against IATA, expected to go to trial in e arly 2010 in Canada, will likewise be argued on the merits.
The IATA PaxIS product is an especially intrusive and troubling data product because unlike any other data product, PaxIS shows the average price of tickets sold on specific routes on airline competitors by specific travel agents. Because of the International Chamber of Commerce Court of Arbitration ruling in the IATA – Amadeus case, the practical effect of the Travelport ruling is that PaxIS remains an incomplete product offering; analogous to a phone book with half its pages torn out.
BTC will provide more analysis as information becomes available.
CONTACT BTC || Kevin Mitchell | 610-341-1850 | mitchell@BusinessTravelCoalition.com
About BTC
Founded in 1994, the mission of the Business Travel Coalition is to bring transparency to industry and government policies and practices so that customers can influence issues of strategic importance to them.

OOOOOOHH Skyteam and Delta Airlines – What have you done?

This is not your father’s Delta.

So I got to experience the new DL Biz Class product. It is on one of the refurbe’d 764s. LHR-ATL DL009

So rather than doing the usual Tim Hughes BOOT assessment of the program – I am going to do a review of the elements that I experienced and how it could improve.

So let me start with the boarding process. Landside – the new DL environment is clearly a very different one. The new refurbished Terminal 4 at LHR is now devoid of BA and QF. (Incidently I arrived 2 days before on the last A380 flight to use the facility for a very long while. The experience was diabolical.)

So T4 is now Skyteam’s new home at LHR. CO and a few other airlines have still to exit but the rest is now sorted and with T1 being Star – it leaves T5 and T3 set to be the home of BA and its OneWorld partners. This marks the first truly integrated major airport that is alliance based. I should refer you to a much earlier post I did early in my blog history – where I described what has actually come to pass.

Anyway the new premium area is not yet open. It will be soon though and looks very nice.

The process of check in – is still a little rough. It will get better. So I made it all the way through. The total departure area landside is really quite nice and quite civilized.

Once past security (lots of people with nothing to do) the terminal is pretty familiar for the regular folks. The gates are a bit small. But the terminal feels unrushed because it is probably only about 30% capacity compared to the prior tenants – probably less. It doesn’t look like there will be much expansion in the near future either. This somewhat begs the question as to why BAA feels it needs a new terminal just now. Anyway I made it to the new Skyteam lounge. WOW! Compared with many other facilities it really is an upgrade. Particularly for DL and AF.

There are some interesting touches – like the Oxygen Bar!!! The staff (Actually Gate Gourmet employees) are not terribly experienced yet. More for looks than functionality is the impression. There were no airline trained staff in the Club area. So don’t expect anyone to help you if you have any service issues. Apart from that there are a few niggles – like none of the PCs/Web terminals have spare power sockets. When will anyone realize that there are two missing ingredients to any business traveler which he regards as vital – power and web access. Cheez!

Once on board – I was treated to a very nice surprise – the brand new seats.

The layout is very good – 1-2-1 staggered so that each person is offset from the people front and back. I have to say that the arrangement works well although I suspect it is not as yield beneficial as say either the BA or UA J class products I have experienced within the last few months.

The seat is a little impractical – the table arrangement leaves a lot to be desired. There is no nicety like the way QF has a place for the water bottle. I somewhat wonder if the table space beside you is the most efficient use of space. The seat is an ALMOST lie flat configuration it feels a little weird but it can work. It is a distinct improvement on the prior product. I believe that from a total space perspective it now beats the BA, AA, UA and CO and OLD QF J class products I have experienced lately.

There are still some areas of improvement – the cleaning left a lot to be desired. The Flight attendants tend to be the same old tired (but very friendly) AFA members. I noticed that there was a lot of assistance required by the passengers to get used to the equipment. Tables etc need a lot of adjustment.

All in all not a bad product. Definitely not your father’s Delta.


Volaris Deals Another Blow to Navitaire

It seems that there are a lot of rats leaving a potentially sinking ship. Over the last 12 months we have seen Westjet, Jetblue and now Volaris all have announced their exit from Navitaire’s OpenSkies/NewSkies environment.

So there is something going on here that we all need to understand. It is the change in distribution paradigm.

Smart airlines are beginning to realize that the power of distribution has now passed from the GDS into the central core of the airlines business. As such the role of the GDS and the functionality requirements have changed. It also means that the Airlines internal IT systems have to have significantly greater functionality than exists in the LITE PSS systems such as Navitaire.

For many years I have argued that there needs to be a Distribution Manager functionality that was simple and functional available to the airlines. Clearly Volaris et al feels the same way.

Listen up people – the world has changed. Anyone stuck in the old world needs a wake up call. This is it.


AA To Mandate 100% Direct Distribution

And so it comes to pass.

The first Full Service Network Carrier to come to the market and advocate a complete break from the traditional GDS based model. AA's Cory Garner announced this week that AMR's airline subsidiaries will move to 100% direct distribution.

Max Hopper must be spinning in his retirement home with this one. AMR and its former child Sabre have finally come to break apart. In less than 60 days AMR has broken the chains that bind that seemed so formidable back in the 80s and 90s.

On August 29th they announced they were bailing out of Sabre's hosting. And earlier this week at CASMA they announced they were bailing out of the GDS model that Sabre used to dominate.

There can be no simple words to describe this fundamental shift in AA's position. We should note that this has not been a sudden decision but a long term progression as the former child moved slowly but inevitably towards conflict with its parent.

So now you have it. Two of the World's premier carriers have now clearly laid out their opposition to the GDS holistic one size fits all model. AA and LH - via different methods have defined the new world order.

Of course this could not have come at a worse time with the GDSs primping themselves for IPO. Now two of the largest content providers have created opposition to the very business model that they are hoping to take to the IPO market.

The WOW team and Sabres joint investors (TPG and Silverlake) must not be happy bunnies this weekend. Needless to say Blackstone must also be a tad PO'd.

You gotta love this business. It is NEVER dull.


29 October 2009

The Winter Cutting Season Is Upon Us

Airlines are starting to go through another round of rationalization and cuts.

AA who last quarter cut a number of operational people is going to shut down its maintenance base in MCI. For those of you who are historians or just a little sentimental this was TWA's base. This is for me personally sad since I worded for TWA/PARS during the 1980s in MCI. AA is eliminating about 700 jobs in total most of them in Kansas City. This is on top of a number of customer service and flight attendant jobs in the last quarter.

US Airways is also cutting a little piece of history. It is essentially throwing in the towel on the LAS hub. The whole cutting of the former HP hub started at the height of the fuel crisis last year when they canceled the night hub. With a significant cut back in traffic to LV - the local Tourism is going to take a hit. The carrier cutting 1,000 jobs next year, shifting virtually all of its flights to its three hubs and suspending several international routes. “It’s a major retrenchment,” said Chairman Doug Parkers. The airline will also deploy smaller aircraft on the shuttle runs.

There will be more.

27 October 2009

JAL Rescue Plan - A Very Japanese Affair

So the details of the JAL rescue plan are beginning to emerge. And it looks like the former laissez faire solution of the prior Japanese administration is being swept away in favor of a hands on solution with extensive government intervention and involvement. Clearly the banks as I have opined previously are not having the usual platitudes of the management and are demanding the Government put some real skin in the game.

Net result?

Up to 13,000 job losses - previously unthinkable. The Government is reported to appoint an oversee agency to monitor and even drive the changes at JAL.Even this may not be enough. The company is hemorrhaging cash and unable to heal itself.

There will be more to come on this one


BAAABI - Finally A Reality This Week?

So BA, IB and AA should find out whether or not their regulatory path has been cleared and they can proceed to create the third and presumably last Transatlantic Alliance Program. With Skyteam's program (AF/KL + DL/NW) already a reality and A Plus (CO, UA, LH and AC coming on stream - it would be logical to assume that it would be a simple approval with some minor tweaks.

The EC earlier this month filed legal papers to object. The three airlines received so-called 'statements of objections' against their planned agreement on coordinating operations and marketing on trans-Atlantic routes, the European Commission, the EU’s antitrust authority, said in an e-mail today.

The Brussels-based commission said the deal may be a “breach of European rules on restrictive business practices.”

However the EC has proved so far to be a reasonably affable player in this regard and given that the only sanction has been the surrender of slots at the hub airports of the major carriers involved. So that can be a given. However the economic value of a slot at LHR is probably worth a lot more than at Madrid or even CDG. So that the 3 players will have to surrender a few slots at LHR will make their life a little difficult and lessen the value of the alliance. The three airlines currently have about 44% of all the slots at LHR. So giving up 10% would be an expected requirement. Interestingly there could be a knock on effect. If BA tried to buy some or all of BMI it is likely that further slots would need to be relinquished. BA is steadfastly holding to the position that surrender of slots is completely unnecessary as the Transatlantic routes are effectively deregulated and therefore a surrender of its slots would be unnecessary.

The City of London - currently in a somewhat less than forgiving mood with BA has made its position clear with regard to a merger of BMI assets and BA. There is also an expectation of loss of assets at LHR by the merger carriers. But only BA has ordered a large enough aircraft to compensate for the loss of slots if they are to keep up the pax numbers.

BA's own position seems to be somewhat weak. It faces strike action at Christmas time with the Cabin Crew (represented by UNITE) calling for a strike ballot today. Needless to say BA faces a long uphill struggle at a time when it can least afford it.


Oh Mea Culpa! Kudos Lost...

In my post a few weeks ago on the Westjet cutover to SabreSonic I did receive a few comments directly. Boy did I hear them!

So firstly I owe a huge apology to the Westjet team for ignoring the obvious contribution that they made to the project. This was not intentional but was clearly an error on my part. Consider myself duly lashed for the omission.

The reports from users are generally the way you want them. Relatively quiet!

So well done to both teams. Clearly there was a lot of prep work. It must have been a frustrating time for the distribution team at Westjet having undergone a series of delays - first with waiting for Navitaire and then the abortive efforts with Aires (announced in 2005 and then cancelled 21 months later).

The inhouse team knew what they wanted and being familiar with several Sabre products made it that much easier. But Westjet runs a pretty tight ship and this shows in the work done.

Best of luck chaps. Is this a model for say a certain company in Europe who still seems to be taking a little extra time about their cut overs.