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)