AA Tries Belatedly To Up The Ante For JAL

After its lackluster effort promising exclusivity to JAL, AA has put its hand in its pocket (or probably more correctly into TPG's pocket) and pulled out a further $300 million. Which takes the total to $1.4Bn it is prepared to offer to invest in JAL and retain JAL in the OneWorld fold. And in a tip of the hat to reality it has offered to add this to the pie irrespective of a Chapter 11 style filing and subsequent reorg.

Will this change the stakes? Is it too late? It certainly does tip the balance more to AA's favour who is by now realizing the cost of losing JAL would be significant.

With a Court Protected Reorg now an almost certainty for JAL - the decision is slipping out of the hands of the management and into ETIC's remit. With the Government now the largest creditor for JAL - this all plays nicely to the traditional way of solving Japanese issues.

JAL needs a major reorg and it needs it now. There is very little time left to effect this without losing some of the good wood as well as cutting the bad.

Is there Someone Missing From The Party?

The Hoopla over the Jetstar/Air Asia pact may be missing a player. That player would be Easyjet.

So here's a thought - how long before Stelios thinks to join up. It might be the right occasion for the Easyjet plane to get built.

Cheers

Mesa - The Long Road to Retribution?

Nearly two years after Mesa stirred the ire of just about everyone in Hawaii for starting a war that led to the demise of Aloha, Mesa itself filed for Chapter 11.

It seems Mr Ornstein as CEO incurred a fair amount of "un"friends in his tenure at Mesa. Many of whom I would think, will not be unhappy to see his company's demise and hopefully to have him gone. But then I am only speculating and this is only a blog.

The reasons why Mesa failed could have been seen for a very long time. In the early 2000s, there were a lot of analysts emphasizing the coming problems of the Regional Jet model 50 seater model. As the fuel crisis deepened the over population of early model CRJs (from both Embraer and Canadair) worsened. And the biggest operator of these? Mesa.

There is a sad story potential that some service points operated by Mesa will suffer a loss of service as a result of this. So what will happen to Mesa? Probably a carve up. My guess is that Republic and Skywest will be likely players.

Cheers

Before You Rush Out For That Nexus One...

Go read what Google has to say about its own device:

http://www.google.com/support/android/bin/answer.py?answer=166507

So AT&T network users. SOL.

Verizon Users. SOL.

Hmmm so is Google trying to tell us about how wonderful their technology is... for the second time today - I keep thinking that Google may just be an evil empire.

Cheers

Google "Ditches Local Listings" ???

I caught this piece on WebProNews that should have all of us worried.

Google seems to be deliberately ditching local listings. I highly recommend if you are involved in SEO (and SEM) that you pay attention to this and let your people and their people know about this. Google is flexing its muscle in more ways than one. If we thought that Microsoft was the evil empire - then we have to accept that Google is far from benign.

Cheers

Jetstar Snags Air Asia Dashing Virgin Hopes

The oft rumoured deal between Air Asia and Virgin Australia Group for the creation of an ultra LCC in the Oz market seems to be as dead as the Dodo.

On Wednesday ATW is predicting that Air Asia and Jetstar will form a partnership initially marketing based but over time it will morph into a bigger arrangement.

Comprising shared resources - virtual code sharing is expected to be the first fruits of the agreement giving the two carrier groups the opportunity to expand reach within the Asia/Oz market one of the fastest growing segments in the region.

With Air Asia X is now serving 3 destinations in OZ - Gold Coast, Perth and Melbourne. Jetstar is already well entrenched in Singapore through its Jetstar Asia and Jetstar Vietnam affiliates. Surprisingly there is little overlap between the two companies.

Now will this be a marriage of convenience or simply a series of marketing based dates? There are some basic issues that will need to be addressed. Qantas (Jetstar's parent) has been in league with Singapore interests who are not necessarily aligned with Air Asia. Air Asia X is making inroads into QF's long beloved Kangaroo route. A daily (now conventionally timed) flight on A330-300 aircraft is a fair number of daily seats to KUL. Does this also indicate a pulling back by QF from its relationship with BA?

For Virgin this reduces the options open to them. They are now looking westwards for their relationship with Delta to matter. If JAL and Delta come to an agreement then we could speculate that Virgin could become a fully fledged member of Skyteam - marking its transition from LCC to Full Service Carrier. Its already hynrid enough!

Cheers

Which Expedia Do You Prefer?

With thanks to Professor Tim for noting the new logo.

So I went through the Expedia sites and had a look at them - it has been a few months since I have seen all of them in context.

There are now quite a few of them - 20 to be exact.

* Australia
* Austria
* Belgium
* Canada
* China (elong.com)
* Denmark
* Germany
* France
* India
* Italy
* Ireland
* Japan
* Mexico
* Netherlands
* New Zealand
* Norway
* Spain
* Sweden
* United Kingdom
* United States

So here are some interesting statistics. All of the current sites but the US sport the old logo. So lets see how long it takes them to update that.

Only one has a girl pointing east - all the others have the contact person being a girl pointing west (left) if there is an image at all. There are 8 sites that use the same image of the US girl (there are 2 different images of her). Expedia doesn't seem to like blonds - they are relagated to the Canadian and Austrian sites only.

Oh yes and don't forget there is a corporate logo which is also different. I present all the ones I know about here for your edification. I ignored the suitcase and obviously I didn't present all of the variants but you get the idea.

Have fun with this and impress your friends

Cheers

"The Middle Seat" 2010 Wishlist - Safety.

Scott McCartney WSJ's Middle Seat Columnist has done his annual wishlist for 2010.

He covers several very important areas:

Airport Security
The TSA in general
Ticketing
Baggage
Flight Safety - Pilot Fatigue.

I applaud his taking this stand. But will anyone listen?

I would like to pick on one issue which is that of Pilot Fatigue. Firstly I am not anti-pilot - far from it - but I do believe a certain degree of reasonableness is required on the part of the Pilots, together with the authorities and the airlines.

The issue I have is with the domicile. Pilots are stationed in a domicile and are required to start their journeys from the domicile irrespective of where they might actually lay their hats on a regular basis. The case of the 2 Colgan Pilots (involved in the accident of CO3407) who both had extensive journeys to their respective domiciles before coming on duty is a case in point. The Pilot rest issue is exacerbated by the travel to and from their domicile's so that in due time the pilot's are not actually getting their legally mandated rest. This poses a severe strain on the pilots mental and physical readiness that is not addressed. Crew Rostering has become much tighter in recent years and the issue of Air Crew (not just pilots) stand down time. No one is not at fault here. The authorities (FAA and the DOT as well as the NTSB) are more than aware of the issue. The Pilot representative bodies and the airline managements all share responsibility for this problem. Ultimately it must be the Pilot's own responsibility to determine if he is safe to fly or not. The system must work so that this is not a case of someone pushing themselves beyond their own limits. Sadly - this is an issue that remains largely unaddressed.

With better knowledge and tools it must be the responsibility of the authorities to investigate and rule accordingly.

The fact that American is under investigation for no less than 3 landing accident or mishaps in the past month should be a warning sign to everyone. This is not a subject that needs further study. There has been quite a lot. It is a subject that demands action.

So let's deal with this soon. Like now.

Cheers

Alas Poor Yorick (aka Northwest)

Every year - I clean out old files and occasionally tackle a long list of things which in the US is known as the "Honey Do" list. This is of course of my own making. So I was reviewing my frequent flyer file. Whereas at one time it was more than 40 carriers deep it has now shrunk to less than 10. And this got me thinking about one of my favorite airlines.

The final chapter in Northwest's history is being written as we speak. While not exactly legendary for their customer service - they have a lot of history that was unique. Northwest Airways, Northwest Airlines, Northwest Orient and back to Northwest Airlines again. It absorbed amongst others its neighbour Republic which included Hughes Airwest, North Central and others.

Well known as being frugal - at one time there were no doors on the bathrooms so that executives and staffers wouldn't have the temptation to hide in the WC during the day. Not that the surroundings were luxurious - for the longest time the corporate HQ was the hanger at MSP.

Effective this month the airline of Don Nyrop and Colonel Lewis Brittin will soon be no more. The airline whose heritage includes Howard Hughes second string airlines and rather infamously D B Cooper will lose its last vestiges of independence as it is swallowed up into the world's largest airline Delta. It is already operating on a single certificate. The attempted bombing of NW253 should not have escaped anyone's notice that the actual A330 was painted in DL colours.

From my side it is a small degree of poignancy. My father and I both worked on the advertising account for Northwest at different times in our careers.

So here's to Northwest and its long history. I am confident that the legacy will live on.

Cheers

What Options Realistically for JAL?

There is a lot of speculation - including the Professor's - over what the real options are for JAL. There are also a lot of moving parts. Many who are unhappy that the white knight is coming from across the Pacific in the form of an American Suitor either Delta or incumbent American Airlines. It this group that see a lot of mileage in making ANA into a mega carrier and having it assume many of JAL's current international routes.

I think that this is pie in the sky thinking. The realistic options are few and far between. With the Government clearly stating it will not give carte blanche in writing yet another cheque for the ailing airline - it has few options.

So the likely scenario in my thinking goes as follows.

Firstly Open Skies means that there are few restrictions in letting ANA move into additional markets. It will be up to ANA to decide how to do that but already it has signalled its intentions by forming a transpacific alliance within an alliance with fellow Star carriers CO and UA.

Second the value of Haneda means that an inter-modal hub will be established there giving ANA an edge of JAL. JAL will be hard pressed to compete with its base in remote Narita. Also the international airlines are not going to be happy with having the local carrier enjoy an advantage and will clamour for access to Haneda.

Thirdly - we have to be practical. The current investors in JAL and those who have in recent years lent it money as it continued to bleed are not going to allow a wholesale carve up with them getting nothing in return.

While no one can reasonably muster a lot of sympathy for the airline itself and its financial institutional backers - there has to be some accommodation. The government bought some more time by agreeing before the markets opened today in Tokyo to double the amount of financial guarantees and cash that will enable JAL to stay afloat after a round of news stories over the past week that said both ANA would be acquiring some JAL routes and that the Government was going to enable a bankruptcy based reorganization.

JAL president Haruka Nishimatsu in a published interview with the Asahi Shimbun newspaper yesterday that he was opposed to any bankruptcy filing including "legal liquidation" and also had no plans to halt international flights. That is said after JAL has already announced or already pruned several cities and routes. On Thursday another Japanese paper the Mainichi Shimbun reported that the government was considering a plan which would see rival All Nippon Airways take over JAL's international flights. This plan was dismissed with derision as "impossible". Indeed such a decision at this time would be counter productive given the slow resurgence of traffic. Remember that Asia Pacific traffic was very badly hit in the Recession last year.

JAL is already on the record favoring a switch to a partnership with Delta and Air France from the OneWorld group of American Airlines for the reasons I have laid out before.

So there really isn't much choice or maneuvering room. JAL cannot recover from its current situation with external help. it's debts and obligations are too great and its need for radical restructuring too hard without a legal form of protection from both existing contracts with labour and a reduction in the bloated and expensive current operations cost load. A restructured arrangement with the banks taking shares in the newly restructured carrier and the existing shareholders - many of whom are small shareholders who must see their share percentage fall. Given the almost junk bond status of its debt and the penny stock basis of its current stock - there is little that anything other than a legal restructuring can accomplish. Its market cap is now worth a little more than a quarter of its competitor ANA. Fall of more than 80% since the halcyon days of 2006. I firmly believe that the ETIC board must move swiftly to act and recommend a form of restructuring akin to the US Chapter 11 for the sick carrier.

Only with this process and a clear plan can the form national carrier survive in any form. There needs to be no more bickering or prevaricating. Rome is decidedly burning and Nero and his friends better move out of the way.

Cheers

Body Scanner Yes or No?

For my first blog of the new decade I thought I would fix on the issue of security and the body scanner debate. So I am going to dive into the fray on this one.

There is quite simply the implied consent rule.

We do everything around this every day. As far as air travel is concerned we explicitly believe that we are being protected - in the same way that we believe that police are responsible for law and order. The issue is not whether you like this situation or whether you approve of the police - you accept their role or accept the consequences.

To this end - we really have little choice other than to accept that the best possible solution is being utilized for our safety when we are traveling. This relates to not only air travel but indeed any form of public transportation can be so governed.

In my humble mind there is no conflict with privacy or profiling of individuals and indeed (almost) any other tool that will ensure our safety while flying.

Refusing the use of Whole Body Scanners on the grounds of privacy is frankly ludicrous. You accept that you have no privacy when you walk into say a Doctor's office and the nurse examines you with our without your clothing.

To simply discard this imperfect but the best we currently have technology on the grounds of some possible misuse of privacy makes no sense at all to me. Ensuring the proper use of the technology and preventing unauthorized use of the technology for nefarious ends (which is the reason the current nominee for the head of the TSA should stand down - read the Washington Post )is clearly something that can and should be managed.

So are you clear on the subject?

I am

Cheers