09 January 2010

The EWR "Trespasser" Identified As Foreign National

As I was waiting to board a flight to Las Vegas this week, I witnessed a long and protracted dialogue between a gate agent (For Virgin America) and a non-english speaking "guest" trying to board my flight. The agent correctly denied the person the right to sit in an exit row as they could not meet the criteria of being able to understand the instructions of a crew member in an emergency. Bravo to the agent. He did the absolute correct thing.

So the alleged man at the center of the Newark Airport Security Breach on Sunday Jan 3rd has been arrested. He has been identified according to News Reports as Haisong Jiang, 28, of Piscataway NJ a citizen of the People's Republic of China.

OK so I am not anti China in any way shape or form. I am however very cognizant that there are rules regarding visas. As a guest in someone else's country we should all be aware that the expectations and rules are are very specific and even not then our behaviour should be even better than resident citizens. If you break the law then you are subject to deportation.

As Mr Jiang seems to have flagrantly ignored the law and caused a massive security alert at EWR that would seem to fall into the pretty serious category of things that in another country - like China - would be subject to an immediate deportation or worse.

If the US Government is serious about preventing potential security problems then it should use tools at its disposal. Somehow the potential of a $500 fine doesn't sound like a meaningful punishment for the crime.

An immediate hearing and then revoking Mr Jiang's visa and then immediately deporting him would seem to be an appropriate response to his behaviour. Or am I missing something?


JAL Bankruptcy Jan 19?

Associated Press (AP) is reporting that JAL's primary creditor an organ of the Japanese Administration has given the green light to a court organized bankruptcy reorganization.

Some of the measures sound pretty drastic. For example employee cuts of 13,000 staff.

This is just the focused and swift action that is required.

Fingers crossed


Farewell 787-3 I hardly Knew You And Also..

Boeing has finally agreed to shut the door on the short range 350 Pax 787-3 aircraft specially designed as a Japan only aircraft for JAl and ANA. ANA formally changed its orders to the longer range 787-8 yesterday.

This also frees up some resources and may indeed spell the end of another Boeing Model - the 777.

With the A350-1000 making inroads the formerly Seattle based manufacturer now has to decide whether to develop the 777 eating 787-10 or stick with two competing products. My guess at this stage is that the 777 lifecycle just got one heck of a lot shorter. Boeing cannot afford to run 4 product lines. It should rationalize on 3 really 2 mass produced lines Narrow body 737 and 787 and a boutique product the 747.

With Boeing now almost certainly going to do another model refresh to the 737 (geared fan) rather than the brand new build aircraft predicted the overlap between the 777 and the larger 787s is too great. And which way will Boeing go, a larger 737 or a smaller 787 to plug a gap or two?

Interesting question. In the mean time Airbus has a more flexible product line with the A318 to A321 and more growth possible out of the 321.

I do believe that we will see both players rationalize around 2+1 models with the Jumbos being boutique hand built products and just 2 lines - widebody and narrow body.

But watch out below... here come the new planes from Bombardier and Embraer not to mention China and Japan.


Quietly EU Drops Suit Against Microsoft

On December 16th, the EU quietly announced that they were dropping the case against Microsoft ending years of very expensive litigation.

Now that bundling has been accepted as anti-social behaviour - perhaps the EC can now look at some of the other practices out there of bundling by other players.

And yes - you know who you are.


The New 3 Hour Rule

And you thought I was speaking about the Tarmac rule...

Nope - this is arriving before departure.

Here is a response from Delta to my question about the issues of missing one's flights.

Dear Professor Sabena,

Thank you for contacting us through delta.com. We are sorry for the delay in responding to your message.

As a guest you may have noticed additional screening measures put into place to ensure the safety of the traveling public. Due to these additional security measures, it is recommended that our guest arrive early for their flights whether it be for domestic flights or international flights. For guest who are traveling from a non-U.S.
location to the U.S., please arrive at the airport 3 hours in advance due to the new International Security measures.

While no specific time has been given for customers to arrive for check-in on domestic flights, it is suggested to be prepared for possible delays at security.

Unfortunately, we don't have an official waiver for guests being delayed at airports and missing their flights due to additional security screening.

We appreciate your business and look forward to seeing you on your next Delta flight.


Benjamin Hartley
Medallion Desk

So now you know....


Your Tax Dollars At Work (USA ONLY)


So Mr Obama has decided that there was a systematic and potentially catastrophic failure of the US security system. But Dear Janet (Napolitano) seems to know that while its a problem - don't worry the Government knows how to fix it. (Remember she changes her tune every 5 minutes). There is no need to panic because the issues are straight forward to fix. Right?

NO WRONG. FIXING THINGS ON A WHITE BOARD IS NOT THE ANSWER. There is still a significant and continuing problem that the President has not either been advised on or has failed to see. Either way - we are STILL AT RISK and all that has happened is another SET OF PLASTERS (Band aids) has been applied to the same problem.

But if I may I would like to point out the various issues that we as regular flyers in the USA face. Surely this is a contributing factor?

So here goes.

There are several programs administered by the Dept of Homeland and Security and its various agencies - TSA, CBP, CIS etc etc). For the TSA which is responsible for domestic protection - the main effort is SecureFlight. A program so successful that the only company qualified to offer it went bankrupt. But wait there is more. Indeed there are different programs for Domestic Travellers, Inbound Travellers and Outbound Travellers:
TSA based
* Registered Traveler (TSA)
* Secure Flight Program (TSA)
* Terrorist Screening Center (FBI)
Global Entry (TSA)
* NEXUS (US+Canada)
* SENTRI (?)
* FAST (US + Mexico)

Then if things go wrong there are different ways to address the problem of a person being denied entry into the USA.

These include:
* Request review or waiver of ineligibility to enter U.S.
o Canadian Citizens (CBP)
o Canadian Citizens (USCIS) or
o Non-Canadians (State Department)

So far I count at least 6 agencies involved in the process. 6 separate agencies with their respective government infrastructures. Multiple ways to get things wrong. 6 political processes to be reviewed... etc etc. spread across at least three Government Departments. How can they possibly keep things in sync???

Now we can add another component to the program in that US Border States (north and south) have programs that let you use an enhanced drivers license for entry into the programs (at least one or more).

So the issue for me here is that if I am trying to be a trusted person and a member of the good guys brigade how can I do that? Actually one of the best ways to do this is to get stopped by the TSA (or one of the legion of different programs). Then you can apply for a Redress to get yourselves fully vetted and then you will be cool.

Pity poor people like several of my relatives who have weird names.

So PLEASE Mr Obama if you REALLY want to avoid a systematic and endemic failure in the system you should look at the base of the pyramid.

We are supposed to have a multi-layered approach to security. Instead we have a compartmentalized approach to security. Driven by that same old bureaucratic Washington quango process that has driven us all nuts for so long... and contributed to the failures that led to the NW253 incident in the first place.

Lets start by having a sense of rationality and streamlining of the process. Money seems to be no object so at least lets get the architecture and the design right NOW WHILE WE CAN. Because I believe at the moment we have a very large truck through which bad people can drive a large amount of bad things through.

Finally perhaps the Government should stop listening to the big defense contractors and start paying attention to the electorate. I would say the electorate is one heck of a lot smarter than the defense contractors.

'Nuf said?


08 January 2010

Yes Virginia, Airlines Can Make Profit

Airline sales of Ancillary products are now driving carrier profits at a rate that has never been seen before. While not quite as revolutionary as some might think - it is clear that the model is here to stay.

I have recently seen some fairly wild estimates and some very pessimistic estimates for the size of Ancillary Revenues but we now have some empirical evidence. With Q3 2009 (Source BTS US) revenues from Ancillaries coming in at around $2 billion - we can safely assume that the run rate is of the order around $10 billion for the US carriers. Add in the European (masters of the art form) and you are looking at double this rate at a minimum. So if we take all airlines as a class we can say that the run rate for Ancillary Revenues could be in the range $20-$25 Billion per year.

Forrester's Travel Gurus - Henry Harteveldt and Elizabeth Stark have just published a Technograph: Airlines Need To Convince Passengers To Use Digital Channels To Buy Ancillary Products

One can easily infer from both the title and the document itself that the Airlines have a lot of work to do to expand this revenue footprint. The downside to service based ancillary revenue (as opposed to value added sales such as Non-Air Products) is that the fulfilment has to be convenient. At the present time that convenience is focused on the only places where the value transaction can occur - IE the airline website and the kiosks.

This is where the current technology generation of tools and services is clearly falling short. Many of the decisions need to be included into the work flow of the sales process. This is a new role for those who are involved in that work flow - either self service or guided modes require this level of capability. However it doesn't exist.

Breaking through the Gordian knot of current TPF and similar based systems to move to an a la carte service model is going to take some time. But the functionality needs to go from the pure airline environment into two distinct areas.

1. Airline partners - such as Travel Agents
2. Third party service providers such as airport based kiosks and mobile providers.

In the former case the agent community needs to clearly step up their work in this area. In the latter case there is now a large and burgeoning community of Trip Based partners who can enable this type of functionality independent of the seller. I realize that this is heresy for someone to advocate the possibility of servicing the customer in this way - but I think we must be realistic and accept that the user will make his own choices with regard as to where and how he interacts with his virtual persona on the trip.

And less the world thinks that this is not going to happen - lets consider the possibilities of how it can. The Ideaworks Group - Jay Sorensen recently produced an evaluation of the BA attitude to ancillaries. "Curiouser and Curiouser:
the Wonderland of Changes Wrought by BA". It included the now infamous BA Price Gouging calculator... showing how cheap it is to book on BA. OK - go and read it - its called the Value Calculator.

The combination of both these recent reports show that the airlines can make money. However the execution leaves a lot to be desired. It will be very interesting to see which airlines do become adept at selling ancillaries and maintaining the value of that service in the customers' eyes. Success or failure will mean billions of captured or lost revenue.


07 January 2010

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.


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.


05 January 2010

Before You Rush Out For That Nexus One...

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


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.


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.


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!


04 January 2010

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


03 January 2010

"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
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.


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.


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.