06 February 2010

So What Will He Do Next?

He is not fooling anyway. Steven Udvar-Hazy has now left his baby and officially retired from ILFC.

But we all know he wont be out of the market for long before he is back in the leasing business.

So I will speculate that given his current non-compete will not be that long. There is just too much opportunity out there for him to sit on the sidelines. Specifically there is a hole in the market now for someone to manage the short term distressed production slots.

Let's see where he re-emerges from the jungle


Update on Aegean's and Olympic's Websites

So there is good news here.

Aegean's website is back up to full speed. They have restored all air fares into the system to all 4 seat buckets are now operational on the website. It still has some glitches and you can break it easily.

And I owe a bit of an apology to Olympic for giving them a hard time over their website being down. Well turns out its not. its still there - just darn hard to find.

So while I will apologize for this (the English website for Olympic can be found here) I will slam them for not doing enough to ensure that their own website shows up in search engines (er like Google and Bing). Further they really should do something about the 2 dot com websites Olympicairways.com and olympicairlines.com. Both of these are registered at Deutsche Telekom but have no data available.


Hotel Points Get Nasty

There is a general debasing of the currency out there. The airlines have slowly found sneaky ways to reduce your FF value. I understand from several people that Frequent Flyer Miles are now the biggest currency in the world.

The incredible overhang of that liability is just mind boggling. However consumer behaviour being what it is. People tend to hoard their points. While people are prepared to go to debt on their credit cards - they dont use up their FF miles. And yes I am guilty of this. (not the credit card debt thing BTW).

Anyway - Hilton and IHG are getting into it. IHG's Priority Club is going after the devaluation of HHONORs points by about 20%. They are offering you at least 1000 points in return for giving them the status on your position with HH. So I did just that. Its a bit sneaky but for a free 1000 points and a chance at 2 million - why not?

Frankly it wasn't enough really but I wanted to see what they would do for me.

From my point of view I was already ticked off at Hilton and therefore I stopped using them this year. My "disloyalty" is not that religious. I always chose a hotel based on location. Only if they are directly competitive (rates and location) does FF miles and points ever really make a difference to me.

So tell me what you think


Should I Go To The Dark Side (iPhone?)

My contract is up and I am sorely tempted....

To move to the iPhone when I have been a dedicated Crackberry user from the early days of the Mobitex network and rare connectivity. From the machine that was really a glorified Beeper to the advanced tool Millions know and rely on and of course are addicted to.

I actually spent a personal day out of the office yesterday - I went up to Canada with some friends and had a great time enjoying the Olympic pre-activities. If you are going anytime in the next 4 weeks - Vancouver is a blast. But I digress.

I counted the number of times I actually looked at the blackberry. I have it set to buzz when new mails or texts arrive. I am not a huge fan of the voice side of the device but accept it. Also I broke the back of the machine (a Bold 9000) within weeks of getting it. I also had the people I was with count me. We did several checks during the day - it became a bit of a game. I was astonished that by the time I arrived back home here are the statistics.

Inbound Calls - 8
Outbound Calls - 10 (plus 4 that the others needed to use because their voice plans didn't support calls from Canada).
Inbound emails 170
Photos taken - 85 (with Blackberry only - many more with my other camera).
Outbound new mails 10
Outbound replies 30
Number of times looked (from 0700-2400) 142. (Give or take about 5%)

I guess this makes me very sad or addicted or probably both.

So returning to whether or not I should move to the Dark Side and get the iPhone. I know a lot of people who love it. However there is the real darkside to it. The cost.
Data Roaming charges are frankly appalling. $15 per MEGAByte. So I asked a colleague to show me his data usage for the iPhone in the USA. On average he was using for apps and email about 200MB a day. Extracting about 80% for the email. (My BB data usage is about 250MB for the emails a day and I rarely use if for surfing). So at that level 20MB a day it would cost me $600 per day in roaming charges. OUCH!!!! And this is just for Canada.

The numbers for Europe and Asia are also pretty hard.

So I considered alternatives. Getting Pay as You Go iPhone agreements in different countries. I am regularly in 4 countries (UK, FR, DE and US) it becomes too hard. The sheer laziness of me (and others I am sure) to swap out SIM cards (and of course its not exactly easy) makes it just too hard for benefit.

Thus since there is no data plan that works for me anywhere on this planet - i am left with very few options. t-Mobile has a great plan for international roaming for BB. $59 all you can eat email. AT&T is $10 more.

So this is where I will sit for now - I am not going to be going to the iPhone.

So today - I will be off to get a new Blackberry Bold 9700.

I will just have to carry on eying with a degree of envy those cool apps on the iPhone....


04 February 2010

Quick Reminder On Comments

Dear readers and fellow professors. Please note that I cannot accommodate non-English comments. While I wish that I could, the chosen language for this blog is English and therefore the comments need to be made in that language.

If you wish to republish the post in another language, may I ask that you contact me directly.


The US Government Has Spoken

Way back when Ancillary Revenue charges were new, I opined that there was an issue of taxation. I argued that if the original bundled ticket was taxed then the unbundled elements should also be taxed.

Well the US Government in the form of the IRS has now spoken. And guess what - the charges are not taxable.

Specifically below you will find what is and what is not taxable according to the IRS. So I have pleasure in presenting the potted version of the rules below. However this is likely to send the Congress rushing to the legislation table. if last year $2Billion was generated in these fees by US airlines and this year projected to rise to $10 Billion - all without tax - then the government is going to find that WAY to easy a target to ignore.

So for the formal Air Transportation Excise Tax - Audit Technique Guide click on the link.

Per the IRS, the following services and fees are not taxable:

• Assistance in making travel plans, purchasing tickets and requesting seat assignments, either in person or on the telephone (as opposed to on carrier’s website).
• Applying the fare paid for an unused nonrefundable ticket to a new ticket.
• Standby fees
• In-flight purchase of food, alcoholic beverages and headsets.
• Checked-bag fees, including overweight and oversized baggage.
• Purchase of airport lounge access, on daily or annual basis.
• Purchase of nonrefundable gift cards.
• Optional custodial services to children traveling without an adult.
• Fee for transference of miles to another account.
• Extending the expiration date of miles in a member’s account.
• Fee for redeeming miles for the purchase of air transportation.
• Fee for canceling and changing a ticket purchased with redeemed miles.
• Purchase of elite status in a loyalty program.
• Providing a printout of account details to a member or third party.
• Providing password protection for account inquiries made by telephone.
• Providing personalized luggage tags.

But the following services and fees are taxable:

• Enabling the purchase of upgrades that are paid for at check-in at automated kiosks.
• Enabling the purchase of upgrades to a higher class of service, at check-in or in advance, with money or miles.
• Fuel surcharges added at the time a customer purchases tickets or acquires tickets by redeeming miles.
• Mandatory custodial services to children traveling without an adult.
• A member's purchase of frequent-flyer miles for his or her frequent-flyer account or another member's account.
• A member's purchase of bonus miles for his or her account.

The government however likes to leave itself a little wiggle room.

Here is the disclaimer which means that they can change their mind...

"NOTE: This document is not an official pronouncement of the law or the position of the Service and can not be used, cited, or relied upon as such. This guide is current through the publication date. Since changes may have occurred after the publication date that would affect the accuracy of this document, no guarantees are made concerning the technical accuracy after the publication date."

And this is off IRS.GOV!!!!


02 February 2010

CORRECTION: Aegean Website Upgrade

Dear fellow professors

I stand before you admonished in not accurately checking my facts. Mea culpa. The information I gave you on the Aegean Airlines (A3) website is incorrect.

Right airline - wrong vendor.

Aegean has migrated AWAY from the SITA IBE to the Amadeus IBE. So the problem is with the cutover to Amadeus's IBE.

Thanks to Professor Tony for setting me straight. And yes its still giving me bad results that raised the price by 48 Euros per segment!!!!


Farewell PARS and NWA.com

With effect of the new month - Delta has retired 2 icons. NWA.com now goes to Delta.com and the old PARS reservations system is all but gone with all flights now in Deltamatic. There are other airlines still in PARS but these are fairly minor. Travelport still manages the infrastructure for the DL data center along with the Worldspan, Apollo and Galileo hosts.

So a brief tear for 2 icons.


01 February 2010

A New World Order - Asia Rising

There is clearly a sea change occurring in air travel. The move to LCC has been a phoenomen that has largely passed the USA by. Europe and Asia have adopted the so called "Southwest" model extensively and extended it. The next gen Hybrid Value Carriers (HVCs) such as Easyjet, Air Asia and Jetstar are not to be found in the USA market.

And now we see that the legacy network based airlines are feeling the pinch. IATA coming off the worst year in its history no longer fully reflects air travel. Rather the new generation of these airlines represent where air travel is going. And consumers are lapping it up.

Two recent pronouncements out of IATA confirm this. Firstly the Asia market has now overtaken the US as the world's largest market. And then there is the news that IATA thinks it is going to take three years for the market to recover.

Right in time for the next recession.

Yes the world is definitely changing....


SITA's New IBE costs More Money

I happened to be working on a project looking at IBEs. Over the weekend SITA's new IBE went live (after being down for more than 36 hours). On its return the availability of fares dropped a whole class. It went from 4 to 3. As a result there are now a lot of people who thought they could buy tickets at the lower fare which has now disappeared.

It is clear there are going to be a few teething problems with the implementation of the new IBE. However its all under SITA's control - they have the pricing, the IBE and the back end Res System

So let's hope it settles down.

I will be watching!!!


CO To Boost LHR Flights

CO is boosting its daily schedule from LHR to 7 come the October schedule. This includes 5 to NYC and 2 to IAH. With some slots acquired recently (presumably from BD who disposed of a few) this puts CO at a distinct advantage for the New York Market. With at least 3 of its services with the larger 777-200 planes, DL has no match with just 2 767-400s on its schedule.

You have to wonder if DL is playing a game here. Forcing the EC to hold BA and AA into a corner by not upping its schedule. The proposed BA-AA alliance has 13 nonstops this summer. Don't forget that CO also has access to the 4 Virgin flights.

Ah gotta love politics


BA Looses 1 Billion Pounds. Red Ink Continues

BA is reported to be losing more than $2 Million per day. When most other players seem to have got their costs under control and started on the road to recovery - BA is not having a good time yet. it is slated to report losses in the most recent quarter of 151 million pounds.

BA is already a very lean carrier. However it has all the issues of a legacy carrier infrastructure that results in costs being too high. For the airline to survive it needs some radical thinking. Here is where I believe that strategy of bigger is better tends to fall apart.

Case in point - their merger with Iberia. IB is a smaller airline and it has higher labour costs. They have totally incompatible long haul fleets (IB is A340s and Boeing 777s and 747s.). Their products are also pretty dissimilar. Thus the benefits of synergy that come from scale will take a long time to impact the bottom line. BA needs a new plan now. Oh yes and how about that pension overhang. On the recent flight from Madrid to London on BA connecting - I had to go through a frankly awful connecting process that took longer than one hour. If this is supposed to be the way IB and BA are to cooperate - they have a very long way to go. (At least till April 2011 when the C concourse opens up at T5).

Thus in my humble opinion - BA needs to look a lot closer to home and fixing its internal issues before venturing out into the wide world. Is it time for Willie to go?


UGC All Good or Not?

I have always felt that the hoopla on User Generated Content was way over played. In recent weeks a few things have come home to reinforce my view.

First I do want to say that User Generated Content is valuable. However it should not be considered a panacea for failing to do your own job. Further how you use the content so generated is as critical as the content itself. Data can be garbage or valuable information depending on how its managed.

Substituting UGC for well written content is a fatally flawed strategy. Assuming reliable UGC therefore falls into the same category.

Recently I have been working on a group vacation and have had the pleasure of using some of the accommodation/rental home sites. As an aside here - I really think after working with the different sites in US and Europe that there is a rather overblown expectation and decided over valuation applied to these businesses. But no matter. I digress. The UGC I see there is pretty useless. Often there is scarcely enough of it. So one or two reviews is pretty useless. For these long tailed businesses - I think that you are somewhat between a rock and a hard place. The over-enthusiastic supplier generated prose fails while the UGC is suspect and thin.

On a less prosaic point - I have written before about Seat Guru part of the Expedia Empire. After my last post - one of their nice people immediately sent me an email about complaining I was being a bit harsh on them. However - I duly followed up and every time I would find a mistake or a missing airline - I would send it in. However the amount of errors and the scale of the missing content is rather large. For example there are no Airbus aircraft on the DL fleet side. Given that Delta is the largest carrier in the world this would seem to be a rather important omission. My point on SeatGuru is that they have come to rely on the users to provide the information. FATAL MISTAKE. Sadly it means that my trust in SeatGuru has fallen to an all time low. I keep finding mistakes and missing content. (Note to Expedia - have someone take a long hard look at the entire site content and then do it on a regular basis!)

The mushroom defense doesn't work here. If you are providing a website service then you really need to be the one pushing for the correct content. Users can be used (if you will pardon the expression) for fact checking and corrections.

So I remain the UGC skeptic. Just because there are lots of them doesn't make them right!


31 January 2010

Greek Airlines Booking Engines Down

Both the Olympic Airlines (formerly known as Olympic Airways) and the Aegean Airlines website booking engines have been down for more than 24 hours.

In the case of Olympic the whole site is down. In the case of Aegean it is the IBE.

I do hope no one is trying to use these sites other than me!

Different messages are coming from the sites. Olympic's says:

The server is under maintenance, please apologize any inconvenience...

For Aegean we have seen several messages. Here they all are:

Air NZ "SkyCouch"

I have been thinking about the Air NZ Skycouch idea. Really cool in concept. However now I have seen the pictures - I think its not quite there.

The long haul flights will benefit for those willing to pay for it. (However the longest haul NZ flight YVR-AKL) will not likely see it for a long while.

I just dont think its that useful. The couple in this picture look decidedly uncomfortable. Not that I have ever seen anyone comfortable in Y.

So I am going to wait until someone comes up with something better. I hope the DL seats have better luck when/if they get implemented.