31 July 2010

Mexico Gets Downgrade - On Air Safety Standards

The Obama Administration has downgraded Mexico to Category 2. According to Reuters, The downgrade from Category 1 to Category 2 is not based on any safety practices at a specific airline. Category 2 typically means that aviation authorities have fallen short on technical expertise, personnel, record-keeping or inspection procedures.

So just watch out when flying to Mexico. And also watch out for some of the weasel words that will be used.


30 July 2010

Yes We Should Read The WikiLeaks Piece

I am an advocate for freedom of information. However the sheer volume of data in the Iraq WikiLeaks dossier is enough to turn anyone several shades lighter,

I do not condone the theft of information nor do I condone the bad acts and poor decisions that contributed to this mess. Worse is the cover up that occurred.

I first read about WikiLeaks in the New Yorker a few months back. Then I was introduced to Mr Assange. Its a balanced piece and obviously designed by the media savvy Mr Assange as part of his assault to get his story out.

So my exhortation to you is to read some of the dossier and draw your own conclusions. Its heady stuff. It makes for unsavory reading. However you understand that fighting the 21st century war is a very hard thing to do. And no you cannot do it in the public eye but you better be prepared for it when it gets out - as it always will.

Remember in the Internet EVERYONE can hear you scream...


Passenger's Advocate Comes Under Fire

It is not often that you read a piece that essentially demolishes someone's credibility. And 3 web pages devoted to it at that. However it seems that the crusade of Kate Hanni is being impugned.

Travel Weekly which I love to read as my retro reading did a decent job of explaining the battle in the Hanni camp.

Personally I was rooting for her, I thought she had a good momentum. But it seems that she has somewhat blotted her copy book. One of the allegations against her is that she targeted Keith Mitchell. While the latter and I do not see eye to eye on just about anything - I do agree that the US should have passenger rights legislation. And so did Kate.

Let's hope there is a win here rather than a putting one person down to get the credit.


The New Category: The Un-Fan

There is a certain legacy feel to life sometimes. Call them Luddites or just call them overwhelmed. But there is a large percentage of the population who just dont want to be your fan. And connect with you on Facebook. Nor do they want you to spam them with countless other messages.

I wrote about this earlier this month - I found another study that confirms my sentiment. This time eConsultancy has picked up the same theme. Check out this article from WebPro News. The eConsultancy piece examines the motivations and habits of consumers. Sorry but you have to pay for it... but its a good piece.

So I have created a new category called the un-fan. He/She has a pride place on my dart board and he makes me think of how to reach him and his colleagues.

You should too...


ARC Data Shows Continued Slowing/Flat Growth

After the initial surge in bookings in the early months Jan till March, the US market appears to be stagnating. The Y/Y growth has slowed and actually in 2 of the 3 months declined. Much of this can be attributed to the activity of 2009. Check out ARC's data (you have to register).

But one thing is for sure, That capacity growth sure is not happening and the airlines are maintaining some significant control.

Will corporate travel come back in September... certainly I am anticipating a bump in traffic to occur from the business side. So too are the airlines it would seam. This time last year - according to my activity counter - we were deluged with offers from all airlines for Q3 deals. So far this time round, there is a significant quiet and lack of promos coming from the US airlines for the 3rd Quarter.


Will They Or Wont They: Google and Travel Transactions

The debate over whether or not Google gets into the Travel Transaction business seems to haunt a lot of people. In my view - the issue is moot.

At the official news conference for the ITA acquisition, Chairman Eric Schmidt REFUSED to be deny that Google will not be in the Transaction business. The Charm offensive (that seems to be failing) studiously has the Google Acolytes saying no we are not going to get into the transaction business.

When I was at Expedia and we started our own charm offensive with the rest of the World - we (as then Microsoft) could not avoid the issue. But we downplayed the threat to the traditional agents. Internally of course we saw that the traditional agency channel was not that smart and therefore we could grab market share easily. That has been proven with the demise of the smaller agent and the rise of the OTA mega intermediary. The distribution pyramid looks dramatically different today than in 1996.

So my point about the issue being moot - is that Google doesn't have to be in the Transaction business. AT LEAST not in the conventional sense. I do agree that Google wont be manning call centers any time soon. But processing squillions of transactions in their cloud. Well don't say I didn't warn you.


Airline Demand Strong, Now What?

This summer the airlines have shown a strong demand from the leisure sector. This has significantly reduced the availability of cheap seats and dramatically raised the pricing - at least in theory.

In practice that oh so subtle move towards ancillary revenues is beginning to pay off. Judging by Q2 profit announcements - the carriers doing not so well are few and far between. The ancillaries are powering many carriers - particularly the US and LCCs to greater profitability.

The weakest areas?

Asia Pacific with both JAL and ANA reporting losses is a prime example. But Chinese carriers are doing very nicely thank you.

And then there are BA and LH. LH has several carriers it is doing a good job on to reform. SN, OS, LX, BD. The core LH mainline we believe is doing better but a long way to go yet. LH still refuses to move at Ancillaries preferring to call itself a Premium Carrier. But still it has hedged its bets with control of German Wings. BA on the other hand is more of a basket case and Heathrow is increasingly becoming irrelevant. While the village of Sipson might be celebrating, the Gnomes of Whitehall must be fretting about how to avoid losing market share of International Traffic.

IF you take a peak at who has what - you have to think that the order books from Farnborough went largely to the lessors. Many of these guys must be betting that the US airlines will need to order new kit soon. But the long haul planes hardly took in any orders. Still 32+58 A380s flying around in EKs colours should scare the pants of just about any network planner.


Air Berlin + OneWorld = What?

Like many other people, I went "Hub?" with the announcement of Air Berlin joining Oneworld.

I recognize that many people think that AB is a LCC carrier but it has been Hybrid for a long time and fails the classic categorizations - FF Program, Connections, GDS Participation, Full Service Flights, Premium Service etc etc. It does indeed operate 3 separate business models:
LCC like,
Regular/network services,
Charter carrier.

For a detailed look - go to Anan.Aero who has done a nice job in assessing the move.

So I can only think of two reasons.

Reason A - OneWorld wants a PR story as its a lite news week after Farnborough.

Reason B - OneWorld wants to tweak the nose of the Kaiser (aka LH).

Let me know if you can think of another reason


The Phony War is Over. Google's Charm Offensive Fails

Yes Folks that nice gentlemanly manner of talking about the Google/ITA acquisition like its all OK boys seems to have ended. The real war (of words) is just starting and its not going to be nice.

In the one corner you have Google's Travel team out telling the world - don't worry be happy - its all good and we are not out for world domination. On the other hand you have the very clear picture that Google IS out to change the world, and those people who think its their world are none too happy about it.

Down Under Claire Hatton - Google's point person in Asia Pac for travel was quoted today in the Australian Edition of Travel Weekly with:

"Google: we won’t take on agents".

Yet at the same time in the Expedia (arguably the world's largest Travel Agent) Q2 results - Head man Dara was issuing dire warnings about the impact of the deal. On TNooz today:

Expedia CEO Dara Khosrowshahi told analysts during the company’s Q2 2010 earnings call late yesterday that the Google-ITA Software deal could have “very significant consequences” on the sector. Highlighting Google’s “considerable market power”, Khosrowshahi said one of the main areas which Expedia will be monitoring is whether the search giant favours its own content and results over those of existing advertising partners, “whether it’s algorithmic, inside their system or hard coded”.

So boys and girls there you have it. And its not blunderbusses at dawn - its all out war - there will be casualties and of course there will be collateral damage - that is going to affect a heck of a lot of people.

Dara did add that he was all right Jack: (Also from the same TNooz piece) “We’re very happy, especially with Google buying ITA, that we’ve got the BFS team and makes us worry a bit (sic) less about what the potential consequences of that transaction could be, at least for us.”

Let's see if his technology team really are up to the battle. Will Expedia create a coalition to combat this dire threat? Or if they will have to import some external help from say Eastern Europe to keep the dreaded Hun at bay?

This, my friends means that it is time to batten down the hatches and prepare for a long and arduous conflict for all of us.


Reporting From Berlin - The Professor will be back to normal and full time next week.