14 August 2010

LAN + TAM = Latin America Powerhouse. Alliance Anyone?

The blockbuster announcement of the creation of a holding company for two of South America's largest airlines into a single body was predictable but unexpected.

The controlling shareholders of LAN and TAM have agreed to a governance model to jointly manage strategic decisions relating to the alignment of the activities of LATAM group holdings. Mauricio Rolim Amaro, currently Vice-chairman of the Board of Directors at TAM S.A., will serve as Chairman of Board of Directors of LATAMand Enrique Cueto, currently CEO of LAN, will serve as LATAM CEO.

The cross border rationalization in Latin America has been predicted for some time but slow to start. With the intrusion of LAN into several markets it was only a matter of time before the airline would have to address the issue of Latin America's largest aviation market. This is a neat way to address it.

The bringing together last year of TACA and Avianca under a joint ownership but with separate brands was therefore a clue. The possibility of synergies and savings to get to scale was obvious.

All of Latin America's traffic is still smaller than the world's current two largest airlines - Delta and Air France KLM. Therefore cross border mergers are inevitable.

The fragility of the market was underscored in the past 2 weeks with both GOL and TAM reporting losses and the rapid fall of once powerhouse Mexicana.

The new company is not without its challenges. Initially the brands will continue to operate independently sharing back office and common practices. Indeed TAM and LAN have cooperated before with TACA in the purchase of Airbus equipment. The three became known as the Three Amigos in this transaction that has enabled a number of commonalities to occur in the Latin American market.

Once more this throws into contention the issue of the Alliance relationships. LAN is a founding member of OneWorld and TAM is a recent convert to STAR taking over from the defunct old Varig as the anchor in Latin America. Now the map may need to be redrawn.

In their announcement the two airlines stated: The combination would create a new Latin American airline group that would offer seamless passenger and cargo service across the continent and around the world. The new group, to be known as LATAM Airlines Group, would include Lan Airlines and its affiliates in Peru, Argentina and Ecuador; Lan Cargo and its affiliates; TAM Lineas Aereas S.A.; TAM Mercosur and all other holdings of LAN and TAM.

For the other Star Members this creates a set of issues. The LATAM market has played Alliance musical chairs for some time. Already Latin America is getting a little crowded with STAR members:

COPA (who will become part as they are aligned with Continental now a STAR player), TACA who could become part of STAR. TAM was formerly aligned with American.

Avianca - the other international brand of TACA/Avianca group is aligned with Delta but not formally aligned with anyone else.

Mexicana was once part of STAR with United's help. Last year it formally joined Oneworld. However in its troubles the partners there did not lift a finger to assist Mexicana as they had to assist troubled Japanese carrier JAL. With the collapse of the airline and filing for bankruptcy - the alliance membership is likely at the very least in question. The recent downgrade of the Mexico Airspace by the US FAA has resulted in all US carriers pulling code share flight numbers. No US Carrier can put their code on a Mexican airlines' flights until the raising of the category.

About the only stable player in all of this has been Aeromexico with their small but steady participation in Skyteam.

This is going to leave GOL as a much courted partner by all three alliances as they each try to figure out what the new world order map will resemble. And what about the rest? I believe there will be a number of airlines who will now seek to combine together to create more formal groupings to combat the sheer size and market power of the new LATAM group.

For the attendant and dependent players particularly PSS and GDS vendors such as Amadeus and Sabre - there will be a hotly contested market for distribution and Airline IT. In my view, direct distribution now becomes a much more viable proposition with the extensive reach of these airline partnerships. One thing is for sure - the money men will be sharpening their pencils while legacy GDS lawyers run to their contracts and see what they can salvage.


13 August 2010

Scholarly Discussion For A Friday

On Jet Blue Flight Attendants, Michael O'Leary's personal habits, Dead Puppies and Stupid Unions.

The professor is part of an esteemed panel of guests discussing Airline Foibles and Tribulations.


JetBlue Flight Attendant - Criminal or Folk Hero?

By now most of you know the story of Mr Slater and his temper.

In some sectors he has been immortalized for his actions as a folk hero.

Let's be clear about this one. He is a criminal and should go to jail.

He abused a position of trust and placed a number of people in serious jeopardy of injury and even (in the case of ramp workers possible death). I don't say this to dramatize the issue but to highlight that someone could have been killed by the explosive deployment of the chute. His protestations to say he took care about deploying the chute show the action was premeditated and therefore deliberate in putting his co-workers (on the ramp) at huge risk.

Mr Slater in my book is a criminal and should be locked up in jail for his actions. I believe there are more than a few regulations and laws he contravened not least of which showed he could be classified as a domestic terrorist.

For once I agree with Donald Trump.


UK Market Source Traffic Woes

The UK market still shows a decline. It is not rising to the level pre-2008 and there are some companies who are failing.

So far this year we have had 12 ATOL failures (CAA Figures). While not as bad as last year - for the recovery year this is not healthy.

But this is not all. Thomas Cook reported this week that its numbers are way down. The Official HMG stats also show a decline of 9% in the April-June quarter outbound travel.

So guys message to Unite - now is not a good time to strike..


11 August 2010

Who Do You Trust And Why in Social Media?

Well it isn't really the Tweeters. Nor is it brands.

People trust what they know personally or have a connection to. This is borne out by the study recently made by Invoke Solutions and quoted in a recent study by eMarketer.

And then perhaps even more interesting to me was the analysis of what inspires trust in Social Media.

My conclusion from all this is that Tweets are going (if not already have become) a lot of noise. I use Tweetdeck to see what's happening but frankly I find it all tiresome and my views on it are decreasing. I go for weeks without looking at it - unless I am feeling narcissistic!

10 August 2010

US Sen. Ted Stevens - RIP

It seems that fate sometimes strikes twice. For the second time Former US Senator Ted Stevens, it did not smile brightly. He was killed on Monday Evening in a plane crash in the State, Alaska, that he loved and served.

He had survived a plane crash in 1978 that took the life of his first wife. Sadly he died in a plane crash this week in a 1957 vintage DHC-3T Turbo Otter.

A towering figure in the US legislature for more than 40 years, he had a huge impact on aviation and obviously the State of Alaska before being ousted under a cloud in 2008.

Stevens loved to fish, and loved airplanes, and "if he had to die — I think this is the way he would have wanted it: in Alaska's bush, on the way to catch salmon," said John Iani, a Seattle attorney raised in Kodiak, Alaska, and a longtime friend.

Customer Service That's Speedy - That's Clearwire

Having been spammed for long enough by Clearwire - who sold me a product I could not use! - I have been trying to opt out of their emails.

Finally I get the option to opt out.

Here is the response.

I thought you would like the time lines


More Scary Google Things

Seems my day for finding scary things in the Googlesphere

In logging into Google Maps it asked me if I wanted to load an alternative mail address.

The one it had was for SOMEONE completely NOT me.


WSJ Gets Its Headline Wrong - Google Agonized Over Privacy, But Obviously Not For Long

READING NOTE - the links require FLASH so hard luck iPad users.

It agonizes no more....

The Wall Street Journal has an interesting piece on Google agonizing over the use of its treasure trove of data on what we all do in the Googlesphere. The headline reads:

Google Agonizes on Privacy as Ad World Vaults Ahead

Well boys and girls - clearly it worries no more.

But time for you to do some homework dear reader.

Go to the WSJ and check out the story. Also click on the link for interactive is you want to see the continuing and mushroom cloud growth of the Googlesphere.

Now I could not find the actual doc - I am sure it will show up soon enough - but here are the extracts.

So given the piece I did yesterday - I would suspect that now would be the time to be somewhat - make that a lot - afraid of the power of the Google Blob.

For all of us we have to get a handle on the difference between privacy (and abuse thereof) and personalization. Its a fine and difficult line to draw.


New Delta Website - Needs Work

So the reason for my frustration with Delta's website yesterday was due to the fact they were putting the new site up.

Congrats - it actually works. However I would like to have the old one back again please.

The login is a little more clunky. OK I can live with that. There is no where to indicate that by entering the city exposes a new set of choices on what type of trip I can book.

They do go on to tell me how much they have changed and how the benefits are therefore me....

Let me give you an example...

Here is what they tell you...

SkyMiles Dashboard: See your mileage balance at a glance—and if you're a Medallion member, you can see exactly how close you are to reaching the next Medallion level.

Hmmm not so. So probably that is crashing right now because this is what I see when I click on skymiles (and yes I have tried it in 4 browsers so its the same).

As you can see although they know I am a platinum member - they are asking me to join Skymiles. Oh dear! In fairness to DL - they do say that they are working on it.

My assessment after an initial spin around the website is as follows:

The top level nav is good. The rest of the website is largely unchanged. So the other elements are familiar. There are new ad serving opportunities that didn't exist before.

As to the core value of providing access to the results I want to see... well that is unchanged. The resulting system still works on a hard and fast LOWEST POSSIBLE result without allowing me to shop with different parameters. Thus the ITA shopping engine in Orbitz offers much better results that I cannot get through either the schedule or pricing path inside the DL site. So in my opinion the ITA QPX engine is superior to the Travelport engine used on the DL website. Sabre's engine which is getting rarer these days still powers the Travelocity site and gives more options but not necessarily better results.

Its also pretty slow. But this is the first day so I hope it gets better but initial analysis indicates the pages are very heavy to load.

So at present I give DL a failing grade and I want the old site back. It seems this is going to be a work in progress for a while as they go through the whole site and fix things

Right now there is a LOT of things to fix. Basic logic is failing. However I persevered and was able to make a booking. Delta should be giving free upgrades to everyone who tried to book and failed.


Keep The Internet Free And Open - Say NO to Google and Verizon Scheme

It seems my post yesterday on questioning Google's capacity for good and evil - may be more relevant than even I have been thinking.

We should all be ardent supporters of an open and free Internet. Well it seems that Google and one of its henchmen think that there is a new definition of net neutrality. One in which there will be a two speed internet. The plebs and the elite.

The Seattle Times, normally a right wing paper, even took time out from its review of the local election candidates to devote its lead editorial to the subject.

Google must be stopped in developing a closed part of the web.

As the headline in the Times said - we must - absolutely "Keep the Internet open, accessible, creative"


With Acknowledgement to Raymond Fong for the use of the image. Check out his blog on a separate Google issue. ore of the same?

Lazy Marketing - British Airways Style

I like to think the best of people and organizations. Its perhaps a naive belief that people don't actively do wrong but getting lazy means that some just don't try hard enough to do what is right.

So allow me to pick on British Airways today.

BA knows a lot about me. It knows my favorite airport (I explicitly filled out a form that stated that). It knows my email address. Heck it even knows to force the use of a particular browser to open the email.

So why does it persist in sending me an offer that is a flagrant come on?

So here are the "restrictions" as indicated by the asterisk.


1. Offer can be booked online at ba.com (flights only and discounted Hotels) or through a travel agent (flights only). If you book through a British Airways call center, you will be charged an additional $20 per ticket for processing.
2. $249 World Traveller (economy) fare shown is each-way based on round-trip, 7-day advance purchase, non-refundable, select economy class midweek (Monday-Wednesday) fares for outbound travel October 21 – December 19, 2010. from New York to London on British Airways services only.
3. World Traveller (economy) fares are from select US gateways to London on
British Airways services only for outbound travel September 02 – October 20, 2010 and October 21 – December 19, 2010.
4. The 2 free nights hotel accommodation is based on double, triple or quad occupancy at participating hotels for a maximum of 2 free nights, which must be taken on consecutive nights at the same hotel. The discount offer must be booked in the same transaction as round-trip transatlantic British Airways airfare, originating in the US only for travel September 02, 2010 – December 19, 2010. Single occupants are entitled to a maximum of 1 free night at participating hotels.
5. Fares may be higher from other US gateways and to other destinations.
6. Fares do not include government fees and taxes of approximately $165 and a $2.50 September 11th Security Fee.
7. $30 weekend travel surcharge (Thursday - Sunday) applies in each direction.
8. For new bookings only made August 10 - 19, 2010.
9. Refunds from previously purchased higher fare types not permitted.
10. 7-day advance purchase required.
11. Minimum stay is Saturday night. Maximum stay is 11 months.
12. Changes to flight only itineraries booked in World Traveller (economy) are permitted, prior to the ticketed departure time of each flight for a fee of $275, subject to availability. The itinerary will be re-priced using fares in effect on the date the ticket is reissued and must meet all rule provisions of the newly ticketed fare.
13. Any changes to your hotel booking during the promotional period will be subject to a $25 amendment fee per change, per booking and are subject to availability. If changed travel dates result in higher rates, you will be charged the additional amount.
14. Any changes to your hotel booking after the promotional period will result in you forfeiting the free nights offer and your booking will be re-priced at the published rates at that time.
15. Please refer to airfare rules of flights selected before completion of payment.
16. Executive Club members can earn BA Miles per the terms and conditions of the
Executive Club.
17. Infant without seat will pay 10% of adult fare. Child discount will allow for a child to pay 80% of the adult fare.
18. Unaccompanied minors permitted for a $75 surcharge each way for flight only bookings.
19. Open to US residents paying in US dollars only, with travel originating in the US.
20. Subject to availability.
21. Cannot be combined with any other offer.
22. Other significant restrictions may apply.

And let's not forget the email was unsolicited. And yet they ask - er - let me correct that - they TELL me that this is confidential and then threatens me thus.

This email is intended solely for the addressee(s) and the information it contains is confidential. If you are not the intended recipient (a) please delete this email and inform the sender as soon as possible, and (b) any copying, distribution or other action taken or omitted to be taken in reliance upon it is prohibited and may be unlawful.

C'mon BA - let's play nice. You can do a WHOLE lot better than this.

So here is the actual lowest price - I have highlighted Seattle.

Start by taking the extra time and telling me what the REAL airfare is from my home airport, not NYC.


09 August 2010

Deaf, Dumb and Blind., Airlines and Passengers

I hope that Robert Cole will allow me to steal his idea for a Blog post and then elaborate on it.

On his Rock Cheetah Blog he did a nice piece on his experience with several airlines.

I am an unabashed airline geek, - in truth a kerosene junky. But I like to work in the breadth of the Travel Industry. There is nothing like it on the planet. But it never ceases to amaze me at the ineptitude of the airlines and sadly also their passengers. Which came first - the chicken or the egg. Dumb airlines or Dumb passengers?

Let's start with the Dumb Airlines... What I like about the European rules on customer behaviour - is that they are unambiguous. Pretty clear and straightforward. You either comply or you can't fly. Simple enough. Generally the performance of the airlines in Europe since the enactment in 2004 has improved from the prior behaviour. Most people in Europe have forgotten the awful summer of 2000 and 2001 when delays and strikes crippled travel across the continent. I agree with Robert - that things could go a lot better. But we all know that there is a clear set if issues that are theoretical that people debate ad nauseam.

Things like the above image - represents about 45 mins of trying to get the Delta website to behave. Yes this included me restarting my browser, clearing cookies and even restarting my PC. This is of course insulting. You know the engine is down - why not tell me rather than pissing me off and letting me get to the end and then see the failure. Grrrr

The latest edition of ATW has gone into a bit of Government bashing. Perry Flint made some pretty good points in his editorial. And I concur that there needs to be some measure of rationality applied to the debate.

For many years the ubiquitous "Weather Delay" or delays caused by the "late arrival of the inbound aircraft..." are the all too familiar refrain over the PA system. In my travels around Europe and the USA over the past few years I hear it less in Europe now than in the USA. its just the same problem - but finding someone to blame is always the answer. Airline just try to get more creative about their excuses. What I do like is when the pilot comes on and tells you the whole story. Somehow it is more reassuring coming from the Pilot - and the airlines do this rather than having their gate agents give the information WHEN the passenger could do something about it.

So let me talk about dumb passengers. And yes there are one heck of a lot of them.

I have this strong feeling that there should be an aptitude test before people are allowed in airports. This should cover, well the basics...

1. Can you tell your left from your right?
2. Can you hear?
3. Can you walk in a straight line with your bag and not block the aisles?

But there is one class of player who deserves to be singled out and shown for being fly in the ointment.

That entity is the airport management.

Last week I had a tight connection between many gates in MSP. I managed (with 9 mins to spare) to catch an electric cart near my arrival gate and persuaded him to drive me to the remote gate. With all due deference to the poor guy driving - I doubt he could have passed the regular driving test. Couple with the fact that the airports have done away with any form of horn or ding dong bell and the real culprit - the tight avenues now blocked with shops and merchandise for the airport to raise money for the city coffers. But the real kicker was when started shouting for people to move out of the way - the poor driver (sic) said I could not do that or he would lose his job. When asked why - he told me that in the main shopping areas he was not allowed to do that and could get some form of demerit for doing it or allowing one of his passengers to do it.

In truth we need a degree of understanding on all sides. We need the passengers to be better prepared. We need the airline (AND their contractors/surrogates) to be more truthful about what is really happening. And we need the airport authorities to do their part also. The air transport system is very complex and there are a number of moving parts. But before we throw all the rocks at the airlines - lets not forget the bad airport managers and the dumb passengers. Oh yes - and don't forget the regulatory bodies. It takes those guys to really mess up.

Let he that is without sin cast the first stone....


Login Recovery

This is a tip...

When you are really in deep kaka and you cannot remember that password. And you changed the domain to work group on that old XP machine... yes Virginia there is a Santa.

Its called www.loginrecovery.com

You need 2 pcs and a connection to the web. Also you need $35 or some European equivalent. Badly they don't tell you about that till the end... but never mind at this point.

Its really useful and I am glad I used it. For Free....

It lists all the major user names on your PC and fortunately from one of the ones I forgot I was able to re-open the machine.

So THANKS guys. And no I am not sending you the money but in recompense here is a blog entry promoting your wonderful service.


Is Google Intentionally Evil, Forgetful, Careless or Just Plain Lazy?

With the news today that Google was killing WAVE - its second major kill of a product/project in 60 days - Nexus One was the other - one has to start to think of Google as being less than altruistic.

In Google's Philosophy its famous ten things, number 6 always sits in front of me.

6. You can make money without doing evil.

Somehow I have a hard time with thinking that this statement has become increasingly hollow. It seems that every time it strays from number 2 it gets a bloody nose.

2. It's best to do one thing really, really well.

I was chatting with a friend of mine who was a rabid anti-Redmondian. He adopted almost everything Google did. Google docs, Android, etc etc. Just lately he has had this feeling he is being watched. I dont think he is a conspiracy theorist but he sent me this story.

He was having a private conversation with one of his family discussing a vision issue. The headline of the email exchange was as seen in the image.

The process of having Google serving up ads to me in my email is frankly abhorrent. If there was anything more unsubtle and evil - this is it. If you are OK with Google capturing all this data for just and "not evil" purposes then go ahead live that way. I am just having a hard time about it.

Google is crushing just about all before it. And now its stepping into Travel in a big way. More power to them for doing that but remember this is the company that likes to Beta and Beta and Beta...... how long exactly was Gmail in beta?

And this is from the same company who Oops I did it again, was very contrite when caught with their hands in the Wifi scanning cookie jar over StreetView.

Google has enormous capacity for good, and as we keep finding evidence thereof - evil.

Sometimes it is good to remind them that they should perhaps take a responsibility for their own actions and actually be a responsible corporate citizen and member of the planet earth.

Till someone convinces me that Google really is out for good, I will remain a tad skeptical. And for sure I am going to be watching what they do and continuing to point out their bad behaviour. And the answer to my question... answer (e) all of the above.


NOTE: This Blog was written in Blogger. The image came from Google Images and I believe the copyright belongs to Mr Myers.

Mirror Mirror On The Wall Who Is The Fairest Of Them All?

If you look at the meta search sites and try and determine which one is best for you... there are a number of subjective criteria. But which tool is best? Who actually serves up the best fares for the consumer?

According to the Sunday Times of London it's Momondo. Congrats to Thorvald and the team in Copenhagen for this honour. Runners up were Kayak and Skyscanner.

However - I will use this opportunity to pick on the subject matter and its inadequate value that results in a poor user experience.

In my alter ego's life, my team have been working on result optimization. As those deeply involved in Search and IBEs know this is a subject matter that is incredibly complex. There are just so many variables.

In looking at the problem there have been two major variable elements which contribute to the quality of the results.

The search system (which covers a lot of areas of the technology)
The source data

In recent years the quality of the technology in search has improved significantly. However the quality of the data and the manner of which it is stored, served and refreshed has not become any better.

So you can have a great engine and lousy data, a great data store and a lousy engine resulting in untrustworthy results.

Then of course there is the result that just is different from the one that you buy. For a consumer anything that is less than 100% spot on represents a lack of trust. I spoke to Jim Young (formerly Marketing Head at Frontier Airlines and now the Honcho at Open Axis Group) in April about this problem. He had an interesting perspective on the issue. Per their research at F9, they could get to a three 9s (99.9%) accuracy if they had a $1 tolerance level for the GDSs. For a 1 cent tolerance level - the number dropped to just over 80%. (Prof note - this was before the merger with Midwest and Republic so I expect this has gone down significantly since then).

In my analysis of the problem the complexity of the solutions and the loose adoption of rules have shown that there are a lot of right answers. These are not false positives they are actually right and valid. These range from elements like the tax tables used, the order of the calculations and the translation of currencies. In several tests we have run this can mean up to 20-25% differential in pricing. More noticeable at the lower total price level than at the higher priced tickets.

With increased complexity of taxes (The US is going to implement another increase in September for visitors) and the introduction of ancillary services and the somewhat shady use of taxes masquerading as really airline fees (like fuel surcharges) - this is not going to get any better.

And don't expect any valid benchmarking to happen any time soon. All attempts thus far have resulted in failure or some self serving results. Each GDSs for example claims their pricing engine is the best.

A little bit of history, when the Professor used to work at one GDS in the 1980s and 1990s - we saw that our pricing in comparison test results sucked vs the others. We had a low tolerance for failure and demanded that our engine adhere strictly to the rules. We found that that the other players didn't quite do that. When we loosened the rules and matched them - the resulting improvement in our pricing engine was dramatic. No one was actually doing wrong but manipulating the rules resulted in lower fares and prices for the consumer.
The airlines who owned us were not very happy about it initially but in the long run were ok with it. The alternative was paying more fees to the other GDSs and losing opportunities for sale.

So the answer is this is a war of biblical proportions. And you can see why Google with its patina of global trust wants to have at this problem.

Anyone serving up fares in this market is probably quaking at what Google can do now with ITA's search/pricing engine and certified data sources. I bet the GDS old timers are now kicking themselves for their short sighted view of not responding to the airlines need for a solution that ultimately allowed ITA to exist.

But remember my opening statement. It is about the definition of subjective criteria.

So the fairest of them all depends almost invariably as to who is looking in the mirror....