Must Be Getting A Little Quiet In South Africa!

They are forming a commission to investigate airline prices

You JUST have to read this article and try hard not to fall about laughing too hard.

Let's have one of these in the EU or the USA and waste squillions of the tax payers money

Cheers

Shhhh Don't Tell ANYONE but OIL was down to around $83 today

The airlines complain a lot about the price of oil. Well its at some of its lowest rates in a long time. Ending the day (in NY) at just of $96 - it was hovering at $83 for a while.

This is good news for the airlines.

Will it last?

Naaaahhhh

LSY opens New Data Centre Near London

This is not normally something I would cover, but it is interesting.

LH Systems has been on the block for a while. Every so often rumours come of their impending sale. The last story came about 4 weeks ago. It was mooted that LSY would be sold to either IBM or Tata.

But it would seem they are proceeding with business as usual and have this nice new data centre. It will be a Tier 3+ (that's pretty good) facility serving amongst others Thomas Cook's IT infrastructure.

Cheers

Best BS PR Release of the week. TripFab

SELL YOUR BOEING AND AIRBUS STOCK

This week's Stupid Airline Tricks award - which we haven't awarded in a while - goes to a team outside of airlines (possibly - we cant be sure here at the Professor's secret skunk works lab).

Tripfab is stretching the limits of hyperbole... (that was not a misprint)

Please read this - its hilarious. In this article the team are claiming "change the way people travel". Is this the Travel Industry's equivalent of Ginger?

This is the release from PR.com

Call your broker now... SELL anything to do with Travel.

Cheers

PS the image is from Cerrone a Disco Monarch's album from about 2002.

BA + IB = Devalued Points? Yup You Bet!

Oh Dear.

This doesnt seem to be my week. Those once great deals on BA - and such wonderful things like cheap single partner awards. They look like going and going fast. November to be exact.

While the announcement by BA of Avios as the merged name of its frequent flyer program - there was bound to be something of an "adjustment". Well get ready folks. Some are predicting that the change will be catastrophic. In one case the alignment takes BA from the nice and friendly 240,000 for a RT pacific 1st class to the astronomic 720,000 same level as Qantas has been charging.

And it doesn't stop there. BA will actually be increasing the somewhat less than acceptable charges that will have to be paid. In many cases BA has been charging higher fees (the infamous QR/YQ merged charges) which make its FF flights cost about $100-$200 more than a US airline for the same itineraries. Interestingly there is no evidence that BA actually pays more in fuel or taxes than these same airlines.

So to make you even more unhappy - read this links from different sites on the same topic

UPGRD
The Points Guy
FlyerTalk
Boarding Area

It is worthwhile to read these stories. Bah Humbug BA!!!

Cheers

US Airways Completes Dismantling Of Vegas Hub

When America West was in its ascendancy - it created a second hum in Las Vegas a scant 287 miles apart from its primary hub in PHX. To boost traffic it created a low price night flight set taking advantage of McCarran's no curfew restrictions on flights.

With the realignment of the merged HP+US systems Pittsburgh got the ax first. Now we are seeing Vegas move to a simple flight pattern to the respective other hubs of US. Gone the PSA shuttle from California, Gone the hub, all that will be left will be 21 flights a day. About the same as Delta American and United. Also gone about 880 jobs mostly from Vegas, the Tempe based airline will close its pilot base there. All down from the mid 1990s when it was the largest airline there.

Story and Image from Las Vegas Sun.

The Saga Techcrunch - A$ The World Turns

It would be very easy to poke fun at the shenanigans going on at AOL owned Huffington Post led Techcrunch.

Techcrunch is generally a good read with a great degree of attitude. Perhaps it is a sign of the maturity of the web or just a small window into our web based corporate culture(s). Yes it looks like in this war - no matter who started it - the suits win again.

For clarity - I think of myself more as a contributor rather than a suit - but in reality I have to be a suit a lot of the time.

The web is supposed to be open, wild and free. That's the good news. The bad news is that these concepts don't necessarily sit well together.

The web based economy has effectively destroyed a significant part of the non-physical economy. From banking to personal relationships to our little world of travel. The resulting models are very different from what many of us (Boomers - sic) grew up with.

And we have folks like Arrington to thank for some of the good and the bad of what has happened. We need people like him and we need independent organs (I struggle with the term blog or journal) to act as the fourth estate of the web.

However it plays out - as a soap opera I suspect, this will have the effect of changing the psyche of the web based economy. While the world will carry on without Arrington at the helm of Techcrunch - the likelihood is that it will have lost some of the veneer of adolescence. Yes the web is growing up. I guess we have to now as well...

Cheers

Scoot - New Singapore Long Haul LCC?

There are rumours flying around the web that Singapore's new Low Cost Long Haul Airline will be called Scoot.

Changi Airport is becoming quite a hotbed of LCC activity. The recent numbers show that LCCs are powering much of the airport's growth. Although competition from the GCC based carriers who over fly the Lion City or the explosive growth of KUL an hour's flight away has creamed off some of the lustre. Qantas's new premium airline is supposed to be based in either KUL or SIN. Chances are pretty slim that it will choose KUL in my view - that it will be based in the Malaysian Capital. Since Qantas announced its plan - a long in the works deal was announced showing Malaysian Airlines and Air Asia had agreed to broad cooperation and rationalization. Tony Fernandez will be joining the MH board as a result. Besides Jetstar already has a base in SIN.

Earlier this year - Singapore Airlines announced that it would be starting a long haul LCC using 777-200s - presumably to compete with the likes of Air Asia X which uses wide body Airbus products A330/340 and has A350s on order.

The new airline's proposed name has inadvertently leaked and it has the name Scoot. While I doubt that this would be the name according to Aviation Week quoting Ipos this is the registered brand name.

Doing the usual thing I looked up the term. I personally use the word a little differently but that's just me.Here are the usual definitions one website went into more details on the naming.

But I think the most urgent issue is to assess whether or not the name is a good one. In my view Scoot would have been better for the short haul than the long haul.Tiger would make a better long haul name. (Too bad Tiger somewhat blotted its copy book in Oz).

There are several examples of airlines that have had their names ridiculed. It is a popular past time. Just look at my name for example. SABENA was translated often into the acronym rather than the Belgian airline (formally Société Autonyme Belge d'Exploitation de la Navigation Aérienne) but to "Such A Bloody Experience Never Again"

So a little more on the choice of aircraft. The 777 is wider in the cabin than the Airbus. 19ft 3 inches vs 18 ft 6 inches. Having flown the airbus - I can tell you that 10 abreast seating on these planes is pretty tight. Scoot is supposed to also have 10 abreast. 4 inches on either side of the cabin wall will make the window seats tolerable.

So here is a request. SQ please don't name your airline Scoot. Choose something a little easier and less likely to be ridiculed.

Thanks

Is Airline Boarding Rocket Science?

I have written before about Jason Steffen's attempts to get rationality into airline boarding. Much to be applauded.

The Economist published an article on how his theories have progressed.

However I believe that in the real world - there are different ways to address this.

Randomized allocation of boarding groups is one simple way (as AA is doing now). Southwest's funnel method - feeds traffic into the jetway fast. Ryanair's staged boarding - seems to work the fastest from my observation.

The basic issue remains that the hydraulics of the flow into an airline cabin will never become efficient unless there is a way to address the basic human interaction and the physical size of the passengers. For example domestic Mexico and intra Asian flights with less portly Americans can actually process faster because smaller nimbler people can share the same physical space.

End of the day. Random wins. But take away a major component such as TRUE limits on bags on board as exists in Europe and boarding works way better. Perhaps Spirit has it right for charging for overhead bin usage.


Cheers

Great Buffet Quote: "Give me a good management team in a very difficult industry, and the industry always wins,"

The airline industry and indeed Travel as a whole is very difficult.I have been in and around it for all of my professional career now spanning more than 38 years. Holy crap has it been that long!!!!

Here is a great story that should give you a great sense of warmth. The end of Ansett is finally here. The last check has been paid and the staff got 96 cents on the dollar.

The lesson should be heeded over at Virgin Australia and also Air Australia (formerly Strategic).

Cheers

Travel Massive Trumps Tired Ogre Tribe

Travel Tribe was a name used to describe collections of people who wanted to interact to share their passion for the subject of Travel.

There was (and still is - read further) a great group of people who started various Travel Tribes in different parts of the world.

However enter the evil Brand Owner Ogre. Seems like Travel Tribe was not just a nice informal thing that travelistas could come together. Nope. The value of the brand was just too strong to prevent the Big Brand Ogre from flexing his legal muscle.

So the heavy hand of various legal threats were made and the thriving community was forced to change their name.

But fear not - Right outweighs Might frequently on the web. In this case Legal threat Might is losing to internet social Right.

So the formerly Travel Tribe meetups are now newly named (actually for many months now) as Travel Massive. and now there are 14 of them worldwide with more forming.

So get in on the action. We also tend to have informal meet ups at conventions such as ITB (Berlin March) and WTM (London November) so enjoy it. And Ya Boo Sucks to the Travel Tribe Spoiler Ogres.

Cheers

Is BTC Right on ASTA or Not?

In the interests of equal time - I am publishing here the Open Letter BTC Gram from the tables of Radnor PA.

The background for anyone who missed it - is that President Obama made a reference to Travel Agents in a speech. Check the Economist for a balanced view of the situation. The pointed reference in the letter to "Industry Insiders" was perhaps aimed at the Professor and others who had the temerity to observe that ASTA's response contained a number of inaccuracies.

Check out the debate in Travel Weekly.

I read 2 perspectives on US Travel Weekly. Sadly the one I preferred seems to have been pulled off. http://www.travelweekly.com/Arnie-Weissmann/Obama-and-our-obsolete-language-of-polarity/

So here is the BTC letter, read it then you see if you agree. I have provided some commentary at the end:


BTCgram
August 30, 2011

ASTA Did The Right Thing In Responding To President Obama’s Comments About Travel Agents
BTC has read with interest stories and postings in the travel industry trade press regarding President Obama’s well-intentioned comments about technology and travel agents as well as industry and media response to them and each other. One central element would appear missing from the discussion and that is what we think inside the industry about this issue is largely irrelevant.
Meetings destinations like Las Vegas no doubt vividly remember the immediate and painful impact on business from the President’s words a couple of years ago, as did the corporate aviation business. Road warriors, once-a-year leisure travelers and young, up and coming business travelers recently heard over and again the President’s influential comments about travel agents. ASTA responded early in the news cycle to help prevent a perception of travel agents as yesterday’s resource from becoming an intractable false reality in the marketplace.
In BTC’s view, ASTA did the right thing to safeguard the businesses of its members. Likewise, Travel Leaders also fired back at the President, ostensibly to protect its business. It’s simply a prudent and necessary business response. To its credit ASTA’s strategy seems to have succeeded as evidenced by consumer business press coverage that included ASTA’s perspective in publications such as USA TODAY, The Economist and The Los Angeles Times.
Industry insiders screeching about business models, technology, new paradigms, erroneous statistics and the mistaken notion that ASTA is yearning for a bygone era is, in BTC’s view, inwardly focused and overlooks the central point of ASTA’s effective response to a potential threat to their members’ businesses. Congratulations to Tony Gonchar and ASTA for providing the precisely required leadership at the exact moment it was essential!
###
About Business Travel Coalition
Founded in 1994, the mission of the Business Travel Coalition is to bring transparency to industry and government policies and practices so that the managed travel community can influence issues of strategic importance to their organizations.
Contacts:
Kevin Mitchell
610-999-9247

There were two great pieces by Kevin May in TNooz.

The first was a report on the flap itself. The second was an unusual publication of a response from ASTA itself. TNooz was right to publish both.

For absence of ambiguity. I think ASTA just put its foot in its mouth by presenting an inaccurate set of numbers and thereby destroyed its own credibility. The point it was taking was admirable if a little naive in my view. The world has changed. A large number of former traditional agents are gone. What remains is a core of hard working and valuable resource. However let's be realistic about the whole thing.

Ultimately logic and numbers will prevail. The concept of the old school Travel Agent who acted as an access into the supply chain has been swept away.

Today's Travel Agents are better. They just don't scale well. Sadly. BTC is not helping the cause in my view and only serves to make the issue worse. But then what do I know... For the record - I would hardly think anyone would label the Professor as an "Industry Insider". Perish the thought.

Cheers

Last 1/3 Year US Market Projection

Every year I play a little game - what will the final part of the year look like. Both for the economy and the Travel sector as a whole post Labor Day.

My usual metrics are to look at airline traffic, hotel occupancy, rates and the economy as a whole.

I don't like to be a pessimistic person - but I am not getting warm and fuzzies about the current state. In my crystal ball I believe we are going to see a general slowdown of the Travel Economy in the last quarter of this year. What are the drivers and the evidence to support my hypothesis?

Starting with the economy - we knew August would not be a positive force on the mood of the economy - blame the politicians for that one. The jobs numbers look poor with zero growth when we need to see an increase of 150,000 new jobs before the unemployment rate falls from its almost historic 9.1% level. Business confidence is not going to be good even if there is a significant boost in jobs programs announced next week by Obama. The best we can hope for is flat for the rest of the year.

During the year - the total amount of airline trips taken have risen about 2-3 points yet the Corporate heavy ARC numbers show a fall of more than 2% in total tickets issued. Further the price of the tickets has risen. We are already (through July showing that nearly 6% total expenditure increase over 2010's numbers. Remember that increasingly ARC's ticket only numbers do not track with the total cost of trips. With therefore a significant additional cost of ancillaries not showing up in the ticket numbers - we are going to see squeezed corporate travel budgets that require some pull back in business travel. I am projecting for the last 1/3rd of the year a pull back of 6% in expenditures to bring budgets back in line. This is going to accelerate the cut in trips compared to 2010 to the tune of about 3-4%. Some chaps who are counting on reaching elite status with their trips in the last quarter better think again.

Leisure travel is also going to see a pull back with Thanksgiving having a bit of a hard time.

I had a scan and looked at deals coming up. International travel ex-USA is not looking promising. Delta recently implemented a second round of cuts in the Winter 2011 schedule. Pulling selected flights rather than cutting routes.

So pricing is holding but I am seeing some new lower priced inventory available. Also pretty good inventory for some international flights on frequent flyer miles.

So boys and girls... there we have it. A quiet last third of the year in travel with numbers down. Batten down the hatches. We might start to also see a few layoffs occurring selectively.

Cheers

What Cost Emirates Profits? Just Ask Qantas.

While Emirates continues to rack up impressive profits, other airlines are calling foul and accusing the airline of benefiting from some degree of financial fiddling to justify the seemingly hard profit numbers.

However I believe that the airline makes money the old fashion way - they earn it.

United Airlines Chairman Jeff Smisek was quite effusive on the subject when interviewed last month during GBTA annual convention in Denver.

Embedded in the results of the QANTAS GROUP last month also was a clear indication of the resulting failure of their international business in the face of competition from - well airlines like Emirates.

As reported by Reuters, QF lost more than AU$200 million on its international operations. With net profits being more than $524 million, the airline must be making money hand over fist domestically.

As QF restructures its international business - EK continues to grow its profits on three key sectors.

The Trans Arabian sea routes, The North South ZA to Northern Europe and of course on the Kangeroo routes.

This gives an indication of where EK makes its money. However clearly they have a number of advantages over QF that QF has now come to realize and will address.

Cheers

EasyJet Musical Chairs

The continuing boardroom farce at Easyjet seems to have roped in some new blood which hopefully will bring a degree of stability to Big Orange. (With due deference to Braniff).

For those who have not been following the saga - Stelios has been having a bit of a feud with the board and the management of his favorite child Easyjet. His concern has been that he disagrees with the move for expansion vs profitability that the company has been pursuing. He launched his latest broadside in July. Stelios is concerned that the relationship between his former protoge and Airbus has become a bit too incestuous. And is concerned that the company is paying too much for its aircraft and buying larger machines unnecessarily. The company now has A320s and A321s it acquired when it board GB Airways but has stepped this up by buying new A320s. Note the company could argue that its larger capacity needs were so severe that it needed to lease a different aircraft type (2 Boeing 757s) during the summer 2010 season to accommodation this. The company is now exclusively Airbus as the last 737-700s were returned this year.

For those of us on the sidelines - the battle seems a little silly since the airline is doing nicely thank you. But a battle there is. As the leading shareholder Stelios is entitled to make his point and he has done so. For the record - his family own 38% of the stock.

Latest to leave is deputy chairman Sir David Michels. The revolving door has seen a parade of folks rotating through the board room in Luton. Among the recent hires as board members are Andy Martin and Adele Anderson. They join recent Deputy Chairman recruit Charles Gurassa. The upheavel is so new that the website has not yet updated the composition.

You can discern the tea leaves here of a change in board direction for the company. On board we now have a bunch of real traditional travel stalwarts.

Let's have a little peak.

Out goes also Sven Boinet (ex - Lastminute.com),
Charles Gurassa has as noted above an excellent travel pedigree
Newcomer Andy Martin is ex Forte, Granada and First Choice (now TUI).
The board seems to have a blue chip set of players. Both women, including its new CEO, on the board shared top 50 most powerful women in the UK status as far back as 2002. Adele has experience in aircraft financing - this seems to be at part of the battle that Stelios is fighting.

For those of us with a little memory this was the company that was founded on the premise that travellers should "cut out the travel agent", we can get an impression that the board will likely take a more traditional approach to distribution. One can infer that the company will become more like a regular carrier and discontinue a key plank of Stelios's product positioning.

Stelios's arguments about the board being a bit cosy - does seem to have some merit. Newcomer Adele and the non-exec chairman were both colleagues at KPMG in the 1990s and 2000s. Rigas Doganis has a long history of working with airlines as an academic and board member of Olympic and SAA. Keith Hammil is currently on the board of Travelodge and was part of the original team of Go.

Clearly this story will run for a long while.

Cheers