2007 - The Year In Review

The year in review

This year 2007 has been yet another period that confirms the old French adage Plus ça change, plus c'est la même chose

So here are Plaudits and Brickbats for well the Aviation, Travel and Tourism Industry.

r Fuel – price thereof. UGH…. Proves that what goes up – must keep going up. Biggest impact has been the actual lack of impact. The global economy has learned to accommodate rising oil prices.

r Slime Green – Cloaking one selves in Green has become a popular past time. So far the industry has done very little actual work to mitigate the effects of Climate Change. The goal has to be the REDUCTION not just the amelioration of Climate Change gases and effects. We advocate the following:

1. Zero footprint. Leave no footprint after you leave.
2. Reduce all your energy consumption (replace light bulbs etc etc)
3. Reduce your energy footprint – use less devices and use them more efficiently
4. Carbon offset more than you use.

r The decline of the greenback. The dollar took a huge tumble. Well someone finally figured out that the Bush strategy of mortgaging the future wasn’t going to work. Blame all round for the subprime mess. Did we learn anything? Yes – a castle is not a home.

a US Airlines – the patient recovered enough to take a walk and in fact even run a little in 2007. However they are catching a cold from the overall US economy. Stay the course chaps – be wise.

a A380/787/A350XWB – new planes! The A380 finally entered service. Airbus launched the A350 formally and Boeing while stumbling on delivery looks like it has racked up 800 orders for the 787.

a Money – Part 1 – New Money – the Arab states, China and other Asian markets are flexing their economic power and buying into the US depressed economy. There will be a HUGE impact in 2008.

a Money – Part 2 – Private Equity – while credit dried up in the latter parts of the year – we still saw a blistering pace of PE deals. Blackstone for Travelport acquiring Worldspan, Harrahs, Closing Sabre, MidWest Airlines, etc etc. Adam Aaron joined Apollo and set about building a very nice Cruise Portfolio. Instead of 2 now there are 3?

a Money – Part 3 – Acquisitions – Airline Consolidation – didn’t really happen – but its coming – well maybe. Air France bought VLM, Lufthansa bought into jetBlue and Air France looks like its going to win Alitalia. Vanguard was acquired by Enterprise. Finally a home for the much travelled Alamo and National brands. The end of Wayne Huizinga’s travel dream.

a OpenSkies – Its going to be ugly at London Heathrow on March 30th with all the new airlines and the opening of T5. EU Open Skies has actually focused all the attention on LHR but it applies across the board. We are going to see a significant battle for market share into and out of the UK mostly transatlantic. However Open Skies also applies to Singapore and other markets. Asean nations are accelerating their own Open Skies and we will see free competition SIN-KUL by the end of 2008. Other markets across Asia will also become free and open.

r Commissions and remuneration – the move to consumer paid distribution continues. GDS distribution is well and truly changed. There are no easy deals for distributers. Cruise commissions – long regarded as being best for the few remaining Travel Agencies out there are now being subject to death by a thousand cuts. The latest being the removal of commissions for Cruise based Air. And lets not talk about Fees!!!!

a Ancillary Revenue – looks good to me – lets unbundle and charge for everything. Would you like to pay for that barf bag or not?

2 Industry Giants left the industry – Gerald Grinstein retired after successfully piloting Delta out of bankruptcy. And only took his salary. Way to go Jerry! You are a scholar and a Gentlemen. Now of only some of your former peers had been not so greedy…. Bob Dickerson after 35+ years retired from Carnival. Obituaries – Bill Misunas, Warren Avis you will be missed.