This was a question posed by Travel Daily News. The sad answer is they are not. Using the well established ALL - Airline Lemming Law (which proscribes that as long as anti-trust is not involved all airlines follow each other's behavior - usually over the cliff) - airlines have followed each other into the Ancillary Revenue sea. And they seem to be very happy with this. Why?
The program meets several airline objectives and criteria:
1. It generates revenue
2. It obfuscates the true price of an airline ticket
3. The LCCs have been doing it successfully and therefore it must be right
4. Everyone else is doing it
5. The passengers are not complaining (well not too much anyway)
The last major to adopt the first bag fee was Delta which aligned its policies with its now wholly owned sub Northwest.
This leaves only Southwest among the US airlines who is not subscribing to the model.
It remains to be seen whether Southwest will adopt this - however I dont think they will be able to hold out for much longer given the enormous sums of money that the US Legacy carriers are saying they are making from the Unbundled a la carte based pricing.
Of course there is that teensy weenie little problem of the tax - but who's are arguing today?
Cheers
07 November 2008
Don't Book FORTUNE PARK HOTELS in Mumbai.
OK chaps this is the second time I have done this. FORTUNE PARK Hotels has tried again to place an ad on my blog.
Every time it happens it will generate this kind of message from me.
Here is the original entry:
http://t2impact.blogspot.com/2008/10/dont-book-fortune-hotels-in-india.html
You have been warned.
Every time it happens it will generate this kind of message from me.
Here is the original entry:
http://t2impact.blogspot.com/2008/10/dont-book-fortune-hotels-in-india.html
You have been warned.
Euro LCCs: A Quantam of..?
The big 3 European Low Cost Carriers have reported their October traffic numbers. They make for interesting reading.
Here are the numbers.
Ryanair carried 5.35m passengers last month, 18% more than in October 2007, taking its rolling 12-month total to 56.8m. October load factor was flat at 85% and on a rolling 12-month basis averaged 81.5%. They have already announced significant cut backs for the Winter months that could see capacity fall by as much as 25%.
For easyJet, October passenger numbers grew by a similar 18.4% to 3.96m, taking its rolling 12-month total to 44.27m (+17.6%). October loads were 1.4 percentage points ahead at 83.9%, and on a rolling 12-month basis 0.5pp ahead at 84.2%. Thus continuing their LF trends higher than their Irish rival.
Alas on the mainland things don't look so good. Passenger numbers at Air Berlin declined by 4.4% year-on-year to 2.7m last month, due to a ‘targeted capacity reduction’ of about 80,000 seats. Load factor dropped 1.6% to 80.1%. Still pretty healthy Air Berlin seems to have stabilized at about half the traffic of Ryanair.
For other airlines in the LCC category things are not looking too good. XL Airways (UK) and Zoom both left the field followed by Sterling last month. But bright spots from the UK include traffic growth at Jet2, and Monarch Scheduled. There is continued uncertainty in Germany over the fate of the musical chairs game being played out with TUI/Thomas Cook/Euro Wings+German Wings and Lufthansa. Air Berlin's ability to play has been weakened by their need to absorb all the hodge podge of traffic they acquired with LTU, DBA etc. The latter of which is no longer an entity.
Cheers
Here are the numbers.
Ryanair carried 5.35m passengers last month, 18% more than in October 2007, taking its rolling 12-month total to 56.8m. October load factor was flat at 85% and on a rolling 12-month basis averaged 81.5%. They have already announced significant cut backs for the Winter months that could see capacity fall by as much as 25%.
For easyJet, October passenger numbers grew by a similar 18.4% to 3.96m, taking its rolling 12-month total to 44.27m (+17.6%). October loads were 1.4 percentage points ahead at 83.9%, and on a rolling 12-month basis 0.5pp ahead at 84.2%. Thus continuing their LF trends higher than their Irish rival.
Alas on the mainland things don't look so good. Passenger numbers at Air Berlin declined by 4.4% year-on-year to 2.7m last month, due to a ‘targeted capacity reduction’ of about 80,000 seats. Load factor dropped 1.6% to 80.1%. Still pretty healthy Air Berlin seems to have stabilized at about half the traffic of Ryanair.
For other airlines in the LCC category things are not looking too good. XL Airways (UK) and Zoom both left the field followed by Sterling last month. But bright spots from the UK include traffic growth at Jet2, and Monarch Scheduled. There is continued uncertainty in Germany over the fate of the musical chairs game being played out with TUI/Thomas Cook/Euro Wings+German Wings and Lufthansa. Air Berlin's ability to play has been weakened by their need to absorb all the hodge podge of traffic they acquired with LTU, DBA etc. The latter of which is no longer an entity.
Cheers
Shoe's on the other foot - Transatlantic Airline Capacity
Humour me here for a little bit. One lesson we learned from the past summer's dramatic surge in oil prices and its corresponding impact on petrol and Jet-A was the impact did not reach the European carriers as badly as it affected the US airlines.
The major European carriers saw the impact of oil to some extent mitigated by the rise in the value of the pound and the Euro against the dollar. Further their ability to charge surcharges made the rises all the more palatable. Thus while there was not a huge increase in traffic - largely the European traffic held its own with Iberia, Air France/KLM, Lufthansa doing pretty well. BA had its own share of problems due to the disastrous opening of T5 at LHR.
Fast forward to next year's summer season and if things hold steady (BIG CAVEAT!) then we will see a reversal of fortunes.
The US airlines will have seen a dramatic fall in the price of JetA back to still high levels of $70-$80 per barrel based. But the dollar's now high value as a result of plummeting pounds and evaporating euros will encourage the US based traveller back into the market.
We are already seeing some new activity. Delta announced yesterday that the AF/KL/NW/DL Transatlantic Alliance will open up 2 new routes to Paris, one from Pittsburgh (currently a ghost town masquerading as an airport) and the other from AA's minor hub at Raleigh Durham's RDU. Paris seems to be popular since US Airways had previously announced new summer service from Charlotte - reinstating a cut service from several years ago. All 3 services will be offered with 2 class 757s.
Stay tuned - this could be interesting.
Cheers
The major European carriers saw the impact of oil to some extent mitigated by the rise in the value of the pound and the Euro against the dollar. Further their ability to charge surcharges made the rises all the more palatable. Thus while there was not a huge increase in traffic - largely the European traffic held its own with Iberia, Air France/KLM, Lufthansa doing pretty well. BA had its own share of problems due to the disastrous opening of T5 at LHR.
Fast forward to next year's summer season and if things hold steady (BIG CAVEAT!) then we will see a reversal of fortunes.
The US airlines will have seen a dramatic fall in the price of JetA back to still high levels of $70-$80 per barrel based. But the dollar's now high value as a result of plummeting pounds and evaporating euros will encourage the US based traveller back into the market.
We are already seeing some new activity. Delta announced yesterday that the AF/KL/NW/DL Transatlantic Alliance will open up 2 new routes to Paris, one from Pittsburgh (currently a ghost town masquerading as an airport) and the other from AA's minor hub at Raleigh Durham's RDU. Paris seems to be popular since US Airways had previously announced new summer service from Charlotte - reinstating a cut service from several years ago. All 3 services will be offered with 2 class 757s.
Stay tuned - this could be interesting.
Cheers
More Evidence of HVC and UPC Convergence
Oh creeps... this alphabet soup is getting worse.
For some time I have been speaking of Low Cost and Legacy airlines morphing into HVC - Hybrid Value Carriers. As LCCs mature - many of them seem to fall prey to wanting to become - well Legacy Airlines.
2 Good examples of this are the following:
Mango (South Africa) has just launched its business product - it now offers two packages of products - Mango Flex and Mango Plus. Yes friends - once again the airlines are showing their true colors by well confusing the consumers.
Meanwhile back in the USA - the newly mega-sized Delta has given in to its baser instincts (and profit motive) and adopted Northwest's baggage policy. The numbers are just too compelling to resist. So effective immediately $15 for the first bag and $25 for the second will now apply. Last week when I flew on Delta - I asked one of the CSRs at check in whether they thought charging was a good idea. Her response was - she hoped DL never charged - her colleagues at the other airlines all felt it was counter productive and caused greater customer service hassles and longer times not shorter to process customers. Well so much for that then!
There are hidden costs in the unbundling of the product. UPC airlines I believe will prevail but I still firmly believe that there is a building overhang of unhappy customers, staff and then there is the taxman...
Hmm we shall see - maybe sooner than later
Cheers
For some time I have been speaking of Low Cost and Legacy airlines morphing into HVC - Hybrid Value Carriers. As LCCs mature - many of them seem to fall prey to wanting to become - well Legacy Airlines.
2 Good examples of this are the following:
Mango (South Africa) has just launched its business product - it now offers two packages of products - Mango Flex and Mango Plus. Yes friends - once again the airlines are showing their true colors by well confusing the consumers.
Meanwhile back in the USA - the newly mega-sized Delta has given in to its baser instincts (and profit motive) and adopted Northwest's baggage policy. The numbers are just too compelling to resist. So effective immediately $15 for the first bag and $25 for the second will now apply. Last week when I flew on Delta - I asked one of the CSRs at check in whether they thought charging was a good idea. Her response was - she hoped DL never charged - her colleagues at the other airlines all felt it was counter productive and caused greater customer service hassles and longer times not shorter to process customers. Well so much for that then!
There are hidden costs in the unbundling of the product. UPC airlines I believe will prevail but I still firmly believe that there is a building overhang of unhappy customers, staff and then there is the taxman...
Hmm we shall see - maybe sooner than later
Cheers
06 November 2008
Are You Going to PhocusWright Nov18th?
At the Bloggers Summit - a cast of thousands - well at least 10 - will be converging and speaking on the whole Web 2.0 stuff! The Professor will be speaking in person!
http://www.phocuswright.com/the_phocuswright_conference_2008_information
I will be speaking on two panels in the morning and afternoon. They will cover the same material so if you are going sign up for one of the sessions.
Moderated by Siew Hoon Yeoh the session promises to be lively and I hope informative. Philip has worked his usual magic and added a couple of elements to the overall show which is a bewildering array of activity and networking.
I will be there from Monday through Wednesday morning when I unfortunately have to leave to attend an airline meeting. So stop by and say hi and sign up for this session we are trying to make it one of the more popular events. Your help would be appreciated.
Remember that this represents the Creme de la Creme of the Travel Industry bloggers both on the panel (modesty!) and in the audience.
Cheers
http://www.phocuswright.com/the_phocuswright_conference_2008_information
I will be speaking on two panels in the morning and afternoon. They will cover the same material so if you are going sign up for one of the sessions.
Moderated by Siew Hoon Yeoh the session promises to be lively and I hope informative. Philip has worked his usual magic and added a couple of elements to the overall show which is a bewildering array of activity and networking.
I will be there from Monday through Wednesday morning when I unfortunately have to leave to attend an airline meeting. So stop by and say hi and sign up for this session we are trying to make it one of the more popular events. Your help would be appreciated.
Remember that this represents the Creme de la Creme of the Travel Industry bloggers both on the panel (modesty!) and in the audience.
Cheers
Kingfisher in default to GECAS?
Well its ending in tears in India. GECAS and Kingfisher are in court fighting over the terms of a lease for 4 A320s. The details are not clear. GECAS says the Indian Airline is in default. Kingfisher says the US company is being unreasonable and they are discussing terms for the return of the aircraft.
The bloodbath that occurred during Q2 and Q3 in India as a result of the high Oil prices is now coming home to roost.
Kingfisher is deferring expansion plans and has recently signed a deal with Jet Airways to coordinate schedules.
I wonder what will happen when Kingfisher has to take the A380?
Cheers
The bloodbath that occurred during Q2 and Q3 in India as a result of the high Oil prices is now coming home to roost.
Kingfisher is deferring expansion plans and has recently signed a deal with Jet Airways to coordinate schedules.
I wonder what will happen when Kingfisher has to take the A380?
Cheers
05 November 2008
Oh The 787 Fastener Problem...
Many moons ago a man named Patterson developed the flush rivet. This was a smooth rivet head that allowed a smooth skin of metal on an Aircraft. The original rivets on early metal planes (like Lindy's Ryan Monoplane) were raised which of course created drag. So the advanced form of flush rivet meant a smooth flow of air on the skin of an aircraft - whether stressed or not.
Pretty much this has been state of the art since the time of the DC2.
However now we are at the 787 and we seem (or rather Boeing does) to have a problem with the fasteners.
This is basic stuff. For Boeing to get it wrong and to incorrectly fit 3% on the first 4 airframes on the 787 line is a pretty poor showing of Boeing's Quality Management Process. Something that in the past they have been renowned for. BUT and this is a big one - we don't know what this does to the strength of the carbon filament structure. But for anyone who has ever had to remove a nail, bolt or try to undo a fastener of any sort - one thing is for certain - the surrounding structure is always left worse off than before.
Given all the going's on with Ship 1 - you can almost be sure that this aircraft is now a pure engineering model with little relationship to the production ships.
Most of today's news reports that there is no chance of a 2008 first flight. And the chances of any production deliveries in 2009 are now looking pretty remote.
I will say now what I have said before. I would not feel very comfortable flying in the first models of the 787. Boeing would do well to come clean on the whole issue and basically throw away many of these early model fuselages and wait till they get it right in the later runs.
Much has been written about Boeing's admiration for Toyota's process and quality. Indeed I have even hear Boeing personnel point to the Eclipse Aviation as an example of a production focused business. Aircraft are not cars. Boeing needs to go back and take stock of what has gone wrong. They should not be afraid to throw away the first airframes in favor of a new batch. At this point it would seem prudent to keep correcting things at the fundamental level rather than by bandaiding them again.
Just my humble opinion
Cheers
Pretty much this has been state of the art since the time of the DC2.
However now we are at the 787 and we seem (or rather Boeing does) to have a problem with the fasteners.
This is basic stuff. For Boeing to get it wrong and to incorrectly fit 3% on the first 4 airframes on the 787 line is a pretty poor showing of Boeing's Quality Management Process. Something that in the past they have been renowned for. BUT and this is a big one - we don't know what this does to the strength of the carbon filament structure. But for anyone who has ever had to remove a nail, bolt or try to undo a fastener of any sort - one thing is for certain - the surrounding structure is always left worse off than before.
Given all the going's on with Ship 1 - you can almost be sure that this aircraft is now a pure engineering model with little relationship to the production ships.
Most of today's news reports that there is no chance of a 2008 first flight. And the chances of any production deliveries in 2009 are now looking pretty remote.
I will say now what I have said before. I would not feel very comfortable flying in the first models of the 787. Boeing would do well to come clean on the whole issue and basically throw away many of these early model fuselages and wait till they get it right in the later runs.
Much has been written about Boeing's admiration for Toyota's process and quality. Indeed I have even hear Boeing personnel point to the Eclipse Aviation as an example of a production focused business. Aircraft are not cars. Boeing needs to go back and take stock of what has gone wrong. They should not be afraid to throw away the first airframes in favor of a new batch. At this point it would seem prudent to keep correcting things at the fundamental level rather than by bandaiding them again.
Just my humble opinion
Cheers
Google-Yahoo Ad Deal is Dead.
I am a big fan of Google and what they have done to reach such a position. However I am not naive enough to think that they are not a threat. In fact Google really is the 600 Kilo gorilla in the market for Travel Ad dollars.
I had personally grave concerns about dominance with their deal with Yahoo. Google+DoubleClick+Yahoo = very scary.
That is all off. But it leaves Yahoo in a really tight spot. Perhaps it drives them to the arms of Microsoft.
The reasons will become clear we understand soon - but basically DoJ said no and after that the attempts at a solution within the confines of what Justice could live with was so small as to be - well impossible.
Cheers
I had personally grave concerns about dominance with their deal with Yahoo. Google+DoubleClick+Yahoo = very scary.
That is all off. But it leaves Yahoo in a really tight spot. Perhaps it drives them to the arms of Microsoft.
The reasons will become clear we understand soon - but basically DoJ said no and after that the attempts at a solution within the confines of what Justice could live with was so small as to be - well impossible.
Cheers
04 November 2008
Obama Inherits...
For the new president-elect there will be no sleep, no holiday, no respite. The state of the US economy demands action and a heck of a lot of effort.
Yes we can - became - Yes we did - now its "Oh shit, now we have a boat load of work to do."
For the US Airline, Travel and Tourism market segment there is a clear set of wins here. Firstly - the standing of America has to go up. It couldn't get worse. Obama made a key point in his acceptance speech to include a message to the rest of the world. And I believe he meant it. The proof will however come from the people of our industry. We all have individual and collective tasks to rebuild travel to and from America. A resurgent America can be both a catalyst and indeed an engine of economic vibrancy and growth in the ATT Sector. No matter where we are on the planet. America matters.
Yes! Let's get down to work. Today is the first day of a new era. Let's all work towards that no matter what the colour of your skin is, your creed, preference or heritage. We can all make the world a better place. America has opened the door. "C'mon in!"
Cheers
Yes we can - became - Yes we did - now its "Oh shit, now we have a boat load of work to do."
For the US Airline, Travel and Tourism market segment there is a clear set of wins here. Firstly - the standing of America has to go up. It couldn't get worse. Obama made a key point in his acceptance speech to include a message to the rest of the world. And I believe he meant it. The proof will however come from the people of our industry. We all have individual and collective tasks to rebuild travel to and from America. A resurgent America can be both a catalyst and indeed an engine of economic vibrancy and growth in the ATT Sector. No matter where we are on the planet. America matters.
Yes! Let's get down to work. Today is the first day of a new era. Let's all work towards that no matter what the colour of your skin is, your creed, preference or heritage. We can all make the world a better place. America has opened the door. "C'mon in!"
Cheers
Air Arabia to open Morocco Hub
Air Arabia - fresh off its debacle with Fly Yeti will have another go at a JV with the launch of Air Arabia Morocco. Its joint venture with Ithmaar Bank, a Bahrain-based investment bank with global reach, and Regional Air Lines a private Moroccan based airline.
Management will be by the Sharjah based carrier.
However like its previous efforts - there is little that can be done to connect the businesses. The air craft of choice is of course the Airbus narrow body. But it is restricted: Range with 150 passengers and reserves with CFM56s 4843km (2615nm), or 5639km (3045nm), or 5278km (2850nm); with V2500s 4874km (2632nm) or optionally 5463km (2950nm) or 5676km (3065nm).Distances between Casablanca and Sharjah for example are over 6000 KMs
Lets hope it works for them
Cheers
Management will be by the Sharjah based carrier.
However like its previous efforts - there is little that can be done to connect the businesses. The air craft of choice is of course the Airbus narrow body. But it is restricted: Range with 150 passengers and reserves with CFM56s 4843km (2615nm), or 5639km (3045nm), or 5278km (2850nm); with V2500s 4874km (2632nm) or optionally 5463km (2950nm) or 5676km (3065nm).Distances between Casablanca and Sharjah for example are over 6000 KMs
Lets hope it works for them
Cheers
03 November 2008
HRG debates opening up their Super Platform
All of the big agencies corporate or leisure/OTA have developed their own technology platform. Of that there is no debate. The question is will they ever do anything with these technology bases.
For a long time I have argued that once you had a multi-GDS environment then you were a little bit pregnant.
HRG as the number 4 global TMC player is no different to the big 3. It needs to keep moving forward. As we approach a perfect storm - this can only spell curtains for the GDS model as it exists today.
David Radcliffe in an interview during the ACTE conference in Rome made a number of interesting remarks:
"We recognize we've got this technology; we also recognize there is a place for industry standards. The industry is crying out for standards, and we need to evaluate the downside and upside of whether we release this. Certainly the smaller TMCs--in fact, anyone who hasn't invested in it by now--has left it too late. And that means they're going to have to get it from somewhere. We are arguing about it right now. "
I will disagree with him that anyone who has not done so is too late. No there are still ways to get into the game. However anyone who depends purely on GDS technology for supplier access is absolutely smoking something if they think they are at all independent. The same applies to any supplier who exclusively depends on GDS for neutral distribution.
Thus we have the makings of a perfect storm when distribution revolution will occur. I think we are there. Well almost. There are a number of elements still missing but the barriers to entry for a smart player to provide distribution technology which meets the needs of both the suppliers and the distributors are now pretty low. All that is needed now is a model that is more efficient and cheaper than the current GDS based one. The airlines have a number in mind. And its not a secret.
If you are interested - contact me directly
Cheers
For a long time I have argued that once you had a multi-GDS environment then you were a little bit pregnant.
HRG as the number 4 global TMC player is no different to the big 3. It needs to keep moving forward. As we approach a perfect storm - this can only spell curtains for the GDS model as it exists today.
David Radcliffe in an interview during the ACTE conference in Rome made a number of interesting remarks:
"We recognize we've got this technology; we also recognize there is a place for industry standards. The industry is crying out for standards, and we need to evaluate the downside and upside of whether we release this. Certainly the smaller TMCs--in fact, anyone who hasn't invested in it by now--has left it too late. And that means they're going to have to get it from somewhere. We are arguing about it right now. "
I will disagree with him that anyone who has not done so is too late. No there are still ways to get into the game. However anyone who depends purely on GDS technology for supplier access is absolutely smoking something if they think they are at all independent. The same applies to any supplier who exclusively depends on GDS for neutral distribution.
Thus we have the makings of a perfect storm when distribution revolution will occur. I think we are there. Well almost. There are a number of elements still missing but the barriers to entry for a smart player to provide distribution technology which meets the needs of both the suppliers and the distributors are now pretty low. All that is needed now is a model that is more efficient and cheaper than the current GDS based one. The airlines have a number in mind. And its not a secret.
If you are interested - contact me directly
Cheers
DoT Concludes Competition is Good
The US Department of Transportation in something of a stunning revelation has concluded that competition is actually good for the airline market.
While subtly trying to argue its case for Caps and the Slot Auction at the 3 major New York Airports - it released the results of its study of activity when competition is introduced into a market.
I am so glad our tax dollars are really at work effectively.
For further details go to the ATA - Air Transport Association of America site www.airline.org or the DOT website www.dot.gov. specifically the following page:
http://www.dot.gov/affairs/dot15908.htm
Joy!!!!
While subtly trying to argue its case for Caps and the Slot Auction at the 3 major New York Airports - it released the results of its study of activity when competition is introduced into a market.
I am so glad our tax dollars are really at work effectively.
For further details go to the ATA - Air Transport Association of America site www.airline.org or the DOT website www.dot.gov. specifically the following page:
http://www.dot.gov/affairs/dot15908.htm
Joy!!!!
United Devalues MP Currency - Introduces Co-Pay
United Airlines - currently short a few bucks has decided to collect them from their most loyal fans - their frequent flyers.
So effective July 2009 - they are introducing a new feature. CoPay. Up to $500.
So it gets just like BA where it would in some cases save you hard cash to buy the damn ticket than use Frequent Flyer Miles.
So brace yourself everyone who has FF miles. Better use them up quick. The currency is decidedly devalued. Rather like the Wall Street System
Cheers
So effective July 2009 - they are introducing a new feature. CoPay. Up to $500.
So it gets just like BA where it would in some cases save you hard cash to buy the damn ticket than use Frequent Flyer Miles.
So brace yourself everyone who has FF miles. Better use them up quick. The currency is decidedly devalued. Rather like the Wall Street System
Cheers
A Silver Lining For the UK from the Global Crisis?
This may sound a little weird but there may be a silver lining from the current global crisis. And this one is very obtuse but bear with me.
It is about the intersection of Gordon Brown's popularity and the need for expanded capacity at London's Airports.
So the UK process for airport infrastructure expansion is shall we say very complicated and extremely long winded. So it comes as a great surprise that the UK is rushing through 2 major projects. The second runway at Stansted and the contentious third runway at LHR.
Determined to thwart the attempts of the Tories who only weeks ago were this close to securing the downfall of the dour Scotsman who currently occupies Number 10 Downing Street, the current Labour Government has pushed through the processes to get the public inquiries out the way.
In the case of Stansted they are going to great lengths to rush this through. Even to the extent of holding hearings in different rooms to shorten the time by 50%. For LHR the public comment and inquiry process was not expected to start until 2010. Now we hear that they are going to shortly start the public process with Gordon promising to rubber stamp it within weeks of the conclusion. Much to the chagrin of many unions, the mayor of London (Tory Boris) and many many in his own party.
Never say there isn't a silver lining in everything.
Cheers
It is about the intersection of Gordon Brown's popularity and the need for expanded capacity at London's Airports.
So the UK process for airport infrastructure expansion is shall we say very complicated and extremely long winded. So it comes as a great surprise that the UK is rushing through 2 major projects. The second runway at Stansted and the contentious third runway at LHR.
Determined to thwart the attempts of the Tories who only weeks ago were this close to securing the downfall of the dour Scotsman who currently occupies Number 10 Downing Street, the current Labour Government has pushed through the processes to get the public inquiries out the way.
In the case of Stansted they are going to great lengths to rush this through. Even to the extent of holding hearings in different rooms to shorten the time by 50%. For LHR the public comment and inquiry process was not expected to start until 2010. Now we hear that they are going to shortly start the public process with Gordon promising to rubber stamp it within weeks of the conclusion. Much to the chagrin of many unions, the mayor of London (Tory Boris) and many many in his own party.
Never say there isn't a silver lining in everything.
Cheers
MOL Stays Stum on - Ryanair Transatlantic
Reporting a 19% increase in traffic and a reasonable rise in revenue - the gross profits fell at Ryanair this half year.
Michael O'Leary stayed quiet on the subject of Ryanair Long Haul.
Michael O'Leary stayed quiet on the subject of Ryanair Long Haul.
Expedia Reports slight fall in Profits
Expedia's Q3 earnings report is in and it makes for good healthy reading for the OTA.
Revenues across the board are up in every geography. Reflecting past activity through September their numbers showed that gross bookings increased 7% to $5.4bn (£3.3bn), with North America bookings up 1%, Europe bookings up 18% and other bookings (primarily corporate travel unit Egencia and Asia Pacific operations) up 25%.
Given the fall in US transactions for the period eeking out a 1% gain is very good. The other geographies probably still reflect an expanding market share for online rather than anything else.
Interestingly there is one metric that shows the weakness in the market. Worldwide merchant hotel revenue rose 7% due to a 15% increase in room nights stayed, including rooms delivered as a component of packages, partially offset by a 6% decrease in revenue per room night. Again this is healthier than what else is out there. This indicates that Expedia's contracts are insulating them from some of the rate falls that others have been seeing.
No mention of the ongoing ugly fight between Expedia and Ryanair.
Cheers
COMMENT FROM ANONYMOUS
"What happened between Expedia and RyanAir? Did EXPEDIA try to scam them like they do with their customers? Customers are being scammed by EXPEDIA. Source: a website called victims of expedia."
COMMENT FROM THE PROFESSOR
I am reluctantly publishing this comment because I believe in free speech. However in future I would ask people to leave comments with their names identified. I have removed the link. If the reader would like to go to the website I am sure you can find it. In future if a commentator would like to leave a message like this as Anon- then it could be a disgruntled ex-employee or something similar, such as a competitor. If you have a formal instance of a story you would like to share - then please submit this to the private address below. I am happy to investigate this however that is not the intent of this blog.
To answer the question posed by Anonymous, I refer you to a prior post:
http://t2impact.blogspot.com/2008/10/ryanair-its-ending-in-tears.html
Thanks
Revenues across the board are up in every geography. Reflecting past activity through September their numbers showed that gross bookings increased 7% to $5.4bn (£3.3bn), with North America bookings up 1%, Europe bookings up 18% and other bookings (primarily corporate travel unit Egencia and Asia Pacific operations) up 25%.
Given the fall in US transactions for the period eeking out a 1% gain is very good. The other geographies probably still reflect an expanding market share for online rather than anything else.
Interestingly there is one metric that shows the weakness in the market. Worldwide merchant hotel revenue rose 7% due to a 15% increase in room nights stayed, including rooms delivered as a component of packages, partially offset by a 6% decrease in revenue per room night. Again this is healthier than what else is out there. This indicates that Expedia's contracts are insulating them from some of the rate falls that others have been seeing.
No mention of the ongoing ugly fight between Expedia and Ryanair.
Cheers
COMMENT FROM ANONYMOUS
"What happened between Expedia and RyanAir? Did EXPEDIA try to scam them like they do with their customers? Customers are being scammed by EXPEDIA. Source: a website called victims of expedia."
COMMENT FROM THE PROFESSOR
I am reluctantly publishing this comment because I believe in free speech. However in future I would ask people to leave comments with their names identified. I have removed the link. If the reader would like to go to the website I am sure you can find it. In future if a commentator would like to leave a message like this as Anon- then it could be a disgruntled ex-employee or something similar, such as a competitor. If you have a formal instance of a story you would like to share - then please submit this to the private address below. I am happy to investigate this however that is not the intent of this blog.
To answer the question posed by Anonymous, I refer you to a prior post:
http://t2impact.blogspot.com/2008/10/ryanair-its-ending-in-tears.html
Thanks
ATA Day of Reckoning is Today!
Strangely enough we all thought that Mattlin Patterson's ATA was long and dead. Apparently not so. Today is the final day in Bankruptcy court that the defunct airline will have any say.
At stake is the 14 slots which the FAA has granted to anyone who acquires the business as a going concern.
Lets see what happens at the end of today.
Cheers
At stake is the 14 slots which the FAA has granted to anyone who acquires the business as a going concern.
Lets see what happens at the end of today.
Cheers
Top 10 Disruptive Technologies 2009
OK so we are into the final stretch of a very interesting 2008 and already the 2009 lists are starting to appear. This one comes from Outsourcing and services giant CSC. I have put a few comments into it to give some context for the ATT market.
According to CSC, a new wave - well almost new - of technologies are disrupting the way businesses operate. Travel will be impacted as in some cases it already has.
1. New Media
The splintering of media types has had a great impact. In some cases it levels the playing fields in others it just makes it way more complicated. One question; is Google a medium? Think about it.
2. Augmented Reality
A blending of virtual and physical reality can boost experimentation in the workplace and spotlight a need for collaborative skills. There is a great need for modeling in the IT side of ATT. Our usual approach is suck it and see. Perhaps now we can start to implement virtually developed tools and services. BTW I think this bleeds more into SaaS.
3. Social Networks
Got a difficult business or technical issue/problem? Do what many companies now do: use social networks to find skilled workers and experts. This works in Ad Hoc. Linked-in is by far the most popular for this. I probably answer 2-3 questions a week already from people I know and in many cases people I don't know. I anticipate this to go up. Not sure it will get really formalized though. I do see Facebook also being used for this.
4. Information Transparency
New technologies and tools bring pertinent data to the forefront, breaking through old silos and giving businesses a clearer vision of information. This one is REALLY tough because of conventional wisdom and airline's tendency to their DNA based obfuscation habits. However I note that Forrester recently did a monogram on BA's IT and Business Change teams. I think this one will run. However will it result in a DNA change at airlines and lead to product and service transparency? Not yet!
5. Web Waves
Software defined- and cognitive radio replace traditional TV and radio, powering new devices to use airwaves as needed. I have no clue what this one is. Someone care to enlighten me?
6. 3D Printing
Too futuristic? Think again. 3D printing will allow anyone to obtain parts and designs straight from the Web. This is already occurring in non-critical applications and between trusted partners (e.g. Boeing's not so successful 787 program). However smaller less ambitious projects could work for physical devices. Not sure it applies really to our virtual world. However we are seeing more walk through services so perhaps a 3D representation of the hotel and service such as a result will help adopt it.
7. Molecular Computing
Bio-medicine gets a boost from technology that allows researchers to better work within the human body. Not really applicable to ATT. However digging into Airline DNA would be a fascinating exercise. Imagine understanding why they do things... hotels too???
8. Cloud Computing
OK so this is the current in vogue tech stuff. Actually we are all guilty of using Cloud Computing - er its called the Internet! Seriously though the replacement of location centric devices with loosely coupled diverse machines is interesting. However the security aspects of this are frightening. Imagine an army of zombie bots attacking your own system.
9. Semantics
Information becomes more useful through semantics and context, which boosts interoperability and innovation in service availability. To me this is more interesting as perhaps Travel and Web 3.0 as the Semantic web. Instead of having to define constantly the complete universe of an application - just being able to develop the context would be a huge win. OTA are you listening here?
10. Web as Reasoning Engine
While the Web itself is not smart - there is nothing to say that it cannot be made to be smart. Our progressive view has always been that there is a natural process progression:
Data--> Information --> Knowledge --> Power
We are still in the first two stages - drowning in data and hardly able to get information reliably out of the web. Making information reliable will lead to a form of reasoning which will develop knowledge. Then it gets interesting.
Comments and thoughts?
According to CSC, a new wave - well almost new - of technologies are disrupting the way businesses operate. Travel will be impacted as in some cases it already has.
1. New Media
The splintering of media types has had a great impact. In some cases it levels the playing fields in others it just makes it way more complicated. One question; is Google a medium? Think about it.
2. Augmented Reality
A blending of virtual and physical reality can boost experimentation in the workplace and spotlight a need for collaborative skills. There is a great need for modeling in the IT side of ATT. Our usual approach is suck it and see. Perhaps now we can start to implement virtually developed tools and services. BTW I think this bleeds more into SaaS.
3. Social Networks
Got a difficult business or technical issue/problem? Do what many companies now do: use social networks to find skilled workers and experts. This works in Ad Hoc. Linked-in is by far the most popular for this. I probably answer 2-3 questions a week already from people I know and in many cases people I don't know. I anticipate this to go up. Not sure it will get really formalized though. I do see Facebook also being used for this.
4. Information Transparency
New technologies and tools bring pertinent data to the forefront, breaking through old silos and giving businesses a clearer vision of information. This one is REALLY tough because of conventional wisdom and airline's tendency to their DNA based obfuscation habits. However I note that Forrester recently did a monogram on BA's IT and Business Change teams. I think this one will run. However will it result in a DNA change at airlines and lead to product and service transparency? Not yet!
5. Web Waves
Software defined- and cognitive radio replace traditional TV and radio, powering new devices to use airwaves as needed. I have no clue what this one is. Someone care to enlighten me?
6. 3D Printing
Too futuristic? Think again. 3D printing will allow anyone to obtain parts and designs straight from the Web. This is already occurring in non-critical applications and between trusted partners (e.g. Boeing's not so successful 787 program). However smaller less ambitious projects could work for physical devices. Not sure it applies really to our virtual world. However we are seeing more walk through services so perhaps a 3D representation of the hotel and service such as a result will help adopt it.
7. Molecular Computing
Bio-medicine gets a boost from technology that allows researchers to better work within the human body. Not really applicable to ATT. However digging into Airline DNA would be a fascinating exercise. Imagine understanding why they do things... hotels too???
8. Cloud Computing
OK so this is the current in vogue tech stuff. Actually we are all guilty of using Cloud Computing - er its called the Internet! Seriously though the replacement of location centric devices with loosely coupled diverse machines is interesting. However the security aspects of this are frightening. Imagine an army of zombie bots attacking your own system.
9. Semantics
Information becomes more useful through semantics and context, which boosts interoperability and innovation in service availability. To me this is more interesting as perhaps Travel and Web 3.0 as the Semantic web. Instead of having to define constantly the complete universe of an application - just being able to develop the context would be a huge win. OTA are you listening here?
10. Web as Reasoning Engine
While the Web itself is not smart - there is nothing to say that it cannot be made to be smart. Our progressive view has always been that there is a natural process progression:
Data--> Information --> Knowledge --> Power
We are still in the first two stages - drowning in data and hardly able to get information reliably out of the web. Making information reliable will lead to a form of reasoning which will develop knowledge. Then it gets interesting.
Comments and thoughts?
02 November 2008
SQ Dives into the Ancillary Revenue KoolAid
The temptation of Christ some might say. Ancillary Revenue may be the devil's spawn. But many airlines particularly the US ones are really singing the praises of the Ancillary Revenue and what it is doing to their bottom line.
So it is not surprising that one of the world's most consistent money earners - Singapore Airlines is jumping into the fray and will now charge for Seat Assignment.
Here is the entire text of the press release. In true airline speak - it is confusing. Thank goodness for committee designed PR releases.
Singapore Airlines customers making Economy Class bookings on singaporeair.com now have the additional choice of guaranteeing themselves a preferred seat, with the launch of Preferred Seat Selection.
Currently, preferred seats available for allocation are located in exit rows. Customers will be offered an option to purchase a specific Preferred Seat, when they make their seat selection for applicable Economy Class bookings, including KrisFlyer redemption bookings. Customers can also purchase a Preferred Seat anytime before check-in (which begins 48 hours before flight departure), simply by retrieving their bookings on Singapore Airlines website.
Preferred Seats offer customers more legroom, and are now available for advance and guaranteed customer selection, for a fee of US$ 50 per sector, for all Singapore Airlines’ flights, except short-haul routes within Southeast Asia, and flights served by Boeing 777-200ER aircraft (this aircraft does not have seats located in exit rows). Preferred Seat Selection is subject to official approval in some markets, and some local variations may apply where regulatory approvals dictate.
Other categories of Preferred Seats, that similarly offer customers more legroom, may also be made available for selection in future.
Previously, Preferred Seats were only available on a request basis, without confirmation. The new option now offers a guarantee of assignment, subject to terms and conditions, on a first come, first serve basis.
For seats located in exit rows, Singapore Airlines requires, as part of a commitment to the safety of customers, that those who select and occupy these seats must meet mandatory safety conditions. These prerequisites, which strictly comply with the Civil Aviation Authority of Singapore’s flight safety guidelines, require that these customers must:
• Be at least 21 years of age at the commencement of the journey.
• Be fully able-bodied, and capable of opening the exit doors and moving quickly, or reaching and passing through the adjacent emergency exit.
• Be able to understand and follow the safety instructions in English.
• Be in good health at the time of check-in, boarding, and during the flight.
• Not be pregnant, or carrying infants, or using an infant seat belt.
• Not be under the influence of any intoxicating substance at check-in, boarding, and during the flight, as determined by ground and cabin crew.
• Not require an extension seat belt because of large body size.
As an example, customers travelling on SQ16 to San Francisco, via Seoul, will pay US$50 to select a Preferred Seat on their flight. For customers traveling from Sydney to London via Singapore (eg. SQ222 for SYD-SIN, and subsequently SQ322 for SIN-LON) will have to pay US$100 to select Preferred Seats on both legs (i.e. SYD-SIN and SIN-LON), as each leg is considered one sector.
Preferred Seat Selection is not available on the All Business-Class Airbus A340-500 aircraft as Preferred Seats are only available in Economy Class cabins. Customers travelling in Business or First Class, or the Singapore Airlines Suites, enjoy specific seat selection at any time from the time of booking, with no additional charge.
So it is not surprising that one of the world's most consistent money earners - Singapore Airlines is jumping into the fray and will now charge for Seat Assignment.
Here is the entire text of the press release. In true airline speak - it is confusing. Thank goodness for committee designed PR releases.
Singapore Airlines customers making Economy Class bookings on singaporeair.com now have the additional choice of guaranteeing themselves a preferred seat, with the launch of Preferred Seat Selection.
Currently, preferred seats available for allocation are located in exit rows. Customers will be offered an option to purchase a specific Preferred Seat, when they make their seat selection for applicable Economy Class bookings, including KrisFlyer redemption bookings. Customers can also purchase a Preferred Seat anytime before check-in (which begins 48 hours before flight departure), simply by retrieving their bookings on Singapore Airlines website.
Preferred Seats offer customers more legroom, and are now available for advance and guaranteed customer selection, for a fee of US$ 50 per sector, for all Singapore Airlines’ flights, except short-haul routes within Southeast Asia, and flights served by Boeing 777-200ER aircraft (this aircraft does not have seats located in exit rows). Preferred Seat Selection is subject to official approval in some markets, and some local variations may apply where regulatory approvals dictate.
Other categories of Preferred Seats, that similarly offer customers more legroom, may also be made available for selection in future.
Previously, Preferred Seats were only available on a request basis, without confirmation. The new option now offers a guarantee of assignment, subject to terms and conditions, on a first come, first serve basis.
For seats located in exit rows, Singapore Airlines requires, as part of a commitment to the safety of customers, that those who select and occupy these seats must meet mandatory safety conditions. These prerequisites, which strictly comply with the Civil Aviation Authority of Singapore’s flight safety guidelines, require that these customers must:
• Be at least 21 years of age at the commencement of the journey.
• Be fully able-bodied, and capable of opening the exit doors and moving quickly, or reaching and passing through the adjacent emergency exit.
• Be able to understand and follow the safety instructions in English.
• Be in good health at the time of check-in, boarding, and during the flight.
• Not be pregnant, or carrying infants, or using an infant seat belt.
• Not be under the influence of any intoxicating substance at check-in, boarding, and during the flight, as determined by ground and cabin crew.
• Not require an extension seat belt because of large body size.
As an example, customers travelling on SQ16 to San Francisco, via Seoul, will pay US$50 to select a Preferred Seat on their flight. For customers traveling from Sydney to London via Singapore (eg. SQ222 for SYD-SIN, and subsequently SQ322 for SIN-LON) will have to pay US$100 to select Preferred Seats on both legs (i.e. SYD-SIN and SIN-LON), as each leg is considered one sector.
Preferred Seat Selection is not available on the All Business-Class Airbus A340-500 aircraft as Preferred Seats are only available in Economy Class cabins. Customers travelling in Business or First Class, or the Singapore Airlines Suites, enjoy specific seat selection at any time from the time of booking, with no additional charge.
"I owe, I owe as off to work I go"... Strikers Return
So back go the IAM chaps working at Boeing plants US wide starting tonight with the Sunday shift.
The 57 day strike has caused a backlog of about 80 planes that wont be delivered. Actually I have maintained that this was good for Boeing to burn off some of that likely cancelled capacity due to the downturn and now or soon to be defunct airlines.
But waiting in the wings are two big orders. One from the newly huge Delta and the other from Ryanair Long haul.
I will lay good money down that the 787 wont fly before the end of the year and also that deliveries wont start until Q2 2009.
Still it will be good to see my neighbors working again.
Cheers
The 57 day strike has caused a backlog of about 80 planes that wont be delivered. Actually I have maintained that this was good for Boeing to burn off some of that likely cancelled capacity due to the downturn and now or soon to be defunct airlines.
But waiting in the wings are two big orders. One from the newly huge Delta and the other from Ryanair Long haul.
I will lay good money down that the 787 wont fly before the end of the year and also that deliveries wont start until Q2 2009.
Still it will be good to see my neighbors working again.
Cheers
Oft Rumoured Now Real? Ryanair Transatlantic
The Irish are reporting that Michael O'Leary, along with reporting some strong line of business results, will announce Ryanair will start offering in late 2009 Transatlantic flights for a nominal 10 Euros. The announcement will occur tomorrow Monday November 3 2008.
Given that the current lowest prices before tax has been US Airways amongst others at 76 pounds roundtrip - it is not a stretch to imagine that he can do this.
The initial locations will be as follows:
DUB/STN to BOS, NYC, LAX, SFO and Florida - my bets would be Sanford and FLL.
The Irish airline will be offering a 2 class service with a biz class that will be VERY expensive
No word yet on the equipment but both Airbus and Boeing will be bidding strongly. A minimum 4 plane fleet will be required which means for Boeing no possible way for the 787 but Airbus could squeeze in those into the A330 line. At a pinch with no cargo the A330 would make the LAX run from Stansted. A 767 would be able to do this with no problem but would not have the same capacity as the A330 and therefore the economics from Boeing would have to be VERY attractive (free swap out to 787s for example) for it to work for FR.
The new service will however likely come with a number of "extra perks". Previously MOL has stated publicly that this will include free sex in C/J - that will be a charge in the Y/M cabin. No word yet on the standup seats ;-)
More details to follow.
Cheers
Given that the current lowest prices before tax has been US Airways amongst others at 76 pounds roundtrip - it is not a stretch to imagine that he can do this.
The initial locations will be as follows:
DUB/STN to BOS, NYC, LAX, SFO and Florida - my bets would be Sanford and FLL.
The Irish airline will be offering a 2 class service with a biz class that will be VERY expensive
No word yet on the equipment but both Airbus and Boeing will be bidding strongly. A minimum 4 plane fleet will be required which means for Boeing no possible way for the 787 but Airbus could squeeze in those into the A330 line. At a pinch with no cargo the A330 would make the LAX run from Stansted. A 767 would be able to do this with no problem but would not have the same capacity as the A330 and therefore the economics from Boeing would have to be VERY attractive (free swap out to 787s for example) for it to work for FR.
The new service will however likely come with a number of "extra perks". Previously MOL has stated publicly that this will include free sex in C/J - that will be a charge in the Y/M cabin. No word yet on the standup seats ;-)
More details to follow.
Cheers
Whither Travelport's Q3 Report?
Disclaimer - This is not a formal offer for sale or a formal stock analysis by a qualified Financial Analysis firm.
OK - So I have been watching and waiting - like many others - for the Travelport 3rd quarter figures and the attendant analysts call. I will be on their like a shot.
However nothing. The 2nd quarter call was on August 13th. So by logic - the call for the 3rd quarter should have been October 15th or thereabouts. Nada. So I went back and noticed that the 2007 period was also pretty late. Reporting occurred the second week of November 2007. So we will probably have to wait another 10 days or so before we see the figures.
This will definitely be interesting. We want to see what happens with the transaction numbers. If there is any indication we should see at least a 12% fall in these numbers. I base this on several factors - airlines reporting (legacy GDS present airlines) have reported across the board a passenger fall off of between 8-22%. Airports are reporting similar numbers. However this will be the first time that the combined data centers are showing - albeit only for days not months.
Can yields hold up with increased unbundled pricing by the GDS businesses? Can the increased yields from the non-airline side counteract the drop off in hotel rates and transactions?
Lets see.
Cheers
OK - So I have been watching and waiting - like many others - for the Travelport 3rd quarter figures and the attendant analysts call. I will be on their like a shot.
However nothing. The 2nd quarter call was on August 13th. So by logic - the call for the 3rd quarter should have been October 15th or thereabouts. Nada. So I went back and noticed that the 2007 period was also pretty late. Reporting occurred the second week of November 2007. So we will probably have to wait another 10 days or so before we see the figures.
This will definitely be interesting. We want to see what happens with the transaction numbers. If there is any indication we should see at least a 12% fall in these numbers. I base this on several factors - airlines reporting (legacy GDS present airlines) have reported across the board a passenger fall off of between 8-22%. Airports are reporting similar numbers. However this will be the first time that the combined data centers are showing - albeit only for days not months.
Can yields hold up with increased unbundled pricing by the GDS businesses? Can the increased yields from the non-airline side counteract the drop off in hotel rates and transactions?
Lets see.
Cheers
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