This is a song I have been singing for a long time. Ancillary Revenues drives unhappy customers and Brand Disloyalty. So the dilemma for the US and all other airlines and travel suppliers is to try and do something about that.
However there are other drivers for Brand Disloyalty. Airlines are especially bad at this. When the good times are around they think they can ignore their customers and at high load factors (80%+). In the last boom (2007) they did just that. Behaving in a very cavalier way. But - you might say - what was new about that, haven't they always done that (BIABLT!) and the traffic always comes back because they have no choice? Well now the web is making this form of behavior much more apparent to the user communities. Whether it is the high value frequent traveller (through such forums as Randy Petersen's FlyerTalk or the regular John Q Public and social media sites that range from Trip Advisor to Facebook and all flavors in between) this behavior can no longer be spun by PR Hacks. It is transparent out there and people who make purchasing decisions can now see it clearly. And they notice and they are not happy about it.
Forrester has recently completed a study and it makes a strong point that their data reveals travel brand loyalty has decreased by 19% since 2006. Actually I personally think the number is much higher now. (For the link go here: http://www.forrester.com/Research/Document/Excerpt/0,7211,47560,00.html). Ouch.
Further, and I quote from Forrester:
"Leisure travelers in 2008 have every reason to be disloyal. Why? More travel products and options for travelers to choose from, virtually no incentives for travelers to remain loyal..."
So this bad behavior needs to be addressed and it better be soon. The airlines in particular believe they can control their customers. Dream on chaps. Those airlines during the downturn who behave well and pay attention to their customers at each and every touchpoint will be winners. Those who pursue business as usual will be slammed when the traffic returns.
You have been warned.
Cheers
04 December 2008
The Professor will be away in Europe
As it is pretty much Doom and Gloom in the USA - what is the mood in Europe. Well the Professor is going to find out in Person.
I will try and bring back some sense of what is going on and the general mood of people.
Posts will be irregular until the end of next week
Cheers
I will try and bring back some sense of what is going on and the general mood of people.
Posts will be irregular until the end of next week
Cheers
Cooks and TUI Threaten UK Government
Thomas Cook's head - Manny, Fontenla-Novoa speaking prior to the meeting between Transport Supremo Geoff Hoon and TUI - threatened that they could force the government's hand by reducing the amount of ATOL bonded travel. In what would seem to be an initially high handed threat - it may prove hollow in the end and he is only playing to the peanut gallery on this one.
What is the issue? Cooks and TUI want a flat rate fee but charged to the customer for ATOL coverage. At the moment they are paying less than GBP1 and they like it that way. Their costs under the current discussed proposals could rise by GBP5 million approx each.
Asked how the big two could force action, Fontenla-Novoa said they must keep it on the agenda of consumers and “chip away” at airline opposition to a universal protection scheme.
If you put this in context they are already dramatically reducing their ATOL business next year because of its lack of profitability. Now that the big 4 are a Monolithic 2 - they can try and throw their weight around.
I doubt this will be more than a PR exercise for them both. But in the end - there should be some form of coverage even if its a mandatory insurance policy paid for by the consumer.
Cheers
What is the issue? Cooks and TUI want a flat rate fee but charged to the customer for ATOL coverage. At the moment they are paying less than GBP1 and they like it that way. Their costs under the current discussed proposals could rise by GBP5 million approx each.
Asked how the big two could force action, Fontenla-Novoa said they must keep it on the agenda of consumers and “chip away” at airline opposition to a universal protection scheme.
If you put this in context they are already dramatically reducing their ATOL business next year because of its lack of profitability. Now that the big 4 are a Monolithic 2 - they can try and throw their weight around.
I doubt this will be more than a PR exercise for them both. But in the end - there should be some form of coverage even if its a mandatory insurance policy paid for by the consumer.
Cheers
Air Anchluss to Grow for a price of 366,000 Euros
Lufthansa has finally made its formal bid for Austrian Airlines. The German airline intends to initially acquire the 41.56% share in Austrian Airlines held by the Austrian government's holding company, (OIAG). It has offered to pay just 366,000 euros ($463,280) for the Austrian government's share, plus 163 million euros ($206 million) if Austrian Airlines hits certain performance targets. Given the current climate that will be hard. Then, Lufthansa make a public takeover bid for private and institutional shares. Lufthansa plans to pay 4.44 euros per share, or 215 million euros ($272 million), for the outstanding shares.
With LX firmly under control, The German empire of Lufthansa will embrace most of the central part of Europe.
Next up - SAS or AZ or both. Then the others will fall like flies - Poland's LOT etc.
With LX firmly under control, The German empire of Lufthansa will embrace most of the central part of Europe.
Next up - SAS or AZ or both. Then the others will fall like flies - Poland's LOT etc.
03 December 2008
Boeing's 787 problems laid bare!
PR Hacks must be doing somersaults at Boeing tonight with the release by Flight's resident blogger of the somewhat scathing Airbus study on the 787 program.
I have managed to struggle through it over the last few hours. It makes for some sobering reading. I struggled a little with deciding whether to post a blog entry on this story. However I think it is too important to hold back. Everyone involved needs to read the report and pay attention. The oversight authorities should be aghast at the holes and missteps in the process, given the nature of the study - at the least the issues must be investigated.
The report is available now in the public domain - here is the link:
http://www.flightglobal.com/blogs/flightblogger/Airbus_787_Lessons_learnt.pdf
The report entitled - Airbus: 787 Lessons Learnt" was prepared by a senior analyst inside Airbus using publicly available material and in some cases material which could be regarded as questionably obtained. Clearly this was not meant for significant external publication by either Airbus or Boeing. But out it is.
The scientific nature of the assessment and its impact should and most likely will have a significant impact on Boeing's stock price tomorrow. Boeing will continue to struggle with this program for sometime. For sure the vastly over-rated and wild claims of delivery of 787s at a very high rate cannot be substantiated for quite a few years into the program. If we are to believe the conclusions and assessments of this report - then the impact on a reduced delivery schedule will impact Boeing's revenues and costs for the next 5-7 years.
Boeing has some serious soul searching to do. It must confront a culture of self belief that surely looks pretty battered now. I stand by one of my original statements which is I am not keen on flying on any of the first batch of 787s. For sure not the first 20 ships and probably not until ship 50+ will we see a solid and reliable process. Maybe then I will want to fly on one. Boeing should take heed of the hubris at Eclipse Aviation and its subsequent downfall.
Wisely some of the suppliers have already stopped work. Frankly the first few airframes should be discarded as being unrepresentative of the product. The much publicized wing box, fastener, engines and weight problems are clearly not just isolated incidents. If we can believe (and I put in a BIG IF) the report then Boeing has systematic issues that must be addressed before this fine design goes into serial production. Boeing should just stop and take a total rethink of the entire concept. The design is not the issue - it is the production process and the relationship with the suppliers, and in turn their performance. The whole concept has shown itself to be flawed. Delegation of the design and supervision come out as being the core issue. Boeing is not the actual problem in most cases, however this was all their idea and their watch. They have accepted the responsibility. Clearly the band aids introduced so far are not enough. They need to step up and just call a halt to the whole idea until the processes are re-thought, validated and tested. Then re-tested. Only when we have a representative sample aircraft should they be allowed to proceed into production. The current ship planned as a prototype is nothing like the production ship. And it should not be used to validate the design - rather just to test. Even some of the testing done to date may be suspect.
The FAA, JAA both should step in and call a halt to what could be a farcical situation. They need to be more involved in this process.
I want to add that my assessment in this blog entry is based largely on the reading of the report and past errors which have in some cases been already addressed. Airplane manufacturing is not a simple process. However if Boeing wants to beat me up about this then I welcome the opportunity for them to address the issues outlined here. If I am wrong and the report is bogus. I will instantly retract it. I find the report credible in my personal opinion.
Let's all hope for Boeing's sake that this can get fixed. Not rushed.
Cheers
I have managed to struggle through it over the last few hours. It makes for some sobering reading. I struggled a little with deciding whether to post a blog entry on this story. However I think it is too important to hold back. Everyone involved needs to read the report and pay attention. The oversight authorities should be aghast at the holes and missteps in the process, given the nature of the study - at the least the issues must be investigated.
The report is available now in the public domain - here is the link:
http://www.flightglobal.com/blogs/flightblogger/Airbus_787_Lessons_learnt.pdf
The report entitled - Airbus: 787 Lessons Learnt" was prepared by a senior analyst inside Airbus using publicly available material and in some cases material which could be regarded as questionably obtained. Clearly this was not meant for significant external publication by either Airbus or Boeing. But out it is.
The scientific nature of the assessment and its impact should and most likely will have a significant impact on Boeing's stock price tomorrow. Boeing will continue to struggle with this program for sometime. For sure the vastly over-rated and wild claims of delivery of 787s at a very high rate cannot be substantiated for quite a few years into the program. If we are to believe the conclusions and assessments of this report - then the impact on a reduced delivery schedule will impact Boeing's revenues and costs for the next 5-7 years.
Boeing has some serious soul searching to do. It must confront a culture of self belief that surely looks pretty battered now. I stand by one of my original statements which is I am not keen on flying on any of the first batch of 787s. For sure not the first 20 ships and probably not until ship 50+ will we see a solid and reliable process. Maybe then I will want to fly on one. Boeing should take heed of the hubris at Eclipse Aviation and its subsequent downfall.
Wisely some of the suppliers have already stopped work. Frankly the first few airframes should be discarded as being unrepresentative of the product. The much publicized wing box, fastener, engines and weight problems are clearly not just isolated incidents. If we can believe (and I put in a BIG IF) the report then Boeing has systematic issues that must be addressed before this fine design goes into serial production. Boeing should just stop and take a total rethink of the entire concept. The design is not the issue - it is the production process and the relationship with the suppliers, and in turn their performance. The whole concept has shown itself to be flawed. Delegation of the design and supervision come out as being the core issue. Boeing is not the actual problem in most cases, however this was all their idea and their watch. They have accepted the responsibility. Clearly the band aids introduced so far are not enough. They need to step up and just call a halt to the whole idea until the processes are re-thought, validated and tested. Then re-tested. Only when we have a representative sample aircraft should they be allowed to proceed into production. The current ship planned as a prototype is nothing like the production ship. And it should not be used to validate the design - rather just to test. Even some of the testing done to date may be suspect.
The FAA, JAA both should step in and call a halt to what could be a farcical situation. They need to be more involved in this process.
I want to add that my assessment in this blog entry is based largely on the reading of the report and past errors which have in some cases been already addressed. Airplane manufacturing is not a simple process. However if Boeing wants to beat me up about this then I welcome the opportunity for them to address the issues outlined here. If I am wrong and the report is bogus. I will instantly retract it. I find the report credible in my personal opinion.
Let's all hope for Boeing's sake that this can get fixed. Not rushed.
Cheers
Alitalia - latest developments
I think we all want to see this end but there is a strange voyeuristic element to watching the strange happenings going on at AZ. It is like a soap opera, i doubt anyone could have scripted it any better.
So Lufthansa has decided that it is cheaper to throw their hat in the ring independently and create a different subsidiary based in Milan. Since AZ has already written off the Milan hub in favour of a politically more expedient Rome only strategy - they are only shooting themselves in the foot. With AirOne essentially going bye bye, LH would have lost the feed from AirOne its current friend in Italy. Setting up a A319 based hub in Linate makes sense. Lets hope they dont have to use Malpensa.
If you were a smart AirOne employee where would you go? LH Italia or the CamelItalia aka new AZ?
BTW the funding from the politically created fund is late (isn't everything in Italy??? BTW that was a joke) but the Administrator has already agreed that the new consortium will be picking up the check from Dec 1). Final closing is now scheduled for December 12th.
Cheers
So Lufthansa has decided that it is cheaper to throw their hat in the ring independently and create a different subsidiary based in Milan. Since AZ has already written off the Milan hub in favour of a politically more expedient Rome only strategy - they are only shooting themselves in the foot. With AirOne essentially going bye bye, LH would have lost the feed from AirOne its current friend in Italy. Setting up a A319 based hub in Linate makes sense. Lets hope they dont have to use Malpensa.
If you were a smart AirOne employee where would you go? LH Italia or the CamelItalia aka new AZ?
BTW the funding from the politically created fund is late (isn't everything in Italy??? BTW that was a joke) but the Administrator has already agreed that the new consortium will be picking up the check from Dec 1). Final closing is now scheduled for December 12th.
Cheers
Capacity Cuts - 2009 version
For a while now I have been predicting that the current 2008 round of cuts was not enough.
Today at an analysts conference and widely reported - the second round has now started to filter out.
3 Airlines have reported cuts/status today. UAL, New DL, and LH. So here are some of the news and some commentary from me.
UAL is stubbornly sticking to its guns that its 25% plane fleet cut is adequate and there will be no more. I think they need to cut their headcount further as noted earlier in prior posts.
Lufthansa is parking some of the oldest planes in its fleet - the A300-600s of which 4 will go to a parking lot. A340-300s may be next. For sure the 737-300/500s will start leaving the fleet.
DL has announced the most aggressive cuts with 8% approx in total cutting domestic and international. For the first time DL is acknowledging that the international expansion will be curtailed and some routes cut back (read downsized with reduced frequency and smaller planes). It says part of the reason is a surplus of international capacity resulting in depressed yields. This will put pressure on NW's older 747s. It is quite likely that some of the dedicated freighters will go. DL did not reveal any plans on the 787s as noted yesterday.
QF has been cutting capacity slowly. BA is shifting some capacity around and cutting smaller marginal markets. Y/Y BA is going to be a smaller airline than it was. While I still don't believe it, the QF discussions seem to be serious and are "official". I still smell a rat and may be part of a Machiavellian plot by a departing Dixon to put pressure on the Aussie government not to loosen the regulator strings too much.
Anyway you cut it - capacity in 2009 will be cut significantly. The extent of those cuts will obviously vary but by the end of the new year - we will have seen total capacity cuts for larger US legacy airlines at about 12-15%. EU based legacy players will see double digit cuts too in some cased (SK, AZ) while the big players will likely stay static to down about 5%. Asia/Pac players will also be down similar amounts.
Ouch. This now confirms that we are in for a deep and lengthy recession. It may extend to airline/travel/tourism beyond the norm (16-18 months).
In a few weeks I will be publishing our 2009 full predictions. But this will give you something to chew on.
Cheers
Today at an analysts conference and widely reported - the second round has now started to filter out.
3 Airlines have reported cuts/status today. UAL, New DL, and LH. So here are some of the news and some commentary from me.
UAL is stubbornly sticking to its guns that its 25% plane fleet cut is adequate and there will be no more. I think they need to cut their headcount further as noted earlier in prior posts.
Lufthansa is parking some of the oldest planes in its fleet - the A300-600s of which 4 will go to a parking lot. A340-300s may be next. For sure the 737-300/500s will start leaving the fleet.
DL has announced the most aggressive cuts with 8% approx in total cutting domestic and international. For the first time DL is acknowledging that the international expansion will be curtailed and some routes cut back (read downsized with reduced frequency and smaller planes). It says part of the reason is a surplus of international capacity resulting in depressed yields. This will put pressure on NW's older 747s. It is quite likely that some of the dedicated freighters will go. DL did not reveal any plans on the 787s as noted yesterday.
QF has been cutting capacity slowly. BA is shifting some capacity around and cutting smaller marginal markets. Y/Y BA is going to be a smaller airline than it was. While I still don't believe it, the QF discussions seem to be serious and are "official". I still smell a rat and may be part of a Machiavellian plot by a departing Dixon to put pressure on the Aussie government not to loosen the regulator strings too much.
Anyway you cut it - capacity in 2009 will be cut significantly. The extent of those cuts will obviously vary but by the end of the new year - we will have seen total capacity cuts for larger US legacy airlines at about 12-15%. EU based legacy players will see double digit cuts too in some cased (SK, AZ) while the big players will likely stay static to down about 5%. Asia/Pac players will also be down similar amounts.
Ouch. This now confirms that we are in for a deep and lengthy recession. It may extend to airline/travel/tourism beyond the norm (16-18 months).
In a few weeks I will be publishing our 2009 full predictions. But this will give you something to chew on.
Cheers
02 December 2008
BA returns to KSA - BMI Pissed Off!
So BA having abandoned Saudi Arabia in 2005 will return at the end of March 2009 to Riyadh and Jeddah. Running 777s in 4 classes to the Capital and 767's in 3 classes to the Western part of the country. The carrier will fly five times a week from London Heathrow to both Jeddah and Riyadh when the service starts on March 29.
When BA abandoned the route in 2005 - it was seen as odd. However there was a lot of tension in the Kingdom at that time and a sense that foreigners were being targeted. BA's own cabin staff became nervous and hated the overnight stop.
So BA has rescheduled the times to address this. I sense that there will be few crew who want to overnight so they will have to run extra crews deadheading. BMI on the other hand seems to have done quite nicely and had no reported issues. Now of course they will be seen to be at a disadvantage having no first class (the A330s dont have first class) and being night flights.
I am sure that new owner LH will have something to say about that.
Cheers
When BA abandoned the route in 2005 - it was seen as odd. However there was a lot of tension in the Kingdom at that time and a sense that foreigners were being targeted. BA's own cabin staff became nervous and hated the overnight stop.
So BA has rescheduled the times to address this. I sense that there will be few crew who want to overnight so they will have to run extra crews deadheading. BMI on the other hand seems to have done quite nicely and had no reported issues. Now of course they will be seen to be at a disadvantage having no first class (the A330s dont have first class) and being night flights.
I am sure that new owner LH will have something to say about that.
Cheers
Airlines start to get nervous - FF programs all quiet
You can tell when airlines are not sure what to do - they keep quiet.
So it would seem it is with the Frequent Flyer Programs - they are just too quiet. Now maybe I am just not paying too much of the right attention, but I see nothing going on at the moment other than some really lame promotions. Witness the following - Delta...
Promotion Number 1 - book 2 Hilton nights and get 6x miles. Hmmm that and 2/6 will get you an old style cup of tea.
Promotion Number 2 - book Alaska and Delta on the same ticket and get 1000 bonus miles. Yahoo!!!!
Nothing so far about the tier levels for 2009. I am debating whether to book on DL and whether my large number of MQMs is worth adding to or not. Do you think DL would be enticing me right now? ... so far nothing.
Contrast this with BA who has decided that Premium travelers are really worth something and are going to hold onto them as much as they can.
United still doesn't realize that I have abandoned them. I would be paying a lot of attention to my Premium guys right now.
So these chaps are probably starting to sweat... all this nickel and dime nonsense with the ancillary revenue has really ticked off the Premium travelers. So as they start to address the general dissatisfaction and aggravation of the frequent flyers. They had better start playing nice or there will be a lot of expensive making up to do. And sorry - flowers and small mile deals don't cut it.
Cheers
So it would seem it is with the Frequent Flyer Programs - they are just too quiet. Now maybe I am just not paying too much of the right attention, but I see nothing going on at the moment other than some really lame promotions. Witness the following - Delta...
Promotion Number 1 - book 2 Hilton nights and get 6x miles. Hmmm that and 2/6 will get you an old style cup of tea.
Promotion Number 2 - book Alaska and Delta on the same ticket and get 1000 bonus miles. Yahoo!!!!
Nothing so far about the tier levels for 2009. I am debating whether to book on DL and whether my large number of MQMs is worth adding to or not. Do you think DL would be enticing me right now? ... so far nothing.
Contrast this with BA who has decided that Premium travelers are really worth something and are going to hold onto them as much as they can.
United still doesn't realize that I have abandoned them. I would be paying a lot of attention to my Premium guys right now.
So these chaps are probably starting to sweat... all this nickel and dime nonsense with the ancillary revenue has really ticked off the Premium travelers. So as they start to address the general dissatisfaction and aggravation of the frequent flyers. They had better start playing nice or there will be a lot of expensive making up to do. And sorry - flowers and small mile deals don't cut it.
Cheers
Rumour of the Day - QF+BA again
OK so who is smoking the bad stuff, yesterday's rumour from the weekend was Etihad buying Emirates. Today its a marriage of Qantas and BA.
There is no way that the Oz regulators would ever allow this. Why? Because the first casualty will be to open the Pacific routes that SQ and EK covet so greatly. However there might be something in the back story - IE that the IB-BA engagement is having troubles.
QF and BA already get the synergies that they want from their prior liaison and the OneWorld Alliance.
Hey give me some of this stuff - it must be good!
Far Out Man..............
There is no way that the Oz regulators would ever allow this. Why? Because the first casualty will be to open the Pacific routes that SQ and EK covet so greatly. However there might be something in the back story - IE that the IB-BA engagement is having troubles.
QF and BA already get the synergies that they want from their prior liaison and the OneWorld Alliance.
Hey give me some of this stuff - it must be good!
Far Out Man..............
01 December 2008
Boeing and SPEEA settle...
So no strike. But both sides have much to reflect on. Not least of which is Boeing's engineering resources are at the moment VERY stretched.
Cheers
Cheers
Indigo a sinking ship?
Indigo - the Indian LCC controlled by family interests associated ITG - Interglobe Technologies and former Worldspan CEO Rakesh Gangwal, has seen its 2 top execs leave in less than 6 weeks.
First to go was its COO. On October 23rd, USA3000 today announced that Steven E. Harfst has been named its first President and Chief Executive Officer, effective Nov. 10th, 2008. Mr. Harfst replacing Angus Kinnear who recently retired as USA3000's Chief Operating Officer. Harfst was previously COO of Indigo and prior to that CEO of North American Airlines.
Today, Saudi Arabian LCC Sama named Bruce Ashby CEO, replacing Andrew Cowen. Ashby formerly was president and CEO of IndiGo and US Airways executive VP-marketing and planning. SAMA has been bleeding red ink and its management team led by Andrew Cowen from Mango Aviation Partners has been struggling to come terms with a very different LCC market of Saudi Arabia.
It is no secret that all Indian carriers have posted large losses. Indigo while well funded initially, must be hurting. It has delayed and slowed delivery of new Airbuses - currently just 22 of its initial 100 firm orders have been completed. Rakesh is probably beginning to wonder if his bailout from Worldspan was that great.
Bruce Ashby is stepping from the frying pan into the fire. Just 2 weeks ago SAMA launched its flights from KSA to India. probably not the best time. SAMA is still struggling to find its grove.
Thanks to Canadian Professor Bryan for this tip.
Cheers
First to go was its COO. On October 23rd, USA3000 today announced that Steven E. Harfst has been named its first President and Chief Executive Officer, effective Nov. 10th, 2008. Mr. Harfst replacing Angus Kinnear who recently retired as USA3000's Chief Operating Officer. Harfst was previously COO of Indigo and prior to that CEO of North American Airlines.
Today, Saudi Arabian LCC Sama named Bruce Ashby CEO, replacing Andrew Cowen. Ashby formerly was president and CEO of IndiGo and US Airways executive VP-marketing and planning. SAMA has been bleeding red ink and its management team led by Andrew Cowen from Mango Aviation Partners has been struggling to come terms with a very different LCC market of Saudi Arabia.
It is no secret that all Indian carriers have posted large losses. Indigo while well funded initially, must be hurting. It has delayed and slowed delivery of new Airbuses - currently just 22 of its initial 100 firm orders have been completed. Rakesh is probably beginning to wonder if his bailout from Worldspan was that great.
Bruce Ashby is stepping from the frying pan into the fire. Just 2 weeks ago SAMA launched its flights from KSA to India. probably not the best time. SAMA is still struggling to find its grove.
Thanks to Canadian Professor Bryan for this tip.
Cheers
ACTE - RFID, STOP THE MADNESS!
The ACTE (Association of Corporate Travel Execs) a US based association representing Corporate Travel folks, has requested a full stop on the deployment of Passports using RFIDs.
While I am not a huge fan of RFID - it represents the best of what is out there at the moment. To try and stop this is like trying to be King Canute and holding back the waves. As Europe and many other countries around the world have already adopted the RFID based passports - the chances of preventing further deployment is slim and none. I have one of the new RFID enabled passports and an RFID based enhanced Driver's License. For sure they stay in their shielded cases...
Cheers
While I am not a huge fan of RFID - it represents the best of what is out there at the moment. To try and stop this is like trying to be King Canute and holding back the waves. As Europe and many other countries around the world have already adopted the RFID based passports - the chances of preventing further deployment is slim and none. I have one of the new RFID enabled passports and an RFID based enhanced Driver's License. For sure they stay in their shielded cases...
Cheers
So How Much to Carry That Bag?
Based on today's fuel costs and adding in labor - the WSJ has done a study on the cost of transporting a bag. 15 Bucks!
I always wanted to know how they came up with that number....
Here is the analysis
http://online.wsj.com/article/SB122757025502954613.html?mod=loomia&loomia_si=t0:a16:g12:r4:c0.119603:b0
I always wanted to know how they came up with that number....
Here is the analysis
http://online.wsj.com/article/SB122757025502954613.html?mod=loomia&loomia_si=t0:a16:g12:r4:c0.119603:b0
Delta to Boeing - a bigger 787 please
According to the WSJ - Delta is considering changing its current inherited 787 order down from 18 of the early model planes. In their place DL wants more 777s particularly the dash 200LR model.
DL according to the report feels that the current plethora of 767-300s is more than adequate along with the A330s. It is likely that DL will switch its order although the timing isn't known at this time.
Now I would be remiss if I didn't point out that DL has never been consistent with its orders of airplanes. It has a long history of changing its mine. Witness the early model 747s it had. Witness the hot and cold attitude to the A300/310 family.
One thing is for sure... DL will be dumping the 747s pretty soon.
Interestingly this may actually portend an uptick for the chances of a DL order for A380. Consider that the world's largest airline by passengers - it has several key trunk routes.
NYC-LHR
LAX-NRT
DTW-AMS
NYC-AMS
NYC-PAR
NYC-NRT
These are routes currently served by 747s or with multiple services per day. In particular it should be remembered that two of Skyteam's other large partners also will be operating A380s - Korean Airlines and Air France. Hmmm that would be interesting. Clearly something that has not escaped our friends from Airbus. As a Delta has previously stated... ... the complexity of its merged fleet and route network will lead it to consider aircraft from Airbus and other manufacturers, too. Before its merger with Northwest, Delta flew only aircraft made by Boeing companies based on a previous pact when as a solo carrier it committed to a Boeing only fleet (as did AMR and Continental for their mainline fleets).
DL according to the report feels that the current plethora of 767-300s is more than adequate along with the A330s. It is likely that DL will switch its order although the timing isn't known at this time.
Now I would be remiss if I didn't point out that DL has never been consistent with its orders of airplanes. It has a long history of changing its mine. Witness the early model 747s it had. Witness the hot and cold attitude to the A300/310 family.
One thing is for sure... DL will be dumping the 747s pretty soon.
Interestingly this may actually portend an uptick for the chances of a DL order for A380. Consider that the world's largest airline by passengers - it has several key trunk routes.
NYC-LHR
LAX-NRT
DTW-AMS
NYC-AMS
NYC-PAR
NYC-NRT
These are routes currently served by 747s or with multiple services per day. In particular it should be remembered that two of Skyteam's other large partners also will be operating A380s - Korean Airlines and Air France. Hmmm that would be interesting. Clearly something that has not escaped our friends from Airbus. As a Delta has previously stated... ... the complexity of its merged fleet and route network will lead it to consider aircraft from Airbus and other manufacturers, too. Before its merger with Northwest, Delta flew only aircraft made by Boeing companies based on a previous pact when as a solo carrier it committed to a Boeing only fleet (as did AMR and Continental for their mainline fleets).
Shhhh Don't Tell Anyone But There Is a Recession!
OK so now the truth is out - we have been in a recession since December 2007.
Most Airline, Travel and Tourism people have known this of course since Jan 1. The denial and partying like it was 2000 was - well just like the calm before the storm. At a Caribbean Mart in January - the supplier's bravely told us all how rates would stay high. Oh how the change has come to us all.
So when will it end?
I am predicting an upturn or rather the bottom out to occur around Q3 of next year. Let's hope I am wrong.
Cheers
Most Airline, Travel and Tourism people have known this of course since Jan 1. The denial and partying like it was 2000 was - well just like the calm before the storm. At a Caribbean Mart in January - the supplier's bravely told us all how rates would stay high. Oh how the change has come to us all.
So when will it end?
I am predicting an upturn or rather the bottom out to occur around Q3 of next year. Let's hope I am wrong.
Cheers
BA makes nice with the Professor
Well here is a nice surprise. BA decided I was worth another shot. This year despite flying over 7 trans-oceanic roundtrips - I could not retain my gold status. Why? Well its because sadly most of those tickets were provided by BA or its affiliates. So consequently I did not qualify as a revenue passenger. But rather than busting me down to Private (aka Blue) they allowed me to get Silver. So I guess I will use them again this year. I have cut United from my friends and family list because their service is just so awful.
So based on my schedule - I shall be looking at pretty much the same players as in prior years. I will post a separate blog on my experiences this year on my private blog.
Cheers
So based on my schedule - I shall be looking at pretty much the same players as in prior years. I will post a separate blog on my experiences this year on my private blog.
Cheers
Revisionist Thoughts on Twitter
I will go on the record and record my change of heart about Twitter. First a disclaimer. I am still no fan of the mindless crap that is sadly in the majority of Twitter and the lack of a way to synthesize and make valuable the >144 character messages.
That said - I have seen some of the power of Twitter both in a commercial setting such as at PhocusWright 2 weeks ago, and definitely in the case of the updates from Mumbai and Bangkok this past week. This takes the message to the streets where only cell phones are available. Clearly in such markets smartphones are not as prevalent but texting is a way of life more so than perhaps in other first and second world territories, it is here in these geographies where in many cases, texting and therefore twitter are the primary form of communication for many people.
At the very least we can see how information is disseminated commensurate with the medium. In the constant battle inside my head between left and right brain, I can justify this as effective proletarian (read free and uncensored) communication. Just look how far we have come from the lowly fax machines used during the Tiananmen Square revolt to Twitter in Mumbai.
There is a trend here. I was a late comer to Blogging. I originally saw it as mindless chatter. I still think this applies to most blogs and tweets.
However I do see that they have their place. Perhaps more than anything this was brought home during the last week when I was out of contact and away from the web with no access to any form of web other than text messages. Have a look at Tim Hughes's blog for today. http://tims-boot.blogspot.com/ and I think you will see what I mean.
I am therefore chastened, but perhaps inspired to consider how we can find ways to solve my two major objections.
Cheers
That said - I have seen some of the power of Twitter both in a commercial setting such as at PhocusWright 2 weeks ago, and definitely in the case of the updates from Mumbai and Bangkok this past week. This takes the message to the streets where only cell phones are available. Clearly in such markets smartphones are not as prevalent but texting is a way of life more so than perhaps in other first and second world territories, it is here in these geographies where in many cases, texting and therefore twitter are the primary form of communication for many people.
At the very least we can see how information is disseminated commensurate with the medium. In the constant battle inside my head between left and right brain, I can justify this as effective proletarian (read free and uncensored) communication. Just look how far we have come from the lowly fax machines used during the Tiananmen Square revolt to Twitter in Mumbai.
There is a trend here. I was a late comer to Blogging. I originally saw it as mindless chatter. I still think this applies to most blogs and tweets.
However I do see that they have their place. Perhaps more than anything this was brought home during the last week when I was out of contact and away from the web with no access to any form of web other than text messages. Have a look at Tim Hughes's blog for today. http://tims-boot.blogspot.com/ and I think you will see what I mean.
I am therefore chastened, but perhaps inspired to consider how we can find ways to solve my two major objections.
Cheers
Amadeus to stop absorbing LH/LX surcharge
Amadeus and its 11.5% part owner (and board member) Lufthansa, have not yet been able to reach agreement on the new PCA (Participating Carrier Agreement) despite some effort to resolve the dispute. So from Feb 1 (Germany and April 1 for Switzerland and Austria - not sure where those power houses of Lichtenstein and Luxembourg will sit), All Amadeus users in those markets will have to accept the autocharge of 4.90 Euros (5 CHF) per sector.
This creates as I have noted before a dilemma for the agents and potentially a game changing situation for the Madrid based GDS.
With a management change at the top of Amadeus - David Jones has been leading the charge against the surcharge, it will be interesting to see how far this one will go. So far the courts have in general sided with Lufthansa.
It does create a dual opportunity, for competitors Travelport and Sabre this is a market opportunity. For the airline - provided they have created enough infrastructure for direct booking (not currently well managed at the moment) there is a moment of opportunity there also. Irony should not be lost on all of us where the booking will end up at Amadeus anyway since the new PSS system of LH is now Amadeus CITP (aka Altea). However not as yet so obviously profitable as the in-direct
GDS booking - it has the potential to rise in price as Amadeus hosting piles on the additional "charges" for value added services via its PSS service.
The battle is not so much about the LH vs Amadeus spat - but rather about the long term self determination rights of the airline.
Be careful what you wish for though... it may come back to bite you.
Cheers
Timothy
This creates as I have noted before a dilemma for the agents and potentially a game changing situation for the Madrid based GDS.
With a management change at the top of Amadeus - David Jones has been leading the charge against the surcharge, it will be interesting to see how far this one will go. So far the courts have in general sided with Lufthansa.
It does create a dual opportunity, for competitors Travelport and Sabre this is a market opportunity. For the airline - provided they have created enough infrastructure for direct booking (not currently well managed at the moment) there is a moment of opportunity there also. Irony should not be lost on all of us where the booking will end up at Amadeus anyway since the new PSS system of LH is now Amadeus CITP (aka Altea). However not as yet so obviously profitable as the in-direct
GDS booking - it has the potential to rise in price as Amadeus hosting piles on the additional "charges" for value added services via its PSS service.
The battle is not so much about the LH vs Amadeus spat - but rather about the long term self determination rights of the airline.
Be careful what you wish for though... it may come back to bite you.
Cheers
Timothy
30 November 2008
Tipping - the next ancillary revenue frontier
OK - I am mad and I really think someone needs to pay for this injustice being inflicted on us all. And I have an object of my ire. Its Micros-Fidelio.
Normally I have a lot of respect for the company that has become the de facto standard in POS - Point of Sale - terminals. But now I hate them with a passion.
Why?
Well the latest version of their software in the US environment comes with automatic tipping included. Learning from their optional packages for Cruise Lines and upscale resorts - the option to add tipping now comes in general packages which are going to cost all of us more money.
So how does it work? By default you can now set the price of the tip to 15% or any other amount. Also it can be post tax or pre-tax. Further there are options to leave a space for additional tips and an auto calculator that gives you the higher levels of tip at specific percentages. I have seen up to 21% offered.
So I want to start a new campaign called NOTIP. This stands for NOT OPTING to TIP INCOMPETENT PROPRIETORS. Speaking to the servers they don't like it either as they are not (necessarily) getting the extra cash. Rather just the airlines and hotels they are using it to boost profits.
So how can you join NOTIP? Just delete the amounts on the bill - you are not obligated to pay any tip. And then give the tip directly to the server in the amount you think is appropriate.
From now on I am carrying more cash and striking these amounts.
Daylight (and Night Time) Robbery.
Just say NOTIP
Normally I have a lot of respect for the company that has become the de facto standard in POS - Point of Sale - terminals. But now I hate them with a passion.
Why?
Well the latest version of their software in the US environment comes with automatic tipping included. Learning from their optional packages for Cruise Lines and upscale resorts - the option to add tipping now comes in general packages which are going to cost all of us more money.
So how does it work? By default you can now set the price of the tip to 15% or any other amount. Also it can be post tax or pre-tax. Further there are options to leave a space for additional tips and an auto calculator that gives you the higher levels of tip at specific percentages. I have seen up to 21% offered.
So I want to start a new campaign called NOTIP. This stands for NOT OPTING to TIP INCOMPETENT PROPRIETORS. Speaking to the servers they don't like it either as they are not (necessarily) getting the extra cash. Rather just the airlines and hotels they are using it to boost profits.
So how can you join NOTIP? Just delete the amounts on the bill - you are not obligated to pay any tip. And then give the tip directly to the server in the amount you think is appropriate.
From now on I am carrying more cash and striking these amounts.
Daylight (and Night Time) Robbery.
Just say NOTIP
Star's new 3 Amigos - TAM, COPA, TACA
Ten years ago - Airbus cut a milestone contract for narrow bodies with 3 Latin American Carriers - TAM, LAN and TACA. This mega deal as it has turned out allowed all 3 to get basically the same airplanes at a sweetheart deal. It became known as the Three Amigos deal.
A decade on and Star seems to be doing the same thing with COPA replacing LAN (a firm member of Oneworld) and now having its own 3 Amigos.
COPA by dint of its relationship with Continental will join as an associate, exiting like its its buddy CO from Skyteam. TAM replaces Varig. The odd one out seems to be TACA who keeps its own counsel. Taca will continue to go its own way but I suspect that Delta is going to be wooing and wooing Sr Kreit. So dont count this one as a permanent done deal.
However this creates a big hole in south America for Skyteam. They need to fill it. Can anyone guess if Avianca/Synergi will be visiting Atlanta any time soon?
A decade on and Star seems to be doing the same thing with COPA replacing LAN (a firm member of Oneworld) and now having its own 3 Amigos.
COPA by dint of its relationship with Continental will join as an associate, exiting like its its buddy CO from Skyteam. TAM replaces Varig. The odd one out seems to be TACA who keeps its own counsel. Taca will continue to go its own way but I suspect that Delta is going to be wooing and wooing Sr Kreit. So dont count this one as a permanent done deal.
However this creates a big hole in south America for Skyteam. They need to fill it. Can anyone guess if Avianca/Synergi will be visiting Atlanta any time soon?
The Professor Returns from Web Exile with Mobile Web
Being away from the web for 8 days was an interesting experience. It was a little tantalizing - I could have accessed it but for 55 cents a minute - nah - this was way more fun going cold turkey.
However I did find a new tool/toy. The Autonet web device. Wow this is a way cool device and well worth having if you rent from Avis. The package is $10 a day and I rented it in the MIA/FLL area without losing a signal. Used it in the hotel, an office and some houses visiting folks and had 4 people accessing it including a very heavy web chat user. Performance was quite acceptable for email and standard surfing.
The package comes in 3 components - the 3G router which converts 3G into Wifi, a car power adapter and a household power adapter. Its simple to set up - plug in the power and select the autonet unsecured router. Go to your web browser and type in the pin code.
Voila.
Chat Soon
However I did find a new tool/toy. The Autonet web device. Wow this is a way cool device and well worth having if you rent from Avis. The package is $10 a day and I rented it in the MIA/FLL area without losing a signal. Used it in the hotel, an office and some houses visiting folks and had 4 people accessing it including a very heavy web chat user. Performance was quite acceptable for email and standard surfing.
The package comes in 3 components - the 3G router which converts 3G into Wifi, a car power adapter and a household power adapter. Its simple to set up - plug in the power and select the autonet unsecured router. Go to your web browser and type in the pin code.
Voila.
Chat Soon
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