Seeing their proposed Transatlantic Alliance going no-where fast and with the scrutiny of the European competition authorities being more and more aggressive (unlike their US DoT counterparts), it looks like the airlines are prepared to deal. Bloomberg and WSJ both reported on Friday that the three airlines (and presumably an army of lawyers) had opened up discussions on the surrender of slots at LHR. Long a bone of contention and with expressions like "Over my dead body" they are now indeed talking about that.
The 3 airlines (and occasionally joined by RJ - Royal Jordanian Airlines) have a great (sic) website with the title MORE TRAVEL CHOICES.COM to put their case against Virgin mostly but the other 2 existing Transatlantic Immunity groups - AF/KL+BL and A++ (LH, AC, UA, CO).
The Professor has opined that the ONLY way this alliance was going to get any chance of success was if the 3 players agreed to surrender slots at LHR.
At about $40 million per slot pair this represents a significant amount. Currently BA alone has 41% of the slots. LH quietly dumped a few to help pay for its take over of BD.
This battle will play for a while. And we know that BA is happy to surrender slots at LHR because it was offering several to JAL as part of the failed deal to keep them in the fold.
In my own opinion the EC and the US authorities have got themselves into a bit of a pickle. They can hardly hammer on these three having let the other 2 alliances gain immunity. So we are really condemned to LESS Travel Choices. Let's hope Sir Richard continues his battle.
Cheers
30 January 2010
Consolidation In LATAM
Slowly but surely cross border consolidation is occuring in LATAM
With LAN extending its reach with named subsidiaries across several markets (Argentina, Peru etc) it was only a matter of time before cross border merger or alliance activity was to occur. Initially the "national" interest didn't deem it quite the right thing to do. But rampant commercialism has broken out across the Continent. With liberalized air agreements with 4th and 5th freedom rights in effect a reality across many markets some form of alliance relationship was inevitable.
Last year TACA and Avianca announced a merger. TACA and even GOL participated in the start up of Volaris in 2007.
Speculation has been rampant for months since the Administration in Chile announced that it was considering putting its shares in LAN up for sale.
Well now there is a buyer. News reports are coming in that TAM will purchase 18% of LAN thus creating the most powerful airline combination across LATAM. This is likely to spur other alliances/mergers across the region with a strong possibility that the two Mexican carriers will be seeking to be a part of this.
Cheers
With LAN extending its reach with named subsidiaries across several markets (Argentina, Peru etc) it was only a matter of time before cross border merger or alliance activity was to occur. Initially the "national" interest didn't deem it quite the right thing to do. But rampant commercialism has broken out across the Continent. With liberalized air agreements with 4th and 5th freedom rights in effect a reality across many markets some form of alliance relationship was inevitable.
Last year TACA and Avianca announced a merger. TACA and even GOL participated in the start up of Volaris in 2007.
Speculation has been rampant for months since the Administration in Chile announced that it was considering putting its shares in LAN up for sale.
Well now there is a buyer. News reports are coming in that TAM will purchase 18% of LAN thus creating the most powerful airline combination across LATAM. This is likely to spur other alliances/mergers across the region with a strong possibility that the two Mexican carriers will be seeking to be a part of this.
Cheers
For The Geek In You - 787 Flights
Boeing has launched a dedicated Website to the 787 Flight Tests.
Stung by all the issues of secrecy and snafus during the lead up to the first flight - this is the "new" Boeing being a lot more open.
Cheers chaps
http://787flighttest.com/
Stung by all the issues of secrecy and snafus during the lead up to the first flight - this is the "new" Boeing being a lot more open.
Cheers chaps
http://787flighttest.com/
The Rehabilitation Of Mike Bair and The 737
The guy who took the fall for the first set of 787 delays - Mike Bair - is now coming back to lead the effort to solve the most important decision for Boeing. What to do with the 737 - Boeing's cash cow. The Boeing 737 is the most successful airliner in history. While its a relatively simple design - it has stood the test of time and has shown itself to be an eminently flexible product. It has taken the place of its larger sibling at birth (727) and the larger plane's own child - the 757. It has been used for all forms of different applications, all with the same basic design.
Boeing has decided to not mess with success and has clearly laid out that it will not support a brand new design. So the Bair led effort already has a simple mission. New engine and probably a new or upgraded wing.
It is also likely that the 737 will get a little bit of a stretch given that the 787-3 has been abandoned. Raked wing tips vs Winglets will also be reviewed.
If I was to speculate - I believe that Boeing will use the time to also create baseline designs and some options for the 737 replacement aircraft. Why? To counter anything else that Airbus may do. While the European subsidiary of EADS has no money to even countenance a major redesign of the A320 it is a newer airframe design and has the potential for a lot more activity and upgrades. One key benefit is the engine position and the higher undercarriage. The 737 has suffered from this issue since the CFM's were installed.
The battle for engine supremacy has taken a major turn. In the last round of engine decisions P&W was the big loser. This time round the P&W seems to be leading the charge.
So Bair has his work cut out for him. Clearly he is back in the fold.
Cheers
28 January 2010
Its Offical - JAL Defects To Skyteam
Well Not Quite Official but on Monday according to many sources in Japan it will be.
So let's look beyond the headline and consider the impact. For JAL its not business as usual no matter what happens. The airline is in deep trouble and the lifeline it has now is not without limits - least of which will be time.
OneWorld will take a major blow as a result of the defection. American is not likely to take this lying down so we can expect there will be some legal knots to work out. This will take some significant amount of time.
Skyteam like Star is developing a two tier membership. JAL and DL will develop a formal Transpacific Immunity Pact that will mirror the ANA-UAL pact and indeed it will resemble the Trans Atlantic Immunity requests that have resulted in pacts on the Transatlantic such as A++ (LH, UA, AC and CO) and the Skyteam version (DL, AF/KL).
The obvious strengthening ties between the various hubs will occur however perhaps we can peer beyond this and look at the impact on lesser members of the Alliances. If OneWorld is to remain viable AA and BA have to get closer. Also they have to find another Asian Partner. KAL and CA are interesting possibilities. If Air China can tolerate Eva Air the surely CX can coexist with either KAL or CA. However QF may emerge as a powerful force not through mainline but through the footprint of JetStar.
There is going to be a lot of shuttle diplomacy over the next few months as the carriers jockey for position in their respective relationships.
With the opening up of markets in Asia - indeed Open Skies coming to the ASEAN nations - we can expect competition to emerge and indeed start to make a lot more sense with the lowering of tariffs and freedom of movement improving.
It will be interesting. For now - let's sit back and watch the battle for Japan play out.
Cheers
So let's look beyond the headline and consider the impact. For JAL its not business as usual no matter what happens. The airline is in deep trouble and the lifeline it has now is not without limits - least of which will be time.
OneWorld will take a major blow as a result of the defection. American is not likely to take this lying down so we can expect there will be some legal knots to work out. This will take some significant amount of time.
Skyteam like Star is developing a two tier membership. JAL and DL will develop a formal Transpacific Immunity Pact that will mirror the ANA-UAL pact and indeed it will resemble the Trans Atlantic Immunity requests that have resulted in pacts on the Transatlantic such as A++ (LH, UA, AC and CO) and the Skyteam version (DL, AF/KL).
The obvious strengthening ties between the various hubs will occur however perhaps we can peer beyond this and look at the impact on lesser members of the Alliances. If OneWorld is to remain viable AA and BA have to get closer. Also they have to find another Asian Partner. KAL and CA are interesting possibilities. If Air China can tolerate Eva Air the surely CX can coexist with either KAL or CA. However QF may emerge as a powerful force not through mainline but through the footprint of JetStar.
There is going to be a lot of shuttle diplomacy over the next few months as the carriers jockey for position in their respective relationships.
With the opening up of markets in Asia - indeed Open Skies coming to the ASEAN nations - we can expect competition to emerge and indeed start to make a lot more sense with the lowering of tariffs and freedom of movement improving.
It will be interesting. For now - let's sit back and watch the battle for Japan play out.
Cheers
BTC+ITM Try to Rally Standards on AR
Normally I am a huge fan of standards. However I ALWAYS caveat it with "provided they don't get in the way."
BTC based in the USA and the UK's ITM are trying to rally the business user community to support an approach for standards in Ancillary Revenue (AR).
Ancilliary Revenues are clearly important to the supply side. There are too many moving parts for this to be left to standard's people. This is for the bold to take and run with it. However that said most of the major moving parts are pretty standardized.
- A piece of baggage is a piece of baggage. It has sizes and weights... there are standards for that.
- The financial fulfillment is set - MPD become EMD-A or EMD-S.
- ARC is ready
- BSP??? Hello????
- Credit Cards - well not quite - but increasingly so. Some already support the detail however most Visa and MC do not.
- GDS ready? Hardly
- Agencies ready - actually yes. Many of them already sell LCC carriers and this is not new news. Agencies who rely on GDS based solutions alone have seen share shift to those who are already deploying solutions where LCC carriers can be booked.
- Booking Tools - definitely not quite ready. So this is a challenge. But there are a lot of aid tools (for example Sabre has one) that have made the process a lot easier. Frankly you can find most things on the web.
From my point of view, trying to mandate standards - admirable as the effort is, can be something akin to a reader of books trying to tell Apple what should be in the iPad based on how people print books. (OK a little harsh but you get my point).
This is a major advancement in functionality. The sellers must just get used to it and start to service the customers accordingly. This is not new, it is now the scale of adoption on the supply side that will cause the agency community to have to sit up and pay attention and do something.
Failure is not an option. For the $25-$50 that corporations are paying for a manual booking - the agency needs to solve this. Self booking tools are hard at work to address the issue. Legacy GDSs are adopting the wait and see approach - much to the chagrin of the corporate execs who are having to do everything themselves.
Recently I spoke to a group of Corporate Execs on a delayed flight - 20 or so chaps sitting in the lounge chatting together. There was an interesting element that I had not considered before. The amount of post reservation work the corp traveler is doing on his own because either his booking tool or his agency is not providing the service. All 20 of them (different nationalities and different companies in the main with 6 different agencies between them) agreed with this. Not one said she/he DIDN'T do this and was happy with the service and everything was done for him. Actually one guy but he was a Chairman of a business and he didn't use a PC so he said - he had his admin do it for him!
That shocked me because while I knew that the corp traveller has to fend for himself, I didn't realize how little value the exec placed on the corp travel service provided. Agreed this is bar stool research but still - its an issue perhaps the Corp Travel providers need to consider further.
Failure is not an option here. Recently I have heard of several corporations who have fired their agencies and inside travel departments and let the budget control mechanism determine how travel is bought and sold. I would love to see if this is a trend and if not why not? Apparently the travellers love it... go figure.
Perhaps I just don't belong in the printing press business after all
Cheers
BTC based in the USA and the UK's ITM are trying to rally the business user community to support an approach for standards in Ancillary Revenue (AR).
Ancilliary Revenues are clearly important to the supply side. There are too many moving parts for this to be left to standard's people. This is for the bold to take and run with it. However that said most of the major moving parts are pretty standardized.
- A piece of baggage is a piece of baggage. It has sizes and weights... there are standards for that.
- The financial fulfillment is set - MPD become EMD-A or EMD-S.
- ARC is ready
- BSP??? Hello????
- Credit Cards - well not quite - but increasingly so. Some already support the detail however most Visa and MC do not.
- GDS ready? Hardly
- Agencies ready - actually yes. Many of them already sell LCC carriers and this is not new news. Agencies who rely on GDS based solutions alone have seen share shift to those who are already deploying solutions where LCC carriers can be booked.
- Booking Tools - definitely not quite ready. So this is a challenge. But there are a lot of aid tools (for example Sabre has one) that have made the process a lot easier. Frankly you can find most things on the web.
From my point of view, trying to mandate standards - admirable as the effort is, can be something akin to a reader of books trying to tell Apple what should be in the iPad based on how people print books. (OK a little harsh but you get my point).
This is a major advancement in functionality. The sellers must just get used to it and start to service the customers accordingly. This is not new, it is now the scale of adoption on the supply side that will cause the agency community to have to sit up and pay attention and do something.
Failure is not an option. For the $25-$50 that corporations are paying for a manual booking - the agency needs to solve this. Self booking tools are hard at work to address the issue. Legacy GDSs are adopting the wait and see approach - much to the chagrin of the corporate execs who are having to do everything themselves.
Recently I spoke to a group of Corporate Execs on a delayed flight - 20 or so chaps sitting in the lounge chatting together. There was an interesting element that I had not considered before. The amount of post reservation work the corp traveler is doing on his own because either his booking tool or his agency is not providing the service. All 20 of them (different nationalities and different companies in the main with 6 different agencies between them) agreed with this. Not one said she/he DIDN'T do this and was happy with the service and everything was done for him. Actually one guy but he was a Chairman of a business and he didn't use a PC so he said - he had his admin do it for him!
That shocked me because while I knew that the corp traveller has to fend for himself, I didn't realize how little value the exec placed on the corp travel service provided. Agreed this is bar stool research but still - its an issue perhaps the Corp Travel providers need to consider further.
Failure is not an option here. Recently I have heard of several corporations who have fired their agencies and inside travel departments and let the budget control mechanism determine how travel is bought and sold. I would love to see if this is a trend and if not why not? Apparently the travellers love it... go figure.
Perhaps I just don't belong in the printing press business after all
Cheers
Second Life: "I'm Not Dead Yet!"
Personally the whole virtual thing was a fun game for a while but not what I would call important in the big picture scheme of things.
Well it seems I may not be so hip after all (OK so you all knew that - the Tweed Jacket and Pipe is a bit of a giveaway).
Anyway - I was really surprised to learn that there has been a bit of resurgence of late. Secondlife's star seems to be not quite so dim. According to recent data released by the company - users grew, time spent and amount spent in the second life "Virtual Economy" grew significantly, 15%, 21% and 65% respectively.
I bounced over to Alexa and saw that from the low point of Feb (the worst part of the US recession) the bounceback has been significant.
Go figure....
Cheers
Well it seems I may not be so hip after all (OK so you all knew that - the Tweed Jacket and Pipe is a bit of a giveaway).
Anyway - I was really surprised to learn that there has been a bit of resurgence of late. Secondlife's star seems to be not quite so dim. According to recent data released by the company - users grew, time spent and amount spent in the second life "Virtual Economy" grew significantly, 15%, 21% and 65% respectively.
I bounced over to Alexa and saw that from the low point of Feb (the worst part of the US recession) the bounceback has been significant.
Go figure....
Cheers
27 January 2010
Mea Culpa - I Got It Wrong - it's iPad
So the little puppy got to go out for a walk today.
Bravo Apple.
Its very cool - and you knew it would be. A few surprises but in general its as expected only in the usual case better. However its also VERY pricey.
But i probably will abandon my efforts to buy a color Kindle and go for the 64GB Wifi+3G version...
But I wont be doing it in too much of a hurry.
BTW could this spell the end of the iPod Classic?
Cheers
Bravo Apple.
Its very cool - and you knew it would be. A few surprises but in general its as expected only in the usual case better. However its also VERY pricey.
But i probably will abandon my efforts to buy a color Kindle and go for the 64GB Wifi+3G version...
But I wont be doing it in too much of a hurry.
BTW could this spell the end of the iPod Classic?
Cheers
iTablet or iSlate?
In a few hours Steve will get up and announce one of the worst kept secrets - Apple's Slate/Tablet.
We know a few things from this morning's press reports.
1. Its going to be based on the iPhone OS - thus ensuring a wide number of Apps to be supported on day 1.
2. It comes with an eReader
3. its going to be called the iTablet (OK so I was right the first time).
4. Steve WILL announce it today.
Am I right... check in tomorrow or look at the news reports
Cheers
We know a few things from this morning's press reports.
1. Its going to be based on the iPhone OS - thus ensuring a wide number of Apps to be supported on day 1.
2. It comes with an eReader
3. its going to be called the iTablet (OK so I was right the first time).
4. Steve WILL announce it today.
Am I right... check in tomorrow or look at the news reports
Cheers
26 January 2010
Who Is In Charge Of ILFC?
We are getting conflicting reports of the goings on in the top echelon of the MGM Tower in Century City. So who is running ILFC?
Rumours have been swirling that Udvar-Hazy is leaving the ship. AIG Director Doug Steenland (former NW Chairman) is now the named non-Exec Chairman of ILFC replacing Udvar-Hazy in that role.
Today S&P downgraded ILFC's credit rating to BBB-.
So we wait....
Cheers
Rumours have been swirling that Udvar-Hazy is leaving the ship. AIG Director Doug Steenland (former NW Chairman) is now the named non-Exec Chairman of ILFC replacing Udvar-Hazy in that role.
Today S&P downgraded ILFC's credit rating to BBB-.
So we wait....
Cheers
Good Vs Bad Ancillary Revenue Behaviour
I am on a bit of a focus on the AR side of life.
My team is busy investigating AR - it is definitely a challenge. The biggest challenge seems to be how to create some way to make shopping and searching in this complex environment work.
There remains a lot of confusion of what AR comprises. Even the process of AR seems to be the subject of myth and speculation. Chris Elliott seems to be on a Jihad about it. Others too. Even Rudi Maxa is hitting the airwaves with a rail or two.
I will be writing some more about the concept of AR and how it can best be implemented. I hope to rope in some talented folks to help us out with our evaluations. If I can appeal to the Professor's friends and yes even those of you who secretly read this and then wipe your cookie out of your browsers... I want to hear from you. I may start to run some joint stories if there is interest enough.
So pay attention to the surveys on the right and respond when you can
Cheers
My team is busy investigating AR - it is definitely a challenge. The biggest challenge seems to be how to create some way to make shopping and searching in this complex environment work.
There remains a lot of confusion of what AR comprises. Even the process of AR seems to be the subject of myth and speculation. Chris Elliott seems to be on a Jihad about it. Others too. Even Rudi Maxa is hitting the airwaves with a rail or two.
I will be writing some more about the concept of AR and how it can best be implemented. I hope to rope in some talented folks to help us out with our evaluations. If I can appeal to the Professor's friends and yes even those of you who secretly read this and then wipe your cookie out of your browsers... I want to hear from you. I may start to run some joint stories if there is interest enough.
So pay attention to the surveys on the right and respond when you can
Cheers
jetBlue to Shut Res Functions This Weekend
In good behaviour (in my humble opinion), jetBlue is taking no chances and will shut down its reservations functions during the cutover from Navitaire to Sabre.
So far they are not predicting an actual return time. It just says "Saturday Afternoon"
Best of luck to them...
Cheers
25 January 2010
High Noon At ILFC - Founder To Exit This Week?
According to the Wall Street Journal - ILFC's founder and current CEO Steven Udvar-Hazy will exit the world's largest aircraft lessor (with over 1000 aircraft in its portfolio). Thus ending a storied relationship perhaps as early as this week.
At a time when the dismemberment of the AIG empire of which ILFC was seen as a jewel is having quite a lot of trouble this could not have occurred at a worst time. In December Moody's lowered ILFC's status to effectively junk status.
The company has seen a battle going on behind the scenes with two potential suitors Allied Aviation Services and Udvar-Hazy himself. In recent months, Udvar-Hazy, 63, has been trying to line up financial partners to buy a small part of ILFC's vast aircraft assets.
Udvar-Hazy has been rumoured to acquire about 10% of ILFC's aircraft portfolio for approximately $4 billion with backing from private equity players Onex Partners and Greenbriar Equity.
With the troubles at ILFC above and the general difficulties for the world's airlines, the market for aircraft is not looking too rosy at the moment. With troubles at Airbus becoming more serious it has several programs in trouble. For Boeing the issue of subsidies may come back to bite it. It would be a very interesting proposition if both Boeing and Airbus were disqualified from bidding on the KC135 replacement contract. Could we see IL76s in USAF colours... nah... but I got you thinking....
Cheers
At a time when the dismemberment of the AIG empire of which ILFC was seen as a jewel is having quite a lot of trouble this could not have occurred at a worst time. In December Moody's lowered ILFC's status to effectively junk status.
The company has seen a battle going on behind the scenes with two potential suitors Allied Aviation Services and Udvar-Hazy himself. In recent months, Udvar-Hazy, 63, has been trying to line up financial partners to buy a small part of ILFC's vast aircraft assets.
Udvar-Hazy has been rumoured to acquire about 10% of ILFC's aircraft portfolio for approximately $4 billion with backing from private equity players Onex Partners and Greenbriar Equity.
With the troubles at ILFC above and the general difficulties for the world's airlines, the market for aircraft is not looking too rosy at the moment. With troubles at Airbus becoming more serious it has several programs in trouble. For Boeing the issue of subsidies may come back to bite it. It would be a very interesting proposition if both Boeing and Airbus were disqualified from bidding on the KC135 replacement contract. Could we see IL76s in USAF colours... nah... but I got you thinking....
Cheers
EzRez Dumps CEO Fitch
Despite some high profile wins of AA Vacations, Delta Skymiles and United Mileage Plus in recent years - things are not necessarily going well at EzRez the Online Travel Technology supplier now based in California.
Tina Fitch who has helmed the company for several years has been ousted and Karen Vergura - has been named Interim CEO while retaining as Vice President, the Finance portfolio. With venture capital funding to the tune of $15 million raised in 2007 one can only assume that things are not going well for the company to cause a change in leadership.
In conjunction with the 2007 funding, Canaan General Partner John Balen and Azure Capital Partners' founder Cameron Lester joined the EzRez Board of Directors. At the same time the company relocated from Honolulu to the Bay Area. Veteran GDS and Travel Industry figure Kathy Misunas also sits on the Board at EzRez.
Tina Fitch who has helmed the company for several years has been ousted and Karen Vergura - has been named Interim CEO while retaining as Vice President, the Finance portfolio. With venture capital funding to the tune of $15 million raised in 2007 one can only assume that things are not going well for the company to cause a change in leadership.
In conjunction with the 2007 funding, Canaan General Partner John Balen and Azure Capital Partners' founder Cameron Lester joined the EzRez Board of Directors. At the same time the company relocated from Honolulu to the Bay Area. Veteran GDS and Travel Industry figure Kathy Misunas also sits on the Board at EzRez.
Three Times A Charm? jetBlue Cutover This Weekend
The last 3 major cutovers have not gone well for the major players involved. Despite the success of the SITA cutover of the Malaysian Airlines new res system, the next two have been rocky at best.So while I hope not to jinx the next one - let's hope that the Sabre cutover of jetBlue from Navitaire to SabreSonic goes well.
For jetBlue it represents a closing of the Neeleman chapter in its history. David Neeleman brought Navitaire to jetBlue as part of the startup process as he had been the founder of the OpenSkies product. To be candid the Neeleman connection landed jetBlue a better support than some of Navitaire's other customers. Sometimes to their chagrin.
For Navitaire this represents another major loss for them with the most recent defection being Volaris the highly successful Mexican startup. 3 major losses in one year represents quite a blow for the Accenture subsidiary. Fortunately they still have one Tiger on their side - Tiger Airways remains a customer.
So best of luck chaps on both sides of the fence. I will be crossing my fingers for you.
Cheers
Internet Filtering By Governments Is Insidious Behaviour
I am not a radical advocate but I do believe that the Internet must be beyond the reach of the government to filter content IE censor content on the web.
However this is behaviour we normally associate with repressive regimes like Iran and North Korea. I think we all accept that Governments are monitoring activity on the web. Yes - it can be expected that Governments spy on their own citizens for a wide variety of reasons. Frankly while I don't like it - passive monitoring doesn't interfere with what I do. However when Government behaviour does start getting in the way - then it is failing its citizens and frankly its a pain. It is at this point that we are Netizens need to do something about it.
So I was shocked to see from one of my fellow TNOOZ nodes Professor Tim Hughes that he is joining a protest against this form of behaviour by the Australian Government.
WHAT AUSTRALIA????
Yes. It appears that the Oz government wants to ensure purity for its society by engaging in a form of Internet Filtering.
I suggest that everyone should get familiar with the issue and register their complaints.
Here is a good resource in Wikipedia.
Both personally and my company have been a victim of blacklisting for SPAM. Now it would appear that I could be blacklisted for content. I hope not.
Carry on - normal service will be resumed
Cheers
However this is behaviour we normally associate with repressive regimes like Iran and North Korea. I think we all accept that Governments are monitoring activity on the web. Yes - it can be expected that Governments spy on their own citizens for a wide variety of reasons. Frankly while I don't like it - passive monitoring doesn't interfere with what I do. However when Government behaviour does start getting in the way - then it is failing its citizens and frankly its a pain. It is at this point that we are Netizens need to do something about it.
So I was shocked to see from one of my fellow TNOOZ nodes Professor Tim Hughes that he is joining a protest against this form of behaviour by the Australian Government.
WHAT AUSTRALIA????
Yes. It appears that the Oz government wants to ensure purity for its society by engaging in a form of Internet Filtering.
I suggest that everyone should get familiar with the issue and register their complaints.
Here is a good resource in Wikipedia.
Both personally and my company have been a victim of blacklisting for SPAM. Now it would appear that I could be blacklisted for content. I hope not.
Carry on - normal service will be resumed
Cheers
Ancillary Revenue - BREATHE IN..... Now.....
There is a lot of talk about merchandising and Airline based ancillary revenue. If you hear some people talk (like me for example) it could be considered the second coming.
I am a huge fan of it from a commercial perspective and absolutely despise it from the user side. Mostly because of the poor way it is implemented. So I am on a personal crusade to improve this.
In one of the discussions Martin Collings and I had over that excellent Rioja on Friday, we discussed the issue of what defines Ancillary Revenue. He too has been a strong advocate of the greater precision in definition. At least he gets to talk about this in his day job over at 1A.
So I would like to try and draw a clear line of separation between the different types of Ancillary Revenue.
For me the most important element is to distinguish between TRIP related ancillary revenue and additional revenue streams for airlines. If we believe CAPA - the total category is worth $58 billion (The link is to a good article over there BTW). However I suspect the direct airline TRIP related revenue is at a run rate closer to $10 billion.
The differential is due to the high value items that have become staples for airlines such as frequent flyer miles. So deals like the Delta Airlines $2Billion arrangement in 2008 with American Express does not fall into the TRIP related revenue category.
In the coming weeks and months I will be writing more and more about the mechanics of Ancillary Revenue. Let me be clear about one thing though. Anyone who believes that Ancillary Revenue will wait for laborious process of standards does rate the desire - call that lust if you like - of the airlines who by necessity must drive ancillary revenue from the closed points of service delivery and the airlines websites into the general sales channels. Legacy GDSs have been saying that they will have to wait. However when challenged in public - it seems that Q5 2009 was the favoured date. That is not soon enough. I too believe that faster and more aggressive adoptions are required.
Now you can breathe out..... for now.
Cheers
I am a huge fan of it from a commercial perspective and absolutely despise it from the user side. Mostly because of the poor way it is implemented. So I am on a personal crusade to improve this.
In one of the discussions Martin Collings and I had over that excellent Rioja on Friday, we discussed the issue of what defines Ancillary Revenue. He too has been a strong advocate of the greater precision in definition. At least he gets to talk about this in his day job over at 1A.
So I would like to try and draw a clear line of separation between the different types of Ancillary Revenue.
For me the most important element is to distinguish between TRIP related ancillary revenue and additional revenue streams for airlines. If we believe CAPA - the total category is worth $58 billion (The link is to a good article over there BTW). However I suspect the direct airline TRIP related revenue is at a run rate closer to $10 billion.
The differential is due to the high value items that have become staples for airlines such as frequent flyer miles. So deals like the Delta Airlines $2Billion arrangement in 2008 with American Express does not fall into the TRIP related revenue category.
In the coming weeks and months I will be writing more and more about the mechanics of Ancillary Revenue. Let me be clear about one thing though. Anyone who believes that Ancillary Revenue will wait for laborious process of standards does rate the desire - call that lust if you like - of the airlines who by necessity must drive ancillary revenue from the closed points of service delivery and the airlines websites into the general sales channels. Legacy GDSs have been saying that they will have to wait. However when challenged in public - it seems that Q5 2009 was the favoured date. That is not soon enough. I too believe that faster and more aggressive adoptions are required.
Now you can breathe out..... for now.
Cheers
iPhone & Android Creep Into The Enterprise
In what can only be assumed to be a full frontal attack on the Crackberry dominance for the Enterprise - both iPhone and Google's Android OS are making headway into the corporate enterprise. IBM and Lotus Notes (remember them - yes they are still out there) have already released a secure version of a remote tool for integration called IBM Traveler (note the spelling!!!) for iPhone users. eWeek is now reporting that IBM will release an Android version for the future in likely "2H 2010".
For the remote application market this is interesting but you have to think that the functionality for products like TripIt et al have already provided a secure solution and that native apps on these remote devices for email make them unnecessary.
I agree that there is an issue of security but eventually how much do we really have to do in order to remain secure. Or is the "Security" issue here a bogey man conjured up by big System Software companies like IBM, Oracle and Microsoft?
Well you have fun with that one
Cheers
For the remote application market this is interesting but you have to think that the functionality for products like TripIt et al have already provided a secure solution and that native apps on these remote devices for email make them unnecessary.
I agree that there is an issue of security but eventually how much do we really have to do in order to remain secure. Or is the "Security" issue here a bogey man conjured up by big System Software companies like IBM, Oracle and Microsoft?
Well you have fun with that one
Cheers
Mystery Guy in MUC - False Alarm
It seems that the chap who caused the alarm in MUC last week was a hapless traveller who did not realize that he had caused the alarm. It is highly likely he was not a German speaker so did not understand what was said to him. According to news reports German authorities have concluded that a man whose laptop triggered a security scare at Munich airport last week was a harmless passenger.
Part of a terminal was closed for hours Wednesday after the man left a screening area with his laptop, which had triggered an alert for possible explosives, without waiting for officials to check it again.
The regional government said Sunday that video footage showed him wandering from the screening area to a duty-free shop. It said he apparently didn't know he caused the alert. He was evacuated along with other passengers and then went through security again -- this time without trouble -- several hours later. The scare embarrassed authorities. Germany's interior minister has promised a thorough investigation.
I will say again that the decision to empty the terminal when the security people "lost" the passenger was the right one. However the handling of the situation shows that more care and thought needs to go into the process.
In security management there is a constant battle of finding the bad guys with "false positives". The notion of false positives - ie how many good guys do you capture along with the bad guys makes the process of identification pretty tough. When new security or heightened security measures are introduced they typically are panic driven addressing the latest threat(s). Just like some of the really stupid ideas post the Christmas Underwear Bomber.
We have all been lulled into sense of "security" that there are so many layers that it must be impossible to breach them. So in effect the focus has shifted from smart thinking to efficient execution. This is VERY DANGEROUS. We need to be smarter than the bad guys. So far we have not demonstrated that. And we need to do a better job.
Remember we retain a degree success only because the other chaps have not been smart enough. It shows however that there is no perfect solution and more importantly there there is no fixed or permanent solution.
Remember - Security is dependent on all of us.
Cheers
Part of a terminal was closed for hours Wednesday after the man left a screening area with his laptop, which had triggered an alert for possible explosives, without waiting for officials to check it again.
The regional government said Sunday that video footage showed him wandering from the screening area to a duty-free shop. It said he apparently didn't know he caused the alert. He was evacuated along with other passengers and then went through security again -- this time without trouble -- several hours later. The scare embarrassed authorities. Germany's interior minister has promised a thorough investigation.
I will say again that the decision to empty the terminal when the security people "lost" the passenger was the right one. However the handling of the situation shows that more care and thought needs to go into the process.
In security management there is a constant battle of finding the bad guys with "false positives". The notion of false positives - ie how many good guys do you capture along with the bad guys makes the process of identification pretty tough. When new security or heightened security measures are introduced they typically are panic driven addressing the latest threat(s). Just like some of the really stupid ideas post the Christmas Underwear Bomber.
We have all been lulled into sense of "security" that there are so many layers that it must be impossible to breach them. So in effect the focus has shifted from smart thinking to efficient execution. This is VERY DANGEROUS. We need to be smarter than the bad guys. So far we have not demonstrated that. And we need to do a better job.
Remember we retain a degree success only because the other chaps have not been smart enough. It shows however that there is no perfect solution and more importantly there there is no fixed or permanent solution.
Remember - Security is dependent on all of us.
Cheers
24 January 2010
2010 Bug - And You Thought I Was Joking
I made a reference to the 2010 bug in an earlier post at the end of 2009.
Well actually it appears I was not wrong. The bug actually did exist. AND it was pretty serious. The days after the turn of the decade, a large percentage of the German population (and we also understand other countries) with the Chip embedded credit and debit cards suffered.
It was not pleasant. It is estimated that nearly 30 million Germans - about 1/3 of the population was affected.
For more information read the English version of the story in the Grauniad.
So next time ... pay attention when I tell you stuff ;-)
Cheers
Well actually it appears I was not wrong. The bug actually did exist. AND it was pretty serious. The days after the turn of the decade, a large percentage of the German population (and we also understand other countries) with the Chip embedded credit and debit cards suffered.
It was not pleasant. It is estimated that nearly 30 million Germans - about 1/3 of the population was affected.
For more information read the English version of the story in the Grauniad.
So next time ... pay attention when I tell you stuff ;-)
Cheers
Crisis? What Crisis - Capacity Grows Again in 2009
In general we have seen a strong discipline in the deployment of capacity by the world's airlines.
The recent 2009 December study by OAG is pretty predictable. Despite some extensive cutting in certain markets - but the time the end of the year rolled around - the total number of seats once again grew topping the previous biggest year for seats which was 2007.
There are a number of trends we can point out - but I think you should go and download the report directly:
http://www.oagaviation.com/aviation-reports/reports-facts-1209.htm
This represents both good and bad news.
it would seem that the airlines are not necessarily cutting the capacity that they need to in order to regain yields. It also indicates that (using other data from Ascend) that the new aircraft are still coming online pretty fast. Further this is being used for replacement services. HOWEVER there are a large number of viable aircraft heading to the desert. While I was at LHR this week about 5 white tail 757s were parked at the BA Facilities on the east side of the airport.
Delta interestingly came out and stated that dollar for dollar the MD88/90 family of aircraft represent greater value to the airline than the newer and more efficient B737NGs that Delta is taking from Boeing.
With equipment and operations numbers falling it indicates that there are a surplus of smaller size capacity aircraft. The number of 2000 early model and smaller RJs which have been pointed to as surplus with many leaving the fleets would be a confirmation of this fact - and of course the downsizing of Mesa is a further indicator.
At the top end of the scale the big twins - currently 777s and A330s are replacing 747s. We are also seeing the end of the A340 as a viable production aircraft. 4 for long haul slogan that Virgin advocated a few years back seems hollow as even VS is taking A330s - its first big twin.
So in general we are seeing a rationalization and a true shift. After the last short recession at the beginning of the Oughts we didn't see a big return of older model planes to inventory. The price of fuel put paid to that. However we are now seeing a significant number of middling aged aircraft heading to the desert and other storage facilities which do have viability. So MD80s and 737 CFM powered classics are readily available. For long haul a large number of 747s particularly -400s are available. This makes for an interesting dynamic. And lets not forget 767-300s (still scarce) and 757s are in pretty plentiful supply. The chance of a low entrant coming in and taking these and starting new businesses cannot be discounted.
Food for thought?
Cheers
Psst Want A Bit Of US106?
So here are some definitive stats on the slightly water damaged US106 plane.
First Factual:
Announcement Regarding Flight #1549: Information on Aircraft
Involved in Accident
Jan. 16, 2009
Type: Airbus A320-214
Built: June 15, 1999
Length of Service with US Airways: Nine years (Aug. 2, 1999) - Delivered to US Airways from new.
Aircraft Lessor: Wells Fargo Bank Northwest, National Association as Owner Trustee
Previous Operator: N/A
Number of Cycles (a cycle equals one take-off and one landing): 16,299
Number of Flight Hours: 25,241.08
Aircraft Checks:
Date of last A-Check (maintenance inspection performed every 550 flight hours) –
Dec. 6, 2008
Date of last C-Check (annual, comprehensive aircraft inspection):
April 19, 2008
Engines: CFM56-5B4/P
Installation Date Total Flight Hours
Engine 1 (left): Jan. 15, 2008 19,182.10
Engine 2 (right): May 28, 2006 26,466.08
The insurer was Chantis. Actually this is the old AIG Insurance unit that has been placed into a special vehicle while the US Government bails out AIG.
The aircraft has been offered for sale as scrap. And lots of people are interested.
So go here to see the pictures and then you can even register to bid.
Chantis/AIG have had so much interest in the plane that they have even put up a little notice to that effect.
http://www.aigaviation.com/aviationsalvage/management/newsdocs/N106US.pdf
Cheers