One of the joys of working in and around the airline business was always the multi-cultural nature of its people. People who worked in an airline could come from different countries. In years gone by the airline personell in a particular country were often seen as the ambassador unofficial of that country. In many cases the airline’s local commercial and operational staff were pioneers and became a help to anyone – especially those visiting that country for the first time. Rumours used to abound that local staffers of Pan Am, TWA and Northwest were often secretly operatives of the CIA. BOAC local staffers were viewed as part of the Empire. And Air France local agents could be secret agents of the Sûreté.
The reverse was also often true, multi-culturalism spread from the remote offices to the head office. A local who wanted to climb hirer in the organization could only do so by transferring to the Head Office. Thus within an airline frequently you would find people of different cultures and countries of origin.
However the emergence of the Global Alliances has in effect ended this golden age of airline cultural exchange.
Now as each airline withdraws its ex-pat staffers back home and the local country staff are managed often by that country's local staff of the home airline – those days have come to an end. Now Germans serve United customers in Frankfurt, Air France people service Delta customers in Paris, and Japanese JAL employees service British Airways passengers.
From a customer service point of view – I see this as a very bad thing. How many times have I been told by an Air France person that my Delta status is worth nothing when it comes to a problem. And in the USA United personnel look at me as if I am from out of space when I try to use my LH credentials.
Overall I think this is sad that we are losing one of those little quirks of the airline business. It also means that an overseas posting is now unlikely for an airline manager. Thus I believe the airline business as a whole will lose some of its attraction to the brighter stars of the next generation. So Global Alliances homogenize everything to the lowest common denominator. What you get - if you like - is the airline equivalent of Beige Boxes. More Silos!
So farewell good people. And thanks for the ride. It has been a lot of fun.
Cheers
24 July 2010
So OneWorld makes 3 across the Atlantic.
So the homogenization of the airline world is almost complete. With now more than 90% of the traffic across the Atlantic under the control of the 3 Alliances the airline world has become something of a boring place.
From a strategic perspective I believe that the creation of this risk sharing – mergers in all but name – alliances create as many issues as they solve. From a user’s perspective – IE the flyer, and as speaking as a frequent flyer, I cannot say that the rewards of the so called “seamless” experience are that great. Frankly I believe they are still a myth in the mind of the airline marketing departments. Let me illustrate this with a simple pair of examples from Star/Atlantic Alliance Plus:
Star Alliance – Transatlantic Alliance A++ AC,CO, LH UA. LH has first class as does UA. CO and AC do not. UA and CO have premium economy, AC and LH do not.
An itinerary NUE-FRA-YYZ-IAH-CCS-IAD-FRA-NUE should be (logically) possible all on A++ carriers and Transatlantic. Not so – the CCS legs are outside of the alliance and therefore have to be either added as a separate flight or as one ways. Any solution would up the price significantly.
I use these to illustrate the issue not to pick on Star/A++ specifically. I believe that the airlines have a long way to go to make the experience truly hassle free. However I think it is getting better. But it takes a very long time and the hype decidedly does not live up to the delivery. I hope that the regulators are paying close attention to the issue. When these alliances anti trust immunity comes up for renewal. I hope that they look at the issues for the customer. In my view the benefits to the customer should be considered as follows:
1. Better choice of schedules – ie more not less flights
2. Lower fares or at least no comparative increase in fares. I also think that the consideration of Frequent Flyer miles should be added to the equation, so that the currency of FF miles be considered as part of the cost equation.
3. Ease of use – to get from A to B should not be harder. Therefore in considering the value of an alliance – the customer issue of nonstop vs connections should also be considered. For example did the alliance reduce the number of nonstop routes in the broader market?
4. The hassle factor. Did the Alliance truly reduce the amount of trip hassle for the customer – of all types not just premium traffic.
If we are truly to regard this as a benefit then a truly objective and transparent mechanism for assessing Alliances should be put in place. I believe that players have the right to set their own standards in an open market. However when the marketplace is restricted to only 3 major players with such a large percentage of the market – then the standards of care and customer value must be put at a high premium. This includes the ability of the governments to force the players to undo their arrangements. Currently these standards are not in place and all that seems to have happened is a lot of talking without consumer consideration. Given how much money the airlines are going to make this year as a result of their oligopoly power – I think this should be a consideration. And with OneWorld now the third man in – we have to be very careful.
Cheers
From a strategic perspective I believe that the creation of this risk sharing – mergers in all but name – alliances create as many issues as they solve. From a user’s perspective – IE the flyer, and as speaking as a frequent flyer, I cannot say that the rewards of the so called “seamless” experience are that great. Frankly I believe they are still a myth in the mind of the airline marketing departments. Let me illustrate this with a simple pair of examples from Star/Atlantic Alliance Plus:
Star Alliance – Transatlantic Alliance A++ AC,CO, LH UA. LH has first class as does UA. CO and AC do not. UA and CO have premium economy, AC and LH do not.
An itinerary NUE-FRA-YYZ-IAH-CCS-IAD-FRA-NUE should be (logically) possible all on A++ carriers and Transatlantic. Not so – the CCS legs are outside of the alliance and therefore have to be either added as a separate flight or as one ways. Any solution would up the price significantly.
I use these to illustrate the issue not to pick on Star/A++ specifically. I believe that the airlines have a long way to go to make the experience truly hassle free. However I think it is getting better. But it takes a very long time and the hype decidedly does not live up to the delivery. I hope that the regulators are paying close attention to the issue. When these alliances anti trust immunity comes up for renewal. I hope that they look at the issues for the customer. In my view the benefits to the customer should be considered as follows:
1. Better choice of schedules – ie more not less flights
2. Lower fares or at least no comparative increase in fares. I also think that the consideration of Frequent Flyer miles should be added to the equation, so that the currency of FF miles be considered as part of the cost equation.
3. Ease of use – to get from A to B should not be harder. Therefore in considering the value of an alliance – the customer issue of nonstop vs connections should also be considered. For example did the alliance reduce the number of nonstop routes in the broader market?
4. The hassle factor. Did the Alliance truly reduce the amount of trip hassle for the customer – of all types not just premium traffic.
If we are truly to regard this as a benefit then a truly objective and transparent mechanism for assessing Alliances should be put in place. I believe that players have the right to set their own standards in an open market. However when the marketplace is restricted to only 3 major players with such a large percentage of the market – then the standards of care and customer value must be put at a high premium. This includes the ability of the governments to force the players to undo their arrangements. Currently these standards are not in place and all that seems to have happened is a lot of talking without consumer consideration. Given how much money the airlines are going to make this year as a result of their oligopoly power – I think this should be a consideration. And with OneWorld now the third man in – we have to be very careful.
Cheers
Is Skype No Longer Real Time?
I think we all love Skype (if you are not a Skype user then you really should be!) But lately I have noticed that Skype is a little slow in delivering messages.
It used to be that Skype would hold a message if you were not logged on until you were there - then it would update. But lately I have noticed that some times it doesn't do this for DAYS!
I hope this is just an aberration because I really do love to use the application for leaving messages.
I would hate to see those chaps at eBay start to mess with Skype and that I have to defect to another service. The utility value of Skype I place WAY above Facebook and Linked in.
Cheers
It used to be that Skype would hold a message if you were not logged on until you were there - then it would update. But lately I have noticed that some times it doesn't do this for DAYS!
I hope this is just an aberration because I really do love to use the application for leaving messages.
I would hate to see those chaps at eBay start to mess with Skype and that I have to defect to another service. The utility value of Skype I place WAY above Facebook and Linked in.
Cheers
19 July 2010
Nexus One = Boat Anchor. What Lessons?
I like the nautical themes since I am at the seaside this week. As I type this I am listening to the sound of the Atlantic pounding some rocks.
Quietly on Apple's big iPhone day - Google pulled the plug on Nexus One. Here is an article from InfoWorld
Now I wonder what does this tell us about Google's ability to provide a consumer facing product? Is there a lesson for the Google/ITA acquisition?
Hmmm now that's a thought!
Cheers
Quietly on Apple's big iPhone day - Google pulled the plug on Nexus One. Here is an article from InfoWorld
Now I wonder what does this tell us about Google's ability to provide a consumer facing product? Is there a lesson for the Google/ITA acquisition?
Hmmm now that's a thought!
Cheers
A Free Case For Your (i4) Boat Anchor
Steve – aka the Dark Lord – has come out fighting on the issue of the iPhone 4’s er connection issue.
He says it has been blown out of proportion and that the media is to blame (sound like anyone else we know?).
Well Steve – this is life. Suck it up.
Apple has like almost every tech company – including many that I have been with – had its share of misfortunes. It is part of the way technology is. What works for some doesn’t work for others. Users expect computers to be infallible. To know the perfect answer. An iPhone is a work of beauty but it has to work as a basic function. Namely it has to work as a telephone. The issue of the antenna – which is among several other issues is that it needs to work normally. I believe from several iPhone 4 users I have spoken to – that the issue is sporadic. For one old time iPhone user – he explained he is as frustrated with the problem as when the iPhone 1 first came out and would disconnect in mid call when moving between towers. The Apple faithful have flamed me a few times for making an issue of the iPhone. Just the facts ma’am. For an empirical assessment of the iPhone from Consumer Reports which confirmed the issue – please visit their website.
I think the iPhone is a work of art and a marvelous thing. I hope Apple gets it right. My objection to it remains the business model and the fact that it is a license to print money. Given the money Apple is making from the iPhone – I believe they have an obligation to get it right.
So through the end of September you can have a case for your iPhone boat anchor. Hopefully after that the next batch will have a better antenna. I should point out that some analysts are reporting more issues with the iphone. But you can figure this stuff out for yourself.
Cheers
He says it has been blown out of proportion and that the media is to blame (sound like anyone else we know?).
Well Steve – this is life. Suck it up.
Apple has like almost every tech company – including many that I have been with – had its share of misfortunes. It is part of the way technology is. What works for some doesn’t work for others. Users expect computers to be infallible. To know the perfect answer. An iPhone is a work of beauty but it has to work as a basic function. Namely it has to work as a telephone. The issue of the antenna – which is among several other issues is that it needs to work normally. I believe from several iPhone 4 users I have spoken to – that the issue is sporadic. For one old time iPhone user – he explained he is as frustrated with the problem as when the iPhone 1 first came out and would disconnect in mid call when moving between towers. The Apple faithful have flamed me a few times for making an issue of the iPhone. Just the facts ma’am. For an empirical assessment of the iPhone from Consumer Reports which confirmed the issue – please visit their website.
I think the iPhone is a work of art and a marvelous thing. I hope Apple gets it right. My objection to it remains the business model and the fact that it is a license to print money. Given the money Apple is making from the iPhone – I believe they have an obligation to get it right.
So through the end of September you can have a case for your iPhone boat anchor. Hopefully after that the next batch will have a better antenna. I should point out that some analysts are reporting more issues with the iphone. But you can figure this stuff out for yourself.
Cheers
So What’s The Real Problem and What’s The Real Answer?
The launch of Open Axis as the standards group for Airlines in Ancillary Services and Direct Connections last week caused a bit of a stir. It has definitely miffed a lot of people. The Legacy GDSs and those who depend on them are good examples of that camp. Indeed also last week at the same time that the Open Axis group was holding its inaugural press conference – in Washington there were hearings where outraged players were moaning that the airlines were not playing ball and providing the Ancillary Services information to the GDSs. I never thought I would see the day when a Hearing in the US Capitol would be held to support the GDSs!
In sifting through the responses over the past few days – I was enjoying a degree of reading how different groups want to see it play out. There is a very good article by Ian Tunncliffe in Travel Technology Update. (Sorry this is by subscription only). So I will give you the essence. Travel Industry Technology needs to get a life and the debate over standards is irrelevant to a market where a vendor can deploy a solution such as an iPad and get traction of thousands of Apps and users without paying any attention to such standard. (OK so this was my interpretation of the piece but I am sure Ian will forgive me for this latitude).
What’s more he is right.
The Professor definitely believes that standards help and has already put his money where his mouth is by endorsing the Open Axis standard (via my alter ego). I am also a great advocate of the Open Travel Alliance and I really hope that the two bodies come to an accommodation if nothing else.
So are these views inconsistent?
Actually not in my view and here is why. I have for a long time believed that the rigid structure of the legacy GDS controlled travel workflow restrained innovation not to mention the free flow of commerce. In the early 1980s it was very useful for piggy back technologies such as Lanyon Boards. In the 1990s the standards enabled the OTAs to come into being. However the real Travel 2.0 the one we all use didn’t want to be constrained. In the past 5 years new businesses in search and itinerary management emerged and have done a very good job. Much better than the GDSs did. So the footprint of the legacy GDS shrank further and further inwards. Having worked in extensively in the OTA world I have witnessed all the major functions of the GDS have been replicated and indeed far exceeded bar one. To wit:
Fare Search – OTAs do better – and Meta Search does just as well particularly in combining fares and availability
Availability – OTAs do better in presentation
File Management/Itinerary – OTAs do better – and Itinerary management services do even better
Customer Management – OTAs do better
Supply Chain access – GDSs do better.
Then add Web 2.0 with the Social components to it and there is no way for the legacy GDSs to hope to match that capability. Even in the interaction of their customer users they have abandoned their dedicated networks in favour of web based solutions.
With the commercial model being driven by the supply chain component – it was only natural that for both commercial and technical reasons (as well as a host of others) that the suppliers would want to tap into the broader market where innovation and customers live. This meant that there was an inevitability about the Supply side wanting to open up access to the general market. (I need not elaborate for my readers that the restraint of the GDS so called “incentives” to users is an evil thing in my view.)
And this is not just theory of the world being a happy place where the GDS model alone addresses distribution to the open market. The legacy GDS global market share of airline traffic has been falling steadily for years. Eroded by both the emergence of LCCs and the greater direct distribution by the Full Service Network Carriers.
Returning to my questions… The real problem has been that the bootstrapping of airline and travel IT to extend the old GDS based model has reached the end of its life cycle. And yes – a new world where Apps can be built and deployed in hours vs years in a far less rigid world has become the de facto standard. Open Access by what ever name has become the norm. The real answer is that we have to now go back to the core reservations systems providers – the PSS vendors – and start beating the drum of revolution. Now is the time for the IT infrastructure to become open and decidedly more nimble. I can imagine that the airlines will not like this. Decidedly the big hosting companies – Amadeus, Sabre and HP/EDS will hate it. The GDSs who have depended on this closed architecture for years are going to be very unhappy. But in my view they have no choice but to change and reform. Then we can stop having IT get in the way of business.
So what are we waiting for?
In sifting through the responses over the past few days – I was enjoying a degree of reading how different groups want to see it play out. There is a very good article by Ian Tunncliffe in Travel Technology Update. (Sorry this is by subscription only). So I will give you the essence. Travel Industry Technology needs to get a life and the debate over standards is irrelevant to a market where a vendor can deploy a solution such as an iPad and get traction of thousands of Apps and users without paying any attention to such standard. (OK so this was my interpretation of the piece but I am sure Ian will forgive me for this latitude).
What’s more he is right.
The Professor definitely believes that standards help and has already put his money where his mouth is by endorsing the Open Axis standard (via my alter ego). I am also a great advocate of the Open Travel Alliance and I really hope that the two bodies come to an accommodation if nothing else.
So are these views inconsistent?
Actually not in my view and here is why. I have for a long time believed that the rigid structure of the legacy GDS controlled travel workflow restrained innovation not to mention the free flow of commerce. In the early 1980s it was very useful for piggy back technologies such as Lanyon Boards. In the 1990s the standards enabled the OTAs to come into being. However the real Travel 2.0 the one we all use didn’t want to be constrained. In the past 5 years new businesses in search and itinerary management emerged and have done a very good job. Much better than the GDSs did. So the footprint of the legacy GDS shrank further and further inwards. Having worked in extensively in the OTA world I have witnessed all the major functions of the GDS have been replicated and indeed far exceeded bar one. To wit:
Fare Search – OTAs do better – and Meta Search does just as well particularly in combining fares and availability
Availability – OTAs do better in presentation
File Management/Itinerary – OTAs do better – and Itinerary management services do even better
Customer Management – OTAs do better
Supply Chain access – GDSs do better.
Then add Web 2.0 with the Social components to it and there is no way for the legacy GDSs to hope to match that capability. Even in the interaction of their customer users they have abandoned their dedicated networks in favour of web based solutions.
With the commercial model being driven by the supply chain component – it was only natural that for both commercial and technical reasons (as well as a host of others) that the suppliers would want to tap into the broader market where innovation and customers live. This meant that there was an inevitability about the Supply side wanting to open up access to the general market. (I need not elaborate for my readers that the restraint of the GDS so called “incentives” to users is an evil thing in my view.)
And this is not just theory of the world being a happy place where the GDS model alone addresses distribution to the open market. The legacy GDS global market share of airline traffic has been falling steadily for years. Eroded by both the emergence of LCCs and the greater direct distribution by the Full Service Network Carriers.
Returning to my questions… The real problem has been that the bootstrapping of airline and travel IT to extend the old GDS based model has reached the end of its life cycle. And yes – a new world where Apps can be built and deployed in hours vs years in a far less rigid world has become the de facto standard. Open Access by what ever name has become the norm. The real answer is that we have to now go back to the core reservations systems providers – the PSS vendors – and start beating the drum of revolution. Now is the time for the IT infrastructure to become open and decidedly more nimble. I can imagine that the airlines will not like this. Decidedly the big hosting companies – Amadeus, Sabre and HP/EDS will hate it. The GDSs who have depended on this closed architecture for years are going to be very unhappy. But in my view they have no choice but to change and reform. Then we can stop having IT get in the way of business.
So what are we waiting for?
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