Travel Massive Trumps Tired Ogre Tribe

Travel Tribe was a name used to describe collections of people who wanted to interact to share their passion for the subject of Travel.

There was (and still is - read further) a great group of people who started various Travel Tribes in different parts of the world.

However enter the evil Brand Owner Ogre. Seems like Travel Tribe was not just a nice informal thing that travelistas could come together. Nope. The value of the brand was just too strong to prevent the Big Brand Ogre from flexing his legal muscle.

So the heavy hand of various legal threats were made and the thriving community was forced to change their name.

But fear not - Right outweighs Might frequently on the web. In this case Legal threat Might is losing to internet social Right.

So the formerly Travel Tribe meetups are now newly named (actually for many months now) as Travel Massive. and now there are 14 of them worldwide with more forming.

So get in on the action. We also tend to have informal meet ups at conventions such as ITB (Berlin March) and WTM (London November) so enjoy it. And Ya Boo Sucks to the Travel Tribe Spoiler Ogres.

Cheers

Is BTC Right on ASTA or Not?

In the interests of equal time - I am publishing here the Open Letter BTC Gram from the tables of Radnor PA.

The background for anyone who missed it - is that President Obama made a reference to Travel Agents in a speech. Check the Economist for a balanced view of the situation. The pointed reference in the letter to "Industry Insiders" was perhaps aimed at the Professor and others who had the temerity to observe that ASTA's response contained a number of inaccuracies.

Check out the debate in Travel Weekly.

I read 2 perspectives on US Travel Weekly. Sadly the one I preferred seems to have been pulled off. http://www.travelweekly.com/Arnie-Weissmann/Obama-and-our-obsolete-language-of-polarity/

So here is the BTC letter, read it then you see if you agree. I have provided some commentary at the end:


BTCgram
August 30, 2011

ASTA Did The Right Thing In Responding To President Obama’s Comments About Travel Agents
BTC has read with interest stories and postings in the travel industry trade press regarding President Obama’s well-intentioned comments about technology and travel agents as well as industry and media response to them and each other. One central element would appear missing from the discussion and that is what we think inside the industry about this issue is largely irrelevant.
Meetings destinations like Las Vegas no doubt vividly remember the immediate and painful impact on business from the President’s words a couple of years ago, as did the corporate aviation business. Road warriors, once-a-year leisure travelers and young, up and coming business travelers recently heard over and again the President’s influential comments about travel agents. ASTA responded early in the news cycle to help prevent a perception of travel agents as yesterday’s resource from becoming an intractable false reality in the marketplace.
In BTC’s view, ASTA did the right thing to safeguard the businesses of its members. Likewise, Travel Leaders also fired back at the President, ostensibly to protect its business. It’s simply a prudent and necessary business response. To its credit ASTA’s strategy seems to have succeeded as evidenced by consumer business press coverage that included ASTA’s perspective in publications such as USA TODAY, The Economist and The Los Angeles Times.
Industry insiders screeching about business models, technology, new paradigms, erroneous statistics and the mistaken notion that ASTA is yearning for a bygone era is, in BTC’s view, inwardly focused and overlooks the central point of ASTA’s effective response to a potential threat to their members’ businesses. Congratulations to Tony Gonchar and ASTA for providing the precisely required leadership at the exact moment it was essential!
###
About Business Travel Coalition
Founded in 1994, the mission of the Business Travel Coalition is to bring transparency to industry and government policies and practices so that the managed travel community can influence issues of strategic importance to their organizations.
Contacts:
Kevin Mitchell
610-999-9247

There were two great pieces by Kevin May in TNooz.

The first was a report on the flap itself. The second was an unusual publication of a response from ASTA itself. TNooz was right to publish both.

For absence of ambiguity. I think ASTA just put its foot in its mouth by presenting an inaccurate set of numbers and thereby destroyed its own credibility. The point it was taking was admirable if a little naive in my view. The world has changed. A large number of former traditional agents are gone. What remains is a core of hard working and valuable resource. However let's be realistic about the whole thing.

Ultimately logic and numbers will prevail. The concept of the old school Travel Agent who acted as an access into the supply chain has been swept away.

Today's Travel Agents are better. They just don't scale well. Sadly. BTC is not helping the cause in my view and only serves to make the issue worse. But then what do I know... For the record - I would hardly think anyone would label the Professor as an "Industry Insider". Perish the thought.

Cheers

Last 1/3 Year US Market Projection

Every year I play a little game - what will the final part of the year look like. Both for the economy and the Travel sector as a whole post Labor Day.

My usual metrics are to look at airline traffic, hotel occupancy, rates and the economy as a whole.

I don't like to be a pessimistic person - but I am not getting warm and fuzzies about the current state. In my crystal ball I believe we are going to see a general slowdown of the Travel Economy in the last quarter of this year. What are the drivers and the evidence to support my hypothesis?

Starting with the economy - we knew August would not be a positive force on the mood of the economy - blame the politicians for that one. The jobs numbers look poor with zero growth when we need to see an increase of 150,000 new jobs before the unemployment rate falls from its almost historic 9.1% level. Business confidence is not going to be good even if there is a significant boost in jobs programs announced next week by Obama. The best we can hope for is flat for the rest of the year.

During the year - the total amount of airline trips taken have risen about 2-3 points yet the Corporate heavy ARC numbers show a fall of more than 2% in total tickets issued. Further the price of the tickets has risen. We are already (through July showing that nearly 6% total expenditure increase over 2010's numbers. Remember that increasingly ARC's ticket only numbers do not track with the total cost of trips. With therefore a significant additional cost of ancillaries not showing up in the ticket numbers - we are going to see squeezed corporate travel budgets that require some pull back in business travel. I am projecting for the last 1/3rd of the year a pull back of 6% in expenditures to bring budgets back in line. This is going to accelerate the cut in trips compared to 2010 to the tune of about 3-4%. Some chaps who are counting on reaching elite status with their trips in the last quarter better think again.

Leisure travel is also going to see a pull back with Thanksgiving having a bit of a hard time.

I had a scan and looked at deals coming up. International travel ex-USA is not looking promising. Delta recently implemented a second round of cuts in the Winter 2011 schedule. Pulling selected flights rather than cutting routes.

So pricing is holding but I am seeing some new lower priced inventory available. Also pretty good inventory for some international flights on frequent flyer miles.

So boys and girls... there we have it. A quiet last third of the year in travel with numbers down. Batten down the hatches. We might start to also see a few layoffs occurring selectively.

Cheers

What Cost Emirates Profits? Just Ask Qantas.

While Emirates continues to rack up impressive profits, other airlines are calling foul and accusing the airline of benefiting from some degree of financial fiddling to justify the seemingly hard profit numbers.

However I believe that the airline makes money the old fashion way - they earn it.

United Airlines Chairman Jeff Smisek was quite effusive on the subject when interviewed last month during GBTA annual convention in Denver.

Embedded in the results of the QANTAS GROUP last month also was a clear indication of the resulting failure of their international business in the face of competition from - well airlines like Emirates.

As reported by Reuters, QF lost more than AU$200 million on its international operations. With net profits being more than $524 million, the airline must be making money hand over fist domestically.

As QF restructures its international business - EK continues to grow its profits on three key sectors.

The Trans Arabian sea routes, The North South ZA to Northern Europe and of course on the Kangeroo routes.

This gives an indication of where EK makes its money. However clearly they have a number of advantages over QF that QF has now come to realize and will address.

Cheers

EasyJet Musical Chairs

The continuing boardroom farce at Easyjet seems to have roped in some new blood which hopefully will bring a degree of stability to Big Orange. (With due deference to Braniff).

For those who have not been following the saga - Stelios has been having a bit of a feud with the board and the management of his favorite child Easyjet. His concern has been that he disagrees with the move for expansion vs profitability that the company has been pursuing. He launched his latest broadside in July. Stelios is concerned that the relationship between his former protoge and Airbus has become a bit too incestuous. And is concerned that the company is paying too much for its aircraft and buying larger machines unnecessarily. The company now has A320s and A321s it acquired when it board GB Airways but has stepped this up by buying new A320s. Note the company could argue that its larger capacity needs were so severe that it needed to lease a different aircraft type (2 Boeing 757s) during the summer 2010 season to accommodation this. The company is now exclusively Airbus as the last 737-700s were returned this year.

For those of us on the sidelines - the battle seems a little silly since the airline is doing nicely thank you. But a battle there is. As the leading shareholder Stelios is entitled to make his point and he has done so. For the record - his family own 38% of the stock.

Latest to leave is deputy chairman Sir David Michels. The revolving door has seen a parade of folks rotating through the board room in Luton. Among the recent hires as board members are Andy Martin and Adele Anderson. They join recent Deputy Chairman recruit Charles Gurassa. The upheavel is so new that the website has not yet updated the composition.

You can discern the tea leaves here of a change in board direction for the company. On board we now have a bunch of real traditional travel stalwarts.

Let's have a little peak.

Out goes also Sven Boinet (ex - Lastminute.com),
Charles Gurassa has as noted above an excellent travel pedigree
Newcomer Andy Martin is ex Forte, Granada and First Choice (now TUI).
The board seems to have a blue chip set of players. Both women, including its new CEO, on the board shared top 50 most powerful women in the UK status as far back as 2002. Adele has experience in aircraft financing - this seems to be at part of the battle that Stelios is fighting.

For those of us with a little memory this was the company that was founded on the premise that travellers should "cut out the travel agent", we can get an impression that the board will likely take a more traditional approach to distribution. One can infer that the company will become more like a regular carrier and discontinue a key plank of Stelios's product positioning.

Stelios's arguments about the board being a bit cosy - does seem to have some merit. Newcomer Adele and the non-exec chairman were both colleagues at KPMG in the 1990s and 2000s. Rigas Doganis has a long history of working with airlines as an academic and board member of Olympic and SAA. Keith Hammil is currently on the board of Travelodge and was part of the original team of Go.

Clearly this story will run for a long while.

Cheers

US DoJ Gets Tough On Anti-Trust

The US Department of Justice is finally waking up from a long slumber and wasting no time in putting some teeth into the enforcement of anti-Trust legislation.

First up - they are likely to deny the merger between NASDAQ and NYSE Eurnext. Next they are likely to deny the AT&T/T-Mobile merger.

What does this mean in travel?

There are 3 major issues on the table today.

First Google - there is now strong evidence that Google will be the target and eventual recipient of stringent anti-Trust measures. It has already paid fines for bad behavior - such as criminal charges related to the Pharma ads issue, This will have big issues going forward for hotels and air activity

Second - GDS behavior. With the protagonists agreeing to a time out for 3-4 months - this moves the Justice Dept's investigation into a common time line with the various lawsuits. With Travelport looking to address its financial woes - a GDS merger is decidedly off the table.

Third for any additional airline merger - the DoJ is going to pour cold water on that. By now any assessment of the situation will see that pricing power has returned to the airlines driven by scarce supply. Thus any additional airline merger type activity will not be viewed favorably in my opinion. that said - the DoJ and the DoT clashed several times on this subject and the DoT won.

Bottom line here folks... be careful what you wish for...

Cheers

Is Google Evil?

This question keeps getting asked.

So have a read what InfoWorld's Cringe column has to say about it.

And in my view (yes my 2 cents)... it doesn't matter any more if there is intention or not. It matters only if people get hurt.

You be the judge

Cheers

ATRA Ratings of "Safest Airlines" are Bunk

The Geneva based organization ATRA claims to use scientific data to rate airlines as being the safest this was provided to me by Professor Jackie who reads the Sydney Morning Herald.

The organization fully termed the Air Transport Rating Agency comes with the tag line "Swiss Quality Assessment". The data is taken from 2009 reports. When it comes to Swiss Airlines I am not sure that quality is that great.
Swiss Airlines are no strangers to accidents the last one being a Crossair Avro RJ100 in 2001 near Zurich.

Further Swiss ATC was to said to take the blame for a mid air collision between a Russian Airliner and a DHL Cargo plane. According to Wikipedia the outcome was as follows. On 19 May 2004, the German Federal Bureau of Aircraft Accidents Investigation (BFU) published its determination that the accident had been caused by shortcomings in the Swiss air traffic control system supervising the flights at the time of the accident and by ambiguities in the use of TCAS, the on-board aircraft collision avoidance system.

Er... Let's look at the list - all the Top 4 Airlines have had crashes in the past 4 years. Note that I am not judging the companies - just indicating whether or not the issue of a crash was to be considered or not. Here is the ATRA list for 2011 and for the top four players their most recent accidents:

Air France-KLM (AF447 A330-200 Mid Atlantic 2009)

AMR Corporation (American Airlines, American Eagle) (AA 331 B737-800 Jamaica 2009)

British Airways (BA38 LHR 2008)

Continental Airlines (CO1404 B737-500 DEN 2008, Calgon Air CO3407 Q400 BUF 2009)

NOTE I DID NOT GO BEYOND THE TOP 4.

Delta Airlines

Japan Airlines

Lufthansa

Southwest Airlines

United Airlines

US Airways

Interestingly none of the Skytrax top 10 airlines are in this list either. So in examining the criteria list they publish top 15 elements. Here we can see part of the problem. Frankly their criteria has some - but in my personal view largely irrelevant - elements that make up the criteria.

The 15 selected criteria are (as stated by ATRA):

Net financial result
Total number of passengers
Total number of employees
Total number of cabin crew employees
Total number of aircrafts
Average fleet age in service
Percentage of aircrafts on order
Fleet homogeneity
Number of aircrafts no longer in production
Number of aircrafts considered at risk
Total aircrafts-km flown
In house maintenance capability
Number of accidents during the last 10 years
Dedicated flight academy pilot-training facilities
Dedicated full flight simulators

(Note the typos are theirs not mine which are more than plenty!)

I therefore would suggest that you go to more relevant and far more respected sources for the information on who is the "safest" airlines.

With IATA now demanding that all members pass the safety audit for membership this should give some comfort.

Air travel is risky but no more so than crossing the street except that you are not in control.

Pronouncements such as this do NOTHING to advance airline safety.

The Professor has spoken.

Cheers and safe flying