When Code Share Falls Apart

I had an interesting time this weekend trying to get home. But while there is a story here about the value of persistence - I am really trying to look at the way the alliance between Delta and Air France/KLM should work.

I made a big mistake - failed to book the right day on my flight. OK - it happens. Accepting my fate - i got up at the crack of very early and took my car to the airport in London. (If you want a good tip - DON'T even THINK about trying to use the tube/underground on the weekends in London). But I digress...

So lets start with the process of checking in. I have a DL code share flight number and a DL ticket. So I get the usual email - time to check in. I click on the link. Eventually DL's website sends me to KLM UK. Air France who will operate the flight doesn't want to check me in. I input the data (after calling AF to get the code share correct AF PNR RLOC) nope doesn't work. But it does then send me BACK to Delta with a link... and the process starts all over again. (BTW I copied each web page to prove my point).

I called AF back - no you cannot check in - go to the airport early!

I get to LHR (they said 3 hours before the flight but I was one of the first at 1 hour before departure). I use the automated check in but check with the AF/KL sales rep to see if the frequent flyer number made it into the record. (It doesnt print on the AF Boarding pass nor does it give my status - the Frequent Flyer's nightmare - lack of recognition!) Her comment - I hate these code shares - it confuses us and not to mention the passengers. So I make it through security and board the flight. (Imagine the following is spoken in a very heavy French accent). "Ladies and Gentlemen - Air France regrets to tell you that there is a slight delay of 2 hours due to bad weather in Paris." OK so that means I will miss my connection in CDG for Seattle. So your intrepid traveller heads up the aisle to speak to the purser.

"Absolutement NON! If you want to leave the aircraft then I am sorry but you will have to pay for a new ticket. It will be very expensive. And besides - all flights in CDG are delayed by the same amount." I can assure you - there is no need.

Back to my seat - I pull out my laptop and log onto the network (thank god for 3G dongles... I can surf on the aircraft). So i now have better information than the agent. So yes there are seats available. Back up the aisle to speak to the purser and the agent...

But saith the Professor... "I have a Delta ticket".

"Then it is up to you..."

So I grab my carry on and head up with aisle. I speak to the gate agent (Cobalt) Well I guess. But you are on your own.

I deboard the aircraft - am officially offloaded. So now I have to go all the way through the airport to the Skyteam checkin terminal transfer desk in T4. Its about a mile walk from Gate 25 to there.

Same story (now on its third retelling) "No you can't do that!" ....But I have a Delta ticket....

"Oh yes then you can!"

The Cobalt agent works hard and gets me on the right flight. I end up getting home. And as for the flight from CDG to SEA? AF306 was canceled! I would have been stranded in Paris along with a heck of a lot of other folks.


I think that there is a lot of integration to do. The way Skyteam works is frankly very poor. Star Alliance has had a lot more time to get this right. Their UA+LH interconnection works a lot better.

What is clear - AF's legendary (and not good) customer service is still no better than it ever was. AF is misleading customers with their bad advice. The Cobalt team at LHR really did pull out the stops to get me fixed. I am indebted to them for solving the problem for me.

However - without insisting on the changes to my flight - I would not be back in the good ol' USA.

Moral of the story - avoid booking on AF if you can. Your DL Elite card is worthless to the AF staff. A DL ticket seems to work a lot better. Oh yes and they have a LOT of work yet to do to integrate their operations.

So much for seamless service! Check out this ad in LHR Terminal 4.

Cheers

Stupid Airline Web Tricks

Since its the weekend it is time for my (occasional) round up of stupid airline tricks - this weeks focus is airline behavior on their websites.

My candidates this week are members of the SkyTeam family. So listen up Delta and Air France - this applies to you. Equal billing BTW for one of the awards goes to Amadeus.

This week's award for "making things unnecessarily complicated and making me annoyed" goes to Delta for the formal inclusion of the name in the sign in process. With due deference to DL - they may have been required to do this for some arcane reason but since no other major airline makes me do that - I am surprised. it is an unnecessary annoyance. So now every time I use Delta.com - I have to go through this annoying extra step.

Thank you the World's largest airline for making me do things that are really unnecessary and constantly reminding me of this fact every time I use your website.

The second award goes jointly to Amadeus and Air France's subsidiary CityJet. The award for "completely inane form of bilingual user experience because I am too lazy to ask the customer what is his preferred language and because I am telling him what to do" goes to these two Air France subsidiaries. (Amadeus still counts Air France as a parent with airline's 23.14% Shareholding in the GDS giant).

It is so pervasive throughout the booking ticketing and itinerary process that I am just flabbergasted at the extent of the nature of the problem.

By now AF as a global airline should be able to have its subsidiaries support a reasonably decent customer experience. But no ... here is one of the transgressions I have encountered - there are so many!

I am flying from one English Speaking Country to Another. So why show me the information in French at the top in bold vs English at the bottom in light type!!!
The translations themselves are appalling. Some of the worst Franglais I have seen.

The Award goes jointly to Amadeus and Air France/CityJet because the engine is an Amadeus one and it lets you know throughout the process that it is Amadeus powering the transaction. So they get equal billing on this one.

Enjoy the rest of the weekend. And Airline Webmasters (are you still called that) I shall be watching you...

Cheers

London Calling - Why BA is Hurting

Excellent piece from Anna.aero on BA and its markets.

http://www.anna.aero/2009/07/24/half-british-airways-capacity-on-transatlantic-routes/

I always thought there was a reason why the BA impact was so severe. Now we can see from those fine people at Anna.Aero the data to back up the gut feeling.

Having fought off the enlarged US-UK Open Skies onslaught last year BA- in the end had to look at its fortress home market and see that the carrier was more vulnerable to the GFC than just about any others.

That said - we can now see that certain other airlines are also impacted. KLM/AF are down 20.5% in GROSS revenue in Q1. That is astounding.

We are not at the bottom yet folks...

Cheers

DL+NW Align GDS Abuse Policies

Delta and NW/KLM are aligning their US based GDS policies on abusive practices. As the Transatlantic Alliance between Air France Group and Delta Group slowly comes to fruition we are seeing some aligning of their policies with regard to GDSs, Travel Agencies and ARC/BSP.

http://www.traveldailynews.com/pages/show_page/30194

What we have yet to see is the alignment for the next generation of activity with the imposition of selective GDS pullouts or penalties as we have seen in Germany with Lufthansa Group against Amadeus and France+Benelux for pure AF Group against Galileo.

Thus it is conceivable for an agent in Amsterdam to book a flight on KLM metal but the booking made on Northwest without incurring the GDS surcharge imposed by KLM there. With Travelport picking up the tab for the near term - we will likely see as in Germany no change in Agent booking behavior. However I do know that many agents are re-thinking their GDS strategies as a result of this new behavior by the airlines.

It sure makes for an interesting marketplace.

Cheers

Is The Rhetoric Against Lufthansa's PFP Too Loud?

I have tremendous respect for Kevin Mitchell and his advocacy of the Business (Corporations) user community.

However I have to wonder why the heat is being turned up against LH? To read more please go here:

http://businesstravelcoalition.com/campaigns/pfp_background.pdf

So why do I disagree with Kevin here? Frankly there is a sense of responsibility that has blame all the way round. LH's frustration with trying to get a resolution out of the GDSs has spilled over into the services model for the agencies. It is of course a classic squeeze play. I have listened intently to both the arguments from the GDSs and from the Airlines who are the real protagonists in this battle. However the agencies (TMCs in the main) and indirectly the corporations are drinking from the well of the Airlines cash which is being diverted by the GDSs for their express intent to retain their customers by using the cash to preserve their market share.

As a member of one of the teams that introduced the incentive model while I was at Worldspan, I can honestly say that the original intent has been somewhat perverted along the way. But frankly it doesn't matter how we got here - the fact is that we are here and the airlines whose cash it is - believe that they should be in control rather than the GDS.

Whether you agree or not, the end game here is that the incentive fees are likely to end or be substantially reduced. It is just an unsustainable model in a transparent distribution world economy.

Where I think there is a real issue is that the transition from a supplier paid model to a user paid model (which is currently under way) requires that the nice and easy holistic one size fits all model either delivers its promise (or its PR!) or the agents have to accept that they cannot rely on the GDSs for full aggregated content. As many regular readers know this has been a constant theme of mine. This is the moment I absolutely think the rhetoric has been misplaced.

I believe that my position is supported by the fact that the Agencies - particularly TMCs - rely ever increasingly on 3rd party automation to fix the inadequacies of the GDSs. Either in content provision (eg access to LCCs) Fare tools, Quality control tools or customer service management tools. The Corporations are happy to demand that level of quality service and even happier to pay for it - or so it would seem.

As the GDSs retreat from the full service model, they are attempting to simply preserve the status quo via a commercially unsustainable incentive program that robs Peter to pay Paul. Perhaps one should ask if that is fair?

Thus in reality if BTC is going to hold a mock trial then there should be a set of co-defendants in the dock. The Agencies and the GDSs are at least accessories to the crime if there is indeed one.

For now, if you follow the logic, LH should not stand alone in the dock - there should be another defendant added to the accused - Air France/KLM. But even then that is not all. You can easily add Gol, Norwegian and EasyJet.

While I think there was once a never never land where the GDSs provided all the tools and services that the agencies (Corporate and Leisure) needed, sadly that time has long passed. There is not going back. So like it or lump it the new world order makes the current model anachronistic at best. Unsustainable - that is for sure. LH is just doing what they think they can.

I just hope that the Airlines and the Corporations can get to an accommodation on this issue - that requires a good dialogue - for that Kevin is correct. But in case anyone is thinking that this will all get resolved with everyone making nice, I fear that they are going to be sadly mistaken. The underlying financial numbers in my humble opinion do not lie. There just isnt a way to make the numbers work for everyone. Whether it is in 2009, 2010 or 2011, the current model WILL undoubtedly change. On that you can depend - and that is no hot air. I simply do not believe the defendants have a case to answer.

Cheers

AF/KL Charges To Be Eaten By Travelport

Travelport has elected to eat the surcharges that will be imposed by AF/KL in France and NL starting this summer.

While both parties admit they are far apart - Travelport is trying to take the pressure out of the system by covering the overage at least for the short term. Just like Amadeus initially did for LH bookings in Germany.

The full impact has not yet hit Germany yet. LH is collecting its fee (4.90 Euros) for LX and LH via an ADM process. Those ADMs should be hitting people's desks in a few days. Then you will see some shift in the market.

We can be pretty sure that there are other carriers considering doing exactly the same thing. So in essence there are at least 4 airlines in Europe charging some form of GDS surcharge fee for content sold via the GDS. (The other 2 players currently doing this are Norwegian Air Shuttle and EasyJet).

Having spent the last week in Berlin at ITB, this is a hot topic for all kinds of Intermediaries, GDSs and Airlines.

With Travelport showing canned demos of its G2 developed product for Multi-Access GDS and LUTE Technologies CommandPRO already in production with several hundred agencies, there are going to be some interesting times ahead.

Cheers

The Breakup of the Holistic Airline Model

For many years people have balked at the prospect of fragmentation - that fear has kept the "Air Transportation System" - well - as a integral holistic service, at least in some people's minds. Much of this stemmed from the good old days when domestic US airlines didn't fight with each other and took each others' tickets in a very gentlemanly fashion. For International travel the only players on effective international routes all swapped tickets because - well International bilateral agreements superseded all other rules.

Fast forward about 30 years and the impact of de-regulation across the spectrum, the growth of ad hoc and even permenant alliances and the pervasiveness of web based technologies and those nice old holistic legislated or commercially constrained systems look decidedly long in the tooth. There really is no such thing as airline neutrality and a holistic system where we live in Utopian cooperation. It is everyone for himself.

Despite this reality some components of these "systems" are still living in the world of yesterday. On the other hand some progressive airlines have decided to blow right through those arcane models and form strong commercial bonds that go outside that nice old holistic model. For example LH buying into JetBlue and then integrating some of their operations. The Volaris/Southwest/WestJet relationship. The new United/Aer Lingus partnership and the announcement today of WestJet and AF/KL tie up. I can cite many more instances but you get my drift here.

It is interesting that on the very day that Westjet/AF+KL announcement is made that you have a senior GDS official getting up and saying that (and I am synthesizng out of context aggressively here to make my point) "...fragmentation ......fundamentally different from our (GDS's) philosophy on content..."

My point is that there is an inevitability now that fragmentation (as The Professor has oft opined) is not a new fleeting thing - it is here to stay and anyone who gets in the way of the unbundled and the fragmentation processes will in my humble opinion become road kill.

I liken this to the break up of Ma Bell (aka the old AT&T). People bemoan the loss of guaranteed dial tone. However they love the development of technology and the lowering of price and the plethora of options. Well so too the airline system model and the IT systems that constrained it that way. Before calm was restored in the telephony market there was a lot of disruption. I think there will be that occurring for a while in distribution.

You have been warned... that noise you hear is not just the wind...

Alitalia Starts Cutbacks

The “new” Alitalia has already started its rationalization. Gone is service to 30 cities including 6 European Capitals. Most will be replaced with partner service via AF/KL under code share.

Ouch

Cheers

Alitalia Opera hits a high note

So bar the shouting it looks like Air France Group will be the right dancing partner for the Italian damsel in distress.
The final price is quite a bit higher than originally thought. The original offer price for the 25% shares was Euro 250 million. The final price is likely to be 300 million Euros and could even could top 325 million if the full incentive kicks in. Of course if history is anything to go by that wont necessarily happen…

Cheers

BA Once Again Leads Declines at EU's Big 3.

Latest Traffic Results for November 2008

Airline Group / RPKs
Air France–KLM / -0.8%
British Airways / -5.9%
Lufthansa / -1.2%

Now they are all down.

UGH!

Cheers

Air Anschluss approved – LH looks North and East

As Austrian’s sale is approved – the German march for European hegemony appears to be unabated with LH eyeing both SAS and LOT next.

Austrian Airlines seems to be all done bar the shouting: "We are pleased that it has proven possible to reach an agreement between ÖIAG and our alliance partner of many years, Lufthansa. The strategic concept removes our structural weaknesses, such as a lack of international sales strength and disadvantages in purchasing. Together with our own measures, this will enable the almost total retention of our network strength. As a result, the benefits for our customers can be retained. None of this would have been possible - even with a great deal of additional capital - had we tried to go it alone," Alfred Ötsch, CEO said on 4th of Jan.

Looking northward, Lufthansa International Director, Karsten Bentz, stated that “after the German and Italian markets, Scandinavia is the most important for Lufthansa”. Lufthansa has reportedly been in talks with SAS, rekindling speculation about a planned acquisition. Confirming this Bentz is also quoted as saying: "We want to take an active part in the consolidation that is taking place in the European airline industry, and that subject is often the focus of Lufthansa management meetings." Meanwhile to the east, Poland’s Treasury Minister, Aleksander Grad, reportedly stated the government may increase the capital of LOT Polish Airlines if no investor other than Lufthansa bids for it.


So LH's has laid out its stall - what about BA and AF/KL?

Cheers

More European Musical Chairs or Not

AF/KLM Group has agreed to acquire the remaining shares in Martinair that it doesn’t hold. They are assuming that the tough times will allow it to proceed to consolidate its ownership. I am not so sure that the competition authorities will be quite so happy. But they have EC approval so I guess its ok. Really I do think the EU commission does tend to work on a double standard with some of these decisions. Hmmm

The Latvian Government has reversed itself and decided not to proceed with acquiring the balance of Air Baltic its JV with struggling SAS. The latter is back in talks with LH. (Are you keeping up???)

LH is making a play for AZ offering to retain both hubs at MXP and FCO – presumably offering to ax its planned LH Italia sub who will operate out of the northern Italian hub.

Etc etc

Cheers

Shoe's on the other foot - Transatlantic Airline Capacity

Humour me here for a little bit. One lesson we learned from the past summer's dramatic surge in oil prices and its corresponding impact on petrol and Jet-A was the impact did not reach the European carriers as badly as it affected the US airlines.

The major European carriers saw the impact of oil to some extent mitigated by the rise in the value of the pound and the Euro against the dollar. Further their ability to charge surcharges made the rises all the more palatable. Thus while there was not a huge increase in traffic - largely the European traffic held its own with Iberia, Air France/KLM, Lufthansa doing pretty well. BA had its own share of problems due to the disastrous opening of T5 at LHR.

Fast forward to next year's summer season and if things hold steady (BIG CAVEAT!) then we will see a reversal of fortunes.

The US airlines will have seen a dramatic fall in the price of JetA back to still high levels of $70-$80 per barrel based. But the dollar's now high value as a result of plummeting pounds and evaporating euros will encourage the US based traveller back into the market.

We are already seeing some new activity. Delta announced yesterday that the AF/KL/NW/DL Transatlantic Alliance will open up 2 new routes to Paris, one from Pittsburgh (currently a ghost town masquerading as an airport) and the other from AA's minor hub at Raleigh Durham's RDU. Paris seems to be popular since US Airways had previously announced new summer service from Charlotte - reinstating a cut service from several years ago. All 3 services will be offered with 2 class 757s.

Stay tuned - this could be interesting.

Cheers

Realignment is a Euphemism for ??? AF Yanks LHR-LAX

Ah those heady days in March when oil was leaping and bounding and Heathrow was opening up.

Fast forward... global slump, oil in free fall and AF is yanking the much ballyhooed LHR-LAX flight.

"We need the plane elsewhere".

Well the truth is it didn't work. Loads and yields were not up to snuff.

So plan B...

The 777 will be deployed to LHR-JFK giving the DL-AF-KL-NW alliance 3 Nonstops between NYC and LHR.

If this is the decision for the big twin - can the SEA-LHR route be far behind?

What is clear that there is now excess capacity on the Transatlantic routes. Even the cutting back at LGW is not taking up the necessary slack. There will need to be more reductions.

Hmmm so much for Open Skies?

Will this bolster the case for BAAABI?

Time will tell

Cheers

Eurosharks - The Germano-Austro-Russo-Siberian Connection

So thanks to the other Professor Alex for this one. There are two and I will need to figure out a way to differentiate them. They are for the record both German!

So it seems that what is going on in Austria is far from a simple battle within our industry. it almost reads like an international spy novel. Take the explosive mix of the mega EuroShark Carriers (LH, AF-KL and BA) and the minnow S7 all in a fight for the carcass of Austrian Airlines. We know what is going on with the big chaps but if we scratch the surface we see that the "minnow" is not so small. It may actually be a great white in disguise. Read on...

Let's just ignore the hilarious attempt at participation by THY Turkish "oops not on time" Airlines who found out they did not have time to mount a serious effort to buy the Austrian carrier. Next time chaps call those nice people at T2Impact - they are very good at this sort of thing!

But S7 does appear to be serious. They have been running ads in the local Vienna papers extolling the benefits of the S7 deal and alluding to the fact that they have lots of energy cash to slosh around. Actually I have been impressed with the chaps at S7, they are not your average CIS carrier. Couple that with the fact that on their payroll they have a very interesting lobbyist.

So you thought the Germano-Austrian part was for LH. Not so my dear friends. This is in reference to the (said) powerful lobbyist one Mr Gerhard Schroeder. He is the chap who is engaged to fight for the inclusion in the party of S7 in the deal with the Austrian Government for their shares in Austrian Airlines. Still with me?

Hmmm but what about the Russo part? Well guess who Mr Schroeder's real employer is? It turns out to be Gazprom OAO, THE Russian Energy Company. Gazprom has a strong investment in S7. Of course most people were somewhat surprised when Schroeder left office and then announced he was going to work for Gazprom. He definitely caused a lot of consternation when he left the leadership of one of the west's largest democracies and headed to work for one of Mr Putin's friends.

I present for your further reading pleasure an article on the switch from none other than the Washington Post.

http://www.washingtonpost.com/wp-dyn/content/article/2005/12/12/AR2005121201060.html

So this sounds like a bit of a soap opera. The Austrians must on the one hand be very happy that they are going to off load their national airline to another poor sucker and that a bidding war has broken out but on the other they had better be careful what they wish for... it might just happen.

Cheers

Timothy

Eurosharks - One Big Gulp United SwissAir and Sabena

Pure plagiarism although I do want a little credit for thinking this before someone else published it.

Lufthansa said Brussels Airlines agreed to be acquired by the Frankfurt based conglomerate.

Strangely enough this reunites SN (the former Sabena) and LX (the former CrossAir and Swissair).

Irony abounds here.

So looks like the German team is ahead in the game and we are still just into the first half. So far they are ahead in several races and have already acquired a chunk of JetBlue.

The French/Dutch and the British need to catch up if this game is going to be interesting.

I may just have to change my name to Professor Lufthansa... nope it just doesn't have the same ring to it.

Eurosharks - and when the smoke cleared there were 4

For Austrian Airlines - not surprising to some - but perhaps a shock to others - the game of musical ownership shares/chairs now looks like this:

There are 4 declared short listed bidders for Austrian Airlines' publicly held shares. They are (drum roll please):
BA, AF/KL and LH plus a dark horse bid from S7.

This sets up the battle for the big boys to buy something. So the battle lines are drawn and everyone is going to battle for each and every one of the little/poorly guys. And dont count out the rich chaps. Austrian has no value to someone like Ryanair or Easyjet but dont expect them to sit on the sidelines when Sabena (excuse me I mean Brussels Airlines) comes on the block more formally.

Interestingly I was doing some filing over the weekend and came across an old copy of Air Transport World April 2008 entitled "SAS Alone" which was the cover story. Judging by the recent frenzy the task to reform SAS just got a WHOLE LOT harder.

All airlines are now keeping their heads down. I hear that many airlines are canceling participation in conferences. Now why do you think that? it can't just be that they dont want people to travel does it?

Do we hear any fat ladies warming up? I think I hear quite a few. Certainly the dogs around me are howling in anticipation of the final chorus

The Sharks are Circling - European Consolidation

The survival of the fittest - law of the jungle - the metaphors could just keep right on coming. So now we have a fairly interesting game shaping up in the master consolidation of European carriers that seems to be going on.

The story so far has the bigger players, lets call them the sharks, being identified for us by Mr O'Leary. They are:

AF/KLM group
Lufthansa
British Airways

The fresh prey consists of the following:

BMI
Austrian
Alitalia
Iberia
Brussels Airlines

Just for fun there are several other players who want to play in the field. S7 (the former Sibir or Siberian Airlines), Aeroflot (who is denying everything), Turkish THY, and Virgin Atlantic for god measure.

At this point nothing can be taken for granted and now all bets are on. So clearly the stakes are going to rise. What do we know for sure? Nothing!!!

However if you are a gambler - here are some easy bets.

BA gets IB. Actually that is the only easy bet.

Here are the other bets:

LH should get Austrian but is being greedy and going after SN as well. They do have a call on BD.

AF/KL is the likely leader in the AZ battle but that one is far from over. Surprisingly they are keeping quiet about SN.

LH and BA are both making noises about AZ just to piss off AF.
SU is keeping its powder dry but Putin's long term goals have resulted in a semi serious bid for AZ before. SU will have enough trouble keeping the rest of the Russian domestic carriers afloat though. S7, TK,AF/KL are all making a run at OS - just to tweak LH's nose. VS wants BD, which is also coveted by BA.

The correct natural order of things should be LH gets OS. AF/KL are welcome to AZ, BD should stay independent, and the interlopers should probably stay out of it.

And just for good measure - there are other players who need a partnership of some sort. SK is in trouble for example.

So where is the European Commission in all of this? Remember that they approved AF/KL but disallowed EI to be acquired by Ryanair. And also remember that the current EC commissioner for Transport is - an Italian. So don't expect much out of Brussels.

This is guaranteed to play for a while and will be messy. If you are a conspiracy theorist - then perhaps you can think that there is some backroom with lots of smoke that has a few players deciding on the future air map for Europe.

Hang on for the wild ride folks....

DOJ nabs guilt pleas from 5 more airlines nets $504 million

Nearly doubling the fines it had levied on bad airline behaviour in coluding on cargo rates earlier this decade, the US DOJ announced that 5 more airlines have now copped a plea.

In this latest round AF-KL Group comes out as the bad guys. Of the 5 airlines named and shamed (and fined) they paid the lion's share of the fines $350 Million for Air France, KLM and Martinair. The balance of the fines came from 2 other airlines - Cathay Pacific and SAS.

The airlines also agreed to cooperate with the DoJ which would indicate that there are more guilty parties waiting to be caught and fined. Whether one of them will end up in jail like the Qantas man remains to be seen. For sure there is likely to be some civil suits filed once the criminal cases are all done.

So the US Government was funding part of today's fight in Iraq courtesy of some foreign airlines. I am sure there is a moral in here somewhere.

Cheers

Timothy