Don;t Be Blue At A Failed Relationship

Most breakups are lets face it less than amicable. People don't just wake up one morning and say "Rationalizing our relationship is not working let's just be friends"

I understand that breakups can now be handled by a wide variety of media. Text (there is even a lame website called TextBreakup), Tweets, and of course the true sign you have been ditched is when your paramour changes her/his status on facebook back to SINGLE AND LOOKING.

In business some of the best laid plans of a business relationship can just fall afoul of the realities of the business environment.


Germany's biggest airline, Deutsche Lufthansa AG, in December 2007 paid $300 million for a 19 percent stake in JetBlue Airways Corp. There were big plans for feeding via JFK and the other points where the 2 airlines intersect. For the smaller airline it was a precursor to a number of deals that have seen them also tie up with some time rival American Airlines who also is in a rival Alliance. 

But to be frank there has been little execution of the grand vision and Lufthansa seems to be pulling in its horns across the board. The German airline's plans for world domination included at the time expansion into the German speaking market and a bold run at different markets like USA (JetBlue), UK (British Midland) and the oft rumoured but never consummated take over of SAS.  With a few bad quarters under their belts - and a general softening of traffic in the markets where its most heavily vested - LH seems to be pulling back. Its put the for sale sign out at Castle Donnington (the English Chateau that doubles as the HQ for BD), now the The Wall Street Journal  is reporting that LH is looking to exit out of its relationship with JetBlue. 

JetBlue and Alaska are the largest unaligned airlines (Southwest should be excluded from this list). Both of them have resisted combining with other larger airlines. AS has a slew of partnerships and has a strong feed as a result while shoring up a fortress on the North South Routes. Effectively AS has conquered the West Coast markets and solved that perennial problem of Mexico vs Hawaii by straddling both effectively.  JutBlue has built a series of very nice hubs in Boston and JFK as well as a number of smaller ones across the country. 

Perhaps what we are seeing is the precursor to a merger between these two feisty and mostly profitable strong regional airlines.

Now there's a thought.

Cheers
 

OTAs Could Suffer Further. With Ancillaries Airlines Start Rethink of OTA Partnerships

The key assumption that most consumers have is that the OTA of choice has full content. But we are beginning to see that this is not the case.

The much publicized battle between Orbitz and American Airlines and then Expedia and American Airlines has seen more examples join them.

We have Delta pulling out of several OTAs.

In the USA and other international markets the reach of the OTA is actually not as broad as most people think.

Let's take into consideration Southwest that doesn't participate in any OTAs. Then we have RyanAir who doesn't participate in anything.

So the actual reach of say Expedia and Orbitz in terms of product for Air is now less than 70% of available flights.

Subtly too not every airline participates fully in either the GDS nor the OTA. As we can see there have been a number of situations where the GDS provided content is not the complete content available to the GDS. Hidden Classes and restricted content further erodes the element of choice for a consumer in an OTA;s product line.

Most of this has been blind to the user with these product issues somewhat hidden both by the brand might of say an Expedia. But now there is a further impact as we see other vendors applying their muscle and rolling back participation in the OTA. The latest to do this is Enterprise Rentacar and their brands such as Alamo and National. Note that Enterprise is the world's largest car rental company.

In the past there have been some very public battles that were short lived. EG British Airways was not in Expedia when the OTA launched. That was eventually rectified. Holiday Inns was out of Expedia for quite some time - till it too joined in the fun.

It is interesting to note that both Orbitz for Business and Egencia can still access American Airlines product. The same is also true of OWW's CheapTickets brand.

However now the fall out of the lack of full participation is sending those who have signed white label contracts with the big OTAs scurrying to their lawyers to examine the contracts.

Case in point. Alaska Airlines who outsourced its Car, Hotel to a joint arrangement between iSeatz and Orbitz. As can be seen in this screen shot below. The image is a little small but click on it to see the full size and notice the Orbitz statement.

This comes from EasyBiz - Alaska Airlines business product.



Alaska must be wondering what it can do next. And many other white label customers who thought that outsourcing their product content to companies such as OWW (Orbitz) and Expedia was the easy answer.

Interestingly this started as a battle of convenience. The tech companies would give you a software solution and full service provision came from a partner such as a travel agent. OR you chose an OTA who did all the heavy lifting plus had better commissions (in theory) and it was a linked connection. With Ancillary Revenues now a high priority for the airlines, and indeed other vendors this is a hot topic.

Over time those commissions have lowered. Now with product coverage falling - this is a new order. Hmmm time to rethink that strategy.

Cheers

RIP Horizon Air 2011

Alaska Airlines is going to shutter branded flying for its Horizon Air wholly owned subsidiary in 2011.

This is according to Air Transport World.

I guess we will still fly Horizon Air planes (once they dump the Canadair CRJ-700s it will be an all DHC8-Q400 fleet) but the rationale for keeping the brand going as a separate entity must be waning.

Interestingly the 2 letter code is QX which is also the tax code for PFC... some accounting people will be happy

Cheers

I Come (This Time) To Praise Southwest

In the past I have berated WN for not allowing direct interaction between WN and its customers via email - even though they have email addresses and could easily allow this.

However I do see that in fact they have a number of tools which would alleviate much of the need for a number of these interactions. So while I still feel they should allow it - indeed I am going to carry on my campaign to get them to allow it - The Professor would like to compliment Southwest on being aggressive in deploying a better than average customer alert system.

In a recent piece for CIO entitled Southwest Upgrades Customer Service I learned they WN even has someone who has been dubbed the CAO for Chief Apology Officer. WHAT a cool job! This is a good article to read and there are some great lessons for all airlines.

I recommend it! Further it is good to see airlines taking the moral high ground here even if it is only WN doing it. I contrast this with Easyjet and Ryanair who have deployed similar technology but have the gall to CHARGE for it!!!

Going back to my crusade, I would strongly suggest to WN that they go ahead and allow a non-verbal direct interaction tool. Examples are chat or an automated tool such as NextIT's smart agent which has been deployed as the mystical Jen on Alaska's website. I asked her for a date (since we live near each other) and she was not amused - but that's another matter.

Cheers

Alaska Tries Deal-A-Day

So as the airlines have to get creative about their marketing, Alaska is dialing for dollars using a Deal a Day concept for 14 days.

At 12.01AM (PDT) they put a new destination up for sale at 30% off.

Whether this is a good deal depends on your perspective. Yesterday, the first day, was PHX - today is EWR.

Randy Petersen describes the current Elite Membership deals out there as the best he has ever seen in 23 years. So I guess the converse is also true - this is the worst its been for the airlines in 23 years.

That is a long time...

Cheers

Will The Airlines REALLY Use Social Media For Consumer Interaction?

Everyone is all a-Twitter these days. Wonderful and wild stories are circulating of Airlines being eagle eyed and capturing and more importantly responding to messages that are dealing with real time issues via Twitter, FB or blogs. Alaska, jetBlue and Southwest are frequently named for doing just that.

OK everyone ...
Stand back.
Get your noses out of the Koolaid trough.
Take a deep breath.

Is there anyone out there who honestly thinks airlines are going to have armies of people who are sitting around waiting to read every Tweet on some little problem? is it just me or is this a completely MAD notion?

This is NOT the right use of Twitter, nor is it an expectation that anyone in their right mind should even think is realistic.

The airlines have never - repeat never - engaged in two way communication with their consumers except at the coal face - boarding gate and onboard.

Don't get me wrong - there are some good uses of Twitter, Facebook and Blogs for the airlines to communicate with their customer base. But let's be realistic, this is not 1:1 it is 1:N where N is many - as in thousands or millions.

Forums and message boards have been managed by airlines and other suppliers for many years - this is not new. Social Media is just a spiffed up version of these tool sets. Just read the blogs put out by the suppliers. Some are refreshingly honest and even helpful. But most are still put out by - well PR Hacks. Even Southwest's efforts in Social Media is managed by their PR department.

I am slamming their efforts - far from it - I think this is a very positive trend. But let's not kid ourselves that this is not an open and frank dialogue and customer interaction tool.

If you believe that this is the case and you disagree with me - then clearly you believe in the tooth fairy and I have some choice ocean front real estate in Nevada you might be interested in.

Cheers

Alaska's Apology - A Little Hollow?

I really like Alaska Airlines. Their service is much better than the other guys. So when they fall over - it seems that normally you can forgive them an indiscretion or two. However I do think that they really messed up over the Xmas period with the bad weather in Seattle. So should we all forgive them? Yes normally except they do somewhat say that they are better than regular humans. It is the "ALASKA" can do spirit. Absolutely - their people are good - but their management seems to have made some blunders lately.

So when you see the apology:

http://www.alaskaair.com/as/www2/flights/2008-holiday-storm.asp?CID=WHA_MP_010809_Storm_Announcement

Think that this weather is normal in Alaska so surely they should have been able to accommodate this in Seattle?

In my personal view Alaska should either change its name or live up to its own image of itself. It further should do something in the form of compensation for all the people who suffered because they made blunders and misjudged the situation.

Just my personal opinion. In future - Airlines should take more responsibility for their performance.

Cheers

Alaska Air's Schedule falls apart under pressure

Alaska Airlines recently made the decision to lay off 1000 workers.

Could that have been the reason that the schedule fell apart beginning on Saturday December 20th?

That morning a mechanical delayed then canceled their first flight to ORD. The next 48 hours have been a text book case of how not to handle things. While Southwest was able to operate a skeleton schedule - AS literally canceled most of their flights. 47 on saturday and the vast majority into and out of Seatac on Sunday.

With flights being diverted to Spokane and then being stranded there (at least 7 flights at last count - not to mention the flights that didnt go today). at 5PM today the arrivals board showed on one flight of AS operating normally. Yet all the other airlines managed to operate some kind of schedule to their points. So why not AS?

At present it looks like it will take over 5 more days to right the ship. Alaska's legendary superior customer service has totally failed. I watched an arriving passenger from a 10 hour international trip only to have to wait for MORE than 8 hours before she would reach the AS desk for assistance.

Clearly - the AS outsource model should be reviewed. Additionally why a reduced schedule should fall apart so easily indicates that there is something fundementally wrong that they need to fix.

Bill Ayer and his crew better be working late tonight to make this go away and fast.

Cheers

Top Travel Security Breaches in 2008

not a good thing to be known for but acording to Baseline Magazine the top 2 security breaches belong to

Alaska Airlines (#5)
Best Western (#6)

http://www.baselinemag.com/c/a/IT-Management/Top-10-Security-Breaches-in-2008/?kc=BLBLBEMNL12152008STR1

Ouch

Alaska Cozies up to Delta

Seattle's home town airline is getting closer to Delta. This may signify the end of their "friends with everyone" strategy that has held them so well. On the other hand maybe not.

On Monday they announce a big partnership. as far as I can tell from inside sources this is an upgrade to the existing independent alliances that Delta has had for the last 3 years and the much older Northwest relationship. It involves codeshares and frequent flyer tieups.

Where this leaves OneWorld remains to be seen. At present Alaska has FF tie ups with the following airlines:

*Air France
*American Airlines
British Airways
Cathay Pacific
Continental Airlines
*Delta Air Lines
Era Aviation
*Horizon Air
*KLM
Korean Air
*LAN
*Northwest Airlines
PenAir
Qantas

* means a premium link.

Cheers

Continental Two Step?

So UAL's United Airlines having jilted its fellow Star Alliance Partner US Airways is not promoting a deal with Continental as the wave of the future.

Having been the "rebuffer" already in merger talks in April, CO would be very unwise to hook up with the rather long in the tooth Chicago based carrier in an alliance partnership. Its fellow Texan, AMR corp is very keen to have Texas a solid OneWorld Alliance market.

For those of you who have not been following the Forsythe Epic Saga of Airlines - here is a recap of CO's position.

Rejected United on April 26th. Recovered its Golden Share back from Northwest (even if the Delwest marriage doesn't go through). Has danced with AMR for a partnership and entry into the OneWorld Alliance. Is constrained until 2010 from leaving its current alliance Skyteam unless Delwest does go through then it can leave 9 months after that formal Union takes place. CO is not a party to the 6 way Skyteam Anti-trust immunity (AF-KL-CS-AZ-NW-DL).

CO is therefore every-one's favorite gal to sleep with but she is playing hard to get. The only one, the two time visitor to Chapter 11 has not slept with at this point is the sole other US airline still standing who also has taken two visits to the Chapter 11 courthouse - US Airways. (Aloha doesn't count anymore as it is no longer offering passenger service).

So decisions decisions. Perhaps there is a possibility of a happy arrangement where there is regular fraternization with more than one player. A Texas Two-Step with AMR and a Pas De Deux with United? Perhaps even CO can take a leaf out of Alaska Airlines playbook where lots of players get to sleep with the Eskimo. Domestically that means CO-NW-AA-DL and HA. Internationally a further few with CX-QF-LN-KL-BA and AF are all partners.

Boy this is getting more complicated than SOAP.

The Game is ON - Continental Redeems Golden Share

OK - so while I hate this - it looks like the game is afoot.

CO has redeemed its Golden Share back from NWA. So now the consolidation game can commence in earnest. It is no longer about common sense. It is about the cojones of boys and their toys.

I am firmly convinced that the best result here for CO is to take on the bigger fish and become the residual management team of a combined UAL/CO. Tilton seems to have outlasted his welcome in Chicago. Besides the $35 million in cash must be burning a hole in his pocket.

For American- this leaves few options. They definitely don't want to have to rescue US Airways. She who is decidedly the ugliest sister in all of this. But American's ego knows no bounds.

One prize is the shy and distant cousin - Alaska Airlines. She now has a great presence in the West Coast with 3 major hubs (SEA, PDX and LAX). A low cost operation and a great commuter airline - Horizon.

As I have said many times I hate this. This is bad all round.

Cheers

Timothy

Gunfight in the West

The West Coast Market Heats Up.

It has been a bit sleepy on the West Coast of late. Sure we have seen a lot of service that went to hubs but not a lot that went North to South. But that is about to change.

Despite an interesting but short lived incursion from Skybus, there has been very little brand new service.

The new services started in 3rd quarter 2007 with a little heralded but very useful new service from Delta’s new partner ExpressJet. Flying Embraer 145s this is not going to set the world alight. Virgin America’s new service though between the major Southern California cities – particularly into San Francisco did spark a reaction. Southwest and Jetblue moved across the Bay and added service from SFO in addition to their OAK service. But this year the Northwest’s airline (Alaska Air based in Seattle) wanted to ensure that no one stepped into their market and offered a very strong schedule of hourly service from LA to Seattle. Beefing up also San Franscico and more flights from PDX sees AS becoming the largest individual airline between the Pacific Northwest and California.

Not to be outdone Virgin announced new service from LAX and SFO to SEA. Then JetBlue started to connect the dots similarly announcing service between LAX and SEA as well as from LGB.

So for one who lives in the Seattle metro area – thanks guys. I appreciate you picking on this market to have a battle. With new service to Germany (LH, FRA-SEA), UK (NW LHR-SEA) and already beefed up service from BA and last year’s addition of flights from CDG to SEA, the place is a hopping. We are looking forward to Air China coming this year.

Cheers

TImothy