KLM Retires Last F50 Ending 50 Years of Propeller Fokkers

After More than 50 years of faithful service the last propeller driven Dutch produced aircraft will leave the KLM fleet. Much has changed. KLM is now part of the French based group Air France Group, and Fokker no longer makes any plane.


Here is to those fine planes and to Anton Fokker's vision.

Cheers

Acknowledgment to Airliners.net and Aerofavourites.nl for these fine images.

Travelport Caves - AF/KL Deal through 2013

Air France Group and Travelport have come to a meeting of the minds on the GDS fee issue and so have negotiated a deal whereby AF/KL will get reduced fees in return for full content through 2013.

Given the speed with which these guys came to a conclusion - someone caved. I suspect it was Travelport. So without a shot being fired they came to a conclusion almost too quickly.

So a lot of GDS execs are probably breathing a huge sigh of relief. GDS users are probably also breathing a sigh of relief. But some people - me included - want to know what is the catch.

So does everyone think that there has been no change?

Think that at your peril

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

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

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

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

So its done - NW+DL = DelWest or Big DL

Welcome to the world’s largest and potentially most troubled airline New Delta

At a time when people should be considering how to reform their models – Delta and Northwest have decided that the world is better off with a large monolithic airline. Frankly this is good news for just about everybody else but Delta+Northwest Passengers and Staff.

For British – the new airline will adopt a moniker of Delboy.

The aim of the new airline is nothing short of worldwide domination with Air France/KLM group taking a stake and the Skyteam Alliance effectively becoming the AFKLDLNW alliance.

The rest of the US market will see rapidly rising air fares. Thanks a lot. So lets speculate a little at what is going to happen in the next year.

Dismantling of the CVG and MEM hubs. Restructuring of the regional business reducing ACMI flying. Bruising competition at certain key markets. The one benefit will be more International service.

Personally I think this will end badly for the stock holders. Sure the Hedge Funds will win in the near term. But the regular stock holders will be looking badly at this in 3 years time.

Could this be the end of Alaska Airlines Independence?

Cheers

T

AZ - the final drumbeat calling the faithful?

The final round of choices for the perennial life supported Italian Airline seems to be approaching. However the final choices seem to be somewhat mundane. Approved for the final round was AF/KL, LH, SU and Air One. TPG having been unable to persuade their first partner (Mattelin Patterson) or find another one, officially threw in the towel over a week ago. Besides they have several other shiny new projects to worry about.

Now it appears there is only LH and AF/KL in the running with SU a long shot. Call it part of the fallout from the liquidity/mortgage crisis but the numbers don’t look so hot now to the potential suitors.

Realistically AF/KL has to be the lead. Remember there is so much emotion and politics wrapped up in this one - logic and commercial common sense does not really work. At least AF/KL won’t close down the Alitalia brand (even though perhaps they should!).

We just can’t imagine Prodi's somewhat shaky coalition approving a Russian or a German ownership.

We can hear Michael O'Leary's cackle from here......... Cheers Timothy