Bye Bye Site 59 Hello LastMinute.com

So finally Sabre is getting wiser about its brand rationalization. With over 20 different brands across its market, Sabre is finally realizing that the cost and value of each brand is not such a simple thing.

When the internet was young (remember when!) we all thought that the Real Estate of the web was infinite and open to all. Anyone with an idea could get online. IBM was as important as Aunt Edna’s website. IE the whole universe was open to small companies and large. Sadly no more. Perhaps one of the ultimate prices to be paid for the stellar performance at Google is that the days of Homesteading are over. Now we need to pay the toll. The gatekeeper of the first decade of the millennium is without a doubt Google. And the price is pretty hefty!

But we should examine Sabre’s other brand confusions. How long can Abacus and Zuji remain as separate entities? And if we think about it in addition to Sabre, there are many others who issues – lets pass a brief and critical eye over the TravelPort family of brands. The list spans pages

So commercial realism and standard marketing strategies will be the form of the future. The trends start now. I shall for one be a little sad that the little brands will have such a hard time to make headway against the goliaths and their big marketing spends.

Cheers

Timothy

Sabre no more? - Vote Day March 23rd

The formal motion has been mailed to stockholders of record on Feb 20th 2007.


01 . PROPOSAL TO ADOPT THE AGREEMENT AND PLAN OF MERGER, DATED AS OF DECEMBER 12, 2006, AMONG SABRE HOLDINGS CORPORATION, SOVEREIGN HOLDINGS, INC. AND SOVEREIGN MERGER SUB, INC. AND APPROVE THE MERGER.
Directors Recommend: FOR

So this is it... the last independent GDS falls to a VC.

The migration will be complete once Worldspan gives up the ghost and becomes part of TravelPort.

Jacques Barrot - Wily politicial EU Commissioner for Transport

I would like to applaud Commissioner Barrot (http://en.wikipedia.org/wiki/Jacques_Barrot) for his efforts in getting at least some semblance of a deal together between Europe and the USA. This has indeed been a tough point as there are so many political aims that conflict.

Conside the huge mountains that have to be crossed to get 27 countries on the EU side to give up bilaterlism as well as the USA to overcome the conflicted Executive and Legilative arms of Government. So while the deal itself seems small it represents a structural shift that is without doubt one of the biggest changes made in Air Transportation regulation since the setting up of ICAO and IATA. And it comes not a moment too soon.

The deal is not out of the woods and I expect this will take at least a year to enact fully probably longer in the case of the US and UK. It may not come soon enough for Virgin America whose future is languishing while deliveries of its A320s rack up - straight to the parking garage. The Transatlantic is one of the most heavily travelled set of air routes in the world. Long term government protectionism is a concept whose time has come - and gone. As the airways and airports become an increasingly scarce commodity opening up to the free market the ownership and control of the Air Space users is the right thing to do.

Jacques Barrot has been written off several times in his career. However he is one of the most skilled politicians I have observed in many years. His negotiating skills are unparalled and he deserves a lot of personal credit for this success. I can only hope that he is able to continue in his job long enough for to see this become a lasting legacy to his position at the EU and for the benefits to trickle down to the market.

For further discussion and opinion please contact T2impact directly. timothyo@t2impact.com

Tonight they turn out the lights HP-US

So names change and things pass but tonight will see the end of an era when America West goes away for good. At the same time the last vestiges of the "old" US Airways will also disappear as the reservations cut over from Sabre to EDS-SHARES is completed. The last bank of flights on the midnight runs from Las Vegas will be handled essentially manually but from tomorrow Sabre Airline Soluutions has one less customer for its core airline hosting services.

Bravo to WestJet.... New Website for Vision impaired

In the late 1980s when I first started to work at TWA-PARS I worked at a desk inside the Res Center in Kansas City. Space was a problem as I was part of a new group focused on Technology and new systems. Over in one corner of the res center was a small group of people who were working on something I had never heard of before. The small group of people didnt last long but they were just as good as any other res user. Except for one thing - they were all blind. Using a system called a Versa Braille and a cobbled together system using a Lanyon board they were able to take reservations. Whether this ever made it beyond a test stage I never found out. However i have always felt that the one thing we suffer in the Web age is our ability to handle it without sight.

Coincidently this week two events occurred which brought this back into focus for me. My mother (who is 96!!!) told me she can no longer see to read - the one thing she always loved to do. This is very thought provoking especially for people like you and me who spend so much time in front of these screens. The other event was WestJet (Canadian LCC) who launched their website for the site impaired.

More power to Westjet and my Mum has employed someone to read to her.

Cheers

Timothy

LCCs - UK CAA study. Evolution or Revolution

To be highly recommended for all students of the Distribution business.

http://www.caa.co.uk/docs/33/CAP770.pdf

I recommend reading this and then we can chat. FYI Look for the new T2Impact/Omnitourism LCC study which was conducted last week. Interesting results. Look for the study to be published in the coming weeks

Cheers

Timothy

Hello? anyone home at Worldspan?

While Rome is burning, Nero is fiddling.

Someone is asleep at the switch again in Atlanta. Why did they give up so easily?
Tsk Tsk, this is a waste of a good relationship. But do not fear - when all is said and Done Expedia will have all 3 GDSs where it wants them. Sabre/Worldspan (aka Travelport-Galileo) in the USA and Amadeus in Europe and Asia. The new millenium version of the giant switch will enable them to move connections between GDS vendors and suppliers direct at will. T2 has been advocating this approach for many years and finally it looks like some people are catching up. Welcome to the club Expedia!

Finally the boys in Bellevue will be doing something right...

SABRE NOW PROCESSES the majority of Expedia's bookings in the U.S.," according to Sabre Travel Network spokeswoman Kathryn Hayden. That's a milestone in Expedia.com's relationship with Worldspan, which for years had the sole franchise on Expedia.com's GDS bookings. In fact, with Sabre now processing bookings for Expedia.com and another Worldspan partner, Priceline.com, Sabre Travel Network's consumer online transactions grew 81.3% to 19.1 million in fourth-quarter 2006.

The strange case of the Flight Attendant and the English Patient

Those of you from the Shires who read the "Mail on Sunday " will undoubtably have been titlated by the story of Ralph Fienness and the Qantas Flight Attendant: http://www.mailonsunday.co.uk/pages/live/femail/article.html?in_article_id=436846&in_page_id=1879&in_a_source=

However there is something really rather funny about all this. Lisa Robertson (said QF FA) was not a full time FA employed by Qantas. She was in fact on casual assignment from the external Flight Attendant company "Morris Alexander Management". This is an interesting company founded by one Morris Alexander who himself (I presume its a he) was once a former FAAA (Flight Attendants Association of Australia) domestic division industrial officer.

I hasten to add that i am sure that Ms Robertson was a fully trained FA and up to par (clearly Mr Fiennes must have thought so at the time) in her capacity as a Coffee Tea or me person. And as a further disclaimer in case I get viscously attacked by another Flight Attendant - this is somewhat tongue in cheek.

Going back to the serious issue here, it seems her claim of being rather poor earning only £12,000/year is justified. Perhaps QF should pay their Flight Attendants (at least the contract ladies and men) a tad more. Then they wouldnt be quite so tempted to engage in flings with Hollywood leading men. So actually the big news is not the sexual antics at 35,000 Feet but rather the interesting way that QF handles its labor contracts. BTW have a quick look at this link off Google: http://www.airc.gov.au/documents/Transcripts/210203c20031094.htm
So I am not making it up!

No wonder QF was in such demand from Macquarie and TPG. Clearly there is a lot more to the buy out than meets the eye. I do hope the appropriate authorities investigate this (chuckle). Now when I fly QF next I am sure they will treat me nicely. I am not quite sure however if I will get the same treatment as Mr Fiennes.

Cheers

Timothy

OK - My 10 cents on the JetBlue fiasco

I am a very big fan of what JetBlue has accomplished so far. They had a great start and achieved a lot by breaking rules and focussing on doing what is necessary for the customer. But the meltdown at the company in recent history shows an astonishing lack of the one thing you assume but cannot touch at a company such as an airline - operational excellence.

Anyone who follow the pioneer (Southwest) knows that they (WN) learned very early on that you have to PLAN for every eventuallity. You can never spend too much time working on this. Plan plan and then plan it again. This is something that they dont seem to have done. With so much of their operation concentrated at JFK (itself one of the worst airports for scheduling in the country) you would have thought they would have planned for this event. Shoot - they even had a dry run (or as that a snow run!) at Christmas time.

However perhaps the worst sin of all was how it handled its customers. Every airline does a bad job here. But jetBlue has had a chance to do something better. It just didnt. If you follow the story like this one in the NY Times - you realize that they reverted back to the tried old solution to the problem of what to do with angry customers: IE "Call Security". Several people I know have contacted me and (I am not sure if it is that they just want to vent) the stories sound bad.

JetBlue Cancels More Flights in Storm’s Wake

Listen jetBlue - do something that no one else has done. BE STRAIGHT WITH YOUR CUSTOMERS.

And everyone else.... LEARN From this fiasco. Plan for the eventuality and PLEASE have a decent way to handle your customers. But dont dispair. Cheap prices will once again lure people back.

Cheers

Timothy

Youtourist an idea that perhaps should not come?

In an effort to joint he Social Networking "craze" those horn dogs at the UNWTO have joined forces to create YouTourist. http://www.youtourist.net/

Already they are going to create a barrier to entry through the use of digital signatures. This undermines the very nature of true social networks. Like the Internet they should be free and open. Just because you create doesn't make it right or even desirable.

I wish them well with this. But I doubt it will be successful.

Let's just let this one die quietly please

Cheers

Timothy

TC+MyTravel - 1st Choice = Big Change (albeit a little late)

The realization that the mainline businesses of Tour Operating is perhaps a dinosaur has finally dawned on the powers that big at the Big VTOs in Europe. And perhaps not a moment too soon. You only have to look at the numbers to realize that the trends of LCC and market segmentation (aka fragmentation) are the dominant forces. Tour Operating has been flat for YEARS. First Choice's numbers have been getting better and their stock has performed as a result better than their larger counterparts.

With the squeeze coming from all quarters and with Lufthansa now fully out of the Thomas Cook business retailer Karstadt Quelle (not exactly a stellar performer in its own right) thinks it can remake the combined entity into the major power house it thinks it should be. Sounds good on paper. Big equals better. Well I am not convinced. Big has resulted in big alright... big losses at all the major players. Yes its about supply chain, but yes its about the consumer. Can KQ lead this new entity into a new era of revenue AND profit growth? Or is this the last dying wish of a dinosaur before it heads to oblivion?

One thing for sure.. the Sun Sand Sea Sex and Beer market is forever changed. I almost feel nostalgic for that simpler time............

Amadeus - their finger on the pulse again

The new Amadeus future traveller study

Study doesn't address the reality - in my humble opinion. Why not?
Today we have essentially 3 classes of traveller: Leisure, Business, VFR. In Europe and Asia the emergence of the cost conscious traveller has fuelled the spectacular growth. The power of the unmanaged traveller too has dramatically changed the travel market. We believe that this is driven more by the opportunity than the consumer push. Either way there is no denying the success of the LCC model. Segmentation of the markets will continue and therefore to pick just 4 "tribes" seems to buck the underlying trend of the market fragmentation we have seen in all consumer categories, not just air tickets. Sorry - I don't buy the conclusion.

But dont take my word for it... here is where to get the whole report:

http://www.amadeus.com/amadeus/travellertribes.html

And now the other shoe drops as BA charges for bags at LHR

Having successfully outsourced the bags at LHR - now BA is going to make money from it. Presumeably the passengers are now funding BA's years of inadequate pension funding through a hidden bag "tax".

Way to go Willie. You tell those Non-Irish Navvies.

Gerry! Gerry! Gerry!

Returning to his hideaway far from the madding crowds of the east coast – Gerald Grinstein, Delta Chairman and CEO was met with a loyal group of fans when he touched down on Friday night.

Best of luck to Gerry and the Delta staffers:

Does Oz need another airline... you bet!

The cozy duopoly that has permeated Australian aviation for decades may be coming to an end. If the Ryan Family+SQ JV Tiger Airways has its way it will deploy at least 3 possibly 5 A320s into the market. Returning the Airbus single aisle to at least a footprint there.

So will this shake up that cosy duopoly? Probably not. But it could easily be enough to get QF and little Blue to rethink some of their upwardly mobile pricing strategies.

Australia as a market should have more competitive pricing. Its price per mile ranks above average compared to other markets. Qantas makes great profits and potential for more is what drew TPG and Macquarie to make their successful bid.

Good luck Tony Davis. But you will need more than 5 planes to do this.

Has Diller lost his touch?

Did Barry Diller and his team miss out on one of the best opportunities to address their issues in a BIG way?

Either someone is asleep at the switch or my judgement is failing me (both are possible!)

So why do I think that Diller should have made the run at Sabre?

Lets agree on the fact that it would make the absolute powerhouse worldwide. Creating a gameover effect across the board. It would probably pass regulatory inspection in the US but would have a hard time in EU. The cost of the 10% buyback is about $6.5 billion+ Sabre will go for less than $5 Billion. The resulting company would not create too big a problem for the technology and reduce the COGS in several areas. It would improve the faltering supply chain relationships and perhaps even make a kinder gentler face. In the newly married Michelle Peluso http://svc.travelocity.com/about/press/0,,TRAVELOCITY%7CBIO_CEO,00.html
it would have a first rate marketing exec. Even Sam could become useful. So a stronger footprint in OTA and a strong supply chain in Sabre plus good footprints in the Hotel and Air channels. This makes a lot of sence. But then nothing is ever this easy.

I suspect it is just bad timing. If this opportunity had presented itself 2 years ago - I am sure that EXP would have jumped at the chance. But now Diller, Dara and Co are running scared. Sure stockholders will get a boost but frankly - the bigger bet would have been to grab significant revenue growth and power across the globe. Can Expedia do it cheaper on their own? Probably but i still think it would have been a better use of the cash pile than resorting to a stock buy back.

Two Thumbs down

Cheers

Timothy

Could Google be the Airlines' newest best friend?

Google quietly slips in checkout for free in 2007.

· We just found out that Google Checkout is free through 2007 compared to the original campaign of through 2006, https://checkout.google.com/seller/freetransactions.html. This is a big deal in our opinion. Google is spending aggressively on gaining traction with its Checkout product and we think the offering has the possibility of disrupting eBay's off-platform PayPal business as well as the general ecommerce market. Google is now effectively paying all credit card fees for partners for a full year. We think Checkout is becoming Google's Internet Explorer, if you will, and we think it is time to start paying close attention. · A knee-jerk reaction would be to trade Google lower because this IE-like initiative will cost them in processing fees and in terms of consumer incentives, $10 off $30, etc. All else being equal, we would be aggressive buyers of Google into any ST weakness around what is going on at Checkout. We think, if it works, it is potentially very disruptive to competition and materially beneficial to Google's core Adwords business.

What does this mean for airlines?

This is ABSOLUTLEY something that we should all pay attention to. For airlines this would represent the biggest cost reduction in their current hit list of controllable distribution cost targets. This is a BIG DEAL. I can only imagine that at least ONE airline will sign up for this early and get the benefit of the deal extended beyond 2007 and beyond. The airline have to do something to show they are attacking their costs. Doing this deal could cut 2-3 % off the cost of processing. IF the airlines are smart. Are they?

Only time will tell

BA outsources baggage handling at LHR

Well there are good times and there are bad times for doing this. However in your own home market just to make a point with the unions - some times this is just plain INSANE.

So here is the rule. If you check in 2 hours earlier than your flight time - then you cannot check your bag.

This is one of those REALLY stupid rules that can be misinterpreted. Fortunately being a Gold Card holder on BA - i was able to "persuade" the nice check in lady to allow my bag to go through. Needless to say I was not terribly impressed.

On the positive side at least this trip to DMO did not actually have contamination.

Expedia's buyback

Good or bad?

Well its good for the stock and good for the stock sellers. HOWEVER Expedia has been delivering a steady stream of mediocre news for over 2 years now. So is everything OK in the Kingdom of Barry?

Dara and Co clearly have a lot to answer for after presiding over a lacklustre 2 years. The business has made a number of missteps. Specifically in the USA it has failed to keep up with the changing nature of a supply constrained marketplace. In International, failure to to tap into the LCC marketplace has stymied its attempts at a dominant position in Europe. Finally the technology platform roll out has been - frankly - bungled.

This has allowed traditional players in Europe like TUI and Thomas Cook enough breathing space to regroup and represent a credible set of alternatives. The powering ahead of Priceline and (again) First Choice has shown that others can be more nimble and execute better than EXP. Finally no real growth initiatives in a business that demands it have been shown during this time.

Therefore in my humble opinion - Stock Buybacks are always a symptom of deep rooted trouble. Expedia is buying time and using some of the cash pile - unwisely in my opinion. It shows that they have run out of reasonable ways to use the cash for the benefit of the business itself. Once the buy back is completed - then what will Expedia do? It had better be good.

Go for it O'Leary! Let Ryanair buy Aer Lingus

I am not a huge fan of Michael O'Leary personally. I don’t know the chap and cannot pretend to understand the way a mild mannered accountant turned into the PR monster that he seems to have become. But the haughty voices should pipe down.

I do think the Irish Government and the Labor unions should just put up or shut up about letting Ryanair takeover the Irish national airline. It is high time the airlines and government interests were severed. But the government of the Republic of Ireland cannot have its cake and eat it too. Let the market decide. So if the unions and the government want a cozy deal then write the law accordingly and take the wrath of Brussels and the Iron Lady Neelie Kroes. Since that is not going to happen either Dermot Manion better find a white knight and soon or embrace the best chance Ireland has of having a seat at the big boys table.

I firmly believed that Ryanair would be the last airline to adopt the HVC - Hybrid Value Carrier model. The outstanding job of making an airline consistently profitable via the LCC model has been pursued with relentless passion by O'Leary and Co. But the opportunity in front of them with the potential acquisition of EI makes perfect sense. If this is truly going to be Michael's swansong before he kicks himself upstairs then more power to him. I believe it will be great for the industry and great for the traveling public. Well OK so the customer service will suck but what do you expect for 99 cents.

Let's stop the whining and see real change and value come to the market.

Cheers

Timothy