For some time now there has been a brewing friction between the airline community – as represented by IATA and ICAO and the European Community over the EC’s ETS – Emissions Trading Scheme. When initially proposed the Airline community was not included in the scheme, however as a major consumer of hydrocarbons this was soon rectified and added to the mix. However the Airline Community did not like it or support it.
In September 2005 the issue spilled out into the open. “Air transport is a global industry and the environment is a global concern. Effective solutions must be global solutions. Member states of the International Civil Aviation Organization (ICAO), including all EU members, are committed to deciding a course of action on aviation emissions in 2007. A European solution is no solution at all. Unilateral regional efforts will only distract from this process," said Giovanni Bisignani, IATA Director General and CEO.
In September 2006, The EC came to plead its case in front of the US Regional meeting of the WEF – World Economic Forum. They were told in no uncertain terms that the proposal was flawed for the design not necessarily the concept. In February 2007 when officially announced, the ETS was given a very cool reception by the Airline Community. While being very careful not to attack the concept, IATA and ICAO have been very strong in their opposition to the scheme’s implementation. This Autumn 2007 as the scheme reaches its roll out, the official aviation organizations (ICAO and IATA) have ramped up their opposition to it.
Let’s consider the issues and try and make sense of it…
Without a doubt the airline industry contributes to global climate change through the extensive use of Hydrocarbons. However jet fuel is one of the cleanest burning of any oil distillate. Further the global use is quite small at only approximately 2% for all uses of Oil based hydrocarbons.
IATA and ICAO have 3 basic objections.
1. They want a global scheme not a country or regional specific one. The UN (of which ICAO is a member organization and so chartered), endorses this point of view. Aviation is a global industry. There is a concern that some countries not just the EC and its member states plus the ECAC covered additional states will unilaterally impose both green taxes or other schemes. The complications of a single unit of countries such as the European Community (EC) starting this scheme creates all manner of issues.
2. They want a fair treatment of aviation particularly airlines in proportion to the amount of climate change contribution from the industry vs other more heavy hydrocarbon and polluting market sectors
3. Full consideration of the issue rather than picking on a small number of user types. (More on this below).
As a note there is several other lurking issue. For example the Chicago Convention of 1946 which explicitly forbids the use of any form of taxation on airline fuel. It could be argued that ETS is such a form of taxation. Clearly IATA and ICAO are somewhat miffed into having to react to this rather than addressing the issue in their own way and on their own time. Caught napping, they are not happy at being told what to do.
For the EC there are significant advantages to making the play to include aviation – especially airlines. Why? Firstly it must be remembered that the EC is trying to become the supra-national organization that legislates and represents the member states. As such it is important for the EC to take a single position. The EC is ramping up more and more to have a single voice with regard to airline. For example it is clearly emboldened by the agreement in May of this year to get all member states a deal with the USA on the Transatlantic Open Skies agreement. In the event that the EC is able to proceed with the ETS and force the inclusion by the non-EC carriers they will have created the first major step. Without a doubt it will put Europe ahead of all other nations in addressing the issue of Climate Change in the sector.
As a unit, Aviation becomes very easy to regulate. With less than 100 players in Europe and points of contact and control easily administered, Aviation is one of the simplest sectors to tax and regulate.
But, and this is a big one, People do not just use airlines to get from A to B. they are but a part of the mix of transport. Popular sarcasm in many countries points to so-called Green Warriors who campaign for Climate Change limiting measures but drive SUVs and buy exotic foods that travel very far. Not to mention their use of distant locales for holidays. So too we must review the issue of the aviation eco-system. Consider the issue of the airport. These are large collectors of people and consumer massive amounts of energy in their own right. Further there are some more efficient than others. Consider the issue of ground congestion waiting for runways. London’s Heathrow airport is one of the most notorious in the world for congestion both on the ground and in the air. Yet the ground portion is not considered in the scheme.
How to resolve this?
There are many issues in front of the aviation community. As with any major issue – this is going to be a tough nut to solve. However if we stick to the broad principals, Airlines should be included as Climate Change contributors in any scheme at the supra national level. Exempting them from the scheme would be inappropriate. The EC will definitely not be backing down from the scheme which means a showdown in some court is likely. The key battle will likely emerge with the US airlines who may choose not to opt into the scheme. As such the US Administration (not that of Bush as it will only occur beginning next year), will be forced to support their citizen airlines. This will likely end up in some form of compromise. Most likely with a voluntary contribution from the US and other non-EC airlines.
It should remembered that we are not speaking of a full taxation system here but rather only an emissions trading scheme. Implementing such a system will be no trivial task. And the passenger or freight owner? Yes they will be impacted. Lets all hope that this is handled in a reasonable way and we can get on with the business of moving people with their own free choice. Do I believe in ETS? Yes. Fundementally it is important for aviation to accept its position and responsibilities. The true cost of the product must not be the past elements that created them but also the allocation of future impact. This has to be the manner of handling product responsibility. The alternative would be a tobacco style witch-hunt post fact. Let’s not make that mistake.
29 September 2007
27 September 2007
Red Shirt for Myanmar - Friday September 28 2007
While I am not normally a political animal in public - I do think we should support the peaceful protests against a repressive regime.
Please show your support for the monks and others protesting the military repressive regime on Friday September 28th 2007 by wearing a red shirt.
Thank you
Please show your support for the monks and others protesting the military repressive regime on Friday September 28th 2007 by wearing a red shirt.
Thank you
Is Boeing pushing too hard on the 787? Words of warning
http://www.flightglobal.com/articles/2007/09/21/216946/former-boeing-engineer-draws-industry-fire-over-787-composite-fuselage-crashworthiness.html
I live in Seattle and am a huge fan of the hometown manufacturer. They have scored what seems to be a Grandslam with the new 787. But a word of caution seems to be creeping in. At the Boeing Future of Flight Center, there is a section of the 787 not too far away from a cross section from a 747-100. What a difference. One is immediately struck by the composite frame’s thin skin vs the conventional metal skin. It did somewhat un-nerve me to look at it. http://www.boeing.com/companyoffices/aboutus/tours/
But it seems that there are some out there that also feel that something may not be right with the design of the new fuselage. http://www.flightglobal.com/articles/2007/09/21/216946/former-boeing-engineer-draws-industry-fire-over-787-composite-fuselage-crashworthiness.html
In this article a former Boeing engineer has drawn industry fire over 787 composite fuselage crashworthiness alarm.
While I don’t want to be an alarmist – it does somewhat worry me. With a backdrop of the fastener problem and the first flight being pushed back from the original Late August time frame into possibly as late as December, i am now worried that Boeing may be just rushing into things. A cautionary tale to be sure.
Am i right? I am not sure I want to be on the plane to find out if I am.
I live in Seattle and am a huge fan of the hometown manufacturer. They have scored what seems to be a Grandslam with the new 787. But a word of caution seems to be creeping in. At the Boeing Future of Flight Center, there is a section of the 787 not too far away from a cross section from a 747-100. What a difference. One is immediately struck by the composite frame’s thin skin vs the conventional metal skin. It did somewhat un-nerve me to look at it. http://www.boeing.com/companyoffices/aboutus/tours/
But it seems that there are some out there that also feel that something may not be right with the design of the new fuselage. http://www.flightglobal.com/articles/2007/09/21/216946/former-boeing-engineer-draws-industry-fire-over-787-composite-fuselage-crashworthiness.html
In this article a former Boeing engineer has drawn industry fire over 787 composite fuselage crashworthiness alarm.
While I don’t want to be an alarmist – it does somewhat worry me. With a backdrop of the fastener problem and the first flight being pushed back from the original Late August time frame into possibly as late as December, i am now worried that Boeing may be just rushing into things. A cautionary tale to be sure.
Am i right? I am not sure I want to be on the plane to find out if I am.
BA – New Strategies New orders but Mr Walsh is not yet done
The BA blockbuster announcement today of its order for Airbus A380s (12), and 24 787s is the big news.
However there is some tea leaf reading behind the headlines which shows a change from the World's Favourite Airline.
The BA Fleet upgrade has been anticipated for some time. It actually says more about what was not decided than the headline numbers. Firstly let’s look at the big puppy. With one of the largest 747-400s (57) in the world adding 12 A380s doesn’t look like a lot. Actually it isn’t. BA is still considering what to do with its 747-400 replacement. If it doesn’t order 747-8s then I for one will be really surprised. But it will be the makeup of the fleet. For the past 10 years BA has been slowly moving to the more efficient 777 aircraft. With almost equal numbers of 777s and 747s in the long haul mix. So there is an outside chance that they may go for a 3 type 787/777/A380 combo for the fleet rather than a 4 type 787/747/777/A380. Given the crew requirements and the bargain prices on A380s right now – that might be a good choice. So where does this leave the A350XWB? Sadly I think this is going to be a non-starter with BA. It would be foolhardy for BA to have a fleet that comprises 6 major types (A319-A321s for short and medium haul), both A350 and 787s for thin medium and long haul 777, 747 and A380 for long haul. That’s a lot of engineering support. Mr. Walsh is no fan of these old behaviors of having less synergy.
So let’s continue our examination of BA’s equipment and strategy. Noticeably absent from today’s announcement was GE. GE’s much heralded initial order of GE90 powered 777s turned to a bust as early performance of the aircraft was spotty at best and diabolical at worst. Quietly BA now has more RR powered 777s than GE90s. All the new types A380 and 787s will be powered by the British manufacturer. This gives us a clue to Boeing’s offer of the 747-8. BA is probably giving Boeing the cold shoulder on the 50 seat enhanced version of its largest plane. Why? We believe it’s because of the engine choice – Boeing has selected the GEnx as the exclusive power plant for the jumbo. BA is not happy. BA has the opportunity to both punish and hold the stick out for Boeing. More 787 orders and probably 747-8 orders if Boeing was to offer RR engines. With Airbus desperate to get a conventional airline on board with the A350 could they be offering BA a super deal also?
Finally in our examination of BA, let’s look at a little heralded announcement that BA is going to deploy 757s on some new routes from mainland Europe to the USA. Given that only a handful of BA’s old 757s are ETOPS approved that means either major mods or acquiring some newer ones. BA’s 757s are among the oldest around. Putting winglets and making them ETOPS would be a pretty heavy task. As the 757s were earmarked for disposal – it reflects that BA has not yet put a decent strategy together for Transatlantic open skies. Further by formally stating they are NOT going after the premium all business market (much to the relief of the 4 Premium new entrants) it says that BA is sticking true to type. We can be sure that ANY move by BA to set up shop across the Atlantic from the mainland will be met with stiff resistance. Well with the possible exception of an Athens or Milan base!
Clearly Mr. Walsh is not yet done. Stay tuned
However there is some tea leaf reading behind the headlines which shows a change from the World's Favourite Airline.
The BA Fleet upgrade has been anticipated for some time. It actually says more about what was not decided than the headline numbers. Firstly let’s look at the big puppy. With one of the largest 747-400s (57) in the world adding 12 A380s doesn’t look like a lot. Actually it isn’t. BA is still considering what to do with its 747-400 replacement. If it doesn’t order 747-8s then I for one will be really surprised. But it will be the makeup of the fleet. For the past 10 years BA has been slowly moving to the more efficient 777 aircraft. With almost equal numbers of 777s and 747s in the long haul mix. So there is an outside chance that they may go for a 3 type 787/777/A380 combo for the fleet rather than a 4 type 787/747/777/A380. Given the crew requirements and the bargain prices on A380s right now – that might be a good choice. So where does this leave the A350XWB? Sadly I think this is going to be a non-starter with BA. It would be foolhardy for BA to have a fleet that comprises 6 major types (A319-A321s for short and medium haul), both A350 and 787s for thin medium and long haul 777, 747 and A380 for long haul. That’s a lot of engineering support. Mr. Walsh is no fan of these old behaviors of having less synergy.
So let’s continue our examination of BA’s equipment and strategy. Noticeably absent from today’s announcement was GE. GE’s much heralded initial order of GE90 powered 777s turned to a bust as early performance of the aircraft was spotty at best and diabolical at worst. Quietly BA now has more RR powered 777s than GE90s. All the new types A380 and 787s will be powered by the British manufacturer. This gives us a clue to Boeing’s offer of the 747-8. BA is probably giving Boeing the cold shoulder on the 50 seat enhanced version of its largest plane. Why? We believe it’s because of the engine choice – Boeing has selected the GEnx as the exclusive power plant for the jumbo. BA is not happy. BA has the opportunity to both punish and hold the stick out for Boeing. More 787 orders and probably 747-8 orders if Boeing was to offer RR engines. With Airbus desperate to get a conventional airline on board with the A350 could they be offering BA a super deal also?
Finally in our examination of BA, let’s look at a little heralded announcement that BA is going to deploy 757s on some new routes from mainland Europe to the USA. Given that only a handful of BA’s old 757s are ETOPS approved that means either major mods or acquiring some newer ones. BA’s 757s are among the oldest around. Putting winglets and making them ETOPS would be a pretty heavy task. As the 757s were earmarked for disposal – it reflects that BA has not yet put a decent strategy together for Transatlantic open skies. Further by formally stating they are NOT going after the premium all business market (much to the relief of the 4 Premium new entrants) it says that BA is sticking true to type. We can be sure that ANY move by BA to set up shop across the Atlantic from the mainland will be met with stiff resistance. Well with the possible exception of an Athens or Milan base!
Clearly Mr. Walsh is not yet done. Stay tuned
22 September 2007
The World's best blogs for Travel Marketing
Can it be that there is already a very large number of blogs out there that we are going to get a best of" book about them? Yes siree. There are literally thousands of them. Every passionate player is on his soapbox and what a large soapbox it is. But this is good. I can read and digest differing opinions from people worldwide. Some of it is organized, some of it is not. Some good some downright terrible. Some pure and pristine, others patently biased and commercially bent.
But hurray for the group of folks who have come together to create the world’s first book of the best travel marketing blogs. For those of us (either sick in the head or just plain crazy) who love this business this comes at a welcome time.
The three major players: Wired In Travel Conference (WIT), Singapore (www.wiredintravel.com), Canada-e-Connect Conference in Vancouver (www.canadaeconnect.com), and Travolution (http://www.travolution.com/) are collaborating on a new eBook called “Tips from the T-List” – the unofficial list of travel-related blogs. A call for submissions for the eBook to be launched in Vancouver, Singapore and London at Canada-e-Connect, and Wired-In-Travel, and through the Travolution media brand is being made.
Please contact one of the 3 people and tell them that Timothy sent you.
It sounds like it will be very cool and definitely useful. Don’t forget to sign up your own blog there and follow the list.
The text of the press release follows:
MEDIA RELEASE Announcing the world’s first book of the best travel marketing blogs A call for submissions: eBook to be launched in Vancouver, Singapore and London at Canada-e-Connect, and Wired-In-Travel, and through the Travolution media brand VANCOUVER/ SINGAPORE/LONDON – Wired In Travel Conference (WIT), Singapore (www.wiredintravel.com), will be collaborating with the Canada-e-Connect Conference in Vancouver (www.canadaeconnect.com), on a new eBook called “Tips from the T-List” – the unofficial list of travel-related blogs.
The eBook will be launched at Canada-e-Connect which takes place in Vancouver on November 7-9, and will then make its Asian debut at WIT on November 27-29. The book will also be available to delegates at the Travolution Autumn Conference in London on November 1 and via its website, blog and magazine.
Mathieu Ouellet from Quebec City, who started the T-List” said, “The idea of bringing together all different travel-related blogs was born and nurtured in Canada, but has quickly turned into a global community of travel marketers, many of whom have come together to form a T-List group on social networking phenomenon Facebook.” Jens Thraenhart, the executive director of marketing strategy & customer relationship management for the Canadian Tourism Commission, who will be chairing Canada-e-Connect and speaking at WIT on “E-Business Strategies For Destinations and Other Marketers in An Age of Transparency”, writes in his Tourism Internet Marketing Blog, “In the world of Web 2.0, Globalization, and Mass Collaboration, as well as cross-national partnerships, we believe we can all make a difference and putting our words into action and lead with an example.”Singapore is joining the organisers of the event in Vancouver and the Travolution brand in London in calling for the best posts from travel-related blogs globally, so the content may serve as tool for travel and hospitality marketers worldwide to make sense of the ever-changing environment of new media, emerging technologies and consumer trends.
Topics will include e-marketing tips, search engine marketing, online advertising, social media, new and ground-breaking website reviews, and much more. “We have been inspired by the collective knowledge of the T-List bloggers since its launch earlier this year. We hope this new book will provide a vital reference guide for travel, tourism and hospitality marketers,” said Kevin May, editor of Travolution. Added Yeoh Siew Hoon, producer of WIT: “This is Web 2.0 in action and we are pleased to bring the weight of the world’s fastest growing market to this project. The T-List will then truly become the A-list of travel-related blogs in this new global, digital age.”
Here’s how you can be part of the world’s first T-list in travel. Deadline for submissions is September 30, 2007. 1. Complete and fax back the following consent form to +1 604 648 9651 or email it to tlist@rezgo.com. Available at http://tourismtechnology.rezgo.com/2007/09/consent-form-for-publication-in-tips.html. 2. Send us three of your best posts. The editors will select one of these posts to appear in the book, with the goal of providing "Insider" experience and expertise in how online marketing can benefit travel and tourism. The posts should be your own work and should be things like tips, observations, or helpful hints. Please do not send news items or trend oriented posts because these will become outdated very quickly. Concentrate on original thoughts, tips, best practices, etc. Please limit the piece to 300-500 words max. You can either email your nominations, or use the T-List Wiki at http://www.radaron.com/wiki/tiki-index.php. 3. Send us a good quality headshot (if you want it included). 4. Send us a good quality screenshot of your blog or website. 5. Send us a very brief bio of yourself, your location (which will be added to a map of all bloggers) and the description of your blog 6. Send us your full name, address, phone and email so we can send you a copy of the book. Only those contributors who make it into the book will receive a copy, however, we will be making a free e-book available for download that you can distribute. 7. Make sure you add your information to the T-List Community on Facebook, where you can also find links to more information and blogs.
Note: The editorial team reserves the right to reject posts or blogs that are either below quality, have a commercial or self-serving connotation, or are not a fit with the overall concept of the book in delivering value for the travel and tourism industry at large. “Tips from the T-List” Team:Stephen Joyce, Publisher (http://tourismtechnology.rezgo.com/) Jens Thraenhart, Editor in Chief (http://tourisminternetmarketing.com/) Mathieu Ouellet, Editor, North America (http://radaron.com/) Yeoh Siew Hoon, Editor, Asia Pacific (http://thetransitcafe.com/) Kevin May, Editor, Europe, Middle East (http://travolution.blogspot.com/) - Canada-e-Connect Conference (http://www.canadaeconnect.com/ and http://www.canadaeconnectblog.com/): Vancouver, November 7-9, 2007- Canadian e-Tourism Awards (http://www.canadianetourismawards.com/): Vancouver, November 8, 2007- Wired-In-Travel Conference (http://www.wiredintravel.com/): Singapore, November 29-30, 2007- Travolution Conference (http://www.travolutionconference.co.uk/): London, November 1, 2007 More information about the T-List Book: http://canadaeconnectblog.com/swag-file/conference-swag-with-a-purpose/
But hurray for the group of folks who have come together to create the world’s first book of the best travel marketing blogs. For those of us (either sick in the head or just plain crazy) who love this business this comes at a welcome time.
The three major players: Wired In Travel Conference (WIT), Singapore (www.wiredintravel.com), Canada-e-Connect Conference in Vancouver (www.canadaeconnect.com), and Travolution (http://www.travolution.com/) are collaborating on a new eBook called “Tips from the T-List” – the unofficial list of travel-related blogs. A call for submissions for the eBook to be launched in Vancouver, Singapore and London at Canada-e-Connect, and Wired-In-Travel, and through the Travolution media brand is being made.
Please contact one of the 3 people and tell them that Timothy sent you.
It sounds like it will be very cool and definitely useful. Don’t forget to sign up your own blog there and follow the list.
The text of the press release follows:
MEDIA RELEASE Announcing the world’s first book of the best travel marketing blogs A call for submissions: eBook to be launched in Vancouver, Singapore and London at Canada-e-Connect, and Wired-In-Travel, and through the Travolution media brand VANCOUVER/ SINGAPORE/LONDON – Wired In Travel Conference (WIT), Singapore (www.wiredintravel.com), will be collaborating with the Canada-e-Connect Conference in Vancouver (www.canadaeconnect.com), on a new eBook called “Tips from the T-List” – the unofficial list of travel-related blogs.
The eBook will be launched at Canada-e-Connect which takes place in Vancouver on November 7-9, and will then make its Asian debut at WIT on November 27-29. The book will also be available to delegates at the Travolution Autumn Conference in London on November 1 and via its website, blog and magazine.
Mathieu Ouellet from Quebec City, who started the T-List” said, “The idea of bringing together all different travel-related blogs was born and nurtured in Canada, but has quickly turned into a global community of travel marketers, many of whom have come together to form a T-List group on social networking phenomenon Facebook.” Jens Thraenhart, the executive director of marketing strategy & customer relationship management for the Canadian Tourism Commission, who will be chairing Canada-e-Connect and speaking at WIT on “E-Business Strategies For Destinations and Other Marketers in An Age of Transparency”, writes in his Tourism Internet Marketing Blog, “In the world of Web 2.0, Globalization, and Mass Collaboration, as well as cross-national partnerships, we believe we can all make a difference and putting our words into action and lead with an example.”Singapore is joining the organisers of the event in Vancouver and the Travolution brand in London in calling for the best posts from travel-related blogs globally, so the content may serve as tool for travel and hospitality marketers worldwide to make sense of the ever-changing environment of new media, emerging technologies and consumer trends.
Topics will include e-marketing tips, search engine marketing, online advertising, social media, new and ground-breaking website reviews, and much more. “We have been inspired by the collective knowledge of the T-List bloggers since its launch earlier this year. We hope this new book will provide a vital reference guide for travel, tourism and hospitality marketers,” said Kevin May, editor of Travolution. Added Yeoh Siew Hoon, producer of WIT: “This is Web 2.0 in action and we are pleased to bring the weight of the world’s fastest growing market to this project. The T-List will then truly become the A-list of travel-related blogs in this new global, digital age.”
Here’s how you can be part of the world’s first T-list in travel. Deadline for submissions is September 30, 2007. 1. Complete and fax back the following consent form to +1 604 648 9651 or email it to tlist@rezgo.com. Available at http://tourismtechnology.rezgo.com/2007/09/consent-form-for-publication-in-tips.html. 2. Send us three of your best posts. The editors will select one of these posts to appear in the book, with the goal of providing "Insider" experience and expertise in how online marketing can benefit travel and tourism. The posts should be your own work and should be things like tips, observations, or helpful hints. Please do not send news items or trend oriented posts because these will become outdated very quickly. Concentrate on original thoughts, tips, best practices, etc. Please limit the piece to 300-500 words max. You can either email your nominations, or use the T-List Wiki at http://www.radaron.com/wiki/tiki-index.php. 3. Send us a good quality headshot (if you want it included). 4. Send us a good quality screenshot of your blog or website. 5. Send us a very brief bio of yourself, your location (which will be added to a map of all bloggers) and the description of your blog 6. Send us your full name, address, phone and email so we can send you a copy of the book. Only those contributors who make it into the book will receive a copy, however, we will be making a free e-book available for download that you can distribute. 7. Make sure you add your information to the T-List Community on Facebook, where you can also find links to more information and blogs.
Note: The editorial team reserves the right to reject posts or blogs that are either below quality, have a commercial or self-serving connotation, or are not a fit with the overall concept of the book in delivering value for the travel and tourism industry at large. “Tips from the T-List” Team:Stephen Joyce, Publisher (http://tourismtechnology.rezgo.com/) Jens Thraenhart, Editor in Chief (http://tourisminternetmarketing.com/) Mathieu Ouellet, Editor, North America (http://radaron.com/) Yeoh Siew Hoon, Editor, Asia Pacific (http://thetransitcafe.com/) Kevin May, Editor, Europe, Middle East (http://travolution.blogspot.com/) - Canada-e-Connect Conference (http://www.canadaeconnect.com/ and http://www.canadaeconnectblog.com/): Vancouver, November 7-9, 2007- Canadian e-Tourism Awards (http://www.canadianetourismawards.com/): Vancouver, November 8, 2007- Wired-In-Travel Conference (http://www.wiredintravel.com/): Singapore, November 29-30, 2007- Travolution Conference (http://www.travolutionconference.co.uk/): London, November 1, 2007 More information about the T-List Book: http://canadaeconnectblog.com/swag-file/conference-swag-with-a-purpose/
OK so a comment on Money Direct
I have been studiously avoiding this issue but I cannot any longer. We did file in support of BTC (Go to their public website) http://btcweb.biz/.)
There are two issues here that I think people have ignored. Tim Hughes pointed out that Money Direct (the name of the JV) is an operating entity owned by Sabre that is accepting an inbound relationship with Amadeus. Approved by the EU they have wasted no time to implement the spin machine. The other issue is that the enemy here is a failure to develop a decent financial fulfillment process for the industry at a cost effective rate. For this there are two "bad boys". Expedia for paying only on an low frequency basis (quarterly for most players) and of course Pegasus for letting their service language.
Let’s be clear. The whole market needs a better way to handle financial fulfillment, currency conversion commission clearing. The high costs are eating into everyone's profits. While I applaud the initiative of the two behemoths - I believe they are the wrong player and there are a heck of a lot of other solutions in other businesses that do well. All is not lost but you will have to think about it. or contact me...
timothyo@t2impact.com
There are two issues here that I think people have ignored. Tim Hughes pointed out that Money Direct (the name of the JV) is an operating entity owned by Sabre that is accepting an inbound relationship with Amadeus. Approved by the EU they have wasted no time to implement the spin machine. The other issue is that the enemy here is a failure to develop a decent financial fulfillment process for the industry at a cost effective rate. For this there are two "bad boys". Expedia for paying only on an low frequency basis (quarterly for most players) and of course Pegasus for letting their service language.
Let’s be clear. The whole market needs a better way to handle financial fulfillment, currency conversion commission clearing. The high costs are eating into everyone's profits. While I applaud the initiative of the two behemoths - I believe they are the wrong player and there are a heck of a lot of other solutions in other businesses that do well. All is not lost but you will have to think about it. or contact me...
timothyo@t2impact.com
787 and the looming fastner crisis.
By now Boeing is having a very hard time explaining away the next delay. But as we have noted several times there are two major issues that Boeing is having with its 787 program. The most public is the Fastener issue. Yes folks there really isn’t a Home Depot aisle where you can go and get these things. They have to be custom built. Further - one heck of a lot of them need to go in the new plane.
So for the lay person - a fastener is the screws, nuts and bolts that put the plane together. After 9/11 many companies mistook the likely growth in the market for these services. This was indeed exacerbated by Boeing itself who declared they would need significantly less of them with a composite fuselage. See: (http://www.boeing.com/commercial/787family/programfacts.html ). It would have been natural to assume that there would be a significant downturn in aircraft building. As a result there was a general roll up of the players with Alcoa emerging as the big player. These 3 factors: down market, lower assumed activity, (including the drivers for innovation usually coming from the military) and the money guys taking over reduced the overall investment. Boeing is far from blameless in this affair. Their supply chain guys need to be given a royal kick for underestimating the challenge and the scale of this issue.
But it’s going to get worse before it gets better. The demand will undoubtedly drive up the price. And we know demand from the 787 camp is moving at scorching speed. Don’t forget we have seen only 3 sets of orders from the North American carriers, AC, NW and CO. What about DL and AA who both have "Preferred deals" with Boeing and large 767 fleets. And now perhaps even worse, Airbus has quietly confirmed that it s abandoning an Aluminum fuselage barrel for a full composite construction.
Our prognosis? Boeing will be hard pressed to make it fly in Q4. But they will do it. A token delivery subject to strict scrutiny of the Japan JAA and the EU/US players may mean it is only certified in Japan. But the fastener problem will persist into 2010 at least and cause delivery cut backs. Boeing's highly aggressive schedule cannot be met for at least the first 100 planes. Result - higher 767-300 rates. Better keep looking for late model 77-300ERs they are like gold dust.
At least this will mast the ther problem (software and wiring) which is not going too well either.
Cheers
Timothy
So for the lay person - a fastener is the screws, nuts and bolts that put the plane together. After 9/11 many companies mistook the likely growth in the market for these services. This was indeed exacerbated by Boeing itself who declared they would need significantly less of them with a composite fuselage. See: (http://www.boeing.com/commercial/787family/programfacts.html ). It would have been natural to assume that there would be a significant downturn in aircraft building. As a result there was a general roll up of the players with Alcoa emerging as the big player. These 3 factors: down market, lower assumed activity, (including the drivers for innovation usually coming from the military) and the money guys taking over reduced the overall investment. Boeing is far from blameless in this affair. Their supply chain guys need to be given a royal kick for underestimating the challenge and the scale of this issue.
But it’s going to get worse before it gets better. The demand will undoubtedly drive up the price. And we know demand from the 787 camp is moving at scorching speed. Don’t forget we have seen only 3 sets of orders from the North American carriers, AC, NW and CO. What about DL and AA who both have "Preferred deals" with Boeing and large 767 fleets. And now perhaps even worse, Airbus has quietly confirmed that it s abandoning an Aluminum fuselage barrel for a full composite construction.
Our prognosis? Boeing will be hard pressed to make it fly in Q4. But they will do it. A token delivery subject to strict scrutiny of the Japan JAA and the EU/US players may mean it is only certified in Japan. But the fastener problem will persist into 2010 at least and cause delivery cut backs. Boeing's highly aggressive schedule cannot be met for at least the first 100 planes. Result - higher 767-300 rates. Better keep looking for late model 77-300ERs they are like gold dust.
At least this will mast the ther problem (software and wiring) which is not going too well either.
Cheers
Timothy
15 September 2007
Stupid Visa Tricks Stops Brit Pop Invasion. Bush Adminstration Breathes Sigh of Relief
http://online.wsj.com/article/SB118980966247828081.html?mod=hps_us_at_glance_pursuits
The Bush Administration and its new tool for foreign policy - the DHS/U.S. Citizenship and Immigration Services - are doing more for American Isolation than the Hoover Administration or any of the inter-world war policies. New "anti-terrorist" rules are ensnaring artists in today's popular culture of music. British Bands like the Klaxons (very good BTW) and Lily Allen are being denied visas - in some cases even being turned away at arrival airports. Of course this is stupid and of course this was never supposed to happen. But it is.
As a naturalized US citizen - this writer is grateful for the opportunity that I have received. However that does not preclude me from being critical of the current Bush Administration, nor do I agree with some of the draconian regulations that now dog the process of getting even to visit (for a holiday)the good ole US of A. Many countries (Brazil for example) actively cite the US policies for raising barriers for US passport holders to enter their countries. From bitter personal experience I can assure you that it is complicated and expensive to get all these visas. I have to constantly maintain more than 1 passport (yes its legal under exceptional circumstances) for the visas I need.
Lets all just hope that the next Administration brings some sanity to the whole process. Sadly I dont think that this is likely. Personally I resign myself to the unpleasantness of the process and mourn the loss of cultural interaction. Thank god for the Internet. At least its (still) democratic and open - for all its anarchic origins.
Cheers
TIMOTHY O'NEIL-DUNNE
The Bush Administration and its new tool for foreign policy - the DHS/U.S. Citizenship and Immigration Services - are doing more for American Isolation than the Hoover Administration or any of the inter-world war policies. New "anti-terrorist" rules are ensnaring artists in today's popular culture of music. British Bands like the Klaxons (very good BTW) and Lily Allen are being denied visas - in some cases even being turned away at arrival airports. Of course this is stupid and of course this was never supposed to happen. But it is.
As a naturalized US citizen - this writer is grateful for the opportunity that I have received. However that does not preclude me from being critical of the current Bush Administration, nor do I agree with some of the draconian regulations that now dog the process of getting even to visit (for a holiday)the good ole US of A. Many countries (Brazil for example) actively cite the US policies for raising barriers for US passport holders to enter their countries. From bitter personal experience I can assure you that it is complicated and expensive to get all these visas. I have to constantly maintain more than 1 passport (yes its legal under exceptional circumstances) for the visas I need.
Lets all just hope that the next Administration brings some sanity to the whole process. Sadly I dont think that this is likely. Personally I resign myself to the unpleasantness of the process and mourn the loss of cultural interaction. Thank god for the Internet. At least its (still) democratic and open - for all its anarchic origins.
Cheers
TIMOTHY O'NEIL-DUNNE
Civility disappears from the skies - loyalty suffers
http://online.wsj.com/article/SB118953945479924099.html
It was really rather a pleasure flying in the post 9/11 world. There was camaraderie and a shared experience of people who all enjoyed a common bond.
Fast forward to today. Shock! Horror! - Southwest described a lady's attire as "inappropriate"! Lamar Muse must be turning in his grave. And the venerable Wall Street Jounal article entitled: Cranky Skies: FliersBehave Badly AgainAs 9/11 Era Fades.
I fly alot. And I can tell you that this is the case. People have lost that ability to demonstrate being nice. But don't necessarily blame the passengers for this. We have LESS service. There are many reasons. Here are a few: Untold thousands and thousands of customer service personnel removed from the system. Packed flights. More connections. Smaller planes. More airport congestion. bad planning by airlines etc etc.
I am afraid I do not subscibe to the position that the airlines are blameless for the ATC mess (as you can probably tell from prior posts). The results are increasingly that there is a long term dissatisfaction which will lead to a loss of brand loyalty. The airlines that are making money now are doing so at the expense of underlying core values. Cranky fliers become disloyal customers who choose against rather than for you. Beware.
It was really rather a pleasure flying in the post 9/11 world. There was camaraderie and a shared experience of people who all enjoyed a common bond.
Fast forward to today. Shock! Horror! - Southwest described a lady's attire as "inappropriate"! Lamar Muse must be turning in his grave. And the venerable Wall Street Jounal article entitled: Cranky Skies: FliersBehave Badly AgainAs 9/11 Era Fades.
I fly alot. And I can tell you that this is the case. People have lost that ability to demonstrate being nice. But don't necessarily blame the passengers for this. We have LESS service. There are many reasons. Here are a few: Untold thousands and thousands of customer service personnel removed from the system. Packed flights. More connections. Smaller planes. More airport congestion. bad planning by airlines etc etc.
I am afraid I do not subscibe to the position that the airlines are blameless for the ATC mess (as you can probably tell from prior posts). The results are increasingly that there is a long term dissatisfaction which will lead to a loss of brand loyalty. The airlines that are making money now are doing so at the expense of underlying core values. Cranky fliers become disloyal customers who choose against rather than for you. Beware.
13 September 2007
The UK passenger numbers flat ex-LHR in decline
The numbers for Air4Cast for the balance of the year are predicting another banner year in air travel. Yet there is some discouraging news for the new owners of BAA. UK traffic is just creeping along at 2% growth for the whole coutry. Which given the continued rise in regions travel means very real passenger declines at LHR and LGW. With Ryanair pulling back at STN for the winter months we may also see some real decline YoY for that airport too. Contrast this with the overall market and in particular advances at LHR's major competitors with EU in general reporting 6% plus for the year.
OK enough already, the UK government needs to step into the mess and address the rot. Of BA will move traffic from its flagship base to the Continent.
OK enough already, the UK government needs to step into the mess and address the rot. Of BA will move traffic from its flagship base to the Continent.
10 September 2007
Galileo/Worldspan Integration Team announced.
OK - So consider this my public humiliation and eating of the hat.
In early 2006 I said that Rakesh would be out of Worldspan and if not then I would be eating my hat if he was not gone by September. Seems I was right with the month - wrong with the year. So munch munch....
The team is pretty much as expected. With Galileo ranks depleted after the Blackstone acquisition it was only natural that the Worldspan team would be used to fill the spaces left. Interestingly Kevin Mooney is named Chief Commercial Officer filling in the combined role and the shoes of Ninan who follows Rakesh out the door with presumably a nice parachute.
Two interesting points emerge,
A) The HQ will remain in the UK. Gordon is not moving! However the commute from Atlanta to Langely shouldn't be too bad as long as the M25 behaves itself. The natural choice for the bulk of the operation will be Atlanta as the old Chicago UA/Apollo HQ in Rosemont was axed in the Cendant days. Parsippany may be in the Garden State but the location is not that good for the new organization. Hence our bet is that Atlanta will be named US HQ. Kansas City will probably be shuttered for good. At some time in the distant future after CITP is fully operational and United is housed in Munich - I think we can then see a rationalization of the mainframe locations. Remember no integration!!! Apollo will finally head into the sunset.
B) Bob Coggin comes in as the Vice Chairman. For him it must seem like old home week. He is very familiar with Worldspan coming from his long stint at Delta. He brings a wealth of experience and a canny mind. Congrats Bob!
The business faces one very big challenge. What to do about the PSS side of the business (aka Airline Hosting). With challenges integrating at least 2 platforms and a number of black eyes for the new IBS based AiRes solution, we expect to see the Travelport business make some moves on this in the next 12 months.
Best of luck chaps
Cheers
Timothy
In early 2006 I said that Rakesh would be out of Worldspan and if not then I would be eating my hat if he was not gone by September. Seems I was right with the month - wrong with the year. So munch munch....
The team is pretty much as expected. With Galileo ranks depleted after the Blackstone acquisition it was only natural that the Worldspan team would be used to fill the spaces left. Interestingly Kevin Mooney is named Chief Commercial Officer filling in the combined role and the shoes of Ninan who follows Rakesh out the door with presumably a nice parachute.
Two interesting points emerge,
A) The HQ will remain in the UK. Gordon is not moving! However the commute from Atlanta to Langely shouldn't be too bad as long as the M25 behaves itself. The natural choice for the bulk of the operation will be Atlanta as the old Chicago UA/Apollo HQ in Rosemont was axed in the Cendant days. Parsippany may be in the Garden State but the location is not that good for the new organization. Hence our bet is that Atlanta will be named US HQ. Kansas City will probably be shuttered for good. At some time in the distant future after CITP is fully operational and United is housed in Munich - I think we can then see a rationalization of the mainframe locations. Remember no integration!!! Apollo will finally head into the sunset.
B) Bob Coggin comes in as the Vice Chairman. For him it must seem like old home week. He is very familiar with Worldspan coming from his long stint at Delta. He brings a wealth of experience and a canny mind. Congrats Bob!
The business faces one very big challenge. What to do about the PSS side of the business (aka Airline Hosting). With challenges integrating at least 2 platforms and a number of black eyes for the new IBS based AiRes solution, we expect to see the Travelport business make some moves on this in the next 12 months.
Best of luck chaps
Cheers
Timothy
09 September 2007
Last call for paper tickets - the end of the line for paper?
With much fanfare IATA announced that it was placing its last call for paper tickets.
However let us be a bit of a naysayer here. We see there are 2 issues.
A) will ALL the world world's airlines meet the deadline?
B) is the absence of paper tickets really a savings to the airlines?
The answer to A is definitely NO. There will be (and I will eat something vile in public if anyone can prove to me that all airlines meet the May 2008 deadline). Specifically Airlines in Asia, Latin America, Africa and the Middle East are struggling with this deadline. Some are just accepting that they will be cut off come the end of May. We believe that IATA needs to arrange some accommodation for these (typically smaller and less financially able) carriers. We are concerned that there will be a new class division of "Have" vs. "Have Not" airlines which will last for some time. Be careful IATA what you wish for.....
The issue of B is more interesting. Having spent years involved in the revenue accounting, ticketing and financial fulfillment side of air transportation - we can assure our dear readers that the processes are less than exemplary. The designs and solutions that have been implemented are rather arcane in their design and in some cases diabolical in their complexity of implementation. It is here that the LCCs have provided a lesson and a model to the rest of the Industry. Ticketless - IE a completely different approach that eliminates the need for even a notional ticket (as e-tickets do) - is a far better solution for simplification and reduction in paperwork and administration. We believe that after May 2008 - and independently of IATA - we will see a greater move away from the e-ticket idea to a pure ticketless implementation.
Of course this begs the question - if we have pure ticketless - should IATA have any say or even sponsorship of such systems as BSPs? Given the removal of anti-trust immunity and the general improvement in commercial conditions worldwide, we believe now is a good time to start to think of a Non-BSP world. If IATA was really keen to reduce the complexity of the business then they should set a date (2010 sounds nice) when they sunset BSP.
OK Mr. Bisignani, why not consider this for the future? Why not drive this home. It would result in a far better solution for the world and a significant savings for the world's airlines not to mention a reduction in your own organization which in turn would result in savings to your members.
However let us be a bit of a naysayer here. We see there are 2 issues.
A) will ALL the world world's airlines meet the deadline?
B) is the absence of paper tickets really a savings to the airlines?
The answer to A is definitely NO. There will be (and I will eat something vile in public if anyone can prove to me that all airlines meet the May 2008 deadline). Specifically Airlines in Asia, Latin America, Africa and the Middle East are struggling with this deadline. Some are just accepting that they will be cut off come the end of May. We believe that IATA needs to arrange some accommodation for these (typically smaller and less financially able) carriers. We are concerned that there will be a new class division of "Have" vs. "Have Not" airlines which will last for some time. Be careful IATA what you wish for.....
The issue of B is more interesting. Having spent years involved in the revenue accounting, ticketing and financial fulfillment side of air transportation - we can assure our dear readers that the processes are less than exemplary. The designs and solutions that have been implemented are rather arcane in their design and in some cases diabolical in their complexity of implementation. It is here that the LCCs have provided a lesson and a model to the rest of the Industry. Ticketless - IE a completely different approach that eliminates the need for even a notional ticket (as e-tickets do) - is a far better solution for simplification and reduction in paperwork and administration. We believe that after May 2008 - and independently of IATA - we will see a greater move away from the e-ticket idea to a pure ticketless implementation.
Of course this begs the question - if we have pure ticketless - should IATA have any say or even sponsorship of such systems as BSPs? Given the removal of anti-trust immunity and the general improvement in commercial conditions worldwide, we believe now is a good time to start to think of a Non-BSP world. If IATA was really keen to reduce the complexity of the business then they should set a date (2010 sounds nice) when they sunset BSP.
OK Mr. Bisignani, why not consider this for the future? Why not drive this home. It would result in a far better solution for the world and a significant savings for the world's airlines not to mention a reduction in your own organization which in turn would result in savings to your members.
08 September 2007
Sabre and Amadeus head for full investigation of proposed JV
The EU has just announced that it has deemed that the competition issue between these two behemoths deserves full investigation:
Origial Case Number 2007/c 190.
http://eur-lex.europa.eu/LexUriServ/site/en/oj/2007/c_190/c_19020070815en00090009.pdf
However in typical EC style you still have only until the 12th September to comment.
Any concentration of GDS type power even at this JV level is in our view likely to result in reduced competition. While we applaud the need for the market to have a better way of processing hotel transactions - we remain skeptical on the value of these two players providing it.
Origial Case Number 2007/c 190.
http://eur-lex.europa.eu/LexUriServ/site/en/oj/2007/c_190/c_19020070815en00090009.pdf
However in typical EC style you still have only until the 12th September to comment.
Any concentration of GDS type power even at this JV level is in our view likely to result in reduced competition. While we applaud the need for the market to have a better way of processing hotel transactions - we remain skeptical on the value of these two players providing it.
04 September 2007
Airlines adjust after Summer of discontent
Great piece in the (still) independent WSJ. http://online.wsj.com/article/the_middle_seat.html?mod=djemseat
The airlines opine that they have been hit by a triple whammy: High Load factors (duh!!!) ATC delays (if all else fails blame the government), The weather (act of God). They can apparently handle 2 out of 3 but not all 3. Apparently Airlines cannot make bad decisions that contribute to the problem…
As a result they are going to operate differently and hold back seats (read this as still overbook just not as badly), use spare aircraft and add flex into the timing.
OK Chaps (Mr. and Mrs. Airline) - I have a suggestion for you. How about using less SMALLER aircraft and bite the bullet on capacity constraints. The overuse of RJs is the fundamental root cause of the increase in aircraft system resources without a corresponding increase in passenger capability or a pricing model that accommodates this significant upsurge in traffic without necessarily increasing the system capacity for passengers.
I have a further suggestion for the FAA. Guys is this a wakeup call for VLJs? If you were to reprice the usage of the scarce airport tarmac, and flight pathways - then this problem can be ameliorated BEFORE it hits us.
But perhaps its just better to blame the Government and the weather than actually doing the right thing.
One day Congress will wake up to the problem and boot in a quick fix.
The airlines opine that they have been hit by a triple whammy: High Load factors (duh!!!) ATC delays (if all else fails blame the government), The weather (act of God). They can apparently handle 2 out of 3 but not all 3. Apparently Airlines cannot make bad decisions that contribute to the problem…
As a result they are going to operate differently and hold back seats (read this as still overbook just not as badly), use spare aircraft and add flex into the timing.
OK Chaps (Mr. and Mrs. Airline) - I have a suggestion for you. How about using less SMALLER aircraft and bite the bullet on capacity constraints. The overuse of RJs is the fundamental root cause of the increase in aircraft system resources without a corresponding increase in passenger capability or a pricing model that accommodates this significant upsurge in traffic without necessarily increasing the system capacity for passengers.
I have a further suggestion for the FAA. Guys is this a wakeup call for VLJs? If you were to reprice the usage of the scarce airport tarmac, and flight pathways - then this problem can be ameliorated BEFORE it hits us.
But perhaps its just better to blame the Government and the weather than actually doing the right thing.
One day Congress will wake up to the problem and boot in a quick fix.
03 September 2007
Jim leaves DL - A job well done + NW/DL
The quiet half of the Jim and Gerry show at DL has finally announced his exit with a generous severance package. Entirely deserved in our opinion. While Gerry was very much the public face, Jim slaved away at the detail. Incoming CEO Richard Anderson has big shoes to fill. But its a clean break and whether or not the oft quoted NW/DL merger of champions comes about, at least it will be based on a clear and open state of play.
From our perspective we believe that a merger of DL and NW will not serve the 2 companies shareholders nor the market in general well. Both players are still reeling from several years in protection and have a difficult enough road to follow without the distraction of such a merger. CVG and MEM would be the immediate victims but while the stockmarket in general may applaud fortress hubs in MSP, DTW and SLC all of them including JFK and ATL are under attack from smaller more nimble players.
Hey Mr Anderson - just say no
From our perspective we believe that a merger of DL and NW will not serve the 2 companies shareholders nor the market in general well. Both players are still reeling from several years in protection and have a difficult enough road to follow without the distraction of such a merger. CVG and MEM would be the immediate victims but while the stockmarket in general may applaud fortress hubs in MSP, DTW and SLC all of them including JFK and ATL are under attack from smaller more nimble players.
Hey Mr Anderson - just say no
Brace yourselves - 787 delay story coming
Boeing is playing down rumours (now fact in our opinion) that the 787 program is running behind schedule.
With May delivery dates looking increasingly shaky, the Boeing spin machine is in full force. On Wednesday the scheduled 787 quarterly briefing should be an interesting affair.
While we doubt we shall see 787s parked in Everett with concrete blocks instead of engines (like the 747 early stage program) there is a now a clear likelihood that the first customers will not be getting their full complement of planes on time.
The culprit(s) the process of reinstalling fasteners for the prototype and yes our old friend software integration are probably the candidates for the delay. We personally believe that the 787 will fly in 2007 Q4 with deliveries coming in before the start of the second half of 2008. Even so that is a very aggressive schedule.
Boeing is not infallible and this goes on to just show that launching a new aircraft is no trivial exercise. Airbus is probably not going to be able to take advantage of this situation. But at least they can take some comfort that they are not the only player to suffer. (No comments please on Embraer's recent melt down of its supply chain).
Coming up - likely that Boeing will shortly formally announce the 787-10 to compete with the higher end A350XWB. Boeing is not shy in letting the new aircraft cannibalize the market for the older model 777-200s.
Stay tuned people. Spin at its finest coming your way.
With May delivery dates looking increasingly shaky, the Boeing spin machine is in full force. On Wednesday the scheduled 787 quarterly briefing should be an interesting affair.
While we doubt we shall see 787s parked in Everett with concrete blocks instead of engines (like the 747 early stage program) there is a now a clear likelihood that the first customers will not be getting their full complement of planes on time.
The culprit(s) the process of reinstalling fasteners for the prototype and yes our old friend software integration are probably the candidates for the delay. We personally believe that the 787 will fly in 2007 Q4 with deliveries coming in before the start of the second half of 2008. Even so that is a very aggressive schedule.
Boeing is not infallible and this goes on to just show that launching a new aircraft is no trivial exercise. Airbus is probably not going to be able to take advantage of this situation. But at least they can take some comfort that they are not the only player to suffer. (No comments please on Embraer's recent melt down of its supply chain).
Coming up - likely that Boeing will shortly formally announce the 787-10 to compete with the higher end A350XWB. Boeing is not shy in letting the new aircraft cannibalize the market for the older model 777-200s.
Stay tuned people. Spin at its finest coming your way.
Back from Holiday... lots to chat about
Sorry we have been quiet during August but the team decided to take some tme off. We will be back in full production later this week as we review the current trends and provide some of our usual milquetoast intensive analysis.
Cheers
Cheers
02 August 2007
Midwest and AirTran - all over bar the shouting?
The inevitable is almost here. AirTran subject to a last minute stumble will finally be able to gobble up the smaller MidWest Express.
The Little Airline that started out as the Kleenex Express will likely cease to exist and Air Tran will have a new mid western hub in MKE.
We are suckers for the little guy but the economics of the airline biz does not allow a premium domestic service to operate in this manner. So the brave experiment will likely end early next year if not before
Will AirTran allow fresh cookies on board. I doubt it. Joe Leonard is trying to lose weight
Cheers
Timothy
The Little Airline that started out as the Kleenex Express will likely cease to exist and Air Tran will have a new mid western hub in MKE.
We are suckers for the little guy but the economics of the airline biz does not allow a premium domestic service to operate in this manner. So the brave experiment will likely end early next year if not before
Will AirTran allow fresh cookies on board. I doubt it. Joe Leonard is trying to lose weight
Cheers
Timothy
Is Iberia worth it – or will the Spectre of Qantas still haunt?
Iberia is at the moment being poked and prodded like a contestant at a very ritzy beauty pageant. With only the Joint TPG/BA team allowed anywhere near the books – you can ask why anyone would want to pay for the company with one of the most bloated payrolls in Europe. Simple. 12 straight years of profit. Oh yes and add in the combined effect of the AF-KL deal as a model and you have an interesting cocktail that someone clearly thinks is worth it.
So what do we think?
Without touching the books and with only public reports to work with we feel it comes down to a certain amount of cojones and ego. BA is literally challenging or daring LH to come out and play. The latter has effectively grown by stealth through defusing competition and broadening its base while at the same time building a set of vassal states to feed its dual hubs in FRA and MUC.
Effectively we are neutral on it. We can’t see the large scale synergies emerging because the London Madrid Axis has been in place for many years. Unlike AF KL who were in different leagues and therefore could engage in joint value, BA and IB wont achieve anything like that. Sure BA will have a growth opportunity in LATAM (one of the bright growth spots in international inter-regional travel) but it is still a small base. IB won’t benefit because it is a mature market and there isn’t the value proposition to move to BA's core markets such as Africa and the orient. So the only other reason for doing it is defense. While there are some short term gains – long term value is far from assured.
Risk factors abound:
Open skies on the transatlantic
Premium niche carriers
LCCs especially Ryanair, Easyjet and Air Berlin
Etc
So we remain ambivalent to the deal. We think that it’s necessary but fundamentally we don’t like the match up.
Cheers
Timothy
So what do we think?
Without touching the books and with only public reports to work with we feel it comes down to a certain amount of cojones and ego. BA is literally challenging or daring LH to come out and play. The latter has effectively grown by stealth through defusing competition and broadening its base while at the same time building a set of vassal states to feed its dual hubs in FRA and MUC.
Effectively we are neutral on it. We can’t see the large scale synergies emerging because the London Madrid Axis has been in place for many years. Unlike AF KL who were in different leagues and therefore could engage in joint value, BA and IB wont achieve anything like that. Sure BA will have a growth opportunity in LATAM (one of the bright growth spots in international inter-regional travel) but it is still a small base. IB won’t benefit because it is a mature market and there isn’t the value proposition to move to BA's core markets such as Africa and the orient. So the only other reason for doing it is defense. While there are some short term gains – long term value is far from assured.
Risk factors abound:
Open skies on the transatlantic
Premium niche carriers
LCCs especially Ryanair, Easyjet and Air Berlin
Etc
So we remain ambivalent to the deal. We think that it’s necessary but fundamentally we don’t like the match up.
Cheers
Timothy
Battle lines drawn Big Airlines vs Big wigs Corporate Plane toys
Here at T2 we have been a big critic of the current "market" based system for allocating Air Space resources such as ATC.
The big airlines have launched into this using a somewhat lame metaphor. Welcome to the party boys! A new website has been launched http://www.smartskies.org/ which aims to put the blame for ATC gridlock at the door of Corporate Jet users.
Not so fast everyone. Surely Delta and others are just as conflicted. Since Delta's Elite service is actually part of the enemy of this community. http://www.airelite.com/ So is Delta speaking out of 2 sides of its mouth. You betcha. But lets not stop here. One of our other gripes with the US Airlines is their diversion of resources by using more smaller planes (IE less Air Space efficient) aircraft to service domestic points. We have a raft of studies that show the air traffic (measured in aircraft movements) is increasing much more rapidly vs total passengers (RPMs). Yes Delta - your mainline fleet reassignment has resulted in more planes in the air which are less efficient. I am just picking on Delta because they are being a particular hypocrite in this debate.
Moral of the story - let he that is innocent cast the first stone.
But the real urgent issue is a full and open debate on the true cost of the Air Space. For that I believe the smartskies.org website is a useful forum for the debate. So everyone - lets have a full and sane (that means rational) debate and come to a long term solution. The old devil worship of General Aviation should not be sacrificed at the alter of public opinion. The FAA needs to fix what is broken and to use a rational pricing mechanism that recognizes the true cost of the Air Space, the runway space and the bits in between.
Cheers
Timothy
The big airlines have launched into this using a somewhat lame metaphor. Welcome to the party boys! A new website has been launched http://www.smartskies.org/ which aims to put the blame for ATC gridlock at the door of Corporate Jet users.
Not so fast everyone. Surely Delta and others are just as conflicted. Since Delta's Elite service is actually part of the enemy of this community. http://www.airelite.com/ So is Delta speaking out of 2 sides of its mouth. You betcha. But lets not stop here. One of our other gripes with the US Airlines is their diversion of resources by using more smaller planes (IE less Air Space efficient) aircraft to service domestic points. We have a raft of studies that show the air traffic (measured in aircraft movements) is increasing much more rapidly vs total passengers (RPMs). Yes Delta - your mainline fleet reassignment has resulted in more planes in the air which are less efficient. I am just picking on Delta because they are being a particular hypocrite in this debate.
Moral of the story - let he that is innocent cast the first stone.
But the real urgent issue is a full and open debate on the true cost of the Air Space. For that I believe the smartskies.org website is a useful forum for the debate. So everyone - lets have a full and sane (that means rational) debate and come to a long term solution. The old devil worship of General Aviation should not be sacrificed at the alter of public opinion. The FAA needs to fix what is broken and to use a rational pricing mechanism that recognizes the true cost of the Air Space, the runway space and the bits in between.
Cheers
Timothy
Subscribe to:
Posts (Atom)