So why is Olympic the worst airline in Europe?

I recently had the honour of Flying the airline that is universally acknowledged to be the sickest in the world.

Having flown it - I can see why.

Despite having the same equipment as other airlines, Olympic Airlines (not Airways any more), just cannot get anything right.

The usual things are forgivable. Bad food - etc. But the staff at both ends (LHR and ATH) were just barely doing their jobs. But the best was clearly reserved for In flight service. If you ever want to see how not to serve your customers this is it. These chaps make Alitalia look like a top flight carrier.

After literally ignoring the passengers, the service was appalling. And once completed with inadequate and unintelligible announcements delivered with all the aplomb of a wet dead fish, the entire cabin crew in economy retired to the galley and then closed the curtain so they would not be bothered by the passengers. Ignoring personal requests in Greek and in English and completely ignoring the call button.

Someone in Brussels should listen to Michael O'Leary for once and put this carrier out of its misery.

Cheers

Timothy

PS Thank god I am returning on BA.

Now it's a full scale rout - Continental joins the cuts

One of the industries best performers (well at least in the USA market), Continental has decided to join the cutback guys and will slash over 3,000 jobs according to the Wall Street Journal. This will include sending out pink slips pretty soon, retiring some of their gaz guzzlers in its fleet (note CO already has one of the youngest fleets) and slashing domestic capacity 16%. Kilner and Smisek will forgo their salaries this year. (Kilner is starring in an ad campaign appearing in the WSJ promoting Houston).

Formally, of the big boys, this leaves only Southwest and Northwest to announce their cuts.

We anticipate that there will be further cutbacks coming from Frontier and Alaska who already announced retiring the RJs. Spirit air already announced its intention to ax at least 400 jobs in Florida.

Used 737-300s anyone?

Cheers

Timothy

International Low Cost - a True Mixed Bag

AirOne today signified it was going to be a big player in International Low Cost Air Travel by signing a big order for Airbus long range widebodies.

At the same time - Air Berlin is contemplating pulling out of all Long Haul flights. Wait a minute didn't they just buy LTU just for the Long Haul routes?

Jet2 is expanding into Long Haul with its 757s.

So this sounds like a very mixed bag at the moment. Much of the uncertainty is clearly being driven by the fuel cost but the maturing of the LCC model indicates that LCCs are now thinking beyond the box. However as my other post of today indicates, beware the siren call of the FSC Model.

Cheers

Timothy

US Airlines get ready to dump capacity on International Routes

The major US airlines - yup that's about all of them have applied to invoke one of those nice little short hand regulatory instruments. This one goes by the name of Dormancy Rights.

Alaska Airways, American Airlines, Continental Airlines, United Airlines, Delta Air Lines, Northwest Airlines, US Airways and United Airlines requested a wavier from the US Department of Transportation on ‘dormancy rights’, permitting them to reduce capacity or suspend operations on international routes over the next two years without losing rights. A blanket wavier means carriers would not be required to apply for individual waivers on each route they wish to cut.

For the non-government brains among us - this means - they can dump a route at will and yet hold onto it for up to 2 years without any advance warning. Neat Trick huh!

United will be among the first.

Cheers

Timothy

More bad news at the US Trunk Carriers - United this time

United finally decided it needed to do some serious cutting.

After watching Delwest, then AMR's American cut way back and at the same time seeing its hopes for a marriage dashed at Match.com (she didn't even make it to the Alter!), United is finally being a bit sensible and cutting capacity. Consigned to the dustbin of history will be a further 6-744s and ALL of the 737s will be gone by 2009.

Also being consigned to that same garbage location is TED. The pointless excuse for a LCC look alike. In the same manner as SONG (Delta's also poor excuse) TED will expire and be replaced with UNIT (just kidding) - mainline United. Seems that this is not a good time to be investing in yellow paint.

Altogether 70+ planes will go.

It should be noted that United has no new planes on order at this time.

Cheers

Timothy

Virgin Blue gets punished for straying from the fold

Virgin Blue was one of the original Low Cost Carriers. However it has strayed from the model and today - it is probably beginning to regret that.

In the last 3 years it has bloated up with the usual accouterments of the Full Service model to wit:

1. Lounges
2. Assigned Seating
3. GDS Participation
4. Multiple aircraft types
5. Interlining

There are more

And to cap it all - it has an MOU with Air Asia to develop a new LCC (conveniently called an ULTRA Low Cost Carrier.)

Well today it seems that this is now coming home to bite badly. JP Morgan has issued a pretty nasty coverage analysis that has been widely picked up down under. There is talk of the airline not surviving.

With Qantas cutting back significantly on both major brands (Jetstar and QF Mainline) Virgin Blue will have no choice but to follow suit.

It may just be me - but it seems that if you have the word Blue in your name, you start as a LCC and then order Embraer E-Jets you end up in trouble. But then this could just be coincidence.

Cheers

Timothy

The Professor will be off for 10 Days.

Dearly beloved...

I shall be away from a computer for about 10 days returning on June 16th. This means I shall not be writing for a while.

Wish me luck - I shall be in Greece admiring truly durable technologies.

Cheers

Timothy

Just because Gio says so doesn't make it so. Paper Tickets the Saga continues

OK so at a sweep of the electronic pen - paper tickets were consigned to history.

Politely BS.

As we are now seeing they are very much alive. Further the lack of full interline e-ticket is causing all manner of problems. For example if you are an external airline serving a single airport in one country without the interline etix of the national or dominant carrier in that market you are screwed. Specifically if you are in Germany and the long haul airline doesn't have an etix agreement with Lufthansa EVEN THOUGH THEY HAVE JOINT FARES. You are now in deep dog poop.

This is causing lots of issues for vendors of software and I am sure that even the GDSs don't have it all fixed yet.

But Don't worry Gio says its OK. And you believe him!!!!

Good luck if you are travelling any time soon on a cheapie consolidator ticket.

Cheers

Timothy

IATA takes a swipe at "Monopoly Suppliers"

IATA at the 64th AGM in Istanbul has been having fun celebrating the end of its paper trail. However it what it describes as "Historic Declaration it makes 6 points. I wont bore you with all of them except one.

• Business partners, in particular monopoly service providers, must become as efficient as airlines are now. If not, regulators must restrain their appetite with tougher regulation.

Now most of you will think this applies to Airports. But I think this is a hidden swipe at Amadeus. Notice I did not say GDSs. Amadeus' monopoly position in several areas is becoming a cause for concern. Without a shadow of a doubt they wield market maker power in both large swaths of the planet and in significant sectors.

I interpret the airlines' 4th point as a challenge.

However this is somewhat of a toothless tiger approach. Who else are they going to turn to?

At least we still have two large scale airframe manufacturers.

Cheers

Timothy

Travelport follows Sabre in a "Fee-less" deal with Lufthansa

So then there was just one.

Sabre was first with a new distribution deal in fortress Lufthansa markets of DE, OS, CH and please let's not forget airportless Lichtenstein. In the new deal - LH will not charge the 4.90 (plus VAT) distribution "fee" to subscribers. Well now Travelport has cut the same deal with LH for its distribution.

This leaves just LH part owned Amadeus as having to accept the fee which comes into effect on July 1st.

But before you all start feeling sorry for Amadeus - remember that they are doing just OK. I am sure that there will be a compromise reached.

One word of caution. Take the following statement with a pinch of salt and a lot of skepticism. " Lufthansa vice president for sales and marketing Thierry Antinori added: "This will give all travel agencies using Galileo or Worldspan long-term peace of mind."

You have been warned

Ayling to BAA - Don't expand LHR

Robert Ayling who was ousted from BA in 2000 as its head, has entered the fray on the BAA breakup and expansion of LHR.

His alternative proposal is to expand either Gatwick or Stansted.

His logic is based on the supposition that the Hub and Spoke model is dead. He may have a point. However the UK needs Heathrow no matter what and the airport is at overcapacity. So unless someone comes up with an idea that will anchor a new airport in the Thames in 15 years at the same landing fees as LHR then I don't think this is going to be anything more than a pipe dream.

The LHR airport expansion with a new third runway is vital to the UK. In 15 years time (the minimum time to build it) the problems of the UK will be severe without the runway.

Just my 2 cents.

Lawrence Hunt lashes out at Analysts over Silverjet failure

Lawrence Hunt has decided that it is all the fault of the Analysts and not anything that he had done which resulted in the fall of his pet airline Silverjet. Since we have the benefit of Monday Morning Quarterbacking, here goes.

In Saturday's Daily Telegraph he is quoted as saying "..."It's not the oil price, it's confidence," said Mr Hunt. "When you have analysts who know nothing about our business writing what they write, it becomes self-fulfilling. It's the analysts that have killed us. " Further he goes on and insisted "Our business model is resilient to oil. We have been able to lift our prices by 20pc in the past few weeks."

Well I have to differ with the apparently still affable Mr Hunt. Oil AND your business model - not to mention a number of what I would call "missteps" by your Silverjet management are the root causes. As one famous person once expressed it "It's the economy stupid!!!" The analysts are not stupid and he would be surprised at how much they actually do know. Apparently more than him - with this benefit of hindsight.

If we follow his logic that the model is "resilient" to oil then surely he would have been able to increase his fares by at a minimum of 50% over the last year to cover the cost of oil. That did not happen by any measurement.

I am sorry to see the model fail. I actually flew Maxjet once (for less than the regular advance purchase coach fare on a US Network carrier). There are lessons for everyone here. I just hope for Larry's sake that when anyone looks up the word "hubris" in the dictionary his picture isn't near it.

Sadly biz class standalone model RIP

Pssst Buddy wanna a get early delivery on a narrow body?

Seems like there are some prize slots opening up on the Production Lines in Toulouse and Renton.

Despite ramping up production - both aircraft manufacturers are facing some down turn. Air Tran is the latest to defer 18 737-700s. Last Week it was Jetblue with deferring A320s. There will be more.

Cheers

Timothy

It's BAAAAK - Cites now go after OTAs over Unpaid Taxes

This week on May 27th the city of San Antonio (its in Texas in case you are - like me - occasionally geographically challenged) won class action status for a Suit against 16 companies including the heavyweight online travel agencies such as Expedia, Orbitz, Priceline and Travelocity.

Not to be out done, on Thursday fellow Texas city Houston also filed a similar lawsuit that probably included a lot of cut and paste from San Antonio's suit.

So while the current State battle on the subject has been a set of battles that have been won and lost by both sides, this represents a new battle ground for all concerned.

Now that the tide has turned aay from tax free Internet Commerce as Cities and other tax authorities struggle with falling revenues, you can expect to see this fight run for quite some time.

Perhaps they can outsource the collection to India.

Continental Two Step?

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

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

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

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

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

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

Boy this is getting more complicated than SOAP.

The end of the paper ticket. IATA PR (aka BS)

"Press Release: Industry Bids Farewell to Paper Ticket"

Well at least those nice people in Geneva think so. They are looking for the last issued BSP paper ticket now. I think it will be in the pacific somewhere tonight. BUT it wont be the last issued ticket on paper. Not by a long shot.

We still have a year validity of tickets that have been issued and there will be paper tickets (OK we wont be allowed to call them tickets because that is now officially banned), issued in the coming months and years. Also there is still a lot of non-IATA players issuing paper tickets, even IATA Airlines in domestic mode are going to be issuing paper tickets.

Of course if we were all very smart - we would go TICKETLESS not that expensive crapola solution called eTicketing.

Cheers

Your Humble Servent.............

Text of the PR Release follows:
May 31st 2008.

Industry Bids Farewell to Paper Ticket
Meets deadline for 100% ET

Istanbul –The International Air Transport Association (IATA) today launched a new era in air travel as it bid farewell to the paper ticket on the eve of the industry’s conversion to 100% electronic ticketing.

“Today we say goodbye to an industry icon,” said Giovanni Bisignani, IATA’s Director General and CEO. “The paper ticket has served us well, but its time is over. After four years of hard work by airlines around the world, tomorrow marks the beginning of a new, more convenient and more efficient era for air travel.”

The history of tickets…

Paper tickets date back to the 1920s. Each airline used a different form with varying rules. Airlines soon recognised the need for standardisation of traffic documents, regulations and procedures to support the growth of an industry that spanned the world. In 1930, the IATA Traffic Committee developed the first standard hand-written ticket for multiple trips. These same standards served the industry into the early 1970s.

The first ticketing revolution occurred in 1972 with automation. The IATA Billing and Settlement Plan (BSP) for travel agents began in Tokyo that year. This led to the birth of the IATA neutral paper ticket. For the first time the IATA logo appeared on the cover of tickets that could be used by any travel agent to ticket journeys on almost any airline in the world.

The next revolution took place in 1983 when the system was further automated with a magnetic stripe on the ticket back. This allowed all of the ticket information to be stored electronically on the ticket itself and it could be used as the boarding pass as well.

At its peak, 285 million of IATA neutral paper tickets (both versions) were printed in 2005.

The first e-ticket was issued in 1994. By 1997 IATA had adopted global standards for e-ticketing. But the evolution was slow and by May 2004, only 19% of global tickets were electronic.

Simplifying the Business

At the 2004 Annual General Meeting in Singapore, the successive crises of war, terrorism and SARS were still being felt, the price of oil was approaching US$40 per barrel and the imperative for cost efficiencies was critical. IATA presented a plan for Simplifying the Business, the highlight of which was to achieve 100% e-ticketing.

Over four years, IATA deployed a global team of 150 people to work with airlines and system providers around the world to facilitate implementation.

“In four years we achieved what many thought was impossible. We made 100% ET a reality everywhere – from our largest hubs to small remote island airports with no electricity. It is an incredible industry achievement,” said Bisignani.

“The benefits to the business are real,” said Bisignani. A paper ticket costs an average of US$10 to process versus US$1 for an electronic ticket. With over 400 million tickets issued through IATA’s settlement systems annually, the industry will save over US$3 billion each year.

Consumer benefits…

Consumers can look forward to easier travel in an electronic world. 100% ET eliminates lost tickets. ETs can easily be changed and reissued without necessitating a trip to a travel agency or airline ticket office. And they enable a wide array of self-service options such as online and mobile check in.

”With ET a reality we can now enter the next phase of Simplifying the Business,” said Bisignani. “We are moving ahead with a further revolution - Fast Travel that will provide convenient self-service options from check-in to baggage tracing and re-booking.”

Cleaning-up paper…

While IATA will no longer issue paper ticket stock, IATA neutral paper tickets issued by travel agents before June 1 remain valid for travel under the conditions they were purchased. Paper tickets may still be provided by an airline from its own offices or from a travel agent in the USA, although it is anticipated the volumes will be very low.

To complete the conversion IATA has contacted 60,000 travel agents in more than 200 countries to collect the remaining unused paper tickets in the system – some 32 million worldwide. These will be securely reclaimed, destroyed and recycled. “An era has ended. If you have a paper ticket, it’s time to donate it to a museum,” said Bisignani.

Last paper ticket ceremony photos

For more information on Electronic Ticketing and Fast Travel visit: www.iata.org/stbsupportportal
- IATA -

Contact:
Lorne Riley
Manager Corporate Communications
Tel: +41 79 542 1961
rileyl@iata.org


Editors Notes:
• IATA (International Air Transport Association) represents some 230 airlines comprising 93% of international scheduled air traffic.
• The IATA Billing and Settlement Plan (BSP) is a system by which IATA, as an independent third party, manages the transfer of money derived from cash sales of airline tickets between travel agents and airlines.
• IATA has 80 BSPs covering more than 162 countries and territories that handle some US$220 billion annually.
• When the ET project was launched in June 2004, the industry was at 19% Electronic Ticketing.
• IATA has 150 staff supporting its Simplifying the Business programme.
• IATA invested $1.3 million in an ET Buddy Programme to provide free consulting to airlines needing assistance in launching their ET projects.
• Since June 2004 IATA has held 23 workshops worldwide to support ET implementation.
• Key Dates
o IATA interline manual ticket established: circa 1930
o Transitional automated ticket (TAT) established: 1971
o IATA creates standard for Neutral Paper Ticket: 1972
o IATA launches BSP Japan and Neutral Paper Ticket: 1972
o Automated Ticket & Boarding Pass (ATB) established: 1983
o Electronic Ticket (ET) established: 1994
o IATA standard for ET established: 1997
o IATA Board of Governors pass resolution for 100% ET: 2004
o 100% ET – June 1, 2008

Timothy

Fly UB Air

This is an expansion of the story that was first published by those nice people at Travel Weekly. So freely adapting their article by Lester Craft here goes
This is the new flight menu for a carrier in organization formed by some of the industries heavyweights. Rumour has it that this is the business model for Delwest Air

Code name UB Air for Unbundled Airways. Herewith the airlines’ pricing charges:
What do you get for your ticket.
• An electronic ticket.
• The right to change your ticket for a fee
• The right to cancel and pay the airline for the priveledge (unless you die in which case a partial refund less fees) will be allowed.
• The right to be charged taxes
• The right to be charged fees
• The right to board the aircraft
• The right to leave the aircraft
• Baggage $25 first bag, and it doubles for each additional bag. No limit except for weight which is pegged at 15 kilos
• Frequent Flyer miles, $100 extra.
• Seats, $100 extra. A few years back, it was rumored that airlines were developing "standing-room-only" configurations. Well, now's the time to make sitting a valuable add-on.
• Arm rests, $15 each.
• Leg room
• Delwest will deploy the new version of its international coach configuration which will be “fixed recliners” your seat is actually a leaning position
• Standing up or changing your position is only allowed with the permission of the Flight Attendant and your handing over of a $5 prepaid chip).
• Leg room, sold in 1-inch increments at $20 an inch. Very lucrative, especially since there is zero leg room currently and everyone would have to purchase at least an inch or two.
• Under-seat storage, $10. Enforced by a little panel with a built-in card swipe. And it's worth pointing out that this is not just about storage. Airlines in fact have long missed out on a chance to promote the fact that they actually offer passengers foot room as well as leg room. Imposing an upcharge could help call attention to this important but overlooked convenience.
• Charging by the pound (as in passenger weight). For example, "New York to Los Angeles, only $1.99 a pound!" This is especially important as the mass of travelers increases in direct proportion to their weight. Unlike freight that tends to bulk out before it weights out, passengers will be charged by gross weight. The Southwest hidden “People” sizewize will be adopted for the new airline.
• Fold-down trays, a dollar a minute. But why stop there? Clean trays are extra at $25 premium.
• Use of an overhead bin, $10. A bargain compared with checking those extra bags.
• Toilets are a steal at 50 cents. Coin-operated, of course, but they also accept most major credit cards.

Delwest’s innovative pricing model will be introduced as soon as their reservation system is upgraded to take all these new enhanced services. Each will appear on your invoice as PLC, Passenger Luxury items

;-)

Niche Low Cost Business Class Airline Model RIP

Silverjet threw in the towel today. Ceasing operations after valiantly attempting to stay afloat. They needed but $5 million to keep the operations open but after being refused a lifeline loan and the deal with Viceroy falling through there really was no chance.

There is an old Axiom if you do business in the GCC. An LOI is worth nothing. Only the money in the bank is the ultimate test. As one of our friends put it, precision for a Brit and a Yank is about 90% done. In the GCC it is only about 50%. Clearly this was a lesson that Silverjet’s management had not quite learned. There will be a lot of mad people out there now, individual investors and those who plowed money into it.

The demise of Silverjet follows EOS and Maxjet. Eos actually had quite some months of operation in cash before they needed their injection . But despite everything they knew the situation was hopeless. In the GCC this model could have worked with newer aircraft and a smaller number of seats based on frequency. However the low cost high end airline in Saudi Arabia Al Khayala soldiers on but it is a short haul carrier offering service inside the 3 major cities and erratic service to Dubai. We believe that like its sister company NAS Air it is not making money.

So L’Avion is the last one left. If they have any sense they will seek protection under the wing of Air France. PrivatAir on a ACMI basis seems to be doing just fine.

Alas poor biz class model – we hardly knew thee.

Cheers

Timothy

So yes Virginia there is a recession Version 2.0 this time with proof.

The recent study by TIA makes sobering reading. Trips not taken, unhappiness with the process. The chief drivers of revenue are the most pissed off.

http://www.cnn.com/2008/TRAVEL/05/30/airtravel.decline.ap/index.html

I think we are all now feeling the pinch. The anecdotal evidence is overwhelming.

The problem that has overcome us all have been shielded by older data forms and statistics that are from a bygone era. I believe we could ask any person in the country (GWB exempted) and she/he will tell you that the world is in recession. Even the Oracle from Omaha calls it that way.

We draw our evidence from the following sources:

GDS sectors are way down (latest to report is Travelport) so far Sabre and Amadeus are not talking.
Savage cuts are now showing up across the board. Hawaii we believe we be down by 20% or greater before the end of the year when all the elements are in.
Significant cuts are being planned. Ryanair was first to announce its Winter 08-09 cuts. Now we see it across the board.
American will drastically reduce its Caribbean traffic and others across the board at the same time parking 75 plus aircraft. The headcount numbers are not yet out.
Las Vegas is WAY off
Hawaii is WAY off
We could go on but lets stop here for now.

So chaps, accept it for what it is and live with it. We are in for a long one. The first real recession the world has seen in more than 2 decades. The world will emerge (I hope) and there will be a different world at the end of it. The slope of the recovery curve will be a lot less resilient and SLOWER. During this time those people who have been the prime drivers for revenue on the legacy carriers (business travelers) will find alternatives. That includes the new virtual there from Nortel. And probably Skype will be the preferred form of communication if eBay ever lets it.

For all of us this is going to reshape the business we are in. So now we need to start rethinking that fundamental new set of thoughts. Collaboration will work better than individual contributions. Are you in?

Good luck to all of us.

Cheers

Timothy

So Does Predatory Behavior Pay? Let's Ask...

American Introduced JFK-STN services in 2006 specifically to counteract the threat of the new low cost Business Niche players which at the time included EOS, Maxjet and Silverjet. They even went to double daily in 2007. Today they announced the cut back of the service and cancellation of the route effective July 7th. Thus leaving AA with a single gateway for all of London.

I guess they were able to achieve what they wanted. Too bad about the collateral damage.