In a masterly stroke of financial genius - Intesa SanPaolo has come up with the answer to what to do with Alitalia.
So here is how it works.
Alitalia buys Air One but not its debt. Alitalia then issues new shares as a new company including shares to AirOne's owners.
Say WHAT?
This is what was reported by Reuters.
http://uk.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUKL140020420080731
I rest my case. The Italian government and Intesa Sanpaolo are certifiable.
01 August 2008
30 July 2008
OOPS did Ryanair get it wrong
Hmmm seems that the smart team at Ryanair is having a little difficulty. They got Fuel pricing wrong and they are going to be savaged for it.
So here is the scoop – wrong fuel hedging. For 2008 they didn’t actually hedge at all. Ooops. But worse – for 2009 they are getting it wrong also. Read from CAPA and Bloomberg.
Ryanair stated (28-Jul-08) it has hedged 90% of its fuel requirements for Sep-08 at USD129 per barrel, and for the three months ended 31-Dec-08 at USD124 per barrel (Bloomberg, 28-Jul-08). The carrier, which reported fuel costs increased 93% year-on-year to EUR367 million for the three months ended 30-Jun-08, has no hedging in place for the fourth quarter (Jan-Mar-09), though it would take out further hedges shortly. CEO, Michael O'Leary, stated in May-08 that Ryanair would not hedge until oil prices fell below USD100 a barrel.
Oh dear.
So lets hope they get it right soon… otherwise the big boys will be very happy to throw a lot of dog poo in Michael O’Leary’s direction.
This does seem to point out that there the airline business is no place for the feint hearted and that you can make mistakes even if you are one of the leaders.
Cheers
Timothy
So here is the scoop – wrong fuel hedging. For 2008 they didn’t actually hedge at all. Ooops. But worse – for 2009 they are getting it wrong also. Read from CAPA and Bloomberg.
Ryanair stated (28-Jul-08) it has hedged 90% of its fuel requirements for Sep-08 at USD129 per barrel, and for the three months ended 31-Dec-08 at USD124 per barrel (Bloomberg, 28-Jul-08). The carrier, which reported fuel costs increased 93% year-on-year to EUR367 million for the three months ended 30-Jun-08, has no hedging in place for the fourth quarter (Jan-Mar-09), though it would take out further hedges shortly. CEO, Michael O'Leary, stated in May-08 that Ryanair would not hedge until oil prices fell below USD100 a barrel.
Oh dear.
So lets hope they get it right soon… otherwise the big boys will be very happy to throw a lot of dog poo in Michael O’Leary’s direction.
This does seem to point out that there the airline business is no place for the feint hearted and that you can make mistakes even if you are one of the leaders.
Cheers
Timothy
29 July 2008
In case you missed it - here is a peak at EVE
She is mighty pretty...
For more pictures go here and download as many as you want.
Cheers
Timothy
http://www.virgingalactic.com/pressftp/
The BA+Virgin et al Price Fixing Scandal Update
The rather nasty case of Price Fixing filed by authorities on both sides of the Atlantic is making some progress.
The consent agreement (in my humble opinion a win for the lawyers only) is now public with a website - www.airpassengerrefund.com.
Ads and emails have been going out and you can sign up to get your refund. Just don't hold your breath on getting paid. It will be many years before payments are made. All this time the lawyers fees will be racking up. Proving once again that old adage that the law can be one giant Ass!!!!
Now comes news that those involved on the BA side including former commercial director Martin "Boy" George may face prosecution from the UK's OFT - office of Fair Trading. Formally according the Britain's Telegraph Newspaper:
The Office of Fair Trading is preparing to announce price-fixing charges against British Airways head of sales, Andrew Crawley; its former marketing and commercial director, Martin George; Iain Burns, former communications head; and Alan Burnett, who previously ran the airline’s UK/Ireland sales operation.
What a nasty mess
The consent agreement (in my humble opinion a win for the lawyers only) is now public with a website - www.airpassengerrefund.com.
Ads and emails have been going out and you can sign up to get your refund. Just don't hold your breath on getting paid. It will be many years before payments are made. All this time the lawyers fees will be racking up. Proving once again that old adage that the law can be one giant Ass!!!!
Now comes news that those involved on the BA side including former commercial director Martin "Boy" George may face prosecution from the UK's OFT - office of Fair Trading. Formally according the Britain's Telegraph Newspaper:
The Office of Fair Trading is preparing to announce price-fixing charges against British Airways head of sales, Andrew Crawley; its former marketing and commercial director, Martin George; Iain Burns, former communications head; and Alan Burnett, who previously ran the airline’s UK/Ireland sales operation.
What a nasty mess
BA+IB - this time BABI its for real
British Airways and Iberia have finally started that long trip up the aisle. Not content to have the Alliance in One World and the Select Gang of 3 with American - this time they have realized that perhaps they are better together. Let's call this arrangement BABI!
Iberia's Ownership has been in doubt for some time since TPG made a slight move about 18 months ago. Then BA said it wanted out of the ownership position. (it owns about 10%). Now as Iberia has struggled with the position of not being quite big enough and having little room to grow - it has finally come to the realization that its future is probably better under the BA banner than going it alone.
BA fresh from it's absorbing of L'avion, is looking to put some more ASMs under its belt to replace those lost by the defections of GBAirways and BMED last year. The strength of AF/KL and LH/LX has made the map of Europe look mighty inviting. It also strengthens their position in any potential merger with AA.
Not wishing to put too fine a point on it - while the deal is/was inevitable - it is still not necessarily the right thing to do. This time the regulators in Brussels should be looking at the deal with a lot more eyes.
And just how big with the new carrier be? The deal will make BABI the 3rd largest carrier in terms of revenue, probably 5th largest just ahead of a slimmed down UAL in terms of pax and the same just ahead of CO in terms of RPMs.
Cheers
Timothy
Iberia's Ownership has been in doubt for some time since TPG made a slight move about 18 months ago. Then BA said it wanted out of the ownership position. (it owns about 10%). Now as Iberia has struggled with the position of not being quite big enough and having little room to grow - it has finally come to the realization that its future is probably better under the BA banner than going it alone.
BA fresh from it's absorbing of L'avion, is looking to put some more ASMs under its belt to replace those lost by the defections of GBAirways and BMED last year. The strength of AF/KL and LH/LX has made the map of Europe look mighty inviting. It also strengthens their position in any potential merger with AA.
Not wishing to put too fine a point on it - while the deal is/was inevitable - it is still not necessarily the right thing to do. This time the regulators in Brussels should be looking at the deal with a lot more eyes.
And just how big with the new carrier be? The deal will make BABI the 3rd largest carrier in terms of revenue, probably 5th largest just ahead of a slimmed down UAL in terms of pax and the same just ahead of CO in terms of RPMs.
Cheers
Timothy
27 July 2008
Is there a life after being a Travel Agent? Let's ask this guy
http://www.cnn.com/2008/WORLD/asiapcf/07/27/japan.porn/index.html
OK now I have your attention - perhaps you can read the article.
This former travel agent retired in Japan and found a new career as a porn star.
So for all those US travel agents who have been looking for a second career look no further than you local DVD store
Best of luck to you
OK now I have your attention - perhaps you can read the article.
This former travel agent retired in Japan and found a new career as a porn star.
So for all those US travel agents who have been looking for a second career look no further than you local DVD store
Best of luck to you
26 July 2008
New GetThere tool makes headway for harassed Travel Arrangers
NBTA Preview Report
I was chatting with Forrester's Henry Hardeveldt and we both were bemoaning the fact that the process of travel arranging is still stuck in the dark ages. He shared with me some of the results from their recent piece on the 3 types of business traveller.
Here is a summary http://www.forrester.com/Research/Document/Excerpt/0,7211,46033,00.html
The heavily managed travellers who fly the most frequently basically don't like the process at all. (I realize this comes as a great shock to everyone).
While not having an epiphany and revolutionizing the process of travel arranging - Sabre has made a step in the right direction with their new Travel Arranger portal on GetThere.
I am looking forward to getting a demo of this tool because the general process is still stuck in the dark ages.
For those of you not going to NBTA in LA next week here is a microsite with some of the functions explained:
http://www.getthere.com/travelarranger/
I still live in hope that there will be a better solution across the board. While I am looking forward to a revolution in this whole process - I fear we will be forced to accept evolutionary steps. This tool sounds like at least its movement in the right direction.
Cheers
Timothy
I was chatting with Forrester's Henry Hardeveldt and we both were bemoaning the fact that the process of travel arranging is still stuck in the dark ages. He shared with me some of the results from their recent piece on the 3 types of business traveller.
Here is a summary http://www.forrester.com/Research/Document/Excerpt/0,7211,46033,00.html
The heavily managed travellers who fly the most frequently basically don't like the process at all. (I realize this comes as a great shock to everyone).
While not having an epiphany and revolutionizing the process of travel arranging - Sabre has made a step in the right direction with their new Travel Arranger portal on GetThere.
I am looking forward to getting a demo of this tool because the general process is still stuck in the dark ages.
For those of you not going to NBTA in LA next week here is a microsite with some of the functions explained:
http://www.getthere.com/travelarranger/
I still live in hope that there will be a better solution across the board. While I am looking forward to a revolution in this whole process - I fear we will be forced to accept evolutionary steps. This tool sounds like at least its movement in the right direction.
Cheers
Timothy
EK's A380s have Showers on board!
OK so Emirates is using the term "indulgence" to describe their premium classes on the upper deck of the new A380 services which start DXB-JFK on August 1st - that's next week.
Outdoing Singapore Air - EK will offer a premium service which initially looked rather tame - but the actual pictures (and from sneak peaks comments from a few who have actually been on the ship) this is going to be one humdinger of a service.
The Biz Class cabins are none too shabby either. You get your very own minibar at your seat.
The clear water in product differentiation of the Middle East Carriers from the rest of the world is going to be growing.
Thank you Emirates for bringing back a little of the opulence to the process of travel. Now if I can only figure out a way to wangle a seat on one of these puppies.
Cheers
Timothy
Outdoing Singapore Air - EK will offer a premium service which initially looked rather tame - but the actual pictures (and from sneak peaks comments from a few who have actually been on the ship) this is going to be one humdinger of a service.
The Biz Class cabins are none too shabby either. You get your very own minibar at your seat.
The clear water in product differentiation of the Middle East Carriers from the rest of the world is going to be growing.
Thank you Emirates for bringing back a little of the opulence to the process of travel. Now if I can only figure out a way to wangle a seat on one of these puppies.
Cheers
Timothy
The Professor is travelling and will be in LA for NBTA annual Shindig
I hope to bring you some tidbits from what is happening and the general sentiment of the corporate travel managers.
Direct from the bar stool research council - I think we should be able to put a thermometer in the mouths of the corporate travel market and see what's making them sick and what the various doctor's think are the remedies to what ails the patients.
Cheers
Timothy
Direct from the bar stool research council - I think we should be able to put a thermometer in the mouths of the corporate travel market and see what's making them sick and what the various doctor's think are the remedies to what ails the patients.
Cheers
Timothy
Qantas's Geoff Dixon outlines a new world order - is he right?
So we are now headed for the era of the mega carrier and little else. Oh yes by the way your fares are going to double and your service will suck but apart from that we will be all right Jack.
http://www.congresscheck.com/2008/07/25/qantas-boss-predicts-%E2%80%98new-world-order%E2%80%99/
I have to take issue and point out a few salient points to Mr Dixon's self serving remarks.
Lets start with the supposition that the airline network model is the right one. Clearly he doesn't think so because he has put his eggs into the LCC model with Jetstar. Just because the FNC (Full Service Network Carrier) model is broken in so many places doesn't mean that other models can fly. If you will pardon the pun.
The LCC model is alive and well. (Ryanair and Air Asia)
The HVC (Hybrid Value Carrier) model is alive and well (Aer Lingus and EasyJet)
The niche market is constantly evolving. The results have been mixed over the last year. We have seen the outright failure of the business only carriers. Yet the niche business services continue to flourish. (Eg LH/AF/KL/BA/LX biz class services).
Where he is right is that this is a step up in terms of what an airline must do. This is where the current crop of legacy airline managements need to have their heads examined. The model needs changing and some airlines will be successful at this and others will just fail. The airline business is high risk and not necessarily high value. There is a great deal of clear water between the consistently successful players and the rest of the market.
As Exhibit A in the "fuel is the root cause of all evil" debate - I present Allegiant Airlines. An airline that is continuing to fly allegedly fuel inefficient MD80 series aircraft.
So the view of the world dominated by the mega boys is not necessarily one I can subscribe to. I suggest you go and read a previous blog entry that I posted earlier this year. I believe now is actually a good time to start an airline. Critical lift in certain markets is needed. If you have planes and can move them to those markets - then you can now make money without fear of intervention by the incredibly shrinking big boys.
If Mr Dixon's view of the world is right we are in for a large amount of grey mice. Let's hope there are a lot of colorful parrots out there who will seize the opportunity and bring in a new crop of airlines with low costs and more appropriate business models that will hopefully make the industry more fundamentally sound.
Its nice to dream
Cheers
Timothy
http://www.congresscheck.com/2008/07/25/qantas-boss-predicts-%E2%80%98new-world-order%E2%80%99/
I have to take issue and point out a few salient points to Mr Dixon's self serving remarks.
Lets start with the supposition that the airline network model is the right one. Clearly he doesn't think so because he has put his eggs into the LCC model with Jetstar. Just because the FNC (Full Service Network Carrier) model is broken in so many places doesn't mean that other models can fly. If you will pardon the pun.
The LCC model is alive and well. (Ryanair and Air Asia)
The HVC (Hybrid Value Carrier) model is alive and well (Aer Lingus and EasyJet)
The niche market is constantly evolving. The results have been mixed over the last year. We have seen the outright failure of the business only carriers. Yet the niche business services continue to flourish. (Eg LH/AF/KL/BA/LX biz class services).
Where he is right is that this is a step up in terms of what an airline must do. This is where the current crop of legacy airline managements need to have their heads examined. The model needs changing and some airlines will be successful at this and others will just fail. The airline business is high risk and not necessarily high value. There is a great deal of clear water between the consistently successful players and the rest of the market.
As Exhibit A in the "fuel is the root cause of all evil" debate - I present Allegiant Airlines. An airline that is continuing to fly allegedly fuel inefficient MD80 series aircraft.
So the view of the world dominated by the mega boys is not necessarily one I can subscribe to. I suggest you go and read a previous blog entry that I posted earlier this year. I believe now is actually a good time to start an airline. Critical lift in certain markets is needed. If you have planes and can move them to those markets - then you can now make money without fear of intervention by the incredibly shrinking big boys.
If Mr Dixon's view of the world is right we are in for a large amount of grey mice. Let's hope there are a lot of colorful parrots out there who will seize the opportunity and bring in a new crop of airlines with low costs and more appropriate business models that will hopefully make the industry more fundamentally sound.
Its nice to dream
Cheers
Timothy
Sold - One Airline - Cheap. Frontier gets funding
Frontier managed to find a savior at the last minute. For $79 million DIP financing - Perseus basically picked up the ailing Denver based carrier. They will end up with the option to purchase just under 80% of the airline for $100 million.
http://www.marketwatch.com/news/story/frontier-airlines-receives-commitment-75/story.aspx?guid={F34ECFC2-4879-4D00-8054-DDDB7E6CFD01}&dist=hppr
I think they got a good deal. Whether it is a wise deal will remain to be seen.
I have high hopes for the chaps at F9. They will need all the luck they can get with UA squeezing them from the top and WN from below. However consider the situation. WN is not going to grow that much (however given their size "not much" is actually quite a lot since they are now the world's #1 passenger mover). UAL is dropping 25% of its fleet. So F9 may just be able to dodge the bullet if they can price their product right and get the mix right. I think they will unless they are incredibly stupid. Well this is the airline industry so you know what that means.
Cheers
Timothy
http://www.marketwatch.com/news/story/frontier-airlines-receives-commitment-75/story.aspx?guid={F34ECFC2-4879-4D00-8054-DDDB7E6CFD01}&dist=hppr
I think they got a good deal. Whether it is a wise deal will remain to be seen.
I have high hopes for the chaps at F9. They will need all the luck they can get with UA squeezing them from the top and WN from below. However consider the situation. WN is not going to grow that much (however given their size "not much" is actually quite a lot since they are now the world's #1 passenger mover). UAL is dropping 25% of its fleet. So F9 may just be able to dodge the bullet if they can price their product right and get the mix right. I think they will unless they are incredibly stupid. Well this is the airline industry so you know what that means.
Cheers
Timothy
25 July 2008
In the river of blood red ink there are .... 1st Half Financials Reviewed Podcast
Come here the professor and Mrs O'Leary (not from Europe) debate the sea of red ink that is the 1/2 year reporting results.
A light hearted delivery of a bad situation
Cheers
A light hearted delivery of a bad situation
Cheers
24 July 2008
Whose missing in the Star Crossed Love Fest?
The announcement today of Continental's formal application to join the Star Alliance and join with United Airlines and 8 other Star members in creating a gigantic transatlantic alliance has a missing member.
It looks like US Airways is being cold shouldered here.
Additionally a special "gang of 4" (AC, CO, UA, LH) has been formed to compete with the other SkyTeam "gang of 4" (AF, KL, NW, DL) and the proposed "gang of 3" (BA, AA, IB) Oneworld members to create another transatlantic JV.
I hope you are following so far.
Well the Skyteam4 made a great deal of noise about this when they started 3 services LHR-LAX, SLC-CDG and JFK-LYS. True seamless experience right?
Actually no.
I tried to purchase a ticket and upgrade from LAX-LHR using my super wonderful status on DL and was told (in no uncertain manner) that no this was actually an Air France flight and that therefore no upgrade for Delta passengers was allowed.
So much for this great idea. This new Star love fest (sans US Airways) should be a true seamless service but like many things in the airline business - its all show and PR rather than any actual substance.
When will they ever change? Comments directly to the Professor or leave them here.
Cheers
Timothy
It looks like US Airways is being cold shouldered here.
Additionally a special "gang of 4" (AC, CO, UA, LH) has been formed to compete with the other SkyTeam "gang of 4" (AF, KL, NW, DL) and the proposed "gang of 3" (BA, AA, IB) Oneworld members to create another transatlantic JV.
I hope you are following so far.
Well the Skyteam4 made a great deal of noise about this when they started 3 services LHR-LAX, SLC-CDG and JFK-LYS. True seamless experience right?
Actually no.
I tried to purchase a ticket and upgrade from LAX-LHR using my super wonderful status on DL and was told (in no uncertain manner) that no this was actually an Air France flight and that therefore no upgrade for Delta passengers was allowed.
So much for this great idea. This new Star love fest (sans US Airways) should be a true seamless service but like many things in the airline business - its all show and PR rather than any actual substance.
When will they ever change? Comments directly to the Professor or leave them here.
Cheers
Timothy
23 July 2008
Today's show is brought to you buy the word STAYCATION
I am not a huge fan of trendy words - a few years ago it was Metro-sexual. Last year's word was a Colbertism - Truthiness.
But now we have this year's word - STAYCATION.
In true objective journalistic tradition of seeking out the truth wherever it may be - I bring you today's example which has now spread into the vernacular and of course has been picked up by Advertising. Special thanks to Professor Stuart for this one.
So the attached ad has been emailed out to Aer Lingus's newsletter recipients and is now shown on their website. Click on the title and you will also be taken to their website.
I leave you to judge the merits of the use of the term.
Cheers
Timothy
PS Someone please forward this to Leno before he goes off the air.
An Island of Black in a Sea of Red Ink - Allegiant
NOTE TO READERS - please read all of this post.
Allegiant announced profits today. A stellar achievement it would seem in the labours of all the other Hercules wannabes.
There is clearly something that they are doing right that the Network Legacy Carriers are not. T2 and Flight are working on a Low Cost Carrier study and our analysis seems to bear out some interesting truths as to why the legacy carrier model is broken. Please ping me directly if you are interested in getting early preview access.
In the mean time - big airlines - read this and weep.
Allegiant bucks trend, remains profitable
Leisure carrier Allegiant Airlines posted a second-quarter profit of $2.6 million (13 cents per share). The Lansing State Journal says that's "down sharply from a profit of $10 million, or 50 cents per share," from the same period a year ago. Still, that result allowed Allegiant to hold on to its status as one of the few U.S. carriers to turn a profit during the current industry downturn. "We had very good results during our second quarter. In spite of exceptional headwinds from fuel, we are yet again one of the few companies in our space who were profitable," Allegiant CEO Maurice Gallagher Jr. says in a statement (PDF file).
And just a little postscript. Allegiant does this with Fuel inefficient planes such as the MD80s of mixed heritage that makes up their fleet.
Allegiant announced profits today. A stellar achievement it would seem in the labours of all the other Hercules wannabes.
There is clearly something that they are doing right that the Network Legacy Carriers are not. T2 and Flight are working on a Low Cost Carrier study and our analysis seems to bear out some interesting truths as to why the legacy carrier model is broken. Please ping me directly if you are interested in getting early preview access.
In the mean time - big airlines - read this and weep.
Allegiant bucks trend, remains profitable
Leisure carrier Allegiant Airlines posted a second-quarter profit of $2.6 million (13 cents per share). The Lansing State Journal says that's "down sharply from a profit of $10 million, or 50 cents per share," from the same period a year ago. Still, that result allowed Allegiant to hold on to its status as one of the few U.S. carriers to turn a profit during the current industry downturn. "We had very good results during our second quarter. In spite of exceptional headwinds from fuel, we are yet again one of the few companies in our space who were profitable," Allegiant CEO Maurice Gallagher Jr. says in a statement (PDF file).
And just a little postscript. Allegiant does this with Fuel inefficient planes such as the MD80s of mixed heritage that makes up their fleet.
Malev's Dilemma - same as everyone else's
Malev is axing its two long haul routes to Toronto Pearson and New York JFK.
So this is a good indicator of the dilemma of the marginal carriers. It is actually a good example of how the network carrier model is broken.
For Malev to make money it would need to charge an increment over its fares last year of approx $2000 in C class and about $500 in Y class to cover just the increase in direct fuel costs alone. Malev has 2 767s - a -300 and a -200. Remember it probably has to rotate one out for one day a week for a B check and then hire in a replacement when they go for C and D checks.
Not sustainable.
So Malev - wise decision.
Cheers
Timothy
So this is a good indicator of the dilemma of the marginal carriers. It is actually a good example of how the network carrier model is broken.
For Malev to make money it would need to charge an increment over its fares last year of approx $2000 in C class and about $500 in Y class to cover just the increase in direct fuel costs alone. Malev has 2 767s - a -300 and a -200. Remember it probably has to rotate one out for one day a week for a B check and then hire in a replacement when they go for C and D checks.
Not sustainable.
So Malev - wise decision.
Cheers
Timothy
If you long for the Nostalgia of Flying
The Professor is very nostalgic when it comes to old aircraft.
So for those of you who also share this sense of nostalgia for airlines and airliners.
Go here: if not look away and click on something more mundane and current.
Hint - turn on your sound and turn off other sound based apps.
Cheers
Timothy
http://www.funstufftosee.com/goodbye.html
So for those of you who also share this sense of nostalgia for airlines and airliners.
Go here: if not look away and click on something more mundane and current.
Hint - turn on your sound and turn off other sound based apps.
Cheers
Timothy
http://www.funstufftosee.com/goodbye.html
United Cuts 100 Aircraft 7,000 jobs but not enough
.......Says the Professor
OK so United is shocking everyone with its dramatic cuts for the fall. 100 Aircraft (all its B737s and a few widebodies) and 7,000 staff.
However the Professor is going to say it's not enough.
Using our standard review of publicly available data - we believe that the number should be closer to 13,000 staff cuts. (FTEs).
This would only enable United to stay at the same rates as it is today. The metric I am using is employees per plane. So from our analysis the cuts do not do the job of reducing the red ink.
Let me drill into the numbers a little further. United is second only to Northwest in reducing its maintenance workers. (Down nearly 70% 2000 to 2007). Thus even if it outsourced all its maintenance it would not make a big enough dent in its employee numbers and of course it would not lower the costs that significantly. So just cutting for the sake of cutting needs a pretty decent plan.
So message to Mr Tilton - if you want to improve your numbers go back to the drawing board and cut more - OR change the model. Oh yes and if you gave back some of your Chapter 11 exit cash bonus that would be nice.
Message to everyone else - its not cutting its changing the model.
Cheers
Timothy
OK so United is shocking everyone with its dramatic cuts for the fall. 100 Aircraft (all its B737s and a few widebodies) and 7,000 staff.
However the Professor is going to say it's not enough.
Using our standard review of publicly available data - we believe that the number should be closer to 13,000 staff cuts. (FTEs).
This would only enable United to stay at the same rates as it is today. The metric I am using is employees per plane. So from our analysis the cuts do not do the job of reducing the red ink.
Let me drill into the numbers a little further. United is second only to Northwest in reducing its maintenance workers. (Down nearly 70% 2000 to 2007). Thus even if it outsourced all its maintenance it would not make a big enough dent in its employee numbers and of course it would not lower the costs that significantly. So just cutting for the sake of cutting needs a pretty decent plan.
So message to Mr Tilton - if you want to improve your numbers go back to the drawing board and cut more - OR change the model. Oh yes and if you gave back some of your Chapter 11 exit cash bonus that would be nice.
Message to everyone else - its not cutting its changing the model.
Cheers
Timothy
How the Recession is Biting - Part 1 Corporates
Dearly Beloved,
I have been writing about the impact of the downturn on the supply side of the equation for quite some time. So I thought I would look at the other side of the fence for a while and see how it is impacting the market from the users perspective. As you could call me an unmanaged traveler - I don't work directly for a large corporation - however I do work as a consultant for corporations and government entities who have differing levels of a corporate travel policy. These range from the ultra strict to the "do what you have to."
In this first piece - I was writing my own extensive story and looking to report on some real world examples. In fact I was about half way through writing the dang thing. However I had today's Travel Weekly newsletter cross my desk. In this edition a long article addressing the subject came from Nadine Godwin - probably one of the more senior industry writers going back many years and a former TW Editor. Her perspective and article could not be bettered so I encourage you to go and read it. You will need to sign up but it is worth the weight.
Also my old friend Steven Schoen the Travel Manager for Siemens and probably one of the real experts of this space has bared his soul on what can be done. So read the side bar story as well.
http://www.travelweekly.com/article.aspx?id=176914
In a follow up article I will talk about the impact on the leisure side of the house.
Cheers
Timothy
I have been writing about the impact of the downturn on the supply side of the equation for quite some time. So I thought I would look at the other side of the fence for a while and see how it is impacting the market from the users perspective. As you could call me an unmanaged traveler - I don't work directly for a large corporation - however I do work as a consultant for corporations and government entities who have differing levels of a corporate travel policy. These range from the ultra strict to the "do what you have to."
In this first piece - I was writing my own extensive story and looking to report on some real world examples. In fact I was about half way through writing the dang thing. However I had today's Travel Weekly newsletter cross my desk. In this edition a long article addressing the subject came from Nadine Godwin - probably one of the more senior industry writers going back many years and a former TW Editor. Her perspective and article could not be bettered so I encourage you to go and read it. You will need to sign up but it is worth the weight.
Also my old friend Steven Schoen the Travel Manager for Siemens and probably one of the real experts of this space has bared his soul on what can be done. So read the side bar story as well.
http://www.travelweekly.com/article.aspx?id=176914
In a follow up article I will talk about the impact on the leisure side of the house.
Cheers
Timothy
22 July 2008
Are Airlines Cheating on Flight Cancellation Compensation?
Dearly beloved
Every year there are a large number of hassles with equipment and weather outages. But this is to be expected in any times. In 2007 we had several major - indeed spectacular - disruptions in the winter of discontent that saw jetBlue meltdown its operations on two separate occasions.
So where are we now? In 2008 so far this year according to published news reports things are not good. Thus far for the first 6 months of the year there have been over 65,000 flights canceled. That is twice for all the number of 2007.
http://seattletimes.nwsource.com/html/travel/2008043947_webcanceledflights10.html
But don't worry the FAA and DOT have implemented new compensation for passengers whose flights are disrupted. That should fix it right?
Er - actually no. Now anything that is what it is gets labeled as a "weather disruption" and is not subject to any compensation.
For your reading pleasure I enclose a response to a request for compensation due to Delta's policy - not weather disruption.
Start with my formal complaint (at the bottom) and work back up to the reply at the top.
Sounds remarkably like a catch 22 problem. Don't you think? So are the airlines cheating? The numbers indicate that they are - the amount paid out according to the DOT has not increased yet the number of flights canceled is running at 4x. Something doesn't sound or feel right
Thanks Delta - my loyalty to you shows no bounds.
Timothy
EMAIL CONVERSATION FOLLOWS:(Hint start at the bottom first).
Dear Mr. O'Neil Dunne,
Thank you for your e-mail describing the problem you experienced.
Our goal is to make your travel experience as smooth and enjoyable as possible, and we regret you didn?t receive the high level of service we strive to provide. Our airport representatives are expected to always be responsive, and offer precise, complete information. It sounds like that didn?t happen in this case, and we will continue to make efforts to improve in this area.
When traveling from U.S. Cities, Puerto Rico, and the U.S. Virgin Islands, all passengers must be at the gate at least 15 minutes before the scheduled departure time. Passengers who do not comply with the published check-in times are subject to having their seats released and subject to re-assignment.
Federal regulations require an airline to give compensation to a passenger who is denied boarding on a flight due to an oversold situation. This particular rule is not applicable in the event of a flight irregularity such as a mechanical or weather delay. Accordingly, we must respectfully decline your request.
Mr.O'Neil Dunne, thank you again for giving us an opportunity to respond to your concern. We very much appreciate your Medallion loyalty to Delta and look forward to the privilege of serving you again soon.
Sincerely,
Mandisa T. Reid
Manager
Customer Care
Original Message Follows:
------------------------
PERSONAL INFORMATION:
Name: Mr Timothy O Neil Dunne
Email Address : timothyo@t2ni.com
SkyMiles Number: 0543535041
COMMENT DETAILS:
Email about Past/Future travel: Past
Nature of Comment: Complaint Concern
Email Pertaining to: Flight_Delay_Cancellation Email about Other topic:
Comments:
Below (in reverse) is my itinerary.
03 Jul 2008 Delta Flight 1051 from Atlanta, GA to Seattle, WA (YV)
02 Jul 2008 Delta Flight 4481 from Manchester, NH to Atlanta, GA (L)
30 Jun 2008 Delta Flight 5169 from Cincinnati, OH to Manchester, NH (K)
30 Jun 2008 Delta Flight 1632 from Seattle, WA to Cincinnati, OH (KV)
The nature of my complaint is twofold.
1. The decision to fly or not fly was not provided by Local Staff in Manchester and no attempt to accommodate passengers was made. Given that the flight would have been an illegal connection, the ground staff should not have boarded passengers such as myself with tight connections.
2. At Atlanta we arrived technically early and i could easily have made the connection except for the fact that the ground staff took 30 minutes to get the hand bags off the aircraft.
3. On arriving at the gate with 10 minutes to spare (the agent closed the door on me) I was told i had arrived late. On looking at the boarding list I saw that in fact the ground agent had in fact closed the flight early (at 2025)and had actually given away my seat BEFORE the due time.
4. The accomodation desk in the terminal was inaccurate with information provided to passengers and failed to accommodate me correctly. I was told SPECIFICALLY that i had a confirmed reservation on the next day - which turned out not to be true. If you investigate the PNR history you will see that in fact the seat was only cleared when I called to the agent and had them re-book the seat on the flight as opposed to the standby status the airport agent had booked me on.
Therefore in light of the fact that I was unable to travel on the correct flight - not to mention the appalling way customers are being treated by your airport staff - i request a DOT mandated compensation as the misconnect was due to Delta action not the stated Weather related delay which contributed but did not actually cause the misconnect.
Would you like a reply to your e-mail?:yes
FLIGHT 1:
Flight Number : 4481
Date : 02jul08
Departure City : MHT
Ticket Number : 2347270848
Every year there are a large number of hassles with equipment and weather outages. But this is to be expected in any times. In 2007 we had several major - indeed spectacular - disruptions in the winter of discontent that saw jetBlue meltdown its operations on two separate occasions.
So where are we now? In 2008 so far this year according to published news reports things are not good. Thus far for the first 6 months of the year there have been over 65,000 flights canceled. That is twice for all the number of 2007.
http://seattletimes.nwsource.com/html/travel/2008043947_webcanceledflights10.html
But don't worry the FAA and DOT have implemented new compensation for passengers whose flights are disrupted. That should fix it right?
Er - actually no. Now anything that is what it is gets labeled as a "weather disruption" and is not subject to any compensation.
For your reading pleasure I enclose a response to a request for compensation due to Delta's policy - not weather disruption.
Start with my formal complaint (at the bottom) and work back up to the reply at the top.
Sounds remarkably like a catch 22 problem. Don't you think? So are the airlines cheating? The numbers indicate that they are - the amount paid out according to the DOT has not increased yet the number of flights canceled is running at 4x. Something doesn't sound or feel right
Thanks Delta - my loyalty to you shows no bounds.
Timothy
EMAIL CONVERSATION FOLLOWS:(Hint start at the bottom first).
Dear Mr. O'Neil Dunne,
Thank you for your e-mail describing the problem you experienced.
Our goal is to make your travel experience as smooth and enjoyable as possible, and we regret you didn?t receive the high level of service we strive to provide. Our airport representatives are expected to always be responsive, and offer precise, complete information. It sounds like that didn?t happen in this case, and we will continue to make efforts to improve in this area.
When traveling from U.S. Cities, Puerto Rico, and the U.S. Virgin Islands, all passengers must be at the gate at least 15 minutes before the scheduled departure time. Passengers who do not comply with the published check-in times are subject to having their seats released and subject to re-assignment.
Federal regulations require an airline to give compensation to a passenger who is denied boarding on a flight due to an oversold situation. This particular rule is not applicable in the event of a flight irregularity such as a mechanical or weather delay. Accordingly, we must respectfully decline your request.
Mr.O'Neil Dunne, thank you again for giving us an opportunity to respond to your concern. We very much appreciate your Medallion loyalty to Delta and look forward to the privilege of serving you again soon.
Sincerely,
Mandisa T. Reid
Manager
Customer Care
Original Message Follows:
------------------------
PERSONAL INFORMATION:
Name: Mr Timothy O Neil Dunne
Email Address : timothyo@t2ni.com
SkyMiles Number: 0543535041
COMMENT DETAILS:
Email about Past/Future travel: Past
Nature of Comment: Complaint Concern
Email Pertaining to: Flight_Delay_Cancellation Email about Other topic:
Comments:
Below (in reverse) is my itinerary.
03 Jul 2008 Delta Flight 1051 from Atlanta, GA to Seattle, WA (YV)
02 Jul 2008 Delta Flight 4481 from Manchester, NH to Atlanta, GA (L)
30 Jun 2008 Delta Flight 5169 from Cincinnati, OH to Manchester, NH (K)
30 Jun 2008 Delta Flight 1632 from Seattle, WA to Cincinnati, OH (KV)
The nature of my complaint is twofold.
1. The decision to fly or not fly was not provided by Local Staff in Manchester and no attempt to accommodate passengers was made. Given that the flight would have been an illegal connection, the ground staff should not have boarded passengers such as myself with tight connections.
2. At Atlanta we arrived technically early and i could easily have made the connection except for the fact that the ground staff took 30 minutes to get the hand bags off the aircraft.
3. On arriving at the gate with 10 minutes to spare (the agent closed the door on me) I was told i had arrived late. On looking at the boarding list I saw that in fact the ground agent had in fact closed the flight early (at 2025)and had actually given away my seat BEFORE the due time.
4. The accomodation desk in the terminal was inaccurate with information provided to passengers and failed to accommodate me correctly. I was told SPECIFICALLY that i had a confirmed reservation on the next day - which turned out not to be true. If you investigate the PNR history you will see that in fact the seat was only cleared when I called to the agent and had them re-book the seat on the flight as opposed to the standby status the airport agent had booked me on.
Therefore in light of the fact that I was unable to travel on the correct flight - not to mention the appalling way customers are being treated by your airport staff - i request a DOT mandated compensation as the misconnect was due to Delta action not the stated Weather related delay which contributed but did not actually cause the misconnect.
Would you like a reply to your e-mail?:yes
FLIGHT 1:
Flight Number : 4481
Date : 02jul08
Departure City : MHT
Ticket Number : 2347270848
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