Ryanair &Expedia - its ending in tears

Ryanair are clearly not happy with Expedia.

With much fanfare the deal was cut in early 2007 and GTA (Octopus) now Travelport was turfed out in favor of Expedia's hotel platform.

Today the commissions are not as Ryanair thinks they should be and Ryanair doesn't seem to like Expedia.

There are tears... it may be "C U in Court" we will have to wait and see.

Cheers

Oops - Cut Capacity, Raise Fares Strategy failed US Airlines

You would think that the significant cuts in capacity from Labour Day onwards would have given the airlines market pricing power and the ability to raise yields. But even with the wonderful drop in fuel prices the airlines just cannot seem to win for trying.

So what did they do wrong?

In my humble opinion the airlines didnt quite do the right thing. So I will ignore for the purpose of this piece the issue of Fuel Hedging that seems to have bitten many airlines.

What didnt go right?

1. The capacity cuts were not enough
2. The reduction in premium traffic was underestimated
3. Reducing the cheap seats inventory was too aggressive
4. The airlines didn't spend enough money in marketing during this time period to boost sales.

What is going to happen next?

Again in my humble opinion we are likely to see some clear further actions:

A) More total capacity cuts
B) A review of the capacity parked and the right sizing of the cuts
C) Opening the cheaper buckets more widely to start moving those numbers back up
D) More cost cuts especially staff
E) Conversely a slowing of merger activity.

Will I be right? You be the judge

Cheers

Line up Airlines begining with the letter A...

And having ownership travails..... Alitalia I think comes before Austrian...

The deadline for Austrian Airlines sale passed yesterday with no confirmed bid. AF/KL declined to bid and the two declared contenders LH and S7 requested more time.

Is this all a plot we could ask ourselves?

Does someone have a vested interest in the situation?

clearly BA has no ability to be interested with its own troubles in getting its slam dunk deal completed. So what can we see here... the great mega carrier redraw may become a damp squid. With oil currently trading below $70 today (Nymex) the airlines may just be better off together. All those dire predictions seem moot. Although many (including the Professor) dont think these low numbers are sustainable - they just might be.

So Austrian better get a move on and not necessarily assume that there will be a sugar daddy coming to save the day.

WIT Blog live

Log onto the WIT blog and see live as things progress

The Professor and others are blogging insights there

http://www.webintravel.com/abacus_blog_central/

Cheers

Loyalty - Airlines have devalued their FFP currency

Steve Hay from ICLP in Hong Kong gave a short but very insightful presentation yesterday at WIT/2008/Singapore.

He demonstrated the difficult positions the legacy carriers are in with their FF programs and how they could address them.

Interestingly it is clear that the airlines have been slowly eroding the value of the currency. The impact has been yet more erosion of brand value amongst consumers. This has been a constant theme of the Professor - the big airlines have done a very bad job in maintaining their brand value.

Steve actually gave a couple of very good ideas about how the supplier community can continue to breathe life into their programs. These are no longer programs about incremental value and loyalty. FFPs are now a price of staying in business. Carriers who move to a la carte service models will be struggling to serve their "premium".

Unfortunately we didnt have time to delve into Steve's ideas but I believe that just ignoring what is going on elsewhere in the airline's marketing mix will come back to BITE them big time. Browsing through the FF sites - such as Flyertalk and Expert Flyer amongst others - it shows that things are definitely not good.

In the Asia-Pacific market - the profligate give-aways of the US carriers didnt happen. However some carriers because of their global alliances were forced to give away large amounts of miles. Qantas recently just destroyed the "Miles" accounts of almost all of its users. It now takes more than a million miles to have that "special" trip - say pair of long haul biz class tickets. Tim Hughes over at the BOOT has clearly vented his frustration at this bad behavior.

While I was writing this a PR release from Sabre crossed my mail. Have a quick peak:

http://phx.corporate-ir.net/phoenix.zhtml?c=73098&p=irol-newsArticle&ID=1215013&highlight=


Bottom line - WAKE UP AND SMELL THE COFFEE - you are further eroding the value of your brands.

Cheers

True of False - Indexing vs Consumer Requirements

OK - badly paraphrased by The Professor - but this was the question posed by Philip Wolf of Tim Hughes and Ram Badrinathan on a panel.

Answer - FALSE!!!

Despite doing the right things - you have to go to the 'Dark Arts' as Tim put it to get onto at least the podium which is the first 2 pages on search.

SEO is therefore now the whole game. UGH!!!

This is the sad and now ugly truth.

And - the biggest browser - Google. Too True. All that money flowing to California.

Double UGH!!!

WIT kicks off in Singapore

To record attendance and actually the largest number of speakers - 67, WIT - Web in Travel kicked off its 4h year at the Suntec Center.

Having attended and participated in the prior years activity - this one is just a little more mature but just as edgy.

Its a great mix of information, opinion and insight. This year's theme of Ideas, Execution, ACTION.

In these times of such uncertainty - its not just the elephant on the table - you need to think out of the circle. This is the place to get both sides of the brain functioning.

More as the sessions progress

Cheers

Obfuscation

I have always felt that part of the basic airline philosophy was that there was "stuff" the airline knew that it would not tell the passengers. Mostly for no reason other than transparency would mean the revelation that an airline is actually a commodity product.

I have to tread carefully here because airlines are customers of my team.

Fundamentally I have felt that the Internet creates near perfect information and this would challenge the airlines' principle of obfuscation. Little did I know that someone would actually make money out of it.

Earlier this week I noted that EUClaims was a star of a UK Channel 4 expose - particularly of BA. Well check out this podcast. The implications of which are somewhat mind boggling. I am not going to editorialize on the rights and wrongs of what this chap does. However it does seem to me that my vision of the near perfect data world and the ability to act on that data may actually come to pass sooner rather than later.

You be the judge

http://iagblog.podomatic.com/entry/2008-10-17T12_58_38-07_00

Cheers

The unthinkable happens in October - WN posts a loss

OK the dust has settled and OMG WN made a loss. The sky will fall.

Clearly the ratings agency had wind of this which is why they lowered ratings recently.



But this is sanguine news for everyone. It shows that everyone is fallible. Last quarter it was Ryanair - this quarter its Southwest. And the cause was the same - fuel hedging.

But the good news is - this can be fixed.

Cheers

Don't Book Fortune Hotels in India

What the Professor is actually telling you NOT to book a hotel.

Sure right.

So exercising my rights of free speech on my own blog - I am saying I will never book this hotel chain nor should anyone else.

Why?

So we are clear - I have asked them before not to post spurious comments which are advertising and clearly against the policy of this blog. They persist in doing so.

Once was a warning twice is blatantly bad behavior.

As this blog is picked up by several other sites this message will be broadcast to several other elements and will likely get a higher ranking than perhaps the hotel chain does.

Insidious attempts at free advertising is just not cricket (DO YOU HEAR THAT

So let this be a lesson. Do not post advertising posing as comments on this site.

First a request - then you get a flame

Thanks for reading

The Battle for Heathrow - in the Blue Corner....

Surprisingly this is making for some strange bedfellows.

For the expansion of LHR (3rd runway and demolition of zillions of homes) is the current Labour Administration.

Against is...

The Mayor of London
Probably the Conservative Party
The Lib Dems
The Unions (in a full page ad in many newspapers yesterday).

As for the building of a new airport to the east - well that one is not so clear.

However I support the full option - new airport in the Thames Estuary.

Cheers

How to explain financial crisis to regular people

I dont normally just forward things but here is a very good description of how you can explain to normal/regular people what just happened to the global banking system

Cheers

http://globaleconomicanalysis.blogspot.com/2008/10/essence-of-rescue-plan-in-comic-form.html

Thanks - well 30% of a million

Dearly Beloved....

Well thanks to all of you who actually voted and those who didnt but wanted to or forgot....

The final tally was that our horse - the Kiva initiative came in 3rd. Not bad as the prize is $300,000

Here is the final tally from Members Projects:

Presenting the Winning Projects


$1.5 million for 1st place goes to:
Alzheimer's Disease: Early Detection Matters and its fulfilling organization, Alzheimer's Association
$500,000 for 2nd place goes to:
Help 100,000 children thrive in the classroom! and its fulfilling organization, DonorsChoose.org
$300,000 for 3rd place goes to:
Loans That Change Lives and its fulfilling organization, Kiva Microfunds

cheers and thanks again

UK Airspace traffic down 8.9% in September

if you have ever seen those really cool videos from Skies over Britain - you will know that the UK Airspace is one of the most busy skies in the world. Not only from the internally generated traffic but all the cross Atlantic traffic usually touches UK airspace.

Anyway - the traffic despite such things as Open Skies and a significant increase in LCC traffic - total traffic is down 2.1% with a significant drop in transatlantic which is down 8.9% according to the UK privatized Air Traffic Control company NATS.

http://www.nats.co.uk/article/216/257/further_slowdown_in_air_traffic.html

Hmmm... these are real data points folks.

Cheers

Amex Cancels Domestic Companion Ticket

American Express has long tried to raise the bar with its personal services to its premium card holders. Since the Green US card was canceled a few years back - they have tried to reposition the Platinum Card as the standard product.

However there are now many different flavors of the card. Debit and Credit. Branded, Co-Branded, special services etc. Its hard to keep up with all the flavors in one country let alone the differences in many others. Of course in the USA market there has been little penetration of a joint bank card version of Amex. However in International Markets there are quite a few examples.

American Express services are not consistent by card color/type. For example a Straightforward Platinum Card does not carry the same privileges as the Delta card does. So you don't get a companion ticket on the Delta Platinum card.

In late 2006 Amex introduced the domestic companion free ticket with much fanfare. However my contacts tell me it was a resounding flop. So few people buy a full fare domestic premium ticket at full wack that it would be a hard thing to do to purchase one, even if they were readily available - which they just were not.

So with little fuss other than a letter to the affected card holders - they have quietly canceled the program.

Cheers

Is this the Zenith of the US Legacy Carriers?

The French have this wonderful expression Plus Ca Change. Roughly translated it means the more things change the more they stay the same. However we could be seeing the end of the US Traditional Full Service Model, it has passed its zenith and we are headed for a different world.

Here is some interesting backup to this supposition from Anna.aero.

http://www.anna.aero/2008/10/10/the-big6-us-legacy-airlines/?utm_source=anna.aero+newsletter&utm_campaign=a43c266e4c-week_63_October_2008_anna_aero_newsletter&utm_medium=email

Frankly it really does show that there is only one way to go - and that is down.

Interestingly they don't make the connection that I think is likely to happen - namely that now is a great time to think about starting an airline.

We have been approached by several players some funded - some not - who are looking to fill in the gaps where the existing players have pulled out or where the service models just are not working economically.

The Western USA for example is taking the brunt of the withdrawal of United's 737 fleet.

So onward and upward - the new UPC airline revolution is with us. Sadly if there was any nostalgia for the the romance of aviation from a bygone era - it is well and truly now dead.

Cheers

Meet this guy - he makes the Professor look nice!

So if you think you have been spun a line by the airline and your compensation has been denied - then watch out for Euclaim. www.euclaim.co.uk

It is run by Henrik Noorderhaven. He delights in that wonderful old fashioned of past times - exposing liars, and he gets paid for it by getting you the consumer compensation.

In tomorrow's (October 13th at 2000) Dispatches program on the UK's Channel 4 TV station - he was the featured part of the story.

He has exposed BA as the WORST airline in Europe for cancellations.
http://www.breakingnews.ie/Business/mhidkfeyidsn/rss2/

Here is the link for C4- however only UK stationed computer machines can view the program. (And special thanks to Professor Stuart for this one!

http://www.channel4.com/news/articles/dispatches/the+trouble+with+british+airways/2490477

What Henrik does is to track the airlines performance and looks for chronic conditions, for example BA914 and BA915 operated LHR-FRA and back. It has been canceled 27 times so far this year.

BA actually cancels 2% of all its flights. This makes it the worst airline in Europe. Further it loses a lot of bags - 2.5 million or a similar number about 2.7% of all bags.

So much for the World's Favorite Airline.

Now of only someone would do this for the US airlines and check out the invocation of Rule 240 and domestic and international compensation. The US airlines are even worse. OK - they fly more but nearly 70,000 cancellations for the first 6 months of this year is not a pretty sight.

Airlines - time to behave and get better at doing what you are SUPPOSED to do. Of course IATA and ATA are crowing about how much better they are this year than last year. But there is this new issue of leaving early which makes it even harder to cope.

I should know - I have been a victim MORE than once.

Cheers

One More for the Gipper - VOTE for MicroLoans

Oh Best Beloved (I am feeling rather Kipling like today)... a good segue into exhorting you to vote for Kiva in the American Express Member's Projects final.

Yoi now have 3 days to vote. In fact if you already voted for another project - you can still change your vote since only the last one counts.

So if you are an American Express Card holder - even if you are not and still want to vote please go here and VOTE. It wont cost you anything but could help Kiva land a BIG prize.

http://www.membersproject.com/

Your votes so far have already moved Kiva up from #4 to #3. so one more push for the Gipper.

MANY thanks and Cheers

The Professor is eternally grateful.

Heads up - The Professor is on the Road thru Halloween

Dear All

I shall be out of the office and on the road for the next 2 weeks.

Europe next week and then Asia the following week - back to the USA or maybe even Mexico.

In the mean time I will endeavor to blog on any stories that are of relevance.

I am soliciting anyone who would like to be a guest blogger at any time - please contact me directly and I will be happy to post your story.

Cheers

The Professor

LeisureLogix - back in stealth mode?

Oh Best Beloved..........

I received an email this morning from Chicke Fitzgerald of LeisureLogix in response to one of my comments which was picked up by 4Hoteliers.

Here is the original article - well actually how it appeared in 4Hoteliers.com :

http://www.4hoteliers.com/4hots_nshw.php?mwi=5049

and then Chicke's response.

http://distribution-solutionz.blogspot.com/

Comments are always welcome!

Best of luck today

Cheers