Support the Open Cuba Initiative

At PhocusWright Last Week - Barney Harford the new CEO of Orbitz Worldwide devoted about a quarter or more of his speech in support of a passionate appeal for the opening of the Cuba market.

I am very happy to join the voices for an opening of US travel to Cuba and the removal of restrictions.

As a firm believer in the philosophy that travel broadens the mind and breaks down barriers between peoples - I am supporting this effort and ask you to also do the same

For more information please go to Open Cuba website.

Oh and by the way... in case you miss it - I would ignore the bit about agreeing to Orbitz terms and conditions ;-) - check the bottom of the snipp'd part of the Open Cuba website.

Cheers

JAL Gets Lifeline - Short Term - And What of the Future?

JAL - still reeling from the huge losses - has secured a brief lifeline from its troubles. In Japan the line between government and industry is not as clearly defined as in other economies. This is not a criticism - just a statement of observation. The loan was secured from a company (Development Bank of Japan Inc) 100% owned by the Japanese Government's Ministry of Finance.

According to media reports in Japan the size of the loan is over 100 billion Yen (approx $1.1 Billion) roughly equivelent to the past 6 months worth of losses.

Effectively JAL its management and the Government entity charged with fixing broken companies in Japan - Enterprise Turnaround Initiative Corp. of Japan - has 6 months to right the ship. This is hardly enough time for them at the moment to do that. So the clock is ticking.

It seems that a Billion here a Billion there is the game for JAL. The ETI Corp and JAL have three basic tasks in front of them. In a normal economy and in a normal world any of the three would be regarded as a significant challenge. These are not normal times.

The Three Challenges are:

1. Restructure the corporate financial structure of JAL all without appearing to file the equivalent of Chapter 11.
2. Restructure the company work practices and functions to streamline the company and make it effective as an entity against the competition of ANA and in a new more competitive local market.
3. Secure an international partner who will help power the business to a sustainable position outside of the domestic market.

I have commented before that the size and scale of JAL's issues are greater than most people had imagined. The amount of unhappy people will be legion. These range from workers who will lose their jobs, to investors who will lose their stock value to bankers who will also be out their cash. At this point I find it hard from the international perspective to see how American/OneWorld can benefit JAL more than Delta and Skyteam.

Against this backdrop are some interesting negotiations on OpenSkies between Japan and the USA. The new Japanese Administration are getting a baptism by fire. I can only wish for the best for everyone concerned. But as in many cases the answers do not lie in the old ways. The Government of Japan has an opportunity to foster the development of a new order in Air Transport in Japan. Opening the market to Low Cost Air services would be a way to expand the market and ultimately to turn one of the most closed markets into a true example of open competition where land (high speed rail) and air can compete fairly. Lowering the cost of flights to Japan could open up a huge tourist market. Perhaps the Japan of 2010 is ready for this.

Now that's a thought

Cheers

What Is The Most Expensive Resource?

So here is a little trivia question for you...

Don't read Wikipedia (it wont tell you)...

So here is the riddle...

"This thing all things devour:
Birds, beast, trees, flowers;
Gnaws iron, bites steel;
Grind hard stones to meal;
Slays kings, ruins town,
And beats high mountain down.

Yes friends the answer is...

TIME

This week's piece by
Gerry McGovern's is about the price we pay to our masters of the web.

It's the same time - TIME. And we used to say that procrastination was the thief of time - now the web has replaced it. But my point this week is that the amount of time that is spent by simply sitting in front of a computer is really a huge waste of this very scarce resource.

Take me for example - I spent the better part of the weekend waiting for the migration from Vista to Windows 7. What another excruciatingly painful and waste of time that was....

However onto more practical things. Our delivery of our products and services have to be better. Gerry's piece makes a very good point. We need to be obsessed - like Google is - with making our sites more efficient and less time consuming. Perhaps we should reward not time spent on site but the shortest time on site.

Think about it

Cheers

Florida to OTAs - See You in Court

So the simmering battle between the OTAs and the States and other jurisdictions on Taxes just went up a notch.

The State of Florida has now formally filed suit against two specific OTAs - Expedia (who is licensed in Florida) and Orbitz (Both LLC and Inc) which are described as foreign corporations in the suit.

Go here to down load the entire filing. (Courtesy of STR).

This is going to be watched and watched. And then this one could even end up on the high court.

Patience by the States seems to be exhausted. I have a feeling this one is just another battle in a very long war.

Cheers

The Right Stuff - US Pilots

I fly - a lot. I know many of you do too. Our whole livelihood in the Travel industry is dependent frequently on a few folks. The life of a pilot used to be glamorous - perhaps not quite so any more - but its still a great job.

I have always felt that there is a correlation between the task and the enjoyment resulting in a better performance the more you enjoy a job. I always used to use Pilots as an example of that.

Recently I came across a site with an view on airline financials. Bob Herbst runs Airline Financials. Its a great site for information on airlines. It is done with a lot of care and an eye on demystifying much of the jargon in airline investing. I highly recommend the site www.airlinefinancials.com.

However on the site he writes a commentary which I found gave me pause for thought.

I encourage you to read it. It gave me a slightly better and more open view of the value of a pilot. The site is very useful... book mark it.

Cheers

EU Ruling on Flight Delays Compensation Makes US Rules Look Decidedly Inadequate.

The decision last week to mandate that any delay of 3 hours or more is the same as a flight cancellation was a victory for consumer protection and an abject lesson for those willing to understand it.

Formally on November 19th, European Court of Justice in Luxembourg decided that passengers who are forced to wait three hours or more will be compensated 600 euros, the same as if their flight had been cancelled.

There is a lot of documentation on this but there are three critical factors that we should pay attention to:

1. The scope of compensation was broadened to cover delays as well as cancellation. Just as an aside here - this may have a negative effect in that if an airline deems that a flight delay is beyond the threshold then the decision to cancel will be taken early and passengers could be left compensated but stranded - just a thought).

2. The delay time has dropped from 5 hours to three hours

3. The definition of what could be compensated - IE the reasons behind the delay was made less precise with the impact that other traditional "reasons" now become "excuses".

All this makes the US scheme even the proposed Bill of Passenger Rights look decidedly weak.

In my humble opinion the US should enact a clear set of rules along with penalties to force compliance by the airlines in the delivery of their product. At the moment the whole contract process is decidedly one-sided. The airlines can decide what they want to do to modify their part of the contract yet the consumer has little or no ability to do so. That to me is unfair.

And no - for once I am not picking on the airlines - I just fundamentally believe that the contract between two parties should be fair and equal. Currently this is not the case based on arcane rules that stem from the propeller era when the product was a lot less reliable. This is no longer the case and the travelling public in the USA deserve a clear set of rules.

And what do you think?

Cheers

Dynamic Packaging Protection - UK Battle

When is a package not a package?

This is at the core of the argument now being hotly debated in the UK. At the centre of the battle is the case of CAA v Travel Republic and Kane Pirie (TR's Managing Director).

The case was brought by the UK's regulatory body the CAA (Civil Aviation Authority) who is the official regulator for a number of things in the UK including Passenger Safety and the bonding of sellers of products (typically Tour Operators) through its ATOL licensing scheme.

The pursuit of Travel Republic is seen as a test case for the CAA in enforcing its recently broader based view that virtually all holiday sales of flights plus accommodation require ATOL cover. Dynamic packaging has been around for a while - some might say it rose to prominence about 5 years ago but the practice of bundling products has been around for years. The CAA and the bonding process in general has been viewed as inadequate especially following the very high profile collapse of the XL group in 2008. So why now and why pursue Travel Republic?

The answer lies in the contested issue of whether regulations cover the sale of "all" travel products. Further with concentration in the intermediary channels - there is a need for the CAA to get tougher. But there is another reason. The CAA's bond pool has been sorely tested by the recent demise of many retailers and wholesalers. Some have indicated that the bond pool may indeed be under water. The CAA has tried in recent years to broaden the pool by offering smaller retailers reduced rate schemes. Of course the real target are the Online Travel Agencies particularly Expedia. So it is a market dynamic issue that pits the traditional wholesalers (now largely concentrated among a few players) vs the OTAs and the consolidators. Also at stake is a possible advantage commercially in how the VAT is treated.

The case was filed in a lower court - Westminster Magistrates and was moved to Stratford before district judge Nicholas Evans - and TR/Pirie were both charged with 20 counts each of breaching the 1995 regulations. it was clear at the time that the case would ultimately end up in a higher court maybe even all the way to Europe's highest court.

Well Round 1 went to Travel Republic on November 11th.

The following day a number of comments were published by the UK's TTG. Check here to read them.

No one really denies Travel Republic has the best intentions at heart despite the stream of vitriol from the Government's QC who compared Pirie personally to Bernie Madoff. However this is a case that will run and run.

Ultimately we can speculate that if TR is successful - then the government will have to mandate a new scheme for consumer protection. However the government seems to have already jumped the gun by raising the APD much higher. While ostensibly a fee related to Aviation uses it is regarded more as a straight revenue tax to help HM Government pay its somewhat large (and growing) total revenue shortfall.

But caveat emptor is always the case. Should the Government win in the ultimate battle - then the face of consumer protection across Europe will change.

Gotta love those lawyers!

Cheers

High Look2Book Rates? Pegasus Says STOP!

As Pegasus follows Sabre down the outsource the data center route to HP/EDS, they are trying to find solutions to some of their more pressing issues. It is clear that they are getting creamed with lots of searches aka looks. Quoting CEO Mike Kistner in the Beat this week:

"These systems were built to manage a look-to-book ratio in the 10 to 50 looks for every revenue producing transaction, and we have seen it as high as a half million to one. It just can't sustain that," Kistner attested.

Well The Professor wants to take Kistner and everyone else who is moaning about it to task on this subject.

GET OVER IT!

Search is what it is. We as an industry have to find a way around this problem. While not belittling the issue - we have to figure out a solution to enabling search. As long as we treat this as a problem rather than a way to better serve the consumer - it will be the industry's Achilles Heel. But it can be and must be solved.

Frankly the problem sits in the architecture of the business and the commercial models around it. Constraining business by charging for looks has hardly served the GDS market well. So too will it be for Pegasus. The Search Genie is long out of the bottle. He must be served.

Tsk Tsk. Time to get real and SOLVE the problem not try and legislate it away

Cheers

OMG Twts Decl in Oct!

First reported last week by Comscore, Twitter traffic is headed downwards. Now Nielsen is confirming the trend. However by some very big numbers:

According to data provided to eMarketer by Nielsen, traffic to Twitter.com was down a dramatic 27.8% between September and October 2009, falling to 18.9 million unique visitors.

Could this be the end of Twitter - hardly - but it does confirm that there is a solid pattern into technology usage.

Once abandoned technology is seldom if ever re-adopted. If you dont believe me come and have a look in my garage.

Interestingly Facebook continues to power ahead

Ouch!

What's Missing In All This? Reflections from the PhocusWright 2009 Conference

Typically a PhocusWright conference is looking forward to a future better world. Innovation etc etc.

We see people coming up with a compelling story but not necessarily a compelling history. One question Philip Wolf was constantly asking a question to which he never got a satisfactory answer - When/how/will a new brand/competitor emerge?

So in the Professor's inimitable style - I want to ask the question why this is the case or more importantly why not.

Over the next few days I shall be posting some insight on public and some private observations.

The show this year was a bit more upbeat than last year when the world was collapsing in total fear. The meteoric rise in Expedia's stock and now the market cap for PCLN being over $2Bn more than Expedia has shaken the traditional views. The market is as one analyst put it "more of a voting machine than a weighing machine"

It has now been effectively 15 years of innovation driven from the web. Perhaps now is a good time to reflect as clearly suppliers and almost everyone associated with the travel value chain are beginning to show.

But one of the stars of the Show has to be Marvin the Dinosaur. Not to mention a reference to dogs!

Cheers

UK Traffic Numbers - Really Not Good

Despite a weak sterling which should have encouraged international inbound traffic... the UK numbers both in and outbound look pretty bad.

The number of visits abroad by UK travelers slumped by 14 per cent or 9.8 million to 60.8 million in the year to September.
Inbound travel to the UK was down by nine per cent or three million to 29.9 million in the same 12 month period.

A 24% drop in business travel to the UK in the year to September contributed to a continuing fall in total arrivals.

http://www.statistics.gov.uk/pdfdir/ott0809.pdf

Cheers

Old Varig RIP

Oh this is a sad one.

In Brazil, the judicial administrator of Flex just asked to be able to resign, since without operating, the purpose of this creation (to “hold” the old VARIG debt became senseless

With just one plane, a $2 billion debt load and the hopes of so many former Varig workers (for their pensions) riding... it would never work.

So finally they flew their last flight and Old Varig/Nordeste and Rio Sul are no more.

Cheers

BA Unions to Willie - Un-Merry Christmas

BA Unions specifically UNITE/Cabin Crew - have started to ballot their members about Christmas strike action. Willie and the Boys are not going to have a Merry Christmas and - even worse - nor will their customers it would appear. I spoke to many BA staff yesterday - about 20 on the ground and a further number Cabin Crew as I wandered around T5. The sentiment was very much against the management. The word "bitter" was brought to mind. I also spoke to a station leader who confirmed that the station was almost 100% for voting for strike action.

It would appear that BA is on a collision course with its staff and the customer as usual will suffer. With BA having slimmed down significantly over the last 24 months - one can only imagine that the ability of "management" staff to step in has been almost eliminated.

Perhaps time to look at alternates for the Xmas break

This is going to end in tears for a lot of people.

Improvement? Yes - But What Degree?S

So ARC has pushed out its Oct figures and they confirm that there are some better news along the way.

Rather than try and figure out who is telling the truth here - I went to the source. I am presenting here ARC's figures for October.

As I noted before the precipitous drop in bookings last year in September and October could only mean that this year would not be quite so bad. Indeed the Y/Y comparisons 2009 vs 2008 might look good. However - when compared with 2007 it doesn't look so hot.

So I present here 3 separate charts from the same source:

Total US bookings for the month
YTD cumulative figures
$ Value of all transactions.

The numbers I believe speak for themselves.

Cheers

The OpenGDS - A New Dawn

Reprinted with kind permission of The Beat:

The Beat ~ a travel business newsletter
New York City
11/9/09 2:32 PM

For many of us who have been involved in travel distribution, it has been an open secret that the global distribution system technology at the core of distribution was if not obsolete at the very least obsolescent--a case that has existed from at least the 1990s and, in my opinion, from before then. This was driven both by the business model of the legacy GDS as well as the strictures of the GDS core software based on IBM's venerable TPF [Transaction Processing Facility] operating system.

Over time, the pure TPF core was supplemented by auxiliary processors, Web front ends etc. IBM, too, started to move further and further away from its core business of application software and hardware to a more services-oriented model. In recent years we have seen IBM pull back from providing functionality common in TPF to being a pure operating system and coupled hardware provider. This caused many TPF users (not just airlines but banks as well) to migrate to more open systems such as Unix and Java-based programming for both cost and functionality reasons. There was considerable grumbling over the most recent upgrade to the Z class processors and the associated zTPF operating system product from IBM. The reason was that the "upgrade" created little or no additional capabilities for the user community.

The traditional GDSs were happy to pick up the development of new functions as they tried to differentiate themselves in the fiercely competitive market. Amadeus for one at its inception never included fares and pricing within the core TPF environment, and that gave them a certain flexibility in their fares products. Sabre had a heavy investment in DEC Vaxes (remember them!). So the move away from the holistic TPF based environment was an inevitable progression when the Web and its associated technologies came along.

Finally, we are beginning to see the results of these efforts in the GDS functionality. Last year Sabre in its briefing sessions on the new profile system outlined a vision of the open architecture which will see a flattening out of the capabilities of the GDS. Last week The Beat reported on what has been another open secret--that Travelport is doing the same thing with its now named Journey Manager and associated universal desktop and new profiles. Amadeus is likely not to be too far behind here.

I will not be presumptuous to describe how each player is now going down the path, but I believe it is now appropriate to state that the legacy GDSs are finally moving to what I call the Open GDS model--a novel concept when stated, but it becomes obvious when you reassess the world through open eyes. It is quite interesting to see how each of the major players is now clearly inching towards this concept and in some radically different ways. However, there are some common characteristics.

• New front end user interfaces/experiences and API/Web services for access
• Unbundled, open ports for supply access
• Advanced customer file management including PNR and Profile services
• New application frameworks

Coincidently, the emergence of credible GDS alternatives using software-as-a-service-based architecture (what used to be called "GNEs") are finally here and, more importantly, in production. Companies like Farelogix have become core to this shift to pry open the GDS model. This is now leveling the playing field with different supply players such as American Airlines, Emirates Airlines and Lufthansa--amongst others--taking legacy GDS Lite or Free approaches to both the commercial model and the technology. Other software providers such as Datalex and OpenJaw now are providing major functions that previously were the exclusive purvey of the legacy GDS world. In fares, too, we are seeing a next-generation of players independent from the GDSs, such as ITA Software and the Microsoft-Worldspan jointly developed ePricing capability.

I would be remiss if I didn't also state that the large online travel agencies have had all this capability for quite some time. So, the ability of an OTA to connect directly to the supply chain and in effect support their own versions of the Open GDS is really already in place. Orbitz before its acquisition by Cendant had already deployed its direct marketplace solution. The OTAs' white-label booking engines are clear examples of this.

While much of this is not new, it is clearly not a revolution but an evolution of the GDS model. And it comes none too soon. However, there are benefits and challenges that come along with this new world order.

The Open GDS model shows that responsibilities for distribution are now more evenly matched at different ends of the value chain. We will now see differing models emerge commercially to match this new open environment. The one-size-fits-everything model is, as I have written before, now clearly on the way out and the coffin has several nails in it already. The Open GDS model is a natural, and in my opinion unavoidable, result of fragmented content. I want to make clear that this was not a chicken and egg story. Fragmented content was always there. The GDSs just didn’t like to accept that fact.

Both ends of the distribution value chain now need to recognize that there are new realities. The suppliers now need to adopt better tools for distribution management, a role that used to be exclusively the domain of the legacy GDSs. Now no more. For the intermediaries and sellers of travel products, multi-source supply is not a nice-to-have but a must have, and in most parts of the world already a fact of life. New systems to support a more bilateral versus multilateral model of supplier relationships must be implemented, and quickly. This cannot be just a bolt-on capability; it must be at the core of the intermediaries' capability.

For the traditional GDS companies in the middle, these are new challenges--not least of which is how to demonstrate that their value remains consistent to suppliers and sellers alike. It would seem that the legacy GDSs are getting poked and prodded from all sides and seemingly all at once. They have fought a good battle, but now it's time to stop the rear-guard action and welcome the 21st Century. The next round of GDS/airline PCA (participating carrier agreement) negotiations will change the commercial landscape of the distribution market. The world will be a very different place in 2013, when the re-contracting season will come to an end. That season is now upon us and the battle lines are drawn.

Welcome to the new dawn. Welcome to the age of the Open GDS.

Travelport First To Cut Deal with BA

Far from its one time part owner Travelport (Galileo and Worldspan) has now concluded a deal with BA.

The deal extends the current opt in/opt out arrangement for significantly less than the regular Legacy GDS segment fee.

It should be noted that in the UK Home market - the moving of content out of GDSs by BA has been under way for some time with the Lime Management.

We can expect to see more content moved out of the legacy GDSs to systems such as Lime over time.

FYI The Agency pays for the Lime service a rather hefty ticketing fee.

Cheers

BA-IB Agreed - Now The Fun Begins

As the details emerge of the deal - it has been agreed - the regulatory fun begins.

The Professor understands the deal will be very similar in appearance (to the customer) as the AF/KL with the retention of brands and coordinated activity. However since AF/KL was a takeover - the process of protracted approvals will be long and complicated.

It is not quite a merger of equals. I believe it is a 55%45% split in favor of the former British Carrier.

However the harmonization of rules particularly union contracts will take years to accomplish. Regulatory approval is another matter with the 4 way atlantic alliance still not agreed. BA will have to give up some slots at LHR and IB some at MAD.

With no viable local Spanish Carrier (Air Europa perhaps) able to pick these up in MAD then it becomes a little harder to work out. Virgin is of course going to make a lot of noise about things at LHR.

So let the fun begin!

Cheers

Shock Horror- AZ Makes Profit!

Say it can't be so... but it is.

AZ made Euro 15 Million in the last quarter. A good deal better than last year at this time when it lost a boat load of cash.

All the metrics look good. Load factors and progressions since the first of the year.

So perhaps Alitalia might be a phoenix in rising... just like its southern neighbour Olympic.

Cheers

Outted in DE, Available at WTM and PCW

Oh dear!
The Professor has been publicly outted in a German trade magazine - FVW.

So now my terrible dark secret is out in the public domain. Not that it was hidden that well anyway! A simple Google search will suffice.

With that having happened - I will be traveling for the next few weeks. Next week at World Travel Mart in London, I shall be there on Wednesday and Thursday. I shall be roaming the halls.

The following week - I am at PhocusWright in MCO - you will find me somewhere amongst the blogger group. Plus propping up a bar or two. Since I cannot afford the outrageous prices at the Omni - I am staying with a VERY select group at the HI Express. We will be having a great time there I can assure you the walls will be rocking!

if you wish to meet up - let me know. my email as always is ProfessorSabena@gmail.com.

Cheers

Stupid Airline Web Tricks

Since its the weekend it is time for my (occasional) round up of stupid airline tricks - this weeks focus is airline behavior on their websites.

My candidates this week are members of the SkyTeam family. So listen up Delta and Air France - this applies to you. Equal billing BTW for one of the awards goes to Amadeus.

This week's award for "making things unnecessarily complicated and making me annoyed" goes to Delta for the formal inclusion of the name in the sign in process. With due deference to DL - they may have been required to do this for some arcane reason but since no other major airline makes me do that - I am surprised. it is an unnecessary annoyance. So now every time I use Delta.com - I have to go through this annoying extra step.

Thank you the World's largest airline for making me do things that are really unnecessary and constantly reminding me of this fact every time I use your website.

The second award goes jointly to Amadeus and Air France's subsidiary CityJet. The award for "completely inane form of bilingual user experience because I am too lazy to ask the customer what is his preferred language and because I am telling him what to do" goes to these two Air France subsidiaries. (Amadeus still counts Air France as a parent with airline's 23.14% Shareholding in the GDS giant).

It is so pervasive throughout the booking ticketing and itinerary process that I am just flabbergasted at the extent of the nature of the problem.

By now AF as a global airline should be able to have its subsidiaries support a reasonably decent customer experience. But no ... here is one of the transgressions I have encountered - there are so many!

I am flying from one English Speaking Country to Another. So why show me the information in French at the top in bold vs English at the bottom in light type!!!
The translations themselves are appalling. Some of the worst Franglais I have seen.

The Award goes jointly to Amadeus and Air France/CityJet because the engine is an Amadeus one and it lets you know throughout the process that it is Amadeus powering the transaction. So they get equal billing on this one.

Enjoy the rest of the weekend. And Airline Webmasters (are you still called that) I shall be watching you...

Cheers