US DoT Tentatively Approves BAAABI. Branson Pissed

For some reason on a Saturday the US Dept. of Transportation has announced its approval of the BA+AA+IB transatlantic alliance. In a continuation of its policy of pro-oligopoly, it demanded only a small concession of 4 slot pairs at LHR be surrendered. Far less than the EC has demanded and far less than its own demands 8 years ago for 16 daily slot pairs to be surrendered.

Virgin Atlantic Chairman Richard Branson is obviously not a happy person.

Already the applause has come from some groups such as BTC who believes that 3 alliances are an inevitability. Given the previous rulings it is unlikely that the EC will impose greater restrictions but it does seem to be a bit of a joke to only ask for 4 slots to be surrendered. A far better arrangement would have been to demand that new slots be made available for new entrant carriers. But the status quo seems to be the protectionism and cronyism that has been a hallmark of the US DoT.

If the competitive authority was truly doing its job then it should open up the market for total freedom. Well we shall see. Next week in Spain the negotiations for the next round of Open Skies between Europe and the USA open up. High on that agenda will be total deregulation and relaxation of sovereignty rules.

Cheers

Recovery? What Recovery….

So the first shoots of spring are around us. Lots of folks are very happy and walking with a new spring in their step. So what about January numbers? Well not so good actually. Yields are still in the toilet and transactions are not as healthy as they could be. We have two sources which should start ringing some alarm bells. OAG reports that capacity is up again for the 6th month in a row. It is continuing to rise at a time when restraint might be a better policy for economic health. And we still see yields in the toilet.


ARC’s numbers show an improvement over 2009. But the numbers are still way down on 2006/7/8. The legacy airlines are feeling the pinch. The LCCs are continuing to grab market share. Total pax numbers are up. More than the percentage of GDS based ARC bookings in the USA.

In looking at these number specifically for the USA we can see that the drop off in 2009 was 19%. For 2010 the drop off from 2008 was still 13%. More worrying should be the yield situation. While transactions are off 2010 vs 2008, revenues are still worse off at 17% when comparing the gross transactions and revenues for 2010 vs 2008. So while traffic is coming back the yield recovery is less. Thus GDSs and transaction model players will be a little happier but those whose livelihood depends on the revenue side of the equation must remain worried. Airlines clearly must think this is going to be a cause for little celebration yet. Long term the numbers tend to confirm the view that there has been a fundamental shift in the market on the revenue types. However there is one factor that ARC’s numbers do not illustrate. The value of the Ancillary Revenue. So if we look at the airlines they can be happy to know that if they are achieving AR revenue boosts of above 4% across the board then they are doing well. What will be interesting is that this is revenue that the Agency channel is missing out on. Perhaps now the agency channel will start to think more seriously at the value of AR to their bottom lines as well.

So this tells us that there is clearly a price being paid by the market and the recovery will be a lot slower than anyone wants. However there are some opportunities to be had if people are smart.

Cheers

British Airways, Less Could Be More

BA is finally coming round to accepting its fate. The airline is making noises similar to that of its close cousin Qantas prior to the latter slashing premium seats on its fleet.

So three new stories should give some context to BA's future positioning with regard to its premium products.

Firstly - First is having a Makeover. BA unveiled its new first class "demi-suite" this week on a 777 used to and from Chicago. The new seat allows for the same number of seats in the cabin (although I have not been able to confirm this) while upgrading the onboard experience. There is a wider bed, a closet for your jacket (more self service from BA) and a better set of seat controls and "unique personal windows"!!!! One thing is for sure. There will be a lot less First Seats out there by the time the roll out of the new first class is complete in 2 years.

Hot on the heals - of this announcement - Open Skies will be flying Paris to IAD. Providing a premium service between the French and US capitals would seem to make sense. Although I have to question whether any government personnel from either country would be flying on a British Aircraft.

Finally Willie Walsh has been spouting off that he will see a reduction in short haul premium seating. Frankly I have noticed of late that the front cabins of the Airbus European Fleet has less of the full seats and more of the convertible seats.

So BA is moving down market. It has to. That is where the market is. Anyone willing to pay 600 Euros for a one way Biz seat in Europe must be off their heads (ok guilty but I had no choice!!!).

Cheers

Ancillary Revenue’s Achilles Heel

In a Beat Article last week – TRX reported that less than 1 per cent of transactions that they process had ancillary revenue.

The statistics are sound – perhaps. Why do I say that? Because they are analyzing information that shows ONLY what it can show. And therefore this is where the Achilles heel of Ancillary Revenue floats to the top. The problem is that the agency tickets cannot accommodate (except in very rare circumstances) Ancillary Revenue items. So the total possibility of fulfilling Ancillary Revenues via the agency channel is almost zero. So the study shows what we already know. IE that you cannot fulfill Ancillary Revenue in the agency channel.

The airlines – particularly US legacy based ones – need to move the process of Ancillary Revenue away from fulfillment just from the airline’s own fulfillment process into the sales channel that constitutes the majority of sales. The airlines need to expand their AR. This is obvious. But the constraint is that the largest tool for selling Airlines’ products – the GDSs – cannot accommodate the sales process. Indeed the current generation of tools will not support this. For proof – I turn to Travelport’s latest Product Advisory. For this I am indebted to Professor Robert one of our regular contributors to the Blog. In PA 917 (Version 01) Airline Additional Services Display Functions in Apollo™ and Galileo™ on page 2 Travelport clearly state’s that the Galileo Desktop will not support Ancillary Revenue.

The initial release of Airline Optional and Additional Services will only be accessible on the Apollo and
Galileo systems via Terminal Emulation (TE). A separate and subsequent will be sent relative to release
to the Worldspan Terminal Emulation (TE) environment. Merchandising capabilities for Galileo Desktop
(Viewpoint) will not be developed. Travelport’s Universal Desktop will include enhanced merchandising
functionality, including access to expanded content, product descriptions, itinerary comparisons, and upsell
capabilities.

Click on this link – page 2

http://travelport-english.custhelp.com/cgi-bin/travelport_english.cfg/php/ma/fattach_get.php?1=AvUK~woWHv8S2Xr~Gjce~yL~Jvsq~6v~_h80lDr~&2=8355

Thus at the very moment the airlines need Ancillary Revenue to improve their bottom lines – one of the largest channels for this potential revenue is blocked to them.

The airlines clearly understand this and are indeed perplexed by the legacy GDSs reluctance to adopt AR. However this exposes the fundamental issue – the true Achilles heel which is that the legacy GDS process does not support AR. So we are clear – it is not that it cannot be done. Already ARC supports the processes. Airlines are able and willing to support the infrastructure that will enable AR sales via the agency channel. The clear proposition is the Airlines need the Agency Channel. The Agency channel has diverged enough from the GDS dependency to enable its own solutions for service of its customers and their partners. So Troy can be saved. What do you think?

Cheers

The Travelport IPO Debacle. Investor Payback?

Despite some generous concessions at the last minute by the Travelport team on their feather beds and parachutes and reduction in the initial offer price, the “London deal of the year” has fallen apart and so there is to be no IPO for TP for at least another 6 months probably not now until 2011. A spin and a brave face allowed the announcement of the cancellation as follows: “We will consider bringing it back to the market at a future date, when equity market conditions are more favorable."

I have spoken to several people who have been on the periphery of the deal and spent the last few days chatting with some investment analysts who have familiarity with Travelports IPO Book. Based on these conversations I would like to give some analysis which I hope will put the failed IPO in perspective. I think we have to look at things through three criteria. For this IPO to work – the general economic climate had to be good, IE the market had to receptive to the type of deal, the specifics of Blackstone and its partners in being able to pre-sell the deal and then for the market herd to either accept or not the package. Finally the critical assessment of Travelport – its recent performance, its model and the prognosis need to be microscopically examined.

It was clear that the climate for IPOs has not been great. Greece and Portugal’s troubles are making headline news in the recent weeks. Of the 62 IPOs launched since December 1 2009 globally, 32 were shelved -- 15 in the U.S., 7 in Europe and 10 in Asia.
The global market upswing that was clear from the end of the year in investment confidence has not translated a market for those mega IPO deals that were a hallmark of the early to mid 2000s. We also have to bear in mind that the market is much chastened and is still seeking real value and future growth rather than just cashing put “Venture Vultures”. But the global debt loading that went on last year to save the somewhat broken financial markets has eventually to be paid. So the climate was perhaps something a contributing factor to this failure. If the climate was overall bad then it would have affected other plays. However it wasn’t bad enough to halt everything. Indeed one of Amadeus’s two VC backers managed to get one of their IPOs away this week. Thus the market’s ability to absorb a large deal like Travelport’s IPO reputed to be one of the largest in London this year was still a viable/possible proposition.

For Blackstone in particular, there has been a certain market resentment against the huge debt mountain that they have in their portfolio. The specific failure of Blackstone in the mega PHH deal at the end of 2007 was an early harbinger of the troubles that would beset the VC market for the next 2 years. And some influential people have not forgotten that. Just ask the guys at GE. Boy were they pissed! I do believe that there is a general negativity towards deals that are straight cash outs for the Venture chaps. As one UK fund manager put it: "Investors in the quoted market are not really enthusiastic about being the buyer of last resort for these ‘used’ private equity investments." (Source Reuters). We have to call a spade a spade. Blackstone has already taken its money out so why should the markets reward them for a bad or mistimed early risk. We should remember that over the past several years the Travelport debt has been widely traded and much of that debt has been heavily discounted. In some transactions that discount over face value was a very high number. Thus there is a significant discount already in the market on that debt that Blackstone is seeking to retire. Those debt holders include many of them who are now tertiary or further removed investors. These chaps are in general bottom feeders and hedge funds. For the general market to essentially become the buyer of last resort was in my opinion the biggest single downer factor for the deal itself. The Tamasek deal also set a bar for a concessions and discounts that meant someone would still need to foot the bill. Well it became clear that the traditional money guys were not keen to cover others’ benefits.

Let’s look at the focus of the company and its risks. As I have written previously Travelport has been very aggressive in the market offering deals on both the supply and the distribution side. BTW they are not alone. Within the user community, Travelport has been offering deals of $4 per segment. Thus the market for segment overrides has been really hot from the middle of 2009 until now. Travelport has been crowing about its “Significant Recent Wins”. But on the airline side, Travelport has been offering full content and opt in arrangements that have lowered the gross revenue from segments. That my friends has the smell of something rotten. Lowered gross and raised incentives to customers for the same or falling transaction numbers has to be accounted for sooner or later. While Travelport bills itself "a strong company with an attractive financial model and great momentum, as demonstrated by recent contract wins,” these need to be put into perspective. A cynical person might have a different opinion of who was coining it if ” …The business remains on track to continue delivering outstanding value for its shareholders.” (Reuters). Further in the case of Travelport (as compared to Sabre and Amadeus) a close examination shows they don’t have the strength in the other 3 lines of business. Its investment in the online market space had to be bolstered last year with a cash infusion from TP to Orbitz (Travelport is the largest owner of Orbitz stock). Similarly last year Travelport took a big goodwill write down in their GTA part of the business that has been tanking in recent years. As we know Travelport is the smallest of the big three in the Airline IT space. Indeed in effect it has lost a major customer with the shuttering of Northwest at the end of last month. Thus its tony PARS airline reservation service now has only minor airline customers.

We cannot discount the fact that their core business has risk, clearly the institutional investors saw that and demanded significant concessions and discounts. The emergence of real alternatives to distribution on both the direct side and via new channels represented by Farelogix and Lute amongst others creates a whole series of risks that were not there when Blackstone took Travelport (aka Galileo) off the market. The emergence of Ancillary Revenue as a major importance for the airlines and the general infrastructure demands point to a requirement for significant technology investment spend in the coming years starting almost immediately. This comes at the very time when Travelport had reduced its R&D budget to a fraction of what it once was in absolute and in percentage terms. Travelport also doesn’t have the ability to point to future savings. It already has discounted and implemented those savings from the merger of Galileo and Worldspan. In fact Travelport has some significant inefficiencies as it supports many different hosts: 3 GDSs (Agency Apollo, Galileo and Worldspan) and three separate airline hosts (PARS, Deltamatic and United Apollo) in two data centers. Nor is there any fat in the Travelport organization that will result in magically creating more book value through cost cutting.

So now we know that the deal failed. In future posts I will examine what the future can hold for Travelport. I will also be looking at the impact on Amadeus and Sabre. While they (IE all GDSs) have a good cash flow and there is no immediate risk for the business, the halcyon days of high value for Travelport might just seem not to be here anymore. Happy Days are just not there in Langley, Atlanta or the Blackstone offices. The next effort (if and when it happens) will have to be substantially different. If the same deal was to arrive on desks in say 6 months it will hit the same opposition and same environment. For Tamesek and its proposed part of the package this could also create a long term issue of finding a way to meet the terms of that agreement without essentially robbing Peter to pay Paul. Jeff Clarke and his team clearly have their work cut out for them to salvage something from this wreckage.

Cheers

And Sabre Makes 3 . Multi-GDS Access

In no surprise to anyone - Sabre has announced that its next generation agent tool will be multi-GDS. Thus making all 3 legacy GDS companies now offering to link to each others' hosts.

This marks a full entry of the GDS players into the agent desktop market. AmadeusOne followed Galileo's as yet undeployed Universal Desktop. The new Sabre tool will ultimately replace MySabre. The new tool is described as a "merchandising platform" in a clear nod to the importance that merchandising will play in the future of travel agent tools.

There will be quite an interesting battle now emerging from the traditional players as they try to figure out how to develop hybrid functionality to access not just basic GDS host based functions but remote XML and even EDIFACT based services. In what must now be an admission that the days of host centric computing are over for the GDS world - the services are going to come from a wide array of sources. For the IPO bound GDSs the investment in technology to catch up to the rest of the world in computing capability will be significant. How this will be paid for remains an open question.

Next generation products from companies like Farelogix and LUTE Technologies are already beginning to appear in the market place.

Cheers

OneWorld Breathes a Sigh of Relief

JAL Stays with OneWorld and announces AA as its "new" partner.

In what the WSJ called a "come from behind" victory for AA - it would seem the legal risks became the big issue.

Anti competitive restrictions could have been pretty intense. There were 2 challenges. AMR had already threatened a protracted legal battle if Delta teamed up with JAL. And the other issue would have been a potential anti-competitive challenge.

So OneWorld can breathe a sigh of relief. However does this make JAL better or (more correctly in y opinion) more viable? The jury will be out for a while on this one.

Cheers

Blackberry 9700 Not Compatible with Office 2010

OOPS

Someone screwed up - or rather we are all a little too premature.

So there is a current incompatibility between the Crackberry BOLD 9700 and the latest iteration of office -Beta 2010.

It SHOULD be fixed sometime soon but in the mean time watch out for it.

For more information on the problem head over to Blackberry.com

http://www.blackberry.com/btsc/search.do?cmd=displayKC&docType=kc&externalId=KB15564&sliceId=1&docTypeID=DT_SUPPORTISSUE_1_1&dialogID=282117039&stateId=0%200%20282115660

As a temp fix here is what you can do.

1. Synchronize all of your data on your old BB device.
2. Back up everything
3. synchronize the information by backing up your calender to a iCalc or some other device.
4. Back up your local addresses to local media (like a SD card)
Restore from these places.

The fix should be in - probably in about 1 month.

Cheers

The Professor - This week And A Request

This week I shall be at the TNooz tcamp2 in London on Tuesday Feb 9th.

So come along and rub shoulders with a must-attend gathering of travel tech journalists, bloggers, entrepreneurs, executives, technicians, engineers and thought leaders. I am just a hanger on but will be there anyway.

So my request?

This week I will surpass 1500 blog entries for the Professor. If you would like to share some comments or give me a suggestion for the 1500th entry - then please send away to professorsabena@gmail.com

Cheers and have a great week

BA vs FR and U2

The January Traffic numbers are in and the numbers are impressive.

Ryanair is now officially more than twice the passenger size of BA. Easyjet is nearly than 50% larger in terms of number of passengers carried. Both of the LCCs are generating better yields than the former national carrier.

So here are the comparisons in January:

Ryanair 4.44m passengers , up 9% year-on-year, Load factor 70%
easyJet, 3.14m passengers up 10.7% Load factor 79.3%,
British Airways, 2.14m passengers dropped 8. Load factor 74.2%.

No need to speculate on the financial impact of these numbers.

However this does indicate that the hybrid model is gaining traction. It will be interesting to see how well FR's numbers look this quarter in comparison to U2.

Cheers

So What Will He Do Next?

He is not fooling anyway. Steven Udvar-Hazy has now left his baby and officially retired from ILFC.

But we all know he wont be out of the market for long before he is back in the leasing business.

So I will speculate that given his current non-compete will not be that long. There is just too much opportunity out there for him to sit on the sidelines. Specifically there is a hole in the market now for someone to manage the short term distressed production slots.

Let's see where he re-emerges from the jungle

Cheers

Update on Aegean's and Olympic's Websites

So there is good news here.

Aegean's website is back up to full speed. They have restored all air fares into the system to all 4 seat buckets are now operational on the website. It still has some glitches and you can break it easily.

And I owe a bit of an apology to Olympic for giving them a hard time over their website being down. Well turns out its not. its still there - just darn hard to find.

So while I will apologize for this (the English website for Olympic can be found here) I will slam them for not doing enough to ensure that their own website shows up in search engines (er like Google and Bing). Further they really should do something about the 2 dot com websites Olympicairways.com and olympicairlines.com. Both of these are registered at Deutsche Telekom but have no data available.

Cheers

Hotel Points Get Nasty

There is a general debasing of the currency out there. The airlines have slowly found sneaky ways to reduce your FF value. I understand from several people that Frequent Flyer Miles are now the biggest currency in the world.

The incredible overhang of that liability is just mind boggling. However consumer behaviour being what it is. People tend to hoard their points. While people are prepared to go to debt on their credit cards - they dont use up their FF miles. And yes I am guilty of this. (not the credit card debt thing BTW).

Anyway - Hilton and IHG are getting into it. IHG's Priority Club is going after the devaluation of HHONORs points by about 20%. They are offering you at least 1000 points in return for giving them the status on your position with HH. So I did just that. Its a bit sneaky but for a free 1000 points and a chance at 2 million - why not?

Frankly it wasn't enough really but I wanted to see what they would do for me.

From my point of view I was already ticked off at Hilton and therefore I stopped using them this year. My "disloyalty" is not that religious. I always chose a hotel based on location. Only if they are directly competitive (rates and location) does FF miles and points ever really make a difference to me.

So tell me what you think

Cheers

Should I Go To The Dark Side (iPhone?)

My contract is up and I am sorely tempted....

To move to the iPhone when I have been a dedicated Crackberry user from the early days of the Mobitex network and rare connectivity. From the machine that was really a glorified Beeper to the advanced tool Millions know and rely on and of course are addicted to.

I actually spent a personal day out of the office yesterday - I went up to Canada with some friends and had a great time enjoying the Olympic pre-activities. If you are going anytime in the next 4 weeks - Vancouver is a blast. But I digress.

I counted the number of times I actually looked at the blackberry. I have it set to buzz when new mails or texts arrive. I am not a huge fan of the voice side of the device but accept it. Also I broke the back of the machine (a Bold 9000) within weeks of getting it. I also had the people I was with count me. We did several checks during the day - it became a bit of a game. I was astonished that by the time I arrived back home here are the statistics.

Inbound Calls - 8
Outbound Calls - 10 (plus 4 that the others needed to use because their voice plans didn't support calls from Canada).
Inbound emails 170
Photos taken - 85 (with Blackberry only - many more with my other camera).
Outbound new mails 10
Outbound replies 30
Number of times looked (from 0700-2400) 142. (Give or take about 5%)

I guess this makes me very sad or addicted or probably both.

So returning to whether or not I should move to the Dark Side and get the iPhone. I know a lot of people who love it. However there is the real darkside to it. The cost.
Data Roaming charges are frankly appalling. $15 per MEGAByte. So I asked a colleague to show me his data usage for the iPhone in the USA. On average he was using for apps and email about 200MB a day. Extracting about 80% for the email. (My BB data usage is about 250MB for the emails a day and I rarely use if for surfing). So at that level 20MB a day it would cost me $600 per day in roaming charges. OUCH!!!! And this is just for Canada.

The numbers for Europe and Asia are also pretty hard.

So I considered alternatives. Getting Pay as You Go iPhone agreements in different countries. I am regularly in 4 countries (UK, FR, DE and US) it becomes too hard. The sheer laziness of me (and others I am sure) to swap out SIM cards (and of course its not exactly easy) makes it just too hard for benefit.

Thus since there is no data plan that works for me anywhere on this planet - i am left with very few options. t-Mobile has a great plan for international roaming for BB. $59 all you can eat email. AT&T is $10 more.


So this is where I will sit for now - I am not going to be going to the iPhone.

So today - I will be off to get a new Blackberry Bold 9700.

I will just have to carry on eying with a degree of envy those cool apps on the iPhone....

Cheers

Quick Reminder On Comments

Dear readers and fellow professors. Please note that I cannot accommodate non-English comments. While I wish that I could, the chosen language for this blog is English and therefore the comments need to be made in that language.

If you wish to republish the post in another language, may I ask that you contact me directly.

Thanks

The US Government Has Spoken

Way back when Ancillary Revenue charges were new, I opined that there was an issue of taxation. I argued that if the original bundled ticket was taxed then the unbundled elements should also be taxed.

Well the US Government in the form of the IRS has now spoken. And guess what - the charges are not taxable.

Specifically below you will find what is and what is not taxable according to the IRS. So I have pleasure in presenting the potted version of the rules below. However this is likely to send the Congress rushing to the legislation table. if last year $2Billion was generated in these fees by US airlines and this year projected to rise to $10 Billion - all without tax - then the government is going to find that WAY to easy a target to ignore.

So for the formal Air Transportation Excise Tax - Audit Technique Guide click on the link.

Per the IRS, the following services and fees are not taxable:

• Assistance in making travel plans, purchasing tickets and requesting seat assignments, either in person or on the telephone (as opposed to on carrier’s website).
• Applying the fare paid for an unused nonrefundable ticket to a new ticket.
• Standby fees
• In-flight purchase of food, alcoholic beverages and headsets.
• Checked-bag fees, including overweight and oversized baggage.
• Purchase of airport lounge access, on daily or annual basis.
• Purchase of nonrefundable gift cards.
• Optional custodial services to children traveling without an adult.
• Fee for transference of miles to another account.
• Extending the expiration date of miles in a member’s account.
• Fee for redeeming miles for the purchase of air transportation.
• Fee for canceling and changing a ticket purchased with redeemed miles.
• Purchase of elite status in a loyalty program.
• Providing a printout of account details to a member or third party.
• Providing password protection for account inquiries made by telephone.
• Providing personalized luggage tags.

But the following services and fees are taxable:

• Enabling the purchase of upgrades that are paid for at check-in at automated kiosks.
• Enabling the purchase of upgrades to a higher class of service, at check-in or in advance, with money or miles.
• Fuel surcharges added at the time a customer purchases tickets or acquires tickets by redeeming miles.
• Mandatory custodial services to children traveling without an adult.
• A member's purchase of frequent-flyer miles for his or her frequent-flyer account or another member's account.
• A member's purchase of bonus miles for his or her account.

The government however likes to leave itself a little wiggle room.

Here is the disclaimer which means that they can change their mind...

"NOTE: This document is not an official pronouncement of the law or the position of the Service and can not be used, cited, or relied upon as such. This guide is current through the publication date. Since changes may have occurred after the publication date that would affect the accuracy of this document, no guarantees are made concerning the technical accuracy after the publication date."

And this is off IRS.GOV!!!!

Cheers

CORRECTION: Aegean Website Upgrade

Dear fellow professors

I stand before you admonished in not accurately checking my facts. Mea culpa. The information I gave you on the Aegean Airlines (A3) website is incorrect.

Right airline - wrong vendor.

Aegean has migrated AWAY from the SITA IBE to the Amadeus IBE. So the problem is with the cutover to Amadeus's IBE.

Thanks to Professor Tony for setting me straight. And yes its still giving me bad results that raised the price by 48 Euros per segment!!!!

Cheers

Farewell PARS and NWA.com

With effect of the new month - Delta has retired 2 icons. NWA.com now goes to Delta.com and the old PARS reservations system is all but gone with all flights now in Deltamatic. There are other airlines still in PARS but these are fairly minor. Travelport still manages the infrastructure for the DL data center along with the Worldspan, Apollo and Galileo hosts.

So a brief tear for 2 icons.

Cheers

A New World Order - Asia Rising

There is clearly a sea change occurring in air travel. The move to LCC has been a phoenomen that has largely passed the USA by. Europe and Asia have adopted the so called "Southwest" model extensively and extended it. The next gen Hybrid Value Carriers (HVCs) such as Easyjet, Air Asia and Jetstar are not to be found in the USA market.

And now we see that the legacy network based airlines are feeling the pinch. IATA coming off the worst year in its history no longer fully reflects air travel. Rather the new generation of these airlines represent where air travel is going. And consumers are lapping it up.

Two recent pronouncements out of IATA confirm this. Firstly the Asia market has now overtaken the US as the world's largest market. And then there is the news that IATA thinks it is going to take three years for the market to recover.

Right in time for the next recession.

Yes the world is definitely changing....

Cheers

SITA's New IBE costs More Money

I happened to be working on a project looking at IBEs. Over the weekend SITA's new IBE went live (after being down for more than 36 hours). On its return the availability of fares dropped a whole class. It went from 4 to 3. As a result there are now a lot of people who thought they could buy tickets at the lower fare which has now disappeared.

It is clear there are going to be a few teething problems with the implementation of the new IBE. However its all under SITA's control - they have the pricing, the IBE and the back end Res System

So let's hope it settles down.

I will be watching!!!

Cheers