The Obama Administration has downgraded Mexico to Category 2. According to Reuters, The downgrade from Category 1 to Category 2 is not based on any safety practices at a specific airline. Category 2 typically means that aviation authorities have fallen short on technical expertise, personnel, record-keeping or inspection procedures.
So just watch out when flying to Mexico. And also watch out for some of the weasel words that will be used.
Cheers
30 July 2010
Yes We Should Read The WikiLeaks Piece
I am an advocate for freedom of information. However the sheer volume of data in the Iraq WikiLeaks dossier is enough to turn anyone several shades lighter,
I do not condone the theft of information nor do I condone the bad acts and poor decisions that contributed to this mess. Worse is the cover up that occurred.
I first read about WikiLeaks in the New Yorker a few months back. Then I was introduced to Mr Assange. Its a balanced piece and obviously designed by the media savvy Mr Assange as part of his assault to get his story out.
So my exhortation to you is to read some of the dossier and draw your own conclusions. Its heady stuff. It makes for unsavory reading. However you understand that fighting the 21st century war is a very hard thing to do. And no you cannot do it in the public eye but you better be prepared for it when it gets out - as it always will.
Remember in the Internet EVERYONE can hear you scream...
Cheers
I do not condone the theft of information nor do I condone the bad acts and poor decisions that contributed to this mess. Worse is the cover up that occurred.
I first read about WikiLeaks in the New Yorker a few months back. Then I was introduced to Mr Assange. Its a balanced piece and obviously designed by the media savvy Mr Assange as part of his assault to get his story out.
So my exhortation to you is to read some of the dossier and draw your own conclusions. Its heady stuff. It makes for unsavory reading. However you understand that fighting the 21st century war is a very hard thing to do. And no you cannot do it in the public eye but you better be prepared for it when it gets out - as it always will.
Remember in the Internet EVERYONE can hear you scream...
Cheers
Passenger's Advocate Comes Under Fire
It is not often that you read a piece that essentially demolishes someone's credibility. And 3 web pages devoted to it at that. However it seems that the crusade of Kate Hanni is being impugned.
Travel Weekly which I love to read as my retro reading did a decent job of explaining the battle in the Hanni camp.
Personally I was rooting for her, I thought she had a good momentum. But it seems that she has somewhat blotted her copy book. One of the allegations against her is that she targeted Keith Mitchell. While the latter and I do not see eye to eye on just about anything - I do agree that the US should have passenger rights legislation. And so did Kate.
Let's hope there is a win here rather than a putting one person down to get the credit.
Cheers
Travel Weekly which I love to read as my retro reading did a decent job of explaining the battle in the Hanni camp.
Personally I was rooting for her, I thought she had a good momentum. But it seems that she has somewhat blotted her copy book. One of the allegations against her is that she targeted Keith Mitchell. While the latter and I do not see eye to eye on just about anything - I do agree that the US should have passenger rights legislation. And so did Kate.
Let's hope there is a win here rather than a putting one person down to get the credit.
Cheers
The New Category: The Un-Fan
There is a certain legacy feel to life sometimes. Call them Luddites or just call them overwhelmed. But there is a large percentage of the population who just dont want to be your fan. And connect with you on Facebook. Nor do they want you to spam them with countless other messages.
I wrote about this earlier this month - I found another study that confirms my sentiment. This time eConsultancy has picked up the same theme. Check out this article from WebPro News. The eConsultancy piece examines the motivations and habits of consumers. Sorry but you have to pay for it... but its a good piece.
So I have created a new category called the un-fan. He/She has a pride place on my dart board and he makes me think of how to reach him and his colleagues.
You should too...
Cheers
I wrote about this earlier this month - I found another study that confirms my sentiment. This time eConsultancy has picked up the same theme. Check out this article from WebPro News. The eConsultancy piece examines the motivations and habits of consumers. Sorry but you have to pay for it... but its a good piece.
So I have created a new category called the un-fan. He/She has a pride place on my dart board and he makes me think of how to reach him and his colleagues.
You should too...
Cheers
ARC Data Shows Continued Slowing/Flat Growth
After the initial surge in bookings in the early months Jan till March, the US market appears to be stagnating. The Y/Y growth has slowed and actually in 2 of the 3 months declined. Much of this can be attributed to the activity of 2009. Check out ARC's data (you have to register).
But one thing is for sure, That capacity growth sure is not happening and the airlines are maintaining some significant control.
Will corporate travel come back in September... certainly I am anticipating a bump in traffic to occur from the business side. So too are the airlines it would seam. This time last year - according to my activity counter - we were deluged with offers from all airlines for Q3 deals. So far this time round, there is a significant quiet and lack of promos coming from the US airlines for the 3rd Quarter.
Cheers
But one thing is for sure, That capacity growth sure is not happening and the airlines are maintaining some significant control.
Will corporate travel come back in September... certainly I am anticipating a bump in traffic to occur from the business side. So too are the airlines it would seam. This time last year - according to my activity counter - we were deluged with offers from all airlines for Q3 deals. So far this time round, there is a significant quiet and lack of promos coming from the US airlines for the 3rd Quarter.
Cheers
Will They Or Wont They: Google and Travel Transactions
The debate over whether or not Google gets into the Travel Transaction business seems to haunt a lot of people. In my view - the issue is moot.
At the official news conference for the ITA acquisition, Chairman Eric Schmidt REFUSED to be deny that Google will not be in the Transaction business. The Charm offensive (that seems to be failing) studiously has the Google Acolytes saying no we are not going to get into the transaction business.
When I was at Expedia and we started our own charm offensive with the rest of the World - we (as then Microsoft) could not avoid the issue. But we downplayed the threat to the traditional agents. Internally of course we saw that the traditional agency channel was not that smart and therefore we could grab market share easily. That has been proven with the demise of the smaller agent and the rise of the OTA mega intermediary. The distribution pyramid looks dramatically different today than in 1996.
So my point about the issue being moot - is that Google doesn't have to be in the Transaction business. AT LEAST not in the conventional sense. I do agree that Google wont be manning call centers any time soon. But processing squillions of transactions in their cloud. Well don't say I didn't warn you.
Cheers
Airline Demand Strong, Now What?
This summer the airlines have shown a strong demand from the leisure sector. This has significantly reduced the availability of cheap seats and dramatically raised the pricing - at least in theory.
In practice that oh so subtle move towards ancillary revenues is beginning to pay off. Judging by Q2 profit announcements - the carriers doing not so well are few and far between. The ancillaries are powering many carriers - particularly the US and LCCs to greater profitability.
The weakest areas?
Asia Pacific with both JAL and ANA reporting losses is a prime example. But Chinese carriers are doing very nicely thank you.
And then there are BA and LH. LH has several carriers it is doing a good job on to reform. SN, OS, LX, BD. The core LH mainline we believe is doing better but a long way to go yet. LH still refuses to move at Ancillaries preferring to call itself a Premium Carrier. But still it has hedged its bets with control of German Wings. BA on the other hand is more of a basket case and Heathrow is increasingly becoming irrelevant. While the village of Sipson might be celebrating, the Gnomes of Whitehall must be fretting about how to avoid losing market share of International Traffic.
IF you take a peak at who has what - you have to think that the order books from Farnborough went largely to the lessors. Many of these guys must be betting that the US airlines will need to order new kit soon. But the long haul planes hardly took in any orders. Still 32+58 A380s flying around in EKs colours should scare the pants of just about any network planner.
Cheers
In practice that oh so subtle move towards ancillary revenues is beginning to pay off. Judging by Q2 profit announcements - the carriers doing not so well are few and far between. The ancillaries are powering many carriers - particularly the US and LCCs to greater profitability.
The weakest areas?
Asia Pacific with both JAL and ANA reporting losses is a prime example. But Chinese carriers are doing very nicely thank you.
And then there are BA and LH. LH has several carriers it is doing a good job on to reform. SN, OS, LX, BD. The core LH mainline we believe is doing better but a long way to go yet. LH still refuses to move at Ancillaries preferring to call itself a Premium Carrier. But still it has hedged its bets with control of German Wings. BA on the other hand is more of a basket case and Heathrow is increasingly becoming irrelevant. While the village of Sipson might be celebrating, the Gnomes of Whitehall must be fretting about how to avoid losing market share of International Traffic.
IF you take a peak at who has what - you have to think that the order books from Farnborough went largely to the lessors. Many of these guys must be betting that the US airlines will need to order new kit soon. But the long haul planes hardly took in any orders. Still 32+58 A380s flying around in EKs colours should scare the pants of just about any network planner.
Cheers
Air Berlin + OneWorld = What?
Like many other people, I went "Hub?" with the announcement of Air Berlin joining Oneworld.
I recognize that many people think that AB is a LCC carrier but it has been Hybrid for a long time and fails the classic categorizations - FF Program, Connections, GDS Participation, Full Service Flights, Premium Service etc etc. It does indeed operate 3 separate business models:
LCC like,
Regular/network services,
Charter carrier.
For a detailed look - go to Anan.Aero who has done a nice job in assessing the move.
So I can only think of two reasons.
Reason A - OneWorld wants a PR story as its a lite news week after Farnborough.
Reason B - OneWorld wants to tweak the nose of the Kaiser (aka LH).
Let me know if you can think of another reason
Cheers
The Phony War is Over. Google's Charm Offensive Fails
Yes Folks that nice gentlemanly manner of talking about the Google/ITA acquisition like its all OK boys seems to have ended. The real war (of words) is just starting and its not going to be nice.
In the one corner you have Google's Travel team out telling the world - don't worry be happy - its all good and we are not out for world domination. On the other hand you have the very clear picture that Google IS out to change the world, and those people who think its their world are none too happy about it.
Down Under Claire Hatton - Google's point person in Asia Pac for travel was quoted today in the Australian Edition of Travel Weekly with:
"Google: we won’t take on agents".
Yet at the same time in the Expedia (arguably the world's largest Travel Agent) Q2 results - Head man Dara was issuing dire warnings about the impact of the deal. On TNooz today:
Expedia CEO Dara Khosrowshahi told analysts during the company’s Q2 2010 earnings call late yesterday that the Google-ITA Software deal could have “very significant consequences” on the sector. Highlighting Google’s “considerable market power”, Khosrowshahi said one of the main areas which Expedia will be monitoring is whether the search giant favours its own content and results over those of existing advertising partners, “whether it’s algorithmic, inside their system or hard coded”.
So boys and girls there you have it. And its not blunderbusses at dawn - its all out war - there will be casualties and of course there will be collateral damage - that is going to affect a heck of a lot of people.
Dara did add that he was all right Jack: (Also from the same TNooz piece) “We’re very happy, especially with Google buying ITA, that we’ve got the BFS team and makes us worry a bit (sic) less about what the potential consequences of that transaction could be, at least for us.”
Let's see if his technology team really are up to the battle. Will Expedia create a coalition to combat this dire threat? Or if they will have to import some external help from say Eastern Europe to keep the dreaded Hun at bay?
This, my friends means that it is time to batten down the hatches and prepare for a long and arduous conflict for all of us.
Cheers
Reporting From Berlin - The Professor will be back to normal and full time next week.
24 July 2010
The End of Airline Multi-Culturalism
One of the joys of working in and around the airline business was always the multi-cultural nature of its people. People who worked in an airline could come from different countries. In years gone by the airline personell in a particular country were often seen as the ambassador unofficial of that country. In many cases the airline’s local commercial and operational staff were pioneers and became a help to anyone – especially those visiting that country for the first time. Rumours used to abound that local staffers of Pan Am, TWA and Northwest were often secretly operatives of the CIA. BOAC local staffers were viewed as part of the Empire. And Air France local agents could be secret agents of the Sûreté.
The reverse was also often true, multi-culturalism spread from the remote offices to the head office. A local who wanted to climb hirer in the organization could only do so by transferring to the Head Office. Thus within an airline frequently you would find people of different cultures and countries of origin.
However the emergence of the Global Alliances has in effect ended this golden age of airline cultural exchange.
Now as each airline withdraws its ex-pat staffers back home and the local country staff are managed often by that country's local staff of the home airline – those days have come to an end. Now Germans serve United customers in Frankfurt, Air France people service Delta customers in Paris, and Japanese JAL employees service British Airways passengers.
From a customer service point of view – I see this as a very bad thing. How many times have I been told by an Air France person that my Delta status is worth nothing when it comes to a problem. And in the USA United personnel look at me as if I am from out of space when I try to use my LH credentials.
Overall I think this is sad that we are losing one of those little quirks of the airline business. It also means that an overseas posting is now unlikely for an airline manager. Thus I believe the airline business as a whole will lose some of its attraction to the brighter stars of the next generation. So Global Alliances homogenize everything to the lowest common denominator. What you get - if you like - is the airline equivalent of Beige Boxes. More Silos!
So farewell good people. And thanks for the ride. It has been a lot of fun.
Cheers
The reverse was also often true, multi-culturalism spread from the remote offices to the head office. A local who wanted to climb hirer in the organization could only do so by transferring to the Head Office. Thus within an airline frequently you would find people of different cultures and countries of origin.
However the emergence of the Global Alliances has in effect ended this golden age of airline cultural exchange.
Now as each airline withdraws its ex-pat staffers back home and the local country staff are managed often by that country's local staff of the home airline – those days have come to an end. Now Germans serve United customers in Frankfurt, Air France people service Delta customers in Paris, and Japanese JAL employees service British Airways passengers.
From a customer service point of view – I see this as a very bad thing. How many times have I been told by an Air France person that my Delta status is worth nothing when it comes to a problem. And in the USA United personnel look at me as if I am from out of space when I try to use my LH credentials.
Overall I think this is sad that we are losing one of those little quirks of the airline business. It also means that an overseas posting is now unlikely for an airline manager. Thus I believe the airline business as a whole will lose some of its attraction to the brighter stars of the next generation. So Global Alliances homogenize everything to the lowest common denominator. What you get - if you like - is the airline equivalent of Beige Boxes. More Silos!
So farewell good people. And thanks for the ride. It has been a lot of fun.
Cheers
So OneWorld makes 3 across the Atlantic.
So the homogenization of the airline world is almost complete. With now more than 90% of the traffic across the Atlantic under the control of the 3 Alliances the airline world has become something of a boring place.
From a strategic perspective I believe that the creation of this risk sharing – mergers in all but name – alliances create as many issues as they solve. From a user’s perspective – IE the flyer, and as speaking as a frequent flyer, I cannot say that the rewards of the so called “seamless” experience are that great. Frankly I believe they are still a myth in the mind of the airline marketing departments. Let me illustrate this with a simple pair of examples from Star/Atlantic Alliance Plus:
Star Alliance – Transatlantic Alliance A++ AC,CO, LH UA. LH has first class as does UA. CO and AC do not. UA and CO have premium economy, AC and LH do not.
An itinerary NUE-FRA-YYZ-IAH-CCS-IAD-FRA-NUE should be (logically) possible all on A++ carriers and Transatlantic. Not so – the CCS legs are outside of the alliance and therefore have to be either added as a separate flight or as one ways. Any solution would up the price significantly.
I use these to illustrate the issue not to pick on Star/A++ specifically. I believe that the airlines have a long way to go to make the experience truly hassle free. However I think it is getting better. But it takes a very long time and the hype decidedly does not live up to the delivery. I hope that the regulators are paying close attention to the issue. When these alliances anti trust immunity comes up for renewal. I hope that they look at the issues for the customer. In my view the benefits to the customer should be considered as follows:
1. Better choice of schedules – ie more not less flights
2. Lower fares or at least no comparative increase in fares. I also think that the consideration of Frequent Flyer miles should be added to the equation, so that the currency of FF miles be considered as part of the cost equation.
3. Ease of use – to get from A to B should not be harder. Therefore in considering the value of an alliance – the customer issue of nonstop vs connections should also be considered. For example did the alliance reduce the number of nonstop routes in the broader market?
4. The hassle factor. Did the Alliance truly reduce the amount of trip hassle for the customer – of all types not just premium traffic.
If we are truly to regard this as a benefit then a truly objective and transparent mechanism for assessing Alliances should be put in place. I believe that players have the right to set their own standards in an open market. However when the marketplace is restricted to only 3 major players with such a large percentage of the market – then the standards of care and customer value must be put at a high premium. This includes the ability of the governments to force the players to undo their arrangements. Currently these standards are not in place and all that seems to have happened is a lot of talking without consumer consideration. Given how much money the airlines are going to make this year as a result of their oligopoly power – I think this should be a consideration. And with OneWorld now the third man in – we have to be very careful.
Cheers
From a strategic perspective I believe that the creation of this risk sharing – mergers in all but name – alliances create as many issues as they solve. From a user’s perspective – IE the flyer, and as speaking as a frequent flyer, I cannot say that the rewards of the so called “seamless” experience are that great. Frankly I believe they are still a myth in the mind of the airline marketing departments. Let me illustrate this with a simple pair of examples from Star/Atlantic Alliance Plus:
Star Alliance – Transatlantic Alliance A++ AC,CO, LH UA. LH has first class as does UA. CO and AC do not. UA and CO have premium economy, AC and LH do not.
An itinerary NUE-FRA-YYZ-IAH-CCS-IAD-FRA-NUE should be (logically) possible all on A++ carriers and Transatlantic. Not so – the CCS legs are outside of the alliance and therefore have to be either added as a separate flight or as one ways. Any solution would up the price significantly.
I use these to illustrate the issue not to pick on Star/A++ specifically. I believe that the airlines have a long way to go to make the experience truly hassle free. However I think it is getting better. But it takes a very long time and the hype decidedly does not live up to the delivery. I hope that the regulators are paying close attention to the issue. When these alliances anti trust immunity comes up for renewal. I hope that they look at the issues for the customer. In my view the benefits to the customer should be considered as follows:
1. Better choice of schedules – ie more not less flights
2. Lower fares or at least no comparative increase in fares. I also think that the consideration of Frequent Flyer miles should be added to the equation, so that the currency of FF miles be considered as part of the cost equation.
3. Ease of use – to get from A to B should not be harder. Therefore in considering the value of an alliance – the customer issue of nonstop vs connections should also be considered. For example did the alliance reduce the number of nonstop routes in the broader market?
4. The hassle factor. Did the Alliance truly reduce the amount of trip hassle for the customer – of all types not just premium traffic.
If we are truly to regard this as a benefit then a truly objective and transparent mechanism for assessing Alliances should be put in place. I believe that players have the right to set their own standards in an open market. However when the marketplace is restricted to only 3 major players with such a large percentage of the market – then the standards of care and customer value must be put at a high premium. This includes the ability of the governments to force the players to undo their arrangements. Currently these standards are not in place and all that seems to have happened is a lot of talking without consumer consideration. Given how much money the airlines are going to make this year as a result of their oligopoly power – I think this should be a consideration. And with OneWorld now the third man in – we have to be very careful.
Cheers
Is Skype No Longer Real Time?
I think we all love Skype (if you are not a Skype user then you really should be!) But lately I have noticed that Skype is a little slow in delivering messages.
It used to be that Skype would hold a message if you were not logged on until you were there - then it would update. But lately I have noticed that some times it doesn't do this for DAYS!
I hope this is just an aberration because I really do love to use the application for leaving messages.
I would hate to see those chaps at eBay start to mess with Skype and that I have to defect to another service. The utility value of Skype I place WAY above Facebook and Linked in.
Cheers
It used to be that Skype would hold a message if you were not logged on until you were there - then it would update. But lately I have noticed that some times it doesn't do this for DAYS!
I hope this is just an aberration because I really do love to use the application for leaving messages.
I would hate to see those chaps at eBay start to mess with Skype and that I have to defect to another service. The utility value of Skype I place WAY above Facebook and Linked in.
Cheers
19 July 2010
Nexus One = Boat Anchor. What Lessons?
I like the nautical themes since I am at the seaside this week. As I type this I am listening to the sound of the Atlantic pounding some rocks.
Quietly on Apple's big iPhone day - Google pulled the plug on Nexus One. Here is an article from InfoWorld
Now I wonder what does this tell us about Google's ability to provide a consumer facing product? Is there a lesson for the Google/ITA acquisition?
Hmmm now that's a thought!
Cheers
Quietly on Apple's big iPhone day - Google pulled the plug on Nexus One. Here is an article from InfoWorld
Now I wonder what does this tell us about Google's ability to provide a consumer facing product? Is there a lesson for the Google/ITA acquisition?
Hmmm now that's a thought!
Cheers
A Free Case For Your (i4) Boat Anchor
Steve – aka the Dark Lord – has come out fighting on the issue of the iPhone 4’s er connection issue.
He says it has been blown out of proportion and that the media is to blame (sound like anyone else we know?).
Well Steve – this is life. Suck it up.
Apple has like almost every tech company – including many that I have been with – had its share of misfortunes. It is part of the way technology is. What works for some doesn’t work for others. Users expect computers to be infallible. To know the perfect answer. An iPhone is a work of beauty but it has to work as a basic function. Namely it has to work as a telephone. The issue of the antenna – which is among several other issues is that it needs to work normally. I believe from several iPhone 4 users I have spoken to – that the issue is sporadic. For one old time iPhone user – he explained he is as frustrated with the problem as when the iPhone 1 first came out and would disconnect in mid call when moving between towers. The Apple faithful have flamed me a few times for making an issue of the iPhone. Just the facts ma’am. For an empirical assessment of the iPhone from Consumer Reports which confirmed the issue – please visit their website.
I think the iPhone is a work of art and a marvelous thing. I hope Apple gets it right. My objection to it remains the business model and the fact that it is a license to print money. Given the money Apple is making from the iPhone – I believe they have an obligation to get it right.
So through the end of September you can have a case for your iPhone boat anchor. Hopefully after that the next batch will have a better antenna. I should point out that some analysts are reporting more issues with the iphone. But you can figure this stuff out for yourself.
Cheers
He says it has been blown out of proportion and that the media is to blame (sound like anyone else we know?).
Well Steve – this is life. Suck it up.
Apple has like almost every tech company – including many that I have been with – had its share of misfortunes. It is part of the way technology is. What works for some doesn’t work for others. Users expect computers to be infallible. To know the perfect answer. An iPhone is a work of beauty but it has to work as a basic function. Namely it has to work as a telephone. The issue of the antenna – which is among several other issues is that it needs to work normally. I believe from several iPhone 4 users I have spoken to – that the issue is sporadic. For one old time iPhone user – he explained he is as frustrated with the problem as when the iPhone 1 first came out and would disconnect in mid call when moving between towers. The Apple faithful have flamed me a few times for making an issue of the iPhone. Just the facts ma’am. For an empirical assessment of the iPhone from Consumer Reports which confirmed the issue – please visit their website.
I think the iPhone is a work of art and a marvelous thing. I hope Apple gets it right. My objection to it remains the business model and the fact that it is a license to print money. Given the money Apple is making from the iPhone – I believe they have an obligation to get it right.
So through the end of September you can have a case for your iPhone boat anchor. Hopefully after that the next batch will have a better antenna. I should point out that some analysts are reporting more issues with the iphone. But you can figure this stuff out for yourself.
Cheers
So What’s The Real Problem and What’s The Real Answer?
The launch of Open Axis as the standards group for Airlines in Ancillary Services and Direct Connections last week caused a bit of a stir. It has definitely miffed a lot of people. The Legacy GDSs and those who depend on them are good examples of that camp. Indeed also last week at the same time that the Open Axis group was holding its inaugural press conference – in Washington there were hearings where outraged players were moaning that the airlines were not playing ball and providing the Ancillary Services information to the GDSs. I never thought I would see the day when a Hearing in the US Capitol would be held to support the GDSs!
In sifting through the responses over the past few days – I was enjoying a degree of reading how different groups want to see it play out. There is a very good article by Ian Tunncliffe in Travel Technology Update. (Sorry this is by subscription only). So I will give you the essence. Travel Industry Technology needs to get a life and the debate over standards is irrelevant to a market where a vendor can deploy a solution such as an iPad and get traction of thousands of Apps and users without paying any attention to such standard. (OK so this was my interpretation of the piece but I am sure Ian will forgive me for this latitude).
What’s more he is right.
The Professor definitely believes that standards help and has already put his money where his mouth is by endorsing the Open Axis standard (via my alter ego). I am also a great advocate of the Open Travel Alliance and I really hope that the two bodies come to an accommodation if nothing else.
So are these views inconsistent?
Actually not in my view and here is why. I have for a long time believed that the rigid structure of the legacy GDS controlled travel workflow restrained innovation not to mention the free flow of commerce. In the early 1980s it was very useful for piggy back technologies such as Lanyon Boards. In the 1990s the standards enabled the OTAs to come into being. However the real Travel 2.0 the one we all use didn’t want to be constrained. In the past 5 years new businesses in search and itinerary management emerged and have done a very good job. Much better than the GDSs did. So the footprint of the legacy GDS shrank further and further inwards. Having worked in extensively in the OTA world I have witnessed all the major functions of the GDS have been replicated and indeed far exceeded bar one. To wit:
Fare Search – OTAs do better – and Meta Search does just as well particularly in combining fares and availability
Availability – OTAs do better in presentation
File Management/Itinerary – OTAs do better – and Itinerary management services do even better
Customer Management – OTAs do better
Supply Chain access – GDSs do better.
Then add Web 2.0 with the Social components to it and there is no way for the legacy GDSs to hope to match that capability. Even in the interaction of their customer users they have abandoned their dedicated networks in favour of web based solutions.
With the commercial model being driven by the supply chain component – it was only natural that for both commercial and technical reasons (as well as a host of others) that the suppliers would want to tap into the broader market where innovation and customers live. This meant that there was an inevitability about the Supply side wanting to open up access to the general market. (I need not elaborate for my readers that the restraint of the GDS so called “incentives” to users is an evil thing in my view.)
And this is not just theory of the world being a happy place where the GDS model alone addresses distribution to the open market. The legacy GDS global market share of airline traffic has been falling steadily for years. Eroded by both the emergence of LCCs and the greater direct distribution by the Full Service Network Carriers.
Returning to my questions… The real problem has been that the bootstrapping of airline and travel IT to extend the old GDS based model has reached the end of its life cycle. And yes – a new world where Apps can be built and deployed in hours vs years in a far less rigid world has become the de facto standard. Open Access by what ever name has become the norm. The real answer is that we have to now go back to the core reservations systems providers – the PSS vendors – and start beating the drum of revolution. Now is the time for the IT infrastructure to become open and decidedly more nimble. I can imagine that the airlines will not like this. Decidedly the big hosting companies – Amadeus, Sabre and HP/EDS will hate it. The GDSs who have depended on this closed architecture for years are going to be very unhappy. But in my view they have no choice but to change and reform. Then we can stop having IT get in the way of business.
So what are we waiting for?
In sifting through the responses over the past few days – I was enjoying a degree of reading how different groups want to see it play out. There is a very good article by Ian Tunncliffe in Travel Technology Update. (Sorry this is by subscription only). So I will give you the essence. Travel Industry Technology needs to get a life and the debate over standards is irrelevant to a market where a vendor can deploy a solution such as an iPad and get traction of thousands of Apps and users without paying any attention to such standard. (OK so this was my interpretation of the piece but I am sure Ian will forgive me for this latitude).
What’s more he is right.
The Professor definitely believes that standards help and has already put his money where his mouth is by endorsing the Open Axis standard (via my alter ego). I am also a great advocate of the Open Travel Alliance and I really hope that the two bodies come to an accommodation if nothing else.
So are these views inconsistent?
Actually not in my view and here is why. I have for a long time believed that the rigid structure of the legacy GDS controlled travel workflow restrained innovation not to mention the free flow of commerce. In the early 1980s it was very useful for piggy back technologies such as Lanyon Boards. In the 1990s the standards enabled the OTAs to come into being. However the real Travel 2.0 the one we all use didn’t want to be constrained. In the past 5 years new businesses in search and itinerary management emerged and have done a very good job. Much better than the GDSs did. So the footprint of the legacy GDS shrank further and further inwards. Having worked in extensively in the OTA world I have witnessed all the major functions of the GDS have been replicated and indeed far exceeded bar one. To wit:
Fare Search – OTAs do better – and Meta Search does just as well particularly in combining fares and availability
Availability – OTAs do better in presentation
File Management/Itinerary – OTAs do better – and Itinerary management services do even better
Customer Management – OTAs do better
Supply Chain access – GDSs do better.
Then add Web 2.0 with the Social components to it and there is no way for the legacy GDSs to hope to match that capability. Even in the interaction of their customer users they have abandoned their dedicated networks in favour of web based solutions.
With the commercial model being driven by the supply chain component – it was only natural that for both commercial and technical reasons (as well as a host of others) that the suppliers would want to tap into the broader market where innovation and customers live. This meant that there was an inevitability about the Supply side wanting to open up access to the general market. (I need not elaborate for my readers that the restraint of the GDS so called “incentives” to users is an evil thing in my view.)
And this is not just theory of the world being a happy place where the GDS model alone addresses distribution to the open market. The legacy GDS global market share of airline traffic has been falling steadily for years. Eroded by both the emergence of LCCs and the greater direct distribution by the Full Service Network Carriers.
Returning to my questions… The real problem has been that the bootstrapping of airline and travel IT to extend the old GDS based model has reached the end of its life cycle. And yes – a new world where Apps can be built and deployed in hours vs years in a far less rigid world has become the de facto standard. Open Access by what ever name has become the norm. The real answer is that we have to now go back to the core reservations systems providers – the PSS vendors – and start beating the drum of revolution. Now is the time for the IT infrastructure to become open and decidedly more nimble. I can imagine that the airlines will not like this. Decidedly the big hosting companies – Amadeus, Sabre and HP/EDS will hate it. The GDSs who have depended on this closed architecture for years are going to be very unhappy. But in my view they have no choice but to change and reform. Then we can stop having IT get in the way of business.
So what are we waiting for?
15 July 2010
Disclosure Of Fees and Charges - Ancillary Revenues
Heads up everyone - the bun fight has started.
last month in Washington - Mr Oberstar held hearings on the subject of Airline Fees.
There are several issues - taxes charged, the amount of fees and the type, the manner of charge and exceptions etc etc.
What some want - such as Kevin Mitchell - is a full disclosure and an easy way to buy the products and services equally in all channels. This challenges the core precept that airline pricing is designed to be as complex and obfuscated as possible.
This seems to have been lost in the warring factions.
In my view the way that a product is charged should be at the decision of the person who sells the product subject to things like lying and dishonesty.
At stake is a lot of money but there is clearly a set of influences at work.
So here is my view on the subject. I feel strongly that the consumer should be able to see what he is buying. But in travel he has been lied to for so long as to what the product is and what the price really is as to have been accepted as being clear.
So what do you think?
Cheers
last month in Washington - Mr Oberstar held hearings on the subject of Airline Fees.
There are several issues - taxes charged, the amount of fees and the type, the manner of charge and exceptions etc etc.
What some want - such as Kevin Mitchell - is a full disclosure and an easy way to buy the products and services equally in all channels. This challenges the core precept that airline pricing is designed to be as complex and obfuscated as possible.
This seems to have been lost in the warring factions.
In my view the way that a product is charged should be at the decision of the person who sells the product subject to things like lying and dishonesty.
At stake is a lot of money but there is clearly a set of influences at work.
So here is my view on the subject. I feel strongly that the consumer should be able to see what he is buying. But in travel he has been lied to for so long as to what the product is and what the price really is as to have been accepted as being clear.
So what do you think?
Cheers
14 July 2010
Here It Comes - Spanish Fly
OK so the headline is a bit hokey but BA and Iberia have had their merger blessed. So now we have definitely have airlines in Europe who are part of a cabal and have not airlines who are - well have not players.
The big 3 groupings of legacy carriers are the expected players -
BA (OneWorld)
AF (Skyteam)
LH (Star)
Their partners cover almost all of Europe. However and in my view this is a good thing - the total pie they control is much less than say in the USA. Ryanair, Easyjet Air Berlin and Wizz all represent a sizeable chunk of the EU market. With North America pretty much aligned and Europe the same - there really is little opportunity for choice amongst consumers other than from just 3 group choices.
In my view this is going to finally dawn on the consumer that he has only 3 options plus a few minor ones when ever he is looking to buy airline seats.
did someone say pork?
Cheers
Millenials Turn Away From Facebook
Lately as regular readers of this blog will know - I have been spending time with younger users. Millenials who will represent the next generation of users. Their parents are my generation and some of them are both colleagues and students.
In speaking particularly to teachers I have found that there is a greater awareness of the lack of attention with the distractions available to teens and recent adults. I am not criticizing them in any way. This is a fact of life. This will have a major impact on their interaction with the products and services we create in Travel.
eMarketer cites several studies in a recent piece on defections. What is particularly worrying as to how many just find it boring with generally the high abandonment rates.We are approaching a problem I have long suspected exists. We actually have too many shiny objects to cope with. As a result we lose interest and move onto the next thing. And if we - (in my case as a Boomer) - lose interest quickly just think how difficult it is to maintain the interest of a Millenial?
In my opinion we need to start to engage differently with the emerging user generation(s). That means we have to do a better job of providing access to the services.
Key amongst these will be:
A social component.
Individual content
more implicit interaction (ie a direct opposite to the current explicit interaction required).
Engaging and maintaining interest by constant refreshing.
it is the last one that makes me cringe because keeping things fresh is always hard. For the travel industry - that has been assumed to be fresh content - new products and promotions. But in my view it has to be deeper. Don't please ask me how yet - I am just coming to grips with the issue.
I do know however that if we don't then the abandonment rates for travel products and services on the web will rise. And travel sites will become as yesterday's news as Second Life and Myspace.
Cheers
12 July 2010
"Who Do You Love?" Or Trust...
That old Bo Diddly song was stuck in my head the other day. Actually the Geoerge Thorogood version. And I have been thinking more and more about the essence of Trust. It just amazes me in Travel how much consumers are expected to trust and are constantly let down.
And then I read two stories from emarketer. Both related to Trust. The first one related to consumers perspectives with regard to trusting Facebook. Interestingly they were more concerned with the commercialization than the abuse of their personal data.
The second item from the same day by emarketer was on the acceptance of mobile marketing messages. Today we are bombarded with the "year of the mobile" messages from interested parties. Yet the first truly mobile commerce generate - the Millenials are none to happy about being marketed/spammed via their mobile devices.
This doesn't bode well for people expecting to make squillions of dollars by sending messages (unsolicited) to mobiles - smart or dumb.
So dear friends - think very carefully about what you are doing before you go down that path...
Cheers
Apple to Face EU Probe
Seems like its the Government's turn to focus a little this week. It also seems like someone was listening or they are just plain smart. I will take either!
The EU is going to launch a probe into Apple’s iPhone business practices. Specifically they are going to investigate two of the 4 revenue streams and possibly the others as well.
The App Store is one, the other is the interoperability of iPhone and other phone systems. This is likely to extend into the Admob/iPhone dispute.
For a detailed read – go here:
Click here to read full story...
Cheers
The EU is going to launch a probe into Apple’s iPhone business practices. Specifically they are going to investigate two of the 4 revenue streams and possibly the others as well.
The App Store is one, the other is the interoperability of iPhone and other phone systems. This is likely to extend into the Admob/iPhone dispute.
For a detailed read – go here:
Click here to read full story...
Cheers
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