FTC FINALLY Opens Up Broad Review of Google’s Market Dominance.

As I have pointed out over many a blog, In my view Google as a company of one. It cannot be judged by any precedent. Because frankly there is none. FTC to Serve Google With Subpoenas

No other company in the history of technology has held as much power and sway as the now sits in the hands of Larry Sergey and Eric. Google’s protestations to the contrary – they are now clearly a company that transcends the ability of any single government’s ability to control them via conventional regulatory means. The law – arcane and archaic as it maybe does have one or two tricks up its sleeve. Based on its limited controls – the US Law allows the various instruments of the US government’s executive branch to determine anti trust behavior. It is here that the Department of Commerce in conjunction with the Dept of Justice has come with the conundrum of what to do about Google.

While I believe that there are few if any Google employees who are outright evil. The ability to exert that power is just too strong. Google is doing bad things. This will come out in the investigation. But as regular readers know I am a strong believer in Newton’s Second Law. I firmly believe that Google is doing bad things through its lack of effective oversight of its employees who are in many cases determined to crush the opposition to anything that will get in the way of the Googleplex Borg. It is not – thus – that the people are doing bad things- but rather that they can manipulate a marketplace by either their direct actions or their withholding of certain facilities or even just by trying to do one thing – Google will (and yes sometimes inadvertently) effect a change in the marketplace that benefits the company. My opinion was that there was little that the US Government could do to prevent the Google acquisition of ITA Software. This proved to be right. BUT Google has stepped beyond the role of a conventional marketplayer.

Google knows this and its people know this. But Google has not yet put in place those controls to prevent damage to the marketplace. Google therefore has therefore been allowed to “get away” with things in the past. In my view this has only emboldened the Google Acolytes to behave even more without constraint. Should the Government have stepped in before? Yes. But they chose either through lack of direct evidence or through negligence or even because they lacked the resources to engage the giant. No matter – the decision has been made to go after them.

Am I right or wrong? On the one hand Google’s resources may indeed be greater than that of the Government’s ability to pursue this case. Thus there is no sure thing that the US Authorities will prevail. On the other hand successive US and International Authorities have failed to place any controls on the tech giant. As it evolves into a product based company from being a pure search utility – it has blown through many control gates.

In travel their power is not absolute. However do they have the ability that they can and will use? In my opinion yes. The lackluster appearance of Google Places for Hotels and the mediocre Google flight product may be a harbinger of a somewhat less than stellar product that will come from Troogle. But make no mistake – these are first generation products and Google will do better. So before these products start to appear to dominate the market, we need better controls. Well sadly it is too late for that. We will get products from Google’s cash pile that will kill certain players in the market. Some of these players probably will deserve to die. But others will be harmed irreparably. There will be “Mapquests” in travel. Indeed let’s be clear here – in travel’s case - there will be some “victimless” crimes. But there will be victims and that awesome power has yet to be revealed.

But by any measure the company is a monopoly and therefore its power must be curtailed. However that is achieved will determine much of what we can and cannot do in the coming years particularly in innovation will shape not just the Travel Industry alone.

I urge you if you are a new or occasional Reader to type the word “Google” into the search box and read some of the posts I have written before. Wander through the Professor’s prognostications. This represents my opinion. Let’s hope that both common sense and the what is “right” rather than what one company can do with its power prevail.

Everyone is entitled to an opinion. This is mine. Please feel free to write to me and tell me how you feel about this.

Cheers

Delta steps into the Dog Poo CORRECTION SEE UPDATE

PLEASE NOTE CORRECTED INFORMATION AND POSTSCRIPT BELOW

Skyteam has come from a late last place to a good second with Star retaining its global dominance in airline alliances.

However along the way – as the key players have been snapped up and now more than 70% of all global airline traffic can be booked on one of the big 3 alliances – there was bound to be a cultural problem or two.

And sure enough there is. As the Huffington post is reporting – Delta passengers on the code share flight with SV-Saudi Arabian Airlines (also known as Saudia) must comply with Saudia’s rules. This includes..

1. No Jews or Israelis
2. No Outward displays of religious affiliation other than that of Islam
3. Women must be accompanied by their husbands or a close male family relative
4. No transportation of religious artifacts of the Christian or Jewish or indeed any non-Islamic faith.
5. Oh yes and don’t expect any Martinis on the flight.

CORRECTION: DELTA IS NOT CODESHARING WITH SAUDIA.
When I checked the story to start with I could not find any DL Code shares out there with SV. Now I understand that Delta has issued a statement that indicates that they will not code share but will of course (as they do today) still interline.

This is of course well within the right of Saudia to insist on this policy which has existed for many years. Further entry into the Kingdom of Saudi Arabia (KSA) is governed by the same level of restriction through its strict Visa program.

EVERY country has the right of self determination, however – Code Shares across boundaries somewhat messes up the global order. OK for conventional arrangements but not for situations like this. So what is Delta to do? Hmmm – someone in International planning is probably sweating bricks right now. Cultural sensitivity is always hard. So the simple answer is that you hope and pray that the controversy blows over. Fat chance. You can cancel the agreement and then Delta becomes the symbol of American Jewry to all Islamists. OR Delta takes a pragmatic approach that is all inclusive. IE That on DL served flights the rule applies and non DL operated flights those rules apply. If then those who arrive in KSA with these bad things – then they have to accept the consequence. BUT DL must now accept that it has to operate some of these flights rather than allowing SV to operate all DL coded flights to KSA.

Clear?

Good luck…

Cheers

EDITORIAL ADDENDUM

This makes most of the point of my story different in the narrative. However my point is writing the story in the first place is that these restrictions will occur no matter what happens. There are different policies some of which are governed by national requirements, some are operational requirements. As a frequent flyer I am exposed to these issues ALL the time. It is an occupational hazard of code sharing. I have pointed out in the past that the so-called seamless experience between carriers is a myth.

As the practice of code-shares proliferates then you will find more of these types of situations emerging. And that was the point of this story. Thanks for reading!!!!

What Cloud Computing Means To Open Airline Distribution

This is a modification of a response to a discussion going on in the Beat.

I have just returned from 2 days of the SITA IT Summit. I believe that it has finally dawned on the airlines that they need to do something about the control of their content. And voila... along comes the very essence of the tools to do this. Apps and the Cloud. What has been missing is a viable product and content delivery mechanism that enables the airlines to easily connect and the users also. The structured nature of the industry is artificially constrained by older and now increasingly irrelevant mechanisms. The reality of today's world is that NO ONE has any right to impose ANY STRUCTURES on any user community. I am not preaching anarchy, just acknowledging what the consumers are expecting of us in the industry to deliver.

The open web has enabled us to enjoy almost unlimited access to content. However that content has been constrained by the structures of those who believed that they are the gatekeepers. And they still believe that they can control that and impose the relevant taxes for the privilege. Cloud Computing, Open Systems and low cost app development with rapid deployment and mass consumer adoption all conspire to blow away these archaic legacy structures.

What has been missing is the delivery mechanism. Clearly Cloud Computing does that - but the airlines need a common delivery infrastructure to do so. One that enables the distribution of product and content in any way shape or form. SITA is stepping up to that plate with an Airline Community Cloud. This is but one of many potential options - but for the first time we will have such an Open Delivery platform that can enable true freedom of distribution.

Then next generation companies such as LUTE Technologies who provide aggregated and common services can compete fairly with the legacy players such as the GDSs.

LUTE does not impose rules and restrictions on either side. We provide splintered or common content. We enable unique bilateral dialogues without restriction. All via the Cloud. The owner of the content decides what he wants to sell. The consumer decides what he will use. This is a balanced and logical way to do things.

So rather than moaning about how the lack of ubiquity (aka the lowest common denominator of content) which is the gripe from the intermediary community - they should now embrace the fact that they can TRULY differentiate their services and provide value both up and down stream. Most importantly they can provide really valuable services to the community that they are (and hope to continue to) service.

Idealistic? Unreasonable? Unachievable? Hardly. This is real folks. The incoming Gen Y and Millenials who are replacing the Baby Boomers EXPECT - actually - DEMAND this level of service. if we don't do it now - then someone smarter and faster will.

So stop whining and embrace the real world. Now can we stop debating whose control is better? Let’s devote our energies to servicing the customer. GDSs need to either embrace or go away. But I don’t worry about that any more – the Technorati have spoken. Now the airlines realize that in 3 year’s time, 58% of their distribution will come from non-GDS channels. Actually I think that number is way too low. Open Clouds with deployment of new functionality in minutes rather than years will crush the structured legacy models.

Cheers

The Flip Side of LBS - Cyber Stalking.

Al Franken - Comedian no more - at least not for the next 18 months - is a Senator in the USA.

He is also very liberal. He is sponsoring a bill essentially to prevent Cyber stalking using Location Based Services in your mobile phone.

You can read about the details in the following article.

The bottom line to this is at a combination of Apple and Google's over-reaching use of LBS systems, and some pretty sloppy coding by Android developers has resulted in not just potential by actual abuse. People forget Newton's second law.

Let this be a lesson

Cheers

DoT Toughening Up on Online Advertising

The US Dept of Transportation is increasing both its surveillance of online advertising for Airline related businesses.

Indeed there is quite a lot of legal constraints on what you can and cannot do/say.

The DoT has just fined Frontier Airlines for a transgression.

Last month several online websites were fined.

And don't forget that the cash strapped US States are also getting into the act.

you have been warned. Comply with the letter and the spirit of the law

Cheers

Ever Wanted To Know The REAL Seattle?

Then here is a way to learn it all in about 2 hours.

This week's A Prairie Home Companion came from Chateau Ste Michelle Winery in Woodenville just outside Seattle and near where I live. So along with a few friends and probably most of the local NPR Station's listeners (KUOW) I went along to listen to Garrison Keeler. It was a great show.

To listen to it (from Monday June 13th) go to the PHC website and down load the archive.

http://prairiehome.publicradio.org/programs/

Cheers

Are US Travelers Stupid?

For a long time the value of brand has been that you can persuade someone to do something that they might not do otherwise.

In today's online - "just a click away" culture - the assumption is that the consumer is now better informed and will therefore make a better decision.

So what about fact?

Are the brand values we know and respond to actually meaningful and correct? Indeed do the brands match up to the expected value that consumers have for them?

In reality often times they don't. Case in point Southwest Airlines.

In 2000, my team did an assessment of Southwest and found that in most cases for the top 25 US based markets southwest did not have the lowest fare in all classifications. In reading Scott McCartney's analysis in the Wall Street Journal last week this trend is really showing. With the end of WN's legendary fuel hedging advantage - WN is well just like any other airline.

Indeed domestically WN is the largest airline in the USA market.



With the merger of AirTran that number has indeed grown.

According to the US DoT WN's average ticket price has skyrocketed 39% in the past five years, while the average ticket price for domestic trips for the industry was up 10%, and much of that is driven by the changes in WN's model.

But you also have to watch for some of the Gotchas. WN used to let you standby for an earlier flight at no cost. Not any more. They used to check a bag no matter what. Not any more - there is a weight and size limit that is typically lower than that of the average bags. They used to treat everyone the same. Not any more you can pay for a premium package with 2 levels of business class fare. You used to be forced to get to the airport early if you wanted a reasonable seat. Not any more - you can buy an earlier boarding pass.

So WN is no longer a discount carrier. It has old planes. It has older employees. It makes money from Ancillary Revenues. It participates in the GDSs. It charges more than 1000 dollars for a ticket.

Yup that makes them a full service airline. But they still like to poke their noses at others. And they still like to accentuate beautiful females to appeal to the male travellers. It will be interesting to see if they ever put a guy on the side of the plane....

Cheers

Bad (Survey) Monkey - Garbage in Garbage Out

I have made many comments before about how I feel that there should be a total ban on Survey Monkey and its usage by unqualified users.

In today's world of validation at every turn - just in case we make a slight mistake - we now have tools to track our every move and there seems to be an obsession with asking the customer or user or audience a question at every turn.

However this is bad.

Comparing Survey Data to Actual Behaviour is like a night and day revelation.

Let me cite a specific example.

BTC - who is a one man publishing machine from Radnor PA - uses survey money or rather abuses it. Just take their latest survey...http://www.surveymonkey.com/s/ancillary_fees

It distorts the true nature of the actual results. Indeed today the effectiveness and value of surveys are now far less. Yet users and marketeers continue to use Survey's as a surrogate for behavior tracking.

Let me cite a recent study by ASTA on GDS. In the survey - the share of systems bares no relation to actual traffic through those systems.

Thus you get what you pay for... garbage in and garbage out.

But perhaps the best question of all on the BTC survey is the last one:



Hardly a survey question would you think?

Cheers

May ARC figures better but still down

May 2011 should be the month where we see an improvement in the numbers from ARC. Expedia settled with AA so we should be seeing a better set of numbers all round. Or should we?

We have been hearing a consistent story that the US market is stagnating. Further the US market is seeing a channel shift to direct from the Agency community.

With the US economy looking like it may be in a mild double dip recession - the nature of the beast is that the agency based transactions are not moving ahead. Further things are not looking good for the rest of the year for the corporate budgets. With many companies showing that their budget share is now spent higher than was anticipated due to the rising cost of air fares I think we are going to see corporate budgets quietly cut after Labor Day.

You have been warned.

Cheers

Cell Phones InFlight

There seems to be a big plot out to fight mobile telephones (cell phone to Americans).

First we hear that they really do cause cancer in Laboratory Amoeba - now they cause Autopilots to disengage all by themselves.

Could this be the real cause of AF447's demise in the middle of the South Atlantic?

So listen to ABC's Dianne Sawyer describe the situation for you in her best gravitas voice.

if you sit in the front of the cabin on a conventional plane - you should be more careful and turn the darn things off. If you have a GPS turned on - that could definitely cause an abnormality.

However just think of that Microwave oven right behind the cockpit - its working on the same frequency.

Cheers

The Web's Had an Impact - Yes Really Here's Proof.

Has the internet changed our lives?

Yes

Any questions?

What - you still don't believe. Where have you been hiding? Under some rock in the Gobi desert I would think.

OK but to what extent has the web changed our lives, our enterprises, our future and that of our kids?

In a very detailed and actually quite compelling piece of reading - McKinsey has done a nice piece on this. Entitled Its quite long 70 Pages but worth the read. I have skimmed through it and on one of the next flights I take I will try and labour through the whole document. In the mean time - I recommend that you read it and reflect.The report titled Internet Matters can be downloaded for free after signing up. Click the link and follow the instructions.

Now about that Betamax machine everyone has been talking about.

Cheers

737 Option for 1/2 point upgrade

It seems that Boeing is making noises to prepare the market for a re-engined 737 NG rather than the entirely new plane that has been mooted.

The logic is inescapable. The majority of users are the new low cost category who are using A320s and 737NGs. Therefore the cost of acquisition plays a big role. But with oil stubbornly stuck in the $100pbl and above - the case for fuel efficiency is decidedly there.

With both the C Series and the A320NEO now on firm path for delivery in 2015 (actually most of the 2016 slots are sold out already) Boeing needs to stop the rot.

With the new aircraft not having an EIS of 2020 or later - this is too much of a gap for the Chicago based firm

So Boeing makes noises to try and stop people defecting.

Well it will be interesting

Cheers

Is EasyJet becoming just like JetBlue - A Legacy Airline

Well it just might be...

Now that jetBlue is to all intents and purposes a full service network/legacy like carrier, why not the other hybrid airlines.

JetBlue now full participates in all GDSs and as a result of its agreement with new hosting vendor Sabre - pretty much everything it does makes it looks like a duck.
(as in if walks like and quacks like - it must be one!)

So when Easyjet announced that it would participate in GDS - it said it would come with a GDS fee - effectively making it free for the airline. Just like Gol and Norwegian do, (and many other airlines wish they could do also!) it got a lot of grumbles from the local Corporate agents.

More work for less pay!

Well now it seems that the airline is considering abandoning the fee pass through to the agents. In ABTN I noticed an article that said they were thinking just that.

It currently charges £3.30 per segment, but in its bid to increase bookings, with travel management companies in particular, this fee could be removed, Easyjet's CEO Carolyn McCall told the website.

The move is likely to be popular with business travel hookers, McCall acknowledged, but will only be made if the figures add up.

“We will run the numbers and see whether we can do it. If we can’t, we won’t and if we can we will,” she said, adding that a decision is likely by September.

Well we know the answer. The numbers don't add up. Especially when the per ticket charge from the alternative channels are just much lower. But the agents are still resisting booking, they want to hang onto those precious incentives as long as they can. If the market was free and the agents could actually book via the U2 website easily - this would not be a contest. But since that is not the case - the dilemma exists.

I wonder if someone at the European Commission is thinking the same thing I am?

Cheers

Who Is the Ancillaries Champ?

Well it depends how you ask the question...

So according to the latest IdeaWorks/Amadeus study there are actually three champs.
By total revenue from Ancillaries


By amount collected from each pax


By percentage per passenger


Now interestingly the US Dept of Transportation decided to take a look at yet another metric which the reverse. IE how much revenue the airlines make from just purely carrying a passenger and charging for the ticket.

That number is also very interesting.

So for your edification I provide all of these elements. So think about how the model has changed.



There is a clear message here - Ancillaries matter to an airline. The message that the GDSs perhaps were not listening to a few years ago. But as you can see this is not a new phenomenon. Ironically it is indeed Amadeus who is sponsoring the study from IdeaWorks. Is there a message here?

This is a trend that has been going for a while.

Happy thinking

Cheers

Oops ANZ Has To Fix The Boat Anchors

I was very criical of the Air New Zealand boat anchors - aka the new Skycouch seats

It seems I might have been just a tad prescient about them.

Responding to criticism that the leg room sucked - they have decided to take out one row of the new Skycouches and then give a little more leg room in there.

I pointed out earlier that the seats didn't look at all comfortable - even the delightful Mary Kirby had to drape her long legs out into the aisle. Yes - you have to click on the older article to see her picture to see what I mean.

It seems that the airline thinks that a "tall person" was anyone higher than say a Sheep according to ABTN's Alex McWhirter someone taller than 5 foot 7 inches. And that these people had trouble getting in and out of the seat.

The airline was quite sanguine about it, forgetting that the majority of passengers who fly on the airline are more likely to be Homo Sapiens rather than the Bovine genus that most airlines think we passengers belong to.

The airline said In a prepared statement,“Air New Zealand’s innovative new B777-300ER interiors have been receiving excellent feedback since they were launched eight weeks ago on April 1. As innovation requires constant improvement we have actively asked for feedback from customers on every flight.

"Some of the feedback has been around the amount of leg room for tall people in some of the premium economy Spaceseats. Therefore Air New Zealand will be removing one row of premium economy seating from the aircraft to provide passengers with up to six inches more legroom."

I wonder what a typical Maori or Tonga based passenger would have to say about that.

Of course now is an even bigger problem, as Alex concludes in his article "But removing a single row will cost ANZ over 10 per cent of premium economy capacity. So will the carrier have to raise fares to compensate for the revenue shortfall? Only time will tell."

Of course one of the earliest criticisms from the trade was the price being charged - now they will likely have to charge even more.

Hmmm can you imagine there must be some red faces in Fanshawe Street.

This is rather sad because I think there is tremendous opportunity to do a better job in coach for the masses (and yes I am one - I fly Y/M class on more flights than I do in F or C).

Cheers

Should We Judge The Pilots of AF447 Yet?

Like many people I have read a lot of the reports on AF447's activity before the plane went into the ocean.

The behaviour of the pilot in command is not fully logical. It is easy to judge that the guy made a mistake and was doing something out and out wrong by pulling the plane into a nose up attitude.

However after reading the report from the French Investigators I am not so sure.

It is clear that the the instruments were not providing consistent and reliable information. Even in the best of weathers the Airbus is inherently a plane that needs software to fly it. The A330 is a fine plane. I have confidence in it and have flown and will continue to fly it. In the dark in a storm with little or no spatial awareness possible and confronted with conflicting and non-existing information - the pilots were making safe decisions, conservative decisions. Or at least that is what they thought.

The BEA Report available in English and in French was correctly released to curb speculation. I don't think it gives any definitive answer as to what happened. I opined earlier that this was another example of the pilot away from the cockpit. That was wrong. It was set correctly and he did the hand over correctly.

This one will be tricky to unravel.

Cheers

Facing Tough Choices - Boeing Many Need To Go for 737 1/2R

Boeing's CEO was pretty adamant that there will be no public pronouncements of a next gen 737 at the upcoming Paris Air Show next week. However Bernstein Research is reporting that Boeing may have to go for a 737 point upgrade which I am calling the 747 1/2R - to be competitive in the coming few years.

This is not a trivial matter. AS I have written previously the 737 is too low on the ground and will need some major rework to accommodate the much wider chord next gen engines. Thus the cost upgrade to a 737 will be significant and still may not yield an aircraft in a near enough time frame. Airbus has advanced the A320NEO EIS date to 2015. For Boeing to do such a half job - it will need to work hard to meet that date with a 737NEO type project.

There will be some triggers to this - Boeing probably wont like to gave to compete with two players and it continues to offer an older model product. Surprisingly the number of mixed Boeing/Airbus fleets has grown in recent years so there is little brand allegiance. We have many fleets which have A330s and 777s. We also have fleets with mixed 737/A320s in them.

Boeing has recently made a big deal over the Sky Interior with the special lighting. Something that Virgin America and other A320 operators have known about for years. And as a personal note - having flown on both - they really do calm you down. The experience is well worth the extra 100K per aircraft that I believe Boeing is charging.

Of course allowing me to speculate - what if Mr O'Leary really does do the dead and buys one of the new planes. It could really hurt Boeing's business not just for the size of the order (reportedly in the 300 plane number) but also in the halo effect. With Airbus reportedly having won the Delta narrow body fleet replacement battle. There must be a lot of midnight oil burning going on in Chicago and Renton

A story that will run for a bit I suspect.

Cheers

Battle Lines Drawn - Jetstar Partners with Priceline

The unexpected announcement in the first quarter of a blockbuster deal between Air Asia and Expedia was not going to go unanswered for long.

Now its out - Jetstar for the whole franchise has partnered with Priceline's Agoda subsidiary to provide accommodation services across the airline's network in Asia.

This will significantly enhance the product and let Jetstar compete as many other airlines do as a Travel Portal rather than just an airline product service.

Expect that Jetstar will now start linking to more partners to provide additional value added services on the site.

Strangely enough this will cause a bit of a realignment. As with many JVs or partnerships - there is always a degree of reaction. Expedia may find itself pitted against a number of other entities that do not wish to do business with the Beelevue WA based Travel Mega player. This will help Priceline's position. As to who will ultimately win? At the moment, (in my view) - the Asia Pacific coverage by Agoda is better than Expedia.

Still this will be an interesting cat fight. May mean that the famous Jetstar/Air Asia partnership that was announced at the beginning of 2010 may not produce anything other than some nice plane designs.

Cheers


With thanks to the Cranky Flyer for the cute image!

Its a Sharing Caring Day At The PS Blog

Understanding the Social Graph is becoming a must have skill. But I am not fully prepared for it despite having read enormous amounts on the subject.

Trying to comprehend the relationship between the data that gets generated, the real relationships and the way the social platform interacts is not a science but more of an art form. For sure no one fully understands it.

I did read a recent article that goes a long way to help understanding how the sharing habits work. Further how an individual works and how they collaborate, share with different people. However for all the science in here, I cannot help but be drawn to the conclusion that individuals are not going to be labelled or constrained. Further projecting the possible options of their behaviour is not going to be any form of perfect science to predict precise actions.

The thought that keeps popping into my head is that - in many respects we are playing trainer's game IE we are behaving the way that is expected of us.

How does Google see it... predictably the the fiendish Google colyte technicians are treating us like lab rats in the Googleplex. AOL commissioned a study and examined (presumable with some approval) the content of many messages trying to understand how people behave. This is what they learned. This image is from an eMarketer review of the results of this data.



if you still feel a bit bemused by the whole thing you are not alone. The Professor too is struggling with that. But rest assured we are all caring for each other....

Cheers

Our Society Is Doomed

Sharing Local Deals is now a common practice.

In my view this is a sad trend for the merchants and is unsustainable. Let me paint the basic picture for you.

1. Total consumer spending is relatively flat or even. IE there is not a huge stimulus for people to spend MORE money on these deals. Therefore the behaviour is to divert spending from one source to another
2. The new players Living Social and Groupon etc take a 50% commission from the deals.
3. The reduced price reduces profitability for the local merchants meaning that they must either pay their suppliers or their staff less or work harder to achieve the same standing in place result.

read the whole article on eMarketer and if you are a local vendor - now is the time to weep

Cheers