The UK and Singapore governments have now signed their much heralded fully open skies agreement that comes into effect coincidently on the same day as the free'er skies between the UK and the USA.
Based on this i believe we shall see SQ flying to LGW (as CX used to and as EK does today) as well as possibly STN if they decide to get into the bulk game using a high capacity A380 as has been mooted for EK's Emirates Express service. Moving at least one flight to another airport will allow SQ to service the LHRJFK market that they have long coveted.
22 November 2007
Government to press ahead with 3rd Runway at LHR
Heathrow's slow decline into a third world airport may come to an arresting end by 2020. This news comes none too soon as the airport faces competition from all corners.
Logically there is no where for the airport to expand than by wiping out the community of Sipson and over 700 homes. So the battle lines are now being drawn. The environmentalists and those whose homes are going to be affected versus the Airlines, the Government, and the TUC representing the direct 180,000 jobs at the airport.
But let's consider what will be the case by 2020. FRA may well have 5 runways by then. Munich will have 4 possibly more. AMS will have 6, CDG 6 etc, etc. That's not all - Jebel Ali in Dubai will be in full swing with modern facilities on a much larger area footprint than poor old Spanish owned LHR even with its new terminal 5 and proposed terminal 6. (No I didnt forget the new replacemen for T2).
However NOT doing it would in the words of BAA "If nothing changes, Heathrow's status as a world class airport will be gradually eroded - jobs will be lost and the economy will suffer. London and the UK's nations and regions alike are reliant on the good international connections that the Heathrow hub provides. "
From a point of reference however I cannot support the notion that air and noise pollution wont increase. That is BS.
Logically there is no where for the airport to expand than by wiping out the community of Sipson and over 700 homes. So the battle lines are now being drawn. The environmentalists and those whose homes are going to be affected versus the Airlines, the Government, and the TUC representing the direct 180,000 jobs at the airport.
But let's consider what will be the case by 2020. FRA may well have 5 runways by then. Munich will have 4 possibly more. AMS will have 6, CDG 6 etc, etc. That's not all - Jebel Ali in Dubai will be in full swing with modern facilities on a much larger area footprint than poor old Spanish owned LHR even with its new terminal 5 and proposed terminal 6. (No I didnt forget the new replacemen for T2).
However NOT doing it would in the words of BAA "If nothing changes, Heathrow's status as a world class airport will be gradually eroded - jobs will be lost and the economy will suffer. London and the UK's nations and regions alike are reliant on the good international connections that the Heathrow hub provides. "
From a point of reference however I cannot support the notion that air and noise pollution wont increase. That is BS.
UK Operators Cheer as Englnd exits EURO2008
In somewhat perverse logic the UK Tour Operators are cheering the fact that England lost 2-3 to Croatia in football yesterday.
Clearing the way to have people book their holidays early and not be "distracted" by the boys in White making any progress or loosing at the various hurdles - it only goes to show that Women rule in English households.
It is a dark day in the pubs across the Sceptred Isle.
Clearing the way to have people book their holidays early and not be "distracted" by the boys in White making any progress or loosing at the various hurdles - it only goes to show that Women rule in English households.
It is a dark day in the pubs across the Sceptred Isle.
20 November 2007
Affiliate Marketing gone... Mad?
As an avid watcher of the contortions that various airlines go through to get you to be both loyal and a frequent purchaser of any old stuff... it is interesting to note what has been going on at the airlines lately.
As we all know Airlines are like lemmings. They do things often to replicate each other. So on the principal that any idea is a good idea if someone says so, then let’s look at some of the recent examples:
BA emiles store.
Following on from others BA has finally stepped into this arena. The first major player was probably Ryanair and therefore all the airlines thought they were made initially. However we see more often than not that Ryanair has become an airline to watch for innovation. With their stated goal of PAYING for passengers to fly on their planes - they do a very good - if somewhat simple job of merchandising as much as they can to their customers. So what of BA and the others?
I suggest you go and check out several of them:
Delta - Medallion Marketplace: http://www.delta.com/skymiles/use_miles/redemption_partners/medallion_marketplace/index.jsp
American Express - Rewards http://www.shopamex.com/
BA Miles estore. - http://www.ba.com/
as we have seen in recent years there has been a trend towards moving customers away from some of the best deals in the house towards spending the miles elsewhere. Given the current programs what we are seeing is a clear move to offload the miles "overhang". For an airline - miles are earned cheap and can be sold essentially at a profit to other. Thus the popularity of such programs.
However we should all be clear that there is another more sinister trend underneath this. That is that the miles are being devalued and a new higher price currency is replacing it. We have already seen the move away from the gold standard of a single price for a ticket. Now there are 2 sometimes even 4 values for a ticket online. Peak vs. off peak and promotional mile redemption rates. The exchange rate also now shows up in different forms. The popular exchange rate has been for quite some time 10,000 miles = $100 dollars of value. No more. Just look at the exchange rates and you will see what we mean. For example Amex offered recently (through December 11th 2007) 30% off miles required for a program. However the new mileage rate is actually quite higher than the old standard so this is not as much of a deal as it appears.
So you have been warned. For more information - check out Randy Petersen's web flyer (yes he of the unruly hair). http://www.webflyer.com/
Cheers
As we all know Airlines are like lemmings. They do things often to replicate each other. So on the principal that any idea is a good idea if someone says so, then let’s look at some of the recent examples:
BA emiles store.
Following on from others BA has finally stepped into this arena. The first major player was probably Ryanair and therefore all the airlines thought they were made initially. However we see more often than not that Ryanair has become an airline to watch for innovation. With their stated goal of PAYING for passengers to fly on their planes - they do a very good - if somewhat simple job of merchandising as much as they can to their customers. So what of BA and the others?
I suggest you go and check out several of them:
Delta - Medallion Marketplace: http://www.delta.com/skymiles/use_miles/redemption_partners/medallion_marketplace/index.jsp
American Express - Rewards http://www.shopamex.com/
BA Miles estore. - http://www.ba.com/
as we have seen in recent years there has been a trend towards moving customers away from some of the best deals in the house towards spending the miles elsewhere. Given the current programs what we are seeing is a clear move to offload the miles "overhang". For an airline - miles are earned cheap and can be sold essentially at a profit to other. Thus the popularity of such programs.
However we should all be clear that there is another more sinister trend underneath this. That is that the miles are being devalued and a new higher price currency is replacing it. We have already seen the move away from the gold standard of a single price for a ticket. Now there are 2 sometimes even 4 values for a ticket online. Peak vs. off peak and promotional mile redemption rates. The exchange rate also now shows up in different forms. The popular exchange rate has been for quite some time 10,000 miles = $100 dollars of value. No more. Just look at the exchange rates and you will see what we mean. For example Amex offered recently (through December 11th 2007) 30% off miles required for a program. However the new mileage rate is actually quite higher than the old standard so this is not as much of a deal as it appears.
So you have been warned. For more information - check out Randy Petersen's web flyer (yes he of the unruly hair). http://www.webflyer.com/
Cheers
19 November 2007
Ouch... nasty accident to brand new A340-600
One of the longest aircraft on the planet suffered a nasty mishap last week.
10 people were injured 3 in the cockpit seriously. Lets hope they recover soon
17 November 2007
Musings from PhocusWright 2007 - The Long Tail
Perhaps a kinder gentler PCW this year at the Omni Resort in Orlando.
Sure there was the usual Philipalooza extravaganza and some nice touches - as usual a great show. BUT the bigger news perhaps is the maturity of the market if this is reflected by the attendees and the content.
On Center Stage - the usual suspects. Michelle Peluso was back in great form now that Sabre is private (under TPG). Lots of buzz on long tail businesses which perhaps suggests that there is game over in the head of the market.
So stands out?
The airlines - conspicuous by their absence. The (what we call) Reverse Yield Management sites - Farecast et al, put on a great panel.
Google - is now the 8000 lb gorilla and becomes the center point of almost every conversation.
Social Media is real, is impactful and is a key ingredient in Travel Distribution now. BTW great party they threw!
OTAs have matured - now it’s about the consumer. Kudos to Michelle for pushing the consumer experience. I have a bet with Rod Cuthbert of Viator as to which of the big 2 will be in the ascendency in 2009. I am backing Travelocity because of Michelle. He is taking the safe way with Expedia.
Investment - LOTS of news here. Hudson Crossing (in whom PCW's Chair has a stake) was out in force. The Libra party had to transfer back to the bar for waking up the golfing neighbors on their floor. Lots of people both seeking and offering capital assistance. Chimney Rock is the new player here; finally an investment bank with some industry professionals. Good to see my old friends Mims Wright and Susan Black have re-united there.
Shock and Horror with the sell out by Libgo to Ozzies Flight Center. Heads will role.
Travelport dropped the hammer and is letting over 1100 people go. Lots of new consultants on the street in the coming months. Flo will be acting CMO and commuting to London. Come May she will be headed to the beach and good for her.
A kinder gentler Philip this year. I understand attendance was down but at those rates phew!!!!
The resort clearly had logistical issues running out of restaurant food on Wednesday night. But all in all another good effort. Next year we can expect that every attendee will be a mobile walking electronic billboard with Philip selling prime time ads on certain people. Terry Jones for example will have premium rates more akin to the back page of the New York Times.
So till next year
Cheers!
Timothy
Sure there was the usual Philipalooza extravaganza and some nice touches - as usual a great show. BUT the bigger news perhaps is the maturity of the market if this is reflected by the attendees and the content.
On Center Stage - the usual suspects. Michelle Peluso was back in great form now that Sabre is private (under TPG). Lots of buzz on long tail businesses which perhaps suggests that there is game over in the head of the market.
So stands out?
The airlines - conspicuous by their absence. The (what we call) Reverse Yield Management sites - Farecast et al, put on a great panel.
Google - is now the 8000 lb gorilla and becomes the center point of almost every conversation.
Social Media is real, is impactful and is a key ingredient in Travel Distribution now. BTW great party they threw!
OTAs have matured - now it’s about the consumer. Kudos to Michelle for pushing the consumer experience. I have a bet with Rod Cuthbert of Viator as to which of the big 2 will be in the ascendency in 2009. I am backing Travelocity because of Michelle. He is taking the safe way with Expedia.
Investment - LOTS of news here. Hudson Crossing (in whom PCW's Chair has a stake) was out in force. The Libra party had to transfer back to the bar for waking up the golfing neighbors on their floor. Lots of people both seeking and offering capital assistance. Chimney Rock is the new player here; finally an investment bank with some industry professionals. Good to see my old friends Mims Wright and Susan Black have re-united there.
Shock and Horror with the sell out by Libgo to Ozzies Flight Center. Heads will role.
Travelport dropped the hammer and is letting over 1100 people go. Lots of new consultants on the street in the coming months. Flo will be acting CMO and commuting to London. Come May she will be headed to the beach and good for her.
A kinder gentler Philip this year. I understand attendance was down but at those rates phew!!!!
The resort clearly had logistical issues running out of restaurant food on Wednesday night. But all in all another good effort. Next year we can expect that every attendee will be a mobile walking electronic billboard with Philip selling prime time ads on certain people. Terry Jones for example will have premium rates more akin to the back page of the New York Times.
So till next year
Cheers!
Timothy
12 November 2007
New ECAC GDS/CRS Rules due this week. Industry Response
The new ECAC rules are due to be announced this week. There is much anticipation of the content. In advance of this - various travel groups have come together to create a manifesto of sorts. Here is the entire press release from one of the parties - the BTC:
PRESS STATEMENT
Travel Groups Transmit Results of Customer Referendum on Reservation System Rules
Consumer choice in air and rail travel at risk
Brussels, Belgium, 13 November 2007--Europe’s business travel industry today transmitted the results of a Customer Referendum to European Commission Vice-President Jacques Barrot concerning revisions to the “Code of Conduct,” rules that govern the computerized reservations system (CRS) industry in Europe. The Referendum is signed by International Airline Passengers’ Association, Advantage Focus Partnership, Belgium Association of Travel Management, Business Travel Coalition, Finnish Business Travel Association, Institute of Travel Management, Scottish Passenger Agents’ Association and Travel Management Alliance. These organizations represent thousands of corporations and millions of customers of the air and rail transportation system in Europe.
The Code has protected consumers against well-documented, anti-competitive behavior in the airline and travel distribution marketplaces when airlines own even a small percentage of a CRS. The Code currently applies to airlines that are considered “Parent Carriers” by virtue of either an ownership stake in or effective control of a CRS. History has proven that even a small percentage of airline ownership in a CRS provides an irresistible economic incentive for abuse. These abuses include privileging the “family-owned” CRS with exclusive and timely-loaded airfare content, practices that eliminate healthy CRS competition and solidify dangerous airline-owner dominance. Airline ownership of CRSs provides further incentives to undermine comparison shopping between air and rail travel options. Without applicable rules, consumers throughout Europe would be denied access to all choices and end up paying higher prices for travel .
As evidenced by numerous Commission communications, and its indifference to the repeated urging of a vast assemblage of concerned industry stakeholders for timely clarification, the Commission appears intent on redefining what constitutes a Parent Carrier and rendering the ownership test obsolete. This market-distorting development would turn the regulatory clock back 20 years before the Code was in effect and unsuspecting consumers paid supra premium prices for air travel, when for example, airfare offerings were manipulated by CRS owning airlines to hide competitors’ lower prices. Scores of millions of European consumers and hundreds of thousands of small and medium size enterprises who use smaller travel agencies are particularly vulnerable. (See analysis at http://tinyurl.com/2jaewc)
The Customer Referendum, first introduced during a Customer Hearing in Brussels on 20 September 2007, resulted in a call for (1) a threshold of a 5% ownership stake by an airline in a CRS for the purpose of establishing the status of Parent Carrier; (2) confirmation by the Commission that Air France, Iberia and Lufthansa are presently Parent Carriers of Amadeus; and (3) affirmation that the status of Air France, Iberia and Lufthansa as Parent Carriers of Amadeus shall be subjected to written and oral industry consultation prior to any proposed change. The Referendum follows.
EU CRS CUSTOMER REFERENDUM
WHEREAS, airline ownership of Computer Reservation Systems is the raison d’etre for adopting and maintaining a CRS Code of Conduct; and
WHEREAS, the undersigned travel industry associations have firmly committed themselves to achieving reasonable reform of the existing EC CRS Code of Conduct, while maintaining in force those core protections that effectively protect consumers from abusive conduct that has historically and inevitably resulted from even small levels of airline ownership of CRSs; and
WHEREAS, serious and ongoing concerns remain that the European Commission is improperly and unilaterally undermining airline “ownership” as an independent means of conferring “parent carrier” status under the Code; and
WHEREAS, the European Commission’s reinterpretation of “parent carrier” criteria would dramatically break with long-settled precedent, contravene industry expectations and ignore the plain language of the Code without properly submitting the change to industry participants for consultation; and
WHEREAS, CRS airline ownership continues to present a real world problem the Code must address in that Amadeus, Europe’s largest CRS, continues be over 46% owned by Air France, Iberia and Lufthansa -- major European airlines that have both the means and the incentive to abuse this ownership position in both the aviation and the distribution markets in the absence of core protections;
THEREFORE, BE IT RESOLVED THAT:
1.The revised Code of Conduct shall contain a recital that shall unambiguously state, “Whereas, air carriers which own or effectively control a CRS system, alone or jointly, can derive unfair advantages in the marketplace from such a position.” The revised Code of Conduct shall include a definition of “parent carrier” that will include an airline ownership threshold of five percent (5%) of the equity, held directly or indirectly, in a CRS company; and
2. The European Commission shall confirm in writing that Air France, Iberia and Lufthansa are presently “parent carriers” of Amadeus under the CRS Code of Conduct; and
3. The status of Air France, Iberia and Lufthansa as parent carriers of Amadeus shall be subjected to written and oral industry consultation prior to any proposed change; in addition, such consultation shall consider all inappropriate influencing factors throughout the distribution chain; and
4.The European Commission in any revised Code of Conduct shall retain the following core protections: mandatory participation and the bans against commission tying, display bias, and functionality discrimination; and
5. All rules other than the core protections shall be eliminated from the revised CRS Code of Conduct; however, the prerequisite for this elimination are the Commission’s enactment of Resolutions 1, 2, 3 and 4 above.
We the undersigned commit ourselves to this Referendum and urge the European Commission to enact them and thereby seize this historic opportunity to achieve Better Regulation in travel distribution.
International Airline Passengers’ Association - http://www.iapa.com/index.cfm/travel/home.welcomeAdvantage Focus Partnership - http://www.sunwaystravel.co.uk/focus-partnership.aspBelgium Association of Travel Management - http://www.batm.be/Business Travel Coalition - http://businesstravelcoalition.com/Finnish Business Travel Association - http://www.fbta.net/Institute of Travel Management - http://www.itm.org.uk/Scottish Passenger Agents’ Association - http://www.spaa.org/Travel Management Alliance - http://www.tmallc.com/new/
CONTACT: Kevin Mitchell 610.341.1850 editor@btcnewswire.com
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PRESS STATEMENT
Travel Groups Transmit Results of Customer Referendum on Reservation System Rules
Consumer choice in air and rail travel at risk
Brussels, Belgium, 13 November 2007--Europe’s business travel industry today transmitted the results of a Customer Referendum to European Commission Vice-President Jacques Barrot concerning revisions to the “Code of Conduct,” rules that govern the computerized reservations system (CRS) industry in Europe. The Referendum is signed by International Airline Passengers’ Association, Advantage Focus Partnership, Belgium Association of Travel Management, Business Travel Coalition, Finnish Business Travel Association, Institute of Travel Management, Scottish Passenger Agents’ Association and Travel Management Alliance. These organizations represent thousands of corporations and millions of customers of the air and rail transportation system in Europe.
The Code has protected consumers against well-documented, anti-competitive behavior in the airline and travel distribution marketplaces when airlines own even a small percentage of a CRS. The Code currently applies to airlines that are considered “Parent Carriers” by virtue of either an ownership stake in or effective control of a CRS. History has proven that even a small percentage of airline ownership in a CRS provides an irresistible economic incentive for abuse. These abuses include privileging the “family-owned” CRS with exclusive and timely-loaded airfare content, practices that eliminate healthy CRS competition and solidify dangerous airline-owner dominance. Airline ownership of CRSs provides further incentives to undermine comparison shopping between air and rail travel options. Without applicable rules, consumers throughout Europe would be denied access to all choices and end up paying higher prices for travel .
As evidenced by numerous Commission communications, and its indifference to the repeated urging of a vast assemblage of concerned industry stakeholders for timely clarification, the Commission appears intent on redefining what constitutes a Parent Carrier and rendering the ownership test obsolete. This market-distorting development would turn the regulatory clock back 20 years before the Code was in effect and unsuspecting consumers paid supra premium prices for air travel, when for example, airfare offerings were manipulated by CRS owning airlines to hide competitors’ lower prices. Scores of millions of European consumers and hundreds of thousands of small and medium size enterprises who use smaller travel agencies are particularly vulnerable. (See analysis at http://tinyurl.com/2jaewc)
The Customer Referendum, first introduced during a Customer Hearing in Brussels on 20 September 2007, resulted in a call for (1) a threshold of a 5% ownership stake by an airline in a CRS for the purpose of establishing the status of Parent Carrier; (2) confirmation by the Commission that Air France, Iberia and Lufthansa are presently Parent Carriers of Amadeus; and (3) affirmation that the status of Air France, Iberia and Lufthansa as Parent Carriers of Amadeus shall be subjected to written and oral industry consultation prior to any proposed change. The Referendum follows.
EU CRS CUSTOMER REFERENDUM
WHEREAS, airline ownership of Computer Reservation Systems is the raison d’etre for adopting and maintaining a CRS Code of Conduct; and
WHEREAS, the undersigned travel industry associations have firmly committed themselves to achieving reasonable reform of the existing EC CRS Code of Conduct, while maintaining in force those core protections that effectively protect consumers from abusive conduct that has historically and inevitably resulted from even small levels of airline ownership of CRSs; and
WHEREAS, serious and ongoing concerns remain that the European Commission is improperly and unilaterally undermining airline “ownership” as an independent means of conferring “parent carrier” status under the Code; and
WHEREAS, the European Commission’s reinterpretation of “parent carrier” criteria would dramatically break with long-settled precedent, contravene industry expectations and ignore the plain language of the Code without properly submitting the change to industry participants for consultation; and
WHEREAS, CRS airline ownership continues to present a real world problem the Code must address in that Amadeus, Europe’s largest CRS, continues be over 46% owned by Air France, Iberia and Lufthansa -- major European airlines that have both the means and the incentive to abuse this ownership position in both the aviation and the distribution markets in the absence of core protections;
THEREFORE, BE IT RESOLVED THAT:
1.The revised Code of Conduct shall contain a recital that shall unambiguously state, “Whereas, air carriers which own or effectively control a CRS system, alone or jointly, can derive unfair advantages in the marketplace from such a position.” The revised Code of Conduct shall include a definition of “parent carrier” that will include an airline ownership threshold of five percent (5%) of the equity, held directly or indirectly, in a CRS company; and
2. The European Commission shall confirm in writing that Air France, Iberia and Lufthansa are presently “parent carriers” of Amadeus under the CRS Code of Conduct; and
3. The status of Air France, Iberia and Lufthansa as parent carriers of Amadeus shall be subjected to written and oral industry consultation prior to any proposed change; in addition, such consultation shall consider all inappropriate influencing factors throughout the distribution chain; and
4.The European Commission in any revised Code of Conduct shall retain the following core protections: mandatory participation and the bans against commission tying, display bias, and functionality discrimination; and
5. All rules other than the core protections shall be eliminated from the revised CRS Code of Conduct; however, the prerequisite for this elimination are the Commission’s enactment of Resolutions 1, 2, 3 and 4 above.
We the undersigned commit ourselves to this Referendum and urge the European Commission to enact them and thereby seize this historic opportunity to achieve Better Regulation in travel distribution.
International Airline Passengers’ Association - http://www.iapa.com/index.cfm/travel/home.welcomeAdvantage Focus Partnership - http://www.sunwaystravel.co.uk/focus-partnership.aspBelgium Association of Travel Management - http://www.batm.be/Business Travel Coalition - http://businesstravelcoalition.com/Finnish Business Travel Association - http://www.fbta.net/Institute of Travel Management - http://www.itm.org.uk/Scottish Passenger Agents’ Association - http://www.spaa.org/Travel Management Alliance - http://www.tmallc.com/new/
CONTACT: Kevin Mitchell 610.341.1850 editor@btcnewswire.com
--
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New ECAC GDS/CRS Rules due this week. Industry Response
The new ECAC rules are due to be announced this week. There is much anticipation of the content. In advance of this - various travel groups have come together to create a manifesto of sorts. Here is the entire press release from one of the parties - the BTC:
PRESS STATEMENT
Travel Groups Transmit Results of Customer Referendum on Reservation System Rules
Consumer choice in air and rail travel at risk
Brussels, Belgium, 13 November 2007--Europe’s business travel industry today transmitted the results of a Customer Referendum to European Commission Vice-President Jacques Barrot concerning revisions to the “Code of Conduct,” rules that govern the computerized reservations system (CRS) industry in Europe. The Referendum is signed by International Airline Passengers’ Association, Advantage Focus Partnership, Belgium Association of Travel Management, Business Travel Coalition, Finnish Business Travel Association, Institute of Travel Management, Scottish Passenger Agents’ Association and Travel Management Alliance. These organizations represent thousands of corporations and millions of customers of the air and rail transportation system in Europe.
The Code has protected consumers against well-documented, anti-competitive behavior in the airline and travel distribution marketplaces when airlines own even a small percentage of a CRS. The Code currently applies to airlines that are considered “Parent Carriers” by virtue of either an ownership stake in or effective control of a CRS. History has proven that even a small percentage of airline ownership in a CRS provides an irresistible economic incentive for abuse. These abuses include privileging the “family-owned” CRS with exclusive and timely-loaded airfare content, practices that eliminate healthy CRS competition and solidify dangerous airline-owner dominance. Airline ownership of CRSs provides further incentives to undermine comparison shopping between air and rail travel options. Without applicable rules, consumers throughout Europe would be denied access to all choices and end up paying higher prices for travel .
As evidenced by numerous Commission communications, and its indifference to the repeated urging of a vast assemblage of concerned industry stakeholders for timely clarification, the Commission appears intent on redefining what constitutes a Parent Carrier and rendering the ownership test obsolete. This market-distorting development would turn the regulatory clock back 20 years before the Code was in effect and unsuspecting consumers paid supra premium prices for air travel, when for example, airfare offerings were manipulated by CRS owning airlines to hide competitors’ lower prices. Scores of millions of European consumers and hundreds of thousands of small and medium size enterprises who use smaller travel agencies are particularly vulnerable. (See analysis at http://tinyurl.com/2jaewc)
The Customer Referendum, first introduced during a Customer Hearing in Brussels on 20 September 2007, resulted in a call for (1) a threshold of a 5% ownership stake by an airline in a CRS for the purpose of establishing the status of Parent Carrier; (2) confirmation by the Commission that Air France, Iberia and Lufthansa are presently Parent Carriers of Amadeus; and (3) affirmation that the status of Air France, Iberia and Lufthansa as Parent Carriers of Amadeus shall be subjected to written and oral industry consultation prior to any proposed change. The Referendum follows.
EU CRS CUSTOMER REFERENDUM
WHEREAS, airline ownership of Computer Reservation Systems is the raison d’etre for adopting and maintaining a CRS Code of Conduct; and
WHEREAS, the undersigned travel industry associations have firmly committed themselves to achieving reasonable reform of the existing EC CRS Code of Conduct, while maintaining in force those core protections that effectively protect consumers from abusive conduct that has historically and inevitably resulted from even small levels of airline ownership of CRSs; and
WHEREAS, serious and ongoing concerns remain that the European Commission is improperly and unilaterally undermining airline “ownership” as an independent means of conferring “parent carrier” status under the Code; and
WHEREAS, the European Commission’s reinterpretation of “parent carrier” criteria would dramatically break with long-settled precedent, contravene industry expectations and ignore the plain language of the Code without properly submitting the change to industry participants for consultation; and
WHEREAS, CRS airline ownership continues to present a real world problem the Code must address in that Amadeus, Europe’s largest CRS, continues be over 46% owned by Air France, Iberia and Lufthansa -- major European airlines that have both the means and the incentive to abuse this ownership position in both the aviation and the distribution markets in the absence of core protections;
THEREFORE, BE IT RESOLVED THAT:
1.The revised Code of Conduct shall contain a recital that shall unambiguously state, “Whereas, air carriers which own or effectively control a CRS system, alone or jointly, can derive unfair advantages in the marketplace from such a position.” The revised Code of Conduct shall include a definition of “parent carrier” that will include an airline ownership threshold of five percent (5%) of the equity, held directly or indirectly, in a CRS company; and
2. The European Commission shall confirm in writing that Air France, Iberia and Lufthansa are presently “parent carriers” of Amadeus under the CRS Code of Conduct; and
3. The status of Air France, Iberia and Lufthansa as parent carriers of Amadeus shall be subjected to written and oral industry consultation prior to any proposed change; in addition, such consultation shall consider all inappropriate influencing factors throughout the distribution chain; and
4.The European Commission in any revised Code of Conduct shall retain the following core protections: mandatory participation and the bans against commission tying, display bias, and functionality discrimination; and
5. All rules other than the core protections shall be eliminated from the revised CRS Code of Conduct; however, the prerequisite for this elimination are the Commission’s enactment of Resolutions 1, 2, 3 and 4 above.
We the undersigned commit ourselves to this Referendum and urge the European Commission to enact them and thereby seize this historic opportunity to achieve Better Regulation in travel distribution.
International Airline Passengers’ Association - http://www.iapa.com/index.cfm/travel/home.welcomeAdvantage Focus Partnership - http://www.sunwaystravel.co.uk/focus-partnership.aspBelgium Association of Travel Management - http://www.batm.be/Business Travel Coalition - http://businesstravelcoalition.com/Finnish Business Travel Association - http://www.fbta.net/Institute of Travel Management - http://www.itm.org.uk/Scottish Passenger Agents’ Association - http://www.spaa.org/Travel Management Alliance - http://www.tmallc.com/new/
CONTACT: Kevin Mitchell 610.341.1850 editor@btcnewswire.com
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PRESS STATEMENT
Travel Groups Transmit Results of Customer Referendum on Reservation System Rules
Consumer choice in air and rail travel at risk
Brussels, Belgium, 13 November 2007--Europe’s business travel industry today transmitted the results of a Customer Referendum to European Commission Vice-President Jacques Barrot concerning revisions to the “Code of Conduct,” rules that govern the computerized reservations system (CRS) industry in Europe. The Referendum is signed by International Airline Passengers’ Association, Advantage Focus Partnership, Belgium Association of Travel Management, Business Travel Coalition, Finnish Business Travel Association, Institute of Travel Management, Scottish Passenger Agents’ Association and Travel Management Alliance. These organizations represent thousands of corporations and millions of customers of the air and rail transportation system in Europe.
The Code has protected consumers against well-documented, anti-competitive behavior in the airline and travel distribution marketplaces when airlines own even a small percentage of a CRS. The Code currently applies to airlines that are considered “Parent Carriers” by virtue of either an ownership stake in or effective control of a CRS. History has proven that even a small percentage of airline ownership in a CRS provides an irresistible economic incentive for abuse. These abuses include privileging the “family-owned” CRS with exclusive and timely-loaded airfare content, practices that eliminate healthy CRS competition and solidify dangerous airline-owner dominance. Airline ownership of CRSs provides further incentives to undermine comparison shopping between air and rail travel options. Without applicable rules, consumers throughout Europe would be denied access to all choices and end up paying higher prices for travel .
As evidenced by numerous Commission communications, and its indifference to the repeated urging of a vast assemblage of concerned industry stakeholders for timely clarification, the Commission appears intent on redefining what constitutes a Parent Carrier and rendering the ownership test obsolete. This market-distorting development would turn the regulatory clock back 20 years before the Code was in effect and unsuspecting consumers paid supra premium prices for air travel, when for example, airfare offerings were manipulated by CRS owning airlines to hide competitors’ lower prices. Scores of millions of European consumers and hundreds of thousands of small and medium size enterprises who use smaller travel agencies are particularly vulnerable. (See analysis at http://tinyurl.com/2jaewc)
The Customer Referendum, first introduced during a Customer Hearing in Brussels on 20 September 2007, resulted in a call for (1) a threshold of a 5% ownership stake by an airline in a CRS for the purpose of establishing the status of Parent Carrier; (2) confirmation by the Commission that Air France, Iberia and Lufthansa are presently Parent Carriers of Amadeus; and (3) affirmation that the status of Air France, Iberia and Lufthansa as Parent Carriers of Amadeus shall be subjected to written and oral industry consultation prior to any proposed change. The Referendum follows.
EU CRS CUSTOMER REFERENDUM
WHEREAS, airline ownership of Computer Reservation Systems is the raison d’etre for adopting and maintaining a CRS Code of Conduct; and
WHEREAS, the undersigned travel industry associations have firmly committed themselves to achieving reasonable reform of the existing EC CRS Code of Conduct, while maintaining in force those core protections that effectively protect consumers from abusive conduct that has historically and inevitably resulted from even small levels of airline ownership of CRSs; and
WHEREAS, serious and ongoing concerns remain that the European Commission is improperly and unilaterally undermining airline “ownership” as an independent means of conferring “parent carrier” status under the Code; and
WHEREAS, the European Commission’s reinterpretation of “parent carrier” criteria would dramatically break with long-settled precedent, contravene industry expectations and ignore the plain language of the Code without properly submitting the change to industry participants for consultation; and
WHEREAS, CRS airline ownership continues to present a real world problem the Code must address in that Amadeus, Europe’s largest CRS, continues be over 46% owned by Air France, Iberia and Lufthansa -- major European airlines that have both the means and the incentive to abuse this ownership position in both the aviation and the distribution markets in the absence of core protections;
THEREFORE, BE IT RESOLVED THAT:
1.The revised Code of Conduct shall contain a recital that shall unambiguously state, “Whereas, air carriers which own or effectively control a CRS system, alone or jointly, can derive unfair advantages in the marketplace from such a position.” The revised Code of Conduct shall include a definition of “parent carrier” that will include an airline ownership threshold of five percent (5%) of the equity, held directly or indirectly, in a CRS company; and
2. The European Commission shall confirm in writing that Air France, Iberia and Lufthansa are presently “parent carriers” of Amadeus under the CRS Code of Conduct; and
3. The status of Air France, Iberia and Lufthansa as parent carriers of Amadeus shall be subjected to written and oral industry consultation prior to any proposed change; in addition, such consultation shall consider all inappropriate influencing factors throughout the distribution chain; and
4.The European Commission in any revised Code of Conduct shall retain the following core protections: mandatory participation and the bans against commission tying, display bias, and functionality discrimination; and
5. All rules other than the core protections shall be eliminated from the revised CRS Code of Conduct; however, the prerequisite for this elimination are the Commission’s enactment of Resolutions 1, 2, 3 and 4 above.
We the undersigned commit ourselves to this Referendum and urge the European Commission to enact them and thereby seize this historic opportunity to achieve Better Regulation in travel distribution.
International Airline Passengers’ Association - http://www.iapa.com/index.cfm/travel/home.welcomeAdvantage Focus Partnership - http://www.sunwaystravel.co.uk/focus-partnership.aspBelgium Association of Travel Management - http://www.batm.be/Business Travel Coalition - http://businesstravelcoalition.com/Finnish Business Travel Association - http://www.fbta.net/Institute of Travel Management - http://www.itm.org.uk/Scottish Passenger Agents’ Association - http://www.spaa.org/Travel Management Alliance - http://www.tmallc.com/new/
CONTACT: Kevin Mitchell 610.341.1850 editor@btcnewswire.com
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11 November 2007
Diller's Empire starts to unravel, Marriage to Malone on the rocks?
In a story initially put out by the WSJ and then syndicated and picked up by such papers as the Seattle Times - titled:
Can This Marriage Be Saved?
Barry Diller and John Malone made a fortune
together. Now they may be headed for a split
There has been quite a lot of speculation about how the House that Diller built has lost much of its luster. Now it could be that Barry and John are going to split. John wants out and the two could be said to be negotiating a split.
Stay tuned but the likely outcome is a lot more pruning of the tree and someone's ego is going to get bruised.
Even as Expedia powers ahead with good results - the yield declines are not making the stock rise much despite the massive buy backs. True it is up nearly 100% on the full 12 months. We shall see....
together. Now they may be headed for a split
There has been quite a lot of speculation about how the House that Diller built has lost much of its luster. Now it could be that Barry and John are going to split. John wants out and the two could be said to be negotiating a split.
Stay tuned but the likely outcome is a lot more pruning of the tree and someone's ego is going to get bruised.
Even as Expedia powers ahead with good results - the yield declines are not making the stock rise much despite the massive buy backs. True it is up nearly 100% on the full 12 months. We shall see....
Libgo sells itself cheaply. $149 million to Flight Centre
One the largest and most venerable of US Travel institutions has been sold to the Australian mega chain - FlightCentre. First reported at Travel Weekly AU.
Itself a subject of a protracted ownership battle, TW - OZ is reporting that FlightCentre has been able to pick up both Liberty Travel (122 offices primarily in the NE USA) plus the Gogo Tours operation (22 centers around the USA) fr a very low $149 million.
This acquistion vaults FC into the top tier of US operations and the combined organization comes in at Number 10 of the largest US Travel outlets.
Itself a subject of a protracted ownership battle, TW - OZ is reporting that FlightCentre has been able to pick up both Liberty Travel (122 offices primarily in the NE USA) plus the Gogo Tours operation (22 centers around the USA) fr a very low $149 million.
This acquistion vaults FC into the top tier of US operations and the combined organization comes in at Number 10 of the largest US Travel outlets.
CanadaeConnect Conference YVR Nov 7-9
I have just returned from this excellent conference. I moderated a panel on Evolution vs Revolution. For the first time in many years, I was able to catch up directly with what is going on in the great white north. I can assure you that innovation is alive and well up there. http://www.canadaeconnect.com/
A couple of brief highlights:
Canada really does have a good handle on the Public Private Partnership model in Tourism. The Team at Tourism Canada are pushing the envelope in getting the whole market involved. Check out http://www.canada.travel/
Canada is still lagging behind the US market in adoption of online but they are tracking nicely and this is not a bad thing.
The USA could take a large leaf out of the Canada Tourism playbook. Even the "joining of forces" of TIA and TBR is not going to be enough to pull this together. As Canada has shown a strong combination of direct Government funding, focused and sane visitor policies, industry participation and standards is a must not a goal.
A strong currency does not help your tourism quotient. The rise of the Looney is going to hurt the travelers from south of the border. Increased security restraints - mostly on the US side make travel (particularly by Road) a less than positive experience.
Jens and his team over at Tourism Canada should be very proud of their work in putting on one of the best shows in Travel and Tourism in a long time. Great Content, well manage show and 300 very engaged attendees made it work well. If you get the chance to go next year - I recommend it highly.
A couple of brief highlights:
Canada really does have a good handle on the Public Private Partnership model in Tourism. The Team at Tourism Canada are pushing the envelope in getting the whole market involved. Check out http://www.canada.travel/
Canada is still lagging behind the US market in adoption of online but they are tracking nicely and this is not a bad thing.
The USA could take a large leaf out of the Canada Tourism playbook. Even the "joining of forces" of TIA and TBR is not going to be enough to pull this together. As Canada has shown a strong combination of direct Government funding, focused and sane visitor policies, industry participation and standards is a must not a goal.
A strong currency does not help your tourism quotient. The rise of the Looney is going to hurt the travelers from south of the border. Increased security restraints - mostly on the US side make travel (particularly by Road) a less than positive experience.
Jens and his team over at Tourism Canada should be very proud of their work in putting on one of the best shows in Travel and Tourism in a long time. Great Content, well manage show and 300 very engaged attendees made it work well. If you get the chance to go next year - I recommend it highly.
09 November 2007
Southwest goes all corporate
"Exciting Changes at Southwest Airlines!" screams the headline of the WN Email blast to some its customers this week announcing some new corporate initiatives. Still fumbling for a new strategy Southwest continues to push towards the corporate market. (Now being copied by Easyjet).
The highlights from the WN mail are as follows:
Enhanced Boarding – Now when you check in you’ll be assigned a boarding group (A, B, or C) and a position within that group (ex: A32) so there’s no need to wait in line. Simply board the plane when your group is called and find your favorite seat.
The Rapid Rewards A-List – Just fly 16 roundtrips in 12 months and we’ll put you on our A-List where we’ll reserve you the best boarding pass available on all your flights for an entire year, which means you’ll most likely get an A boarding pass.Log into your MySouthwest® account on southwest.com tomorrow to see how close you are to making it on the A-List. Members who qualify for the A-List as of November 8, 2007, will be receiving notification either by postal mail or e-mail within 3 to 5 days.
Freedom Awards – You can now convert two Standard Awards into one Freedom Award. With the exception of a few blackout dates, Freedom Awards are not subject to seat restrictions on Southwest Airlines flights, so if a seat’s available, it’s yours!
Business Select – When you purchase this new fare, you can guarantee that you’ll be among the first to board, and you’ll also get extra Rapid Rewards credit and a free drink to boot!
Simplified Fare Choices – Our fare choices are now even simpler! We’ve done the shopping for you, so it’s easy to find the perfect fare to meet all your travel needs.
Updated Gate Areas – We’re redesigning our gate areas to give you a more comfortable and productive space that will include comfy seats, power stations, a family area in which to enjoy those preflight moments!
Clearly this is the fork in the road for WN and its protege Ryanair.
Cheers
Timothy
The highlights from the WN mail are as follows:
Enhanced Boarding – Now when you check in you’ll be assigned a boarding group (A, B, or C) and a position within that group (ex: A32) so there’s no need to wait in line. Simply board the plane when your group is called and find your favorite seat.
The Rapid Rewards A-List – Just fly 16 roundtrips in 12 months and we’ll put you on our A-List where we’ll reserve you the best boarding pass available on all your flights for an entire year, which means you’ll most likely get an A boarding pass.Log into your MySouthwest® account on southwest.com tomorrow to see how close you are to making it on the A-List. Members who qualify for the A-List as of November 8, 2007, will be receiving notification either by postal mail or e-mail within 3 to 5 days.
Freedom Awards – You can now convert two Standard Awards into one Freedom Award. With the exception of a few blackout dates, Freedom Awards are not subject to seat restrictions on Southwest Airlines flights, so if a seat’s available, it’s yours!
Business Select – When you purchase this new fare, you can guarantee that you’ll be among the first to board, and you’ll also get extra Rapid Rewards credit and a free drink to boot!
Simplified Fare Choices – Our fare choices are now even simpler! We’ve done the shopping for you, so it’s easy to find the perfect fare to meet all your travel needs.
Updated Gate Areas – We’re redesigning our gate areas to give you a more comfortable and productive space that will include comfy seats, power stations, a family area in which to enjoy those preflight moments!
Clearly this is the fork in the road for WN and its protege Ryanair.
Cheers
Timothy
UK Agencies push back on Easyjet Fees
Easyjet's decision to participate in Amadeus andGalileo is meeting resistance from the very people it is suposed to benefit - the TMCs. The fees are (well in our opinion) astronomically high. So too it would appear thinks HRG's Chief ripped the fees and said his company will just have to provide a work around for the carrier access.
So why the high fees? Well the GDSs are not willing to compromise on certain issues - such as the additional fees of pricing (e.g. Amadeus's master pricer/value pricer series products). So the fees have been loaded up to the point where it is not really attractive.
I dont think that there is going to be much take up of this - Easyjet is actually targeting the Corporations not the Agencies (as much) with this announcement. Either way there is going to be trouble and even some unpleasantness.
What do you think?
Let me know
Post comment or timothyo@t2impact.com
So why the high fees? Well the GDSs are not willing to compromise on certain issues - such as the additional fees of pricing (e.g. Amadeus's master pricer/value pricer series products). So the fees have been loaded up to the point where it is not really attractive.
I dont think that there is going to be much take up of this - Easyjet is actually targeting the Corporations not the Agencies (as much) with this announcement. Either way there is going to be trouble and even some unpleasantness.
What do you think?
Let me know
Post comment or timothyo@t2impact.com
07 November 2007
Its Official! EasyJet is not a Full Blown HVC
Throwing out the pure LCC (Low Cost Carrier) model in favor of the HVC (Hybrid Value Carrier) has been on the cards for some time for Stelios's Orange clad heros. Now they big step, they have agreed to go into the GDS - Amadeus and Galileo for sure. Given their reach these make sense. (Sorry Tex!)
Using the model developed for Norwegian Air Shuttle, the GDS will be charging out a fee for this "service" This fee will be listed in the final pricing.
Impact?
So GOOD for Easyjet - they needed to do this for the broader reach. This gives them what they want and at a model that makes sense
VERY RISKY for Amadeus and Travelport. I believe this is a short sighted decision and will ultimately result in many conventional carriers adopting the model. However so far Amadeus has proved adept at surfing over this issue. However the number of Masterpricer transactions will be a big sticking point. I would love to have listened to that conversation. I doubt that Easyjet had good advice on this subject.
SIGH OF RELIEF for the travel agents - they now have less competition but more work and more cost
NEUTRAL for corporations - not sure its a benefit though - its more paper/processing work
BAD for LCC scanning vendors. But not that bad since Ryanair is not going to follow suit.
GREAT for Ryanair.They wasted no time in crowing over this one. Read the great press release:
http://www.ryanair.com/site/EN/news.php?yr=07&month=nov&story=gen-en-051107
For the other competition, expect Air Berlin however and several others (eg German Wings) to follow suit.
Using the model developed for Norwegian Air Shuttle, the GDS will be charging out a fee for this "service" This fee will be listed in the final pricing.
Impact?
So GOOD for Easyjet - they needed to do this for the broader reach. This gives them what they want and at a model that makes sense
VERY RISKY for Amadeus and Travelport. I believe this is a short sighted decision and will ultimately result in many conventional carriers adopting the model. However so far Amadeus has proved adept at surfing over this issue. However the number of Masterpricer transactions will be a big sticking point. I would love to have listened to that conversation. I doubt that Easyjet had good advice on this subject.
SIGH OF RELIEF for the travel agents - they now have less competition but more work and more cost
NEUTRAL for corporations - not sure its a benefit though - its more paper/processing work
BAD for LCC scanning vendors. But not that bad since Ryanair is not going to follow suit.
GREAT for Ryanair.They wasted no time in crowing over this one. Read the great press release:
http://www.ryanair.com/site/EN/news.php?yr=07&month=nov&story=gen-en-051107
For the other competition, expect Air Berlin however and several others (eg German Wings) to follow suit.
05 November 2007
Diller splits up IAC again - Only Match, Ask and Citysearch are left
Diller has decided he needs a few pennies. So he is spinning out 4 of the remaining businesses in IAC (InterActive Corp). So far the Travel businesses (except Timeshare) are all out as Expedia. Soon to follow are:
Moneytree (Lending)
HSN - Home Shopping Network
Ticketmaster
Interval International
This will leave the rump with just 3 players - Match.com, Ask.com (Search) and Citysearch.
Many of these players are now mature enough to stand on their own and return some value to Mr Diller and crew.
Cheers
Timothy
Moneytree (Lending)
HSN - Home Shopping Network
Ticketmaster
Interval International
This will leave the rump with just 3 players - Match.com, Ask.com (Search) and Citysearch.
Many of these players are now mature enough to stand on their own and return some value to Mr Diller and crew.
Cheers
Timothy
03 November 2007
Gol completes commitment for Varig's interim Fleet, Private Equity talk swirls
To celebrate the re-launch of the UK service, (GIG-GRU-LHR) Gol CEO Constantino de Oliveira "Junior" announced that they had secured 14 767-300s and 14 737-800s for the starred but ill-fated former Brazilian national carrier. The new fleet should be fully operational by the end of next year when all the aircraft are refurbished to VRG's specifications. In a very tight market for 767-300s where these planes came from is somewhat of a mystery. There is no one disposing of them at the moment especially with the delay of the replacement craft 787 Dreamliner.
At the same time - rumors are now swirling that with a reduced stock price - down nearly 50% on the year - Gol is looking to take the 30% in public hands back private. Gol has confirmed that it has received private equity interest in assisting in such a move. With Brazil's travel market starting to boom - despite the ongoing air traffic control mess - there is much to be enthusiastic. Whether the original players in Varig's bankruptcy - Mattelin Patterson and Cerberus are among those interested remains to be seen.
At the same time - rumors are now swirling that with a reduced stock price - down nearly 50% on the year - Gol is looking to take the 30% in public hands back private. Gol has confirmed that it has received private equity interest in assisting in such a move. With Brazil's travel market starting to boom - despite the ongoing air traffic control mess - there is much to be enthusiastic. Whether the original players in Varig's bankruptcy - Mattelin Patterson and Cerberus are among those interested remains to be seen.
01 November 2007
US (Mobile Carriers) halting advances in Mobility
Far be it for us to pick on another business sector unless there is a significant impact on ours. Well today I am mad and getting madder about the US Mobile carriers.
What's the problem?
Advances in mobile technology especially in the area of Mobile Data Services is enabled by technology. It is adopted by consumers if they see a benefit. That benefit is driven by usually two factors - Keeping competitive (my phone is cooler) or convenience/functionality. Classic examples are the iPhone for the former and Blackberries for the latter.
Unfortunately this means that we need contracts that are competitive and don't discriminate. Phones last for about a year. In my case I am probably pretty hard on my devices but still - each year I need to change to accommodate both drivers. Not so fast say my providers.... Sign here for a 2 year contract and oh by the way you may not have an equipment upgrade. I pay extra now for that facility so that all the people on my contracts can upgrade and get new phones every year.
Still... I see people with old phones using them because of the two drivers: They are afraid of their contract and they are afraid to change. This makes the US market a laggard in adoption of advanced mobile data systems.
Thanks - AT&T, Sprint Nextel, T-Mobile, Verizon et al for keeping us as Luddites.
What's the problem?
Advances in mobile technology especially in the area of Mobile Data Services is enabled by technology. It is adopted by consumers if they see a benefit. That benefit is driven by usually two factors - Keeping competitive (my phone is cooler) or convenience/functionality. Classic examples are the iPhone for the former and Blackberries for the latter.
Unfortunately this means that we need contracts that are competitive and don't discriminate. Phones last for about a year. In my case I am probably pretty hard on my devices but still - each year I need to change to accommodate both drivers. Not so fast say my providers.... Sign here for a 2 year contract and oh by the way you may not have an equipment upgrade. I pay extra now for that facility so that all the people on my contracts can upgrade and get new phones every year.
Still... I see people with old phones using them because of the two drivers: They are afraid of their contract and they are afraid to change. This makes the US market a laggard in adoption of advanced mobile data systems.
Thanks - AT&T, Sprint Nextel, T-Mobile, Verizon et al for keeping us as Luddites.
31 October 2007
787 Program still not out of the woods - Bair points a finger
The outgoing, recently ousted, Boeing 787 Dreamliner program manager Mike Bair has publically pointed the finger at the much vaunted Global Supply Chain system for delay problems with the new wonder plane. At this week's scheduled quarterly meeting of the Snohomish County EDC, Bair kept a pre-arranged date to give a breakfast address in Everett. He didn't hold any punches.
Much like then head of Boeing Commercial, Alan Mullay's famous comment on Washington State' competitiveness in 2003 (Quote "We suck"), Bair pointed the finger at key players in the supply chain. Afterward, Bair declined specifically to name the suppliers Boeing "won't use again." He said he was referring not just to the six first-tier airframe partners — Alenia of Italy; Mitsubishi, Fuji and Kawasaki of Japan; Spirit of Wichita (spun out from Boeing), Kansas.; Vought of Texas — but also to some of their suppliers in the second tier.
Bair made his comments pointedly at the key global supply chain partners and of course Boeing's own management of it: "That whole production system is built for 1,200 pieces. ... Everything about it was designed for 1,200 parts," he said. "We threw 30,000 at it, " indicating the Chicago based company's misunderstanding of the complexity of the processes.
It has been well understood by industry insiders that Boeing's management process was built around a system of delegation and responsibility of the individual supply chain partners. IE that the partners had to be totally responsible for design, fit and functionality of each of their chunks of the process. Boeing would then have hit teams who would act as fire fighters flying to supply chain hiccoughs and fixing the problems. The idea looks great in the boardroom and on a white board. Not so easy in practice as Airbus has learned throughout the years.
So who are the guilty parties? While we have no definitive information, we can speculate through process of elimination. Sources inside Boeing have indicated that there has been a lot of activity of Boeing engineers making European trips. With the Japanese partners being well show cased by Boeing we can only imagine that there has been less than satisfactory performance from other of the vendors.
So what is the impact on the 787 program and Boeing for the future?
Immediately we anticipate that Boeing managers will be taking a hands on role in resolving some of the issues at the problem partner/suppliers. At this stage they cannot bring the production facility back in house because there is no "in-house" facility to bring it to. With Spirit (Formerly Boeing Wichita) a separate company - there are no production capabilities that could be added without long lead time and factory facilities being created. As for a reason, " ...some of them proved incapable of doing it," Bair said. In the interview after his speech, he expressed frustration that some partners seemed "unwilling, for whatever reason." "They just didn't do what we thought they could do," Bair said. "Who knows why?"
For the long term future his will impact the 737 Replacement narrow body designed for launch and in-service by approximately 2015. Some news reporters regarded this as a boost for the Puget Sound (Seattle) region. Not so fast. For a 2015 date, selection of the manufacturing site would likely be made at least five years earlier. At one point, explaining the reason for the 787's global supply chain, Bair said it was difficult to ask the Japanese to invest money and then build their sections somewhere else than Japan.
So is the supersite concept that he outlined — supplier factories located alongside final assembly — really practical? "I don't think it's outside the realm of what may have to be done," Bair said in the interview afterward. "Toyota builds as many cars here in the U.S. as in Japan." A supersite approach would make the next aircraft assembly operation a bigger prize than the 787 plant, which has not attracted many supplier jobs to Washington. Boeing has spent millions in hiring in ex-Toyota managers as well as sending engineers and managers to Japan to understand a car like production platform for its aircraft.
So we can expect for the next 2 years a lot of PR war of words flying around as Boeing is courted to build the next gen production facility for the 737FG (Future Generation) aircraft. One thing is for certain - it won’t be Renton. I will lay bets on that one. There just isn’t enough space at the current production line for that. Since the sale of land nearby for a shopping mall and office development; only if Paccar (ironically builders of Mack and Peterbilt brand trucks) could be persuaded to move would there be anything like the room for such a supersite. Highly unlikely when there are so many other competing and suitable sites. Plus with many states itching to land the supersite - we can be assured that Texas, Alabama and California would be in the running.
"The right way to do this would be to have all those big parts across the street so you could just roll them in," Bair told his audience. "We'll see on the next airplane programs whether we can accomplish something like that." And who says it has to be in the USA?
Much like then head of Boeing Commercial, Alan Mullay's famous comment on Washington State' competitiveness in 2003 (Quote "We suck"), Bair pointed the finger at key players in the supply chain. Afterward, Bair declined specifically to name the suppliers Boeing "won't use again." He said he was referring not just to the six first-tier airframe partners — Alenia of Italy; Mitsubishi, Fuji and Kawasaki of Japan; Spirit of Wichita (spun out from Boeing), Kansas.; Vought of Texas — but also to some of their suppliers in the second tier.
Bair made his comments pointedly at the key global supply chain partners and of course Boeing's own management of it: "That whole production system is built for 1,200 pieces. ... Everything about it was designed for 1,200 parts," he said. "We threw 30,000 at it, " indicating the Chicago based company's misunderstanding of the complexity of the processes.
It has been well understood by industry insiders that Boeing's management process was built around a system of delegation and responsibility of the individual supply chain partners. IE that the partners had to be totally responsible for design, fit and functionality of each of their chunks of the process. Boeing would then have hit teams who would act as fire fighters flying to supply chain hiccoughs and fixing the problems. The idea looks great in the boardroom and on a white board. Not so easy in practice as Airbus has learned throughout the years.
So who are the guilty parties? While we have no definitive information, we can speculate through process of elimination. Sources inside Boeing have indicated that there has been a lot of activity of Boeing engineers making European trips. With the Japanese partners being well show cased by Boeing we can only imagine that there has been less than satisfactory performance from other of the vendors.
So what is the impact on the 787 program and Boeing for the future?
Immediately we anticipate that Boeing managers will be taking a hands on role in resolving some of the issues at the problem partner/suppliers. At this stage they cannot bring the production facility back in house because there is no "in-house" facility to bring it to. With Spirit (Formerly Boeing Wichita) a separate company - there are no production capabilities that could be added without long lead time and factory facilities being created. As for a reason, " ...some of them proved incapable of doing it," Bair said. In the interview after his speech, he expressed frustration that some partners seemed "unwilling, for whatever reason." "They just didn't do what we thought they could do," Bair said. "Who knows why?"
For the long term future his will impact the 737 Replacement narrow body designed for launch and in-service by approximately 2015. Some news reporters regarded this as a boost for the Puget Sound (Seattle) region. Not so fast. For a 2015 date, selection of the manufacturing site would likely be made at least five years earlier. At one point, explaining the reason for the 787's global supply chain, Bair said it was difficult to ask the Japanese to invest money and then build their sections somewhere else than Japan.
So is the supersite concept that he outlined — supplier factories located alongside final assembly — really practical? "I don't think it's outside the realm of what may have to be done," Bair said in the interview afterward. "Toyota builds as many cars here in the U.S. as in Japan." A supersite approach would make the next aircraft assembly operation a bigger prize than the 787 plant, which has not attracted many supplier jobs to Washington. Boeing has spent millions in hiring in ex-Toyota managers as well as sending engineers and managers to Japan to understand a car like production platform for its aircraft.
So we can expect for the next 2 years a lot of PR war of words flying around as Boeing is courted to build the next gen production facility for the 737FG (Future Generation) aircraft. One thing is for certain - it won’t be Renton. I will lay bets on that one. There just isn’t enough space at the current production line for that. Since the sale of land nearby for a shopping mall and office development; only if Paccar (ironically builders of Mack and Peterbilt brand trucks) could be persuaded to move would there be anything like the room for such a supersite. Highly unlikely when there are so many other competing and suitable sites. Plus with many states itching to land the supersite - we can be assured that Texas, Alabama and California would be in the running.
"The right way to do this would be to have all those big parts across the street so you could just roll them in," Bair told his audience. "We'll see on the next airplane programs whether we can accomplish something like that." And who says it has to be in the USA?
Hertz owes it all to Ryanair?
Well not quite but the numbers are pretty good. Outpacing both domestic and international regular growth by a factor of at least 2 - Hertz cozy relationship with Ryanair goes from strength to strength. So far in their best quarter of the year for Leisure activity - Hertz went as far as to comment on the value of the exclusive relationship between the two companies.
PS Sorry if the image is a bit fuzzy... use your glasses!
AZ - the final drumbeat calling the faithful?
The final round of choices for the perennial life supported Italian Airline seems to be approaching. However the final choices seem to be somewhat mundane. Approved for the final round was AF/KL, LH, SU and Air One. TPG having been unable to persuade their first partner (Mattelin Patterson) or find another one, officially threw in the towel over a week ago. Besides they have several other shiny new projects to worry about.
Now it appears there is only LH and AF/KL in the running with SU a long shot. Call it part of the fallout from the liquidity/mortgage crisis but the numbers don’t look so hot now to the potential suitors.
Realistically AF/KL has to be the lead. Remember there is so much emotion and politics wrapped up in this one - logic and commercial common sense does not really work. At least AF/KL won’t close down the Alitalia brand (even though perhaps they should!).
We just can’t imagine Prodi's somewhat shaky coalition approving a Russian or a German ownership.
We can hear Michael O'Leary's cackle from here......... Cheers Timothy
Now it appears there is only LH and AF/KL in the running with SU a long shot. Call it part of the fallout from the liquidity/mortgage crisis but the numbers don’t look so hot now to the potential suitors.
Realistically AF/KL has to be the lead. Remember there is so much emotion and politics wrapped up in this one - logic and commercial common sense does not really work. At least AF/KL won’t close down the Alitalia brand (even though perhaps they should!).
We just can’t imagine Prodi's somewhat shaky coalition approving a Russian or a German ownership.
We can hear Michael O'Leary's cackle from here......... Cheers Timothy
30 October 2007
American Prevails in first stage of battle with Google over Names
The first stage in the battle between Google and AMR's American Airlines over the use of brand names in Paid Search went to the plaintiff.
Google sued to dismiss the case andthe judge without any comment dismissed the attempt.
However things are going to be hard for AMR going forward. So far not one single suit has been resolved by a judgement in favour of the plaintiff. But then again - the suitors have all been pretty light weight.
Let see what happens. We are predicting nothing more than a messy fight and at least one unhappy result
Cheers
Timothy
Google sued to dismiss the case andthe judge without any comment dismissed the attempt.
However things are going to be hard for AMR going forward. So far not one single suit has been resolved by a judgement in favour of the plaintiff. But then again - the suitors have all been pretty light weight.
Let see what happens. We are predicting nothing more than a messy fight and at least one unhappy result
Cheers
Timothy
Roundup Since I was away last week
Dear Readers... sorry for the silence.
I spent the last weeek exploring the great American West. Driving a UHaul (aka a large 10,000lb capacity truck) between Seattle and Big Sky Montana was an experience. You get a definite appreciation for the size of the American continent. Some of those things you see from the air are hard to make out at ground level. If you want to rent a REALLY great truly ski in ski out in the Largest Ski area in the USA - then send me a ping.
But this has been an interesting week. the A380 finally started shuttling lovers (oops I mean passengers) in First Class Suites playing chess behind closed doors on SQ. But there were lots of other stories:
Kitty Hawk Airlines stopped service - flying priority freight head to head against the logistics mega carriers of UPS and Fedex is a tough battle. It just goes to show its a business of scale. Remember those little old converted prop planes we used to see around the US country side - well most of them are going bye bye - just like the Supplementals before them.
Northwest rounded out the huge profits of the spectacular second quarter.
Merril Lynch dumped their grumpy Goldman Sachs hating CEO (No relation) O'Neal. Imagine living in the same building as your sworn enemy!!!! No truth to the rumour that his payout is in United stock.
Despite all the advice - people still havent booked their Winter Vacations. In the USA - that means you are going to PAY and PAY!!! Alternatively for about the price of a one way ticket in 1st class on SQ - you can rent my condo in Big Sky!
ILFC finally commited to the Airbus A350XWB. There is no truth to the rumour that the XWB stands for Xtra Weight onBoard as a reference to the new size wize for humans in the USA. However they did up the number to 20 from 16 original orders.
SAS Dumped their Q400 Fleets. Imagine reading the story of the 3rd crash landing by SK when you are flying in said aircraft doing 3 take offs and landings to get from BZN-SEA. SK has just had enough
BA lost it 3rd franchise partner in 6 months with GB airways selling out to EasyJet and Loganair (the Trislander carrier) dumped their contract. No truth to the rumour that Kulula will dump BA when they start flying to the UK next year.
And what about those slots at LHR - 4 of them (not part of the GB airways sale) are on offer to the highest bidder. BAA/LHR has allowed EI to transfer its slots for SNN-LHR to the new service to LHR from Belfast. That story will run for a while.
More insight and analysis starting tomorrow.
Cheers
Timothy
I spent the last weeek exploring the great American West. Driving a UHaul (aka a large 10,000lb capacity truck) between Seattle and Big Sky Montana was an experience. You get a definite appreciation for the size of the American continent. Some of those things you see from the air are hard to make out at ground level. If you want to rent a REALLY great truly ski in ski out in the Largest Ski area in the USA - then send me a ping.
But this has been an interesting week. the A380 finally started shuttling lovers (oops I mean passengers) in First Class Suites playing chess behind closed doors on SQ. But there were lots of other stories:
Kitty Hawk Airlines stopped service - flying priority freight head to head against the logistics mega carriers of UPS and Fedex is a tough battle. It just goes to show its a business of scale. Remember those little old converted prop planes we used to see around the US country side - well most of them are going bye bye - just like the Supplementals before them.
Northwest rounded out the huge profits of the spectacular second quarter.
Merril Lynch dumped their grumpy Goldman Sachs hating CEO (No relation) O'Neal. Imagine living in the same building as your sworn enemy!!!! No truth to the rumour that his payout is in United stock.
Despite all the advice - people still havent booked their Winter Vacations. In the USA - that means you are going to PAY and PAY!!! Alternatively for about the price of a one way ticket in 1st class on SQ - you can rent my condo in Big Sky!
ILFC finally commited to the Airbus A350XWB. There is no truth to the rumour that the XWB stands for Xtra Weight onBoard as a reference to the new size wize for humans in the USA. However they did up the number to 20 from 16 original orders.
SAS Dumped their Q400 Fleets. Imagine reading the story of the 3rd crash landing by SK when you are flying in said aircraft doing 3 take offs and landings to get from BZN-SEA. SK has just had enough
BA lost it 3rd franchise partner in 6 months with GB airways selling out to EasyJet and Loganair (the Trislander carrier) dumped their contract. No truth to the rumour that Kulula will dump BA when they start flying to the UK next year.
And what about those slots at LHR - 4 of them (not part of the GB airways sale) are on offer to the highest bidder. BAA/LHR has allowed EI to transfer its slots for SNN-LHR to the new service to LHR from Belfast. That story will run for a while.
More insight and analysis starting tomorrow.
Cheers
Timothy
17 October 2007
Detla and Air France announce new Atantic JV
Delta Airline and Air France have just announced the first major foray into the transatlantic Open Skies venture. By making it a JV they resolve any issues about how it will be operated.
Initially covering JFK-ORY, JFK-LYS, and of course JFK-LHR and ATL-LHR. 3 new slots at LHR will be accomodated by Air France surrendering some of its slots to Delta who will operate the service.
Reported by both CNN.com and USA Today - the deal has been in the works for some time and will start in March 2008 and run for 8 years. It will eventually the joint venture is expected to increase revenues, competition and customer travel choices on key routes across the Atlantic.
The first phase will begin April 2008 and will include all non-stop flights operated by Air France and Delta between Air France's Paris-CDG, Orly, and Lyon hubs, and Delta's Atlanta, New York - JFK, Cincinnati and Salt Lake City hubs. It will also include flights operated by both carriers between London-Heathrow and the U.S.A combined 19 daily flights and more than 4,500 seats per day -- a 45% increase -- are expected to be part of the first phase of implementation.
Specifics about the SLC-LON service has not yet been clarified.
Initially covering JFK-ORY, JFK-LYS, and of course JFK-LHR and ATL-LHR. 3 new slots at LHR will be accomodated by Air France surrendering some of its slots to Delta who will operate the service.
Reported by both CNN.com and USA Today - the deal has been in the works for some time and will start in March 2008 and run for 8 years. It will eventually the joint venture is expected to increase revenues, competition and customer travel choices on key routes across the Atlantic.
The first phase will begin April 2008 and will include all non-stop flights operated by Air France and Delta between Air France's Paris-CDG, Orly, and Lyon hubs, and Delta's Atlanta, New York - JFK, Cincinnati and Salt Lake City hubs. It will also include flights operated by both carriers between London-Heathrow and the U.S.A combined 19 daily flights and more than 4,500 seats per day -- a 45% increase -- are expected to be part of the first phase of implementation.
Specifics about the SLC-LON service has not yet been clarified.
Earnings season starts - Delta posts great results
Delta just reported its first full quarter of results - ok so its the best quarter of the year but still a pretty good result. But this is nothing to crow about and there is a lot to do.
Delta Air Line Inc.'s third-quarter net income more than quadrupled to $220 million as the company's planes were fuller than ever during the summer. In its first full quarter since emerging from bankruptcy, the carrier also saw revenue increase 10% to a quarterly record of $5.23 billion.
FOR MORE INFORMATION, please see: http://www.wsj.com/earnings
But what about the other guys? Our analysis shows it will be a mixed season. The results will in general be good across the board. However there will be a few players who are already under-performing. Dont be surprised. One carrier to watch will be Skybus but since they are private not likely to see any financials.
It will be interesting!!!
Delta Air Line Inc.'s third-quarter net income more than quadrupled to $220 million as the company's planes were fuller than ever during the summer. In its first full quarter since emerging from bankruptcy, the carrier also saw revenue increase 10% to a quarterly record of $5.23 billion.
FOR MORE INFORMATION, please see: http://www.wsj.com/earnings
But what about the other guys? Our analysis shows it will be a mixed season. The results will in general be good across the board. However there will be a few players who are already under-performing. Dont be surprised. One carrier to watch will be Skybus but since they are private not likely to see any financials.
It will be interesting!!!
787- Bair out, Shanahan in as Boeing struggles
Boeing has reshuffled its Commercial Airplanes group as a result of the retirement president-Boeing International Laurette Koellner.
However we all know that the real reason is that someone had to take the fall for the 787 delay. Mike Bair is that guy, moving over from running the 787 to the new VP-business strategy and marketing for Boeing Commercial Airplanes. BCA's president/CEO Scott Carson made the changes before he himself got the big heave ho. However if there is any other delay - you can rest assured Chicago will be looking to push out one of its own.
The "new guy" is however an experienced hand at Boeing. Pat Shanahan previously led the 757 and 767-400ER programs.
One thing about Boeing though is that they have a very deep pool of managerial talent with wide experience. Airbus on the other hand has had more specialist experience but in the past promotion or experience was gained as a result of your nationality not necessarily your skill set.
However we all know that the real reason is that someone had to take the fall for the 787 delay. Mike Bair is that guy, moving over from running the 787 to the new VP-business strategy and marketing for Boeing Commercial Airplanes. BCA's president/CEO Scott Carson made the changes before he himself got the big heave ho. However if there is any other delay - you can rest assured Chicago will be looking to push out one of its own.
The "new guy" is however an experienced hand at Boeing. Pat Shanahan previously led the 757 and 767-400ER programs.
One thing about Boeing though is that they have a very deep pool of managerial talent with wide experience. Airbus on the other hand has had more specialist experience but in the past promotion or experience was gained as a result of your nationality not necessarily your skill set.
16 October 2007
Air Travel - the New Sin Tax
Following the success of the various fees and fees being charged in various jurisdictions – the governments are beginning to use Air Travel as a tax revenue source, sadly with little relevance to the use of the funds.
So let’s look at the issues – it is not very simple. In fact its REALLY complicated.
The facts:
1. Governments need more money
2. Environment is a bigger issue now than it has ever been (thank you Al Gore)
3. Air infrastructure is creaking
4. Post 9/11 security demands are enormous
5. Growing demand (with increased spending) is moving faster than GDS growth
6. Prices of air travel has fallen and continues to fall
7. And one to come….
So with these background facts it is only natural that taxes/fees or other charges are going to be due to be paid by someone.
The US originated much of this via the various post 9/11 fees and as well the allowing of mandated PFCs (Passenger Facility Charges) which allowed individual US airports to levy fees for airport usage. But perhaps one of the most interesting issues is that the US traveling population has been paying into a fund which has been funding the feds nicely every year. It was intended for the things like new airports new runways etc etc. None of which it ever funded.
So the Brits jumped in and started charging the now infamous APD. No pretence – it’s a tax. The French however wanted to charge several taxes for things like saving Africa and the environment. But they got smart about it and actually show how much the fee is for “eco”.
Next up the Dutch… the Secretary General of IATA is now pretty pissed.
So is everyone going to do this? Probably we are going to see all manner of fees and charges emerging over the next few months and years.
You remember my 7th point above…
It’s the Chicago convention. It is supposed to be used to exempt airlines from paying taxes on international travel. Specifically it bans the taxes on fuel. In the past it has been used as logic for avoiding all taxes on international travel as agreed by the Chicago convention which also set up ICAO as a UN Agency. The latter is important because it transcends national laws.
So bottom line… all bets are off and air travel is now a full open source for new taxes. Despite what Mr O’Leary might say – they are here to stay. We should only hope that some international rationalization of the tax regime is put into place. The only way to do that is to file a notice under GATT or some other convention. Otherwise its going to get REALLY messy. Watch for this its going to run and run.
Cheers
Here is the text of the IATA Press Release
Dutch ticket tax proposal is ineffective and inappropriate- breaches international obligations -
GENEVA -The International Air Transport Association (IATA) condemned the Dutch Government's plans to impose further taxes on air passengers. The government is planning to tax passengers departing the Netherlands by air as much as€45 citing environmental reasons."This passenger tax is ineffective, inappropriate and it breaches international obligations.It is a thinly disguised tax grab that does nothing for the environment. If anything, it is counter productive as it limits airlines' ability to buy newer, more fuel-efficient aircraft," said Giovanni Bisignani, IATA Director General and CEO."Airlines are making great strides to improve their environmental performance. Last year we saved 6 million tonnes of CO2by shortening 350 routes globally. We have improved fuel efficiency 70% over the past 40 years and forecast a further 25% improvement by 2020. The Dutch Government should be looking at what it can do to help airlines limit emissions. It can start by working with other EU governments to implement a Single European Sky that would save 12 million tonnes of CO2each year. It should also look at tax credits as an incentive to improve environmental performance rather than counterproductive taxes," added Bisignani.The passenger tax also breaches resolutions of the International Civil Organisation (ICAO) and Article 15 of the Chicago Convention on International Civil Aviation. "I am surprised that the Netherlands, as an ICAO Contracting State, chooses to ignore its obligations and trample over international agreements," Bisignani commented."We are seeing a worrying trend across Europe with governments cynically taxing air passengers for environmental reasons then failing to use the revenues for environmental purposes. These taxes are blunt instruments that just damage tourism and impact the competitiveness of European businesses. We urge the Dutch Government to rethink this ineffective, inappropriate and misguided proposal," concluded Bisignani.
So let’s look at the issues – it is not very simple. In fact its REALLY complicated.
The facts:
1. Governments need more money
2. Environment is a bigger issue now than it has ever been (thank you Al Gore)
3. Air infrastructure is creaking
4. Post 9/11 security demands are enormous
5. Growing demand (with increased spending) is moving faster than GDS growth
6. Prices of air travel has fallen and continues to fall
7. And one to come….
So with these background facts it is only natural that taxes/fees or other charges are going to be due to be paid by someone.
The US originated much of this via the various post 9/11 fees and as well the allowing of mandated PFCs (Passenger Facility Charges) which allowed individual US airports to levy fees for airport usage. But perhaps one of the most interesting issues is that the US traveling population has been paying into a fund which has been funding the feds nicely every year. It was intended for the things like new airports new runways etc etc. None of which it ever funded.
So the Brits jumped in and started charging the now infamous APD. No pretence – it’s a tax. The French however wanted to charge several taxes for things like saving Africa and the environment. But they got smart about it and actually show how much the fee is for “eco”.
Next up the Dutch… the Secretary General of IATA is now pretty pissed.
So is everyone going to do this? Probably we are going to see all manner of fees and charges emerging over the next few months and years.
You remember my 7th point above…
It’s the Chicago convention. It is supposed to be used to exempt airlines from paying taxes on international travel. Specifically it bans the taxes on fuel. In the past it has been used as logic for avoiding all taxes on international travel as agreed by the Chicago convention which also set up ICAO as a UN Agency. The latter is important because it transcends national laws.
So bottom line… all bets are off and air travel is now a full open source for new taxes. Despite what Mr O’Leary might say – they are here to stay. We should only hope that some international rationalization of the tax regime is put into place. The only way to do that is to file a notice under GATT or some other convention. Otherwise its going to get REALLY messy. Watch for this its going to run and run.
Cheers
Here is the text of the IATA Press Release
Dutch ticket tax proposal is ineffective and inappropriate- breaches international obligations -
GENEVA -The International Air Transport Association (IATA) condemned the Dutch Government's plans to impose further taxes on air passengers. The government is planning to tax passengers departing the Netherlands by air as much as€45 citing environmental reasons."This passenger tax is ineffective, inappropriate and it breaches international obligations.It is a thinly disguised tax grab that does nothing for the environment. If anything, it is counter productive as it limits airlines' ability to buy newer, more fuel-efficient aircraft," said Giovanni Bisignani, IATA Director General and CEO."Airlines are making great strides to improve their environmental performance. Last year we saved 6 million tonnes of CO2by shortening 350 routes globally. We have improved fuel efficiency 70% over the past 40 years and forecast a further 25% improvement by 2020. The Dutch Government should be looking at what it can do to help airlines limit emissions. It can start by working with other EU governments to implement a Single European Sky that would save 12 million tonnes of CO2each year. It should also look at tax credits as an incentive to improve environmental performance rather than counterproductive taxes," added Bisignani.The passenger tax also breaches resolutions of the International Civil Organisation (ICAO) and Article 15 of the Chicago Convention on International Civil Aviation. "I am surprised that the Netherlands, as an ICAO Contracting State, chooses to ignore its obligations and trample over international agreements," Bisignani commented."We are seeing a worrying trend across Europe with governments cynically taxing air passengers for environmental reasons then failing to use the revenues for environmental purposes. These taxes are blunt instruments that just damage tourism and impact the competitiveness of European businesses. We urge the Dutch Government to rethink this ineffective, inappropriate and misguided proposal," concluded Bisignani.
11 October 2007
Boeing - Delay on 787 - More indepth analysis
So the smoke has cleared and as we predicted as far back as May (well spotted Addison) Boeing did not make its overly ambitious schedule for the 787. Lets dive a little into the Boeing situation.
The 777 program - much less complex and very little integration issues arrived exactly on time promised delivery with a suitable gestation period occurred to United on the day promised.
The 787 is several orders of magnitude more complex. For example 4x the lines of code in the software. Vendors from all over the world with not just components but major subassemblies (like Wings and Fuselage barrels etc etc).
An overly aggressive delivery schedule
Supply chain issues that range from raw materials to specific parts such as fasteners.
However perhaps the biggest challenge remains just learning how to run a business such as Boeing has set themselves up for. It is clear by the amount of "travel work" that there have been and will continue to be significant issues in the integration of this just in time production capability. Boeing is probably guilty of believing it’s on Bullshit. The 787 is not the Smart Car type production they thought it was. No manner of Toyota engineers is going to make an inherently complex process any easier.
So from our vantage point, the following issues remain with the aircraft:
1. The learning curve is steeper than the Company ever imagined.
2. The amount of time for learning while now extended is still not going to be enough.
3. The amount of "travel work" indicates it requires an overhaul of the assumptions that were created in the design of the production schedule - particularly where the Italians are concerned. Building the schedule on the basis of the relationship to Spirit was somewhat optimistic.
4. Single sourcing has long term ramifications that need to be revisited. Boeing needs to consider how to ensure long term supply of its critical finished and raw supply chain. In this case they cannot blame the procurement process of the Government (a la C17) as a root cause.
5. Raw materials access beyond the direct provision of the supply chain interface is a cause for concern. The significant rise in the price of raw materials (whether plastics for the composite sections or Titanium) is going to cost Boeing dearly in future years.
We believe that the early customers such as ANA, JAL and Qantas are going to see significant in service issues particularly at some airports where Ramp Rash is well known. Those and other 787 customers would be well advised to learn from Boeing's issues in doing a gentler ramp up of the new aircraft. It should be remembered that it has been a long time since we saw a generational change in aircraft introduction.
And finally - let’s not forget Airbus. They better learn also. AND given the long term contract lock down of certain components that Boeing has already made - they better get their supply chain right for the A350XWB.
The 777 program - much less complex and very little integration issues arrived exactly on time promised delivery with a suitable gestation period occurred to United on the day promised.
The 787 is several orders of magnitude more complex. For example 4x the lines of code in the software. Vendors from all over the world with not just components but major subassemblies (like Wings and Fuselage barrels etc etc).
An overly aggressive delivery schedule
Supply chain issues that range from raw materials to specific parts such as fasteners.
However perhaps the biggest challenge remains just learning how to run a business such as Boeing has set themselves up for. It is clear by the amount of "travel work" that there have been and will continue to be significant issues in the integration of this just in time production capability. Boeing is probably guilty of believing it’s on Bullshit. The 787 is not the Smart Car type production they thought it was. No manner of Toyota engineers is going to make an inherently complex process any easier.
So from our vantage point, the following issues remain with the aircraft:
1. The learning curve is steeper than the Company ever imagined.
2. The amount of time for learning while now extended is still not going to be enough.
3. The amount of "travel work" indicates it requires an overhaul of the assumptions that were created in the design of the production schedule - particularly where the Italians are concerned. Building the schedule on the basis of the relationship to Spirit was somewhat optimistic.
4. Single sourcing has long term ramifications that need to be revisited. Boeing needs to consider how to ensure long term supply of its critical finished and raw supply chain. In this case they cannot blame the procurement process of the Government (a la C17) as a root cause.
5. Raw materials access beyond the direct provision of the supply chain interface is a cause for concern. The significant rise in the price of raw materials (whether plastics for the composite sections or Titanium) is going to cost Boeing dearly in future years.
We believe that the early customers such as ANA, JAL and Qantas are going to see significant in service issues particularly at some airports where Ramp Rash is well known. Those and other 787 customers would be well advised to learn from Boeing's issues in doing a gentler ramp up of the new aircraft. It should be remembered that it has been a long time since we saw a generational change in aircraft introduction.
And finally - let’s not forget Airbus. They better learn also. AND given the long term contract lock down of certain components that Boeing has already made - they better get their supply chain right for the A350XWB.
09 October 2007
US Air Force Tanker Deal - A different view
So at the moment all of the Beltway bandits are probably engaged in the biggest political battle of the season. Who is going to win the USAF's Air Refueling contract. it could be worth $100 Bn when all is said and done.
In the red corner is Reigning Champ and long favoured bidder Boeing with its decidedly ancient Boeing 767 design. In the Blue corner is the Northrup Grumman and EADS-Airbus Industrie the nasty Franco-German smelling foreigners, with their bigger A330 based design. OK so on patriotic grounds Boeing should win. But not so fast. NG/EADS-Airbus (what a mouthful) is proposing a production line in Alabama Only 400 Miles from where Mercedes (And EADS Shareholder, builds its M and R series).
At the moment the battle is squarely around an old US based design smaller and the bigger newer European design.
But i would like to post a contra view. Because over to the side is Lockheed-Martin (US's Largest Defense Contractor) advocating an update to the very decrepit C5 with the C5M re-engined, updated avionics. Boeing is also advocating more purchases of the C-17.
Lets start with the C5M. BAD IDEA. The plain is clapped out and the wings leak like crazy. It is in such poor shape that half the fleet (the ones that can fly not the ones on the books) are now used as cannibalization for parts. It has lost most of the crews (After being forced to do back to back tours the Reservists who fly this old clunker bailed en masse).
So how about this. Re-think it. Although I am sure that the Lobbyists would welcome this and Congress and the others will moan - but even though this contract has been scandal plagued and delayed for nearly 10 years, they time has come to rethink the whole idea of Military airlift in the USA Arsenal.
I propose that the US uses the A330M as a COTS based aircraft. I further propose that all the money that was to be used for C5M be used to purchase many more additional C-17s.
Who wins?
Boeing ends up with a good contract extension on the C-17 and we can reduce the price do the very stupid US procurement practices. Further they can stop wasting time on the 767. Time to put the old girl out to pasture which in turn will free resources for the now troubled 787 program.
Lockheed gets a smack in the eye - they need it.
NorthrupGrumman/EADS-Airbus (whew!) get a US production line and possibly a shot at the Hercules replacement market with the A400M.
The US Air Force (remember them) get much greater airlift capacity and better tanking with multiple convertible aircraft better suited to today's needs.
The US public gets a better deal for its money
Will they do it?
Naw not a hope in hell. Still nice idea.
Cheers
Timothy
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In the red corner is Reigning Champ and long favoured bidder Boeing with its decidedly ancient Boeing 767 design. In the Blue corner is the Northrup Grumman and EADS-Airbus Industrie the nasty Franco-German smelling foreigners, with their bigger A330 based design. OK so on patriotic grounds Boeing should win. But not so fast. NG/EADS-Airbus (what a mouthful) is proposing a production line in Alabama Only 400 Miles from where Mercedes (And EADS Shareholder, builds its M and R series).
At the moment the battle is squarely around an old US based design smaller and the bigger newer European design.
But i would like to post a contra view. Because over to the side is Lockheed-Martin (US's Largest Defense Contractor) advocating an update to the very decrepit C5 with the C5M re-engined, updated avionics. Boeing is also advocating more purchases of the C-17.
Lets start with the C5M. BAD IDEA. The plain is clapped out and the wings leak like crazy. It is in such poor shape that half the fleet (the ones that can fly not the ones on the books) are now used as cannibalization for parts. It has lost most of the crews (After being forced to do back to back tours the Reservists who fly this old clunker bailed en masse).
So how about this. Re-think it. Although I am sure that the Lobbyists would welcome this and Congress and the others will moan - but even though this contract has been scandal plagued and delayed for nearly 10 years, they time has come to rethink the whole idea of Military airlift in the USA Arsenal.
I propose that the US uses the A330M as a COTS based aircraft. I further propose that all the money that was to be used for C5M be used to purchase many more additional C-17s.
Who wins?
Boeing ends up with a good contract extension on the C-17 and we can reduce the price do the very stupid US procurement practices. Further they can stop wasting time on the 767. Time to put the old girl out to pasture which in turn will free resources for the now troubled 787 program.
Lockheed gets a smack in the eye - they need it.
NorthrupGrumman/EADS-Airbus (whew!) get a US production line and possibly a shot at the Hercules replacement market with the A400M.
The US Air Force (remember them) get much greater airlift capacity and better tanking with multiple convertible aircraft better suited to today's needs.
The US public gets a better deal for its money
Will they do it?
Naw not a hope in hell. Still nice idea.
Cheers
Timothy
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03 October 2007
Tony Ryan 1936-2007
A canny Irishman who pioneered the core of Aircraft leasing with GPA in the 1970s and at the same time founded the airline that pioneered low cost - Ryanair has died aged 71.
He founded GPA - Guiness Peat Aviation in 1975 only to see it come crashing down in 1992.
Of course and perhaps in hindsight one his greatest achievements may end up being his choice of the man who he hired to run his airline. While not the man to fully benefit from his core ideas - he nevertheless was a true pioneer in Airline commerce. As Michael O'Leary described his mentor and family friend yesterdayas "one of the greatest Irishmen of the 20th century."
He should be remembered as such.
He founded GPA - Guiness Peat Aviation in 1975 only to see it come crashing down in 1992.
Of course and perhaps in hindsight one his greatest achievements may end up being his choice of the man who he hired to run his airline. While not the man to fully benefit from his core ideas - he nevertheless was a true pioneer in Airline commerce. As Michael O'Leary described his mentor and family friend yesterdayas "one of the greatest Irishmen of the 20th century."
He should be remembered as such.
Sabre and EDS extend Outsource Agreement to 2014
Citing the relationship as contributing to Sabre's continued business transformation, the two Dallas area based companies have extended their agreement for another 6 years.
Probably business as usual, there is no need for Sabre to re-enter the mainframe business or go back to managing the "bunker" in Tulsa.
However there is a bit of under the covers work that is interesting - mostly in what was not said rather than the rah rah announcement.
For some time Sabre (which BTW stands for S-emi A-utomated B-usiness R-esearch E-nvironment) has been looking at what to do with its aging core platform. With Travelocity businesses (including LastMinute.com) on a much better footing and driving boat loads of transactions - now is the time to look at the other major parts of the business, namely the airline reservations and the GDS services.
Sabre's airline reservations business reached a peak with the US Airways outsource (long before bankruptcy #1). Since then they have lost market and mind share to the upstart Amadeus and its ALTEA (I don’t have the acronym) business. Carefully grabbing outsource deals from first Qantas and then BA, Amadeus has demolished the legacy infrastructure providers. The last casualty being Lufthansa Systems which closed down its FACE project during the summer. With astounding success, Amadeus now provides services to most of the world's top airlines. They are to be complemented on an incredible sales success. But the delivery is long from over. With a significant gestation period and a fall back to the use of BABS as the master inventory system, the Amadeus team has a very steep hill to climb to master all of these new customers. Whither Sabre in all this?
Sabre now needs a new system. There has been much talk and rumour of a deal with Unisys (the bride/mother left at the altar after Lufthansa Systems FACE project was cancelled). The rumours have yet to be verified but the sources are sound. Build it or Buy it? No trivial task whichever one is chosen. No army of Indian outsourced programmers is going to make this one easy. Whatever happens, there needs to be a new core and its needed soon or Sabre could lose its anchor customer American Airlines, in much the same way as Cendant/Travelport lost United Airlines to the STAR Alliance/Amadeus CITP - Common Information Technology Platform.
So chaps what's it to be? There are still some nice plumbs sitting on the table waiting to be eaten. If not, heaven forbid will the business go to AiRes or ITA, even Navitaire? Time's awastin'
Cheers
Timothy
Probably business as usual, there is no need for Sabre to re-enter the mainframe business or go back to managing the "bunker" in Tulsa.
However there is a bit of under the covers work that is interesting - mostly in what was not said rather than the rah rah announcement.
For some time Sabre (which BTW stands for S-emi A-utomated B-usiness R-esearch E-nvironment) has been looking at what to do with its aging core platform. With Travelocity businesses (including LastMinute.com) on a much better footing and driving boat loads of transactions - now is the time to look at the other major parts of the business, namely the airline reservations and the GDS services.
Sabre's airline reservations business reached a peak with the US Airways outsource (long before bankruptcy #1). Since then they have lost market and mind share to the upstart Amadeus and its ALTEA (I don’t have the acronym) business. Carefully grabbing outsource deals from first Qantas and then BA, Amadeus has demolished the legacy infrastructure providers. The last casualty being Lufthansa Systems which closed down its FACE project during the summer. With astounding success, Amadeus now provides services to most of the world's top airlines. They are to be complemented on an incredible sales success. But the delivery is long from over. With a significant gestation period and a fall back to the use of BABS as the master inventory system, the Amadeus team has a very steep hill to climb to master all of these new customers. Whither Sabre in all this?
Sabre now needs a new system. There has been much talk and rumour of a deal with Unisys (the bride/mother left at the altar after Lufthansa Systems FACE project was cancelled). The rumours have yet to be verified but the sources are sound. Build it or Buy it? No trivial task whichever one is chosen. No army of Indian outsourced programmers is going to make this one easy. Whatever happens, there needs to be a new core and its needed soon or Sabre could lose its anchor customer American Airlines, in much the same way as Cendant/Travelport lost United Airlines to the STAR Alliance/Amadeus CITP - Common Information Technology Platform.
So chaps what's it to be? There are still some nice plumbs sitting on the table waiting to be eaten. If not, heaven forbid will the business go to AiRes or ITA, even Navitaire? Time's awastin'
Cheers
Timothy
02 October 2007
And today's newest Travel plyer is.... Auntie Beeb!
The venerable BBC - bastion of Britishness is now a major player in worldwide travel. How come? They just bought a large chunk (majority share) in Lonely planet.
As a major provider of content worldwide and one of the best and most trusted sources of travel content - this is a natural tie up. The Beeb wins on 3 fronts:
1. Great content for TV - an adjunct to their various travel programs and of course Mr Palin.
2. Great print and core content written in their iconic style that transcends natural tribalism
3. A wealth of existing relationships
For Lonely Planet - it takes it to the next level. Lets just hope they dont screw it up
As a major provider of content worldwide and one of the best and most trusted sources of travel content - this is a natural tie up. The Beeb wins on 3 fronts:
1. Great content for TV - an adjunct to their various travel programs and of course Mr Palin.
2. Great print and core content written in their iconic style that transcends natural tribalism
3. A wealth of existing relationships
For Lonely Planet - it takes it to the next level. Lets just hope they dont screw it up
01 October 2007
Amadeus targeting Worldspan and Galileo with Sleeze
Well it looks like the gloves are off...
Amadeus this past week unleashed its own version of a Sleeze campaign by sending out large boxes of emptiness to Galileo and Worldspan subscribers.
A message has gone out from the combined WSP/Gal sales HQ to the troops as follows: I quote verbatim
Date: Fri, 28 Sep 2007 00:53:18 +0000 North American Sales Teams: Please be aware that Amadeus has launched a very aggressive marketing campaign targeting our customers. In some instances, they are sending customers an oversized cardboard box that is empty except for a large banner (pictures below). The wording on the box points the reader to the following website with a presentation that makes numerous assumptions about Travelport's acquisition of Worldspan. http://www.yougettochoose.com/Choice/ This is a very aggressive campaign aimed at capitalizing on the fear, uncer! tainty and doubt that some of our customers may be experiencing. Rather than respond to this attack directly which could serve to validate their claims, we will take the high road and continue focusing on the business of servicing our clients. Instead, we encourage you to engage with your clients and let them see through our actions how ridiculous Amadeus' claims are. You may also choose to point out that Amadeus must be quite threatened by the new Travelport GDS if they went to the expense and trouble of shipping empty, overly-large boxes to our travel agencies all over the United States. You can point out that Travelport would not use our marketing monies in such a frivolous manner. Additionally, we are planning a creative advertising and email campaign in the coming weeks that will set the stage for our communication to customers and the industry at-large. Thanks for your support. Cheryl and Erin
Sleeze? You be the judge
Cheers
Timothy
So you think the 787 will be delivered on time?
Then you my friend are in the minority - at least according to the site Bet2give.com. https://bet2give.com/b2g/market/linear/market.html?symbol=Boeing787onTime
Here you can see what REAL people are saying about the odds of Boeing delivering on time. Having spoken to many industry insiders (including some at the manufacturer itself) my best summation of the information is that there is NO WAY Boeing will be able to either:
A) Deliver its first aircraft on time - fully certified in all jurisdictions
B) Maintain the delivery schedule as proposed in the first 12 months.
So if you want to track this then go to the website and check it out. It will be interesting to see what happens
Here you can see what REAL people are saying about the odds of Boeing delivering on time. Having spoken to many industry insiders (including some at the manufacturer itself) my best summation of the information is that there is NO WAY Boeing will be able to either:
A) Deliver its first aircraft on time - fully certified in all jurisdictions
B) Maintain the delivery schedule as proposed in the first 12 months.
So if you want to track this then go to the website and check it out. It will be interesting to see what happens
29 September 2007
Emissions Trading in Aviation - a treatise
For some time now there has been a brewing friction between the airline community – as represented by IATA and ICAO and the European Community over the EC’s ETS – Emissions Trading Scheme. When initially proposed the Airline community was not included in the scheme, however as a major consumer of hydrocarbons this was soon rectified and added to the mix. However the Airline Community did not like it or support it.
In September 2005 the issue spilled out into the open. “Air transport is a global industry and the environment is a global concern. Effective solutions must be global solutions. Member states of the International Civil Aviation Organization (ICAO), including all EU members, are committed to deciding a course of action on aviation emissions in 2007. A European solution is no solution at all. Unilateral regional efforts will only distract from this process," said Giovanni Bisignani, IATA Director General and CEO.
In September 2006, The EC came to plead its case in front of the US Regional meeting of the WEF – World Economic Forum. They were told in no uncertain terms that the proposal was flawed for the design not necessarily the concept. In February 2007 when officially announced, the ETS was given a very cool reception by the Airline Community. While being very careful not to attack the concept, IATA and ICAO have been very strong in their opposition to the scheme’s implementation. This Autumn 2007 as the scheme reaches its roll out, the official aviation organizations (ICAO and IATA) have ramped up their opposition to it.
Let’s consider the issues and try and make sense of it…
Without a doubt the airline industry contributes to global climate change through the extensive use of Hydrocarbons. However jet fuel is one of the cleanest burning of any oil distillate. Further the global use is quite small at only approximately 2% for all uses of Oil based hydrocarbons.
IATA and ICAO have 3 basic objections.
1. They want a global scheme not a country or regional specific one. The UN (of which ICAO is a member organization and so chartered), endorses this point of view. Aviation is a global industry. There is a concern that some countries not just the EC and its member states plus the ECAC covered additional states will unilaterally impose both green taxes or other schemes. The complications of a single unit of countries such as the European Community (EC) starting this scheme creates all manner of issues.
2. They want a fair treatment of aviation particularly airlines in proportion to the amount of climate change contribution from the industry vs other more heavy hydrocarbon and polluting market sectors
3. Full consideration of the issue rather than picking on a small number of user types. (More on this below).
As a note there is several other lurking issue. For example the Chicago Convention of 1946 which explicitly forbids the use of any form of taxation on airline fuel. It could be argued that ETS is such a form of taxation. Clearly IATA and ICAO are somewhat miffed into having to react to this rather than addressing the issue in their own way and on their own time. Caught napping, they are not happy at being told what to do.
For the EC there are significant advantages to making the play to include aviation – especially airlines. Why? Firstly it must be remembered that the EC is trying to become the supra-national organization that legislates and represents the member states. As such it is important for the EC to take a single position. The EC is ramping up more and more to have a single voice with regard to airline. For example it is clearly emboldened by the agreement in May of this year to get all member states a deal with the USA on the Transatlantic Open Skies agreement. In the event that the EC is able to proceed with the ETS and force the inclusion by the non-EC carriers they will have created the first major step. Without a doubt it will put Europe ahead of all other nations in addressing the issue of Climate Change in the sector.
As a unit, Aviation becomes very easy to regulate. With less than 100 players in Europe and points of contact and control easily administered, Aviation is one of the simplest sectors to tax and regulate.
But, and this is a big one, People do not just use airlines to get from A to B. they are but a part of the mix of transport. Popular sarcasm in many countries points to so-called Green Warriors who campaign for Climate Change limiting measures but drive SUVs and buy exotic foods that travel very far. Not to mention their use of distant locales for holidays. So too we must review the issue of the aviation eco-system. Consider the issue of the airport. These are large collectors of people and consumer massive amounts of energy in their own right. Further there are some more efficient than others. Consider the issue of ground congestion waiting for runways. London’s Heathrow airport is one of the most notorious in the world for congestion both on the ground and in the air. Yet the ground portion is not considered in the scheme.
How to resolve this?
There are many issues in front of the aviation community. As with any major issue – this is going to be a tough nut to solve. However if we stick to the broad principals, Airlines should be included as Climate Change contributors in any scheme at the supra national level. Exempting them from the scheme would be inappropriate. The EC will definitely not be backing down from the scheme which means a showdown in some court is likely. The key battle will likely emerge with the US airlines who may choose not to opt into the scheme. As such the US Administration (not that of Bush as it will only occur beginning next year), will be forced to support their citizen airlines. This will likely end up in some form of compromise. Most likely with a voluntary contribution from the US and other non-EC airlines.
It should remembered that we are not speaking of a full taxation system here but rather only an emissions trading scheme. Implementing such a system will be no trivial task. And the passenger or freight owner? Yes they will be impacted. Lets all hope that this is handled in a reasonable way and we can get on with the business of moving people with their own free choice. Do I believe in ETS? Yes. Fundementally it is important for aviation to accept its position and responsibilities. The true cost of the product must not be the past elements that created them but also the allocation of future impact. This has to be the manner of handling product responsibility. The alternative would be a tobacco style witch-hunt post fact. Let’s not make that mistake.
In September 2005 the issue spilled out into the open. “Air transport is a global industry and the environment is a global concern. Effective solutions must be global solutions. Member states of the International Civil Aviation Organization (ICAO), including all EU members, are committed to deciding a course of action on aviation emissions in 2007. A European solution is no solution at all. Unilateral regional efforts will only distract from this process," said Giovanni Bisignani, IATA Director General and CEO.
In September 2006, The EC came to plead its case in front of the US Regional meeting of the WEF – World Economic Forum. They were told in no uncertain terms that the proposal was flawed for the design not necessarily the concept. In February 2007 when officially announced, the ETS was given a very cool reception by the Airline Community. While being very careful not to attack the concept, IATA and ICAO have been very strong in their opposition to the scheme’s implementation. This Autumn 2007 as the scheme reaches its roll out, the official aviation organizations (ICAO and IATA) have ramped up their opposition to it.
Let’s consider the issues and try and make sense of it…
Without a doubt the airline industry contributes to global climate change through the extensive use of Hydrocarbons. However jet fuel is one of the cleanest burning of any oil distillate. Further the global use is quite small at only approximately 2% for all uses of Oil based hydrocarbons.
IATA and ICAO have 3 basic objections.
1. They want a global scheme not a country or regional specific one. The UN (of which ICAO is a member organization and so chartered), endorses this point of view. Aviation is a global industry. There is a concern that some countries not just the EC and its member states plus the ECAC covered additional states will unilaterally impose both green taxes or other schemes. The complications of a single unit of countries such as the European Community (EC) starting this scheme creates all manner of issues.
2. They want a fair treatment of aviation particularly airlines in proportion to the amount of climate change contribution from the industry vs other more heavy hydrocarbon and polluting market sectors
3. Full consideration of the issue rather than picking on a small number of user types. (More on this below).
As a note there is several other lurking issue. For example the Chicago Convention of 1946 which explicitly forbids the use of any form of taxation on airline fuel. It could be argued that ETS is such a form of taxation. Clearly IATA and ICAO are somewhat miffed into having to react to this rather than addressing the issue in their own way and on their own time. Caught napping, they are not happy at being told what to do.
For the EC there are significant advantages to making the play to include aviation – especially airlines. Why? Firstly it must be remembered that the EC is trying to become the supra-national organization that legislates and represents the member states. As such it is important for the EC to take a single position. The EC is ramping up more and more to have a single voice with regard to airline. For example it is clearly emboldened by the agreement in May of this year to get all member states a deal with the USA on the Transatlantic Open Skies agreement. In the event that the EC is able to proceed with the ETS and force the inclusion by the non-EC carriers they will have created the first major step. Without a doubt it will put Europe ahead of all other nations in addressing the issue of Climate Change in the sector.
As a unit, Aviation becomes very easy to regulate. With less than 100 players in Europe and points of contact and control easily administered, Aviation is one of the simplest sectors to tax and regulate.
But, and this is a big one, People do not just use airlines to get from A to B. they are but a part of the mix of transport. Popular sarcasm in many countries points to so-called Green Warriors who campaign for Climate Change limiting measures but drive SUVs and buy exotic foods that travel very far. Not to mention their use of distant locales for holidays. So too we must review the issue of the aviation eco-system. Consider the issue of the airport. These are large collectors of people and consumer massive amounts of energy in their own right. Further there are some more efficient than others. Consider the issue of ground congestion waiting for runways. London’s Heathrow airport is one of the most notorious in the world for congestion both on the ground and in the air. Yet the ground portion is not considered in the scheme.
How to resolve this?
There are many issues in front of the aviation community. As with any major issue – this is going to be a tough nut to solve. However if we stick to the broad principals, Airlines should be included as Climate Change contributors in any scheme at the supra national level. Exempting them from the scheme would be inappropriate. The EC will definitely not be backing down from the scheme which means a showdown in some court is likely. The key battle will likely emerge with the US airlines who may choose not to opt into the scheme. As such the US Administration (not that of Bush as it will only occur beginning next year), will be forced to support their citizen airlines. This will likely end up in some form of compromise. Most likely with a voluntary contribution from the US and other non-EC airlines.
It should remembered that we are not speaking of a full taxation system here but rather only an emissions trading scheme. Implementing such a system will be no trivial task. And the passenger or freight owner? Yes they will be impacted. Lets all hope that this is handled in a reasonable way and we can get on with the business of moving people with their own free choice. Do I believe in ETS? Yes. Fundementally it is important for aviation to accept its position and responsibilities. The true cost of the product must not be the past elements that created them but also the allocation of future impact. This has to be the manner of handling product responsibility. The alternative would be a tobacco style witch-hunt post fact. Let’s not make that mistake.
27 September 2007
Red Shirt for Myanmar - Friday September 28 2007
While I am not normally a political animal in public - I do think we should support the peaceful protests against a repressive regime.
Please show your support for the monks and others protesting the military repressive regime on Friday September 28th 2007 by wearing a red shirt.
Thank you
Please show your support for the monks and others protesting the military repressive regime on Friday September 28th 2007 by wearing a red shirt.
Thank you
Is Boeing pushing too hard on the 787? Words of warning
http://www.flightglobal.com/articles/2007/09/21/216946/former-boeing-engineer-draws-industry-fire-over-787-composite-fuselage-crashworthiness.html
I live in Seattle and am a huge fan of the hometown manufacturer. They have scored what seems to be a Grandslam with the new 787. But a word of caution seems to be creeping in. At the Boeing Future of Flight Center, there is a section of the 787 not too far away from a cross section from a 747-100. What a difference. One is immediately struck by the composite frame’s thin skin vs the conventional metal skin. It did somewhat un-nerve me to look at it. http://www.boeing.com/companyoffices/aboutus/tours/
But it seems that there are some out there that also feel that something may not be right with the design of the new fuselage. http://www.flightglobal.com/articles/2007/09/21/216946/former-boeing-engineer-draws-industry-fire-over-787-composite-fuselage-crashworthiness.html
In this article a former Boeing engineer has drawn industry fire over 787 composite fuselage crashworthiness alarm.
While I don’t want to be an alarmist – it does somewhat worry me. With a backdrop of the fastener problem and the first flight being pushed back from the original Late August time frame into possibly as late as December, i am now worried that Boeing may be just rushing into things. A cautionary tale to be sure.
Am i right? I am not sure I want to be on the plane to find out if I am.
I live in Seattle and am a huge fan of the hometown manufacturer. They have scored what seems to be a Grandslam with the new 787. But a word of caution seems to be creeping in. At the Boeing Future of Flight Center, there is a section of the 787 not too far away from a cross section from a 747-100. What a difference. One is immediately struck by the composite frame’s thin skin vs the conventional metal skin. It did somewhat un-nerve me to look at it. http://www.boeing.com/companyoffices/aboutus/tours/
But it seems that there are some out there that also feel that something may not be right with the design of the new fuselage. http://www.flightglobal.com/articles/2007/09/21/216946/former-boeing-engineer-draws-industry-fire-over-787-composite-fuselage-crashworthiness.html
In this article a former Boeing engineer has drawn industry fire over 787 composite fuselage crashworthiness alarm.
While I don’t want to be an alarmist – it does somewhat worry me. With a backdrop of the fastener problem and the first flight being pushed back from the original Late August time frame into possibly as late as December, i am now worried that Boeing may be just rushing into things. A cautionary tale to be sure.
Am i right? I am not sure I want to be on the plane to find out if I am.
BA – New Strategies New orders but Mr Walsh is not yet done
The BA blockbuster announcement today of its order for Airbus A380s (12), and 24 787s is the big news.
However there is some tea leaf reading behind the headlines which shows a change from the World's Favourite Airline.
The BA Fleet upgrade has been anticipated for some time. It actually says more about what was not decided than the headline numbers. Firstly let’s look at the big puppy. With one of the largest 747-400s (57) in the world adding 12 A380s doesn’t look like a lot. Actually it isn’t. BA is still considering what to do with its 747-400 replacement. If it doesn’t order 747-8s then I for one will be really surprised. But it will be the makeup of the fleet. For the past 10 years BA has been slowly moving to the more efficient 777 aircraft. With almost equal numbers of 777s and 747s in the long haul mix. So there is an outside chance that they may go for a 3 type 787/777/A380 combo for the fleet rather than a 4 type 787/747/777/A380. Given the crew requirements and the bargain prices on A380s right now – that might be a good choice. So where does this leave the A350XWB? Sadly I think this is going to be a non-starter with BA. It would be foolhardy for BA to have a fleet that comprises 6 major types (A319-A321s for short and medium haul), both A350 and 787s for thin medium and long haul 777, 747 and A380 for long haul. That’s a lot of engineering support. Mr. Walsh is no fan of these old behaviors of having less synergy.
So let’s continue our examination of BA’s equipment and strategy. Noticeably absent from today’s announcement was GE. GE’s much heralded initial order of GE90 powered 777s turned to a bust as early performance of the aircraft was spotty at best and diabolical at worst. Quietly BA now has more RR powered 777s than GE90s. All the new types A380 and 787s will be powered by the British manufacturer. This gives us a clue to Boeing’s offer of the 747-8. BA is probably giving Boeing the cold shoulder on the 50 seat enhanced version of its largest plane. Why? We believe it’s because of the engine choice – Boeing has selected the GEnx as the exclusive power plant for the jumbo. BA is not happy. BA has the opportunity to both punish and hold the stick out for Boeing. More 787 orders and probably 747-8 orders if Boeing was to offer RR engines. With Airbus desperate to get a conventional airline on board with the A350 could they be offering BA a super deal also?
Finally in our examination of BA, let’s look at a little heralded announcement that BA is going to deploy 757s on some new routes from mainland Europe to the USA. Given that only a handful of BA’s old 757s are ETOPS approved that means either major mods or acquiring some newer ones. BA’s 757s are among the oldest around. Putting winglets and making them ETOPS would be a pretty heavy task. As the 757s were earmarked for disposal – it reflects that BA has not yet put a decent strategy together for Transatlantic open skies. Further by formally stating they are NOT going after the premium all business market (much to the relief of the 4 Premium new entrants) it says that BA is sticking true to type. We can be sure that ANY move by BA to set up shop across the Atlantic from the mainland will be met with stiff resistance. Well with the possible exception of an Athens or Milan base!
Clearly Mr. Walsh is not yet done. Stay tuned
However there is some tea leaf reading behind the headlines which shows a change from the World's Favourite Airline.
The BA Fleet upgrade has been anticipated for some time. It actually says more about what was not decided than the headline numbers. Firstly let’s look at the big puppy. With one of the largest 747-400s (57) in the world adding 12 A380s doesn’t look like a lot. Actually it isn’t. BA is still considering what to do with its 747-400 replacement. If it doesn’t order 747-8s then I for one will be really surprised. But it will be the makeup of the fleet. For the past 10 years BA has been slowly moving to the more efficient 777 aircraft. With almost equal numbers of 777s and 747s in the long haul mix. So there is an outside chance that they may go for a 3 type 787/777/A380 combo for the fleet rather than a 4 type 787/747/777/A380. Given the crew requirements and the bargain prices on A380s right now – that might be a good choice. So where does this leave the A350XWB? Sadly I think this is going to be a non-starter with BA. It would be foolhardy for BA to have a fleet that comprises 6 major types (A319-A321s for short and medium haul), both A350 and 787s for thin medium and long haul 777, 747 and A380 for long haul. That’s a lot of engineering support. Mr. Walsh is no fan of these old behaviors of having less synergy.
So let’s continue our examination of BA’s equipment and strategy. Noticeably absent from today’s announcement was GE. GE’s much heralded initial order of GE90 powered 777s turned to a bust as early performance of the aircraft was spotty at best and diabolical at worst. Quietly BA now has more RR powered 777s than GE90s. All the new types A380 and 787s will be powered by the British manufacturer. This gives us a clue to Boeing’s offer of the 747-8. BA is probably giving Boeing the cold shoulder on the 50 seat enhanced version of its largest plane. Why? We believe it’s because of the engine choice – Boeing has selected the GEnx as the exclusive power plant for the jumbo. BA is not happy. BA has the opportunity to both punish and hold the stick out for Boeing. More 787 orders and probably 747-8 orders if Boeing was to offer RR engines. With Airbus desperate to get a conventional airline on board with the A350 could they be offering BA a super deal also?
Finally in our examination of BA, let’s look at a little heralded announcement that BA is going to deploy 757s on some new routes from mainland Europe to the USA. Given that only a handful of BA’s old 757s are ETOPS approved that means either major mods or acquiring some newer ones. BA’s 757s are among the oldest around. Putting winglets and making them ETOPS would be a pretty heavy task. As the 757s were earmarked for disposal – it reflects that BA has not yet put a decent strategy together for Transatlantic open skies. Further by formally stating they are NOT going after the premium all business market (much to the relief of the 4 Premium new entrants) it says that BA is sticking true to type. We can be sure that ANY move by BA to set up shop across the Atlantic from the mainland will be met with stiff resistance. Well with the possible exception of an Athens or Milan base!
Clearly Mr. Walsh is not yet done. Stay tuned
22 September 2007
The World's best blogs for Travel Marketing
Can it be that there is already a very large number of blogs out there that we are going to get a best of" book about them? Yes siree. There are literally thousands of them. Every passionate player is on his soapbox and what a large soapbox it is. But this is good. I can read and digest differing opinions from people worldwide. Some of it is organized, some of it is not. Some good some downright terrible. Some pure and pristine, others patently biased and commercially bent.
But hurray for the group of folks who have come together to create the world’s first book of the best travel marketing blogs. For those of us (either sick in the head or just plain crazy) who love this business this comes at a welcome time.
The three major players: Wired In Travel Conference (WIT), Singapore (www.wiredintravel.com), Canada-e-Connect Conference in Vancouver (www.canadaeconnect.com), and Travolution (http://www.travolution.com/) are collaborating on a new eBook called “Tips from the T-List” – the unofficial list of travel-related blogs. A call for submissions for the eBook to be launched in Vancouver, Singapore and London at Canada-e-Connect, and Wired-In-Travel, and through the Travolution media brand is being made.
Please contact one of the 3 people and tell them that Timothy sent you.
It sounds like it will be very cool and definitely useful. Don’t forget to sign up your own blog there and follow the list.
The text of the press release follows:
MEDIA RELEASE Announcing the world’s first book of the best travel marketing blogs A call for submissions: eBook to be launched in Vancouver, Singapore and London at Canada-e-Connect, and Wired-In-Travel, and through the Travolution media brand VANCOUVER/ SINGAPORE/LONDON – Wired In Travel Conference (WIT), Singapore (www.wiredintravel.com), will be collaborating with the Canada-e-Connect Conference in Vancouver (www.canadaeconnect.com), on a new eBook called “Tips from the T-List” – the unofficial list of travel-related blogs.
The eBook will be launched at Canada-e-Connect which takes place in Vancouver on November 7-9, and will then make its Asian debut at WIT on November 27-29. The book will also be available to delegates at the Travolution Autumn Conference in London on November 1 and via its website, blog and magazine.
Mathieu Ouellet from Quebec City, who started the T-List” said, “The idea of bringing together all different travel-related blogs was born and nurtured in Canada, but has quickly turned into a global community of travel marketers, many of whom have come together to form a T-List group on social networking phenomenon Facebook.” Jens Thraenhart, the executive director of marketing strategy & customer relationship management for the Canadian Tourism Commission, who will be chairing Canada-e-Connect and speaking at WIT on “E-Business Strategies For Destinations and Other Marketers in An Age of Transparency”, writes in his Tourism Internet Marketing Blog, “In the world of Web 2.0, Globalization, and Mass Collaboration, as well as cross-national partnerships, we believe we can all make a difference and putting our words into action and lead with an example.”Singapore is joining the organisers of the event in Vancouver and the Travolution brand in London in calling for the best posts from travel-related blogs globally, so the content may serve as tool for travel and hospitality marketers worldwide to make sense of the ever-changing environment of new media, emerging technologies and consumer trends.
Topics will include e-marketing tips, search engine marketing, online advertising, social media, new and ground-breaking website reviews, and much more. “We have been inspired by the collective knowledge of the T-List bloggers since its launch earlier this year. We hope this new book will provide a vital reference guide for travel, tourism and hospitality marketers,” said Kevin May, editor of Travolution. Added Yeoh Siew Hoon, producer of WIT: “This is Web 2.0 in action and we are pleased to bring the weight of the world’s fastest growing market to this project. The T-List will then truly become the A-list of travel-related blogs in this new global, digital age.”
Here’s how you can be part of the world’s first T-list in travel. Deadline for submissions is September 30, 2007. 1. Complete and fax back the following consent form to +1 604 648 9651 or email it to tlist@rezgo.com. Available at http://tourismtechnology.rezgo.com/2007/09/consent-form-for-publication-in-tips.html. 2. Send us three of your best posts. The editors will select one of these posts to appear in the book, with the goal of providing "Insider" experience and expertise in how online marketing can benefit travel and tourism. The posts should be your own work and should be things like tips, observations, or helpful hints. Please do not send news items or trend oriented posts because these will become outdated very quickly. Concentrate on original thoughts, tips, best practices, etc. Please limit the piece to 300-500 words max. You can either email your nominations, or use the T-List Wiki at http://www.radaron.com/wiki/tiki-index.php. 3. Send us a good quality headshot (if you want it included). 4. Send us a good quality screenshot of your blog or website. 5. Send us a very brief bio of yourself, your location (which will be added to a map of all bloggers) and the description of your blog 6. Send us your full name, address, phone and email so we can send you a copy of the book. Only those contributors who make it into the book will receive a copy, however, we will be making a free e-book available for download that you can distribute. 7. Make sure you add your information to the T-List Community on Facebook, where you can also find links to more information and blogs.
Note: The editorial team reserves the right to reject posts or blogs that are either below quality, have a commercial or self-serving connotation, or are not a fit with the overall concept of the book in delivering value for the travel and tourism industry at large. “Tips from the T-List” Team:Stephen Joyce, Publisher (http://tourismtechnology.rezgo.com/) Jens Thraenhart, Editor in Chief (http://tourisminternetmarketing.com/) Mathieu Ouellet, Editor, North America (http://radaron.com/) Yeoh Siew Hoon, Editor, Asia Pacific (http://thetransitcafe.com/) Kevin May, Editor, Europe, Middle East (http://travolution.blogspot.com/) - Canada-e-Connect Conference (http://www.canadaeconnect.com/ and http://www.canadaeconnectblog.com/): Vancouver, November 7-9, 2007- Canadian e-Tourism Awards (http://www.canadianetourismawards.com/): Vancouver, November 8, 2007- Wired-In-Travel Conference (http://www.wiredintravel.com/): Singapore, November 29-30, 2007- Travolution Conference (http://www.travolutionconference.co.uk/): London, November 1, 2007 More information about the T-List Book: http://canadaeconnectblog.com/swag-file/conference-swag-with-a-purpose/
But hurray for the group of folks who have come together to create the world’s first book of the best travel marketing blogs. For those of us (either sick in the head or just plain crazy) who love this business this comes at a welcome time.
The three major players: Wired In Travel Conference (WIT), Singapore (www.wiredintravel.com), Canada-e-Connect Conference in Vancouver (www.canadaeconnect.com), and Travolution (http://www.travolution.com/) are collaborating on a new eBook called “Tips from the T-List” – the unofficial list of travel-related blogs. A call for submissions for the eBook to be launched in Vancouver, Singapore and London at Canada-e-Connect, and Wired-In-Travel, and through the Travolution media brand is being made.
Please contact one of the 3 people and tell them that Timothy sent you.
It sounds like it will be very cool and definitely useful. Don’t forget to sign up your own blog there and follow the list.
The text of the press release follows:
MEDIA RELEASE Announcing the world’s first book of the best travel marketing blogs A call for submissions: eBook to be launched in Vancouver, Singapore and London at Canada-e-Connect, and Wired-In-Travel, and through the Travolution media brand VANCOUVER/ SINGAPORE/LONDON – Wired In Travel Conference (WIT), Singapore (www.wiredintravel.com), will be collaborating with the Canada-e-Connect Conference in Vancouver (www.canadaeconnect.com), on a new eBook called “Tips from the T-List” – the unofficial list of travel-related blogs.
The eBook will be launched at Canada-e-Connect which takes place in Vancouver on November 7-9, and will then make its Asian debut at WIT on November 27-29. The book will also be available to delegates at the Travolution Autumn Conference in London on November 1 and via its website, blog and magazine.
Mathieu Ouellet from Quebec City, who started the T-List” said, “The idea of bringing together all different travel-related blogs was born and nurtured in Canada, but has quickly turned into a global community of travel marketers, many of whom have come together to form a T-List group on social networking phenomenon Facebook.” Jens Thraenhart, the executive director of marketing strategy & customer relationship management for the Canadian Tourism Commission, who will be chairing Canada-e-Connect and speaking at WIT on “E-Business Strategies For Destinations and Other Marketers in An Age of Transparency”, writes in his Tourism Internet Marketing Blog, “In the world of Web 2.0, Globalization, and Mass Collaboration, as well as cross-national partnerships, we believe we can all make a difference and putting our words into action and lead with an example.”Singapore is joining the organisers of the event in Vancouver and the Travolution brand in London in calling for the best posts from travel-related blogs globally, so the content may serve as tool for travel and hospitality marketers worldwide to make sense of the ever-changing environment of new media, emerging technologies and consumer trends.
Topics will include e-marketing tips, search engine marketing, online advertising, social media, new and ground-breaking website reviews, and much more. “We have been inspired by the collective knowledge of the T-List bloggers since its launch earlier this year. We hope this new book will provide a vital reference guide for travel, tourism and hospitality marketers,” said Kevin May, editor of Travolution. Added Yeoh Siew Hoon, producer of WIT: “This is Web 2.0 in action and we are pleased to bring the weight of the world’s fastest growing market to this project. The T-List will then truly become the A-list of travel-related blogs in this new global, digital age.”
Here’s how you can be part of the world’s first T-list in travel. Deadline for submissions is September 30, 2007. 1. Complete and fax back the following consent form to +1 604 648 9651 or email it to tlist@rezgo.com. Available at http://tourismtechnology.rezgo.com/2007/09/consent-form-for-publication-in-tips.html. 2. Send us three of your best posts. The editors will select one of these posts to appear in the book, with the goal of providing "Insider" experience and expertise in how online marketing can benefit travel and tourism. The posts should be your own work and should be things like tips, observations, or helpful hints. Please do not send news items or trend oriented posts because these will become outdated very quickly. Concentrate on original thoughts, tips, best practices, etc. Please limit the piece to 300-500 words max. You can either email your nominations, or use the T-List Wiki at http://www.radaron.com/wiki/tiki-index.php. 3. Send us a good quality headshot (if you want it included). 4. Send us a good quality screenshot of your blog or website. 5. Send us a very brief bio of yourself, your location (which will be added to a map of all bloggers) and the description of your blog 6. Send us your full name, address, phone and email so we can send you a copy of the book. Only those contributors who make it into the book will receive a copy, however, we will be making a free e-book available for download that you can distribute. 7. Make sure you add your information to the T-List Community on Facebook, where you can also find links to more information and blogs.
Note: The editorial team reserves the right to reject posts or blogs that are either below quality, have a commercial or self-serving connotation, or are not a fit with the overall concept of the book in delivering value for the travel and tourism industry at large. “Tips from the T-List” Team:Stephen Joyce, Publisher (http://tourismtechnology.rezgo.com/) Jens Thraenhart, Editor in Chief (http://tourisminternetmarketing.com/) Mathieu Ouellet, Editor, North America (http://radaron.com/) Yeoh Siew Hoon, Editor, Asia Pacific (http://thetransitcafe.com/) Kevin May, Editor, Europe, Middle East (http://travolution.blogspot.com/) - Canada-e-Connect Conference (http://www.canadaeconnect.com/ and http://www.canadaeconnectblog.com/): Vancouver, November 7-9, 2007- Canadian e-Tourism Awards (http://www.canadianetourismawards.com/): Vancouver, November 8, 2007- Wired-In-Travel Conference (http://www.wiredintravel.com/): Singapore, November 29-30, 2007- Travolution Conference (http://www.travolutionconference.co.uk/): London, November 1, 2007 More information about the T-List Book: http://canadaeconnectblog.com/swag-file/conference-swag-with-a-purpose/
OK so a comment on Money Direct
I have been studiously avoiding this issue but I cannot any longer. We did file in support of BTC (Go to their public website) http://btcweb.biz/.)
There are two issues here that I think people have ignored. Tim Hughes pointed out that Money Direct (the name of the JV) is an operating entity owned by Sabre that is accepting an inbound relationship with Amadeus. Approved by the EU they have wasted no time to implement the spin machine. The other issue is that the enemy here is a failure to develop a decent financial fulfillment process for the industry at a cost effective rate. For this there are two "bad boys". Expedia for paying only on an low frequency basis (quarterly for most players) and of course Pegasus for letting their service language.
Let’s be clear. The whole market needs a better way to handle financial fulfillment, currency conversion commission clearing. The high costs are eating into everyone's profits. While I applaud the initiative of the two behemoths - I believe they are the wrong player and there are a heck of a lot of other solutions in other businesses that do well. All is not lost but you will have to think about it. or contact me...
timothyo@t2impact.com
There are two issues here that I think people have ignored. Tim Hughes pointed out that Money Direct (the name of the JV) is an operating entity owned by Sabre that is accepting an inbound relationship with Amadeus. Approved by the EU they have wasted no time to implement the spin machine. The other issue is that the enemy here is a failure to develop a decent financial fulfillment process for the industry at a cost effective rate. For this there are two "bad boys". Expedia for paying only on an low frequency basis (quarterly for most players) and of course Pegasus for letting their service language.
Let’s be clear. The whole market needs a better way to handle financial fulfillment, currency conversion commission clearing. The high costs are eating into everyone's profits. While I applaud the initiative of the two behemoths - I believe they are the wrong player and there are a heck of a lot of other solutions in other businesses that do well. All is not lost but you will have to think about it. or contact me...
timothyo@t2impact.com
787 and the looming fastner crisis.
By now Boeing is having a very hard time explaining away the next delay. But as we have noted several times there are two major issues that Boeing is having with its 787 program. The most public is the Fastener issue. Yes folks there really isn’t a Home Depot aisle where you can go and get these things. They have to be custom built. Further - one heck of a lot of them need to go in the new plane.
So for the lay person - a fastener is the screws, nuts and bolts that put the plane together. After 9/11 many companies mistook the likely growth in the market for these services. This was indeed exacerbated by Boeing itself who declared they would need significantly less of them with a composite fuselage. See: (http://www.boeing.com/commercial/787family/programfacts.html ). It would have been natural to assume that there would be a significant downturn in aircraft building. As a result there was a general roll up of the players with Alcoa emerging as the big player. These 3 factors: down market, lower assumed activity, (including the drivers for innovation usually coming from the military) and the money guys taking over reduced the overall investment. Boeing is far from blameless in this affair. Their supply chain guys need to be given a royal kick for underestimating the challenge and the scale of this issue.
But it’s going to get worse before it gets better. The demand will undoubtedly drive up the price. And we know demand from the 787 camp is moving at scorching speed. Don’t forget we have seen only 3 sets of orders from the North American carriers, AC, NW and CO. What about DL and AA who both have "Preferred deals" with Boeing and large 767 fleets. And now perhaps even worse, Airbus has quietly confirmed that it s abandoning an Aluminum fuselage barrel for a full composite construction.
Our prognosis? Boeing will be hard pressed to make it fly in Q4. But they will do it. A token delivery subject to strict scrutiny of the Japan JAA and the EU/US players may mean it is only certified in Japan. But the fastener problem will persist into 2010 at least and cause delivery cut backs. Boeing's highly aggressive schedule cannot be met for at least the first 100 planes. Result - higher 767-300 rates. Better keep looking for late model 77-300ERs they are like gold dust.
At least this will mast the ther problem (software and wiring) which is not going too well either.
Cheers
Timothy
So for the lay person - a fastener is the screws, nuts and bolts that put the plane together. After 9/11 many companies mistook the likely growth in the market for these services. This was indeed exacerbated by Boeing itself who declared they would need significantly less of them with a composite fuselage. See: (http://www.boeing.com/commercial/787family/programfacts.html ). It would have been natural to assume that there would be a significant downturn in aircraft building. As a result there was a general roll up of the players with Alcoa emerging as the big player. These 3 factors: down market, lower assumed activity, (including the drivers for innovation usually coming from the military) and the money guys taking over reduced the overall investment. Boeing is far from blameless in this affair. Their supply chain guys need to be given a royal kick for underestimating the challenge and the scale of this issue.
But it’s going to get worse before it gets better. The demand will undoubtedly drive up the price. And we know demand from the 787 camp is moving at scorching speed. Don’t forget we have seen only 3 sets of orders from the North American carriers, AC, NW and CO. What about DL and AA who both have "Preferred deals" with Boeing and large 767 fleets. And now perhaps even worse, Airbus has quietly confirmed that it s abandoning an Aluminum fuselage barrel for a full composite construction.
Our prognosis? Boeing will be hard pressed to make it fly in Q4. But they will do it. A token delivery subject to strict scrutiny of the Japan JAA and the EU/US players may mean it is only certified in Japan. But the fastener problem will persist into 2010 at least and cause delivery cut backs. Boeing's highly aggressive schedule cannot be met for at least the first 100 planes. Result - higher 767-300 rates. Better keep looking for late model 77-300ERs they are like gold dust.
At least this will mast the ther problem (software and wiring) which is not going too well either.
Cheers
Timothy
15 September 2007
Stupid Visa Tricks Stops Brit Pop Invasion. Bush Adminstration Breathes Sigh of Relief
http://online.wsj.com/article/SB118980966247828081.html?mod=hps_us_at_glance_pursuits
The Bush Administration and its new tool for foreign policy - the DHS/U.S. Citizenship and Immigration Services - are doing more for American Isolation than the Hoover Administration or any of the inter-world war policies. New "anti-terrorist" rules are ensnaring artists in today's popular culture of music. British Bands like the Klaxons (very good BTW) and Lily Allen are being denied visas - in some cases even being turned away at arrival airports. Of course this is stupid and of course this was never supposed to happen. But it is.
As a naturalized US citizen - this writer is grateful for the opportunity that I have received. However that does not preclude me from being critical of the current Bush Administration, nor do I agree with some of the draconian regulations that now dog the process of getting even to visit (for a holiday)the good ole US of A. Many countries (Brazil for example) actively cite the US policies for raising barriers for US passport holders to enter their countries. From bitter personal experience I can assure you that it is complicated and expensive to get all these visas. I have to constantly maintain more than 1 passport (yes its legal under exceptional circumstances) for the visas I need.
Lets all just hope that the next Administration brings some sanity to the whole process. Sadly I dont think that this is likely. Personally I resign myself to the unpleasantness of the process and mourn the loss of cultural interaction. Thank god for the Internet. At least its (still) democratic and open - for all its anarchic origins.
Cheers
TIMOTHY O'NEIL-DUNNE
The Bush Administration and its new tool for foreign policy - the DHS/U.S. Citizenship and Immigration Services - are doing more for American Isolation than the Hoover Administration or any of the inter-world war policies. New "anti-terrorist" rules are ensnaring artists in today's popular culture of music. British Bands like the Klaxons (very good BTW) and Lily Allen are being denied visas - in some cases even being turned away at arrival airports. Of course this is stupid and of course this was never supposed to happen. But it is.
As a naturalized US citizen - this writer is grateful for the opportunity that I have received. However that does not preclude me from being critical of the current Bush Administration, nor do I agree with some of the draconian regulations that now dog the process of getting even to visit (for a holiday)the good ole US of A. Many countries (Brazil for example) actively cite the US policies for raising barriers for US passport holders to enter their countries. From bitter personal experience I can assure you that it is complicated and expensive to get all these visas. I have to constantly maintain more than 1 passport (yes its legal under exceptional circumstances) for the visas I need.
Lets all just hope that the next Administration brings some sanity to the whole process. Sadly I dont think that this is likely. Personally I resign myself to the unpleasantness of the process and mourn the loss of cultural interaction. Thank god for the Internet. At least its (still) democratic and open - for all its anarchic origins.
Cheers
TIMOTHY O'NEIL-DUNNE
Civility disappears from the skies - loyalty suffers
http://online.wsj.com/article/SB118953945479924099.html
It was really rather a pleasure flying in the post 9/11 world. There was camaraderie and a shared experience of people who all enjoyed a common bond.
Fast forward to today. Shock! Horror! - Southwest described a lady's attire as "inappropriate"! Lamar Muse must be turning in his grave. And the venerable Wall Street Jounal article entitled: Cranky Skies: FliersBehave Badly AgainAs 9/11 Era Fades.
I fly alot. And I can tell you that this is the case. People have lost that ability to demonstrate being nice. But don't necessarily blame the passengers for this. We have LESS service. There are many reasons. Here are a few: Untold thousands and thousands of customer service personnel removed from the system. Packed flights. More connections. Smaller planes. More airport congestion. bad planning by airlines etc etc.
I am afraid I do not subscibe to the position that the airlines are blameless for the ATC mess (as you can probably tell from prior posts). The results are increasingly that there is a long term dissatisfaction which will lead to a loss of brand loyalty. The airlines that are making money now are doing so at the expense of underlying core values. Cranky fliers become disloyal customers who choose against rather than for you. Beware.
It was really rather a pleasure flying in the post 9/11 world. There was camaraderie and a shared experience of people who all enjoyed a common bond.
Fast forward to today. Shock! Horror! - Southwest described a lady's attire as "inappropriate"! Lamar Muse must be turning in his grave. And the venerable Wall Street Jounal article entitled: Cranky Skies: FliersBehave Badly AgainAs 9/11 Era Fades.
I fly alot. And I can tell you that this is the case. People have lost that ability to demonstrate being nice. But don't necessarily blame the passengers for this. We have LESS service. There are many reasons. Here are a few: Untold thousands and thousands of customer service personnel removed from the system. Packed flights. More connections. Smaller planes. More airport congestion. bad planning by airlines etc etc.
I am afraid I do not subscibe to the position that the airlines are blameless for the ATC mess (as you can probably tell from prior posts). The results are increasingly that there is a long term dissatisfaction which will lead to a loss of brand loyalty. The airlines that are making money now are doing so at the expense of underlying core values. Cranky fliers become disloyal customers who choose against rather than for you. Beware.
13 September 2007
The UK passenger numbers flat ex-LHR in decline
The numbers for Air4Cast for the balance of the year are predicting another banner year in air travel. Yet there is some discouraging news for the new owners of BAA. UK traffic is just creeping along at 2% growth for the whole coutry. Which given the continued rise in regions travel means very real passenger declines at LHR and LGW. With Ryanair pulling back at STN for the winter months we may also see some real decline YoY for that airport too. Contrast this with the overall market and in particular advances at LHR's major competitors with EU in general reporting 6% plus for the year.
OK enough already, the UK government needs to step into the mess and address the rot. Of BA will move traffic from its flagship base to the Continent.
OK enough already, the UK government needs to step into the mess and address the rot. Of BA will move traffic from its flagship base to the Continent.
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