ASTA just released a report on the Financial health of the US Travel Agent community. Even though it took them a year to publish the findings - I hope that wasn't to get rid of unflattering information.
ASTA is doing a good job in trying to keep the Agency community psyched up on the one hand and the consumer protected on the other. Despite having a job that is akin to putting fingers in the dyke - they continue to put on a brave face.
But the role of an agent has forever changed. It is doubtful by looking at these numbers that the agent model is sustainable at anything but a niche business.
Here is the full text of the Press Release.
ASTA Releases 2nd Annual Financial Benchmarking Report
Alexandria, Va., April 3, 2008-ASTA today released its second annual Financial Benchmarking Report, the results of which provide travel agencies with data that can be used to pinpoint areas of excellence, as well as areas which can be improved. Among the key findings, the report discovered that of those surveyed, the majority (75.6%) were profitable in 2006 and similarly expect to be profitable again in 2007 and 2008. The average profit (as defined by percentage of revenue) reported for 2006 was 7.1 percent, and forecasts for 2007 and 2008 show stronger profits are expected. The study, which Premium members receive as part of their membership package, is the only industry report of its kind to specifically examine travel agency financial benchmarks, including revenue sources and annual travel agent revenue
"ASTA is an industry leader in developing and analyzing studies that get to the very heart of what it takes to be successful in an increasingly competitive industry. The results of this report will help travel agencies maximize their earnings by showing them the most profitable revenue mix," said Cheryl Hudak, CTC, ASTA president and CEO. "Armed with this kind of data, agency owners and managers will be able to determine whether their agents and independent contractors are generating revenues at a competitive level."
Not surprisingly, the study found that labor and rent are the two largest areas of operating expenditures. Employee salaries and benefits alone represent 49.6 percent of operating expenses, although that percentage varied, anywhere from 41.5 percent to 59.0 percent depending on the responding agency's regional location. As such, rent and labor represent the two best options for agencies looking to improve their financial situation, either by cutting expenses or, as in the case of labor, increasing revenue through increased productivity.
Among other findings:
On average, respondents have 9.8 Full-Time Equivalents (FTEs) in their agency. The median was 4.8 FTE.
73.6 percent of those surveyed reported that they sell primarily leisure-based travel.
With respect to commissions and service fees, base commission revenue was the primary source of revenue for cruises and tours, while when examining non-air travel segments, only car rental revenue comes primarily from service fees.
Revenue from transactions and service fees was the largest source of ARC and non-ARC revenue for airline bookings.
For air bookings, 16.6 percent of ARC revenue was derived from international flights.
The full report is available for purchase for $950 to non-members. ASTA Travel Agent members receive a complimentary 2-page summary of the report; those interested in receiving the full study receive a substantial discount and pay only $350.
The study was conducted in May 2007 and polled ASTA's Research Family, a group of 491 travel agents. The survey has a 95 percent degree of confidence with an error rate of +/- 6.
ABOUT ASTA
ASTA's (American Society of Travel Agents) mission is to facilitate the business of selling travel through effective representation, shared knowledge and the enhancement of professionalism. ASTA seeks a retail travel marketplace that is profitable, growing and a rewarding place to work, invest and do business.
05 April 2008
American (AA) finally joins epay - but with a twist
American has finally decided that it can make money from those people who dont want to use credit cards or those people that would prefer a more direct relationship. They are now prepared to accept direct debit via electronic check when buying tickets on the airline’s Web site, AA.com.
“We continue to enhance our AA.com site to make it an unequaled resource for travel planning and trip purchases,” said Derek DeCross, American’s Managing Director – Interactive Marketing. “By adding the ability to pay for tickets with electronic checks, we’re offering customers more choice and greater control over the purchase process. Electronic checks are another example of our focus on making it even easier to do business with American Airlines.”
Now some would say that the process of doing business with AA is not exactly the easiest. (Try deciding you don't want to be an Aadvantage member). But give them some marks for trying this approach. Still there are no airlines yet accepting Google Checkout. I cannot for the life of me understand why. Several airlines (EG Northwest and Southwest) are already using Paypal.
Unfettered and secure financial instruments are needed to power the web to greater heights.
Cheers
Timothy
“We continue to enhance our AA.com site to make it an unequaled resource for travel planning and trip purchases,” said Derek DeCross, American’s Managing Director – Interactive Marketing. “By adding the ability to pay for tickets with electronic checks, we’re offering customers more choice and greater control over the purchase process. Electronic checks are another example of our focus on making it even easier to do business with American Airlines.”
Now some would say that the process of doing business with AA is not exactly the easiest. (Try deciding you don't want to be an Aadvantage member). But give them some marks for trying this approach. Still there are no airlines yet accepting Google Checkout. I cannot for the life of me understand why. Several airlines (EG Northwest and Southwest) are already using Paypal.
Unfettered and secure financial instruments are needed to power the web to greater heights.
Cheers
Timothy
Brits can now be told where to go.
Where is the Value for the UK traveler? The UK de-nationalized Post Office would like you tell you.
On April 1st the UK Post Office Travel Division published its report on the value destinations based on currency rates and usage. In the plus column UK and Sterling holders should consider South Africa, the Caribbean, Hong Kong and the USA. However on the downside the slide in the Pound is most noticeable in Europe falling 17% in the past year against the Euro. Even those currencies that are currently pegged to the US dollar such as the Gulf (GCC) states are suffering the impact with inflation and rising costs eating into holiday spending. US food and transportation costs have risen significantly during the past year.
The savvy British Traveller doesn’t always follow logic. The exchange usage – Pound into Euros – has escalated nearly 30% year on year. So the general health of the UK market seems to be holding up. However – we are now starting to see the twin impacts of the global economic turndown and the rapidly rising price of fuel. Still the price of the flights on discount Low Cost Carriers has not kept pace with the rise in Fuel costs.
So where is your best value according to the Post Office? South Africa or Jamaica if you have the time. If not – stay home.
On April 1st the UK Post Office Travel Division published its report on the value destinations based on currency rates and usage. In the plus column UK and Sterling holders should consider South Africa, the Caribbean, Hong Kong and the USA. However on the downside the slide in the Pound is most noticeable in Europe falling 17% in the past year against the Euro. Even those currencies that are currently pegged to the US dollar such as the Gulf (GCC) states are suffering the impact with inflation and rising costs eating into holiday spending. US food and transportation costs have risen significantly during the past year.
The savvy British Traveller doesn’t always follow logic. The exchange usage – Pound into Euros – has escalated nearly 30% year on year. So the general health of the UK market seems to be holding up. However – we are now starting to see the twin impacts of the global economic turndown and the rapidly rising price of fuel. Still the price of the flights on discount Low Cost Carriers has not kept pace with the rise in Fuel costs.
So where is your best value according to the Post Office? South Africa or Jamaica if you have the time. If not – stay home.
3 Down - Any more?
So this has been an interesting week. First Aloha (citing competition from a predatory competitor (read Mesa's go!) then ATA (citing loss of the Fedex teaming contract) and now Skybus (citing the economy and fuel) have all shut down this week.
So will there be any more?
There are a few carriers who are in trouble. These 3 airlines will not withdraw enough capacity from the system to make a big difference so the basic issues still remain. Airlines need to have a better and more rational approach to their commercial model.
T2 believes that there will be a few attempts at resuscitating these airlines. We hope for the employees sakes that this is successful.
Cheers
Timothy
So will there be any more?
There are a few carriers who are in trouble. These 3 airlines will not withdraw enough capacity from the system to make a big difference so the basic issues still remain. Airlines need to have a better and more rational approach to their commercial model.
T2 believes that there will be a few attempts at resuscitating these airlines. We hope for the employees sakes that this is successful.
Cheers
Timothy
03 April 2008
LHR - T5 - Horrid for BAA and Airlines
Knock on effect from BA’s debacle at LHR. Other carriers are stymied
While BA is grappling with its baggage woes – lets not think that everything is rosy for everyone else at Heathrow.
First BAA. As we have clearly seen the Spanish both paid too much for BAA and at the same time (or even as a consequence) they have very little money to invest. The uncertainty of the situation is exacerbated by the parliamentary investigation of BAA which could lead to a break up of the former government monopoly. This is even more likely to involve in delays in investment to fix LHR’s woes. And they are both legionary and legendary.
For the other airlines – this means delays for both Star and Skyteam airlines to move to their new homes. Which in turn need to be refurbished and brought up to something better than “less than a third world airport” that is now LHR. I recently flew through LHR and T4. It is amazing the building hasn’t been condemned.
The real winners – CDG, AMS, MAD, FRA and MUC.
While BA is grappling with its baggage woes – lets not think that everything is rosy for everyone else at Heathrow.
First BAA. As we have clearly seen the Spanish both paid too much for BAA and at the same time (or even as a consequence) they have very little money to invest. The uncertainty of the situation is exacerbated by the parliamentary investigation of BAA which could lead to a break up of the former government monopoly. This is even more likely to involve in delays in investment to fix LHR’s woes. And they are both legionary and legendary.
For the other airlines – this means delays for both Star and Skyteam airlines to move to their new homes. Which in turn need to be refurbished and brought up to something better than “less than a third world airport” that is now LHR. I recently flew through LHR and T4. It is amazing the building hasn’t been condemned.
The real winners – CDG, AMS, MAD, FRA and MUC.
Is Alitalia finally finished?
The AZ unions are banking on a Silvio win in the coming elections to bail them out. How short sighted are they?
This is the cras behavior of the worst order. Silvio will make nice pronouncements for votes and then be forced by the EU to accept a compromise. The Italian government cannot put more money into AZ - under current laws.
This bodes very badly for Olympic.
Cheers
Timothy
This is the cras behavior of the worst order. Silvio will make nice pronouncements for votes and then be forced by the EU to accept a compromise. The Italian government cannot put more money into AZ - under current laws.
This bodes very badly for Olympic.
Cheers
Timothy
ATA Stops Flying - Files for Protection
The list of creditors is nearly 400 pages.
This is quite sad but in context people! ATA was already sick. Now with them out - Southwest has a problem with all the people booked to Hawaii. Expect WN to take a small hit and be a creditor also. At least they got something tangible - the gates at MDW.
Cheers
Timothy
This is quite sad but in context people! ATA was already sick. Now with them out - Southwest has a problem with all the people booked to Hawaii. Expect WN to take a small hit and be a creditor also. At least they got something tangible - the gates at MDW.
Cheers
Timothy
I picked a hella of a time to quit....
The immortal lines spoken from Lloyd Bridges in Airplane seem very apropos this week. So I will be doing some blogging during the evening and night times...
I know - I am supposed to be on Vacation
Cheers
Timothy
I know - I am supposed to be on Vacation
Cheers
Timothy
02 April 2008
Travel Agents dropping like flies... again
The latest numbers from the UK's CAA - the official licencing body for UK Travel Agency bonding via its ATOL scheme - show a decline of 252 agencies who were not renewed. This comprises agents who have gone out of business, failed to meet the requirements or were just too late. Essentially this represents a pretty heavy drop of agents who have fallen by the wayside.
It is interesting that the UK market system with bonding has actually preserved the small agent longer than the US system who saw their peak in 1998 and now is just a shadow of its former self.
Sad really. They were warned!ATOL
It is interesting that the UK market system with bonding has actually preserved the small agent longer than the US system who saw their peak in 1998 and now is just a shadow of its former self.
Sad really. They were warned!ATOL
01 April 2008
Brazilian Market enters turmoil again
After the stellar growth of both TAM and GoL over the last few years – both airlines are now hitting some turbulence. Are we likely to see some major cutbacks or will they be able to ride out the storm before David Neeleman enters the scene?
Both TAM and GoL reported poor results this time out. GoL is now saddled with the rump of Varig which is probably now on business plan number 93. If the once national carrier sounds like the Hokey Pokey you would be forgiven for thinking so. Both airlines though need to rationalize their operations.
However the regulator ANAC needs to accept some responsibility here for playing fast and loose with the politics. They have to either get out or regulate. The quasi interference has not benefitted the public. Brazil is the largest market in South America and it still has a lot of possibility for expansion. Neeleman thinks so. If for no other reason than he has a ready market in the Mormon community!
For now though the regulators need to be looking at supporting the market with stimulus packages. This should include addressing some of the airport infrastructure issues particularly access to and from the airports in Rio and Sao Paolo. Of course it goes without saying that the Government needs to invest significantly in the ATC system.
So chaps – better get a move on – your days of fast growth without cost are now over. You don’t have much time before you get new competition – from a professional.
Cheers
Timothy
Both TAM and GoL reported poor results this time out. GoL is now saddled with the rump of Varig which is probably now on business plan number 93. If the once national carrier sounds like the Hokey Pokey you would be forgiven for thinking so. Both airlines though need to rationalize their operations.
However the regulator ANAC needs to accept some responsibility here for playing fast and loose with the politics. They have to either get out or regulate. The quasi interference has not benefitted the public. Brazil is the largest market in South America and it still has a lot of possibility for expansion. Neeleman thinks so. If for no other reason than he has a ready market in the Mormon community!
For now though the regulators need to be looking at supporting the market with stimulus packages. This should include addressing some of the airport infrastructure issues particularly access to and from the airports in Rio and Sao Paolo. Of course it goes without saying that the Government needs to invest significantly in the ATC system.
So chaps – better get a move on – your days of fast growth without cost are now over. You don’t have much time before you get new competition – from a professional.
Cheers
Timothy
IATA has more bad news – the recession bites deeper and broader
IATA has more bad news – the recession bites deeper and broader into global air transport.
IATA’s latest worldwide traffic numbers are not providing any comfort to beleaguered airline managers.
The latest numbers we are seeing from several key industry indicators are increasingly depressing. The factors affecting traffic are beginning to bite.
Witness the following:
US Airport traffic continues to slow. The extra day of February this leap year masks a flat traffic month.
Load factors are falling across the board.
Yields are significantly off
Deals – especially across the Atlantic abound even for the summer.
Premium traffic that has held up well is now declining.
The airlines are not going to be able to retire large fleets of inefficient jets because the ones that need to go are the ones that they need!
This is going to be a bumpy ride. Sorry but I am now a bear….
Cheers
Timothy
IATA’s latest worldwide traffic numbers are not providing any comfort to beleaguered airline managers.
The latest numbers we are seeing from several key industry indicators are increasingly depressing. The factors affecting traffic are beginning to bite.
Witness the following:
US Airport traffic continues to slow. The extra day of February this leap year masks a flat traffic month.
Load factors are falling across the board.
Yields are significantly off
Deals – especially across the Atlantic abound even for the summer.
Premium traffic that has held up well is now declining.
The airlines are not going to be able to retire large fleets of inefficient jets because the ones that need to go are the ones that they need!
This is going to be a bumpy ride. Sorry but I am now a bear….
Cheers
Timothy
31 March 2008
Exclusive: O’Leary Quits Ryanair – to start new Long Haul LCC
Exlusive to T2. O'Leary resigns as CEO of Ryanair.
After 3 years of saying “Maybe” Michael O’Leary has finally taken the plunge and will leave the Irish airline he has nurtured to great success. Today is his last day.
O’Leary is reported to have come to terms with the FR Board and using his position as a director of Ryanair Direct has in fact made himself redundant along with the other 40 employees in Dublin.
Clearly he has his eye on something bigger. Beaten to the punch by David Neeleman of jetBlue in starting a new airline in Brazil, O’Leary will be starting a new airline to be based in Dublin and will start service exactly one year from today 1st April 2009.
T2 can exclusively reveal that the new airline will be built on the pure low cost model. It will feature long and short haul flights but mostly long haul. Its first destination is the Island paradise of San Seriffe in the Indian Ocean where the flights will land at the Capital Bodoni. It’s a bit of a stretch to make a 737-900ER get there but the canny O’Leary was able to snag several in a fire sale at Boeing’s Renton plant now that the original purchaser – Adam Air – has gone out of business. He will initially purchase 4 of the green tails. He is planning to fly next to Hawaii and take over routes previously flown by now defunct Aloha Airlines.
The airline has already been named and the website address Myegoair.com has already been allocated. Commented O’Leary “I am F***ing tired of listening to other S***heads telling me what to do.” Now he feels he can really tell them where to get off. Advanced reservations are already being taken at a brisk pace.
For further details please contact Mr O’Leary directly at tightwad@myegoair.com
After 3 years of saying “Maybe” Michael O’Leary has finally taken the plunge and will leave the Irish airline he has nurtured to great success. Today is his last day.
O’Leary is reported to have come to terms with the FR Board and using his position as a director of Ryanair Direct has in fact made himself redundant along with the other 40 employees in Dublin.
Clearly he has his eye on something bigger. Beaten to the punch by David Neeleman of jetBlue in starting a new airline in Brazil, O’Leary will be starting a new airline to be based in Dublin and will start service exactly one year from today 1st April 2009.
T2 can exclusively reveal that the new airline will be built on the pure low cost model. It will feature long and short haul flights but mostly long haul. Its first destination is the Island paradise of San Seriffe in the Indian Ocean where the flights will land at the Capital Bodoni. It’s a bit of a stretch to make a 737-900ER get there but the canny O’Leary was able to snag several in a fire sale at Boeing’s Renton plant now that the original purchaser – Adam Air – has gone out of business. He will initially purchase 4 of the green tails. He is planning to fly next to Hawaii and take over routes previously flown by now defunct Aloha Airlines.
The airline has already been named and the website address Myegoair.com has already been allocated. Commented O’Leary “I am F***ing tired of listening to other S***heads telling me what to do.” Now he feels he can really tell them where to get off. Advanced reservations are already being taken at a brisk pace.
For further details please contact Mr O’Leary directly at tightwad@myegoair.com
G2 Falls to Amadeus
G2Switchworks who has been trying to raise money for the last few months has been unsuccessful and now succumbed to the wiles of the French/Spanish by agreeing to be bought out by Amadeus
The deal has been in the works for months off and on. The US credit crunch exacerbated by the slow development of the core platform has left the company with few options. The existing shareholders were unwilling (and in some cases unable) to pony up any more cash. Looks like today G2 ran out of cash.
This leaves Farelogix in an interesting position.
It also leaves the airlines in somewhat of a quandary. They (the airlines) now have few options to alternative distribution in the neutral world. Plus they all signed rather stringent contracts which will enable the GDSs to squeeze some more blood out of the stone.
Thanks to the legions of people who ping'd me on this one.
Looks like there are some folks in Chicago looking for a new gig. The biz folks are the most affected, the techies get to stay and become part of the monster.
Cheers
Timothy
The deal has been in the works for months off and on. The US credit crunch exacerbated by the slow development of the core platform has left the company with few options. The existing shareholders were unwilling (and in some cases unable) to pony up any more cash. Looks like today G2 ran out of cash.
This leaves Farelogix in an interesting position.
It also leaves the airlines in somewhat of a quandary. They (the airlines) now have few options to alternative distribution in the neutral world. Plus they all signed rather stringent contracts which will enable the GDSs to squeeze some more blood out of the stone.
Thanks to the legions of people who ping'd me on this one.
Looks like there are some folks in Chicago looking for a new gig. The biz folks are the most affected, the techies get to stay and become part of the monster.
Cheers
Timothy
30 March 2008
Sadly Aloha Airlines succumbs
Aloha Airlines one of the last true independent airlines that can trace its lineage back 60 years will cease flying on Monday evening.
While they placed the blame on Mesa's go! airlines subsidiary - it was a combination of factors that forced AQ into the twilight zone.
Let's hope someone picks up the pieces.
While they placed the blame on Mesa's go! airlines subsidiary - it was a combination of factors that forced AQ into the twilight zone.
Let's hope someone picks up the pieces.
Flogging now illegal in Europe
Commercial Blogging become illegal on Monday night in Europe. Those pesky people who wax lyrically and effuse wondrous statements about hotel sites and restaurants will now face the ire of the European Commission.
Not quite sure how it will get enforced but... oh well you have now been warned.
So ANYONE doing this is committing an illegal act.
This practice has some wonderful names:
Flogging
Astroturfing
CoBlo
So you have been warned hoteliers.
Does this mean that we will be clear of content that is not commercial in blogs. Far from it. But anyway... lets hope Tripadvisor and its ilk clean up their act(s) accordingly.
Cheers
Timothy
The Professor takes a little time off
Hello dear people.
I shall be away from Blogging next week officially. So depending on my sleep patterns and news stories - expect a lite flurry or nothing at all.
Cheers
Timothy
I shall be away from Blogging next week officially. So depending on my sleep patterns and news stories - expect a lite flurry or nothing at all.
Cheers
Timothy
Gotta Love Bush....
I would like to thank the president for disrupting my journey this week. He made a quick trip to Pittsburgh which resulted in complete chaos for that city's commuters and a 45 minute shut down of the airport.
This is the first time I have seen or even heard of this process. Apparently regular mortals are not allowed anywhere near Air Force One.
This was the sequence of events:
He lands in the late afternoon for a quick presentation to an individual who had done sterling work in Africa. Landing closed the airport for a short time while AF1 taxied to a remote part of the massive airport complex. Bush's motorcade then closed down traffic as it went to its 2 stops. Then back out to the airport closing all roads on the West Side of Pittsburgh. A journey that should take about 45 mins in traffic lasted 2. So scraping into the airport we all dutifully board our flights (there were about 10 planes in total waiting) we have to wait until Bush gets back there and then takes off back to DC.
Not that this would be confined to Bush alone, I am sure other president's have done the same thing.
President Bush met with Lydia Humenycky when he hopped off Air Force One at Pittsburgh International Airport on a stopover for a Republican fundraiser. (This was the intro paragraph for the news story on AP). And so she should be honored. But isn't this thing done usually at the White House? Then it was off to a quick fundraiser. Er - so the REAL reason for the trip was a fundraiser. Is this the best use of Government resources? If that total expenditure of funds (just out of pocket) had been donated to the fundraiser it would have saved us all money....
So like I said - Gotta love Bush and the system that allows such profligate expenditure and waste. So thanks GWB. Next time do send me some advance notice on the disruption so we can AVOID YOU!
Cheers
This is the first time I have seen or even heard of this process. Apparently regular mortals are not allowed anywhere near Air Force One.
This was the sequence of events:
He lands in the late afternoon for a quick presentation to an individual who had done sterling work in Africa. Landing closed the airport for a short time while AF1 taxied to a remote part of the massive airport complex. Bush's motorcade then closed down traffic as it went to its 2 stops. Then back out to the airport closing all roads on the West Side of Pittsburgh. A journey that should take about 45 mins in traffic lasted 2. So scraping into the airport we all dutifully board our flights (there were about 10 planes in total waiting) we have to wait until Bush gets back there and then takes off back to DC.
Not that this would be confined to Bush alone, I am sure other president's have done the same thing.
President Bush met with Lydia Humenycky when he hopped off Air Force One at Pittsburgh International Airport on a stopover for a Republican fundraiser. (This was the intro paragraph for the news story on AP). And so she should be honored. But isn't this thing done usually at the White House? Then it was off to a quick fundraiser. Er - so the REAL reason for the trip was a fundraiser. Is this the best use of Government resources? If that total expenditure of funds (just out of pocket) had been donated to the fundraiser it would have saved us all money....
So like I said - Gotta love Bush and the system that allows such profligate expenditure and waste. So thanks GWB. Next time do send me some advance notice on the disruption so we can AVOID YOU!
Cheers
T5 Showplace or Shambles
"not our finest hour" was Willy Walsh's comment on day 2. However we are now well into Day 3 and things are still not good. A further 54 flights are already cancelled on Monday and disruption will continue into Tuesday at least.
The problem? baggage system and processes.
It seems BA has not learned from the debacle at DIA when that opened over 10 years ago. However there is a subtle difference. At DIA the amount of cross flow bags connecting is actually significantly lower than at LHR. 1 Cabin bag and longer trips means more luggage. BA has also not learned from its own baggage woes of the past 3 years. The unions have bleated long and hard about BA's baggage practices including the outsourcing of a significant part or the baggage process at LHR prior to the move.
This shambles has lasting consequences for BA, BAA and the Transatlantic traffic flows in general. BA has been losing feed at LHR, other airlines are making better connection hubs at AMS, CGD, FRA, MUC, MAD etc. BA's financials will take a big hit from this debacle. Not least of which is the 10,000 Euro fine PER PASSENGER that will be levied for incorrect information passed to customers on Day 1. Couple that with a minimum of 200 Euros per passenger disrupted and the numbers are going to be staggering in compensation. The current rate of chaos means that BA has already lost effectively one day of out its schedule. (Thus this will again be a 365 day year not a leap year for the airline).
Ouch!
But wait. It gets better. BA has been able to borrow T4 this week when they moved into T5. No more. Delta, Continental and Northwest all move over there today with their start of operations. Given that T4's baggage system broke down 3 weeks ago, this is not going to be pretty.
Someone needs to be severely spanked for this bad behavior. It was preventable.
The problem? baggage system and processes.
It seems BA has not learned from the debacle at DIA when that opened over 10 years ago. However there is a subtle difference. At DIA the amount of cross flow bags connecting is actually significantly lower than at LHR. 1 Cabin bag and longer trips means more luggage. BA has also not learned from its own baggage woes of the past 3 years. The unions have bleated long and hard about BA's baggage practices including the outsourcing of a significant part or the baggage process at LHR prior to the move.
This shambles has lasting consequences for BA, BAA and the Transatlantic traffic flows in general. BA has been losing feed at LHR, other airlines are making better connection hubs at AMS, CGD, FRA, MUC, MAD etc. BA's financials will take a big hit from this debacle. Not least of which is the 10,000 Euro fine PER PASSENGER that will be levied for incorrect information passed to customers on Day 1. Couple that with a minimum of 200 Euros per passenger disrupted and the numbers are going to be staggering in compensation. The current rate of chaos means that BA has already lost effectively one day of out its schedule. (Thus this will again be a 365 day year not a leap year for the airline).
Ouch!
But wait. It gets better. BA has been able to borrow T4 this week when they moved into T5. No more. Delta, Continental and Northwest all move over there today with their start of operations. Given that T4's baggage system broke down 3 weeks ago, this is not going to be pretty.
Someone needs to be severely spanked for this bad behavior. It was preventable.
24 March 2008
Skybus CEO resigns
Bill Diffenderfer the sometimes acerbic CEO of Skybus and former CEO of XOL, has resigned "to resume a book-writing career". Definitely a new take on the "pursue other interests" that normally accompany exists like this.
Skybus who has aimed to become the "Ryanair of America" has had its share of issues. Cutting back on deliveries - coping with high fuel costs - entering and exiting markets quickly. Perhaps some of the not so well loved attributes of FR.
Skybus should have them lined up 6 deep wanting to get on board. But sadly its take on the Ryanair model is not attracting customers in the ways it had hoped.
Lets wish them all the best. However a new dynamic CEO is required and the caretaker CFO is not going to do the job.
Best of luck Skybus. Lets hope this does not become another Western Pacific.
Cheers
Timothy
Skybus who has aimed to become the "Ryanair of America" has had its share of issues. Cutting back on deliveries - coping with high fuel costs - entering and exiting markets quickly. Perhaps some of the not so well loved attributes of FR.
Skybus should have them lined up 6 deep wanting to get on board. But sadly its take on the Ryanair model is not attracting customers in the ways it had hoped.
Lets wish them all the best. However a new dynamic CEO is required and the caretaker CFO is not going to do the job.
Best of luck Skybus. Lets hope this does not become another Western Pacific.
Cheers
Timothy
22 March 2008
Delta and Northwest - it ain't over till the fat lady sings
And she is still eating.
The news reports out of both MSP and ATL are very confusing. DL pilots exec is saying "Non" but their rank and file is not so sure. NW pilots say yes but only on their terms. The key issue is pilot seniority.
Breaking with objectivity here - I think it is dead because DL has not waited for the outcome to get on with their lives. Atlanta is offering severance to over 30,000 staff. With Delta's need for additional pilots already acute even the reduction in domestic flying is only going to delay the inevitable. There are more pilots needed.
This merger remains a bad idea. I cannot see it coming right. Frankly Wall Street has shown its ineptitude of late and therefore its push for this should be viewed in the context of a quick win for the traders and bottom feeders and bad news for the long term viability of the company (ok the 2 of them).
The news reports out of both MSP and ATL are very confusing. DL pilots exec is saying "Non" but their rank and file is not so sure. NW pilots say yes but only on their terms. The key issue is pilot seniority.
Breaking with objectivity here - I think it is dead because DL has not waited for the outcome to get on with their lives. Atlanta is offering severance to over 30,000 staff. With Delta's need for additional pilots already acute even the reduction in domestic flying is only going to delay the inevitable. There are more pilots needed.
This merger remains a bad idea. I cannot see it coming right. Frankly Wall Street has shown its ineptitude of late and therefore its push for this should be viewed in the context of a quick win for the traders and bottom feeders and bad news for the long term viability of the company (ok the 2 of them).
Boeing's Troubles with 787 Continue. This time its the Wing Box
This is one of those Oh Shit moments.
Boeing’s efforts to save weight on the 787 has resulted in a weakened central wing box, this is the core bit of the aircraft which effectively anchors the whole airplane.
First revealed in Public by ILFC’s Chairman Steven F. Udvar-Hazy
At the JPMorganChase Transportation Conference this week in his keynote speech and reported by Jon Osterow in the FlightBlogger this week the issue of a weakened wing box on the 787 was revealed. Most certainly this means a significant delay. Don’t believe that for a minute this is not a serious issue. It is and rightly Boeing is doing a lot to address it.
The impact will be significant on the production line with delays again not just in the first flight but also in the delivery schedule. Effectively we are now looking at a 2 year delay for Boeing to start deliveries from the pronouncements even last year at roll out day 7-8-07. For the early aircraft and the subsequent production line the impact on weight will be significant. Boeing’s hopes of a lighter 787 within spec have now been dashed. As with all aircraft this will have an effect either in range, lifting capacity or both. Having to strengthen the wing box means that the first aircraft off the line will be range constrained due to less fuel capacity. This is probably only a few percentage points but in the fine tuning of the aircraft it is something to watch. Hazy and many other purchasers are now setting their bean counters to calculate how much compensation is coming their way.
Sadly the work on the wing box was one of the brighter spots in the program. The Japanese have been scrupulously working to achieve all the goals that Boeing set them. I say again Boeing. PLEASE take the time to identify the issues and work them through. Boeing’s retreat into silence is a marked turnaround from their original open and transparent dialogue with the marketplace. Suggestion. Start holding regular briefings so people can know what is going on. Learn to manage not stifle the news.
Cheers
Timothy
Boeing’s efforts to save weight on the 787 has resulted in a weakened central wing box, this is the core bit of the aircraft which effectively anchors the whole airplane.
First revealed in Public by ILFC’s Chairman Steven F. Udvar-Hazy
At the JPMorganChase Transportation Conference this week in his keynote speech and reported by Jon Osterow in the FlightBlogger this week the issue of a weakened wing box on the 787 was revealed. Most certainly this means a significant delay. Don’t believe that for a minute this is not a serious issue. It is and rightly Boeing is doing a lot to address it.
The impact will be significant on the production line with delays again not just in the first flight but also in the delivery schedule. Effectively we are now looking at a 2 year delay for Boeing to start deliveries from the pronouncements even last year at roll out day 7-8-07. For the early aircraft and the subsequent production line the impact on weight will be significant. Boeing’s hopes of a lighter 787 within spec have now been dashed. As with all aircraft this will have an effect either in range, lifting capacity or both. Having to strengthen the wing box means that the first aircraft off the line will be range constrained due to less fuel capacity. This is probably only a few percentage points but in the fine tuning of the aircraft it is something to watch. Hazy and many other purchasers are now setting their bean counters to calculate how much compensation is coming their way.
Sadly the work on the wing box was one of the brighter spots in the program. The Japanese have been scrupulously working to achieve all the goals that Boeing set them. I say again Boeing. PLEASE take the time to identify the issues and work them through. Boeing’s retreat into silence is a marked turnaround from their original open and transparent dialogue with the marketplace. Suggestion. Start holding regular briefings so people can know what is going on. Learn to manage not stifle the news.
Cheers
Timothy
For True Airline Geeks Only
Want to hear the absolute latest spin on the US Airline Industry. Then go to this website and try and drink from the fire-hose of the JPMorgan Chase (and now Bear Sterns) Conference on the Transportation Industry the majority of which is airline related. It covers presentations held over 2 days.
However hurry because there are limitations on these - some expire in a few days all expire by June 23 2008.
Sadly you will miss Hazy's speech where he lays into Boeing about the 787 delays.
However hurry because there are limitations on these - some expire in a few days all expire by June 23 2008.
Sadly you will miss Hazy's speech where he lays into Boeing about the 787 delays.
21 March 2008
The Sad Story of the US Astronaut Corp
Once the proud standard bearers of a nation, the US Astronaut Corps is but a shadow of its true intent.
This piece on NPR's This American Lfe with Ira Glass perhaps shows what is wrong with the "American Way". It is shocking to me that the Shuttle Program will end in 2 years time. That we will have no US official manned space program between 2010 and 2020 at the earliest. The USA will have to rent access to the Space Station from the Russians.
Their main role these days - PR. The program dedicated to what? It is not clear.
Click the link to hear the story. The Bush Administration and NASA should be completely ashamed. Everyone should be saddened by this travesty
Say Aloha again to Chapter 11. More to come.
In the current issue of Air Transport World there is a great article to how everything is rosy in the garden of the US Airlines. One quote is from the very first sentence: "Incredible Turnaround' "On Jan 1 (2008) for the first time in six years, the US airline industry began a new year with no carriers operating under (Chapter 11) bankruptcy protection."
Clearly not for long.
Aloha airlines was first to jump pack entering court protection for the second time in under 2 years on March 20th. The result of the credit markets melt down and a complicated transaction involving United Airlines and Yucaipa - the holding company of Aloha Airlines. The stated reason of competition from Mesa's go! airlines is somewhat BS in my opinion. This was a screw up. Anyone who thinks UAL would make a good investor has been misreading the tea leaves.
We predict that this will not be a solo event in 2008. We already have another carrier on doom watch. If oil stays above $100/pbl (read above $2.70 for avgas) then this is for us a certainty that there will be others.
Sad but in our opinion true.
Thanks to AS and RE for contributions to this story.
Clearly not for long.
Aloha airlines was first to jump pack entering court protection for the second time in under 2 years on March 20th. The result of the credit markets melt down and a complicated transaction involving United Airlines and Yucaipa - the holding company of Aloha Airlines. The stated reason of competition from Mesa's go! airlines is somewhat BS in my opinion. This was a screw up. Anyone who thinks UAL would make a good investor has been misreading the tea leaves.
We predict that this will not be a solo event in 2008. We already have another carrier on doom watch. If oil stays above $100/pbl (read above $2.70 for avgas) then this is for us a certainty that there will be others.
Sad but in our opinion true.
Thanks to AS and RE for contributions to this story.
Buying an airline ticket using Paypal
I had the opportunity to use Paypal to buy my Southwest Airlines ticket for next week.
The experience should be relatively painless if it wasn't for some quirks in the Southwest website.
But there is one quirk you should know about if you use Paypal. It doesn't like American Express. So you will not be able to complete the transaction if you ONLY have Amex as the connection in your Paypal account.
Now that both Northwest and Southwest are promoting the activity (spend $250+ and get a $50 credit) the other airlines should join in.
And where is Google Checkout in all of this? MIA?
Cheers
Timothy
The experience should be relatively painless if it wasn't for some quirks in the Southwest website.
But there is one quirk you should know about if you use Paypal. It doesn't like American Express. So you will not be able to complete the transaction if you ONLY have Amex as the connection in your Paypal account.
Now that both Northwest and Southwest are promoting the activity (spend $250+ and get a $50 credit) the other airlines should join in.
And where is Google Checkout in all of this? MIA?
Cheers
Timothy
20 March 2008
US Airlines panic and yank on the handbrake
When I was a lot younger - I, (and many other young Brits) used to practice what we called "Handbrake Turns". In small English cars like an A40 or a Mini this was quite effective at dramatically changing direction of the vehicle. The US Airline group seem to be wanting that kind of change now.
There is just a blizzard of stories coming down the wires about how the US Airlines are falling over themselves trying to cut capacity.
Delta is telling everyone it is now "an international" airline and will cut dramatically its US point to point routes. Look for CVG to take a hit again. 3000 staff will be shed and many older aircraft idled. (With the 733s ad 762s now all gone that can only mean the MD88s of which some are already parked). And you can kiss that merger goodbye.
United is spreading doom and gloom everywhere. As it should - its in a very weak position
The list goes one with Alaska, Frontier and Jetblue also hastening departures from their fleets. For these 3 carriers these will be low time aircraft.
About the only one person who can be happy with this is Southwest. If everyone else panics and slashes capacity - then WN will benefit. Can you say Texas Hold'em?
Chaps - slashing your way to success is a poor strategy. Think about your businesses in totality. Slashing the US domestic feed spells trouble for Delta. Putting all your eggs in one basket (International) which is much more volatile and risk prone to me is a poorly thought out move.
Come back Jerry - all is forgiven.
There is just a blizzard of stories coming down the wires about how the US Airlines are falling over themselves trying to cut capacity.
Delta is telling everyone it is now "an international" airline and will cut dramatically its US point to point routes. Look for CVG to take a hit again. 3000 staff will be shed and many older aircraft idled. (With the 733s ad 762s now all gone that can only mean the MD88s of which some are already parked). And you can kiss that merger goodbye.
United is spreading doom and gloom everywhere. As it should - its in a very weak position
The list goes one with Alaska, Frontier and Jetblue also hastening departures from their fleets. For these 3 carriers these will be low time aircraft.
About the only one person who can be happy with this is Southwest. If everyone else panics and slashes capacity - then WN will benefit. Can you say Texas Hold'em?
Chaps - slashing your way to success is a poor strategy. Think about your businesses in totality. Slashing the US domestic feed spells trouble for Delta. Putting all your eggs in one basket (International) which is much more volatile and risk prone to me is a poorly thought out move.
Come back Jerry - all is forgiven.
They said they wouldn't but now they did. BA ups IB Stake
Despite having denied wanting to be part of the Iberia take over (still not consummated), BA has been quietly buying into Iberia. It has raised it's stake to 13.15% up from 10%. So why and why now?
Let's all speculate today. Its a slow news day in Europe, people are leaving early for their Easter Vacation. Your options are:
1. Its relatively cheap.
2. The EU consolidation race is hotting up again now the AZ race seems to have been resolved
3. TPG needs the help. There is not so much cash around to help Private Equity.
4. Olympic is too much of a basket case.
5. Because they can
6. I have no clue
7. The US consolidation season has ended and there is none so let's look at Europe
8. The real reason is ___________ (fill in the blank)
9. Some of the above
10. All of the above.
Answers please on 100 Euro bills.
Let's all speculate today. Its a slow news day in Europe, people are leaving early for their Easter Vacation. Your options are:
1. Its relatively cheap.
2. The EU consolidation race is hotting up again now the AZ race seems to have been resolved
3. TPG needs the help. There is not so much cash around to help Private Equity.
4. Olympic is too much of a basket case.
5. Because they can
6. I have no clue
7. The US consolidation season has ended and there is none so let's look at Europe
8. The real reason is ___________ (fill in the blank)
9. Some of the above
10. All of the above.
Answers please on 100 Euro bills.
19 March 2008
Is Air France paying too much for Alitalia?
Air France is buying Alitalia. A big sigh of relief goes up in Rome. A challenge will be filed from a certain building not a million miles from Dublin Airport. But is M. Spinetta (isn't that an Italian sounding name?) paying too much? Probably not for dominance.
But the price to be paid is not for the intrinsic value of the business - it is so someone can save face.
Alitalia will require a massive investment program. At a time when airlines operating costs are going through the roof. One could argue - if one was a French Trade Unionist - that the investment in AZ could be much better served in paying more money to AF workers.
A resurgent Alitalia could provide a much needed boost to the Italian economy. I am not so sure that the new EC entrants are going to be happy about that. Why is this important? Because when the issue of alleged illegal state aid for AZ finally wends its way before the commission it may just end up in front of a not so happy administrative law judge.
But the price to be paid is not for the intrinsic value of the business - it is so someone can save face.
Alitalia will require a massive investment program. At a time when airlines operating costs are going through the roof. One could argue - if one was a French Trade Unionist - that the investment in AZ could be much better served in paying more money to AF workers.
A resurgent Alitalia could provide a much needed boost to the Italian economy. I am not so sure that the new EC entrants are going to be happy about that. Why is this important? Because when the issue of alleged illegal state aid for AZ finally wends its way before the commission it may just end up in front of a not so happy administrative law judge.
There is a recession - just ask Las Vegas
The old slogan used to be "What happens in Vegas stays in Vegas." However now it seems that getting anything to happen in Vegas is a stretch. The new Las Vegas slogan is "Your Vegas is showing" although you might be confused if you think the slogan is VEGAS RIGHT NOW. Either way there is very little action going on. And what here is - is definitely down.
However I digress....
The news is bad.
Here are the results from January in Las Vegas as reported in Travel Weekly USA.
LAS VEGAS VISITOR STATISTICS were released last week for January, and the numbers were down across the board. According to a report from the Las Vegas Convention and Visitors Authority, visitor volume dropped 0.6% compared with January 2007, the largest decline in visitor volume in 12 months. Total convention attendance was 677,978 for the month, the weakest start of the year for convention numbers since January 2002, just after 9/11. January occupancy levels dropped 0.5% year-over-year. Gaming revenues for Clark County were down 4.1%. The total number of passengers passing through Las Vegas' McCarran International Airport dropped by 2.8% in January, on the heels of a 2.5% decline in November and a 3.2% drop in December, marking the first decline in numbers of passengers through McCarran since August 2003. And the average daily auto traffic on major highways into Las Vegas was 74,399 vehicles in January, the lowest number in three years.
Ouch...........
No one wants to party it would seem. Except perhaps Eliot Spitzer.
Cheers (I hope)
Timothy
However I digress....
The news is bad.
Here are the results from January in Las Vegas as reported in Travel Weekly USA.
LAS VEGAS VISITOR STATISTICS were released last week for January, and the numbers were down across the board. According to a report from the Las Vegas Convention and Visitors Authority, visitor volume dropped 0.6% compared with January 2007, the largest decline in visitor volume in 12 months. Total convention attendance was 677,978 for the month, the weakest start of the year for convention numbers since January 2002, just after 9/11. January occupancy levels dropped 0.5% year-over-year. Gaming revenues for Clark County were down 4.1%. The total number of passengers passing through Las Vegas' McCarran International Airport dropped by 2.8% in January, on the heels of a 2.5% decline in November and a 3.2% drop in December, marking the first decline in numbers of passengers through McCarran since August 2003. And the average daily auto traffic on major highways into Las Vegas was 74,399 vehicles in January, the lowest number in three years.
Ouch...........
No one wants to party it would seem. Except perhaps Eliot Spitzer.
Cheers (I hope)
Timothy
18 March 2008
Be Careful Delta - What you wish for may actually happen.
Delta offers voluntary severance to 50 percent of all employees.
Wait that's 50%????
According to a story posted on WSJ.com this is what Delta is offering. a 5% cutback of domestic flying (in addition to their 11% last year). That is a pretty significant change and represents a major shift in the staffing of the airline. However this comes at a time of difficulty. Clearly we don't know the terms but there is a looming shortage of Pilots in the US and in particular at Delta.
I doubt we will see this replicated across the board but I do believe that airline lemming mentality will cause some of the other airlines to do something similar. A warning though goes with this. If you don't take the severance package, then your job is not safe.
These are exciting if not scary times.
Wait that's 50%????
According to a story posted on WSJ.com this is what Delta is offering. a 5% cutback of domestic flying (in addition to their 11% last year). That is a pretty significant change and represents a major shift in the staffing of the airline. However this comes at a time of difficulty. Clearly we don't know the terms but there is a looming shortage of Pilots in the US and in particular at Delta.
I doubt we will see this replicated across the board but I do believe that airline lemming mentality will cause some of the other airlines to do something similar. A warning though goes with this. If you don't take the severance package, then your job is not safe.
These are exciting if not scary times.
They are falling like flies.... for Amadeus
SAS is falling for Amadeus. After pronouncing words in private that sounded like hell would freeze over before they would let themselves fall into the Amadeus camp, Robin Kamark has indeed signed a deal with Amadeus.
So another one bites the dust. Now will Amadeus finally step up to the plate and bring on more resources to accommodate all these airlines?
Let's hope so for the customers sake.
Cheers
Timothy
Here is part of the PR.
The SAS Group has signed a letter of intent with Amadeus, one of the leading suppliers of global distribution systems and IT solutions in the airline industry.
The letter of intent means that parts of the SAS commercial IT platform will be replaced. These include sales, booking, ticketing, check-in and load-control. The new and modern systems are standardized and easier to use, in addition travel agencies will be able to access the lowest fares with SAS through Amadeus.
"This letter of intent provides the SAS Group the possibility to offer our customers innovative solutions during the years ahead. It will be easy to find a good-value alternative. In addition, the agreement will include considerably reduced distribution costs," said Robin Kamark, Senior Vice President, Airline Commercial, SAS Group.
"This has been a long process and we are now looking forward to the next step in this expanded cooperation."
So another one bites the dust. Now will Amadeus finally step up to the plate and bring on more resources to accommodate all these airlines?
Let's hope so for the customers sake.
Cheers
Timothy
Here is part of the PR.
The SAS Group has signed a letter of intent with Amadeus, one of the leading suppliers of global distribution systems and IT solutions in the airline industry.
The letter of intent means that parts of the SAS commercial IT platform will be replaced. These include sales, booking, ticketing, check-in and load-control. The new and modern systems are standardized and easier to use, in addition travel agencies will be able to access the lowest fares with SAS through Amadeus.
"This letter of intent provides the SAS Group the possibility to offer our customers innovative solutions during the years ahead. It will be easy to find a good-value alternative. In addition, the agreement will include considerably reduced distribution costs," said Robin Kamark, Senior Vice President, Airline Commercial, SAS Group.
"This has been a long process and we are now looking forward to the next step in this expanded cooperation."
17 March 2008
Such a deal - Paypal: Southwest and Northwest $50 off.
To kick-start usage of Paypal as a form of payment - EBAY has partnered with both the 'wests' to offer $50 off any purchase of $250 or more.
Given the lackluster acceptance so far this is good news. Akin to the Mastercard promo with the launch of Priceline.
Paypal should benefit but the airlines should ultimately benefit more. What's missing, or rather WHO is missing is Google's Checkout. Why aren't they in the game yet. Hello - Sergey and Larry - stop playing with your 767 and get with the program here.
Cheers
Timothy
Given the lackluster acceptance so far this is good news. Akin to the Mastercard promo with the launch of Priceline.
Paypal should benefit but the airlines should ultimately benefit more. What's missing, or rather WHO is missing is Google's Checkout. Why aren't they in the game yet. Hello - Sergey and Larry - stop playing with your 767 and get with the program here.
Cheers
Timothy
IAPA sees the light - Yes Amadeus is airline controlled (maybe)
Couched in respective terms the BTC Press release (below) shows that the passenger groups are beginning to understand that there is a hidden impact to the new proposed CRS rules from the EC.
Users and consumers (Agencies and travellers) need to pay attention to the new rules which provide a wide open door to abuse by airlines owning GDS entities. In this case the only player impacted is Amadeus. Where I believe the EC did not address enough attention is in the quasi GDS environment of airline hosting.
You read and be the judge.
Cheers
Timothy
Press Release
London, UK, March 17, 2008
FOR IMMEDIATE RELEASE
IAPA fears European CRS Code of Conduct review will lead to higher fares
The European Parliament is currently considering revisions to the CRS (Computer Reservations System) Code of Conduct proposed by the European Commission.
Although the principles of the revised Code of Conduct remain solid and seem to afford protection to consumers regarding neutrality and transparency of information presented on CRS, there is a potentially fatal flaw which could result in higher fares.
The flaw is that the Code of Conduct could effectively be rendered impotent by a new interpretation of the term “parent carrier”. This term has always been understood to apply to airlines that own a share of a CRS, and the Code has key restrictions on such airlines’ behaviour to prevent them from introducing bias to the CRS display that would favour their own flights.
Now IAPA understands that what constitutes a “parent carrier” could be interpreted (for the first time) as excluding the key airlines Lufthansa, Air France and Iberia which, between them, own 46% of Amadeus, the leading CRS in Europe.
The implications of this are that these airline would no longer be constrained by the restrictions of the Code, and travel agents, consumers and competitive airlines alike would have to rely on those airlines’ good nature and sense of fair play to ensure that CRS flight listings remain neutral and unbiased.
If this proves not to be enough, these airlines could squeeze competitive flights and fares off the crucial first page of results from travel agents’ CRS displays and some key internet travel sites, allowing them to increase their own fares. Meanwhile, the worthy clauses of the Code of Conduct, which have served travel agents and airline passengers well for nearly two decades, would gather dust on the shelves.
IAPA is calling on all MEPs to ensure that the intentions of the Code are honoured in practice and not just on paper, and to ensure that a level of ownership of 46% is actually recognised as leading to the potential for influence.
End
Users and consumers (Agencies and travellers) need to pay attention to the new rules which provide a wide open door to abuse by airlines owning GDS entities. In this case the only player impacted is Amadeus. Where I believe the EC did not address enough attention is in the quasi GDS environment of airline hosting.
You read and be the judge.
Cheers
Timothy
Press Release
London, UK, March 17, 2008
FOR IMMEDIATE RELEASE
IAPA fears European CRS Code of Conduct review will lead to higher fares
The European Parliament is currently considering revisions to the CRS (Computer Reservations System) Code of Conduct proposed by the European Commission.
Although the principles of the revised Code of Conduct remain solid and seem to afford protection to consumers regarding neutrality and transparency of information presented on CRS, there is a potentially fatal flaw which could result in higher fares.
The flaw is that the Code of Conduct could effectively be rendered impotent by a new interpretation of the term “parent carrier”. This term has always been understood to apply to airlines that own a share of a CRS, and the Code has key restrictions on such airlines’ behaviour to prevent them from introducing bias to the CRS display that would favour their own flights.
Now IAPA understands that what constitutes a “parent carrier” could be interpreted (for the first time) as excluding the key airlines Lufthansa, Air France and Iberia which, between them, own 46% of Amadeus, the leading CRS in Europe.
The implications of this are that these airline would no longer be constrained by the restrictions of the Code, and travel agents, consumers and competitive airlines alike would have to rely on those airlines’ good nature and sense of fair play to ensure that CRS flight listings remain neutral and unbiased.
If this proves not to be enough, these airlines could squeeze competitive flights and fares off the crucial first page of results from travel agents’ CRS displays and some key internet travel sites, allowing them to increase their own fares. Meanwhile, the worthy clauses of the Code of Conduct, which have served travel agents and airline passengers well for nearly two decades, would gather dust on the shelves.
IAPA is calling on all MEPs to ensure that the intentions of the Code are honoured in practice and not just on paper, and to ensure that a level of ownership of 46% is actually recognised as leading to the potential for influence.
End
CarRentals.co Acquired by Expedia
Congrats to David and the crew over in my startup in the bedroom aka CR.com
This shows that Expedia is in need of some revenue fixes or is intent on closing gaps in its product line - probably both.
There are not that many places for an intermediary to make money. Airline revenue is practically zilch, Hotels are falling, Cruise is a mirage so Cars is about all that's left in the single supply line. Of course opaque packaging and ancillaries still look the most promising.
This shows that Expedia is in need of some revenue fixes or is intent on closing gaps in its product line - probably both.
There are not that many places for an intermediary to make money. Airline revenue is practically zilch, Hotels are falling, Cruise is a mirage so Cars is about all that's left in the single supply line. Of course opaque packaging and ancillaries still look the most promising.
Blog Number 300
Now we feel really old. This is the 300th Blog entry from T2Impact. We should have a glass of champagne or something to celebrate.
Truth is however there is a lot of doom and gloom around. The US economy is in the toilet and Paulson and Bush seem to have no answer to the economic ills that face the current world’s largest economy. So rather than celebrate – we are going to use this occasion to stare into our crystal ball and look at the US Airline market. Despite their best year ever – profits and passenger wise. There are basically many structural problems affecting the market. Not content with taking a neutral position – some of the leading analysts – Jamie Baker at JPMorganChase and the S&P guys are being active in marking down the US airlines.
Why are we seeing this now? The trigger has for sometime being the buildup in the cost side of the airlines economic equation. The run up to $100/barrel oil did nothing to slacken the pace of airline price increases and consumer appetite for airline services. Indeed as we reported earlier this year the 2008 holiday season looks very bright based on the January Caribbean Hotel mart. But elsewhere the whole market looks miserable. We saw a distinct drop off in January traffic which seemed to echo the slowdown we saw from August of last year. In February we were surprised by a strong performance in the US market – we suspect March’s traffic reports (airport movements) will go soft again. Airlines are going to start pulling capacity again. Hopefully they will to remain healthy.
On a brighter note – I would like to thank all of you for your support and assistance in delivering this milestone. When we first started writing seriously from last year – I was still a skeptic about the whole blog movement. However now we have been doing this for some time – I for one am a convert and an ardent fan. However we do hope that people realize that there has to be a code of conduct and that sooner or later one will be published. Publish and be Damned still comes at a price. We have no aspirations of being a Matt Drudge.
Thank you for all your comments – public and private. They actually do help us to focus our efforts. Finally thanks to the unseen people who use the information for their improvement! We hope that this blog will continue to be helpful to everyone. Given that the lads and lasses at T2 all have day jobs – and your truly does too – it is a wonder sometimes that we get any time to write. But we will continue to publish while you continue to read.
And it’s a good night from him
timothyo@t2impact.com
Timothy J O'Neil-Dunne
Managing Partner - T2Impact Ltd
Global Travel eBusiness
Tel (US) +1 425 836 4770
Mobile (US) +1 425 785 4457
Mobile (International) +44 7770 33 81 75
Fax +1 815 377 1583
UNIVERSAL VOICEMAIL BOX +1 425 749 4221
www.t2impact.com
Truth is however there is a lot of doom and gloom around. The US economy is in the toilet and Paulson and Bush seem to have no answer to the economic ills that face the current world’s largest economy. So rather than celebrate – we are going to use this occasion to stare into our crystal ball and look at the US Airline market. Despite their best year ever – profits and passenger wise. There are basically many structural problems affecting the market. Not content with taking a neutral position – some of the leading analysts – Jamie Baker at JPMorganChase and the S&P guys are being active in marking down the US airlines.
Why are we seeing this now? The trigger has for sometime being the buildup in the cost side of the airlines economic equation. The run up to $100/barrel oil did nothing to slacken the pace of airline price increases and consumer appetite for airline services. Indeed as we reported earlier this year the 2008 holiday season looks very bright based on the January Caribbean Hotel mart. But elsewhere the whole market looks miserable. We saw a distinct drop off in January traffic which seemed to echo the slowdown we saw from August of last year. In February we were surprised by a strong performance in the US market – we suspect March’s traffic reports (airport movements) will go soft again. Airlines are going to start pulling capacity again. Hopefully they will to remain healthy.
On a brighter note – I would like to thank all of you for your support and assistance in delivering this milestone. When we first started writing seriously from last year – I was still a skeptic about the whole blog movement. However now we have been doing this for some time – I for one am a convert and an ardent fan. However we do hope that people realize that there has to be a code of conduct and that sooner or later one will be published. Publish and be Damned still comes at a price. We have no aspirations of being a Matt Drudge.
Thank you for all your comments – public and private. They actually do help us to focus our efforts. Finally thanks to the unseen people who use the information for their improvement! We hope that this blog will continue to be helpful to everyone. Given that the lads and lasses at T2 all have day jobs – and your truly does too – it is a wonder sometimes that we get any time to write. But we will continue to publish while you continue to read.
And it’s a good night from him
timothyo@t2impact.com
Timothy J O'Neil-Dunne
Managing Partner - T2Impact Ltd
Global Travel eBusiness
Tel (US) +1 425 836 4770
Mobile (US) +1 425 785 4457
Mobile (International) +44 7770 33 81 75
Fax +1 815 377 1583
UNIVERSAL VOICEMAIL BOX +1 425 749 4221
www.t2impact.com
16 March 2008
"Delivering Proactive Customer Service" Southwest
Southwest has been severely slapped over the maintenance issues regarding inspections in older model Boeing 737s in its fleet. It ended up grounding several planes on March 12th and providing some disruptions to its regular operations.
Coincidentally I actually flew that day on Southwest. As I opened the in-flight magazine my eye was drawn to the lead piece from Colleen Barrett, President of WN. The title was "Delivering Proactive Customer Service".
At the end of the day - I did get interrupted and yes my flights were late - ending up over an hour late at my destination. As an LCC - Southwest relies on its customers to make their own decisions. In my case - specifically it could have done a better job to help me make a decision. Take the connection or wait for the next direct (but stopping) flight. Was Southwest proactive? Actually no. Nor for many other passengers who were in a similar situation. For Southwest, there is a lesson here. Pass on that "Proactive" attitude to the local teams. They have the ability to make something happen and they could actually do something about helping passengers make good decisions.
Lets hope that WN learns something from this experience. It definitely needs to arm its customers with better information and better capability to know the extent of the issues facing it.
One other thing I noted. The legendary pitch in and help spirit seems to be taking a back seat. There were 2 SWA employees (flight crews) who were sitting around waiting for pass rider travel. Neither stepped in to help. They could have and should have. Perhaps if the passengers had been more restless they would have.
Cheers
Timothy
Coincidentally I actually flew that day on Southwest. As I opened the in-flight magazine my eye was drawn to the lead piece from Colleen Barrett, President of WN. The title was "Delivering Proactive Customer Service".
At the end of the day - I did get interrupted and yes my flights were late - ending up over an hour late at my destination. As an LCC - Southwest relies on its customers to make their own decisions. In my case - specifically it could have done a better job to help me make a decision. Take the connection or wait for the next direct (but stopping) flight. Was Southwest proactive? Actually no. Nor for many other passengers who were in a similar situation. For Southwest, there is a lesson here. Pass on that "Proactive" attitude to the local teams. They have the ability to make something happen and they could actually do something about helping passengers make good decisions.
Lets hope that WN learns something from this experience. It definitely needs to arm its customers with better information and better capability to know the extent of the issues facing it.
One other thing I noted. The legendary pitch in and help spirit seems to be taking a back seat. There were 2 SWA employees (flight crews) who were sitting around waiting for pass rider travel. Neither stepped in to help. They could have and should have. Perhaps if the passengers had been more restless they would have.
Cheers
Timothy
So the protest goes in - Now what?
Boeing - playing sore looser - has filed a a formal protest against the award of the Boeing Tanker contract to Northrup Grumman based on Airbus's A330.
Automatically the review will be conducted by the GAO. It has 100 days to review and then a possible further round could add another 100 days to the protest. This is highly likely given that Boeing will likely protest again unless of course they win in which case Northrup will likely protest.
In the mean time the Air Force has to put up with an ageing fleet of Tankers whose average age is now 40 years plus. Kudos to Boeing for building a product that has been so successful.
As a US taxpayer, I am loathe to see this process go further. We all want to see the USAF get its new tankers and for the rest of the world to get on with it.
My wish? Boeing to cooperate with NG and become a contractor to the project. NG could definitely do with some help. Airbus has a significant hill to climb with some of its other projects.
Lets hope the USAF got their numbers and criteria right in the award. If not then we should all feel concerned that the procurement process for US military is (as I believe) deeply flawed. This should be a priority to review for the next US Administration.
Cheers
Timothy
Automatically the review will be conducted by the GAO. It has 100 days to review and then a possible further round could add another 100 days to the protest. This is highly likely given that Boeing will likely protest again unless of course they win in which case Northrup will likely protest.
In the mean time the Air Force has to put up with an ageing fleet of Tankers whose average age is now 40 years plus. Kudos to Boeing for building a product that has been so successful.
As a US taxpayer, I am loathe to see this process go further. We all want to see the USAF get its new tankers and for the rest of the world to get on with it.
My wish? Boeing to cooperate with NG and become a contractor to the project. NG could definitely do with some help. Airbus has a significant hill to climb with some of its other projects.
Lets hope the USAF got their numbers and criteria right in the award. If not then we should all feel concerned that the procurement process for US military is (as I believe) deeply flawed. This should be a priority to review for the next US Administration.
Cheers
Timothy
11 March 2008
SAS vs Bombardier Kiss and Make up… and MORE Q400s
So SK and Bombardier have resolved their nasty spat over collapsing undercarts on its fleet of Bambardier DHC8-400Qs by giving a big credit and SK taking on a bunch of CRJs and (Drum Roll) please brand new Q400s. It doesn’t seem logical but well this seems to be the OK answer to the nasty fight.
Here’s a novel thought – privatize US airports.
For more years than many of us can remember the US Government has had a secret tax on airlines. The tax 8-10% on airline tickets was designed to cover the cost of airport and airways improvements including terminals and runways. Actually it was used to provide billions of dollars in funds that went directly to the federal coffers and never to the intended purpose. When the money didn’t get to the airports – local authorities within the States and cities who own and run the airports started to institute PFCs – Passenger Facility Charges. These charges now comprise a revenue form for the airports. But not necessarily for the use they were intended. The situation of poor management by the FAA and the lack of funding has resulted in capacity constraints in the US Air Transportation System at the airport level. This is now the bottleneck and not a solution in sight.
So now I would like to suggest an alternative solution to the problem in total. Rather than yet another half hearted attempt at a solution – I think we should try and address the problem once and for all.
So my proposal is straightforward and I hope simple. Privatize the airports.
This has occurred in many different parts of the world but the US model seems to not have adopted this novel idea. However the concept is not so easy given the different ways in which funding attempts are handled. There needs to be both an obligation and a method to ensure that funding occurs on a regular and consistent basis. To this end the privatization needs to also cover a long term set of goals – meeting the needs of growth and safety. The only way this is going to happen is if there is a secure funding method that kick starts the whole process. So the recommendation is to add Government backed bonds rather than funding from the Government. But from the moment that is offered then the revenue to the Feds ceases and the funds can then flow correctly.
This will require the US Congress to be able to make some smart decisions. Lets hope that this can happen soon. Then finally we can get new infrastructure – gridlock will be relieved… sometime this century. We can but hope
Cheers
Timothy
So now I would like to suggest an alternative solution to the problem in total. Rather than yet another half hearted attempt at a solution – I think we should try and address the problem once and for all.
So my proposal is straightforward and I hope simple. Privatize the airports.
This has occurred in many different parts of the world but the US model seems to not have adopted this novel idea. However the concept is not so easy given the different ways in which funding attempts are handled. There needs to be both an obligation and a method to ensure that funding occurs on a regular and consistent basis. To this end the privatization needs to also cover a long term set of goals – meeting the needs of growth and safety. The only way this is going to happen is if there is a secure funding method that kick starts the whole process. So the recommendation is to add Government backed bonds rather than funding from the Government. But from the moment that is offered then the revenue to the Feds ceases and the funds can then flow correctly.
This will require the US Congress to be able to make some smart decisions. Lets hope that this can happen soon. Then finally we can get new infrastructure – gridlock will be relieved… sometime this century. We can but hope
Cheers
Timothy
The fight with BALPA turns ugly. BA Needs a new game plan.
Despite best efforts by both sides, the fight of BA’s new subsidiary OpenSkies has now turned ugly. BALPA has been looking for a fight. BA has been looking for ways to break the union’s stranglehold. To me the battle is being waged at a time that BA doesn’t need a fight. The airline is already slowing down and is highly susceptible to a number of factors that will cause its financial performance to degrade. Already the stock is down 50% and it is going to go down even further in my opinion. This should not be the case.
The missteps of the Walsh era are now coming back to haunt the management. Sir Rod left the airline in a good shape. But Walsh has done little other than to run the airline on autopilot. His tenure has been marked by several missteps including labor unrest, baggage snafus, Air France’s encroachment into LCY and the loss of 2 major franchise carriers, BMED and GB Airways. Now BA’s response to EU-US open skies is “OpenSkies” and the LCY-JFK one-stop lame flights. As a long time paying passenger with Gold Card Status – I believe that BA is just being less than smart and needs a new game plan.
The missteps of the Walsh era are now coming back to haunt the management. Sir Rod left the airline in a good shape. But Walsh has done little other than to run the airline on autopilot. His tenure has been marked by several missteps including labor unrest, baggage snafus, Air France’s encroachment into LCY and the loss of 2 major franchise carriers, BMED and GB Airways. Now BA’s response to EU-US open skies is “OpenSkies” and the LCY-JFK one-stop lame flights. As a long time paying passenger with Gold Card Status – I believe that BA is just being less than smart and needs a new game plan.
Farewell Western Airlines
One of the last vestiges of a great little airline has finally gone. Delta has apparently retired the last of its 737-300s which included a batch it inherited from Western Airlines back in the 1980s.
Western Airlines was a great airline that didn’t quite manage to become a great big airline. In the merger mania of the 1980s it was swallowed up into Delta that saw DL gain a foothold into the western USA.
A few years ago when SeaTac was renovating I saw the big flying W that used to grace the ticket counters exposed for a few hours while they ripped out the counter area walls. I doubt that there are many people who remember WA. I had the priviledge of serving via the Ad Agency at McCann Ericsson for a few years.
So farewell for the last time.
Cheers
Timothy
Western Airlines was a great airline that didn’t quite manage to become a great big airline. In the merger mania of the 1980s it was swallowed up into Delta that saw DL gain a foothold into the western USA.
A few years ago when SeaTac was renovating I saw the big flying W that used to grace the ticket counters exposed for a few hours while they ripped out the counter area walls. I doubt that there are many people who remember WA. I had the priviledge of serving via the Ad Agency at McCann Ericsson for a few years.
So farewell for the last time.
Cheers
Timothy
10 March 2008
Will be on the road again this week - so few posts
Anyway - I think I have given you enough... to go on for a few days.
There is a lot going on right now. So stay tuned.
Cheers
Timothy
There is a lot going on right now. So stay tuned.
Cheers
Timothy
Road Warriors of the world unite… Roaming is getting “Free”er.
This is from jiwire (www.jiwire.com) an excellent resource for road warrior types. (Your blogger included). AT&T has captured Starbucks. But with a twist as this entry tells it, the game is now possible to provide for free. This is good news. Lets hope it works out. Even as a non-coffee (although I live mostly in Seattle) drinker, this is a good.
AT&T Takes Starbucks & Boingo Does McDonald's
Finding a "free" Wi-Fi hotspot in the US just got a whole lot easier, now that AT&T is taking over the Starbucks contract formerly held by T-Mobile. The reason is simple: the 12 million AT&T DSL and U-verse customers with at least 1.5Mbps service will now get free access at all 17,000 U.S. AT&T Wi-Fi locations, including the 7,000 Starbucks stores. In addition, any customer with a Starbucks stored-value card used at least once a month gets a free two hours per day -- money they're likely to be spending anyway. Starbucks is the crown jewel of U.S. Wi-Fi properties, and making access available to so many customers for free is a huge deal. We expect many Wi-Fi mavens to flee Comcast for AT&T broadband as a result. The handover has already started, and will be completed market-by-market by the end of the year. But T-Mobile Hotspot subscribers will not be left out in the cold -- they can continue to roam at Starbucks for at least the next five years.
Meanwhile, Boingo, the biggest Wi-Fi roaming network with 100,000 locations worldwide, has not been standing idly by. It just announced an agreement with Wayport to bring more than 9,000 North American McDonald's locations under the Boingo umbrella. And since Boingo already had a contract with AT&T, it gained all those Starbucks locations too. Now both Boingo and iPass offer access to the combined Starbucks-McDonald's juggernaut, to go with their excellent overseas and travel-oriented hotspot networks. In one heady week, the U.S. Wi-Fi scene has gone from frustratingly fragmented to near-free and friendly.
Cheers
Timothy
AT&T Takes Starbucks & Boingo Does McDonald's
Finding a "free" Wi-Fi hotspot in the US just got a whole lot easier, now that AT&T is taking over the Starbucks contract formerly held by T-Mobile. The reason is simple: the 12 million AT&T DSL and U-verse customers with at least 1.5Mbps service will now get free access at all 17,000 U.S. AT&T Wi-Fi locations, including the 7,000 Starbucks stores. In addition, any customer with a Starbucks stored-value card used at least once a month gets a free two hours per day -- money they're likely to be spending anyway. Starbucks is the crown jewel of U.S. Wi-Fi properties, and making access available to so many customers for free is a huge deal. We expect many Wi-Fi mavens to flee Comcast for AT&T broadband as a result. The handover has already started, and will be completed market-by-market by the end of the year. But T-Mobile Hotspot subscribers will not be left out in the cold -- they can continue to roam at Starbucks for at least the next five years.
Meanwhile, Boingo, the biggest Wi-Fi roaming network with 100,000 locations worldwide, has not been standing idly by. It just announced an agreement with Wayport to bring more than 9,000 North American McDonald's locations under the Boingo umbrella. And since Boingo already had a contract with AT&T, it gained all those Starbucks locations too. Now both Boingo and iPass offer access to the combined Starbucks-McDonald's juggernaut, to go with their excellent overseas and travel-oriented hotspot networks. In one heady week, the U.S. Wi-Fi scene has gone from frustratingly fragmented to near-free and friendly.
Cheers
Timothy
Passenger numbers for February - back on the up?
Tracking numbers fro Air4casts and other sources we are seeing a return into positive territory after a slow down at the end of last year and a bad January. But I will caution before looking at this too hard - remember that February this year has an extra day's worth of revenue. With this fact and also Easter being early - we may still see some more positive signs.
BA is still looking a little sickly loosing the BMED and GB Airways for the first full period of time. In the USA market United still looks a little pale. Southwest and other players are looking a lot healthier.
In 2007 we saw also that the hotel market managed to have positive numbers in Yield, occupancy rates and ADRs. But the softness is showing in certain areas. Specifically we see small business groups, leisure (non-VFR) slowing. The continuing fall of the dollar is benefiting perversely the top ed of the market as Europeans flex their financial muscles.
Suffice to say - we think the market is "volatile"
Cheers
Timothy
BA is still looking a little sickly loosing the BMED and GB Airways for the first full period of time. In the USA market United still looks a little pale. Southwest and other players are looking a lot healthier.
In 2007 we saw also that the hotel market managed to have positive numbers in Yield, occupancy rates and ADRs. But the softness is showing in certain areas. Specifically we see small business groups, leisure (non-VFR) slowing. The continuing fall of the dollar is benefiting perversely the top ed of the market as Europeans flex their financial muscles.
Suffice to say - we think the market is "volatile"
Cheers
Timothy
09 March 2008
FAA fines Southwest $10.2 Million for Safety Violations
I am a huge fan of the low cost model it is what is saving the airline business model in general. Airlines became too complicated. On a recent trip to Europe I flew on 3 legacy carriers (Delta, BA and Lufthansa) – 2 LCCs (Easyjet and Ryanair) and one regional airline (VLM now part of Air France). The LCCs have done a great job of changing how things are done but relentlessly asking the question WHY DO I NEED THIS?
However clearly Southwest made that not just a question of the above the wing activity but also in some maintenance by failing to inspect some 46 aircraft when they were due. That is a no-no. Full stop period or what ever you want to say. This is bad for everyone. There is never any issue about below the wing safety. Shame on WN for this. Irrespective of if you do not like the FAA process or procedures - that is NO EXCUSE for this failure. Since this occurred from March 2007 when WN themselves reported the issue to the FAA - then also shame too on the FAA for not forcing the issue earlier and actually enforcing the rules by grounding some or all of the affected aircraft, 6 of which were ultimately found to have real cracks.
This is bad for everyone. I actually hope that the FAA is able to levy the fine in final judgement and then use the money to hire more inspectors. It is a dark secret that there are not enough of them.
Cheers
Timothy
However clearly Southwest made that not just a question of the above the wing activity but also in some maintenance by failing to inspect some 46 aircraft when they were due. That is a no-no. Full stop period or what ever you want to say. This is bad for everyone. There is never any issue about below the wing safety. Shame on WN for this. Irrespective of if you do not like the FAA process or procedures - that is NO EXCUSE for this failure. Since this occurred from March 2007 when WN themselves reported the issue to the FAA - then also shame too on the FAA for not forcing the issue earlier and actually enforcing the rules by grounding some or all of the affected aircraft, 6 of which were ultimately found to have real cracks.
This is bad for everyone. I actually hope that the FAA is able to levy the fine in final judgement and then use the money to hire more inspectors. It is a dark secret that there are not enough of them.
Cheers
Timothy
Wide ranging reports - 787 Delayed again - implications
Sadly as we have reported frequently here, the 787 is running late again. The project is still not hitting its milestones. While Boeing was quietly crowing last year when the full extent of the A380 delays became apparent and insisting that there aggressive time line was solid, it now becomes clear that this was off base.
So I will reiterate our position on the situation with the 787. It will take years to bring the project to full production run rate. Our estimate is that this will not occur until well into 2010 possibly even later. The issues yet to be resolved are numerous and complex. Even after they are solved turning the solutions into a viable production line with smooth processes is far from being assured. Boeing is very fortunate in that after the design issues are resolved they have a cadre of execs who have solid moving production line experience who came from Toyota and Ford etc. But the hump to get over is/will continue to be a big/long one. We will continue to monitor the situation and hope to report some estimates on impact later.
Lest it seem that we are beating up on Boeing alone, let me just say that these are issues that will face Airbus in much the same way with the A350. Unlike Boeing with a single current project to worry about - Airbus has 4. The A380, The A330 Tanker/Military, The A350XWB and do not forget the A400M which is a pretty sick project at the moment.
I say again...
Take the time and its actually OK to add fudge factor to the overall project. Take a deep breath and really think hard. For Boeing - you have one more chance for a schedule correction. Get it right this time. For Airbus - learn and don't get too aggressive with the schedules. For the suppliers - you have two years of missed schedules and delivery lines. Spirit in KS will be particularly vulnerable having a strong dependence on Boeing.
So I will reiterate our position on the situation with the 787. It will take years to bring the project to full production run rate. Our estimate is that this will not occur until well into 2010 possibly even later. The issues yet to be resolved are numerous and complex. Even after they are solved turning the solutions into a viable production line with smooth processes is far from being assured. Boeing is very fortunate in that after the design issues are resolved they have a cadre of execs who have solid moving production line experience who came from Toyota and Ford etc. But the hump to get over is/will continue to be a big/long one. We will continue to monitor the situation and hope to report some estimates on impact later.
Lest it seem that we are beating up on Boeing alone, let me just say that these are issues that will face Airbus in much the same way with the A350. Unlike Boeing with a single current project to worry about - Airbus has 4. The A380, The A330 Tanker/Military, The A350XWB and do not forget the A400M which is a pretty sick project at the moment.
I say again...
Take the time and its actually OK to add fudge factor to the overall project. Take a deep breath and really think hard. For Boeing - you have one more chance for a schedule correction. Get it right this time. For Airbus - learn and don't get too aggressive with the schedules. For the suppliers - you have two years of missed schedules and delivery lines. Spirit in KS will be particularly vulnerable having a strong dependence on Boeing.
Is Singapore picking off Europeans one country at a time?
Portugal last week joined the UK in a simple Open Skies bilateral treat treaty with the Republic of Singapore.
What is interesting about this is not that it happened but the fact that the EU has been trumpeting its common aviation policy stance particularly with the USA, yet individual countries still make deals like this.
The EU should be much more consistent on these matters.
What is interesting about this is not that it happened but the fact that the EU has been trumpeting its common aviation policy stance particularly with the USA, yet individual countries still make deals like this.
The EU should be much more consistent on these matters.
The USAF Tanker deal - some thoughts
Quite frankly I was shocked to learn that the US Air Force had decided to select the Northrup Grumman/EADS team over Boeing. The decision had a seam of inevitability in it that was a train going to Abilene.
However in today's global economy where the words "National" and "Interests" are not always synomomous, this is a positive trend. But the decision criteria was not based on anything but the previously stated (and in my understanding) and fair set of rules. According to the statements from the USAF committee, Airbus won on all criteria accounts. The fall out in both Washingtons is going to reverberate for a long time.
Boeing would do well to accept the decision. If the criteria was flawed or if the result were not so clear cut then a protest should be conducted. However given the background and the time taken to make the decision, one can only believe that the review was conducted in the most strict of circumstances.
One of the arguments I have seen against the award has been the notion that high tech jobs are being outsourced to foreigners. Frankly I believe the opposite is the case. An industrial base of additional understanding especially in composites will be a direct result of this award.
Perhaps now that the decision has been made then we can only hope that there are some lessons to be learned here. One of the biggest lessons that should be learned is that the US Defense Acquisition process is flawed and needs rework.
One final thought is that there is a bad knock on effect within the airline industry. The 767 production line has been hanging on with some cargo based sales but very little new sales as customers wait for the 787. There is already a very big shortage of 767-300 size aircraft and the probably 18 month to 2 year total delay in the 787 program means a strong shortage of this size equipment. This is not good and will need monitoring in the coming months.
However in today's global economy where the words "National" and "Interests" are not always synomomous, this is a positive trend. But the decision criteria was not based on anything but the previously stated (and in my understanding) and fair set of rules. According to the statements from the USAF committee, Airbus won on all criteria accounts. The fall out in both Washingtons is going to reverberate for a long time.
Boeing would do well to accept the decision. If the criteria was flawed or if the result were not so clear cut then a protest should be conducted. However given the background and the time taken to make the decision, one can only believe that the review was conducted in the most strict of circumstances.
One of the arguments I have seen against the award has been the notion that high tech jobs are being outsourced to foreigners. Frankly I believe the opposite is the case. An industrial base of additional understanding especially in composites will be a direct result of this award.
Perhaps now that the decision has been made then we can only hope that there are some lessons to be learned here. One of the biggest lessons that should be learned is that the US Defense Acquisition process is flawed and needs rework.
One final thought is that there is a bad knock on effect within the airline industry. The 767 production line has been hanging on with some cargo based sales but very little new sales as customers wait for the 787. There is already a very big shortage of 767-300 size aircraft and the probably 18 month to 2 year total delay in the 787 program means a strong shortage of this size equipment. This is not good and will need monitoring in the coming months.
08 March 2008
The Skyrocketing Cost of Slot Pairs at LHR $52 million each!
CO was revealed to be the purchaser of a recent set of slots at LHR.
A Continental Airlines filing to the US Securities and Exchange Commission has revealed it paid $209m for four pairs of take-off and landing slots at Heathrow Airport.
The most recent price at LHR was pegged at $40 million last year. So clearly a nice fat increase even allowing for the fall of the dollar against the pound. And who did they pay that money to? We believe it was the parent company of GB Airways (then a BA Franchisee). After selling the airline to Easyjet – they retained 4 slot pairs at LHR. This is where they went. A nice tidy profit.
Pity poor BAA and its Spanish owners. I bet they were wishing they had been able to pocket that cash and use some of it to either pay down their debt or improve some services at LHR.
A Continental Airlines filing to the US Securities and Exchange Commission has revealed it paid $209m for four pairs of take-off and landing slots at Heathrow Airport.
The most recent price at LHR was pegged at $40 million last year. So clearly a nice fat increase even allowing for the fall of the dollar against the pound. And who did they pay that money to? We believe it was the parent company of GB Airways (then a BA Franchisee). After selling the airline to Easyjet – they retained 4 slot pairs at LHR. This is where they went. A nice tidy profit.
Pity poor BAA and its Spanish owners. I bet they were wishing they had been able to pocket that cash and use some of it to either pay down their debt or improve some services at LHR.
The electric chair… Literally on BA
One of my fellow bloggers is Tim Hughes who writes THE BOOT
Tim has been on a truly acerbic tear on what he thinks is a personal plot against him by Qantas. Well I am beginning to think the same from BA. As regular readers know – I am pretty vociferous about the way BA is being run and its various misfortunes. Well I am beginning to think its personal.
Disclosure – I am a Gold Card holder (sorry Delta this is where my extra flights went) So I really like the upstairs on a 744. This was a new version of the seats. (Much better by the way from the older ones). But as I sat there – as soon as I touched bear metal I kept getting shocked. So since BA knows I am a Gold holder (for the first time they are actually making an effort to ID me)I think it could be personal. Oh but wait it was ME who chose the seat. So it MUST be all seats…. Sure enough more than one seat has the problem. Not sure if this is due to this particular aircraft or others – but I seem to recall that I had felt it before and just ignored it.
Anyone else felt that electrifying feeling on BA?
Tim has been on a truly acerbic tear on what he thinks is a personal plot against him by Qantas. Well I am beginning to think the same from BA. As regular readers know – I am pretty vociferous about the way BA is being run and its various misfortunes. Well I am beginning to think its personal.
Disclosure – I am a Gold Card holder (sorry Delta this is where my extra flights went) So I really like the upstairs on a 744. This was a new version of the seats. (Much better by the way from the older ones). But as I sat there – as soon as I touched bear metal I kept getting shocked. So since BA knows I am a Gold holder (for the first time they are actually making an effort to ID me)I think it could be personal. Oh but wait it was ME who chose the seat. So it MUST be all seats…. Sure enough more than one seat has the problem. Not sure if this is due to this particular aircraft or others – but I seem to recall that I had felt it before and just ignored it.
Anyone else felt that electrifying feeling on BA?
Expedia's formula rolls into India
After nearly 2 years of dancing with different potential partners including the big 4 Indian Portals – (Makemytrip, Yatra, Cleartrip and TravelGuru) Expedia is now rolling out its own site developed in house.
Starting with Hotels, as it has done in all but the first few makets, and a bit of content might not seem to be a big deal in India where there are very few hotels to even book. However Expedia has one advantage over everyone else – it is already the largest booker of Hotels in India thanks to its worldwide clout.
Domestically Expedia will probably do OK as it connects to the local LCC airlines such as Kingfisher. And this is where it will start to get interesting. The LCCs fall in and out of love for the portals on a regular basis. So it is not uncommon for a carrier not to be present in the portal. This is both by design and by accident or problem.
No one is making much money out of the local LCCs. The yields are too low. Expedia has the advantage of better international reach so should have a better shot at the making money on the international flights as does Makemytrip. Much like the airlines themselves there will have to be a shakeout sooner or later. For now – welcome to the zoo that is India Expedia. Good luck. Good luck also figuring out the taxes on hotels….
Starting with Hotels, as it has done in all but the first few makets, and a bit of content might not seem to be a big deal in India where there are very few hotels to even book. However Expedia has one advantage over everyone else – it is already the largest booker of Hotels in India thanks to its worldwide clout.
Domestically Expedia will probably do OK as it connects to the local LCC airlines such as Kingfisher. And this is where it will start to get interesting. The LCCs fall in and out of love for the portals on a regular basis. So it is not uncommon for a carrier not to be present in the portal. This is both by design and by accident or problem.
No one is making much money out of the local LCCs. The yields are too low. Expedia has the advantage of better international reach so should have a better shot at the making money on the international flights as does Makemytrip. Much like the airlines themselves there will have to be a shakeout sooner or later. For now – welcome to the zoo that is India Expedia. Good luck. Good luck also figuring out the taxes on hotels….
29 February 2008
The Professor will be away for a week.
I will try and write but I am going to enjoy the rigors of ... Berlin and the world's largest travel trade show - ITB.
So if you are there and want to contact me (ply me full of alcohol etc) then please email me timothyo@t2impact.com
Cheers and have a good week
Timothy
So if you are there and want to contact me (ply me full of alcohol etc) then please email me timothyo@t2impact.com
Cheers and have a good week
Timothy
28 February 2008
Allegis again?
OK Hands up those who remember the name Allegis?
Well it seems that a small part of it must live on in people's memories. United and Westin are cooperating on the PS service (premium 757 transcon). Nice pillows and blankies an an Oasis of Calm in the red carpet clubs.
It was a cool idea... too bad it didn't work.
Cheers
Timothy
Well it seems that a small part of it must live on in people's memories. United and Westin are cooperating on the PS service (premium 757 transcon). Nice pillows and blankies an an Oasis of Calm in the red carpet clubs.
It was a cool idea... too bad it didn't work.
Cheers
Timothy
27 February 2008
Gunfight in the West
The West Coast Market Heats Up.
It has been a bit sleepy on the West Coast of late. Sure we have seen a lot of service that went to hubs but not a lot that went North to South. But that is about to change.
Despite an interesting but short lived incursion from Skybus, there has been very little brand new service.
The new services started in 3rd quarter 2007 with a little heralded but very useful new service from Delta’s new partner ExpressJet. Flying Embraer 145s this is not going to set the world alight. Virgin America’s new service though between the major Southern California cities – particularly into San Francisco did spark a reaction. Southwest and Jetblue moved across the Bay and added service from SFO in addition to their OAK service. But this year the Northwest’s airline (Alaska Air based in Seattle) wanted to ensure that no one stepped into their market and offered a very strong schedule of hourly service from LA to Seattle. Beefing up also San Franscico and more flights from PDX sees AS becoming the largest individual airline between the Pacific Northwest and California.
Not to be outdone Virgin announced new service from LAX and SFO to SEA. Then JetBlue started to connect the dots similarly announcing service between LAX and SEA as well as from LGB.
So for one who lives in the Seattle metro area – thanks guys. I appreciate you picking on this market to have a battle. With new service to Germany (LH, FRA-SEA), UK (NW LHR-SEA) and already beefed up service from BA and last year’s addition of flights from CDG to SEA, the place is a hopping. We are looking forward to Air China coming this year.
Cheers
TImothy
It has been a bit sleepy on the West Coast of late. Sure we have seen a lot of service that went to hubs but not a lot that went North to South. But that is about to change.
Despite an interesting but short lived incursion from Skybus, there has been very little brand new service.
The new services started in 3rd quarter 2007 with a little heralded but very useful new service from Delta’s new partner ExpressJet. Flying Embraer 145s this is not going to set the world alight. Virgin America’s new service though between the major Southern California cities – particularly into San Francisco did spark a reaction. Southwest and Jetblue moved across the Bay and added service from SFO in addition to their OAK service. But this year the Northwest’s airline (Alaska Air based in Seattle) wanted to ensure that no one stepped into their market and offered a very strong schedule of hourly service from LA to Seattle. Beefing up also San Franscico and more flights from PDX sees AS becoming the largest individual airline between the Pacific Northwest and California.
Not to be outdone Virgin announced new service from LAX and SFO to SEA. Then JetBlue started to connect the dots similarly announcing service between LAX and SEA as well as from LGB.
So for one who lives in the Seattle metro area – thanks guys. I appreciate you picking on this market to have a battle. With new service to Germany (LH, FRA-SEA), UK (NW LHR-SEA) and already beefed up service from BA and last year’s addition of flights from CDG to SEA, the place is a hopping. We are looking forward to Air China coming this year.
Cheers
TImothy
Congratulations to Heifer International
I am a huge fan of sustainability in development. And despite being in the Travel and Tourism business – I am a big fan of programs that enable people to help themselves. For the past several years we have supported Heifer International as a part of both the T2 and my personal annual charity activity. I have encouraged clients and other members of the T2 team to do the same. Now comes news that they have been recognized with a grant from the Gates Foundation. Here is the official blurb:
On January 25, Heifer announced a four-year $42.8 million grant from The Bill & Melinda Gates Foundation to fund a project to help poor rural farmers in East Africa double their incomes by increasing their production of high quality raw milk to sell to dairies. This is the largest single grant in Heifer's history
I urge you to sign up with Heifer. It is probably one of the most effective forms of giving out there.
Cheers and thanks
Timothy
On January 25, Heifer announced a four-year $42.8 million grant from The Bill & Melinda Gates Foundation to fund a project to help poor rural farmers in East Africa double their incomes by increasing their production of high quality raw milk to sell to dairies. This is the largest single grant in Heifer's history
I urge you to sign up with Heifer. It is probably one of the most effective forms of giving out there.
Cheers and thanks
Timothy
Don’t say its over already? DL+NW merger rumours.
I hear Dusty Springfield in the background singing – you don’t have to say forever just be close at hand….
It looks like things are not going well with the merger discussions at DL and NW. First it was the pilots arguing over the seniority lists. Now it is rumoured (totally unsubstantiated so far) that AF-KL may not be too happy with the current arrangement. However anyway you cut it – things are not rosy with the merger. Both parties on Tuesday put out notes saying “we want to but..”
We remain clearly unimpressed with the merger concept in general at this stage without a clear policy of opening up competition from external sources. Mergers cause less competition and higher prices in the airline market. Therefore by definition failing to meet one of the key criteria established publically by Delta. So any illusions of efficiency are not going to positively impact the consumer. If the US Administration (either current or next) wants to approve it – then they should do so ONLY if there are safeguards to open competition. The easiest way to ensure that is by removing the foreign restrictions and allowed 7th, 8th and 9th freedom traffic. Over at IAG they have been discussing this. Here is the podcast:
Cheers
Timothy
It looks like things are not going well with the merger discussions at DL and NW. First it was the pilots arguing over the seniority lists. Now it is rumoured (totally unsubstantiated so far) that AF-KL may not be too happy with the current arrangement. However anyway you cut it – things are not rosy with the merger. Both parties on Tuesday put out notes saying “we want to but..”
We remain clearly unimpressed with the merger concept in general at this stage without a clear policy of opening up competition from external sources. Mergers cause less competition and higher prices in the airline market. Therefore by definition failing to meet one of the key criteria established publically by Delta. So any illusions of efficiency are not going to positively impact the consumer. If the US Administration (either current or next) wants to approve it – then they should do so ONLY if there are safeguards to open competition. The easiest way to ensure that is by removing the foreign restrictions and allowed 7th, 8th and 9th freedom traffic. Over at IAG they have been discussing this. Here is the podcast:
Cheers
Timothy
25 February 2008
Dude - where's my audience? Facebook (Shock Horror) Audience Decline
In October while preparing a piece on Web Trends I noticed that MySpace on Alexa was starting to show some declines. At the time when I showed this data to an audience in Singapore I was almost booed off the stage for such heresy. Well dearly beloved - it does seem that there are quite a few swallows around so we may actually be witnessing the decline of vanilla Social Networking.
No lesser authority than the UK TIMES online is reporting the same thing now. Here is the article in its entirety.
Speaking purely personally and from a bar stool research study of - well one, I can tell you that I have noticed this fatigue occurring more frequently and persistently. I am a true experimenter. I am always trying new things. However managing all of the distractions is VERY HARD. In January - I turned off Facebook alerts. (Sorry MySpace never really got going). I also unsubscribed to most of the Facebook apps after one of them caused me a lot of bad spam and other assorted nasties to appear on my computer.
Honestly I do not have enough time for a lot of this junk. Facebook is OK but i cannot say I am a huge fan. I cannot see how people live their lives there. Although I empathize with those who do. There are only so many hours in the day. Some times just resting my fingers feels really good. So I am no web socialite (of course being a Cambridge Man don't necessarily support Oxford folks like Boris) but i think I am probably a representative sample of others who are - well just too damned busy for this stuff.
ENJOY!
From The Times
February 22, 2008
Web socialites succumb to ‘Facebook fatigue’Adam Sherwin, Media Correspondent
From politicians to film stars, anyone who was anyone had a Facebook profile. But the social networking phenomenon may have peaked now that the number of British users of the site has fallen for the first time.
Analysts are speaking of “Facebook fatigue” after figures showed a 5 per cent decline from 8.9 million unique visitors to the website in December to 8.5 million last month. The fall could be a seasonal dip - Facebook’s audience is still 712 per cent higher than it was a year ago and 9 per cent higher than three months ago.
The actress Sienna Miller and the Tory MP Boris Johnson are Facebook members. Yet in the fickle world of internet “cool”, the popularity of the site, where users socialise, discuss their passions and exchange photographs, may have reached a plateau.
Facebook, which has an implied valuation of £7 billion after Microsoft took a minority stake, annoyed members last November by publicising details of their shopping habits without their permission.
Facebook: The bluffer’s guide
Forced to sign up by repeated friend requests? Hit the virtual ground running with our virtual guide
Multimedia
Facebook section - full coverage
Background
Careless Facebook users ‘open to identity theft’
Ten essential Facebook accessories
Parents are turning into online spies
Networkers who click with 1,000 ‘friends’
Nic Howell, of the internet industry magazine New Media Age, said: “Social networking is as much about who isn’t on the site as who is. When Tory MPs and major corporations start profiles on Facebook its brand is devalued, driving its core user base into the arms of newer, more credible alternatives.”
Alex Burmaster, European internet analyst at Nielsen Online, which compiled the statistics, believes that Facebook users are finding that managing their virtual life too demanding. “There could be an element of Facebook-fatigue. While building up the number of friends and getting all the alerts was fun for a while, people are possibly finding it hard to manage their networks and the sheer amount of information/updates they now get from this network. For some of the early adopters the novelty has possibly worn off.” He added: “One month of falling audiences doesn’t spell the decline of Facebook or social networking. At some point its phenomenal growth rate would have to end and it’s simply a case of having reached that point.” Other social networking sites panel of nearly 40,000 internet users who have a meter attached to their suffered a decline during the last quarter, including MySpace, owned by News Corporation, the parent company of The Times, which was down 14 per cent and Bebo (8 per cent).
Networks on Yahoo! and Google-owned sites experienced falls of 16 cent and 30 per cent respectively, while Piczo, a site intended for teenagers, lost 56 per cent of its audience.
Nielsen predicted that the next generation of social network sites would cater to specific interests such as travel, business, or wealth. WAYN (Where Are You Now), a travel networking site, had a 25 per cent increase in its British audience in the past year to 461,000, and LinkedIn, a network for professional and business people, recorded a jump from 161,000 to 433,000 users.
Fears over the dissemination of personal information may be affecting Facebook. Members have been warned that they could become victims of identity fraud after giving personal details to strangers.
Neilsen found that 19.2 million (58 per cent of the active UK Internet population) visited a social networking site in January, with the average visitor spending 2 hours 26 minutes on it.
Facebook is being challenged by the BBC’s community web pages, which recorded a 21 per cent increase in the last quarter. The BBC said traffic to the pages was being driven by the popularity of its iPlayer “on demand” service, which has recorded 17 million programme downloads in seven weeks.
Nielsen Online's dtat comes from a panel off nearly 40,000 internet users who have a meter attached to thier computers
No lesser authority than the UK TIMES online is reporting the same thing now. Here is the article in its entirety.
Speaking purely personally and from a bar stool research study of - well one, I can tell you that I have noticed this fatigue occurring more frequently and persistently. I am a true experimenter. I am always trying new things. However managing all of the distractions is VERY HARD. In January - I turned off Facebook alerts. (Sorry MySpace never really got going). I also unsubscribed to most of the Facebook apps after one of them caused me a lot of bad spam and other assorted nasties to appear on my computer.
Honestly I do not have enough time for a lot of this junk. Facebook is OK but i cannot say I am a huge fan. I cannot see how people live their lives there. Although I empathize with those who do. There are only so many hours in the day. Some times just resting my fingers feels really good. So I am no web socialite (of course being a Cambridge Man don't necessarily support Oxford folks like Boris) but i think I am probably a representative sample of others who are - well just too damned busy for this stuff.
ENJOY!
From The Times
February 22, 2008
Web socialites succumb to ‘Facebook fatigue’Adam Sherwin, Media Correspondent
From politicians to film stars, anyone who was anyone had a Facebook profile. But the social networking phenomenon may have peaked now that the number of British users of the site has fallen for the first time.
Analysts are speaking of “Facebook fatigue” after figures showed a 5 per cent decline from 8.9 million unique visitors to the website in December to 8.5 million last month. The fall could be a seasonal dip - Facebook’s audience is still 712 per cent higher than it was a year ago and 9 per cent higher than three months ago.
The actress Sienna Miller and the Tory MP Boris Johnson are Facebook members. Yet in the fickle world of internet “cool”, the popularity of the site, where users socialise, discuss their passions and exchange photographs, may have reached a plateau.
Facebook, which has an implied valuation of £7 billion after Microsoft took a minority stake, annoyed members last November by publicising details of their shopping habits without their permission.
Facebook: The bluffer’s guide
Forced to sign up by repeated friend requests? Hit the virtual ground running with our virtual guide
Multimedia
Facebook section - full coverage
Background
Careless Facebook users ‘open to identity theft’
Ten essential Facebook accessories
Parents are turning into online spies
Networkers who click with 1,000 ‘friends’
Nic Howell, of the internet industry magazine New Media Age, said: “Social networking is as much about who isn’t on the site as who is. When Tory MPs and major corporations start profiles on Facebook its brand is devalued, driving its core user base into the arms of newer, more credible alternatives.”
Alex Burmaster, European internet analyst at Nielsen Online, which compiled the statistics, believes that Facebook users are finding that managing their virtual life too demanding. “There could be an element of Facebook-fatigue. While building up the number of friends and getting all the alerts was fun for a while, people are possibly finding it hard to manage their networks and the sheer amount of information/updates they now get from this network. For some of the early adopters the novelty has possibly worn off.” He added: “One month of falling audiences doesn’t spell the decline of Facebook or social networking. At some point its phenomenal growth rate would have to end and it’s simply a case of having reached that point.” Other social networking sites panel of nearly 40,000 internet users who have a meter attached to their suffered a decline during the last quarter, including MySpace, owned by News Corporation, the parent company of The Times, which was down 14 per cent and Bebo (8 per cent).
Networks on Yahoo! and Google-owned sites experienced falls of 16 cent and 30 per cent respectively, while Piczo, a site intended for teenagers, lost 56 per cent of its audience.
Nielsen predicted that the next generation of social network sites would cater to specific interests such as travel, business, or wealth. WAYN (Where Are You Now), a travel networking site, had a 25 per cent increase in its British audience in the past year to 461,000, and LinkedIn, a network for professional and business people, recorded a jump from 161,000 to 433,000 users.
Fears over the dissemination of personal information may be affecting Facebook. Members have been warned that they could become victims of identity fraud after giving personal details to strangers.
Neilsen found that 19.2 million (58 per cent of the active UK Internet population) visited a social networking site in January, with the average visitor spending 2 hours 26 minutes on it.
Facebook is being challenged by the BBC’s community web pages, which recorded a 21 per cent increase in the last quarter. The BBC said traffic to the pages was being driven by the popularity of its iPlayer “on demand” service, which has recorded 17 million programme downloads in seven weeks.
Nielsen Online's dtat comes from a panel off nearly 40,000 internet users who have a meter attached to thier computers
Virgins seem to be everywhere - and not so cheap
For some time we have seen Virgin Blue evolve from a LCC into - well something that looks remarkably like Ansett except better managed and making some money. However in recent years after the initial blush it too has seen its share of back room ownership struggles that I am sure is still making dear Sir Reg spin in his grave.
Now days after reporting that we believe Virgin Blue is no longer a true LCC airline - it seems the management paid attention and has fallen in love with Air Asia's model. It is rumoured to be looking at setting up JV based in OZ for a true new LCC based on Air Asia.
Virgin Blue is still not quite fish nor fowl and has not been able to achieve the stellar results of some of its fellow (now former) brethren such as RyanAir. Its yields last year were only 9.7% compared to the 21.1% for the aforementioned Irish LCC.
So far Virgin has not done well in trying to get a formal LCC operating, sustaining profits in the model. Perhaps it should not try again! Indeed the last 2 Virgin operations have been anything but LCC.
Cheers
Now days after reporting that we believe Virgin Blue is no longer a true LCC airline - it seems the management paid attention and has fallen in love with Air Asia's model. It is rumoured to be looking at setting up JV based in OZ for a true new LCC based on Air Asia.
Virgin Blue is still not quite fish nor fowl and has not been able to achieve the stellar results of some of its fellow (now former) brethren such as RyanAir. Its yields last year were only 9.7% compared to the 21.1% for the aforementioned Irish LCC.
So far Virgin has not done well in trying to get a formal LCC operating, sustaining profits in the model. Perhaps it should not try again! Indeed the last 2 Virgin operations have been anything but LCC.
Cheers
New Brazillian Airline - the Richard and David show?
Rampant rumours floating around concerning a possible new airline to start in Brazil with David Needleman and Richard Branson as investors.
While it would seem to make sense - this has to be a little on the outside of credibility. Why don't I think this will fly?
Well....
Brazil is a notorious pit of failed airlines. But $200 million is a nice round number.
The purported plan for Embraer E Jets flying all over the country would be rather nice.
But I think TAM and GoL might have something to say about this. With landing slots at both Sao Paolo airports pretty tight, anything else is going to be tough.
Anyway the rumour of adding Branson to the mix would create even greater mystique. But what would they call it? Virgin Blue is already taken. Jet Virgin seems to be somewhat prosaic how about Virgin Agogo. Yes - that will do nicely.
Cheers
While it would seem to make sense - this has to be a little on the outside of credibility. Why don't I think this will fly?
Well....
Brazil is a notorious pit of failed airlines. But $200 million is a nice round number.
The purported plan for Embraer E Jets flying all over the country would be rather nice.
But I think TAM and GoL might have something to say about this. With landing slots at both Sao Paolo airports pretty tight, anything else is going to be tough.
Anyway the rumour of adding Branson to the mix would create even greater mystique. But what would they call it? Virgin Blue is already taken. Jet Virgin seems to be somewhat prosaic how about Virgin Agogo. Yes - that will do nicely.
Cheers
21 February 2008
The World is going crazy...
I swear that there are forces causing mass craziness to occur in the Universe.
Consider the evidence:
1. Qantas Holidays will be now part of Jetset Group
2. Virgin Blue is for sale (Again!!!)
3. Reed Trade Magazines which includes everything from Variety to Flight to Travel Weekly is for sale.
What is the world coming to....
I think I need to take a deep breath and sit this one out.
Consider the evidence:
1. Qantas Holidays will be now part of Jetset Group
2. Virgin Blue is for sale (Again!!!)
3. Reed Trade Magazines which includes everything from Variety to Flight to Travel Weekly is for sale.
What is the world coming to....
I think I need to take a deep breath and sit this one out.
UPDATE: British Airways +m Virgin Price Fixing Lawsuit
Looks like I gave you all bad information.
So here is the good info.
The esteemed law firm of Cohen Milstein Hausfeld & Toll () represented the plaintiffs on both sides of the Atlantic. There are separate websites for the UK () and the USA ()
Each of these sites will give you what you need to register your claim and see the official documentation.
I am busy collecting all my BA segments....
Cheers
Timothy
So here is the good info.
The esteemed law firm of Cohen Milstein Hausfeld & Toll () represented the plaintiffs on both sides of the Atlantic. There are separate websites for the UK () and the USA ()
Each of these sites will give you what you need to register your claim and see the official documentation.
I am busy collecting all my BA segments....
Cheers
Timothy
20 February 2008
Unbundled Pricing Everyone is doing it! MORE INSIDE
But wait - don't order yet - there are more fees and taxes we can charge you....
Many people (HM Government in particular via the OFT) have been railing on the Low Cost Carriers about their pricing practices. In their defense I provide evidence exhibits A and B both concern British Airways.
Exhibit A. British Airways has been fined on both sides of the Atlantic for Price Fixing on Fuel Surcharges. The fact that they get charged at all rather than put into the ticket should be reason enough to demonstrate my point - but there is more.
Exhibit B. British Airways offer of discounted Business Class. (Email dated 2/20/08)
Here is the fine print:
Terms and conditions
* New Club World is available on most flights from IAD, JFK, LAX, MIA, ORD, PHX, SEA, SFO and currently rolling out across the rest of the long-haul fleet. Fares shown are each way based on round-trip 42-day advance business class purchase for outbound travel June 1 — August 31, 2008 from select US gateways to London on British Airways only. Higher fares apply for other travel dates and from other US departure gateways. All fares subject to government approval and do not include government fees and taxes of approx. $265 plus $2.50 September 11th Security Fee. Minimum stay Saturday night. Maximum stay of 11 months. Valid for new bookings only made February 12 — March 13, 2008. Subject to availability. Other significant restrictions apply. Full terms and conditions (click).
Ah but I thought I would check and see what other airlines charge on their special business class. I checked with Delta (who just also happen to be having a biz class sale). Here is Delta's fine print:
Taxes/Fees:
Fares do not include a $3.40 ($3.50 for tickets issued on or after January 1, 2008) Federal Excise Tax, Passenger Facility Charge(s) of up to $4.50 for each flight segment, or the September 11th Security Fee of up to $2.50 for each flight segment. A flight segment is defined as a takeoff and a landing. International fares do not include U.S. International Air Transportation Tax of up to $30.20 ($30.80 for tickets issued on or after January 1, 2008) and U.S. and foreign user, inspection, security or other similarly based charges, fees or taxes of up to $280, depending on itinerary. These taxes and fees are the responsibility of the passenger and must be paid at the time the ticket is purchased.
So - its the same for everyone. It makes the LCCs look not so bad.
So anyone who complains about the LCCs in future - please look at the whole trend.
I thank you for reading
Timothy
Many people (HM Government in particular via the OFT) have been railing on the Low Cost Carriers about their pricing practices. In their defense I provide evidence exhibits A and B both concern British Airways.
Exhibit A. British Airways has been fined on both sides of the Atlantic for Price Fixing on Fuel Surcharges. The fact that they get charged at all rather than put into the ticket should be reason enough to demonstrate my point - but there is more.
Exhibit B. British Airways offer of discounted Business Class. (Email dated 2/20/08)
Here is the fine print:
Terms and conditions
* New Club World is available on most flights from IAD, JFK, LAX, MIA, ORD, PHX, SEA, SFO and currently rolling out across the rest of the long-haul fleet. Fares shown are each way based on round-trip 42-day advance business class purchase for outbound travel June 1 — August 31, 2008 from select US gateways to London on British Airways only. Higher fares apply for other travel dates and from other US departure gateways. All fares subject to government approval and do not include government fees and taxes of approx. $265 plus $2.50 September 11th Security Fee. Minimum stay Saturday night. Maximum stay of 11 months. Valid for new bookings only made February 12 — March 13, 2008. Subject to availability. Other significant restrictions apply. Full terms and conditions (click).
Ah but I thought I would check and see what other airlines charge on their special business class. I checked with Delta (who just also happen to be having a biz class sale). Here is Delta's fine print:
Taxes/Fees:
Fares do not include a $3.40 ($3.50 for tickets issued on or after January 1, 2008) Federal Excise Tax, Passenger Facility Charge(s) of up to $4.50 for each flight segment, or the September 11th Security Fee of up to $2.50 for each flight segment. A flight segment is defined as a takeoff and a landing. International fares do not include U.S. International Air Transportation Tax of up to $30.20 ($30.80 for tickets issued on or after January 1, 2008) and U.S. and foreign user, inspection, security or other similarly based charges, fees or taxes of up to $280, depending on itinerary. These taxes and fees are the responsibility of the passenger and must be paid at the time the ticket is purchased.
So - its the same for everyone. It makes the LCCs look not so bad.
So anyone who complains about the LCCs in future - please look at the whole trend.
I thank you for reading
Timothy
It's Official G-YMMM is headed for the Knackers Yard
As we predicted on January 18th - The B737-200ER that had a lucky escape at LHR - is going to be headed for the scrap heap.
BA and the CAA have announced that the aircraft is beyond economic repair.
Interestingly - and I hope no one is superstitious... this aircraft is only the second 777 to be written off. The first one was a GE powered example that when returned to the Lessors by (old) Varig was so clapped out that they decided to declare it a write off and call for Steptoe. G-YMMM also spent a little time with (old) Varig. Let's hope this is not a trend
Cheers
Timothy
BA and the CAA have announced that the aircraft is beyond economic repair.
Interestingly - and I hope no one is superstitious... this aircraft is only the second 777 to be written off. The first one was a GE powered example that when returned to the Lessors by (old) Varig was so clapped out that they decided to declare it a write off and call for Steptoe. G-YMMM also spent a little time with (old) Varig. Let's hope this is not a trend
Cheers
Timothy
IF you are so inclined... Send your comments to the EC Parliament on the new Code
The EC Code of Conduct has been prepared by Jacques Barrot and his team. Despite a lot of opposition to the plan and new code from the broad spectrum of the industry, the new code seems to favor European based GDS companies.
Since there is only one of these animals - it would seem to focus on the benefit to them.
Regular readers know that I am against half hearted regulation. Either manage or don't. As Ted Turner used to have on his desk a sign that said "Either lead, follow or get out of my way", this is a good place to pay attention to that advice.
If you would like to add your voice to this poorly defined legislation - then I suggest going here:
While I have a lot of respect for M Barrot - I believe that here he has been misled. At least they could have joined the rest of the world and called the class GDS... rather than CRS which still persists in the legislative text.
Since there is only one of these animals - it would seem to focus on the benefit to them.
Regular readers know that I am against half hearted regulation. Either manage or don't. As Ted Turner used to have on his desk a sign that said "Either lead, follow or get out of my way", this is a good place to pay attention to that advice.
If you would like to add your voice to this poorly defined legislation - then I suggest going here:
While I have a lot of respect for M Barrot - I believe that here he has been misled. At least they could have joined the rest of the world and called the class GDS... rather than CRS which still persists in the legislative text.
19 February 2008
GDS are the most cost effective distribution Channel?
Meet The New Profit Champ - Air Arabia
Move over Ryanair, Easyjet, Air Asia and Gol. Say hello to the new king.
OK so my mathematical skills are not always the best but I think I can use a spreadsheet. (Should anyone be able to prove me wrong I will immediately retract this story!)
It looks like we have a new Champion in the airline yield stakes. Its one that most people in Europe and the US - probably Asia have never even heard of let alone flown on.
Its Air Arabia.
For its 2007 results go here: http://www.airarabia.com/Air%20Arabia%20Net%20Profit%20Soars%20to%20AED%20376%20million.html
Frankly the numbers really shocked me. I was expecting a good result but this was very good. So net yield is 29.3% vs 13.5% last year. That is pretty much at the highest I have seen in any carrier. Higher even than Ryanair (2006 FR's numbers put them at the top of the Airline Business profitability league with 21.1% yield). With fares at about the right level for a Low Cost Carrier ($130 each way) they are doing a lot right.
Congrats to Adel Ali and his team.
Cheers
Timothy
OK so my mathematical skills are not always the best but I think I can use a spreadsheet. (Should anyone be able to prove me wrong I will immediately retract this story!)
It looks like we have a new Champion in the airline yield stakes. Its one that most people in Europe and the US - probably Asia have never even heard of let alone flown on.
Its Air Arabia.
For its 2007 results go here: http://www.airarabia.com/Air%20Arabia%20Net%20Profit%20Soars%20to%20AED%20376%20million.html
Frankly the numbers really shocked me. I was expecting a good result but this was very good. So net yield is 29.3% vs 13.5% last year. That is pretty much at the highest I have seen in any carrier. Higher even than Ryanair (2006 FR's numbers put them at the top of the Airline Business profitability league with 21.1% yield). With fares at about the right level for a Low Cost Carrier ($130 each way) they are doing a lot right.
Congrats to Adel Ali and his team.
Cheers
Timothy
British Airways and Virgin pay the price of Price Fixing
Lest anyone think that price fixing and signalling in the airlines is a closed shop affair - BA and VS will both have to fork out $200,000,000 to ticket holders of Long Haul seats from Aug. 11, 2004, through March 23, 2006. And yes folks I sat on quite a few of those seats. During that time BA flew a total of 50 million passengers short and long haul but the fuel surcharge only affects "long haul" seats whose passengers will get up to 10 pounds. Virgin flew about 7.5 million passengers during that time of which 100% was long haul. Virgin passengers get the same amount and of the fund BA pays 2/3rds the balance is Virgin.
This makes an interesting formula as it implies that Virgin is now 1/2 the size of BA long haul.
This is a sorry story as it resulted in casualties on all sides. There are no heroes in this story except perhaps the honesty of Virgin to come clean about the affair and spill the beans. I would be there are either other airlines quaking in their boots about this or others thanking their lucky stars they didn't get caught.
Strangely enough the alliances are one of the best places for refuge. You have to be SO careful not to talk about collusion that in any major discussion on the topic they have a lawyer present!
So anyway - I will be filling out my forms and claiming back my money.
When it comes up this is supposed to be the website to file:
http://www.virginbapassengerrefund.com/
It is showing under construction or a 400 error at the moment.
Sad....
This makes an interesting formula as it implies that Virgin is now 1/2 the size of BA long haul.
This is a sorry story as it resulted in casualties on all sides. There are no heroes in this story except perhaps the honesty of Virgin to come clean about the affair and spill the beans. I would be there are either other airlines quaking in their boots about this or others thanking their lucky stars they didn't get caught.
Strangely enough the alliances are one of the best places for refuge. You have to be SO careful not to talk about collusion that in any major discussion on the topic they have a lawyer present!
So anyway - I will be filling out my forms and claiming back my money.
When it comes up this is supposed to be the website to file:
http://www.virginbapassengerrefund.com/
It is showing under construction or a 400 error at the moment.
Sad....
18 February 2008
21 787s now in assembly in Everett... when will we see the first one fly?
They are still burning the midnight oil in Everett.
Formally Aircraft number 2 is in final assembly. See here for an image released Feb 15th. http://boeingmedia.com/imageDetail.cfm?id=15106&clr=release. Altogether there are 4 ships on the line.
Contrast this with the image released earlier showing the first aircraft Ship #1 and the 2 static test aircraft. LN2 now joins them.
Since this one was widely circulated earlier - I am going to risk the wrath of Boeing and reprint it here.
Altogether there are 21 aircraft (mostly in pieces out of sight of both these photos) now in Everett. Four are now officially on the line itself. Still it has been a mild winter so far so not much chance of any weather related problems with the aircraft.
The prognosis is getting better but things are still not looking rosy for the schedule. Despite several statements from Carson and Co, it really doesn't look good for 109 Aircraft delivered by end of 2009. The biggest problem will be full certification. To all intents and purposes the LN1 (First aircraft) is not really a representative sample of the aircraft. While the design in now "100%" complete there is a lot of work to be done to bring the current line delivered structures as well as parts in the supply chain already that will have to be re"travelled". Certification will be extremely tight. The biggest obstacle being the Cold Soak test. There is now just a short window every year when such a test can be accommodated. The consensus from what can see is that first flight will now slip into Q4. Delivery for May 09 to ANA looks reasonable if you are an optimist.
Boeing... do it right. Take the time. And best of luck to you
17 February 2008
Stop the Madness - I think I want to get off... thoughts on Merger Mania
The increasingly shrill noise of Airline Mergers is one that is not new to readers of this blog.
But lets consider the realities of the situation. Lets say that DL and NW announce their intended nuptials this week. Getting the proposition ready to take to the alter is going to take at least another 3 months. If during that time another airline pair who have been secretly dating and now decide to announce that they too intend to get hitched, then the US Congress will demand hearings - most likely in both houses. So lets add another month for that. By now it will be summer and there will be lots of focus on electioneering. There are a heck of a lot of seats up for grabs not just the presidency. It is highly likely that there will be an effective standstill. No one is going to be keen to approve this. So I would put the chances of a regulatory decision before the election as about 50:50. If it is more than one pair - sorry but Japanese style weddings in industries do not go down well, so expect a full round of investigations pushing the decision even further out. But as we know there are others who would want to put in their oar on regulatory approval. Consider for example any protest that may be filed in say Europe. As any one of these deals will have an impact on the transatlantic runs - dominance could be the order of the day. An AF-KL-DL-NW joint venture could be a pretty juicy prospect for Monsieur Barrot to look at.
Oh and just one thought. One of the earliest casualties in a DL+NW merger would be the CVG hub. CVG is technically in Kentucky but it serves Ohio's biggest city. That means for those of us young enough to remember is a crucial state in a closely fought general election. In the case of a CO-UA merger Columbus would be an early victim. Also in Ohio.
Oh and just another thought. Chairman of the Aviation oversight committee in the US Congress is one Mr Jim Oberstar (17th Term congressman) who happens to hail from Minnesota. If the NW deal goes through - Delta isn't leaving Atlanta so I guess its Sayonara Egan (aka MSP). That is not going to happen without a fight.
The list could go on....
Point being don't expect this to happen fast. It faces huge regulatory hurdles and legal challenges. This is highly likely to be a hot cup of Sake that will be passed to the New Administration of McCabee or Clintama.
But there again it does provide lots of cannon fodder for pundits.
But lets consider the realities of the situation. Lets say that DL and NW announce their intended nuptials this week. Getting the proposition ready to take to the alter is going to take at least another 3 months. If during that time another airline pair who have been secretly dating and now decide to announce that they too intend to get hitched, then the US Congress will demand hearings - most likely in both houses. So lets add another month for that. By now it will be summer and there will be lots of focus on electioneering. There are a heck of a lot of seats up for grabs not just the presidency. It is highly likely that there will be an effective standstill. No one is going to be keen to approve this. So I would put the chances of a regulatory decision before the election as about 50:50. If it is more than one pair - sorry but Japanese style weddings in industries do not go down well, so expect a full round of investigations pushing the decision even further out. But as we know there are others who would want to put in their oar on regulatory approval. Consider for example any protest that may be filed in say Europe. As any one of these deals will have an impact on the transatlantic runs - dominance could be the order of the day. An AF-KL-DL-NW joint venture could be a pretty juicy prospect for Monsieur Barrot to look at.
Oh and just one thought. One of the earliest casualties in a DL+NW merger would be the CVG hub. CVG is technically in Kentucky but it serves Ohio's biggest city. That means for those of us young enough to remember is a crucial state in a closely fought general election. In the case of a CO-UA merger Columbus would be an early victim. Also in Ohio.
Oh and just another thought. Chairman of the Aviation oversight committee in the US Congress is one Mr Jim Oberstar (17th Term congressman) who happens to hail from Minnesota. If the NW deal goes through - Delta isn't leaving Atlanta so I guess its Sayonara Egan (aka MSP). That is not going to happen without a fight.
The list could go on....
Point being don't expect this to happen fast. It faces huge regulatory hurdles and legal challenges. This is highly likely to be a hot cup of Sake that will be passed to the New Administration of McCabee or Clintama.
But there again it does provide lots of cannon fodder for pundits.
16 February 2008
Bethune: The US Airline industry makeup needs to change. Is he right?
Gordon Bethune - Boeing exec turned Continental saviour turned Aloha Chairman and Industry Analyst - recently sat down with the Houston Chronicle's Bill Hensel. See the interview here: http://www.chron.com/disp/story.mpl/business/5546668.html
So is he right? If not then what?
My answer is: Yes and No.
Yes it needs to change and No the big mergers are not the answer. In fact quite the opposite. We need MORE competition not less.
So IF the US Congress is listening here is a 6 point manifesto for such an industry make up change:
1. Remove all ownership restrictions. Allow foreign ownership and control.
2. Remove all 5th, 6th and 7th Freedom constraints and have open skies into and out of the country effective immediately.
3. Open 7th and 8th Freedom rights provided that the airlines can show an economic return. IE no dumping. You might want to wait a year before implementing this.
4. Implement a true Carbon Footprint policy - comprehensive that covers limits on emissions and promotes trading against a global metric.
5. Implement open airport pricing including freeing the airports (not the Feds) to charge Peak/Off Peak pricing
6. Stimulate new entrants through a domestic program similar to the ExIm Bank for foreign purchasers.
Put this in place and you will have a free market environment that will stimulate low cost entrants and competitive market pricing. Then it doesn't matter if you have big or small airlines.
And before I am hoist on a petard with cries of "Naive" I would encourage the US to pay close attention to the European model. Effectively this is what they have. True it has been a very bumpy road to get there but essentially it is mostly now in place.
So is he right? If not then what?
My answer is: Yes and No.
Yes it needs to change and No the big mergers are not the answer. In fact quite the opposite. We need MORE competition not less.
So IF the US Congress is listening here is a 6 point manifesto for such an industry make up change:
1. Remove all ownership restrictions. Allow foreign ownership and control.
2. Remove all 5th, 6th and 7th Freedom constraints and have open skies into and out of the country effective immediately.
3. Open 7th and 8th Freedom rights provided that the airlines can show an economic return. IE no dumping. You might want to wait a year before implementing this.
4. Implement a true Carbon Footprint policy - comprehensive that covers limits on emissions and promotes trading against a global metric.
5. Implement open airport pricing including freeing the airports (not the Feds) to charge Peak/Off Peak pricing
6. Stimulate new entrants through a domestic program similar to the ExIm Bank for foreign purchasers.
Put this in place and you will have a free market environment that will stimulate low cost entrants and competitive market pricing. Then it doesn't matter if you have big or small airlines.
And before I am hoist on a petard with cries of "Naive" I would encourage the US to pay close attention to the European model. Effectively this is what they have. True it has been a very bumpy road to get there but essentially it is mostly now in place.
14 February 2008
Open Skies - US and OZ but with a catch
Australia and the US have announced a new Open Skies agreement. But it comes with a little catch. It is bilateral only.
It is really interesting to see that one of the first truly large scale (seventh freedom) Open Skies agreements came between the UK and Singapore, it becomes effective March 30th. However this OZ-US arrangement will effectively hamper Singapore's efforts to open up SQ service from Oz to the US west coast. Ditto the UK will not be able to operate freely from US to OZ despite having operated 7th Freedom right services in the 80s and 1990s as a code share.
One of these days we will see the USA operate a truly Open Skies agreement worldwide with fully all freedom's One through Eight. So US Congress - put your money where your mouth is....
But then I am only an analyst.
It is really interesting to see that one of the first truly large scale (seventh freedom) Open Skies agreements came between the UK and Singapore, it becomes effective March 30th. However this OZ-US arrangement will effectively hamper Singapore's efforts to open up SQ service from Oz to the US west coast. Ditto the UK will not be able to operate freely from US to OZ despite having operated 7th Freedom right services in the 80s and 1990s as a code share.
One of these days we will see the USA operate a truly Open Skies agreement worldwide with fully all freedom's One through Eight. So US Congress - put your money where your mouth is....
But then I am only an analyst.
Currency, Fees - Fees and Taxes UGH!
We used to joke that the most complex market to sell travel products was India and the most numbers in currency on a ticket was Turkey and Poland.
Well chaps - it ain't so easy any more in some of the regular markets.
For GDS users the unbundling of products and adding in of fees is making it more and more difficult to get this right. PLUS the calculations are getting weirder.
To illustrate my point - lets just look at the recently introduced (and effective July 08) Lufthansa OB Fees. So its a 4.90 Euros per segment. Actually that is a TAXABLE charge subject to VAT. Holy cow (or what ever that is in German) how the heck do you calculate that?
With the world moving off the dollar standard and onto other currency standards - the nice stable world of currencies has gone. Now we have Euros and Pounds and Dollars all calculated on a daily basis. And in many cases calculated differently by GDS and private fare engines.
I would hate to have to be the one who has to work on these things.
One word of advice? NOW is the time to start planning your own system instead of just using a GDS on its own. The days of a nice homogeneous and holistic distribution system are long gone. Time to call it a night or the cavalry...
Well chaps - it ain't so easy any more in some of the regular markets.
For GDS users the unbundling of products and adding in of fees is making it more and more difficult to get this right. PLUS the calculations are getting weirder.
To illustrate my point - lets just look at the recently introduced (and effective July 08) Lufthansa OB Fees. So its a 4.90 Euros per segment. Actually that is a TAXABLE charge subject to VAT. Holy cow (or what ever that is in German) how the heck do you calculate that?
With the world moving off the dollar standard and onto other currency standards - the nice stable world of currencies has gone. Now we have Euros and Pounds and Dollars all calculated on a daily basis. And in many cases calculated differently by GDS and private fare engines.
I would hate to have to be the one who has to work on these things.
One word of advice? NOW is the time to start planning your own system instead of just using a GDS on its own. The days of a nice homogeneous and holistic distribution system are long gone. Time to call it a night or the cavalry...
13 February 2008
Check out our videos from WIT 2007
http:// www.webintravel.com/gallery_video.php
Also while you are there - see if you can come to WIT 2008.
Cheers
Timothy
Also while you are there - see if you can come to WIT 2008.
Cheers
Timothy
08 February 2008
Be careful where you speak... it will come around...Podcast now on ATW Online
Greetings....
Sorry I am travelling for a week. So the dispatches will be few. I am spending a week back in the old country. For several days I joined the UK commuters. I just don't know how they do it.
In the meantime here is a new link for the podcast chanel on ATW. It is now available.
http://nls.atwonline.com/t?r=42&c=32932&l=1362&ctl=743D4:1C479A2AA9BC064F4F0D93601383D683F91BDD2A20A1D99A
Thanks
Sorry I am travelling for a week. So the dispatches will be few. I am spending a week back in the old country. For several days I joined the UK commuters. I just don't know how they do it.
In the meantime here is a new link for the podcast chanel on ATW. It is now available.
http://nls.atwonline.com/t?r=42&c=32932&l=1362&ctl=743D4:1C479A2AA9BC064F4F0D93601383D683F91BDD2A20A1D99A
Thanks
04 February 2008
The Lemmings Are At It Again - United Introduces 1 Bag Policy
Yes!
Take a leaf from the Seattle Supersonics basketball team who can screw up almost any lead they start with - United has introduced a new bag policy guaranteed to piss off just about everyone.
The new bag policy states:
"As of February 4, 2008, United has a new checked baggage policy. Non-elite Mileage Plus® members and non-members traveling on non-refundable Economy tickets within the United States, Canada and U.S. territories, may check one bag for free and a second for a $25 fee. The new policy applies to tickets purchased beginning February 4, 2008 for travel on or after May 5, 2008. "
According to NPR this should generate more than $100 million in incremental revenue which will be used to offset the increase in fuel. What next - charging passengers by weight?
So why is this screwed up?
1. It hits almost no one. Most people don't check bags these days thanks to those dandy little roller aboard thingies.
2. It will move what could have been checked onto the carry-on. This means Flight Attendants will be wrestling with more bags on board onto already crowded overhead bins. Frequent Flyers who know better don't typically check bags so now there will be less room for them. And there is a security aspect.... advanced anti bomb gear is focused on checked bags not carry-on.
3. What happens on a code-share flight? LH, US etc etc.
So congrats United - you have managed to upset....
Leisure travelers who need this facility
Business travelers who will now need to fight with the reduced room
Flight Attendants who have to do more work
Ground Handlers who have less to do
Security that is going to be harder to police.
Your Star Alliance partners who will be just as confused as their passengers
So lets put is into perspective. UAL's mainline and regional per pax revenue is about $257 with around 70 million pax carried. That means if every passenger was to pay an extra $1.43 cents then this would yield the same as the new bag policy. UAL - last year I flew 8 flights legs on you. I am happy to send $11.44 to cover my contribution as long as i don't have to put up with the extra hassle. But wait - I am a Premier Exec traveller so I get a waiver:
"As a valued Mileage Plus Premier Executive® member you will be exempt from this new fee. The number of bags you are allowed to check at no charge will continue to be in accordance with your Mileage Plus status and/or class of service flown."
This ranks up there with Delta's Zero Pillow policy.
Thanks but no thanks, I shall be moving my business elsewhere.
Take a leaf from the Seattle Supersonics basketball team who can screw up almost any lead they start with - United has introduced a new bag policy guaranteed to piss off just about everyone.
The new bag policy states:
"As of February 4, 2008, United has a new checked baggage policy. Non-elite Mileage Plus® members and non-members traveling on non-refundable Economy tickets within the United States, Canada and U.S. territories, may check one bag for free and a second for a $25 fee. The new policy applies to tickets purchased beginning February 4, 2008 for travel on or after May 5, 2008. "
According to NPR this should generate more than $100 million in incremental revenue which will be used to offset the increase in fuel. What next - charging passengers by weight?
So why is this screwed up?
1. It hits almost no one. Most people don't check bags these days thanks to those dandy little roller aboard thingies.
2. It will move what could have been checked onto the carry-on. This means Flight Attendants will be wrestling with more bags on board onto already crowded overhead bins. Frequent Flyers who know better don't typically check bags so now there will be less room for them. And there is a security aspect.... advanced anti bomb gear is focused on checked bags not carry-on.
3. What happens on a code-share flight? LH, US etc etc.
So congrats United - you have managed to upset....
Leisure travelers who need this facility
Business travelers who will now need to fight with the reduced room
Flight Attendants who have to do more work
Ground Handlers who have less to do
Security that is going to be harder to police.
Your Star Alliance partners who will be just as confused as their passengers
So lets put is into perspective. UAL's mainline and regional per pax revenue is about $257 with around 70 million pax carried. That means if every passenger was to pay an extra $1.43 cents then this would yield the same as the new bag policy. UAL - last year I flew 8 flights legs on you. I am happy to send $11.44 to cover my contribution as long as i don't have to put up with the extra hassle. But wait - I am a Premier Exec traveller so I get a waiver:
"As a valued Mileage Plus Premier Executive® member you will be exempt from this new fee. The number of bags you are allowed to check at no charge will continue to be in accordance with your Mileage Plus status and/or class of service flown."
This ranks up there with Delta's Zero Pillow policy.
Thanks but no thanks, I shall be moving my business elsewhere.
01 February 2008
Podcast on British Airways new Biz class LCY-NYC
For your listening pleasure....
David Bentley, IAG and yours truly discuss the BA-A318 proposed services from LCY.
Episode: BA's A318 plans - a good idea or not?
http://iagblog.podOmatic.com/entry/eg/2008-02-01T12_24_07-08_00
Enjoy!
Timothy
David Bentley, IAG and yours truly discuss the BA-A318 proposed services from LCY.
Episode: BA's A318 plans - a good idea or not?
http://iagblog.podOmatic.com/entry/eg/2008-02-01T12_24_07-08_00
Enjoy!
Timothy
Touchdown!
OK so its Super Bowl weekend in America and I could not resist this one.
Air Asia started its (very meagre at the moment) schedule from KUL - SIN.
AirAsia will operate 28 weekly scheduled flights between Singapore and Kuala Lumpur. AirAsia’s twice daily flights will arrive in Singapore at 1055hrs and 2055hrs and depart for Kuala Lumpur at 1130hrs and 2140hrs. Besides AirAsia, Tiger Airways and Jetstar Asia also commenced operations on the Singapore-Kuala Lumpur sector today. This brings the total weekly scheduled passenger flights between the two cities to 254.
This will rise significantly when the brakes come off towards the end of the year nd it becomes open skies on the route.
So TOUCHDOWN Tony and his crew!
Air Asia started its (very meagre at the moment) schedule from KUL - SIN.
AirAsia will operate 28 weekly scheduled flights between Singapore and Kuala Lumpur. AirAsia’s twice daily flights will arrive in Singapore at 1055hrs and 2055hrs and depart for Kuala Lumpur at 1130hrs and 2140hrs. Besides AirAsia, Tiger Airways and Jetstar Asia also commenced operations on the Singapore-Kuala Lumpur sector today. This brings the total weekly scheduled passenger flights between the two cities to 254.
This will rise significantly when the brakes come off towards the end of the year nd it becomes open skies on the route.
So TOUCHDOWN Tony and his crew!
Champagne all round boys and girls... Opodo makes a profit
It may seem meagre to other combatants but 7 years after its first launch - Opodo has FINALLY MADE A PROFIT.
Opodo was formed in 2000 by nine of Europe’s leading airlines. Its publicly stated two main objectives were to become a low cost distribution channel for travel products, and to become a leading player in the (then) increasingly lucrative online travel market. Opodo launched its first site, www.opodo.de, in Germany in November, 2001. This was soon followed by the launches of the United Kingdom site, www.opodo.uk, in January, 2002, and the French site, www.opodo.fr, later that year in April. Opodo currently has been launched in, and operates in ten different countries. These include Germany, Austria, the United Kingdom, Spain, France (under 3 brands), Italy, and Scandinavia under the Travellink Brand (Finland, Denmark, Sweden and Norway). The website lists 8o European airlines as co-owners with Amadeus. BA, AF/KL, EI, LH, AZ, OS, IB, FI.
Well done to the team in Hammermith. Too bad about the investment write off - but Amadeus probably needs that these days to counter its rapidly rising profits.
Opodo was formed in 2000 by nine of Europe’s leading airlines. Its publicly stated two main objectives were to become a low cost distribution channel for travel products, and to become a leading player in the (then) increasingly lucrative online travel market. Opodo launched its first site, www.opodo.de, in Germany in November, 2001. This was soon followed by the launches of the United Kingdom site, www.opodo.uk, in January, 2002, and the French site, www.opodo.fr, later that year in April. Opodo currently has been launched in, and operates in ten different countries. These include Germany, Austria, the United Kingdom, Spain, France (under 3 brands), Italy, and Scandinavia under the Travellink Brand (Finland, Denmark, Sweden and Norway). The website lists 8o European airlines as co-owners with Amadeus. BA, AF/KL, EI, LH, AZ, OS, IB, FI.
Well done to the team in Hammermith. Too bad about the investment write off - but Amadeus probably needs that these days to counter its rapidly rising profits.
BA to add direct LCY-JFK Service probably 2009
British Airways seems to be having a case of the weirds.
Fresh from announcing an airline with no rationality (OpenSkies) they are now announcing a new Biz Class only service from LCY to JFK using 2 just ordered Airbus A318s configured 32 seats only. But there is a catch....
It has to stop.
As in somewhere to fuel up. Thus adding up to to 2 hours elapsed time to the schedule.
If this is a precursor in order to convince someone that he nonstop could work - then OK. BUT this doesn't make any real sense if it will permanently be a one stop flight.
Doing the Math calculations:
Its marginal from Cannery Wharf in time improvement. And actually LOSES time if you are going from the West End.
Now where are they going to stop? Bermuda? Gander? and then a nonstop into LGA instead of JFK...
Sorry this is baffling.
Fresh from announcing an airline with no rationality (OpenSkies) they are now announcing a new Biz Class only service from LCY to JFK using 2 just ordered Airbus A318s configured 32 seats only. But there is a catch....
It has to stop.
As in somewhere to fuel up. Thus adding up to to 2 hours elapsed time to the schedule.
If this is a precursor in order to convince someone that he nonstop could work - then OK. BUT this doesn't make any real sense if it will permanently be a one stop flight.
Doing the Math calculations:
Its marginal from Cannery Wharf in time improvement. And actually LOSES time if you are going from the West End.
Now where are they going to stop? Bermuda? Gander? and then a nonstop into LGA instead of JFK...
Sorry this is baffling.
31 January 2008
Social Networking already peaking (peaked?)
There has been a lot of speculation in looking at the most recent numbers from Comscore for Oct/Nov/Dec 2007. We are actually seeing a downturn in MySpace users in the USA. Anecdotal evidence has been floating around for some time about usage peaking and then declining after relatively short life-cycles. This is however the first time that we have seen hard evidence of this. Here is a good thread on the Blog Creative Capital... http://creativecapital.wordpress.com/2008/01/29/its-official-us-social-networking-sites-see-slow-down/
I encourage you to read it.
My personal position on the subject is to take a balanced view. I am probably a heavy web user - like most of this blog's readers. But I find Social Networking sites like MySpace and Facebook both intrusive and in many cases annoying. I am also very leery of the recent Facebook decision to open up the platform which resulted in viruses and various forms of malware spreading around. I also found the encouragement and the use of mass mailings/messages by users a time sink. Eventually I turned off all notifications from both sites. I find myself drawn to using Linked In and Plaxo as ways to maintain my address book and retain ad hoc relationships with others. Probably more useful for my business. I know many kids however who are quite happy with the management of their social relationships via Facebook. Probably the 20 somethings in New York also find this useful. It just doesn't suit me. Dopplr, Triphub and other tools are "nice" but not a useful as a utility like TripAdvisor.
From a professional perspective I regard social networking as a mixed blessing. It has changed the game for content and trust. A good counter balance for some of the crap and fluff content that has been a stable for Tourism and Travel for years. However the inconsistency bothers me. Can I rely on a single site or a single resource that is rich in one part but sparse in another one? What about the grey bits in the middle? On balance i believe it is good for the market and the industry and it has changed the game - largely an improvement. The biggest downside is that it is another facet that we have to manage. Many of our clients find that hard to swallow despite some hard evidence as to its value.
n the final analysis (and I realize I am taking a huge broad brush to this)I find it a necessary evil. But remember it's called SOCIAL networking for a reason. Its a tool and a service. Use it wisely and appropriately. Adopting it to be trendy is about as useful as taking a space on Second Life. Fun but fleeting. I predict we will see a lowering of the use and the absorbing of Social Networking tools into mainstream activity. I think also we will see a strong backlash against opening up these platforms to crass commercialism. The best analogy I can think of is to compare the utility values of eBay and Craigslist. You use both to buy and sell stuff. Both are appropriate in different cases. So it will be with private social networks, pure social nets, commercial social nets, and special interest social nets. Your life changes doesn't mean that you stay loyal to the same things you used in prior stages.
If I may quote "When I was a child, I spake as a child, I understood as a child, I thought as a child: but when I became a man, I put away childish things."
(1Cr 13:11 Hey you didn't know I could quote the Bible - thanks to the web I can! So I guess my parents investment in my education wasn't entirely wasted!)
I think we shall see many more things like this. Just don't expect miracles!
I encourage you to read it.
My personal position on the subject is to take a balanced view. I am probably a heavy web user - like most of this blog's readers. But I find Social Networking sites like MySpace and Facebook both intrusive and in many cases annoying. I am also very leery of the recent Facebook decision to open up the platform which resulted in viruses and various forms of malware spreading around. I also found the encouragement and the use of mass mailings/messages by users a time sink. Eventually I turned off all notifications from both sites. I find myself drawn to using Linked In and Plaxo as ways to maintain my address book and retain ad hoc relationships with others. Probably more useful for my business. I know many kids however who are quite happy with the management of their social relationships via Facebook. Probably the 20 somethings in New York also find this useful. It just doesn't suit me. Dopplr, Triphub and other tools are "nice" but not a useful as a utility like TripAdvisor.
From a professional perspective I regard social networking as a mixed blessing. It has changed the game for content and trust. A good counter balance for some of the crap and fluff content that has been a stable for Tourism and Travel for years. However the inconsistency bothers me. Can I rely on a single site or a single resource that is rich in one part but sparse in another one? What about the grey bits in the middle? On balance i believe it is good for the market and the industry and it has changed the game - largely an improvement. The biggest downside is that it is another facet that we have to manage. Many of our clients find that hard to swallow despite some hard evidence as to its value.
n the final analysis (and I realize I am taking a huge broad brush to this)I find it a necessary evil. But remember it's called SOCIAL networking for a reason. Its a tool and a service. Use it wisely and appropriately. Adopting it to be trendy is about as useful as taking a space on Second Life. Fun but fleeting. I predict we will see a lowering of the use and the absorbing of Social Networking tools into mainstream activity. I think also we will see a strong backlash against opening up these platforms to crass commercialism. The best analogy I can think of is to compare the utility values of eBay and Craigslist. You use both to buy and sell stuff. Both are appropriate in different cases. So it will be with private social networks, pure social nets, commercial social nets, and special interest social nets. Your life changes doesn't mean that you stay loyal to the same things you used in prior stages.
If I may quote "When I was a child, I spake as a child, I understood as a child, I thought as a child: but when I became a man, I put away childish things."
(1Cr 13:11 Hey you didn't know I could quote the Bible - thanks to the web I can! So I guess my parents investment in my education wasn't entirely wasted!)
I think we shall see many more things like this. Just don't expect miracles!
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