The Ryanair Website Down Issue.

Firstly I am not being an apologist for FR or MOL.

The issue of taking the website down seems to have irked a lot of people. It has to be remembered that FR is a bus company. It is not a fancy airline.

I always felt that Southwest did an excellent job of lowering expectations and then raising them with the delivery. FR doesn’t bother about raising the expectations after lowering them. Its delivery is what it is. HOWEVER unlike LCCs (including WN) it consistently has lower fares than its competitors. Sure there is more than anecdotal evidence that FR charges higher prices in certain instances than its direct competition. However all things considered, they offer lower fares. So that makes it a” what you see is what you” get arrangement between the customer and the airline. Rather than being subtle about it, they just tell you upfront. I can point to innumerable times when I have been confronted with legacy airlines who have the exact same policies and do the exact same things as FR however WITHOUT telling you first.

Bottom line, FR did a good job in getting the word out. The people who will be impacted need to be ready for the outage. If they are not then its Caveat Emptor. Plain and Simple.

Cheers

The Professor Welcomes The Beat

I am pleased to say that The Beat - David, Jay and Mary Ann amongst a cast of thousands - has started to syndicate The Professor's Wisdom.

If you are a reader for the first time, then welcome and I hope you find my blog postings of value to you.

If you are a previous (lapsed?) reader then welcome back.

The Professor promises to provide informed opinion on the topics of Aviation, Travel and Tourism.

Cheers!

Watch Out Seattle (Redmond) Here Comes Google OS

The rumours are now possibly future fact. Google has confirmed one of the worst kept secrets that there will be a Google PC OS arriving second half 2010. That means that we can expect "beta" versions sooner than that most likely on netbooks.

This will put pressure on Microsoft to step up to the game. So far however Google has not put a dent into MS's business with Google desktop and webtop based apps. Frankly neither Open Office nor Google docs are really any good other than for perhaps occasional use.

But over time Google will get better.

So here is an interesting thought. If Microsoft was sued by the EC and the US DoJ for tying the web browser to the OS. Should Google be sued for tying the PC OS to the Web browser (Google's OS will be Chrome based)?

Enquiring minds want to know...

Cheers

Reed Finally Offloads Travel Weekly

The grande old dame of Travel Business Publications has found a new home with Reed selling the Travel Weekly portfolio still in its possession to the founder of Holiday Autos.

Perhaps now he can reunite the various members of the group and build a true Travel Industry Media source spanning print and web distribution.

Star Current and Future Members Unhappy

So the DoJ has taken the gloves off on the ATI for CO to join the Star Alliance.

Justice is clearly sending a message that the concentration of the Alliance model cannot impede competition. And more power to them for finally waking up to that fact. The Europeans up till this point have perhaps been more aggressive - however the fait accompli of several alliances and mergers in the face of airline shut downs has muted their voice in decrying the behavior.

I believe that the DoJ is right in recommending dis-approval of the ATI. At the same time they should also not allow the BA AA transatlantic ATI to proceed. Approving one means by definition approving the other. But what of the existing DL/AF alliance? well there is already and existing Star set of immunity so the balance is really still there. So overall - it probably should be allowed to remain albeit with certain caveats based on performance in the next few years.

Let's hope that rationality trumps expediency.

Cheers

Don't Panic Seattle (Yet!) Boeing and the Second Line

There has been much speculation on the reasons for the Boeing purchase of the 787 Aft fuselage fabrication facility in South Carolina. Before anyone rushes to conclusion - chill out a moment.

It should be remembered that Boeing's grand plan for this Automotive style Just-in Time production process for the 787 was deeply flawed. The 787 is not a Smart Car. (Although at this rate it could end up being a bit of an expensive proposition tying down Boeing as Smart has Mercedes). It is a very complex and highly sophisticated integrated system. The plan to outsource technology and essentially risk to partners all over the world and to essentially out Airbus Airbus has not worked. Boeing will not make the same mistake again.

So Boeing has been quietly bringing back all the services in-house and taking direct control of the major subsystems assembly and indeed the design. With so many problems with the project related to a lack of control - ultimately the fault lies with Boeing. It was too ambitious and too complex. Couple this with a corporate culture that was based on a certain degree of elitism and voila - with the benefit of hindsight it didn't work.

However one must applaud Boeing for recognizing the error of its ways. What one cannot be in admiration of has been how the spin has oozed out of Boeing on the 787 transformation.

Using the threat of the so called second line move to another location outside of Washington State has the politicians all up in a tizzy. Chill people!

For Boeing to move and manage 2 separate production lines given the less than stellar performance in getting just the first plane built does not bode well for the company and its long term stock performance. It also is a bit of a smoke screen to move attention away from Boeing's performance on the project so far.

However the Unions must share a certain level of responsibility in making the project work. So far they have acted responsibly and Boeing should at the very least acknowledge this. Should the Unions start to agitate in the next 24 months - then all they are doing is playing to Boeing's game.

And that's the Professor's opinion. What's yours?

United Credit Card Move - Smart or Dumb?

IS THERE A SUBTEXT PLOT ABOUT THE COST OF CLEARING?

By now the debate is ranging far and wide about the wisdom of United Airlines decision to push credit card fees down to the agent in certain circumstances. The airline has been vilified on the subject by the Travel Agent press. No one seems to be springing to their defense - and at this stage neither am I - however I do think the issue needs a little deeper evaluation.

My take on this is simple. Now was not the time to do it.

UAL like many airlines is trying to change the model from supplier paid to user paid. Good if you can make it happen. For now however when you need all the distribution channels you can get - particularly if they result in higher yields then you would not want to be pushing them away. There is no doubt that there are instances where the agent may be using UA's merchant agreement in a not so direct and useful way to UA. For example plating on UA in order to get an unusual ticket issued. However the selective imposition would not be a good idea in my humble opinion today. I just think that United should not have chosen now to have this fight.

Longer term this situation does however represent a skirmish in a bigger set of battles - perhaps even a war of Tolkien proportions. That is the issue of the cost of financial fulfillment.

There is a very clear move on behalf of the credit card companies to shore up their business models. With near banks exiting the financial services market and the big banks getting very much bigger - the number and amount of fees on all transactions is rising and rising rapidly. UA is clearly being mindful of the long term trend of this and are trying to do something about it. They should be commended for starting to bring attention to the subject.

So chaps - this is one issue I am going to be following in the coming months. We are definitely going to see this issue stay near the front burner. I do believe we are going to see a strong focus by the supplier community - particularly airlines - on credit card fees.

Cheers

The Not Quite So Strange Case of Qantas

The Professor is currently on a round the world roadshow trip for one of our clients. In doing so - I have been engaging in a social experiment of doing the entire trip in coach. As I chose BA/QF's low RTW fare - I am experiencing the joys of coach travel much of it on Qantas.

Qantas is an airline in transition. It is moving from a pure legacy carrier and under Joyce aiming to remake its future as a feisty HVC - Hybrid Value Carrier. Let me assure you there are no sacred cows anywhere inside Qantas now (perhaps a sacred 'Roo though!!!)

The business strategy under the Dixon era regime seemed to be almost Microsoft like - Embrace and Extend. Betting on the ability to support multiple brands and multiple business models shoring up the uber Brand.

The new guy - another Irishman - Joyce seems to have understood that the GFC is not going to let that model be sustained. So he has started the arduous process of remaking the airline from the inside out. Bringing with him some of his key Lieutenants from Jetstar - he is determined to lower the cost base and at the same time to enhance the organization to adopt new thinking. This type of behavior would not be possible under the old regime - it is still not without risk given the testy nature of the relations with the Unions. Australian Labour relations are not the easiest to deal with. So delicate would be the description of the negotiations that have to be undertaken. But we can expect to see a brighter smarter definitely more agile QF.

The corridors in Mascott (QF's HQ area) are getting more like ghost towns. Whole departments have been axed or merged. Gardening leave has been ordered for many. Indeed outsourcing the IT area to IBM will put many of that team out to grass for a long time.

Joyce is not mincing any words or so his actions are demonstrating. He is determined to make the mainline airline viable in the face of low cost competition and encroachment from external sources. The traditional battle for maintaining the status quo - and thus ensuring QF's protected position seem to be regarded as lost. Now the airline must compete on its product and conventional market tools. The last vestige of the Flying Kangeroo as a matter of public pride and therefore worthy of public protection has vanished. It can only be a matter of time before the Pacific really opens up. Contrast this with the debate over a possible bail out of BA in the UK.

So QF's protected world is now open. The threats come from local (Virgin Australia group with its 4 airlines), Traditional advisaries - SQ and CX etc, The occassional foray into the Oz market by the US airlines - Delta being the latest one this month to start the service. But perhaps one of the most threatening is the encroachment by the GCC airlines - Qatar, Etihad and of course Emirates that has seen that airline rise to being a major carrier on the Trans Tasman routes.

Today's news shows that QF is now not prepared to tolerate Boeing's BS on the 787. Cancelling part of the 787 order is a major psycholigical blow to the program. Nothing earth threatening but definitely a kick in the teeth. Given the severity of the problem in the 787 program - they are looking at a significant additional delay in deliveries to the early customers. Scuttlebutt says that the redesign could add many many months of delay to the program. This puts another issue BACK on the table with the weight/performance. QF was hoping for the ability to operate SYD-LHR nonstop. That is not going to be on the cards for a while in my opinion.

So watch out world. If Joyce gets his way - QF will emerge from the current crisis a much better animal.

Cheers

The Professor Will Be Away... Again + Google

It seems I am not a master of my own destiny these days. So I shall be away from home base for over a month.

During this time I will not be able to post on this blog as often as I like. So my apologies dear readers.

And here is a comment on Google.

Of late I am starting to think that Google has become a passionate force for not so good. I used to admire them a lot more than I do now.

I have also learned to my cost that form dominates function. Making a change on my blog image resulted in Google's spider dropping me and also their new functions have started to bypass sites such as my blog. Apparently I was not alone - but while others have picked back up - I am languishing and falling behind.

A plot... accidental - deliberate?

Not sure dear reader but it shows the unnecessary power they wield without check

Cheers

Ryanair - The First Airline Ever To Publicize An Outage

Well you have to hand it to the boys and girls in Dublin. Calling a spade a spade has never been a problem

So announcing that they will shut the site down on June 24th is a bold but actually pretty fair move.

It is one of the only times I can remember when an airline says it will shut down its site and sets the expectations for how it will handle itself in the process.

I find this very refreshing

Cheers

Do Travel Agents Matter Eh?

In Canada - Yes Sire they do ...

The recent spat over commissions in the vast North of Canada has the Travel Agents - well somewhat in vogue again.

I wont bore with details about the Air Canada and Westjet raise/lower/raise commissions only to make the point that the spat proves that in today's buyer's market the agents are actually very important.

Why? Well if your yield is in the toilet (as it is) it has become an issue of economics for the supply side. Thus the minimal amount that the agents represent in cost compared to the loss of yield actually makes the agents seem like a good deal. For the neighbor to the south, the revenue is off by nearly 30% on only a 6% reduction in passenger numbers (ARC figures for May). That clearly shows that any way to mitigate this drop is good.

What have we seen publicly? Delta introduced 10% on certain routes in the NY market. AC and Westjet settled on 7%. etc etc. So compared to the 10-15% drop in yield for the airlines these commission numbers look actually attractive.

Does this signify that there is a lot of cash awash in the market? Actually when you look behind the numbers we see that the GDSs are still getting wads of cash from the Airlines in GDS transaction costs/fees, commissions are actually rising, the amount of money the publicly traded intermediaries are getting seems to be going north not south. And of course the deals out there for consumers are unheard of.

The airlines are in turmoil and despite the words of wisdom coming from Chairman Willie, we are seeing an about face by the supply side who just 12 months ago still spurned the Agency channel.

So as the pendulum has swung more - let's just take a moment to reflect that there is an opportunity for new found cooperation by the Travel Distribution System as long as people don't get too greedy. That means that the airlines and the user community must continue to look where the costs are and vigorously pursue rooting them out and making the channel(s) more and more efficient. Woe betide anyone who thinks this state of affairs is permanent and they can sit back and sing "Happy Days Are Here Again". Anyone who enables cost reduction in a win win for the suppliers and sellers should be embraced.

But ultimately - this too shall pass. So remember on whose head you trod on the way up. They might just kick you on the way down. As the Emperor Augustus said - Festina Lente - hasten slowly.

Cheers

HKG Traffic Falls again

6% might not seem like a lot but for the first 5 months of 2009 this is not good news. Worse is that the losses are not abating. May's numbers shows pax were off nearly 13%. Cathy must be suffering badly as the majority of these are going to be business travelers cutting back.

Even the airport is predicting more bad news for June

With China in the doldrums and Swine flu further compounding matters, the recovery will not necessarily be arriving any time soon. Finally the impact of the loss of the trans-shipment (flight from Taiwan can now go direct) Cathay's poisition is looking pretty awful at the moment.

Freight continues to collapse which is the worrying thing for everyone.

Yields are going to stay low for a long while yet.

Cheers

Swine Flu in Context

The death reported today of the first H1N1 patient in the UK should not be cause for undue alarm. Coming 3 days after the official declaration of pandemic by WHO - the number of cases have risen in the UK by another 11% to over 1400. This shows that the disease is a threat and should not be taken lightly.

However I believe we should not panic.

On my recent travels - I have seen quite a few people sporting facemasks and the like. At the same time - people openly sneezing or with other sundry bad habits continue unabated.

Just remember there is one key thing you can do - WASH YOUR HANDS FREQUENTLY - that is a pretty good way to keep the spread of any disease contained.

Cheers

Speculating On The Ryanair Order

So Ryanair is getting a lot of interest in its potential order for up to 300 Aircraft.

Most people poo poo Michael O'Leary as a crank. He frequently floats ideas just for effect. 1 Pound Toilets anyone?

This time however we think he is in deadly earnest and no one can afford to ignore him.

In a year when the NET airline bookings for both Airbus and Boeing have JUST cracked double figures, these sort of numbers are astronomical and terribly important to the stock of both companies. (EADS and Boeing).

The big question really is the likely outcome. So there are 4 doors:

Behind Door #1 is an all Boeing deal. Conventional money is on this one because its somewhat obvious.
Behind Door #2 is an all Airbus deal. This is the risky profile by JL is the master salesman.
Behind Door #3 is a composite deal. This will be expensive for both parties because both suppliers will have to pay extra to allow it.
Behind Door #4 is the goat. IE a laughing MOL.

I am not making any bets - just yet... except the side bet that THERE WILL BE A PR statement during Paris.

I also have a secret bet on something else. I will share with you if it happens. It has to do with a slightly different proposition.

Cheers

Bad Luck Story

Dr Addison Schonland runs the very well put together Podcast and Blogs over at IAG. despite the fact that he is a closet Republican - we do enjoy working together having co-authored 2 studies on LCCs.

Over at his blog is the really sad story of the couple who missed AF447.

http://blackprogram.blogspot.com/2009/06/bad-luck-story-of-week.html

Is It Time To Rethink Safety?

We take safety for granted.

We are complacent.

We are in danger.

There are so many studies on the subject of safety that you can drown in the amount of information. It is clear that the travelling public has been essentially "lucky" in that the number of accidents is not higher than it is. Hopefully this luck is not an accident of chance but a result of systematic focus on safety.

One of the most dramatic improvements in cockpit management has been the Electronic Flight Bag - EFB. However the recent incident involving an Emirates A340 at MEL highlights that there is still a problem with the overall safety of the system - namely the human factors side.
http://www.flightglobal.com/articles/2009/05/29/327075/emirates-incident-highlights-electronic-flight-bag-human.html

There is no answer to the question of how to manage safety - it is essentially unmanageable. We just have to hope and pray that the combination of factors that can cause an accident either never happen or that we can create mitigation for them.

Reading the reports of the AF447 accident, it would seem to the layman (and that includes me) that there are circumstances when things go wrong and nothing can be done to fix them if there is a major external distracting event going on. The lessons of Eastern Flight 401 have been researched and analyzed yet the core combination of factors continue to cause either accidents or almost accidents.

The recent revelations of the CO commuter Q400 accident reveals some things that should never have happened. Yet they still do. Crews commuting from more than 2000 miles away and sleeping on couches in a ready-room. Etc Etc.

We all as public and as professionals must be vigilant. We have to ensure that safety is not someone else's job. Its all our job. There is an excellent article in ATW June 2009 entitled back to basics. It makes a sobering read. We cannot just look for politically expedient solutions. We have to bring a culture of endemic focus on safety that embraces us all. We are all part of the solution. We can be thankful to the boys and girls in the front who guide the tubes to their destinations. But they are just part of a machine. That machine needs to work at 100%, all of the time.

Cheers

Once Was Not Enough - Airlines Cut More

Twice was not enough
Will the third round of cuts be enough to bring capacity inline with demand?

Just in time for the Paris Air Show next week we see another dose of (new and really real this time) reality hitting the market. Pursuing the conventional pendulum (aka knee jerk response) to a down turn - we are watching another round of cuts take place in the market. Delta and American shaved another 1-3 points off their capacity in total for the post Labor day schedule. BA is warning of cuts across the board from labour to shuttering OpenSkies. In this month's Air Transport World, Editor Aaron Karp ("Were They Tough Enough? " - http://www.atwonline.com/magazine/currentTOC.html ) makes the case that the bloodletting at the end of 2008 and the first quarter of this year was just not sufficient for the airlines to sustain their business model. The empirical data in support is stark. Yields are in the toilet. US travel agency derived airline passenger revenues were off almost 30% in the month of May 2009 on only a less than 9% drop in passengers. That is pretty bad by any measure.

Those of you who are regulars of this blog will recall that I singled out United last year for not cutting their head count costs commensurate to match the reduction in their fleet.

Now we see the new Boeing CMO 2009-2028 being released and for the first time ever (as far as I can tell) the plane maker is actually cutting its long term forecast. So the pull back is not just temporary. We are seeing a structural change in the market.

http://www.boeing.com/commercial/cmo/index.html

As an aside here it is a great tool and this years version is much easier to use and gives better quality data.

With oil prices rebounding and headed north of $100/ppb, the spectre of the gas guzzling uneconomic fleet is rising again. with effective deflation, rising costs and still declining demand - the airlines are in this perfect storm of bad news. As Willie has exhorted his boys and the rank and file - standard solutions and behavior are not acceptable. However I wonder if the rhetoric matches the execution. And of course while BA is a poster child for this perfect storm of bad news but they are by no means the worst and the sole victim of this situation. At least BA has the ability to control much of its own destiny (Unions willing we think!).

So chaps - brace yourselves for the long haul. There will be more cuts and more belt tightening.

However - while this would be a good time to think about how to radically change the airline cost model not just applying the scalpel, I am just not seeing any evidence of this occurring. Chaps - wake up and smell the coffee. You are being presented with a golden opportunity to make your businesses stronger for the long haul.

Not taking this chance means that the airlines are going to be condemned to having to cut again, and again... Then the opportunity missed will be looked on as a luxury! I hope that in future time I wont have to write about the time when the airlines missed their golden moment.

Cheers

1 Swallow? Try 5 - Assessment of ARC 2009 Year to Date

So we now have 5 full months under our belt and the variances shown from the extra day in 2008 and the differences in Easter now all mitigated, what can we see from the ARC data.

Well we see that the transaction numbers have been slowly improving. But where the big hole exists - its in yield. This bodes badly for the rest of the year for the airlines.

Transactions improved to only being down 8.4% BUT the sales totals are off just under 30%. That means that the airlines must be heavily discounting to maintain revenues. With commissions creeping back into the Airlines and agencies lexicon - something has to be done to improve yield. The airlines don't have the bounce of a strong book of revenue to fall back on either. this puts the airlines into that nastiest of all quandaries. Whether to discount further to capture just about any cash that's out there or to start investing in smart distribution arrangements to boost traffic and reduce COGS.

The drop in sales tracks directly with the drop in commercial traffic. We estimate across the board as a generalization that the market is off 15%. Stories coming from BA, LH and premier GCC and Asian carriers indicate that premium traffic is just off by 30%. No amount of 2 for 1's are going to improve this yield. Further the corporate wallets are going to stay shut for at least through the summer months. Even the last 2 quarters of 2009 are not going to look that much better as the Corporate traveler adjusts to the lack of approved spending.

Chaps we are not anywhere near the bottom yet.

Cheers

Longevity, The Gene Pool and ...Travel?

Mortality - we all to some extent (other than the odd monk or two) fear it.

At my mother's passing a few weeks ago, it fell to me to write the Eulogy and I had to assess what defined her life. She was born in India, moved to Canada, then back to England all before the age of 18. During her marriage to my father - they traveled the world extensively and were a part of what constituted then, the jet set. Of course her real passion was always her dogs!

Travel and the cultures they encountered defined the life of my family. My father also was born in a then exotic locale - Shanghai. As I go through the process of closing down the family home - I was struck by how much of what is in the house and was part of my family's life, symbolized that essence of travel - the small mementos and the (in some cases quite large) artifacts they acquired along the way.

Returning to my own home - it struck me that I too have followed that same path. However what was a past time for both parents has turned into a passion for me both professionally and personally.

Travel is far less glamorous today than it was in my parents' time. I recall personal encounters in airports as a child which seemed all quite normal yet today would be regarded as extraordinary. Still the lure of travel affects us all.

However the risk of travel was brought home to us last week with the loss of AF447. My father missed a flight on the original Comet only to be waiting at the airport the next day when news came of the total loss due to a design fault.

My mother lived to a right old age of 98. The week before she died we discussed her coming to visit all her family in the USA this summer. She really loved to travel and frequently - by that I mean every few months - she did so, short and long haul. The family eventually decided to entitle the Eulogy and the service as "A Life Well Lived". I only hope that when it comes time for me to board the great jetliner in the sky, that others will say that Travel defined my life as much as it did hers.

Keep traveling and spread the passion. Travel does indeed make us better people and the world a better place. The longer we live the greater the opportunity to learn and contribute to a better place on this planet. Hopefully that really does get into the gene pool.

Cheers


PS The Professor would like to again thank everyone who sent in emails and wrote cards, Facebook entries and even texts. We encourage everyone who would like to commemorate her life to contribute to her favorite charity which was Guide Dogs for the Blind. There are many such organizations around the world for example:

US: http://www.guidedogs.com/site/PageServer
UK: http://www.guidedogs.org.uk/

I thank you.

Social Media And The Act of Hooking Up: No Intimacy And No Loyalty

As I live in America - I am somewhat starved of conventional media's thinking opinions. The BBC and the commercial channels in the UK seem to have a better way of looking into issues - not too superficial and not too self serving. My favorite non-musical radio station where I live is my local NPR outlet KUOW.

On driving to an appointment on Monday I heard a very interesting piece on Sex without Intimacy (a link to the broadcast is below) - this got me thinking of the impact of Social Media on the current generation. If they just want sex without intimacy then surely they have no need for conventional loyalty. And so it seems that as we have changed our channels of communication - the ensuing attachments to (previously) conventional mores seem to have been lost. Perhaps because I am a little older - I value things like loyalty, honour and duty. Today loyalty from Millenials and even Gen X and Gen Y'ers is primarily to one's friends and not to the greater good. Definitely they don't feel the same attachment to brands. If they are the attachment is governed more on the basis of convenience rather than values.

So this got me thinking about brands and loyalty in travel in the age of social media. Bear with me on this one - I think its one of those observations that I hope you will think about.

Therefore it is important for us to consider when pitching to these groups to understand their motivation. While this is probably not a light bulb idea for most people who read this blog - it has taken me quite some time to appreciate it and the depth of the sentiment. It must be that nostalgic streak in me.

http://www.npr.org/templates/story/story.php?storyId=105008712

Listening to the young ladies that were interviewed for the program it somewhat unnerved me to think that they had come to separate the essence of their relationships by splitting the concept of Love Making, Friendship and Intimacy. So too one can infer that these same people have the ability to separate their sentiments and desires when it comes to making purchases - especially for life-style products such as Travel. Please note I am not criticizing this behavior, merely trying to understand the impact of the core thinking by this class of people who are clearly very important to our market.

I put this down to the ability of the young to multi-task like never before and to compartmentalize their emotions and decision making skills. Both left and right sides of the brain. Would that I had that natural skill or that my own brain was rewired in this way. (Banishment of guilt!!!!)

The challenge of brand building in this environment must be enormous. It is probably more relevant today than at any time in the past when one appreciates how difficult it is to build a long lasting brand in this "noisy" environment and just how quickly it can evaporate.

Think about it... ponder the question. Can loyalty actually exist in today's Social Media?

Comments please at your convenience. And don't worry - I wont shout at you nor attempt a virtual Hook Up!

Cheers

BA AA IB - last chance? Maybe, Maybe Not...

The guns are drawn the submissions are in and the old protagonists are lined up ready for the great shoot out at the Heathrow Coral.
Could this be the last chance for the BAAABI alliance to get its long sought anti-trust alliance approval?
In my humble opinion - there is no certainty one way or the other.

So lets do a quick review.

BA+IB. This has gone nowhere lately due to the GFC and the impact on the premium business market especially LHR-NYC. IB is feeling the pain but perhaps to a lesser extent that BA how is publicly wearing its hair shirt with Willie Walsh being surprisingly open about the extent of the impact on the former UK Flag Carrier. With the pound's fall against the Euro the value proposition would be hard to make in pure financial terms. Therefore I believe that this part of the deal is dead for now.

The Star and DL/AF alliances have powered ahead and built a considerable legal and commercial framework for Transatlantic service. While the product doesn't match the commercial model yet - and it will take some time to do so - these make a compelling case for equal consideration for BA and AA.

Virgin's unaligned status is perhaps the biggest fly in the ointment for the proposed tie up. Sir Richard is vociferous in his opposition. He knows full well that should the alliance be approved then his position as an independent will become almost if not actually untenable.

On the regulatory front - the Regulators have bowed to airline pressure and suspended some key anti-competitive measures such as the use it or lose it rule at major EU airports.

So will it happen?

My personal opinion is that judging from recent approvals under the current incumbent of the EC's Transportation Czar that their will be tacit approval. However not so fast. The EC has launched investigations into the LH dominance while at the same time approving LH's acquisition of BD. There is no rush on anyone's part at the moment. The sea of red ink - with IATA screaming BASTA - will likely be $9 billion this year. There really is no urgency to get this done. The impatience of BA and AA even if Transportation gives them approval will have to wait for significant anti competitive investigation that frankly could take years.

Like I said at the beginning - this has yet to run its course and while another battle with the old gunslingers shooting at each other doesn't mean the end is in sight.

I think we can rest easy in our beds knowing that there will not be any major casualties and even if someone does get wounded - they are going to get up and fight another day. Wyatt Arpy and Doc Walsh are not going to be the heroes, not today anyway.

Cheers

WIT Program Focuses on Startups

I have always had a soft spot for start ups. In my career I have probably reviewed hundreds of business plans and heard innumerable pitches of good ideas and frankly some real corkers.

For WIT in Singapore October 20-23 entrepreneurs will be given the chance to pitch to some of the most experienced people in the field and a crack at a 50,000 dollar grant. For full details go here:

http://www.webintravel.com/index.php/newsroom/39-news/492-wit-start-up-pitch-in-full-swing.html

The process starting now will lead up to a chance to pitch in front of a live audience during WIT's 5th anniversary session.

May the best idea win!

Cheers

The Professor Returns

Dear Readers

I hope you will forgive my silence over the last 3 weeks. I took some urgent time due to the passing of my mother who made it to the grand old age of 98.

I hope to return to regular posting in the coming days.

Thanks for your understanding and all the notes of condolences.

Cheers

Brits Want It Warm - But Where?

Those nice people at Skyscanner have been happy to share their search data with us.

Here are the list of risers:

Going Up – the biggest rising summer holiday destinations for Brits

1. Bangkok, Thailand (+271%)
2. Los Angeles, USA (+170%)
3. Porto, Portugal (+163%)
4. Dalaman, Turkey (+160%)
5. Orlando, USA (+158%)
6. Istanbul, Turkey (+157%)
7. Sharm El Sheik, Egypt (+156%)
8. Bodrum, Turkey (+153%)
9. Burgas, Bulgaria (+152%)
10. Oslo, Norway (+143%)

And the Biggest Losers?

Going Down – biggest falls in interest of summer holiday destinations for Brits

1. Prague, Czech Republic (-15%)
2. Cork, Republic of Ireland (-13%)
3. Paphos, Cyprus (-11%)
4. Geneva, Switzerland (-6.5%)
5. Palma, Spain (-6%)
6. Pisa, Italy (-5.5%)
7. Nice, France (-5%)
8. Bordeaux, France (-4.5%)
9. Menorca, Spain (-4%)
10. Venice, Italy (-3%)

Biggest rises and losses in flight searches on Skyscanner.net for summer 09 (May 1st-Aug 30th) compared to summer 08. Flights from UK airports.

Interesting - draw your own conclusion. For more details go to www.skyscanner.net

Cheers

Indaba-2009 - More of the Same

The Professor was not able to go to Indaba in Durban ZA this year... I do hope to next!

So how was it? From a distribution and general sentiment point of view - the optimist in me would say quiet.

The Professor's local spy noted that it was much quieter and wetter than last year, crowds were well down. The opening night beach party was postponed for an hour, but the rain was coming down so hard that not many people went anyway. They do need to think about this in future.

Travelport had a breakfast function and announced nothing (again).

Announcements of a new deal between Travelport and SAA have been imminent for some time but don't hold your breath.

Cheers - there is always next year

US ARC numbers - Getting Better?

Pre-Swine/Pig/Mexican/H1N1 Flu numbers have just been published for Jan-April 2009 for US agency sales.

They may show a little bit of hope - however the possibility has been dashed with the early returns for May as reported by Travelport that show transactions dropping yet again.

Sorry chaps... lets hope for a recovery in June.

Cheers

Do Web Ads Have Time Period Sensitivity?

This is a fascinating question - is there a prime time to the web when advertising is better received.

As we all know (or should know by now) the web is now absorbing as much mindshare as TV. For certain population segments the web has surpassed that of TV. Conan O'Brien who takes over from Jay Leno on the Tonight Show June 1st is even running ads on the US Network NBC touting that his show looks better on TELEVISION.

eMarketer using UK research drawn from Lightspeed Research and the Internet Advertising Bureau (IAB UK), show that the best time is (not surprisingly) night time.

http://www.blogger.com/post-create.g?blogID=34367341

Now note that because effectively you live in REAL time on the web - yet you can time shift tv - this is more effective information that can be used. Thus Evening viewers really are evening viewers rather than slotting a commercial into US Prime Time TV that has a greater than 40% chance that it will be time shifted.

But perhaps we should accept that the amount of influence formal advertising has over us has diminished over time and now the new "Hidden Persuaders"* are those who run Google and Facebook.

Time to finally move over Madison Avenue - its all about the Valley now.

Cheers


* For those who are tender in their youth and don't get the reference - go here: http://en.wikipedia.org/wiki/Vance_Packard

Latest Airline TLA/Buzzword - ATI

So the airlines all want it - legislators (as if they don't have enough to do are very happy to enjoy this distraction) - what the heck am I talking about ATI?

Anti
Trust
Immunity

So frankly I am not a huge fan of creating specific exemptions from good laws. Anti-Trust Immunity means that you are engaging in a practice that you freely admit is anti-Trust (and therefore against the law) yet you want to be exempt so you can engage in something that well is not exactly consumer friendly.

I prefer Black and White. Grey/Gray is not a good color combination.

At the moment there is a significant debate driven largely by Continental's shift from Skyteam to Star and by the expansion of the 3 big alliances. BA-AA-IB (that's BAAABI to regulars of this blog) is still out there. Now the BTC has thrown its voice in support of AA in this manner.

So let's see if I get this right. Several OneWorld airlines are requesting ATI so that they can combine their resources at LHR and across the Atlantic (in normal times among the most profitable routes on the planet), OK fair enough so far. But by combining them - they have a footprint that is at least bigger than all their competitors combined? The justification? the other ATI players have bigger footprints in their home markets. Following their logic this safeguards competition?

Sorry I just don't and cannot buy that argument.

Interestingly enough Air Transport World in their latest editorial penned by Perry Flint is voicing its objection to the EC proposal to make the ATI automatically reviewed at least every 3 years.

I really think that we need to have good competition. We need to have fair competition. I am against ATI. I hope that in future - there will be a clear formula that can emerge that will allow airlines to compete truly competitively without Government Intervention except for consumer protection.

Right now I don't see it. I guess I am more in the Richard Branson camp on this one.

This is going to be a battle that will run for some time yet. May the fairest of them all win out.

Cheers

LAN Loses Baggage Container To JAL 747

Or better known as LD2 meets outboard starboard engine

At LAX a passing JAL 747-400 pax aircraft sucked in a loose LAN owned LD1 lower deck container. It could have been a LD3 we cannot tell - LAN owns both types. The exact details are on Monday 11 May 2009, a metal baggage container - measuring approximately 5 feet by 5 feet by 4 feet - was sucked into the engine of a Japan Airlines Boeing 747 with 245 passengers from Los Angeles International Airport. The accident occurred about 1:30 p.m. when Flight 61 to Narita, Japan, pulled back from Gate 101 at the Tom Bradley International Terminal. Airport officials said the vacuum created by the air intake of the left outboard engine was so strong it pulled the empty container off a baggage cart that was either parked or driven too close to the aircraft. There were no injuries and other arrangements were made for the 245 passengers and 18 crew members

The result - a great day for Youtube: http://www.youtube.com/watch?v=picE8ZvknpA

EC Gets Tough On Air Ticket Pricing (Update - see at end)

The European Commission is on a mission to force airline tickets to be displayed to the consumer as clearly and as plainly as well as - er - paint. Thus the price offered is the price you pay. A collision course you might say with the airlines and their distributors who are trying to drive ancillary revenue from add-ons. Something that many airlines believe and are now demonstrating is actually saving their behinds.

The EC has a clear position and has enacted legislation to ensure that the conditions are clear and unambiguous. EC Vice President Antonio Tajani (ITALY), in charge of Transport said, "Applying full price transparency is an obligation under the air services regulation. It is a duty for airlines to impose high standards across the industry; it is our responsibility to ensure that all players respect the same rules. This is of first and foremost importance for the consumer who wants to compare prices across airlines and make a real choice."

Thanks to Professor Andrew in Saint Louis for this tip. Today (May 14th) the EC published is second report. There are several links to go to:

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/783&format=HTML&aged=0&language=EN&guiLanguage=en

For the first round of tables go here:
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/287&format=HTML&aged=0&language=EN&guiLanguage=en

So far they are not naming the bad people only the good ones or the ones "not yet in compliance".

Bottom line folks - the US could learn a thing or two about this form of consumer protection. You can be sure the Obama Administration and Jim Oberstar http://oberstar.house.gov/ are all over this one. Will we see a US bill of rights or a charter of the same sort WITH teeth? not likely at this stage.

However it is clear that if the airline play the ancillary revenue obfuscation game - it is inviting re-regulation. Be careful what you wish for!

Cheers

The EC's enforcement page was down when I wrote the first version of this post. Therefore you can now find the enforcement details updated here:

http://ec.europa.eu/consumers/enforcement/sweep/index_en.htm

Busy Week... Lots of Stories!

So this has been a busy few weeks. While I have been on the road - I have spent some time trying to understand the state of the travel "economy". There are some noticeable representative signs of the recession. Hotels have fewer staff. Whole floors have been shut off. Restaurants are noticeably less full. etc etc.

The big question for many remains are we there yet? There being the bottom of the curve. Even if we are "there" which a few people seem to believe - the next sequential question is what sort of recovery will we have and how long will it take to return to "normal" - whatever that is.

The general consensus seems to be that the general market is down around 12 points. Consistent with what I have been saying so far - this is the 15%. What we are seeing continues to confirm the position that the GDSs are suffering far worse than the overall market. This is due to the nature of the bulk of their business being dependent on the corporate market. Travelport's numbers this week are stark evidence of the depth of the downturn. Worldspan's numbers continue to plummet Galileo is not doing much better.

The retraction is affecting just about everyone. We do see some bright spots. Norwegian is a good example - they seem to be profiting from the re-trenchment of SAS. LAN is another example who is determined to face the recession by expanding. Despite some pretty awful numbers - Lufthansa seems determined to bulk up through acquisition of some smaller players in Europe.

So here are some other stories that have caught my eye and a few comments:


Ryanair continues its relentless push towards the automated airline. One major new charge - lose your automated boarding pass and you have to pay the equivalent of $55. To the relief of Americans coming to Europe, FR has announced that it will not be charging the fat tax - with a caveat. As soon as they figure out how to collect it without disrupting 25 minute turn arounds - then you can expect it to come back.

Air Jamaica has a new twist on the second bag price. Oh yes we make you pay and we dont guarantee delivery on this flight. Come back tomorrow was a headline in Travel Weekly. Not that JM's bag services have been anything to write home about of late!

Chris Rodrigues is relinquishing the CEO title to his deputy at Visit Britain. Looks like he wants a more political focus in the run up to the UK Olympics in 3 years.

ATM was great say the organizers. You know my opinion. It really was a lot less than last year. So far I have not seen official statistics other than the number of stands - I wonder of that quantity - how many of them were actually occupied.

Speaking of Dubai - this week's stupid vendor tricks award goes to FlyDubai.

Here is a snap shot of their announcements page.



As you can see - even though they dont start service until June they want to default the booking widget to today's date. Tsk Tsk. For a professional outfit like FZ, they (and their provider Radixx) should do better. Still I wish them all the best for their first flights that take off on June 1st. Air Arabia watch out - these guys are coming for your blood!

Also Emirates (no relation to FlyDubai) has concluded a deal with BT to consolidate their call centers into a single global comms entity. More power to them on this one - their 9 CCs and then various CTOs will now be linked by a new network provided by BT.

SITA announced one of the first deliverables in its next gen PSS - the Customer Journey CJ to replace the former passenger record we all know and love called the PNR. Best of luck to Jim Peters and his crew on this one.

And finally - latest to hold out the hand or more accurately point the nose into the stimulus trough is Sabre. They are raising dire warnings of hell fire and brimstone if the government doesnt do something to stimulate travel (and consequently improve Sabre's GDS bookings!).

"Brits Want It Warm" Says Skyscanner

Skyscanner like several other sites does these nice polls. I like the ones they do as they provide a nice little insight to the minds of the consumer from different perspectives.

Of course I would caution anyone in reading too much into such research. So they asked Britons why they travel. For the full results go here:

http://news.skyscanner.net/articles/2009/05/002355-warm-weather-wins-over-value-say-skyscanner-holidaymakers.html

Commenting on the results - Barry Smith one of the founders said “Our poll shows that Britons’ love of sun is still the most important driving force behind holiday location choice. Although the recession is influencing travel choices, escaping Britain’s gloomy climate is the most essential goal. Sunny countries that are non-euro such as Turkey and Croatia are likely to be especially popular this summer.”

Now here is the conundrum. Brits like many other nationalities in Europe have kept their wallets, purses, handbags and cash closed. Thus there has been far less advance booking this year. If the UK summer is going to be good then the chances for a late booking bonanza is not likely. The weather prognostication is just that - a hot British Summer. People are going to be staying at home and spending their money at B&Q and Homebase rather than Ryanair and Thomas Cook.

Look for the volume of special offers to pick up in the coming weeks.

Cheers

ATM and Dubai – A Perspective

I did say I would try and avoid doom and gloom stories- but I think that this is a story that should be told.

This week the Professor was in Dubai during Arabian Travel Mart. I use the opportunity to both catch up with clients, friends and even people who don’t fall into either of these categories. The marketplace is very subdued. There are grim faces everywhere. Rumours are flying of the doom and gloom variety. I can attest to several first hand observations of the depth of the collapse in Dubai. I do not use that word lightly. While there are some positive signs from Emirates of stable passenger numbers, EK is not immune from the same pressures that Legacy carriers such as BA and Delta are experiencing. The International Herald Tribune had an article May 8th 2009 on the impact of the biz travel downturn on SQ, BA and others. It is clearly a state of affairs that has astounded everyone by the depth and breadth of the reductions.

The ATM show itself was down in exhibitor volume. The halls that handled the property groups were actually closed. Throughout the show there were empty stand positions, something I do not recall from prior shows. I attended all 3 days and on no day did the attendance look anything like prior years. It was frankly very quiet, I had meetings at the coffee shop in the center of the halls and I could observe the traffic on both entrances – there was no rushing, no bunching . I am sure numbers must be down at least 20% probably a lot more. The building program exacerbated the problems of taxis and I am sure that this upset and frustrated many a show goer. I went out of my way to talk to hoteliers to get their perspectives. I was so taken aback by their war stories. Typical responses: “ we don’t know when we will be back to above 40% occupancy” and “I doubt we are even covering our opex let alone debt coverage.”

One night I went with some colleagues to the new Atlantis resort at the end of the first completed Palm. To say that it was quiet would be like saying a mortuary was a busy place. Rates are down universally. I spoke to several people who gave me first hand stories of deals they had received. Even the top hotels like the Jumeriah properties, The Fairmont and the Grand Hyatt all had evidence of heavy discounting.

The exodus of the expat community is also significant. While no hard numbers exist – I was again quite taken aback by the number of people I knew personally who had left or were leaving.

It is going to take a long time for normality to return. By normality – I mean reasonable yield and occupancy levels. Clearly Dubai has to do a lot to remarket itself and lower its costs. The Saudi traveler who is the most coveted customer these days has so many choices elsewhere that he needs to be courted and sold to rather than held at arms length.

New skills like selling rather than order taking will need to be learned.

Cheers

Stupid Vendor Tricks

It never ceases to amaze me how some suppliers treat their customers.

I most cases the customer is treated like an idiot. Or worse that he is given a useless offer that is just not deliverable,

Let me give you an example.

Avis… I rent them all the time. They tell me how wonderful I am and that they award me free rental weekends. So far I have NEVER been able to use them.

Now comes news of their latest offer. Rent for one week a premium car and you can have for 2 days a GPS for free. So of course we will all want to go through the hassle of returning the unit. And really we want to rent a unit for the whole 5 other days….

Hello people!!!

Note to vendors, treat your users with respect and they will respond to you. And ALWAYS remember Newton’s second law:

To every action there is an equal and opposite REACTION.

Cheers

Capacity continues to fall – dramatically – Are we there yet?

I have just spent nearly a week in the UK and have been looking at the current situation of the market. I think we all know that premium traffic is just a disaster. Last week British Airways announced a 2:1 sale on business class. This on top of their free seats for SMEs.

Capacity continues to fall globally. On this scale, the world's airlines have cut 6% flights for April 2009 Y/Y with a 3% drop in seat capacity. According to the latest statistics from OAG, frequencies and capacity within the UK for April are down year on year by 13% and 14% respectively, the last time the April figures for the UK were lower than this was in 2001. International services to and from the UK are down by 10%. The LCC sector is not immune either with a 12% reduction in capacity. In the USA another metric is the reduction of the number of routes. In one year according to anna aero the number has dropped domestically by 300.

So have we reached the bottom yet? Sorry – I don’t think so. With a bumper summer being promised for the UK – I don’t see people opening their wallets for flights. Instead they are going to be spending it in their back gardens and working on some DIY. This past April – while not the warmest on record was the 10th warmest April ever recorded. People are not going to be too keen to travel….

Of course if this week’s Bank Holiday is anything to go by – then we know that every bank Holiday this summer will be guaranteed to rain!

Cheers

GDSs Glorify Their Fare Performance! But Can You Trust Them?

You can tell I have been contemplating the issue of Trust.

As some of you may know there is much debate around the “who gets the lowest fare really” question.
Sabre is touting its Topaz based study. Now it has even gone to the expense of creating a website devoted to the achievements.

I make no judgment of the study or its methodology. However in our private studies – we can assure you that there are differences – frequently significant – between the results of the GDSs, the results of the OTAs and the results of the Airline.com sites. The results vary significantly market by market. (And don't get me started on the meta-search companies). Now we also see that as caching is being used more frequently we see difference that are frequently driven by the caching. The “look in one place book in another” only works when it comes with a performance guarantee from the inventory owner. This has been one of my gripes about meta searches. Quality measurements in the performance area is always going to be interesting and probably never coming. Obfuscation is still the order of the day. But I do think there is a glimmer of hope in that less and less people are relying on the GDS as the source of the fares and as a result (particularly outside North America) the issue of a trusted fare is being understood.

Inside the GDS the guarantee of a seat and fare via the PCA (participating carrier agreement) is passed onto the travel intermediary through the subscriber contract. Now that the GDS infrastructure cannot handle the sheer volume of searches on an economic basis – the current answer is to use Cached fares+availability such as via ITA’s engine. However by the time it gets handed off to another source for booking the cache may be out of date or just plain wrong. In the GDS world this is handled somewhat. But in the new world of open access this commercial coverage is still not quite there yet. However it will have to be.

Anyone willing to forward a solution to this problem and its very complex set of issues? (and no I am not accepting that everyone has to use the GDS as the answer).

Answers on a post card or the back of an envelope please….

Cheers

So Who Do You Trust?

In the current economic environment – everyone has to work harder for their daily bread. I dont think there are many people in the Travel Industry who would doubt that statement. Even Prince Waleed (Kingdom Holdings) is down quite a lot. The Evening Standard is even speculating that he may have to cancel his order for the second Private Airbus A380.

So against this backdrop – it is probably a good idea to ask “who do you trust?” As Media goes through a radical change this is a very pertinent question. eMarketer has just published a little piece from TNS Media Intelligence. In this the online players should take heart that their trust levels seem to be pretty high. However there are some really dark clouds in the study.

There is some very interesting data of differences in countries – so its well worth a click on over to this link to see it:

http://www.emarketer.com/Article.aspx?R=1007067

However – some bad news for people like the Professor. Private Blogs are trusted among the least. The most trusting are the Italians at a measly 14%. Everyone else is well below 10%. Makes you want to cry doesn’t it….

Sob Sob

Delta Introduces - ehemmm - Commissions

Say WHAT????

Yes... as a "trial" DL introduces 10% commission... from NYC area to LATAM

And who said generosity is dead?

Cheers

ATM 2009 - Quiet and Very Subdued

So the 2009 Arabian Travel Mart opened today.

Very quiet and very subdued. I participated in many events and spoke to a lot of people who are attending - many for the regular n'th time.

General perception.

UGH!

it is bad.

I can honestly say the overall management was its usual high standard - but the level of attendees was noticeably down.

No crowds at the reception/entrance.

The new taxi process however really sucks.

Cheers

The Icelandic Raiders Vanquished

What a difference a year makes. Just 2 years ago the Icelanders were tackling stakes in such companies as Easyjet and taking a large stake in American Airlines. Now look how far they have come. The last of the raiders is FONS. And this story (roughly translated from Norwegian) tells the story of the bankruptcy filing. Thanks to Professor Kai for this one.

"The district court of Reykjavik approved today to take Fons, holding company of Palmi Haraldsson and Johannes Kristinsson into bankruptcy procedure. The company owns Securitas and Plastprent. Palmi says this is a shock. The company has been in a better position than many other companies.

Fons has been a major company in the Icelandic economy for the past years and amongst other owned a large part in FL Group. With Securitas and Plastprent owns Fons a part of the English toy stores Hamleys and the Nordic travel agency Ticket.

"This is of course an enormous shock," says Palmi but does not want to comment further on the position of the company. The request had been made to put the copany into bankruptcy which the district court approved today. "

This is sad in my view. We need entrepreneurial talent to inject fresh blood into our industry.

Plea To the Dutch: Please Don't Change

The terrible events of April 30th this past week are yet another example of the power of the few (in this case one) to disrupt the lives of the many or indeed the rest.

As with other acts of terrorism - it is always about the ability of someone to destroy the values of the masses to their own selfish ends.

Queen's Day in the Netherlands is a wonderful and joyous occasion that has been existed since 1885. My plea is don't change. Celebrate that which is your unique culture and freedom. To change would be to acknowledge that this deranged person was right and then we collectively all lose. If it gets changed and things are not as they were - then any other like-minded person will do the same thing.

Don't give in and don't change.

Thanks for reading

Cheers

More Pig Flu Resources

This one from Kevin and his team over at BTC:

http://www.netvibes.com/btc#Flu

Cheers

Is A Pax Bill Of Rights Needed?

There are arguments both for and against obviously.

In the European Community and other markets there is a clear set of responsibilities on the airlines.

Just in case anyone is interested - I actually do have an axe to grind on this subject.

But it seems that my lot - which I am happy to share at a future time had nothing on the plight of DL510 on April 10th. In that case the elements conspired against the airline and the passengers were innocent victims. Clearly DL could have done a better job than they did. For a complete chapter and verse on the subject check out today (Tuesday's) Wall Street Journal on the subject.

http://online.wsj.com/article/SB124087571331061425.html?mod=djemseat

In my case - DL had no excuse. The just screwed up. Plain and Simple and of course now they refuse to admit it.

In Europe - as I have reported before there is even a guy who checks the validity of the airlines story about so called "Weather" delays.

Bottom line.

You don't have to take it... and there are already several courses of redress you can take.

And to Delta - I am still waiting for an apology from you. But then again I am still flying you so go figure... may be I am brain damaged by too much flying.

Cheers

Professor On The Road Next 2 Weeks

I have a road trip from hell... so bear with me - it will be quiet from me.

We have a lot coming down soon - there is the Swine Flu panic, the Q1 reports are still trickling in, and I am sure there will be more. Boeing might actually be doing something with the 787.

Keep your heads above water and paddle like crazy!

Cheers

Swine Flu - More an "Infodemic" - USTA

Here is the text of the mail from Roger Dow of US TIA. I think he is being wise.

Dear Travel Colleagues:

As I'm sure you are aware, the swine flu situation is today's lead story in every paper, the morning news shows and on every radio station. The possibility of travel restrictions is already being talked about by U.S. officials and the EU and a few other countries are already discouraging travel to Mexico and the United States. The U.S. Travel Association will take a lead role in addressing this challenge.

Just a few short years ago, the SARS and avian flu pandemics created an "infodemic" with media hysteria threatening air travel, lodging and meetings. We have learned important lessons from those challenges and must apply them in an effective, coordinated manner to this situation. While we in no way want to minimize the seriousness of the threat, it is important that our industry be vigilant about news activity and aggressively report the facts as the situation develops. As we reminded people during previous health scares, it's important to "be prepared, but not panicked."

I will be hosting a conference call at 4:30 pm today with other travel associations to discuss the travel community response. I will keep you informed as the situation develops.
Sincerely,

Roger Dow
President and CEO
U.S. Travel Association

UK's Rich List For Travel

OK Have a heart for the UK's rich list - they lost a chunk of money.

Just for your edification I publish the list of "Travel" related folks from the Rich List.

For the full list go here:

http://business.timesonline.co.uk/tol/business/specials/rich_list/rich_list_search/?l=17

I define the category as Aviation Travel and Tourism - here is the list broken into 100ths. Also for your edification I have put their current or source of their Travel related fortunes beside them. Forgive me for taking a few liberties with the list. Some on the list really are not from or in the UK but that was not my call - the Sunday Times put them in. Check out your favorite person!

28th, Swire family (Cathay Pacific) £1.3bn; 32nd, Sir Richard Branson (Virgin Group) £1.2bn; 49th, Roger and Peter De Haan (Saga/Grey Haired Folks) £840m; 81st, Sir Stelios Haji-Ioannou and family (easyJet/easyGroup) £544m;

110th, Brian Souter and Ann Gloag (Stagecoach) £473m; 128th, the Walker family (Flybe) £400m; =156th, Sir Peter Rigby (aviation, hotels) £330m; =156th, Jasminder Singh and family (Edwardian Group hotels) £330m;

204th, Andrew Davis (von Essen and Premiair) £290m; 207th, Sir Michael Bishop (BMI) £280m; 235th, Peter Harris and family (Bourne Leisure) £245m; 247th, John Cook and family (Bourne Leisure) £225m; 264th, John Woodward (caravan parks); £212m; 268th, Mike Gooley (Trailfinders) £205m; =274th, David Babai (Gullivers Travel Associates - see also =694) £200m; 296th Geoffrey Kent (Abercrombie & Kent) £193m;

307th, Naresh Goyal (Jet Airways) £182m; =309th, Firoz Kassam (hotels) £180m; =309th, Harpal Matharu and family (hotels) £180m; 388th, Surinder Arora and family (hotels) £140m;

402nd, Tim and Kit Kemp (hotels) £134m; 406th, David Crossland and family (Airtours and TravelJigsaw) £130m;

540th, Guy and Julia Hands (hotels) £100m;

=657th, David Allen (caravan parks) £85m; =675th, Rahul and Rita Sharma (Best at Travel) £85m; =694th, Edward Faith and family (Gullivers Travel Associates) £80m; =694th, Uzi Kattan (Gullivers Travel Associates) £80m; =694th, Norman family (Condor Ferries) £80m; =694th, Peter Stephens (Lotus Group travel and conferences) £80m;

=863rd, Dinesh Dhamija (ebookers) £65m; =924th, Kenneth Townsley (Gold Medal Travel) £60m;

=986th, Stephen Bond (aviation) £55m.
________________________________________

Etailing Grows BUT....

Emarketer is reporting studies from Forrester and Citi group that etailing is the bright spot in the current US economy. "According to a survey by Forrester Research and Shop.org, US online retail sales rose an average of 11% in the first three months of 2009."

Go here for the study outline: http://www.emarketer.com/Article.aspx?R=1007058

However there is an ominous sign in the numbers for travel. Pure etailers are performing significantly worse than hybrid players. And not just by a small statistical variation. The numbers are pretty significant.

With airlines being able to stabilize their Q1 numbers but with a radically reduced yield - this bodes ill for the pure web based OTAs.

I think we should brace ourselves for some bad Q1 numbers from the big 4.

Long term - the move to a multi-channel environment is the direction of the market. That has significant implications for how the technology and the strategy of both suppliers and intermediaries play in the market. I will say again. Emerging from the other side of the recession will be a whole different world. Species evolution!!!

Cheers

UK To Up APD Levy

Rather than abolishing the APD levy the UK is raising it to GBP3.00 per pax. In the big picture scheme of things this is not going to cause holiday makers to change their behavior. However something needs to be done about the whole process of the a guarantee. Whether this is a head tax or a percentage tax will challenge even the best mathematician.

However I believe that the APD itself is flawed and a more generalist approach should be considered. Finding a solution to the LCCs products and including them along with accommodation only providers will be a challenge.

In the end - perhaps we should just accept that it is caveat emptor.

Cheers

A Tweeter Not, Maketh A Luddite?

I am still struggling with the concept of Twitter on a broader basis. I originally thought I was alone but I have found quite a few Professors out there who share the same view. I don't think it is an age thing either.

My big concern is that we are about to be overwhelmed by the amount of digital "stuff" that will be generated.


Gerry McGovern's editorial today about adopting different writing styles for web vs. the printed form applies even more pertinently to the Twitter form.

I went through today's Sunday paper and counted the number of mentions of Twitter in the news sections of the paper. (including the ads in those sections). I was astounded when it exceeded 300. I gave up after that.

What I realized is that there is a lack of nuance. I (being me or all of us) cannot really take a subtle approach to the issue of Twittering. I have binary choice - opt in or be left out. As Professor Cloud said in a recent conversation - are we becoming a generation of people who adopt technology because we are afraid of being left behind or even worse being left out if we don't adopt said technology? This is a frightening concept to me who grew up where the notion of an Orwellian world was something to fear.

Little did we know that we would adopt the very framework of this world so easily and out children think nothing of it. We have become de-sensitized to the adoption of the technology that has to power to cause our minds to become - perhaps something we don't want to be.

Rick Evans' lyrics were ringing in my ears today. I think 2525 is going to happen a lot sooner than any of us think. In my mind's eye the world of technology gone just a tad awry as personified in Gibson's books is here and now, not the slightly ahead of now that he writes about.

No I am not a luddite. I have been a huge supporter and manager of technology, I intend remaining so - but not at any price. I do think its healthy to challenge the philosophical notion of the concept of the technology such as Twitter.

Does the balance being beneficial mean that it should be allowed?
Who makes the rules?
Should there be rules?
What is the loss? IE What are we giving up if we take on and adopt a certain technology?

I hope that we all can question technology and remember that we need to remain in control as humans. Ceding ultimate power to a machine or a technology was something I never thought possible and the stuff of science fiction. The spread and ease of adoption of Twitter has given me cause to pause and reflect whether I still believe that.

Something for everyone to consider.

Good night and Good luck.

Here are some references.

Zager and Evans Lyrics for 2525 can be found here:
http://www.metrolyrics.com/in-the-year-2525-lyrics-zager-and-evans.html

Gerry McGovern's blog and comments can be found here:
http://www.gerrymcgovern.com/nt/2009/nt-2009-04-27-traditional-writing.htm

William Gibson's blog and website is here:
http://www.williamgibsonbooks.com/

And of course in my view one of the best places to get knowledge is the library.
Take a trip - sign up and be a part of your library. It will amaze you!
For the Internet Public Library go here:
http://www.ipl.org/

Swine Flu - US Raises State of Alert

So I dont think this is a time to panic - but I do suggest that people are reminded of good practice in dealing with the outbreak of Swine Flu.

Easy ways to protect against infection
Little can be done to prevent an outbreak of flu from spreading, health experts caution, but they say common sense measures can help individuals protect themselves. Practice the following:
- Wash your hands frequently
- Cover your cough or your sneeze
- Use alcohol-based gel or foam hand sanitizers
- If you have flu-like symptoms, stay away from work or public transportation
- Social distancing. Stay away from people who might be infected

Here are some resources you might be interested in:

http://www.who.int/csr/disease/swineflu/en/index.html

http://www.cdc.gov/swineflu/

And remember - TAKE YOUR VITAMINS....

Cheers

Pet Airways Immortalized on NPR

I have written about Pet Airways before. Now news comes from Professor Stuart (he in Palo Alto although he is really Irish), that Pet Airways has achieved immortal fame by being mentioned on NPR's Show

"Wait Wait Don't Tell Me."

So just for fun - I went to look to see if Pet Airways is listed on Facebook. Wow - lots of friends there and they are quite a vocal group.

Sign up as a friend if you wish:

http://www.facebook.com/pages/Pet-Airways/36484447069

I think I am keeping my dog at home this year.

Cheers

Next CEO of Aer Lingus?

I am not a betting man. But I enjoy watching others take a flutter.

I do think its rather funny that we have people betting on the next CEO of Aer Lingus.

Go to Paddy's for the absolute latest odds:

http://www.paddypower.com/bet?action=go_type&category=SPECIALS&disp_cat_id=&ev_class_id=45&ev_type_id=11365

I think this is just a riot. Who ever is doing the handicapping needs their heads examined.




Cheers