Great Quotes For The Weekend

I found this one... it really just oozes symbolism.

I have come to like the musings of one Mr Tony Tyler of CX. While he may be the Chicken Little of the Airline industry at the moment (or possibly vying with Giovanni Bisignani for that title), he does have a certain turn of phrase.

So here is one of his recent better ones:

Tony Tyler CEO: Cathay Pacific: "We keep waiting for signs of the green shoots of recovery...When we look at the rice-paddy we see only one or two green shoots rising out of the watery mud. Certainly not enough to fill a rice bowl! The very best we can say is that things have stopped getting worse, but a real and sustained business upswing still seems like a distant dream,"

In truth the situation in Asia is far worse than elsewhere at the moment. The double whammy of the GFC and Swine Flu have really hit HKG and CX very hard.

Cheers

World Peace Day 2009

Let's all hope that peace will reign in our life times.

Think Peace, Always.

Cheers

The Professor

How To Become Popular - Twitter Style

Far be it for me to tell you what to do... but in the world of virtual Social Networks where your "friends" can be anywhere - the human notion of being popular seems to work just as well in the web world as the real world.

Here is some compelling research you might be interested in from rapleaf as put out on Techcrunch.

All I can say is... there is the old saying - empty vessels make the most noise.

I think it applies on the web too...

Cheers

USAF Tanker - Depoliticize The Decision

I haven't commented on the Tanker Wars in a while. However with the impending publication of the latest RFP - perhaps it is time to rethink the process.

The Tanker battle has always been a political hot potato. it has been fraught with criminal misdealings and almost constant wrangling

So I have a suggestion for the august people in the US Dept. of Defense and the Congress.

Buy both the A330 and the 767.

SAY WHAT???

Hear me out here - my reasoning is not that crazy. Let's consider this. They are not similar aircraft. The real question is the best fit for the role. So if the Air Force acquires both aircraft in limited numbers now on a lease basis - lets say a fleet of 25 Aircraft each, they could both be evaluated fairly and the USAF would get to start replacing the 600+ aging not fit for much else than the scrap heap KC135s.

Also I think the powers that be in the purchasing office should buy the COTS version. Both are currently deployed in different places and therefore they meet the NATO standard for compatibility. Thus there should be no reason not to do anything else but fly the things. Judging by recent history of US military aircraft purchases - during any life time the aircraft has been so modified from its original configuration that all the likely mods can either by developed with production experience or (as they would be leased) they could be sent back to the manufacturer as being unsuitable. The cost inefficiency of buying 2 aircraft vs one would be more than outweighed by the other cost based advantages. (If you don't believe me just ask the airlines that operate mixed Boeing and Airbus Fleets).

In my view the Air Force would get its capability earlier. The manufacturers could start delivering product and the procurement process could be one heck of a lot simpler and faster. PLUS by taking this path the politicos would be forced to make an assessment based on operational FACT as opposed to political speculation.

End result - a fleet of aircraft doing its job earlier. A cheaper product to buy. Competitive pressures maintained to keep pricing down. More flexibility in deployments. Lower risk for the user community. More resources for the hard pressed men and women who serve in the US Armed forces.

Contrast this with the continued wrangling over which aircraft is POTENTIALLY best. The constant messing with the spec. And a lot of hot air being expended in various parts of the country.

Will this happen? Nah... that's WAY too sensible a solution.

Stop The Noise Please I Wanna Get Off

Tim Hughes excellent blog (The Boot) had an interesting take on Twitter et al. This for me raises the issue of how well we are humans are coping with the value of Social Networking.

I think that we are all suffering from the effect of too much noise. I often wonder if we are actually communicating too much. I believe we spend more time talking that we did say 15 years ago before cell phones became ubiquitous. So email made us write more. Actually the "one to many" capabilities of today's communication tools makes us READ more than we had to - and not necessarily quality reading matter as witnessed by the fall off in readership of newspapers.

I still have the fundamental problem in that from my perspective everyone’s comments regarding Social Media are focused on either the macro/global scale value or an individual binary interaction possibility (I could explain that but I think you get the idea).

On the Global scale everyone seems to be excited about Twitter as a way of generating noise. And that is the fundamental problem . There is TOO MUCH GLOBAL NOISE. I have been tracking my emails and FB comments and frankly I was drowning before in email alone – now I am just underwater permanently. So I am busy canceling email subscriptions and Tweets that I used to follow as being of little or no value to my life long term or worse I have to edit out the things that I used to like in favor of keeping up with things that must be followed (You WILL obey!)

I have turned off so many things that frankly I used to enjoy because now I have to be careful about the physical amount of time taken to read and absorb things. So my concern is multiple.


Allow me to share my thoughts on the fundamental issues that these services and Social Networking tools generate and then see if you are in agreement

1. There is no quality measurement tool. I have no way of knowing whether the info reaching me from someone I follow is germane, in context or just plain old drivel.

2. Any reasonable level of responsibility in people's comments is sorely lacking.

3. The battle for mind share by Twitter, Facebook, Google et al (including Linked-in etc etc) is turning us into victims - innocent wounded non-combatants. I really didn't sign up with Facebook to be spammed, but I am and I am sure that most other people are too. The sheer amount of unnecessary stuff one has to filter out before you reach the nuggets is somewhat challenging.

4. The process of unsubscribing and turning things off is pretty hard and not always effective. The digital footprints that these social networks leave behind with out of date information is scary.

5. The inconsistent time lag between a change one might make and the update reaching all the parts connected is both scary and to some extent dangerous.

6. The lack of ability to fix something that could be wrong...

7. Social Creep! I want to have just the information and relationships that I originally asked for - not all this other creep based noise that arrives in as extraneous digital junk that I have to sweep away.

8. Why is the onus on me to manage it and deal with the junk?

So I can see why some of the people I know are becoming Luddites. I can identify 4 sub types:

Some are the "I don't care any more so I just wont play the game" type (aka the Browned Off Luddite)

Some are the "I hate you and will deliberately work against the system and create havoc destroying the premise and the assumptions of the service (aka the Terrorist Luddite)

Some are the "Help there is nothing I can do" type (aka the Deer Luddite)

And finally there is the "We're not going to take it any more" (aka the Tommy Luddite)

The way I see the problem is its the syndrome of "because it's there". However does just because you can mean that you must either push the digital crap or you must pull it?

If you got this far then clearly I have made an impression on you. But if not then I am just contributing to the noise myself!

OK so now where are my earplugs...........

Extra Extra: Bumping Has Increased! Passenger Satisfaction Fails to Soar Again.

Perhaps it’s a little unfair to compare the 1970s and 80s Air travel with today’s luxurious and vastly superior (sic) customer serviced product, but it seems to have come to the attention of the US Dept of Transportation that bumping has increased. So says the WSJ. The Wall Street Journal I am sure this comes as new news to many of the Professor’s readers. Perhaps even more shocking is that the airlines are having a harder time in compensating passengers and getting people to give up their seats in an oversold situation.

By now every frequent flyer and the vast majority of everyone else knows that if you don’t have a seat assignment – then your chances of getting bumped are now pretty high. Airlines conversely know that unless they can allocate a seat assignment a passenger is highly unlikely to confirm the booking.

Against this backdrop and that of the “Imprisoned Passengers” of recent fame – the US Congress is still considering whether or not to legislate. However this is the same group of folks (Congress that is) that has once again deferred addressing the issue of consolidation when considering competition amongst airlines.

You have to wonder if the Dept. of Transportation is actually asleep at the switch or the supposed oversight committee in Congress is paying attention. So far the US Dept. of Justice is being far more aggressive in cases of airline related service and competition issues. The recent spat over the CO application to Star Alliance is a good example. Yes once again deferred reviewing Airline Competition practices and set no date for reconsidering it. Thus ensuring that anything coming up in the near future will be assessed (or rather ignored) since there will be no context.

Last Call for Voicing Your Opinion on Pax Rights

Here is the agenda for next week’s conference in Washington DC on Passenger rights.

The Professor will be commenting after the event. Too bad I cannot get to DC due to a conflicting schedule

Cheers

MEDIA ALERT
September 17, 2009
CONTACTS
BTC || Kevin Mitchell | 610-341-1850 | mitchell@BusinessTravelCoalition.com
FlyersRights.org || Kate Hanni | 707-337-0328 | kate@flyersrights.org

Airline Passengers Conduct Their Own Hearing in Congress
WHAT
Air Passenger Rights Stakeholder Hearing to examine legislative proposals to provide passengers with the option to deplane after 3 hours of extended tarmac delay.

VENUE
• Tuesday, September 22, 2009
• 9:00am
• Room 2200 Rayburn House Office Building
ACCESS
• Only standing-room tickets left. Participants can secure remaining tickets at http://stakeholderhearing.eventbrite.com
• Tickets can be printed out from EventBrite site and presented at the hearing for expedited seating.
• Those registered, but without tickets, may pick up their tickets outside the hearing room.
• No walk-ins will be permitted. (except for press and Congressional staff)
CONFIRMED MEDIA OUTLETS COVERING THE HEARING
• Aviation Daily
• Bloomberg News
• Business Travel News
• Conde Nast Traveler
• Consumer Reports
• Kiplinger
• The Associated Press
• The New York Times
• The Philadelphia Inquirer
• The Wall Street Journal
• Travel Technology Update
• Travel Weekly
AGENDA
Welcome
Kevin Mitchell, Chairman, Business Travel Coalition
Opening Comments
Kate Hanni, Executive Director, FlyersRights.org
Hearing genesis, purpose, objectives, sponsors
Airline Industry Passenger Service
Robert L. Crandall, Former Chairman and CEO, American Airlines
Travel Industry Views of Congressional Intervention
Kevin Mitchell, Chairman, Business Travel Coalition
Keynote Address
Senator Barbara Boxer (D-CA)
Hearing Proceedings
Jerome Greer Chandler,Veteran and Award-Winning Aviation Journalist
Review process; Introduce Questioners and Witnesses
Questioners
Link Christin, Adjunct Professor of Law, William Mitchell College of Law
Luke Thomas, Founder, LTVenntures; CEO, The Vennture Group
Shawn O’Brien, MD, St. Mary's Hospital Medical Center
Leslie Yourra, Business Owner and Mother
Dave Carroll, Songwriter / Performing Artist
Jay Boehmer, Senior Editor, Business Travel News
Colin Tooze, Vice President, Government Affairs, American Society of Travel Agents
Jennifer Michels, Deputy Editor, Aviation Daily
Shane Downey, Government Relations Manager, National Business Travel Association
William McGee, Contributor, Consumer Reports
Witnesses
Scott Nason, Aviation and Travel Industry Consultant, SDN TT&H Consulting, LLC
Dr. Amy Cohn, Associate Professor of Industrial and Operations Engineering, University of Michigan
George F. Doughty, Executive Director, Lehigh Northampton Airport Authority
James M. Crites, Executive Vice President of Operations, Dallas/Fort Worth International Airport
Kate Hanni, Executive Director, FlyersRights.org
Kevin Mitchell, Chairman, Business Travel Coalition

Webjet Acquires FareCrawler - US Bound

Marking another foreign attack at the large US OTA market - Webjet has announced its intention to come to the US through the acquisition of FareCrawler.com and associated brands.

Joining CheapFlights (UK based) in the market for the second tier of players - there is clearly plenty of business to go around. Initially this is more likely to make news at the home market (Webjet is an Australian based company) than in the US. However the bringing of consolidator fares to the online space is a well accepted premise in Europe and Asia/Pac but not so in the US OTA market.

It is not clear if Webjet will set up its own fulfillment organization or continue to use Picasso Travel who currently fulfills for Farecrawler.

Cheers

The Slashing Season II

Over the past few days more job losses have been announced at several airlines.

Uncharacteristically the latest news comes from 2 airlines not normally associated with layoffs.

Aeroflot and JAL

However between the two of them 9000 jobs will be before the end of the year.

There will be more.

Cheers

Cross Border Ticketing – The Final Frontier?

It is one of life’s great mysteries. You can do anything technically on the web, but political and commercial constraints prevent access to products across borders.
Recently the Wall Street Journal did an analysis on the countries of Middle East and Asia looking at which countries did the most internet filtering and the levels of penetration in those markets. Suffice to say there is a lot of government web filtering going on in many markets. The well publicized issue of Google enabling access to information to at least one government is probably the tip of the iceberg of how governments wish to choose to manage their subjects. This is not a good sign.

But in our (travel) business there is too a specialized form of commercial constraint by the powers that be. Some of the reasons are admirable some are not. Protecting the innocent and the weak should be a goal for all. Allowing the global mega brands to dominate all markets is something that should be of concern. However the one that somewhat gets me is the issue of Cross Border ticketing. Now comes evidence that this is not a theoretical issue but a growing problem for companies trying to constrain their products.

I think there is a definite underlying belief that airlines do not want users to know their true pricing. Transparency is a complete anathema to the sale of a legacy airline product. The hoops through which carriers make the consumer jump has contributed significantly to both the cost and complexity of the airline based product. Is this a good thing or a bad thing? Carriers will probably jump up and down and say it’s a good thing. Consumers will beg to differ.

According to Forrester, more than a third of all European consumers online have purchased something cross border. Given the difficulty of doing so in Travel probably constrains the number in Travel below the average although I have no direct evidence. Targeting The European Cross-Border Buyer is a paper worth a read.

The European Commission has actually banned the practice of any commercial constraint of purchase in the single European market. However getting an IATA license to issue a pan European ticket is still not a even a possibility more than 10 years after the major expansion of the market. Theoretical yes – actually – definitely not

I do believe that over time – there will be a lessening of the practice. The airline based obfuscation of pricing will have to be simplified. If there is one lesson to be learned from the recent sharp downturn in the global economy – you need to be able to react much more quickly. If you think about it, not allowing cross border electronic ticketing is – well rather silly.

Cheers

Southwest to Europe, Ryanair to USA – LCCs Spread Wings

These days it seems that Southwest has started to copy Ryanair more and more.

First it introduces priority boarding. Then it starts charging for extras. Now it seems to be following the mouth of Michael O’Leary by announcing that Southwest Airlines plans to open international routes to Europe and South America, although so far there is "no timetable" for the move, Lee Lipton Director-Network Strategic Planning has told this publically at the Routes 09 Conference just ended in PEK. Ryanair is more than a little famous for its CEO describing some of the - er amenities - on the long haul flights he has proposed.

The interesting thing will be a view of what the travel experience will be like. As for the equipment, WN has had a Transatlantic capable aircraft for many years. However none of its 737-700s are equipped for ETOPS. With big and mid size twins regularly serving the Atlantic and Latam markets this should not be a stretch. 737-700Ers and 737-900ERs are already plying their wares in markets around the world and of course light loaded BBJs have this capability as indeed does Airbus ACJs although today no Airbus narrow body is currently flying transatlantic commercially in ETOPS configuration (watch for someone to prove me wrong).

The launch of Air Asia X in 2008 has shown that irregular schedules integrated into a regular operation can work quite nicely thank you. One thing you can be sure of… this has sent network planners scurrying for their slide rules and laptops.

Cheers

RIP The World

Having flown in and out of DXB many times at day and at night - I used to marvel at the creation of the various projects in the Gulf. However knowing a little about the topography of the Gulf, I really worried about the impact on the environment - both on the destination of the build and the original source of the sand. This is a major ecological change.

Now this most spectacular project of Man has bitten the dust. A stark reality of the real world not quite living up to the hype.

The Times (of London) was not so sanguine - it savaged the folly of the project.

While it is sad to see what was arguably one of the most interesting of all projects - it is definitely a lesson on the perils of going beyond the boundaries.

All quite sad recently.

Cheers

Warning... Facebook is Forever - v3.0

I love Microsoft Outlook. Like many people I live in it - it really does help run my life.

Also like many people I have a page on Facebook.

For some time now Facebook has been making access to the pages open. I doubt that many people have been thinking about this. However perhaps you should. Whatever is on your Facebook public profile page or if you have set you account to the default open - then you can have a picture or comments that you might not necessarily thought was viewable outside of Facebook. Think again.

The line between a closed user group and open social networks is now blurring rapidly. The concept of a differentiation between your "true social" and your "extended social" network is no longer totally in your control when you commit to technology such as Facebook. I have commented that many of the open apps out there are building links to the various social network tools like Twitter, Facebook, MySpace, Linked-In etc. There is a battle going on between these players for mind share and we are going to be collateral victims whether we like it or not. Let me give you a specific example - there are others - but this one scares the living daylights out of me!!!

I am always trying to look for new tools to improve my productivity. I drown in email as I know many others do. So I found a great tool, I have been using it for about a year now - xobni. That's inbox spelled backwards. Its a great tool... but...
there is a catch. They mine data from the social network accounts and show the data on them.

Well a warning they are using the open access links to access the data on your Facebook. At first it was just the image. Well now it has gone deeper as the access into your social network goes viral.

So if your picture or latest comments on Facebook happen to be of a salacious nature - then it will appear in the image box to the right. More so its conceivable that when your job interview email arrives on the desk of XYZ Corp for the job of newest hot shot of Client relations it will also bring up other data. Also it is quite conceivable that there was a relationship between a third party that you both know (for example the chap who got you that interview) who just happened to be having an affair with the same person you are having an interview with the relationship will show up... OK so a little far fetched but the possibility has been there for a while and is now very real. Oh yes and by the way - I pulled a few things off my Facebook as a result. I think I am going to edit some of my "network" out.... Also I think I am a little late to the party on this one. I did a search using variants of "Where does Facebook Appear" and there is a lot of instances to give you sleepless nights.

So once again - you have been warned. Facebook is forever...

Cheers

NBTA joint project with Farelogix - Your Input?

Are you an NBTA member? Then read on.

This is an email that has gone out to the organization. You are encouraged to participate if you are a member. And if you are not... then it still might be interesting....

cheers

NOTE THIS IS NOT A SOLICITATION. It is purely of interest.

Text of email follows:

Dear Member,

‘Open for Business Travel’ is a proposed initiative to build and deliver the travel industry’s first Open-Source, ‘No-Frills/Low-Cost’ Corporate Booking Solution. Under the open source model, anyone can have access to software source code and corresponding rights to use, redistribute and/or customize the software. If successful, ‘Open for Business Travel’ has the potential to be a landmark travel industry community project directly benefiting all members in the travel supply chain and across NBTA membership – buyers, sellers, TMCs, suppliers, vendors, and technology companies.

So far, industry interest in this project has been high, however, the project concept needs to be validated, through an assessment of its likelihood of success, and the general interest among the corporate travel buyer community. Please take a minute to complete this brief online questionnaire:

In order to participate, you may either:
1. Click on this link

or
2. Copy-paste the entire following link between quote marks (NOT including the quote marks) in a web browser
" http://research.zarca.com/k/SsUPPUsQTTsPsPsP "

Thank you for your participation.
Regards,
NBTA
________________________________________

So A Quiz - Which EU Based Flag Carrier Is Weakest in Its Home Market

So let me be specific.

Which European based airline that is a legacy/flag carrier is weakest in its home market? For many years this used to be KLM.

So lets use the metrics that we know and love - I will cheat and use the share of scheduled flights. This means that there is a considerable amount of capacity that is not included in our search - but lets press on.

Lets start with the 5 top markets to simplify matters:

These are for originating traffic:

UK
Germany
Spain
France
Italy.

1. Lets now look at which airlines enjoy a dominant position in that market - IE 50% of total capacity. Answer? Just one - Air France (excluding KLM).
2. Now lets look at which Flag carriers are bigger than their low cost rivals. Answer all but the UK where BA is now relegated to second place behind Ryanair. Indeed at just 17% it is the lowest market share of any airline.
3. Where do all LCCs form bigger than Legacy airlines? Add Spain and Italy although Spain doesn't really count because New Vueling is mostly controlled by Iberia.

Still this is an interesting trend!!!

If we look at the next tier of markets (12 in all) then the numbers have the same characteristics, so for the following markets:

Norway
Greece
Netherlands
Switzerland
Sweden
Portugal
Ireland
Austria
Finland
Belgium
Denmark
Poland

1. Of Flag carriers only one has a Flag Carrier rate higher than 50% (Finland)
2. Countries where Flag Carrier is smaller than one LCC alone (Ireland - Ryanair, Greece - Aegean, Norway - Norwegian, Poland - Wizz)
3. Countries where Flag Carrier is smaller than combined LCCs (above plus Sweden)

Fun to think of this right? Oh yes the answer in case you missed it was BA.

Cheers

Source OAG Max w/c 7 Sept 2009.

Amadeus One - Next Gen Desktops Coming

I have written a more than a few times on the changing face of the GDS products. Latest on the market is the new Amadeus ONE. Developed in the USA by the dev team based on the East Coast - the new tool is Amadeus latest effort at cracking the US market. Something that thus far has resisted the allures of the Franco-German-Hispano combine.

have a read at Amadeus's own US based site.
A good interview is available on the Beat's subscription pages:
www.thebeat.travel.

It is amazing how a little competition galvanizes the soul. However - there is a clear trend here. I am a whole hearted fan of this trend - whether I come from the user or the supplier community - it is welcome sight to see the GDSs' show their unbundled products.

So far on the work station side - we see Travelport's UDT (Universal Desktop) and now Amadeus's Amadeus ONE, neither of which has so far been deployed into the market. We are waiting to see the Sabre product. Sabre on the other had was first out of the box with new off host based profiles.

On the independent side we are seeing new next gen technology based products from such people as Concur and Farelogix amongst many others including our client LUTE. This includes OpenSource corporate tools, agent desktops, open supply access, expense management and profiles. These products join the already competitive market for fare management solutions ticketing engines etc etc.

The world is starting to open up. The realization that an open environment is hard for GDSs to accept. But as more than one senior GDS exec has explained - that is so yesterday - now we are seeing the fruits of their labours.

Is this enough and does the commercial model match the technology? That is an interesting question.

Cheers

Customer Service and Initiative

Being a customer service representative can be a monotonous job at the best of times. Doing the same thing day in day out is cause for boredom and other sorts of interesting behaviors.

Today I had a difficult flight combination. 4 flights to get to my destination (when actually a simple nonstop would have done). As seasoned travelers and well trained airline people know 4 segments is not a winning combination particularly when you are transferring across airlines and different PNRs.

So I was that rare case of 3 different PNRs and tickets and 2 airlines with 4 segments. The make or break in my journey was to occur when I swapped airlines. AND I had a bag to check through.

Well the very charming young lady at Lufthansa check in in Newark Terminal B regarded this as a challenge and went out of her way to solve the problem. She was only a temporary employee (An Ulsterwoman to boot!) on a one year assignment from a Tourism course in Northern Ireland along with 10 of her fellow students. She handled the difficulty with aplomb and care that would have put a seasoned veteran to shame.

She actually went down to the baggage area - retrieved my (short tagged) bag, retagged it and came back to give me the appropriate paperwork. Not only that she then told me what to do to ensure that my bag was on the flight.

OK so I am an old hand at traveling and I am invariably jaded about the ability of the person behind the counter to be able to solve the problem - and MORE IMPORTANTLY give me the confidence that they both knew what they are doing and can communicate same.

This young lady did all of that.

Kudos to LH for its training program. And definitely kudos to the young lady for doing a job well. It really made my day when it could have gone pear shaped very badly.

See I can be nice............

LX In Or Out – A Harbinger?

Over the past few weeks behind the scenes a high stakes drama has been going on over the seemingly innocent issue of just one airline in a GDS. In this case the battle was over Lufthansa Group subsidiary Swiss Air Lines (LX)’s participation in Sabre. I am not going to comment on the actual nature of the dispute between the parties. That is for them to surface and share – far be it for me to address that issue.
Rather I would like to look at the underlying issue that the case for a universal supply chain via the GDS is at the very heart of the concept of the GDS that we have known and loved for a very long time, is now under threat – and probably its current life cycle is reaching the end.

The fact that Sabre and LX were able to (very quietly) tell the world that they had come to an agreement and that as a result LX would not be kicked out/asked to leave/disappear from (delete as you think appropriate) of Sabre. That is the positive news.

However we are seeing this battles occur time and time again. Next year will see the first of the major airlines set up for a battle with the GDS over the cost of participation in the GDS’s market. In my humble opinion – the battle lines have already been drawn and we are in for a long term and long drawn out fight.
The social contract that existed with the current round of contracts was largely blown – by the GDSs in my reading. The deal that was at the heart of the social contract was that the airlines would provide full content to the GDS players in exchange for lowered GDS costs of participation. As we have seen that GDSs learned a trick (funnily enough from the airlines) that unbundling the GDS products and services from the standardized fee could indeed result in a GDS gross revenue increase. The airlines in return feel that the GDSs have not played nice. So it is against this backdrop that the contracts will be reviewed.

Already a new model is out there – its called the opt in model. IE access to full content is no longer all encompassing – the airline can choose to opt out certain parts or prices of the product set. The famous Air Canada clause was the start of this trend.

No matter how the individual battles go for the airlines and the GDSs – there must now be the need for the Travel Intermediary community to have another way to secure their supply chain. There is a strong demand for a neutral but bilateral form of relationship tools between the parties to the distribution game. There are now many options. Most of the third party travel agency based technology companies now have the ability to provide for direct relationship management services. Indeed reading the announcements of the airlines who have chosen next gen PSS systems such as that recently announced by American in its move from Sabre (Airline Solutions) to HP/EDS, it becomes obvious that the focus is away from a transactional based infrastructure and model to a consumer/customer relationship model.

Smart agencies and intermediaries will be the ones who see the writing on the wall and develop independent solutions. Already we estimate that in excess of 80% of all US GDS generated PNRs have been touched by a 3rd party system. Still it will be hard to kick the segment override "drug" habit. Some have already done so and are many months sober. I firmly believe that this will spread over the coming years.

I will repeat and oft followed theme in this blog. The universal “one size fits all” model is dead – long live that special relationship between individual market players and partners. This is a more natural act and one that now is possible in ways that the protagonists (happy and unhappy) could only have dreamed about as recently as 6 years ago.

Next few years will be interesting...

Cheers

BTC Releases Study On Pax Delay

The BTC has been a long campaigner in the issue of passenger rights. And so to put the money where the mouth is - they commissioned a study on the travel industry opinion on the thorny issue of passenger flight delays.

The just released study results should make for some compelling reading for the airlines and their users. Clearly there is an impression that the airlines have failed to heed issues of passenger rights. The industry reaction has been to obfuscate the issue rather than address it. Voluntary self governance rules have failed and even the current regulations are largely flaunted by US carriers.

Contrast this with the situation in Europe. The European Commission issued passenger rights legislation in 2004. Since that time the airlines have been forced to comply and provide automatic compensation.

I believe that the US airlines have had enough time to work this out. The recent cases of tarmac delays and "imprisonment" culminating in several flights last month of extended delays should be enough for the US Dept of Transportation to issue new regulations and/or Congress to act appropriately to curb the industry excesses.

Of course I should point out that the reasons for the situations are not always the direct fault of the airline. However too often a delay or an external factor is cited for the reason. The best one I heard a few weeks ago was "Operational Reasons". The EC rules are quite simple and compliance is now a standard and accepted convention. AS I have noted before - the best performing airlines are the LCCs with Ryanair toping the table. Yet still bad airlines on both sides of the Atlantic try to hide behind erroneous interpretation of situations.

People this is not hard. Either the US DoT should fix this problem as a consumer protection issue or they should hand over the question to a different agency.

Passenger rights legislation is long overdue in the USA. As a very frequent traveller - I can more than attest to this. While I cannot vouch for the BTC's efficacy of the study - I believe it to accurately reflect a need to address the problem and the conclusions should point to a new passenger bill of rights legislation.

I for one am wholeheartedly in favor of this

Cheers

"The World's Ugliest Website" - Craigs List Lessons To The Wise

Oh Gerry McGovern does it again.

He takes apart one of the most successful but arguably ugliest websites around - Craigslist.

There is a lot of application from this article into the world of Travel. One of the biggest messages in his story is:

IT'S ALL ABOUT EXECUTION STUPID! Over and Over and Over again.

We have great websites that are cool and just focus on the aesthetics. Useless. Flash - Useless in most cases.

Great transaction websites are not about entertainment - a fact that seems to be lost on just about everyone on the push side of the equation.

I use craigslist like many other people. It is simple and straightforward AND I DON'T have to learn anything new. It's just there and it works.

However I have to say I was disappointed when I tried to use it in the UK. Content was useless and no one replied to my ads. However the UK equivalent seems to do just fine and did the job for me:

Gumtree - try if if you live in the UK. Its a little annoying in how it works barraging you with useless emails that only go to annoy.

And this goes to another point that Gerry makes that we should all learn. DO NOT ANNOY YOUR CUSTOMER.

There are numerous pieces written about how fickle the Web based consumer behaves differently than in the offline/real world. However I think that Gerry has hit on something that just about everyone has forgotten. Namely that it is not just about attracting but retaining a customer. Also don't assume (as everyone seems to do) that she/he wants to interact with you. In many cases they don't. Consider this. How many sites actually let opt out of ads, emails and general digital diarrhea junk that they throw at you. Today the amount of junk that comes our way is frankly frightening. Craigslist? Nada - just the facts ma'am.

So take the lesson to heart here. Now that we are reaching maturity in web terms - now we need to start to look at how much we are pissing off our customers and actually creating bad behavior such as driving people away and indeed causing the seemingly flighty behavior of the consumer. Yes folks I am actually saying that we are getting the customers we deserve.

And if I may - there is actually one group who seems to understand this - at least from a cursory point of view. OK so this will seem to be slightly left field but bear with me for a moment. The sector is the Porn industry. These chaps know that visitors don't just arrive there by accident. But they also recognize that the user doesn't want to be scammed with unnecessary emails and junk. One of my friends works in the ecommerce side of the Porn business and whether you like it or not they have been responsible for some of the best innovations on the web. He went to great pains to explain how this is a focus for (at least his company) to reduce the amount of unhappy customers so that they come back. Their focus is not so much on new punters but on returning customers has been on reducing things that upset or grate with the users.

Lessons we can all learn. Craigslist is definitely on my list of top ten performing sites. It is the only one that scores high on the "don't annoy me too much" scale. As for the design - well it isn't going to win any awards from me - but this Pinto gets me where I want to go just fine. Can your website say that?

Cheers

Oh Pandora What Have You Done

One of my personal favorite applications is Pandora. Simple and Easy - and its just there.

So I love the idea of internet radio and Pandora is the best in my view.

However to save money - they dont like people like me who turn it on all day long and listen to it. I could put up with the annoyance of "Are you still there and listening" but now they are rationing the amount of listening time to 40 hours a month.

Sorry - this isn't going to work for me... so I am defecting and spreading to other internet radio sites like LastFM (when it works... its a big of a dog...)

Anyone got any other ideas?

Cheers

True Road Warriors Communications Tools

I am a road warrior - by choice and by happenstance. So over time I have developed a number of strategies to reduce the cost of travel. But now there is a formal advice from the Customs and Border Patrol division of the US Department of Homeland Security

So one of the items from my prior blog entry on the US Homeland Security"> advice

IE leave your laptops at home...

I actually thought about how easy will it be for someone to follow the advice. So this piece is targeted at US residents with US credit cards and US addresses. It could be modified for other countries. The idea was to see if I could save money and comply with the US rules at the same time.

I set about trying to see if there is a way to do it and to my mind find the lowest practical cost way to undertake this. The challenge for me was to build a solution that ANYONE could use so this is a sort of quick self help primer for people who travel a lot. Even if you travel a little this will be useful. Indeed for some of my friends who have adopted this - the ROI has been in a matter of days after using their usual US cell/mobile phone to call home from Europe!!!

What are the components?

Skype, (Gizmo also works)
A webmail account such as Gmail for forwarding all your mails to.
A GoogleVoice account - useful but not required if you have Skype
A cheap Blackberry mail account for global mail access
An unlocked phone - GSM preferably that supports up to 3G.
An inquisitive nature plus a fair amount of patience

I will divide this up onto voice and data. I will also assume that you are reasonably smart and can do the things I recommend. If not then there is a world of self help in the individual components. The working combination is what this blog entry is all about. Then finally I will give you the setup that I created to meet with the US Homeland Security guidelines. So this is really an omnibus primer on what to do.

For Mobile Phone access

Firstly the device – one easy way is to get yourself an unlocked phone - then buy a local SIM card. Almost everywhere you go – you can get one. Make sure you can get a Pay as You Go card. Some countries demand a local address – for that you will have to find a “friend” who can get you a local address. An alternative is to use a multi country card like Lebara. . These are cheap and can be had at almost any location. Having a local phone makes it easier for your local friends and business contacts to reach you. Simply grab the number and remember to put it on your business card (hand write it) as you give them out locally). MAKE sure they understand its temporary. In many countries mobile numbers have become quite disposable.

Another suggestion is to try and find a good Multi Sim card mobile phone. Of course this is the Cell/Mobile phone networks worst nightmare. So you will find it difficult to get one. One of the best is the Samsung D880 it can handle 2 lines concurrently it would appear although I have not used one myself. HOWEVER if you go for a newer one the actual dual sim doesn’t work as well. You have to log in and out. But the older model misses the newer US 850 band. To have a perfect dual sim card – you really need a dual radio device and so far I haven’t seen a good one of these. SOMEONE please prove me wrong.

If you do have a current US cell phone company – make sure that you sign up for the International roaming option. It can be turned on or off according to your contract and usually without extending or affecting your master contract. These usually cost about $5 a month and pay for themselves pretty quickly. WARNING, watch out for the terms of the agreement. Phone companies are pretty sneaky. They advertise a good rate but you find it’s like airline deals there is a SET UP FEE for each call. That is the killer….

Now the set up. Use GoogleVoice (the old Grand Central) to get your phones forwarded to a common number. Then the call needs to be routed over a backbone that is IP based (at no international rate to you). Technically what you are doing here is illegal as you have set yourself up as a telecoms operator. So strangely enough the big Telco boys don’t like competition. At worst you can do a call and callback service. At best you can actually use this to route the calls to your phone. Corporate users have this capability if they have local offices in the country you are visiting. GoogleVoice is good because it delivers you your voice messages via email so you can listen to a wave file on your portable device such as a blackberry or iPhone.

Getting a low cost local provider in the cents per minute range is really tough when travelling. So there are a wide variety of calling card options but I have always found this to be pretty darn inconvenient. As I am a blackberry fanatic – aka a Crackberry addict – I found one service that works well. Truphone. It works for Symbian, Ericsson and iPhones as well. So for pay as you go it’s about 5 cents for most major locations. Plus it integrates well with your own normal Blackberry, iPhone etc etc. This is the one I use most often because its easiest to use and the cost per minute is reasonable. Contrast this with my AT&T cellphone bill for use in Malaysia at over $2 per minute even on the cheap international plan.

A big note is needed here on the use of roaming voice. The new EU directive has lowered the cost of roaming voice in each country. This is a very positive sign and soon we should have pan European contracts available. However the rest of the world has one major difference. They don’t charge for home market inbound calls. So IF you can get a local inbound number to work and that is your home market – then there is no cost to you nor does it come off your minutes.

OK so we sorted voice out.

Email and Data

How about email? Well firstly the easiest and best options. The cheapest way to get your data worldwide is to sign up for a worldwide account for Blackberry in the USA. Sorry everyone else but this is ONLY possible in the USA.

The best 2 options are T-Mobile’s email plan for Blackberry. It used to be $30 but they recently bumped it to $40. Corporate accounts should still be able to get this for the lower rate even if you have to pay this yourself – it is a godsend. THEN add the international option. This can be added and subtracted. However the contract is a 2 year one. You can get a lower contract if you are prepared to provide your own phone. To do this go to eBay and look at the phone options. There is of course risk in this… The other option is AT&T. this is about $10-20 more expensive. Verizon’s phones are still not suitable so the Crackberry doesn’t work on their network and Sprint’s roaming partners are pretty awful. So you really are constrained to these 2 providers.

And Data? Don’t even think about it on your device. Data roaming can be as expensive as $1 per MEGABYTE (Australia). Just think about that when you are roaming. However now that 3G is pretty pervasive you can actually think about this. There are 2 major options. Buy a 3G dongle or the more normal find a Wife hotspot.

There has been almost universal rejection of the laptop 3G option and even 3G tethering via the phone. Sad really because it’s a pretty good idea. Instead you have the 3G dongle – but watch out for this. MAKE SURE you take your laptop with you to the store and have them install it. I have found that certain antivirus applications like Norton so mess with the installation that they don’t work at all. Very frustrating this summer in UK (O2), Germany (Blau) and France (SFR) where I tried to make this work. The letters in brackets are the local providers I tried. However there are some silver lining things. Usually with a larger network you get access to their Wife or Wimax network. In the UK the O2 account gives you FREE access to the Cloud network. So for 30 pounds I bought the dongle – which works on my son’s PC but not on mine. However I get free unlimited access to the Cloud network. So 3 days of usage and the ROI is done. I have used it for weeks… PLUS I found out that the Cloud works in other countries. So my local hotel in Berlin uses it and its no additional charge. Another option is to find places that have free or low cost Wife. In France almost all the Tourist offices now provide 1 euro a day hotspot charges. I used this in France as it was very effective with no limits. However to say that we got funny looks when we showed up after midnight in a foreign car with 4 people lit eerily by laptop light was weird!!!

So how did I do the full set up?

In order to meet with the conditions laid out on the CBP website – I bought a netbook for $299. These are pretty handy. I like the ACER. I bought a second hand unlocked Blackberry for $50. I configured a new GMAIL account for all my usual accounts and had the mail forward to that single account with its own password. Then THAT account was linked to my blackberry. My GoogleVoice account was modified to only ring the cell phone and I set a special ring tone so that I knew to send the message to voice mail – thereby leaving a message that told the caller I would call them back. I bought the local sims for my mobile and connected the mobile to Truphone. I also made sure that Truphone was loaded on my Blackberry (always have a back up!!!) . I modified my address line on my email accounts so that people know from when to when to call me on my local numbers.

What happened… I got my emails on the new (ex-eBay) Blackberry as normal and I didn’t have to do anything. My local phone works just fine – it takes about 10 seconds longer to set up a call as the Truphone application sets up the call. In most cases I can use the Truphone on my regular Blackberry but that comes off my minutes and I have to pay the local charging rate – so I tend not to use it. Voila!

Now the downsides…

Firstly its 2 extra devices you have to carry. The second Blackberry and the local phone. OK not too bad but a pain in the butt. You also need to have the peripherals (chargers etc.). I have a little black ex-EK first class bag which houses all my cables. Since I already use Sony and Blackberry phones this is not really an issue. I also use the USB charging devices. UNFORTUNATELY and here is a heads up – they are changing the standard for USBs to small devices. The new USB-micro socket will be universal on all cameras and cell phones in the coming years. Blackberry’s new 8520 has it as does many cameras. UGH another cable I have to provide.
You have to have discipline. Make sure NOT to answer that phone when it rings (turn it off!! Or send ignore). AND of course the set up is complicated. After 12 years of using a Crackberry I am used to this. So for me this was not a difficult model to work with. The incremental time is using it was negligible, it also cost me was very little – although the set up time was long – and then undoing it was also tough.

All in all – I can tell you that it IS possible to comply with the US Homeland Security advice on the subject. However the weirdoes in Washington clearly have no idea how business works. I wonder if Obama’s Crackberry can be modified to work like this…. I hope you find this useful.

Cheers

WTO On Illegal (or not) Airbus Subsidies - The Envelope Please....

In What has been one of the most acrimonious cases and surely the most expensive in 14 years of the WTO rulings - the august body has sent a more than 1000 page ruling to both parties in the case - the USA and the EC.

According to the Wall Street Journal the ruling goes against the EC for illegaly subsidizing Airbus (now a unit of EADS but at the time the case started it was still largely a quasi Government entity).

The Professor's initial scan of the available information is that the case became as much about making law as interpreting it. So it will be long and convoluted. In the near term this means that we will not be able to comprehend much of it.

Look for more updates over the next few days. This is a story that will take a long while to unravel.

Cheers

Air Anchluss A Reality - LH aquires OS

OK so this is just a little naughty of me - and I know there will be some people who wont find this funny - but the theory has now become fact. After what seems a tortuous process including multiple trips to Brussels, LH has finally succeeded in getting control over Austrian Airlines Group.

So now comes the tricky part of integration. The chaps from Frankfurt have their work cut out for them. On the other hand judging by the success of the integration of LX (a larger airline) into the LH family - the prognosis has to be good that this will be a good program.

For the boys and girls in Vienna - this must be a huge relief.

Cheers

An A380 Parked in the Desert?

The spectre of armed guards patrolling the high California desert near Victorville guarding one or more of Airbus's behemouth A380s moved a step closer yesterday with the announcement that Airbus and SQ have agreed to defer deliveries of 6 copies. With QF doing the same - it looks like several early adopters are pushing out their deliveries. Another telling sign is that EK's latest schedule is somewhat bereft of A380 routes.

Hmmm given the amount of lead time to build these puppies - it is not that easy to shift them around in the delivery schedule. I maintain that the current recession could have been much worse for both of the big 2 manufacturers if they had been firing on all cylinders on their flagship programs - the A380 and 787 respectively. Imagine if A380s and 787s had been pouring off the lines in both Everett and Toulouse as was originally envisaged. In that case one could well imagine that quite a few of them would have flown straight to the desert.

Cheers

I Come (This Time) To Praise Southwest

In the past I have berated WN for not allowing direct interaction between WN and its customers via email - even though they have email addresses and could easily allow this.

However I do see that in fact they have a number of tools which would alleviate much of the need for a number of these interactions. So while I still feel they should allow it - indeed I am going to carry on my campaign to get them to allow it - The Professor would like to compliment Southwest on being aggressive in deploying a better than average customer alert system.

In a recent piece for CIO entitled Southwest Upgrades Customer Service I learned they WN even has someone who has been dubbed the CAO for Chief Apology Officer. WHAT a cool job! This is a good article to read and there are some great lessons for all airlines.

I recommend it! Further it is good to see airlines taking the moral high ground here even if it is only WN doing it. I contrast this with Easyjet and Ryanair who have deployed similar technology but have the gall to CHARGE for it!!!

Going back to my crusade, I would strongly suggest to WN that they go ahead and allow a non-verbal direct interaction tool. Examples are chat or an automated tool such as NextIT's smart agent which has been deployed as the mystical Jen on Alaska's website. I asked her for a date (since we live near each other) and she was not amused - but that's another matter.

Cheers

Airlines Vs GDSs - The Sequel.

The long running battle over distribution control is akin to the Harry Potter saga. It goes on and on, a long drawn out affair with as many plot twists and turns as J K Rowling's Historic Novels. The current phase (at least as far as the movies are concerned) of teenage angst for the three heroes has broad similarities in the airlines separation of their dependency on the GDS. Thus the Three GDSs do rather look like instruments of He-Who-Must-Not-Be-Named.

Finding out who is the one (or ones) who has gone over to the Dark Side draws analogies that could fill volumes.

A recent piece in BTN entitled "GDS CEOs Assess Changed Airline Negotiating Dynamics" has brought a light onto the battle lines that are being drawn.

To some - there is a desire that says they wish the whole issue would go away so that the players could quietly negotiate in peace. Over time they could come out with a solution that is acceptable to the protagonists that evokes images of epic battles of the forces of Good vs those of the Dark Lord. In that way the seemingly innocent bystanders - which is how the agencies cast themselves - could carry on without interruption and changes on their side.

However - this is all somewhat wishful thinking. The facts of the matter demand a change in the status quo. Earlier this year at the height of the recession with bad news resounding in everyone's ears - the top two US airlines CEOs both came out in favour of radical change in the model.

"...maybe I'm dreaming here," American CEO Gerard Arpey said envisioning a future "where those folks who are the intermediary between us and our customer have to pay for access to our product rather than us paying them to distribute our product." Arpey called that shift a "long-term vision," rather than a near-term reality. Within days Delta CEO Richard Anderson followed with a similar statement saying, "Over time, the industry has to evolve to the model of other industries, where people pay us for our content rather than us paying them to take our content."

Over on the other side of the pond the model for the next round of negotiations was quietly being rolled out by arguably one of the more successful of the legacy carriers - Lufthansa. LH, itself an Amadeus owner, was able to to turn the GDS model on its head and control the GDS radically reducing its both core and marketing costs and in some cases turning its GDS expense into a profit center.

Sitting in the USA market and watching Southwest become more and more like a Full Network Carrier, it is easy to assume that the contrarian airlines (LCCs) have little impact. However again over in Europe the share and importance of the Low Cost Carriers particularly Ryanair and Easyjet have changed the dynamics of airline product distribution forever. Multi-source access is not a luxury or even just a competitive differentiator, now its an absolute necessity.

The GDSs have clearly failed to live up to their premise of universal supply chain providorship. The rapid rise in and now significant cost of maintaining independent links to direct airlines and indirect GDSs indeed the rise of all the IT costs for an agency/intermediary make the GDS just one of many - while still important - channels of distribution. For which they now have to justify themselves with better product in service models. In a conventional market - a world described above by Messrs Arpey and Anderson, this should promote a drive to excellence and passion for better products and services. However at this time the GDSs are struggling with lower transaction counts and demands for more product functionality. All at a time when they have paired both their operating services and their R&D to the lowest level possible.

It is against this backdrop that the first airlines will start to see their PCAs - participating carrier agreements open for re-negotiation starting in 2010.

Will it end in tears? Will there be peace and harmony across the land? Will they all end up in a master race lovefest?

Stay tuned - this is a battle for the long term hearts and minds of the user community, both the airlines and the intermediaries. To my point of view the current model represents an unnatural act - rather a series of them. To me it is unsustainable and demands reformation if not revolution.

For the first time real options are emerging not just from within (Like Galileo's Universal Desktop product acquired from G2 and Amadeus One) but also from the independent technology market - like Booking Builder and Farelogix. These applications represent both an unbundling of the GDS product but also new cheaper forms of commercial models that deliver the capabilities faster than the GDS have traditionally been capable.

This is a story that will run long and hard!

Cheers

Udvar-Hazy To Play Hardball With AIG - May Quit ILFC AND Start Rival

The battle of wits between the ILFC players has become a war of words - or rather a lack of them.

Steven Udvar-Hazy yesterday refused to deny that he would leave the company he founded ILFC. But combined with recent reports it is becoming clear that the players are not all in sync yet.

So at the heart of the matter is the need for AIG to divest itself of its holding in ILFC. But with not enough support for the divestiture deal to Udvar-Hazy himself, he is threatening to leave and start a rival. You can be damned sure that both Boeing and Airbus would support him in a heartbeat. Thus he is really in the driver's seat on this one. Starting a new company with a less complicated and burdened capital structure and the support of both the leading manufacturers could be very advantageous to the Hungarian born master aircraft salesman.

Don't you just love grown up games...

Travel M-Commerce - Still Birth Pains

I am a fan of the whole idea of M-Commerce. Particularly how it can have applications for the whole Travel Category.However my enthusiasm is tempered by (now more than) 10 years of experience in trying to get Mobile Apps off the ground without any noticeable success.

So I was very interested in reading the latest M-Commerce Report by eMarketer.

In particular there are two contrasting elements to their study.

Travel was one of the highest categories of product that people SAID they would be willing to purchase via a mobile app. However there is a huge gap between the desire and the execution - early adopters don't even rank travel apps on their radar.

So we have a chicken and egg situation. Further the obstacles to success of M-Commerce are many and varied. Of these the largest percentage are not going to get solved - in my humble opinion - any time soon.

So take a look at the list the ones that consumers in the report detailed this is illustrated on the top here. However consider both the small sample size and the audience.

I spent much of the summer roaming around Asia Pacific and Europe testing 3G networks and interactions. (OK this was a by product of what I was doing - I really am not THAT sad - even though the SFR shop in St Gilles Croix de Vie was getting pretty sick of me by the end of August). I found a lot to commend it. The networks in general are now reliable and robust. But the applications are clearly lacking. So the red hot market at the moment is the marriage of the Netbook to a 3G network and the corresponding Carrier sponsored products. EG Lease a Netbook for X Euros a month and get the device and the data included.

Steve Jobs - not so secret - iTablet project will hope to capitalize on this trend when it emerges likely at CES or MacWorld in January 2010. But by its nature this is likely to be a further obstacle to the deployment of robust Mobile applications. Namely the splintered client side applications environment.

In the various projects I have undertaken on Mobile - I have found that the stumbling block has been both the technology (lack of ubiquity of Client side application environment), the commercial model of making money. (This was usually the greed of the Mobile Operators who refuse to share the data usage revenue or alternatively at the very least figure out a way not to penalize the application with a surcharge). We long ago figured out solutions to the other problems.

The promise of Android (and son of Android aka Chrome) as well as other multi-hardware platform services such as Windows Mobile, Linux and Symbian has all so far proved to be a figment of the developers imaginations.

However I remain hopeful that this will eventually sort itself out. But as you saw from my post yesterday about Skype on Blackberry - the proprietary nature of the vendors and the networks seems to be at the root cause of the issue. However I am not holding my breath in the short term... So I am still bearish on this regardless of the optimism of others such as PhocusWright on the subject.

Thank you and have a nice day.

Southwest's Social Media Efforts Good or?

Today, at the invitation of Professor Addison - I participated in a podcast reviewing WN's effort's in the Social Media space with the new Travel Guide service.

To listen to the podcast check out this link and see if you like it.

I believe that if anyone can do it WN can. But it comes with its pitfalls.

So come listen to the Professor with his usual Curmudgeon view on some of these efforts.

Agree with me or not - this is definitely a 1.0 version. If it makes it to a reasonable delivery of a 2.0 version then I have promised Addison I would pay for his EarlyBird boarding. And I get a word in on what I think about the product too!

So at the risk of being a dart board target for the WN PR folks - see if you agree with me or not.

Cheers

Booking Fee Mania Spreads to AsiaPac

Bowing to another inevitability - Zuji (aka Travelocity AP) will cut booking fees effective today.

Inevitable? Why?

Well the experience elsewhere has shown that it didn't hurt Priceline to start with who killed them in 2007. Earlier this year the big 3 US also cut them - Expedia, Travelocity and Orbitz. All with negligible effect on their bottom line. More importantly the impact in the US market showed that the transaction loss for the OTAs was less than the airlines and of course the traditional offline outlets. Thus proving that there was some growth left in the OTA model.

So Zuji cutting fees is just normalizing something that has shown to work elsewhere.

So now - no more fees... Anyone still charging fees for transactions face a diversion of business away.

So LCCs and others - pay attention - there may just be a lesson here.

Cheers

Any Bets On How Many More Times Boeing Will have to Re-Build 787 Prototypes ZA001 to 003?

Today's absolutely best quote comes from Flightblogger on Tweetdeck.

Flightblogger Tweeting (lord help me for reading Twitter) from the Morgan Stanley Investment Conference was listening in to Boeing's CEO describing the current status of the 787 development:

McNerney on ZA001-ZA003: "We've built a couple of the airplanes four or five times."

'Nuff said Squire!

So I guess they have one more to go before take off... but don't count those chickens. Jim has already replaced Scott - and for sure he is going to be looking not to make the same mistakes of his predecessor(s). Remember the schedule was not his... so he still has a spare life to call another delay.

Cheers

Southwest Gingerly Steps Towards Ancilllary Revenue Model

... and may be trips on the way.


Now here is a turnaround. Instead of being the innovator Southwest is taking a leaf out of the European LCCs and charging for an ancillary service - namely early boarding.

Southwest's new "Early Bird" check-in product sounds simple enough - but wait... hold on theer pard'ner - not so fast.

Check out the fine print of the program:

http://www.southwest.com/flight/early-bird-faq.html?int=HOMEWNEW01CHECKN090902

Holy Moli - this sounds pretty complicated:

Contrast this with Ryanair's total boarding policy which fits neatly into the following page. AND this includes their DBC policy AND it covers international passport requirements.

http://www.ryanair.com/site/EN/faqs.php?sect=chk&quest=boardingproc

I have to say that this only goes to show that the myth of Southwest as a non-legacy carrier is clearly just that - a myth.

Come on chaps - you can do better than this. WAY TOO COMPLICATED.

I thought Southwest is about Luv and KISS. This sure ain't it.

Open For Business Initiative - Right Time?

Farelogix seems to have done it again - lit the blue touch paper and retired to watch the resulting fireworks. This time in the Business Travel market.

This time - their focus is an area that has seen a rise of both the cost and the frustration of the user community.

The business adoption of Online should have been an easy proposition. All business users are essentially connected via their corporate web nets. However the complications imposed by both the financial controls and the GDS based environment resulted in a set of complex products that were cumbersome and difficult to deploy and administer. However with the general move away from Office Admin staff to self service activity within the corporation - the human support of the business traveller dwindled over time. Thus self service became the only game in town.

For the TMC intermediaries there was a nice pot of gold in this move. They were able to charge a fee for both automated (Touchless) and serviced (Touched) bookings. Normal figures are at the $25/50 cost per transaction level respectively.

Thus the TMCs were happy to let the user community pay in return they got to keep all the "bennies" that would have normally accrued to an agency.

This is great if the self service technology resulted in both ease of use and more importantly speed of use. However the current crop of tools remain complex and unnecessarily time consuming. One has to wonder if there really was a benefit to the corporation in this process. Today you have a chap who costs about $250-$500 per hour fully loaded making a reservation and typically taking about an hour or usually more to make his reservation. This replaced the $25/hour clerical level agent who previously did the job in half the time. Perhaps not the most efficient use of time and resources.

The level of frustration by the Corporations in the deployment of these tools (what I would call 1.0 products) has a litany that could and does fill volumes. The leading players are Concur with their CliqBook Suite and Sabre's now venerable GetThere product. Despite the development of online corporate tools from the big 3 OTAs their share of the revenue of the players has been minimal despite a fairly mature product. Smaller players have come up with niche products like Booking Builder - and who can forget Portaga - one of the best ideas that never saw the light of day.

Enter Farelogix who has once again caught the wave of the sentiment that the current tools are not up to the job and they are proposing (not a product as yet). They are proposing an open source tool that can be customized by the corporation and used to connect to the traditional GDS infrastructure or any supply chain host that the company wants to do business with - both indirect and direct.

While I am not a huge fan of Open Source I am definitely a fan of unbundling the totalitarian complex reservations and distribution systems into components aka Open Architecture. This to my mind is where Farelogix shines. Providing a platform that can be applied with local smarts to meet the needs of the specific user community. Appropriate use of technology without the need to change everything seems to be a key ingredient. But perhaps the most important feature is that the user community in the Corporations (as embodied in membership in NBTA) now has the ability to take control of their own environment and their own bilateral business relationships with suppliers and/or intermediaries. Note I say seems to be - because this is a vision not a product as yet. However as they have shown with their Hawkeye Open Source solution Farelogix can finally crack open an independent access into the GDS world. And they are developing a good track record of delivering. While this might seem to be heresy to the GDS model, they (the GDSs) clearly seem to agree with Farelogix as can be seen with their initiatives ranging from the new off-core Profiles to Travelport's Open Desktop initiative and Amadeus's ONE product.

As many readers will recall I am oft to comment that today the vast majority of PNRs created in a GDS are now touched by a third party system. This capability today is funded by the agency community themselves or increasingly by the corporations. Farelogix initiatives such as Open for Business and its encouragement by NBTA is not starting a new trend - it is actually continuing the evolution of the distribution model.

So this seems to be the right product at the right time. Let's wish them well in executing it. This is not a sector for the feint hearted. Having developed several corporate products since the mid 1980s, I can attest to the difficulty in getting them ready for market and then deploying them.

Best of luck chaps.

Cheers

Shoots In The US Market?

OK - so how about a little good news for a change.

I finally got to see the numbers for July from ARC. There is clearly a trend here:

Even accounting for the aberrations in Feb and the changes in Easter - we can see that since March the transaction numbers have clearly changed for the better. July's numbers show only .77% Y/Y down. August which should be out in the next week will be interesting. I would actually expect that we will see a definitive improvement in September as this was the month when sales first started to dive last year.

So now its a game of nerves for all concerned. Will the US airlines maintain discipline and keep capacity down? So far they seem to have done a good job and we don't have a really sick player who could upset the apple cart.

I will not be cheering just yet. We are still in effect bumping along the bottom. We have lost a lot of capacity and traffic from the system. For proof of this look no further than Victorville CA (and several other places like it). That is one heck of a lot of capacity. Including some highly viable 757s out there.

At the moment the really sick sector in the market is the hotels. Despite the recession - actually their capacity (according to Smith Research) INCREASED several points this year. So hotel yields there are going to stay bad.

My current sentiment? The airlines must maintain restraint and even cut more than they would normally seasonally. We have already seen the first seasonal cuts from AMR. We will see many more programs in place. However these programs are really temporary. The Airlines have bought themselves some time and burnished their balance sheets a little to survive till next year. They still need to be prepared for 2 events - a sharp downturn in the economy somewhere in the system due to a localized problem and/or a pandemic like H1N1 flu. Either of these are very possible - one might even say probable.

I will however say one thing that hopefully by now is sinking in. The time that has been bought needs to be leveraged. That means the airlines in particular (although this applies to just about every sector) needs to go back and look at their current cost structures and cut them back. This ranges from the bloated headcount at Expedia to the marketing spends at certain companies. The signs are there. Now is the time to do something about the underlying cost structure.

Carpe Diem




SOURCE (c) ARC CORP 2009

Skype and Blackberry - Missing In Action

Earlier this year Skype made a big deal about producing software for mobile devices. Promising iPhones, Androis and Blackberries access to Skype.

Well not so fast quickdraw. Skype just released a new version of their code and Blackberry is still MIA!!!!

So c'mon Skype - give us what you know we want.

(Memo to everyone else) if you want to get cheap access on your Crackberry - try Truphone.

Cheers

REMINDER - COMMENT POSTING POLICY

As a reminder to those people who follow this blog.

I know you are all good intentioned folk. However there does seem to be an element of radicals out there who are determined to pollute the Professor's prognostications.

Posting commercial entreaties IS STRICTLY VERBOTEN. For example to use comments on this website to sell laptops, or "my hotel in India is the best thing since sliced bread."

So please do us all a favour and don't do it. You are wasting your time and more importantly my time. You will be treated as vermin and stomped on.

If you have an article you want me to write about or you wish to contact me - please send me a private email to professorsabena@gmail.com (when it doesn't have outages of course!)

Thanks for reading and have a nice day!

Oh Dear Southwest Again...

Southwest has now had to admit the number of planes affected by the uncertified parts scandal has increased to approaching 20% of the fleet (82 planes out of 500).

While the vendor has been suspended by Southwest, the issue remains. The parts are not that common that WN can simply go out and buy them off the rack, thus the FAA is being very lenient in extending the time for WN to fix things until Christmas. However it is almost guaranteed that this time the FAA will again slap WN with a fine and WN may whine but it will pay the fine this time without murmur.

You may recall that last year for a similar violation the FAA slapped one of the largest fines on an airline for maintenance violations to Southwest who fought it but in the end paid - not that they couldn't have afforded it.

The now former vendor's spokesperson described the problem this: "This is a paperwork and procedures issue, not a flight-safety issue," he said.

Whether it is or it isn't safety can never be compromised. There has to be zero tolerance 100% of the time. However this is a not just an airline issue - the regulatory body has to accept a level of responsibility as does the paymasters who must ensure adequate funding for the process.

A case in point is the extended amount of time that was allowed to address the fuel tank issue after the TW800 disaster and others.

Not that I want to jump to any conclusion. I would happily book WN today if I needed to fly on their route system. I feel they are perfectly safe, but I would probably choose another airline if the price was the same. Call it just a "safe than sorry" attitude.

We should all be able to rest easy that when we board an aircraft that the system works. In the case of WN this has happened more than once. That needs to be fixed. The FAA needs to make sure it doesn't happen again at WN or any other airline for that matter.

Cheers

Opening Day of The Culling Season

Today in Idaho - many hundred of hunters headed into the hills to cull the Grey Wolf which after being removed from the endangered species list earlier this year by the US Government Department of Fish and Wildlife, became fair game for legal killing.

For the airline industry - it is still a matter of survival but there is no such Government protection. So the killing instinct is pretty darn strong.

Thus listen up - brace yourselves everyone - the shoots of the reviving economy notwithstanding, we are about to enter the airline employee reduction season. The bean counters have done their sums and the routes have already been paired. Now the only piece is to actually match the costs to the revenues. Yes it is time to cut the staff back again. First out of the gate? AMR with a 900 person cull of their flight attendant ranks.

Not withstanding one of the largest reductions (number wise for sure - and percentage-wise also) in the history of the business already since September of 2008, the airlines must cut again in order to reduce their costs. The pressure of the current elevated (I choose my words carefully) oil price and the continued low yields leave the airlines one possible choice - cut the headcount.

All the fudge factors have already been exhausted. Hiring Freezes (even Southwest), reduced wages, voluntary retirements and as a new wrinkle work for free or take enforced time off. So now the bare bones must be cut. But the other metrics are already in place - Planes parked, deliveries deferred, routes and schedules paired, I could go on.

The numbers coming out of IATA on the first half performance - while expected are still very ugly. Despite recent positive signs, in the main the prognosis is that it will only get a little worse and that we are "bumping along the bottom".

So brace yourself folks - there will be many more announcements over the coming few months on staff reductions.

One side note here - there are still several areas of cost that the bean counters may have missed. The attempt by United to address one of them (Credit Card Fees) has provoked a firestorm of protest including Senate investigation etc. So perhaps it is time again to re-open the cost of distribution and evaluate where further costs cutting can be made. If you don't think this is possible then give me a call - because I can show you multiple ways to reduce the cost of customer delivery and distribution costs. Perhaps the Airline Staff Associations and Unions should get more aggressive with the airlines to look elsewhere for cost savings.

You have been warned.

Worst Offending Airports

OK so this should be a Friday post - but since I am just having a little fun today - here is a factoid for you.

Those nice people at Skyscanner have published a list of the worst offending airports with ambiguous names and not quite that close to the city center.

http://news.skyscanner.net/articles/2009/09/002866-ambiguous-airports-how-far-is-the-airport-from-the-city-it-serves.html?utm_source=Airmail&utm_medium=email&utm_campaign=newsletter

In the top 10 of the airports currently with scheduled service, Ryanair takes the biscuit with serving all of them. NOTE London Oxford (newly named and badly so) doesn't have any service today from anyone.

Some of the Worst Offenders:

1. Munich West (Memmingen) - 70 miles (112km) from central Munich

2. Oslo (Torp) - 68 miles (110km) from central Oslo

3. Frankfurt (Hahn) - 68 miles (110km) from central Frankfurt.

4. London (Oxford) - 60 miles (97km) from central London

5. Stockholm (Skavsta) - 59 miles (95km) from central Stockholm

6. Barcelona (Girona) - 58 miles (94km) from central Barcelona

7. Barcelona (Reus) - 58 miles (94km) from central Barcelona

8. Paris (Beauvais ) - 55miles (88km) from central Paris

9. Dusseldorf (Weeze) - 50 miles (80 km) from central Dusseldorf

10. London (Stansted) - 40 miles (km) from central London

In the best performing category - they have forgotten a few:

Toronto City
Singapore
Dubai
Sharjah

However I believe that one of the worst distances is still Riyadh (RUH) which actually does have a downtown airport - though that is reserved for the royal family. The airport is 40 miles from the terminal to the exit gate!!!

Cheers

Ebay Finally Dumps Skype

In a move that should have all of us (heavy Skype users) quaking in our boots - Ebay is going to sell off its Skype subsidiary. EBay Inc. said Tuesday it will sell a 65% stake in its Skype Internet phone business to private investors in a deal that marks the end of an unhappy tech marriage.

San Jose, Calif.-based eBay said it will get $1.9 billion in cash and a $125 million note from the buyer, an investment group led by the private equity firm Silver Lake including Index Ventures, Andreessen Horowitz and the Canada Pension Plan Investment Board.

The group will take a 65% stake in the company, while Ebay will retain 35%.

In 2005 eBay acquired all of the outstanding shares of privately-held Skype for a total up-front consideration of approximately €2.1 billion, or approximately $2.6 billion, which was comprised of $1.3 billion in cash and the value of 32.4 million shares of eBay stock, which was subject to certain restrictions on resale.

Interestingly Silver Lake is also an investor in Sabre. So there is a travel industry connection here.

Lets hope that the new chaps do the right thing with Skype and keep it true to its roots. However I don't see them being altruistic. Current Skype revenues are pretty meaningless. Today also Boingo dumped Skype as a partner for its Skype Zones service.

I guess I may just have to move to Google (UGH) or Gizmo.

Cheers

EC To Review Package Holiday Protection

Bowing to the inevitable or just feeling like grabbing a fist full of nettles? Either way the European Commission is to launch a review of the Package Holiday Directive this autumn. The European commissioner for consumer affairs, Meglena Kuneva, said the legislation is "out of date having been created and implemented in the 1990s."

The core of the issue in Package Holiday protection is that now more than 50% of all holidays are booked dynamically either in total package form or in components often from different vendors.

At the same time the UK's regulatory body the CAA is reviewing protection under its ATOL scheme which last year took a big hit from the collapse of XL Airways and is potentially bankrupt.

If the EC is smart it will acknowledge that the market has changed and implement generic rules that apply to the sale of any travel product component or package no matter how its sold.

As expected the agents and tour operators are in favour, the airlines (particularly the LCCs) and online agents are not.

We will keep an eye on this ongoing issue.

Cheers

SkyEurope Shuts Doors

Sadly the little airline that could finally folded. It filed for bankruptcy today and ended all operations.

I first became acquainted with SkyEurope just before launch when I sad down with Christian Mandel in a Ratskeller somewhere in Germany - I forget where. We laid out a plan for the reservations system and he followed my recommendation.

Sadly SkyEurope became a victim of over expansion and eyes too big for their capacity.

The decline was long and painful but to most inevitable. SkyEurope's model was niche and a nice one at that. They should have held out for staying there rather than the overly ambitious path they took. When O'Leary et al talked about scores of LCCs failing across Europe the seeming high flyer was the poster child for his views.

So sadly - a depressed market and the emergence of a stronger smarter competitor in WizzAir was the ultimate deciding set of factors.

Better Luck next time chaps.

Cheers

Service vs Price in Shopping

In a world where hard economic times are abounding - price is sometimes the only metric that makes sense to people. However it assumes that the brand value is known.

In the 1990s (and with no disrespect to the much improved airline of the same name), people used to tell me that the price of an airline ticket was the most important factor. So my usual retort to this was - if you had to fly from London to Sydney (the kangaroo route) would price be your prime consideration? Your only consideration? In well over 90% of the time people would be inflexible and say that it was naturally the case. So (said I) if Aeroflot saved you 200 pounds and took 3 days would you still do it? That would reduce the pool by - well by about 100%. On no - said they - safety is the most important thing. The ensuing debate would expose all sorts of criteria and influences that make up the buying decision.

So the service vs price choice is not a simplistic binary question. This has some interesting influences on the decision to choose an airline choice. Everyone assumes that the airline product is simple. The fact that Ryanair and others have made it so is a testament to the stripping away of the unnecessary parts of the product, namely the unbundling. However the issue is straightforward. You don't just travel from airport to airport, you travel from home to destination whether its aunt Mabel's place or the HQ of MegaCorp.

Forester has an excellent panel and it has just published a bit of research on the topic. It divides the consumer into 4 categories:

Service Seekers
Price Seekers
Service and Price Seekers
Others.

Across 12 industries Forrester found:

"Service Seekers were more likely than Price Seekers to buy more products, stay with their current provider, and recommend their provider to friends and colleagues. ... It turns out that Service Seekers are excellent customers to target."

Check out the summary here:

http://www.forrester.com/Research/Document/Excerpt/0,7211,55244,00.html?src=Alert

While I think that this is possible to be true - I shall be a little skeptical. Frankly in a questionnaire people will answer the issue in a way that would tend to favour service. In real life the shopping decision is more complex in particular airlines as I noted above.

At the end of the day - in order to get a sale - you must tick a lot of boxes. The Service must be clear and provided in a consistent manner. (How many airline fail to remember that - indeed how many companies in general forget that). Product expectation must be set realistically and again delivered against. The right context for the customer must be present. (Don't keep calling me Mrs when I told you I am Mr). And don't make too many assumptions about me.

The classic example of this is Southwest. Low expectation was the order of the day and they delivered. However recently the other airlines have matched that low expectation. So the differentiation in the honest and fresh approach taken by Southwest is less than it was before. Not really because WN did anything bad - but because in the market they became like the others. Interestingly - we just did another test on WN and we find again that their yield per mile (for the basic product) in available seats is still often higher than that of their competition. However for now their ancillary revenue is lower so the net price paid has not risen as fast as the other airlines. Could WN be missing out on revenue?

Universally I believe that most customers have a low opinion of the airline shopping experience online. The time is definitely ripe for a better experience. Then if that service can be delivered online as well as offline - the reward could be a higher price/yield. However - since the airlines have done such a good job at commoditizing themselves - I doubt we shall see that for a while.

So what do you think?

Cheers

Social Media Madness

As I start to see more and more icons appearing on websites showing (and crowing) about each (usually commercial) site's social media prowess, I find some of this more than a little confusing. Further the sheer plethora of different options now is mind blowing.

However as is often the case it takes a fresh look at this. So this little idea is from my sister Professor Jennifer.

If they combined the top social media sites MySpace, Facebook, YouTube and Twitter, it would be:

My Face, You Twit!

'Nuf said!

Cheers

LH Tightens Grip and Gets Toe Hold In USA

Not content with its first foray into the English Speaking geographies via the UK through its BMI acquisition, Lufthansa is now carving its initials on jetBlue. It already owns nearly 20% of the equity and now it has filed for a set of code-shares from JFK and presumably other markets in order to bolster its presence in the New York market.

With United focusing on its very close relationship with new BFF Continental, LH wants more than just a casual relationship for one of the larger US market. While the code share arrangement was almost inevitable (LH has never yet taken an equity position in another carrier without a code share deal), one cannot help but think the recent mega slot swap in New York (which made Delta the top dog) didn't have some bearing.

Most especially LH was left with almost no feed at JFK clearly a condition that the German mega carrier could not let continue.

This is a win win for both carriers. JetBlue gets access to Transatlantic feed (EI's marketing agreement doesn't exactly create head spinning numbers). LH gets domestic feed to just about any market with convenient connections throughout the USA all the way from San Jose to Burlington VT.

The new reality of coach/economy travel and a comparable product in the back cabin makes for an easy fit.

Don't expect this arrangement to be a rush job. jetBlue's aging Navitaire OpenSkies system has a hard time with connections. So the full implementation of the code shares may have to wait until SabreSonic comes up fully.

Also an interesting side note here, the timing cannot just be coincidental. With CO getting ATI approval just weeks before this announcement - it makes for some interesting discussions about the dominance of Star Alliance. Perhaps some of Justice's fears were not unfounded. Someone at Dept of Transport must be thinking that they didn't pay full attention to this eventuality. Perhaps even Mr Oberstar can raise the issue again. However the door of the stable is likely have any impact on that herd of horses who are long gone! All in all competition across the Atlantic has been decidedly lessened.

Cheers