Altea Outage in OZ - Long Term Impact?

Qantas, the first user of the full Altea airline reservation system suite from Amadeus, suffered a major outage (as it turned out "outages" is more accurate as it kept going up and down) on 3 Jan 2010. This follows a separate outage in September and a "meltdown" in November as reported by the main Sydney newspaper. This outage apparently continued on Jan 6th. Of course no official word on the outage on the QF website. A spokesman for QF claimed that there was intermittent outages for about an hour.

There is a good synopsis from Tim Hughes. The approach taken by Tim indicates how the attitude of the regime change (from old school Dixon) to the current team (ex-Jetstar Irishman Joyce) will affect the future of the mainline airline. With QF now open to foreign investment (under the terms of the recent Australian Government White Paper on Aviation) the winds of change are now likely to sweep in.

So if I may I will pick up on the point Tim was making. QF is heading down a very different path than the one outlined by Geoff Dixon and we can be assured that the old cronyism of the dominant market player is not likely to be tolerated by Joyce and his team. However whether the rank and file get that is another matter. Clearly the customer service functions were clearly unprepared for it and the event went from bad to worse. The twitterhea that ensued was ample to say the least.

I will draw the analogy between Ryanair (that moves a heck of a lot more passengers) who handled multiple outages in August of 2010 including peak times and how they dealt with the problems and QF. I fully accept that FR is a different animal. But they coped with the issues and moved their passengers efficiently.

For Amadeus - not everyone is smiling - this must be a big black eye. QF has been their shining example how well they do. Altea has many issues not least of which is the time taken to implement and the cost of the system - both in operating costs and implementation costs. I have spoken to several airlines who went through the pain of the cutover process and almost all have been less than enthusiastic about how it went. Again we know that it is a very unpleasant experience going through that cutover process. I have personally lived and worked on two major res system cutovers. They are a nightmare. For potential users of Amadeus Altea Suite - even some who have already signed up - there is a lot of disquiet about the whole process. Given the hiccups that occurred in November and December with TAM, they are right to go back and make sure that all the contingency plans are in place. Some airlines are seriously thinking of running for the hills though!

For QF and Amadeus - I see some of this wind of change occurring sooner rather than later. Amadeus can kiss goodbye any chance it had of capturing Jetstar. Amadeus will not be quite so central to their future and QF will likely start to cast its net a little wider to other systems to help it transform from the legacy and stodgy old line business of the former regime into a much more nimble player. CEO Alan Joyce has made no bones about the fact that QF mainline must shape up or the routes will go to Jetstar. Amadeus should be under no illusions that it affects them too.

Now they have a lot of repair work to do.

Cheers

With special thanks to the SMH and DT.com.au for the images

The EWR "Trespasser" Identified As Foreign National

As I was waiting to board a flight to Las Vegas this week, I witnessed a long and protracted dialogue between a gate agent (For Virgin America) and a non-english speaking "guest" trying to board my flight. The agent correctly denied the person the right to sit in an exit row as they could not meet the criteria of being able to understand the instructions of a crew member in an emergency. Bravo to the agent. He did the absolute correct thing.

So the alleged man at the center of the Newark Airport Security Breach on Sunday Jan 3rd has been arrested. He has been identified according to News Reports as Haisong Jiang, 28, of Piscataway NJ a citizen of the People's Republic of China.

OK so I am not anti China in any way shape or form. I am however very cognizant that there are rules regarding visas. As a guest in someone else's country we should all be aware that the expectations and rules are are very specific and even not then our behaviour should be even better than resident citizens. If you break the law then you are subject to deportation.

As Mr Jiang seems to have flagrantly ignored the law and caused a massive security alert at EWR that would seem to fall into the pretty serious category of things that in another country - like China - would be subject to an immediate deportation or worse.

If the US Government is serious about preventing potential security problems then it should use tools at its disposal. Somehow the potential of a $500 fine doesn't sound like a meaningful punishment for the crime.

An immediate hearing and then revoking Mr Jiang's visa and then immediately deporting him would seem to be an appropriate response to his behaviour. Or am I missing something?

Cheers

JAL Bankruptcy Jan 19?

Associated Press (AP) is reporting that JAL's primary creditor an organ of the Japanese Administration has given the green light to a court organized bankruptcy reorganization.

Some of the measures sound pretty drastic. For example employee cuts of 13,000 staff.

This is just the focused and swift action that is required.

Fingers crossed

Cheers

Farewell 787-3 I hardly Knew You And Also..

Boeing has finally agreed to shut the door on the short range 350 Pax 787-3 aircraft specially designed as a Japan only aircraft for JAl and ANA. ANA formally changed its orders to the longer range 787-8 yesterday.

This also frees up some resources and may indeed spell the end of another Boeing Model - the 777.

With the A350-1000 making inroads the formerly Seattle based manufacturer now has to decide whether to develop the 777 eating 787-10 or stick with two competing products. My guess at this stage is that the 777 lifecycle just got one heck of a lot shorter. Boeing cannot afford to run 4 product lines. It should rationalize on 3 really 2 mass produced lines Narrow body 737 and 787 and a boutique product the 747.

With Boeing now almost certainly going to do another model refresh to the 737 (geared fan) rather than the brand new build aircraft predicted the overlap between the 777 and the larger 787s is too great. And which way will Boeing go, a larger 737 or a smaller 787 to plug a gap or two?

Interesting question. In the mean time Airbus has a more flexible product line with the A318 to A321 and more growth possible out of the 321.

I do believe that we will see both players rationalize around 2+1 models with the Jumbos being boutique hand built products and just 2 lines - widebody and narrow body.

But watch out below... here come the new planes from Bombardier and Embraer not to mention China and Japan.

Cheers

Quietly EU Drops Suit Against Microsoft

On December 16th, the EU quietly announced that they were dropping the case against Microsoft ending years of very expensive litigation.

Now that bundling has been accepted as anti-social behaviour - perhaps the EC can now look at some of the other practices out there of bundling by other players.

And yes - you know who you are.

Cheers

The New 3 Hour Rule

And you thought I was speaking about the Tarmac rule...

Nope - this is arriving before departure.

Here is a response from Delta to my question about the issues of missing one's flights.

Dear Professor Sabena,

Thank you for contacting us through delta.com. We are sorry for the delay in responding to your message.

As a guest you may have noticed additional screening measures put into place to ensure the safety of the traveling public. Due to these additional security measures, it is recommended that our guest arrive early for their flights whether it be for domestic flights or international flights. For guest who are traveling from a non-U.S.
location to the U.S., please arrive at the airport 3 hours in advance due to the new International Security measures.

While no specific time has been given for customers to arrive for check-in on domestic flights, it is suggested to be prepared for possible delays at security.

Unfortunately, we don't have an official waiver for guests being delayed at airports and missing their flights due to additional security screening.

We appreciate your business and look forward to seeing you on your next Delta flight.

Sincerely,

Benjamin Hartley
Medallion Desk

So now you know....

Cheers

Your Tax Dollars At Work (USA ONLY)

NOT!

So Mr Obama has decided that there was a systematic and potentially catastrophic failure of the US security system. But Dear Janet (Napolitano) seems to know that while its a problem - don't worry the Government knows how to fix it. (Remember she changes her tune every 5 minutes). There is no need to panic because the issues are straight forward to fix. Right?

NO WRONG. FIXING THINGS ON A WHITE BOARD IS NOT THE ANSWER. There is still a significant and continuing problem that the President has not either been advised on or has failed to see. Either way - we are STILL AT RISK and all that has happened is another SET OF PLASTERS (Band aids) has been applied to the same problem.

But if I may I would like to point out the various issues that we as regular flyers in the USA face. Surely this is a contributing factor?

So here goes.

There are several programs administered by the Dept of Homeland and Security and its various agencies - TSA, CBP, CIS etc etc). For the TSA which is responsible for domestic protection - the main effort is SecureFlight. A program so successful that the only company qualified to offer it went bankrupt. But wait there is more. Indeed there are different programs for Domestic Travellers, Inbound Travellers and Outbound Travellers:
TSA based
* Registered Traveler (TSA)
* Secure Flight Program (TSA)
* Terrorist Screening Center (FBI)
Global Entry (TSA)
* GEOS (CBP)
* NEXUS (US+Canada)
* SENTRI (?)
* FAST (US + Mexico)

Then if things go wrong there are different ways to address the problem of a person being denied entry into the USA.

These include:
* Request review or waiver of ineligibility to enter U.S.
o Canadian Citizens (CBP)
o Canadian Citizens (USCIS) or
o Non-Canadians (State Department)

So far I count at least 6 agencies involved in the process. 6 separate agencies with their respective government infrastructures. Multiple ways to get things wrong. 6 political processes to be reviewed... etc etc. spread across at least three Government Departments. How can they possibly keep things in sync???

Now we can add another component to the program in that US Border States (north and south) have programs that let you use an enhanced drivers license for entry into the programs (at least one or more).

So the issue for me here is that if I am trying to be a trusted person and a member of the good guys brigade how can I do that? Actually one of the best ways to do this is to get stopped by the TSA (or one of the legion of different programs). Then you can apply for a Redress to get yourselves fully vetted and then you will be cool.



Pity poor people like several of my relatives who have weird names.

So PLEASE Mr Obama if you REALLY want to avoid a systematic and endemic failure in the system you should look at the base of the pyramid.

We are supposed to have a multi-layered approach to security. Instead we have a compartmentalized approach to security. Driven by that same old bureaucratic Washington quango process that has driven us all nuts for so long... and contributed to the failures that led to the NW253 incident in the first place.

Lets start by having a sense of rationality and streamlining of the process. Money seems to be no object so at least lets get the architecture and the design right NOW WHILE WE CAN. Because I believe at the moment we have a very large truck through which bad people can drive a large amount of bad things through.

Finally perhaps the Government should stop listening to the big defense contractors and start paying attention to the electorate. I would say the electorate is one heck of a lot smarter than the defense contractors.

'Nuf said?

Cheers

Yes Virginia, Airlines Can Make Profit

Airline sales of Ancillary products are now driving carrier profits at a rate that has never been seen before. While not quite as revolutionary as some might think - it is clear that the model is here to stay.

I have recently seen some fairly wild estimates and some very pessimistic estimates for the size of Ancillary Revenues but we now have some empirical evidence. With Q3 2009 (Source BTS US) revenues from Ancillaries coming in at around $2 billion - we can safely assume that the run rate is of the order around $10 billion for the US carriers. Add in the European (masters of the art form) and you are looking at double this rate at a minimum. So if we take all airlines as a class we can say that the run rate for Ancillary Revenues could be in the range $20-$25 Billion per year.

Forrester's Travel Gurus - Henry Harteveldt and Elizabeth Stark have just published a Technograph: Airlines Need To Convince Passengers To Use Digital Channels To Buy Ancillary Products

One can easily infer from both the title and the document itself that the Airlines have a lot of work to do to expand this revenue footprint. The downside to service based ancillary revenue (as opposed to value added sales such as Non-Air Products) is that the fulfilment has to be convenient. At the present time that convenience is focused on the only places where the value transaction can occur - IE the airline website and the kiosks.

This is where the current technology generation of tools and services is clearly falling short. Many of the decisions need to be included into the work flow of the sales process. This is a new role for those who are involved in that work flow - either self service or guided modes require this level of capability. However it doesn't exist.

Breaking through the Gordian knot of current TPF and similar based systems to move to an a la carte service model is going to take some time. But the functionality needs to go from the pure airline environment into two distinct areas.

1. Airline partners - such as Travel Agents
2. Third party service providers such as airport based kiosks and mobile providers.

In the former case the agent community needs to clearly step up their work in this area. In the latter case there is now a large and burgeoning community of Trip Based partners who can enable this type of functionality independent of the seller. I realize that this is heresy for someone to advocate the possibility of servicing the customer in this way - but I think we must be realistic and accept that the user will make his own choices with regard as to where and how he interacts with his virtual persona on the trip.

And less the world thinks that this is not going to happen - lets consider the possibilities of how it can. The Ideaworks Group - Jay Sorensen recently produced an evaluation of the BA attitude to ancillaries. "Curiouser and Curiouser:
the Wonderland of Changes Wrought by BA". It included the now infamous BA Price Gouging calculator... showing how cheap it is to book on BA. OK - go and read it - its called the Value Calculator.

The combination of both these recent reports show that the airlines can make money. However the execution leaves a lot to be desired. It will be very interesting to see which airlines do become adept at selling ancillaries and maintaining the value of that service in the customers' eyes. Success or failure will mean billions of captured or lost revenue.

Cheers

AA Tries Belatedly To Up The Ante For JAL

After its lackluster effort promising exclusivity to JAL, AA has put its hand in its pocket (or probably more correctly into TPG's pocket) and pulled out a further $300 million. Which takes the total to $1.4Bn it is prepared to offer to invest in JAL and retain JAL in the OneWorld fold. And in a tip of the hat to reality it has offered to add this to the pie irrespective of a Chapter 11 style filing and subsequent reorg.

Will this change the stakes? Is it too late? It certainly does tip the balance more to AA's favour who is by now realizing the cost of losing JAL would be significant.

With a Court Protected Reorg now an almost certainty for JAL - the decision is slipping out of the hands of the management and into ETIC's remit. With the Government now the largest creditor for JAL - this all plays nicely to the traditional way of solving Japanese issues.

JAL needs a major reorg and it needs it now. There is very little time left to effect this without losing some of the good wood as well as cutting the bad.

Is there Someone Missing From The Party?

The Hoopla over the Jetstar/Air Asia pact may be missing a player. That player would be Easyjet.

So here's a thought - how long before Stelios thinks to join up. It might be the right occasion for the Easyjet plane to get built.

Cheers

Mesa - The Long Road to Retribution?

Nearly two years after Mesa stirred the ire of just about everyone in Hawaii for starting a war that led to the demise of Aloha, Mesa itself filed for Chapter 11.

It seems Mr Ornstein as CEO incurred a fair amount of "un"friends in his tenure at Mesa. Many of whom I would think, will not be unhappy to see his company's demise and hopefully to have him gone. But then I am only speculating and this is only a blog.

The reasons why Mesa failed could have been seen for a very long time. In the early 2000s, there were a lot of analysts emphasizing the coming problems of the Regional Jet model 50 seater model. As the fuel crisis deepened the over population of early model CRJs (from both Embraer and Canadair) worsened. And the biggest operator of these? Mesa.

There is a sad story potential that some service points operated by Mesa will suffer a loss of service as a result of this. So what will happen to Mesa? Probably a carve up. My guess is that Republic and Skywest will be likely players.

Cheers

Before You Rush Out For That Nexus One...

Go read what Google has to say about its own device:

http://www.google.com/support/android/bin/answer.py?answer=166507

So AT&T network users. SOL.

Verizon Users. SOL.

Hmmm so is Google trying to tell us about how wonderful their technology is... for the second time today - I keep thinking that Google may just be an evil empire.

Cheers

Google "Ditches Local Listings" ???

I caught this piece on WebProNews that should have all of us worried.

Google seems to be deliberately ditching local listings. I highly recommend if you are involved in SEO (and SEM) that you pay attention to this and let your people and their people know about this. Google is flexing its muscle in more ways than one. If we thought that Microsoft was the evil empire - then we have to accept that Google is far from benign.

Cheers

Jetstar Snags Air Asia Dashing Virgin Hopes

The oft rumoured deal between Air Asia and Virgin Australia Group for the creation of an ultra LCC in the Oz market seems to be as dead as the Dodo.

On Wednesday ATW is predicting that Air Asia and Jetstar will form a partnership initially marketing based but over time it will morph into a bigger arrangement.

Comprising shared resources - virtual code sharing is expected to be the first fruits of the agreement giving the two carrier groups the opportunity to expand reach within the Asia/Oz market one of the fastest growing segments in the region.

With Air Asia X is now serving 3 destinations in OZ - Gold Coast, Perth and Melbourne. Jetstar is already well entrenched in Singapore through its Jetstar Asia and Jetstar Vietnam affiliates. Surprisingly there is little overlap between the two companies.

Now will this be a marriage of convenience or simply a series of marketing based dates? There are some basic issues that will need to be addressed. Qantas (Jetstar's parent) has been in league with Singapore interests who are not necessarily aligned with Air Asia. Air Asia X is making inroads into QF's long beloved Kangaroo route. A daily (now conventionally timed) flight on A330-300 aircraft is a fair number of daily seats to KUL. Does this also indicate a pulling back by QF from its relationship with BA?

For Virgin this reduces the options open to them. They are now looking westwards for their relationship with Delta to matter. If JAL and Delta come to an agreement then we could speculate that Virgin could become a fully fledged member of Skyteam - marking its transition from LCC to Full Service Carrier. Its already hynrid enough!

Cheers

Which Expedia Do You Prefer?

With thanks to Professor Tim for noting the new logo.

So I went through the Expedia sites and had a look at them - it has been a few months since I have seen all of them in context.

There are now quite a few of them - 20 to be exact.

* Australia
* Austria
* Belgium
* Canada
* China (elong.com)
* Denmark
* Germany
* France
* India
* Italy
* Ireland
* Japan
* Mexico
* Netherlands
* New Zealand
* Norway
* Spain
* Sweden
* United Kingdom
* United States

So here are some interesting statistics. All of the current sites but the US sport the old logo. So lets see how long it takes them to update that.

Only one has a girl pointing east - all the others have the contact person being a girl pointing west (left) if there is an image at all. There are 8 sites that use the same image of the US girl (there are 2 different images of her). Expedia doesn't seem to like blonds - they are relagated to the Canadian and Austrian sites only.

Oh yes and don't forget there is a corporate logo which is also different. I present all the ones I know about here for your edification. I ignored the suitcase and obviously I didn't present all of the variants but you get the idea.

Have fun with this and impress your friends

Cheers

"The Middle Seat" 2010 Wishlist - Safety.

Scott McCartney WSJ's Middle Seat Columnist has done his annual wishlist for 2010.

He covers several very important areas:

Airport Security
The TSA in general
Ticketing
Baggage
Flight Safety - Pilot Fatigue.

I applaud his taking this stand. But will anyone listen?

I would like to pick on one issue which is that of Pilot Fatigue. Firstly I am not anti-pilot - far from it - but I do believe a certain degree of reasonableness is required on the part of the Pilots, together with the authorities and the airlines.

The issue I have is with the domicile. Pilots are stationed in a domicile and are required to start their journeys from the domicile irrespective of where they might actually lay their hats on a regular basis. The case of the 2 Colgan Pilots (involved in the accident of CO3407) who both had extensive journeys to their respective domiciles before coming on duty is a case in point. The Pilot rest issue is exacerbated by the travel to and from their domicile's so that in due time the pilot's are not actually getting their legally mandated rest. This poses a severe strain on the pilots mental and physical readiness that is not addressed. Crew Rostering has become much tighter in recent years and the issue of Air Crew (not just pilots) stand down time. No one is not at fault here. The authorities (FAA and the DOT as well as the NTSB) are more than aware of the issue. The Pilot representative bodies and the airline managements all share responsibility for this problem. Ultimately it must be the Pilot's own responsibility to determine if he is safe to fly or not. The system must work so that this is not a case of someone pushing themselves beyond their own limits. Sadly - this is an issue that remains largely unaddressed.

With better knowledge and tools it must be the responsibility of the authorities to investigate and rule accordingly.

The fact that American is under investigation for no less than 3 landing accident or mishaps in the past month should be a warning sign to everyone. This is not a subject that needs further study. There has been quite a lot. It is a subject that demands action.

So let's deal with this soon. Like now.

Cheers

Alas Poor Yorick (aka Northwest)

Every year - I clean out old files and occasionally tackle a long list of things which in the US is known as the "Honey Do" list. This is of course of my own making. So I was reviewing my frequent flyer file. Whereas at one time it was more than 40 carriers deep it has now shrunk to less than 10. And this got me thinking about one of my favorite airlines.

The final chapter in Northwest's history is being written as we speak. While not exactly legendary for their customer service - they have a lot of history that was unique. Northwest Airways, Northwest Airlines, Northwest Orient and back to Northwest Airlines again. It absorbed amongst others its neighbour Republic which included Hughes Airwest, North Central and others.

Well known as being frugal - at one time there were no doors on the bathrooms so that executives and staffers wouldn't have the temptation to hide in the WC during the day. Not that the surroundings were luxurious - for the longest time the corporate HQ was the hanger at MSP.

Effective this month the airline of Don Nyrop and Colonel Lewis Brittin will soon be no more. The airline whose heritage includes Howard Hughes second string airlines and rather infamously D B Cooper will lose its last vestiges of independence as it is swallowed up into the world's largest airline Delta. It is already operating on a single certificate. The attempted bombing of NW253 should not have escaped anyone's notice that the actual A330 was painted in DL colours.

From my side it is a small degree of poignancy. My father and I both worked on the advertising account for Northwest at different times in our careers.

So here's to Northwest and its long history. I am confident that the legacy will live on.

Cheers

What Options Realistically for JAL?

There is a lot of speculation - including the Professor's - over what the real options are for JAL. There are also a lot of moving parts. Many who are unhappy that the white knight is coming from across the Pacific in the form of an American Suitor either Delta or incumbent American Airlines. It this group that see a lot of mileage in making ANA into a mega carrier and having it assume many of JAL's current international routes.

I think that this is pie in the sky thinking. The realistic options are few and far between. With the Government clearly stating it will not give carte blanche in writing yet another cheque for the ailing airline - it has few options.

So the likely scenario in my thinking goes as follows.

Firstly Open Skies means that there are few restrictions in letting ANA move into additional markets. It will be up to ANA to decide how to do that but already it has signalled its intentions by forming a transpacific alliance within an alliance with fellow Star carriers CO and UA.

Second the value of Haneda means that an inter-modal hub will be established there giving ANA an edge of JAL. JAL will be hard pressed to compete with its base in remote Narita. Also the international airlines are not going to be happy with having the local carrier enjoy an advantage and will clamour for access to Haneda.

Thirdly - we have to be practical. The current investors in JAL and those who have in recent years lent it money as it continued to bleed are not going to allow a wholesale carve up with them getting nothing in return.

While no one can reasonably muster a lot of sympathy for the airline itself and its financial institutional backers - there has to be some accommodation. The government bought some more time by agreeing before the markets opened today in Tokyo to double the amount of financial guarantees and cash that will enable JAL to stay afloat after a round of news stories over the past week that said both ANA would be acquiring some JAL routes and that the Government was going to enable a bankruptcy based reorganization.

JAL president Haruka Nishimatsu in a published interview with the Asahi Shimbun newspaper yesterday that he was opposed to any bankruptcy filing including "legal liquidation" and also had no plans to halt international flights. That is said after JAL has already announced or already pruned several cities and routes. On Thursday another Japanese paper the Mainichi Shimbun reported that the government was considering a plan which would see rival All Nippon Airways take over JAL's international flights. This plan was dismissed with derision as "impossible". Indeed such a decision at this time would be counter productive given the slow resurgence of traffic. Remember that Asia Pacific traffic was very badly hit in the Recession last year.

JAL is already on the record favoring a switch to a partnership with Delta and Air France from the OneWorld group of American Airlines for the reasons I have laid out before.

So there really isn't much choice or maneuvering room. JAL cannot recover from its current situation with external help. it's debts and obligations are too great and its need for radical restructuring too hard without a legal form of protection from both existing contracts with labour and a reduction in the bloated and expensive current operations cost load. A restructured arrangement with the banks taking shares in the newly restructured carrier and the existing shareholders - many of whom are small shareholders who must see their share percentage fall. Given the almost junk bond status of its debt and the penny stock basis of its current stock - there is little that anything other than a legal restructuring can accomplish. Its market cap is now worth a little more than a quarter of its competitor ANA. Fall of more than 80% since the halcyon days of 2006. I firmly believe that the ETIC board must move swiftly to act and recommend a form of restructuring akin to the US Chapter 11 for the sick carrier.

Only with this process and a clear plan can the form national carrier survive in any form. There needs to be no more bickering or prevaricating. Rome is decidedly burning and Nero and his friends better move out of the way.

Cheers

Body Scanner Yes or No?

For my first blog of the new decade I thought I would fix on the issue of security and the body scanner debate. So I am going to dive into the fray on this one.

There is quite simply the implied consent rule.

We do everything around this every day. As far as air travel is concerned we explicitly believe that we are being protected - in the same way that we believe that police are responsible for law and order. The issue is not whether you like this situation or whether you approve of the police - you accept their role or accept the consequences.

To this end - we really have little choice other than to accept that the best possible solution is being utilized for our safety when we are traveling. This relates to not only air travel but indeed any form of public transportation can be so governed.

In my humble mind there is no conflict with privacy or profiling of individuals and indeed (almost) any other tool that will ensure our safety while flying.

Refusing the use of Whole Body Scanners on the grounds of privacy is frankly ludicrous. You accept that you have no privacy when you walk into say a Doctor's office and the nurse examines you with our without your clothing.

To simply discard this imperfect but the best we currently have technology on the grounds of some possible misuse of privacy makes no sense at all to me. Ensuring the proper use of the technology and preventing unauthorized use of the technology for nefarious ends (which is the reason the current nominee for the head of the TSA should stand down - read the Washington Post )is clearly something that can and should be managed.

So are you clear on the subject?

I am

Cheers

The Professor's 2010 Crystal Ball Gazing

As the old decade draws to a close now I have to dust off the old cloak and the all rusty ball and decide what is going to happen next year.

General Travel Trends: Modest growth of both traffic and yields. Leisure will move ahead even further. This has significant impact on airline and hotel product offerings. One surprising trend will be that Intermediaries will gain market share vs Direct which will benefit GDSs in the short term. Increased use of corp video and personal video conferencing tools will be finally proved to reduce airline traffic. I predict someone will publish a study on this effect. Google will continue to make more money out of Travel category than any other player. Green wont be a big deal in 2010 as the recriminations from Copenhagen (aka Hopelesshagen) continue. Some countries will now apply unilateral green policies. Fuel will rise. Inflation will start to bite. Travel Industry employment will remain low. Airline deliveries will continue to see deferments.

Winners and Losers in airlines. surprisingly Southwest will struggle with its business model. It has reached the end of the current low cost model and it will morph into a hybrid airline. One US major will unveil a lower cost "simplified" domestic product and will be instantly matched by the others which will stimulate traffic probably in first quarter. UA and CO will move even closer together. US will start to look around feeling a little out in the cold. Look for perhaps a relationship with part LH owned jetBlue. DL will further consolidate and shrink a little further but will complete its partnership with JAL after the venerable carrier goes through its bankruptcy re-org. FR will have a moderated growth year - U2 will see a major challenge on some of its turf by a (former) legacy carrier. Look for one LCC based merger to take place in Europe. Consolidation will continue in India with another carrier losing its corporate identity. China will recover. Virgin Blue will continue to struggle. All LATAM carriers will continue to grow - look for at least one carrier their to switch allegiance in 2010. Trend of the year will be Merchandising although some airlines will get this wrong in spectacular fashion.

In Hotels. Pegasus will continue to struggle Synxis will continue to grow. PCLN will further solidify its growth. Look for a major merger in hotel distribution coming from an Asian base. Expedia will try to clean up its act in hotels and improve yield which will upset some of the major chains at least one of whom will have a major spat with the Bellevue travel giant. Look for Expedia to become the world's largest agency in 2010-2011. Orbitz will improve but corporate parent Travelport will offload a dismembered GTA.

In Distribution the big news will be the Q2/3 IPOs which will go out with modest success. The Money Venture Men will be happy. The poor debt ridden rumps left behind will continue to be unhappy. The allure of the cash flow will continue to seduce the uncanny investors all of whom will regret their buy in after about 6 months. The Term Full Content will have new meaning. Most major carriers will have adopted Opt-in content deals which will compromise the legacy GDS model. A lot of people will focus on replumbing XML based infrastructure. Merchandising at the point of sale will be a major trend. The Term OpenGDS will come to have more meaning. Look for major players to build bilateral relationships as opposed to traditional multilateral based links. Financial fulfillment will emerge as a major trend with EMD becoming a household word. Look for a degree of consolidation among corporate agencies. There will also be continued failings among smaller/mid size players as the shakeout grows. Search will continue to drive everyone crazy but teams will start to look to address the high cost of search. Twitter's light will grow dim as more commercialization and ghost/fraudulent usage grows.

Cool Stuff? The new iTablet (and clones) will start with an instant following. It will be the product of the year. Someone will finally do a mashup of all the "There's an App for that" different applications to create a viable first generation Personal Travel Assistant. Look for "Virtual Extension Reality". We have already had time shifting now we will have reality shifting with "Augmented Reality" being but a version 1.0 of this stuff.



So what will the end of the year look like... better than this one.

Happy New Decade from the Professor.


With special thanks to CBS, Demi, and the old guy for the image use.

Is Merchandising Anarchy?

According to Chris Elliott it just might be if you read his headline catching post on MSNBC's blog.

So I think this should be a wake up call to everyone associated with merchandising to ensure that some of the advise is taken to heart AND accommodated.

Specifically if I can synthesize it down - I would say that everyone has to be crystal clear in the process of what is included and what is not.

The EC is likely to develop a set of rules that differentiate FEES and TAXES as I noted on an earlier post.

So before anyone starts going off the deep end and creating merchandising opportunities that are convoluted, please remember to think about the customer.

Cheers

Second Decade of the Millenium Review

Dateline: Tuesday December 31st 2019. No one would have believed you if one could have predicted 20 years ago what we have seen this past decade when we were pre-occupied with Y2K and the millennium?

Sir Tony Blair was rehabilitated and elected the Head of the United Nations. He was a surprise compromise choice after the two term Al Gore whose tenure was historic in a global climate agreement in 2017, the first Caucasian Secretary General since the disgraced Kurt Waldheim. After 16 rounds of deadlock – Blair was elected in 2019.

The final round of GATT - known as the Havana Round after the Havana conference in 2017 – resulted in true harmonization and real teeth in worldwide global commerce. The most significant accomplishment was achieved last year 2019 with the Worldwide Agreement on Tax. Known commonly as WAX.

2020 next year will be a leap year which means also an Olympic Year – to be held in Mumbai. After much controversy over the selection of Mumbai over hotly favoured Cape Town

The Microsoft company was split into 4 separate companies early in the decade marking the then biggest company breakup in US corporate history. Of the So Called Teen Bills (after the late Philanthropist and Microsoft Founder Bill Gates) only three survive. The Operating System business became free ware in 2015 and is now mostly a standards and maintenance organization. Office Solutions and Corp Systems were re-merged into Corp Services Corp. The Universal Arts Company (after its merger with Electronic Arts and Universal-NBC) became the largest Entertainment Content Company in the world. Google Electric itself a merger of Google and the former GE has become the leading infrastructure company after the forced divestiture of their media interests.

Airframers: The Boeing Power Series engined 797 Narrow Body Family finally appeared and has been met with universal acclaim as the last in the conventional start of the art in aircraft design. The corresponding Airbus Bombardier A500 Series narrow body aircraft which first flew in 2018 is still hotly favoured to be the aircraft of the next decade with its controversial design and advanced technologies particularly in the use of hydrogen fuels. Airliners are now threatened as a species with the adoption of CommLink (see below). The heavy burden of environmental and security charges as well as the continued milking of the travel business made it the cigarette revenue source of its time. The last of the fewer than 50 Airbus A380s built will be retired as gas guzzlers sometime in the next 2 years despite having such few hours on their airframes. With most having been converted to freighters after the oil crisis in 2012. The two year delay in redesigning the 787 after the delamination incidents early in the mid sized Boeing model was matched by a corresponding delay in A350 which had a rather serious overweight problem. Both Boeing And Airbus Bombardier now have essentially just two product lines – the narrow body and the wide body. The last 777 rolled off the line in 2015.

For Airlines – the two Global Airline Alliances remain the focus of the regulators. Skyteam and Star now comprise more than 60% of the world’s total passengers. The Term GAA becomes a common term for all that is wrong in customer service. With the merger of Singapore Airline, Emirates and Virgin Atlantic into the Virgin Airline Group under one common brand – they are now the largest single airline brand worldwide. Ryanair finally softened its stance after Michael O’Leary retired his chairmanship in 2018 he had left the day to day running of the European arm in 2014. Its long haul operation was not a success and it was abandoned in 2016. The long haul part was finally merged into a revived Aer Lingus. Southwest and Easyjet merged their infrastructure businesses but retained the individual brands. Air Asia’s spree of buying second tier airlines worldwide seems to continue unabated but is seen as a bottom feeding exercise in a declining market.

In hospitality after a hotly contested merger battle for the hand of Intercontinental Hotel Group – they merged with Hilton. In Quick Succession Marriott acquired Hyatt and then at the low end the Choice Group. The JW Marriott Group is still vying with Hilton. The third member of the Troika is Carlson Accor Group.

In Distribution Jim Davidson finally retired after 8 years of running mega corp AmaLogix. John Martin an industry unknown from Banking is the youngest head of an Open Distribution Company (ODC which moniker replaced the archaic term GDS in the early part of the decade). He heads the multi-faceted Sabreport group.

With the huge adoption of CommLink – the virtual meeting business – and the high cost of fuel, total travel finally peaked in 2017 and has fallen 2 % in the last 2 years of the decade. The Travant Group which emerged from the spin out of Google’s once secret Troogle project and the merger with the hotel switch company and the remnants of the non-content components of the largest Travel Company in the world Expedia. The largest second largest travel company famous for its kiosks and tour operating business is now the Thomas Cook company (formed from a merger of Thomas Cook, American Express Travel and JTB).

In Travel Tools – the OTP – Open Travel Platform and its subsequent offspring UTP – Universal Travel Platform standard (itself built on the OML standard) was widely adopted as the master standard by which all players in the value chain would communicate. With the adoption of the Havana Round and UN mandated via IATA on WAX (see above) simplifying global government revenue harmonization processes – financial fulfillment has been vastly simplified. The abolition of the financial clearing houses of BSP and ARC (remember them!) further reduced the cost and simplified the way in which consumers purchased travel. The sunset of the use of non-electronic money in 2018 has also further simplified process. Fraud however remains a constant problem particularly after the global bank clearing brownout that occurred in 2013.

And that’s the way it is on December 31st 2019. Have a good new decade. This will be Professor Sabena’s final posting – he has pleasure in announcing his retirement this day.

Enjoy and Cheers



With thanks and acknowledgement to GreenAviation and Design Q for the images.

Its Official!

The Professor is NOT on the no fly list (well at least today) and as far as he can tell is not on any watch list.

I am a newly certified Global Entry participant. So for the next few years I can use those new fangled machines. this means I am held to a higher standard than regular travellers.

Let's see how good this gets

However for the rest of you who want to join - pay your dues (its not cheap) and click here: (Hint they don't make it easy!!!)

What The Secretary Really Meant

I have taken the liberty of putting in thought bubbles into the US Dept of Homeland Secretary's Official Statement:

Statement by Department of Homeland Security Secretary Janet Napolitano

Release Date: December 26, 2009
For Immediate Release
Office of the Press Secretary
Contact: 202-282-8010

"I am grateful to the passengers and crew aboard Northwest Flight 253 who reacted quickly and heroically to an incident that could have had tragic results. PHEW WE DODGED THAT BULLET THANK GOD THE PASSENGERS WERE ON THE PLANE - LORD HELP US IF THEY HADN'T BEEN THERE The Department of Homeland Security immediately put additional screening measures WE THINK THEY ARE SECURITY MEASURES BUT JUDGING FROM OUR HISTORICAL PERFORMANCE ANYTHING GOES AT DHS into place—for all domestic and international flights—to ensure the continued safety of the traveling public I AM NOT RESPONSIBLE WHEN PLANES FALL OUT OF THE SKY SO PEOPLE'S HOUSES ARE EXEMPT FROM THESE NEW MEASURES. We are also working AND THIS IS A FIRST FOLKS closely with federal, state and local law enforcement on additional security measures, as well as our international partners AL QUAEDA HAS RECENTLY BEEN AWARDED GOLD STATUS ON OUR LIST OF PARTNERS on enhanced security at SOME airports and on flights OR AT LEAST THE ONES WE THINK WE KNOW ABOUT BUT WE DO HAVE A TENDENCY TO LOSE A FEW LIKE THAT NORTHWEST FLIGHT THAT OVERFLEW MSP.

The American people should continue their planned holiday travel and, as always, be observant and aware of their surroundings and report any suspicious behavior or activity to law enforcement officials. IF YOU ARE NOT AN AMERICAN THEN TOUGH COOKIES I DON'T GIVE A DAMN AND I HAVE NO RESPONSIBILITY FOR YOU WHATSOEVER.

Passengers flying from international locations to U.S. destinations may notice additional security measures in place BUT ONLY IF YOU HAVE BEEN SLEEP WALKING OR IN A COMA FOR THE PAST 10 YEARS WILL THIS ACTUALLY MATTER. These measures are designed to be unpredictable YUP LIKE EVERYTHING ELSE HERE AT THE DHS - EVERYDAY IS SOMETHING NEW. HECK I CANT EVEN FIND MY OFFICE ON SOME DAYS, so passengers should not expect to see the same thing everywhere INCONSISTENCY IS A HALLMARK OF MY ADMINISTRATION I DONT INTEND LETTING ANYONE HAVE A PREDICTABLE TRIP PERIOD. Due to the busy holiday travel season, both domestic and international travelers should allot extra time for check-in. OH YES AND THAT INCLUDES YOU MOTHER"

IS THIS MIKE ON?
###

... After The Horse Has Bolten

So This week's Stupid Airline Tricks award goes to the DHS and the TSA.

Their knee jerk response includes such wonderful things as no inflight maps and no announcements of landmarks and anything that could be used to give the passengers on the aircraft some reference point of where they might be.

A possible source of the official instructions can be found here. It is allegedly signed by Gale Rossides.

Er excuse me - i think on my itinerary it tells me when I am due to arrive. Also last time I checked we are surrounded by time pieces. But I didn't see anything in these instructions about giving up watches or banning watches from flights. I can just see the goons at various airports around the world removing Googlemaps, Google Earth, Atlases and maps from people's computers and carryons. Does the word cras come to mind?

So thinking like a conspiracy theorist - I think this is a sinister plot by the AFA to enforce passenger behavior on airliners. But I digress. I further think its possibly an attempt to not point out things that are obvious.

These rules (which carry an expiration date of Dec 30th), don't seem to offer much in the way of additional security. About the only thing it is going to do is to limit the spread of H1N1 or other communicable diseases as most US airlines don't bother to have clean blankets on board these days.

The TSA needs to get back into the game of thinking what is wrong with their elaborate schemes. They have developed a solution which has fundamental flaws in it. That needs to be rethought.

Oh and one more thing. At Schiphol they have the Air Blown Scanners are designed to detect PETN. However they are set up so that there is only one per gate. Thus if you leave from the H (low cost terminal) gates there are 3 scanners and the PETN based scanner is only on one. Not sure that is really a good idea.

If the US was truly interested in solving the issue of bringing chemicals onto the plane then it would would have long ago mandated a system of either 100% manual search or 100% scanner inspection.

But don't get me started on the multiple layers of the so called security that this chap passed through. This was exactly the same as the situation on 9/11. There was the ability to link the terrorists to at least one bench warrant for them. This shows that the central plank of the security namely not just identifying the real or potential bad guys but not letting them onto the plane is still a failure.

This breakdown means that this weeks Professor's Stupid Airline Tricks Award goes to the ladies Administrator Rossides (TSA acting) and Secretary Napolitano (DHS Secretary).

Now don't just sit there - do something!

Cheers

You Are Only As Safe As......

In what must be a stunning admission of the obvious US Dept of Homeland Security Secretary Janet Napolitano said “No one is happy or satisfied with that. An extensive review is under way.”

If you go to the TSA website and read the complete guff that is there (I particularly like their Myth Busters section - it is rather inadequate I would say).

Of course after more than 8 years since 9/11 and countless pointers and incidents that have occurred before and since - we still do not have a secure system.

I recently travelled to 5 airports in South America. Liquids BTW are allowed through domestic flights and still between some countries. Over the past year I must have been through an airport over two hundred times or probably more. I have watched innumerable security devices that don't work and staff who either don't have a clue or are remarkably disinterested. The TSA is probably no worse but decidedly not best in class in this respect. There are many others who are better at doing this kind of work.

One statistic I would like to see is the amount of absenteeism for whatever reason for TSA employees. Saying (as the website does) you have improved considerably from prior years only shows how bad it was before. We must accept that the government is not going to be good at doing this any better than anyone else. So we are somewhat condemned to a mediocre system. We however as system users must fight for a better level of quality. It is not a temporary situation - we have to fight for it on every trip at every stage.

The current US Government solution has been based on a layered approach to the issue of security. This approach is still probably the best we have. However you have to ask yourself is it adequate? More importantly are all the elements for a formal layered system in place? In my opinion it is clearly neither. I liken the approach of the management (by the Dept Of Homeland Security) of this layered approach to that of the US financial ratings agencies. They only realize there is a problem when someone else points it out to them, even though to the common man it is blatantly obvious.

So I will (probably misquote in words but the context is clear) quote Rafi Ron who was the head of Tel Aviv Airport security - he now runs his own security firm in the DC area. He stated on a panel I ran in 2002 - "You are only as safe as your fellow passengers are alert and will let you be safe".

Judging by the events of the past few days on NW253 this was the case.

So ask yourself the one question. What would you have done? Clearly a lot of other people on the NW flight just sat in their seats petrified. Only a few passengers decided to take action. If you can believe the news reports, the crew were not the people to take the terrorist to the secure seat. It was the passenger who jumped him. That shows that we still have a lot of issues as to how the system could work.

Next time you listen to that pre-flight briefing announcement consider that one phrase actually rings very hollow. It goes something like this "... Remember the Flight Attendants are here for your safety".

Safe travels everyone.

Cheers

Christmas Giving

As its Christmas day and the dog woke me up - I have decided that this Christmas I will give to the usual round of charities that my family supports. I thought I would share with you what they are and suggest that you do the same.

Our interest has always been in supporting 4 basic principles:

Free Speech
Climate
Animals
Helping those to help themselves

To this end here are the ones I recommend you join me in supporting:

1. NPR - National Public Radio in the USA.

2. TerraPass (headed by my former colleague Erik Blackford). This is a paid form of guilt but I recommend you do it anyway.

3. Animals. I am a dog person. So there are three that I support. All of them are in the UK. These were favorites of my Mother so I do it in her name. The Dog Trust, the Guide Dogs for the Blind and German Shepherd Rescue. I particularly like this one because the initials are GSD (not GDS get it!!!)

4. Finally my favorite for bang for the buck is Kiva.org. So far I have seen a 100% return on my donations. So please give generously and get involved in your giving.

I have made it easy for you so all you have to do is to click on the links and you can gift in less than 30 secs. How easy is that!!!!


Cheers and Merry Crimble

Whose On The Favorite List At American?

I just went to see "Up In The Air" its a great movie. While I am not quite of the same league as George, I can empathize with a lot of this. I recognize many people I have met in the story, and apart from George may even resemble one or two of them. However it is rather a long advert for American! Even Sam Elliott's appearance is a little over the top. But its a great fun watch.

Recently I have written a fair amount about American Airlines and its new direct distribution approach.

So now its probably appropriate for all of us to look at the list of who is "approved" so far. While I have had the list for nearly two months - I think now is a good time to share.

So for those of you who are really keen to see this you can find the link here:

http://www.t2i.biz/AAdistpals

Enjoy!

Cheers

The Oughts Trend of The Decade

So as we enter the holiday season - I have been reflecting on what would be the trend of the decade.

Wow what a decade it has been. Consider all the good and not so good things that have occurred over the past 10 years. Remember that this time ten years ago people were preparing for the IT meltdown of all time - Y2K. Remember that?

So what has been the Trend of the Decade. Some might argue that Social Networking is the trend. I would agree it has been tremendous and the boom occurring late in the decade coming to the fore largely in the last quarter has radically changed the collective consciousness. Nope that is not quite my nominee.

How about mobile. As the decade opened - I was heavily involved in mobile apps with the promise of geo-location. Nope Mobile didn't quite make it as the killer app for the oughts. However the general adoption of advanced devices is astounding. Now if ONLY THE CARRIERS would let us have reasonable annual contracts...

How about Google? This has certainly been their decade. Look how they have managed to replace Microsoft as the guardian of the IT flame. In doing so they have avoided the hatred of MS. However they now exert more power and control, and they know more about our innermost thoughts than anyone ever has. Their power is frightening. If you are not in real fear by now of the allegedly benign giant - then you should be. But no not these guys.

So Give UP???

The answer in my humble opinion is Digital Junk - The Trend of the Decade is eTrash. The mindless pushing of digital bits of data into the ether. This is truly the decade when the ability of our puny brains to comprehend the amount of data out there finally ran out.

Cheers

The Professor's Christmas Greetings

Christmas is coming,
The GDSs are getting fat,
Please put some XML
In the old legacy hat.
If you haven't got any XML,
HTML will do,
If you haven't got HTML,
Then let's hope God'll bless you.

Christmas is coming,
The markets are going free,
Spruce up your marketing for everyone to see.
If you you haven't got merchandising,
Some selling will do;
If you haven't got any clue,
I'm really sorry 4 U!

Christmas is coming,
The season of good cheer,
Let's all sing about our open new year!
If you are happy to sing,
Then a little practice will do;
If you haven't got a jolly song,
Then May God... bless... you...!


The Professor, his Elves and fellow Professors around the world would like to wish you wherever you are peace hope and understanding. May this spirit of hope and good cheer last all through the year. Please keep your emails, comments (and yes even Tweets) coming. I promise to do my best to keep providing you with some insight and information. Hopefully we will all be a little wiser and richer in mind by this time next year. So thank you for reading and may you and your families have a great one.

Cheers, and may your God go with you

The REAL 2009 Travel Awards Show

Don't listen to cheap imitations - for the real scoop listen to Professors, Braniff, Sabena and Mrs O'Leary dish the real dirt on 2009

http://iagblog.podomatic.com/entry/2009-12-22T13_47_26-08_00

Enjoy our annual roast

Cheers

LH and Amadeus FINALLY Come To Terms

So the deed is done. Effective March 1st 2010 LH and Amadeus have a full content 3 year deal.

So behind all the backslapping and other wonderful words that will be spoken - there is a clear set of expectations of what can only be described as "huh?"

Most people reading the Press Releases will just gloss over a few terms. But there is enough here to drive a truck through. LH has clearly won some major concessions in both price and conditions.

Gentlemen (airlines and ladies) - start your engines - time to re-examine your GDS contracts!

Cheers

Grupo Marsans Should Probably Stick To Buses

Another Grupo Marsans Airline bites the dust. This time its Air Comet its Spanish based company that was grounded by Spanish Regulators after a court gave permission for a German bank to seize the fleet for non-payment of loans.

This marks the second time a Grupo Marsans airline has gone out of business or been taken over by the Government as was the case with Aerolineas Argentinas.

According to Wikipedia: Grupo Marsans operates as a tour operator in Spain. It has operations in Spain, France, Italy, Brazil, Mexico, Venezuela, and Argentina, as well as representations in Latin America. The company was founded in 1910 and is based in Madrid, Spain. Grupo Marsans is a subsidiary of Autobuses Urbanos del Sur, SA.

So perhaps in future they should stick to buses.

This is also bad news for Airbus as Grupo Marsans had many Airbus products on order including 10 A350s and 4 A380s. Earlier this year some of the white tails at Toulouse were revealed to be A330s originally destined for Air Comet.

Cheers

Not A Great Day For AA/OneWorld

All humour aside, OneWorld received two bits of bad news yesterday.

Firstly from Asia came the news that the Japanese Government is unlikely to provide a full bailout for JAL. JAL's stock in recent days has risen on reports that Delta has won the dance card of the old lady JAL.

Then today the US Dept. Of Justice nixed the BAAABI (BA, AA, Iberia) Alliance. However this is last one may not be that bad. The DoJ also tried to nix the CO/Star Alliance partnership. The DoT is the ruling authority in the case. They could well do the same and rule in American's favour.

Finally our hope is that the injuries sustained in the accident to AA 331 are minimal - so far there are reports of injuries but no fatalities. The aircraft (Boeing 737-800) whose route was DCA-MIA-KIN, broke in three pieces after a landing overrun tonight in what was pretty foul weather. So far 40 injuries have been reported and 3 possibly serious. The aircraft has been reported to be one of the older 738s in AA's fleet.

Cheers

787 #2 flies

 

 

3 Hour Rule: Is It Enough & Will It Work?

With much heralding the US DoT has implemented effective April 2010 a new rule that limits tarmac delays of more than 3 hours. While itself a victory for Kate Hanni and her FlyersRights group, it doesn't do a lot of things.

Firstly it is not a law. Let's hope the Boxer/Snowe Bill becomes law this session. Secondly international is not subject to this. Effectively letting JFK and the Transatlantic carriers off the hook. Thirdly this is far from a comprehensive Passenger Bill of Rights that many (me included) have been seeking. The Boxer/Snowe bill from the fine Senators from California and Maine must pass. Event then it is not as comprehensive as the EU legislation.

Being a frequent flyer and at the same time working within the industry, I have perhaps a more heightened awareness to the issues of operational nature that affect flight operations. The US Air Transportation System is a finely tuned animal moving 3/4 of a billion people annually on its scheduled apparatus. Europe's traffic (as represented by the ECAC countries) is now approaching a similar size and has a far more complex infrastructure due to the national jurisdictions that it covers. However the EC has been able to pass and implement a far more comprehensive set of rules than the USA. For which successive Administrations must accept responsibility.

For a comprehensive set of rules and how to implement them as an example - I suggest dear readers you go and visit the Relevant European Community Transport Website - Passenger Rights

As to whether it will work, I am somewhat skeptical due to the nature of some airports and the ways in which some airlines have the peaks and hub banks. Like all services - there needs to be a better way to manage these peaks and the onus needs to go back to the airports to implement this. Today they have a vehicle for collecting a passenger head tax - PFCs some of which are used to line City Coffers rather than directly related to services provided. Each airport has the right to charge a peak slot time price. What the DoT has failed to do here is to make the policy have greater teeth by only putting the onus on the airlines. The airports too must be part of this equation as indeed must the DoT itself through its management of the FAA.

For regular readers of this column - I am still angry (make that livid) at Secretary LaHood's recent screw up over the BA India Fare debacle. Perhaps he is trying to deflect attention away from that by announcing this "Rule" now.

In the long run there is no substitute for a comprehensive set of rights and rules that can be justly applied. There are no arguments that can be levied by any of the supply side players (Airports, Airlines, FAA etc) as the EU's code has been implemented and has shown a materially improved level of service to the travelling public.

So to answer my own question. The answer is No and No. But it is a move in the right direction. Let's hope it is not the only move.

Cheers

With thanks to the Brisbane Times for the most appropriate picture.

767: I'm Not Dead Yet!

While the 787 has been stealing a lot of the limelight (and not all of it complementary) the 767 the plane that the Dreamliner was supposed to replace had garnered only 2 orders and 5 cancellations for a net of -3 orders on the year. But today ANA (the launch customer for the 787) redressed the insult and put the 767 back into positive territory. (Unlike the other Seattle Team - the Seahawks who had a disgraceful showing yesterday).

With the certification process now underway for the 787 and a target of nearly 9 months to obtain approval - the Chicago based plane maker needs to keep things positive. The 787 after one of the most aggressive sales programs in history and a very healthy order book actually experienced a net loss of 70 orders this year. Airbus correspondingly gained 22 orders for the year for its A350 family.

I suspect we may see a resurgence in orders for the 767 as a stopgap to replace existing short falls of 787. But the likely continued winner will be the A330. The Airbus wide twins (OK and the smattering of 240s) have a backlog of nearly 900 aircraft.

And with an acknowledgement to Mr Idle and Company for the image and quote.

Cheers

Stansted Sale Halted On Technicality

In March the UK Competition Authority ruled that the UK major airports authority should divest itself of two of its three London Area airports.

As a result Gatwick has been sold and Stansted has become the battle ground for BAA vs the authorities.

The technicality is that one of the members of the investigation team was also an advisor to a group of pension funds who owned a chunk of Manchester Airport one of the bidders in the Gatwick sale. As a result of this "bias" the divestiture process has been halted.

For a full report on the Tribunal's assessment and ruling click this link.

Clearly this has disappointed at least one of Stansted's tenants. Its largest is Ryanair whose CEO was quick to blast the decision.

So this is another story that will play and play

Cheers

Who Blinked? BA or Amadeus?

BA and Amadeus have signed a three year extension to their existing contract which will now expire in 2013.

Both parties seem pleased with the deal which BA's John Mornement, head of selling and distribution at British Airways, said the agreement reduces the airline’s distribution costs. Amadeus was also pleased as it extended the ability of the GDS subscribers to have access to full content.

So the answer is they probably both blinked. Let's hope that they all read the fine print carefully. Look for increased costs for the intermediaries as a result of this agreement.

Cheers

Travel Weekly's Nadine Finally Retires

Perhaps not the most flattering of headline I could write - but Nadine Godwin, long time Travel Weekly (US) Editor and staffer has finally hung up her formal pad and pen for the last time. TW has done a nice piece on her. Have a read although it hardly does justice to her career.

Knowing Nadine for more than 20 years - I am sure she and the cats will not go quietly.

I had the chance to say good bye earlier this month at the Farelogix SPRK symposium. I hope we gave her a good send off.

Cheers Nadine. Best of luck and keep writing.

EC Investigates Taxes and Fees. Doesn't Like What It Sees - Likely To Legislate

One thing you can say about the European Commission (EC) when it doesn't like something - it acts pretty quickly. With the powers of judge jury and executioner, the EC has broader powers than those of the usual sovereign state authorities.

The Commission formed a committee to investigate airline fees and taxes. his Project Study group has just released their findings. The 25 page report is clear and concise.

"The investigations that were conducted in relation to this Common Activity involved an examination of 281 flights and contact with 34 airports and 24 airlines. These investigations and contacts form the basis for the conclusions reached in this report."

The conclusion of the report should give a clue as to how the EC will act in the future:

"The practical knowledge gained by the participants during the course of the Common Activity has fostered a new understanding of the airline industry within the respective consumer authorities. As such, the completion of this report represents a starting point for increased consumer protection cooperation across Europe, clearer guidelines for airlines on how to present air fares to consumers and, most importantly, more transparent transactions for consumers purchasing flights."

The study itself surprisingly had small amounts of representation. only 10 of the 29 EU nations were included. Under the direction of Norway's Consumer Ombudsman, the group did not include participation from the two major travel markets of UK or Germany.

The carriers investigated were:
*Aer Arann
*Aer Lingus
*Air Berlin
Aireuropa
*Air France
Austrian Airlines
British Airways
Brussels Airlines
Czech Airlines
Estonian Air
*Iberia
Icelandair
Iceland Express
KLM
Lufthansa
Malmö Aviation
Norwegian
Polish Airlines LOT
Ryanair
SAS
*Skyways
Spanair
Travel Service/Smart Wings
*Vueling
Note those with the * chose not to cooperate.
34 Airports were also evaluated.

Ths study showed that of the Fees and Taxes charged (TFCs in the EC's speak) only 41% were directly levied by a government body or airport. Of the remainder more than half was attributed to Fuel Surcharges. Given that the study was done at the end of 2008 - it is likely that the percentage of TFCs has grown since then and the proportion of non Tax levied charges has also increased.

The Study group found that many of the airlines were not in compliance with EC rules. It specifically states that to be in compliance an airline has to ensure that its charges as represented on the website should be:

To be in accordance with Article 23, government taxes and airport charges must be:

clearly distinguished from other charges and
correspond with the actual amounts levied by airports and governments.

A follow up of the airlines in June and July this year showed that several airlines are still not in compliance. Also a noticeable exception - "Optional services – for example food/beverages, seat reservations, insurance or luggage – have not been scrutinized in this project."

The project study group made a number of direct recommendations. Here are the main two:

"The project group therefore recommends that all air fares should be comprised of the following elements: the basic air fare, airport charges and government taxes which are levied per passenger and the total price. All other unavoidable TFCs should be included in the basic air fare.
Further fees should only be added to the ticket price provided these are genuine optional fees and not mandatory costs all passengers are obliged to pay."

"The project group consequently recommends that passengers travelling in Europe should have a clear legal right to be refunded all airport fees and government charges which are not due. If the ticket for air transport is not used we believe that passengers should be entitled to repayment of all prepaid taxes and charges imposed on passengers by airports and governments and collected by airlines."

I believe that Article 23 regulation will be revised soon to address these issues. This will make the display of information simpler but will impose a set of conditions on airlines that will be hard for their systems to comply. The study while applauding the ability of the consumer to shop (presumably via the Search and OTA sites) did not address how they may also be required to display this information.

So chaps you have been warned. Offer airline products for sale and you will need to be pretty explicit.

Cheers


PS If you want a copy of the study - please ping me.

Airline Traffic Nov 2009 Figures Reveals Interesting Dilemma for US Carriers

We have two pieces of interesting data from sources that normally match.

The data sources are the US ATA - Air Transport Association, and the Airlines Reporting Corporation - ARC.

ATA measures total traffic for US airlines. So taking like for like - there are two sets of metrics. The table looks like this

November 2009 year vs year previous activity.

ARC Transactions up 8.64%
ARC Sales up 6.86%

ATA Passengers down 1%
ATA Sales down 7%

Even accounting for approx a 21 day advance purchase average and some date skewing due to Thanksgiving - this shows us that there is perhaps an interesting phenomenon emerging. I believe be that the percentage of travel booked via Intermediaries is actually rising and significantly.

PhocusWright and others have been predicting this for some time. The Professor believes this to be the case. We have seen that the effect of the Fee removal on OTA sales has been pronounced, with significant revenue increases since September - most recently in November the Y/Y growth was 20%. In addition even the TMCs are reporting better at 6% growth. The remaining category of "other" namely retail and tour operator/wholesaler based sales were flat in November. While it will be some months before we see formal numbers out of the GDS companies - we can be sure that the big 3 are showing increases that seem to counter the airlines continued downward trend.

It will be some months yet until the BTS (official government stats) are reported but we have a pretty good proxy now with the numbers we see from ARC and the ATA.

For the airlines this trend represents an interesting dilemma, and perhaps a clue to their recent behavior. With all the positive talk of airlines enabling Intermediaries to sell ancillary products via new tools this can only be positive. However there is a lurking issue. The legacy GDSs will also benefit from this swing in sales from Direct to Indirect.

Thus the airlines will need to look to the agency community as a class to swing them away from the legacy GDSs if they are to be successful in reducing distribution costs. If not then there is a risk that the GDSs will gain power and force concessions (and therefore higher costs) from the airlines. As we have seen even in the recession gripped down market - the GDSs have been able to boost yields.

As I have noted before - this is a war with many battles.

Cheers

Legacy GDSs Promote Fragmented Pricing Schemes

The recent distribution arrangement between Travelport and British Airways should come as no shock to anyone. As widely reported several weeks ago – BA is determined to adjust its distribution mode – the UK airline has re-signed with Travelport. It is also reported to be near an agreement with Amadeus (who also hosts the British Carrier). Despite being somewhat battered in the recent downturn – the British Carrier is driving to a beat where it lowers its costs for distribution. So lets briefly examine what is has agreed to with Travelport and what it wants to get from the other GDS companies.

Based on the current 3rd quarter Travelport numbers its (TP) average revenue per segment it gets largely from the airlines is near to its record highs of $6.00 (actually $5.82). While there has been an unbundling of the GDS segment fee lets use this number as a way to illustrate the relative deal with BA.

With approximately 60% of its revenue coming from the home market of the British Isles (again rounded for the sake of this illustration) the arrangement with BA is that BA will charge an opt in fee of three pounds per segment. In Dollar terms this is $ 4.50 per segment, which means that BA has set a price of net $1.32 per segment it will pay for distribution. In Ticket terms that translates into $3.04 per ticket (using 2.3 segments per ticket an industry norm). BA is of course not the only airline to charge a home vs away market model. A few years ago Amadeus announced a home vs away market pricing scheme in an effort to stem opt in contracts. The differential it proposed was vastly different with a home market discount of approx 50 cents per segment. A far cry from BA’s $4.50 opt in charge.

However this is not all. BA in the UK home market uses the service of Lime Management to issue discounted tickets (typically the lowest yielding fares in the market) at a per ticket charge of 13 pounds. That translates into a fee (note this is paid by the agent) of $19.50. Given BA’s recent losses – the achievement of this revenue for its discounted tickets can and does have an impact on its bottom line.

British Airways is not alone. KLM is quietly introducing a 6 Euro ticketing fee via the legacy GDSs in January in many markets.

The push pull of the legacy GDSs and the network carriers on the issue of the fee continues to be a battle royal. The war is only in its early days. Many battles will be fought. The outcome however has a certain degree of inevitability about it.

Cheers

Great signs we have missed since we gave up smoking...

A Public Service Message at Rio de Janeiro International (GIG) Airport

Rational Thinking - An Oxymoron Concept For Airlines

The conventional wisdom says that brand accounts for something. Indeed there is a signicant amount of balance sheet value attached to brands.

Not just for today but in the future and definitely in the past. Yet brands have a habit of going away fast.

Hands up those who remember PC Travel, Preview Travel and Pointcast? Three major brands with some reference to Travel in early days of the web. Or more interestingly great consumer brands like Sam Goody, Tower Records and Photomat. Brands that are now consigned to the scrapheap of history.

My point here is that airlines have always tried to get you to make irrational decisions about their products.

Have a read of Gerry McGovern's blog this week.

While he makes two incorrect assertions - Ryanair is not yet charging for toilets and it is not the world's largest single branded airline yet (that honor goes to Southwest), he makes the point that rational people will pay for the extras and put up with the crap from Ryanair. They wont do that for airlines that promise more charge more and fail to deliver the greater "value". this is akin to the David Ogilvy's classic ad about the Rolls Royce loud clock. In that instance a RR owner is going to make a lot more noise about the clock not working than a Pinto Owner worrying about his door opening.

Southwest set expectations low and over delivered for years. Ryanair sets expectations low and consistently delivers the fundementals - IE low cost transportation.

Is that rational behavior? I don't know - just ask the people who complain about no seat assignments when they paid the average fare of 32 Euros that FR charges.

Think about it.

Cheers

The Red Bag Story

Or How I got home on Friday despite all the odds.

On Friday (December 18th) I had a salutory lesson on travel. What ever could have gone wrong went wrong. But also its a lesson in how knowing the system and actually the generosity of customer service people can thwart the obstacles and get you what you want.

The ingredients are simple. An expensive coach ticket Berlin to Seattle. DL flight numbers AF operated metal (code share). Bad weather across Europe. Incompatible systems AF and DL.

Knowing in advance that things were going to be bad (last friday of the year for travel) I decided to go to the airport early. Just before leaving - I checked my itinerary on DL and found that they had changed my flight to a connection over NYC on DL rather than the AF code share over Paris. OK - I accepted that. (ESP since I received an upgrade). But it meant hanging around for 6 hours at Tegel Airport. Surely there was a better way. Arriving at the airport - I was met with at least 100 people who had the same idea. After a 90 minute wait in line - I made it to the front of the queue. Sorry your AF flight is cancelled and I cannot help you. Go to DL (Who opens in another 30 mins). Schlepping between gates in the snow became a fun exercise.

DL said great yes you are confirmed but no we cannot issue the boarding passes because we need the ticket. Eventually after much tooing and froing - back I go to AF. Cutting in line (it was still about 100 people long) I managed to get them to write a FIM (these are great - its essentially a get out of jail free card). Back to DL who then issued my ticket.

The rest of the journey was very fraught as it was late and there was a huge storm headed to NYC. But with 45 mins to spare at JFK - I managed to get my bags - check in for the next leg and then race across the 2 DL terminals just as the last few passengers were boarding the connection flight to Seattle.

I knew my bags would not make it despite the smiles of the JFK baggage team. Sure enough arriving in Seattle they didn't. And yes the possibility of bags showing up became remote as the day went on. With the East Coast largely shuttered by the storm - the thought of my bags not making it because more and more a fear. However yes - my bags were on the van on its way over. Hurray!!! And yes there were 2 bags and yes the second one was red. Disappointment. The assumption that the second red bag was mine was just too easy.

However by 9PM (now 24 hours later) my trusty red bag showed up.

So no morals here other than some advice.

Here goes:

1. Hardcopy EVERYTHING!!!
2. Be polite and nice and get the person's name at each stage. AND YES THEIR INTERNAL PHONE NUMBER.
3. Always thank them
4. Trust them to know their jobs.
5. A FIM (when your trip is interrupted) is a wonderful thing. Get one no matter what.

And above all...

Be PERSISTENT - it is a required skill in Travel

As a special thanks - I would like to thank Daniela (DL Customer service in Tegel). Her counterpart at AF - Anita. The DL team in NYC for protecting me. And also to DL's baggage service and their contractor in Seattle Bags Inc.

I am now home and the Xmas presents made it also

Cheers

The 2009 ITM Study On Use Of Technology - Some Observations

The Beat recently did a piece on the UK based ITM's study on the Use of Technology in the travel process. The report is wide ranging and contains a lot of trend information.

However picking through the data to obtain valuable nuggets on what lessons can be learned is not that easy. So allow me the indulgence of picking on one area. IE the need for broader content availability.

If by now you have not surmised that the Professor is clearly biased in favor of multi-content platforms - then you have not been paying much attention. But it is not my bias really - rather it is an acknowledgement that fragmented content has existed for a very long time. The options for access to fragmented content were few and far between. Now that is changing and changing fast.

With the airlines starting to flee the one-size fits everything (aka via the GDS) they join the other sectors such as hotels and ground transportation that have had this issue for years. The acknowledgement that content is full fragmented and that the aggregation of content is a valuable service, players are changing how they source and what they source.

it should never be underestimated that Travel Technology vendors tend to accentuate the positives, there is now a general acceptance that the current generation of technology has indeed improved the lot of the user community as represented by the ITM members. I would guess that the vast majority (ie in excess of 95%) of all the PNRs generated by ITM members are indeed touched by a third party (read non-GDS) system. The ITM study states that the most commonly used type of technology among those polled was online self-booking, at 70 percent.

But more interesting for me was the demand for access to Non-GDS content with over 60% of ITM members stating this as a requirement. This is a pointer to the changes coming. The term full content is already a misnomer. The legacy GDSs can no longer provide full content. Not that actually they ever did. The caveats in the definition in GDS contracts are wide enough to drive a truck through.

Use this information wisely.

You can purchase the study from the ITM directly. Members will get free copies in about May 2010.

Cheers

BA Quietly Compensates Loyalty During Strike Threat

BA has quietly compensated those people who didn't cancel or rebook their flights during the recent strike threat.

As the Professor understands it from several people the grading is as follows:

Per passenger
Per number of legs on BA
Per leg type
Per status of membership

So a family of 4 would receive for a European leg 2500 miles each resulting in 10,000 miles bonus that is automatically added to the account.

This seems very generous and sets a dangerous precedent for BA in the future. Oh yes and if you didn't get the offer perhaps you should ask for it.

Cheers

Deep Breath - Office 2010 Beta

After some initial hicoughs I am now using Office 2010. So far its faster and has more functionality. I am getting used to all the features.
I can say that it is indeed very interesting and probably will be worth the upgrade.

check it out

Cheers