An iPad for $499? How about $1170!

OK so I will admit I am biased because I really do dislike the "ancillary" revenues that an iPhone extracts from its seemingly (in other moments) sane and rational people.

So I went to Best Buy and looked at a fully functioning netbook from HP mini 210-1010nr Black netbook featuring an Intel N450 Processor with 1GB Memory and 160GB Hard drive. $299.99. Add an extended warranty ($45) Shipping (free but lets add $25) A case (it comes with a slip case) $0. I could extend the memory. But it's a multi tasking machine. So far I have a comparable machine but no 3G wireless support. The iPad requires a 2 year 3G data plan....

So I left Best Buy and wandered over to the AT&T Wireless store. I can buy a Netbook (the same machine) for only $199. it comes with Wifi and 3G built in. Ah ha! A comparable machine.

So the numbers are $199+protection $99. and? Well nothing else. Total including tax $317.58 (tax included). Shipping was free. Add back some additional accessories - add another $49 - making a total $371.40.

So how did I come up with the $1170 price? Go check out this article.

So will I pay - lets be kind $800 for an extra 20% of screen real estate and a REALLY COOL device? Oh yes and remember the iPad is a single tasking machine.

And that data plan price? Standard pricing is $35 for 200MB/month or $60 for 5GB per month. Roaming internationally? It is $19.50 PER MEGABYTE. To put that in perspective. The average web page size is 60KB or $1.17 PER WEB PAGE.

So if its all the same to you - I think I will pass on the iPad.

Cheers


Cheers

Amadeus Announces Abolition of GDS Segment Overrides and More

In what must be one of his last acts as CEO - David Jones told a packed audience of Travel Agents in London this morning (April 1st) that he was finally acknowledging the immorality of paying agents to use the Amadeus system. Dressed like Clement Atlee with a shorn head and wearing a 1930s top coat against the spring showers, Jones stunned the audience but there were further shocks in order as he had more to add.

To cheers from the suppliers in the audience (who had paid for the rally event) and jeers and thrown shrimp from the agents, the British CEO who is known for his gentility didn't mince any of his words.

"I have long believed that the practice of paying a travel agent to use our system was a disservice to our real paymasters the airlines." Continuing on - he challenged the leaders of both Sabre and Travelport to join him in his holy crusade to rid the industry of outdated business models and a return to as he put it "a normalized state" of affairs.

The encouraging words of wisdom to the assembled audience of suppliers however were short lived when the other shoe fell.

"Effective immediately, we are also abolishing the differential in all booking fees irrespective of whether the booking comes from online or off line or from an agent or a supplier.

Commenting on the announcements, one agent was overheard to say "Blimey, what will happen next Willie Walsh as a Flight Attendant". An airline executive who was within earshot was heard to mutter and describe the acts as "robbing Peter to pay Paul."

A small group of people in the audience at the rear of the crowd were suitably glum and looked remarkably unhappy. It is rumoured these people were Amadeus Agency Sales staffers.

jetBlue Completes Migration To Legacy Carrier

In the recent years - airlines have fallen in love with the Low Cost Carrier model - LCC. But more recently as the strictures of the model start to constrain the growth of the business - the startup LCCs are started to adopt more hybrid like characteristics. At the same time the legacy full service network airlines have adopted many of the LCC characteristics. This dual trend - big airlines becoming hybrid and LCCs becoming hybrid has now passed a formal milestone. The first LCC to become a full service legacy carrier.

Welcome to the old boy club JetBlue.

In the past 3 years jetBlue has undergone a radical transformation. Here are some of the things it now does:

1. Participates in ARC
2. Participates in GDSs
3. Interlines
4. Hosted in Sabre
5. Is partially owned by LH

Etc etc

So as you can now see - jetBlue has become a full service network carrier just like all the others. Voila - completing its transition.

Seems like the LCCs are the dying breed despite their greater profitability.

Hmmm food for thought.

Cheers

EC Updates Banned Airlines List

The 13th update is now out

Interestingly a few airlines got clean bills of health but in general the list was expanded. The latest airline to get "restricted" is Iran Air.

All carriers from 17 countries – 278 companies in total – are banned: Angola, Benin, the Democratic Republic of Congo, Djibouti, Equatorial Guinea, Gabon, (with the exception of three carriers which operate under restrictions and conditions), Indonesia, Kazakhstan (with the exception of one carrier which operates under restrictions and conditions), the Kyrgyz Republic, Liberia, Philippines, Republic of Congo, Sierra Leone, Sao Tome and Principe, Sudan, Swaziland and Zambia. 10 air carriers are allowed to operate under restrictions and conditions - Air Koryo from the Democratic People Republic of Korea, TAAG Angola Airlines, Air Astana from Kazakhstan, Iran Air from Iran Gabon Airlines, Afrijet and SN2AG from Gabon, Air Bangladesh, Air Service Comores and Ukrainian Mediterranean Airlines from Ukraine. A further few airlines are also included outside this list.

For the full list go here:

http://ec.europa.eu/transport/air-ban/doc/list_en.pdf

Many companies ban their employees from flying on these airlines irrespective of where they fly. So it is important to note this airline list. There are a few players here who are commonly used carriers readily available in GDSs or other distribution tools. It is important therefore to check your current company policy compliance if you are a flyer. For a company HR and/or risk assessment company providing insurance coverage for staff - it would be important to remind people of the necessity of compliance to existing conditions.

Cheers

Timothy

Behavioural Targeting Effectiveness

A great study sponsored by NAI and conducted by Howard Beales looked at Behavioural Targeting in 2009.

As the subject has become somewhat contentious of late - I was very interested to see this report. It covered a lot of territory and has good source data.

I highly recommend that you read the whole report (25 pages not that long) if you are interested in this type of targeting and its effectiveness vs that of regular run of network online CPM based advertising.



I wanted to see if there is a consistent advantage to using this from a pure cost perspective - well approx 10% and its pretty consistent across the year.

So irrespective of the issue of privacy concerns it seems that BT has some value. In Travel this may be even more important given the higher CPMs that accrue to the vertical vs other product segments.

It may also have - and this is pure speculation on my part but let's call it an educated hunch - that Social Media based media coupled with BT may prove to be even more effective. That may result in too small a target but an interesting idea nonetheless.

Just call me an old CPM geek

Cheers

With thanks to the AdTorque network for the image

U cnt txt on Rynr

Sorry - no more texting on Ryanair any more.

OnAir and Ryanair decided not to carry on working together and have terminated their agreement.

Seems that only a year ago Michael O'Leary was saying:

"Nobody is flying on Ryanair because it is a bastion of solitude where you can contemplate life."

Read more:

So now your Low Cost Flights can be quiet again.

Cheers

Phot courtesy of Eurocheapo.com

KLM Retires Last F50 Ending 50 Years of Propeller Fokkers

After More than 50 years of faithful service the last propeller driven Dutch produced aircraft will leave the KLM fleet. Much has changed. KLM is now part of the French based group Air France Group, and Fokker no longer makes any plane.


Here is to those fine planes and to Anton Fokker's vision.

Cheers

Acknowledgment to Airliners.net and Aerofavourites.nl for these fine images.

Alliances - Good or Bad. DoT vs DoJ Debates

I am not a strong advocate of cartels and oligopolies - they do distort competition and harm the consumers.

I also don't buy the big is always beautiful argument. Small and Nimble are things I admire.

I was very interested to read the Editorial Piece "Taking Sides" in Travel Weekly analyzing the DoT vs DoJ argument on Alliances and the new inner Alliances of the big 3 players mostly on the Transatlantic and now coming to the Transpacific.

In the current versions of the US House of Representatives bill on the FAA Authorization for 2010 and 2011 - there is a provision to sunset these agreements within 3 years. The Senate's version does not agree and this more radical provision has been left out.

I do believe that there is a strong sense of empathy from both Houses for the consumer protection. With the airlines clearly on the mend and fares rising, the sense of worrying about the health of the airlines is waning and the greater focus on main street and the downtrodden consumer will see the DoJ Consumer Protection view be the ascendant one. Will the Senate version prevail will be an interesting debate?

At this time - I would put it at even money. Come April when the bills head for conference - much will depend on the current economic climate and the anti-big establishment sentiment that seems to be rising in Congress.

Cheers

Some Light Fun For Friday

So you think airlines are boring?

Think again.

Have a look at the dueling Youtube videos from a pair of US based Low Cost Airlines.

This is funny..............

http://www.iagblog.com/

If its not on the home page type "US LCCs are fun!" in the search box.

Cheers

S1451 - Less the HR915 But Still With Interesting Quirks

Huh?

These are the Senate and the House bills for the FAA Authorization for the next 2 years. For Travel there are a mountain of things in here. In the House version for example there was a provision that would have sunset anti trust immunity for Airline Alliances. And a provision that would have given extra powers to Flight Attendants. The Senate version passed this week (23 March) and now goes for conference with the House version that passed way back last May 2009.

One interesting amendment to the bill would require the airlines to offer an opt in option of having flight delays provided to users by text or email.

However what is interesting to me - given my current interest in Ancillary Revenues is the requirement as outlined in an Amendment by Sen Menendez the Junior Senator from New Jersey which would require full disclosure on fees.

This disclosure requirement would create of course more bureaucracy for everyone. But doesn't the government just love that anyway.

So stay tuned - this bill is due for its final reconciliation next month.

We shall be watching!

Cheers

EU and US Agree on OpenSkies2

After several months of sometimes tense negotiations - the USA and the European Community have reached agreement on the framework of OpenSkies 2 according to Reuters.

This is healthy for everyone.

The basics include expanded ownership on both sides. Open Market access has been expanded, however the thorny issue of cabotage has not been resolved and will have to wait for another round.

Cheers

NEWS FLASH: Iberia to Hold Off Signing Final Merger Docs

I am not one to normally put out a news story - preferring to comment. But this is a fresh off the wires story that I have been following for some time.

According to Aviator.Aero the board at Iberia has decided to hold off "indefinitely" their final merger approval with British Airways.

In the Aviator.Aero news letter of today March 25th 2010 the following story appears.

"Iberia (Spain) board of directors to hold off signing merger agreement with British Airways indefinitely."

More details (or a retraction) as this story progresses. So far it has not appeared on their website either and no one else has picked it up

Cheers

Should US Airways Be Given Exemption At PHL?

Hoping to slide in the request for an exemption for their operations in the heavily congested north east USA, US Airways is hoping to be exempted from the upcoming performance based customer charter due to arrive next month.

So the question is should the airline (based in sunny Arizona) be excused the delay rules. Remember that several airlines including American Delta and Jetblue have requested exemptions for JFK and Continental has requested the same for EWR based on the current situation (one runway is out at JFK) and in general for the ATC congestion there.

The new DOT rule states that if domestic flights sit on the tarmac for more than three hours with passengers aboard, airlines face a fine of up to $27,500 per passenger. Thus airlines will be more likely to cancel a flight rather than paying heavy fines.

Note that at the present time the US DoT has not ruled on these requests. The new regs come into force next month.

In my opinion there is a case to be made for the current JFK situation until the runway resurfacing project is complete. But whether the others are eligible - that is a different matter.

Cheers

E Clear Assets - just US$100K

In what must be a shock to a lot of people the UK based bankruptcy administrators for failed credit card processing firm E-Clear have uncovered just £72,000 after months of investigations into the controversial credit card processing firm and said the situation was “looking bleak”.

Remember this is the company that in effect brought down 2 major players in the UK - the Globespan Group at the end of last year and previously in September 2008 XL Leisure.

For an industry as heavily regulated as the travel business is and supposedly the UK banking regulations are tight - this is really quite shocking.

Let's just hope that there is something positive that comes out of this. For now - it would behoove any transaction based player to check into your credit card processor. There could still be some scary stuff out there and let's hope you are not caught out like the hundreds of employees who lost their livelihood and those who lost real money - investors and creditors alike.

Court To BA - Pay Up!

Some of you may recall that I did a post in December about the case of BA's fare guarantee not.

Well thanks to Scott McCartney of the Wall Street Journal - I was reminded of this. I am actually pleased to see that someone actually took the challenge and sued BA in court. AND WON.

I think there was a degree of arrogance from BA that Scott is way too nice to actually state but he does quote the evidence. Quote: British Airways says it should have been obvious. "Anybody who knew anything about travel knew that was totally out of whack," says BA spokesman John Lampl."

So now the case of caveat emptor is no longer sufficient according to BA anyone who buys a fare has to be an expert in fares and therefore must be fully armed with the arcane nature of airline airfares when buying any ticket. I am sure many of the readers of this blog can quote many a case where the fare paid on a cents per mile basis was even below that of the tickets in question.

Sadly the case where a Mr Dutta sued BA in court was only small claims and therefore there really is no precedent established as a result. So the fact that the government has blessed that airlines are not to be bound by the contracts they get into and the customers are - gives distinctly a one sided nature of the agreement. Still if the purest looks at it - perhaps its a bit like health insurance. Now you have to buy it....

Cheers

A Woman! What Is The World Coming To?

Congrats to the board at Easyjet for hiring a highly competent manager in Carolyn McCall. I think this is the perfect foil for a certain pair of Irishmen who must be classed as the Orange's competitors.

However with no Aviation background this will be a challenge. There are few clues as to how she will rule at the house that (now Sir) Stelios built. She is known as a forceful manager and perhaps that is what is needed after the steady if somewhat undramatic style of her predecessor Andy Harrison.

There are many challenges she faces. An increasing chance of confrontation in the market between Ryanair and U2. Head to head battles with BA. As the airline has been quite successful in moving to a hybrid model - they have captured additional revenue and boosted yields from their customers. However they also face the challenges of no access to LHR and some other airports. I do foresee that during her reign U2 will make a major foray into an entrenched airport and challenge one (or more) of the weaker legacy EU carriers. I think that there will still be the guarded dance between FR and U2 with them both continuing to avoid head to head battle.

Also look for setting an eye on longer haul, brand franchising and less boardroom brawls that have been somewhat of a distraction.

And for anyone who thinks the Professor is a misogynist, the headline is a less than subtle joke that we have not had a EU CEO in airlines for some time - Barbara Cassini was the last one if I recall - and I am sure someone might correct me otherwise. I am really happy to see the old boy network get some female flavour. Let's have more people like Ms McCall irrespective of gender... it should (always) be about the competence which is good for all.

IATA;s Answer to Global Warming....

Thumbing through another masterful piece of PR from IATA (full of green footprints) I happened across list of some of their strategies for reducing the carbon footprint.












So admirable goal but somewhat questionable execution.

Just take a read for yourself. Particularly Page 4. But let me save you the bother - here is what it says as an example of a technology solution to global warming:

"Less energy-consuming lighting and in-flight entertainment"

IE more air rage with bored pax in the Y cabin.

Oh yes - and I know I am taking it out of context but if you are going to indulge in puffery they you will have to accept the consequences....

Cheers

ARC Blasts CASMA and Issues Challenge

At the CASMA conference this week in sunny Quebec (actually there is still snow on the ground), Mike Premo of ARC laid down the gauntlet. The organization needs to get a life. It also needs to get behind the needs of the airlines and adopt a very proactive stance on the subject of Ancillary Revenues.

He pointed out a number of home truths that the organization needs to take to heart. But while this might easily be the pre-eminent take away from his speech – the important underlying message of his speech was that the whole travel industry needs to provide infrastructure of ancillary revenue.

Clearly there has been a lot of posturing in recent months on the topic. But the core issue is that the distribution channels – led by the legacy GDSs are not moving fast enough to meet the needs of the airlines. Earlier this week Amadeus (as reported in Travel Weekly Australia) laid out a timeframe of when they will support Ancillary Revenues "bookable via agent desktops within three years". Well get with the program people! – this is not going to be fast enough. In 3 year’s time the airline business cycle will be back at the top and looking at a coming down turn.

Having spent considerable time with airlines and their PSS vendors – I believe this “dog in the manger” attitude of the traditional GDSs is doing a major disservice to their paymasters. The stalling has to stop and the GDSs need to suck it up and deliver the capability of selling ancillary revenues via merchandising soon or face the consequences. Surprisingly at least one public event middle management representatives of the 3 legacy GDSs tried to outdo themselves in how their companies are hard at work on AR and as clearly stated by one of them – they will deliver their platform “by the end of the year” (eh hmm that was in 2009).

Mike knows that he can support the sale of ancillary revenues via the agency channel. He is clearly losing his patience. And he is not the only one.

Cheers

Ultimate Irony

BA leases Ryanair Planes and Crew








Tony Ryan must be spinning in his grave – FR is leasing 4 planes and crew to BA on short haul European routes to cover the short fall of capacity as a result of the Flight Attendants strike against the UK former national carrier.

To compound matters Michael O'Leary - freely acknowledging that "he was not always entirely supporting of what Willie Walsh is doing" and clearly haven't always been on the same side calling BA a "big pension deficit on wings" - MOL has called for an end to the strike.

If this isn’t irony – I don’t know what is.

Cheers


Photo Courtesy of BBC/UK

Should We Vote?

I am very nostalgic when it comes to airline brands and Marques. Professor Henry and I are big fans of the former Braniff.

So it comes as something of a Hobson's choice that Republic has to decide which brand to retain - Frontier or Midwest.

The answer is pretty obvious but still there is a certain sadness about which one will be consigned to the scrapheap.

Republic itself was a relatively short lived airline brand that was formed from the merger of Hughes Airwest and North Central in 1979 to 1985 when it was sold to Northwest and gobbled up, you can actually still see some of the RW and NC coded aircraft mostly DC9s that Delta will phase out.

The new Republic Airways has grown rapidly from a contract services carrier to a full branded presence acquiring in quick succession Frontier and Midwest Express. The latter grew out of the airline division of Kleenex Maker Kimberley Clark, the former a born again brand of the scrappy airline out of Denver.

And there really is no contest. So no point in voting. Perhaps the question is whether the Republic brand would be placed on many aircraft. Nah - not a good idea - stick with a name that has value.

Cheers

Finally in the Air - And It Really Is Sexy

OK so I am somewhat of a kerosene junky - but I think I need to get a new habit. Not jetfuel - but Rocket Fuel.

This aircraft has to be one of the sexiest things in the air.

Clearly Sir Richard thinks so... so head over to the Virgin Galactic Website and check it out.

I reprint the picture here because it is just a beautiful machine.

Cheers

Will Other Airlines Place Their Eggs In the Social Media Basket?

Australian LCC and Qantas group airline Jetstar has announced that it will increase its spend in Social Media in the next financial year to 40% of its total marketing budget. Jetstar head of marketing and public relations, David May, in announcing the change to the Australian media said they had “tested the waters” of social media during 2009 with huge success. He continued that the fragmentation and rapidly rising costs of traditional media on and offline it became clear to the airline that social media was the next obvious medium for marketing.

Some experts have predicted that Social Media spending will account for nearly 20% of all airlines marketing spend in 5 years. Of course that challenges a degree of belief. How will they actually spend the money?

Having armies of people watching Facebook or Tweeting like mad. Given that Social Media marketing costs should be significantly lower than traditional spend the greater bang for the buck is sounding more like we will have a new class of SM Maven who will be texting and blogging and posting away. Either way we will very soon have target fatigue.

I shudder to think what this will look like. We will be deluged with messages of little or no relevance. "Flight 101 took off with one guy who has baggy pants and a snake" would be the equivalent message on a slow news day.

I think we may just retreat to advertising for some straight forward sanity.

But then I am just one person who doesn't want to drink from a fat pipe of Twitter feeds.

Cheers

PS thanks to who ever posted this clip from Snakes on a Plane.

A Pleasant Surprise - An App That Did Better Than I Thought

I know I have a low expectation of technology - been working in it way too long. Hence this is why I am long in the tooth. But over the weekend I finally got round to testing a new app - Award Wallet.

I have tried many different frequent flyer programs and frankly they all suck. But this one JUST might do a good job. it might also replace my current way of taking care of my itineraries - but lets not get ahead of ourselves.

I spent 2 hours loading all my frequent flyer information manually. Tripit has a better and easier way of doing this for itineraries but it doesn't work much of the time with my trips on Delta. But Award Wallet got the info on my trip on KLM into which I had put my DL skymiles number. And low and behold I got the whole trip. I was really pleasantly surprised.

However my joy was not complete. I cannot change my seats on the Delta flights even though I am a squillion miler and I can see the itinerary. I have to do that manually.

OH HOW I HATE ONE WAY MESSAGING.

I could berate KLM and Delta but it would do no good. Some person figured out that it would be too much work to have an active 2 way link between the systems so no we are not going to allow that....

Bummer...

Anyway - if this is the standard for how itineraries can be managed then I think that Tripit and Co have some new tricks to learn.

Now the bad news. If you want to really take advantage of it - I have to pay for the upgrade. Like many of these sort of applications - they want me to pay for it. Hmmm sorry - not going to happen. I can have access to the real thing in the raw flesh and no it is not worth it to me - you will have to prove that you are better than say ExpertFlyer before I could even consider this. Expert Flyer has a much broader set of functions for booking award tickets. But I have to pay $5 or $10 per month just to start. But I don't know how much I will/can spend on Award Wallet.

I should also tell you that the app did rather upset me - I was spammed many times with invites. So the process was not without pain.

But we have hope that there can now be apps that can actually start to take some of the drudgery out of the process of managing my trips.

So I hope that the other players in this space can sit up and take notice.

Cheers

I Am Not Paranoid - They Are Watching Me!

It seems that Social Media has been the theme of late in my posts - its probably timely and definitely worth spending time considering.

I have lots of issues about Social Media and still remain unconvinced that my life is better as a result.

That said I am a blogger so I must be contributing to it. Which leads me to a good story that has come out of the EFF - Electronic Frontier Foundation. Under the FOI - US Freedom of Information Act they managed to discover that the Feds have been using Social Media to spy on the populace. So here is the link to the document and it includes a nice long presentation by the Feds on how to use Facebook etc to discover activity good and bad.

The attitude I have to this - is if you put something into the public domain then you should accept the consequences. Not quite sure what the Latin equivalent of that is akin to Caveat Emptor

Since both Facebook and Google's Buzz have created far more lax rules about your personal data - each of us has to be vigilant as to what is going where. It seems that once your data is available in public it is no longer protected even if you think it was. Remember that almost all sites carry disclaimers allowing them to change their policies at any time. So if the site carries a disclaimer that says "We will never sell your information" don't take that to mean they wont get some pecuniary gain from using it or passing it on overtly or covertly or even inadvertently to others. Oh yes and do remember they don't have to tell you if they change their policy. And finally yes it is your obligation and responsibility to know if they do and when they do as they have no liability whatsoever for messing and abusing your personal data.

So by now you should be completely paranoid like I am.

Its enough to make me want to return to the quill....

Cheers

Kulula to FIFA - Hokey Cokey!

Hats off to Kulula for making Airline ads fun again.

The latest version is packed full of images that are going to enrage the fat cats at FIFA.

This one will run for a while

Cheers

Travelport's Travelport Opinions - What The World Needs Now?

Dionne Warwick's 1960s song is probably appropriate in this age of Social Media. But if I can carry on mixing metaphors - we could be looking for love in all the wrong places.

Travelport has been pushing its new social media vehicle "Travelport Opinions (tm)" for some time now and recently started to push it very hard. So I decided as the professor to investigate it further.

I signed up (oh dear just what I need more spam). The tool is quite nice and hats off to Vinivi for the tool. I actually like it. I was quite impressed that there is a large number of users - over 1200 now.

However when I started to dive into the details - a more cynical person than I might have some issues with it.

So lets start with some statistics.

Of the top 15 users (ie off the top page of members) 11 of them are Travelport employees and one is from the platform provider.

Indeed 303 are listed as Travelport employees. A further 25 are listed as Vinivi staffers. Presumably there are others who didn't declare their affiliation.

The point scheme seems to be something of a self fulfilling prophecy as the users clubbing together creates a homogeneous group around the obviously largest single group namely Travelport employees.

Based on my evaluation and reviewing some of the stated reviews - all of the self interest questions immediately bubble up to the top. IE if you thought that Tripadvisor was bad then imagine what TravelOpinions can do with biased reviews. I checked and sure enough there are a few in there. I wont bore you with the details but just look at some English hotels.

So yes the world needs more love but in the Professor's humble opinion it doesn't need another self interest vehicle

Cheers

More Reasons To Be Afraid - Very Afraid

I have written before about how things on Facebook and other Social Media services can comeback to haunt you.

Just lately I have disabled Xobni because it made MS Office 2010 beta unstable. So I turned it on for a little bit and then tried to investigate some of the newer connections I have made. It is somewhat scary what is now appearing IN CONTEXT about the business relationships that I have.

Tools like Xobni (that's inbox spelt backwards) and Gist are really diving deep to provide the user some context about their relationships. However this is somewhat scary stuff as to how much does become available.

Not to be outdone MS Office 2010 will have this functionality built in. The hooks are already in - I can now click on a name and get data about someone. It also seems to be a learning engine so that those people who are new can be highlighted as to their social media footprint.

So this is your warning - time to clean up facebook and any other social media footprints you may have and make them clean. When Office 2010 rolls out in June - then it really wont be the end of anything except your ability to control it.

As any college career guidance counselor will advise you - clean up your digital dirt before it gets seen. Now that advice has to be expanded to not even letting things get out there to start with. On the Web EVERYONE can hear you scream, pole dance, smoking a joint etc etc..... It also makes mistakes and captures erroneous information - intended or otherwise.

Cheers

US Transactions Remain Down But Improving

US Transactions as measured by ARC Tickets issued remain down. They have not returned to the levels of 2006/7/8 but are better than 2009. In looking at the 2010 numbers we can see that the trend is upwards. Y/Y numbers look encouraging.

Drilling into the numbers we can see that there has been healthy increases of the TMCs.



In fact they are now doing better than the OTAs in improved yields. This has good news for the agencies and also indicates that the OTAs improvement while still positive could possibly have run its course. There does of course remain a degree of revenue/yield pressure.

I think we can see that the airlines will start to review how their cost structure looks in the light of an improved transaction picture but with a still diminished yield.

Next month will be interesting - given the late Easter again it should show improved yields given the extra days of sale.

Cheers

Constant Connection Destroying Communication

In reading my sunday newspaper - came across an article about Constant Contact. This gave me some pause for thought. So I started to think of how many ways I am actually connected - it is rather frightening. On this week's episode of the Office (NBC On Thursdays) Dwight says to Michael that he wants to be contacted on any one of his 6 numbers. Geez - I am just as bad. I have actually more than that:

Skype - 1 number
Truphone - 1 number
Mobiles - 3 numbers
Land Line - 4 numbers for the office + 1 number home
Universal Mailbox - 1 number
1 Fax number

UGH that's 12 numbers that exist in the POTS world.

Not to mention the various websites, email accounts and other personas.

So are we over connected and less communicative?

Food for thought on Sunday

Cheers


PS no prizes for guess what the image is - but ping me if you don't know....

Social Media Needs Organizational Relevance

Social Media has become part of the fabric of our over communicated world. My fellow TNoozer - Siew Hoon has an interesting piece on her blog.

When the web was young - I was very happy that we were finally getting contextual structure to the process of advertising. Being an old ad geek from the 1970s and 80s - the emergence of a truly metric'd media environment was like a dream come true. Too bad it got screwed up almost as badly as the old ad world. So now we have shades of truth that we can show can prove just about anything.

Just when we thought it was getting at least comprehensible - along comes Social Media. Most companies embraced SM with a passion but not from the same base as traditional media. Many companies today run their Social Media in a different silo from their advertising. For example I understand that Southwest puts Social Media in the hands of its PR team. relevance

We thus have silos that don't talk to each other. These silos can be understood as being separated because the medium/media are new and in many cases not manageable in the traditional formats and metrics. eMarketer has done a nice bit of research on the subject that I encourage you to read. It shows how diverse the silos are. particularly pointing to the likely result of disconnected and obtuse messages being delivered into the market - we know already that this is confusing the user community. At the PhocusWright session in Berlin earlier this month - the session moderated by Kevin May - PhoCusWright@ITB Bloggers Summit Workshop 2: Brand Management, Fighting Fires and Finding Fans Through Social Media - indicated how this can really get screwed up. The move to real time communications has changed the way companies and brands adjust. But the message of the squeaky wheel getting the attention most of the time did emerge. That is scary if Social Media is the customer feedback mechanism and is then disconnected with the rest of the brand.

If masters of the brand do not address this and bring Social Media into the overall brand management process then lord knows what we will get. A Corporate version of Chat Roulette perhaps?

Cheers

Why Twitter Is Starting To Annoy Me

Twitter has its place. I used to think that it had a clear value in certain situations but not in others. Now I am finding it very hard to see anything but a few small cases when it will be useful.

Among the times when I thought it might be useful is as a tool to add to comment on certain activities. If you will the use of Twitter as a self broadcasting tool. I believe this was the original value. I still think this works but only in moderation. EXTREME MODERATION.

Another use I thought was originally useful was the ability to post questions. However at the recent Phocuswright event in Berlin - I saw it getting out of hand. Despite the use of a moderator and #tags. The questions coming through don't necessarily function without extensive effort. I actually found it very annoying and distracting. Why? Because there is as much drivel in there as there are nuggets. it just confirmed to me a suspicion I have harboured for a long time that the empty vessels make the most noise. Unfortunately in Twitterland most noise makes that person a superstar....

On my way back from Europe I stopped off for a client meeting in the heart of Long Island (NY). The rather up-market hotel the client put me in did the pre-requisite "Follow us on Facebook and Twitter" etc. I have come to think that this is somewhat arrogant. Just like Ashton Kutcher's Tweets, it is both pointless and mindless. I think what has happened is that once everyone jumps on the bandwagon - then the value starts to diminish. I have come to the conclusion that hotels and other suppliers are all still suffering from Telex/TWX withdrawal and that Twitter is in fact a new form of this one way messaging. They needed something that began with the letter T on their letterhead!

I have found that there is little reason to follow people on Twitter all the time - but even focused on the occasional time when it could be useful - I cannot seem to follow them without the sense that 140 Characters are really not doing it for me.

So my conclusion is that Twitter has now become the latest contributor to the delinquency of our fellow man. All we are doing is spreading more data drivel and useless bits and bites. We are really confusing noise based data with information.

I wish that there was some useful way to edit out some of this noise but I doubt it. The entire exercise seems to be based on the principle that the wisdom of the crowd trumps analysis and thought. I just have a problem with that notion.

I am sure that this will upset some of the die hard Twitter fans. But I find myself being turned off by Tweets. I will however stay open to anyone who can convince me that there is a tool which is has an ability to edit out useless drivel. Then perhaps I can get interested in it again.

Yours Curmudgeonly

EasyJet adds Mobile Customers Service

On any typical morning at Luton the airport bustles with people rushing for flights. However the contrast with say 10 years ago or more is startling. It is the dress of the passengers.

What used to be an almost exclusively for Leisure market with loads of families and couples off to sun destinations now sees a very different crowd. The business person is now more than likely to be that group who occupies the security lines. (Not the check in lines as everyone has previously checked in if they are biz people).

Easyjet deserves a lot of the credit for this. Taking the low cost model to business markets is driving the differentiation between them and Ryanair. It is also driving greater revenue per passenger - but also greater costs. Easyjet is now deploying technology to improve the quality of the checkin process. In a story carried by ABTN, an Easyjet Spokesman commented: "We are evaluating the technology as to how it can speed up the check in process."

"It allows our staff to have more contact with passengers, providing a faster and more informative service.

"We will never get rid of check-in desks like some other airlines have done in the past," he said.

CapGemini in a recent piece on its concept of Mobile Service Partners combining to deliver services to the consumer via any mobile devices estimates that by the year 2030 almost all travel customers will use some sort of mobile Information and Communication (I&C) device to handle their travel arrangements, independent of the larger computing devices such as PCs and laptops. The formal line between the customer and the supplier provider will blur making some of these services less necessary.

Who knows maybe Ryanair will be right in the end. But for now - in the customer service stakes - Easyjet seems to have the ascendancy. So more and more of those Easyjetters will be biz folks.

BA Tries New Cost Measures

A great piece in the Beat this week on BA's new compensation program in the USA indicates a different tack by BA in its way to try and reform its business.

Having essentially rolled over on the issue of GDS fees - it is going after - let's call them softer targets. There is a lot of fodder in the battle with the Flight Attendants - who probably have lost the hearts and minds of the consumers. BA in my opinion now has the ascendancy in that battle. So now it is going after a revised compensation plan against the agency community. This time the US TMCs.

Given the importance of the business market to BA's bottom line (particularly after the disastrous 2009) this might be a risky strategy. Given the spring shoots now appearing in the USA - it would seem unwise to stifle the growth and upset this group of people. But perhaps it feels emboldened by the pending BAAAIB alliance approval and the resulting synergies - particularly in the business market to the UK. Given the relatively small footprint by Star on the UK - US market and the paucity of Skyteam flights (just 2 767s a day between LHR and JFK) perhaps they can throw their weight around.

However I do hope someone from the DoT is paying attention. The reduction/absence of competition on the Transatlantic run does seem to allow behavior like this.

This is my opinion and take it for what its worth

Cheers

Jetstar Follows Ryanair Model - Attacks Airports

Jetstar which is the low cost airline of the Qantas Group (heck it even says so now on some of its planes like the A330s) has taken a leaf out of the Ryanair playbook in picking on airports.

After its very public spat with Darwin last year - it has now picked on a smaller airport - Rockhampton. Pulling out its big PR guns - the airline is now pulling flights and denouncing the airport pretty much as the devil incarnate.

What is rather funny in all this - as soon as it announced the decision to pull back on the Brisbane to Rockhampton route - its flights were immediately replaced by Tiger Oz. Oh yes and by QantasLink...

Go figure

Cheers

IATA finally acknowledges LCC market

Acknowledging that that there is actually a low cost airline model - IATA has (begrudgingly) started to include LCC statistics in its reporting. Don't believe me? I quote directly from IATA's stats:

"As IATA member airlines carry 93% of international traffic measured by RPKs, this change does not make a large difference in the statistics" IATA Jan 2009 Report. I think I bed to differ. The LCC model has a profound effect on airline statistics.

Interestingly IATA seems to only capture those pure LCC airlines. They so far admit that there is only 7% of total traffic being LCC. And this is where there is a pretty fundamental failure of the IATA statistical model. It measures that notional value RPK (RPMs). IE Revenue Passenger Miles. If for no other reason than everyone else uses passengers as a measure of total traffic it is high time that IATA woke up and started publishing some real data on passenger numbers.

IATA claims that LCC traffic is only "7%" of total traffic. Given that the vast majority of LCC passengers are short haul and only a smattering of long haul traffic this is starting to distort the figures. Let me illustrate this.

The total traffic worldwide (using ACI data) is estimated at 4.5 billion passengers these are actual landings and take offs. This number tends to be inflated as it includes and counts each passenger twice. One take off and one landing. So in my opinion there are actually around 2.2 billion actual worldwide passengers. (PSJs - for Passenger Segment Journeys). If we look at just one group - the ELFAA - European Low Fares Airlines Association which comprises: Vueling | easyJet | flybe | Jet2.com | Norwegian | Ryanair | Sky Europe | Sterling | Sverige Flyg | transavia.com | Wizz Air

They carried 162 million pax last year. And this is not all (but it is most) EU carriers. If we were to add back in MENA, Africa, Asia Pac, USA and Latam carriers the numbers would swell by at least double. (WN alone is now more than 100 million pax). So you can see the share of market pax worldwide by true LCCs is higher than the 7% shown using the RPK model.

Interestingly if we look at an apple to orange comparison - according to IATA's numbers total traffic (in RPKs) was down nearly 11% for Europe in 2009. But for ELFAA airlines (passengers flown) it was up 8.7%. Interestingly IATA claims that the impact of LCCs mitigated the annual fall in traffic by one full percentage point. IE LCC growth saved the world from a full percentage drop of 1 %.

For the long term - you have to make the assumption there is a move towards hybrid value carriers - where airlines move away from pure legacy full network service carriers and pure LCC models to hybrids of all types. An apple to apple comparison of say United Airlines revenue models looks remarkably similar to say Easyjet these days.

Now I am sure that some people may pick at my numbers but - the analysis is sound I believe.

Cheers

Boomers Need Glasses and....

Interesting study out of eMarketer on Smartphone and Mobile Internet usage by Boomers.

Now as I am a (relatively young) boomer despite the pipe and the tweed jacket, I can attest to the real issue which is our fingers are not quite that adept at using the touch screen and we need glasses to read those damn small screens.

Frankly I think there is another influence at work. We are really tired of having to adopt new technology and also its shaky performance. And here hangs a tale that should get all tech bods sitting up and paying attention.

We are now so assailed by "new" functions and capabilities - we have adopted a culture where function exceeds form. We really do need a reset and get back some of the form that is more comfortable to us older types. Just because something is cool and new - doesn't mean we should take it.

I am by no means a Luddite but I do find it tiresome having to learn SO MANY NEW interfaces to applications and devices. I really wish that someone one give me tools that are LESS explicit and more automatic. AND were reliable and trustworthy.

In this research I read that I am not alone. Indeed because of what I do in my day job I have to learn new things every day. (I am told that should keep Alzheimers away!) So I use a lot of new devices and tools and learn new interfaces almost daily. And here is a secret - I have a good crew of people who can help me to learn them and remember the stupid ass codes that my old feeble mind forgets.

So here is an appeal to those hoping to get me excited about a new device. THINK first. Think of my usability issues. Try and find ways to simplify my life rather than adding complexity to it.

On behalf of the Woodstock generation - I thank you.

Peace Man..............

The Long March Back to 3 Class Seating

Tim Hughes wrote an interesting piece not so long ago on the death and rebirth of first class.

It seems he is spot on. The latest carrier to offer premium economy (with a touch of leg room extra) is CO. Their announcement further aligns them with their new best friend UA.

It does seem to be that the first class is going to die a slow death. A relic of a bygone era. Rather like Concorde.

Still I can say I have flown a couple of times in a decent first class. Its a really great experience. Did I enjoy paying the 4X price for the short duration of the trip? No!

And neither does anyone else. (with few exceptions and you know who you are).

Cheers

Is The Asia Crisis Over Yet?

Good news emanating from Asia this week.

Singapore is usually a pretty stable proxy for the whole region. It is typically imune from the fluctuations that can be dramatic in some of the other markets like Bali or Hong Kong.

After a dramatic drop off in visitors and time spent that began in the latter half of 2008 and reached its lowest point in the first quarter 2009, the market has slowly inch by inch crawled back. In January 2010 - the market occupancy rose above that of a year earlier. While not fully back to the same level of occupancy enjoyed before - the Singapore Government must be happy with the results. Correspondingly SQ must also be happy to see the back of 2009.

While yields are not fully restored yet - we are seeing rises there too.

This is good news all round

Cheers

Farewell Cruisematch 2000

I note with a twinge of sadness the passing of Cruisematch 2000. In its time it was revolutionary. Founded in the early 1980s by Pete Arnette (Forgive me if I spelt his name wrong) who started this after leaving Pan Am where he was the Air Sea guy.

Originally a multi-cruiseline engine it was purchased and absorbed into RCCL and became the external reservations system.

Originally an IBM System/38 it went through several iterations.

However effective April 2010 it will lose its Green Screen capability and emerge phoenix like in a next generation mode with much more capability.

Cheers

OneWorld, A New Force?

OneWorld has come back from the brink of extinction that so nearly doomed its existence. Now aggression has returned to the team.

So having retained JAL - the team has plugged a hole in their environment by signing Kingfisher as the Indian airline. This leaves as a foregone conclusion that Jet Airways will now partner with Skyteam or risk being left out in the cold. In turn this means that there will be a falling into the ranks by many of the unaligned carriers.

The likely independents are the stalwart holdouts - Emirates and Virgin.

So what's next - I think we will see a fair degree of activity with the Alliances over the next 12 months. With Transpacific and Transatlantic alliances being formed and BA/QF immunity on the Kangaroo route seeing renewal last year - there will be some added complications emerging but things should settle down into a regular pattern. Ultimately I believe that Alliances will reduce the competition. I remain hopeful that independent players will pick up the slack.

Cheers

Your Are Not Wrong - The US Airline Industry Is Slimmer

I have been pondering doing a post on the subject of the decline in the airline employment in the USA.

No need ETN did it for me....

So click the link and read the impact.

Since the peak of 2000 employment has fallen by 170,000 or about 25%. That is a lot of people who were directly employed by the US airlines. However while this number should send shivers down the spine of every union rep - there are some places where there are some bright spots.

Outsourcing has risen. So there are a lot more staffers who work for external corporations. But who has hired more than any other entity in the US Transportation System?

Why the TSA of course. They have a federally mandated employment of 43,000 screeners. That translates into about about 7-8K of additional support staff. Yet the staff turnover is still very high.

So if you have been outsourced. Get yourself insourced and go and work for the TSA?

Cheers

When Code Share Falls Apart

I had an interesting time this weekend trying to get home. But while there is a story here about the value of persistence - I am really trying to look at the way the alliance between Delta and Air France/KLM should work.

I made a big mistake - failed to book the right day on my flight. OK - it happens. Accepting my fate - i got up at the crack of very early and took my car to the airport in London. (If you want a good tip - DON'T even THINK about trying to use the tube/underground on the weekends in London). But I digress...

So lets start with the process of checking in. I have a DL code share flight number and a DL ticket. So I get the usual email - time to check in. I click on the link. Eventually DL's website sends me to KLM UK. Air France who will operate the flight doesn't want to check me in. I input the data (after calling AF to get the code share correct AF PNR RLOC) nope doesn't work. But it does then send me BACK to Delta with a link... and the process starts all over again. (BTW I copied each web page to prove my point).

I called AF back - no you cannot check in - go to the airport early!

I get to LHR (they said 3 hours before the flight but I was one of the first at 1 hour before departure). I use the automated check in but check with the AF/KL sales rep to see if the frequent flyer number made it into the record. (It doesnt print on the AF Boarding pass nor does it give my status - the Frequent Flyer's nightmare - lack of recognition!) Her comment - I hate these code shares - it confuses us and not to mention the passengers. So I make it through security and board the flight. (Imagine the following is spoken in a very heavy French accent). "Ladies and Gentlemen - Air France regrets to tell you that there is a slight delay of 2 hours due to bad weather in Paris." OK so that means I will miss my connection in CDG for Seattle. So your intrepid traveller heads up the aisle to speak to the purser.

"Absolutement NON! If you want to leave the aircraft then I am sorry but you will have to pay for a new ticket. It will be very expensive. And besides - all flights in CDG are delayed by the same amount." I can assure you - there is no need.

Back to my seat - I pull out my laptop and log onto the network (thank god for 3G dongles... I can surf on the aircraft). So i now have better information than the agent. So yes there are seats available. Back up the aisle to speak to the purser and the agent...

But saith the Professor... "I have a Delta ticket".

"Then it is up to you..."

So I grab my carry on and head up with aisle. I speak to the gate agent (Cobalt) Well I guess. But you are on your own.

I deboard the aircraft - am officially offloaded. So now I have to go all the way through the airport to the Skyteam checkin terminal transfer desk in T4. Its about a mile walk from Gate 25 to there.

Same story (now on its third retelling) "No you can't do that!" ....But I have a Delta ticket....

"Oh yes then you can!"

The Cobalt agent works hard and gets me on the right flight. I end up getting home. And as for the flight from CDG to SEA? AF306 was canceled! I would have been stranded in Paris along with a heck of a lot of other folks.


I think that there is a lot of integration to do. The way Skyteam works is frankly very poor. Star Alliance has had a lot more time to get this right. Their UA+LH interconnection works a lot better.

What is clear - AF's legendary (and not good) customer service is still no better than it ever was. AF is misleading customers with their bad advice. The Cobalt team at LHR really did pull out the stops to get me fixed. I am indebted to them for solving the problem for me.

However - without insisting on the changes to my flight - I would not be back in the good ol' USA.

Moral of the story - avoid booking on AF if you can. Your DL Elite card is worthless to the AF staff. A DL ticket seems to work a lot better. Oh yes and they have a LOT of work yet to do to integrate their operations.

So much for seamless service! Check out this ad in LHR Terminal 4.

Cheers

The Great GDS Unbundling - Not Pretty.

Taking a leaf out of their customers' book - the GDS have started to slowly but surely unbundle their pricing. The old one size fits everything model is clearly on the way out.

So let's get the reasons out the way first as to why they are doing this - and why now?

It is simple. The standard GDS model is broken. I realize this may be a shocking revelation to many people - both inside and outside the Travel Distribution arena, but sometimes you have to call it like it is. It is broken because the amount of money (revenue) coming into the GDS via the traditional segment fee model is not sufficient to support the outgoings (especially in Travel Agent Incentives). Further - the legacy GDS companies have a significant technology investment expenditure facing them to significantly change their systems from being EDIFACT based to being XML based. The change in architecture is not just skin deep - it will require radical changes in core architecture to finally kill off the legacy nature of their business.

From the customer side the standard legacy network carrier model is also broken. The vastly better commercial proposition of the LCC airline model has resulted in the emergency of the Hybrid Value Carrier model that I have been writing about for more than 3 years. Legacy carriers going unbundled and LCCs going mainstream

However the biggest issue is not the technology, rather it is the commercial model. For this reason - the conflicts in the various different pricing schemes have finally brought the old legacy segment fee model to its knees.

So is this the Professor just ranting or is there some evidence to support this?
Ehem... plenty!

Two recent articles in The Beat confirm this. Amadeus has formally announced its unbundling. Commenting on this - Amadeus VP Ian Wheeler said:

"Airlines can choose to buy or choose not to buy those, giving more transparency and flexibility in the contract compared with the participating carrier agreement. It's an unbundling of our previously packaged offer. The more complex, scheduled carriers tend to take more of the options."

Amadeus has several models out there already. It has classified its carriers into Pure Altea hosted - pure GDS only and then a host of hybrid options. For example Virgin Blue Navitaire hosted airlines pay Amadeus a fee for routing their GDS traffic through the Amadeus Community Link. Paradoxically the low cost carriers are many times paying higher distribution fees than the traditional carriers.

For quite some time now Travelport has been offering a number of different connection options. Begining in 2008 they aggressively targeted the LCCs by offering almost "free" distribution via their desktop system Go! This was expanded recently to include Galileo offerings. The next generation application agent workstation system - Universal Desktop - will continue this offering. Given their recent IPO failure - they will be under a lot of pressure to boost their revenues and make things look better for the inevitable repeat. Since they have to a large extent (like the other GDSs) mortgaged their future with this low cost GDS deals and high inventive agent arrangements. The ONLY outcome is a difference.

Not to be outdone, in another article in The Beat Sabre is also offering unbundled services. Stung by the loss of their anchor customer American Airlines and the announcement that AA will sunset EDIFACT as the preferred protocol for external distribution communication - The Texas based GDS has announced its first XML connected airline. Easyjet. Commencing April Sabre will launch its new FlexConnect (Not to be confused with the common nomenclature of Farelogix - FLX), service and interestingly it will not be the cheapest of connections.

But the unbundling doesn't stop there. Sabre is currently offering developers its wonderful new contract. And for a mere $1 per booking in support fees - it will allow connection to the Sabre system. This has been met with somewhat of a less than enthusiastic response by the developer community.

Finally the line between Airline IT and GDS which used to be pretty finite has now become blurred. For Amadeus the ascendant player in Airline IT - they are now leveraging lower GDS fees if the airline pumps more GDS based transactions and signs up for the full Altea suite. Thus perpetuating the effective economic DIS-incentive for airlines to move their distribution to direct. In the early days of the web, Amadeus hosted (both pure and System User) airlines actually had to pay MORE money for direct distribution than via the GDS. Airlines are effectively caught between a rock and several hard places with these new unbundling deals.

We have even had one airline group come and explain that while their hosting fees were minimal with their current provider, the cost of providing that link via the GDS distribution channel made the cost prohibitive. To the tune of $8-10 per booking. Thus far outweighing the cost differential in hosting fees. (And BTW that is not the highest cost per GDS hosted booking - we have seen MUCH higher instances).

If the regulators were truly paying attention to what was going on - they would see that the bundling/un-bundling/re-bundling of the Airline IT and GDS services were discriminatory. It would make Microsoft's bundling of Internet Explorer with Windows see tame in comparison.

So the world is changing. The airline bean counters are going to have to pay a lot closer attention to what is going on. The Lawyers too. So what does this do to the airlines who have signed long term contracts? They should start looking deeply at their contracts and will see that there are a LOT of loopholes. I have told our Airline customers that the time for contract words is over. Let's see the invoice first and then we can talk about the terms!!!

And I will leave you with a further thought. If the distribution channel thinks they are immune from the imposition of fees as a result of this unbundling - think again. We have numerous examples of agencies seeing all their incentives eaten up in "charges and fees" - and then some.

You have been warned.

Cheers

Bad Service In the Travel Industry

I try to go and visit the ATM - Arabian Travel Mart - every year. My team has done quite a lot of work over the years in the Gulf States (GCC). One of the Leading trade shows is ATM. It is run by Reed Exhibitions who also handle the World Travel Mart in London.

Between the two of them - I have had a relationship with Reed for - well more than 20 years. It somewhat irks me that EVERY YEAR I have to re-register with them. You would think by now they would know who I was (OK no snickers here please). Especially when Reed is off touting their credentials for Social Media.

So this year when it came time to register - I duly received my invitation to register early.

GREAT - they finally got it this year. Even a reasonable facsimile of my name!

I click on the email link... disappointment.

"Your Session has expired" What??? I didn't have a session yet how could it expire?

OK so rather than just abandoning things I thought OK its a simple bug - I hope they have not sent this email to 50,000 people and everyone gets the same response.

So let me tell the webmaster - he will fix things. Right? WRONG!

Here is the error:

:
83.138.169.176 does not like recipient.
Remote host said: 550 sorry, no mailbox here by that name. (#5.7.17)
Giving up on 83.138.169.176.

So moral of the story. If you are in our business then perhaps you should be sure to make things work.

I am sure that we are all guilty of doing silly things but this is a pretty major site and it needs to get fixed.

I hope they remember me after this rant

Cheers

BA777 Accident Final Report

I finally got to read the report. It makes for some interesting reading.

From the gist of what I have read - despite the knowledge of the dangers of ice in fuel tanks - it had not been deemed enough of a risk for anyone to worry about. Guess again.

I believe that this shows that just about any entity can be subject to a failure in their system of quality. What needs to be done now is to pay close attention to the accident recommendations and swift implementation.

The risk of the issue makes the possibility of a repeat accident greater than was previously imagined. Purity of the fuel and processes for dealing with it should be a hot topic of debate.

With the number of accidents continuing to fall but the resulting survivability of any accident not really changing - one can only imagine the horror of a fully loaded widebody coming down in a residential area close to an airport. In Africa this has actually happened. The last time an aircraft was destroyed in an accident at LHR was G-ARWE the B707 in April 1986 with 5 Fatalities.

We cannot let our vigilance drop

Cheers

The Long Road Back For US Travel Agencies

Recently ARC (the old Airlines Reporting Corporation) has begin to make some of its vast data more readily available for the marketplace.

I believe that ARC represents a good proxy for the US market and the GDSs in the USA in particular. Well at least for now.

Recently they have made available the breakout of the different types of Travel Agency based transactions. Breaking them into 3 categories - Mega (meaning TMCs) Online and the ubiquitous "Other" category - it is interesting to see how the downturn last year affected the Mega and the OTA categories differently. As a proxy for the future we can see that the worst is definitely now behind us in TRANSACTIONS. However revenue/yield continues to lag and we are not seeing it come back. I believe it will be some time for us to see some significant improvements in yield.

What we see is that the market definitely bottomed out in February 2009. So now we are one year on from there. Yes the OTAs have made inroads. The abolition of fees has made the OTA more attractive to users. However there is still the issue of the legacy GDS based OTAs inability to handle ancillary revenue services such as paying for premium seats and baggage that is so important for the airlines.

If Travel Intermediaries want to make the change and look for new revenue forms - they should really start looking to cooperate with the airlines and try and drive the profitable solutions of ancillary revenue sales.

Cheers

Founderless ILFC Hits Turbulence

This week I took a little detour and a few days off and went to Arizona. I got to indulge myself with some viewing of the Davis Mothan AFB Boneyard. I also tried to get into the Evergreen maintenance facility aka the aptly named Pinal Air Park but was turned away. I even saw an old Pan Am 707 the USAF had purchased. But I digress...

Without the pioneering spirit of its Hungarian born founder and now former leader, ILFC seems to have hit some turbulence.

At the end of last year citing issues of the leadership and the seeming lack of direction by bailout king AIG, Moody's downgraded AIG's bonds to a very low state. This week Fitch's ratings (yes those people who didn't seem to know what was going on before) downgraded ILFC's bonds to junk (BBB from BB status).

In the mean time Steven Udvar-Hazy seems quite far along the comeback trail. Those private equity and venture funds who backed him for his aborted efforts to buyout ILFC from the insurance giant recognize that there is a value in the marketplace for some "re-ordering" of the assets for aircraft. As I have mentioned before, there is an over stuffing of the supply pipeline at the moment. As a result some existing lessors (usually banks) are seeing to monetize their assets and reduce their exposure to the aircraft market. The aircraft manufacturers need to ensure that more orders come in and that they are not left with white tails.

Stay tuned - there will be more

QF and Those First Seats - False Economy?

I have noted a few different stories about the QF decision to reduce First Class on all but 12 A380s. I note that the total cost quoted for the removal was $400 million. Lat time I checked that's about the price of a new A380. So let's just assume for a minute that we buy the PR - therefore we have a life span of 5 years for a seat. So should we consider the economic value of the decision. If you look at both aircraft then we would see that the A380 could feasibly double the number of seats from 14 to 28 (replacing first with business). For the 747s also. So we are looking at 2x A380s (net gain 28 seats). For the 747s same thing but there are 30 of them of which 4 are currently 2 class and the rest 4 class. So lets assume 20 of them will get reconfigured net gain 280 seats. (I have heard as few as 9) So the total gain is 308 seats. Hmmm I am not quite sure this is a really compelling economic decision.

So hopefully someone at QF can explain the economics of this.

Thanks

Timothy

Bad Browser Behaviour. You Know Who You Are!

Its the weekend - its Valentine's Day so my post for today is about how much Travel Sites love their Customers. Sadly its not enough.

My rant is focused today on people who consistently ignore the user community and create bloated websites with poor usability. The "everything and the kitchen sink" approach is something that really bothers me. After 15 years of web + travel we should have developed some good practices usability should be refined and the tools for the consumer should be simple and easy to use. We should have moved beyond the explicit process of having to enter large amounts of data in order to get a simple nugget answer to the question that I asked.

Do we have that? No!!!

What we have is bloatware of the worst order. We have inefficient, confusing and often times broken processes. Because I am a bit of a curmudgeon - I even keep examples of the number of times I have seen broken or illogical even very bad processes.

So to share my love to all the Professor's readers today - I will concentrate on just two aspects. Page Weight and Browser Window size.

There are a lot of people out there who are waiting for great content. The typical user is ADHD. Ten Seconds and you have lost him. For travel ecomm sites the engine is typically going to take about 5-10 seconds to load new content. Cached content can be served a lot faster but then when its cached its out of date data. Lots of things to consider when making a decision. My basic rule of thumb is don't confuse, lie or delay providing information.

So back to my basic two peeves today.

Page Weight - what is the ideal page weight? Today most people are serving up pages in the 100K range. I try to advise people who are outside of the USA to try and bring it in at under 70K. To justify pages that often exceed 150K, the websites try to justify their behaviour to their users by using the quoted speeds of upload/download. Yet the speeds of download range across the board. I use a rule that says take the maximum quoted bandwidth and divide by 4. That gives you the true speed that the user will experience in serving up that home page you spent all that money on. Page Weight is however not the only criteria in loading a page. Consider which bits of information are useful to the consumer. Ajax pages are vile terrible things but quite useful. Flash pages are just vile terrible things. If you can use techniques for speedier loading of the important information first. (For example the commit button shouldn't be the last thing that loads!!!). For a good article on page weights and what you can do about things - go here.

Now my other real peeve is the poor use of real estate. We have now several issues related to screen real estate.

There are a greater number of mobile users. They are not all using the big Dell Notebooks. They are using iphones and crackberries. The proliferation of small PCs is also an issue. They are using very slow 3G connections and a small aka slow processor speed netbook. Even public Wifi is slow - frequently I see 3G speeds and Wifi at the same page serving rate. (That is not because 3G is fast - its because the wifi is slow). if you have not mobilized your site in some way shape or form you are looking out on a lot of users. In many countries there are many times the number of mobile users than fixed users. Bear that in mind when designing your apps.

Also the growth of letter box format screens has advanced significantly. For full stats from the official source (W3C) go to their website for a summary of the formats and browser shares etc. The nice thing is that now you can interpret this data using information from Google Labs (which is analogous to the W3C) data. For this you can load the Browser Size screen template. I am amazed at how many sites fell outside the 90% window. Tsk Tsk. Forcing a user to scroll around your page is a NO-NO!

So treat this as a little Valentine's day card from the Professor to all of you.

Enjoy the day with your loved ones.

Cheers (and Kisses)

US DoT Tentatively Approves BAAABI. Branson Pissed

For some reason on a Saturday the US Dept. of Transportation has announced its approval of the BA+AA+IB transatlantic alliance. In a continuation of its policy of pro-oligopoly, it demanded only a small concession of 4 slot pairs at LHR be surrendered. Far less than the EC has demanded and far less than its own demands 8 years ago for 16 daily slot pairs to be surrendered.

Virgin Atlantic Chairman Richard Branson is obviously not a happy person.

Already the applause has come from some groups such as BTC who believes that 3 alliances are an inevitability. Given the previous rulings it is unlikely that the EC will impose greater restrictions but it does seem to be a bit of a joke to only ask for 4 slots to be surrendered. A far better arrangement would have been to demand that new slots be made available for new entrant carriers. But the status quo seems to be the protectionism and cronyism that has been a hallmark of the US DoT.

If the competitive authority was truly doing its job then it should open up the market for total freedom. Well we shall see. Next week in Spain the negotiations for the next round of Open Skies between Europe and the USA open up. High on that agenda will be total deregulation and relaxation of sovereignty rules.

Cheers

Recovery? What Recovery….

So the first shoots of spring are around us. Lots of folks are very happy and walking with a new spring in their step. So what about January numbers? Well not so good actually. Yields are still in the toilet and transactions are not as healthy as they could be. We have two sources which should start ringing some alarm bells. OAG reports that capacity is up again for the 6th month in a row. It is continuing to rise at a time when restraint might be a better policy for economic health. And we still see yields in the toilet.


ARC’s numbers show an improvement over 2009. But the numbers are still way down on 2006/7/8. The legacy airlines are feeling the pinch. The LCCs are continuing to grab market share. Total pax numbers are up. More than the percentage of GDS based ARC bookings in the USA.

In looking at these number specifically for the USA we can see that the drop off in 2009 was 19%. For 2010 the drop off from 2008 was still 13%. More worrying should be the yield situation. While transactions are off 2010 vs 2008, revenues are still worse off at 17% when comparing the gross transactions and revenues for 2010 vs 2008. So while traffic is coming back the yield recovery is less. Thus GDSs and transaction model players will be a little happier but those whose livelihood depends on the revenue side of the equation must remain worried. Airlines clearly must think this is going to be a cause for little celebration yet. Long term the numbers tend to confirm the view that there has been a fundamental shift in the market on the revenue types. However there is one factor that ARC’s numbers do not illustrate. The value of the Ancillary Revenue. So if we look at the airlines they can be happy to know that if they are achieving AR revenue boosts of above 4% across the board then they are doing well. What will be interesting is that this is revenue that the Agency channel is missing out on. Perhaps now the agency channel will start to think more seriously at the value of AR to their bottom lines as well.

So this tells us that there is clearly a price being paid by the market and the recovery will be a lot slower than anyone wants. However there are some opportunities to be had if people are smart.

Cheers

British Airways, Less Could Be More

BA is finally coming round to accepting its fate. The airline is making noises similar to that of its close cousin Qantas prior to the latter slashing premium seats on its fleet.

So three new stories should give some context to BA's future positioning with regard to its premium products.

Firstly - First is having a Makeover. BA unveiled its new first class "demi-suite" this week on a 777 used to and from Chicago. The new seat allows for the same number of seats in the cabin (although I have not been able to confirm this) while upgrading the onboard experience. There is a wider bed, a closet for your jacket (more self service from BA) and a better set of seat controls and "unique personal windows"!!!! One thing is for sure. There will be a lot less First Seats out there by the time the roll out of the new first class is complete in 2 years.

Hot on the heals - of this announcement - Open Skies will be flying Paris to IAD. Providing a premium service between the French and US capitals would seem to make sense. Although I have to question whether any government personnel from either country would be flying on a British Aircraft.

Finally Willie Walsh has been spouting off that he will see a reduction in short haul premium seating. Frankly I have noticed of late that the front cabins of the Airbus European Fleet has less of the full seats and more of the convertible seats.

So BA is moving down market. It has to. That is where the market is. Anyone willing to pay 600 Euros for a one way Biz seat in Europe must be off their heads (ok guilty but I had no choice!!!).

Cheers

Ancillary Revenue’s Achilles Heel

In a Beat Article last week – TRX reported that less than 1 per cent of transactions that they process had ancillary revenue.

The statistics are sound – perhaps. Why do I say that? Because they are analyzing information that shows ONLY what it can show. And therefore this is where the Achilles heel of Ancillary Revenue floats to the top. The problem is that the agency tickets cannot accommodate (except in very rare circumstances) Ancillary Revenue items. So the total possibility of fulfilling Ancillary Revenues via the agency channel is almost zero. So the study shows what we already know. IE that you cannot fulfill Ancillary Revenue in the agency channel.

The airlines – particularly US legacy based ones – need to move the process of Ancillary Revenue away from fulfillment just from the airline’s own fulfillment process into the sales channel that constitutes the majority of sales. The airlines need to expand their AR. This is obvious. But the constraint is that the largest tool for selling Airlines’ products – the GDSs – cannot accommodate the sales process. Indeed the current generation of tools will not support this. For proof – I turn to Travelport’s latest Product Advisory. For this I am indebted to Professor Robert one of our regular contributors to the Blog. In PA 917 (Version 01) Airline Additional Services Display Functions in Apollo™ and Galileo™ on page 2 Travelport clearly state’s that the Galileo Desktop will not support Ancillary Revenue.

The initial release of Airline Optional and Additional Services will only be accessible on the Apollo and
Galileo systems via Terminal Emulation (TE). A separate and subsequent will be sent relative to release
to the Worldspan Terminal Emulation (TE) environment. Merchandising capabilities for Galileo Desktop
(Viewpoint) will not be developed. Travelport’s Universal Desktop will include enhanced merchandising
functionality, including access to expanded content, product descriptions, itinerary comparisons, and upsell
capabilities.

Click on this link – page 2

http://travelport-english.custhelp.com/cgi-bin/travelport_english.cfg/php/ma/fattach_get.php?1=AvUK~woWHv8S2Xr~Gjce~yL~Jvsq~6v~_h80lDr~&2=8355

Thus at the very moment the airlines need Ancillary Revenue to improve their bottom lines – one of the largest channels for this potential revenue is blocked to them.

The airlines clearly understand this and are indeed perplexed by the legacy GDSs reluctance to adopt AR. However this exposes the fundamental issue – the true Achilles heel which is that the legacy GDS process does not support AR. So we are clear – it is not that it cannot be done. Already ARC supports the processes. Airlines are able and willing to support the infrastructure that will enable AR sales via the agency channel. The clear proposition is the Airlines need the Agency Channel. The Agency channel has diverged enough from the GDS dependency to enable its own solutions for service of its customers and their partners. So Troy can be saved. What do you think?

Cheers