Mass Customization and Ancillary Revenue

I am definitely between positions on the announcement by ATPCO of their "ATPCo bundled services product". The cabal supporting this consists of 27 Airlines and 6 Pricing Systems. The focus of the announcement is to talk about the "OC" optional services fare filing capabilities. FULL TEXT OF THE MAY 11th RELEASE BELOW. "Travel Agencies, Travel Management Companies, and GDSs Announce Support for Standards to Enable Shopping, Sale of Ancillary Products Across Distribution Channels."

A notable hold out is American Airlines who feels that the standards will interfere with their ability to individualize the relationship with their customers. AA's Cory Gartner was less than circumspect in his statement to The Beat this week "We are talking about Amazon style, where a customer is coming to us having purchased these things in the past, therefore these are the things that are going to be most profitable for American Airlines to offer because we think customers value these things and will pay for them."

And this is where my dilemma starts. On the one hand I firmly believe that standards are good for the world, but on the other hand I am a fanatic in the belief that suppliers and their customers should be able to define their own relationships. The web has done a great job in developing the abilities of individual relationships between business partners. Driven in part by the use of standards such as XML and HTML. The web enabled open standards and open source software in the process loosening the grip of Microsoft and IBM. But it also enabled the rise of the Google behemoth. Now we need to do things "the Google way". Not necessarily bad but not necessarily good.

Part of me wants to cheer the ATPCo standard. But then this other part of me (yes the older curmudgeonly bit) says - "hmmm seen this before" - and its just another effort to curtail innovation and control the market by those nice people who brought you high costs of distribution. Check out the quotes in the Press Release and indeed the strange bedfellows who combined to endorse the release.

My unease with the cabal of players who are running this are they are saying its a common standard among themselves and enforces the acceptance by the legacy GDS service providers. This represents a closed shop of the usual suspects. Thereby closing out other interested parties who are looking at the dissemination of the data results to the consumer. Specifically stating in The Beat Article:

"The coalition repeated the GDS companies' expectation that they would "provide corporations and travel agencies the ability to shop, book and fulfill airline ancillary services to travelers by late 2010." What remains to be seen, though, is how quickly that would happen and how pervasive it would become."

My unease is that there are many more people involved in search, shop, book and fulfill and itinerary management now as the product categories fragment and as new players emerge to do different/better jobs at serving the consumer.

My challenge is therefore to the "coalition" to show that they are truly open and will publish the standards and make them available - for example under the Open Travel Alliance (OTA) rather than just ATPCo. So that other players who are involved in the travel provision can take advantage of the "standard". At the same time others who chose not to file published or other fare types via ATPCo - such as private fares outside of the Cat 15/25/35 categories - can adopt the same standard. And what about other users such as Tour Operators etc? I think you get my point.

If this is to be a standard then make it truly open so that anyone involved in travel can take advantage of it.

And another point while they mention EMD, the BSPs (in international markets are ignored). As I have written before - the financial fulfillment process of Ancillary Revenues is the Achilles heel.

In the mean time - I think I will continue to cheer on others who are bringing new and better products and services which add value to the whole market and helping build better relationships between business partners, not just the old guard finding more ways to put fences around the existing legacy GDS based "one size fits everything" model.

Anyone willing to take me up on this challenge?

Cheers


Here is the full text of the Press Release:

Travel Agencies, Travel Management Companies, and GDSs Announce Support for Standards to Enable Shopping, Sale of Ancillary Products Across Distribution Channels

NEW YORK, NY, May 11, 2010 - The industry’s leading travel management companies, online agencies, and global distribution systems (GDSs) today announced their support for plans to implement recently developed, industry-wide technology standards which enable shopping, booking, payment, and reporting of ancillary services. These standards will also facilitate the use of new capabilities that are being developed by the GDSs to help agencies manage the complexity of unbundled offerings, while enabling airlines to differentiate through the sale of ancillary services across all distribution channels. Use of these common and recently launched technology standards will create the opportunity for airlines and agencies to sell ancillary services seamlessly, and corporations to optimize their business travel programs by better anticipating and tracking their full air spend.

American Express Business Travel, BCD Travel, Carlson Wagonlit Travel, Despegar, Expedia, Egencia, HRG, Opodo, Orbitz, Orbitz for Business, Travelocity, Travelocity Business, Amadeus, Sabre Travel Network and Travelport have agreed to support common technology approaches for the merchandising of airline ancillary services.

British Airways, Delta Air Lines, LAN and WestJet support the development of this capability as an option for distributing new products and services. Additionally, Air New Zealand has confirmed that it is mobilizing OC and EMD projects.

By combining ATPCO’s (Airline Tariff Publishing Company) category for optional services “OC” fare filing capabilities with soon-to-be-enabled Electronic Miscellaneous Documents (EMD), airlines will be able to quickly introduce their revenue-building ancillaries to the broadest travel audience through both indirect and direct distribution channels. The group of travel industry buyers also endorses the development of common messaging standards for direct API solutions for those airlines that wish to manage the ancillary data directly with a GDS, enabling the easy and efficient shopping, selling, payment and reporting of ancillaries.

Travel agencies are experts at selling airline products to their customers, and they have keen insight into how these groups want to buy airline products. By using industry technology standards, airlines can quickly deliver the ability to sell ancillary services. Additional capabilities will emerge throughout the year to enable corporations, agencies and airlines to complete the sale and fulfillment of these products within the GDS, enhancing agency efficiency at the point of sale, and integrating into existing back office systems.

Over the past year, many airlines have evolved their business model in an effort to generate incremental revenue by either creating product bundles that differentiate their offerings or by bundling and unbundling various products and services, such as premium seating or baggage fees. Today’s announcement aligns GDSs, online travel agencies and travel management companies around support for the use of recently developed technology standards to help airlines introduce new unbundled fare structures, and demonstrate what is included in bundled fares, while also providing consumers and business travelers full choice and value in their air travel options.

Many capabilities enabling the sales of ancillary services already exist within the GDS environments. Airlines that adopt industry technology standards are expected to plan how to best leverage it this year. The GDSs plan to provide corporations and travel agencies the ability to shop, book and fulfill airline ancillary services to travelers by late 2010.



QUOTES:
Amadeus
“It is a great achievement to have all these parties endorse the best way forward for the travel industry. We believe supporting these technology standards will benefit everyone in the travel value chain, from providers to travelers. Airlines will be able to differentiate their ancillary services offer and market it more effectively through travel agencies and to consumers,” said Philippe Chérèque - executive vice president, Commercial for Amadeus.

American Express Business Travel
"When it comes to providing merchandising options to our valuable customers, its critical that we have broad access to such supplier content, that fully integrates into our downstream processes," said Michael Qualantone, vice president/general manager, Global Supplier Relations, American Express Business Travel. "We want proven, reliable and efficient technology to avoid additional cost, processing errors and service disruption."

BCD Travel
Rose Stratford, senior vice president of global supplier relations for BCD Travel, said “We applaud a standardized approach that will enable us to better serve our corporate travelers. It will offer us the opportunity to better manage our traveler needs while providing our clients with the transparency and reporting necessary to manage ancillary fees more efficiently.”

Carlson Wagonlit Travel
Matt Beatty, vice president, Global Supplier Management for Carlson Wagonlit said, “With the GDSs providing quick and easy access to ancillary products and services via common, industry-wide technology standards, we can help our clients and their travelers make better-informed choices to meet their business travel needs while optimizing the efficiency and cost management of corporate travel programs.”

Delta
“Delta supports this development of technology that facilitates the potential distribution of new ancillary products and services. We are continuously seeking distribution methods that satisfy the marketplace, and this technology is an option we are considering. It is important that we work with our agency partners to find the best possible solutions for our customers,” said Jim Cron, senior vice president, Global Sales and Distribution for Delta Air Lines

Despegar
"Despegar.com believes that customers need clear information in order to choose wisely. By setting these standards the travel industry is moving one step forward towards price transparency," said Roberto Souviron, chief executive officer, of Despegar.

Egencia
"It's important for the industry to come together to solve our common issues," said Rob Greyber, president of Egencia, the corporate division of Expedia Inc. "By adopting these technology standards, we can increase the visibility of ancillary costs to travelers, which is good for airlines & travelers, and keep corporations ability to control spend. Policy controls govern financial accountability at the point of purchase, lessening the audit burden for corporations.

Expedia
"A concerted effort like this to make these products bookable in the most prominent booking channels sets up all parties for success," said Gary Fritz, president of Expedia Partner Services Group. "These standards pave the way for making a la carte airline products more transparent and accessible to leisure travelers, which in turn will lead to higher adoption rates."

HRG
“Following our call for common standards last year, joining this group enables us to continue with our drive in this very important area. It will enhance the way we deliver our products and service changes to our customers so that it works for everyone in the value chain,” Bill Brindle, Business Technology and Distribution Director for HRG.

LAN
“Convinced that merchandising and ancillary revenues are an effective way to differentiate and diversify in an industry highly pushed towards commoditization, LAN initiated a couple of years ago an important effort in order to actively participate in these business streams,” said Sergio Mendoza, vice president, Distribution and Revenue Management at LAN. “A multichannel strategy definitely helps us better serve our customers and represents a competitive advantage. On the other hand, standards are necessary in order to simplify and make the multichannel distribution feasible and efficient. We have a huge challenge defining those standards for a business model that is being created as we speak, but that is what makes all this so much fun.”

Opodo
“To agree on the use of common industry standards in the merchandising of ancillary products is a crucial development for the travel industry. We are proud to be part of a move which will ultimately enhance consumer protection and trust,” Ignacio Martos, chief executive officer of Opodo.

Orbitz/Orbitz for Business
"Orbitz Worldwide has been in discussions with the airlines regarding how to appropriately merchandise their ancillary services for an extended period of time, but finding an efficient technology solution has been a major barrier to progress. Establishing industry standards will result in more productive conversations with our airline partners that will allow us to focus on their business needs rather than technology solutions," said Michael Nelson, president of the Partner Services Group, Orbitz Worldwide, Inc. "The end result will be that our business and leisure customers will have access to the information they need and the products they desire."

Sabre Travel Network
“Everyone wants a healthy travel industry, and it’s clear that ancillary sales have been successful in helping airlines increase revenues,” said Greg Webb, president of Sabre Travel Network. “But this revenue success for airlines has come with a number of challenges for consumers, travel agencies and even the airlines. We intend to solve these issues so the real value of travel can be experienced by everyone.”

Travelocity
“Our top priority is making it easy for consumers to understand the perks and costs of choosing different airlines, and we’ve got several tools on the site today that help,” said Noreen Henry, senior vice president, Partner Marketing for Travelocity. “But, with the increasing number of add-on fees, it’s important to establish a common way for airlines to deliver that information to sites like Travelocity. Having these standards is a necessary step in helping us show consumers all of the possible options and the associated costs.”

Travelocity Business
“In business travel, lack of visibility into ancillary fees is not just a challenge for the traveler, but also the corporation that tracks and manages the total cost of each trip,” said Yannis Karmis, president of Travelocity Business. “A universally-recognized set of programs, delivering an accurate measurement of overall value for selling, tracking and accounting for ancillaries would offer transparency benefitting both airlines and travel meets the requirements of CFOs at all parties.”

Travelport
Travelport’s mission is to deliver informed choice to business and leisure travelers throughout the world – which means ensuring that each and every search results in a complete and comparable display of competitive travel options,” said Gordon Wilson, deputy chief executive officer of Travelport. “In this context, accelerating the adoption of industry-wide technology standards for airline ancillary services will bring greater transparency and choice to travelers, while enabling airlines to merchandise their products in the way that they want to sell them.”

WestJet
“WestJet sees the sale of ancillary products via all distribution channels as an important part of its value proposition going forward,” said Catherine Dyer, WestJet vice president, Distribution. “We think it’s important that our valued agency partners have the ability to sell these products to our guests in a way that is efficient and convenient.”


MEDIA CONTACTS:
Air New Zealand Amadeus
Mark Street Corporate Communications
Mark.Street@airnz.co.nz +34 91 582 7809
mediarelations@amadeus.com
North American Media Contact
Debbie Iannnaci
+1 305-499-6448;
diannaci@amadeus.com


American Express Business Travel BCD Travel
Tracy Paurowski Thad Slaton
+1 212-640-8409 +1 678-441-5292
Tracy.j.paurowski@aexp.com thad.slaton@bcdtravel.com

Carlson Wagonlit Travel Egencia
Kim Derderian Paige Young
+33 (0) 141336044 +1 425-679-4053
kderderian@carlsonwagonlit.fr pyoung@egencia.com

Expedia HRG
Katie Deines Fourcin Sallyanne Heywood
1 425-679-7991 +44 (0) 1256 312624
Katie@expedia.com Sallyanne.heywood@hrgworldwide.com

Orbitz/Orbitz for Business Sabre Travel Network
Brian Hoyt Nancy St. Pierre
+1 312-894-6890

Is The Travel Recovery Faltering?

April and Early May were not good months for the Travel Industry across the pond. The latter half of the month saw the Ash Clouds from the angry Icelandic Volcano.

But it seems that the surge in bookings we saw from the beginning of the year was not being sustained.

ARC's April numbers - total transactions - show a decline in growth.


But we are not going to see a boost in May either. We have more ash disruptions and BA strikes. But this should not materially affect the bigger picture of travel in the USA market.

So there is something going on. The economy is beginning to feel the heat of the Eurozone crisis. But the Europeans should not be affecting the US point of sale. The high cost of travel across the Atlantic with Eastbound traffic is beginning to bite. Perhaps the US carriers have cut back too much and more capacity needs to be added for the summer. Checking on flight prices across the Atlantic in both directions doesn't give much comfort despite the dramatic fall of the Euro against the dollar.

As I reported earlier the Pow Wow delegates are now trekking their way home probably less enthused than they could be.

Let's see how the Summer 2010 will progress. I am not terribly optimistic that we are going to see that bounce being sustained

And what do you think?

Cheers

Does Google Get It Right Always?

Google has been the all conquering hero for some time. But as we have seen of late that gleam is wearing a little thin and with a certain amount of tarnish on it. The recent privacy spat over their "accidental" collection of data is an example. I used to work for a very large company who was also accused of such bad behavior. So I have some empathy for the impact.

After the huge hype for Nexus One phones - the unlocked Android based phone directly from Google - the company decided to shut it's only web store. I recently had the opportunity to play with several Android phones. Its funny that the level of quality on the software of the Android phone was not unlike the way Google handles search. Its almost good. But it takes a degree of effort to get a great result. If you work in software a long time - you realize that users expect perfect results. Yet we never get the perfect answer. Many times we don't even get a great answer. But I really did expect the product to be a lot better than it is. I also got to play with other versions of the Android. WAY BETTER!!!!

This had me thinking what will Google be like if (or rather when) it goes directly into the travel transaction business. ITA has built a very good business in solving search for single vendors and neutral players such as Kayak, Bing and of course Orbitz. One thing is for sure - the nice gentlemanly rules of the club will not be played by Google. Why? because they don't play by the rules as we know them. In fact Google's whole business ethic is about breaking the rules. Good thing or bad thing?

So the one thing that worries me more than anything else is that quality will be a casualty. But stick with me here a moment. Perhaps Google took a look at the quality of travel content and decided that actually it matched Google's loose approach to quality. Lately I have become involved in search. I think search is going to have a profound effect on travel and the way it is managed and handled. We are still very early in search in travel. This will be a long road. There is so much more to be learned about search. Mostly that the ability of the content to be searched can - at best - be described as embryonic. Travel content (or more accurately components of travel products) don't lend themselves well to search. So we tend to simplify and abstract the minimum level of data in order to serve up search results which if we are truly honest are pretty crappy. Oh yes and of course few if anyone (on the true supply side) really wants to let the product be searched effectively.

To answer my own question - I believe that Google just may be correct about travel.

But it doesn't mean that it is right. Nor does it mean that Google's way is the right way.

But we are about to find out how much fun it will be to try. And my exhortation to everyone else - particularly the existing players in the business - is we had better get serious about search. If not we will be saying that Google has become the evil empire.

Cheers

"No Harm, No Foul" Says Google

In the continuing noise over Google's collection of data "accidentally" Google's CEO Eric Schmidt posed a question: "Who was harmed? Name the person," Mr Schmidt said at the company's annual Zeitgeist conference in Watford, UK. (BBC Quote).

So let me extend the analogy, if someone spies on another person either through a keyhole or via an internet camera - is that a crime. If the other person didn't know then what the harm?

So let's be clear Mr Schmidt - collecting data was NOT accidental. Someone did it deliberately. And their rights were abused. In some countries that is regard as an offense. In some countries it is not. In all countries it is an abuse.

In the US, advocacy group the Consumer Watchdog (according to John M Simpson, of the group) has written to the FTC (US Federal Trade Commission) saying it should investigate Google.

"Google has demonstrated a history of pushing the envelope and then apologizing when its overreach is discovered, given its recent record of privacy abuses, there is absolutely no reason to trust anything the Internet giant claims about its data collection policies."

War driving is fun but you don't store the information.

'Nuf said?

Do Airlines or GDSs Cheat on Displays?

I love finding things that don't work or fail to work as billed. I have been recently working on a project with regards to competition and compliance. I went back and had a good look at the current European Union CRS Regulations.

I was working with one of my team - Professor Sonja - and she noticed that some airlines fail to comply with the letter of the regulations. But as to whether they are technically in default or manipulating the system - I will let you be the judge.

So here is the rule:

Point 10 from the Regulations Annex states:

Where air carriers operate under code-share arrangements, each of the air carriers concerned — not more than two —
shall be allowed to have a separate display using its individual carrier-designator code. Where more than two air carriers
are involved, the designation of the two carriers shall be a matter for the carrier actually operating the flight.



if you look at the 2 examples above you will see that in fact in the display (from Sabre) that indeed there are three instances of the same physical flights shown. However on one of the combinations a specific flight does not show any classes of service. OK so is that within the law? Now look carefully at the two different sets. In set one (yellow) you will see that the flight times are off by 5 mins. So the first flight on the combo might not be the actual same flight. Actually we checked with both the airline res and the airport and they are. In the second option (green) the equipment is different (777 vs 332).

This was a specific case we stumbled upon by accident but I firmly believe there are a large number of these instances where the GDS displays show more than the designated 2 options. It would seem that someone needs to go and check the correct compliance with the pertaining regulations.

Agreed?

Cheers

PS before anyone starts on at me about the schedules being out of sync and this is an isolated example - I can show many more from different dates and times. Some airlines are worse than others.

Google - "accidental data collection"

Google issued a giant mea culpa for "accidentally" collecting data about websites people were visiting.

Politely Balderdash....

Last time I checked - collecting data of any sort requires a conscious decision. There was no accident about the process. A Google engineer (inhouse or contractor) designed the system to collect data. The supervisor reviewed the code. The hardware for the storage of data had to be purchased and approved. The device had to be set up to collect data. The data had to be stored somewhere. So data was collected in 30 markets.... I think you get my point. I don't think by any stretch of the imagination you could call the collection of data "accidental".

Now the question is will Google take any advantage of the meta data (ie data about data) that it collected. Will it also notify all those people it collected data from that it did just that - collected data of a private nature.

These are questions that will fuel the fire of Google's practices. For some time - Google's practices have worried me. I don’t want to slam them for everything that they do but I think we should all be on the look out to ensure that this sort of thing does not occur again. Google as the world's largest data touch point service has more information on each of us that it can correlate together, than anyone else. What it knows about us is pretty scary. Combining that with travel pattern information would give it power that no other supplier in the travel vertical has ever had. The potential for misuse of data - actively or accidentally just boggles the mind.

Cheers

US Inbound Visits Decline 6% in 2009

For a tough year the US managed to eek out a smaller decline incoming than might have been expected. Year on Year according to the US TIA - the overall decline was 6%.

There are three reports that can be viewed.

To view the top states and cities visited by overseas travelers, go to: http://tinet.ita.doc.gov/outreachpages/download_data_table/2009_States_and_Cities.pdf

The 2009 overseas traveler profile may be viewed at: http://tinet.ita.doc.gov/outreachpages/download_data_table/2009_Overseas_Visitor_Profile.pdf

To see the market profiles, go to: http://tinet.ita.doc.gov/outreachpages/inbound.general_information.inbound_overview.html

There are some interesting characteristics that can be gleaned from the data.

Business Travel took a hammering - down more than a million visits and who dropped in market share to now around 20% of all trip visits. This reflected the major drop in transatlantic business travel which is reflected throughout the report. Leisure travel rose slightly. The needle didn't mover for many other points. For example advance purchase stayed the same. Average number of nights etc.

And what of 2010.

The rise in the dollar is going to hurt inbound in my opinion. The increase in the dollar against the Euro has been significant in 2010 and with the Euro zone in financial crisis we will see a slackening off of Euro visitors. This will be offset by a rise from Asia and Latin America but remember that Western Europe represents the largest proportion of visitors to the USA and double the number from Asia.

So US vendors selling inbound better sharpen your pencils at Pow Wow starting tomorrow.

Cheers

Dubai - Reset

The headline this morning may seem quite dramatic. Here is the coverage from ATWonline:

Emirates fiscal-year profit soars to $1.1 billion

Emirates Group reported net income of AED4.2 billion ($1.14 billion) for its fiscal year ended March 31, a substantial increase over a AED1.49 billion profit in 2008-09, marking its 22nd consecutive profitable year despite what it described as "a year fraught with worldwide market instability and economic uncertainty."

So this morning there are a lot of happy people in Dubai and smiles all round in that nice new building that is their HQ.

I was in Dubai for the Annual Arabian Travel Mart last week and I spent some time speaking to many people from the business, who live in the region and Dubai itself. While ATM was - shall we say a bit quiet - I don't have the numbers but as a seasoned show goer - it was quieter than I expected.

There has been a significant downsizing. Perhaps not of the total economy but definitely of people's expectations. The two ex-pat communities are both notably chastened by the bursting of the bubble. There is still a correction on-going. There are wonderful anecdotal tales of people whose job it is to move the tower crane so it looks like the building is still being built. What is not anecdotal are the canceled and delayed projects. Even the closely controlled newspapers are full or projects where the boosters are denying that they have been canceled. But suffice to say the boom curve is a lot flatter and a lot further out. Next month will see another mini-exodus of expats at the end of the school year. Some broken dreams will be realized.

Out at "The World" the essence of extravagance - there is but one lone property occupied. It looks a little forlorn but I am sure its owner is very happy.

For the travel marketplace - this will take some time to smooth out. There is an excessive amount of inventory that needs to catch up to the travellers. Strangely enough Dubai and Las Vegas share a lot more of issues than they might think.

However overall I am impressed with the way they have dealt with the bust. The taxi drivers sound a little happier (always a good sign). And the flagship of what the airline means to the rest of the world is giving them pride again. The price was heavy and will continue to be so. How much and exactly what form is unknown to all but a few.

Cheers

Is a Fee a Tax? The Aussies now know

The Australian Federal Court ruled in court this week that a Fuel Surcharge is not a tax (even though it has been listed in the fare rules as a tax like item). As a result of the ruling - the Australian agents will get a windfall of commissions due during the time the surcharges were first filed.

Whether the ruling is appealed (highly likely) and it makes its way all the way up to the Australian Supreme Court remains to be seen. But we are now seeing that the issue of what is a fare, what is a fee and what is a tax will need to have greater scrutiny.

For the US environment - the USA Internal Revenue Service actually ruled on this last year, declaring that ancillary revenues are not a fare and not a tax. Thus opening up the opportunity for every jurisdiction where an airline product is sold (absent pure airline transportation fares) or delivered to be taxed.

As you can tell the airlines are none too pleased with this ruling. But unbundling the fare into these buckets of fees etc was hardly likely to escape the scrutiny of the lawyers and the tax authorities. Indeed anyone who unbundles their products will be under scrutiny. (er hummm GDSs - are you paying attention here?)

I would caution on too much celebrating by the agents at this point. They will of course have to pay their own tax on this!

Cheers

Say Goodbye to 2 Storied Brands

Today as they say is the first day in the rest of your life.

It also marks the end of 2 storied airline brands. As regular readers know I am a bit nostalgic for airline brands.

Today Continental announced that it will be subsumed into United. Also at various press conferences and meetings over the past few days - Air Jamaica (Air Jam) has been consumed into Caribbean Airlines.

Somewhat sad but understandable.

Farewell both of you

Cheers

Open Travel Comes to Seattle - Where Are You?

Open Travel has its first full meeting in 2 years starting tomorrow.

With a good crew of technology luminaries from most of the major sectors. I was privileged to spend an hour with the board meeting today looking at where the organization goes next. Tomorrow we get into the meat.

No promises but I will try and do a follow up blog on what happened.

During the show Stephen Joyce and Dennis Schaal of TNooz will be tweeting and blogging. Further in the evening we have TCamp4 hosted by Gene Quinn and Dennis will aim to make sense of it all.

Hot on the Agenda already are Ancillary Revenues and the complexity of delivery into the market.

So what aren't you here?

Oh yes - I know its because you think it rains here all the time (OK so today it lived up to its reputation).

Cheers

Search vs Navigation?

Are you a control freak?

I am - well maybe just a little bit. What do you trust more - navigating down YOUR path or relying blindly on search - usually Google based on a specific site.

The answer is fundamental to how we build our sites and how we allow the user community into the site. If search was so good then theoretically we wouldn't need deep linking. But we know that despite the squillions that are spent on search it is still an imperfect art. Getting a lot better - but still pretty naff. And there is a good set of reasons to this. Most websites are still first generation affairs still relying on the same logic that got them onto the web in the first place. People got fat dumb and lazy and frankly scared to fix something. So company websites tend to be largely imperfect affairs of a spaghetti like mess of inconsistent blocks of data (don't you DARE call them information). The user is FORCED to hash through them looking for good quality data that they can use. If you don't believe me - just try searching for your number one product or attribute on your website and see what gets returned. Go on - try it - I dare you (with acknowledgment to the late Robert Conrad). I think it should be comulsory that a company's CEO and top management team must all sit in a room with their customer service staff and show them how well they navigate around their company's shop window - aka the website. It would be a wake up call.

For me - I pretty soon get cheesed off with the search facility on the site and almost always end up using navigation which in turn is inconsistent and often leads to to seeing SO many broken links and poor results. (Not to mention all the circular loops that poor nav leads me to).

The premise that any information is better than no information seems to drive a lot of people's thinking. It is why we all have Web ADD. WE just don't get a good experience so we keep looking until we get what we want. Or until we lose interest. Which seems to be the majority of the cases.

Back to our question of the day. Gerry McGovern's piece this week argues that Navigation is more important than search. Aha - for once I disagree with him. It is BOTH. They are the yin and yang of your business. You need them both and one without the other is to upset the natural rhythm of the universe. BUT you have to make sure that they work both in tandem as well as individually.

Too few people forget that - don't you be one of them...

So back to dealing with control freaks - here is a little article for you to enjoy.

Cheers and Happy Sunday.

Apple's iTravel May Have a Problem

Just for fun I searched the Apple site for the word iTravel. Seems that someone on the iphone app filed an app called this in October of 2007. They have a website hotelwidgets.com

So before everyone starts using the term iTravel they had better be careful

And its only Saturday!!!

Cheers

What Does Google Really Want From ITA?

So speculating on why Google wants ITA software ranges from the good to the bizarre.

The usual candidates are its Search Business, its software and its expertise. But I have another idea. In addition to the above - how about it wants to become a huge player in the overall travel space and can do that with the significant library of ITA's Patents

Let me list a two of them...

The Needlebase Patent - United States Patent 7668740

Fare Construction Patent US Patent 6263323

I wont spoil your fun by listing them all - but there are a lot of them. The categories range from payment to user interface to shopping as well as the obvious. And these are but a few. You can be darn sure that right now there are a bunch of lawyers pouring over these little gems.

And there are a whole lot more being filed and in the works.

Think about it.

If you are in the business of travel - perhaps you should be afraid now. If high priced Google patent pit bull attack lawyers get a hold of these - those of us in Travel Technology will have a very miserable life.

Scary?... Yup - now you see why that $1 billion number is not that bad.

Cheers

PSS and GDS Customers Might Want To Revisit Their Contracts

This is a salutory warning to those who interact with external (typically GDS based and PSS based) systems. This post should be read by airlines, travel agents and third party technology providers to the passenger industry.

In the overall scheme of things the unprecedented events since April 15th of the Volcano should cause those who pay bills to the GDSs for products and services to go back to look hard at their contracts.

If you have a contract that has threshold clauses in it - then definitely pay attention.

Let me pick on 4 customer types:

Airlines - IT Customers
Airlines - GDS - Participating Carriers (PCA)
OTAs - GDS subscribers
Travel Agents - GDS Subscribers

I also recommend anyone who has a signed GDS contract as a third party technology provider should also read this post.

In the next few weeks and months the airlines are going to be getting a lot of extra charges from, amongst others, Amadeus (the bills will come due after the IPO). Amadeus is on the record as saying that the volcano will have minimal impact on their IPO and are steaming ahead with it. What they didn't say was if the impact will be bad. It just may be - as more than one person who reads this blog told me - positive. The airlines didn't cause the mess but they are going to be paying for it no matter what. But all that extra processing is going to be an additional cost for the airlines. All those passengers who were checked in and then had to be "de-boarded" Hmmm that will be interesting to see how that works in those contracts. (PSST Hint to other PSS and airline IT vendors - if you didn't cash in on this gravy train more the fool you!)It is very important that the bean counters examine their invoices from their vendors VERY CLOSELY over the next few months to ensure that all the costs that are in the contract are correctly charged and that the Airline IT guys don't try and slip in some extras in there. I liken this to an unscheduled maintenance on a car. You get the bill and the estimate just doesn't match what you were quoted for!

For PCA based agreements - the cancellation costs that may be accrued needs to be carefully studied. Every airline accounts receivable person worth his salt better be on his toes. Also those nice bill auditors - people like Kale Consultants - should get into the act and make sure that they are poised to check and support their customers - the users.

For OTAs, the big ones at least, they should be OK (GDSs have a habit of turning a blind eye to larger users) - however head back to your contract and look at the threshold clauses. You will like be breaching them. Hitwise and others reported record breaking traffic which translates into a lot of extra hits for NO ADDITIONAL revenue. For smaller OTAs and those whose IBE is provided by a third party - indeed the 3rd party technology providers as well - go check out your contract. I just checked mine and I cringed. Fortunately I had no traffic on it last week!!!

For regular travel agencies whether or not you have an online presence via a booking engine, you need to make sure you have checked your activity. For those bookings that were canceled or re-booked by you - you should be OK. But for those cases where you helped your stranded clients and looked for viable options for them (because you are a customer service operation) and didn't generate additional GDS bookings - you will be hit by a double whammy - additional traffic and several days of no revenue.

With BA and others shutting out inventory, other airlines generating schedule change messages onto queues - there was an AWFUL lot of airline initiated traffic that resulted in extra hits with no corresponding revenue.

If you are one of these people - it may be a good idea to pull out your contract and have a deep look at it. If you are adversely affected - you might want to consider this next time you are sitting round the table whether its for a cold brew or its a hard negotiating session.

You have been warned

Cheers

BA Blames Others For Res System Snafus

In what must either be a simmering dispute between Amadeus and BA or Amadeus's failure to provide basic functionality to BA Reservations - Willie Walsh went on the offensive with his pleas to having customers be patient with BA as they rush to restore order and get people home.

Knowing a little about the reservations system - it would seem that either a rule could be written to cover how interline, codeshares and GDS based new bookings could use the system at a lower priority for BA's own customers. To wit - BA has an unused letter in its inventory bucket system which could be used to accommodate passengers who had existing reservations. "R". While my solution would be simplistic with a bit of jerry rigging the customers with existing tickets could be ticketed on a priority basis in R notional bucket ahead of any Y seats. only when R's were exhausted for a particular flight would the seats cascade down to open classes of seats. Yes it would take some effort but it would be a solution.

However it seemed all the bright sparks at Amadeus and BA couldn't figure out a system way to handle the customers who were stranded. Result - BA had to shut off all access to its seats for new customers and others alike. Turning it back on again has proved to be a little challenging. With reduced staff manning the check in process there are fewer people around who know how to fix it. Hats off to the boys and girls who work on the line in res who had to work all these queues!

In defense of BA - Willie is right - this whole thing was unprecedented. But airlines spend a lot of time creating and planning for disaster scenarios as existed. Well boys and girls we now have a new one to deal with. And it is likely to happen again. That Volcano could erupt for hundreds of years.

But let's also say that there has been a creeping issue which is now confronting airlines. Lack of Capacity. With an estimated 3-5 years of airframe production capacity now sitting parked in various deserts the reduction and better matched ASKs to RSKs - the capacity of the overall system to match seats in the situations such as we have seen becomes a lot harder. Airlines should go back and look at their scenarios on how they can plan for eventualities such as this. And don't forget that now there is a legal requirement to adhere to newer tougher rules - The EC Customer Protection which came into force in 2005 was enforced by the EC. Regulation (EC) No 261/2004.

For sure - the chaps who design and sell and more importantly manage PSSs should think of how they can deal with situations like this in the future. Welcome back to the world of FIMs and Reaccomodation. And don't forget the Law is going to be breathing down your neck.

Cheers

The Germans Are Coming (Again)

Deutsche Bahn - German National Railways - was at one time the world's most loss making travel business. Today it is the model of efficiency. The services are pretty good. I recently road the rails with them and was even more impressed than before.

Now it seems they are setting their sights across the waters to the UK Based pan European Bus and Train operator Arriva.

This would mark a significant expansion outside Germany for DB.

DB will be subject to some strict scrutiny not just by the regulators but by other European Short Haul transport operators - I am thinking Ryanair for one. How much of the State subsidies are used to fund these forms of acquisition is a touchy subject in Europe. The quasi government owned or subsidized entities have advantages. Not least of which is the underwriting of the risk in their core businesses. The BBC and its commercial arm BBC Worldwide Ltd (formed 15 years ago from the BBC Enterprises unit) competes with many commercial operators. And let's not forget the Boeing vs. Airbus battle.

So will DB be successful in its bid for Arriva? Probably. This is a business of enormous scale and with significant labour issues. Arriva alone has 34,000 employees.

Watchout... The Germans are coming!

Cheers

A Week In "Customer Service" Hell

According to my phone logs in and out - this week I have spent more than 22 hours of time "interacting" with Customer Service operations. These ranged from technology companies to financial services to airlines and hotels.

What a thoroughly unpleasant experience. I have come to the following conclusions:

After more than 15 years of full on internet - Customer Service has ceased to exist either by phone, chat and online.

Users have no choice but to use the web as the human customer service is so universally awful.

The damage done to brands is largely self inflicted.

The basic tenants of human decency have been replaced by fake concern and routine lying

Lying is an art form and comes in so many ways.

Perhaps I should have come to earth at a different time. Because the whole experience of talking to these people has been universally bad.

I realize I may not be the easiest person on the planet but trust me on this one - I tried all sorts of different tactics - being nice, being dumb, being assertive, it really didn't matter.

Of the more than 25 people I have spoken to - there was JUST ONE - who actually listened to my problem/issue and then worked with me to resolve it. But she was clearly off her script by that time. But thanks to her - something that had taken days to not resolve with some of her colleagues - she worked at it and (heaven forbid) even called me back to make sure it still worked.

So to all you customer service managers - or Chief Customer Contact Person - YOU SHOULD BE ASHAMED OF YOURSELVES.

Cheers

With SPECIAL thanks to Orange (subsidiary of France Telecom) for the image from their article on how to complain.

CO says "The Economy Rebounding Slowly" - But do we agree with them?

In the first quarter of 2010 - almost all the airlines reported their numbers. I note that the big 6 (WN, US, UA, CO, DL and AA) all had cautious words to say about their performance.

However I am not sure I agree with them. ARC's numbers for revenue/bookings not passenger's flown show differently.

The numbers show a very strong resilience in pick up from January onwards which in turn has shown a gradual rise from the low point of the middle of last year. Indeed March's numbers are at the same level for revenue and transactions as March of 2008 the previous best month on ARC record.

So to say the economy is rebounding in Continental's words "slowly" doesn't quite gibe.

But then I am just a passive observer...

Cheers

Welcome To Earth Day - Boy Is She PO'd

Mother Nature - (aka Mother Earth) should be happy with us. We are starting to do some real things to address the damage we have done to our environment.

BUT is it enough and is it too late?

Probably not to both questions but here is a short list of some things we can do to change behavior and stop abusing our home. These are all easy and good things to do.

1. Stop using Plastic Bags. At my house we have a bag holder. It used to get filled up, we had to get another one. Now it is rarely filled and the only thing that goes in there is the newspaper protector. I ALWAYS (or at least try to) refuse to get a plastic bag at any retail point. My car is now full of those recycled bags and I put a little note on the dashboard to remind myself - "Got Bags" before I go into a store. This is something you can do.

2. If its less than a mile WALK. Stop using cars for short trips. If its less then 3 miles - the bike it.

3. Reduce the food waste. Try this experiment. At the end of each meal pile all the unused food onto a plate and put it on a scale - then see how much you wasted. Doing this every day for a week see if you can reduce the amount by both cooking less and eating the things on your plate. In my household we have reduced the amount we throw away to almost nothing. Do the same thing in a restaurant. There is no shame in sharing meals or ordering 2 appetizers rather than a grossly filling main course.

These are 3 easy things you can do.

Remember my motto - Avoid, Reduce, Repurpose and Recycle.

This is good for all of us.... try it today

Cheers

ARC Numbers - A Robust Q1 - Ash Impact

The numbers from ARC are in for March and I have had a chance to review them. I think they look pretty good. What is interesting is that yields are actually running higher than in a long time.

The headline numbers for the month of March/YTD are pretty encouraging:



So now we are seeing some real improvement lets keep fingers crossed that (absent Ash) the market is on the up trend.

BTW I did a quick back of the envelope job on the total number of passengers affected. So far if we assume that the average plane affected has a capacity of 200 passengers (considering the mix of transatlantic large planes and European single aisle craft - this is a good number). Strangely enough my numbers (average of 1.1 million pax a day impacted) differ slightly from IATA. But I suspect that the word impacted means that some passengers were delayed as opposed to outright lost flights. Air4Casts was also using 1.1 million pax a day that I believe is the right number. So using IATA's numbers that is 7.2 Million passengers in 6 days. Ouch.

The US wont be as badly impacted although this is the largest portion of the international non-continental traffic. But still the global number also affects the GDS. Using the global number of 7.2 Million tickets and some very broad numbers - here is the estimate of GDS impact:

7,200,000 Tix total
3,600,000 GDS Tix
8,280,000 Segments
57,960,000 GDS lost Revenue @$7

Ouch - and the majority of that loss was from Amadeus.

Cheers

Ryanair Right To Hold Off Another Day?

Seems that everyone is back in the air playing catch up with their flights. But one noticeable exception has been Europe's largest carrier by passenger numbers. Ryanair.

They have been far more careful than the other carriers. FR has been running a full schedule from their Southern and Eastern bases but the core of the network based in the North of Europe has been shut down for the better part of a week.

They also have a better DOC model and less overhead costs to carry. Thus they can operate more directly tied to their flights and carried passengers.

But did they err too much on the side of caution?

Their stranded passengers might think so, but they might just have made the right decision. Only time will tell. Their numbers will definitely take a big hit because they have less capacity spare to play with.

Cheers

GDSs Start Modifying Terms and Pricing - Welcome to the New Model that you will pay - Unbundled and of course More Expensive.

"So how would you like your GDS PCA today sir - you can have it anyway you want it as long as its black." (And profitable to me).
"This is a really old bike good for only one thing, it is not modern and can do very little ... I will give you only a few measly pennies.." "What it was your beloved ancestor's prize possession - then take less not more for this old heap of iron scrap...."

For some time now those airlines (that are astute and are tightly managing their costs) have probably noticed that their total flow of money to the GDSs are - well let's not put too fine a point on it - expanding.

In preparation for the ancillary revenue model that are emerging the GDSs are taking different tacks with regard to the cost model. Some are unbundling and others are now "adjusting" their fee structures.

One thing is for sure. The GDSs are determined not to be left out of this gravy train. They are going to be charging a lot of money for ancillary revenue services if they can get away with it. I predict a showdown is coming between the GDSs and the airlines over this. The GDSs are already putting out stories on how much new infrastructure they are putting in place to make themselves ready for AR. Travelport is taking a different tack from its competitors and is sticking well and truly with the IBM model by buying a whole load of new zTPF boxes.

As one IT wag told me several years ago after evaluating the zTPF system - he made an interesting point. For the first time in his memory (he had started with TPF version 2.X) - zTPF was going to run effectively the same Operating System but with no new functionality added. Seems like the old boys in Hursley (near Winchester) are finally being pensioned off.

But I digress..

The issue is going to be how the GDSs price the ancillary services. Will they do it fairly and equitably? And here they stand at a reasonable risk. If they price it at zero or essentially little charges then they will have a hard time in cost recovery. If they price it too expensively - the airlines wont distribute the AR products via the GDS and will resort to new channels and more flexible yet cheaper alternatives like Direct Connect tools.

The Airline accountants (now somewhat dusted in ash) are going to be looking for more places to save money. The GDS better play nice. For the coming IPOs this year - this represents a bit of a threat. The world is not quite as homogeneous as it once was.

Better pay attention to this one chaps... it wont be a nice and easy model. As the old adage goes - "Fool me once shame on you, fool me twice shame on me." Think of that when you stand across and start negotiating over that big old iron.

Cheers

The UK Government vs the Will of Willie Walsh

This whole episode fascinates me. The issues confronting the decision makers are very complex and not easy to discern and that is before making decisions.

It seems pretty evident that BA management took a calculated risk that the government and its various organs could be manipulated if presented with a fait accompli. This is exactly what they did. They carefully planned how they could make the UK airspace open. Considering the evidence in front of them there was a relatively low risk. In my humble and not very educated opinion there was minimum risk at any time to the passengers. If anyone didn't want to take the flight they could exit and not step on the aircraft. Lufthansa decided yesterday to start flights against the advice of their authorities - again with minimal risk. In doing so they forced their government's hand. BA therefore made the same decision (albeit a little more hurriedly. So with 28 or so aircraft that headed north or eastwards - the aircraft duly arrived over UK airspace. Finally some time around 2000 the UK Government and NATs agreed to open the UK airspace. However by then some of these planes were already out of fuel and landing in a wide variety of places - BRU, SNN, CDG amongst others. A few brave souls who had put on extra fuel and had the temerity to wait it out started to arrive to a closed UK Airspace. The first to actually land was BA84 from Vancouver and it circled over the Isle of Man for nearly 90 mins before finally making its way and landing before the scheduled opening of the airspace.

The rest is history.

Now we have the UK government in the form of lord Adonis playing damage control.(As an aside here is a definition...Myth & Legend / Classical Myth & Legend.. Greek myth a handsome youth loved by Aphrodite. Killed by a wild boar, he was believed to spend part of the year in the underworld and part on earth, symbolizing the vegetative cycle...) given his political gyrations perhaps not such an inapt name...

But beware ... the issue of the aircraft and the damage remains an unknown quantity.

So indulge me a little here and let me make a plea to the whole industry. We don't know enough and we are not doing enough to measure the ash cloud and its impact. The one or two empirical evidence sources we have are not enough to draw on conclusively. We should be sending aircraft into the cloud in the same way we have hurricane hunter aircraft. Not enough study of this phenomenon is being made.

For some results taken a few days ago by a German research aircraft go here:
http://www.bmvbs.de/Anlage/original_1134440/Report-of-Falcon-Flight-19-April-2010.pdf

At the very least this aircraft D-CMET and its UK counterpart D-CALM should be up there testing the atmosphere every day.

Clearly the current rules are not adequate and we are not doing enough to coral the issues into cogent decisions.

Whether Willie and his boys are right or wrong is not the issue. It is whether we know enough to let them be right or wrong. To err is human to forgive divine but not over the souls of innocent passengers either today or at some point in the future if an engine that wears out prematurely breaks down.

Cheers - I hope

First Into LHR - BA84

Looks like the Canadians win...

My spies on the ground (Thanks Professor Mike) confirm they hear 747 engines

So who called it?

Congrats to BA for the b*lls to hold the planes in the air for that long.

And best to the pilots and crews of the planes that will arrive at British Airports tonight.

Cheers

For the Geeky Lot - Volcanic Ash Reading Material

As you can imagine the Professor is wont to follow the world through the eyes of an academic. While I have a day job this is way too good an opportunity to see what else is out there in terms of scientific knowledge.

So in the interests of those of you who are also a little geeky - here are two documents that you might want to read.

The first one is the formal ICAO document on the standards and expected impact of Volcanic Ash. The subject has been studied and is known to have harmful effects. So ICAO (the official UN body on aviation) has reports for each of its major areas. This is the formal contingency plan. So far the adherence to the plan seems to have been somewhat spotty at best - however this is SUPPOSED to be the rule book. Have a fun read here:

http://www.paris.icao.int/documents_open/show_file.php?id=274

The other document is associated with the formal review of an accidental fly through a cloud - as it turned out also over another of Iceland's Volcanoes. The case was ten years ago when a NASA plane inadvertently flew through a cloud that had shifted further than planned and right into the flight path of a NASA DC8-73. it took me a while to find this after I saw a reference to it - but this is the original document from NASA (there is another copy on the ALPA pilot's site also.)

http://ntrs.nasa.gov/archive/nasa/casi.ntrs.nasa.gov/20030068344_2003079762.pdf

This is a good document to describe the actual impact of what really happens.

Enjoy both of these...

Cheers

AOL Accounts Hacked

This is probably not new news to a lot of people - but there has been an alarming increase in hacked AOL accounts of late. My metric? the amount of spam from known people with AOL accounts which I have received in the past month.

If you do a google search on AOL ACCOUNTS HACKED the number one entry that comes up is a "how to" guide to hack AOL accounts.

This is very helpful...

Time to use GMAIL or something else.

Yet another sinister plot by Google to strip the world of competition?

You be the judge

Cheers

LH to run an extensive schedule tonight from US to DE

So at least one airline has some moxie to run flights tonight.

Despite the prediction that the cloud will cover most of Germany tomorrow, DLH are running flights starting with most of the stuck flights from the US heading east bound.

According to Flight Stats most of the flights are going.

I also have it on personal notice - that Boarding Passes have been issued. So DCS has been updated to reflect these flights.

Stay tuned to TNooz for more updates

Cheers

So Who Will Decide When Its Safe To Fly? The Answer May Surprise You

At this morning's press conference the European Community was adamant that safety was the pre-eminent issue. There is a lot of noise and hot air (in addition to the ash itself) floating around. As I noted yesterday this is not a question of black and white - it is a question of grey and risk.

Will airliners deliberately be flown into ash clouds - no. But what of the risk of flying into air that has "some" ash particles in it? As I noted in my post yesterday this has been done before as ash is present in the atmosphere at almost all times - the issue is the severity/intensity , location and type. So far there is a lack of good ability to examine the dust from space. (As an aside - this comes at a time when the lack of ability to see what's going on in our planet is becoming clearer). So the ability to track the dangerous particles is pretty apparent. Thus this is not an exact science and we don't have the easy ability to determine what is safe.

So if Science cannot give us anything other than "an indication" then who will make the decision?

One more set of factoids for you. The first empirical evidence of the damage that can be done to engines has been a pair of F/A18s operated by the Finnish Air Force they flew into the dust on Thursday and then had their engines stripped down and the blades examined. Here are some pictures for you to see.

The issue facing everyone as we move from a direct safety issue is the long term impact on the equipment. Aircraft Engines are very expensive. Shortening their life has a double impact. The cost of the engines will rise to maintain and repair them. Shortening their life also reduces the available pool of engines. And here is an important issue. The pool of available engines for spares and replacement is actually quite small.

Not surprisingly the two groups that will make the decision will largely be the following:

Aircraft and Engines are often leased (usually separately) so the owners of these engines will be a key decision maker in the overall process. The big guys include ILFC (part of the foundering AIG group) and other independent companies typically bank like. The other group who have a large portfolio are the aircraft financing arms of the manufacturers. Boeing and Airbus. These two groups will likely take a more conservative approach (ILFC and co) or less (Airframe and engine manufacturers).

The other group that will have the most telling impact on the decision will be the insurance companies. Personal risk and airframe/equipment risk.

So there you have it. The politicians and the airlines can argue all they like - the decision is now being debated in the Aircraft owners and the insurance companies. Lloyds in London must be an interesting place right about now

Cheers

With Ash Firmly On Horizon For Weeks, Should Amadeus Pull IPO?

Amadeus's blockbuster IPO is going to happen next week if the course is maintained. However we should consider whether (or not) the company should pull the IPO due to the unprecedented impact of the Iceland Volcano.

So let's consider what's at stake here. The total European traffic is down at least 60%.

Here are the latest stats of traffic counts (Flights).

# Thurs 15 - 21,000 out of 28,500 flights flown.
# Fri 16 - 11,500 out of 28,500 flights flown.
# Sat 17 - 5,000 out of 22,500 flights flown.
# Sun 18 - 5,000 out of 25,000 flights flown.
# Mon 19 (estimate) - 9,000 out of 28,000 flights flown.

Amadeus is by far the largest European GDS and therefore will be proportionately adversely affected more than the others. Particularly since the most affected countries are UK, DE, Scandinavia, France and Benelux. This affects all of Amadeus's business lines with its 2 leading ones - Airline IT and GDS being the most adversely hit.

From the position I have of looking at various sources of bookings - I can assure you that the number of new bookings have dropped dramatically. At a time when they should be rising for the summer periods.

However I think we need to face the fact that the restoration of flights will be at a significant reduction of traffic to what we assumed before. This too will have a long term impact on Amadeus. The GDS business will suffer accordingly, the IT business will be impacted a lot less. Amadeus's EBITD looks really attractive based on the current footprint of transactions. That is going to take a significant hit until the issue of the Ash is accommodated and we know how things will turn out. This could last for a period of a few weeks or as long as a few years.

At the very least we have lost a week's worth of flights by the time this is over. That is 2% of the gross annual production. Yes the company can absorb that. But if the adverse situation is greater then we could see a significant curtailment of transactions intra TC2 and inter TC1 and TC3 into TC2.

In my opinion, prudence would dictate that Amadeus should postpone their IPO for at least a month until the situation becomes clearer. This would be the wise thing to do.

For Amadeus to proceed at this point would be somewhat foolhardy or very very brave. Either way its a risk that should be examined carefully. If the IPO does proceed then the punters need to factor in the risk that Amadeus's first year results will be off significantly from prior years. Given the significant backing of the financial community as opposed to the general individual investor - lets hope people are making proper and appropriate decisions with regard to risk.

This is my opinion - what is yours?

Cheers

Stupid Airline Trick #49 - Search?

Dearly beloved - yes its the weekend and I have a little time left on my hands as the Ash is causing all my regular work to be placed on hold. So here is an example of the new search from Delta's website. Actually its not that new. It has been this way for about 4 months. And it is frightful.

Delta has decided that we want cheaper rather than practical.

Check out the 4th column.

The Professor's way to look at fares is to review them on 3 separate levels.

Level 1 - Absolute Lowest Fare - known as the Lowest Possible Available Airfare (LPAA)

Level 2 - Lowest Regular Fare - known as the Lowest Logical Available Airfare (LLAA)

Level 3 - Lowest Desirable Fare - known as the Lowest Desirable Available Airfare (LDAA)

From a usability point of view, consumers want the to know the LLAA and compare it to the LDAA. LPAA should only be considered if the customer is truly searching for the absolute lowest. Lowest Possible carries with it the issue of overnights. As you can see in this example even the shortest time option carries with it a double overnight. So would I really want to do this and arrive a blithering wreck? (wait don't answer that...)!

Yet the corresponding request on Orbitz, Expedia et al returns quite similar prices without a double overnight. If you think this is just the Professor deliberately being difficult. I tried the search on a wide number of days to different destinations in Europe (long past the Ash period) yet within reasonable short time periods (IE within 30 days of departure) and I found many instances of this problem in BOTH directions across the Atlantic.

So the advice I have to the web people at DL is - get a life... I realize you might be airline staffers and used to doing connections like this - but for the regular man in the street this is not practical. At the very least give him the option of choosing a shortest time option...

Cheers

PSST Want The Best Flight Info on the Ash

Then go to Tnooz...

http://www.tnooz.com/2010/04/17/news/volcanic-ash-cloud-and-european-travel-live-blog/

Cheers

The Results of the Social Media Survey

So you have voted.

The results are somewhat to be expected.

50% of you say you don't understand it and its too confusing.

The other half range from those who occasionally Tweet to SM Mavens.

Cheers

EU Disharmony Over The Ash. Why The Airlines Should Be Allowed To Fly

That nice fluffy relationship between all the players in this unprecedented situation over the Volcanic Ash from Iceland seems to have dissolved.

The major players are sitting in different corners. The Governments and the ATCs are erring on the side of caution and the Airlines and the now very weary millions of travelers are both confused and in some cases getting pretty angry.

The issue as always is the "shades of grey".

Everyone knows that flying through the ash will result in severed damage to the aircraft's engines. But after the "n" number of parts per million have dissipated that impact decreases to zero. Also the ash is not universal at all altitudes. So the question is WHEN will it be safe to fly the planes and under what rules.

The airlines have decided that they have been waiting long enough and have taken matters into their own hands. Commencing yesterday and continuing today - they have been running some test flights. Air France and its sister carrier KLM along with Lufthansa have all conducted test flights. Further the authorities have permitted some re-positioning flights to take place and BA and other airlines have done this. Both AF/KL and LH are reporting that the aircraft they flew have emerged without any damage.

On both sides of the argument there are good points. The authorities have essentially closed airspace for most of Northern Europe. Was that the right thing to do? Yes absolutely. But can the system run at a lower level of frequency and still be safe? I believe the answer is yes with obviously definitive caveats.

What the airlines want now is to be allowed to start limited service and under an agreed set of rules. Right now the governments are not budging. But I suspect that tomorrow they will have to.

We should point out that every year there are some 50-70 volcanic eruptions. Of which at least 2-3 are of the same type as the Icelandic chappie currently spewing his stuff. Many of these volcanoes erupt for extensive periods of time. Thus the Icelandic event is neither new nor that rare. What is rare is the prevailing weather and atmospheric conditions combined with the severity and timing of the eruption.

For a great resource on this please visit the Smithsonian Institute.

We have to move to a different state. We need to move to a temporary capability that will start to let aircraft fly. This requires the various authorities to agree on the rules. These rules should be related to the data:

Frequency of flights
Current Volcano conditions
Accurate and reliable measurements
Diversion capabilities.

In addition the airlines need to set rules for people to travel. This should include a suspension of the usual rules on DBC and diversion. A certain degree of "at risk" should be exposed to the passengers and they need to be clearly allowed to make their decisions to fly or not. These decisions should not be based solely on their own safety - which should be Government determined - but by the risk of flight delays and possible diversions. If you wish - apply the Ryanair criteria to the flight.

We need to remember that there has and always will be volcanic particles in the atmosphere. The extent to which it represents a risk has to be a standard supported by strong science and hard factual evidence. AS we can see currently at time of writing BA is flying a 747-400 from Heathrow to its maintenance base in Cardiff. To test the conditions.

Let's get back to work.

Cheers

UK Shuts Down, EU next. Icelandic Revenge

In revenge for the devastation of their banking system... the tiny country of Iceland has exacted its revenge across Europe starting with the UK

Have a look - real time..

http://www.radarvirtuel.com/#

Wow!

It's called Eyjafjallajoekull!

Cheers

The End Of The PC As We Know It

Apple quietly unveiled a new tool as part of iPhone OS4. It is its new ad targeting delivery vehicle. iAd.

Thanks to Professor Ben for alerting me to this.

Clearly I missed the whole hoopla and was just happy that Apple recognizes that people actually can chew gum and walk at the same time (aka multi-tasking). What is somewhat scary though is that the new platform has an area of secure functions that the user has no control over.

Within the new OS4 - a number of functions will now operate independent of the owner/user. Some of these are valuable features to improve the quality of the User Experience (UE). For example the geolocation services will not require apps that use them to be turned on. the apps can be off and the geolocation service will update/sync as necessary. Indeed the OS will now wake up an app if there is something interesting going on. Think of Facebook staying constantly on and being aware of where you are at all time. To me the scary thing is that the user has no control over it. Rules of use and access will be controlled by some geeks in Cupertino.

Thus iAd will become the standard for the delivery of geo-targeted ads. Indeed in Ben's Opinion and I concur - this will challenge the whole notion of ad targeting. Move over Google here comes Apple. I think I am losing track of who has control over the real Death Star

This will create a whole new class of always on services that stay with you. Indeed the initiative will make mobile the pre-eminent interface between the user and the eworld. Thus in my opinion the PC will decline as the primary interface to the web.

Wait did I say that???

Yes - this is a challenge to the PC centric world that we know and love. We are headed towards the world of the Star Trek Communicator. However the device will not be tied to a Ship's Computer it will tied to the web with all its idiosyncrasies.

So going back to my theory. We have a new world emerging. 5 years ago who would have thought that the innovation to drive a sea change in mobile would have come from Apple. But they have managed to do it. I would have put money on Blackberry and would not have lost any (I did back their stock by the way). But now the convergence that we have heard for so long will likely come from the house of Steve. Thus I nominate Ocelot for the next named Apple OS X software. I think they should skip the whole 10.x and go to 11. OS X-11 Ocelot will be the slimmer version of the OS that merges all the OS4 of the iPhone with the Mac OS. Combine that with a clamshell tablet and then I would be very interested. (I just can't bring myself to say I would purchase an iPad).

Hello Redmond, Santa Clara, Mountain View - anyone home?

Cheers

Riding the Rails - Simplifying the Experience.

IATA has had an initiative for some time called SPT - simplifying passenger travel.

BOW DO WE NEED THIS!

This past week - the Professor has been riding the rails. Given the different and varied number of trips I took - I almost felt like this was I was John L Sullivan (of Travels fame).

So here is what I actually undertook:

18 Separate Train Journeys

Heathrow Express (UK)
London Underground (4)
Gatwick Express (UK)
Zurich Tram (2)
SBB Train (2)
Munich S-Bahn
Munich U-Bahn
Deutche Bahn ICE (2)
SNCF TGV
DB IC
DB Regional
Stuttgart S-Bahn

Interestingly the service is good and reliable. But it really opened my eyes to one key fact - Air Travel has become WAY too complicated and therefore of less and less value as a form of transportation.

I believe that we in the industry need to start working hard to reduce the complexity of the travel experience.

So who is going to take on my challenge? It really needs to be a crusade.

Cheers

UA and US Chatting

Somewhat rebuffed by a stable CO - UA has turned to US as a potential merger partner.

This seems to have the rather rancid smell of 2 bad airline models (despite improvement) trying to get to scale. (Hello doesn't anyone look at history?).

So let's hope that UA sees the error of its ways and goes back to nesting with CO.

Still they just might actually do it - after 2 prior attempts in 2008 and previously in 2000 - this just could happen. Not sure that would be good.

Cheers

Mega Airlines Inc - aka BA+IB

The 2 airlines have finally sealed their deal. Newly emboldened BA (despite some heavy losses during the 2 strikes over the Easter Holidays) has signed on its definitive agreement with Spanish airline Iberia.

The share ownership will be 55/45 in favour of BA. There is still one get out of jail free card - this is if BA fails by June 30th to conclude their agreements to resolve the somewhat large pension deficit issue. Despite securing agreements with the unions this is by no means a sure thing. There is a small issue of the amount of cash that the fund is deficient by....

So things are looking up for the new airline group. Let's see what the EU regulators say to the deal. They still have to rule.

The merger should be completed officially by the end of the year and full integration (except for the brands) is targeted for about 5 years.

Cheers

Do You Really Care About Your Customer?

So let's see if you pass the Professor's test criteria:

1. Do you put your 800 Number/access telephone in the work flow before he/she purchases?
2. Do you answer your phone and have metrics for acceptable performance
3. Is your service consistent no matter which channel your customer reaches you.
4. Do you reward your staff based on number of calls rather than quality of calls?
5. Do you give your agents the ability to solve the customer's issue including paying compensation
6. Do you have more than 2 layers of escalation from the first call touch point.
7. Do you actually answer emails?

I think you get my point. I cannot think of any one Travel Business that has the right characteristics. And before you throw lots of rotten eggs at me - look inward first. Is it really a question of money?

So let me ask you if you understand what are the two things that the customer wants you to care about?

1. Don't treat me like an idiot
2. Remember that my time is more precious than yours.

If your philosophy enables your customer to feel that you actually are treating them with respect - firstly cut out that trashed old script. Throw out the efficiency paradigm. Efficiency is not the only metric. And take the time to understand his issue. And cardinal rule according to the professor is to let the customer take control of the conversation even if it is to allow him to rant.

One of my favorite writers about the Web is Gerry McGovern and his weekly piece is usually a tooth jarring reminder about our obligations and trust - sacred that it is - to the customer. The current arrogant behavior that many travel companies take to their user community is shameful.

In fact I try and stop using the word customer at all.

So let me leave you with the end comment on Gerry's blog: "What's the best attribute your web team can have? Caring about your customers time. Treat their time as a truly precious thing. Treat them as intelligent. Focus on service. Focus on what the customer wants to do, not what you want the customer to do. Solve their problem, not yours. It's a shift in thinking but it's where the future lies."

Cheers

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