We have two pieces of interesting data from sources that normally match.
The data sources are the US ATA - Air Transport Association, and the Airlines Reporting Corporation - ARC.
ATA measures total traffic for US airlines. So taking like for like - there are two sets of metrics. The table looks like this
November 2009 year vs year previous activity.
ARC Transactions up 8.64%
ARC Sales up 6.86%
ATA Passengers down 1%
ATA Sales down 7%
Even accounting for approx a 21 day advance purchase average and some date skewing due to Thanksgiving - this shows us that there is perhaps an interesting phenomenon emerging. I believe be that the percentage of travel booked via Intermediaries is actually rising and significantly.
PhocusWright and others have been predicting this for some time. The Professor believes this to be the case. We have seen that the effect of the Fee removal on OTA sales has been pronounced, with significant revenue increases since September - most recently in November the Y/Y growth was 20%. In addition even the TMCs are reporting better at 6% growth. The remaining category of "other" namely retail and tour operator/wholesaler based sales were flat in November. While it will be some months before we see formal numbers out of the GDS companies - we can be sure that the big 3 are showing increases that seem to counter the airlines continued downward trend.
It will be some months yet until the BTS (official government stats) are reported but we have a pretty good proxy now with the numbers we see from ARC and the ATA.
For the airlines this trend represents an interesting dilemma, and perhaps a clue to their recent behavior. With all the positive talk of airlines enabling Intermediaries to sell ancillary products via new tools this can only be positive. However there is a lurking issue. The legacy GDSs will also benefit from this swing in sales from Direct to Indirect.
Thus the airlines will need to look to the agency community as a class to swing them away from the legacy GDSs if they are to be successful in reducing distribution costs. If not then there is a risk that the GDSs will gain power and force concessions (and therefore higher costs) from the airlines. As we have seen even in the recession gripped down market - the GDSs have been able to boost yields.
As I have noted before - this is a war with many battles.
Cheers
20 December 2009
Legacy GDSs Promote Fragmented Pricing Schemes
The recent distribution arrangement between Travelport and British Airways should come as no shock to anyone. As widely reported several weeks ago – BA is determined to adjust its distribution mode – the UK airline has re-signed with Travelport. It is also reported to be near an agreement with Amadeus (who also hosts the British Carrier). Despite being somewhat battered in the recent downturn – the British Carrier is driving to a beat where it lowers its costs for distribution. So lets briefly examine what is has agreed to with Travelport and what it wants to get from the other GDS companies.
Based on the current 3rd quarter Travelport numbers its (TP) average revenue per segment it gets largely from the airlines is near to its record highs of $6.00 (actually $5.82). While there has been an unbundling of the GDS segment fee lets use this number as a way to illustrate the relative deal with BA.
With approximately 60% of its revenue coming from the home market of the British Isles (again rounded for the sake of this illustration) the arrangement with BA is that BA will charge an opt in fee of three pounds per segment. In Dollar terms this is $ 4.50 per segment, which means that BA has set a price of net $1.32 per segment it will pay for distribution. In Ticket terms that translates into $3.04 per ticket (using 2.3 segments per ticket an industry norm). BA is of course not the only airline to charge a home vs away market model. A few years ago Amadeus announced a home vs away market pricing scheme in an effort to stem opt in contracts. The differential it proposed was vastly different with a home market discount of approx 50 cents per segment. A far cry from BA’s $4.50 opt in charge.
However this is not all. BA in the UK home market uses the service of Lime Management to issue discounted tickets (typically the lowest yielding fares in the market) at a per ticket charge of 13 pounds. That translates into a fee (note this is paid by the agent) of $19.50. Given BA’s recent losses – the achievement of this revenue for its discounted tickets can and does have an impact on its bottom line.
British Airways is not alone. KLM is quietly introducing a 6 Euro ticketing fee via the legacy GDSs in January in many markets.
The push pull of the legacy GDSs and the network carriers on the issue of the fee continues to be a battle royal. The war is only in its early days. Many battles will be fought. The outcome however has a certain degree of inevitability about it.
Cheers
Based on the current 3rd quarter Travelport numbers its (TP) average revenue per segment it gets largely from the airlines is near to its record highs of $6.00 (actually $5.82). While there has been an unbundling of the GDS segment fee lets use this number as a way to illustrate the relative deal with BA.
With approximately 60% of its revenue coming from the home market of the British Isles (again rounded for the sake of this illustration) the arrangement with BA is that BA will charge an opt in fee of three pounds per segment. In Dollar terms this is $ 4.50 per segment, which means that BA has set a price of net $1.32 per segment it will pay for distribution. In Ticket terms that translates into $3.04 per ticket (using 2.3 segments per ticket an industry norm). BA is of course not the only airline to charge a home vs away market model. A few years ago Amadeus announced a home vs away market pricing scheme in an effort to stem opt in contracts. The differential it proposed was vastly different with a home market discount of approx 50 cents per segment. A far cry from BA’s $4.50 opt in charge.
However this is not all. BA in the UK home market uses the service of Lime Management to issue discounted tickets (typically the lowest yielding fares in the market) at a per ticket charge of 13 pounds. That translates into a fee (note this is paid by the agent) of $19.50. Given BA’s recent losses – the achievement of this revenue for its discounted tickets can and does have an impact on its bottom line.
British Airways is not alone. KLM is quietly introducing a 6 Euro ticketing fee via the legacy GDSs in January in many markets.
The push pull of the legacy GDSs and the network carriers on the issue of the fee continues to be a battle royal. The war is only in its early days. Many battles will be fought. The outcome however has a certain degree of inevitability about it.
Cheers
Great signs we have missed since we gave up smoking...
A Public Service Message at Rio de Janeiro International (GIG) Airport
Rational Thinking - An Oxymoron Concept For Airlines
The conventional wisdom says that brand accounts for something. Indeed there is a signicant amount of balance sheet value attached to brands.
Not just for today but in the future and definitely in the past. Yet brands have a habit of going away fast.
Hands up those who remember PC Travel, Preview Travel and Pointcast? Three major brands with some reference to Travel in early days of the web. Or more interestingly great consumer brands like Sam Goody, Tower Records and Photomat. Brands that are now consigned to the scrapheap of history.
My point here is that airlines have always tried to get you to make irrational decisions about their products.
Have a read of Gerry McGovern's blog this week.
While he makes two incorrect assertions - Ryanair is not yet charging for toilets and it is not the world's largest single branded airline yet (that honor goes to Southwest), he makes the point that rational people will pay for the extras and put up with the crap from Ryanair. They wont do that for airlines that promise more charge more and fail to deliver the greater "value". this is akin to the David Ogilvy's classic ad about the Rolls Royce loud clock. In that instance a RR owner is going to make a lot more noise about the clock not working than a Pinto Owner worrying about his door opening.
Southwest set expectations low and over delivered for years. Ryanair sets expectations low and consistently delivers the fundementals - IE low cost transportation.
Is that rational behavior? I don't know - just ask the people who complain about no seat assignments when they paid the average fare of 32 Euros that FR charges.
Think about it.
Cheers
Not just for today but in the future and definitely in the past. Yet brands have a habit of going away fast.
Hands up those who remember PC Travel, Preview Travel and Pointcast? Three major brands with some reference to Travel in early days of the web. Or more interestingly great consumer brands like Sam Goody, Tower Records and Photomat. Brands that are now consigned to the scrapheap of history.
My point here is that airlines have always tried to get you to make irrational decisions about their products.
Have a read of Gerry McGovern's blog this week.
While he makes two incorrect assertions - Ryanair is not yet charging for toilets and it is not the world's largest single branded airline yet (that honor goes to Southwest), he makes the point that rational people will pay for the extras and put up with the crap from Ryanair. They wont do that for airlines that promise more charge more and fail to deliver the greater "value". this is akin to the David Ogilvy's classic ad about the Rolls Royce loud clock. In that instance a RR owner is going to make a lot more noise about the clock not working than a Pinto Owner worrying about his door opening.
Southwest set expectations low and over delivered for years. Ryanair sets expectations low and consistently delivers the fundementals - IE low cost transportation.
Is that rational behavior? I don't know - just ask the people who complain about no seat assignments when they paid the average fare of 32 Euros that FR charges.
Think about it.
Cheers
The Red Bag Story
Or How I got home on Friday despite all the odds.
On Friday (December 18th) I had a salutory lesson on travel. What ever could have gone wrong went wrong. But also its a lesson in how knowing the system and actually the generosity of customer service people can thwart the obstacles and get you what you want.
The ingredients are simple. An expensive coach ticket Berlin to Seattle. DL flight numbers AF operated metal (code share). Bad weather across Europe. Incompatible systems AF and DL.
Knowing in advance that things were going to be bad (last friday of the year for travel) I decided to go to the airport early. Just before leaving - I checked my itinerary on DL and found that they had changed my flight to a connection over NYC on DL rather than the AF code share over Paris. OK - I accepted that. (ESP since I received an upgrade). But it meant hanging around for 6 hours at Tegel Airport. Surely there was a better way. Arriving at the airport - I was met with at least 100 people who had the same idea. After a 90 minute wait in line - I made it to the front of the queue. Sorry your AF flight is cancelled and I cannot help you. Go to DL (Who opens in another 30 mins). Schlepping between gates in the snow became a fun exercise.
DL said great yes you are confirmed but no we cannot issue the boarding passes because we need the ticket. Eventually after much tooing and froing - back I go to AF. Cutting in line (it was still about 100 people long) I managed to get them to write a FIM (these are great - its essentially a get out of jail free card). Back to DL who then issued my ticket.
The rest of the journey was very fraught as it was late and there was a huge storm headed to NYC. But with 45 mins to spare at JFK - I managed to get my bags - check in for the next leg and then race across the 2 DL terminals just as the last few passengers were boarding the connection flight to Seattle.
I knew my bags would not make it despite the smiles of the JFK baggage team. Sure enough arriving in Seattle they didn't. And yes the possibility of bags showing up became remote as the day went on. With the East Coast largely shuttered by the storm - the thought of my bags not making it because more and more a fear. However yes - my bags were on the van on its way over. Hurray!!! And yes there were 2 bags and yes the second one was red. Disappointment. The assumption that the second red bag was mine was just too easy.
However by 9PM (now 24 hours later) my trusty red bag showed up.
So no morals here other than some advice.
Here goes:
1. Hardcopy EVERYTHING!!!
2. Be polite and nice and get the person's name at each stage. AND YES THEIR INTERNAL PHONE NUMBER.
3. Always thank them
4. Trust them to know their jobs.
5. A FIM (when your trip is interrupted) is a wonderful thing. Get one no matter what.
And above all...
Be PERSISTENT - it is a required skill in Travel
As a special thanks - I would like to thank Daniela (DL Customer service in Tegel). Her counterpart at AF - Anita. The DL team in NYC for protecting me. And also to DL's baggage service and their contractor in Seattle Bags Inc.
I am now home and the Xmas presents made it also
Cheers
On Friday (December 18th) I had a salutory lesson on travel. What ever could have gone wrong went wrong. But also its a lesson in how knowing the system and actually the generosity of customer service people can thwart the obstacles and get you what you want.
The ingredients are simple. An expensive coach ticket Berlin to Seattle. DL flight numbers AF operated metal (code share). Bad weather across Europe. Incompatible systems AF and DL.
Knowing in advance that things were going to be bad (last friday of the year for travel) I decided to go to the airport early. Just before leaving - I checked my itinerary on DL and found that they had changed my flight to a connection over NYC on DL rather than the AF code share over Paris. OK - I accepted that. (ESP since I received an upgrade). But it meant hanging around for 6 hours at Tegel Airport. Surely there was a better way. Arriving at the airport - I was met with at least 100 people who had the same idea. After a 90 minute wait in line - I made it to the front of the queue. Sorry your AF flight is cancelled and I cannot help you. Go to DL (Who opens in another 30 mins). Schlepping between gates in the snow became a fun exercise.
DL said great yes you are confirmed but no we cannot issue the boarding passes because we need the ticket. Eventually after much tooing and froing - back I go to AF. Cutting in line (it was still about 100 people long) I managed to get them to write a FIM (these are great - its essentially a get out of jail free card). Back to DL who then issued my ticket.
The rest of the journey was very fraught as it was late and there was a huge storm headed to NYC. But with 45 mins to spare at JFK - I managed to get my bags - check in for the next leg and then race across the 2 DL terminals just as the last few passengers were boarding the connection flight to Seattle.
I knew my bags would not make it despite the smiles of the JFK baggage team. Sure enough arriving in Seattle they didn't. And yes the possibility of bags showing up became remote as the day went on. With the East Coast largely shuttered by the storm - the thought of my bags not making it because more and more a fear. However yes - my bags were on the van on its way over. Hurray!!! And yes there were 2 bags and yes the second one was red. Disappointment. The assumption that the second red bag was mine was just too easy.
However by 9PM (now 24 hours later) my trusty red bag showed up.
So no morals here other than some advice.
Here goes:
1. Hardcopy EVERYTHING!!!
2. Be polite and nice and get the person's name at each stage. AND YES THEIR INTERNAL PHONE NUMBER.
3. Always thank them
4. Trust them to know their jobs.
5. A FIM (when your trip is interrupted) is a wonderful thing. Get one no matter what.
And above all...
Be PERSISTENT - it is a required skill in Travel
As a special thanks - I would like to thank Daniela (DL Customer service in Tegel). Her counterpart at AF - Anita. The DL team in NYC for protecting me. And also to DL's baggage service and their contractor in Seattle Bags Inc.
I am now home and the Xmas presents made it also
Cheers
The 2009 ITM Study On Use Of Technology - Some Observations
The Beat recently did a piece on the UK based ITM's study on the Use of Technology in the travel process. The report is wide ranging and contains a lot of trend information.
However picking through the data to obtain valuable nuggets on what lessons can be learned is not that easy. So allow me the indulgence of picking on one area. IE the need for broader content availability.
If by now you have not surmised that the Professor is clearly biased in favor of multi-content platforms - then you have not been paying much attention. But it is not my bias really - rather it is an acknowledgement that fragmented content has existed for a very long time. The options for access to fragmented content were few and far between. Now that is changing and changing fast.
With the airlines starting to flee the one-size fits everything (aka via the GDS) they join the other sectors such as hotels and ground transportation that have had this issue for years. The acknowledgement that content is full fragmented and that the aggregation of content is a valuable service, players are changing how they source and what they source.
it should never be underestimated that Travel Technology vendors tend to accentuate the positives, there is now a general acceptance that the current generation of technology has indeed improved the lot of the user community as represented by the ITM members. I would guess that the vast majority (ie in excess of 95%) of all the PNRs generated by ITM members are indeed touched by a third party (read non-GDS) system. The ITM study states that the most commonly used type of technology among those polled was online self-booking, at 70 percent.
But more interesting for me was the demand for access to Non-GDS content with over 60% of ITM members stating this as a requirement. This is a pointer to the changes coming. The term full content is already a misnomer. The legacy GDSs can no longer provide full content. Not that actually they ever did. The caveats in the definition in GDS contracts are wide enough to drive a truck through.
Use this information wisely.
You can purchase the study from the ITM directly. Members will get free copies in about May 2010.
Cheers
However picking through the data to obtain valuable nuggets on what lessons can be learned is not that easy. So allow me the indulgence of picking on one area. IE the need for broader content availability.
If by now you have not surmised that the Professor is clearly biased in favor of multi-content platforms - then you have not been paying much attention. But it is not my bias really - rather it is an acknowledgement that fragmented content has existed for a very long time. The options for access to fragmented content were few and far between. Now that is changing and changing fast.
With the airlines starting to flee the one-size fits everything (aka via the GDS) they join the other sectors such as hotels and ground transportation that have had this issue for years. The acknowledgement that content is full fragmented and that the aggregation of content is a valuable service, players are changing how they source and what they source.
it should never be underestimated that Travel Technology vendors tend to accentuate the positives, there is now a general acceptance that the current generation of technology has indeed improved the lot of the user community as represented by the ITM members. I would guess that the vast majority (ie in excess of 95%) of all the PNRs generated by ITM members are indeed touched by a third party (read non-GDS) system. The ITM study states that the most commonly used type of technology among those polled was online self-booking, at 70 percent.
But more interesting for me was the demand for access to Non-GDS content with over 60% of ITM members stating this as a requirement. This is a pointer to the changes coming. The term full content is already a misnomer. The legacy GDSs can no longer provide full content. Not that actually they ever did. The caveats in the definition in GDS contracts are wide enough to drive a truck through.
Use this information wisely.
You can purchase the study from the ITM directly. Members will get free copies in about May 2010.
Cheers
BA Quietly Compensates Loyalty During Strike Threat
BA has quietly compensated those people who didn't cancel or rebook their flights during the recent strike threat.
As the Professor understands it from several people the grading is as follows:
Per passenger
Per number of legs on BA
Per leg type
Per status of membership
So a family of 4 would receive for a European leg 2500 miles each resulting in 10,000 miles bonus that is automatically added to the account.
This seems very generous and sets a dangerous precedent for BA in the future. Oh yes and if you didn't get the offer perhaps you should ask for it.
Cheers
As the Professor understands it from several people the grading is as follows:
Per passenger
Per number of legs on BA
Per leg type
Per status of membership
So a family of 4 would receive for a European leg 2500 miles each resulting in 10,000 miles bonus that is automatically added to the account.
This seems very generous and sets a dangerous precedent for BA in the future. Oh yes and if you didn't get the offer perhaps you should ask for it.
Cheers
Deep Breath - Office 2010 Beta
After some initial hicoughs I am now using Office 2010. So far its faster and has more functionality. I am getting used to all the features.
I can say that it is indeed very interesting and probably will be worth the upgrade.
check it out
Cheers
I can say that it is indeed very interesting and probably will be worth the upgrade.
check it out
Cheers
19 December 2009
Down To The Wire - JAL's Dancing Partner
The stakes are getting higher - JAL needs a dancing partner. Does the blushing but somewhat older mature (potential) bride go with the newly enriched king or the prince of the neighboring land she has known for so long?
I have opined already on the two potentials - AA and now being assisted by TPG or Delta and the rest of the Skyteam players particularly Air France/KLM.
I think the nod goes to the Atlanta Good Old Boys rather than the Texas Mafia. My reasoning is not based on any insider knowledge other than an assessment of the situation. Delta has more to gain the American has to lose. Although at this point there is a big loser here. OneWorld as an alliance.
American rather weakly offered to up the ante last week with saying that JAL would be its only Far Eastern partner. That was rather stating the obvious since most of the rest are already taken by either Star or Skyteam. But significantly it doesn't improve matters for JAL who needs a lot of help and indeed new feed to boost its flagging fortunes. So in fact in my opinion this was a negative not a positive.
In the mean time - JAL's position continues to deteriorate. So the decision is getting more and more urgent.
This one is far from over but I do think that the choice is become a lot clearer.
Cheers
I have opined already on the two potentials - AA and now being assisted by TPG or Delta and the rest of the Skyteam players particularly Air France/KLM.
I think the nod goes to the Atlanta Good Old Boys rather than the Texas Mafia. My reasoning is not based on any insider knowledge other than an assessment of the situation. Delta has more to gain the American has to lose. Although at this point there is a big loser here. OneWorld as an alliance.
American rather weakly offered to up the ante last week with saying that JAL would be its only Far Eastern partner. That was rather stating the obvious since most of the rest are already taken by either Star or Skyteam. But significantly it doesn't improve matters for JAL who needs a lot of help and indeed new feed to boost its flagging fortunes. So in fact in my opinion this was a negative not a positive.
In the mean time - JAL's position continues to deteriorate. So the decision is getting more and more urgent.
This one is far from over but I do think that the choice is become a lot clearer.
Cheers
MOL Has Lunch - Occasionally
I missed the paper edition but knew it was coming - so this morning I logged on to the FT and read the Lunch with Michael O'Leary Column.
Sadly it doesn't reveal any insight into the chap. It is more of a rehash of a conversation that leaves you wishing you had a bit more than the Reporter's Bagel.
Anyway - have a read - its good toilet reading.
Cheers
Sadly it doesn't reveal any insight into the chap. It is more of a rehash of a conversation that leaves you wishing you had a bit more than the Reporter's Bagel.
Anyway - have a read - its good toilet reading.
Cheers
The French Legal Reasoning System
So 2 decisions from the French legal system should leave people in the rest of the world scratching their heads. I love France and the French people. The French system of law stemming from Napoleon is incorporated into many different legal systems around the world including one could argue the USA. However these decisions will leave a lot of people wondering how they are able to operate.
Decision 1 – Let off the EADS and 17 of its current and former staffers and let them go scott free. A great piece can be found in the Financial Times:
Essentially the AMF (French Stock Market Regulator) found 7 of the group including former Co-CEO (and Frenchman) Noel Forgeard and recommended to the enforcement agency fines of 12 million Euros and various other enforcement actions. The final committee of mandarins however disagreed and on a very flimsy set of reasoning and excuses let everyone off. (mind you and an aside – this form of behavior is a mere pittance compared to the likes of some of the more recent US based fraudsters).
Decision 2 – Convict Google of Copyright infringement. According to various media reports a French court found Google Inc. guilty of copyright infringement for scanning books and putting extracts online without a publisher's consent. This will likely put a dent into the Web Giant’s plans for a library for all online. Google said it will comply for now while it appeals. The court awarded Euros 300K to a French Publisher and ordered the content removed.
So you watch yourself when you do business in France. It would appear they do tend to favor themselves. And to all Peoples around the world (including the French) Joyeux Noel!
Decision 1 – Let off the EADS and 17 of its current and former staffers and let them go scott free. A great piece can be found in the Financial Times:
Essentially the AMF (French Stock Market Regulator) found 7 of the group including former Co-CEO (and Frenchman) Noel Forgeard and recommended to the enforcement agency fines of 12 million Euros and various other enforcement actions. The final committee of mandarins however disagreed and on a very flimsy set of reasoning and excuses let everyone off. (mind you and an aside – this form of behavior is a mere pittance compared to the likes of some of the more recent US based fraudsters).
Decision 2 – Convict Google of Copyright infringement. According to various media reports a French court found Google Inc. guilty of copyright infringement for scanning books and putting extracts online without a publisher's consent. This will likely put a dent into the Web Giant’s plans for a library for all online. Google said it will comply for now while it appeals. The court awarded Euros 300K to a French Publisher and ordered the content removed.
So you watch yourself when you do business in France. It would appear they do tend to favor themselves. And to all Peoples around the world (including the French) Joyeux Noel!
18 December 2009
Amadeus Ancillary Revenue for Germany - Not till Q3 2010
I dont normally like to pick on the GDSs individually but my focus on Ancillary Revenues keeps uncovering issues where the legacy GDSs are dragging their feet.
Case in Point.
Amadeus
Here is a cut of 2 slides from a presentation of one Mr Thomas Gruber.
My issue is that it is touting delivery of the Ancillary Revenue services in Germany by 2010. THIRD QUARTER.
This is not soon enough. It is critically important that greater pressure on these aggressive deadlines is paid.
So Amadeus time to get on the program - please do it sooner so we can all benefit.
Cheers
The TNooz Elves
... have been busy preparing for the Holidays.
As part of this they/we are doing a predictions list. Click on the link to see them.
The Professor will be doing his Xmas show this week so click back often to see it - or sign up for the RSS feed
Cheers
As part of this they/we are doing a predictions list. Click on the link to see them.
The Professor will be doing his Xmas show this week so click back often to see it - or sign up for the RSS feed
Cheers
Are You REALLY Ready For Merchandising?
So listen up boys and girls – in case you think that Merchandising is coming down the pipe sometime – maybe never… guess again. The days of speculation are over. UA alone is at a run rate of $5 Billion per year. American I would say is already higher. Thus the estimate by Ideaworks that this is a $10Billion business is already on the low side.
The Beat recently sad down with the honchos of AA’s New Direct Connect platform. One quote really caught my eye.
Cory Garner: “We have an XML direct connection in production today for use. We envision that an XML pipe will exist in parallel with legacy pipes for some period of time; it's just that the XML pipe is where that additional merchandizing capability will be. Our legacy pipes will not have that. We are not interested in putting development dollars in a standard that will be going away at some point. It will be just a matter of when GDSs cut over, when agencies cut over--at which point we will decide when the legacy technology is no longer necessary.”
Over the past few weeks I have been working directly with merchandising players both on the supply side and the intermediary side. We have developed solutions for merchandising on a wide variety of levels. These range from seats to bags to non-air. While there are still holes in the infrastructure – most of them are now covered. The missing pieces I am not waiting for – we will work those out.
What amazes me is that after so much talk about how important ancillary revenues are to airlines – how little engagement there has been in the process from the Intermediary side. I have been trying to analyze why this would be the case. I believe it is because they are “waiting” for the GDSs to come up with the answer. What I see in the statement above is that the airlines are clearly ahead of the GDSs. Now the GDSs must play catch up. If I look at the recent press on Amadeus’s efforts – one could be easily forced to interpret that they are slowing things down waiting for some magical industry standard. Again – I would say get over it.
Ancillary Revenue and its companion Merchandising are clear differentiators for an airline. Intermediaries better get on board with the airlines or there will be a period of difficulty when the two are not partners. As noted above – there are many people not waiting. If your teams are not heavily engaged in integrating merchandising functionality at your point of sale then you are already late. Smart players are already building tools for bundled and unbundled products. Early adopters will be winners. Late adopters will be road kill.
So fair warning – better get out there… Your number 1 New Year’s resolution better be to be ready for this. Smart players will figure out this is a great revenue opportunity with Airline product. Dumb people will be waiting again this time next year for the GDS to give them what they think will be easy. And even then – they wont know what to do with it….
Do you want seats with that?
Cheers
15 December 2009
Happy to Lose This Bet
So I owe a certain Doctor a dinner because the 787 finally took to the air today.
Boeing should be proud. At least it didn't misbehave as far as the viewing public is concerned.
Congrats to Boeing for getting the Dreamliner into the air.
Now the real hard part starts. Getting it certified for passenger services and ramping up production.
To the thousands of workers from Japan to Italy - today is your day.
Cheers
Boeing should be proud. At least it didn't misbehave as far as the viewing public is concerned.
Congrats to Boeing for getting the Dreamliner into the air.
Now the real hard part starts. Getting it certified for passenger services and ramping up production.
To the thousands of workers from Japan to Italy - today is your day.
Cheers
Travelport Retains Flight Centre... and....
Against a lot of odds - TP retained FCL in Australia. Or at least part of the business.
The odds were definitely against Travelport. Amadeus had mounted a very strong campaign as had Sabre. Heavyweights went a courting in Brisbane.
In the end it probably came down to the cost of transition rather than anything else. I suspect that the canny people at FCL knew that there were certain concessions that they wanted from Travelport to stay on Galileo. These would have included:
Full GDS incentive fees for all bookings
Access to LCC content
Powershopper entries at no charge
Etc etc
So congrats to the Travelport team (yes even Gordon went visiting) the impact of losing FCL in Oz would have been devastating to Travelport so it really was a life and death struggle.
Look for Flight Centre however to become more aggressive in its technology process. With the Datalex debacle now a matter for the courts rather than implementation - they need a new tech base to move forward. Could it be that Travelport agreed to fund some of that?
At the very least it evens the playing field and sends a clear signal to Madrid that Travelport will not be a pushover on any customer.
Interestingly there is a post on Gordo's blog:
"There’s no question that the GDSs need to up their game. But there also needs to be a well-thought through “technology framework” for the travel industry if we are to put the customer at the centre of everything we do."
I think what he misses is that the concept that the GDS is no longer at the centre of this triangle. While trying to hold out an olive branch to both sides of the GDS centric value chain - he misses the point. It is no longer a linear or even triangular world. It is a completely open world. Interestingly the only time the word Open appears in this blog is when in the context of Open Travel Alliance. Something that Travelport has not exactly been actively supportive of in cash and people time. I share his stated view that there is a need for standards. But I do not subscribe to those who are determined to subvert the process to their own ends as others have done before. Travelport has in the past been guilty of this either through neglect or active efforts.
Where I do agree with him is one of his final statements.
"The challenge for the GDS in the new distribution model I’m proposing is that we have to disrupt the status quo."
Let's see if he really does have the moxie to put that into reality. That also includes blowing up the segment fee model.
How will history judge this?
Cheers
The odds were definitely against Travelport. Amadeus had mounted a very strong campaign as had Sabre. Heavyweights went a courting in Brisbane.
In the end it probably came down to the cost of transition rather than anything else. I suspect that the canny people at FCL knew that there were certain concessions that they wanted from Travelport to stay on Galileo. These would have included:
Full GDS incentive fees for all bookings
Access to LCC content
Powershopper entries at no charge
Etc etc
So congrats to the Travelport team (yes even Gordon went visiting) the impact of losing FCL in Oz would have been devastating to Travelport so it really was a life and death struggle.
Look for Flight Centre however to become more aggressive in its technology process. With the Datalex debacle now a matter for the courts rather than implementation - they need a new tech base to move forward. Could it be that Travelport agreed to fund some of that?
At the very least it evens the playing field and sends a clear signal to Madrid that Travelport will not be a pushover on any customer.
Interestingly there is a post on Gordo's blog:
"There’s no question that the GDSs need to up their game. But there also needs to be a well-thought through “technology framework” for the travel industry if we are to put the customer at the centre of everything we do."
I think what he misses is that the concept that the GDS is no longer at the centre of this triangle. While trying to hold out an olive branch to both sides of the GDS centric value chain - he misses the point. It is no longer a linear or even triangular world. It is a completely open world. Interestingly the only time the word Open appears in this blog is when in the context of Open Travel Alliance. Something that Travelport has not exactly been actively supportive of in cash and people time. I share his stated view that there is a need for standards. But I do not subscribe to those who are determined to subvert the process to their own ends as others have done before. Travelport has in the past been guilty of this either through neglect or active efforts.
Where I do agree with him is one of his final statements.
"The challenge for the GDS in the new distribution model I’m proposing is that we have to disrupt the status quo."
Let's see if he really does have the moxie to put that into reality. That also includes blowing up the segment fee model.
How will history judge this?
Cheers
14 December 2009
13 December 2009
Don't Want To Be A Tiger Anymore?
Well it seems that the first defection from the Tiger camp was Gatorade who "didn't renew". Now it seems that the one we all see so regularly (if you are a frequent flyer) in airports around the world - IE Accenture - has dropped Tiger from their campaign and will unveil shortly a new global ad campaign.
So I think this is to be expected. While everyone rushed to the golfer's defense, Accenture was noticeably quiet.
Moral of the story is... be careful what happens. It may come back to bite you. In that case you may have a Tiger in your tank.
(OK so its been a quiet news weekend)
Cheers
So I think this is to be expected. While everyone rushed to the golfer's defense, Accenture was noticeably quiet.
Moral of the story is... be careful what happens. It may come back to bite you. In that case you may have a Tiger in your tank.
(OK so its been a quiet news weekend)
Cheers
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