This little announcement crept into the bottom of this weeks TW Travel Technology Newsletter:
SPECIAL NOTE: Beginning in July, the Technology E-letter will be published once a month, on the first Thursday of each month, beginning with the July 5 edition.
From a daily newsletter to once a week to now once a month in less than a year. Well - sounds like anyone writing for this stuff will be hard pressed for copy and making money. So perhaps the subject matter has ceased to be very interesting. What's next? Eyefortravel reducing its conferences (perhaps it should do this anyway). Last year we saw the merger of several shows and the quiet shuttering of others. I guess TT is now a utility and not very sexy any more.
Makes you wonder why we do it!
Well here's a little secret - we are really crazy..................
Cheers
ITK
Wednesday, May 30, 2007
Alitalia - and then there were 2...
The Government of Sr Prodi can't seem to do much right these days.
Hot on the heels of a major right down of its dilapidated fleet and a resulting bad quarter, AZ lost one of the 3 remaining suitors. Sadly it was the strongest financially - the TPG, Mattelin Patterson consortium bailed yesterday. Reason? Connot comply with the restrictions on the bidding process imposed by the government. This leaves just Aeroflot (yes those guys) and AP Holdings (AirOne) only in the running.
So unless there is a white knight at the last moment (and I believe that the bidding process does not allow that), then the Prodi regime has a terrible dilemma on its hands. I can almost hear Mr O'Leary jumping for joy.
Our advice (which of course at this point is provided free of charge) is to re-open the bidding process and remove many of the stupid constraints on the bidders.
Its the only way to resolve a bad situation. However for the Italian government 3 not very nice choices:
Box A - admit you were wrong and re-open the bidding
Box B - the Russians get it (Garibaldi will be spinning in his grave)
Box C - Monopoly run by AirOne.
Hmmmm I think I would seek asylum in the Vatican
Cheers
ITK
Hot on the heels of a major right down of its dilapidated fleet and a resulting bad quarter, AZ lost one of the 3 remaining suitors. Sadly it was the strongest financially - the TPG, Mattelin Patterson consortium bailed yesterday. Reason? Connot comply with the restrictions on the bidding process imposed by the government. This leaves just Aeroflot (yes those guys) and AP Holdings (AirOne) only in the running.
So unless there is a white knight at the last moment (and I believe that the bidding process does not allow that), then the Prodi regime has a terrible dilemma on its hands. I can almost hear Mr O'Leary jumping for joy.
Our advice (which of course at this point is provided free of charge) is to re-open the bidding process and remove many of the stupid constraints on the bidders.
Its the only way to resolve a bad situation. However for the Italian government 3 not very nice choices:
Box A - admit you were wrong and re-open the bidding
Box B - the Russians get it (Garibaldi will be spinning in his grave)
Box C - Monopoly run by AirOne.
Hmmmm I think I would seek asylum in the Vatican
Cheers
ITK
Tuesday, May 29, 2007
Stealth Fare increases - United Airlines new policy
Like all good travellers - the team at ITK like to use the automated tools whenever possible. Better we do it than have some half baked agent in India give you bad information and then charge you for the privilege. However there are times when the IBE - Internet Booking Engine just doesn’t work. It cant handle for example International very well. So admittedly International is but a small percentage of the airlines business but it is an increasingly important part. So one would expect the airline to allow international access to special folk who can manipulate the system to get the answer that is actually there but not viewable through the eyes of the IBE.
United has a new policy. Upgrades are now only available on their website. So if the website doesn’t work what can you do? Answer - nothing. Kicking screaming and throwing a tantrum (this is the usual recourse) only works some times.
So United and others are now deploying these "self service" tools that in fact raise their yields resulting in a stealth price rise by denying the traveller access to someone who can fix the problem.
I am picking on United because I had the specific issue of this today. But other carriers have similar policies, processes and procedures that are resulting in the same thing. A barrier to lower fare access resulting in the punter having to buy a higher fare than is actually necessary.
It adds a whole new meaning to the term "Lower fares MAY be available on our website". Actually United is being careful (as are most airlines) in actually NOT saying that the LOWEST fares are available at their websites because - as I have been able to see numerous times - actually they are not.
Cheers
Timothy
United has a new policy. Upgrades are now only available on their website. So if the website doesn’t work what can you do? Answer - nothing. Kicking screaming and throwing a tantrum (this is the usual recourse) only works some times.
So United and others are now deploying these "self service" tools that in fact raise their yields resulting in a stealth price rise by denying the traveller access to someone who can fix the problem.
I am picking on United because I had the specific issue of this today. But other carriers have similar policies, processes and procedures that are resulting in the same thing. A barrier to lower fare access resulting in the punter having to buy a higher fare than is actually necessary.
It adds a whole new meaning to the term "Lower fares MAY be available on our website". Actually United is being careful (as are most airlines) in actually NOT saying that the LOWEST fares are available at their websites because - as I have been able to see numerous times - actually they are not.
Cheers
Timothy
Thursday, May 24, 2007
New Tools for Consumers - Better Research - smarter consumers?
There are now some pretty good tools available for researching and buying products.
This last week saw that Farecast came out of beta (this is beginning to be a huge joke as for example GMAIL is still officially in Beta), YAPTA started up and FareCompare - probably the grand daddy of them all - is still plodding out there.
These tools have in fact done a better job at consumer advocacy than say a Kayak or Mobissimo. In fact they are better tools. Too bad they don’t seem to have a good business model that is obvious.
So armed with this new set of tools are the consumers getting better or what?
At this stage there is an interesting lever being used by several of the sites to trumpet their successes. This is the fare refund program.
Way back when the OAG was the tool of choice (the book not the website!), every ticket was refundable. Today's tickets are rarely refundable for the lowest fares used. But in response to a general outcry over "Use it or Lose it" rules - many airlines introduced a fare refund or re=use program. Today most airlines offer this - even Southwest. However it is not usually offered in a manner that you can actually get your money back. Only with difficulty will Alaska offer the money without a fee. Basically most of the refunds get eaten up in "User" fees that the airlines slap on. For example Northwest will charge you $25 to issue a travel voucher - however if you insist on getting the cash - then you will need to fork over $100. Some airlines offer a one day return policy. Delta offers this and you can cancel your ticket and get your money back if you do so in 24 hours. BE CAREFUL though - you could get caught because if you do this online it will automatically cancel the seats you have taken and then put you to the back of the queue for a cheap seat. Meaning you could lose out altogether.
But the point of my story here is that there is a new chapter emerging that will change the shape of the relationship between Consumer and airline. In the past the airline controlled the intermediary (Travel Agent - on or offline) because that person was the one making the reservation and had a contractual relationship. In this new world the consumer is freely giving his own data to a 3rd party not subject to a contractual relationship. Thus these 3 players can aggregate the data and provide consumer facing tools at will. This will keep the airlines up at night while they try and figure out yet another losing battle in the war to retain opaque pricing information.
Fundamentally the consumer is more empowered IF HE/SHE is smart enough to use that information. So the trick for airlines and intermediaries is to retain their edge. For even more fun and games - why not contact one of the analysts at InTheKno and find out how you can actually use some of this technology to your advantage - irrespective of whether you are a consumer, intermediary or supplier.
Give us a ping. www.inthekno.com
This last week saw that Farecast came out of beta (this is beginning to be a huge joke as for example GMAIL is still officially in Beta), YAPTA started up and FareCompare - probably the grand daddy of them all - is still plodding out there.
These tools have in fact done a better job at consumer advocacy than say a Kayak or Mobissimo. In fact they are better tools. Too bad they don’t seem to have a good business model that is obvious.
So armed with this new set of tools are the consumers getting better or what?
At this stage there is an interesting lever being used by several of the sites to trumpet their successes. This is the fare refund program.
Way back when the OAG was the tool of choice (the book not the website!), every ticket was refundable. Today's tickets are rarely refundable for the lowest fares used. But in response to a general outcry over "Use it or Lose it" rules - many airlines introduced a fare refund or re=use program. Today most airlines offer this - even Southwest. However it is not usually offered in a manner that you can actually get your money back. Only with difficulty will Alaska offer the money without a fee. Basically most of the refunds get eaten up in "User" fees that the airlines slap on. For example Northwest will charge you $25 to issue a travel voucher - however if you insist on getting the cash - then you will need to fork over $100. Some airlines offer a one day return policy. Delta offers this and you can cancel your ticket and get your money back if you do so in 24 hours. BE CAREFUL though - you could get caught because if you do this online it will automatically cancel the seats you have taken and then put you to the back of the queue for a cheap seat. Meaning you could lose out altogether.
But the point of my story here is that there is a new chapter emerging that will change the shape of the relationship between Consumer and airline. In the past the airline controlled the intermediary (Travel Agent - on or offline) because that person was the one making the reservation and had a contractual relationship. In this new world the consumer is freely giving his own data to a 3rd party not subject to a contractual relationship. Thus these 3 players can aggregate the data and provide consumer facing tools at will. This will keep the airlines up at night while they try and figure out yet another losing battle in the war to retain opaque pricing information.
Fundamentally the consumer is more empowered IF HE/SHE is smart enough to use that information. So the trick for airlines and intermediaries is to retain their edge. For even more fun and games - why not contact one of the analysts at InTheKno and find out how you can actually use some of this technology to your advantage - irrespective of whether you are a consumer, intermediary or supplier.
Give us a ping. www.inthekno.com
Friday, May 11, 2007
Alert - Slowdown Coming
For the last 2 years - 2006-2007 we have been very bullish on the Airline Industry in general. With clear weaknesses persisting in certain sectors, the mood however has been broadly bullish. Particularly with respect to the US Domestic market. Record load factors and yields have pushed the sector above its previous historic highs of 2000. There is however a trend emerging within the overall sector that is worrying.
The highs are shorter and the lows are deeper and longer.
Peter Drucker once wrote that the industry sector that had never made money was Tech. Airlines as a whole in the North American market have not shown and industry profit in 6 years.
However the situation is not looking good for the mid term. Several companies are issuing warning notices - Southwest and Delta being prime examples - that the US market will be at best flat in 2008. Delta is responding by even more cuts in its Domestic mainline markets and shifting capacity to the International market. Southwest is starting to look at how Ryanair and Easyjet are boosting their bottom lines with ancillary revenues.
So enjoy it while it lasts. Look for significant increases in non-traditional (IE legacy) airlines activity in 2008. The LCC share will continue to rise and yields will decline from their 2007 highs.
Cheers
Timothy
The highs are shorter and the lows are deeper and longer.
Peter Drucker once wrote that the industry sector that had never made money was Tech. Airlines as a whole in the North American market have not shown and industry profit in 6 years.
However the situation is not looking good for the mid term. Several companies are issuing warning notices - Southwest and Delta being prime examples - that the US market will be at best flat in 2008. Delta is responding by even more cuts in its Domestic mainline markets and shifting capacity to the International market. Southwest is starting to look at how Ryanair and Easyjet are boosting their bottom lines with ancillary revenues.
So enjoy it while it lasts. Look for significant increases in non-traditional (IE legacy) airlines activity in 2008. The LCC share will continue to rise and yields will decline from their 2007 highs.
Cheers
Timothy
Monday, May 7, 2007
Trivia time... Do you know your Boeings?
Boeing for many years has had its own numbering scheme. Thus if you are a serious anorak then you know that British Airways uses the designation 36 from its predecessor company BOAC. Thus the Rolls Royce Conway powered 707s were 707-436.The few P&W powered versions that BOAC acquired were designated 707-336s.
If you really want to get a list of all Boeing's customers - send me an email and I will give you the hidden key...
Cheers
Timothy
If you really want to get a list of all Boeing's customers - send me an email and I will give you the hidden key...
Cheers
Timothy
New LCC in......... New Zealand?
New LCC startup KiwiJet has been announced with Flat Fares from NZ$150.
Dominant Carrier Air New Zealand smells a rat and tells its staff to stop leaking confidential information since the idea sounds suspiciously like their own plans for a Domestic LCC. Company spokesman David Jamieson told staff in a memo though there was no evidence of a leak, "it was important they keep information commercially confidential".
The new airline will be reasonably well funded $20Million and backed by American Investors. Welcomed by leading Agency Chain - Australia's Flight Center - it comes as the Trans Tasman market is getting crowded with Emirates operating a lot of flights instead of letting its planes sit on the ground in SYD and MEL. At the same time a resurgent NZ is moving agressively into long Haul markets including now the only schedule RTW service.
Dominant Carrier Air New Zealand smells a rat and tells its staff to stop leaking confidential information since the idea sounds suspiciously like their own plans for a Domestic LCC. Company spokesman David Jamieson told staff in a memo though there was no evidence of a leak, "it was important they keep information commercially confidential".
The new airline will be reasonably well funded $20Million and backed by American Investors. Welcomed by leading Agency Chain - Australia's Flight Center - it comes as the Trans Tasman market is getting crowded with Emirates operating a lot of flights instead of letting its planes sit on the ground in SYD and MEL. At the same time a resurgent NZ is moving agressively into long Haul markets including now the only schedule RTW service.
Friday, May 4, 2007
Is this the new best job in the world?
"Head of Astronaut Sales" for Virgin Galactic is Carolyn Wincer. Based in London - she is now developing sales channels for the Virgin SpaceFlights when they start in a few years time.
With early deposits the experiences or cabins are essentially sold out through 2010. This is for PAYING customers.
Is this the new dream travel job?
InTheKno will shortly be undertaking its first annual education survey. Lets see what the market thinks
The InTheKno Team
With early deposits the experiences or cabins are essentially sold out through 2010. This is for PAYING customers.
Is this the new dream travel job?
InTheKno will shortly be undertaking its first annual education survey. Lets see what the market thinks
The InTheKno Team
Thursday, May 3, 2007
EU GDS Deregulation
Altitude with Attitude asks "to deregulate or not?"
The EU Commissoner - the adept M.Jacques Barrot http://ec.europa.eu/commission_barroso/barrot/index_en.htm - for Transport has been soliciting input on the need to deregulate the GDS market. As you probably know there is a significant difference of opinion on both sides of the Atlantic on the issue of GDS regulation. The current regulations on the EU side are set to be replaced. So the question is do we keep them or not?
With the US market deregulated for over a year - we have not seen the sky fall and arguably competition has crept into the market. So is there a case for retaining regulation?
Firstly it is important to remember that the markets are remarkably different. GDS bookings accounted for a significantly smaller portion of the total air travel market emanating from the EU than the US market. Why? A lot more LCC traffic and the lack of participation already is smaller. There is only one GDS with Airline ownership - hardly control - which is Amadeus. (Down significantly from its hey day with control now in the hands of Private Equity investors.)
Secondly the need for consumer protection is now less as there are better and greater obligations for passenger rights than in the US market.
Thirdly the consolidation of the TMC market in Europe into 4 major global players and significant regional ones lessens the need for tight regulation of the supply chain access system.
Our opinion is that there is no need to retain the GDS regulation and that it should be allowed to die quietly. However the EU is known for responding to pressure from certain quarters. There is a chorus being orchestrated (love the mixed metaphor) by BTC Chairman Kevin Mitchell (A US person) to get the EU Corporations to form up against the GDS deregulation. We believe that the regulation structure is now largely an anachronism in todays open markets.
We welcome other views and are happy to debate this issue.
Cheers
Timothy
The EU Commissoner - the adept M.Jacques Barrot http://ec.europa.eu/commission_barroso/barrot/index_en.htm - for Transport has been soliciting input on the need to deregulate the GDS market. As you probably know there is a significant difference of opinion on both sides of the Atlantic on the issue of GDS regulation. The current regulations on the EU side are set to be replaced. So the question is do we keep them or not?
With the US market deregulated for over a year - we have not seen the sky fall and arguably competition has crept into the market. So is there a case for retaining regulation?
Firstly it is important to remember that the markets are remarkably different. GDS bookings accounted for a significantly smaller portion of the total air travel market emanating from the EU than the US market. Why? A lot more LCC traffic and the lack of participation already is smaller. There is only one GDS with Airline ownership - hardly control - which is Amadeus. (Down significantly from its hey day with control now in the hands of Private Equity investors.)
Secondly the need for consumer protection is now less as there are better and greater obligations for passenger rights than in the US market.
Thirdly the consolidation of the TMC market in Europe into 4 major global players and significant regional ones lessens the need for tight regulation of the supply chain access system.
Our opinion is that there is no need to retain the GDS regulation and that it should be allowed to die quietly. However the EU is known for responding to pressure from certain quarters. There is a chorus being orchestrated (love the mixed metaphor) by BTC Chairman Kevin Mitchell (A US person) to get the EU Corporations to form up against the GDS deregulation. We believe that the regulation structure is now largely an anachronism in todays open markets.
We welcome other views and are happy to debate this issue.
Cheers
Timothy
Wednesday, May 2, 2007
Congrats Delta Employees - don't spend it all at once
There's going to be some partying going on in ATL, SLC, CVG and NYC tonight.
The payouts for the 40K employees have just been announced:
Cash and equity
Management employees get around $5K cash and $200K equity (vesting over time)
Contract employees get around $2K cash and $9K equity (vesting straight away).
Let hope they use it wisely.
On this subject I think we should all give a round of applause to Gerald Grinstein. Honorable to the end he is hardly taking anything for his pains other than his (in comparison) modest salary of $350K. I think this is a noble and much to be admired action on behalf of a true ethical person. Gerry - hats off to you.
Now lets see any others (its too late for Mr Tilton) do something similar.
Cheers
Timothy
The payouts for the 40K employees have just been announced:
Cash and equity
Management employees get around $5K cash and $200K equity (vesting over time)
Contract employees get around $2K cash and $9K equity (vesting straight away).
Let hope they use it wisely.
On this subject I think we should all give a round of applause to Gerald Grinstein. Honorable to the end he is hardly taking anything for his pains other than his (in comparison) modest salary of $350K. I think this is a noble and much to be admired action on behalf of a true ethical person. Gerry - hats off to you.
Now lets see any others (its too late for Mr Tilton) do something similar.
Cheers
Timothy
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