Thursday, April 28, 2011

How the new DOT airline rules will benefit you

Last week, the Department of Transportation issued a sweeping new set of rules expanding the situations in which airlines must provide compensation to fliers and requiring greater disclosure of fees and taxes.


Here's a look at how the new rules will affect you, and my response to them:
1. Refund of bag fees if luggage is lost 
This is an absolute no-brainer and it's too bad the airlines had to be regulated into doing this. If you send something by FedEx and it's an hour late past the promised delivery time, you get a refund no questions asked. Disappointed that the rule doesn't include delayed bags — just lost ones.
2. Full disclosure of all fees on websites 
If you know where to look, most airlines have already done this, but the fees aren't all on one easy-to-find page. Ryanair in Europe actually has had this for years with a link showing all its fees clearly spelled out. U.S. airlines need to do this too. It will lead to better customer relations. All fees, including frequent-flier fees, bags, online booking, changes, pets, infants and whatever else should be clearly organized in one place. Whether they should be displayed at check-in counters is another matter — that would be a pretty big sign.
3. Involuntary bumping payment increased  
Even $1,300, the new maximum, won't compensate someone who missed a $10,000 cruise, or forfeited a $5,000 vacation and missed two days of work plus other expenses. I would rather have seen some mechanism for passengers who incur enormous financial loss because of a bump situation to get compensated fairly. The good news is that relatively few passengers are involuntarily bumped each year (about 65,000 in 2010).
4. Tarmac delay rule extended to international flights 
Good idea, overdue. Airlines and airports are getting their act together and developing strategies to offload those passengers who wish to return to the terminal in the event of long tarmac delays. Remember, the rule does not say a flight has to be canceled. Just that you have to allow whoever wishes to return to the terminal the chance to do so.
5. Requiring taxes to be shown in all advertised fares 
This one seems unfair to me. Should restaurants now add the meal and or sales tax to all menu prices? Should the local electronics retailer include sales tax on their television ad prices? Hotels? Rental car companies? Why are airlines being singled out? We do think that any fare that requires a round-trip purchase be listed in ads only as a round-trip fare. But requiring taxes to be listed is discriminatory and will be a nightmare for the airlines (especially since some taxes vary depending on connecting city and routing).
6. What should have been in the new rules 
The list left off one regulation we need: compensation for schedule changes made long after you bought your ticket.
You buy a ticket in April; in October the airline tells you they don't fly that route anymore, but you can buy a new fare on another airline for three times the price or get your money back. No. The original airline should put you on the alternate airline at the same price you paid. Or perhaps you bought a nonstop flight, but the airline switches you to one making two connections at the same fare. No. A hamburger is not the same as filet mignon.
Another scenario: Your airline used to fly daily from a city, but service is reduced to 3 times a week. Five months after buying your fare and making land arrangements that are non-refundable, you have to buy two nights hotel at your own expense to wait out the next departure home. No. The airline should pay for the hotel.
Fliers, what did the new DOT rules get right, and what else do you wish was covered? Sound off in comments below.
George Hobica is the founder of Airfarewatchdog.com. Airfarewatchdog features the best airfares on thousands of routes verified by a team of expert fare analysts.

http://travel.usatoday.com/experts/hobica/story/2011/04/How-the-new-DOT-airline-rules-will-benefit-you/46575920/1?sms_ss=twitter&at_xt=4db9c0fd5104a480,0

DOT’s Tweaking of Traveler Protections

The new airline customer-service rules issued Wednesday by the Department of Transportation may sound like a lot of change but really boil down to small modifications of existing rules and codifying some measures that airlines have already adopted.
Perhaps the most impactful change for travelers is including international airlines in the tarmac-delay rule. We’ve seen some serious delays on international airlines – passengers stuck onboard grounded planes for 10 hours or so. U.S. airlines – faced with huge fines if they didn’t act – have largely learned to avoid long onboard delays. Now foreign airlines will have to do more to make sure they have gates and contingency plans for dealing with travel disruptions. They are subject to fines if passengers are left onboard a delayed flight for more than four hours.
The new rule also expands the number of airports where it would be in effect. Previously flights that were stranded at small airports were exempt. Now smaller airports, including airports to which flights divert, are included for domestic and international airlines.
Travelers should have the choice – wait it out or give up, go home or get on another flight, if you can.
Perhaps the least impactful new rule is the one getting a lot of headline attention – forcing airlines to refund baggage fees if bags get lost. The key here is that fees don’t get refunded if bags are simply late. You only get your $25 back if the airline never delivers the bag to you, not if it didn’t get on your flight or got sent to San Diego instead of San Antonio.
It can take many weeks for an airline to officially declare a bag “lost,’’ never to be found, and many more to actually get compensated for your losses. You may be out several hundred or even several thousand dollars (never check valuables!) in clothing and belongings, and you face a torturous process of trying to prove the value of lost goods to an airline with receipts. Airlines depreciate the value of goods lost and unilaterally decide what to pay you. The $25 bag fee is the least of your worries by the time you get through with the airline.
Bumping up compensation to involuntarily bumped passengers should further curb airline overbooking and make travel more reliable. It may also sweeten the offers airlines make to get volunteers to give up their seats.
The fee disclosure regulations probably won’t have much impact, however. By now, most travelers know most airlines charge baggage fees. Southwest Airlines advertising probably does more to educate the public on that than any regulation. Now airlines will have to tell you clearly that there may be additional fees like baggage, and make it easier to find the fees.
It can be difficult to click around an airline Web site to find actual baggage charges, often buried in sections with baggage rules. A clear menu would be preferable – if you want fries with your hamburger, the price of fries is on the same menu. Imagine if a restaurant just posted a notice that fries were an additional fee and you had to go somewhere else to find the actual price.
The DOT didn’t require airlines to include their customer-service promises in the legal contract of tickets, called the “contract of carriage.’’ That would have given travelers a way to take airlines to court when they didn’t live up to their promises.
The new rules do require airlines to let consumers either hold a reservation for 24 hours without a fare change or get a full refund within 24 hours. That’s actually something most airlines already do – most big carriers pledged to do that 10 years ago when they pre-empted passenger-rights legislation in Congress by voluntarily offering customer service protections.
It’s unfortunate the airline industry doesn’t seem to be able to step up on its own and treat customers more fairly, straighten out its service problems and be more open about its pricing. The DOT is trying to protect passengers, and airlines do respond when pushed by the government. Perhaps if the industry had more leadership and was more proactive instead of reactive, it wouldn’t have to come to that.

How to Turn Customers into Brand Ambassadors

 After I talked about the future of “search” in my previous article, lets now look at what a brand should do to win in the new “search” paradigm.

It starts with listening, a simple act in the digital world the importance of which is yet to be fully understood or appreciated. Listening to conversations about your brand or product or service offers multiple opportunities. If people are speaking well of you, you’ve an opportunity to convert them to your brand ambassadors. If they are speaking ill of you, thank them for helping identify an opportunity for you to grow and to resolve an issue in a way that turns around their perceptions and experience.
Don’t listen and you end up missing out on both opportunities above and you should be prepared to face a potential backlash from dissatisfied customers. For example, Vishal Rao, a frustrated customer of MakeMyTrip ended up creating a new site RuinedMyTrip.com to share his horrifying experience and it is prominent on searches for the company. For more on this, check out this Mint story.
Tools such as Google Alerts and TweetDeck do a great job of helping a brand listen to conversations about it. Once a brand has laid the foundation to continuously listen, it can embrace some or all of the opportunities of “social search,” some of which are below:
–Be present on relevant Social Media: Given that search results increasingly throw out more social media channels such as Facebook, LinkedIn, Twitter, Flickr, SlideShare, and others, being present on these channels opens up new opportunities to be found by customers on search engines. Take a minute to search for your name on Google and observe the results. This article ‘Google will force all B2B companies to Tweet’ will help you further understand the importance of Twitter.
–Turn your satisfied customers into brand ambassadors: Given that potential customers want to know about your product or service through the people who’ve already used it, the opportunity of leveraging your existing customers to bring in more customers is unmatched. But how? There are numerous ways to do it.
Recently, LinkedIn launched a new feature called its “Company Page,” where any company can list its products or services. There is no reason you should not request your satisfied customers to share their feedback about you. At Digital Vidya, we’ve been continuously making the most of our LinkedIn Company Page to build credibility and generate more business. Similarly, you can request recommendations be placed on your LinkedIn profile.
Today, Twitter is one of the favorite platforms for consumers to share their opinions. The question is whether you can encourage and inspire your satisfied customers to share their views about you. You can then use the stream of positive tweets about your brand as testimony to attract new customers. For examples, 24hoursloot.com has integrated a Twitter stream into their website in the form of “true testimonials from real people” to boost conversion rates for every campaign, which drives traffic to their Web site.
Believe me, it’s also worth spending time in identifying and requesting some of your customers to blog about you. Let me share two examples from our social media workshops: Social Media Workshops in India: The one I endorse and Social Media and the ‘GURUs’
In addition to blogging, it doesn’t cost you anything to request your satisfied customers write about their experience about your brand on popular review sites such as MouthShut.com. Here is an example of another business for which we requested experts to review our products at JavaRanch, one of the most popular Java discussion forums.
Likewise, depending upon your industry, you will have enough avenues to realize the opportunity of word of mouth. Please remember, if you are listening, you may discover a number of satisfied customers, who otherwise gets missed.
While it’s important to acknowledge and encourage your delighted customers, it’s even more critical to take care of your dissatisfied customers. In the world of social media, nothing works better than making a public apology and taking responsibility of your mistakes. By resolving the concerns of your customers in public, you are likely to strengthen your relationship with your satisfied customers in addition to turning your frustrated customers into brand ambassadors.
CafeCoffeeDay has an interesting case in which they smartly recovered from a short-lived crisis by appropriately responding to their customers in a timely way. By publicly dealing with the situation, as MakeMyTrip is also doing, you show that you are doing your best to improve customer satisfaction.
I will be happy to answer any questions you may have on the tools and case studies discussed. Moreover, I invite you to share relevant personal experiences in the Comments.

Pradeep Chopra is chief executive of Digital Vidya, a leading Indian digital marketing training company. He also runs a digital marketing community on Facebook.  He’s reachable on LinkedIn and on Twitter @pradeepchopra. You can read his full mentor bio here.



http://blogs.wsj.com/indiarealtime/2011/04/27/chief-mentor-how-to-turn-customers-into-brand-ambassadors/

Thanks to Naviatarie's New Skies, AirAsia considering frequent flyer program

I was going through old e-mails (Easter weekend spring cleaning) and was bemused to see an August marketing e-mail from AirAsia poking fun at reward clubs with jibes like "pardon me random rewards card" and "what are you looking at Mr Buy 5 Get 1 Free Coffee Card?"

Only a few weeks prior AirAsia X chief executive Azran Osman-Rani remarked at a Sydney conference that the AirAsia group was mulling a frequent flyer program.

"The way I would look at frequent flyer points is not necessarily the way other airlines have looked at it," Osman-Rani starts. Indeed, two years ago Osman-Rani told me he shunned the thought of a frequent-flyer program. Now technological improvements have created new propositions.

"What has changed is this new engine--the [Navitaire] New Skies platform--and the ability to have a more robust and powerful CRM engine," Osman-Rani says of the booking engine and customer relationship management. "You can now have a real relationship with individuals," Osman-Rani says.

For instance, in exchange for storing all of my trips in an account so I can eventually receive a free ticket, AirAsia could receive valuable marketing information about me, such as where I like to fly, what ancillary options I choose. Rather than spend money on open marketing, AirAsia could spend that budget on a reward tickets.

"Our success relies on our ability to find the right way of connecting and reaching out to people and being able to execute it in a very efficient way," Osman-Rani says. Indeed, as Flightglobal publication Airline Business remarked in a recent editorial, "Airlines will need to plough copious amounts of their ever-scare cash reserves into truly reaching their customers and understanding their individual quirks."

AirAsia has always been improving its implementation, but technical limitations have impeded, for all airlines, faster and more efficient marketing. That is a hurdle AirAsia has been working to overcome. Last year the carrier raised eyebrows when it said a minimal cost advertising campaign on Facebook let it cut back on print advertising. Now New Skies permits the carrier to take another leap.

"It's about being able to create a program because you can do tailored one-on-one marketing, track purchasing patterns, histories, create deals and structures for them," Osman-Rani says.

Many marketing e-mails I receive from airlines are constructed based on what I have told airlines: where I live and travel from and what regions and offers I am interested in.

If AirAsia follows through with its thinking, it will now be New Skies predicting what I am interested in, and alerting me to special offers. But for New Skies to learn about me, it needs to know who I am, and what better way to get that information than a frequent flyer account where all of my trips are stored.

This is also good news for investors. AirAsia becoming leaner helps return dividends. For prospective AirAsia X investors, if the airline knows its passengers better gets them to travel more, that fuels the high growth trajectory the AirAsia X IPO is focused on.


http://www.flightglobal.com/blogs/asian-skies/2011/04/thanks-to-naviataries-new-skie.html

Monday, April 25, 2011

Handbook on Financial Planning

by Mr. Tan Kin Lian
For free distribution to consumers
31 March 2011






embedded viewer courtesy of: https://docs.google.com/viewer

Saturday, April 23, 2011

Is the hub and spoke model broken?

 
Network players have always struggled to make short haul pay, but it remains an essential part of the hub-and-spoke model. Now low-cost carriers dominate this market, can the two sides shift their strategies to work together?
 

There is an uneasy tension brewing in the hub-and-spoke model. Network players would kill to have feeder partners the size of Ryanair, AirAsia or Southwest. While squaring the business case for all sides is tough, both camps are keen to boost their passenger numbers and bottom lines at minimal cost. This sparks hope for hub-and-spoke relations between the two opposing creeds.

"Herb Kelleher created a bit of a religion with his no-frills approach," says Vueling chief Alex Cruz. "Nearly 30 years later, easyJet and Ryanair have been dictating what is and what is not acceptable within the religion." Clickair, which is now merged into Vueling, started off as a good disciple, following the low-cost doctrine to the letter. "We believed everything in this new religion would make us successful," says Cruz. "But our business-class passengers said 'sod this, we're going to another carrier'. After that we began to pick and choose every commandment."

Vueling began connecting its own passengers via its Barcelona base in July 2010. "That is a big no-no," says Cruz. "Commandment number five states 'thou shalt not connect passengers'." By the end of 2010 it had handled a "meaningful" 177,000 transfers. "It was obvious with our network size that it was worth doing," says Cruz. "The results have been fantastic. We have had very few increased costs, yet it has been a tremendous additional revenue source." In 2011 Vueling expects to increase its transfer traffic total towards half a million.

Passengers pay for both point-to-point legs, plus a €5 ($6.80) connecting fee. As part of the deal they get free wireless access and shopping discounts at Barcelona airport. This costs Vueling nothing; it is an airport incentive. "We took on one single, non-variable expense - a transit position at Barcelona airport in case of lost boarding cards," Cruz explains.

Vueling's Navitaire Open Skies platform was able to handle multiple segments, so only "a little bit of development" was needed, although the airline plans to upgrade to New Skies at the end of the year. The remainder of the relaxed six-month lead-up was used for talks with Barcelona airport operator Aena and for handling agent training. "We are probably slow at these things, but we tend not to fail," says Cruz. "We have proven that we are able to do this and drive our cost base down."

Madrid-based Iberia, which owns 45.85% of Vueling, has looked on with interest. Facing competition from low-cost carriers and high-speed rail, Iberia is "simply not making money on short- and medium-haul operations", said chief executive Antonio Vazquez, just before becoming chairman of International Airlines Group, the new British Airways and Iberia parent.
"We cannot operate with the costs of Iberia and the revenues of a low-cost carrier. We must adapt, otherwise we will lose market share and put our long-haul feeder operations in danger," said Vazquez. Iberia's priority may lie with long-haul, but a restructured feeder network is vital because 70% of its international passengers connect.

In Vueling, it seems, Iberia may have found a partial solution. It has tapped Vueling to operate a selection of short-haul routes from Madrid under a short-term contract that runs from April until the end of the summer.
Iberia is also handling several short-haul routes to regional franchise partner Air Nostrum, as it tries to thrash out a longer-term solution with its pilots. Several options are on the table, including establishing a new ­short-haul airline and contracting out flying to third parties under similar agreements to the one signed with Vueling and Air Nostrum.

This fits neatly with Vueling's growth strategy. "Obviously the next step for us is to connect with another airline and we wanted to do in a controlled way," says Cruz. "This year we are going to attempt to prove wrong commandment number six - 'thou shalt not do anything with other airlines'."
In addition to the Madrid routes, Vueling will feed Iberia's Barcelona-originating Sao Paulo and Miami services, although neither will be available through Vueling's website. Most of Vueling's flights already carry Iberia's code under a one-way codeshare deal, regardless of whether they connect or not. But Vueling has now lifted a GDS restriction, which limited its flights to point-to-point sale, so its flights can be sold in conjunction with Iberia's. This means a passenger can request a Miami-Mallorca flight from their agent, including Vueling's Barcelona-Mallorca segment, on a single, all-Iberia coded itinerary.

BREAKING THE RULES
"As time goes by, we will remove further restrictions and sign deals with other airlines so that they can sell itineraries with their own airline and an Iberia segment, even though it is flown by our metal," says Cruz. "We have this job for Iberia, but we are building it very much in mind to fit with other airlines."
Cruz says Vueling has received tentative feeder approaches from several carriers, including oneworld's American Airlines. "We are quite aware of the fact that we are 45.85%-owned by a oneworld airline. This gives us easier access to oneworld carriers."

Through its diluted alliance ties, Vueling is virtually cousins with Qantas budget subsidiary Jetstar, which has a well-advanced feeder strategy. The Melbourne-based carrier boasts codeshares with American Airlines, Japan Airlines and Qantas, as well as an increasing number of interlines.
Like Cruz, Jetstar Group chief Bruce Buchanan is deliberately shaking things up, offering products not typical to low-cost players. On 1 February, Jetstar became the first non-oneworld carrier to participate in oneworld-branded fare packages, via its Qantas codeshare. "Through strategic interline and alliance fare agreements such as this, we are tapping into new customer markets," says Buchanan. Cruz believes this could be a viable path for Vueling. "It makes a lot of sense and could be a very interesting model for us to follow, but they are 18-24 months ahead of us."

Low-cost purists would probably argue that Jetstar and Vueling are complicating their models under the influence of their legacy airline owners. But, surprisingly, even the greatest fundamentalist of them all, Ryanair, does not immediately dismiss the idea. "If someone was willing to pay us for feed, we would be very happy to talk to them," says Ryanair deputy chief executive Michael Cawley. He says there are two ways Ryanair could be motivated to act as a feeder: to generate additional passengers or being given "a big cheque to do it". But Cawley is quick to add that any partner would have to take all the responsibility: "We would not want any complexity, and the passenger would have to transfer their own bag." But this would be "virtually impossible", says Marcelo Bento Ribeiro, who is yield and alliances director at Brazilian low-cost carrier Gol. "If you want to service international connecting passengers, you have to bring in some complexity."

COMPLEXITY KICK
Gol kicked off its feeder strategy three years ago and today it has one-way codeshares with Air France, American Airlines, Delta, Iberia and KLM. Similar deals with Aeromexico and Qatar Airways should go live by June and it has interline deals with many more. "Every passenger we get through those partnerships, we wouldn't get any other way," says Bento Ribeiro. "Their revenue goes straight to the bottom line - I can't give any numbers, but it definitely contributes to our results. Gol really has to thank Air France, because it took the time - and a considerable workload - to see whether it was even possible. Other airlines were much more conservative."
Gol was cautious too, restricting its deals to the "low-hanging fruit" of one-way codeshares. "It is easy to do it all one-way, but that doesn't mean we'll never have the ability to market other airlines. It brings more complexity in terms of fare structures and workload, so, if we ever started doing that, we would start with just three or four [destinations]."

Bento Ribeiro says the jump from interlines to codeshares was "not much more complex, operationally". Gol was already listed on the global distribution systems and offered connections on its own network, meaning most of the work was IT-related. Gol now uses Navitaire's New Skies platform and is satisfied with it. "We don't have any plan move away from it. For our business, it fulfils our needs."
Gol revisited every aspect of its operation before its feeder debut in 2009. This revealed that its staff had never seen paper tickets before and its bag tags were not 100% IATA-compliant. "I would advise anyone considering such as move to do very careful planning," says Bento Ribeiro. "This is not something you can turn on one day and have working the next. You need to work closely with your airline partner to make sure you understand one another's expectations. You need to agree on every point, to avoid misunderstanding or unfulfilled expectations, and communicate well with your employees so they understand what to do in every situation." He also recommends "very careful and transparent" dialogue with investors. "Our only concern was making sure our investors knew we were adding to our business and not changing it."
Gol's key motivation was to increase its passenger numbers. "Low-cost carriers all over the world are evolving. They realise that to grow, you must cater for different sections of the market. If they only cater for cost-sensitive leisure customers, at a certain point they will reach their fill of that and have to go for another segment," says Bento Ribeiro. Seabury senior vice-president Geoffrey Weston agrees: "As the low-cost market shakes out, everyone is focusing on segmentation, putting even more pressure on network carriers."
Although codeshares are not hugely different from interline deals, passengers are reassured by familiar branding, he says. "When you carry another code, like Delta's, customers know what degree of service they are going to get. They know it has been audited as safe and secure. This increases customer confidence and customer volumes."

Long-haul players seeking feed in Brazil have a limited choice - two airlines control 80% of the market - but Bento Ribeiro believes that, beyond his own market, low-cost and network partnerships are a hot topic. "This is something virtually every long-haul carrier these days is trying to figure out. The big issue is that not all low-cost carriers want to do it, but I do think this is a trend." JetBlue director, alliances and partnerships Scott Resnick agrees, saying that low-cost to traditional airline feed is "definitely" something to watch. "This is new area for us, but it has growing importance within JetBlue."

ATTRACTING A MATE
This is hardly a surprise. JetBlue is quite the sought-after partner, thanks to its New York JFK hub, even attracting an equity investment from Star Alliance heavyweight Lufthansa. But this did not stop it sealing an interline deal with Lufthansa's oneworld rival American Airlines. "Lufthansa is a good partner, but we don't want to be tied down to any alliance or partnership. Our obligation to our shareholders is to find partners that deliver the most value," says Resnick.
Resnick dismisses concerns about the risk of a product divide as passengers transition from traditional carriers to low-cost players. "It's not as important as it once was. Although we are an all-coach carrier, we make sure we deliver a premium experience that happens to be coach, but is consistent with legacy airlines. Passengers are looking for good connections, which are seamless and on time with friendly staff." After pursuing an organic growth strategy, JetBlue was looking to swell its passenger numbers. Resnick says it was "hard to look beyond the opportunity" of connecting traffic, although costs remained a prime concern. "We don't disclose the specific results of our ­partnerships, but we are really pleased and encouraged by how they are performing, contributing to our growth and ramp-up. We are happy with what we have seen so far."
JetBlue codeshares with Cape Air and Lufthansa on selected routes and has interline deals with Aer Lingus, American Airlines, El Al, Emirates and South African Airlines. "We will add about another six this year," says Resnick. "I'm not sure what the maximum is, but most airlines have more than 100 interline partners; we have seven. I don't envision 100-200. That's just not the right model for us."

JetBlue recently invested $50 million in its transition to Sabre, but its earliest deals were done with a "less robust" reservations platform, which meant it needed to work more closely with its first three partners. "Technology cannot be understated in this field. Our cutover to Sabre has accomplished many, many benefits beyond partnerships. What we are doing today would not have been possible before, so we have no regrets."
Resnick believes technology has a big part to play in reducing the complexity and cost implications of low-cost to traditional airline tie-ups. "I suspect we will see this as a trend see among low-cost carriers. There is definitely space and room in the industry for low-cost technology to make this easier."
Today JetBlue's interline fares are only available for sale via its partners' websites and through travel agencies, but the airline is looking to add this functionality to its own website. "We are excited about this, which is something we are working on actively now. It will be the first half of this year."

Unlike Gol, JetBlue prefers interlines to codeshares as they deliver the majority of the value, without the extra complexity. "What does the code really bring, other than complexity?" asks Resnick. "If you end up being the marketing carrier, you have a big [cost] lift in having to file fares in partners' markets. We have invested a lot in our brand. We want to be transparent about who we work with." He has reason to be cautious. Late last year, Jet-Blue faced a hefty fine from the US Department of Transportation because its call-centre staff failed to specify when flights were operated by Cape Air under codeshare. "That was an important lesson for us to learn," says Resnick. "We have taken it very seriously."

Then there is the question of airport preference. Dirk Albrecht, partner in charge of Roland Berger's Aviation Practice, believes the mega-hub or point-to-point debate is "projecting itself onto the short-haul market more than long-haul at the moment". Low-cost carriers favour cheaper, uncongested airports, while network carriers want mega-hubs. This is just one more element that would have to be resolved for the two sides to join forces.

But a solution might be needed sooner rather than later. Roland Berger's report "Future scenarios for the European airline industry" questions whether low-cost airlines will operate all intra-European flights by 2015.They already dominate short-haul, making disconnect a major question for legacy airlines, says Albrecht. "I don't think they can avoid this situation, because they are already in the middle of it, so it's a more a case of what they can do to alleviate it," he says.

In the absence of a coherent solution from the airlines, passengers are becoming more savvy. "Those passengers who know how to connect will connect anyway," says Chris Tarry, principal of aviation consultancy CTAIRA. He adds that if just two or three passengers per flight transferred between easyJet and Virgin Atlantic at Gatwick, it would create a feasible feeder operation. This has not escaped Virgin's attention. Last May, Julie Southern, then Virgin Atlantic chief commercial and financial officer, said: "We do talk [with easyJet] about it periodically and we already have quite a lot of self-connecting traffic. The challenge is we have fundamentally different business models. EasyJet is not willing to put complexity into its model."

OVERLAY OPENINGS
Tarry says this reluctance creates openings for overlay services, such as transfer agents, and new ancillaries like connecting insurance. "The easier you make it for the travelling public, the more likely they are to take it up." Indeed, in an ironic echo of the travel agency days, companies such as Icelandic technology firm Dohop have stepped in to encourage passengers down the self-connecting route.
Airports have also emerged as unlikely connections facilitators, lured in by the appeal of increasing their airline and passenger numbers. But while airports may have a link role to play, a senior airline source observes that "eight out of ten people don't know who airport operators like BAA are", so they would need to invest in a consumer-facing brand.

Despite this reservation, the source believes low-cost and network carrier connections have a future. He flags the potential of a tie-up between low-cost goliaths like easyJet and Southwest, with the transatlantic leg served by a new joint-venture long-haul carrier or an existing player like Virgin Atlantic. "This is not too remote from reality," he says.



http://www.flightglobal.com/articles/2011/02/22/353510/focus-is-the-hub-and-spoke-model-broken.html

Friday, April 22, 2011

Government Adds New Rules to Airlines: the winners and losers

he US Department of Transportation announced more regulation on the airline business this week and it has me a bit confused. The airline industry is already one of the most regulated industries in the US and some of these new rules just seem silly. Let’s take a look at them one by one:


Lost Bag Means Bag Fee Refund
I actually like the concept of this — it makes sense to me. If I am paying an airline money to handle my bag, it makes sense that I be refunded that fee if the bag is lost at no fault of my own. However, I am not to keen on the government forcing airlines to do this.


Tarmac Delay Rule to Include International Flights
Even though I love flying, I hate being stuck on the tarmac. I can sit on a plane for 15 hours while flying and be fine since I am making progress. However just sitting on the tarmac going no where just bites. The DOT already has regulated domestic flights cannot be sitting on the tarmac for more than three hours and now extends that to international flights. I am already not a fan of the domestic three hour tarmac rule and even more against international flights.
Not all airports can handle international flights the same. If a flight needs to be diverted to an airport that normally doesn’t handle international flights, it is going to take time to get the proper personnel there.
Now that airlines could face huge fines with international flights to the US, they will be more likely to cancel them. Unlike many domestic flights, which have multiple flights per day, many international flights will only have a few flights per week. That means you could be stranded in another country for days versus being stranded on the tarmac in the US for a few hours.

More Money for Bumped Passengers
Over booking flights always makes sense on paper, but is super annoying when you are the person that gets bumped.
When an airline knows that on average there will be a certain percentage of people that won’t show up for a flight, so they oversell, that makes good business sense. Good business sense doesn’t always means good customer service. The fees will be increased from $400 to $650 for short delays and $800 to $1,300 for longer ones.
It does annoy me that many airlines do not seem to do the right thing when it comes to bumping passengers and quite a few have been fined. Out of all the rules imposed by the DOT, this is the one actually angers me the least.


Disclose All Fees
This seems to duplicate what airlines already do. Maybe I have missed something, but every airline I have ever booked with clearly states on their website what they charge for. Sure some might be a little more tricky than others, but many businesses operate the same way. Have you ever tried to buy a car and get additional fees? Of course.
What is really bothersome is the government is looking to regulate how airlines show their fees. Why does the government feel the need to force airlines to do this, but not other industries?

Add Taxes and Government Fees to Advertised Fares
This one makes the least sense. What other industry is required by the government to include taxes and government fees to their advertised prices?
Most states have tax and people know they will pay tax. Can I walk into a dollar store with $1 and buy something? Nope, where I live I will need $1.09 and I know that. I think this goes to show that the airline business is treated unfairly and “consumer protection” groups are going too far to discriminate against airlines. I just wish the government wouldn’t play along.


http://www.airlinereporter.com/2011/04/government-adds-new-rules-to-airlines-the-winners-and-losers/

Check This: Traveler Sentiment Falls Amid Airline Fee Free-For-All

March 24, 2011

When it comes to air travel, U.S. travelers increasingly feel like they are being taken for a ride, according to a new PhoCusWright report. While traveler attitudes toward airlines are lukewarm overall, consumers report feeling worse about their airline experiences versus a few years ago.

Heat from the Middle Seat: The U.S. Consumer Perspective on Air Travel reveals that less than half of U.S. air travelers feel positive about their airline experiences. A quarter of fliers feel negatively, while three in 10 are neutral. The results translate to an average score of 3.29 on a scale of 1 to 5.

"Fliers are essentially giving airlines a grade of C+, which is barely above satisfactory," said Carroll Rheem, director, research. "But even more concerning for airlines is that their most valuable customers – business travelers and those with higher annual household incomes – are even less happy than the average."

Both business travelers and affluent travelers (i.e., those with an annual household income of US$100,000 or more) are less likely to have positive sentiments toward their flying experiences and more likely to have negative sentiments. The trend is particularly pronounced for affluent travelers, who are nearly twice as likely as travelers with annual household incomes of $50,000 to have slightly or very negative sentiments.

Consumer attitudes towards their air travel experiences have soured over the same period that airlines have added baggage fees and other new charges. Thirty-eight percent of leisure-only U.S. travelers feel slightly or substantially worse about their airline experiences compared to a few years ago, while just 13% feel slightly or substantially better. Four in ten business travelers feel their experiences have gotten worse.

In addition to checked baggage fees, airlines are aiming to increase sales of optional services like preferred seating and priority boarding. These new products and packages represent a tremendous opportunity for airlines. However, the decline in traveler satisfaction could limit their ability to fully realize that opportunity.

"Consumers are inherently reluctant to buy more services from companies they feel are taking advantage of them – and unfortunately, many feel that way about airlines today," said Rheem. "Airlines have therefore put a ceiling of their own creation on the potential success of optional services. If they focus on repairing relationships with their passengers, airlines have the ability to break that ceiling. Whether or not they have the inclination remains to be seen."

Heat from the Middle Seat: The U.S. Consumer Perspective on Air Travel provides insight into key issues that shape travelers' relationships with airlines, and analyzes how those relationships impact the leisure air travel landscape. The report studies air shopping and booking behavior among U.S. travelers, measures consumer sentiment toward airlines, and examines the factors impacting traveler loyalty. Key topics include:
  • The role of intermediaries in the air shopping process
  • Traveler interest in ancillary products
  • Traveler attitudes towards airlines, and trends over time
  • Attitudes and behaviors of airlines' most valuable customers, including business travelers and those with high annual travel spend
  • Incidence of behavioral loyalty toward airlines, impact on booking channel and loyalty drivers
This report, a derivative of PhoCusWright's Consumer Travel Report Third Edition (forthcoming), is essential reading for travel companies throughout the air distribution chain. As airlines seek to minimize distribution costs and boost earnings with new, bundled services, the consumer perspective remains a crucial – but often overlooked – success factor. Heat from the Middle Seat: The U.S. Consumer Perspective on Air Travel (US$695) tracks the most important traveler trends impacting air travel sales and distribution.


http://www.phocuswright.com/library/fyi/1585

Study shows increase in negative sentiments toward airlines

By Johanna Jainchill
 
Less than half of U.S. air travelers feel positive about their airline experiences, while a quarter of U.S. fliers feel negative, according to a new report from PhoCusWright.

The report, "Heat from the Middle Seat: The U.S. Consumer Perspective in Air Travel," finds that consumers feel worse about their airline experiences now versus a few years ago, coinciding with the same period that airlines have added baggage fees and other charges.

PhoCusWright found that 38% percent of leisure-only U.S. travelers feel slightly or substantially worse about their airline experiences compared to a few years ago, while just 13% feel slightly or substantially better. Among business travelers, 40% feel their experiences have gotten worse.

"Fliers are essentially giving airlines a grade of C+, which is barely above satisfactory," said Carroll Rheem, PhoCusWright director of research. "But even more concerning for airlines is that their most valuable customers — business travelers and those with higher annual household incomes — are even less happy than the average."

The report found that affluent travelers (those with an annual household income of $100,000 or more) are nearly twice as likely as less affluent travelers (those with annual household incomes of $50,000) to have slightly or very negative sentiments.

In addition, both business travelers and affluent travelers are less likely to have positive sentiments toward their flying experiences and more likely to have negative sentiments, the report found.

PhoCusWright said that in addition to baggage fees, airlines are aiming to increase sales of optional services like preferred seating and priority boarding.

Those fees represent "a tremendous opportunity for airlines," PhoCusWright said, but one that could be difficult to realize with the decline in traveler satisfaction.

"Consumers are inherently reluctant to buy more services from companies they feel are taking advantage of them — and unfortunately, many feel that way about airlines today," Rheem said.

"Airlines have therefore put a ceiling of their own creation on the potential success of optional services. If they focus on repairing relationships with their passengers, airlines have the ability to break that ceiling. Whether or not they have the inclination remains to be seen."


http://www.travelweekly.com/Travel-News/Travel-Agent-Issues/Study-shows-increase-in-negative-sentiments-toward-airlines/

Saturday, April 16, 2011

ICAO CAPSCA:

Contains materials like:
  • Convention Articles, Assembly Resolutions, Council Decisions and Declarations & Press Releases
  • SARPs & Guidelines
  • Forms 



http://www.capsca.org/CAPSCARefs.html

Friday, April 8, 2011

TTG Asia: Taking off in clear skies

The gloom and doom is over as ASEAN flag carriers grow revenue and spread their wings this year