Posts Tagged business travel
More unbundling unbundling
Posted by murray in Latest News on July 7th, 2010
We are not really unbundling airfares at all, are we? Let’s face it, what it boils down to, is increasingly frenetic attempts to milk more money from long suffering cattle class passengers. No, really (say airlines) we are giving people the choice.
Are they? I want to travel; from A to B – but in first class. So, how much has, say, my pushing £10,000 fare across the pond been “unbundled”? I don’t have any bags, so the 3 pc allowance can be discounted – No, it can’t, say the airlines. I don’t want any food, so that can go as well. Erm… No, again, says the airline. I don’t drink… Nope. No allowance for that. Okay – Now, Here’s a real killer – I don’t need the lounges or the shower on arrival or the extra special check-in or the…. No, no, no say the airline. Actually, the same applies in business class and, where appropriate, in Premium Economy.
So, tell me, Why have others got the “choice” whereas I am stuck with having to pay for all this stuff I don’t want or need – Why can’t I get a cheaper first or business class fare? Well, you see, (says Mr Airline) we are basically making you pay something towards that lot down the back so we have to make it worth your while. And as you have clearly more money than sense, Mr My-Company-is-Paying-The Bill, what we are offering does not really cost all that much anyway, as we charge you a going rate….
My point is this. If unbundling is really a concept airlines wish to pursue, then all passengers should have the “right” to have an unbundled fare. Just unbundling the Y cabin, really supports the premise that it is all about trying to claw back some of the money lost, in a despotic attempt to offer fares that are hoplessly out of kilter with legacy airlines air travel costs, rather than deal with the real cost problems inherent in their arcane structures.
There are other issues as well. Unbundling works for low cost carriers because they operate short haul point to point stuff, aimed mainly at leisure travellers and the real budget end of the air travel spectrum. When we move into the medium and long haul arenas, it’s another ball game. Especially when we stray beyond simple there-and-back stuff.
One of the big features of present medium and long haul arrangements is that the rules (perhaps I should say “conventions”) are pretty much universal. So, I can go from Zurich to Riyadh to Dubai to Karachi and back to Zurich in the knowledge that, having bought my ticket and established at my starting point what I am taking with me and what I get is all included, I can be sure that the same conventions will apply throughout my trip. If things get unbundled without taking present conventions in mind, things get a bit tricky. So leg 1: Luggage Okay, but have to pay for food. Leg 2: Food included but have to pay for baggage; Leg 3: No luggage or food included… and so on. We also find another issue: What does my ticket include? Would the ticket selling airline have to tell me what is and what is not included – and would I be able to take it all in without a) having a laughing fit and start shouting “You can’t be serious” down the line – or b) simply give them the address of a good pshyco-analyst? Or do we find ourselves in the same hoplessley banal situation similar to the UK’s railways, whereby if I walk into my local railway station and ask for a ticket from Gerrards Cross to Leeds, I will be told that I can buy a ticket to Marylebone and then would have to buy another ticket at Euston – so, in airline terms, the carrier from Zurich would say “I can sell you a ticket to Riyadh and then you will have to buy another one there”.
It would not take long for anyone to work out what a devastating affect this would have on the practicality of global air travel, not to mention the cost of buying one way, point to point fares.
… just thought I would throw this in!
What is really useful …. to a travel agent…!
Posted by murray in Latest News on July 6th, 2010
So, we are, what? 10 years in? 20 years in? to the internet, with all it’s developments. Every five minutes, we are told about this or that “new” internet “tool” and how each and everyone of them is going to “revolutionise” travel. Well, do they? What has really proved useful to the average agent-in-the-street? I can’t speak for everyone, of course, but I will tell you what I find invaluable on a day to day basis.
Needless to say, I cannot live without my GDS. I am not going to debate the pros and cons of each, but you need one. Further, you need to be able to work it and by that, I mean by using the “native” or as some would say “cryptic” entries. Point and click is a waste of time. It has been tried but never really caught on and as long as you know your entries, working using the native language is very much faster.
What else? Google Earth is essential. Now, when I am asked for a hotel, no matter where it is in the world, I can ask the client where the meeting is and then say “Yes, I have a hotel booked. You come out the hotel, turn left and it’s about 300 yards down on the left hand side” – And I can do that for any address, anywhere in the world.
Expedia is next. “Expedia is a booking system” I hear you cry. Well, it is – but have you ever looked at a fare on your GDS and thought “That doesn’t look right” or “I wonder if I have missed a very much cheaper way of doing this itinerary”. Now, as we all know, you either have contracts for CAT45 etc fares, or you don’t. So, if in doubt, I will run the itinerary through Expedia. You have to be a bit careful with connections and times but it means that you can be sure your fare is right and that you have not missed something. Further, it allows you to weigh up options – an Expedia fare may be cheaper, but is it worthwhile making two changes (say) instead of one, to save maybe £30 on a £800 fare.
Tripadvisor has its uses. We all tend to book the big groups, mainly because we know, then, that we will get a standard. If we book Leading Hotels of the World, it will be good. Hilton, NH, Marriott or Ramada are safe for middle management, Intercontinental for the boss and Mercure, Novotel or Ibis for the clients lesser (but nonetheless important), troops. Trouble is, the group hotels, the “safe bets” can be full and then we may be working in the unknown – and this is where Tripadvisor comes in.
Wegolo is an invaluable asset to know, as well. This is almost like having a GDS for the low fare carriers – and it’s global, too. Odd low cost types pop up on the GDS system but this can be more of an irritation than anything else – How many of us have managed to do a USA connection from, say British Airways to JetBlue! Worse, airlines such as Aer Lingus who try to get the best of both worlds and wind up falling in between the two. Airlines should be either a) On or b)Off GDS systems. Wegolo lets you check (and book) on low cost carriers that may exists practically anywhere in the world – without having to, effectively, remember all sorts of airline names – and not to mention, remember their routes as well.
I should also mention seatguru. I don’t use seatguru that often but GDS seat maps are, though accurate, not as clear as seatguru can be. Especially when one has a very particular client. Also useful for seat pitches and the like.
Apart from the obvious email, the most useful mobile communication tool is the humble SMS text message. Iphone apps have their uses, but no internet access, no app. The SMS text message gets through, no matter what. It lurks in the ether and when it sees a chance – zip! – it’s there. This I know from my experience trying to communciate with my brother who was caught up in 9/11. Mobile phone calls were neigh on impossible – but a text message got through, each and every time. If there is a disaster, communication lines get clogged – fast. Whereas the iphone-dependent person cannot get through, the SMS person can get through to their agent. A big plus, when the chips are down. (And so is having an agent). The same applied, incidently, during the more recent volcanic ash saga.
Do you know any other really useful tools?
The Hidden Mysteries…
Posted by murray in Latest News on April 17th, 2010
We have not grasped this at all. Nothing is moving which operates over the height of, say, a double decker bus. If, that is, you can get on one. It is not a question of a later flight, or even tomorrow or even the day after tomorrow. Europe is grounded – and we are all going to stay grounded for a while yet. I have never come across this – even after the calamity of New York, there was something that could be done, we knew, at least, that in a few days time something could be done. Now, we don’t.
There is a great mass of humantity which stretches across the continent of Europe, indeed, of our globe who all wish to be somewhere else and that somewhere else, is home. We cannot, at this stage, even think about starting a new venture.
So what will we discover? Air travel, at best, for anyone who travels cattle class, is a miserable experience. Even before you start, you are faced with long lists of what you cannot do, followed by long queues, followed by more people telling what you cannot do, followed by being confined to your seat, followed by more queues, followed by people assuming that you are hard, psychotic terrorist until you can prove otherwise, followed by…… To get home, you have to do it all again. America is wondering why their tourism is down, airlines wonder the same.
I should add that it is different for the budget airlines – they do exactly what they say on the tin, and no more – we have come to accept that – so for them the issue is not as dire.
Coupled with this, air travel has now demonstrated it’s vulnerabilities. Air travel was always vulnerable to extremes of weather; now it also is vulnerable through strike action, it is vulnerable through acts of terror – now it has shown that it is vulnerable through it’s own technology. Aircraft engines are designed to fly at x thousand feet or they use too much petrol. They are not designed to cope with ash in the high atmosphere – although the famous case of the Jumbo came through, having gone right into an ash cloud – as technology advances, it becomes more sensitive – more fickle, even – we do not realise this until an event such as this occurs – and this is a great failing of technology – it may be clever, but it is not robust. If British Airways had kept a few Vickers Viscounts knocking about the place, many may be able to get home. Think of cars, a battery failure on a modern car means you are stuck – in the old days, you just got out the starting handle.
The increasingly vulnerable nature of air travel coupled with the unpleasant general experience is a poisonous brew. The vulnerabilities may, in some measure, be addressed. The experience – the “holistic travel experience” can be easily dealt with. Airlines, however, choose not to. Indeed, with things like unbundling of fares, they are intent on making that experience even worse.
Then there is the matter of choice. People can choose which airline to fly on and all airlines compete. What may have been missed, is that people may choose simply not to travel, unless absolutely necessary. Worse, it may be the premium traffic that decides not to travel. Not because of cost (though that is an important aspect) simply because it is all simply too much like hard work. What is dangerous for airlines, is that firms may discover that they can manage very well without having people flitting about the place. After all, global business managed to get on before the advent of mass air travel. Firms may decide that a person based at an outpost, with greater executive powers, is a better way of doing things than someone having to go there all the time. An example of this (on a different level, of course!) was British “Gunboat Diplomacy” where decisions were made and actions taken by young naval officers without the benefit of even being able to telephone a higher authority. It actually worked rather well (at the time).
Then we will have the knock on – and for the airline business, this just adds to the cost. Premium traffic can just decide not to travel. Premium traffic has the financial ability to hole up in a nice, comfortable hotel and wait until it is all over, premium traffic has satphones, communications technology, a yacht that it may be able to call on – even a mate with a light aircraft. What airlines have to deal with, when the skies re-open, is us normal people. People on cheap tickets, away with the family, on charter flights, who now have maxed out credit cards, no cash and are sleeping at terminals. Premium traffic does not want to travel in amongst all this – so they wait. Revenue not only falls, but airlines then have to spend money flying with aircraft full of people whom they may even have to pay, rather, compensate, for being on board.
This is not the end, not even the begining of the end. In realising how vulnerable air travel is and by realising how miserable air travel is for many people – and above all, by doing something about those aspects – it may just be the end of the beginning.
…all getting very silly…
Posted by murray in Latest News on April 13th, 2010
Image: Daniel St.Pierre / FreeDigitalPhotos.net
Usually, with the BTC stuff, I have to read it several times before any lightbulbs start to flicker. It is all good stuff, but being a simple-minded sort of chap, it takes a while to understand the thrust of what they are on about.
A typical BTC missive arrived with a thud into my email in box. Another weighty tome, a bit like dropping the Encylopedia Britannica onto the desk and saying “precis this by this afternoon”. This time, I followed through about this bloke from Farelogix, Jim Davidson, but not of the “nick, nick” variety, who seems to have a bit of a bee in his bonnet about, well, about an awful lot really.
I have read some of the Farelogix press releases. They do not make sense. For example, one dated Feb 2010 talks about “…consumers generally make their reservations through a travel agency… where overall cost is a primary requirement” In the next breath we have “…Many travelers would welcome access to a new world of convenience and add-on choices available directly from their mobile device prior to departure.” Erm, Yes. If cost is a major concern, they are hardly likely to want to add stuff on, are they? Another statement runs “..Airlines can offer individual travelers a variety of add-on services, such as seat upgrades, priority boarding…” Wow! Farelogix has found the holy grail – have their mobile service and Hey! Presto! your $9 ticket will get you a seat in first class – and you join the front of the queue.
Mobile technology has it’s place and will become more popular – but I think the prophets of mobile technology need to take a reality check. You see, according to them, we agents should all have disappeared just after Graham Alexander Bell said “Look, these tin cans and this piece of string – could we make communication better?” We have had the telephone – and we are still here. We have had the fax machine – and we are still here, the mobile phone, the internet and the internet on mobile phones – and we are still here. We have had our commission taken away, so clients pay us a fee – and we are still here. Why? Simple – because in the final analysis, man is a social animal – we like to communicate and I mean really communicate. As in: talk a bit about the weather, what the last trip was like, the bloke/ bird that we sat next to (depending on orientation) a bit of banter, a laugh or as the Irish say, for the craick…..
For all Farelogix may go one about how their kit may be the best thing since sliced bread, that social element can never, ever, ever be replaced by any form of technology. And it is that social thing which makes us belong – and why real agents will always have a place.
Saving Money on Busines Travel – A Reprise
Posted by murray in Latest News on April 7th, 2010
Some time ago – many years ago, in fact – I wrote an article, which I included on my website about this topic. In that article I make the statement: “When you call the travel agent, or go to your online booking site, 99% of all chances to save money on travel have been lost”.
Never more so than in a recent example of what I mean by this. Over a good few weeks, one of my clients worked with me to assemble a 12 sector itinerary, for an engineer, that covered ground in the Far East, including Bangkok, Singapore and a few other places. After all this was done and dusted, a few days before he was due to depart, a request came through to assemble an itinerary for London to Port Moresby, Suva and Honararia. As you know, all Pacific rim destinations.
You all know what is coming – “Why?”
The client company had an engineer, who is already in Singapore (a jumping off point for flights to Port Moresby) yet they want to send another engineer out from London, who, in effect, can have a drink with his mate in Singapore on the way through – rather than divert the guy already out there. Apart from cost, there is an engineer who is going to have to do a cattle class 14 hour flight (just to get to Singapore) and a goodly amount thereafter (again in cattle) – and be expected to hit the ground running after a whole day of non stop travel.
As far as cost is concerned, one could say Ah! I can get a return trip to Australia for £600 (or even £700) – a good price! No, it isn’t. In this instance £1 to fly to Australia and back is too much. Why? Because a chap is already there. No matter how many agents or booking sites the client goes to, no matter how cheap or how expensive a ticket may be – the point is that the second travel “event” should not be taking place at all. Any cost, therefore, is too much.
So, planning ahead is good way to save money – and that has nothing to do with travel agents, on line off line or any other line. In this case, it was the chap running the clients engineering department who got a sharp rap on the knuckles!
Why Airlines and IATA Need To Tread Carefully…
Posted by murray in Latest News on May 16th, 2009
Airline revenue falls, BSP revenue falls – BSP being, amongst others, the monthly income payment that airlines received from travel agents – panic sets in. So, what are we talking about? The figures do look big – BSP churns some 240 billion dollars worth a year; a fair chunk of that being from the 58,000 travel agents world wide. IATA-BSP lost, last year 85 billion in bad debts – horrors! Well, not really when you bear in mind that this represents some 0.35% of turnover (an expression used loosely). Now, airline revenue comes mainly from BSP – some 80% to be exact – which means that travel agents – online AND offline – still represent the main source of airline income, despite the increasingly despotic attempts by airlines to drive traffic away from the various agency networks.
Of this BSP income for the airlines (and about 95% of the world’s airlines are in IATA BSP – and certainly nearly all of the “legacy” carriers) 80% of the UK airline income is generated by just 140 of 1,300-ish UK IATA agents – and half of it by just 30 agents (thank you, Travel Weekly).
The knee jerk reaction of airlines is to demand that BSP (and so, agents) start paying every two weeks rather than monthly, as they do now. In other words, the airlines get less money but on a more regular basis. Failing that, in order to “stop the bad debts” (which is running at, you will recall, 0.35% of turnover) IATA BSP wish to impose bonding on everyone who looks even slightly less than gold plated. This, at a time when bonds and loans are, of course, very easy to come by.
From this, we can deduce that airlines have clearly failed the marshmallow test. Take now! And hang the consequences! Well, What are the consequences? Agents, especially, will remember British Airways arrogantly proclaiming that they “Did not owe agents a living” whilst taking away the commission paid on airline tickets. Fine, said agents, who went away and in the words used in a PhoCus Wright study promptly “….. responded strategically, tactically and most of all aggresively to adapt, survive and succeed” in other words, showed the airlines two fingers and got on with the job of selling travel.
The worm turns, agents (and remember I mean online as much as any other; even Expedia and Travelocity are agents) do not owe airlines a living, either. There is a mutual dependency – the likes of Travelocity are very good at what they do, retailing (or shall we say, distributing content) whereas airlines are supposed to be good at what they do, which is shipping people from A to B. Travelocity et alia make a profit; airlines don’t – which says an awful lot about who actually owes whom, what. Airlines (and to a greater or lesser extent IATA) still ponitificate Canute-like about what they are going to do. Actually at the moment, they can. Just. Where they are taking their eye of the ball, if they ever had it on the ball, is by not watching those BSP statistics. That 50% of their income is dependent upon 30 agents – such as AMEX -at present.
Any precipative action, such as going to two week payments may well have exceedingly uncomfortable side affects, say 80% of their income coming subsequently from 30 (or less) agents. Why is this? Simple – “Divide and Rule”. Airlines could only pontificate and rule the roost because they had a wide and diverse distribution network through many channels, they did not need to really listen to any one product distributor simply because there wasn’t one. Yet, since the demise of commission, there is – or rather there are 30 of them and as they impose more onerous restrictions that number will fall, or rather that 30 will control and ever greater share of the income pie – and that is when you really start to sweat.
You do not need to be an expert to see this all too clearly. Where do you buy your daily bread? Yes, TESCO, Sainsbury or ASDA . Where did you buy your last PC? Yes, PC World or DELL. Your last thingy for fixing that irritating squeak? Yes, B&Q, WICKS (or Halfords, depending). Take the old IBM story where arrogance spawned Microsoft. Or just take a look what has happended to the local pub, even. All these are examples of what happens when people take a short term view by people with a short term interest. Airlines are lining themselves up, very nicely, thank you, for exactly the same treatment. They will soon be told what they can sell, where they can sell it and for how much. They behave or wallop! All that valuable, say, BA, trans-atlantic traffic goes to AA or UA or VS.
Of course, airlines say that they “talk” to the agents (Talk rather than “communicate with” – of course) but to whom are they are talking? Yes, you are right, to that 30. And that 30 have their own agenda, which is, of course, to control 80% or 90% of that BSP revenue, not 50%. I do not know what the critical mass is, but it cannot be far off. So, AMEX becomes the air travel business’s answer to B&Q. If you are an airline, you do what AMEX says, or you get nothing. Up to you, of course. Yes, they can distribute themselves and will have to. What we have here, however, is a service providor, a maufacturer, trying to retail and as I say, retailers are a lot better at retailing than manufacturers. Just look down the Times Rich List. Even Old Beardie once answered the question “How do you become a millionaire?” with “Start with 10 million and open an airline”.
So, airlines need to think things through (they won’t) and so does IATA (it can’t – think, that is). IATA is a body which believes that Stalin’s way of doing things was rather soft. And Airlines, like Sir Anthony Eden, still think they rule an empire. Things have changed dramatically over the last ten years or so and will indeed continue to do so. It is just intereting to note that the very architects of that change process, those that pulled down the orginal edifice with first checking to see what still needed support, now find themselves in turbulent air whereas those they lectured about that change, the agents, have quietly and efficently got on with the job. Airlines and IATA can talk the talk, they just cannot walk the walk.
Saving Money on Travel
Posted by murray in Latest News on May 12th, 2009
Once upon a time I wrote an article on this subject and the unabridged version, for those that really want to have a go at saving money on travel, is available on my website. This is the short version to get you thinking.
Fact: The quickest and esiest way to save money on travel, is by not travelling in the first place. Recently, many firms have found out that, since they cut back on travel, they have not gone bust, the company has continued to function and life, as such, carries on. Do you really need to be there, I ask. Let’s face it, the East India Company managed to trade from Calcutta back in about 1700 and frozen to death when a trip for a meeting would have taken the best part of a year. Yet they traded, and traded very well. We talk, now, about living in a “Global Economy” – yet we have always lived in a global economy, even the Romans spent a lot of time trouble and effort keeping their trade routes open and even fought a nifty little war with the Persians over a matter of rights of access. So, don’t pretend the “global economy” is something new.
How did they manage, we wonder, without travel? Simple. They delegated. They made sure that the people in far away lands were told precisely what to do and what was expected of them and if they did not perform then they got their head chopped off. The means of motivation has changed just a tad over the years, but the principle remains the same. So, do you really need to be there?
Fact: When you call the travel agent or go to book online 99.9% of all opportunites to save money have been lost. Let me make this clear, saving money has nothing at all to do with which company you use, if you use self booking tools, have a strict policy about only travelling in economy, drink three cups of coffee before breakfast or have a policy checker living in a little office on the thrid floor whose name is Frederick. It is to do with thinking about why you are travelling, could someone else who may be going a few days later or earlier, deal with it? Will the journey you are taking produce a measurable, tangible benefit for the company? Or are you just travelling because it seems like a good idea? Believe me, I know some very senior managers who have saved a lot of money by blocking people going to, say, conferences because the only reason that the intended travellers could come up with was “Well, we ought to be there”.
Here is another thing – “We” – not just “I”. There are still companies who have to travel in multiples of 3 – or even 2 – for no other reason than “two people always go”. At the end of the day, it is not the travel that one needs to look at, it is the why that travel was generated in the first place. In my article I suggest that what you should do, is to take at random, three or four travel “events” and get whoever went to write down the net tangible benefit the company received from those events. Let’s see it in hard cash.
There are, of course, things that you must travel for, system breakdowns, for example – but even here, if there are a lot of these, the answer lies not in trying to shave off £10 from a round trip to Delhi but in looking at your kit and finding out why it breaks down so often.
Many look closely at the expenses of a trip, at systems to closely monitor those expenses. Many look at their flight costs and use all sorts of techniques to analyse their travel costs and produce reports to discuss with airlines special deals. What I say is don’t bother. It’s pointless. UNLESS you first look at the reasons behind each travel event – because unless that travel event can produce a hard nosed benefit for the company, then even £1 for a flight is £1 wasted.
Just a thought!
Off Loading Costs
Posted by murray in Latest News on May 2nd, 2009
Here we go again! As airlines run out of profit and money, the hunt is on for more bits and bob’s they can pass on, so as to keep “low” prices. It seems to me that the time has come to step back and take a deep breath.
Airline travel is not a cheap item. An Airbus costs a lot of money, so does the petrol, the crew, getting it up, getting it down, getting it loaded, off-loaded. Hell! Even parking the thing up, costs a lot more than £2.40 at the local NCP.
What we have here, is a situation where someone wants to sell a service cheaply, which inherently costs a lot of money to provide. A situation where one now wants to charge a reasonable fee for something which over the years, one has spent many thousands of Dollars telling the world (quite successfully, as it turns out) people can have for next to nothing. And people wonder why there is a problem.
The latest bette noir is the GDS cost – the cost of getting the seat from the aeroplane to the client. This should be paid for by the travel agent (online or offline) and …. Whoooah! Stop there. The travel agent is not going to pay for anything. The client will pay, always has done and always will. What has come about over the years, is a price for a service whereby one has somehow managed to fool the various advertising standards people, of many countries, that the £1.00 (or $1.00) that appears on the promotional stuff is a valid figure. It isn’t. What we really have, is an industry where “transparency” is not a word which features in their dictionary. Air fares are not transparent. Exactly the opposite. Many charges appear after the “fare” and are buried under various codes which are meaningless to the travelling public.
But let us go back further. What are airlines about? What do they really want to do? The so-called “low cost” airlines are about simple A to B stuff, 2 hours or less, you get exactly what it says on the tin and no more. Fair enough. They do not need the GDS (that said, it is getting increasingly difficult to track them down. From a business travel agent’s point of view, sites such as “Wegolo” are proving increasingly invaluable as a “low cost GDS”). For legacy airlines, it is a different picture and these airlines need to decide what business they are in and if they, indeed, wish to continue in it.
A lot of business travel is not about going from A to B. It is about going from A to B and C, D and very often E as well. It does not all start from the home country and involves bits of the world which involve many agents grasping for their atlas (or, in modern terms, Google Earth). Here, the GDS is invaluable. This is where it does it’s job. The thing is, many of these flights involve going from airline to airline, changes of flight at various points en route and lot of general fuss and what-not. The key elements in being able to do this are: 1) The ability to interline and 2) The relevance of the “minimum connecting time” or MCT. The former allows one to mix airlines on one ticket and the latter, to regulate the time one needs to make a change of airline. If all airlines go “me only” (that is, come off the GDS and go it alone on their own websites), the all flights become just, what is known as, “point to point”. So, if you want to go from, say, Cairo to Dublin via Larnaca (’cos that is where the connection is) in old money, you get, on one ticket: Cairo to Larnaca to Dublin. The airline would interline (hence, on one ticket) and the MCT applies so you can be booked thorough and so, you make your “1 hour and a bit” Larnaca connection – most importantly, if the connection goes all pear shaped, you are able to get on the next available connection without having to worry.
BUT – in new money, that does not happen. You can only buy a ticket Cairo to Larnanca and then have to buy another ticket Larnaca to Dublin. Now, the MCT does NOT apply. You have to arrive at Larnaca, collect your bags, go through security, walk around to departures, re-check-in… and how long should you allow? If you miss your connection flight, tough. Buy another ticket.
Even more (airline) stupidity: This interline traffic is valuable stuff. Since, secretly, airlines have been dumping cheaper interline fares what is left becomes worthwhile traffic. You must have a GDS to book it and invariably (now! here’s the rub!) you need an agent to book your travel. Many airline reservation department, these days, are staffed by pretty clueless types from all sorts of places whose training is very precise (no “holistic” travel training) and if what you want does not drop in front of them straight away, they just can’t cope. Indeed, getting them to tell you their name can be a major thing…. sometimes.
The GDS, therefore, contributes a major and vital element, not only in airline traffic but generally, in making the whole concept of business travel possible. The GDS systems have been fiddled with by the EEC and various other bodies who are intent on making a very clever and practical system, which works into a cumbersome and pedantic system that doesn’t. It is not a question of viewing the GDS as a cost to be moved, the GDS is a lifeline which should be nurtured and developed (and in the case of Amadeus, just made to ruddy well work sensibly) – it is a cost that should be in the price of the ticket, because without the GDS, advanced air travel would simply not work.
Credit Crunch Travel
Posted by murray in Latest News on April 15th, 2009
A Victorian 747
Saving money has nothing at all to do with travel agents, online or offline, neither has it anything to do with negotiating contracts with airlines or fee levels with TMC’s. It has nothing to do with taking a later plane or going around the houses to get from A to B. It has everything to do with your company culture and how you view the need to travel. I have heard quite a few senior company officers talking about how little they have travelled this year, compared to last; “Do you know, this time last year, I had already made 20 trips, this year I have only made 3!” They say, proudly. To which I reply “Really? And your company has not gone bust, nor has it fallen apart at the seams?”
What this shows, is that we focus too much on the cost of travel and not nearly enough on the reason for travel. I am not, for a moment, suggesting that no-one needs to go anywhere – what I am saying is that it is time to seriously think about why one is travelling in the first place, ever bearing in mind the maxim “The quickest way to save money on travel, is not to travel in the first place”.
Why do we need to travel so much? Let’s face it, the “global economy” is not new. The East India Company, Tea Clippers, the Chinese trips of Zhou Man and Yang Qing – hell!- even the Romans fought a war with the Persians whilst trying to open new trade routes to the Far East. At that time, one could not consider simply popping over from Amsterdam to Peking for a meeting – such would take many months and was fraught with many dangers – and would take many months to get back home again.
Yet today, we have instant global communications, we have video conferencing, we have means of communications that makes one wonder, if such were available to the ancients, what would they have achieved!? The Victorians, who forged the way in many respects to introduce us to mass travel and who laid the groundings of our modern internet, traded throughout the world without the need to “pop over for a meeting” yet today, in many corporations, we do not seem to be able to manage a weeks’ work without having to criss cross the globe.
The ability and feeling of need, to travel became ingrained in our business psyche somewhere along the way. Certainly, in the New World, there is the view that “ability to be there” somehow equates with showing dynamic ability, the “can do” approach – Why? What needs to travel is knowledge, know how, management skills – and that does not always require the human form to travel with it. Perhaps the biggest reason for excessive travel is the failure to delegate; the need to excercise immediate control, in turn, the failure to place the right person in the right place to begin with and then to empower them.
The problem is not technology, the problem is that we have not really learnt how to use it and how to incorporate the use of technology into the way we do business. The need to be there, physically, is not as important as we think it is. It is here, at such a fundamental level where we start to save money on travel – asking ourselves – Why?
Recession – But Now What?
Posted by murray in Latest News on March 18th, 2009
One thing worries me more than this recession. It is what is going to happen afterwards. Okay, so we have VAT at 15%, interest rates really low and the banks being told to lend, lend, lend. We still have Her Majesty’s Grateful Government doing for the jobs market what Arthur Scargill did for mining and we have a raft of, er… measures to help us which on the face of it seem like a good idea but are, when you look at them, totally useless. Take this car thing, for example. If you have a 9 year old car, you can take it to a Government disposal place and get a £2,000 voucher off a new or a one year old car. Look, if I drive around in a 9 year old car, I sure as hell can’t afford a new one (or a year old one) – that’s why my present (faithful) Rover 216 is an “M” reg.
But why should I be more worried about next year when, hopefully, we shall start coming out of the recession? The bankers pissed all their own money up the wall, basically, so HMG gave them some more of our money and told them “You are very naughty. Now, take this taxpayers money and use it to pay your pension funds… er… we mean lend it to the Great British Public” This assumes that we want to borrow. But do we?
What is going to happen when this is over? Interest rates go to – what? 10%? 15%? VAT should go back to 17.5% but what happens of it suddenly goes to 20% (or worse?) What will happen to tax – especially if there is an election, out go Mr Brown’s lot, in comes Mr Cameron’s and says that we will all have to pay 60% income tax and neatly manages to blame it all on the last lot?
Spending, keeping the money flowing, is important. Now, we have not got it to spend it and no-one in their right mind will borrow it, to spend it because we do not know what is 12 months down the line – what horrors may await us. Capital expenditure (CapEx) is not a one year thing. For most of us it is a 3 or 5 year thing. We may have a good low rate now, but greater damage will be done if £300 a month suddenly becomes £1,300 a month – this could force more business onto the rocks than the recession itself.
What we need is mid-term security (3 to 5 years) not short term. If HMG cannot do this, then at least the Bank of England should give some guarantee. Business cannot get going without mid term security. Jo Public also needs to know. Rather than throwing money at the banks – arguably, good money after bad – perhaps it would have been/ would be better to give it to the small man – even if it goes into the “black” economy at least it is in the economy rather than shoreing up bank balance sheets which is all the present activities will do because, for reasons given above, people do not want to borrow. It’s a shame business has been left to Mandleson, the man who changed the Norman Tebbit Cycling Club into the Peter Mandleson Flying Club and who is really not interested in talking to anyone unless a) they have a yaucht and b) they invite him to a shindig on it.
What has all this got to do with travel? Business Travel is the first to go and may be the last to recover. As I say, the easiest way to save money in travel is not to travel in the first place and last month business travel dropped by almost one third. Business class cabins on routes where a year ago, you were lucky to get a seat (eg Singapore) are now running half empty; across the pond – pick any seat you like – Hell! No! Pick your whole cabin! Dubai? Who was it that said, “When the tide goes out, we can see who is swimming naked”? Leisure travel may not suffer as much, to begin with, because the concept of a holiday is pretty much enshrined in the British psyche – but my feeling is that “cheap” will be replaced by “best value” – though if the recession deepens and real HMG effort does not go in to putting pounds in people’s pockets rather than bank balance sheets then we have yet to see the effect that this will have on retail holiday sales – and leisure flights for that matter. Given that holidays at home cost more than a holiday overseas, there could be plenty of shocks yet to come.
Travel Agencies will suffer because the big ticket holidays will suffer. Selling travel is like playing Rugby, you score points by kicking goals but win matches by scoring tries. The goal kicking is the mickey-mouse, drossy stuff like cheap tickets and cheap holidays, the money lies in the “getting the result” : the Safari that you land or the 14 night Caribbean holiday for 6. The people that had that sort of money, lost it when Alpha-Dad Number 1’s (to be equal, or Alpha-Mum Number 1’s) hedge fund went pear-shaped. The question is, how long will it take, not just for that sort of salary to become the norm (again) but also how long before it becomes the norm AND Alpha-Dad Number 1 feels confident enough to loosen the purse strings?
