Tag Archives: amadeus

PlaneBusiness Banter Now Posted!

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We’re baaack!

Hello everyone. It’s that time again. Time for the first issue of PlaneBusiness Banter in 2011.

What topics are front and center for our first issue of the year?

Airline stocks.

Which airline stocks outperformed the group for 2010? I’ll say this — it was a great year for those who took the plunge and invested in the sector. We had four stocks we cover post gains of more than 100%, with one almost hitting a 200% return mark. The vast majority of stocks we track posted double-digit gains for the year. Only a handful ended up in the negative category.

We also talk about fourth quarter stock performance. Looking at the quarter, we had a somewhat different picture — as lo and behold — a US regional airline took top honors for the quarter. Which airline pulled off that feat?

But we are not just talking stocks.

No, we are talking a lot about American Airlines and its efforts to single-handedly dismantle the distribution system that the airlines have used since, well, American Airlines and its then subsidiary Sabre, developed the first GDS system. Many years ago.

Over the Christmas holidays, there were a number of happenings on this front. We’ll update you on those, and give you our take on what is eventually going to happen, and why we also think the timing of American’s push to put its Direct Connect system in place might have been, well, ill-timed.

Then again, throw in the planned merger of Google and ITA — and maybe it isn’t that badly timed.

I know. It’s confusing. That’s what makes it so interesting to talk about. There are way too many angles to consider — depending on whether you are an airline, a passenger, or a travel agent.

But make no mistake about it — airlines want more control over their inventory, they want to know who is buying its inventory, and they don’t want to pay a third party to facilitate the sale of that inventory.

American Airlines got its hand slapped last week by the NTSB, after someone in Tulsa apparently downloaded the contents of the flight recorder that was on the Boeing 757 that slid off the runway in Jackson Hole.

The NTSB was not happy.

Meanwhile, the airline and its flight attendants met last week with the NMB — in an attempt to get contract negotiations back on track. Both sides left unhappy.

I don’t think this union is going to be happy unless they go to a strike.

And then — there is the weather. Airlines are already putting out estimates of how much the rotten weather in December cost them. This week? Another winter storm is causing mayhem across the South and in the Northeast.

Oh, you know. We talk about all this — and more — in this week’s issue.

Subscribers can access this week’s issue here.

The Super Human IT Effort A Reservations System “Migration” Requires

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Editor’s Note: This week I welcome a previous contributor to PlaneBuzz, Frank Arciuolo. Frank has not been seen around these parts in a long time. For reasons he talks about in his latest effort. I figure he felt sorry for me after it took him two hours to read this week’s issue of PBB, and thought the environs around here had been much too quiet!

In his previous efforts in PlaneBuzz, we used a “Godzilla” rendering for his ID photo. I figured it’s time you get to see the real deal. Mud and all. Enjoy!

Hi there, Godzilla here. I know it’s been a very long time since I’ve contributed to PlaneBuzz but I’ve been preoccupied with some of the more mundane things in life – like trying to find gainful employment. My plan when I left my last job at the beginning of 2008 was to do some part time flight instruction and get a part time job as an FO on a corporate jet – I even got my CE500 type rating.However, like they did so many other people, circumstances conspired against me. Taking flying lessons is well down the list of priorities for most people now, if it makes the list at all. And right seat jobs in corporate aviation are as scarce as, well, the hair on my head.

But, I digress. Anyway, thanks to Holly for letting me fill my idle time and the pages of PlaneBuzz simultaneously.

You know the feeling an ex-airport ticket agent gets when he/she wakes up on the Wednesday before Thanksgiving, looks out the window to see dense fog – then rolls over and goes back to sleep because they are off that day? That’s the feeling I got when reading about recent events at WestJet concerning their reservations system cutover and the system cutover at JetBlue this weekend.

In my previous lives I’ve participated in about 8 reservation system cutovers; one as an airline employee and the others as an interested bystander, AKA a vendor. My advice to any IT person working at an airline that is considering switching reservations systems is to dust off the resume and start networking (the people kind). People in the reservations system business (the “biz”) often refer euphemistically to a reservations system cutover as a migration. That’s a nice word, migration. It gives one the vision of a flock of Canadian geese traveling to MIA for a nice warm winter.

However a reservations system migration, or at least the ones I’ve been involved in, does NOT resemble a migration of birds to South Beach for the winter. Picture a reservations system migration as a flock of 1 million geese leaving Canada on a Friday night. On Saturday morning nobody can find ANY geese ANYWHERE. By Saturday mid afternoon 3 million birds arrive in Tampa, but only 25% of them are actually the geese that left Canada Friday night, the rest are pigeons. By Saturday night trucks have been chartered to take ALL of the birds from TPA to MIA because nobody wants to let them out of their sight. The trucks arrive in MIA Sunday morning and are gone through manually (by IT employees) to determine which are the geese they want to keep and which are the pigeons. Sunday night the airline CEO does the math and realizes that 25% of 3 million does NOT equal the 1 million geese he had Friday night. Where are the rest of the geese? Holy crap, what’d we do with those pigeons? Resumes and bird poo simultaneously hit the mail and the fan Monday morning.

Funny story, yes, but perhaps more real than you think. Airline reservations are literally money in the bank. Moving this valuable asset from one point in cyber space to another is fraught with land mines. There are a host of technical issues that would make your eyes glaze over and I’d be happy to talk about them in detail to any other IT geeks out there, but that’s not today’s point.

Since migrating is such a gut wrenching experience where the BEST result is a zero sum gain (and the worst result is working in bird poo), don’t do it! Some cutovers are unavoidable, like the DL/NW move and whatever will eventually happen with YX/F9 and the boyz in IND. Those cases also represent mergers/acquisitions, where the party on each side of the transaction has an interest in avoiding a train wreck. Migrations that are the riskiest are the ones where an airline is changing reservations systems they may have outgrown, or perhaps for a better deal.

Traditional hosting or multi host systems are very good at high volume transactions and at communicating with Global Distribution Systems (GDS) and other systems. Because they communicate with external systems so well, traditional host systems can greatly expand an airline’s distribution reach. However, since those external systems, by design, withhold certain information from the host system (like fare basis code, form of payment, and other key customer information), the host system has difficulty figuring out of someone booking in an external system has simply reserved a seat or has actually purchased a ticket. Traditional host systems are excellent for generating large volumes of bookings and they can ensure tickets are purchased on booking within its system, but not as good as ensuring the purchase of bookings made outside its system.

The newer reservations systems are much slicker at communicating with customers within their system and with the airline’s web site, but are not very good at communicating with outside GDS and other systems. Like the traditional hosting systems, they are good at forcing the customer to purchase a ticket before ending the reservation. One big advantage they have over traditional hosting systems is that the newer systems create a database of the airline reservations. A real database allows the airline to do detailed analysis of its customers and to effectively execute Customer Relationship Marketing (CRM) to its customers based on their purchases. This type of information makes airline marketing people salivate at the possibilities for the easiest type of marketing there is – to your existing customer.

For a boutique type airline starting out that has made the decision to remain out of the GDS and its evil and expensive booking fees, the selection of a reservations system would lean towards one that allows better CRM. However if the airline grows to a point where expanding the distribution network is necessary, as is agreeing to booking fees and all the rest, they’ve chosen the wrong reservations hosting system.

It makes sense to either add the robust external communication feature to the true reservation database system, or add the relational database feature to the traditional hosting systems. The first system to truly do that will have the golden egg. However, there are immense technical challenges of taking the incredibly dense set of text files (which is really what they are) that are contained in the reservations systems of AA, UA, DL, etc. and indexing them into a relational database. That would seem to argue for a solution that “bolts on” to the big hosting system and allows both systems to do what they do best.  

Until this happens, try to be on vacation the weekend your airline reservations migrate!

And TheBeat Goes On…


Hello earthlings. How is everyone today?

I myself am just peachy. I returned yesterday from a nice two day jaunt to Austin, TX., where I was honored to have been asked to give the luncheon keynote presentation at TheBeat Live Conference.

If you are involved in corporate travel, if you need to interact with a GDS system on a regular basis, if corporate airline contracts make you dizzy with frustration, if the thought of migrating your airline’s computer system to a new version keeps you up at night — or any combination of the above — TheBeat should be required reading for you. (This link takes you to their blog, the publication is subscription only, just like PlaneBusiness Banter.

TheBeat was begun several years ago by Jay Campbell, who was a reporter for years with Business Travel News. Jay and I go way back. Waaaaay back.

The cool thing about Jay and David Jonas and Mary Ann McNulty and the rest of the gang who now work under the Promedia umbrella is that they have the same irreverent attitude towards this lovely and oh-so-entertaining industry as I do.

As a result, a gathering of Beat subscribers is very much like what a gathering of the PlaneBusiness Banter subscriber base would be. Lots of opinions, lots of in-your-face discussions, and a really worthwhile way to spend a couple of days.

So — what was the topic of my presentation this year? “Liquidity, Leverage and Labor.” I think that is pretty much self-explanatory.

What is one thing that I learned from attending this year’s conference? Amadeus is not sparing any expense as they greatly expand their presence in the United States. On a number of different levels.

Needless to say, the question of whether the GDS systems are worth it, are becoming irrelevant, or need to change into something completely different was a major topic both officially and unofficially.

The state of corporate contracts with airlines — a hot topic. The issue of just who is going to pay for the ever-escalating cost of “look to book” ratios in terms of accessing travel information online — a hot topic. The effect of individuals now being able to control their entire travel experience in the palm of their hand, thanks to the iPhone and more than 2000 travel-related applications available for that iPhone?

The general consensus is that we really haven’t even scratched the surface on how this is going to massively change the way travel is both managed and consumed.

Oh yes, which leads to another big area of change — control of travel and its expenses from a corporation perspective. Who has it, who is losing it, and who is taking it.

Oh and the procurement method of purchasing travel? If your company is still doing it — you need a new CFO. And if your CFO is the one in charge of authorizing travel, you need a new CEO.

More in this week’s PlaneBusiness Banter on the conference.