Everyone Take a Deep Breath....

So - we bet that the media will be all over the latest news that seems to come straight out of the Onion:

Ryanair is considering charging passengers to use the toilet on its aircraft. According to the Belfast Telegraph - The airline's CEO, Michael O'Leary, is touting the idea of putting a coin slot on the toilet door as a means of raising "discretionary revenue".

OK - we know that's pretty mind-boggling - but we think this is going to be WAAYY overblown. Let's take a look at what O'Leary actually said, as reported by Today in the Sky:

"One thing we have looked at in the past and are looking at again is the possibility of maybe putting a coin slot on the toilet door so that people might actually have to spend a pound (about $1.43)... in future."

Well, that outrageous statement is actually hedged pretty well. Look - we know we joke about how far airlines will go to make an extra dollar (we even have a tag for "25 cents to use the bathroom") - but we just can't get worked up about it that much. We just don't think it'll happen.

However, if it does happen - FMV will be the first to test how water resistant their air sickness bags are...

Cold Cash Better than Kind Words

We saw a fluffy piece here that's a bit of a backhanded compliment to the on-line travel industry. Apparently, there is an "American Consumer Satisfaction Index". This index suggests that, in general, consumers were less satisfied with e-commerce last year. E-commerce satisfaction dropped from 82 to 80 (out of 100). However, satisfaction with the travel segment of e-commerce did NOT decline.

More specifically:

"Expedia (+2.7) and the All Others category (-2.5 percent) tie for first at 77. Travelocity comes in second place (+2.7 percent to 75) followed by Orbitz (+1.4 percent to 74). Priceline.com falls one percent to 72"

We're not surprised to see Priceline lagging in this index, as their opaque model is a bit more vulnerable to lingering ill will if the consumer has a bad travel experience. In related news, Priceline reported 4Q revenue up 21% last night after the bell. So I guess we'll believe the consumers voting with their wallets rather than those voting in the "index". Even if you were burned by a bad opaque buy, if price is your main driver, you're probably going to go back to their well time and again.

Sonic Is On A Roll

An understated press release recently came out that announced Jetblue has chosen SabreSonic as their new host system. It gives a hint of JetBlue branching out to expand partnerships:

Rick Zeni, JetBlue's Vice President of Change Management-Passenger Service System. "Sabre will allow JetBlue to offer greater revenue-producing codeshare and interline partnership opportunities... "

A few notes:

- Looks like some consultant got the final say to Zeni's title "Change Management - PSS"?

- This is actually the second announcement of Sabre scoring a host win in 2009 – the other being a recent WestJet announcement. We know that Amad-oose is pounding the market with Altea – but Sabresonic has some momentum going for it.

- Even more interestingly – both of these airlines used to be on the Navitaire platform. JetBlue probably decided to look around since they had to migrate to the New Skies platform anyway. It just seems telling that Navitaire wasn’t able to keep Jetblue in the fold despite all of the features New Skies is supposed to add.

- The timing is also interesting right after Sabre's purchase of EB2. We assume that Sabre is planning to incorporate EB2 as their new IBE platform (the Frontier migration to Datalex would have been the first clue they had to do something) – but we wonder if JetBlue will be the launch partner for that platform (or Westjet).

- The press release says that Jetblue will take control of Sonic in 2010. FMV is always amazed at how long integrations projects like this take, so we’ll be watching to see if JetBlue is any different. We'll also see if they can implement the IBE in that timeframe as well.

- Finally, we can’t help but love the name “Sabresonic”. It always reminds us of “Sonic the Hedgehog” which is one of our favorite video games. Any reason to dredge up Sonic once again is ok in our book. Though "Grand Theft Airline" has a snappy, edgy ring to it, too... Maybe next time.

Stimulous we can believe in

We saw in the paper today that, for the next few months, JetBlue is offering passengers a full refund if they buy tickets and subsequently get laid off. Granted, knowing that you're getting a refund isn't going to make you feel any better while you box up your cubicle. If you're that worried about getting canned, you probably won't book a trip to the islands anyway.

However, it appears that more and more people aren't buying anything (especially luxuries like travel) just because they are afraid that they should be afraid. A promo like this is just what it might take to get some of those people off the sidelines. In fact, in such cases, the promo won't cost JetBlue a dime (even before you get to the fine print). More importantly, the promo might swing some share toward JetBlue.

Kudos to JetBlue.

Travel 5.0 on Web 2.0 with New Skies 3.0

FMV ran across this pretty good article that covers JetStar’s migration to Navitaire’s New Skies 3.0 system. JetStar is the first airline to launch on this platform, and it appears that everything went pretty smoothly. Although it’s pretty amazing that their ENTIRE computer system had to be taken down for an entire day!

“You couldn’t book, you couldn’t change any bookings, you couldn’t check in somebody at the airport -- you couldn’t do anything that an airline would normally use a computer system to do. We were completely without IT support for 23 hours,” said Jamie Perry, GM of distribution and commercial systems at Jetstar.

Wow.

Jetstar is the first Navitaire customer to go live with New Skies 3.0; Ryanair, AirTran, and Gol are all currently live on 2.1. Additional functionality seems to include code-share and thru-checking functionality, as well as improvements on their IBE side.


Too bad for the short term pain to JetStar, though this is something Navitiare had to do for the long term. It’s clear that even “LCC’s” are moving up the functionality chain – where partnerships / alliances and ancillary revenue are becoming a big part of their strategy. Navitaire has to add functionality to stem the tide of their larger customers moving off of Open / New Skies and on to the big boys of the PSS world.

Best Airline Blog of 2008!

Flight Global has announced their 2008 Webbie Awards, including the BEST BLOG OF 2008! Whoo! Whoo! High Five! Wait. What? Fare Market Value wasn't even nominated?

Cue Phil Collins:
"...There must be some misunderstanding,
There must be some kind of mistake..."

Well, there's always next year. They'll probabaly sweeten the prize money by then, too. In the meantime, congratulations to the winner, http://www.jetwhine.com/ and finalists, crankyflier.com and http://www.blogsouthwest.com/. Fine blogs, every one. Keep up the great work!

Don't Call Us...

We need to take a short pause today to commemorate the birthday of one of our greatest leaders. President Lincoln? Sure, him too. We were thinking Jenn, the virtual agent, at Alaska Airlines. We're a touch belated, as she actually turned one a couple days back. [For pure comedic value, as well as some background on the project, read this interview with Jenn that appeared in Travel Weekly last March.]

Jenn

Alaska notes that Jenn has facilitated 1.5M chat sessions in her first year of life. Think of the benefits that provided. Let's assume she improved site conversion, driving a little revenue and possibly removing some channel costs. She has to have saved a few dollars in the call center, answering the easy questions that choke the lines for other customers. Throw on a little free publicity, and we're guessing Jenn's paid for herself already.

Jenn's milestone comes as United Airlines announced it will no longer allow customers to lodge complaints over the phone. Surely this will result in a more consistent, and probably better, response to complaints. Not to mention it probably will save money.

American also AAnnounced new cAAll center AAutomation.

As the industry continues to look for cost savings, and customers adapt to self-service, we expect to see much more fine tuning in the call centers. Especially if consumers start to question the value they are receiving for call center transaction fees.

You are Free to Move Around Rewards

The Wall Street Journal's "Middle Seat" reported today on a speech from Laura Wright, Southwest’s chief financial officer during the Raymond James Growth Airline conference:

Southwest is working on revamping its frequent flier program... Ms. Wright says the revamp is expected late this year or early in 2010. Southwest also plans to overhaul its Web site, which she says ranks third in use among travel Web sites, between Mapquest and Google Maps.

Currently, Southwest’s Rapid Reward program offers free tickets based on only on the number of trips you fly. It seems a long time coming that the program would transition to rewards that scale with the value of the flight. FMV definitely expects that to change – towards something more in line with Miles Flown or Dollars Spent. What will be more interesting is if they start offering tiers of elite customers, including priority boarding, free drinks and point bonuses.

However, this change coupled with the revamp on the website announcement leads us to believe that there is a lot of new technology coming to LUV. FMV wonders if they can hit the right combination of revenue-enhancing changes while keeping their "little scrappy airline" image. The public comments following the WSJ article suggest we are not alone.

Morning 'Zoo

On Friday, Travelzoo announced, and Travel Weekly reported, that they purchased the Fly.com domain name for $1.8M. Well, it turns out that maybe the bigger story is that over the weekend they launched an air meta-search product using said domain name. Way to come out blazing. Did they have a commercial during the Super Bowl that we missed?

Taking a quick spin, we're not seeing anything truly unique on the look/feel of Fly.com vs. other established meta's. However, it is pretty interesting that Travelzoo deals are dished up along with the air search results. Let's be honest, they manage to promote some pretty darn good hotel rates from time to time. Does this mean a return to the ~$100/share TZOO glory days of late 2004?





Probably not, but we do love the smell of synergy in the morning. Although there are a lot of hurdles to transition from a media-centered advertising player to a meta-travel site - T'Zoo has a lot going for it. With its existing consumer base, and a decent air search to go with their ads, it seems that the 'Zoo may be able to carve out some room from the established meta's a challenge.

And can this crowded meta market offer any silver lining to the OTA's? We can't really think of one.