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.

Airline Merchandising 101

If you spend any time at travel conferences, you're going to hear airlines talking about "merchandising". It is quite probably a federally mandated talking point. What does it mean?

We can enjoy Slide 18 from this PPT from United Airlines for a peak behind the curtain. UA is targeting a $1B revenue increase (roughly 5% over current ~$20B revenue) in five years from the following initiatives:

• Seat upsell, $300M/year


• Unbundling product (e.g. Baggage Fees), up to $300M/year


• New products, $400M/year

We wish we knew more about the "new products" (c'mon, pay toilets!), but we speculate that means things like entertainment, buy-on-board, new lounge purhcase plans, etc. Wait and see.

PS, FOR NERDS ONLY:

This is all interesting stuff, but the humor is found in the math error. Note that the slide indicates that seat upsell "can DOUBLE to $300M/year". That means the incremental benefit is only $150M. That means the total target only adds to $850M, not $1B. Not to mention that a $100M range was cited for "unbundling product". Oops, now we're down to $750M. Fine, fine, $250M is a rounding error when you're talking about $20+B in total. However, they may want to hire a consultant to check the other consultants' work (yes, FMV Available)

JetBlue: Labor Strife in Marketing Dept.?

We normally try to stick to the facts, but in this case we'll start a rumor. Something is amiss in the Marketing Department at JetBlue. It simply has to be.

Here is the skinny. As we understand it, the carrier observed that certain customer segments frequently change their travel plans, and may pay a premium for a fare that allows changes or refunds. On Monday, the carrier announced that, for those customers, there would be a new product offering flexibility and convenience that is cleverly named "Refundable Fares".

Hoo boy, that's rich. Refundable Fares? Seriously, someone please tell us they did not pay somebody to brand that? Is there a whiteboard somewhere with TrueRefund, BlueRefund, FlexBlue, and RefundaBLUE scratched out? What kind of a world do we live in, where a straightforward proposition does not need a snappy name?

Anyway, you get 4x TrueBlue points if you buy a Refundable Fare. So at least we know the marketing department is there. They just don't seem to be functioning at peak.

SITA tries Ideating...

SITA ponies up huge for R&D – sinking $110 million on an R&D budget. However, it looks a big chunk of that budget goes to B-School consultants. Check out this article from Eye 4 Travel (Yeah yeah, we know they are a PR Newswire) describing the research:

SITA's CEO Francesco Violante said: "The pace of change in developing technologies continues unabated from Web 2.0 to Cloud Computing to new mobile applications and virtualisation. The speed of new technology development requires a dedicated focus on how these technologies can be incorporated into SITA's portfolio of solutions for the air transport industry."

The SITA Lab will deploy an Innovation Knowledge Management system to support the generation, capture and evaluation of new ideas. The system will be open to employees, as well as customers and partners, in order to create an Innovation Ecosystem for the air transport industry.

SITA's Chief Technology Officer, Jim Peters, who said: "Emerging technology is now driven more and more by the digital lifestyle of today's consumer rather than by traditional business-focussed IT solutions. SITA needs to be continually watching and learning from what happens in the consumer digital market to understand key trends and to be able to adapt and adopt consumer-driven technologies to create innovative solutions which address air transport industry problems. "


So they are creating: “An “Ecosystem” for “Innovation Knowledge Management” in order to capture the “virtualization” of “Web 2.0” as a result of “Consumer-Driven Technologies”

Heh heh, You can’t make this stuff up!!

Oh wait – maybe you can….(check out video link below...)


Ideating...