Just remember readers - You didn't read it first at the Seattle PI, You didn't read it at CNN, You didn't read it at MSNBC - But you did read this prediction at FMV !!
It's official: Microsoft is the mystery buyer of FareCast... Microsoft did not confirm the purchase price, but a source says the figure is in the $100 million range.
Looks like the price tag has increased from the previously reported $75 million. Screw drinks - DINNER is now on you guys!
Congrats to the FareCast crew.
Friday, April 18, 2008
Tuesday, April 15, 2008
FareCast = "He Gone"
Way back in December, when SideStep got taken out by Kayak - FMV posed this nugget of wisdom:
It’ll also be interesting to see what happens now with FareCast and Mobissimo.
Well, it looks like our crystal ball rocks because FareCast just got purchased for $75 million - but here's the wierd part - Buyer unknown:
"Farecast has been sold in a deal that values the Seattle online travel search startup at more than $75 million, according to a source with knowledge of the situation. The buyer was not known and Farecast Chief Executive Hugh Crean declined to comment. "
The rumor getting the most play is that Expedia ponied up the cash to purchase the local site - but to FMV, this seems like an expensive proposition for a million visitors or so a month. Also - doesn't seem like their fare prediction algorithim would mesh for the largest OTA on the block.
Who else then? The only other name we can think of would be MSN - simply because they already have a relationship, they are local, they are always looking for unique content to drive their travel site, and who knows how long they will keep their expedia relationship. It'll be interesting to find out...
But otherwise - congrats to the Farecast crew, not a bad run to clear $50 million or so! Drinks on you guys if we ever meet. Not the kind with cream and sugar. Only so we can stay clear of the Starbucks vs. DD dilemma, of course.
It’ll also be interesting to see what happens now with FareCast and Mobissimo.
Well, it looks like our crystal ball rocks because FareCast just got purchased for $75 million - but here's the wierd part - Buyer unknown:
"Farecast has been sold in a deal that values the Seattle online travel search startup at more than $75 million, according to a source with knowledge of the situation. The buyer was not known and Farecast Chief Executive Hugh Crean declined to comment. "
The rumor getting the most play is that Expedia ponied up the cash to purchase the local site - but to FMV, this seems like an expensive proposition for a million visitors or so a month. Also - doesn't seem like their fare prediction algorithim would mesh for the largest OTA on the block.
Who else then? The only other name we can think of would be MSN - simply because they already have a relationship, they are local, they are always looking for unique content to drive their travel site, and who knows how long they will keep their expedia relationship. It'll be interesting to find out...
But otherwise - congrats to the Farecast crew, not a bad run to clear $50 million or so! Drinks on you guys if we ever meet. Not the kind with cream and sugar. Only so we can stay clear of the Starbucks vs. DD dilemma, of course.
Friday, April 11, 2008
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:
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)
Tuesday, April 8, 2008
Another Low (i.e. Gutter) Fare Promotion
You have to hand it to them. They've got a Spirit that just won't quit. From the airline that brought you the MILF sale comes a suggestion that it may be time to score some strange:
"Bored with your marriage to high fares? Spice up your travel with some strange new fares from Spirit. Life is better with some strange!"
If you're not understanding the reference, get yourself over to the Urban Dictionary for some remedial education. If you're not sure why this promo is probably going to be successful, you may not be spending enough time in the bar at convention hotels...
"Bored with your marriage to high fares? Spice up your travel with some strange new fares from Spirit. Life is better with some strange!"
If you're not understanding the reference, get yourself over to the Urban Dictionary for some remedial education. If you're not sure why this promo is probably going to be successful, you may not be spending enough time in the bar at convention hotels...
Monday, April 7, 2008
Jump back, what's that sound?
Greetings from CASMA at the Intercontinental Playa Bonita Resort in Panama!! (bonus points to any of you readers that understand the Van Halen reference in this entry's title).
Yes - it looks like conference season has started for 2008 and FMV travels far and wide to keep our loyal readers up to date. This year CASMA has picked a great resort to host the conference - and FMV will highly recommend the Intercontinental. The conference has even arranged transportation to the hotel - which is about 45 minutes from the airport. The only problem is that Panama City itself does not seem very inviting to explore, and there is a general consensus that there is not much enthusaism for going into the city and seeing the sites (which doesn't seem much after you get past that big canal thing).
In terms of attendance - seems well attended in terms of numbers, but not as much in terms of companies and organziations. For instance - out of a total of about 200 people, COPA has 18 people attending (ok, that makes kinda sense since it's home turf for them), ARC has 19 (huh??), and each of the GDSs have 9-10 as well (which also makes sense because let's face it - CASMA is a bit of a GDS love-fest after all...).
Buzz words we predict to watch out for today during the gatherings:
1) Some reference to "4 carriers going under in the same week..."
2) Anciliary revenue (with multiple references to Ryan Air)
3) Price of oil
It's enevitable - airline people just can't help themselves. For those of you that can't be here, go ahead and "ease the seat back", we'll post updates as noteworthy things happen and time permits.
Yes - it looks like conference season has started for 2008 and FMV travels far and wide to keep our loyal readers up to date. This year CASMA has picked a great resort to host the conference - and FMV will highly recommend the Intercontinental. The conference has even arranged transportation to the hotel - which is about 45 minutes from the airport. The only problem is that Panama City itself does not seem very inviting to explore, and there is a general consensus that there is not much enthusaism for going into the city and seeing the sites (which doesn't seem much after you get past that big canal thing).
In terms of attendance - seems well attended in terms of numbers, but not as much in terms of companies and organziations. For instance - out of a total of about 200 people, COPA has 18 people attending (ok, that makes kinda sense since it's home turf for them), ARC has 19 (huh??), and each of the GDSs have 9-10 as well (which also makes sense because let's face it - CASMA is a bit of a GDS love-fest after all...).
Buzz words we predict to watch out for today during the gatherings:
1) Some reference to "4 carriers going under in the same week..."
2) Anciliary revenue (with multiple references to Ryan Air)
3) Price of oil
It's enevitable - airline people just can't help themselves. For those of you that can't be here, go ahead and "ease the seat back", we'll post updates as noteworthy things happen and time permits.
Thursday, March 27, 2008
Ryanair: Apparently Not-So-Low LCC
Hey, it turns out that high fuel prices really hurt airlines' profits. In fact, especially if you think you can give away tickets and make it up on ancillary revenues, you really need to cut costs. At least that is the current state of affairs at Ryanair, who hopes to cut $621-Million in annual costs in various areas, including labor, due to extraordinary high fuel costs.
Yes, Ryanair also hopes to boost the top line through higher baggage and credit card fees. But we have to say, when the poster child of LCC's is talking about a need to tighten the belt, this is not going to be a good year for airlines. You can save yourself a call to Jamie Baker, Robert Mann, or Terry Trippler. You just read it in The FMV.
Yes, Ryanair also hopes to boost the top line through higher baggage and credit card fees. But we have to say, when the poster child of LCC's is talking about a need to tighten the belt, this is not going to be a good year for airlines. You can save yourself a call to Jamie Baker, Robert Mann, or Terry Trippler. You just read it in The FMV.
Wednesday, March 26, 2008
Emirates: Thank you very little
We saw this fairly disturbing news last week. Apparently Emirates allowed the "first authorized mobile phone call made from a commercial flight" last Thursday. This follows the several million unauthorized wireless calls, texts, bbery messages, etc. made daily on US flights - - you know who you are.
This was no gimmick - Emirates plans to roll this "service" out on all flights. That's right - - now you can enjoy a trip around the globe while receiving continuous sidestream updates on some blowhard's all-important business deal, Aunt Polly's gout, and how much Pookums misses their Little Boo, and conversations that end with "No, I love you more - you hang up first..." The silver lining? Apparently only six of these goofs that don't recognize the value of a few hours unplugged can talk at one time.
A bit off our core topic, but inevitably carriers will charge for this service, or offer legitimate distribution services via inflight wireless devices, so we figured we'd keep the FMV audience up to date. In the meantime, note to self: remember not to fly Emirates. And also:
This was no gimmick - Emirates plans to roll this "service" out on all flights. That's right - - now you can enjoy a trip around the globe while receiving continuous sidestream updates on some blowhard's all-important business deal, Aunt Polly's gout, and how much Pookums misses their Little Boo, and conversations that end with "No, I love you more - you hang up first..." The silver lining? Apparently only six of these goofs that don't recognize the value of a few hours unplugged can talk at one time.
A bit off our core topic, but inevitably carriers will charge for this service, or offer legitimate distribution services via inflight wireless devices, so we figured we'd keep the FMV audience up to date. In the meantime, note to self: remember not to fly Emirates. And also:
From "Today’s Cartoon by Randy Glasbergen", displayed with special permission. For many more cartoons, please visit Randy's site @ http://www.glasbergen.com/. Thank you, Randy!
Thursday, March 20, 2008
Some Economy Seats are More Economy Than Others
Since FMV moved it’s headquarters to Chicago late last year – we find ourselves flying United a lot. You may think it’s because of their weird faux-cartoon ads that they plaster everywhere – but it’s really because of their “EconomyPlus” seating with extra legroom. After earlier hints, JetBlue has officially jumped on that bandwagon:
JetBlue will reconfigure its Airbus A320 fleet to offer seats with more legroom, and will charge more for those seats. JetBlue is calling the product Even More Legroom, which will offer 38 inches of pitch in the second to fifth rows plus emergency exit rows 10 and 11... The airline will charge $10 each way for short-haul flights (under 600 miles), $15 for medium-haul flights (601 to 1,500 miles) and $20 for long-haul flights (over 1,500 miles).
That’s actually great – but there is also another kicker:
The airline won't be selling Even More Legroom in the GDSs because of "technological limitations," JetBlue said. But the airline added that clients who book via a GDS can go to the Manage Your Flight link on JetBlue's Web site to purchase the extra legroom.
A few FMV points:
1) OK, we just assumed that JetBlue’s marketing department had a down day when they branded their new refundable fare product “Refundable Fares”. But seriously, “Even More Legroom”? Please try a little harder to imply that the old coach seats don't have crappy legroom. You know who will REALLY hate this name?? The call center agents who face this scenario happening 100 times a day:
JetBlue Agent: “Hello, You have reached JetBlue – how may I help you”
Customer: “Uhh, Hi – I bought a seat for my upcoming trip, and I know I get a roomy seat, but I’d now like to purchase EVEN MORE LEGROOM!! Ha Ha Ha”
2) This also has “Ancillary Revenue” written all over it and kind of goes against the Jetblue vein. Fine – you don’t have a “business class” – but you now have the beginnings of tiered system…
3) Finally – and most importantly - we love the fact that this purchase option is not available in the GDS. It’s the mythical “Fourth Cabin” limitation of GDSs; they cannot inventory control this type of stuff, and therefore can’t sell it. But FMV will bet you $10 (Even More Legroom for a short-haul flight) that the GDSs come out and blame the airline as not being “buyer focused” for doing this to them. It's classic GDS victim-hood at it's best (see Air Canada).
So while you won't catch us flying JetBlue just yet (simply not enough flights from ORD), we applaud them for providing meaningful product differentiation (i.e. not just a seatback TV and faux-hipster vibe). We also applaud mother nature, for dumping a (late) winter storm on Chicago today, giving us the perfect excuse to duck out early to watch the NCAA tournament. For those stuck on a cot at ORD - sorry, but these things happen for a reason.
JetBlue will reconfigure its Airbus A320 fleet to offer seats with more legroom, and will charge more for those seats. JetBlue is calling the product Even More Legroom, which will offer 38 inches of pitch in the second to fifth rows plus emergency exit rows 10 and 11... The airline will charge $10 each way for short-haul flights (under 600 miles), $15 for medium-haul flights (601 to 1,500 miles) and $20 for long-haul flights (over 1,500 miles).
That’s actually great – but there is also another kicker:
The airline won't be selling Even More Legroom in the GDSs because of "technological limitations," JetBlue said. But the airline added that clients who book via a GDS can go to the Manage Your Flight link on JetBlue's Web site to purchase the extra legroom.
A few FMV points:
1) OK, we just assumed that JetBlue’s marketing department had a down day when they branded their new refundable fare product “Refundable Fares”. But seriously, “Even More Legroom”? Please try a little harder to imply that the old coach seats don't have crappy legroom. You know who will REALLY hate this name?? The call center agents who face this scenario happening 100 times a day:
JetBlue Agent: “Hello, You have reached JetBlue – how may I help you”
Customer: “Uhh, Hi – I bought a seat for my upcoming trip, and I know I get a roomy seat, but I’d now like to purchase EVEN MORE LEGROOM!! Ha Ha Ha”
2) This also has “Ancillary Revenue” written all over it and kind of goes against the Jetblue vein. Fine – you don’t have a “business class” – but you now have the beginnings of tiered system…
3) Finally – and most importantly - we love the fact that this purchase option is not available in the GDS. It’s the mythical “Fourth Cabin” limitation of GDSs; they cannot inventory control this type of stuff, and therefore can’t sell it. But FMV will bet you $10 (Even More Legroom for a short-haul flight) that the GDSs come out and blame the airline as not being “buyer focused” for doing this to them. It's classic GDS victim-hood at it's best (see Air Canada).
So while you won't catch us flying JetBlue just yet (simply not enough flights from ORD), we applaud them for providing meaningful product differentiation (i.e. not just a seatback TV and faux-hipster vibe). We also applaud mother nature, for dumping a (late) winter storm on Chicago today, giving us the perfect excuse to duck out early to watch the NCAA tournament. For those stuck on a cot at ORD - sorry, but these things happen for a reason.
Ouch Redux: Northern Exposure Edition
What goes on here? Just last month we wrote about Ryanair shutting down their reservations for 3 days to upgrade their systems.
Now comes word that Alaska Airlines will shut down access to their mileage plan systems in April for a week! No redemption, no mile-based upgrades, no signing up for the program, etc.
We suppose the business impact is relatively small. They gave loyal customers a month notice, and most passengers will be able to figure it out and work around the outage. But you can rest assured that some know-it-all customers will be pretty hacked off to find out that they can't redeem their miles right-then-and-there for that all-important dream trip to Anchorage.
It just seems hard to believe that system migrations like these can't happen a little quicker. A few days we get - but a week?? A $3.5-Billion bank like Bear Stearns can teeter on the brink of bankruptcy, get bailed out by the Fed, nearly fail again, then get liquidated by a quasi-partership of the government and an opportunistic white knight in just two days -- and an airline can't migrate a few customer profiles in less than a week? What kind of a world do we live in?
Now comes word that Alaska Airlines will shut down access to their mileage plan systems in April for a week! No redemption, no mile-based upgrades, no signing up for the program, etc.
We suppose the business impact is relatively small. They gave loyal customers a month notice, and most passengers will be able to figure it out and work around the outage. But you can rest assured that some know-it-all customers will be pretty hacked off to find out that they can't redeem their miles right-then-and-there for that all-important dream trip to Anchorage.
It just seems hard to believe that system migrations like these can't happen a little quicker. A few days we get - but a week?? A $3.5-Billion bank like Bear Stearns can teeter on the brink of bankruptcy, get bailed out by the Fed, nearly fail again, then get liquidated by a quasi-partership of the government and an opportunistic white knight in just two days -- and an airline can't migrate a few customer profiles in less than a week? What kind of a world do we live in?
Monday, March 17, 2008
Booking Bonus Days AAre Gone
Well it is official. Mileage bonuses for booking direct on a cAArrier website are just not happening anymore. If any carrier is still doing it, it's probably due to a technical error or a staffing restriction (i.e., the guy that was supposed to pull the promo got laid off). Cue the Little River Band classic, "Reminiscing".
The latest sorrowful news came to us courtesy of the American Airlines DealFinder tool. No more booking bonus at AA.com after AApril.
Sigh. Now how are we going to earn our reward tickets to Tulsa? Hmmm. What to do? Note to self: Pitch ncAA "tournament pool for miles" idea to AA.
The latest sorrowful news came to us courtesy of the American Airlines DealFinder tool. No more booking bonus at AA.com after AApril.
Sigh. Now how are we going to earn our reward tickets to Tulsa? Hmmm. What to do? Note to self: Pitch ncAA "tournament pool for miles" idea to AA.
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