The End of the Airport Passenger Fees?

“Our Heads Are Round so our Thoughts Can Change Direction” [Francis Picabia]
Inflight Shopping

As I outlined in my summary on the Hamburg Aviation Conference, my friend Daniel expressed his believe that within 20 years, there will be no more passengers fees.
At the same time, Michael O’Leary was recently quoted that he expects in very short time they will offer the flights for free.
But flying costs money, no matter how good the aircraft engines become, terminal construction and maintenance, ground handling, air traffic control, gasoline, pilots, cabin crews, aircraft, insurance, it all needs to be paid. And no matter how effective you calculate …

… someone has to pay the bill.

Airlines lower their ticket prices, covering the “loss” with “ancillary revenues”. While those “ancillaries” have been understood as services previously bundled (inflight meal, baggage, flight insurance), they meanwhile extend quite into “inflight shopping”.

At the same time, traditionally airport landing fees, split into the landing and passengers, covered for the airports’ cost of operations and development. This basic, sensible model is now threatened. It will change. But how. When the airline and airports fight for the revenue of the passenger – I believe both will loose.

Airport Duty Free

So currently it is a fight between airport and airline for the money of the traveler. I hear airlines expressing their anger about the airports increasingly draining the pockets of the passengers pre- and post-flight. And the airports upset about architectural changes enforced by the evaporating aviation income, forcing them to add shopping in arrivals halls and rebuilding terminals for improved shopping, i.e. forcing the passenger through the duty free store. Or how to speed up the check-in process to increase the dwell time of the traveler to spend more money shopping. And the shop owners about the increasing pressure to cash in on the passenger in order to pay the expensive rental deals with the airports. And, and, and…

And no, it does not help to imply that the politicos should provide airports similar to train stations. Yes, it is true, airlines bring business to the regions. Airports are important infrastructure. But in the end … someone has to pay the bill.

Source firewalkeraussies.comWhat we will need is a serious, joint discussion about the future business model in aviation. At the moment there is no discussion. There’s the airlines, the airports and business models that cannot work. And we need to have the politicos and the usually government-controlled ATC (and border control, security, etc.), we have to have the ground handlers, the shops and all other players on the table. You can’t reconstruct all the small airports. We don’t need a fight. We got to work together for a sustainable business model. ERA, AAAE, IATA, ICAO, this is your call.

Food for Thought
Comments welcome

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“Our Heads Are Round so our Thoughts Can Change Direction” [Francis Picabia]
Which Network???

At the recent Hamburg Aviation Conference one of the speakers questioned all those airport different apps. And it reminded me of my issue about a common login process for the airport wifis. But then he questioned, that all those apps simply don’t make it to the users first screen. Initially 16, meanwhile on the larger phones more like 24 apps fighting for the attention of the user.

Then my friend Erica forwarded me that Wired-article, addressing the increasing problems the news-industry has with their advertising-driven business model. Which reminds me of those magazines I happen to read. And I simply thought, what they do wrong from my very personal point of view.

What is the advantage of Google, Facebook and those new players? If is their ability to intelligently and dynamically associate my interests and provide me with the information I am interested in. To show me that on the first page. Without omitting other possibly interesting information. Even the advertising is targeted (which requires mass). And we happen to believe that intelligence.

Until we switch to the time-line view. In Facebook with /?sk=h_chr – in LinkedIn no such URL-tweak since Microsoft took over, but if you use the browser you can hover your mouse on the … on the right above the first news, selecting “Recent Updates”. Yes, I use Google, but I understand they also mix advertising in. But…

Ow-my-gawd, but I’m German, what about my personal data and stuff?

That was another topic we discussed in Hamburg. Travelers and readers are willing to give personal information … If. It. Makes. Sense.

No, I do not want to drop my pants for a general news headline or another “case study”. And I do not like to use “real data” when someone asks me to download this nice new study they did. Have Feivel Mousekewitz on your mailing list bouncing? Good chance I’ve accessed data without seeing the need why I should add myself to a mailing list of yours. Oh yes, and I assign “custom e-Mail” to many of those and it’s wondrous who sends me advertising and how quickly on many of those “trusted business partners”!

And I do not want to get another app. Ages ago, I decided to limit myself to 10 newsletters and two or three social networks. Facebook I use mostly privately. LinkedIn for business. And LinkedIn being “difficult” both in Russia and China is an issue of concern. Google+ I dropped. I use airline apps on my travels, in fact only to get the boarding pass into my phone’s “wallet”. I used some apps for airport information, just recently learned about FLIO and try that now. But pay? Or apply profile? What’s in it for me? I like TripIt to take track of my travels, though since it was acquired by Concur and Concur by SAP it’s anything but perfect. Same as with Skype and LinkedIn since they got part of Microsoft.

But yes, it is a constant fight for space on my first smart phone screen. Or for my PC’s Windows start menu (which I customize for the sake of finding what I “need”). Yes, I’d like a single (trusted!) app to do it all.

I use phone (1), messages (2, SMS, iMessage), Facetime (3) and Viber (4, video calls), mail (5), calendar (6) and address book (7). Camera (8) and camera library (9), eBook-Reader (10), Musicplayer (11), Videoplayer (12). Maps/Navigation (13) and weather (14). Facebook (15), LinkedIn (16), browser (17). Twitter, Skype, WeChat, etc. are on the secondary page. I use Shazam (18) to identify songs I hear somewhere. Threema (19, secure messenger), Trello (20) and PayBack (21, shopping loyalty card). Amazon and IP-TV were moved to secondary pages too. A single (trusted) general news source (22). And AirVideo (23) for at home access to our video archive. My phone only has 24 spots, so the last one is used “ad hoc” as needed. For Hamburg Aviation Conference they asked to use Slack (which did not make it to my permanent apps). Routes has its own App. Where would I put “airports”? Even as a frequent traveler, I have either Wallet on the first page for travels. Or maybe FLIO. There was a time I had four or five screens. I have two left. A third if you consider the “travel” folder with all those travel apps I only need on occasion.

Want to make it to my phone? What shall I remove for the sake of your app?

So I think, the airports must ask themselves, it it truly makes sense to bet all their money on their app. Or if they should look for an aggregator, providing their information from a single app. If I travel i.e. from Berlin via London to Belfast, that I do not need three apps, but a single one. If I use the commercial lounge in London, same app. If I want to use WiFi inflight and enroute, same app. But that requires common standards. Which brings me back to Data Silos and the need of common interface standards I addressed in my last post and will address at PTE.

We need common interface standards.
We need to tear down the silos.
We need to communicate.

Food for Thought!
Comments welcome

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Hamburg Aviation Conference 2017

As I attended to be interviewed about the stuff we do at CheckIn.com, you can click the image to view the video on Facebook.

Reviewing the recent Hamburg Aviation Conference, the aviation conference addressing new developments and ideas, it boils down to a “known issue” for the future of the aviation industry:

To tear down the walls.

Data Silos … and it’s not new.

As outlined here in Food for Thought and have been asked to address at Passenger Terminal Expo, there were a lot of very fancy ideas and outlooks where we want to go. About any session addressed the “data silos”. There are a lot and I mean a lot of good ideas and developments taking place as we speak. But all of them are isolated ideas and developments. Look at what airline X does. See here airport Y.

Just one of the many statements at Hamburg Aviation Conference on the topic:

“The check-in process is a totally disjointed process” [Peter Parkes]

Remember my posts about Checkin 2015 and the follow up Check-in 2020?

The underlying line I hear, though not really addressed, just mentioned, is the data silos. Even when being mentioned, it was mentioned as something that “naturally” has to happen. But without it, all or most of those wonderful developments remain what they are. Silos. Be it an(other) airport-silo, an(other) airline-silo, silos being disconnected from the other silos within the same company.

But. This. Is. Not. New! Together with Richard Eastman, from 1996 I emphasized the conversion from a whole sale model to a consumer driven model and the disintermediation in aviation distribution: Everyone deals with everyone. The example Yesterday / Today to the left is from my presentation at ITB in 2000.

On the floor, there were many discussions that there is a need in “change managers”, as there are all those fancy solutions and understanding of the need. That again reminded me of my question, why after 20 years only 20 airports implemented A-CDM – in my opinion for the very same reason. Everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it…

There were quite some discussions about the data silo issue and airports and tech companies telling about those very new and fancy solutions they develop. But when I look across to other airports, airlines or tech companies, I find they just build new Data Silos.

It’s not about Data Silos …
… but about Silo Thinking

Data Silos are simply the result of the real problem.

It’s about “who’s data is it?”. It is about the decision makers and stakeholders unwillingness, inability and misconception about a collaborative approach: “Give me your data but don’t date touch mine”… The very same as on the A-CDM side of our business.

The point when the aviation industry reinvented itself and evolved into e-Commerce was back in the 60s t0 80s, when the rise of the CRSs required standardized messages to exchange through the aviations teletype (telex) network. The birth of what today is AIRIMP. Nowadays, IATA works on “New Distribution Capabilities“, though there are fundamental issues when you compare airline sales to Amazon. Where Amazon works with warehouses and even opens own shops, the airline seat is one of the most perishable goods – something Amazon for good reason touches very differently.

The second large move was again forced, when in the mid 90s to 2000 the Internet forced the players to “get online”. Since 1994, I preached the need for airline sales to embrace that change.

I mentioned A-CDM and TAM as a starting point to tear down those walls, but I see a lot of not invented here responses.

Else … The Passenger Journey

Some of the really good ideas in the dead lock of silo thinking, where about one of the new hypes: The Passenger Journey.

When talking about the customer, how do we identify that very customer? By e-Mail? I just happen to change my employer at times. And I get a new address. I currently run three “main addresses” and use different ones for the various social networks. If you identify me by e-Mail, I use a different one when I travel for business than what I do personally. I’m two customers. Data Silos.

There was quite some talk about the need of the “passenger journey”, but also how fragmented that journey is. No wonder, the passenger being split to “airport customer”, “border control/security”, “airline” and the exchange of the traveler from one to the other complicated by Data Silos.

Around 2000, I mentioned in my annual presentation about Airline Sales & e-Commerce for the Airline Sales Representatives Association, that Google was said to identify a unique person within 20 searches, based on IP geographic area, typical questions, etc. That was what … 17 years ago? And we don’t even have a single source of truth for a passenger in aviation. Very often we have separate profiles even within an airline – for GDS/CRS (old legacy tools), check-in and operational processes, but separate for social network contacts. A customer contacting via Twitter or Facebook is (in my experience) usually not associated to the passenger profile! Some examples to the contrary, usually on the large and newer players (i.e. Norwegian, easyJet). Is this a premium customer on the social network or is it a first traveler? Is it someone enroute or at home? Data Silos.

At lunch we talked about another example. I may be a prime customer (“frequent flyer platinum”) at airline A, but I have trouble, getting recognition at airline B. Because it is not about being a frequent traveler, it’s solely about revenue. You are not with us, we don’t want youThat a good treatment of the frequent flyer on your competition might entice him/her to your own product is beyond the decision makers in most if not all airlines. Data Silos? Silo Thinking!

Else … Global WiFi access

On the “customer journey”, every stakeholder forces the customer to change Wifi on the way, use an app for the airport, the airline, the other airport, etc., etc. I mentioned that back in my Check-in 2020 blog.

Whooops. And my friend Stephan Uhrenbacher has to tell me he had an app developed that does it all: FLIO. But… Unfortunately the providers don’t want this, they oppose it and fight to not make this happen. And the airport WiFi is hardly in the control of the airport, but of “some provider” the airport just pays. So they want their log-in processes and pages and have no interest in “usability”. That being true especially on the U.S. market, where in addition the “free WiFi” very commonly fails and then the users complain about FLIO and not about the free WiFi provider of the particular airport. Stephan promised me, the idea is not dead, but yes, the task is not as easy as it might sound. Thanks to Data Silos.

Else … Ryanair, Air Berlin & Lufthansa

Kenny Jacobs in his very interesting interview announced they complained legally about the Lufthansa/Air Berlin merger, saying that is what it is, being called a “lease” business or whatever. As such, Germany remains a protected market with Lufthansa dominating 62% of the domestic travel.
Side note: That also goes in line with the trade press reporting the remaining Air Berlin being not sustainable. Questioning if Air Berlin is now simply bled dry, leaving the commercially loss making parts in the remaining company, accepting the bankruptcy as a logical end to it. I happen to agree with that assessment.

He also  announced they will feed to Aer Lingus and Norwegian on an “interline light” model but with baggage thru-check. Another step from Low Cost to classic operations model. As I kept emphasizing in my Airlines Sales & e-Commmerce presentations. Low Cost will only need a business case to provide “classic” services. Also nice to remember that ANNA.aero article a year ago (right).

Ryanair develops inhouse, for speed and prioritization of development. Ryanair decided to stop looking at other airlines what they do on their digital strategy, but they look at digital pacemakers, Amazon, Facebook, etc. to learn what they can do to attract the customer.

WiFi onboard? Consumers want to use their own devices on board. But the bandwidth inflight is not sufficient for mass communications. He believes the speed to come up in two years, but then the bandwidth demand will also increase. Yes, for long haul, but on regional flights not a real issue he believes.

User Centric Design

Konsta Hansson of Reaktor.aero had an interesting look into user centric design, not to decide for the user what he needs, but find out what the user needs and leave out the rest. He questioned if a check-in is a given need – or just a legacy process. Using RFID and e-Passports, I strongly agree with him.

Question I’d have and could not answer is based on the assumption that “check-in” is obsolete, how would you really refresh processes from the existing legacy processes to a completely digital process? And how do you manage the necessary change management with stake-holders like government bodies? Data Silos.

Who’s Customer is it? A Revenue Issue

Shall the passenger be shopping in the airport or in the airplane?

My three friends Stefan, Daniel and Marjan were on stage, discussing the different models the airports have to decide upon about their revenue stream for the passenger, called “ancillary revenues”. Daniel emphasized that within 20 years, the revenue for the airports no longer comes from the airlines. But (declining) from the in airport shops and (increasingly) the aerotropolis.

With Ryanair talking about “free tickets”, keep in mind, there is nothing such as a free meal. Someone will have to pay the air ticket somewhere in the process.

Summary: Start Moving

There was a lot of visionary ideas about where to go, but rather little about how to get there. The above concerns were quickly voiced but not identified as concerns. Steps taken are taken by individual stake holders (technology companies) and less on a development of common standards. So we have fantastic ideas, but we all keep develop our own individual standards = Data Silos. And worse: Silo Thinking!

We talk about “passenger journey” but the solutions are neither user centric nor easy to use. There was recently a story on LinkedIn titled Brand suicide case study: British Airways I strongly recommend… It is a good example about Data Silos, Silo Thinking and not specific to the named airlines. The same story unfortunately is true for most airlines. What we need is a management effort to Tear Down the Walls!

Food for Thought!
Comments welcome

… and if you happen to have a job for me looking after this, please keep in mind I am a job seeker!

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On-Time Performance and Punctuality League

Incompatible Data

Mark from OAG directed my attention this week on OAG’s Punctuality League, which they offer for free download and compiled the results in a “dashboard”, though I find that exceptionally unintuitive and more confusing than helping. FlightStats offers a similar information in tables and graphs I find far more intuitive, the On-Time Performance Awards.

Now after a quick first look, it shows already that it’s incompatible.

I just look at the first OAG graph “Top 20 Airlines by LCCs/Mainline Airlines”.

  1. Hawaiian Airlines (89.87%)
  2. Copa Airlines (88.75%)
  3. KLM (87.89%)

and compare to FlightStats, where Hawaiian neither shows in the Top 10 International Airlines nor Major Airlines (neither Mainline nor Network), but only Top 1 on Regional Airlines. KLM is 1st on International Network flights and 4th on mainline flights.

When I first encountered the FlightStats monthly statistics for airlines and airports, I’ve contacted them (with no reply) if I may add that as an indicator to our airport data. As I consider that valuable information for aviation network planners.

But as I stumble immediately over differences, it raises question. Such, it might be a good idea if OAG and FlightStats talk to each other to make sure they use the same data, and logic before they dig into detail. Or that they explain how they value the data and interpret it. As is, there are unexplained differences. Sorry, now I distrust both sources…?

Indicator. Indicator?

It can only be an indicator, as both sources fail to relate the one to the other. My first question would be to correlate the on-time performance to the hub airlines. Because it is utterly unfair to blame an airport, if their major hub airline is notoriously late.

Then one shall also keep the size of an airport and it’s congestions in mind, i.e. British Airways suffering from congestions in London-Heathrow or Thai Airways in Bangkok. Who is cause? Who is victim?

Yes, for CheckIn.com we emphasize that all that data can only be indicators. To be interpreted by an experienced network planner. Because a single new flight makes a major impact on a new or small airport, but has little statistical relevance on a major hub. Saying that, isochrones are in itself valuable statistical data and we put them into our analyses for a reason. As they are a necessity in comparison with the catchment area analysis to interpret the possible impact for a route. In forecasting, you work with indicators, you have no facts.

Big Data – Big Trouble

At the same time you work with big data, so the more data you work with, the more vital it is to get them from a sound source and have them integrated into a common system. Whereas most established data providers, be it OAG, Flight Stats, SITA, etc. have not yet  addressed that for a “good reason”. But as an industry, it is vital we add this and integration is very high on our back log at CheckIn.com of what we where we want to go!

For the time being, national statistics differ from Eurostats, differ from aviation industry statistics, differ from common sources. These differences in data you get from FlightStats and OAG just being an example that this is also an issue in aviation. Who’s right? I even have examples where the numbers figure within an airport’s own website for a given year. In order to improve, we got to tear down the walls! And yes, that’s part of what I will talk about at coming Passenger Terminal Conference & Expo in March. Will you be there? Please let us meet!

Rotational Impact

So. Why do I give these on-time-performance, no those delay statistics so much thought? Aside the cost of delays summing up to millions, they are not just a nuisance, but a problem. Because when I did that additional case study on cost savings, based on the Zurich Airport’s deicing I did for SAE G12 and WinterOps.ca, I learned an important fact from Swiss (the airline). Whereas the passengers impacted by the immediate flight understand the problem and accept higher force, the aircraft is not operating a single flight, but an entire rotation (a chain of flights) during the day/week. Any major delay has a rippling effect in the network. And if you have a snow-caused delay in the morning in Zurich, your passengers on the evening flight from the Mediterranean summer vacation will not understand and file for compensation. And the airline usually pays!

And for network planning, it is vital to know if you have to build in (expensive) buffers into your schedule, to cover up for the potential delays. That means your aircraft and especially crews are not airborne as much as they could be, such causing further loss of revenue. There is a very good reason airlines increasingly add clauses in the handling contracts with the airports punishing for creating delays and rewarding for reducing such. Being said to be an expert in winter ops planning, it’s bad enough about technical or natural (weather) delays. But yes, delays are also caused by aviation management, be it handling agent, airline operations or air traffic control.

A Summary…

So what now. I think the availability of delay statistics is compelling, useful and needed. But take them with care, as you take all statistics. Try to understand how they are computed, the logic behind and ask your provider accordingly. Yes, that includes our own. That’s why we publish the CheckIn.com methodology. Only if you understand it, you can yourself interpret it. Trust it.

We got to understand in our industry the value of data and common data structures. A delay is a delay? Nonsense. As I mentioned back three years ago in the article about A-CDM.

And I distrust any “closed source” company that does not provide me with their methodology on their analyses. Like many airports do. On the other side, at CheckIn.com, the value is not really the methodology (which is sound), it’s the work that is behind it, the compilation of data from different sources, the constant improvements we give that. Only given sound data, we can provide quality analyses. Given the quality data, anyone can come up with more or less professional analyses. Even to come up with the calculations we do to calculate an airport’s impact on a traveler’s likeliness to choose the one or other airport can be replicated. Though no, we don’t explain in detail how we do it, but the general concept. The hard work we spend every day to merge data from different sources, to cover for mistakes and other short-comings – that makes our work so hard to copy… And is a main part of our USP (Unique Selling Proposition), what makes us “unique”.

Food For Thought
Comments welcome!

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