15.04.2014 Aviation, Low Cost, Management, Sales

What is ‘Low Cost’?

An interview in ATN with Girma Wake, Chairman, RwandAir triggered a question that spooks around for quite a while now.

ATN: Are you afraid that this new environment will bring more low-cost carriers or do you believe that this model does not fit into the African environment?
GW: I personally believe that low-cost carriers in the African sense will be very difficult to achieve. First, because the cost of fuel in Africa is high, second there are limited secondary airports in Africa, we all fly from the same airports, and third there are few countries where the traffic density is large enough. If you are paying more for everything, handling, fueling, overflying etc, how can you be a low cost carrier?
So the question will have to be modified, may be not so much on the low-cost aspect of it but considers the issue of flying smaller airplanes to smaller airports covering smaller destinations bringing passengers to the major hubs. Such a model will probably work but the low-cost model as it works in Europe and America will take some time to develop in most parts of Africa.

Can a regional carrier with small airlines operate low cost? Can a long haul carrier operate low cost? Why can’t the big ones operate low cost?

Just my idea on that: I truly believe that a small carrier can operate a low cost model. In the beginning the carriers operated large narrow-body like 737-800 or A320 with some 185 seats. More and more, they also operate smaller aircraft like the 737-700 or the A319. And the time the prices were really low are gone as well. In the end you have to cover cost of operations as well as secondary cost like marketing, call center, claims and refunds, taxes and the likes. Not to forget the kerosene as a main cost block, forcing the models to slowly converge. Did I mention Intersky’s regional low-cost operations?

German DLR recently made a study on the fare levels. Comparable flights turned out i.e. an average fare incl. taxes/fees (selected days) like

Ryanair (FR)	78,78
Easyjet (U2)	97,44
Germanwings (4U)	144,33
Air Berlin (AB)	158,64
Wizz (W6)	69,99

With “low cost” and “traditional” airlines offering about the same price levels, it is about cost of operations and you got to cover your cost – low cost or “old model”.

IHS actually reports on the importance of low cost carriers for the smaller regional airports. With cost savings programs reducing services (and service), the “old carriers” loose quickly ground to the ever-expanding, young and hungry competitors. Where Lufthansa services about any German airport in the past, today Turkish Airlines offers more services to German Airports from Istanbul than Lufthansa from Frankfurt! easyJet (with a large base in Berlin) today operates more aircraft (199) than Air Berlin Group (153). And easyJet has 166 aircraft on order plus 100 options (Air Berlin Group 55 orders).

But easyJet can be booked in the GDS. There website even supports to book multiple flights connecting, which I did myself to the U.K. lately (via LGW). As I keep saying: The difference between Lufthansa or Air Berlin and easyJet is NOT that they are only bookable on the Internet (which is simply not true), but that easyJet doesn’t have legacy systems and processes – for easyJet, they focus on the business case! Where “airline sales” often gives special rates to portals and travel agency chains, easyJet does not see a benefit to sell low. They focus to sell high. So if you negotiate with them, you don’t negotiate competing the cheap fares. Also repeating myself: Anyone can sell “cheap”, you need no sales manager to do that.

And two remarks closing: Carolyn McCall, CEO of easyJet is known to understand and promote “service” as a unique selling proposition (USP). And WestJet with its Christmas Miracle had clearly a promotion for the WestJet trade mark in mind. While the “established” airlines keep diluting their own trade marks: What again has “Lufthansa” to do with “Germanwings” (Swiss, Austrian, …)? Ain’t they competitors?

Post Scriptum: ANNA.aero just announced axing of Ryanair, mostly of regional routes.

You should not rely on Ryanair for anything more than a door opener to make your airport known… And as an airport and region, you should have a strategy to sustainably place your airport on the “road map” of the global aviation network. That requires a strategy, incoming, route feasibility studies and all that common homework.

Food for Thought
Comments welcome

In memoriam: Airline Sales Representatives Association Frankfurt e.V

Having addressed “Airline Sales & e-Commerce” in presentations between 1994 and 2007, I became honorary member in 1999. I have tried to raise awareness for the changes our industry faces but now regretfully have to accept the official disbanding of the association effective August 1st, 2014.

15.03.2014 Aviation, IT

APOC, OCC, NMOC and A-CDM – a Bigger Picture

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

IHS Jane's ATC Innovation Award 2014 — IHS Jane’s ATC Innovation Award 2014

Returning from World ATM Congress in Barcelona (with the IHS Jane’s ATC Innovation Award in my baggage!), I think it’s time to address some feedback on an issue that I keep discussing in LinkedIn and elsewhere: The need to “link” the Airlines Operations Control Center (OCC) and the APOC (Airport Operations Center), the latter being a vital part in A-CDM.

Unfortunately, I see it happening frequently that these “control centers” live in their own little universe with little to no links to their peers. Talking about “Big Data”, Sabre as well as Amadeus and Travelport are “big data players”, though in danger to keep the silo thinking up too long.

Where Sabre once brought global e-Commerce to aviation, back in the 60s, back in the mid-80s, we installed the first Sabre Terminals in European travel agencies, aviation now stumbles behind on the possibilities of global e-Commerce, thanks mostly to technical limitations. As no-one wants to invest… If AA wouldn’t have invested at the time, where would we all be today? But is TPF (Transaction Processing Facility) still the core of our being? Or is it time to move on?

“When we are taught aviation at university we get the impression of how advanced aviation technology really is. When we start working, we are at awe, how little common sense or state-of-the-art is applied in aviation technologies.”

[a student at DLR German Aerospace Agency I recently talked to]

Today’s Agenda

Some keywords what I mean to address here are definitions such as A-CDM (vs. CDM) and Departure – or concepts like Collaboration or Rotation

What is the difference between an Airline Operations Control Center (OCC) and an Airport Operations Center (APOC)? And what about the Air Traffic Control’s Network Management Operations Center (NMOC)? And where is the “collaborative aspect” in these?

Right now, they are just three different data silos and collaboration, where it exists, is on a very small local level.

The OCC focuses to limit the negative impact any disruptions have on the operation of any single aircraft in the fleet. The OCC is – so far – the only point that has a rotational point of view, looking at the entire rotation of the aircraft and trying to minimize the impact of disruptions not just on the flight in question, but for all the ones following that particular “segment” (flight A to B).

With increasing legal demand to reimburse passengers on late or canceled flights beyond the value of their net fare they paid, this is were money for the airline is burned. And impact of disruptions and delays at the airport or in the air space may be a nuisance for the work at the airport or the air traffic controllers, but they have a commercial impact on the airline:

They are expensive.

Nevertheless, I seem to be rather alone in that point of view in discussions. Yes, there is an intellectual understanding at airports and ANSPs, but I have a gut-feeling, that it does not “compute” there really: Or why is it, that many ANSPs are not having their representative in the APOC? Not to talk about direct links yet. Or in the OCC? Or why do many APOCs not have direct (data) links to the OCCs of even their most important airlines?

What is … Departure Time?

One discussion a few days ago addressed the definition of “departure”. And it is such a basic difference in definition, it hit me like a hammer, making me understand the impact of that different perception! When air traffic control talks about departure, they talk about the take-off of the aircraft (ATOT). When the airline and airports talk about the departure, they often talk about the time, the aircraft leaves it’s parking position at the terminal or on the apron, the off-block-time (AOBT). I had trouble, understanding, why an airport should invest into a “Pre-Departure Sequencer” instead of a DMAN in the delair-definition. The difference is based on the same subtle misperception of departure. The PDS and most “DMANs” out there focus on the TOBT, taking somewhat into account the delivery of the aircraft “in time” to the runway. Based on a rather “static” assumption of ATC capacity. The DMAN in delair perception optimizes the “real” departure. Taking into account minimum separation of aircraft, depending on the Standard Instrument Departure (SID) route and other highly complex parameters, the DMAN calculates the best TOBT. Thus, no matter the general disruptions at the airport and the real throughput on the runway by ATC, it delivers as many aircraft as possible for departure. That maximises the throughput and in turn minimizing the recovery time after general delays or disruptions.

All that though happens at the given airport, i.e. Zürich. Talking with airports about departure management, the issue is about always that ATC (the ANSP) does not participate in the departure management, does not provide the needed information and – heresy! – how could we just imply that we could sort out the sequence for the air traffic controller? It works in Zurich? Heresy!

Is A-CDM not an FAA and Eurocontrol requirement? Burn it at the stake!

But now we go a step further…

The impact of the aircraft rotation and why A-CDM is something airlines should consider linking OCC to APOC, consider to spend time though the ANSPs who initiated the entire process are the ones stumbling behind their once shining visions of collaborative approaches:

Because the ANSP thinks in “Silo” and leg (flight from A to B).

A friend just recently told me about a major market, offering free access to the excellent flight-data for all flights within the region to the ANSP of a neighboring region, giving this to be offered in reverse to them. The neighboring ANSP (smaller) is not interested, the data is for sale. And they don’t see the additional value having access to the live flight data offered to them. Excuse me? That is Silo thinking.

And that is, why aviation technology today is way behind other industries. Because there is still silo-thinking. “Collaborative Decision Making” is a nice concept, but it fails real life on a large scale for the narrow-minded thinking of the people who’s job it would be to push the idea! It’s not about the bigger picture, but simply about own benefit. People call that “Greed” and it’s a mortal sin.

Food for Thought
Comments welcome

10.02.2014 Aviation, Management

The Right Perspective

New Airport Insider recently published a blog by one of who they call the “Generation Y”, students, getting ready for the travel and aviation industry. What triggered my attention there was a very basic, though very common misperception, what I call “the inside-out-look”.

What’s wrong with that?

That is rather easy. If you provide flight services, you fly both directions. Worse, if you subsidize any airport, you likely do it to attract commerce to your region (tourism is commerce too). You likely don’t do it to make the people in your region to take their money elsewhere. As such, the focus of airports and politicians alike must be on the outside in, or as we say in the travel industry; the incoming.

In the example, which is very common, the French author considered “rail” a competitor to flight. Which is true on the inside-out-look, or outgoing, but it’s simply missing the point once you look outside-in.

Aside of Germany, France and a handful other nations, train is usually no issue. Within these countries, train is very competitive on the local market, especially the high speed trains like French TGV or German ICE. But now I go abroad. Into another country. I go into any travel agency, even in France or Germany and ask for international travel. Give me a guess: How often will they offer you train, even i.e. Paris-Frankfurt? All they intuitively look for in phase 1 is “flight”. Is the city the client wants to connect to bookable on the GDS (Global Travel Booking System)? If not, the agent (hopefully without showing you) rolls the eyes, curses you and starts looking up how the f*** to get you to that godforsaken town you ask for…

In short: If you have an airport “nearby” with scheduled services that link you into the global aviation networks on the GDSs (connections are important), you are visible. Else, you’re an annoyance. If there is an airport “nearby”, travelers may take train, bus, rental car or taxi for the remainder of the trip.

Likely, not knowing the language, maybe not even the local alphabeth, it’s going to be a taxi or a car from a large (global) rental car company offering navigation system. Or a personal pickup…

Later, the train may become a competitor. But that’s another story. To trigger global commercial interest, an airport is a strategic answer.
But not just the airports, but also the connectivity by scheduled flights, which can be booked in the GDS, connecting the airport to the global aviation networks! Second lesson, most local-minded politicos miss to understand with their inside-out-look…

Food for Thought
Comments welcome!

01.02.2014 Aviation, IT

Check-in 2020

Aside other sources, I copy the content of that news with kind approval of Momberger Airport Information:

Passengers travelling with British Airways through London Heathrow Airport Terminal 5 have begun to test the personalized digital bag tag being developed by the airline. Microsoft Employees have been chosen to take part in a month-long trial, using a specially adapted version of the British Airways app, to provide essential feedback that will help shape the final product. The digital bag tag, which contains all of a passenger’s baggage details, could eventually replace the need for a new paper tag for every flight. Comprehensive testing of the tag has already taken place to make sure that it works in a live airport environment and can stand up to the rigours of airport baggage systems and everyday travel. Customers on the trial will use a Nokia Lumia Windows smartphone to check in, chose their seat and obtain their mobile boarding pass. Each will be equipped with a specially adapted version of the British Airways app, which automatically updates the digital bag tag with a unique barcode, containing new flight details and an easy-to-see view of their bag’s destination – just by holding the mobile phone over it. They can then save time by quickly dropping their bag off at a dedicated bag drop desk, before going straight through security. The personalized digital bag tags have been specially developed by British Airways, in partnership with Densitron Displays, and Designworks Windsor. #963.AIT4

These news upset me as much as the one I read about Amadeus trying a bag tagging based on 3G-technology. Or Air France and other airlines introducing “home-print” bag tags.

As I mentioned two years ago in my little article about a possible check-in-scenario for 2015, I would see a far more reasonable approach (and easy/fast to bring to market) by the aviation industry to use established standards. Why do they use a QR-code with a modified layout? Anything to hide? Or simply to do it different? Which by the way equals “more expensive”, faulty and slow. And – worse of all: Incompatible like VHS and Betamax…

Why do they try to implement and sell expensive, non-industry-standard-compliant stuff here? Why not using existing and proven technologies like RFID or the newer (but to be standard) NFC? Why force me to use an “App” (and where can I get online when being abroad?) or even worse, an expensive 3G-Network technology? Which Network???

In addition to my (somewhat delayed) prediction about Check-in 2015, I’d also like to see a common free airport WiFi system; wherever an airport offers free WiFi, it’s a common log-in worldwide. Maybe even the same for inflight, just a quick cost note if not free. Or at least a common log-in-process. Enabling to register “globally” is an added value for the Jet Set. And would encourage safer WPA2-connections. “CDM” in action – across aviation industry stakeholders 😉

I’m allowed to dream, right?

Food for Thought
Comments welcome

26.01.2014 Aviation, Low Cost, Management, Russia, Values

Global Economic Centre of Gravity

A Wake-Up Call

If you ask yourself, why Germany and Europe and their Aviation Industry stumbles behind on a global scale, ask our politicians! Ask them why new airports are being built in Turkey (+150 Mio. passengers) and Dubai (+160 Mio. passengers), triple the capacities of Frankfurt (56 Mio. passengers), more than double that of London-Heathrow (70 Mio. passengers). Each! More even than all London Airports together have – and they operate at their limits, new expansion stalled in bureaucracies. And ask them, why German Airlines go bankrupt (Augsburg Airways, Cirrus Airlines, Contact Air, OLT, …), struggle to survive (Lufthansa) or are already steered by Arabs (i.e. Air Berlin, Darwin Airline) … Our answers? “Air Passenger Duty“, night curfews, stop of 3rd runway in Munich (instead of Transrapid), Capital Airport disaster in Berlin, etc., etc.
There was a time, when German Lufthansa was the measure of all things. Without Lufthansa, i.e. the Boeing 737 would never have been build, nor become the most successful airplane type of all times.

Today the big shots are called by the Arab airlines, Emirates wiht 39 Airbus A380 just ordered another 140 of that mega-airplane, their fleet of 200 aircraft triples with more than 400 new aircraft on order. And Lufthansa’s Star Alliance partner Turkish Airlines doubles the fleet, adding almost 200 to the existing 200. And as mentioned, Istanbul gets another airport (they have two already) for another 150 million passengers, three times as many as Frankfurt manages today.
Lufthansas order list may look similar, but most of the aircraft needs to replace older generation “gas hogs”. And with 10 A380 and another four on order, with 29 747 with just 10 new on order, Lufthansa is in no position to play in the same league as an Emirates.

Germany Purchasing Power vs. Airports 2016 [updated 2016]

What many oversee is the commercial impact of aviation. As I show for many years now the correlation of economic centres in relation to airports and their size, there is simply also a historic development giving a warning example.

As Carthage and Rome have been the centre of the world in there time, as was Genoa (Columbus) or Bombay. Always the metropolises where strategically located at trade routes. And as shipping (the one on the water) got competition by rail, street and aviation, developments in aircraft construction shot airports like Shannon or Anchorage into the insignificance of history.

My former boss compared this with the old American railroad tycoons. Their self-conception was to build rail tracks and operate large iron horses, not the mass transport of people and goods. As the first aircraft were developed, they belittled these developments. As the World Wide Web developed, Microsoft belittled this development and to date limps reactively behind current developments (the Windows 8 Apps are simply uncompetitive compared to their Apple paragons).

And currently, the politicians of the “industry nations” miss to set the right tracks for the future. Would Moscow get the Russian corruption in check, no politicians would dare to challenge the authoritarian regime of this resource rich country. Just as they handle China with velvet gloves, knowing exactly that money rules the world and in the end, if they want to “profit” from the business, they dodge their high moral and ethics first… And aviation is simply a punching ball for them, screaming “noise” and “pollution”, no matter the major, largely unsubsidized developments in quieter and fuel efficient aircraft… Yeah, don’t think, just hit’em and milk’em!

For aviation, it is finally about moving people and goods from A to B (as efficiently as possible). And who believes the thousands of aircraft seats ordered in the Middle East would fly empty… Where does the traffic flow? Minimum growth in Europe. A graph by the CEO of Turkish Airlines given when he took seat of chairman of the European Airline Association AEA pinpoints it:

At the same time Lufthansa impairs it’s cooperation with Star Alliance Partner Turkish Airlines, with the reasoning that they would “unfairly” pull longhaul passengers to their hub in Istanbul. “Obstinacy” you call that I think. Because factually, in the current political sludge and struggle for survival, Lufthansa has nothing substantial to counter such developments

Cash cow - milked dry — Cash cow – milked dry

Aviation in Europe: Lufthansa and Air Berlin have rested too long on their successes, Western politicians simply understand aviation as a milk cow they can drain, ignoring the negative repercussions to commerce of their decisions against aviation development. Even Ryanir “stumbles” and frantically tries to reshape the own, aggressive business model, replacing it in fact with a core-different business model. If that will succeed? I doubt it.

My expectations: One global hub will remain in Europe. With Easyjet and current focus by Norwegian, London has a good chance, if they get their capacity problems managed. London isn’t dependent on the drip of British Airways as are Frankfurt (Lufthansa) or Paris (Air France), being tied to these airling operators for the better or worse.
Passengers from or to Europe then will fly with regional feeder services into the real global hubs in Moscow, Istanbul, Abu Dhabi or Dubai. As a hub to South America Portugal could position itself, but also Madrid and Morocco (outside the EU) are showing ambitions, a prophecy being rather risky there.

The traffic and commerce streams are changing. And I have concerns about the ability of the industry nations politicians to realize that the world suddenly bypasses them. And when they wake up, it will simply be too late.

Food for Thought
Comments welcome

02.11.2013 Aviation, Management

Ground Damage

Just reading with great interest in Ground Handling International (October 2013 issue) an article starting:
“Can we ever hope to rationalize the slightly surreal situation that sees a poorly-paid ramp agent driving an expensive unit of GSE around a multi-million pound aircraft? Alwyn Brice considers ground damage solutions”

Reading “[…] drew our attention to the fact that an insurer has no obligation to conclude a deal with a handler if he (the insurer) feels that the risk is poised too high.”
Just a reminder: Insurances are modern betting companies. Here, they bet that the ground damage stays long-term below the insurance fees. Insurance wins. If you mess up their risk-evaluation, they get rid of you as quickly as (in-)decently possible. Unfortunately, they rather frequently happen to tell their friends (the other insurances) about you. And yes, that’s the case for insurances anywhere.

That said: It is in the “common” interest to have experienced, reliable staff operating. One approach can be, to demand that in the contract. Just not yet part of any contract I’ve seen.

And every time (airline) managers tend to “outsource” existing business parts, they most times do know their new “partners” provide lesser quality for less money, safe on salaries and training quality – as the airline sure tweaked their operations already to cost effectiveness (within internal quality levels). The only the ground handler can become cheaper is to compromise quality. What worries me often, is the nonchalance with which security and safety are as such willingly put at stake by senior aviation managers “for the sake of business” (cash).

Not to misunderstand me. There are business cases that make outsourcing reasonable, I know General Sales Agents (GSAs) and Ground Handling companies serve a purpose when there is not enough “own business” to justify own staff. And in such cases they can provide better quality by consolidating business and having the advantages coming with the larger scale of operations.

Food for Thought
waiting for comments

25.10.2013 Aviation, IT

A-CDM, TAM and Changing Paradigms

The last weeks I was traveling a bit more. And while I attended WinterOps Canada, my boss was at Inter Airport Europe to promote our solutions jointly with our partner UFIS Airport Solutions. Coming back from Canada, I attended the renowned international TAM Symposium, taking place in Braunschweig, where I currently live.

Making new friends in Vancouver, it was my pleasure to also strengthen my friendship with Etienne at TAM Symposium, meeting also wonderful people like Tom, Johan, Anne, Erica, Louise, Kris or Hamsa, just to name a few – you know who you are 😉

One of the core results of these past two weeks is quite frightening. After years of promotion of A-CDM in Europe, there is only a handful of people who understand what A-CDM is all about. Even the experts at TAM Symposium reduced CDM (Collaborative Decision Making) to the sending of DPI-messages (Departure Process Information) to the Eurocontrol NMOC (Network Manager Operations Center). “Eight Airports have established A-CDM”…

As we promoted lately in a press release, Zürich became Eurocontrol CDM compliant (number nine). After doing CDM for more than 10 years, that was newsworthy… Because only now, it counts…?
Though if that is true, if it only counts when the data is linked to the ANSP (Air Navigation Services Provider, Air Traffic Control) why is it always a problem to get the ANSP into the APOCs (Airport Operation Centers) being developed?

Source firewalkeraussies.com — 4-way tug-o-war

As I had expressed before, A-CDM is so much more than what most people, even the experts understand it to be. It is not just a concept to share data, but to work together for a common improvement, making sure everyone pulls on the same rope…

Now the makers of the TAM Symposium even add onto it, promoting TAM, Total Airport Management 😮

So what is TAM? Where CDM is mostly focused (so far) on the airside to improve airport processes, TAM adds the landside. Which is by the way, what Meta-CDM is all about as well, right Alison?
Again, if I search for “Total Airport Management” on the Internet, I get a ton of different explanations what TAM is… or is supposed to be? Even from companies who have been attending the TAM Symposium since it first started. Be it DLR, Eurocontrol, Wikipedia or Siemens. If I then turn it to a global scale and look at CDM or TAM, I could start crying.

“And discussing TAM and CDM, one of the key findings was that no-one understands what these developments are all about.”

As Etienne expressed in his short presentation, the main issue – and mostly the missing link – in the end is “The ‘C’ in CDM”. It’s about Change. Complexity. Cloud. Collaboration. Communication. Many things, but mostly not about Collaboration (as the definition says), but about Change.

Change from a holistic data model with data residing in independent silos, towards a “cloud computing”, where you share the data and the players benefit from the collaboration of data, making sure everyone at any time has the same information at hand. Actually, that reminded me of a presentation of my dear friend Richard, who I quote in the header of this blog, which dates back into 2002 … The underlying concept he raised even as early as 1996!
It is frightening to think that in aviation, the airline, airport, ground handler and air traffic control work – to date – with different data. Supposedly the same, but there’s no guarantee for that…

So do we need to promote “TAM” or “CDM”? Or should we simply start to promote to use state of the art concepts such as “cloud computing” for the benefit of all players?

One of the questions that came up in the event was “Who owns the data”? And that is already the wrong question. No-one “owns” the data in a cloud. But by sharing, the quality of data is improved for the benefit of all – if you start of with an assumed value, whoever has the real value first, will amend the information, accessible seamlessly to anyone.

Once the pacemakers in global e-Commerce, enabling global flight booking in the 60’s long before “Internet”, the aviation industry has lost its bite long ago, stumbles behind.

To make CDM or TAM happen, we need to change. And change is (always and everywhere) a major problem. And we should start to think beyond our petty sandboxes, about the benefits of accurate data and how we can work together to a mutual benefit.

Another question that came up, was about the missing of airlines in CDM-development, they being the main beneficiary of the process. Which is right. If Zurich can now accurately forecast the delays and cancellations caused by winter operations, Zurich can inform the airlines operating flights inbound to Zurich in time to possibly cancel that flight, due to weather, ensuring this particular aircraft aside of that flight stays on-time in its rotation (its daily or weekly operations plan) and does not get stuck in Zurich with a three-hour delay. In reverse, easing the situation for the situation at Zurich.

As a result, the flight cancelled, no passenger compensation will be paid for it or the following flights the aircraft is planned to operate. The resulting cost is lower than if the flight would go without such warning and gets stuck at Zurich.

So yes, the airlines benefit from such development and it is a great pity that they do not understand that. Though as mentioned in my last post, when flying to Vancouver, BA and AA were unable to issue the boarding pass for the next flight segment. So even within the Oneworld Alliance, they seem incapable of sharing the necessary data.

Now looking back at Richards presentation 2002 (and several before then) and comparing to what Hamsa Balakrishnan of the MIT said in her presentation at the TAM Symposium, I somehow feel reminded of good ol’ Don Quixote.

So let’s keep fighting those wind mills 😀

Food for Thought
(comments welcome)

Update: Following link failures, the files are now linked locally. The original links are:
delair Press Release on Zurich Airport A-CDM (2013)
Richard Eastman @ MIFNET 2002
Hamsa Balakrishnan @ TAM Symposium 2013
Etienne was hired by SITA in Spring 2015
UFIS A/S has been acquired by Amadeus in 2014

20.10.2013 Aviation, Management, Values

My American Airlines Story

As many of you know, I started my career with American Airlines. That I left due to a mobbing supervisor was one of the “mistakes” I do happen to regret in my career. Though looking at American today, I am not so sure if I’d be a happy employee either.

As Air Transport News summarized World Low Cost Airline 2013 congress: “In the current cut-throat market conditions with the so-called legacy carriers cutting jobs, renegotiating staff contracts, the concept of customer loyalty to a brand is becoming obsolete as the lines between full service carriers and low cost ones are getting blurry and price has become the key factor for customers when it comes to choosing a short haul flight.”, they make a common mistake, as I strongly believe that brand is not becoming obsolete, just neglected.

AA logos during the times

AA. No question.

When I started with American, it was the world’s largest airline. We were Proud to be American, we received frequent training to always smile at the customer and “customer first”. We also received monthly video updates from the senior management about strategic plans and news, we were a big family. Reminder: That was the World’s largest airline. In all those years, in fact in the past 80 years, the American aircraft was easily distinguishable by the eAAgle on the tail with it’s double A. In many movies, AA aircraft could be identified simply by the silver body with the blue/white/red stripe, even without the logo or the name on the body not being visible. From far away and even in bad weather, the aircraft was easily distinguishable by its prominent AA on the tail.

blank nose

The new aircraft at that is a greyish color, reminded me on my first encounter too much of the U.S. Military Airlift Command, with bright colors being the name on the side of the body and the colors of the American flag on the tail, very similar to U.S. Airways and with very little profile. And the main identifier, the “AA” is gone for good…

American (new) – US Airways – American (traditional)

The staff is “just another airline”, I did not receive much of a smile at all, neither on the ground, nor in the air. Having been the pacemaker in aviation technology, inventing SABRE, enabling global bookings long before Internet, Frequent Flyer Program and Yield Management, technical problems found me at a loss. British Airways, partner of AA in the Oneworld Alliance was unable to issue the Boarding Pass for the connecting AA-flight – all being booked under AA flight number. Baggage being checked through to Vancouver, I received one boarding pass for HAJLHR, then in London the next one for LHRDFW and because the onward flight was beyond 24 hours (I made a 23hr-stop to meet friAAnds), I only got my third boarding pass to Vancouver in DFW. My baggage they could handle, but to issue the boarding passes for the entire trip was a technical problem? I’m at a loss, find that even questionable on a legal level…

Robert “Bob” Crandall

Discussing my experience with friAAnds and stAAf I met during my trip, I found that the AA-spirit is gone. Ever since Bob Crandall left, the button-counters took over, who had no vision, but claimed they’d know how to make money. Trashing the high values I encountered in my time when Bob Crandall was in charge, staff is an expensive and expendable resource, service is a theoretical concept of questionable value, people just fear for their jobs and working for American competes with working for anyone else. And now AA is under Chapter 11, “restructuring”. Well, a good result to turn the world leader in aviation to a patient under Chapter 11, right?

Goodbye Lufthansa

What is my personal lesson about this? I believe that brand is underestimated. Be it American to drop a recognized, gradually developed brand of 80+ years, dropping the “AA” which was a core in 40+ years of AAdvertising, or be it Lufthansa, “outsourcing” European flights to “Germanwings”, with no visible relation to its mother. And wondering, why passengers show no longer any brand loyalty flying within Europe.

And it confirms lessons that I learned many years ago. My “boss” during business education in a large whole sale business told me: “There is always someone who can do it cheaper”. So price is not a differentiator for a sustainable business.

Richard Eastman

And my friend Richard taught me: “Price is psychological”. It is about what is the buyer willing to pay for what reasons. And “cheap” is mostly not the main value. Brand, service, loyalty, identification are very important drivers. Why would one buy an Apple iPad? There are cheaper tablets out there, some of them possibly even better. Why do I buy a Windows-based Ultrabook convertible replacing my Laptop and my iPad? Why do I choose brand X over brand Y? Believe me, I could buy “the same” for half the price, but my experience with the brand is good, why should I go “cheap” on something as important as my IT?

Airline Managers focused on the Return-of-Investment and the Shareholder Value but without a vision are followers, they do not make good managers.

Any good business started with someone believing in an idea and taking a risk. Once you loose that entrepeneural spirit, you become a follower and start loosing.

Food for Thought
(comments welcome)

21.08.2013 IT

What is ‘Big Data’?

A new hype shakes up the business world. Everybody talks about “Big Data”. But what is that all about?

nsa — Source: AP Photo/Google, Connie Zhou

Basically it’s an utterly normal issue. More and more data is collected, increasingly larger amounts of data have to be analysed and made “usable”. And this is the crux of the matter, even NSA faces problems with. Because you can’t see the wood for the trees. And to call for the example of the Needle in the Haystack… As I showed years ago, that “problem” is none, but can be solved quickly with the right tool (a strong magnet)…

But what the “experts” try here, is to find from a randomly found pine tree needle from the forest, all the other needles that originally belonged to the same tree. And the forest grows!

The first, Big-Data-experts came up with, have been personal profiles, coming from a variety of different sources. That Google and Facebook still offer me young Russian ladies for marriage is a good sign that they are way off even that goal. It makes their life not any easier that I don’t work at German Mail in Bonn, neither being the treasurer of Kassel.

Big Data is simply a reality, no “hype”. But it remains a “problem”. To manage “big data”, I need the matching technology on the one side, on the other intelligent and fast fitering algorythms. And as the amount of data grows faster than the processing power, the real problem is predictable. Either I filter the large amount of data very rough, or I filter smaller amount of data very detailed. A question of width and depth of information. So what does NSA do with the data? First, filtering it by catch words and phrases. Then have a highly paid analyst try to separate the wheat from the chaff.

Two dangers:

1. False Positive. This defines information that is incorrectly assessed. I.e. in Spam an important message the computer considers Spam. Is it about people and the NSA, a “false positive” can have devastating repercussions, such as the denial for totally innocent people trying to enter the U.S. (such happening).

2. Privacy Protection. It’s being compromised and I keep lately quoting the former U.S. Presidents Franklin und Truman:

“Those who surrender freedom for security will not have, nor do they deserve, either one.” [Benjamin Franklin]

“we want no Gestapo or secret police. FBI is tending in that direction. They are dabbling in sex-life scandals and plain blackmail. J. Edgar Hoover would give his right eye to take over, and all congressmen and senators are afraid of him”. Ersetze FBI durch NSA… Und was, wenn die “Teaparty” tatsächlich an die Macht kommt (vergleichbar bei uns der NPD)? [Harry S. Truman]
Replace FBI by NSA… And what, if the “Tea Party” in the U.S. really get’s to power (comparably our NPD)? We call it something falling into the wrong hands.

In aviation, we also work daily with “big data” and not just British Airways develops ideas to merge their customer profiles with the public profiles of their clients from the Social Networks… We also have to think about how far we want to go. Or if there are other areas of “big data” of interest, such as operations management.

Food for Thought
comments welcome

17.08.2013 Religion

Heresy

Writing last week’s blog, I was confronted again with my criticism of church. For the ones of you who don’t know: I believe in God. Being maybe not what church tells us, but “some higher entity”.

Researching on “heresy”, I sure stumbled over Galileo Galilei. Church-accused of heresy and put under house arrest for the remainder of his life, we nevertheless all know today that church was wrong and our world is not the center of the universe.
Galileo’s approach taking Augustine’s position on Scripture, can be interpreted today as the reminder that the bible was written by people who never heard of contraception, Internet or space flight … Trying to interpret things they could not understand they used metaphors.
So I believe the Bible and especially the life of some Jesus of Nazareth to have a good ethic and moral message, but written and rewritten in centuries after Christ lived, from hearsay, tales and songs, church only declared Christ to be son of god a good 435 years later.

I also deny to condemn people with other believes to hell, as it was Christ who died on the cross to take the sins of humanity until the final day of judgement at the end of the world. Being a Jew himself, I doubt that he made or wanted any differentiation between confessions: “Father, forgive them. They don’t know what they are doing”.

And he might have known of some religions, but I am sure the people later interpreting his life never imagined Australia or the Americas. Though isn’t it important to believe in God? Looking at the different churches and religions that raised from the Old Testimony and believing in the same God, they are their worst enemies. Thinking about Manitou as the god of the Indians, his “ghosts” as the angels, I don’t see, why it should not simply be a different understanding of God and his angels, stemming “naturally” from a different history. And in fact, they understood their position as a caretaker of nature, not rulers and destroyers (what blasphemy).

It’s not about church, or the Bible, it is about being a good man. If you interpret the Bible (or the Koran or any other religious foundation) to justify murder, war or theft, you are evil and have a sick understanding of what Christ, Mohammed, Buddha or whoever you believe in wanted.

Is it heresy to question interpretations of church? Is it heresy after millenia of proven mistakes they made? Didn’t church fall in with the Third Reich and condemn Jews happily to death? Did they not enrich themselves by stealing their money? Did they not commit murder and sanction war – in history to date? Are they not accused through time and again to abuse children? No, I do not believe in church. I believe there are many decent people in the churches. About the system I agree with Lazarus Long:

“The most preposterous notion that H. Sapiens has ever dreamed up is that the Lord God of Creation, Shaper and Ruler of all the Universes, wants the saccharine adoration of His creatures, can be swayed by their prayers, and becomes petulant if He does not receive this flattery. Yet this absurd fantasy, without a shred of evidence to bolster it, pays all the expenses of the oldest, largest, and least productive industry in all of history.”

And yes, by the way: “The second most preposterous notion is that copulation is inherently sinful.”

Food for Thought
comments welcome