What does an airline do with 90 A380

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.

A380 Terminal DXBIn LinkedIn, based on a recent analysis by RBS, someone raised the concern about 90 A380. Will it impact Europe? I disagree with the question, it’s point of view and the analysis.

The main mistakes most “Western” analysts and experts do in looking at the Emirates (and the greater Middle East) is the trained focus on shareholder value, fiscal year (results) and political elections.

Long term thinking in “The West” has been replaced long ago by the above obstacles. But it is a vital part of the cultures in other parts of the world. First and foremost is the family. Followed by the clan. Then the neighboring clans, then by the “same people” (i.e. Muslims, other Sheiks, …). The main rule is that the family and the clan must prosper. Until very recently in such terms, the Sheiks survival was simply a matter of following these simple rules – which by the way are also described in the bible.

So what will ‘the Emirates’ (not just talking about the UAE) do with hundreds of A380s, with thousands of seats? Why do they build the largest number of luxury resorts worldwide? The Palm? The World? Free Zones for commerce? Because having the – what thes DO understand to be temporary – “Gift” of Cruide Oil income, their expressed target is to establish the Emirates regions as a crossroad for international tourism and commerce – and the “it-destination” for the rich and famous.

triballeaders_natgeoWhen the crude oil is gone, they will be remembered by their own for their foresight and to not just have spend the riches but at the same time made a lasting impact.

Will Europe, India, other markets suffer from that? Yes. Because the Emirates and their development tries to take away long-haul-connecting passengers. They will expand. They started on the racetrack Europe-Asia. They slowly expand now to Russia-North-Africa, connecting Asia with North Africa at the same time. They will not be competing much on the ruinous Europe-America-market, except to take the passengers connecting in Europe from North America to Asia…

They play by the rules, as long as these rules don’t interfere with their goal. when politically advisable. Else, always be aware: Their family and the clan comes first! If they have to bend or break other people rules for the benefit of the family or clan, they will do.

Their goal is so easy – but hard to grasp for too many of so-called “experts”, as their goals are so long-term…

Food For Thought…

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The Need For Consultancy

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.

I lately got involved in discussions about the need for consultancies and how that market suffers the first from the financial crisis.

Roland Berger
Roland Berger

German top-consultant Roland Berger was quoted saying “You cannot push-start a car from the inside”. Which I found valuable. But it reminds me of a major shortcoming of todays managements: I have not needed to push-start a car for decades. The view is rather rare on the streets. But I need to confirm: The job of a consultant in most cases is to have an unbiased look at the company, speak to the people, listen to their advise, organize it and present it to the company. At that level, some creative suggestions on how to solve the identified shortcomings helps to make you a good consultant.

sxc439663Another cause is the discouraging of creativity by the bean counters. “Do your job, don’t think” is very common in larger companies with strict hierarchies. Mostly these companies are “managed” by bean counters, thinking of staff only as a little wheely in the machine – a “human resource”. Exchangeable, not valuable. In such cases I either can make these managers understand the value of a reevaluation of their values and the advantages of motivation of creativity, but more often I can only help them by voicing what they overheard for too long from their own people.

So the job of a truly good consultant (but they are rare) is to listen. To gain the trust from the people. To qualify, summarize their needs, consider solutions and present the findings to the management. The best ideas on the job are usually not mine. My experience only helps me to qualify them and put them into a structure and present them to management in a way they understand. Being the moderator…

Food For Thought.

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Crumbling Facades

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.

What is money all about?

Crumbling FacadesFirst the financial market in the United States failed. Constructs where a single person is responsible for the loss of 50 Billion US$ are just the top of an iceberg. That ice berg turned and we all feel it’s repercussions.

But it was not the U.S. that caused the problem, but the greed of financial managers and the corruptibility of the politicians that made it possible. German’s federal state banks had to be sold, only to learn the buying banks from the other states are simply in similar troubles.

Deutsche Bank manager Ackermann and Deutsch Bahn boss Medorn keep up the facade of the reasoning for the indecent salaries they and their buddies in other corporations pay themselves, blaming others in their companies for the problems their companies face. Isn’t it the CEO who is ultimately responsible? If he has his company not in check, he may not be worth his salary. If his company looses money, they make a bonus? When they fire people, they make another bonus? “No risk, just fun” the yellow press recently titled…

Companies asking for help, often “suddenly” coming up with hidden “treasures” and financing leaks often as high as the losses so far admitted. Oops. If I have a management that has no up to date information about their financial situation, I can imagine this in a start up or small company – but we talk “global players” here! My advise: Fire them! Sue them! You got to, they got to learn the basics of business before they are allowed any management job again!

Politicians having been informed as early as August about the financial troubles of German Hypo Real Estate but now claim their innocense?

In Russia, Oligarch Boris Abramovich lost first the control on AirUnion, which meanwhile “somewhat” restarted as Rossavia as a state airline, now looses Malev as well. His buddy Lebedev is out of a deal to take over German Öger Tours, he’s short on money – weren’t these the people anyone worldwide envied for their incredible wealth?

And wasn’t “U.S. President” a synonym for integrity? Thank you Mr. Bush… What a legacy for Barrack Obama.

So with all these crumbling facades, it is not the time for blame. But it’s time to roll up your sleeves and work to get us out of the mud hole these irresponsible and greedy idiots drove us all into. I am daily facing cases, where good people loose their jobs to managers, still thinking to cut heads is the solution. Or airline managers believing that it’s important to increase revenue at all cost. Flights take off fully booked but causing the airline to loose money?! That has nothing to do with bad sales, but with a bad, price-only-focussed strategy of short-sighted managers. Good service needs good people. But our industries miss to show their own strategy. What makes an airline commercially successful? More aircraft with less people? A drop in service? A university graduade being sent to the key account having no idea what a cross ticket is or what makes a travel reseller select one airline vs. another? Pay for coffee inflight? The next business for airports and catering companies is logically to have vending machines offering snacks and drinks at the gate (or on the aisle infront of the waiting room) at cost below that offered inflight…

BethuneQuote

But what keeps my mind busy is the question, why the facades visibly crumble, why we work in an industry where everyone tells me no one in his right mind would invest in? I did question the human “resource”-thinking. I hear from Lufthansa that the “Lufthanseat” (the employee news) is off reality. American Airlines staff tells me they have never heard of the company update video I remember from the 80s.

BransonEmployeesOur industry is like the opposite to the car industry, but not any better: Where they focus to build the big cars for big money and ignored the growing demand for low-consuming cars, our managers seek quick revenue at any cost…? Load factors and market share at the cost of yield and income.

We can learn from the current U.S. president. Airlines got to learn again that the manager is head of the family. That means (s)he also has to look after the family income and budget. But they got to get out of their glass domes, listen to staff and customers alike and finally start face reality!!! And come to grips and learn to make money!

Food For Thought – your thoughts about this sure are welcome…

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St. Florian’s Principle²

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.

Oh holy dear St. Florian
Don’t burn my house
Take the neighbors one

Four related cases in the past weeks triggered this Food For Thought:

helpdeskGerman Rail – remember Lufthansa…

The IT system of German Rail crashed, disabling not only the entire distribution for a day, but also the train guidance system EBULA causing major delays on train schedules, stranded passengers, the whole nine yards.

The German FVW titled its blog “That wouldn’t have happened in the past”. In m comment I referred to Lufthansa’s IT-crash in 2004 (German article). It is not impossible for IT to fail: A “99,9% up-time” is an +8 hour outage. Usually at the most busiest and inconvenient times.

Purely incidentally I was once at Frankfurt airport when the system failure disabled issuance of boarding passes. To date, I do not understand, why the staff just sat back and delayed boarding for “technical reasons” until I came, wrote the seat numbers on blank boarding passes and handed them out to the check-in agents. A wonder: NO single traveler sat on any middle seat, they either had a window or an aisle seat. I think that never happened ever since 😉 And that flight was about the only one that left that day “on schedule”…

But the believe in the invulnerability of the IT-systems is as unfounded at is is common. Contingency planning for any possible natural disaster, but none for the case of a computers black out! There were processes in place “b.c.” before computer. Have copy samples of “manual documents” dusting in a folder in the closet is not much of an investment, but it could be the difference to a cancelled operation. And for the case of a power outage just a box somewhere with enough copies for a 24 hour backup could not be that expensive either…

bahnAnd even if you rely on it, German rail sure saved a few hundred Euros not investing on a cache memory for the train guidance system that would have saved them from major train delays…

Don’t they ever learn? Bean counters…

Oh holy dear St. Florian…

Striiike…

Image courtesy -die Welt-, click for full image series
Image courtesy “die Welt”, click for full image series

It is simply a miracle how lightly the passengers of U.S. Airways got out of a potentially fatal situation that is not uncommon in the aviation industry: Bird strike. Yes, the pilot is a hero, but as usual that means he has been faced with an impossible situation and by tons of luck was able to avoid desaster by a hair. As safe as flying is, accidents happen.

Reports do question the efficiency of the New York authorities. It’s not far from the hudson to central Manhattan. And a bird strike can disable steering capabilities… Let’s say, they got another wake up call.

wigFriends called raising a discussion related to my WIG-idea. No, that one is also “stalled”. But yes, In case of a bird strike, a WIG would not crash but simply drop some meters and float. And despite the fact that I am sure, countries in the tropical belt, especially faced with global warming should have a vital interest to push that technology, Mauritian Air Taxi just ordered a fleet replacement using standard engines.

Oh holy dear St. Florian…

Nokia

nokiaYes, I know gloating is not nice. But a report last week on Nokia is a case that does make me smile. Nokia in 2007 shut down their plant in Bochum from one day to the other to replace it with a newly built plant in Romania. The result: Nokia’s reputation went through the floor (they became “the example” in Germany), their sales dropped, the Romanian plant only employs less than half of what they planned for. So the bean counters were miserably wrong with their previous assessments about the advantages for Nokia.

The closing of the report said something like: In the retrospect of the financial crisis, sure Nokia was just a little premature, but it shows how wrong it is to focus on numbers and short term profit only, underestimating social cohesion in crisis. It’s tough to calculate people’s reactions. And yes, more than 1.300 of the 2.500 former employees still have no new job… Them having the usual 50-100 friends and relatives in direct vicinity plus the usual 50-100 friends of these friends that are being aware of that, even on a conservative calculation that accounts easily up to some 5-10 million “lost customers”.

Oh holy dear St. Florian …

Uptime

99% uptime = +8 hours/year outage
99% uptime = +8 hours/year outage

Speaking with the IT-expert in a German tour operator about “dynamic packaging” he gave an example of his counterparts in other companies to target 70% uptime of their GDS-based functions. The issue we discussed being “time outs” on API-calls on the GDS causing vital systems to stall. We agreed. 70% is a farce! 99.x is the necessity. 99.9+ must be the goal. Having been pace makers on the IT-networking since back in the 60s (SITA, Sabre & Co), the travel industry has lost its drive.

Asking about why the tool they use does not have a function to check on API-calls for a time-out, I was told that the IT-company developing the tool did develop it for “agent use”, not for an “Automator” working unsupervised…

Oh holy dear St. Florian …

Do you have other such cases?

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Job Challenge or Play It Safe?

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.

sxc278961I am recently faced with the question, if I shall take up a very challenging position, asking the best of my abilities, thus meaning fun, but at high risk of a temporary assignment … Or play it save and go for a job I can do good, but which does not pose any real challenge but routine work – in return for a safe job?

And many friends face a similar question. Do they leave their “secure” job for another one around the corner they don’t know how “secure” it truly is? Monetary thoughts, very high valued by the bosses are of minor interest to most. It must be decently paid. No question about it. But if that is the case. Would you trade safety for some risky challenge? Sure – this answer did change quite a bit since the financial market turned the entire world into a madhouse.

So we all have to think about this question and give it serious consideration. But it can not be generally answered. Any one’s risk assessment is different. It depends on obligations to others, family, credit for a house, etc., etc..

If we have a challenging, well paid job and loose it? It is sad to see friends going broke, their spouses leaving them when times are no longer luxurious. So what values are important in life? At the same time, there are many companies speaking not of personell, staff or “our people”, but of human resources… What messages do we get from that?

Reconsider your values…

Food For Thought

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Old School – New School

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.

KniggeSome of you have already read the Sapphilosophy-Blog I created in September as a result of another discussion with friends on philosophical issues like love, friendship, honor.

Very famous in Germany on the topic is “the Knigge”, his book “On Human Relations” being considered to date the guideline for respectful interpersonal relations.
In the past weeks, I was told to be “old school”, namely for the respect I have for people, but also about topics like loyalty or (personal) honor. These values are in short supply these days, but I am convinced it is the more necessary to hold up the flag.

Once more I was told this is my main weakness. Right. But being a weakness in business, I found it my great strength in life. I stay errect and look into the mirror with pride. Sure I made my share of mistakes, but is there anyone flawless? And I stand up to them. The same friend questioning this “weakness” asked me, how I could be so optimistic despite the treatment I received throughout my business life. That is because of my friends – mostly people like you, reading this blog. For you I am grateful.

I thought about it quite a while if I should address this topic in the Food For Thought blog, but the world is changing. Greed, arrogance and egomaniac arrogance are going out of fashion, the global financial crisis and people like Barrack Obama make us reconsider our values. In aviation and travel industry, we shall also consider how we treat our own, business partners and staff alike. And if it makes sense to save money at all cost.

Robert "Bob" Crandall
Robert “Bob” Crandall

Robert “Bob” Crandall was my topmost boss when I started in the airline industry back in the late 80s. He shaped the entire industry, but having met him just briefly, he has been a role model for me ever since. Under his management, the entire company was a family. Everyone worked for the benefit of the family. Suppliers were happy to deal with American Airlines. Sounds strange to you these days? Yeah. The bean counters took over.

Food For Thought: Can you look at your life with pride?
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Debugging Six Sigma

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.

SixSigmaIf you don’t know what Six Sigma is about, read this Wikipedia-article first.

I had some discussions lately about sense or nonsense of Six Sigma. Part of the information flooding today is that there are a lot more variations of “best practices”. So I do not disagree with Six Sigma, but there’s two points you should keep in mind with their or any other best practices. They are guidelines. Not a panacea. And with all such best practices, they are about what you make out of them.

For Six Sigma especially, there is a point I found far to strictly adhered to: The financial focus.
In most jobs I have done in my life, I was the fire fighter for managers who did not understand the value of a fire fighter. Because a fire fighter is paid like an insurance. You are happy if you never need it.
We call it the Saint-Florian-principle:

Oh dear holy Saint Florian,
Don’t burn my house
take the other one…

automationThere are many such jobs in any company, but that’s the jobs, most often the first ones being cut by Six Sigma disciples. Service, support. They are cost factors, they do nothing but cover for the mistakes done up front. As there must be no mistakes, there’s no need for service and support. It’s a very typical trend for any company where managing responsibility is transferred from the entrepeneur to the finance, money driven folks.
Good ideas are declined as they are risky and you got to believe in the idea. Speaking to the financial guys, my experience is that you hit a brick wall. The same is true if you talk about “non-essential” services. Like service. And my experience is that the entrepeneur has a total different understanding of Six Sigma or other such best practice principles, than financial bean counters.

So it is not about Six Sigma or not, but what you make out of it! I think, we just learn, what bean counters got and get us into. I call it greed and fear. “CYA”: Cover your ass. I learned that from a CEO with finance background. I may live better if I would live their way. But I sleep far better trying something and standing up for my own mistakes.

What a chance the U.S. to have a president-elect who is creative and open to change = risk? I hope the focus of companies shifts from a conservatory play-it-safe back to a search for creative new ideas and do some trial. Sure, not everything will work out. But I predict: The survivors are the ones that move.

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Value of Time

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.

MomoHaving linked Momo last week, I know the book is worldwide not as well known as in Germany. It is the story about a little girl fighting the Grey Gentlemen, who live of time and suck it (just like vampires) from us. We have less and less time to be happy. People themselves become grey. “Time is money and we don’t have any” is a joke I increasingly hear. Itself and it’s variants. Seminars in “time management” are said to be a cash cow.

Time is the only commodity we cannot replace.

What good is it, if you are wealthy but lack happiness? Friends wonder that I take one hit by Murphy after another, still smiling, still happy. A question of priorities: I am happy. Yes, I can live of Hartz IV if I have to. No, nothing I fancy. But we are lucky to have such a fail-safe! I visited Russia lately. The average income in the city I visited is 10-15.000 Rubels (350-500 Euros). No real social security. The average cost for a one-room apartment is 10-15.000 Rubels. Oops…? I have met people living there. Happy people. Not rich. But happy. Something becoming rare as people gain wealth…

Money ≠ Happiness?

Do I want to be wealthy? No. Yes, a decent monthly income doing a decent job would be great. And I love to do a good job. I am happy.
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Blood Money

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.

VampiresAn Inuit chief once compared the human life on Earth with cancer. Instead of looking after the world and trying to live in balance, we exploit its resources, extinct other life-forms, farm life, even kill and eat other intelligence, such as whales. No symbiosis but parasite. Like vampires.

What was not said, but I imply it – is that not all people, but just some (powerful) humans are like cancer. Many managers think they must be “tough”, make utmost profit at all cost (who told them that?). And humanity’s and world’s immune system fails.

The “Western” industry nations are build on a religious system that values life. God gave us Earth to foster it. But there is a strange implied value system that builds around “wealth” and “power”. It’s an old question: Are rich people happy? Can you purchase happiness? If you dominate, are you loved?

Starting my own business, I was (very) quickly confronted with “Corporate Social Responsibility” and questions about corporate morale and ethics. Questions as alien to me as the question “Do you breathe?”. (If I don’t, the question is useless).

Thinking about this, I hope that this crisis will enable some of our “decision makers” to recognize some of the disease and cut it. But I doubt that. Too many politicians (and journalists) are part of the systems, suck blood themselves. They would risk too much of their own blood-money, are part of the system. Welcome the Gray Gentlemen.

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Managers Learning From The Nuremberg Trials

Juergen is one of the very few people, I really mean, VERY FEW, people that understand both airlines and airports.

Thanks to friends like Sapphire, I discuss lately questions of Ethics and Morale. If you like to join into the discussion, I recommend you our SapPhilosophy blog.

"If I wouldn't have done 'someone else' would have"
Neither was: “If I wouldn’t have done ‘someone else’ would have”

If I look at the managers today, they hide behind the same old reasons as did the people with powers in the Third Reich. Did we not learn from the Nuremberg Trials? Oh, I am German and this is about Nazi-Deutschland, I am not supposed to touch it…? Come on, this is history and we should learn from it.
The Nuremberg Trials clearly condemned the idea “I was under orders” or “If I did not do it, someone else would have done it”. Company X publishes an increase in revenue of 15, 20% but anounces about the same time job cuts of about the same many employees? Who decided? Who is the responsible boss? He did not know? Get outta here! The Nazis all were the same innocent. But charged guilty and many got hung.
So maybe we should call in for a new Nuremberg trials – and look at the current managers and politicians? Look into the mirror: You, for yourself. What do you do? Can you maybe improve on your personal (and also corporate) morale and ethics? Are you guilty?

21.09. I referred to the “Gray Gentlemen” from Michael Ende’s bestseller Momo. If you don’t know it: They are stealing the time of people and the people become busy and successful and rich, but poor in the true luxuries: Time, family, friends.

And if you believe in God, do you truly believe your soul is anything but black, if you just pray to the gods of wealth? How many families you condemn by hiding behind the above excuses? Or the one calles “Shareholder Value”? If you are a shareholder? Aren’t you responsible if the management of the company you own part of works that way?

A month ago I/we also addressed the 10 New Commandments. I would very much appreciate if you read them and also that you let me know what you think about them. Or if you find them truth and spread them!

No. 10 quotes the Serenity Prayer:

God grant me the serenity to accept the things I cannot change,
courage to change the things I can,
and the wisdom to know the difference.
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