If it did not work before in better economic times, what makes you think in will work now?
June 8, 2009
Jet America Airlines to fly for 9 dollars | www.freshnews.in
This model will fail...again. Cannot believe someone would invest in the person (Weikle) that started Skybus... a company that failed within months of startup. At least Donald Burr and Freddie Laker enjoyed years of success before going out of business This is not another Allegiant model...unfortunately...if it were and done by someone else...it just might make it.
AF-KLM eyes CSA and now purchased 25% interest in Alitalia
March 26, 2009
Air France-KLM eyes CSA, crisis ongoing | www.reuters.com
AF-KLM seems to have taken their eye off of the core AF/KLM airline. There is a point of diminishing returns when it comes to economies of scale and they have reach that point! EU may take a greater interest should their be anymore consolidations. This assumes that Iberia remains a separate entity or does something with BA. Lufthansa done a better job of acquisitions, investments and starting new business and seems to be more strategic in their approach.
BA/IB Merger talks has 2 Opportunities to Collapse
February 2, 2009
British Airways-Iberia merger talks on the rocks | www.reuters.com
1. BA stock price at 133 pence and potentially can go lower could call off the talks. 2. AA/BA antitrust immunity request could likewise kill the deal.
We need to better understand the entire automotive industry ecosystem
January 12, 2009
U.S. Drivers Keep Autos Longer, Shun Showrooms on Job-Loss Risk | www.bloomberg.com
I was on the phone the other day with a colleague from Freescale and I was frankly surprised to hear that the decline that they are seeing in their production/demand is due to the automotive meltdown. Because I'm only peripherally involved in the industry (through GPS and indash infotainment), I really didn't think through that car manufacturers were a primary consumer of semi-conductors.
As oil continues its decline, can it prop up the travel industry's slumping profitability picture?
January 12, 2009
Oil Prices Hit $86 a Barrell | www.msnbc.msn.com
Jet fuel is one of the top 3 cost items for airlines. Since the summer of 2008, the price of oil has declined from $140 barrel to under $40 a barrel today. This should be very good news for investors in airline stocks, as it should directly flow to the bottom line if airline ticket prices hold steady. Likewise, cruise lines' profitability is closely tied to this volatile commodity and the major players in the cruise industry could benefit from the continued decline in pricing. But right now, what we face is a need to stimulate travel, which is normally done through price reductions. Will these suppliers pass on the cost reductions to consumers?
The travel ecosystem is shifting, beginning with the GDSs and online players
January 8, 2009
Expedia Vet Takes Orbitz Helm, Sabre Vet Takes Travelocity Wheel | www.btnonline.com
Both Orbitz and Travelocity this week announced new leaders at the helm. Both have cut costs substantially due to reduced revenues and profitability. Orbitz now has a technology savvy, operationally capable, marketing focused executive who is talking already about social media, which implies new models afoot for the OTA. Orbitz had been outpaced by Expedia and Travelocity in the advertising model/social media capabilities, but does it really help them to do a "me too" offering to match Trip Advisor and iGoUGo? Just weeks ago, Amadeus founding CEO Jose Tazon stepped down in favor of his number two, David Jones, who had been the de facto day to day leader for some time, as Jose managed board and investor relationships with their private equity owners, BC and Cinven. Sabre puts its own COO at the helm of Travelocity, not replacing him in the Sabre organization, but instead splitting his job amongst his peers. Is it time to go from 3 GDS companies down to two?
The lines of travel distribution are blurring
December 30, 2008
New Report Evaluates Trends in Online Travel Market | www.travelagentcentral.com
The PhoCusWright report that spawned this article reports that the online travel distribution market has shifted to 61% being sold via supplier sites (otherwise known as consumer direct) and 39% is sold via online travel agents. Suppliers are trying to wring more dollars out of frequent, loyal bookers, which means increased focus on personalization, loyalty and community. OTAs, by comparison, are trying to wring any dollars out of their mass of unconverted lookers, as the almighty transaction gives ground to eyeballs and emerging advertising-based lines of business.
What will happen to the gaming industry as travel to Las Vegas declines?
December 5, 2008
Travel Numbers see steep decline [in Las Vegas] | www.klas-tv.com
Las Vegas has always enjoyed occupancy rates higher than the national average, but in the last few months, the economic situation plaguing the country has hit them hard. Occupancy is down to 84%, which rivals post September 11th levels. In the month of October, Las Vegas had a drop of 13% year over year, or nearly a half a million visitors. Historically there has been a direct correlation between occupancy and gaming revenues. That correlation weakened somewhat in the 90s when Las Vegas attempted to become a family destination. Now that the city is squarely back in the "Sin City" role, the tie between hotel occupancy and gaming is very strong again. Factors to watch: - Air capacity and frequency declines - Visitor statistics - Occupancy rates - Proportional gaming revenue declines
Financial markets react to the historic election of Obama - what of the travel industry?
November 6, 2008
Asia cheers Obama win, but Europe down | robots.cnnfn.com
With the economy as a clear priority of the new administration, the world markets reacted to the election of Barack Obama, with investors voting with their wallets. In Asia, the Nikkei, the major index for the Tokyo Stock Exchange, closed up 4.5%. South Korea's Kospi composite index finished with a 2.4% advance, according to Dow Jones. The Hang Seng index in Hong Kong ended up 3.7%. The Australian All Ordinaries index was up almost 3% at its close and the markets in Taiwan and the Philippines ended lower. European stocks and U.S. futures fell after Democrat Barack Obama was projected to have been elected President of the United States. London's FT-100 and Paris' CAC-40 eeach fell more than 2%, while Germany's Dax was about 1.5% lower. It remains to be seen how the markets will close today in Europe and how the US markets will react. But it is the longer term results that will matter.
Is the reported "airline recovery" just the upside of the jetfuel roller coaster?
November 4, 2008
US airlines pull out of a tailspin | us.ft.com
Airlines are enjoying much lower fuel costs than they did in the summer of 2008. Perhaps the use of the word "enjoy" and the notion that recovery is around the corner is a bit like a weatherman in the middle of a hurricane talking about tomorrow's sunshine. At least that was the observation of a writer in Airline Weekly this week. When the prices were high, the airlines kicked into high gear, cutting costs, trimming schedules, parking aircraft in the desert and finding ways to charge passengers for various services, previously offered gratis. Now that the prices are low (remembering that everything is relative), will they hand off a slice of those profits to consumer? Not likely! And what will be the impact on the other sectors of the industry? The GDS companies depend on airline ticket sales for 90% of their revenues. And the hospitality industry also caters to the air traveler as their primary market. What will become of them?
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