Archive for May 2010

Being a public company – A good thing?

Before I launch into this subject I think I had better make one thing very clear. What I write about this and all the other subjects past, present and future is MY view and not necessarily those of any company I have worked for. I am sure they are very capable of giving their own opinion if asked! I am in a position where, within reason, I can say what I want now I have retired.

I learned two truisms about PLC status very early on. Firstly, it earns a few people a lot of money and secondly, all the rules of the game change to dramatic effect. There are so many people there to take their cut and they do not go away. In fact not only do they remain but others join them with the sole intend of using the company as a vehicle to increase their cash flow and make money. But that is not the bad part, after all everyone from the filing clerk to chairman wants security and income. The bad part is that you are both directed and judged by these folk and many of them do not have a clue about the business from a commercial perspective. To them it is trends and numbers with very little room for entrepreneurism, flexibility and market forces.

Allow me to try and explain in perhaps a rather simplistic way. Once you have gone through all the posturing, audits, presentations and gained the necessary financial house and investor commitment you finally become a public company valued at your given share price times the number of shares released. Now all you have to do is deliver everything you said in your presentations resulting in the expect revenue, cash flow and profit. Simple.

But it is not simple even if you achieve all the above. Why? Because you not only have to deliver it but you have to deliver in the same shape as originally presented i.e. by doing it exactly as you said you would. Why you may ask? Surely the end result is the important bit especially as circumstance change so much in the commercial world what with new technologies, prices, competitors etc. No, what you have to prove is that you knew what you were doing in the past so they can trust you to do it in the future regardless of change. You see as soon as the results are published they become history and it is the next set of results they are looking to and hey, if you ‘got lucky’ this time what is to say you will not be so fortunate next year.

It reaches a point that you have to invest huge funds and resources managing a bunch of institutions and investors that basically do not trust your opinion against there’s even though they do not understand the industry you are in. Very often the people you have to convince are young analysts fresh out of university who focus almost entirely on past statistics, economic forecasts and news journals. Woe betide you if you do not convince these folk as it is them, rather than your customers who call the shots and the word loyalty or trust are not in their vocabulary!

I guess if I was invested megabucks in an organisation I too would want to go through it with a fine-tooth comb but surely there must be a less expensive and less time consuming way than this?

Thanks for looking in

It has been a few months since I decided to do this blog. I just wanted to continue having the opportunity to speak about the industry I love as well as put together some of my strange (but mainly true) stories of my life in travel.
I have a monitoring package of sorts which tells me how many people view and what areas of the world they come from and I am both delighted and amazed by the interest.
I have not tried to broaden readership as I do not really have a clue how to but it would be great if I could cover more people and places with my ramblings so can you help me? If you want to can you tell some of you friends and colleagues the blog address? Every so often I will let you know how we get on and what new and obscure places look in!
Needless to say viewers have complete individual anonymity and all I get is what area and how many. That blog address again is
Also please take the opportunity to get in touch if you want to ask my view (or add yours) on anything either by the ‘comment’ icon on one of the blog articles or by sending me an email.
Thanks again!

More dispensable than I thought!

My old firm HRG has just announced its results and I must say I am impressed. It seems they can and have managed without me quite well. And there was me thinking I was indispensable.
We always dared to believe in the seismic change to delivering on value rather than headline price and it seems to have actually worked in that their clients must have realised that a superficially low price has no longevity.
Mind you there may have been a few casualties along the way as their client retention rate is not as high as it was and there seems not too many barnstorming new signings for a global company. I guess my prognosis must be that whilst a strategy of being ‘the customer’s consultant’ is the right way to go and clearly successful it is still work in progress against those that want a quick, traveller visible, upfront buck.
Another thing that is remarkably slower growing than I expected is their high tech range of Spendvision products. I thought profits from this business would be rocketing as it delivers exactly what corporations say they want i.e. the definitive end to end solution. I have seen it and it is damn good but I suspect some corporations do not want an initial cost for the benefit of long term gain. The world seems more about now and not the future when it comes to business travel.
One of the greatest areas for opportunity for them is their government business. They currently have the British Ministry of Defence and Foreign and Commonwealth Office which are mega in size and both about to cut back in expenditure however what they are still fighting for is much of the vast Government business. In my opinion this business has been procured and operated so very badly that HRG, with their track record, could seriously increase their share.
So my message to my old colleagues is well done. But kind of wish you were missing me a little more!


What does the name CASA 212 mean? To those that know their aircraft it is a small twin propeller plane but to me personally it is a terrible reminder of a flight from hell.
The designers must have had bad day as it looks like something between a pram and a small boat. The latter description got me to wondering if even those that created it had much faith in its ability to stay out of the water. Then, to cap it all, they described it as an ‘Aviocar’ which led me to thinking that we could always taxi to our destination if necessary.

It was a long time ago but my journey is still etched in my mind. I had recently arrived in Puerto Rico and was due to connect onto a local island hopping flight to Anguilla, My incoming BA flight was on time, my suitcase was waiting for me at the carousel and off I went to the domestic check –in area without a care in the world. How deluded I was.

My first inkling of impending doom was finding myself in a noisy overcrowded non air conditioned shed behind a queue of about 40 people all expecting to get on my flight that had less than 30 seats. They seemed to have all their worldly possessions with them including large musical instruments and a fridge.

A solitary bored gum chewing female agent was languidly checking people in at a rate of one per five minutes which gave me a desk eta of two hours (one hour after scheduled departure) when help arrived in the form of her male supervisor who squeezed her butt, picked out her gum and plugged his face into hers. After giving the appreciative girl what looked like a full tonsillectomy he climbed on top of the desk and shouted “I got 20 bucks for any of yous who ain't getting on this plane”. If I had known I would have taken him up on the offer but other more knowledgeable travellers pounced on the idea of making money and self preservation.

Having completed their overbooking ‘cull’ they herded us, like lambs to the abattoir onto the tarmac to find our plane which they seemed to have misplaced. The way our check-in Lolita said goodbye seemed terribly final, almost as though she knew something we didn’t. The rain was sheeting down as we tramped across the tarmac like a bunch of refugees past lines of new shiny jets searching for our ‘aircraft’.

Then there it was! Our plane/car/boat, sat slightly apart from the others like a forlorn ugly duckling. It was old, oil streaked and there was a very worried looking man standing under one of its wings with a torch pointed at an engine shaking his head. “You gotta be kidding” I distinctly heard him say as he peered through the soggy gloom. At the back end of the plane they were trying to load the fridge and the rest of the bags using the wedge and push method. Some bags aren’t going to make it I thought.

We boarded. It was like trying to get in a coffin with a bunch of outsize people with no manners and two left feet. Sitting down was rather like that ‘Twister’ game where you squash together and put your hands and feet on different coloured circles but finally we all seemed to get there. I had what looked like a 7 foot basketball player with a ghetto blaster sat next to me. I reckoned I could have changed the tracks with my nose if it was switched on. In front of us we could see the open cockpit and the two pilots were having a heated exchange. “Well were going anyway” the captain said to the sodden co-pilot who I last saw under the wing. I saw him pale visibly.

And then we were off! After three tries the port engine started in gouts of flames which were told through a crackling loudspeaker was “quite normal”. By this time I was scrabbling for the safety card in the hopes of improving my survival chances. I gazed at it over the volume switch of the ghetto blaster which was now poking into my cheek. It said there were no life vests and that we were to use our seat cushions instead. I groped downwards and found they were the thickness of a slice of bread and probably just as porous.

I then browsed over the instructions for the brace position but discarded it as I did not think I could get into a foetal position around my neighbours ‘mega bass’. I also remember someone who should know telling me that the sole purpose for the brace position was to protect your teeth so they could identify you after the event, Nasty!

We lurched forwards and started to crab our way towards the end of the runway. Our co-pilot was sulking and had his arms folded while our gallant captain struggled with the controls. Then the engines roared, the rivets rattled, interior fitments fell off, a lady screamed and we were off.

The Casa rumbled down the runway. And rumbled, and rumbled and rumbled showing no sign of getting airborne. In the length it takes for a jumbo to fly our Casa still stuck to the ground like a limpet. The lady’s scream went up a decibel and the end of the runway came into view and at the last second we took off. Well actually not so much took of as lifted our undercarriage and lurched forward like an aged woodpecker. Another second later we had waves under our wingtips and the captain was hauling on the misnamed ‘joy stick’ as though his life depended on it. It probably did.

We never seemed to get as high as the clouds and all their content of rain and occasional lightening crashed down on us. We started being thrown around like peas in a drum and it was then that the hymn singing started up from the passengers in front who had a better view than me. We all joined in like demented gospel singers convinced that we were singing at our own funeral. We were half way through a particularly depressing number made famous by Paul Robeson when Anguilla came into view.

We did not so much land as fly into the runway. We barely had to dip our nose and there we were. The engines stopped and there was total silence. We sat there in the dark with the rain drumming on the aircraft roof and puddles forming on the carpet. Finally from row 3 there came a voice saying “thank you sweet Jesus” and we all stampeded for the exit.

So that was it! We survived! Hallelujah! But there was a sting in the tail. The guitar arrived safely and so miraculously did the fridge but my brand new Samsonite did not
I initially had to stifle an amused chuckle as I saw the contents of someone’s case come out on the belt until I recognised one of my T-shirts. My case had opened like an eggshell disgorging its contents everywhere. I still have two odd socks from that terrible night and often wonder where all my underpants went. I expect there must have been a shortage of them on the island at the time.

Airlines and Travel Management Companies (TMC)

I genuinely find it interesting to note that very little has changed over the years despite commission cuts/removal, direct sell and net fares. Airlines still need TMCs to sell their seats and TMCs are still just as much in need of airline funding. The essential metrics remain the same and it is only the methodology that has flexed to meet market changes.

This status quo has not changed despite intense efforts from airlines as they strive to find ways of getting corporations to book direct. The only trouble is they are not TMCs and can only offer individual booking service which represents a fraction of the whole TMC integrated package. Add to this their obvious bias to their own fares and flights and it becomes clear that unless they incur the cost and role change to embrace the total TMC product not much is going to change. It would not take them long to do the math that says it is cheaper to outsource to TMCs than transform themselves. In fact, if they really were smart they would outsource more of their own services, like reservations for example, to TMCs. Some years ago an airline did just that for a short time and discovered TMC staff took more calls and got better customer reaction than their normal service.

The relationship between airline and TMC can be a rather strange alliance. The only comparison I can think of comes from the animal world where the female praying mantis makes love with its mate and then tries to eat it! It can often be very turbulent and can be tracked by just how well the market is doing. When airline sales go up they start thinking “who needs these agents” and the cooperation and incentives go down. Partially as a result their market share starts dropping until they start thinking “hey, we better start being nice to these guys again”. The result is a constant wavy line of highs, lows and then highs again. Some time someone is going to realise that some kind of continuity (say a mid point) between the highs and lows would provide better results.

Some corporations are puzzled that there is still a financial relationship at all despite market changes where they too pay the TMC. I cannot understand this as they are constantly driving down their payments to TMCs so the TMC has to make up the shortfall elsewhere within the supply chain. Also TMCs do all sorts of things for suppliers that have little direct influence on any particular corporation. These can be activities spanning, access to staff, marketing, M.I. and exposure of special airline benefits. Despite this I still think airlines mainly ‘incentivise’ TMC to increase client volume and share and they are right to do so in my personal opinion.

So, in summary, TMCs still maintain the same (or possibly more) margins from airlines despite the onset of fees. The airlines want to stop it but have failed so far. The more corporations drive for commoditisation, net pricing et al, the more these incentives will grow. My recommendation to corporations is to let it happen. As long as you are getting what you need why try and influence other relationships.
I am sure everyone will agree!