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Archives for November 2011

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AMR and American Airlines file for Chapter 11 Reorganisation

American Airlines has shared that its parent company, AMR Corporation, and certain United States-based subsidiaries have voluntarily filed for Chapter 11 reorganisation under United States law.

The company has filed voluntary petitions in the U.S. Bankruptcy Court for the Southern District of New York.

American took this action in order to achieve a cost and debt structure “that is competitive in the airline industry”. The Board decided that it was necessary to take this step now to restore the company’s profitability, operating flexibility, and financial strength, said Thomas W. Horton, chairman, chief executive officer and president of AMR and American Airlines.

The United States Chapter 11 reorganisation process enables a company to maintain normal business operations while it establishes a competitive cost and debt structure.

“AMR’s Board of Directors determined that a Chapter 11 reorganisation is in the best interest of the company and its stakeholders. Just as with the company’s major airline competitors in recent years, the Chapter 11 process enables American Airlines and American Eagle to continue conducting normal business operations while they restructure their debt, costs and other obligations,” stated the company.

This action has no direct legal impact on any American Airlines operations outside the US, stated the company.

American expects to continue normal business operations throughout the reorganisation process, and the business will continue to be operated by the company’s management.

The company has approximately $4.1 billion in unrestricted cash and short-term investments. This cash, as well as cash generated from operations, is anticipated to be more than sufficient to assure that its vendors, suppliers and other business partners will be paid timely and in full for goods and services provided during the Chapter 11 process in accordance with customary terms, according to the airline. Because of the company’s current cash position, the need for debtor-in-possession financing is neither considered necessary nor anticipated.

Horton said, “This was a difficult decision, but it is the necessary and right path for us to take - and take now - to become a more efficient, financially stronger, and competitive airline.”

He further explained, “In recent years, even as the airline industry faced unprecedented challenges, American strengthened our domestic and global network; fortified our alliances with the best partners around the world; launched a transformational fleet deal that will give American the youngest and most efficient fleet in the industry; and invested in our product, service and technology to build a world class customer experience.”

“But as we have made clear with increasing urgency in recent weeks, we must address our cost structure, including labour costs, to enable us to capitalise on these foundational strengths and secure our future. Our very substantial cost disadvantage compared to our larger competitors, all of which restructured their costs and debt through Chapter 11, has become increasingly untenable given the accelerating impact of global economic uncertainty and resulting revenue instability, volatile and rising fuel prices, and intensifying competitive challenges.”

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Thomas W. Horton named chairman and CEO of AMR Corporation and AA

The Board of Directors of AMR Corporation, the parent company of American Airlines (AA), has named Thomas W. Horton chairman and chief executive officer of the company.

Horton is to succeed Gerard Arpey, who this week informed the Board of his decision to retire. Horton will also succeed Arpey as chairman and chief executive officer of American. Horton will continue to serve as president of AMR and American.

Horton was named President of AMR and American in July 2010. Previously, Horton served as executive vice president – finance and planning and chief financial officer of AMR and American. He was named to that position in March 2006.

“The process launched today will no doubt require far-ranging and sometimes difficult change, but it represents an opportunity to rebuild American in a way that assures its ability to compete in a changed world,” Arpey said.

He added, “I appreciate the Board's confidence in me, but I also believe that executing on this plan requires a new leader for a new time. That is why I informed the Board of my decision to retire and, with my enthusiastic support, the Board decided to appoint Tom as CEO.”

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New flight search engine to let users maximise the value of their miles

Superfly, a new flight search engine that combines flight information with individual consumer data and preferences, has been launched.

Rather than focusing solely on presenting the cheapest flight, Superfly says it helps individual consumers identify the options with the greatest personal value. Travellers can use Superfly’s personal travel insights to better manage their rewards programmes and cash-in on the opportunities they present.

Superfly has been founded by Jonathan Meiri and Zviki Cohen with the sole purpose of personalising travel.

The company says Superfly’s engine is a unique online platform that personalises flight search by adding an individual’s data -- frequent flyer miles, elite statuses, rewards programmes and individual preferences -- into the decision-making process of choosing a flight.

For the first time, travellers can fully take advantage of their frequent flyer miles and rewards programmes when booking travel online, stated the company.

“Today’s mainstream flight search websites completely ignore the impact of consumer data,” said Jonathan Meiri, CEO of Superfly. “This is a defining issue for the future of online travel services. Superfly is a secure tool that not only has access to all the flights in the world, it also combines that information with personal travel preferences in order to help consumers figure out which flight is right for them.”

What’s the difference between Superfly and Kayak?

The company states: Both Superfly and Kayak provide a flight search service and are powered by the ITA/Google platform. While Kayak simply sorts by price, Superly’s default search takes your personal data and preferences into account before sorting by the best value for you. You are however also able to sort by price on Superfly.

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Pennsylvania Tourism Office signs exclusive deal with Foursquare

The Pennsylvania Tourism Office has signed an exclusive deal with Foursquare that allows users to obtain “PA Lock & Keystone” badges by “checking-in” with their mobile devices at Pennsylvania restaurants, museums, retail shops, historic landmarks, state parks, wineries and other tourist attractions.

The Pennsylvania Tourism Office, under the state Department of Community and Economic Development, is dedicated to inspiring travel.

Last year, Pennsylvania became the first state to partner with Foursquare by populating the network with more than 200 state tourism attractions and creating four custom badges. Since the launch, and subsequent retirement of those four badges, visitPA has amassed nearly 90,000 followers and adds approximately 150 new followers daily. To date, over 67,800 Foursquare users have unlocked a PA badge providing tips and recommendations for travel locations and allowing users to earn rewards and discounts using their mobile devices.

According to Department of Community and Economic Development Secretary C. Alan Walker, Pennsylvania is the first and only state to create exclusive branded badges on Foursquare, leading to the attraction of thousands of followers to the state’s tourism website – visitpa.com.

“To keep the momentum going, we have partnered again with Foursquare to launch the new Lock & Keystone badge, and are working with our local tourism partners to market this new initiative,” said Walker.

The Pennsylvania Tourism Office is partnering with the Philadelphia Convention and Visitors Bureau, Lycoming County Visitors Bureau, the Greater Philadelphia Tourism Marketing Corporation, Bucks County Visitors Bureau, and Crawford County Convention and Visitors Bureau to promote the new Lock & Keystone badge.

To earn the new badge, users need to follow visitPA on Foursquare at www.Foursquare.com/visitPA.

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LBS revenues in Europe to reach €435 million by 2016

Mobile location-based service (LBS) revenues in Europe are being tipped to grow from €205 million in 2010 at a compound annual growth rate (CAGR) of 13.4 percent to reach €435 million in 2016.

According to a new research report by Berg Insight, 20 percent of all mobile subscribers in Europe already use some kind of location-enhanced application on a regular basis. Local search, social networking and navigation services are the top application categories in terms of number of users. The social networking category is forecasted to experience the highest growth in the coming years.

In North America, the larger installed base of GPS-enabled handsets and smartphones has enabled higher uptake of LBS. Berg Insight estimates that about one third of mobile subscribers now access LBS on a regular basis. The total North American LBS market is forecasted to grow at a CAGR of 2.3 percent from US$ 620 million in 2010 to reach US$ 710 million in 2016.

The installed base of GPS handsets in Europe has reached 35 percent of total handsets and surpassed 70 percent in North America.

Berg Insight highlighted that the revenue model for many mobile apps in the consumer segment is shifting from premium fees to ad-funding. This is also the case for LBS where now also navigation services are becoming free for end-users and developers monetise their offerings through ads and various service bundles. However, revenues may not grow at the same rate as usage since the mobile advertising ecosystem is still nascent. It will take some years before a successful model has been established that allows advertisers to reach out to a critical mass of active users. This is especially true for emerging location-based advertising, added the report.

Travel industry

The underlying trend driving LBS is smartphone adoption. They are quickly becoming users’ primary source for communication, information and entertainment in general but more specifically when they are traveling.

If the travel industry wants to meet consumers where they are, it has to participate and maintain a strong presence in platforms because it’s growing fast.

Location-based applications give marketers a chance to engage with customers or prospects in a whole new way. Using location-based marketing can be both an acquisition and retention/loyalty tool. Perhaps the most promising area is social sharing/ word-of-mouth because users are already sharing their activities via smartphones.

One of the most consistent premises behind location-based marketing is the ability to reach the right person, at the right time, in the right place, with the right message. So, for instance, a hotel may reach business travellers when they are at an airport. Because mobile phones have become integral to the lives of most consumers, it makes sense to leverage opportunities for engagement when users are out in the world. And because travel / tourism is all about exploration and experience, the category has a unique opportunity to use the combination of location, activity, demographic and time targeting to engage.

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Venere.com launches mobile site

European online accommodation specialist Venere.com has launched its mobile site. The company has dedicated an entire section to Venere.com deals with seasonal promotions, 24-48 hour sales and destination specific offers with prices starting from €30.

The company highlighted that its focus is on improving customer services and hotel discoverability, and it also acknowledged that mobile as a channel is becoming a major source for booking last minute accommodation online.

The initial launch covers five languages: English, Italian, French, Spanish and Danish. The company says the site is optimised for the most common mobile devices.

“Hotel bookings are much easier and faster if you can rely on your mobile, said Spyros Assonitis, director global marketing at Venere.com. “For this reason, our next step will be the launch of the 'Hotel Near Me' feature and many others to allow customers to find accommodation while traveling.”

The site has been created by mobile platform firm Usablenet.

To celebrate the new mobile site, Venere.com has launched a contest that will allow users to win 40 free weekends across Europe and the Mediterranean.

Users can participate in the contest, titled Book Mobile and Win Trips to Europe and the Mediterranean, via the company’s site, www.facebook.com/venerecom or www.win-with-venere.com. Those who make a booking (till 23rd January, 2012 via m.venere.com) will be entered into a draw for 40 free weekend breaks.

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First airline co-brand card featuring EMV chip-with-signature technology unveiled

Chase Card Services, a division of JPMorgan Chase & Co., and British Airways recently shared that EMV chip-with-signature technology is now available on the British Airways Visa Card. Cardmembers can now use the British Airways Card at any chip-enabled, point-of-sale device, such as train ticket kiosk, restaurant or gas station.

The addition of EMV chip-with-signature technology makes the British Airways Visa card the first airline cobranded credit card issued in the US that is chip-enabled, said Andrea Burchett of The Mileage Company, operators of British Airways’ Avios currency and rewards.

“The new EMV chip-with-signature provides our globally minded flyers with a safe and convenient way to make transactions when overseas,” said Burchett.

The British Airways Visa Card has EMV chip-with-signature technology that features a microchip as well as a traditional magnetic strip to accommodate merchants in the US.

The companies highlighted that the embedded microchip makes the card extremely difficult to copy, because the encrypted chip enables safer processing and storage of data.

The British Airways Visa Card does not charge foreign transaction fees, delivering up to three percent savings on international purchases. Cardmembers earn 2.5 Avios, the new British Airways Executive Club currency, for every $1 spent on British Airways purchases. All other purchases earn 1.25 Avios for every $1 spent. Cardmembers also have the option to redeem Avios for future travel on British Airways or any one of its 11 oneworld alliance partners.

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Maximising the benefits of customer data insight as a travel company

A survey has indicated that many travel industry businesses anticipate a change in ancillary revenue strategies next year, with more emphasis on up-selling and cross-selling.

According to Collinson Latitude’s survey, which featured loyalty and ancillary revenue managers, particularly across the airline industry, the industry is seeking to maximise the benefits of customer data insight. Nearly half of respondents (49 percent) believe cross-selling and up-selling through the booking process will be the fastest-growing area of ancillary revenues for travel businesses in 2012. Furthermore, 30 percent of respondents predict that non-travel related product sales will play a pivotal role in the future of ancillary revenues.

“With travel companies holding so much knowledge about their customers, cross-selling and up-selling strategies can be tailored to match benefits and promotions to customers’ wider profiles. This targeting can increase the attractiveness, perceived value and ultimate success of ancillary revenue programmes,” said Collinson Latitude director Janet Titterton.

The survey also indicated that conventional travel-related offers will remain important in ancillary revenue programmes. Among respondents, 19 percent predict greater cross-selling and up-selling of travel-related products through the booking process, while 21 percent predict an increase in on-board ancillary revenues for airlines.

Traditional travel-related ancillary revenues will clearly remain important, said Titterton. For example, 22 percent of survey respondents currently implement ancillary revenues by unbundling previously packaged products and services.

“However, this process needs to be handled carefully: although ancillary revenues can bring costs down for customers – as unwanted services are no longer paid for – the perception is often very different. As services previously viewed as ‘free’ become billed separately, the travel industry needs to demonstrate to customers that such services really do provide choice and value for money,” added Titterton.

Targeting

As highlighted in the survey, it is important to note that “targeting” can place a travel company in an advantageous position.

Travel businesses continue to gather customer preferences and have been looking to provide improved personalised features for travellers.

In its regular interactions with specialists in this arena, EyeforTravel has found that travel companies are attempting to better serve their most loyal customers while also working to differentiate themselves from competition on features other than cost. A lot of these efforts are focused online in gaining a deeper understanding of the plans that a user has already made, and then using that information to market travel enhancements, upgrades, or add-ons.

Challenge

The fact that consumers have moved away from traditional digital assets and moved to social space has posed a major challenge to travel companies. For their part, marketers have become a lot more attuned to using data and presenting personalisation and customisations in digital assets.

The critical step to developing true one-to-one marketing communications is in organising analysing and segmenting the database.

Many companies make the mistake of rushing through these strategic steps in order to implement the tactical portion of their marketing plan. This is a critical mistake, according to John Gardner, President and CEO, Integrative Logic (Gardner was a speaker during one of EyeforTravel’s conferences in Miami last year). According to Gardner, a one-to one marketing communications plan goes much deeper than finding out what your customers last clicked on and their name. It is a 360-degree examination of the customer: their intent, motivations, demographics and psychographics, geography, media consumption, as well as transactions. The key to one-to one communications is developing true attitudinal segmentation methodology that ties into a segmented channel strategy that allows you to take advantage of ways consumers utilise content and make sure the content they receive is as relevant as possible.

One has to understand what is uniquely important to each customer to enable messaging to be created that is timely, relevant and useful to them.

Making use of data, garnering relevant information from analysis of that data, and then using that knowledge to take profitable actions is a challenging task. The travel industry has acknowledged the same and travel companies are working with many internal and external resources to refine this approach.

Personalised Experience

Travel companies are also taking initiatives to tailor their customers’ online experience.

For instance, Finnair recently became the first airline to implement Amadeus Dynamic Website Manager. With this move, the airline is expected to improve revenues as a result of optimised up-sell and cross-sell opportunities, and its ability to benefit from market opportunities through faster deployment of promotions. Using the customer’s frequent flyer information, travel history, preferences and cached user’s browsing activities, the offering will propose relevant offers or services that fulfil the unique needs of Finnair customers. For example, offering lounge access at off-peak times to frequent flyers that do not usually have access or a massage at a connecting airport if the duration of the connection time is longer than two hours. This way the airline is working on delivering a personalised online experience that recognises the unique needs of every customer.

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Kayak sees 5m downloads for its mobile apps in first nine months

Travel search engine Kayak has shared that its mobile applications have been downloaded over 10 million times since their introduction in March 2009. The company has witnessed over five million downloads in the first nine months of this year, representing growth of 97 percent over the nine months ended September 30, 2010.

The company offers mobile applications for the iPhone, iPad, Android, BlackBerry, Symbian and other platforms.

Kayak, which filed for its IPO more than a year ago, shared the same in its latest amendment to Form S-1 registration statement as filed with the Securities and Exchange Commission recently. As per the document, queries conducted on Kayak’s mobile applications accounted for 13.2 percent and 8.2 percent of the total queries for the first nine months of this year and the full year ended December 31, 2010, respectively. However, the company estimates that mobile applications accounted for less than one percent of total revenues during those periods.

Mobile queries were 13.2 percent of total queries in the first nine months of 2011, as compared to seven percent in the same period in 2010. In all, 679 million user queries for travel information were processed through Kayak’s websites and mobile applications during the first nine months of this year.

The company’s revenue for the nine months ended September 30, 2011 was $170.6 million, a 33 percent increase over the corresponding period of last year and its revenue for the year ended December 31, 2010 was $170.7 million. This increase in revenue is primarily due to increased travel queries on its websites and mobile applications, which increased 44.7 percent and 38.3 percent for the first nine months of 2011 and the full year 2010, respectively, over the comparable periods in 2010 and 2009.

Kayak attributed the increase in query volume to a variety of factors including its investment in marketing activities, the acquisition of swoodoo in May 2010 and checkfelix.com in April 2011, and its partnership with Bing Travel which began in March 2011. “The increase in query volume was partially offset by a reduction in RPM due to an increase in mobile queries, for which we earn revenue at a lower rate,” the company shared in the document.

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Hyatt Hotels’ mobile app focuses on clean design with an intuitive flow

Hyatt Hotels Corporation has introduced its mobile app that allows iPhone users to search and explore hotels using location-based technology, check-in and checkout, book new and view existing reservations, as well as join, find deals and track point balances through Hyatt Gold Passport, Hyatt’s guest loyalty programme.

The company shared that an Android app is currently under development.

The Hyatt Hotels app has been launched in order to simplify the travel research process for consumers on-the-go. The company acknowledged that researching travel options can be time consuming – especially if you are on the road and need information immediately.

“We wanted our app to offer a clean design with an intuitive flow so travellers can easily have all the most important details at their fingertips to make their travels as simple and seamless as possible,” said Bill Bernahl, vice president, e-Commerce, Hyatt.

Some of the features of the mobile app include: One touch access to key features; Access to weather, local time, maps and turn-by-turn driving directions to any Hyatt destination worldwide; Search, find and book hotel reservations based on rate, location and available amenities at properties around the globe.

Hyatt’s mobile offering also includes a mobile website, which allows guests to find and book a hotel, access special offers and make new reservations. This site, which is accessible at Hyatt.com on any smartphone, is available in five languages – English, German, Japanese and simplified and traditional Chinese.

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