I know you were expecting a follow up post to Tuesday’s discussion about Farelogix, but that’s going to have to wait. Very soon after my post went live, Sabre sent me a note to say that “Much of what was ‘mocked up’ by Farelogix is already being done today by Sabre.” I’m talking to them tomorrow. So look for that post (or posts) next week. Instead, today we’re going to talk about one of my favorite topics that has been neglected for too long….
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For years, Alitalia was my favorite topic on the blog because of the complete incompetence of management. Time and time again, the airline found itself in terrible shape and nobody could do anything about it. But then the government stepped in and merged it with Air One forming a big Italian airline that was supposed to be profitable and stable. Though that whole “profit” thing never really worked out very well, the drama subsided and Alitalia became boring. That appears to be changing and I’m excited. The airline can once again resume its rightful place at the Worst Airline Ever. Hooray!

So, what’s been going on since the last time I wrote about the airline more than two years ago? Ah, well, more of the same garbage.

Alitalia just reported its results for the full year 2012 and it posted a loss of about $366 million for a net margin of just shy of -8 percent. Ok, ok, so about a third of that was an extraordinary item related to fleet renewal but it’s still terrible, and it’s way worse than the roughly $90 million loss the year before. But hey, the airline says it broke even in the fourth quarter. Hmm.

You’d think with a breakeven fourth quarter, things would be looking up, right? I’m going to say no, especially since CEO Andrea Ragnetti was just canned. Oh wait, I’m sorry. Ragnetti and the company “have mutually agreed to terminate their relationship.” In other words, he would like to spend more time with his family, go fishing, or, um, enjoy his retirement years despite the fact that he’s only in his early 50s.

Meanwhile, the airline is looking for someone to step into the hot seat. This person must be calm under pressure and be able to get everyone to support him no matter what he does. Wait, I know… Silvio Berlusconi! Hmm, looks like he’s busy with politics again, so they’ll have to keep looking. How Italians have somehow come to support this man again, I have no idea. But, well, this is Italy. And we’re getting off topic.

Things just don’t look good for Alitalia as it stands today. The airline was able to improve its load factor last year but only to 74.6 percent. It looks to me like the airline has too much capacity out there, but I assume national pride is getting in the way of doing the right thing. Meanwhile, that national pride has eroded enough to actually hurt Alitalia’s competitive position through loosening protectionism.

The Italians had previously only allowed Alitalia to fly the lucrative Milan/Linate to Rome/Fiumicino route with other airlines having to use Milan/Malpensa. Fares were high and flights were plenty. It was as if only one airline was allowed to fly between Boston and New York/LaGuardia with all others forced to use JFK. But that changed late last year when easyJet was finally given access. That was a big blow to Alitalia. After all, the easiest way for it to compete is when it doesn’t have any competitors.

Where does Alitalia go from here? Well I can’t imagine the airline going out of business. In fact, I wouldn’t hesitate to fly Alitalia at all. I hear the new business class is actually quite nice. But the airline is still going to need some help.

All signs point to an eventual takeover by partner Air France/KLM. This is a marriage that makes the American/US Airways courtship seem positively short. The airlines have flirted for years, but acquisition efforts have been blocked by those too proud to allow the French to own Italy’s national airline. If I were Italian, I’d be happy somebody else wanted to take the stinker off my hands.

Will the Italians finally realize that an acquisition by Air France/KLM is probably its best hope? I have no clue. But until then, I’ll gladly keep watching what is still my favorite airline to mock.

As you know from my trip report last week, I was in Miami attending Farelogix media day. But what is it that Farelogix actually does? The company’s end goal is to give airlines the freedom to sell tickets the way they want. Ultimately, this will make it easier for travelers to buy tickets with the options they want. In fact, Farelogix has put together a system that would make buying tickets much better today… if there weren’t so many roadblocks preventing it from being implemented.

As a traveler, you shouldn’t care about the name Farelogix. Farelogix sells directly to airlines and won’t be the name you’ll see as a traveler. The idea is to create a system that the airlines can use to distribute fares and ancillary options to anyone who wants them. And I do mean anyone, because this is really just putting the information into an XML format that can then be sliced and diced in a million different ways. It’s up to the airlines to use this technology to reach the end customer, but as a customer today, you aren’t going to see it.

Today, I’m going to talk about what the system is, but then I’ll address why you can’t use it yet in a future post. Keep in mind that these screenshots are just of a basic system showing functionality, so it’s not meant to be pretty. The bundle names and fares have been changed as well.

When you do a search, you will be able to see fares in the way the airlines want them displayed. In this case, we see American’s fares on top with the three different bundles that the airline rolled out earlier this year. Then United’s fares are below and they don’t do bundles. So you can display it all in one place, expanding each airline if you want to see more details.

Then when you pick a fare, you can see all options available to go with that fare. Here’s where it gets really interesting. The idea is that you would have logged in and all of your airline frequent flier numbers would be stored, so it would know if you have elite status or not. It would then enable you to see exact fee information instead of just seeing ranges of fees as you do today.

In this particular example, there were two travelers. The one on the left is an elite member and the one on the right is not. As you can see, the guy on the left gets priority boarding and first two bags free while the guy on the right has to pay. But the guy on the right can simply click to add that to his cart before checking out.

Each of these options also gives the ability to integrate multimedia. So here you can see a picture of the meal that you would be buying. They can also put video in there as well. It means no more searching for pictures on random sites online to find these things.

You’ll also be able to pull up the seat map and see which seats are available at which price. It would include premium economy seats and those “choice” seats where you have to pay to sit. And you would be able to mouse over and see the seat that you’re going to get (maybe not the EXACT seat but, well, you get it).

Then when you’re ready to check out, you can see a final price that shows everything that’s included and everything you’ve opted for. It can process the payment and issue the tickets right there.

If you purchased something like a lounge pass, how would you get it? Well, the system can just send it directly to your phone if the airline is set up to use a QR code to allow you to enter. It can all be done very easily. But it doesn’t stop at the purchase point.

You can even check in using this system and it would be able to push upgrade offers right there, with payment handled in the system. Then you can get your boarding pass and be on your way.

Of course, for Farelogix, this is just something they mocked up to show what could be done. It’s pretty impressive, but it’s far from limiting. It’s all about having the data in a simple format that can be manipulated in a million ways. Online travel agents can use this data to create a far better display than what they have today, comparing options in a much more intelligent way incorporating fees as needed. Real travel agents can use a system like this to manage their own ticketing as well. In fact, it’s set up so that you can plug anything into it. In other words, if American did this, a travel agent could then pull in American’s data and combine it with that of other airlines that sell only through the Global Distribution Systems (GDSes). Then it can all be presented and acted upon in one place. How ideal.

So why hasn’t this happened? Oh me, oh my. It’s a long and painful tale. That will have to follow in a later post.

Another day, another government “crisis” because our Congressional leaders can’t find a way to do what’s right. I’m not looking to point fingers in this post, because it doesn’t do any good. (I have no doubt you will all do that in the comments anyway.) I simply care about sifting through what’s actually going to happen and what is just political posturing. Sequestration goes into effect on March 1 unless a compromise can be reached, and once again, doom and gloom is predicted. This time, the face of that disaster is crazy flight delays because the government can’t staff the air traffic control system. I don’t believe it one bit. (But I should be clear that sequestration is a terrible idea.)

First of all, I assume that they’ll come up with yet another deal that kicks the can down the road, preventing the major budget cuts that come with sequestration but failing to put together a long term solution. That’s been par for the course. But what if they don’t come up with a solution? Then what happens?

Well, when sequestration goes into effect, major budget cuts hit across the government. Before, the big talk was about how it would cripple our national defense because budgets would be cut so much. But now there’s a new face of doom, and it’s that our air traffic control system is going to be paralyzed. Oy vey.

The big push on this has come from soon-to-be-retired Secretary of Transporation Ray LaHood. (Oh man, I can’t wait until he’s retired.) If sequestration goes into effect, there will be cuts of about $600 million at the FAA. Part of that will come from cutting contracts and moving funds around as best as possible, but according to LaHood, it’s not enough.

In the end, there has to be some kind of furlough of air traffic controllers, that then will also begin to curtail or eliminate the opportunity for them to guide planes in and out of airports.

Oh no, the sky is falling! The sky is falling! What are we going to do?! We’re going to keep operating the national airspace system, that’s what.

Clearly the goal here has to be to shift resources around as much as possible in order to make sure that the impact on day to day operations is minimized as much as possible. Will furloughs be needed? Probably. But that doesn’t mean they’re going to go slash staff at enroute air traffic control centers or in towers at major airports. Instead, you should see the impacts around the edges.

For example, the FAA has put out a list of what it might do, and it includes about 100 airports that could face air traffic control tower closure. Recognize any of these airports? If you’re a private pilot, you probably do, but very few of these have commercial service. The ones that do have commercial service see very few operations – Santa Rosa (CA), Trenton (NJ), and Latrobe (PA) face closure. We could also see cuts in Sioux City (IA) and some other airports with a few regional flights a day. Those have just a handful of flights per day at most, but let’s be clear. Just because the tower closes doesn’t mean the airport closes. Those flights can actually still run without a tower if the airline chooses to. Keep in mind, these are all just potential closures anyway.

If this happens, I simply cannot see the air traffic control system becoming paralyzed as many seem to have predicted. For commercial flights, it will run as normal in the short term, or at least it should run as normal unless the FAA does something stupid. I say that for the short term only, because longer term they’re doing things like putting off preventive maintenance on ancient systems that could result in more pain and suffering down the line. But hopefully at worst, this is a short term issue.

Please don’t take this as an argument in favor of sequestration. It’s a terrible way to cut a budget, and it will be bad in the long run. We will have to expect further delays in getting the NextGen air traffic control system going (on top of the insane number of delays we’ve already seen). It will also mean FAA employees (and employees of all government agencies) will take a big hit, and yes, it will have on impact on our aviation system. It’s just not going to be the immediate doom-and-gloom that others predict. Still, it would have grave consequences over time. And that’s true for our entire country, not just for air travelers.

In the Trenches: Changing Our Services – Intuit Small Business Blog
This is actually more about flight changes instead of changing our services, but well, close enough.

Aviation Experts Select Winning Birthday Cake! – JetBlue BlueTales
Apparently the Blue Crew has been drinking heavily because they invited me back to judge another year of the cake contest. My first pick lost in favor of Baltimore. Hasn’t Baltimore won enough lately?

Redondo Beach man’s lifelike model recreates Pan Am 747 in City of Industry warehouse – Long Beach Press-Telegram
Another story on Anthony Toth’s fantastic 747 mockup in which I was quoted. It just keeps getting better.

Matthew from Live and Let’s Fly wrote up a story about how he was removed from a United flight to Istanbul for taking pictures.

<sarcasm>Clearly the flight attendant was right for ridding the airplane of such a terrible menace.</sarcasm>

Assuming this is true (which we don’t know for sure, but I have little reason to doubt it), can anyone see a good reason why this should be the case? And I’m talking about a really good reason, not some cooked up idea that maybe the Soviets are going to try to steal seat technology or the Taliban is going to bring our airplanes down with photobombs.