Rejected!

Good Morning, Cafe Patrons.

I am serving up a special, extra strong shot of travel caffeine today, as I think we all need something potent to help clear our minds of what has been a truly befuddling week in the Australian air travel industry.

Virgin Blue was left hanging at both the US and Australian altars with two of their brides-to-be - Delta and Air New Zealand - as the US Department of Transportation rejected their proposed tie-up with Delta, and the Australian Competition and Consumer Commission did the same with their Air New Zealand proposal. In both rejections, the hypocrisy seems quite evident as not only has the US DOT has approved a similar (but much larger) British Airways / American Airlines trans-Atlantic partnership but the ACCC in Australia actually approved the Virgin / Delta deal last year.

Ironically, on the very same day the US DOT rejected the Virgin / Delta marriage another Australian Government entity, the International Air Services Commission, approved a continuation of what now amounts to a duopoly on the Australia-South Africa route by extending the codeshare agreement between Qantas and South African Airways. This duopoly is thanks to V Australia (owned by Virgin Blue) recently pulling out of the AUS-SA route, leaving those two aforementioned code share partners the only direct services between the two countries.

Both regulatory bodies cited various anti-consumer sentiments in denying the partnerships, but in my mind (both as a corporate and consumer purchaser of travel) I certainly don't think either body was representing my interests. Why isn't the ACCC weighing in on the South African/Qantas code share for instance, instead leaving it to some other governmental body to ascertain the impact on the consumer? Isn't the 2nd "C" in ACCC all about the consumer?

Perhaps Virgin and Delta should hire the lobbyists that BA and AA used when petitioning the US DOT on their alliance across the Atlantic, as they obviously spun their message correctly whereas Virgin and Delta seemingly did not. Regardless, I can't fathom how the DOT could justify BA/AA getting in bed together but have decided with Virgin and Delta to, um, keep things virginal apparently.

Same for the ACCC here. They claimed that a Virgin and Air NZ partnership "...would lessen competition and increase the likelihood of ‘‘coordinated conduct’’ on the trans-Tasman route." Apparently the US DOT doesn't think the same logic applies over there, as I'm sure there will be a fair bit of "coordinated conduct" between the Brits at Waterside and the Yanks at DFW.

And just to add more insult to injury, Qantas has now stated publicly that they have a beef with Virgin's proposed partnership with Etihad. Let's not even bother with discussing the merits of airlines objecting to other airlines' plans, shall we? Of course Qantas now has issues with Virgin's plans, but does anyone have any issues with Qantas' codeshares through to Europe with BA/CX, etc? Sorry, I just said I wasn't going to go there...!

Now, I'm not advocating that all governmental bodies charged with consumer protection around the world should operate under the same guidelines when it comes to regulating things like air travel. However, I would hope that they would operate with at least the same logic. And I for one find all these rulings illogical. After all, if there is any industry on this planet that is excellent at trying new ways to fill a void in a particular part of the market, it's the airline industry (see: Southwest, Ryanair, AirAsia...and yes, even Virgin Blue circa 2001.)

If Virgin and Air New Zealand do link up and decide to start doing anti-consumerish type things like charging $1500 one-way across the Tasman, I'm sure Qantas, Tiger, Emirates or any number of future upstarts will be ready to step in and bring that consumer back with lower prices or better service or whatever will woo the customer. So why do we need endless bureaucracy combined with a lack of common sense dictating the market?

Perhaps one day I will be paying $1500 one-way across the Tasman, standing up for the entire flight, and paying a fiver to use the toilet thanks to "coordinated conduct." And if that day happens, Cafe Patrons, I may have to charge extra for that lid on your morning cuppa...

EXTRA SHOT FOR THE DAY

I'll be in Hong Kong all next week through Friday, and thanks to a jam-packed schedule and some "renovations" I'll be doing on the Cafe, we'll be closed next Friday, September 25th. I'll be back open on October 1st with a whole new look - come check it out!

Image courtesy www.commons.wikimedia.org

Same, Same...but Different?

Greetings, Cafe Patrons.

For those of you who have been to Thailand, Cambodia or other parts of SE Asia, you may be familiar with the theme of this week's Cafe. Whether it's a fake Rolex or a hotel room that's not quite as nice as you thought it was on the Internet, you'll hear a common reply from the locals: "yes, it's same same...but different!"

Which is what was running through my mind at last week's Association of Corporate Travel Executives' Asia Pacific Conference in Singapore. And no, it wasn't because someone was trying to sell me a "Louie Veeton" handbag for my wife ("no really honey, it's a real one...same same but different...!")

As I was sat at a roundtable listening to an industry perspective presentation, one of the attendees whispered to his tablemate that "we've heard this all before, has nothing changed in our industry? It's the same thing every year." And that's when it hit me - yes it's "same same" - but quite different than it may seem on the surface.

Take content fragmentation, GDS relevance and online adoption in Asia Pacific, for example. Five years ago when I attended my first ACTE Asia Pacific conference, I was working for a GDS company and was part of a session discussing the demise of traditional distribution due to the "imminent rise of online booking and direct connects in the region." Lots of nodding heads in the audience at that one.

At the conference last week, we heard from several TMC's including HRG and BCD that online booking adoption is growing in Asia Pacific and that supplier content fragmentation continues to be the norm in this region. So there you go - on the surface it sounds like we were saying what was said five years earlier ("same same!")

But listen closer, and you'll start to hear the "but different" part of the old saying. During another industry perspective presentation at ACTE, BCD's Greg O'Neil in particular talked about this subject within a comprehensive white paper called "At The Tipping Point" in which he rightly points out that while online booking has grown significantly in the region (the "same same" part) the BCD white paper also notes that "...a further trend toward the increased use by business travelers of smart phones and other Web—enabled devices should be seen as an interlinked development with online booking." That's the "but different" part.

The great fun of being in this region is that while on the surface sometimes things seem to move quite slowly, the undercurrent is whipping along at a break-neck pace. So while some people may see things as not progressing all that fast, others realise that when you reach the back-end of a period of time in this region you can expect things to suddenly look very, very different.

Many of the GDS pros, TMC leaders and buyers I spoke with last week to various degrees all understand that a big shift is already underway in Asia with respect to travel technology, distribution and traveller behaviour. And that shift is that mobile and hand-held devices are going to drive tremendous growth in self-service in Asia Pacific that will likely put this region well ahead of the rest of the world in this space in the coming months. Note I said months - not years.

Yes, given the plethora of GDS options (TOPAS or TravelSky, anyone?) seemingly endless new online upstarts (excellent IPO, MakeMyTrip) and rapid rise of mobile social media (60% of all tweets globally come from Asia - yowza!) this market may seem to be a madhouse sometimes. But from madness often comes greatness, and it's likely that the corporate travel industry will meet again in Singapore next year and look back on what will likely have been quite a year for travel technology in the region.

And that, my tablemates at ACTE, is very, very different than what you may think it is.

EXTRA SHOT FOR THE DAY

At the risk of taking credit for something I know I had no direct influence on, I still am pleased to know that Virgin Blue is at least thinking the same way I am.

In an earlier Cafe posting I offered up several ideas which DJ could take on board to help them in their attempts to steal corporate market share away from Qantas. This week they've announced that at least one of my points - widebody planes on domestic routes - will become a reality from May 2011 when they introduce A330 aircraft on routes between Perth and the east coast. Flying to Australia's largest state on a large aircraft is just natural, as why wouldn't you want to start stretching out as soon as you possibly can?

And just in case, by some miracle there are Virgin Blue patrons starting to have a peek in the Cafe's windows, I might suggest that they next see about what they're going to do with that useless "Premium Economy" class....

Image courtesy AustralianGamer.com

If You Want to Play Corporate Travel Leapfrog, Best to Have Strong Legs

Morning, everyone! This week I had the pleasure of attending the Asia Pacific Aviation Outlook Summit here in Sydney. A 3-day gathering of the airline and travel industry glitterati packed with presentations and pontifications about the future of air travel, and the travel industry in general.

After flying on, writing about and booking tickets with airlines for years it was great fun to go to a conference devoted to the business of air travel. And what became apparent to me is that when it comes to business travel, airlines are pretty tough to keep up with.

As Cafe regulars would know I've devoted a few Friday Mornings lately to talking about Virgin Blue's quest for the Australian corporate market. And if the presentations I heard this week prove to deliver what was talked about, any possible leap frog plans past Qantas that Virgin had could prove to be very tough to deliver on.

It boils down to simple economics: the Qantas Group is profitable, despite all the groaning about costs and constant (and very publicised) battles with some categories of employees. Qantas' CEO Alan Joyce at the conference this week put it in very plain terms: they are making money. And when you make money, you can spend money. And when you can spend more money than your competitors, you'll end up leapfrogging well out of their league.

Joyce spoke at length about the 8 to 9 figure investments (yes that's tens to hundreds of millions of dollars) in airport operations and passenger experience technologies they've started to just roll out, and it is obvious they are moving into a new generation of convenience for business travellers. I'm soon to get my new Qantas Frequent Flyer card (got my "personal" email from Alan himself letting me know it's on the way!) and after what I heard this week I can't wait to try it out.

I've written lately about comfy seats, in-flight entertainment, air staff that try to do wonderful things for you, and all that good stuff. But time after time, in study after study, the things that business travellers tend to rate as most important when choosing an airline (assuming they have a choice of course) is convenience, reliability and capacity - and Qantas is nailing those facets well beyond the rest of the market.

With the new virtual check-in, and soon-to-come personal bag tags, as a busy traveller I'll be able to waltz into the airport minutes before my flight, stroll past the RFID kiosks which will pick up my information from the radio chip embedded in my Frequent Flyer card, toss my bag with similarly ID'd bag tag attached onto the waiting conveyor, and voila - I'll be checked in and on my way. No stopping at a touch-screen, and certainly I won't have to stand in line and talk to a person (heavens no!) to check in. It doesn't get more convenient than that.

And it probably didn't come cheap - which again is why Virgin will continue to struggle to capture the corporate market as I would predict that this new technology will be a huge hit with road warriors. As Virgin ekes out a profit, Qantas' money train seems to keep rumbling along just fine- "tank you very musch" as the Jolly Irishman Mr. Joyce would say. Deep pockets can buy big things, and this "frog" has some big legs. Going to be tough to get the jump on this....

Virgin's Business Class Bliss - the V Australia Sky Try

Morning everyone! After a couple of weeks off the Barista is revived, refreshed and ready to tackle all things travel. And much of my refreshed state comes from a truly fantastic holiday to Fiji. Which, interestingly enough, started off with a flight experience that has (at least in my mind) led me to believe that Virgin Blue's new boss John Borghetti has the future right where he probably wants it.

As I've said in previous editions of the Cafe, I was struggling to figure out how Virgin's new boss was going to loosen the bear hug on the corporate travel market that Qantas currently enjoys. But thanks to a terrific experience on V Australia (or maybe it was too much Fijian kava) things have started to crystallise in my mind about some things that Virgin Blue can start using to make inroads into the business travel market.

As a first-time flyer on V Australia, I have to admit even though I had heard the advertising and some feedback from others who've travelled on them, I was expecting a more Virgin Blue-like experience. Imagine my pleasant surprise then after boarding the plane that besides a flight attendant crew who all looked younger than my son, there was very little Virgin Blue and a whole lot of something else.

That "something else" was what you just don't seem to get these days on other airlines, and that's a feeling that you're in for a whole new experience. Yes, the colour schemes are from Virgin Atlantic and so is the pop/rock music piped in (which sure beats hearing Qantas' "I Still Call Australia Home" anthem over and over again) but the plane itself just feels more cool, more comfortable, and more unique than anything I've been on lately. The other "something else" was the crew - just as young, laid back and better looking than I am as is the rest of Virgin's staff but they just seemed to adapt their approach to the passengers better than other crews I've travelled with lately.

For example, our flight was to Fiji so obviously it was a holiday-heavy flight. However in Business class, there were several travellers who looked as though they were either coming from or going to a business meeting. As opposed to assuming everyone was off on holiday, the crew in the cabin took the time to not only say hello but also stop and query the nature of the passenger's journey. With Mrs. Barista, Barista Junior and yours truly already in our shorts and sandals it was obvious what our story was, but not so obvious was what the gentleman across the aisle with the Tumi laptop bag and phone glued to his ear was up to. Just saying a quick hello is fairly Virgin Blue or Qantas-like, but a "what will make your trip with us more comfortable?" is what V Australia seems to be about.

Now onto the actual experience on board: with mood lighting, cool colour schemes, big touch-screen TV's with on-demand content available for you right from the moment you sit down until arrival at the other end, and completely lie-flat seats, this biz class product is a real winner. Coupled with excellent food and, of course the requisite sit-down bar, the entire V Australia flying experience was a treat. As their adverts for the SYD-NAN route say, you'll wish the flight was longer. And I certainly did.

However - and this is the "Hey John, listen up!" moment- I was actually more impressed with the Premium Economy product. Not so much as saying its the best long-haul Premium Economy product in the sky, but rather that I believe that this product, installed in the first few rows of Virgin's domestic aircraft, would give Virgin Blue a differentiation in the domestic business class sector rather than the half-hearted attempts at doing so they currently have on board.

The V Australia Premium Economy seat is covered in very comfy, soft leather, has useful (ie- not painful) footrests on the seat in front, has generously-sized on-demand TV screens that, coupled with free on-board Foxtel, would really entertain the biz traveller and make it feel like a more international-type product rather than a rigged-up domestic seat with an extra drinks tray. Throw in a free welcome glass of bubbly in one of V Australia's cool and rather large champagne "schooners" (nothing like a big fat drink after a long day to calm the nerves!) then if I had the chance to fly biz class domestically this way I'd be all over it.

For certain, it will take a lot more than one comfy seat to send the corporate traveller who's drunk on Qantas Frequent Flyer status and points staggering over to Virgin Blue. But I'm sure John's got all those other aspects of engendering corporate loyalty all figured out. It's the actual flying experience on Virgin that I've said before still has a long way to go, but I think by taking a few pages out of their sister long-haul product then DJ could have a flying chance at it.

The Most Useless Travel Blog Posting Ever

Good morning, everyone. I know (or at least I hope) your weekly visits to the Cafe are insightful, interesting and useful - but I think today I may just disappoint.

I'm intrigued by the recent moves in personnel and public statements being made by new Virgin Blue boss John Borghetti as he continues to reiterate that Virgin Blue's future is based on a significant growth in corporate business. Just this past week it was announced for example that he's poached a bunch of his former Qantas colleagues to take on senior roles in Brisbane. And given that he was instrumental in building up Qantas' business products over years down in Mascot I certainly am sure he knows what he's doing.

However, as a frequent business traveller, and someone who flew Qantas predominantly for nearly 6 years and recently started flying on Virgin Blue, my curiosity is based on wondering how on Earth Virgin Blue is going to take a slice of Qantas' stranglehold on the Australian business travel pie. Because much of that curiosity stems from the fact that having flown Virgin Blue nearly every week over the past few months I have absolutely no clue how they are going to pull this off.

I certainly do not profess to know what drives the satisfaction of every single business traveller out there. But having logged my fair share of miles all in the name of whatever organisation I happened to be working for at the time, I do think I have a good idea of what business travellers are looking for in an airline.

But I really, truthfully, have no idea what I would tell John and his old and now new cronies there at Virgin Blue how they're going to capture the business travel market. Thus, today's Cafe being the most worthless travel blog post ever.

What I can tell the Virgin Blue team however, are some things about travelling for business on Virgin Blue that I would think that, if changed/edited/deleted altogether would be a great start:

- Terminal experience: OK, so this is a tough one, given that airlines have only so much control and influence over Macquarie Airports (oops, sorry - I mean airport operators) to enhance the airside experience. That being said, the difference between Sydney Domestic Terminal 2 vs. 3 (Virgin vs. Qantas, basically) is significant. I'm not talking about shopping or food- I'm talking about feel. Most savvy business travellers today in an era of mobile/online check-in are breezing into the terminal with only minutes to spare before boarding and don't give a rats about shopping or eating. The light, airy feel of Qantas' Terminal 3 compared to the dark, low-ceilinged rabbit warren of Terminal 2 makes me want to cut those minutes down to one single minute. T2 in Sydney (and don't even get me started on Melbourne) needs a serious overhaul.

- The "fun" factor: I don't have any specific issue with this, as I enjoy a sharp-witted flight crew and genuinely friendly welcome as much as the next person. What I don't like is when those who are tasked with my safety and onboard comfort put that fun above their job. The problem with the flight crew on Virgin from a business perspective is that they don't pay enough attention to why I am travelling. I don't need a joke after a long day and I'm buried in my laptop as soon as the seat belt sign is off, I just need a "hi there, do you need anything?" and then move on. Even if Qantas' flight attendants aren't always the warmest (generalisation of course, there are some very nice ones) they at least have the "attend" part of the job down pat.

- Make a decision on the front of the plane: the current "Premium Economy" is neither Premium nor good economy. Let's face it: flights in Australia aren't all that long, so why have a product that doesn't really give you any significant difference in the on-board experience? Qantas' domestic business class may not necessarily be "worth it" (again, given relatively short flights) but at least the difference in the product is noticeable.

- Narrow planes = narrow opportunity: Virgin needs to get bigger planes on the more popular routes. Like the earlier points around the "light and airy" feeling in the QF terminal vs. the DJ terminal, there is still something infinitely more comfortable being in economy on board a plane with two aisles rather than one. Every flight on Virgin Blue just reminds me of travelling in the USA, aka: Boeing 737/Airbus A319 hell. No matter that the seats are leather, or that there is a seat-back TV in front of me, I would rather be on a wide-body jet any day of the week. Especially to Melbourne, which is such a short flight that having a wide-body plane for a 50-minute journey seems luxurious. Business travellers like luxury, no matter how small it may seem, and having to cram on board single-aisle aircraft when you could go on something bigger just doesn't cut it. And yes - I am saying I prefer a creaky old wide-body 767 to a brand-new 737.

- Free Foxtel: I would have to think that the most clear-cut differentiator is that Virgin offers 24 channels of live-to-air TV on the seat back in front of you rather than stale Channel 9 news updates with the ingratiating Deborah Hutton winking at you from out-dated overhead monitors. I'm sure JB has already thought of this, but if you want corporate loyalty - give us free Foxtel!

Again, as I have said numerous times, I can't imagine how difficult it must be for an airline to offer various pre-flight and on-board experiences and capture market share all in the name of profitability. So if John Borghetti ever did shimmy up to the Friday Morning Cafe and order up some advice from the Barista, I'm not sure I could truly help him out. But as an avid and well-seasoned traveller, I would hope that my useless advice could perhaps find some value somewhere, somehow. Like JB's goal to achieve 20+% share of the corporate market...we dare to dream....

Ah Technology - the Highest of Highs...Followed by the Lowest of Lows.

My fellow cafe fiends, I write to you today with a heavy heart. OK, perhaps that's a bit much...let's just say I've been betrayed.

Yesterday I heralded the long-awaited coming of truly mobile check-in, using my Blackberry as a boarding pass with Qantas. Well, it's time to silence the trumpets as my return experience wasn't so exciting.

When I repeated the process of checking in for my return flight (in the cab on the way to the airport - had to keep up the image of "man on the move") after clicking the "Check In" button on the Qantas mobile site I was left with this crushing message: "Boarding pass expired. Please call 13 13 13 for assistance."

But I don't want to talk to anyone. I want my robot fingerprint!

Alas, apparently there is some bug in the system where if you check into your outbound flight, sometimes it checks you in for the return flight at the same time. Or so the Qantas staff on the help line told me.

Actually, it wasn't all bad - I've never had such excited Qantas people on the phone with me helping out with a problem. When I rang in and described my plight, the agent on the phone couldn't have been more excited. "Ooh, you're my first call who's used the service! Let me get out my new manual and see what we can do." A few calls back and an escalation to a supervisor only got me to the above conclusion - a bug - but hey, at least the human element of technology was nice to work with.

But I have to say that my earlier effusiveness has waned somewhat...let's see how things go next time as I'll likely be using Virgin Blue's new "Checkmate" system for my next trip. Here's hoping it will bring back that "high" - well, high-tech anyway - feeling from before!

Checking Out the New Checking In

Mobile phones have been around for ages it seems. And yes, mobile technology providers, handset manufacturers and software companies have been saying for years that the process of getting on an airplane is going to be revolutionised.

But until yesterday, this particularly well-travelled Barista had yet to really and truly have his travel experience altered by the mobile world.

How did this happen? It only took a little squiggle of lines looking much like a robot's fingerprint, scanned on the screen of my mobile, to change everything.

Recently both Qantas and Virgin Blue announced the availability of mobile check-in along with a suite of other mobile-device enabled services - mainly geared towards iPhones and Blackberries. Virgin Blue in particular has made much noise about their Blackberry-specific application which from my limited exposure to the "App World" seems to be a big deal as it appears to me that nearly everyone else is building Apps for the iPhone. As a Crackberry addict I'm pleased someone is looking out for us who crave real buttons on our smartphones rather than vapourous touch screens. Luddites unite!

But, back to the real action, and how do these much-vaunted applications work in the real world? I can honestly say they work a treat. The night before my flight to Melbourne on Qantas, I logged into their mobile site, found my booking, checked-in on my phone and received a 2-dimensional (in techspeak it's actually called "2D") barcode via SMS and on the Qantas mobile site. Today I just strolled past the check-in queues and kiosks, through security, and straight to the gate where I flashed my phone under the scanner and voila- a beep and a green light later and I'm on my way down the jetway.

I should point out that it's not a completely paperless process- you do get a little ATM-receipt sized piece of paper which you need to produce at the door of the plane to prove that you've used a paper-less process to get that far. An added layer of security, the flight attendant assures me. No problem, I'm all for a bit of tree sacrifice for safety.

But as I write this post, I find myself strangely excited about the prospect of repeating the process on my way home tomorrow. Perhaps not so much because the mobile check-in has finally found it's day in the sun, but more so that I am hoping that I'm again the only person on my flight tomorrow who will be able to whip out their phone and scan my way onto a flight.

As with all new technologies, it's only as cool as long as you're the only one who knows about it. After everyone starts doing it, I'm sure it'll be as boring as in-flight food in no time.

Here's Johnny!

So perhaps the least surprising announcement in the Australian travel industry came earlier this week when Virgin Blue introduced former Qantas Executive GM John Borghetti as the new boss at Virgin. I think pretty much everyone who’s in the business here knew that as soon as Borghetti’s 12 months of non-compete time were up he’d likely pop up at another carrier, and even more likely at Virgin since Brett Godfrey announced his departure last year.

What will be very, very interesting to watch as Borghetti takes over the reins is whether he can deliver on his ultimate boss’ (Sir Richard Branson) statement that Australia’s number two airline will need to “go after the business market in a big way.” Borghetti was a big driving force behind Qantas’ business products, including the launch of their new business class early in the past decade as well as overhauling the QF flagship lounges – all critical to attracting the high-yielding corporate traveller dollar.

Virgin has done a nice job in recent years of slowly but surely adding on more features to woo business travellers, from upgraded lounges to increased flights amongst top city pairs to special seating to a greatly enhanced Velocity rewards program. These are the “fab four” of what attracts the business traveller: frequency, points, lounges and perks.

If we focused on just the fab four factors, then the good money would likely be on Qantas to continue to enjoy dominance in the business market as although Virgin has indeed greatly improved their products over the past few years, by and large they still are a bit behind Qantas in terms of frequency (although they are very close, especially on SYD-MEL) loyalty (QFF is still the biggest loyalty program in Australia),and lounges (newly refurbished domestic lounges and let’s not even try to compare the Qantas International First Class lounge to anyone else.)

With respect to perks I’ve not been able to experience Virgin Blue’s approach to upgrades, special seating requests, better meals, etc. as I’ve just not flown them enough to have an opinion, so for the sake of this discussion I’ll just call that even.

However, where things get interesting is thanks to the new frugality brought on by the GFC, and that is with fares. DJ has enjoyed strong growth since taking over from Ansett as the antipodean #2 carrier and much of that is due to their aggressive fare discounting in the leisure sector attracting cost-conscious holiday makers. Well guess what – CFO’s and corporate travel managers are the new “holiday makers” in that they too are now seeking out the best deals, the cheapest seats, and any airlines who will give that to them.

I’m afraid that like the original Fab Four, the aforementioned fab four of business travel are about to be broken up and go on solo careers as many companies aren’t concerned about who gives out the most points anymore or who has Cararra marble in their lounge bathrooms (guess which carrier that distinction belongs to?)

So, which approach will Borghetti use to woo Sir Richard’s expected corporate travellers – the QF method of providing “addictive” travel perks like swish lounges and Platinum cards, or will he go after the bottom-line minded travel buyers and CFO’s as after all, they’re the ones really holding the purse strings? Only time will tell (Borghetti apparently starts in May) but I’m sure it will be an interesting matchup to watch.

EXTRA SHOT FOR THE DAY : “AUSTRALIAN GOVERNMENT STIMULATES THE CORPORATE TRAVEL INDUSTRY”

Sorry if the headline is misleading, because I’m sure billions of dollars are not about to be put into the corporate travel industry. But about $500 million or so of government "money" is actually out there for the taking...

Talk is starting to heat up around the impending (apparently within the next 3-4 weeks) announcements by the Australia Federal Government around who wins and who loses across their $500M+ annual expenditure in travel. Airlines, hoteliers, travel agencies and technology providers are all on pins, needles and lobbyists’ hotlines waiting to hear how the Qantas dual stronghold (on air and travel management services) will be reallocated. Note that I said “how” rather than “whether” as I will be extremely surprised and not a little dismayed if nothing changes out of this process.

What’s great about this whole thing is that everyone and their mother thinks they’re going to get a slice of this enormous pie. Even Etihad is wading into the fray, as the Middle-Eastern airline’s CEO James Hogan was recently quoted as saying the six-year old carrier is fully into the bidding process. Given Qantas often complains about Mid-East carriers enjoying government subsidisation that QF hasn’t had for years, it would be slightly ironic if any of them got a slice of the Australian Government’s spend. As a taxpayer, however, I’m more than happy to have the Government fly on more cost-effective suppliers - assuming Etihad or any other carrier will indeed be cost-effective of course....