Here is the first part of a good article from Spencer Stuart executives Michael Bell and Thierry Lindenau. I just saw the second part of their two part story go up on the Flight Global site, and it is well worth a read.

Consultants popping up everywhere. In recent posts I’ve referred to Boston Consulting Group, linked to the McKinsey Quarterly, Derek Gerow from Bain was at the same Airline Sales Channel Forum as me last week, and a few weeks ago someone forwarded me an invitation to an event LEK are hosting jointly with IATA on ancillary revenue. Speaking of LEK, I can’t let this mention go without repeating a great quote from a former LEK partner I used to work for after he had left LEK.

“Women can come to the office dressed in any colour they please, whilst men can only wear blue or grey suits; but when the work gets tough a man can roll up his sleeves, whilst a woman who takes off her jacket is a secretary”

A real throwback to an earlier age, but he could still bring in the big consulting jobs and that was what counted. I can’t say he was overly popular with the women in the office though.

Back to LCC’s and their evolving business model, here is evidence of what on the surfact of it sounds like a very amicable divorce.

Duane Pfenningworth – Raymond James
I wonder if you could talk about your transition on the reservation system side from Open Skies to Sabre? Why you’re making this change and what would this enable you to do with partners such as Lufthansa that you can’t currently do?

David Barger
Good morning Duane. I think it’s a natural evolution in this chapter of our company’s growth, and very, very pleased with Navitaire over the first Open Skies system over the first nine plus years of our history. And then we take a look at not just our growth but also where we’re growing. Later this year 20% of our ASMs will be into international or Caribbean markets. The ability to as we take a look at the booking flow through the website and the ability to monetize the booking flow. By the way, this is all prior to whether it’s opportunities with Aer Lingus or Lufthansa and the Lufthansa family of airlines that we plan to have connectivity with later this year. So we just think this is prudent for this time because it really, we think, optimizes our revenue opportunities. And for this chapter of our growth, it was prudent for us to make the move anyway.

From the Flight Global Spencer Stuart article, here is a good quote, but what is even more impressive is the job title:

Garry Kingshott, chief executive advisor of Philippines budget carrier Cebu Pacific, sums it up nicely: “The next phase of low-cost development is to continue to play the price leadership game, to drive market stimulation, ultimately with zero fares and ancillary revenue.”

I don’t agree with the zero fare theory, but I am totally committed to increasing airline ancillary revenue. Did I mention the Air Pacific case study? (well, maybe about every second day for the past week!)

And then whilst still on the topic of LCC’s, news this week from Jetstar Asia:

The ability to interline gives Jetstar Asia greater visibility on the global booking system used by travel agents and will allow Qantas customers to more easily book an itinerary such as London-Singapore-Penang using the two carriers.

Regarding the above story I was talking to a colleague in Nice who was close to this, and he said to me something along the lines of:

“Selling is one thing but when comes to time of servicing then it is another story. Without interlining it is virtually impossible to sell chargeable SSR’s and when you think about adding rebooking you have to master the way fares are filed (cat31) so if you do not think about the full range of services from day 1 then you just create traffic towards the call center and as the fares cannot increase then the margin goes. As a customer this is great to be able to buy a ticket with an LCC carrier and a classic airline”

That is about enough LCC news for one day, or probably for one week, at least as far as this blog is concerned. And just in case you didn’t get it, the title is intended to be very tongue in cheek.

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