Glassdoor: Employee Satisfaction (or lack thereof) in the Travel Industry

Glassdoor.com, a cool website where "anyone can find and anonymously share an inside look at jobs and companies" has provided an interesting peek at job satisfaction inside the travel industry.

Travel is probably an industry Glassdoor knows something about given the site's founders which include such industry notables as Bob Hohman (Hotwire, Expedia) Tim Besse (Expedia) Ryan Aylward (EzRez, Hotwire) along with a few others who serve on the board who've spent a bit of time in travel: Rich Barton, Erik Blachford and Stephen Kaufer.

And what has Glassdoor, which garners its information from current and former employees, come up with? Might as well start with the OTAs since Glassdoor practically grew up in the OTA world:

The chart above details the approval ratings of the companies themselves and their CEOs as reported by the employees who came to Glassdoor and left feedback. (Hugh Jones isn't rated because of a limited number of responses - probably because he is still new in the role.) Looks like Hotwire is a pretty good place to work - we'll leave it to you to decide if that is because all of these guys left to start Glassdoor or not. (Just kidding, Ryan et al)

Glassdoor's info gets more interesting looking at hoteliers:
The highest rated CEO, Issy Sharp, has just announced that he is stepping down - a real shame according to this report. Bill Marriott and Hyatt's Hoplamazian are just a hair behind Sharp, however.

Not surprisingly, airlines show by far the greatest variability from one to another:

Things appear pretty bleak over at American and American Eagle - with labor strife a way of life at AA, clearly Something isn't Special in the Air. Even US Airways pulls better rankings. Southwest and JetBlue, as usual, prove that they are run more like hoteliers than airlines with ratings like these. (oh, they make money like hoteliers, too)

But the big takeaway? Continental and United - look a the difference in internal company ratings. Glassdoor doesn't have a rating for Jeff, but boy do they have one for Glenn. This is going to be one interesting merger, don't you think?

Continental: No More Free Lunch - Probably for the Best

Continental Airlines, which has made considerable marketing hay about the fact that they still served airline food for free, has decided to drop the practice.

Clever Continental advertising pieces like these will need to be re-worked a bit but free (airline) food can't be as big of a draw as other airline purchasing influencers such as price, schedule and frequent flyer program.

Back when other airlines began imposing baggage fees, Continental was among the last of the airlines (save Southwest of course) that opted to begin charging for checked baggage. We are told that Continental was looking for signs of share shift away from airlines that were adding baggage fees. Alas, no share shift was apparent so ultimately Continental decided to match the other mainline hub and spoke carriers and enjoy the revenue benefit.

Similarly, it has probably become impossible for Continental to show any share-shift (and resulting revenue gain) from continuing to serve food. In fact, they may have actually been at a disadvantage as some carriers have started to really sell some good food.

From recent first-hand experience, we can report that while free food on CO was nice, it was certainly nothing to write home about. In fact, some of the buy-on-board food has become so good (particularly on Delta) we'd actually prefer to pay a few extra bucks and actually get something that is fresh, healthy and tasty. Or not.

So, we'll see some costs come out and, hopefully, some nice ancillary revenue gains - Continental is projecting about $35M in improved revenue and cost savings - and that's a lot of sandwiches.

DOT: LGA and DCA Slot Swap is a Go for Delta and USAirways

The DOT has just issued a tentative waiver that will allow USAirways and Delta Air Lines to swap their landing slots at New York LaGuardia and Reagan Washington National airports. As we discussed previously, this will allow Delta and USAirways to greatly increase their dominance at these two airports, respectively, by allowing them to effectively transfer under-utilized landing slots between themselves. USAirways operates a large operation at DCA which will grow larger while their operations at LGA will shrink dramatically when they cede slots over to Delta. Delta will pick up many of the small routes which US currently operates (often with small propeller aircraft) and be able to better integrate them into Delta's growing New York operation.

However, the DOT is mandating that US and DL give up some slots to "carriers with no or limited service" at DCA and LGA. 14 pairs at DCA and 20 pairs at LGA (a pair is required since take-offs must generally equal landings for a successful operation.) have been marked for re-distribution. To be sure, this is a small number of the 42 slot-pairs USAirways originally stood to gain at DCA and 140 Delta was expecting at LGA.

Let the jockeying begin but we expect JetBlue, Southwest, AirTran and maybe Frontier to be at the top of requesting parties.

And as we've said before, get ready for the final shut-down of Cincinnati by Delta as a hub or focus city. The airlines are only trading slots, not aircraft. Those 120 slots will need a substantial number of aircraft for operations - we bet they are going to come from the operation in CVG.

Slot Swap: When the Dust Settles, Who Will Lose - We bet Cincinnati

We haven't yet discussed the current New York slot swaps yet because we wanted to take a little time and digest. For those of you not paying attention, this airline game of Wife Swap (a TV show, really) has got Continental and AirTran trading a few slots at Washington National/LGA for Newark and a huge transfer between Delta and USAirways at New York LGA and Washington National.

The Continental/AirTran deal is fairly straightforward. AirTran gets more slots at airports where they have a decent presence and need to continue fending off Southwest. Continental picks up a few slots at their super hub at EWR and, most importantly, removes a low-fare competitor from the market. Without the need to match pesky AirTran's fares not just to Atlanta but to many destinations beyond, Continental will be able to dramatically improve their pricing power at EWR. Yes, they'll still have to match JetBlue and may opt to match fares from other New York airports but it certainly cleans things up for them.

Delta and USAirways is a much more interesting deal which will allow each carrier to fortify their existing strongholds. USAirways has been relegated to serving smaller, second tier markets from New York LGA for sometime. They have not had the international presence or business market presence to command corporate deals in the New York marketplace. These smaller markets such as Norfolk, Buffalo and Richmond have been served largely with Dash-8 turboprop aircraft which have become increasingly difficult to operate in and out of LGA due to the constant Air Traffic Control delays - all in all, a relatively poor use of valuable LGA slots.

Meanwhile at DCA, USAirways has the opportunity to dominate the preferred airport in the nation's Capital. Not only will USAirways be able to build additional connecting traffic but they will be able to dominate the local origin and destination market. Having fellow Star Alliance partner United as the dominate carrier at the other major airport, Dulles, certainly helps as well as it enables frequent fliers to pool their mileage earning across both carriers to gain status etc.

The one thing that has not been discussed is where Delta is going to get the aircraft to operate the additional 125 flights to/from LGA. Delta has promised to operate regional jets vs. the Dash 8 turboprops that USAir currently operates. (A few flights today are also operated by Colgan Air for USAir using 19 seat aircraft)

Delta certainly is not going to go out and acquire new aircraft for these flights. Our rough estimation is that around 30-40 aircraft are required to operate these flights based on an average flight of around 90 minutes, standard aircraft utilization etc.

There is probably one place where Delta can easily come up with the aircraft: Cincinnati. Long rumored to be on the chopping block and already dieing a slow death, we expect that Delta will pull substantial resources from CVG to operate in New York. A great posting by our friends at Cranky Flier details Delta's current regional jet operations at CVG - currently expected to be around 180 weekday departures in November, down from a high of nearly 400 in 2007. Those 180 departures (leaving a handful for the traffic CVG naturally generates) could easily fund the 125 new departures from LGA.

We expect the final de-hubbing of CVG to be accomplished by moving the lion's share of these aircraft to the New York LGA markets if and when the slot swap is approved - and we are confident it will be approved.

Sorry, CVG - wish we had better news but our bet is that your hub is going the way of American Airlines in Nashville and Raleigh/Durham or USAirways in Baltimore or Pittsburgh. The upside for the industry is that this rationalization will remove substantial capacity - something which is desperately needed.

New York Air Market Continues to Heat Up: American Offering Double Miles

The highly competitive market in New York continues to just get hotter. Today, American launched a new promotion offering New Yorkers double AAdvantage frequent flyer miles for the rest of the year. On all routes, all fares, worldwide.

This is clearly a response to a similar offer that Delta made a few weeks ago for which was broader in some respects (you don't have to live in NY) but also more targeted because you need to be a Delta American Express card holder.

What is interesting is that American felt the only place they needed to match the offer was the NYC market. The New York area has increasingly become a battle ground between Delta, Continental and American. AA and DL (especially DL) have added extensive new flights from JFK, AA has opened a new terminal at JFK. Continental continues to operate the largest operation of any of the carriers, albeit over at Newark - NY's third airport even though it is in New Jersey. (Which simply allows Delta to claim more flights from New York meaning the state rather than the metropolitan area - funny, they dont make the same claim in Cincinnati where the airport (CVG) is actually in Kentucky!) But we digress.

Complicating the story is Continental's impending move from the Skyteam Alliance (of which Delta is part of) to the Star Alliance which has not had a strong New York presence. Many NY travelers split their loyalty between Delta and Continental and credit their miles on both into one program. This is about to change as consumers will no longer be able to credit CO flights to DL and vice-versa. This change, set to happen this fall, raises the stakes for both carriers to hold on to the other's travelers.

Oh, and if you want those double miles on AA, go here and register....

Delta: Cutting Further Capacity this Fall

Delta announced this morning that they will cut capacity by10% this fall vs. the same time last year due to the effects of the recession and rising oil prices. Of note, they will also reduce international capacity by a further 5% for an overall reduction in international flying of 15% year over year.

Several international routes of note are on the chopping block for the fall. First up is Atlanta-Shanghai nonstop service. This is a route that Delta fought bitterly for against other US carriers and only started flying in March of 2008.

Also on the block are nonstops from Cincinnati (CVG) to Frankfurt (FRA) and London-Gatwick (LGW). Since merging with Northwest, Delta has pulled back significant capacity in CVG in favor of its newer and much larger hub just North of CVG in Detroit. If CVG can no longer support nonstops to London and Frankfurt (routes Delta has flown for more than 10 years) one can only expect further downsizing in CVG.

Delta: Ooops, we forgot the fuel surcharge: Crazy deals to Europe!

Last night, Delta uploaded a host of new fares for Central and Southern European destinations including Madrid, Zurich, Athens, Barcelona and the like. In so doing, however, they managed to leave off the $200 fuel surcharge making for some outrageously low airfare deals.

For example, JFK-Zurich in August for $233 including all taxes and fees. Similar deals were to be had to Madrid and Barcelona - the taxes alone to Europe these days are often over $100. Athens was a bit more but who is going be bothered paying $400 for a ticket to Greece in the peak of summer?

How did this happen you may ask?

Airlines file or load international airfares from their internal systems to a distribution partner known at ATPCO or the Airline Tariff Publishing Company. ATPCO is owned by most of the major airlines and serves as a central "hub" for fare (but not inventory) distribution to the major Global Distribution Systems (GDSs) such as Sabre, Travelport and Amadeus. ATPCO sends international fare changes to the GDSs five times per day where it is processed and made available for sale. Travel agents (everyone from Amex to Expedia) can access the airlines fares, schedules and availability directly from the GDSs.

Airlines send two pieces of data to ATPCO with each load: Fares and rules. The fares are fairly self explanatory - a basic dollar amount for each specific fare product. The rules get more tricky. This is where each fare product is defined - things like Saturday night stay requirements, advance purchases, etc. Also part of the rules section is, you guessed it, fuel surcharges. In last night's load, Delta inadvertently left of the $200 fuel surcharge for these fares. ATPCO dutifully uploaded the fares to the GDSs and voila: Cheap tickets to Europe!

And, yes, the deals are still out there as of this posting - but dont expect them to last too long - you can be sure Delta is taking steps to correct their mistake....

American's Complaint Against Imhof Joining Delta - Now Viewable Here

Here is the actual complaint American had lodged against Charles Imhof, former MD-Passenger Sales at AA.

While not nearly as soap-opera worthy as the Starwood/Hilton complaint but we really have to wonder about the basic judgement skills of a senior executive with AA. Sending highly confidential files clearly marked as such to a personal email address days before resigning to take a similar role at a chief competitor? Downloading sensitive documents onto a stick? Negotiating an employment agreement from his AA.com email address? ReAAlly?

Read the complaint and make your own decision.

Round I: Starwood vs. Hilton, Round II: AA vs. DL

Crains NY is reporting that American Airlines has filed a lawsuit against Chuck Imhof who recently left the top sales position at AA in New York for a similar role heading up Delta's sales efforts. The suit alleges that Mr. Imhof, prior to his resignation, emailed confidential strategy and pricing documents to a personal email account from his work account.

Sounds quite similar to the current saga unfolding between Starwood and Hilton where several senior executives departed Starwood for Hilton and, according to Starwood's complaint, decided to take more than a few confidential documents along to jump-start their future careers.

AA is sueing to prevent Imhof from working for Delta and is also suing him personally to claw back deferred compensation, performance bonuses and stock options as well as legal fees.

We are waiting for a copy of the actual complaint - we'll have more to share after we review.

Delta Finally Seems to Admit that Shuttle Pricing is Broken on LGA-DCA/BOS

Last week, Delta quietly lowered pricing on the Delta Shuttle which operates between New York LGA and Boston/Washington Reagan National.

For years, Delta (and USAirways) have both charged over$300 each way for a last minute, walk-up fare. Of course, corporate discounts lowered these fares considerably for companies with huge volumes but the masses were stuck with paying $329+taxes each way.

Several months ago, Delta down-sized the LGA-DCA flights from MD-88s to Regional Jets in response to slowing demand on the route

But now it appears that a combination of the decline in business traffic, Amtrak's success in the market and competition from JetBlue from JFK to Washington Dulles and Boston have finally pushed Delta to think differently about this market.

A check of Shuttle flights this afternoon showed walk- up fares to Boston as low as $129 and DC at $169. Talk about relief! There are even lower fares out there when booking round-trips and staying a minimum of 3 days or over a Saturday night - as low as $199 total, including tax roundtrip. With a 21 day advance purchase one way tickets up to Boston are just 74 bucks including tax.

To further sweeten the pot, Delta is offering 2,500 bonus SkyMiles each way (+ the normal 500 you would earn anyway) until July 26th. More details here.

Now if only they could fix the Air Traffic Control delays into LGA.........

Delta Brings Back Agent Commissions - Really

Delta, the airline which in their last earnings call suggested that travel agents and OTAs should pay them for content, has apparently had a change of heart and decided to pay agents.

Travel Weekly is reporting that Delta is offering agents a 10% commission on all flights originating in the New York metro area (LGA, JFK, EWR, HPN and SWF) to Mexico, the Caribbean and Central/South America.

When was the last time we heard of a major US-based airline increasing commissions? Obviously, private back-end commissions and overrides have continued to be part of the landscape since the airlines reduced and ultimately cut back on commissions years ago. But we haven't seen a broad, shot-gun approach to the market like this, except maybe from the likes of Air India...

Agents need to book tickets by June 30th for travel until December 15th so DL is clearly targeting the softer summer(Northern Hemisphere, anyway) and fall periods.

Offering the bonus on routes to Mexico is clearly understandable but motivating people to travel who are scared is notoriously difficult - think post 9/11.

As for the other routes, clearly DL is seeing softness in one of the areas where they have recently added extensive new service. Since last December, Delta has added service to Bogota, Manaus, Fortaleza, Recife, Tegucigalpa and expanded service to Sao Paulo, Rio and Guayaquil. Granted, most of these routes are operated from Atlanta, but New York metro area is clearly a major feeder market for these flights. From New York, Delta operates nonstops to Sao Paulo, San Juan, Mexico City, Bogota and a host of other Caribbean islands.

But how ironic that Delta has gone from asking for payment from agents to paying them in a just a few short weeks.... and will the Caribbean/Latin market leader, American, react? And how will Delta's soon to be ex-partner across the Hudson, Continental (who also operates a huge route system into Latin America and Caribbean) react?

Delta and Northwest Bring Back 500 Bonus Miles for Booking Online - Are the OTAs Finally Stealing Share Back from Supplier Sites?

Well, its been nearly six weeks since the OTA fee-removal frenzy began. As you will no doubt recall, The pre-fight (or should we say pre-flight) warm-up match was nearly two years ago when Priceline and Hotwire dropped air booking fees. In the Main Event, Round One, Expedia dropped air booking fees, then Travelocity quickly followed suit and Orbitz finally joined the party a week or so later. Round Two was kicked off when Orbitz dropped booking fees on hotels which was quickly matched by Expedia.

But now, the question is, is it working - are the OTAs actually grabbing growth back from the supplier sites?

Maybe so - Today, Delta (and Northwest) both returned to offering 500 mile booking bonuses on their websites - something we have not seen in nearly two years. The airlines (in their usual lock-step fashion) first lowered the bonus from 1000 miles to 500 and then eliminated them all together. It is billed as a temporary promotion so we'll see what happens. If the airlines operate as they usually do, we'll have bonus miles back at all the supplier sites by the end of the week. It could be just a broad attempt to stimulate bookings but we doubt it - the airlines have gotten much smarter in recent years in how they target demand stimulation offers - this is a broad swipe.

And why not? Given the new pricing parity, airlines have little else to offer other than websites that are generally sub-par when compared to the content, functionality and service offerings that the major OTAs have built out. Millions of consumers have paid $7 for these services for years - it goes to figure that even more would opt to buy from an OTA given price parity.

Comically, Delta's PR team seems to have missed out on a few of the changes in the OTA world given the first point they trumpet regarding booking at Delta.com is no booking fees. And the 2nd point is a best fare guarantee which still falls FAR short of the Orbitz offering.

OTAs offer many different airline choices, combinations of different carriers for the same trip which often results in a lower fare, money-saving air+hotel package products, often superior en-route service and, in the case of Orbitz, even assurance that if the price goes down, you'll get your money back - something no airline offers. Maybe the airlines have woken up - it looks like at least Delta and Northwest have...

Delta joins AA in Suggesting that OTAs and Travel Agents Should Pay for Content

If you listened to Delta's Q1 earnings call this morning, you heard some interesting commentary on the future of distribution according to Delta.

DL management echoed American's CEO's suggestion on their call last week that the time would come when OTAs and agents would pay the airlines for their content. Interesting how the airlines can have these "open" discussions in their earnings calls, isn't it? We've been following the commentary over on Dennis Schaal's blog but this was too rich to pass up without a few thoughts of our own!

Of note, DL stated that "TMCs have an important role to play" and seemed to imply that their main target was the OTAs particularly when DL described the "value we provide vs. others" online. Maybe so, Orbitz's Price Assurance which offers consumers a refund when fares decline seems like a pretty good value. The same can be said for the multitude of air+hotel packaging options that the OTAs provide to consumers. And many consumers would also vote Orbitz's TLC in-route support to be far superior to many airline's offerings. And multiple airlines? Try booking a multi-carrier trip on Delta.com or Continental.com. OTAs are all about offering consumers choices and comparison opportunities - things they do quite well.

More interesting, however, was the suggestion that "OTAs should pay for [airline] content the way they do for hotels" Hmmmm. Obviously, someone at Delta has not taken a quick look at hotel distribution costs - nor drivers of OTA profitability. Newsflash: OTAs don't make any money selling airline tickets! They make it selling hotels. And they don't pay hotels - quite the opposite. Can you imagine the horror if someone at Delta knew that many chains are paying Expedia/Travelocity/Orbitz in the mid-teens for distribution? And what of independent hotels? Considerably more.

And finally, DL mentioned that Delta.com was driving ~ 37-38% of Delta's revenues - great news indeed. But they also estimated that the OTAs were providing in the area of 30% of Delta's revenues - wow is all we can say on that one.