Being a public company – A good thing?

Before I launch into this subject I think I had better make one thing very clear. What I write about this and all the other subjects past, present and future is MY view and not necessarily those of any company I have worked for. I am sure they are very capable of giving their own opinion if asked! I am in a position where, within reason, I can say what I want now I have retired.

I learned two truisms about PLC status very early on. Firstly, it earns a few people a lot of money and secondly, all the rules of the game change to dramatic effect. There are so many people there to take their cut and they do not go away. In fact not only do they remain but others join them with the sole intend of using the company as a vehicle to increase their cash flow and make money. But that is not the bad part, after all everyone from the filing clerk to chairman wants security and income. The bad part is that you are both directed and judged by these folk and many of them do not have a clue about the business from a commercial perspective. To them it is trends and numbers with very little room for entrepreneurism, flexibility and market forces.

Allow me to try and explain in perhaps a rather simplistic way. Once you have gone through all the posturing, audits, presentations and gained the necessary financial house and investor commitment you finally become a public company valued at your given share price times the number of shares released. Now all you have to do is deliver everything you said in your presentations resulting in the expect revenue, cash flow and profit. Simple.

But it is not simple even if you achieve all the above. Why? Because you not only have to deliver it but you have to deliver in the same shape as originally presented i.e. by doing it exactly as you said you would. Why you may ask? Surely the end result is the important bit especially as circumstance change so much in the commercial world what with new technologies, prices, competitors etc. No, what you have to prove is that you knew what you were doing in the past so they can trust you to do it in the future regardless of change. You see as soon as the results are published they become history and it is the next set of results they are looking to and hey, if you ‘got lucky’ this time what is to say you will not be so fortunate next year.

It reaches a point that you have to invest huge funds and resources managing a bunch of institutions and investors that basically do not trust your opinion against there’s even though they do not understand the industry you are in. Very often the people you have to convince are young analysts fresh out of university who focus almost entirely on past statistics, economic forecasts and news journals. Woe betide you if you do not convince these folk as it is them, rather than your customers who call the shots and the word loyalty or trust are not in their vocabulary!

I guess if I was invested megabucks in an organisation I too would want to go through it with a fine-tooth comb but surely there must be a less expensive and less time consuming way than this?

Thanks for looking in

It has been a few months since I decided to do this blog. I just wanted to continue having the opportunity to speak about the industry I love as well as put together some of my strange (but mainly true) stories of my life in travel.
I have a monitoring package of sorts which tells me how many people view and what areas of the world they come from and I am both delighted and amazed by the interest.
I have not tried to broaden readership as I do not really have a clue how to but it would be great if I could cover more people and places with my ramblings so can you help me? If you want to can you tell some of you friends and colleagues the blog address? Every so often I will let you know how we get on and what new and obscure places look in!
Needless to say viewers have complete individual anonymity and all I get is what area and how many. That blog address again is http://wwwbusinesstravel.blogspot.com
Also please take the opportunity to get in touch if you want to ask my view (or add yours) on anything either by the ‘comment’ icon on one of the blog articles or by sending me an email.
Thanks again!
MIKE

More dispensable than I thought!

My old firm HRG has just announced its results and I must say I am impressed. It seems they can and have managed without me quite well. And there was me thinking I was indispensable.
We always dared to believe in the seismic change to delivering on value rather than headline price and it seems to have actually worked in that their clients must have realised that a superficially low price has no longevity.
Mind you there may have been a few casualties along the way as their client retention rate is not as high as it was and there seems not too many barnstorming new signings for a global company. I guess my prognosis must be that whilst a strategy of being ‘the customer’s consultant’ is the right way to go and clearly successful it is still work in progress against those that want a quick, traveller visible, upfront buck.
Another thing that is remarkably slower growing than I expected is their high tech range of Spendvision products. I thought profits from this business would be rocketing as it delivers exactly what corporations say they want i.e. the definitive end to end solution. I have seen it and it is damn good but I suspect some corporations do not want an initial cost for the benefit of long term gain. The world seems more about now and not the future when it comes to business travel.
One of the greatest areas for opportunity for them is their government business. They currently have the British Ministry of Defence and Foreign and Commonwealth Office which are mega in size and both about to cut back in expenditure however what they are still fighting for is much of the vast Government business. In my opinion this business has been procured and operated so very badly that HRG, with their track record, could seriously increase their share.
So my message to my old colleagues is well done. But kind of wish you were missing me a little more!

PERIL ON PLANES 1

What does the name CASA 212 mean? To those that know their aircraft it is a small twin propeller plane but to me personally it is a terrible reminder of a flight from hell.
The designers must have had bad day as it looks like something between a pram and a small boat. The latter description got me to wondering if even those that created it had much faith in its ability to stay out of the water. Then, to cap it all, they described it as an ‘Aviocar’ which led me to thinking that we could always taxi to our destination if necessary.

It was a long time ago but my journey is still etched in my mind. I had recently arrived in Puerto Rico and was due to connect onto a local island hopping flight to Anguilla, My incoming BA flight was on time, my suitcase was waiting for me at the carousel and off I went to the domestic check –in area without a care in the world. How deluded I was.

My first inkling of impending doom was finding myself in a noisy overcrowded non air conditioned shed behind a queue of about 40 people all expecting to get on my flight that had less than 30 seats. They seemed to have all their worldly possessions with them including large musical instruments and a fridge.

A solitary bored gum chewing female agent was languidly checking people in at a rate of one per five minutes which gave me a desk eta of two hours (one hour after scheduled departure) when help arrived in the form of her male supervisor who squeezed her butt, picked out her gum and plugged his face into hers. After giving the appreciative girl what looked like a full tonsillectomy he climbed on top of the desk and shouted “I got 20 bucks for any of yous who ain't getting on this plane”. If I had known I would have taken him up on the offer but other more knowledgeable travellers pounced on the idea of making money and self preservation.

Having completed their overbooking ‘cull’ they herded us, like lambs to the abattoir onto the tarmac to find our plane which they seemed to have misplaced. The way our check-in Lolita said goodbye seemed terribly final, almost as though she knew something we didn’t. The rain was sheeting down as we tramped across the tarmac like a bunch of refugees past lines of new shiny jets searching for our ‘aircraft’.

Then there it was! Our plane/car/boat, sat slightly apart from the others like a forlorn ugly duckling. It was old, oil streaked and there was a very worried looking man standing under one of its wings with a torch pointed at an engine shaking his head. “You gotta be kidding” I distinctly heard him say as he peered through the soggy gloom. At the back end of the plane they were trying to load the fridge and the rest of the bags using the wedge and push method. Some bags aren’t going to make it I thought.

We boarded. It was like trying to get in a coffin with a bunch of outsize people with no manners and two left feet. Sitting down was rather like that ‘Twister’ game where you squash together and put your hands and feet on different coloured circles but finally we all seemed to get there. I had what looked like a 7 foot basketball player with a ghetto blaster sat next to me. I reckoned I could have changed the tracks with my nose if it was switched on. In front of us we could see the open cockpit and the two pilots were having a heated exchange. “Well were going anyway” the captain said to the sodden co-pilot who I last saw under the wing. I saw him pale visibly.

And then we were off! After three tries the port engine started in gouts of flames which were told through a crackling loudspeaker was “quite normal”. By this time I was scrabbling for the safety card in the hopes of improving my survival chances. I gazed at it over the volume switch of the ghetto blaster which was now poking into my cheek. It said there were no life vests and that we were to use our seat cushions instead. I groped downwards and found they were the thickness of a slice of bread and probably just as porous.

I then browsed over the instructions for the brace position but discarded it as I did not think I could get into a foetal position around my neighbours ‘mega bass’. I also remember someone who should know telling me that the sole purpose for the brace position was to protect your teeth so they could identify you after the event, Nasty!

We lurched forwards and started to crab our way towards the end of the runway. Our co-pilot was sulking and had his arms folded while our gallant captain struggled with the controls. Then the engines roared, the rivets rattled, interior fitments fell off, a lady screamed and we were off.

The Casa rumbled down the runway. And rumbled, and rumbled and rumbled showing no sign of getting airborne. In the length it takes for a jumbo to fly our Casa still stuck to the ground like a limpet. The lady’s scream went up a decibel and the end of the runway came into view and at the last second we took off. Well actually not so much took of as lifted our undercarriage and lurched forward like an aged woodpecker. Another second later we had waves under our wingtips and the captain was hauling on the misnamed ‘joy stick’ as though his life depended on it. It probably did.

We never seemed to get as high as the clouds and all their content of rain and occasional lightening crashed down on us. We started being thrown around like peas in a drum and it was then that the hymn singing started up from the passengers in front who had a better view than me. We all joined in like demented gospel singers convinced that we were singing at our own funeral. We were half way through a particularly depressing number made famous by Paul Robeson when Anguilla came into view.

We did not so much land as fly into the runway. We barely had to dip our nose and there we were. The engines stopped and there was total silence. We sat there in the dark with the rain drumming on the aircraft roof and puddles forming on the carpet. Finally from row 3 there came a voice saying “thank you sweet Jesus” and we all stampeded for the exit.

So that was it! We survived! Hallelujah! But there was a sting in the tail. The guitar arrived safely and so miraculously did the fridge but my brand new Samsonite did not
I initially had to stifle an amused chuckle as I saw the contents of someone’s case come out on the belt until I recognised one of my T-shirts. My case had opened like an eggshell disgorging its contents everywhere. I still have two odd socks from that terrible night and often wonder where all my underpants went. I expect there must have been a shortage of them on the island at the time.

Airlines and Travel Management Companies (TMC)

I genuinely find it interesting to note that very little has changed over the years despite commission cuts/removal, direct sell and net fares. Airlines still need TMCs to sell their seats and TMCs are still just as much in need of airline funding. The essential metrics remain the same and it is only the methodology that has flexed to meet market changes.

This status quo has not changed despite intense efforts from airlines as they strive to find ways of getting corporations to book direct. The only trouble is they are not TMCs and can only offer individual booking service which represents a fraction of the whole TMC integrated package. Add to this their obvious bias to their own fares and flights and it becomes clear that unless they incur the cost and role change to embrace the total TMC product not much is going to change. It would not take them long to do the math that says it is cheaper to outsource to TMCs than transform themselves. In fact, if they really were smart they would outsource more of their own services, like reservations for example, to TMCs. Some years ago an airline did just that for a short time and discovered TMC staff took more calls and got better customer reaction than their normal service.

The relationship between airline and TMC can be a rather strange alliance. The only comparison I can think of comes from the animal world where the female praying mantis makes love with its mate and then tries to eat it! It can often be very turbulent and can be tracked by just how well the market is doing. When airline sales go up they start thinking “who needs these agents” and the cooperation and incentives go down. Partially as a result their market share starts dropping until they start thinking “hey, we better start being nice to these guys again”. The result is a constant wavy line of highs, lows and then highs again. Some time someone is going to realise that some kind of continuity (say a mid point) between the highs and lows would provide better results.

Some corporations are puzzled that there is still a financial relationship at all despite market changes where they too pay the TMC. I cannot understand this as they are constantly driving down their payments to TMCs so the TMC has to make up the shortfall elsewhere within the supply chain. Also TMCs do all sorts of things for suppliers that have little direct influence on any particular corporation. These can be activities spanning, access to staff, marketing, M.I. and exposure of special airline benefits. Despite this I still think airlines mainly ‘incentivise’ TMC to increase client volume and share and they are right to do so in my personal opinion.

So, in summary, TMCs still maintain the same (or possibly more) margins from airlines despite the onset of fees. The airlines want to stop it but have failed so far. The more corporations drive for commoditisation, net pricing et al, the more these incentives will grow. My recommendation to corporations is to let it happen. As long as you are getting what you need why try and influence other relationships.
I am sure everyone will agree!

Unite's ulterior motive

Someone said something interesting to me yesterday about the BA dispute. We were talking about why the Unite union is persisting with strike action and he highlighted a possible motive that MIGHT have some merit.
Probably the best chance for future union longevity is re-nationalisation. If this strike brings BA to its knees there is a compelling argument that says the government would have to step in rather like they did with the banks except more so.
An interesting concept.
He also told me how sour relationships between striking and non striking crews has become. For example it has been said that some strikers have been running their keys along the side of non strikers cars in the staff car parks. how nice and democratic that is.
Meanwhile the BA tough stance continues. Again there is a view that if BA gave strikers back their travel perks the whole thing would be over. BA is saying that they made it absolutely clear from the outset that if people went on strike this perk would be gone for good and they cannot or will not go back on it. Meanwhile BA has taken the opportunity to sack one particular union rep that has been causing huge discord for years and this too illustrates their stance.

The Sleeping Salesman

Becoming a sales rep for an airline was not in my immediate plans. I had a much better idea that involved sex and travel. It was my dad who steered me away from my depraved plans by using his influence to get me into sales and I have never been sure whether I should have thanked him or not. Let me explain.

There were four of us. All good mates, working in the reservations office of British Airways and all with a keen interest in football, pubs, late night curries and the female of the species. The only small things we lacked were money, finesse and charm so one night we sat around a grubby pub table in Hampton and decided something had to be done.

I think it was Roger that had the idea. Why not become cabin crew? Most of the stewards we knew were wealthy and most importantly both gay and surrounded by pretty women in exotic locations. What if we with our heterosexual testosterone fuelled bodies joined up? It would be like a pack of horny foxes let loose in a hen house. Well that’s what we thought.

For some reason my mum and dad was appalled at the idea. They expected their son to become a captain of industry not a global gigolo and they immediately hatched a plan to divert me. Unknown to me they spoke to a godfather I never knew I had who was a big noise in Varig Brazilian Airlines who in turn told his poor UK GM to offer me a job in his sales department. So that is the route I took while my mates had a whale of a time until it became too much for them!

So here I was. It was my first week in Varig and I had been given the area of London SW1 to cover. I was keen as mustard to go out there and tell interested companies and agencies about the sheer joy of flying Varig to Brazil. I think my colleagues were less impressed as everyone bar me seemed to know how I got the job. Anyway, off I went with my squeaky new cheap suit and a shiny black suitcase my mum bought me with the same pride as my first school satchel. Shame it only contained a Sun newspaper and a tube of Toffee sweets.

Each rep had at lest one really big and all important office to visit and mine was a company called Wakefield Fortune (later to become HRG) in Milbank by the Thames. I did not know much about it apart from its importance and that I was to be ‘very careful’ by a helpful and possibly malicious colleague. So off I went with my eyes bright and my wits unprepared into one of the hottest days of the year. Life could not get better than this I thought as I strode through St James Park in the sunshine on the way to what became a very steep learning curve.

The entrance to the office was daunting. It was one of those very old and grand buildings and I marched through it with flagging confidence. The temperature changed immediately from hot to cool and there, ready to meet me was the manager called Peter. He greeted me warmly but in a similar way to that of Count Dracula welcoming Jonathon Harker into his castle.

He was very interested in me. He particularly wanted to know how experienced I was and promised, with a glint in his eye, to ‘show me the ropes’. He explained that it was pointless me walking around the office to speak to all his staff and it would be best if he sent them to see me in groups. He explained he did not have a convenient place to do this so he harmlessly suggested I based myself in the pub across the road and they would come over in shifts. How very kind, I all too innocently thought. It became a late morning, lunch and afternoon I would never forget. Actually that is not quite true because I don’t remember much, but what I do remember I will not forget….if that makes sense?

The first group arrived with Peter as a willing escort. Break the ice he said, buy them all a drink. I started trying to take their orders and Peter said not to worry as Reg behind the bar would be willing to do that and keep a tab for me. Oh what a fool I was. It turned out there were at least fifty staff and they all liked spirits and they were all thirsty. I tried to talk about Brazil but they were all far more interested in football, drinking and the opposite sex which was an amazing coincidence as they are my favourite subjects too.

Suddenly it was three in the afternoon and they had gone. I was sat there in the middle of a load of empty glasses and spilt peanuts with a queasy feeling in my stomach. The beginning of the mother of all headaches was growing behind my eyes and Reg was standing in front of me with a bill bigger than an entire month’s expenses. You bloody mug he muttered under his breath as I gave him all my money and tottered out of the door into bright sunlight. I even forgot the cardinal rule of all reps which is always get a receipt.

My head was spinning and the sun was burning. I started walking back through St James Park trying to rehearse what the hell I was going to say to my new boss. I had enough sense not to return to the office drunk so I thought I would just lie down on the grass for a few minutes until I felt more sober. Sitting on the ground I thought I can’t lie on my shirt because I would get grass stains on the it so I took it off and settled down.

I woke with a jump. Most people had left while I was asleep and there I was, two hours later, feeling like the living dead and probably looking like a corpse too. I then realised I was feeling something on me and, as I lay, there I pushed my chin down so I could see what was lying on my chest. The first thing I observed was that I was badly burnt. Then to my growing horror I realised that what was on my chest was my boss’s business card. The man had clearly walked past and seen me. He had not woken me, but simply left his calling card as a menacing invitation to visit him in his office on my return.

The horror of it. My first week in a semi resentful office and I had spent all my company money, got drunk and passed out in the local park. You prat I thought!
I gingerly got up and put my crumpled shirt back on to cover the worst of my burns. It was then that I noticed that he must have spotted me quite early because my skin under the card was as white as a sheet. In fact for the whole of that summer I went around with a lighter business card shape in the centre of my chest. It took a lot of explaining I can tell you.

Amazingly I survived my experience. Wakefield Fortune and Peter in particular were notorious and my humiliation was seen more as a baptism of fire than a disciplinary offence. Later in my career I worked alongside Peter and gained my revenge many times over!

Back to surprises

Having been basking in the Maldives sun for the last 16 days I was starved for news and fortunately missed the UK election circus. Now I am back I have been getting all sorts of surprises. For example we seem to have two sworn political enemies walking around like love struck teenagers vowing to run the country in a ‘grown up’ way. Good to see but scary as well in that you can win a fraction of seats yet become a deputy prime minister these days. Who needs proportional representation when you can do this without it! I wonder how long it will be before the first lovers’ tantrum.
Surprise number two was to hear talk about the abandoning of Heathrow’s expansion plans. This kind of madness could only happen in the UK. You go out and review, consult, consider then come to a conclusion. You make an announcement and then…..it gets banned a few weeks later. Why did they bother in the first place?
Finally I have observed with increasing incredulity that the BA cabin crew will be striking again. Are they crazy? Can they not see that BA management (who incidentally just sacked the crew’s troublesome union rep) are simply not going to back down? Mind you I said the same thing about Heathrow expansion. BA are going to try and stop it through the courts presumably on the basis that the votes were cast on the internet with only 2000 responses which is hardly a mandate I would have thought. My sources tell me that by the end of the last strike over 70% of crew were turning up anyway. To me this is a much clearer mandate for calling the strike off.
Finally, I see Virgin may soon be getting a much overdue bashing in the courts. I am not keen on whistle blowers and I deplored the way they stitched BA up in order to protect themselves for doing the same thing. Now Cathay is doing the same thing to them which I find ironic. Can it be that the UK’s favourite entrepreneur Richard Branson is a serial price fixer? I could not possibly say but I am sure time and courts will tell. Surely not!