The breathing space given to BA by the court ruling that the previous strike was illegal has not been wasted by them. Their contingency planning has gone into overdrive with Willie Walsh announcing yesterday that their aim is almost “business as usual”. With 1,000 newly trained staff, pilots standing in for cabin crew along with those that break the strike it looks like the management are set to prevail.

On top of that, BA’s management is winning the battle for the UK publics’ hearts and minds. Unfortunately, the cabin crew are seen in many areas as overpaid (especially compared to their competitors) and underworked. And that’s on top of being seen as hell bent on a mission to destroy their own company. As their CEO pointed out yesterday, if the strike goes ahead there will have to be even more cuts to recover the lost income.

Whilst, only time will tell who prevails, the odds for the crew winning don’t look good. Which leads on to “who will win the peace?” BA appear to have done great planning to get through any strike, but they will still have to work with the crew once they win. In many ways, painting the crew as overpaid and underworked might be great for the rough and tumble of the battle. However, when the crew are eventually back onboard how will they be viewed by the management and public?

Also, how will they feel about having lost? I only hope that BA are also planning as hard for peace as they have for the battle.

I am sure the administrators of E-Clear plc are being kept busy as they hunt for the missing money. Travel weekly (click here to read their news) report that some £100 million had been withheld by E-clear from its numerous clients.

Their report is about an ABTA member, Allbury Travel who went bust last year and where the majority owner of E-Clear was also, apparently, involved with. It seems some £13m of loans had been made to Allbury from the owner of E-Clear and, no doubt, the administrators of Allbury, E-Clear and FlyGlobespan will be trying to piece together the flow of the money from all the companies concerned.

When the full story is finally known it will make for interesting reading. In the meantime, as I mentioned earlier, more regulation is on the way to protect the consumers who are the ultimate losers in this sorry saga. And, if you still haven’t checked out your processing agreement then what is keeping you?

BA recently published research Harvard Business Review research which indicated the importance of face to face contact. And, with visits to the Business Travel Show and to the Airline Information networking event in Amsterdam last week I have had a lot of face time with airlines like Transavia, KLM and Alitalia as well as numerous other people working in the travel market.

Showing the value of meeting face to face I was able to get some more insight into the ongoing E-Clear saga. The latest information on the grapevine appears to be that FlyGlobespan were not the merchant of record. Or, put another way, E-Clear seems to have been acting as the merchant as agent of the airline. Not the normal way business is done.

Another insight, and no doubt, if the Serious Fraud Office find there is a case to answer, one that will be critical is that the transactional data within E-Clear seems to be missing. Whilst this information is from the grapevine, the fact remains that E-Clear doesn’t have the millions owed to FlyGlobespan. This is story that is going to run and is going to have implications not just for those in the airline and travel industry, but, also for consumers.

And then there were two. After many years of being the industry pioneer, Groupe Aeroplan have now been joined by another FFP spin off – by TAM in Brazil. There has been much talk about other airlines spinning off their programs, although with the recession much of that has been no more than just talk. However, perhaps TAM will be the the start of a new wave of spin-offs as airlines look at new ways of generating additional profits and learning from Aeroplan.

Qantas has been the other airline where there has been much talk about a spin off of their FFP. Certainly, QF have been forward thinking and have been weathering the recessionary storm by taking lots of, early, pre-emptive measures both in terms of capacity and operational costs. Qantas, like Air Canada, hold a very special place in their home markets, which would certainly imply that QF could have similar success that Groupe Aeroplan enjoys today.

Perhaps 2010 will be the year not just of baggage charges, but also of FFP spin off?

BA have just announced that they have made an operating profit (note the word operating and not bottom line!) in their 3rd Quarter of £25m compared to the operating loss in the same period last year of £51m. And, whilst the loss in the quarter at £50m was better than the £122m in the same period, it is still a loss.

Overall passenger revenue is down by 13% with premium traffic down 9.7% in the quarter although they note that whilst volumes are stable the yield is starting to show improvement.

Interestingly enough, “other revenue” is showing a 9.2% increase on the comparable period. BA attribute this to “new web based ancillary sales” (for example their new seat charge) and “increased use of Airmiles for hotel and leisure activity bookings”.

They don’t break out the Airmiles figures nor the ancillary sales, all of which could be comparisons from small numbers in the previous year. It is only recently that BA have dipped their toe into the unbundling of their product. However, it is significant that BA have chosen to mention this, perhaps indicating that they will be moving full steam ahead in both the ancillary and loyalty areas.

With TAM in Brazil having floated its Frequent Flyer Program and joining Groupe Aeroplan maybe BA will be dusting down plans to sell its loyalty program?

Click here to go to the BA Press Release with the full details of their Q3 results.

I was on a very empty British Airways 747-400 the other day. In an aircraft with some 70 business class seats there were just 15 people. Although this quarter is traditionally a quiet one it struck me that even that didn’t account for so many empty seats.

Was it because in the run up to the initial Christmas strike that many people choose to book with another carrier worried that BA might be on strike and/or that the action might actually push the company over the edge into bankruptcy? BA has some £2 billion of cash on hand and many analysts believe that this should allow them to ride out any prolonged action. However, what is the impact on the brand as well as future bookings?

On the plus side, as I was getting on the bus (yes, even at T5 you can still end up getting bused to and from the aircraft!) to catch my connecting flight, there were a number of BA staff enroute back home. On one of their bags was a tag encouraging colleagues to vote “No” to the strike action.

Only time will tell if that crew member is still in a very small minority, but, I thought it was a very telling sign.

It has been an interesting few weeks with various airlines reporting their numbers. Ryanair’s figures showed increased passenger numbers, but those travelling seem to be spending less on items like onboard sales as revenue growth of ancillaries slowed. In the past, ancillary revenue growth has been faster than the increase in passenger numbers.

However, FlyBe have had a dramatic increase in their ancillary sales per passenger. It appears that they are reaping the benefits of the integration of BA’s regional services which they bought a couple of years ago. BA paid FlyBe to take the perennial loss making service of their hands and it shows what can be done with a clear strategy.

BA, did at least, have the sense to retain a stake in FlyBe, so they are, at least going to share in any flotation or sale further down the line. I wonder if BA will be looking at their short haul European network to see if there are any lessons they can learn/apply from FlyBe?

For more information about Flybe’s results, click here to go to their website and the Press Release with full details.

It’s been an interesting week for US airline profitability. On one hand, the likes of AirTran and Allegiant rack up record profits and even Continental eek out a profit. Yet the majors like Delta, American and United all remain mired in the red. Having said that, there are some bright spots in all of the majors results.

So what’s going on?

Is it that AirTran and Allegiant are newer airlines and/or have lower costs? Or perhaps it is better strategy and execution – Allegiant, for example, view themselves as a travel company rather than just an airline. They don’t seem to view ancillary revenue as being, well ancillary! To them it is a core part of their offering.

With IATA reporting that global air travel demand fell 3.5% in 2009 (despite a pick up in December 2009) how is it that some airlines are managing better than others? IATA, which represents some 93% of airline global traffic, said that airlines flew at 75.6% load factor – or put another way 3 out of every 4 available seats were sold.

Clearly, there are a number of factors at play and it isn’t as simple as traditional carrier versus LCC or even old versus new. Airline profitability in Latin America will be the subject of the Ai conference that is being held in Buenos Aires on 6/7th of May – more details by clicking here. It will also be a core topic for the “Mega Event” which will be in Montreal on 11/12th of November (updated website will follow, but you can click here for the link to last year’s conference website.)

***STOP PRESS****

Airline Information will shortly be officially launching their 2010 Mega Event. The 6th Annual FFP conference along with the 4th Annual Ancillary Revenue event are going to be held in Montreal on 11th and 12th of November.

Mark your diaries and check out Airline Information’s website for more updates shortly.

We all know that horrible feeling waiting for your bag to arrive. Now that horrible feeling starts at departures as you’re asked to stump up money to check in your bag. What started out at Ryanair as a way of saving money has been taken up by airlines across the world as they struggle to make money.

And make money from these charges they are. According to new research from Jay Sorensen at IdeaWorks* the 5 major US airlines will generate some $117 million in baggage fee revenue in 2010. Interestingly enough, the research points out that Southwest Airlines have opted not to take this approach and have been advertising heavily with their “bags fly free on Southwest” as their USP.

The other interesting piece in this research is the consumer reaction. So far, American consumers, seem to have swallowed these charges. However, they reacted negatively when the same airlines tried to increase base fares.

Time will tell if the Southwest or the charging approach brings in passengers and profits!

Click here to read Jay’s full research

To find out more about IdeaWorks click here

* IdeaWorks and Michael Smith from SeaMountain are associates