Archive for the ‘Travel Trader’ Category:
Why Google Is Chasing Travel
At Social Flights, we have said many times that nothing economic truly can happen until people get together to build something. Economics is the science of incentives and no incentive is stronger in the human species than family and community. It does not take much of a chasm of reason to see why Google is so interested in travel and travel related properties.
Travel is the keystone for change; change of ideas, change of relationship, change of intentions, and change of markets. A banker is not interested in money – they are interested in the rate of change of money; it’s called “interest rate”. People are not interested in the same old story, they want the story to change – this is what keeps their “interest”
Again, we find Google at the center of the social “Interest Rate” in travel. Don’t think for a minute that Facebook “timeline” is not also a move to capture how people change and react and adapt to the conditions around them. This almost makes it pointless for people to try to react to these changes because such a reaction is, in fact, registered by the platform driving the reaction. Is this a problem?
From http://www.tnooz.com/2011/12/12/news/google-quietly-introduces-social-travel-service-schemer/
What makes you want to go to a place to begin with? When you have chosen a place – what makes you want to explore further? The inspiration phase of leisure trip planning research has been by far the hardest for tech-based services to master.
Google has announced (and started sending out Beta invites to) a new service, known as Schemer, which attempts to compete in this gap. Effectively it is local destination ideas based on tips from your (Google+) friends, celebrities (oh yes!) and professional destination content producers (ie. travel writers).
If destination research moves to starting at Google Schemer rather than Google Search, then Google will be able to pitch flights, hotels and other travel services, without having to necessarily work within the confines of their existing web properties.
Everyone else who makes it their business to build P2P platforms such as tour guides and recommendation platforms will be cut out of the loop. If Google can now branch away from their core search and into the social connectivity business, they can compete with their own customers. Is this a problem?
What Google does not do, and cannot do, is actually operate a jet aircraft. They cannot clean a hotel room or manufacture a rental car. They cannot cook a holiday dinner or wax a snowboard. Real people need to do this. Why is Google chasing Travel? Google is chasing people. At the end of the day, people drive Google. Is that a problem?
Why Google Is Chasing Travel
At Social Flights, we have said many times that nothing economic truly can happen until people get together to build something. Economics is the science of incentives and no incentive is stronger in the human species than family and community. It does not take much of a chasm of reason to see why Google is so interested in travel and travel related properties.
Travel is the keystone for change; change of ideas, change of relationship, change of intentions, and change of markets. A banker is not interested in money – they are interested in the rate of change of money; it’s called “interest rate”. People are not interested in the same old story, they want the story to change – this is what keeps their “interest”
Again, we find Google at the center of the social “Interest Rate” in travel. Don’t think for a minute that Facebook “timeline” is not also a move to capture how people change and react and adapt to the conditions around them. This almost makes it pointless for people to try to react to these changes because such a reaction is, in fact, registered by the platform driving the reaction. Is this a problem?
From http://www.tnooz.com/2011/12/12/news/google-quietly-introduces-social-travel-service-schemer/
What makes you want to go to a place to begin with? When you have chosen a place – what makes you want to explore further? The inspiration phase of leisure trip planning research has been by far the hardest for tech-based services to master.
Google has announced (and started sending out Beta invites to) a new service, known as Schemer, which attempts to compete in this gap. Effectively it is local destination ideas based on tips from your (Google+) friends, celebrities (oh yes!) and professional destination content producers (ie. travel writers).
If destination research moves to starting at Google Schemer rather than Google Search, then Google will be able to pitch flights, hotels and other travel services, without having to necessarily work within the confines of their existing web properties.
Everyone else who makes it their business to build P2P platforms such as tour guides and recommendation platforms will be cut out of the loop. If Google can now branch away from their core search and into the social connectivity business, they can compete with their own customers. Is this a problem?
What Google does not do, and cannot do, is actually operate a jet aircraft. They cannot clean a hotel room or manufacture a rental car. They cannot cook a holiday dinner or wax a snowboard. Real people need to do this. Why is Google chasing Travel? Google is chasing people. At the end of the day, people drive Google. Is that a problem?
Is There An Alternative To Commercial Airlines?
In Japan and Europe, high speed rail often competes with air travel for short distance routes. While it may take 3-4 hours door-to-door to travel 300 miles in an aircraft, the high-speed train can cover the same door-to-door distance in more comfort, the same time, and for less money. An automobile may need 6 hours to complete the same journey at a similar cost of ownership.
What many peoples fail to realize is the possibility that a community can operate their own airline. This alternative is being pioneered by Social Flights. The regionalization of air service is a new concept that allows communities to own and operate one or more aircraft maintaining control over the schedules and locations where the aircraft flies.
In the United States, a rift continues to grow between available air service and reasonable alternatives to air service. This creates a substantial burden on families; but it also creates a compound burden on the economy upon which those families depend for their livelihood. If corporate travel is constrained, the economy as a whole is constrained.
From this article in the NY Times:
Consider the new realities of air travel. Competition is decreasing, fares are rising and airlines are adjusting routes (and charging extra fees) in ruthless calculations to extract the greatest possible revenue per mile flown.
Many airlines will continue shrinking overall capacity and trimming domestic routes in 2012, and the Chapter 11 bankruptcy filing of AMR, the parent company of American Airlines, will merely exacerbate the situation. In 2012, American will “ground some planes and resize our network,” the company’s chief executive, Thomas W. Horton, recently told employees.
In addition, John P. Heimlich, the chief economist of the trade group Airlines for America, said, “Capacity reduction is one of the steps the industry is taking to preserve profitability.”
Several articles are now popping up comparing the alternatives that are available. An overnight Amtrak in a cozy sleeper car can cost the same for some routes as the aircraft - unfortunately, Amtrak is not universally connected to very many routes. High speed rail is still on the drawing boards but still many years away with fewer stops and likely connecting major hubs anyway. The other alternative is to simply drive; with the ground travel and delays incurred t hub airports, a commercial flight less than 750 miles can have an door-to-door average speed of around 70 miles per hour.
Michael Boyd, the president of the consulting company Boyd Group International, sums up the phenomenon succinctly. “The cost of flying airplanes across the sky has eclipsed the ability to support it at many communities,” he said in a recent forecast. In 2012, he predicts, airlines will accelerate the mothballing of smaller 50-seat jets, the workhorses for connecting service between many midsize airports, and even some big ones.
Social Flights can provide the knowledge, expertise, personnel, certification, and equipment to maintain and operate an aircraft fleet, as well as the social media backbone that allows people to self-organize around the aircraft asset.
As such, the community can create direct flights bypassing hubs, they can schedule flights for their corporations and shuttle their executives to new business markets for a price that is hugely favorable to any existing alternative; which is often nothing.
KLM Social Airlines
Few people get on a commercial airplane to enjoy the fine food, friendly conversation and sensational view – but that may change as KLM continues to innovate in social media. Some may remember that KLM was the first to provide on-demand service from Europe to Miami booked entirely through social media.
This time, KLM is banking on the fact that people who have both an origin city and a destination city in common, would have other things in common as well. KLM observes that people share information with each other so freely on social media- so maybe they’ll share information with each other on “Social Airlines”.
Will something get lost in the translation between the virtual and the reality? Fortunately, Anne van den Berg was kind enough to provide Social Flights with a translation of her Dutch language blog, Editor Anne Daily:
You always have to wait and see who will sit next to you on an airplane. A crying kid or a smelly man, it is not always fun. Soon, this can be in the past. The Dutch airline company KLM will be offering seating suggestions based on someone’s Twitter or Facebook account. The goal, says an executive from KLM, is letting, mainly business, passengers network. I am very curious how this will work.
Well, we are asking the same questions at Social Flights. In fact we are attempting to fill small aircraft on direct flights based on a similar assumption that people of like interests would choose to share an airplane together. While the KLM starts with a full plane and sorts people by interests, Social Flights hopes to go one step further and use such data to “kickstart” scheduled “flash Charter Jet” service. So while KLM sees an important branding advantage, Social Flights sees and entirely new paradigm for air transportation – public Charter Jets.
Anne van den Berg continues with the following analysis:
- What kind of customers are you serving? I wonder, what customer are waiting for this service? Personally, I like having some conversations with my neighbour in an airplane, but, mainly when I return from a trip, I want to sleep. Nó contact. If someone will come and sit next to me with the expectation of discussing the state of the world in a highly intellectual manner, it is very probable he will be deceived.
- And what about privacy? I expect that customers will have to do an opt-in, but do you want to give everybody insight in who you are? If you put your Twitter information out there, sure that is public already, but Facebook? That is mainly meant for family and friends (although some people will stretch that definition).
KLM has since disclosed in this CNN article that mutual acceptance to use the social seating tool will be required. KLM was quick to note that the intention is not to create a dating game and they did not disclose if they would charge an extra fee for the service. Further, they they did mention adding any amenities in support of the friendship event.
This leaves me wondering what the implications of being “unfriended” in virtual space and reality space at the edge of physical space. In any case, Social Flights will be watching KLM developments actively. Thanks Anne for the tip and translation on this story – let’s share a flight sometime.
The Personal Light Jet
National Public Radio recently aired 2 very interesting segments on the airline industry. The first segment cited companies leaving small cities because of poor air transportation service. The second segment cited an interesting statistic; all of the airlines that existed before the deregulation act of 1978 have gone bankrupt.
But wait, wasn’t airline deregulation supposed to be good for the airlines? Wasn’t it supposed to spawn innovation and drive economies of scale? Wasn’t it supposed to increase choices for the airline passenger?
Well, at least one of these impacts is true; deregulation spawned innovation – although probably not the way it was predicted in 1978. Today, new technologies are appearing everywhere from new forms of social organization to faster and smarter aircraft systems. This article features a very interesting aircraft sector called the personal sport jet. While I do not know enough about their actual business model, it would appear that they are aiming where the airlines and major manufacturers simply cannot reach.
With an operating cost of $400 per hour instead of $1200-$2000 per hour in this class, the excel sportjet can deliver a 2 hour jet flight performance in a “regionalization” market. Social media trends show us that people are connected in shorter distances and far more diverse locations than the hub and spoke system can accomodate.
This aircraft is small, lightweight, and fast. It uses a single jet engine and flies at a lower altitude reducing pressurization forces and associated cost. The Sport Jet II carries 4 people and employs extensive use of composites in addition to simplified pilot qualification requirements.
Clayton Christensen’s book “The Innovator’s Dilemma” cites numerous now classic examples of how industries are threatened by simple upstarts that deliver what the customer wants at a price they can afford without the complexity and “over-performance” burden that mainstream players evolve into.
While the aviation business is very complicated, it is truly a pleasure to witness new products and innovations that come to market under the radar of the big players. We hope that they grow to have an impact on the industry. After all, that is what Social Flights is all about.
Bravo Sport Jet II, Bravo.