Overpaid Officials?

If you want an early new year titter, read the linked article on Ryan Air and the OFT.

I quote a magical response to criticism that Ryan Air only allows one type of obscure method of credit card payment in order to get round legislation that would normally prevent it from advertising all flights with credit card fees included, which would mean almost double the fares in many cases of their advertising.

"Ryanair is not for the overpaid John Fingletons (of the OFT) on this world but for the everyday Joe Bloggs who opt for Ryanair's guaranteed lowest fares because we give them the opportunity to fly across 26 European countries for free, £5 and £10. What the OFT must realise is that passengers prefer Ryanair's model as it allows them to avoid costs, such as baggage charges, which are still included in the high fares of high cost, fuel surcharging, strike-threatened airlines"

I am sure John Fingleton of the OFT may have a case to question if they know how much he is paid and whether that compares badly to the money the spokesman at Ryan Air earns but here's how the Ryan Air little dodge works.

For every passenger booking a flight there is a single credit card fee of £5 even if the total is paid on a single credit card transaction - so if 4 passengers are booked on the same transaction, then the fee taken is £20 ($40 if the flights are returns), whereas the actual underlying cost is between 1.5% and 2.5% of the value of the original transaction. All airlines are up to similar stupid tricks at the moment but I have been victim of Ryan Air's wheezes where quoted costs are miles off the actual price paid.

It's not a debate to get into early in the morning because I think Ryan Air have done a great deal to open up air travel across Europe but their advertising has consistently annoyed me as it bears no relation to the real costs you pay and the total rubbish service that ensues - they squeeze every penny of profit they can out of people.

It's a little conundrum on a Monday morning, but if Ryan Air actually do provide millions of seats across Europe at little or no cost, then how do they make their money (and their profits are very nice)? And even if a fair proportion of passengers do pay through the nose as I have done for small incremental services, what things do Ryan Air not pay for that other firms do that costs them significant operating costs?

It's a little thing, but I would hope pilots and engineers are paid and used consistently across all airlines, or am I being naive?

Business Travel - Statistics vs Facts

You can always rely on that impartial magazine, Business:life, the business section of BA's Highlife magazine to give you some impartial comment. This month, they extol how business travel is rising again and how statistical surveys show clearly that face to face meetings beat technologically aided ones.

Of course, nothing beats a good face to face meeting. Then again, this month, I will spend precisely 3 working days at home and only 6 nights. I can tell you, I yearn to use more technology whenever possible as the drudge of excessive international travel outshines the popular perception of its glamour. I can also tell you that despite technological advances like webmail or universal Exchange accounts, mobile phones and Blackberry-style devices, you are not as productive on the road as you are in an office.

The article starts by saying that business travel has dropped off as companies have reined back expenses in the face of the recession - no astounding news there. They also find in their surveys that many firms have specifically cut back on the class of travel allowed, the hotel classifications and the frequency of travel - again, no rocket science here. However, only 28% of companies have promoted more technologically orientated meetings such as audio, video or webconferencing. In fact, as an industry veteran, I can attest that the more companies have used such technology and saved vast amounts of money on travel, the more they have got aggresssive on driving down costs of the technologically driven conferences. I found that really frustrating, as flying to Dusseldorf to sell more automated conferencing to Vodafone who rebuffed me on my price, I found that the entire Business Class section was full of their employees all on single day's meetings from the UK.

To give an idea, today and tomorrow's meetings for me with flights, trains, taxis, hotels and meals will cost in total over £1,500. If I had done all of them via technology, they would have cost no more than a few pounds using Skype at one end of the spectrum and maybe one or two hundred pounds using something more advanced. Plus I would not have spent so many hours unproductively sitting on a plane or in a taxi.

The research in business:life asserts that face to face meetings yield greater profits than those deals done digitally. I think this is a vast generalisation biased towards the travel industry. This month, no amount of profit I earn for my clients will pay for the time lost at home - that is a simple fact. I begrudge every penny I earn this way. I have also tried to group together as much travel in a single month as I can to get it over and done with - the rest of the relationships will be driven digitally. In my eyes, the face to face is there to build trust and get key points across but the reality is that the details will be solved by digital communication. One of the greatest drivers in this is the audit trail - written word or recordable conferences are vital to create the reviewable evidence of what has been discussed between all parties and decrease the time to deals. And that is the key factor this research has missed - digital communication has collapsed the time required to make a deal happen because if details could only be discussed and agreed at face to face meetings, then they would drag on forever.

I will give a classic example of this. In all my dealings with the US West Coast, I fly for 12 hours and we would have fantastic face to face meetings where casual executives would energetically and enthusiastically agree actions and commitments at 'internet speeds'. You would shake hands, fly 6,000 miles home and when you next pick up the phone they either deny agreeing something or factors have changed. I cannot tell you how frustrating that could be - and it taught me that you either sit in front of them for as long as it takes to legally get everything agreed and incur the corresponding travel expense or you use digital communication to record all the commitments and then fly out for the contract signing. As I grow older, I get proportionally nore frugal with sharing my time out and, even when selling, I make sure that someone is absolutely on the same page as me before incurring the travel expense.

Here is the rub. Long after the shine of international business travel has worn off and you become more crotchety about the airconditioning in hotels or the delays on airlines or the crappiness of paying for check in then having a free-for-all to get a seat, you realise that time is the most costly commodity you waste not money. I begrudge every minute I miss at home. Today, I have attended two excellent meetings in Milan and then flown to Rome - I have then spent the rest of the day catching up on emails, eating quickly round the corner and then pestering you with my thoughts. The fact is, the more time you spend on travel, the more you time you spend at the back end of every day catching up on your commitments.

I also assert that mobile managers see their immediate staff less regularly - which means that more problems brew due to lack of direct personal communication. Hah! The more time you are in an aeroplane, train or taxi, the less time you can spend in front of the people who mean most to you - your staff. I will tell you something else - I think the more mobile the manager you are the more decisions you make on the fly without proper conferring or access to key data as you are on the go. Either that or you delay more in order to buy yourself time to access the same data or cobfer. Either way, the more mobile you are as a manager, the less robust or speedy are your decisions.

I will also say, from personal experience, the more I travel the less I sleep. I have travelled all my life, since a kid. It isn't just about the comfort of the bed but when I am on the move, I have more worries about whether I am in control or not or making sure I am hitting my commitments or that uncreatianty of being away from your family - I have never shaken it off and last night was a classic case of interrupted sleep prior to two key meetings that if I had done them via conference call I wouldn't have missed a beat. It means that if you are like me, over a period like this month of constant travel, there will be a time when I arrive at a meeting 'off my game' and I don't get exactly what I want out of it. Worse still, I might underperform. It happens, we like to deny it but it's a fact.

When I have been engaged in contracts demanding high visibility in an office, I have got into a routine which allows me to exercise more vigorously and regularly while I can control my eating habits more easily. During periods of prolonged travel, as I have experienced in the last 2 years, I have excercised far less and more sporadically while my eating habits have been driven by eating out constantly which inevitably means bigger meals and less healthy eating.

It is true, you need to see people face to face to build rapport and trust - sometimes to steamroller those little or large issues which get in the way of a deal. But don't kid yourself that at the slightest drop of a hat that you need to get on a plane. It isn't worth it, you are kidding yourself and, more often the not, your client doesn't appreciate it. Think about it - if a client succumbed to every request to a face to face meeting, they too would have no time to get their jobs done. It is far more respectful that you get things done by buying short snatches of their time when you need it using technology that does not drag them away from the desks and homes rather than waiting for the window to get face time.

I cannot tell you the number of times I have heard executives or salespeople say to me that they will get the latest information on a deal when they meet with a client at some point in the future. God knows, I do it too. But just imagine if you simply call or email a customer for an update there and then or prior to your meeting with your manager - then you have the latest information at your fingertips rather than using the face time meeting as the stake in the ground. The clever manager or salesperson is the one who uses technology to drive a deal rather than to wait for face time to keep the momentum. Face time should be given out frugally and for key objectives only. Those who are hellbent on building their airmiles or impressing their mates in the pub are the ones who spend their lives hunched over Blackberries at take off or moaning about the delays they had at the hands of Iberia Airways (like me earlier this month).

Personally, no matter what the statistics say, you can drive more sales, and hence greater profits, by using technology to your advantage and making face to face meetings really pay. It's no longer about the actual travel cost but the lost opportunity cost of not looking after your staff or being available for more clients, the quality of your decision making and the quality of your life. My simple philosophy as I grow older and wiser is that I begrudge the time I spend in pokey hotel rooms, even those close to the most holy city in the world, but away from my home and loved ones.

I leave you with just one stupid statistic from the article I read - 52% of those surveyed by BA said that by taking fewer flights they harm their business. Just how stupid is that for a business whose market is in their home country, for example, but it just shows to me that the modern businessperson is more at home with old technology rather than the new.

It makes us older sages the cool dudes for just once because we know how to utilise technology to our best advantage simply because we value our time more. We have proven that you can teach old dogs new tricks simply because they know it gets them more treats.

The Glamour of International Travel

As I sit in alone in a small room in Barcelona, where I have somehow damaged the airconditioning switch so that I am inside a medium sized refrigerator when the outdoor temperature is 25 degrees, I am once again pondering what's good about international travel.

A young American lady sitting across the aisle on the plane over told me that she was spending 4 months in Spain and was looking forward to it. I agreed - it was a great adventure. She asked me how long I would be in Spain and I replied one night. After a day in meetings, I was to spend a night in the hotel and then another morning of meetings, then plane home. I must have done this a hundred times in the last year, it seems, and I cannot remember the last time I actually kicked back and had a moment to myself to enjoy some of the spectacular cities I have visited, from Rome to Stockholm to the inside of Copenhagen airport only. I lie. Now that I think of it, I did manage a trip around the harbour of Hamburg in an open top boat, breathing diesel fumes, sun beating on my head and sweating profusely in a suit. I saw several scrap heaps, empty dry docks and Roman Abramovich's new yacht covered in plastic - and all the while I kept glancing at my watch worrying that I would be late for my meeting.

The day had not started well. Due to travel costs, the cheapest flight got me to Barcelona just 40 minutes before my meeting, cutting it all very fine. The plane was packed so full that there was nowhere near enough room in the departure lounge, let alone on the aircraft, for us all to comfortably sit. It was fashionably, but bloody annoyingly late - by well over an hour and so my slim margin of error was already burnt away before I started, causing one of those stupidly fractious journeys where I felt like going onto the flight deck and telling the pilot to put his foot down. How he would have laughed and either shot me as a terrorist or pointed to the throttle as being a lever not a pedal.

In the cost consious era of business travel, I found myself in the section called 'Basic' as classified by Iberia Airways - a euphemism for 'abattoir class'. This is a level that makes Ryan Air look like the Orient Express. A mere tomato juice cost €2.50, rivalling any of O'Leary's rip offs. The good news was that they do not charge extra for check in, bags, jetways or fast queuing - just get to the front and stand up quickly. And you get a real seat allocated to you beforehand. That made the return flight to Barcelona exactly half what I paid for a recent Ryan Air one way trip from Frankfurt-Hahn airport to Stansted. Oh yes, believe me - Ryan Air advertise cheap flights but I paid, with check in, priority boarding and one tiny bag in the hold, exactly double the price to go for a flight double the distance to Barcelona, both ways. One other, nit-picking point - Frankfurt-Hahn airport is around 200km from Frankfurt, and is a god forsaken hell-hole infested by more flies than a festival of rancid horse manure. Granted it was hot but even I couldn't see the waitress in the small cafe for the fog of flies in the room. Some of us think London Luton is stretching the imagination, but this is like calling Birmingham Airport a London airport.

Whenever I mention what I do or where I go, it always sounds good that I have been to Germany last week and Spain this week etc. But when you sit like 'Billy Nomates' alone catching up on the day's emails and messages with a motley room service sandwich half eaten at your side and only two channels with English on and both are boring business news running the same endless loop, it really is not as glamourous as it sounds.

Tomorrow is 28 degrees in Barcelona - I am only hoping the office I visit has good ventilation or else it will be another day in a sticky shirt, preying for a shower. Hands up all those who know what I'm talking about.

Spend A Penny?

It had to happen - Ryan Air are considering charging for using the toilet on their flights.

Today, I bring you an exclusive interview from the marketing genius behind the idea, Penny Pertwee.

Rising Cost Of Service

I asked Miss Pertwee (with a silent 't') what gave Ryan Air the idea to charge for using the toilets on their flight.

"Well, to be sure," she said, "We have charged for most things now and are limiting the hand baggage to just 10 Kg so that you are forced to put some luggage in the hold as you would be hard pushed to put two rats in a bag and weigh less than 10 kg. Then we can charge the customer for the luggage in the hold per kg over the maximum allowable which will change to a much lower number for sure soon."

I pointed out that this makes Ryan Air in danger if actually being far more expensive and less attractive to travel on then their rivals.

"Be gone with yer," she replied with a disarming smile and a twinkle in her eyes. "With the height and weight restrictions coming in soon, Ryan Air will always be the cheapest airline if you are 5 foot dwarf weighing less than 25 kg, with a 10 kg bag, no luggage and not needing the toilet, food or water. We are committed to providing that level of service for those sorts of people."

What about the plan to charge for using the toilet then?

"Well the cost of allowing passengers to walk up the aisle to the toilets is rising," she said. "Particularly as we plan to remove the carpets in the aisle and install small seats for travelling rodents or other pets at a small charge. Also there is an impact on the environment, as if you have been to the toilet before the flight then you will weigh less when you get on and so the plane will use less fuel particularly at take off which is easier on the environment."

Spending A Penny?

How much will the service cost and how will it be charged for, I asked?

"We had quite a time working out the charging levels and how to charge," she said. "You know some big people can, let's say, need more of the facilities than smaller folk, so the charging needs to be a balance between the most fair charge and the most lucrative for the airline. So we have come up with a unique 'menu' of charges.

"A standard No. 1 of up to 30cl is just €1. For between 30 to 50cl it is €1.50 and then it's €3 for above 50cl and Guinness drinkers. The way it works is that you take a measuring cup inside the toilet with you, and once you have finished you pour the contents into the measuring machine we have fitted in the toilet and the amount rings up on the convenience lights outside so the steward or stewardess can read it and charge you on the way out. If you do a No. 2 then the toilet is fitted with a patented 'guffometer' which measures odour - the charges vary depending on weight and odour but suffice to say a standard poo will cost around €2 and if have had a curry then it will be €5 minimum. For those who 'paid a penny and only farted' then it's just €0.50, the same if you want to just 'powder your nose' which is just a euphemism for a good fart. By the way, we determine the weight by having the person stand on the weighing scale before they enter the toilet and then when they come out - the convenience display shows the staff the combination of weight and odour to charge for, and toilet paper can be bought on the drinks trolley at roughly €1 per poo or other."

The Screaming Habdabs?

I pointed out that what if someone is ill or incontinent? Surely this system of charging penalises those sorts of people?

"Come now," she said reproachfully. "As you well know, if you are disabled and need a wheelchair, then you have to pay. That's the rules and it's only fair. Just the same as, if you choose to get on a Ryan Air flight needing the toilet that's your lookout - and for those who are ill, we are a cheap airline not a flying toilet. If you are ill, then don't fly with us - it's you choice."

I asked, what about children - shouldn't they be able to use the facilities for free?

"Now why would we do that?" asked Miss Pertwee. "They occupy space on the flight, they breath the valuable oxygen in the cabin and they can pee and poo as good as anyone and they spend time in the toilet which limits the time for others to use them. No, they are charged just the same. And before you ask about nappy changing facilities, that counts the same as a good fart."

The Way Of The Future

I asked if Ryan Air plan any further charges in the future?

"God, we have only just started," she shrieked noisily. "We plan to charge in the near future for using a pilot and then for the level of their ability to fly. We also plan to charge for looking out of the windows, the seats (as we plan to suspend normal passengers from the ceiling for the flights, you can pay extra for a seat), we plan to charge for a proper landing not one at high speed with a thwack which is the usual, and then we will charge for cabin oxygen, heat, lighting and the air displaced during the plane's journey. We are working on other charges and they involve charging for safety demonstrations, life jackets and using the emergency exit in case of an emergency.

"At Ryan Air we are committed to low cost travel so long as you are below 5 foot, weigh less than 25 kg, have 10 kg hand luggage, no bags in the hold, do not use the toilet, want to eat or drink, can hold your breath, don't look out the window, don't mind if a trainee flies the plane and don't use the emergency equipment if we should crash."

Taking The P***

The above interview is clearly a spoof and is not representative of Ryan Air's views.

However, Ryan Air's intent to charge for using the facilities on their flights is. If, like me, you have used Ryan Air and their idea of carting people safely from A to B, then you will know that between their pathetic check in facilities and obsession for charging for the most popular basic requirements for anyone wanting to travel any distance, then they are just trying to advertise low cost fares and charge you for anything you would normally need. It's a carrot to draw you in and then sting you for the obvious.

This is quite literally 'Taking the P***' and they know it.

Integrated Transport System

Back in 1997, John Prescott said that 'Britain would have an Integrated Transport System'. Of course, as with much of what Prescott said it was pure hot air. Sadly, nearly 12 years on, we are paying the price of those empty words and lack of action.

The CBI today says that our transport network is 'unreliable, congested and is undermining our competitiveness'. It echoes what most of us in business have felt for some time - the word they have missed off is 'expensive'. Remarkably, they rated train travel as satisfactory in terms of reliability and is considered to be improving. Clearly they have been using very different trains to most commuters.

Trains, Planes & Automobiles

Trains are a running joke in this country. While rolling stock is slowly being updated on the lucrative franchises handed out, the handling of rush hour remains appalling. If you commute into London then you will know what I am talking about. Fast trains at rush hour are the most expensive tickets on the network and you are subjected to densely packed carriages and no seat for the journey, made almost unbearable in Summer due to lack of ventilation. Nowadays, my wife and I will travel by car together as affording two tickets at such excessive cost each day is just ridiculous and with £9 for parking and £8 for congestion charge and around £10 for diesel it makes economic sense.

Of course, the answer that the Mayor and PM will have is to raise the price of the congestion charge or find some other tax to attempt to penalise you into taking the packed trains - or as Ken Livingston was planning, to actually charge a congestion charge for using the trains in rush hour. This stupid and illogical way of trying to manipulate behaviour comes from the long, historic belief of the Anglo-Saxon and Norman lineages that if you tax someone then they won't do it.

The idiot thing is that no one takes a rush hour train or car journey by choice. They do it because that's what business and working demands. Most people in this country have set hours of work and while flexi-hours are a great innovation, over 90% of businesses cannot afford such luxury for its employees simply because their customers demand service within normal business working hours and beyond. In order to be successful in business, you need to be delivering your products and services within working hours. And that means that any more costs heaped onto getting staff to work within those normal hours will just make the business less competitive.

The Burden of Transport

In my business, my biggest expense lines outside of payroll is travel. Taking out accommodation costs which I try to avoid if I can, a quick analysis reveals it is cheaper to use a car for internal travel in the UK than trains with the exception of the Underground in London. A cursory glance will tell you mile for mile it is cheaper to use planes than cars or trains. Yet a bus and a train has to be cheaper than a plane to buy, maintain and run, particularly with all the ancillary costs.

Most people commuting to their office cannot recharge that to their employer and so bear the cost themselves, so the hidden cost of transport in business is huge. This will eventually manifest itself in wages which need to remain competitive yet still provide enough to cover the employees' transport back and fore from work. If you look at the cost of specifically trains and buses over the last 11 years it is easy to see that their cost has risen well out of proportion with wage increases.

It is costing us more to work than ever before thanks to transport costs.

The State of The Union

Britain is not some backward nation on its uppers - well not yet anyway. In that last 11 years, we were told repeatedly that we had a super economy and we were well off as a nation. Of course that has proved to be complete rubbish but it does make you wonder why on earth we have not ploughed enough money into getting our transport system in line with the modern age. Ministers would tell you that it is because of lack of previous investment and it's a case of catch up. Well, that's no excuse to exacerbate the problem on their watch. Now we are talking mega-numbers, not quite in line with bank bail outs, naturally, in order to put it right.

And here is the rub. This has been a Government of missed opportunity which is a phrase I have used before. The real shame is that when a crisis came hundreds of billions of pounds were taken without a cursory thought as to how they would be used or spent by the people they gave it to just as a knee jerk reaction to the failing banking system. Heaven knows, if such money was available then, why were we not spending it on our future like transport infrastructure - and if it could have so easily have been conjured up, why did we not use it before?

Of course, tax is at the heart of the matter and we shall find out in years to come just how much it has cost to save the skins of a few bankers and keep a bunch of bank businesses many of which deserved to fail. What we will count the cost of at the same time is how much new infrastructure, new hospitals, schools and much more we could have spent our hard earned money on while we pay off the 'expense tabs' of the elite bankers, the very same people who now sit like vultures on the PM's shoulders telling him how much money he needs to spend to dig himself out of the mess he got us into.

You can be sure of one thing, not one of them will be telling him to hold back the cash for banks and spend it on transport or any other worthy cause. That does not pay a banker's wages or bonus - and that is the priority of this Government, make no mistake. This period of history will be the single biggest missed opportunity in Britain's economic history - and we will remain uncompetitive for years because of it.

A Sign of The Times?

I always remember Terminal 2 at Heathrow on a Monday morning for having security queues the length of the terminal and then back round on itself and check-ins fuller than a Wagamama queue at Saturday lunchtime in St Albans. This Monday morning, 12 January, there were no queues - anywhere. Is this a sign of the times?

Travel Industry Being Hit?

I know BA announced good profits last quarter and both Ryan Air and EasyJet still talk bullishly, but this morning, for the second time in less than a few weeks, I have been shocked by the small numbers of people at Heathrow Airport. I wonder if anyone else has observed the same or am I just lucky on timing?

I have some acquaintances in the travel industry and there is no doubt that leisure travel is significantly down with one major travel firm I know experiencing a 40% drop in revenue although conversely their profits had held good.

If my experience is anything to go by, my 6.00am Alitalia Flight to Rome this morning had absolutely no queue at the check-in, no queue at security and less than 25 people on the flight, including the attendants. We got away on time and arrived in Rome early. I can't remember the last time that ever happened to me on a Monday morning - even the traffic heading into Heathrow was very light.

The Terminal 5 Effect?

After the fiasco of Terminal 5's pathetic start up last year, perhaps the collective easing at Terminals 1 & 2 is now visible - I doubt it. In my experience, with the lack of automatic check-ins for most continental airlines, the check-in counters at Alitalia are usually mobbed an hour before the flight by cackling people in expensive suits or ski outfits. So having packed hand luggage only and checked-in the night before, I arrived far too early and could have had an extra 30 minutes in bed.

However, Dunn's Law of Consequential Effect, would have come in to play. This Law states that if you believe that any one of the following are true 1) the traffic will be light, 2) check-ins not full or 3) security queues not long, then if you allow less than rush hour times to get to the airport, then automatically all 3 assumptions will be wrong resulting in lateness equalling the cube of your delayed start time. This has been verified by extensive results in live experiments causing several missed flights and journeys of great stress.

Empty Economy, Packed Business Class

No this is not the title of some fantastical Chinese film. One curious observation of this morning's flight, was that the small, cramped section of Business Class of just 3 rows at the front were full, while the rest of us 'nose-pickers' spread ourselves out luxuriously in Economy Class for the 2 hour flight. Quite how firms can justify Business Class fares costing at least treble the price of economy on such short trips is beyond me, particularly in a recession. But then again I have always believed this for short hops. It's just companies adding to the perks of short-hop managers who are probably finding any excuse to be on a plane in order to look busy while accruing their tiered points for Executive Club so they can have nice holidays and get promoted to Gold next year - maybe even that BA Amex Card they all dream of. And it's not only greedy Bankers, lawyers and Accenture employees at that game. I once flew to Dusseldorf when the ENTIRE Business Class section was taken up by Vodafone employees, several of whom turned up to the meeting I was attending, which was ironic as I was pitching on webconferencing to help reduce their travel costs.

It struck me, as we landed at Rome, that perhaps Alitalia might have broken even on the empty flight thanks to those generous people in Business Class paying well over the odds for their tickets.

Good News for Emissions, Bad News for The Economy

The boom in continental air travel thanks to the likes of Taxless citizens like Stelios, has helped fuel the economy while transporting all those who leveraged their equity to buy a second property at the end of some obscure route. It was all part of the 'cause and effect' spiral of the boom in the last 10 years. Empty planes actually do nothing to help reduce carbon emissions but they do impact the economy as airlines like Alitalia, already a perrenial flirter with bankruptcy, may well have to start reducing flights if they cannot fill enough seats to make money. While this may be a welcome relief to those who are concerned with carbon emissions, it does mean the economy must be suffering all round.

Still, if I get another line of seats to myself on the way back, I shan't be complaining.