This week: Comair begins to rebuild its Cincinnati hub; AirTran and Delta duke it out on fares--and bend the truth--in Atlanta; President Bush's intervention in a potential American Airlines strike raises serious questions; hotels in Hong Kong and New York change names; a desperate El Al slashes summer business-class fares to Israel; and much more.
COUNTER INTELLIGENCE: The Big Rebuild Begins at Comair
Comair returns to the skies on Monday, July 2, when it launches flights from its Cincinnati hub to 26 cities. The move comes just 10 days after pilots ratified a new contract to end their 89-day strike at the carrier, which flies as the Delta Connection. The initial Cincinnati schedule calls for at least one roundtrip per day to all 26 destinations, including major cities such as Detroit, Pittsburgh, Orlando and Toronto. Another large increase in service is due by the end of July and the airline expects to be back to pre-strike strength--it flew to 95 cities--by December.
ALTERNATE ITINERARY: AirTran Provokes a Delta Response in Atlanta
If anyone needs proof that the existence of alternate carriers drives down fares, then you need look no further than Atlanta, where Delta has been forced to match the lower, less-restricted fares offered by AirTran. Delta positioned its move--creating low-priced, one-way fares that don't require a Saturday-night stay--as a major breakthrough for Atlanta-based travelers, but the flexible fares apply only in markets where Delta competes with AirTran or other low-fare airlines. One example: The walk-up fare between Atlanta and Washington/Dulles, where Delta and AirTran both fly, is now just $456 roundtrip. But for Atlanta-Washington/National flights, where Delta is unchallenged, the walk-up fare remains $1,308 roundtrip.
CAUGHT IN THE ACT: Truth, Justice and the Airline Way
The aforementioned fare battle in Atlanta between Delta and AirTran already has produced its first victim: the truth. Both sides were caught in the act earlier this week as they stumbled, spun and postured. In Monday's Wall Street Journal story covering the Delta fare play, a Delta spokesperson was quoted as saying the new prices were "aimed at stimulating business and leisure travel in a slowing economy." On the same day, however, Business Travel News quoted Delta president and chief operating officer Fred Reid claiming, "There is nothing we can do to stimulate business travel." Meanwhile, over at AirTran, the airline first dismissed Delta's new Atlanta fares, then on Tuesday announced a "sale" on 7-day advance purchase tickets. The problem? AirTran's sale offered prices that were no better than its previous "Grade A" fare sale, which had expired only two weeks earlier.
EXECUTIVE SUMMARY No Strike, But Lots of Questions, at American
American Airlines and its flight attendants return to the bargaining table today, just hours before a federally-mandated 30-day cooling off period ends. But there won't be a strike July 1 because President Bush announced Tuesday he would declare a Presidential Emergency Board and automatically delay the strike for 60 additional days. Bush's decision raises several disturbing questions, however. First of all, Bush has long ties to American. The airline has been a major contributor to Republican causes and American chief executive Don Carty personally contributed the legal maximum of $100,000 to Bush's inaugural committee and $5,000 to his Florida recount efforts. Worse, Bush's pre-emptive announcement takes the time pressure off today's last-ditch negotiations. "Everyone knows the real work is done against a strike deadline," one nationally known mediator told me this week. "Take away the strike deadline and you take away the impetus to negotiate." Worst of all, Bush's move doesn't even guarantee travelers a strike-free summer. Should a PEB be invoked, it only delays a potential strike until September 1, smack in the middle of the Labor Day weekend travel period.
IN THE LOBBY: Hotel News You Need to Know
Two well-known New York hotels are adding names. The swanky Waldorf Towers is adopting the Conrad moniker. Conrad is Hilton's luxury brand name and the company is hoping to add Conrad properties throughout the United States. Meanwhile, the Inter-Continental has changed its name to the Inter-Continental Barclay. The Barclay was the property's name when it opened in 1926. … Speaking of Inter-Continental, it has taken over management of The Regent Hong Kong after its parent company purchased the famed Kowloon property for about $350 million. … Marriott is launching an in-room magazine this fall. Don't look for scintillating new reading, however. The magazine will feature reprints from major magazines, most of them from the AOL Time Warner stable. … American Express and Starwood have launched a credit card tied to the Starwood Preferred Guest frequent-stay program.
WEEKLY WONDER: Desperate Times, Desperate Measures at El Al
The continued unrest in the Middle East has all but destroyed Israel's tourism business and El Al (800-223-6700), the state-owned carrier, has been scrambling for ways to get travelers back on board. Its latest offer: $975 one-way business class fares from New York/Kennedy to Tel Aviv. Among other restrictions, the deal requires a roundtrip purchase for travel before September 3.