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 The Tactical Traveler

joe A BUSINESS-TRAVEL BRIEFING
FOR FEBRUARY 20 TO 27, 2003


BY JOE BRANCATELLI

This week: the wild and wacky world of fuel surcharges; the BART link to San Francisco International Airport has been delayed again; Continental admits its financial woes to the SEC; a slew of hotels have just opened; British Airways begins an in-flight Internet and E-mail test; and much more.

COUNTER INTELLIGENCE: The Wild and Wacky World of Fuel Surcharges
Northwest Airlines imposed a $10 each way fuel surcharge on virtually all of its fares on Thursday (February 20), launching a new chapter of a wild and wacky week of charges and destructive major-carrier behavior. The saga began Friday, February 14, when Continental raised all its fares by $10 each way, claiming it needed the increase to cover the spiraling cost of fuel. American and most other major carriers matched the increase. But Northwest didn't go along with the increase, causing the other Big Six Lemmings to rescind the fare increase by Monday, February 17. On Tuesday, American Trans Air added a $3 each way fuel surcharge on all but its "Y" (straight coach) fares. Wherever they competed with ATA, the Big Six matched the surcharge. Then came the Northwest surcharge, which applies to all of its fares except full coach, first class, business class and 3-day advance-purchase prices. What's the difference between a fare increase and a surcharge? A surcharge is more annoying--the airlines always try to be annoying as well as rapacious--and it also applies to most negotiated corporate fares. Will the Northwest surcharge stick? Probably, at least where the Big Six compete with each other. It won't survive on routes where alternate carriers such as Southwest, JetBlue and Air Tran fly because the low-fare carriers probably won't be dumb enough to impose the surcharge.

AIRPORT REPORT: The BART-SFO Extension Is Delayed Again
Embassy Suites has opened a 273-suite property at 207 Porter Street, which is located on the outer perimeter of Logan Airport in Boston. The hotel offers free airport and city transportation, 16 meeting rooms, an indoor pool and an on-site restaurant. ... Priority Pass has added 17 Air Canada Maple Leaf Lounges to its worldwide network of airport clubs. Priority Pass members will now have access to the Air Canada lounges in Calgary, Edmonton, Halifax, Montreal, Ottawa, Toronto/Pearson, Vancouver and Winnipeg. ... A fifth runway has opened at Amsterdam/Schiphol, 35 years after it was first proposed. ... The $1.5 billion Bay Area Rapid Transit (BART) extension to San Francisco International has been delayed again. The 8.7-mile, four-station extension was supposed to open late last year. The launch was then delayed until last month. But the project is still in the hands of the contractor and has yet to be tested. That means the line to SFO may not open until the early summer.

EXECUTIVE SUMMARY: Continental Stops Living the Lie
Led by loudmouthed chief executive Gordon Bethune, Continental Airlines has been insufferably arrogant as it publicly claimed operational and managerial superiority over the rest of the Big, Sick Six. Even the humiliation of its large 2002 loss--Continental had predicted it would be profitable by last year's second quarter--hasn't stopped the chest-beating and smarter-than-the-average-airline public pronouncements. But Continental is singing an entirely different tune in its most recent Securities and Exchange Commission filing. The airline told the SEC last week that it expects a "significant loss" in 2003 and admits its limited resources make it more vulnerable than competitors to a prolonged travel decline. Although Continental said it had enough funds to last through 2003, it needs new financing to meet ongoing cash requirements and admitted it was unable to forecast whether it could secure the financing. Moreover, it has outstanding orders for 67 Boeing aircraft and no back-up financing for the planes. And, as of December 31, it had $5.7 billion in long-term debt and capital lease obligations on its balance sheet, but a market capitalization of just $767 million. Based on its $5.73 a share closing price on Thursday (February 20), Continental's market cap has now declined to $378 million.

IN THE LOBBY I: Notable New Hotels in Nashville and St. Louis
The 93-year-old Hermitage Hotel has reopened in Nashville after a $17 million, 10-month restoration. The hotel's 112 rooms are extremely large (about 475 square feet each) and feature Jacuzzis, DVD players and free, high-speed Internet. Published rates start at $210 a night. ... The old Statler Hotel in St. Louis, which was known as the Gateway Hotel before it closed almost 20 years ago, has reopened as the Renaissance Grand. The 918-room property is owned by Kimberly-Clark, the paper-products company. Opening rates are $59 a night through March 4 and $99 a night through April 4. Published rates start at $129 a night.

IN THE LOBBY II: On the Luxury Lodgings Beat
The Montage Resort & Spa is due to open in Laguna Beach, California, on Friday, February 21. The 30-acre oceanfront property offers a huge beachfront spa, three swimming pools and three restaurants. The 262-unit property includes 51 suites and 37 rooms that the hotel describes as "beach bungalow-style." ... Ritz-Carlton has opened a 349-room resort at Lake Las Vegas, Nevada. The $170 million property is part of a 2,300-acre resort that will include shopping, restaurants, offices and luxury condos. Lake Las Vegas is about 17 miles from the Las Vegas Strip and a 20-minute drive from McCarren International Airport. Introductory rates, which include breakfast, start at $189 a night. ... The St. Regis hotel in Aspen is planning a $30 million renovation that will add a new spa and convert about 98 of its rooms into luxurious, 2- and 3-bedroom suites that will become the St. Regis group's first fractional-ownership offering. ... The Four Seasons in Washington, D.C., is launching a unique service: Arriving guests who are picked up by the hotel's car service can phone ahead to order room service.

ON THE FLY: Business-Travel News You Need to Know
British Airways has begun a three-month trial of Boeing's in-flight E-mail and Internet system called Connexion. It is available on one of BA's 747s on the New York/Kennedy-Lohndon/Heathrow route. Lufthansa began testing the system earlier this month. ... Canada has lowered its security charge on domestic flights to C$14 roundtrip. The fee, imposed after the 9/11 terrorist attacks in the United States, had been C$24. ... Alaska Airlines now offers interlining of electronic tickets with both Northwest and American Airlines. ... London began a unique attempt at curbing road congestion on Monday (February 17). Most cars entering the central city pay a 5-pound (about $7.50) charge for the privilege. Taxis are exempt, however. For more information, check the London Congestion Charge Web site.

This column originally appeared at JoeSentMe.com.

Copyright 1993-2004 by Joe Brancatelli. All rights reserved.