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 The Tactical Traveler

joe A BUSINESS-TRAVEL BRIEFING
FOR APRIL 3 TO APRIL 10, 2003


BY JOE BRANCATELLI

This week: A new airline bailout would cap the pay of the top bosses; SARS and the Iraq war lead to more schedule cutbacks; Air Canada slides into bankruptcy; Chicago's mayor secretly bulldozes Meigs Field; United and US Airways link award charts; and much, much more.

COUNTER INTELLIGENCE: The Battle Over Another Airline Bailout
House and Senate committees passed two separate versions of another airline bailout this week and the numbers are in the $3-$3.5 billion range. But the congressional concepts of a bailout hit a wall Wednesday when the White House criticized the amount as "excessive." The Bush Administration prefers a much smaller aid package of about $1 billion, which would reflect the cost of making the government the insurer of last resort for war-risk insurance and the funding of some federally mandated security upgrades. Both the House and Senate versions, however, contain clauses that would cap the pay of the top five executives at each airline for two years. Compensation would be limited to 2002 salaries and no bonuses or options or back-door payouts would be allowed. "We're holding our noses on this one," a Senate staffer told me Thursday. "Nobody on the Hill looks very kindly on industry leaders making 50 times more than congressmen and then putting their hand out for federal assistance." Sparring over the terms of the bailout is likely to continue over the weekend.

AIRPORT REPORT: Terminal Shifts and Screener Layoffs
Continental Airlines now operates from Gates 6 and 8 in Terminal Two of Phoenix Airport. ... Northwest Airlines has shifted its Tokyo hub operation to the Satellite Two terminal at Narita Airport. The carrier is promising WorldClub facilities at Satellite Two in about 10 days. ... The Transportation Security Administration says it will begin laying off about 3,000 security screeners this month. Budget constraints are forcing the layoffs, but recent declines in airline traffic also make the case for the redundancies.

CUTBACK CARNIVAL: SARS and the War Take Their Toll on Schedules
One ridiculously predictable circumstance (a drop in bookings because of the Iraq War) and one completely unpredictable event (the rapid spread of the SARS virus) have severely depressed worldwide airline traffic. As a result, airlines around the world have been slashing routes and frequencies with no advance notice. In addition to the cutbacks detailed in the last several editions of Tactical Traveler, take note of these changes: US Airways and Delta Air Lines have both cut a number of flights on their no-longer-hourly East Coast shuttles connecting Boston, New York/LaGuardia and Washington/National airports. ... Virgin Atlantic will reduce frequencies to London from both New York and Los Angeles during April and May. ... In addition to its previously announced cuts, Continental Airlines says it will slash another 2 percent of its flights from the summer schedule. ... Cathay Pacific, based in Hong Kong, where the SARS virus may have originated, is cutting at least 15 daily flights from its weekly schedule. ... Until mid-July, Qantas will be cutting flights by as much as 20 percent. Included are cuts to frequencies to Australia from Los Angeles and the last-minute deferral of Qantas' plan to begin flights from Chicago this week. ... Lufthansa is dropping one flight a day to New York, Boston and Los Angeles. It has scrapped service to Phoenix and Dallas. ... Air New Zealand is reducing flights on its Auckland-Los Angeles route in May and June. ... Singapore Airlines will be reducing flights from New York and Los Angeles. It had previously announced it was dropping all service to Chicago and Las Vegas.

CYBERTRAVELER: Seen on the Web This Week Ian Evans of DigitatHit.com posted a funny and infuriating piece about Holiday Inn's claim of in-room Internet access. As the piece explains, Holiday Inn says dial-up dataports qualify as "Internet access." In that spirit, I am announcing today that I have a full head of hair. ... Northwest Airlines, which apparently has nothing better to do with its time and resources, is introducing a new livery. It retains the iconic "red tail," but otherwise looks like the lower-case typography adopted by British Midland when it renamed itself "bmi" last year. ... Earlier this week, Chicago Mayor Richard Daley sent bulldozers in the middle of the night to destroy Meigs Field, the city's close-in general-aviation airport. Daley then conducted a scary, almost incomprehensible press conference, which was excerpted in the Chicago Tribune.

FINANCIAL FOLLIES: Coming, Leaving--and Skirting--Bankruptcy
Air Canada filed for bankruptcy protection earlier this week. It is operating all its flights as well as all the flights of its various subsidiaries such as Jazz, Tango and Zip. (I just report 'em, folks, not name 'em.) ... US Airways emerged from bankruptcy protection this week, not because it is healthy, but because it needed to resume normal financial operations in order to secure its federally guaranteed loan and a capital injection from its new patron, the Retirement System of Alabama. Hours later, it created a firestorm by rejecting its gate leases at its Pittsburgh hub and demanding lower lease payments. This ploy stunned some of US Airways' most loyal political poodles, including Sen. Arlen Specter, the Pennsylvania Republican. "A lot of people who have been relying on US Airways to operate in good faith are in a state of shock," Specter said on Wednesday. (When was the last time you heard "airline" and "good faith" in the same sentence, by the way?) ... Bankrupt UAL Corp., the parent company of United Airlines, has been delisted by the New York Stock Exchange. The airline's shares, probably worthless but selling for around 75 cents, are now traded over the counter. (UAL shares sold for $53 in July, 2000.) ... American Airlines may have skirted a bankruptcy filing this week after securing almost $2 billion in labor concessions. (Alone among Big Six bosses, American chief executive Don Carty has taken a huge pay cut this year and has refused all bonuses in recent years.)

ON THE FLY: Business-Travel News You Need to Know
United Airlines Mileage Plus and US Airways Dividend Miles members can now claim awards from either carrier. However, US Airways flyers cannot claim awards for seats on United's Star Alliance partners. ... American Airlines and Hawaiian Airlines now offer interline privileges on electronic tickets. ... The Transportation Department quietly approved the tri-partite code-share agreement between Continental, Delta and Northwest airlines. The carriers will be limited to code-shares on 2,600 daily flights and be required to give up some gates at New York/LaGuardia and Boston/Logan airports. ... There have been two Cubana planes hijacked to Florida in recent weeks. One of the aircraft, a decades-old DC-3, has been seized by authorities in Key West, Florida. The former wife of a Cuban spy is trying to claim the plane to help satisfy a multi-million dollar judgment she won against the Cuban government.

SARS WATCH: The Worldwide Epidemic No One Knows About
SARS (severe acute respiratory syndrome) is creating a worldwide panic--except in the United States, where the electronic media is devoting around-the-clock coverage to developments (and rehashes of developments and talking-head analyses of developments) in the Iraq war. But this epidemic is the worst of all worlds for travelers: The virus not only is airborne and lives for several hours on inanimate objects, it is also being carried around the globe by airline passengers. Both the World Health Organization and the U.S.-based Centers for Disease Control are urging travelers to defer travel to SARS hotbeds such as Hong Kong, southern China, Singapore and Vietnam. And the State Department has picked up the CDC warning, meaning that airlines now will bend most purchase rules should you choose to change your upcoming flights to the affected areas.

This column originally appeared at JoeSentMe.com.

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