The Tactical Traveler
A SPECIAL YEAR-END
BY JOE BRANCATELLI
This week: The outlook for business travel next year: Expect more chaos and cutbacks at the Big Six; clear sailing for the nation's fast-growing alternate airlines; a slew of interesting, long-haul international routes; huge growth of high-speed access and automated check-in kiosks at the nation's hotels; and much more.
THE BIG SIX: More Problems, More Losses, More Chaos
The Big Six carriers claim that a turnaround is just around the proverbial corner, but a clear-eyed view suggests more problems, more losses and more chaos. The sickest of the Big Six, United Airlines and US Airways, are at operational and financial points of no return. United's ability to secure private financing and exit bankruptcy rests on government approval of loan guarantees, but United has yet to produce an acceptable business plan. The future of its Denver hub may rest on the success of Ted, the much-derided second attempt to launch a low-fare unit. And United is locked in an internecine battle with Atlantic Coast, its commuter carrier at its Dulles hub. ... US Airways continues to burn cash despite its emergence from bankruptcy. It has alienated its employees, who are being pressed for still more concessions despite two rounds of givebacks. It faces an imminent challenge from Southwest Airlines at its Philadelphia hub. And US Airways' ham-fisted tactics at its Pittsburgh and Washington/National hubs have angered passengers and local politicians. ... American Airlines faces a decision on its oddball fleet, which now offers "more room" and "less room" configurations that confuse everyone. Its aging premium-class cabins need an upgrade to remain competitive. ... Delta Air Lines is demanding huge givebacks from its pilots after lavishly compensating a lackluster management team. ... Many of the most frequent travelers on Continental Airlines are in open revolt over the airline's increasingly aggravating rules and snippy service. ... Northwest Airlines, looted by its management in the 1990s, wants more concessions from employees who have repeatedly sacrificed even before the 9/11 cutbacks. ... Oh, and the Big Six hubs will continue to contract. Northwest will eliminate about 15 percent of its flights at Memphis and Delta will drop about 20 percent of its capacity at Salt Lake City.
ALTERNATE AGENDA: The Sky's the Limit for the Other Guys
If the picture for the Big Six seems cloudy at best, the outlook for the alternate carriers seems happier: The sky is, quite literally, the limit. JetBlue Airways expands into Boston next month and the initial response has been so strong that the airline has already added flights before the January 16 launch date. ... AirTran, which has been growing rapidly in Delta's backyard, will be building up its presence at Dallas/Fort Worth, where it will go head-to-head against both Delta and American. It moves into new space at DFW next month. ... America West will expand its Las Vegas hub. It is adding flights on existing routes and, beginning in March, launches service to six new cities. ... Now that it has been guaranteed some growing space at its Denver hub, Frontier will add flights and routes there throughout the year. ... And then there's the king of the low-fare carriers, Southwest Airlines. It enters the Philadelphia market in May, will bulk up at St. Louis and plans to add dozens of what it calls "connect the dot" nonstops between cities it already serves.
HOTELS: This Is the Dawning of the Age of Automation
Business travelers have come to embrace check-in kiosks at the airports and 2004 may finally be the year that hotels jump into the arena in a big way. Hilton, Marriott and Starwood are testing self-check-in in high-traffic lobbies and early results are encouraging. In fact, it's surprising that hotels haven't moved faster in this arena. Chains have sporadically tested automated check-in systems since the mid-1990s. ... Watch for more chains to adopt high-speed access, both wired and wireless, as a brand standard. Many business travelers now consider high-speed access a must-have amenity, even in resort and vacation destinations. ... There'll be a thinning of the lodging ranks in 2004. Several chains--Adam's Mark, Wyndham, Le Meridien and Regent included--are on the verge of financial and marketplace extinction. The Adam's Mark chain is on the block and at least five properties are already planning to switch brands in 2004. Wyndham lost dozens of properties in 2003 and will lose dozens more in 2004. Le Meridien's assets are also for sale. Most watched: the disposition of the chain's large portfolio in London.
INTERNATIONAL ITINERARY: The Long Hauls Get Longer
In what will otherwise be a dull year for domestic flying, there will be some notable developments on international routes. Emirates, the Dubai-based airline, will finally make its debut on U.S. soil when it begins nonstop New York-Dubai service. ... Assuming another outbreak of SARS doesn't cripple the Hong Kong economy, Cathay Pacific will finally launch its nonstop service between New York and Hong Kong. (Continental already flies the route.) It will also add New York-London flights. ... And Singapore Airlines will inaugurate what will be the longest haul in the world: an 18.5-hour nonstop between Los Angeles and Singapore. ... The shift to two-class international service will pick up another adherent when Iberia drops first-class service on long-haul routes. ... Delta Air Lines will add several international flights from its Cincinnati hub. ... American Airlines will bulk up further in Latin America. ... Aer Lingus will add nine new European cities from its Dublin hub. ... Lufthansa will fly to Charlotte. ... Ryanair, which has been gobbling low-cost market share in Europe, will be adding bases at secondary airports near Rome and Barcelona.
ON THE FLY: Worth Watching Next Year...
The progress of America West's transcontinental service. ... The battle between Song and JetBlue for control of Boston-Florida market. ... The evolution of hotel markets such as Philadelphia, Houston, Miami and San Francisco, where too many hotel rooms are chasing far too few travelers. ... The value of the dollar against important currencies such as the euro, British pound and the Japanese yen. ... A start-up carrier called Primaris, which hopes to launch in 2004. ... The opening of the long-overdue new terminal at Toronto/Pearson airport. ... The new taxes on hotels, car rentals and other travel activity imposed by revenue-starved states and municipalities. ... The debut on the world stage of Taj Hotels, the Indian chain, which hopes to acquire high-end properties in key gateway cities in 2004. ... Liberia, Costa Rica, where three of the Big Six will be adding flights.
This column originally appeared at JoeSentMe.com.
Copyright © 1993-2004 by Joe Brancatelli. All rights reserved.