The Tactical Traveler
JOE BRANCATELLI'S BUSINESS-TRAVEL BRIEFING
FOR JULY 28 - AUGUST 11, 2005
- Delta and Northwest Seem Headed for Bankruptcy
- American Airlines Moves JFK Domestic Flights Next Month
- United Rings Up Another Huge Quarterly Loss
- More Dramatic Shifts in the Hotel World
- Checked-Baggage Costs May Rise Again
- Three International Carriers Plagued by Strikes
- Mumbai Airport Is Closed by Flooding
Delta and Northwest Go Shopping for a Handbasket
Delta and Northwest airlines have turned in dreary second-quarter financial results and it is becoming increasingly difficult to see how either carrier can avoid bankruptcy. Delta's second-quarter loss of $388 million pushes its post-2000 pool of red ink north of $10 billion. And Delta's stock tumbled this week after the release of a memo from chief executive Gerald Grinstein, who admitted that the carrier seems headed for the bankruptcy court. The airline's new $5 billion turnaround plan may not be enough to save the carrier, Grinstein wrote. "There can be no doubt that Delta's transformation plan is delivering results," he insisted. "What is also clear is that it is not enough." Over at Northwest, the airline's second-quarter loss jumped to $217 million from the $175 million loss last year. It's post-2000 financial results show a cumulative loss of $3.6 billion. "Losses of this magnitude are not sustainable," said Northwest chief financial officer Neal Cohen. He should know. He was CFO during US Airways' first trip to the bankruptcy courts. Northwest's most-pressing problem: a possible mechanics strike on August 20.
You Didn't Think We Were Finished Talking Bankruptcy
Bankrupt United Airlines on Thursday (July 28) reported a second-quarter loss of $1.43 billion, five times more than last year's loss. Most of the red ink was for special charges, but the loss is awesome when you consider the fact that the airline is now almost three years into the bankruptcy-reorganization process. Meanwhile, disgruntled United flight attendants are now threatening to mount unannounced local strikes in retaliation for United's repudiation of their contract and pension plans. United management's only response is to claim that strikes would be illegal, but there is no evidence to back United's claim. And we'll all be watching to see if United does, indeed, file its first reorganization plan next week as promised. … The merger of America West, which recorded a small second-quarter profit last week, and bankrupt US Airways continues to gather legal steam. The Air Transportation Stability Board, the post-9/11 federal loan agency that is owed money by both carriers, signed off on the merger last week. Meanwhile, if you have any doubts at all about who will be running the merged carriers, rest assured it will be America West. A proposed top-management slate is filled with America West employees except for Al Crellin, US Airways' executive vice president of operations, who will retain his position in the merged airline. And even that appointment is controversial because Crellin has presided over US Airways' operational meltdowns in the past year, including the luggage debacle last Christmas in Philadelphia.
American Airlines Plans a Big Move at Kennedy in August
Travelers who've been forced to weave their way through what has seemed like endless construction and detours at American Airlines' facilities at Terminals 8 and 9 at New York/Kennedy get their first payoff next month. American says it will move all its domestic flights at Kennedy into the new terminal on August 24. The first phase of the $1.1 billion terminal was unveiled this week. AA's international flights at JFK aren't likely to move until the second phase of the new terminal is ready in 2007. … Meanwhile, over at Dallas/Fort Worth, all international flights except those operated by American Airlines have now relocated to Terminal D. American, which will represent 70 percent of Terminal D's operations, still has not posted a move date. … Mumbai Airport was closed most of this week after more than three feet of rain flooded the Indian airport, which is located along the banks of the Mithi River. Extremely limited operations resumed today (July 28), but full schedules are not likely to be resumed until next week. … Kent Airport near London lost its air service this week when low-fare airline EUjet tanked. An Irish company owned both the airline and the airport.
Get Out Your Hotel Scorecard
Unlike the Big Six airlines, the big hospitality chains are flush with cash and they continue to open, renovate and reflag hotels around the world. So pull out your scorecard and mark these changes. The iconic, 577-room Hilton Sydney has reopened after a three-year, $200 million reconstruction. Hilton has also opened the 228-room Hilton Santo Domingo, which is located on the city's oceanfront boulevard known as "El Malecon." … The 34-story Swissotel Krasnye Holmy Moscow has opened. Accommodations in the 235-room property offer high-speed Internet access and flat-panel television. The hotel has a spa, an indoor swimming pool and four restaurants and bars. It is located on Kremlin Island in the Moscow River, about 3 kilometers from Red Square. … Doubletree has put its flag on the 220-rooom Washington Terrace hotel in the District of Columbia and converted a Clarion Hotel in downtown Norwalk, Connecticut, into the Norwalk Doubletree. … Meanwhile, two shrinking hotel chains continue to contract. The much-touted, $68 million, Le Meridien in the Block E redevelopment in Minneapolis has gone independent and is now called the Graves 601. And the Wyndham Martineau Bay Resort on Vieques Island off Puerto Rico has been taken over by Starwood Hotels. It's currently being run as an independent, but will eventually be converted into a W Hotel.
Business-Travel News Your Need to Know
Northwest Airlines has apparently lowered the free luggage allowance on international flights to 50 pounds per bag. Bags that weigh more will cost $25. Until this week, Northwest had offered the industry-standard 70-pound-per-bag free-luggage allowance on its international flights. Northwest lowered the domestic luggage allowance to 50 pounds a bag several years ago and other major carriers matched. It'll be interesting to see if other international airlines match this change, too. … Strike update: As of Thursday afternoon, July 28, Asiana, South African Airways and Aerolineas Argentinas were all canceling flights due to a variety of strikes and industrial actions. If you're booked on any of those carriers, check before you fly. … The Algerian who plotted to blow up Los Angeles Airport during the Millennium celebrations was sentenced to 22 years in prison. He has already been in custody for five years.
Copyright © 1993-2005 by Joe Brancatelli. All rights reserved.