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 The Tactical Traveler

joe JOE BRANCATELLI'S BUSINESS-TRAVEL BRIEFING
FOR AUGUST 11 - AUGUST 25, 2005
Northwest Airlines' Big Lie on Its Strike Schedule
Northwest Airlines and its mechanics are on a collision course for a strike or lockout on August 20 and Northwest management is already lying through its corporate teeth about its ability to keep the carrier flying. Although Northwest executives repeatedly claim that they will stick to "100 percent of our scheduled flights," the carrier is already slashing, burning and preparing for cutbacks. The most obvious schedule sham has already occurred: Northwest has advanced its fall schedule, which would normally have gone into effect in September, to August 20. That means several thousand flights that would have operated between August 20 and the Labor Day weekend have already been wiped off the schedule. (If you're "confirmed" on a Northwest flight in that time period, better double-check your reservations.) As for what remains, Northwest's commitment is literally a day-to-day affair. A management contingency plan that leaked out this week reveals that Northwest will cancel flights on the morning of departure whenever and wherever necessary without advance warning. Two other ploys management will use: hiring charter airlines to fly Northwest flights and busing passengers between destinations rather than operating many shorter-haul flights.

British Airways Travelers in Chaos at Heathrow
A dispute at a flight-catering firm at London/Heathrow on Wednesday turned into a total disaster today (August 11) when British Airways employees launched a wildcat strike and BA was forced to cancel or divert hundreds of flights. Worse, all BA flights into and out of Heathrow have been canceled through 6 p.m. on Friday (August 12) and there are indications that the problem will continue throughout the weekend and into next week. The initial dispute erupted on Wednesday morning after caterer Gate Gourmet fired hundreds of workers at Heathrow and long- and short-haul BA flights departed without meals. On Thursday morning, BA's baggage handlers, who are represented by the same union as the Gate Gourmet workers, stopped loading bags. Later, BA check-in staffers stopped working, too, and British Airways was forced to cancel Heathrow departures and redirect flights headed to Heathrow from the United States, Canada and other countries. Pittsburgh loses more US Airways service later this month when the bankrupt carrier cancels its flights to Altoona, PA; Greensboro, NC; Knoxville; San Diego; and Seattle. The Holiday Inn at Dublin Airport changed hands this week and the 247-room property is now being managed as a Clarion hotel.

Delta Scrambles Service on Song and the Delta Shuttle Desperately trying to conserve cash to avoid a bankruptcy filing, Delta Air Lines is scrambling operations on its low-fare Song service and on its Northeast Corridor Shuttle flights between Boston/Logan, New York/LaGuardia and Washington/National airports. Effective November 1, Delta will retire its Shuttle-specific fleet of 120-seat Boeing 737-300G planes and replace them with MD-88s configured with 134 seats. The MD-88s became available when Delta closed its Dallas/Fort Worth hub and dropped other routes. Over at Song, the airline's struggling clone of JetBlue Airways, Delta is trimming flights on several routes from LaGuardia, Boston and Hartford and reallocating the equipment to routes to Florida from New York/Kennedy and Boston. It is also adding one new route on November 1: Orlando-San Francisco. The latest crisis for Delta developed this week when it delayed filing its quarterly financial results with the Securities and Exchange Commission and admitted it was having trouble finding a company to process its credit card payments. Its current credit card arrangement expires August 29 and the vendor wants a "significant cash reserve," cash that Delta doesn't have. Speaking of dwindling cash, Independence Air says its financial position continues to worsen and it many not have enough funds to survive the brutally slow winter months. The airline is already planning to cut 15 percent of its schedule beginning September 6. That's about 60 daily flights. It will also drop service between its Washington/Dulles hub and two California cities: San Diego and San Jose. The carrier is also delaying delivery of Airbus A319s originally scheduled for delivery next year.

Rising Oil Prices Mean Rising Fares
Crude-oil prices briefly surged past $66 a barrel on Thursday and closed at a record high of $65.80 a barrel on the New York Mercantile Exchange. That led at least three airlines--United, Delta and Continental--to raise fares. The price hikes range from $2 to $10 a segment on discounted fares. Air Canada also raised fares on Thursday afternoon. The Air Canada hike was C$5 to C$12 a segment. The U.S. dollar is plummeting again against the euro and other world currencies. It closed Thursday at $1.24 against the euro, a ten-week low. The dollar has also dropped to 110 Japanese yen and $1.81 against the British pound.

Southwest Airlines Slaps Capacity Controls on Awards
Southwest Airlines' simple, easy-to-use, easy-to-understand frequent-flyer program, Rapid Rewards, just got more restrictive and more complicated. Effective February 10, the airline will slap capacity controls on all flight rewards. Southwest was the only carrier to offer any-seat/any-flight availability on awards. To take the sting out of the change, Southwest now allows 24 months to accrue award credits rather than the old 12-month accrual period. But that's not much of an emollient since all the other capacity-controlled major carriers allow virtually unlimited time to accrue award miles and rewards. America West and US Airways have confirmed what we reported several briefings back: The merged carrier's new Dividend Miles credit card provider will be Juniper Bank. Why is the airline switching from Bank of America? Money, of course. Juniper, a subsidiary of Barclays, is paying $130 million for the right to be the card provider and it is advancing the cash-strapped carriers $325 million against the future purchase of Dividend Miles. Juniper also issues the credit cards for AirTran Airways' A-Plus Rewards and Frontier Airlines' Early Returns plans.

Business-Travel News You Need to Know
Boston/Logan and Continental Airlines are in an ugly dispute over Continental's free Wi-Fi service at Logan's Continental Presidents Club lounge. Logan charges $7.95 a day for Wi-Fi access in public areas of the airport and airport officials want Continental to buy the service from them. Logan officials have even gone so far as to claim that Continental's free W-Fi service is a security risk. Continental has asked the Federal Communications Commission to intervene in its favor. Alaska Airlines recorded an abysmal 49.8 percent on-time rating in June. That's the worst showing by any airline since the United Airlines meltdown in the summer of 2000. United recorded a 42.7 percent on-time rating five years ago last August.

Copyright 1993-2005 by Joe Brancatelli. All rights reserved.