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 The Tactical Traveler

joe JOE BRANCATELLI'S BUSINESS-TRAVEL BRIEFING
FOR AUGUST 18 - SEPTEMBER 4, 2005


What Was the Name of That Hotel Again?
The endless game of change-the-flag that hotel chains play was taken to a new level this week when two new brands were miraculously created from existing properties around the nation. Hyatt announced on Monday that it would "revitalize" the AmeriSuites chain and "rebrand" it as Hyatt Place. Actual details of the campaign won't be released until late next month and the 140-property AmeriSuites chain won't begin flying the Hyatt Place flag until next year. Hyatt purchased the AmeriSuites brand from the Blackstone Group earlier this year. Speaking of Blackstone, it now owns the Wyndham chain and a group of hotels called the Boca Collection. It announced on Tuesday that it had created a new brand called LXR Luxury Resorts, which is essentially a grab bag of better Wyndham properties and Boca hotels such as the Boca Raton Resort and Club, the Registry Resort in Naples, Florida, and the Rihga Royal in New York. Some of the Wyndham-related properties that will be drafted into LXR are three Puerto Rico resorts (El Conquistador, El San Juan and Condado Plaza), the Boulders in Arizona and the otherwise undistinguished Park Shore in Waikiki. Blackstone said it will invest more than $400 million to make the agglomeration of "landmark properties" and "prized hotels" meet the as-yet undefined LXR standard. Just for good measure, Blackstone threw still another brand, the Golden Door Spa, into the LXR mix.

Meet the New Boss in Orlando
How fast are alternate airlines dislodging the Big Six? Consider Orlando, which has been Delta Air Lines territory for more than 15 years. Not anymore. Southwest now controls 22 percent of all the seats into and out of Orlando, larger than Delta's 21 percent share. Southwest's share of the Orlando market was just 19 percent last year. American Airlines is a distant third with 9 percent of the Orlando market. Manchester, England, touts itself as an alternative to the crowded London/Heathrow and London/Gatwick airports. But the airport in northern England takes a hit this fall when bmi drops its flights to Washington/Dulles on October 30. Also going: flights to nine continental European cities operated by a British Airways subsidiary. Under pressure from a growing corps of low-fare German carriers, Lufthansa is gearing up low-fare service from Hamburg. Flights to six European cities begin October 15.

Mortgaging the Future for the Unprofitable Present
The textbook example of how not to run your financially stressed airline was Pan Am, which throughout the 1980s sold off its profitable operations to prop up the essentially unprofitable core. Eventually, of course, Pan Am sold off all the profitable parts and then collapsed in 1991. Why mention Pan Am now? Because it looks like both Delta Air Lines and Independence Air are mortgaging the future to prop up the unprofitable present. Delta this week sold off its profitable Atlantic Southwest Airlines (ASA) commuter carrier to SkyWest. Delta paid more than $700 million for ASA in 1999, but, desperate for cash to stave off a bankruptcy filing, sold it this week for just $425 million. ASA will continue to fly as Delta Connection for 15 years, according to the sale terms. Over at Independence Air, the financially strapped start-up generated $31 million in cash by deferring deliveries on its fleet of Airbus planes. The problem with that? It forces Independence Air to continue to rely on its inefficient fleet of regional jets, which is one of the reasons that the carrier is drowning in red ink. The airline was down to $66 million in cash before the Airbus move. George Mikelsons is out as chief executive officer at ATA Airlines, the carrier he founded as a travel club in 1973. That means the bankrupt airline is now totally controlled by Southwest Airlines, which has made an investment in ATA, has a code-share agreement with it and has placed one of its former executives in day-to-day control of operations.

Everybody Raises Fares, Even Southwest and JetBlue
It's a sure sign that the rampaging price of oil is finally beginning to bite. Even Southwest and JetBlue raised fares last week. The Southwest Airlines fare hike was $2 each way on flights up to 600 miles, $3 on flights up to 900 miles and $4 on longer flights. JetBlue Airways raised its Florida fares and some transcontinental prices by $5 each way. All of the Big Six carriers and AirTran Airways eventually joined in on the fare increase launched last week. Depending on the route and the fare category, prices rose from $3 to $10 one-way. American Airlines this week increased its international surcharge by $10 each way.

Air Canada and WestJet Plan Big Expansions
The ever-changing Canadian air-travel network will soon undergo another round of adjustments as the country's two major carriers fiddle with their respective networks. WestJet, for example, is ending its two-year experiment with flights to Windsor, Ontario, on October 30. But it's growing aggressively elsewhere. Beginning September 6, WestJet will add Toronto-Fort Myers flights. Two days later, it will add flights to Las Vegas from Toronto, Winnipeg, Edmonton, Calgary and Kelowna, British Columbia. Nonstop flights from Calgary to London, Ontario, begin after the Windsor service ends. The airline will also add flights from several Canadian cities to Phoenix, Fort Lauderdale, Palm Springs and Los Angeles in the winter. Plans at Air Canada include flights with two new aircraft, the 93-seat Embraer 190 and the 75-seat CRJ-705. Beginning on December 1, Air Canada will launch nonstops between Newark and Calgary. On December 17 come nonstops between Vancouver and San Diego; Abbotsford and both Toronto and Calgary; and Calgary and Orlando. Air Canada will also add 50-seat regional-jet flights between Hamilton and both Montreal and Ottawa. Those routes begin September 18. Air Canada will also bulk up its Las Vegas service on October 30 when it launches Airbus nonstops from Vancouver, Calgary and Montreal. Finally, it launches three weekly flights between Toronto and Santo Domingo, Dominican Republic, on November 3.

Business-Travel News You Need to Know
It's been a bad week for plane crashes. More than 120 people were killed on Saturday (August 13) when a Helios Air Boeing 737 crashed just north of Athens. The Cypriot aircraft may have suffered a catastrophic decompression at 34,000 feet. And more than 150 people were killed in Venezuela on Tuesday when a West Caribbean Airways MD-82 crashed. The Colombian airliner apparently had engine trouble. Air marshals are no longer required to wear suits, ties and dress shoes while on duty. The Homeland Security Department has relaxed the old dress code, which air marshals complained made them stand out in this era of less-formal attire on planes. Korean Air has equipped some of its flights from New York/Kennedy and Los Angeles with Connexion by Boeing in-flight Internet service. Singapore Airlines is offering passengers booked on flights from Los Angeles free baggage pick-up and check-in at their home or office between six and 24 hours before departure. The promotion lasts until November 15. America West and US Airways will unveil the combined company's new logo and livery next week.

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