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 The Tactical Traveler

joe JOE BRANCATELLI'S BUSINESS-TRAVEL
BRIEFING FOR DECEMBER 8 - DECEMBER 15, 2005


That Hole in Your Wallet Is Where Diners Club Used to Be
At the very moment last week that I was recommending the Diners Club as a good alternative to airline-specific frequent-flyer credit cards, Diners Club was beginning to drop virtual death notices on its existing cardholders. Effective January 1, Diners Club Rewards points can no longer be exchanged for miles in the Continental, Northwest, America West or US Airways programs. And it gets worse: Points transfers to United Airlines Mileage Plus end on April 27. That leaves Diners Club with just American Airlines and Delta Air Lines. The mass exodus of major-carrier frequent-flyer programs was not Diners' call. It's a result of Diners' decision to co-brand its card with MasterCard. The exiting carriers all have their own bank-card deals and those banks don't want a competing MasterCard offering mileage transfers.

Is Southwest Dismembering ATA at Midway?
Southwest Airlines came to the "rescue" of bankrupt ATA Airlines last year with a package of loans, code-sharing and gate transfers at Chicago/Midway Airport. But even as ATA was announcing another big cutback at Midway this week, the airline's unsecured creditors were claiming in bankruptcy court that Southwest and a potential new investor are trying to carve up the carrier on the cheap. And at least from the standpoint of Midway, it's hard to argue with the contention. ATA has cut its service at Midway by 70 percent during the year and this week announced that it would drop Midway flights to three more cities: Fort Myers, Orlando and San Francisco. The carrier also says it will keep just one gate at the airport that it once dominated. All the gates are slated to go to Southwest, which had been growing at Midway even before the ATA deal. Also opposed to the Southwest-ATA package is the Air Transportation Stabilization Board (ATSB), the federal bailout agency that loaned ATA almost $170 million. The ATSB says transferring ATA's remaining Midway gates to Southwest will deprive the agency of collateral to repay the loans should ATA be liquidated.

Outrage Is the Name of the Bankruptcy Game
If you think bankruptcy has changed the ways of the airlines that found their way into Chapter 11, think again. The outrages only get worse. Point One: You'll be picking up more of the tab of the United Airlines bankruptcy thanks to a deal the now three-years-bankrupt carrier has struck with Denver Airport. The laughable, never-fully-operable automated baggage system that United demanded Denver build is now shuttered, but United still owes almost $200 million on it. Airport officials have agreed to forgive the debt in exchange for a promise from United to maintain its Denver hub. The airport will use our passenger-facility fees to help erase the debt. Point Two: The woman who crafted the controversial, bankruptcy-proof executive-pension and executive-retention plans at Delta Air Lines is now suing the airline. Michele Burns, the carrier's former chief financial officer, who bailed after taking her retention bonus, claims that Delta is trying to revoke one of her perks: free, first-class travel for life on the bankrupt airline. Burns has already left her subsequent job at another bankrupt company and received more than $8.2 million after a 20-month stint there. Point Three: Speaking of ludicrous executive bonuses, the creditors committee of United Airlines has filed objections to the carrier's plan of reorganization. Its major concern: the size ($285 million) and form of a new executive-incentive plan proposed by United management.

An Airport by Any Other Name…
The endless debate over a third airport for Chicago to augment O'Hare and Midway led Greater Rockford Airport to change its name to Chicago/Rockford International. The Rockford theory: branding the facility, about 90 miles from downtown Chicago, with a Chicago identity would bring more carriers. Well, think again. Since the airport changed names last month, it has used a $2.5 million grant to lure flights from United Airlines beginning next year. On the other hand, the United payment led Hooters Air to announce that it would drop its Rockford flights next month. And Northwest Airlines, which resumed Rockford flights to its Detroit/Metro hub earlier this year, will also pull out in January. Rockford paid Northwest almost $3 million to launch service, but the airport won't renew the grant and Northwest won't fly to Rockford without a subsidy. Rockford also lost flights this year when TransMeredian, a public-charter carrier, went out of business. … London/City Airport, the close-in commuter airport that offers a slew of short-haul flights to Europe, is now on the London mass-transit system. The Dockland Light Rail link at the airport opened this week and it directly connects London/City to the London Underground at the Bank and Canning Town stations.

Business-Travel News You Need to Know
Westin Hotels says that it will ban smoking at all of its U.S., Canadian and Caribbean hotels beginning next month. … US Airways has retreated (How often have we said that?) on its plans to remove the at-seat power ports on its Airbus fleet. The airline now says that it will leave the ports on the planes that already have the power outlets. … LAN Airlines is phasing in a new business-class on its Boeing 767-300 aircraft. Seats will convert to lie-flat beds and the airline's new at-seat entertainment system will have 15-inch screens. … The Internal Revenue Service says the 2006 mileage-deduction rate for driving expenses will be 44.5 cents. That's less than the 48.5 cents now in place, but higher than the 40.5-cent rate in effect at the start of the year. … The British House of Lords has squashed efforts to permit flyers to sue airlines for any injuries or deaths caused by deep vein thrombosis (DVT). … Aloha Airlines has been given permission by its bankruptcy court to dump its employee pension plans on the quasi-public Pension Benefit Guarantee Corp.

Okay, It's Not A Christmas Carol, But…
'Tis the season to be jolly and the TV screens are already filled with bad holiday shows. But if you pick your way through the puppets, animations, musical specials and the increasingly rare screenings of the really good stuff (the 1951 Alistair Sim version of A Christmas Carol leaps to mind), you can make your way to the History Channel on Saturday (December 11). There you'll find the first two episodes of Secrets of the Black Box. Reported by Peter Greenberg, the programs consider the events surrounding Korean Airlines Flight 007, which was destroyed over Russian airspace in 1983, and Aloha Airlines Flight 243, which lost a huge section of its roof at 24,000 feet. The shows air at 8 p.m. Eastern and 9 p.m. Pacific time.

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