THE BRIEFING FOR MAY 3 - MAY 17, 2007
By Joe Brancatelli
· Watch for Falling Fares--and Rising Prices
· Desperation Breeds Stupidity at Gary Airport
· Starwood Is Coming--and Going--in Florida
· Seriously, We Open in Reno on May 15
· Do You Really Want to Shop in Pittsburgh?
· Do You Know Where Your Credit Card Is?
· United Tries to Scam Its Best Customers
Watch for Falling Fares--and Rising Prices, Too
The nation's carriers have been reporting their April operating statistics this week and most reported that their load factors have begun to fall and the fares they could charge for the seats they are selling have begun to drop. They also said that they were meeting resistance to higher fares in bookings made for the rest of the spring and the summer. That means we should expect some fare sales, right? Never underestimate the perversity of the airline industry. Earlier this week, Southwest Airlines raised fares by as much as $2 each way. Its competitors promptly matched. Now $2 isn't much, of course, but it is Southwest that has been the most vocal about passenger resistance to higher fares. And then there's this: United Airlines is attempting to raise prices by up to $50 each way. On Wednesday (May 2), United raised premium-class and full-fare coach prices by as much as $50 one-way. Other fares were jacked up by $5-$10 each way. As of late Thursday afternoon, no other carriers have matched United's move.
Desperation Breeds Stupidity at Gary Airport
Officials in Gary, Indiana, have been desperate to get airlines to fly to its abandoned airport, which is just 35 miles from Chicago/O'Hare. After three previous attempts (by the new Pan Am and the defunct Southeast and Hooters Air) failed, Gary officials thought a name change would help. So it scrapped the Gary Regional Airport moniker and adopted the name Gary/Chicago International. Then in December it poured about $500,000 in marketing funds into SkyValue, a start-up public-charter carrier that launched service to five sun destinations. But SkyValue's operations have been lousy and its flights have been plagued by long delays. The carrier was also a financial sinkhole. In fact, the airport director, Chris Curry, secretly loaned SkyValue $325,000 last month without first getting the approval of the Gary airport board. The other shoe dropped late last week when SkyValue announced that it would stop flying at the close of business on Saturday, May 5. Gary Airport now wants to sue SkyValue's chief executive for fraud if SkyValue doesn't repay the loan. Of course, in order to sue, the Gary Airport Authority had to retroactively approve Curry's secret loan. (It did that on Tuesday, May 1.) Will SkyValue now repay the loan? The airline is saddled with $3.8 million of debt, so the chances of that look about as good as the chances of another carrier launching flights at Gary anytime soon.
Starwood Is Coming--and Going--in Florida
The endless shuffling of hotels in the various brand portfolios continues apace. Starwood, for example, has opened the St. Regis Resort in Fort Lauderdale, Florida. The beachfront property includes 28 private residences, 34 hotel condos and 166 guestrooms, each with a view of the Atlantic Ocean or the Intracoastal Waterway. There's also a spa, a restaurant, a wine room and a lobby bar. At the same time, however, Starwood said that it will close and demolish the 645-room Sheraton Bal Harbour on July 1. The late 1950s high-rise, designed by Morris Lapidus and originally opened as an Americana hotel, will be replaced by three 27-story towers. The new buildings, due in 2011, will house another St. Regis. … New York's Tudor Hotel in the Tudor City development has shed a name that almost no one knew it had. The 300-room property has recently been the Crowne Plaza United Nations. … Accor, the huge French lodging chain, has sold off the Red Roof Inns chain to an investment consortium. Accor says that it has no plans to sell its other low-priced U.S. chain, Motel 6.
Seriously, No Kidding, We Launch May 15
The registered-traveler program at Reno Airport, which was supposed to open last year, continues to be delayed. Although the sponsor, Unisys, says the so-called RT Go lanes will open on May 15, there's little reason to believe it. Unisys has been promising, and then delaying, the launch in Reno every 15 days or so. If and when it opens, it will become the second company to operate a registered traveler program. … Clear, the one registered-travel program that is running at a few airports, isn't doing that much better. Its much-touted, incredibly expensive, shoe scanners, which were designed to allow Clear members to keep their footwear on when clearing security, have still not been activated…. The Transportation Security Administration now permits guests of the Hyatt Pittsburgh Airport to clear the screening checkpoints and shop at the airport mall. Of course, first you have to go to an information desk near a security checkpoint, fill out a form, get a non-flying boarding pass (whatever that is) and pass through security as if you were going to fly.
Business-Travel News You Need to Know
Here's something you don't want to hear: Four JetBlue Airways employees were arrested this week on charges that they used credit cards forgotten by passengers rushing to catch flights. According to New York prosecutors, three customer-service agents and a flight attendant went on shopping sprees using the forgotten credit and debit cards. … More news on Air Canada Flight 185, which was bombed by Sikh militants in 1985. A government inquiry was told this week that Air India officials warned police at Toronto/Pearson airport that militants had planned to bomb an Air Canada plane. The warning was never passed on to Canadian government security officials, however. More than 300 people died when Flight 182, traveling from Canada to India via London, was blown up in midair. … United Airlines is switching soft-drink suppliers again. It's returning to Coca-Cola products after a five-year deal with Pepsi expired. … The U.S. dollar staged an extremely modest rebound against the euro and the British pound this week. The euro is now commanding about $1.35 and the pound is at about $1.98. The dollar also strengthened against the Japanese yen and is now at about ¥120.
United Appreciates Your Loyalty. Your Reward: Higher Fares.
Kudos to Arnie Weissmann, editor-in-chief of Travel Weekly, who this week exposed a sleazy attempt by United Airlines to beat higher fares from some of its best customers. As Weissmann wrote, United sent some Mileage Plus members a "welcome back" note with a chance to earn 2,000 bonus miles. Mileage Plus members were required to use a special link to book their travel and earn the bonus miles. But Weissmann found that the prices being generated by the special link were more than twice as high as the lowest fares he could find just by surfing independently to the United.com site.
ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.
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This column is Copyright © 2007 by Joe Brancatelli. JoeSentMe.com is Copyright © 2007 by Joe Brancatelli. All rights reserved.