THE BRIEFING FOR JUNE 1 - JUNE 14, 2007
By Joe Brancatelli
· Let a Thousand Big Six Merger Rumors Bloom
· Alaska Airlines Will Launch Flights to Hawaii
· Midwest Airlines Goes Two 'Class' on All Flights
· Revenge of the Loonie Against the Greenback
· Sixteen Small Cities Losing Commuter Flights
· Doesn't Anyone Want to Buy Alitalia?
· What's New on the Road This Month
Let a Thousand Merger Rumors Bloom
Northwest Airlines emerged from more than 20 months in bankruptcy yesterday (May 31) and it marks the first time since 9/11 that all of the Big Six carriers are flying without Chapter 11 protection. So what's next? Merger mania, of course. After US Airways' quixotic and disruptive attempt earlier this year to grab Delta Air Lines before it emerged from bankruptcy, the merger fever was put on the metaphoric back burner. But now, as one Big Six executive told me this week, "everyone is talking to everyone about everything." At least by route-map standards, Northwest and Delta remain the most likely partners. United Airlines, which hoisted the for-sale sign as far back as last fall, is willing to merge with anyone, which would allow chief executive Glenn Tilton to deploy his golden parachute. US Airways, which is an operational mess thanks to the still-incomplete merger with America West, seems corporately incapable of doing anything but trying to merge. American and Continental claim they are disinterested, but both admit that they may not be able to stay on the sidelines. What's it all mean for us business travelers? Well, chaotic Big Six operations if the mergers happen and lack of focus on current day-to-day details as the bosses divert management time to merger war games. Long term, of course, it means more market opportunity for the alternate carriers.
Alaska Airlines Gets the Aloha Spirit
Alaska Airlines this week confirmed what has been one of the worst-kept secrets in the travel business: The Seattle-based carrier will begin flying to Hawaii this year. Effective October 12, it will begin daily flights between Sea-Tac and Honolulu. Then, on October 28, it will launch daily service between Seattle and Lihue. A third Hawaiian route will be seasonal: Anchorage-Honolulu service starts December 9. All of the flights will use Boeing 737-800 aircraft configured with 16 first-class seats and 141 coach chairs.
Imitation Is the Sincerest Form of Anti-Merger Defense
Midwest Airlines has always gone its own quirky way, first with an all-coach configuration called "Signature Service" that rivaled most carriers' domestic first-class offerings. Then it added a more traditional coach service called "Saver," but never allowed the twains to meet. Flights were either all Signature or all Saver. But now that it is desperate to stay out of a merger with AirTran Airways, Midwest Airlines is essentially going to two-class service on all of its routes. Well, not two classes exactly, but both Signature and Saver service on all flights. On its Boeing 717 aircraft, Midwest will now offer 40 Signature seats configured 2x2 with 36 inches of legroom. Down the back will be 59 Saver seats configured 2x3. On the airline's MD-80 aircraft, there will be 12 Signature Seats and 132 Saver seats. Assuming Midwest survives as an independent airline, the reconfiguration will be completed this fall on the 717s and by mid-2008 on the MD-80s. Midwest says passengers buying selected unrestricted fares on the 717s will immediately get Signature seats. Signature seats on the MD-80s will be available for an upgrade fee. If all of this stuff confuses you, you can see the new seat maps and FAQs here. AirTran Airways isn't confused, though. Shortly after Midwest announced the changes this week, AirTran claimed Midwest was simply imitating AirTran, which offers a two-class configuration where travelers can easily upgrade to the roomier seats up front.
The Revenge of the Loonie
The Canadian dollar has been the laughing stock of North American currency for so long that people forget the moniker "loonie" refers to the bird on the back of the C$1 coin, not the state of Canadian monetary policy. But no one is laughing at the loonie now. The Canadian dollar hit a 30-year high against the U.S. dollar this week as it soared above 93 U.S. cents. Needless to say, the strength of the loonie makes Canada a much more expensive destination for U.S. travelers and makes U.S. business travel more affordable for Canadians. … Meanwhile, the dollar has made some gains--admittedly, miniscule ones--in Europe. The dollar is now at about $1.35 against the euro and $1.98 against the British pound, slightly better than its showing earlier this spring. … Shares of Northwest Airlines began trading again on the New York Exchange yesterday (May 31) as the carrier exited bankruptcy. The opening price was just under $25 a share.
What's New and Noteworthy on the Road in June
June is a big month for new international flights. Continental Airlines adds Athens-Newark flights (June 7). US Airways begins seasonal service from Philadelphia to both Brussels (June 1) and Zurich (June 8). Iberia launches Washington/Dulles Airport-Madrid flights (June 2). Northwest Airlines starts flights to Brussels and Dusseldorf from Detroit (June 15). Delta Air Lines launches Atlanta-Seoul (June 4). Air France begins flights from Seattle-Tacoma to Paris on June 11. And LAN Airlines begins nonstop service to Santiago, Chile, from both New York/Kennedy and Los Angeles (June 2). …Domestically, Delta will begin service this month from Atlanta to a host of new cities: Boise, Idaho; Bozeman and Kalispell, Montana; and Fort Smith, Arkansas. From Salt Lake City, there will be flights to Salem, Oregon, and Yakima, Washington. AirTran Airways starts service in Portland, Maine, with flights to Baltimore/Washington and Orlando (June 7). Midwest Airways starts flights from Milwaukee to Seattle-Tacoma on June 18. Southwest Airlines adds Fort Lauderdale-Providence, Rhode Island (June 4); Norfolk-Tampa (June 17); and Denver-Oakland (June 17). … The big winner in June: flyers in San Diego. This month, JetBlue Airways begins nonstops to Boston (June 28), AirTran adds nonstops to Orlando (June 29) and Southwest launches nonstops to Houston/Hobby (June 4).
Business-Travel News You Need to Know
Mesa, best known for its commuter flights for several Big Six carriers, is pulling the plug on 16 small cities. Among the cities being dumped: Visalia and Merced, California; Moab, Vernal and Ely, Nevada; and Cedar City, Utah. All the cities were served--usually quite badly--with Mesa's 19-seat turboprops. … TPG, the consortium that once owned pieces of America West and Continental airlines and recently bid on Qantas, has dropped out of the auction of Alitalia. The reason should come as no surprise to folks who know anything about Italian politics: The Italian government keeps changing the rules of the bidding and the terms of purchase. Now only two bidders--Aeroflot and Air One--are left with a chance to purchase the government's stake in the chronically ill Italian carrier. … Expedia now sells tickets for JetBlue Airways flights. … SAS settled a strike over the weekend and today (June 1) it eliminates the Braathens name from its Norwegian flights. The Norway service is now called SAS Norge. … In case you've missed the apocalyptic coverage in the general media: A traveler with a drug-resistant form of tuberculosis has been quarantined, the first time in 40 years that the federal government issued such an order. But the man flew twice in May and officials are looking for other passengers on Air France 385 on May 12 and Czech Air 0104 on May 24.
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.
THE FINE PRINT All of the opinions and material in this column are the sole property and responsibility of Joe Brancatelli. This material may not be reproduced in any form without his express written permission.
This column is Copyright © 2007 by Joe Brancatelli. JoeSentMe.com is Copyright © 2007 by Joe Brancatelli. All rights reserved.