THE BRIEFING FOR JUNE 14-JUNE 28, 2007
By Joe Brancatelli
· Start Planning for That AirTran-Midwest Merger
· Flags Change at Major Hotels Around the World
· U.S. Carriers Shuffle the International Deck
· The Seats Are Closing in at Frontier Airlines
· Omni Hotels Begins Online Advance Check-In
· Fares Drop to $1 Each Way on Hawaii Routes
· London Goes Smoke-Free Beginning on July 1
Better Start Planning for That AirTran-Midwest Merger
Midwest Airlines' shareholders talked with their ballots today (June 14) and they overwhelmingly screamed for a merger with AirTran Airways, which is offering about $370 million for the Milwaukee-based carrier. A slate of three directors nominated by AirTran won about 65 percent of the votes of existing Midwest shareholders. The AirTran nominees replace three sitting directors who opposed a merger with the Atlanta-based carrier. After months of opposition, this is the third big setback for Midwest Airlines management this week. AirTran said about 60 percent of Midwest stockholders had tendered their outstanding shares for the buyout. And Midwest management admitted that its current profitability plan is falling short of its goals. The company even withdrew its earnings guidance for the year. If Midwest management continues to resist a merger, however, they do have some options, unpalatable as they may be. For instance, a "poison pill" clause allows it to flood the market with new shares. And Wisconsin law allows a majority of the board of directors to block a merger regardless of shareholder sentiment. With today's development, AirTran controls three of the nine slots on the Midwest board.
The Flags Keep Shifting on Major Hotels Around the World
The high-stakes game of hotel branding continues and hotel owners around the globe are replacing the flags they fly over their buildings. In London, for example, the owner of what had been the Conrad hotel changed management and now the property is known as the Wyndham London-Chelsea Harbour. And in Hawaii, Waikiki's 107-year-old Moana Hotel has shifted brands within the Starwood family. After decades as the Sheraton Moana Surfrider--Sheraton merged the Moana with the neighboring Surfrider Hotel years ago--the stately building in the heart of Waikiki is now flying the Westin flag. Omni Hotels says it now permits online check-in up to 48 hours before travelers arrive at the hotel. Marriott Hotels says that it will develop a line of "boutique" properties with the assistance of Ian Schrager, the former Studio 54 impresario and the current purveyor of trendy hotels.
U.S. Carriers Shuffle the International Deck
United Airlines says that it will resume its nonstop Los Angeles-Hong Kong service in October and add Washington/Dulles-Rio De Janiero flights, too. But since United doesn't have the available cash to buy or lease planes, it will have to shuffle its deck to make the flights happen. To free up equipment for the new routes, United will reduce frequencies on its routes to Hong Kong from San Francisco and Chicago. American Airlines dumps its Dallas/Fort Worth-Buenos Aires flights on October 26. Northwest Airlines resumes flights on the Osaka, Japan-Saipan, Northern Marianas, route on December 21. Continental Airlines is moving up the start date for its Newark-Mumbai service by a month. Flights now begin on October 1. Delta Air Lines adds regional-jet flights between Los Angeles and Leon, Mexico, on July 10.
A Yen for the Dollar in Japan, But in Europe
The U.S. dollar continues to be anemic against the euro and the British pound, but business travelers headed to Japan have reason to cheer. The greenback this week hit its highest point against the yen in almost five years. One U.S. dollar now commands ¥123. In Europe, however, it continues to be hard slogging. A euro costs US$1.33 and a British pound commands US$1.97. The dollar was trading at about 1.25 Swiss francs. The year-old, three-way Hawaii fare war reached new heights--or lows--over the weekend. The start-up airline go! lowered some fares to $1 each way. That price briefly crashed the carrier's Web site as travelers rushed to pick up the bargains. The incumbent inter-island carriers, Hawaiian and Aloha airlines, did not match the short-term promotion. When taxes and fees were added, the $1 fare cost about $7.
The Seats Are Closing in at Frontier Airlines
Frontier Airlines, the all-coach carrier based in Denver, won't offer quite as roomy a ride in the months to come. Frontier is installing all-leather seats in its fleet of Airbus A318s and A319s, but it will also be wedging in an extra row of chairs. That will effectively reduce legroom to 32 inches in the front of the planes and an industry-standard 31 inches in some rows at the back of the aircraft. Most seats on Frontier's A318s and A319s currently offer 33 inches of legroom. Both Southwest Airlines and JetBlue Airways this week said that the rising cost of fuel may force them to slow their route expansions. They're not alone. Continental Airlines said this week that it was delaying delivery of some new aircraft.
Business-Travel News You Need to Know
Cape Cod-bound flyers take note: Maintenance issues this week grounded the fleets of sister carriers Cape Air and Nantucket Airlines. Service is slowly returning to normal, but if you're not already holding a ticket, you'll probably not get out this weekend. A 57-room Microtel Inn has opened at Indianapolis Airport. London goes smoke-free on July 1. Virtually all enclosed work and public spaces will bar smoking and that includes restaurants, cocktail bars and pubs. Overwhelmed by the number of first-time passport applicants, the Bush Administration has temporarily suspended its rule requiring passports to travel to and from Canada, Mexico, the Caribbean and Bermuda. Travelers who can prove that they have applied for a passport will be allowed to travel without one until September.
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.