THE BRIEFING FOR JANUARY 10-24, 2008
By Joe Brancatelli
· Big Six Merger Talk Makes a Comeback
· Airfares Rise Again, Even in Hawaii
· Gain Some, Lose More at the Smaller Airports
· The Skies Open, British Airways Dips Its Toe In
· Southwest Slashes Its Checked-Bag Allowance
· Watch Out for Possible Strike Action at Qantas
· Citibank Raises Its International ATM Fees
Last January's Big News--Big Six Mergers--Makes a Comeback
Here we go again. A perfect storm of negatives--plunging stock prices, $100-a-barrel oil, softening demand and a slowing economy--means that the Big Six are hot to merge. Again. Just like last January. And since we're going to be inundated with an endless stream of credulous media speculation, ill-informed talking-head expertise and idiotic security-analyst spin, let's restate with some clarity what we already know: None of these potential mergers are going to be done because they are good for passengers. None of the mergers that might make sense on the route maps--Delta-Northwest and United-US Airways come immediately to mind--necessarily make sense financially or organizationally. No matter who else gets hurt--flyers, employees, stockholders, cities--the Big Six bosses will get theirs and get it in obscene amounts. And the stated need for the mergers--industry consolidation to reduce capacity--has no basis in logic, history or marketing. So I suggest you let merger talk go in one metaphoric ear and out the other. Don't waste a second on anything you read or hear until a deal (or multiple deals) is actually announced.
Airfares Rise Again, Even in Hawaii
So what did United Airlines do after running a dreadful operation in December with more than a thousand cancellations? Raise fares, of course. The $10-$20 roundtrip price bump was immediately matched by the other Big Six carriers wherever they compete. … Fares are even rising in the Hawaii inter-island market, which has enjoyed $39 one-way fares for more than 18 months. Go!, which started the fare war when it launched in June, 2006, raised its basic one-way fare to $49 last week. Aloha and Hawaiian airlines, the incumbent carriers, immediately matched the increase. … Citibank is putting the screws to international customers again. Beginning January 26, it will charge 1 or 2 percent for international ATM withdrawals even if you're a Citibank accountholder using a Citibank ATM machine.
Win Some, Lose More at the Nation's Smaller Airports
Commuter carrier Big Sky is shutting down. It has already closed its Delta Connection operations based at Boston/Logan. That means flights to cities such as Watertown and Albany, New York, and Trenton, New Jersey, have disappeared. Big Sky has also dumped its Midwest operations, dropping service in cities such as Cape Girardeau, Missouri, Owensboro, Kentucky, and Jackson, Tennessee. The airline also hopes to sell its remaining operations, which serve 15 airports in Montana. If not, however, the airline will close its doors in March. … Skybus, the unbundled-price airline, is adding more service to smaller airports. It will launch flights from its Columbus headquarters to Wilmington, Delaware on March 7 and Niagara Falls on April 1. On March 13, it adds flights from Greensboro, North Carolina, to both Gary, Indiana, and Wilmington. … SkyTeam Alliance carriers are moving to Terminal 2 in Mexico City later this month.
The Skies Open and British Airways Dips Its Toe In
When the so-called "open skies" regimen between the United States and the European Community begins on March 28, the four Big Six carriers not flying to London/Heathrow Airport will immediately launch service there. British Airways will retaliate by launching an entirely new carrier called, appropriately enough, Open Skies. It will fly nonstop from the United States to continental European destinations. But BA's rollout will be much more cautious than originally envisioned. As BA explained this week, Open Skies won't launch until June and will start with just one plane and one route: New York to Paris or New York to Brussels. Although Open Skies has yet to choose Newark or New York/Kennedy as its home base, it has settled on an in-flight configuration. The Open Skies Boeing 757 will have 82 seats: 24 fully flat, 6-foot-long beds, which have been lifted from BA's first-generation Club World business class; 28 premium economy chairs that will offer an extraordinarily generous 52 inches of legroom; and 30 seats in a depressingly familiar coach cabin, complete with middle seats. Most of the other details about Open Skies, including prices, are still unknown, but will be slowly revealed at the airline's Web site: FlyOpenSkies.com.
Business-Travel News You Need to Know
Southwest Airlines is slashing its free checked-bag allowance. Effective January 29, it is adopting the two-bag, 50-pound limit of the Big Six. A third bag, which is currently free, will cost $25. … AlpiEagles, a commuter carrier flying primarily in Northern Italy, has shut down. … Qantas flyers take note: A contract dispute between management and the airline's engineers could lead to job actions and flight cancellations. The first strikes were due this week, but have been delayed until at least February 1.
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 © 2008 by Joe Brancatelli. JoeSentMe.com is Copyright © 2008 by Joe Brancatelli. All rights reserved.