A BRIEFING FOR JUNE 19 TO JULY 3, 2008
By Joe Brancatelli
· United and Continental Forge an Alliance
· Here Comes Another Bushel of New Hotels
· Delta Cuts in Orlando, Boston and Los Angeles
· TSA Security Screeners Now Dress Like Cops
· Why Is This Man Buying US Airways Stock?
· Avis Joins the Southwest Rapid Rewards Plan
· United Says Chicago Has No Meeting Space
United, Continental and the Star Alliance Forge a Deal
United Airlines found something of a white knight today (June 19) when Continental Airlines, which earlier this year had spurned a merger with the sickest of the Big Six, agreed to a wide-ranging alliance. Also included in the deal: Continental will leave the SkyTeam Alliance fronted by Delta, Northwest and Air France, and switch to the Star Alliance, which is fronted by Lufthansa, United and Air Canada. The Continental-United deal will include code-sharing, frequent flyer program and airport-club reciprocity and recognition of each carrier's elite frequent flyers. But don't panic: The new alliance could take at least a year to consummate because Continental is tied to Delta, Northwest and SkyTeam until nine months after the potential Delta-Northwest merger is consummated. Besides, the Transportation Department also must sign off on the Continental-United-Star Alliance tie-up. That doesn't mean some of the groundwork hasn't already been laid, however. For example, Continental's after-summer schedule includes massive cuts in flights to the hubs of both Delta and Northwest airlines. Also, two immediate questions of interest: What happens to US Airways' participation in the Star Alliance? And will Continental, which currently requires 75,000 miles of flying for the Platinum level of its OnePass program, eventually boost the threshold to 100,000 to match the requirement of 1K status, the top level of United Mileage Plus?
Here Comes Another Bushel of New Hotels
Hotel occupancy has slowed noticeably in recent months and you may even have noticed your nightly rate dropping a bit. Normally, that would mean putting the brakes on hotel expansion. But buildings take years to plan and build, so there is lots of inventory still in the pipeline. Here's what has opened in the last two weeks. Four Seasons has added a 117-room property in Florence. The hotel spans a pair of 15th and 16th-century buildings situated on 11 acres on the edge of the centro storico. Four Seasons has also opened its second hotel in Istanbul. This one is a 166-room property on the European banks of the Bosphorus. Aloft, the new brand from Starwood, has opened its second property. The 136-room property is in the HavenPark development in Rancho Cucamonga, California, close to Ontario Airport. Speaking of airport hotels in California, Hampton Inn has opened two of them. One is at Burbank Airport, the other is the second Hampton near the small airfield in Bakersfield. Hilton Garden Inn has also opened another airport hotel. This one, a 137-room property, is near Gulfport-Biloxi Airport in Mississippi. Staybridge Suites has opened a 132-suite hotel in Liverpool, England.
Delta Makes Huge Cuts in Orlando, Boston and Los Angeles
Delta Air Lines says it will cut its domestic capacity by another 13 percent later this year and slow its breakneck international expansion. The biggest casualties: Orlando, Boston and Los Angeles, where Delta has been trying for the umpteenth time to establish a hub. Flights to Orlando from more than a dozen cities will be dropped and a slew of recently launched service from Los Angeles will end, including nonstops to Boston; Hartford, Connecticut; and Columbus, Ohio. Boston cuts include the end of flights to Norfolk, Virginia; Charleston, South Carolina; Greensboro, North Carolina; and Jacksonville, Florida. Also chopped: Flights from New York/JFK to London/Gatwick and Bucharest, Romania. The airline never launched its previously announced JFK-Paris/Orly and Los Angeles-Washington/Dulles flights. Virgin America will cut about 10 percent of its flights in the fall, but the reductions will come via frequency reductions on existing routes. . AirTran Airways is cutting Newburgh, New York, off its route map. Mexicana says it will drop its flights from Portland, Oregon, on September 2. The carrier has been flying to Mexico City and Guadalajara. Air Canada is trimming its schedule by about 7 percent. Most notable cuts: Toronto-Rome and Vancouver-Osaka.
You Are What You Wear, So TSA Screeners Now Dress Like Cops
No, you're not seeing things and airport and city police departments have not beefed up their presence at the airport. All those new people with royal-blue shirts and metal badges? They're just Transportation Security Administration (TSA) screeners in their new uniforms, which were clearly designed to make you think they are law-enforcement personnel. The old TSA uniforms were white shirts with fabric shields. The TSA says the faux-cop look is meant to command more respect from travelers. Needless to say, real police officers are not pleased with the TSA's new look-alike attire. United Airlines has opened a new Red Carpet Club at Chicago/O'Hare Airport. The club is located at Gate B18, not far from the existing Red Carpet lounge. Speaking of O'Hare, the Federal Aviation Administration says that it will lift slot restrictions at the nation's most important airport effective November 1. Washington/Dulles has gotten another international route. Avianca has launched five weekly flights between IAD and Bogota, Colombia.
Why Is This Man Buying US Airways Stock?
Doug Parker, chief executive of US Airways, earlier this month purchased 197,000 shares of the airline's stock. He paid $551,000, the equivalent of a year's salary. Such a buy--US Airways closed at $3.54 today, June 19, after selling north of $60 in January, 2007--can only mean one of three things. Parker is a lousy investor. Parker is really confident in his management skills despite all of the public evidence to the contrary. Or, rather than give up his salary (something Continental's president and chief executive have done), Parker diverted it to a stock buy. This way he can claim to be on the side of the angels and sharing the pain as the airline piles up losses. If US Airways goes bankrupt and his investment is lost, he's no worse off than if he had given up his salary. And if US Airways does rebound and the stock soars, he makes a tidy profit. I leave it to you to decide which is the most likely scenario.
Business-Travel News You Need to Know
Avis Rent A Car has joined the Southwest Airlines Rapid Rewards plan. Emirates Airlines is due to begin flying the Airbus A380 in October between New York/Kennedy and Dubai and now there'll be a second U.S. route for the leviathan. Qantas says that it will fly the plane between Los Angeles and Melbourne beginning on October 20. The Qantas configuration will have 14 first-class beds, 72 business-class seats, 332 coach chairs and 32 seats in the airline's new Premium Economy cabin. Two groups want a federal court to reconsider its ruling that border agents can search the contents of laptops without reasonable suspicion of illegal activity. The 9th District Court in California ruled earlier this year that laptops are the functional equivalent of luggage and fair game for random searches.
Too Bad a Nice Town Like Chicago Has No Meeting Space
Chicago-based United Airlines held its annual meeting last Thursday (June 12). Where was it held? At a Marriott in Woodland Hills, California, about a half-million miles from anywhere. Was United management, led by chief executive Glenn Tilton, hiding after last year's meeting was disrupted by disgruntled employees? Oh, no, said United spokeswoman Jean Medina. When queried about the odd choice by Peter Pae of the Los Angeles Times, Medina explained that United could not find a place in Chicago.
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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