A BRIEFING FOR JUNE 11 TO JUNE 25, 2009
By Joe Brancatelli
· Here Come the Cuts in International Service
· Mother of Mercy, Is This the End of Midwest?
· More and More and More and More Hotels Open
· US Airways Is Giving Something Away. Seriously.
· Shoe Bomber Richard Reed Is on a Hunger Strike
· Barcelona's New Terminal Opens Next Week
· Maybe the 'W' in W Hotels Means 'Walk Away'…
Here Come the Cuts in International Service
The unprecedented decline in traffic on international flights, especially in the premium classes, has yet to have a major impact on schedules. But big cuts are inevitable and the first tranche of international reductions is leaking out. After previously announcing a 10 percent cut, most of which would be frequency reductions, Delta Air Lines said this week that it would trim 5 percent more than originally planned. And the larger cuts mean routes will disappear entirely. What'll get the chop? Two international routes, to London/Gatwick and Frankfurt, from Delta's shrinking Cincinnati hub. Nonstops to Seoul and Shanghai from Atlanta, Delta's largest hub. And nonstops to Edinburgh from Delta's international nexus at New York/Kennedy Airport. British Airways will also be in a slashing mode. While it has reaffirmed its intention to launch daily, 32-seat, all-business-class flights from Kennedy to London's City Airport near Canary Wharf in the fall, BA will reduce overall New York-London capacity by trimming other services. Gone in October will be the daily nonstop between Kennedy and London/Gatwick, a route that BA launched last October. Also going will be at least one of BA's seven daily Kennedy-London/Heathrow flights.
Mother of Mercy, Is This the End of Midwest Airlines?
The long and tortured decline of Milwaukee-based Midwest Airlines (fka Midwest Express) took another strange twist this week. After essentially destroying its once-admired in-flight service, slashing its route network, beating off a proposed merger with AirTran Airways by becoming a vassal of Northwest Airlines and then turning itself into a mostly regional-jet carrier, Midwest traded more of its freedom for loans to keep flying. In exchange for $6 million in debt financing from Republic Airlines, Midwest is booting Skywest as one of its commuter carriers and turning all of the flying over to Republic. After the switch out, Republic will fly more than two dozen regional jets on Midwest routes and Midwest itself will be down to a fleet of just nine Boeing 717s. And there is continued speculation that Midwest will shed even those remaining jets. That would leave Midwest as a virtual scheduled airline, a marketing shell that sells commuter and code-shared flights operated by other carriers.
More and More and More and More Hotels Open
During the same week that the owner of the W San Diego hotel abandoned the property and the St. Regis Monarch Beach was headed for a foreclosure (see below), the rest of the lodging industry was indulging in an orgy of new openings and reflaggings. Get out your scorecard because this is a long list. Where the paying guests will come from is anyone's guess. … A 113-room Holiday Inn Express opened in Nashville. … A Doubletree hotel, called The Wit, opened in Chicago just a half-block from the Chicago River. … Crowne Plaza has converted a 270-room former Sheraton in Newton, Massachusetts. … A 132-room Hilton Garden Inn opened in Arlington, Texas. Not far away, in Colony, a 104-room Fairfield Inn and a 104-room Residence Inn have opened. All three properties are operated by the same hotel-development company. … Up the pricing ladder, the world's first Hotel Missoni opened in Edinburgh, Scotland. The 136-room property has been designed by the fashion house as the prototype of a luxury brand for Rezidor, the company best-known for running Radisson hotels overseas. … And after a $100 million renovation, The Pierre Hotel on Central Park has reopened in New York. The 189-room icon is now operated by Taj Hotels of India.
US Airways Is Giving Something Away. Seriously.
US Airways has been leading the charge in charging travelers for items that once were part of the basic ticket price. But now it's giving something away in its 18 US Airways Clubs. Effective immediately, 11 of the airport lounges offer free WiFi. The others will offer the free Internet access by the summer. … Columbus is the latest airport where Delta and Northwest airlines have combined operations. All Northwest flights and check-in operations are now located with Delta on Concourse B. … There's a new bmi lounge at Terminal 1 of London/Heathrow airport. The bmi club is open to elite travelers and business-class customers of bmi and Star Alliance customers traveling to bmi international destinations. … Regus, which operates what's left of the old Laptop Lane chain under the Regus Business Center Express brand, has opened a second location at Seattle-Tacoma airport. The new business center is located on Concourse C. … The new Terminal 1 at Barcelona will open on June 16. It will be used by Spanair and other Star Alliance carriers.
Business-Travel News You Need to Know
Northwest Airlines has aligned its international coach drinks policy with its merger master, Delta Air Lines. Beer and wine will now be free in the back of the bus on international flights. … China Eastern Airlines, which flies from Los Angeles and New York to Shanghai, has gobbled up Shanghai Airlines, a mostly domestic carrier. … Remember shoe bomber Richard Reed, who tried to ignite his explosive-laden shoes on an American Airlines flight? Now incarcerated in a Supermax prison near Denver, he's been on a hunger strike since March to protest the government's decision to bar him from group prayer. The government has now relented after explaining to a court that Reid was barred from group prayer because the Islamic prayer group in the Supermax prison includes Ramzi Yousef, one of the terrorists convicted in the 1993 World Trade Center bombing.
Maybe the 'W' in W Hotels Stands for 'Walk Away'…
The owner of the W Hotel in San Diego is taking the extraordinary step of walking away from the property. Sunstone Hotel Investors has forfeited the 258-room property to lenders after it failed to reach a compromise on a $65 million securitized mortgage. Sunstone bought the hotel for $96 million in 2006, but it isn't generating enough revenue to cover the monthly mortgage payment. And not too far up the Southern California coast, the now-notorious St. Regis Monarch Beach is facing a foreclosure auction. The companies that own the 8-year-old resort are in default of a $70 million loan and the 400-room property is due to go on the block next month. Any buyer would also get the resort's golf course, but would be on the hook for $230 million in mortgages. In case you've forgotten, the St. Regis Monarch Beach is the hotel where AIG, fresh from an $85 billion taxpayer-funded bailout last fall, spent more than $440,000 for an incentive trip.
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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