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A BRIEFING FOR LATE AUGUST, 2010
By Joe Brancatelli
· American Ramps Up Fees, Legacies Shrink Again
· LAN and TAM Merge, Create Latin American Giant
· Major Changes in Downtown Atlanta Hotel Market
· No Strike at British Airports This Summer After All · More Hotel Rooms for New York and Shanghai
· Delta Improves Its Policies on SkyMiles Upgrades
· AirTran Raises Its First Checked Bag Fee to $20
American Ramps Up the Fees, Legacies Shrink Again
Everyone and their uncle (and their nieces and nephews in the mainstream media) weighed in this week on American Airlines' decision to start selling seat assignments for "prime" coach seats. But the bottom line on the fees--American will charge $19-$39 each way--may be explained by the Your Choice chart on the American Web site. Amazingly, it is even more complicated, inexplicable and convoluted than the legacy carriers' fare structure. And it explains why legacy carriers now have their smallest share of the U.S. commercial aviation market ever. According to government figures, the five network airlines that can trace their lineage to pre-deregulation days commanded just 70 percent of the market in July. But Southwest Airlines is now within a rounding error of 10 percent of the market. And 10-year-old JetBlue Airways has grown to 3.67 percent. AirTran Airways is 2.67 percent of the market and Alaska is at 2.65 percent. Meanwhile, one note about American's so-called Express Seat program. They will initially be available only at the airline's airport kiosks because American's computer systems are so archaic that the carrier can't sell them through other distribution outlets. As with most other legacy carriers' seat-assignment charges, American's full-fare flyers and elite members of American AAdvantage are exempt.
Big Changes in Atlanta; More Rooms for New York and Shanghai
Atlanta's hotel market has a much different face after two downtown hotels were sold off to become college dormitories and a third changes flags. The Wyndham Garden Hotel and the Baymont Inn on Piedmont Street will close now that they have been sold to Georgia State University. And the 502-room Renaissance Hotel on West Peachtree Street has been saved from the scrap heap by a new deal that will turn the property into the first Sol Melia property in the United States. Based in Spain, Sol Melia is strong in Europe and Latin America, but has been unable to get a foothold in the U.S. market. … Meanwhile, New York gets another W Hotel. A 217-room property has opened at the corner of Washington and Albany Streets in the Wall Street area, which is increasingly residential. There are also two new luxury boutique hotels in Manhattan: the 166-room Cassa just off Fifth Avenue in Midtown and the 249-room Park Avenue South Gansevoort in the Murray Hill neighborhood. … There's another spurt of new properties in Shanghai, too. Most notable is the Fairmont Peace on the Bund. It is a restoration of the once-luxurious Peace Hotel that dominated pre-war lodging in the city. Also new: a branch of Accor's Grand Mercure brand at the Shanghai Railway Station and a 25-story Hotel Nikko in the Hongqiao Development Zone.
LAN and TAM Will Merge, Creating a Latin American Giant
Let's be honest, most of us usually pay attention to Latin American aviation only when a U.S. carrier adds or subtracts flights or a big name in Latin travel hits the skids. But attention must be paid to the prospective merger of LAN and TAM, two carriers that individually already outpace their other Latin competitors. LAN, which started in Chile, has passenger-airline subsidiaries in Argentina, Ecuador and Peru and is considered the best of the Latin carriers. TAM is one of Brazil's largest carriers. Together, LAN and TAM will serve 115 cities in 23 countries and they carry as many passengers as US Airways and the soon-to-be combined Iberia and British Airways. And as with BA and Iberia, the carriers will maintain separate identities, but be owned by a new holding company. The new holding company's name? You may have guessed it: Latam. … Delta Air Lines will drop nonstop flights between New York/LaGuardia and Nassau in the Bahamas. It's not a replacement, but Delta does intend to launch nonstops next June to Iceland from Kennedy Airport in New York. … Air Canada is the latest North American carrier to jump into the market for flights to Tokyo's Haneda Airport. Air Canada will launch daily nonstops from Vancouver on January 29. The Haneda service will be in addition to Air Canada's daily flight between Vancover and Tokyo/Narita.
No Strike at British Airports This Summer After All
BAA, the Spanish-owned company that operates London/Heathrow, London/Stansted and several other U.K. airports, won't be hit with a strike after all. BAA and its union have come to a wage and work rules agreement. … The observation deck in the iconic Theme Building at Los Angeles has reopened on weekends. The deck was closed after the 9/11 terrorist attacks. Apparently, LAX and other security officials have decided that terrorists don't work weekends. … Delta Air Lines and the agency that runs New York/Kennedy have filled in some of the blanks on Delta's move to an extension of Terminal 4. Construction of a new 9-gate facility will begin next month and is scheduled to be completed in May, 2013. At that time, Delta will move its international flights from Terminal 3 (Pan Am's old Worldport) and Terminal 3 will be demolished. Delta's domestic flights remain in Terminal 2, which will be connected to Terminal 4 by a "passenger connector." We assume that means a hallway, not an umbilical cord that physically lashes travelers together. Delta will pay about $75 million of the estimated $1.2 billion price tag. The rest of the funds will come from bond sales and the airport's $4.50 per segment passenger-facility fee.
Business-Travel News You Need to Know
AirTran Airways flyers take note: The airline has raised the fee it charges for the first checked bag to $20. The $5 bump takes effect on September 1. … Delta Air Lines says Medallion elite travelers now receive free upgrades on SkyMiles Award tickets. However, the upgrades will clear only after all Medallion upgrades on paid tickets have cleared. In another change, the airline says companion upgrades are now available for tickets purchased on L, U and T class fares. Those upgrades will clear only after all Medallion members are upgraded, however. … Several new lounges have been added to the Priority Pass program. Among the newcomers: the premium lounge in Terminal 3 at Delhi; Club S.E.A. in Terminal 2 at Milan/Malpensa; and the Escape Lounge in Terminal 1 at Manchester, England. … Starwood Hotels has joined the Southwest Airlines Rapid Rewards program. … The dollar hit a 15-year low against the yen this month. One U.S. dollar now commands only about 85 Japanese yen.
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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 © 2010 by Joe Brancatelli. JoeSentMe.com is Copyright © 2010 by Joe Brancatelli. All rights reserved.