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THE BRIEFING FOR MAY 26 - JUNE 9, 2011
By Joe Brancatelli
· Delta, US Air Try Again on the LGA-DCA Swap
· Spirit Airlines Limps Onto the NASDAQ Market · Would You Stay at a Chain Called 'Public Hotel'?
· Alaska Air Extends Its Club Hours in Four Cities
· JetBlue Will Fly to Anchorage From Long Beach
· Continental Dumps Double Miles on Shopping
· National Car Opens Emerald Aisle in Jacksonville
If at First You Don't Succeed, Get More Arrogant
Airline executives are notoriously thick-headed and convinced that they are masters of the skies who cannot be crossed. That's the only way to explain why Delta Air Lines and US Airways are once again trying to swap assets at New York/LaGuardia and Washington/National airports. And swap those gates and slots in a way that's even more offensive than the deal the Department of Transportation nixed last year. As you probably don't recall, back in the summer of 2009, Delta was going to give US Airways 42 pairs of slots at National and the rights to fly to Tokyo and Sao Paulo in exchange for 125 pairs of slots at LaGuardia. In February, 2010, the Department of Transportation said it would approve the deal only if Delta and US Airways sold 34 pairs of those slots to other carriers. Delta and US Airways got petulant and variously threatened to scrub the deal or sue the government. They eventually sued, but that suit was withdrawn this week when the airlines announced a new deal: Delta would get 132 LaGuardia slot pairs from US Airways in exchange for 42 Washington slots, the Sao Paulo rights and $66.5 million in cash. They offered to divest just 24 slot pairs. In other words, Delta and US Airways want more than the original trade and offered the government less divestiture than it demanded. It'll be interesting to see how the DOT reacts.
Speaking of Arrogant Airline Executives…
The icky guys who run the miserable Spirit Airlines--Bill Franke, who almost destroyed America West, and Ben Baldanza, one of the many who've tried to destroy US Airways--had this great idea: Take Spirit public. Their initial plan called for a float of 20 million shares for a price between $14 and $16, which would have raised as much as $320 million. But by the time the initial public offering went out this week, the tepid market reaction forced Spirit to pare the float to 15.6 million shares and reduce the price to $12. On its first day of trading as a public company on NASDAQ today (May 26), Spirit promptly dropped as low as $11.11 before closing at $11.55. So the only question left: Who were those investors who kicked in $187 million to buy those 15.6 million shares? With oil selling at $100 a barrel. For an airline whose last public disclosure of financial results (the first six months of 2010) showed a loss of $2.8 million. For a carrier that is constantly fined by the Transportation Department and is hated by almost everyone who mistakenly flies it.
I Guess It's Just the Week for These Kinds of Folks…
The last time we heard from Ian Schrager, he'd left his Morgans Hotel Group with flashy, but money-losing, properties, got pushed out of an independent venture renovating New York's Gramercy Park hotel and was in a floundering partnership with Marriott. (Originally announced in 2007, Schrager and Marriott claimed they'd open 100 Edition hotels in 10 years. To date, just two have opened and one of those sued this week to sever its ties with Edition.) So what's Schrager up to now? He's dissing the boutique hotels he made famous ("people are sick of" them, he says) to create a chain called Public. No, not the Publix supermarket chain. A chain of hotels called Public. As in Public Hotels. The first is due to open in Chicago in October. It's a renovation of the hotel that is currently called the Ambassador East. If you can get past the blizzard of meaningless adjectives that Schrager uses to describe the Public Hotels concept, you will learn that the Ambassador East's Pump Room restaurant will be run by another buzz-addicted guy, Jean-Georges Vongerichten. Schrager's leave-behind quote about Public: "What I did before was based on exclusivity, and this is inclusive. This is for everyone that wants it." Yikes…
Alaska Airlines Extends Hours of Board Room Clubs
Alaska Airlines has cannily avoided getting gobbled up by a bigger carrier or being forced into an airline alliances. Maybe its ability to stay independent is due to small details like this: the airline has extended the operating hours of Board Room club lounges in San Francisco; Anchorage; Portland, Oregon; and its Seattle hub. The Seattle club will now open from 5 a.m. to 10:30 p.m. daily. … National Car Rental now offers Emerald Aisle service at the airport in Jacksonville, Florida. … A Muslim prayer room has opened in Terminal 1 at Munich. … JetBlue Airways launches nonstop flights between Long Beach and Anchorage on June 8. It will use Airbus A320s on the seasonal route.
Business-Travel News You Need to Know
Continental Airlines ends the "twice the miles" shopping scheme in the OnePass program on July 19. … Air Canada won't be launching a low-fare carrier after all. The airline's pilots voted against a new contract that would have paved the way for a sub-carrier to compete with WestJet. … The former Vagabond Inn and Fairfield Inn in Rancho Cordoba, California, has converted to the Red Lion brand. … Lufthansa is giving up on its Lufthansa Italia operation that flew Airbus A319s between some major Italian cities. The three-year-old service ends on October 29.
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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 © 2011 by Joe Brancatelli. JoeSentMe.com is Copyright © 2011 by Joe Brancatelli. All rights reserved.