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THE BRIEFING FOR DECEMBER 8-22, 2011
By Joe Brancatelli
· How Fast Can American Jump Into BA's Arms?
· JetBlue Adds a Boston-Dallas/Fort Worth Route
· Just in Time: Chains Add Warm-Weather Resorts · Philadelphia Pays Big as Southwest Downsizes
· Hilton Forced to Discount New 'Premium' Awards
· American Code-Shares on OpenSkies' Paris Route
· Going to Mexico? So Are Southwest and AirTran
How Fast Can American Jump Into the Arms of BA and Iberia?
If past is precedent--and it always is with airlines--American Airlines will never be the same after last week's Chapter 11 filing. In fact, no U.S. airline that's gone bankrupt since 9/11 has survived without a merger. Witness Northwest and Delta, the oft-bankrupt US Airways and America West, United and Continental and even Frontier and Midwest. But don't listen to the talking-head "experts" pitching an American combination with US Airways, Alaska Airlines or even JetBlue Airways. Not only are all of those potential suitors problematic, but Texas-based American Airlines has already told us who its financial white knight will be: the International Airlines Group, the company created last year to facilitate the merger of British Airways and Iberia. In an interview with The Times of London during the summer, then AA president Tom Horton talked up the existing AA-BA-Iberia alliance as "effectively a synthetic merger." Now American's chief executive, Horton also said "this alliance could form the basis of a cross-border merger." There is just one fly in the merger ointment, of course. U.S. law currently restricts foreign companies to a maximum 25 percent ownership stake in U.S. flag carriers. But have no fear, explained Horton. He said he expected the laws to change "in my working lifetime." Who wants to bet that Horton, now 50, accelerates the process by leaning on Texas' already-compliant Congressional delegation to start the ball rolling as early as next year?
Is JetBlue's New Route a Poke in American's Corporate Eye?
JetBlue Airways announced a new route this week and it's hard not to view it as a sharp poke in the newly humbled corporate eye of American Airlines. On May 1, JetBlue will fly three times a day from Boston to Dallas/Fort Worth. DFW is American's hometown and primary hub, of course, and American was the major carrier in Logan until JetBlue arrived. Of course, there could be other things at play here, too. JetBlue and American have a loose alliance these days and the JetBlue announcement could signal a further American pullback in Beantown. Watch this one closely before launch date, folks. ... Southwest Airlines is going to Mexico. Sort of. Southwest's AirTran Airways subsidiary has announced four new routes starting next spring: San Antonio-Cancun and San Antonio-Mexico City starting on May 24 and John Wayne/Orange County-Cabo San Lucas and Orange County-Mexico City beginning on June 3. Another wrinkle: Since AirTran doesn't serve Orange County now, the airline will also launch daily connecting flights to San Francisco and Las Vegas on June 3. ... Virgin America is still screwed up due to a switch to new reservation computers in recent weeks. Travelers are having all sorts of trouble--making or changing reservations, choosing seats, printing out boarding passes--and all Virgin offers is a constantly changing pseudo-apology on its Web Site. Book with appropriate fear and caution.
It's Getting Cold, So Bring on the New Warm-Weather Resorts
As the weather gets nasty in much of the country, the major hotel chains are ramping up the openings of warm-weather properties. Hyatt, for example, has opened the first tower of its new Hyatt Place hotel in Waikiki. It has 191 rooms. A second tower, with 235 additional accommodations, is slated to open in the spring. Meanwhile, the Frenchman's Reef Marriott has reopened on St. Thomas in the Virgin Islands after a six-month, $48 million renovation. Marriott has also opened a 128-room Fairfield Inn in Cabo San Lucas. Starwood has opened a 172-room Westin in Abu Dhabi. It's located along the fairways of the Abu Dhabi Golf Course. Starwood has also opened a 296-room Aloft in Bangkok. The hotel is in the Sukhumvit 11 entertainment district.
Philadelphia Feels the Pain as Southwest Downsizes
Philadelphia flyers are already feeling the pain as Southwest Airlines drops several routes in the next few months and leaves US Airways as the only carrier. The big kahuna? Skyrocketing fares on the key inter-Pennsylvania route, Philadelphia-Pittsburgh. Fares are currently around $200 roundtrip with minimal advance purchase, but will hit the $700 range in mid-January when only US Airways is left standing. Prices are set to more than double on the Philadelphia-Boston route when Southwest departs in February. It's even worse on routes to destinations such as Manchester, New Hampshire, and Providence, Rhode Island. When Southwest departs, current fares of around $120 roundtrip will jump into the $700 range, too. ... The rating agency Fitch has downgraded the bonds issued by three big airports: Dallas-Fort Worth, Miami and Chicago/O'Hare. You should recognize the thread: All are hubs for the now-bankrupt American Airlines. ... Advantage Rent a Car, a division of Hertz, has opened at eight new airports in Europe: Amsterdam; Bergamo, Italy; Brussels; London/Luton; Hamburg, Germany; and Grenoble, Lyon and Paris/Orly in France.
A Humbled (If Silent) Hilton Discounts 'Premium' Awards by 30 Percent
The secret devaluation of Hilton HHonors has come back to bite the hotel chain on its corporate butt. It's now been forced to discount its new "perks"--premium-room and "points and cash" awards--by 30 percent. It's probably the closest thing to an apology as you're going to get from Hilton, which has yet to admit its devaluation wasn't a "computer glitch" or give a full explanation of its award changes. You can see the details of the discount, valid through the end of June, here. To add insult to devaluation, however, you have to register for the points rebate. ... Diamond and Platinum members of Delta SkyMiles running late for a connection in Atlanta may get a ride to their aircraft in a Porsche SUV. The German carmaker is moving its American headquarters to a location near Atlanta Hartsfield and has made some vehicles available to Delta on a short-term basis.
Business-Travel News You Need to Know
American Airlines is now putting its code on the Newark-Paris/Orly flights operated by OpenSkies, the all-business-class boutique carrier owned by British Airways. OpenSkies' BizSeat class is coded W in the American systems. ... FAA Administrator Randy Babbitt resigned this week after being charged with drunk driving in Virginia last weekend. Before being appointed FAA Administrator, Babbitt was a pilot for almost three decades. Trust me, just don't think about it. ... You'll find the Airbus A380 on at least two more U.S. routes next year. Air France will launch twice-daily Paris/CDG-Los Angeles flights on May 28. And Lufthansa will begin daily Frankfurt-Houston/Intercontinental flights with A380s on August 1.
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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.