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THE BRIEFING FOR JULY 26 - AUG. 9, 2012
By Joe Brancatelli
· American Will Keep First Class on Transcons
· Another Big Shake-Up on International Routes
· TSA Expands PreCheck to Two More Hubs
· JetBlue and Virgin America Add Elite Levels
· United Says It Knows How to Fix Its Problems
· National's One-Two-Free Returns on August 22
· Enterprise Brings 'Exotic' Car Collection to LAX
American Will Go Narrowbody, But Retain First, on Transcon Flights
American Airlines will revamp its service next year in the Transcontinental Triangle of New York/JFK, Los Angeles and San Francisco. As its major competitors already have, American will pull its widebody aircraft and switch to narrowbody planes. The new aircraft, specially configured Airbus A321s scheduled to start arriving in November, 2013, will have a surprise: 10 lie-flat first-class seats configured 1x1. American's competitors have all dumped first class on the transcon routes, but American vice president of marketing Rob Friedman insists that there's a demand for an F cabin from the entertainment and banking sectors. Besides the 10 seats in first, American's A321s will have 20 lie-flat business-class seats configured 2x2, 36 Main Cabin Extra chairs and 36 seats in traditional coach. The 102-seat capacity of the A321s is drastically below the 168 chairs on the aging Boeing 767s that American currently uses. Friedman refused to discuss AA's capacity plans for the transcon, however, and wouldn't discuss future frequencies in the JFK-LAX and JFK-SFO markets. But AA's switch sounds eerily similar to the capacity-cutting move United Airlines made in 2004, when it slashed 35 percent of its transcon seats by dumping Boeing 767s for 110-seat Boeing 757s. And while you can question AA's choice to hold on to first class, you can't argue with its decision to ape United: According to an analysis by PlaneStats.com, United currently generates 21.64 cents per seat mile on transcon routes compared to American's 13.72 cents.
Get Ready for Another Shake-Up on International Routes
Another drastic overhaul of international route networks is headed our way. Delta Air Lines, for example, continues to slash its Europe winter flying plans after years of furious expansion. Besides a raft of other previously announced reductions from its New York/JFK hub, Delta is dumping its Altanta-Barcelona and Atlanta-Milan routes on October 25. The now-seasonal flights will resume late in March. ... United Airlines has begun downsizing at its Houston/Intercontinental hub and the first casualties are two routes to Mexico (Toluca and Tuxtla/Gutierrez) in September. But United will also drop flights between IAH and Paris/CDG on October 8. In their place, United is relaunching two routes from its San Francisco hub that have already failed multiple times in the last decade. Flights to Paris/CDG begin again on April 11. Service to Taipei resumes on April 9. United will also add daily Boeing 737-800 flights between its Washington/Dulles hub and San Salvador, El Salvador, on December 19. ... Turkish Airlines, United's Star Alliance partner, is more bullish on Houston, however. It will launch four weekly flights to Istanbul on April 1 using three-class Boeing 777s. ... Speaking of Star Alliance carriers, SAS Scandinavian has announced flights from San Francisco to Copenhagen for the third time in the last decade. Economic downturns led SAS to cancel the SFO-CPH route in 2002 and 2008 before flights ever began. The latest attempt is due to operate six times a week starting April 8. ... American Airlines says it will begin four weekly flights between its Miami hub and Asuncion, Paraguay, on November 15.
TSA Expands PreCheck to Two More Hub Locations
Good news for United Airlines flyers--but not from United, which never has much good news for customers. The Transportation Security Administration says that it has opened two new PreCheck locations: Terminal C South in Houston/Intercontinental and Terminal 7 at Los Angeles. Both are primarily used by United Airlines flyers. ... Avis Car Rental says that it has opened its first locations in Taiwan. Besides Taipei airport, Avis has added branches in the cities of Chupei and downtown Hsinchu. ... Speaking of car rentals, Enterprise has opened a branch of its Exotic Car Collection at LAX. The operation rents vehicles such as Bentleys, Jaguars, Aston Martins and Maseratis. You know, basic econoboxes...
JetBlue, Virgin America Add Elite Levels to Their Frequency Plans
As JetBlue Airways and Virgin America court frequent flyers and corporations disgruntled with the service offered on the legacy airlines, they're working to make their frequent flyer programs more appealing. Both introduced their first elite levels this week. At JetBlue, the so-called Mosaic level of True Blue will launch in the fall. It targets travelers who accumulate 15,000 base flight points a year. You also qualify if you fly 30 segments and 12,000 base points. The benefits of Mosaic include: free second checked bag; expedited security at 36 airports; early boarding; the ability to use TrueBlue points to purchase seats with extra legroom; a 24/7 customer-service line and nine points per dollar spent when you book at JetBlue.com. Full details are here. At Virgin America, Elevate will now have gold and silver elite levels. The silver level will require 20,000 status points per year and the gold level will require 50,000 points. Benefits include extra points per dollar spent; priority check-in; free upgrades to Main Cabin Select as much as 24 hours before departure; up to three free checked bags; and waiver of some service fees. More information is here. ... Hilton HHonors and Citibank introduced a new credit card this week and, in essence, a $95 annual fee gets you HHonors Gold Level for as long as you keep the card. More details and a strategy for using the HHonors card to get elite status at other hotel chains are on today's Steals & Deals page.
United Says It Lied to You Yesterday, But Is Telling the Truth Today
Airline second-quarter earnings were released this week and they were nifty: Bankrupt American Airlines managed an operating profit, US Airways had a record quarter, JetBlue earnings doubled and Southwest had a huge run-up in profit. United Airlines? Not so much. Its profit fell nearly 40 percent from last year's second quarter and it missed analyst estimates so badly that United shares fell nearly 6 percent today (July 26) after the figures were released. Worse, United said revenue from corporate accounts, which are locked into contracts, rose 16 percent and that its "buy up" program--selling Economy Plus seats and cheap premium-class upgrades to average flyers instead of giving them to elite customers--was doing fine. That means revenue from the "uncontrolled" business traveler--those of us who can book away when an airline deteriorates--must be plunging. Worst of all, United chief executive Jeff Smisek says he has a handle on the airline's problems, which mostly began after the switch to a single computer system in March. "We know what we did to get us into the operational problems we've had, and we know how to get back out of it," he said. Of course, it wasn't long ago that Smisek insisted that things were going just great. So you'll have to decide whether Smisek was lying to you yesterday or lying to you today. But you should know that United's operations in the first 25 days of the third quarter have been just as bad or worse as they've been since March. United in July is canceling flights at nearly three times the rate of Delta, its nearest competitor, and is delaying twice as many flights. Oh, and just for yucks, United led a $4-$10 domestic roundtrip fare increase this week.
Business-Travel News You Need to Know
National Car Rental fans take note: The next edition of One-Two-Free, the popular promotion that offers a free rental day after every two rentals, begins on August 22. As with last year's promotion, it will run through January 31. Look for a registration page in the next few weeks. ... A federal appeals court rejected the airline industry's attempt to stop a Department of Transportation regulation that requires all carriers to advertise the full fare including taxes and fees. The airlines claimed the regulation trampled on their free speech rights. The 2-1 appeals court decision rejected the argument, however. "The [rule] doesn't prohibit airlines from saying anything; it just requires them to disclose the total price and to make it the most prominent figure" in ads. ... A long, ugly battle between Hyatt Hotels and the Unite Here hotel-worker's union has blossomed into a national boycott. Expect to see pickets at dozens of Hyatt properties in major cities.
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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 © 2012 by Joe Brancatelli. JoeSentMe.com is Copyright © 2012 by Joe Brancatelli. All rights reserved.