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THE BRIEFING FOR AUGUST 16 TO 30, 2012
By Joe Brancatelli
· Rare Win for Labor in the American Bankruptcy
· New Hotels Near, Far and on the Football Pitch
· Qatar Flies to Chicago, American Bolts on Brussels
· Branson's Virgin Trains Booted Off British Routes
· Hilton HHonors Loses Its Only Central Paris Hotel
· Watch for Fares to Rise as Oil Hits $95 a Barrel
· Is Smisek Too Arrogant to Know United's Sinking?
A Rare (Tiny, Temporary) Win for Labor in the American Bankruptcy
Bankruptcy Judge Sean Lane dealt American Airlines management a small--and probably temporary--blow this week when he refused to allow the carrier to abrogate the contract of its unhappy pilots. He decided that American overreached when it asked for essentially unlimited rights to code-share with other airlines and to furlough pilots. But he also gave American until tomorrow (August 17) to amend its application. The pilots union, which earlier this month overwhelmingly voted against American's supposedly "last, best" concessionary contract, called Lane's decision "a rare Chapter 11 victory for labor." But American's flight attendants, who conclude voting on their concessionary contract offer tomorrow, were more realistic. Overall, they said, the Lane decision was a "blistering indictment of labor unions." What's it mean? American's revised abrogation request, carefully tailored to Lane's objections, will be granted. Flight attendants will probably vote against their contract, too, and then Lane will allow American to abrogate their existing agreement. Biggest loser of all? US Airways, desperate to fast track any potential merger. US Airways stock slid below $10 a share today (August 16), a 30 percent drop since July 17, when US Airways chief executive shot his mouth off in a Washington speech. The end game? IAG, the parent company of British Airways and Iberia, buys into a reconstituted American. That's been the agenda all along, of course.
New Hotels Near, Far and on the Football Pitch
Haul out the hotel scorecard because the major hotel chains have opened or reflagged properties near and far and even on the soccer field. ... At home, a 134-room Hyatt Place has opened in Delray Beach, Florida, and a 100-room Residence Inn has opened in Coralville, about 20 miles from Eastern Iowa Airport (CID) in Cedar Rapids. And InterContinental opened the first of its restyled Candlewood Suites in North Little Rock, Arkansas. The property includes a so-called Lending Locker, which offers loans of small appliances, task lighting and desk fans. ... Two notable conversions: Hilton has turned the Embassy Suites near Temple Square in Salt Lake City into a DoubleTree. And the former Marriott in Rocky Hill, Connecticut, has been turned into the 251-room Sheraton Hartford South. ... Overseas, the big news is a dual-branded Hilton at the new St. George's Park National Football Centre in Burton-on-Trent, England. The 330-acre site includes a building that houses an 86-room Hampton and a 91-room Hilton. ... Marriott opened a 212-room Renaissance in Istanbul. The 20-floor property on the European side of the city overlooks the Bosphorus and is located in the Besiktas district.
Qatar Flies to Chicago, American Bolts on Brussels
We should have expected it from the moment earlier this year that Brussels Airways launched a route to New York/Kennedy. American Airlines drops its JFK-Brussels flights on November 6. ... Qatar Airways says it will launch a nonstop Chicago/O'Hare-Doha route on April 10. Qatar will use two-class Boeing 777-300ERs configured with 32 business-class seats and 293 coach chairs. Flying time will be about 15 hours. ... WindJet, an Italian carrier based in Sicily, folded last weekend. That was just in time to create chaos as Italians headed out for their summer holidays. ... Another attempt to run all-business-class service has collapsed. Hong Kong Airways is abandoning its all-business flights between its hometown and London/Gatwick. The route launched in March using Airbus A330-200s configured with 34 lie-flat beds and 82 reclining chairs. ... The world's weirdest route--Dulles-Madrid flown using Aer Lingus aircraft and the United Airlines code--is ending. The so-called "enhanced code-share"--So that's what it is!--dies unloved and unwanted in October after a two-year run.
Meet the New Travel Boss, Different Than the Old Travel Boss
Google this week bought Frommer's, the travel-publishing operation founded by Arthur Frommer and most recently owned by John Wiley & Sons. The purchase price was not disclosed. Frommer's assets, about 350 guidebooks and the Frommers.com site, are expected to be merged with Zagat Survey, the restaurant-guide publisher that Google purchased last year. Google also paid $700 million for ITA Software in 2010. Besides a terrific public site (see here), ITA creates products that are the technological underpinning of travel sites such as Orbitz. And Google has been quietly building both a Google-branded flight-search engine (see here) and a hotel-booking product (see here).
Hilton HHonors Loses Paris, Priority Club Rewards Loses 42 Hotels
Attention Hilton HHonors members: You're losing one of the most-coveted award gets in the system. The Hilton Arc de Triomphe, the only Hilton Family property in central Paris, is on the way out. A contentious lawsuit between the property's owner and Hilton ended with a win for the owners. Agence France-Presse, which has seen the court order, says the owners can evict Hilton within 90 days. The property is popular because it's new (opened in 2004), it has an excellent executive lounge and it has large rooms. Besides, Hilton's other Paris-area hotels are at the airports or distant from the city center. ... Priority Club Rewards has not lost an iconic Paris hotel, but it has lost 42 others lately. As I explained in May, Hospitality Properties Trust (HPT), a real estate firm, purchased the Sonesta chain and has been converting its properties to Sonesta from InterContinental brands. And 20 more HPT properties switched en masse to Wyndham brands on August 1. That means you'll find them in the lightly regarded Wyndham Rewards plan trading as "new" Hawthorn Suites or Wyndham hotels. ... Delta SkyMiles is dumping two Indian airlines, Jet Airways and Kingfisher, on October 1.
Business-Travel News You Need to Know
Delta Air Lines tried raising walk-up fares as much as $10 roundtrip this week, but rolled back the increase when other airlines refused to match. ... Despite Delta's failure this week (not to mention United's failed across-the-board price hike last week), expect airlines to push hard to raise fares in the coming weeks. After dropping below $80 a barrel earlier this summer, crude oil prices closed north of $95 on New York markets today (August 16). And Brent crude, which more accurately reflects the prices that airlines pay for jet fuel, is back above $115 a barrel on London markets. ... Virgin Trains, another Richard Branson operation that promised more than it ever delivered, has lost Britain's prestigious "West Coast franchise." On December 9, First Group takes over the routes linking London/Euston with cities such as Manchester, Liverpool, Birmingham and Glasgow. With typical bombast, Branson branded the government's decision to toss him for First Group's higher financial bid as "insanity." But the BBC puts the Virgin Train Experience in context.
Is Jeff Smisek Too Arrogant to Know That United Is Sinking?
Five months after United Airlines shifted to a single computer system and promptly sank to the bottom of every available consumer-satisfaction and financial-performance metric, you'd have thought chief executive Jeff Smisek would be looking for an emergency exit. But no-o-o-o-o... He's actually sunk $1 million of his own dough into United stock (UAL). According to a report on Forbes.com, Smisek paid an average of $18 a share for his purchases over the preceding six months. Normally, you'd congratulate a chief executive when he puts his money where his management is, but you have to wonder if it's not just blind arrogance with Smisek. It's not that United is bad now, but also that it has gotten worse, both financially and operationally, in each month since the computer switch. With no operational improvement in sight and United stock down about 30 percent from its 52-week high in February, all you can say for sure is that Smisek is paying for the privilege of hoisting himself on his own petard.
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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.