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THE BRIEFING FOR APRIL 11 TO 25, 2013
By Joe Brancatelli
· Airlines Hit the Pricing Fare Wall, But Keep Trying
· JetBlue Adds Flights to Worcester, Massachusetts
· Hyatt Increases Perks for Diamond Elite Members
· Consolidated Car-Rental Center Opens at Midway
· Emirates Says It Will Fly Between JFK and Milan
· FAA Delays Sequester-Inspired Tower Closings
· Delta Ups the Price of Most Same-Day Standbys
We Rejected Higher Fares in March, So Airlines Try Again in April
If March operational reports from major carriers are to be believed, flyers are pushing back hard against rising airfares. After months of increased passenger revenue per available seat mile (PRASM), the key measure of airline pricing power, most airlines ran into a brick pricing wall in March. Delta Air Lines' revenue growth was just 2 percent, less than half what the carrier had predicted. Moreover, Delta says demand for seats was lower than expected "as a result of our attempt to drive higher yields." US Airways says its March PRASM was flat even though it predicted revenue growth of as much as 4 percent. American Airlines' March revenue growth was a near-invisible 0.3 percent and Southwest Airlines says its PRASM was "comparable to...March 2012." United Airlines reported a PRASM increase (6.5 to 7.5 percent), but only because its cancellation rate doubled compared to March, 2012, and its overall flight capacity last month shrank an eye-popping 4.6 percent. But never think that airlines learn the lessons of the market. Delta today (April 11) launched an across-the-board $4 roundtrip fare hike. It's Delta's fourth attempt at a structural price hike in the last 60 days, according to FareCompare.com. Two of the three earlier fare increases ended in failure when other carriers didn't match Delta's moves.
JetBlue Will Add Flights to Worcester, Massachusetts. No, Really...
Worcester Airport in Central Massachusetts has been without substantial air service for two decades and without any commercial flights at all after public-charter carrier Direct Air folded more than a year ago. But JetBlue Airways sees some sort of market there because it will add flights from Worcester (ORH) starting on November 7. There'll be daily service to both Fort Lauderdale and Orlando using 100-seat E190 aircraft. ... Hawaiian Airlines wants to launch nonstop service between its Honolulu hub and Beijing next year, but this year it's giving up the ghost on Honolulu-Manila service. The flights have been operating since April, 2008, but Hawaiian will shut it down on August 1. ... Frontier Airlines resumes year-round service between its Denver hub and Fresno, California, on May 17. The day before, it'll launch seasonal flights between Denver and Eugene, Oregon. ... Southwest Airlines continues to add new routes and convert flights from its AirTran Airways subsidiary. New flights include: Nashville-Pittsburgh; Atlanta-San Diego; Des Moines-Las Vegas and Jacksonville-Chicago/Midway.
The FAA Delays Those Sequester-Inspired Air Tower Closings
Although virtually no one would be affected by the closure of air-control towers due this week, the Federal Aviation Administration has delayed the shutdowns. The reason? A spate of lawsuits aimed at forestalling the closures, which the FAA ordered as a result of the budget sequester of March 1. The 147 towers are now due to close on June 15. ... Eight car-rental companies at Chicago/Midway now operate from a consolidated rental center. The rental center opened Tuesday (April 9) and renters will be shuttled to and from the building by a common-use fleet of white buses. More information and a couple of cheesy photos are here. ... A 127-room Hyatt Place hotel has opened at Florida's Pensacola International. ... The new airport in the Qatari capital of Doha, Hamad International Airport, was supposed to celebrate a "soft opening" last week. But it was called off just hours before the first scheduled flights because the $15 billion facility still hasn't met local safety and security protocols. The airport was originally expected to open in 2010 and four other opening dates have come and gone. Until the new place gets the kinks out, Doha International continues as the hub for Qatar Airways and other the carriers serving the Gulf emirate.
A Whole Mess of Limited-Service Hotels Around the World
As more and more business travelers abandon the traditional full-service hotels, the major hotel families are ramping up the number of properties in their limited-service portfolios. Starwood, for example, has converted one of its Four Points properties into the 154-room Aloft Tucson University. Hilton has opened an 86-room Hilton Garden Inn in Hanoi, Vietnam. Hyatt has opened a 149-room Hyatt House at the Cobb Galleria mall in the Atlanta suburb of Smyrna. And Marriott has added a 120-room Residence Inn in Odessa, Texas, and an 84-room Fairfield Inn on Ashley Phosphate Road in North Charleston, South Carolina. ... Holiday Inn has lost a batch of hotels in Germany, including two in Dusseldorf, two in Cologne and branches in Heidelberg, Aachen, Mannheim and at Hannover Airport. The properties have all become Leonardo Hotels, a European chain operated by Israel's Fattal Group. ... The Autograph Collection, Marriott's affiliated group of independent properties, has added two of Britain's best boutique hotels: Threadneedles in London's financial district and The Glasshouse in Edinburgh.
Emirates Says It'll Fly Between New York and Milan
Here's a route you might never have expected: Emirates of Dubai says it will start nonstop flights between New York/Kennedy and Milan/Malpensa on October 1. The airline will use Boeing 777-300ERs configured with eight first-class seats, 32 seats in business and 310 in coach. Four other carriers already fly the route--Delta Air Lines, American Airlines and Alitalia from JFK and United Airlines from Newark--but Emirates will be the only one with a first-class cabin. ... Icelandair says that it'll launch a Newark-Reykjavík route on October 28. There'll be four weekly flights and the airline will also continue to fly from New York/JFK. ... Hainan Airlines, the Chinese carrier, says it will launch nonstop flights between Chicago/O'Hare and Beijing. The airline will fly two-class Airbus A330-200s four days a week starting on September 3.
Business-Travel News You Need to Know
Hyatt Gold Passport, the only hotel frequent guest program that did not devalue this year, is actually sweetening the pot for its top-level Diamond members. The existing welcome amenity program (1,000 points or an in-room food-and-drink perk) has been extended to the chain's international full-service hotels. Until now, the Diamond welcome amenity only applied at full service Hyatt properties in the United States, Canada and the Caribbean. ... Delta Air Lines is changing its day-of-flight change/standby flight procedures on April 23. Bottom line: Regardless of your status in Delta SkyMiles, you'll probably pay more than you do now. Full details are here. ... You can now transfer the Ultimate Rewards points you earn with Chase Sapphire and Chase Ink credit cards to the Virgin Atlantic Flying Club. ... Vueling, a low-fare Spanish airline, has accepted a buyout offer from International Airlines Group, which already owns Iberia and British Airways.
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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 © 2013 by Joe Brancatelli. JoeSentMe.com is Copyright © 2013 by Joe Brancatelli. All rights reserved.