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THE BRIEFING FOR APRIL 24-MAY 8, 2014
By Joe Brancatelli
· What United Has Here Is a Failure to See Failure
· What Delta Has Here Is a Failure to Tell the Truth
· No Train for You for Months, Says Newark Airport
· No Trains for You Next Week, Say London Unions
· Everywhere You Look, More New Hotels Open
· The Dollar Is Falling Against the Pound and Euro
· Lufthansa Charging for Coach Seat Assignments
What United Has Here Is a Failure to See Failure ...
With fewer players than ever, the U.S. airline industry squeezed almost all of its first-quarter earnings reports into a 24-hour window this week. Almost all were profitable in the first three months of the year, no small thing given traditionally weak first-quarter traffic and this year's nasty weather. The unsurprising exception: United Airlines. Nearly four years after the "merger of equals" with Continental, United still finds regular profit elusive and the airline's C-suite remains in denial. United lost $489 million excluding special items in the first quarter while Delta earned $281 million and American registered a $480 million profit. In response, as they do after each post-merger disaster, United's top apologists mouthed platitudes. "This quarter's financial performance is well below what we can and should achieve. We are taking appropriate steps," said chief executive Jeff Smisek. "We recognize that we have lagged on revenue and are taking the necessary actions to remedy that," claimed chief revenue officer Jim Compton. United also insisted that things were turning around because customer ratings were improving. Uh, no. The American Customer Satisfaction Index, released just hours before United's excusefest, once again rated United dead last among airlines. In fact, United's ACSI rating dropped to 60 percent from last year's 62 percent approval rate. Investors aren't buying United's C-suite bleatings, either. Shares of United Continental Holdings, the parent company, dropped nearly 10 percent in today's trading.
What Delta Has Here Is a Failure to Speak the Truth ...
Meanwhile, over at Delta, executives were all a twitter about their robust earnings, the latest in a string of impressive results in recent years. But you have to wonder if Delta is, well, cooking some of the books. One example: President Ed Bastian is now denying that we heard what we all heard about the carrier's operations in Seattle, where Delta is battling Alaska Airlines. In the earnings conference call with security analysts on Wednesday (April 23), Delta claimed 65 percent of its traffic at Sea-Tac now consists of connecting passengers. An analyst, Hunter Keay of Wolfe Research, wondered how Delta managed that feat since the carrier said its Sea-Tac connecting traffic was just "10 to 20 percent" only three months earlier. The lower number was not "an accurate depiction ... I think it might have been a misunderstanding of what we were talking about," Bastian told the analyst. Except, of course, it was no misunderstanding. Three months ago, during the fourth-quarter conference call, Delta executive vice president Glen Hauenstein told Keay that Seattle traffic was "primarily local because we're not connecting very much." And when pressed to quantify the number of connecting flyers, Hauenstein said "10 or 20 percent." But, hey, these are airlines, right? We're always misunderstanding them, even when we quote them directly.
No Trains for You for Months, Says Newark Airport
AirTrain service at Newark Airport will close for renovations on May 1 and remain shuttered for at least 75 days. The train, which links the passenger terminals, parking lots and commuter and Amtrak rail connections, needs "critical repair work," according to airport managers. Buses will replace the trains during the construction work, which, as anyone who uses Newark knows, doesn't sound particularly palatable. ... Silver Airways, a commuter carrier, says it is shutting a huge part of its Atlanta/Hartsfield network. It'll drop routes to Muscle Shoals, Alabama, and four Mississippi airports: Greenville, Laurel/Hattiesburg, Meridian and Tupelo. ... A spate of near-airport hotel openings lately. There are new Homewood Suites near Calgary Airport and Winnipeg Airport, a 115-room Holiday Inn Express near Puerto Vallarta and a 126-room Hampton Inn near Roanoke Airport.
No Trains for You Next Week, Say London's Transport Unions
Fair warning to travelers headed to London next week and much of May: A dispute between London and transport unions means strikes that will stop the London Underground and most rail service between London/Heathrow and Paddington Station. The first strike is scheduled to hit the Underground between 9 p.m. local time on Monday (April 28) and continue for 48 hours. Another strike is scheduled for 72 hours beginning at 9 p.m. on May 5. The strikes will also extend to the Heathrow Express and Heathrow Connect lines. The folks who run those services confirm that the slower, cheaper Connect service will close entirely during that time. They claim, however, that they'll operate two hourly Heathrow Express trains in each direction during the strike. There are buses that run between the airports and London, of course, but they will be bogged down in the same road traffic that will make taxi travel a nightmare. If you can avoid London and Heathrow during the strike days, do it. And remember to avoid United Airlines to London in June, when it is the first Star Alliance airline scheduled to move to renovated and rebuilt Heathrow Terminal 2. Update on Friday, April 25: Transport for London, the agency that handles the region's public transportation, has issued strike-contingency plans. The reality is grim. Read them for yourself here.
Everywhere You Look, More New Hotels Are Opening
It's nearly impossible to keep up with the new hotels opening worldwide. Even if we keep it to the major chains, the list is daunting. So get out your scorecard--or smartphone or whatever you do to keep track--as we run them down with breathtaking speed. From Marriott, there's a 98-room Fairfield Inn in the Southpoint area of Durham, North Carolina, and an 89-room branch in Urbandale, a suburb of Des Moines; a 233-room Residence Inn in the Pearl District of Portland, Oregon; a 110-room Courtyard in Columbus, Mississippi; and a 364-room Courtyard in the Jianggan District of Hangzhou, China. ... Starwood has opened a 180-room Westin in the Riverfront district of Wilmington, Delaware, and a 134-room Aloft in the Bricktown neighborhood of Oklahoma City. It has also opened two Aloft properties as conversions from other brands. The 143-room Aloft near Calgary University was once a Quality Inn and the 254-room Aloft in downtown Atlanta was once a Days Inn. ... Hilton has opened a 79-room Hampton Inn on Niagara Falls Boulevard in Niagara Falls, New York, a 92-room branch in Windsor Mills, Maryland, and a 79-room outpost in Carrizo Springs, Texas. It also opened a 260-room Hilton in the Samara mixed-use complex in Santa Fe, New Mexico. ... InterContinental has reflagged two properties in Canada. The 201-room Crowne Plaza in Kitchener, Ontario, was once a Delta Hotel and the 258-room Holiday Inn in Sherwood Park, Alberta, is a former Coast hotel.
Business-Travel News You Need to Know
Lufthansa flyers take note: Beginning on Monday (April 28), the airline will charge coach flyers on lower-priced tickets a 25 euro charge for advance seat selection. The affected fare classes are W, S, T, L, and K. You'll still be able to choose a seat free of charge within 23 hours of departure, however. ... The dollar is falling against major currencies again. The euro is now at $1.39 and the British pound commands $1.70. On the other hand, the greenback has risen past $1.10 against the Canadian dollar. ... American Eagle, the wholly owned commuter airline of American Airlines, has changed its name to Envoy. But the name is not sticking ... literally. Decals with the Envoy logo have peeled off the jets during flights. American has responded by removing the decals until a more permanent--read: better-quality--adhesive can be found. By the way, the American Eagle name won't disappear with or without better glue. American Eagle will remain the overall brand of American's commuter service, which is now operated by third-party carriers as well as Envoy.
Watch a LOT Polish Jet Go Back to the Future
I'm no plane geek, but I did like this time-lapse video of a LOT Polish jet being repainted in the carrier's old livery. LOT retired the old livery in 1973. The new old paint job is to celebrate the Polish airline's 85th anniversary. Maybe the LOT employees who repainted the plane can offer their services to livery-challenged Envoy.
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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 © 2014 by Joe Brancatelli. JoeSentMe.com is Copyright © 2014 by Joe Brancatelli. All rights reserved.