The Tactical Traveler By Joe Brancatelli
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Business-Travel Briefing for November 5-19, 2015
The briefing in brief: Follow the denials in the Egypt crash. American begins its AAdvantage cuts. United once again puts a price on its crappy service. And now for something completely different: more Lufthansa strikes. How low can Gogo go? Starwood grows. And much more ...
Terror at 30,000 Feet? Listen to the Desperate Denials
It's impossible to know yet if terrorists took down a Russian aircraft last Saturday (October 31) over the Sinai Peninsula, but pay attention to the increasingly strident denials by Russian and Egyptian officials. Egypt's repressive, quasi-military government is desperate to assure the world that it has quelled Islamic terrorism in the Sinai and throughout the country. It hasn't and that has depressed tourism, which accounts for more than 10 percent of Egypt's economic output. And, of course, Russia has embarked on a foolhardy intervention in Syria. Russian president Vladimir Putin is equally desperate to keep his people ignorant of the costs of Russia's unilateral actions in defense of Syrian dictator Bashar al-Assad. But did ISIS or some other terror organization sneak an explosive device onto the aging Airbus A321 operated by a shaky Russian charter carrier? U.S., British and other European intelligence sources now think so and they point to the poor security at Sharm el-Sheikh airport, where the flight originated. Indeed, Egyptian officials yesterday (November 4) sacked the airport's head of security. The 18-year-old Airbus, headed for St. Petersburg, came apart at 30,000 feet about 20 minutes after takeoff. All 224 people aboard perished. ISIS has been claiming credit for the crash since it happened. Is there any plausible explanation besides terrorism? Perhaps. The aircraft suffered a hard landing and tail damage 14 years ago in Cairo. Some safety experts say the aircraft's debris field--the tail was found several miles from other wreckage--is largely consistent with a failure of the tail-section repair.
Merger Largely Complete, Here Come the Cuts to AAdvantage
Consumed with completing its merger with US Airways, American Airlines largely kept the status quo this year at its American AAdvantage program. But with the hardest part of the merger now out of the way, expect the program cuts to come hard and fast in the months ahead. Although you shouldn't expect a massive, immediate overhaul of AAdvantage--now the most generous major program due to huge devaluations at United MileagePlus and Delta SkyMiles--American certainly plans to bring it back to the pack with earning cuts for members who spend the least. The first moves, in fact, came this week. American slashed earnings for the least-expensive seats you can buy on British Airways and Iberia, its joint-venture and Oneworld Alliance partners. Effective February 1, so-called "discount" and "deep-discount" fare buckets on British Airways and Iberia no longer earn 100 percent of miles flown. They now earn just 50 or 25 percent. Lower-cost premium economy fares on British Airways also have been stripped of class-of-service bonuses. The new and old BA charts are here. The Iberia charts are here.
United Once Again Puts a Price on Crappy Service
Remember when pre-merger United Airlines handed out Skykits stuffed with travel vouchers whenever there was an egregious example of crappy service or aircraft disrepair? The Skykits and similar devices disappeared after the merger with Continental Airlines because the new bosses led by now-departed Jeff Smisek didn't believe customers deserved acknowledgements of failure or hard-dollar apologies. Now that Smisek is gone and his replacement is on the disabled list, however, United is back in stasis and desperately needs patience from its disaffected passengers. So back come the Skykits, this time in the form of electronic vouchers worth as much as $125. Starting earlier this week, United airport agents were empowered to spread around vouchers as a tangible expression of the airline's regret that it is a mess. An internal United memo described the vouchers as "in the moment" instruments to be given "when extenuating circumstances warrant a gesture of goodwill." Of course, a cynic could point out that Skykits maxed out at $250 and the current certificates top out at $125 and that could mean United is only half as sorry as it used to be about its parlous condition.
Now for Something Completely Different: More Lufthansa Strikes
Lufthansa has grudgingly admitted transatlantic bookings have been hurt by its attempt to force us to book via its Web sites or pay about $18 more per ticket. And as if more than a dozen pilots strikes in 18 months didn't make us even less likely to book the German carrier, here comes something completely different: a weeklong flight attendants strike due to begin tomorrow (November 6) at noon German time. The issue? More of the same. Lufthansa is attempting to cut costs despite hefty profits and expects everyone--pilots, flight attendants, passengers--to follow orders and underwrite management's giveback demands. Lufthansa says it will publish details of its strikebound operations here.
American Airlines now says it will launch flights between Los Angeles and Tokyo/Haneda on February 11. The route will be operated with Boeing 787-8 Dreamliners configured with 28 business class beds, 48 Main Cabin Extra seats and 150 coach chairs. American's plans have been the subject of a regulatory firefight with Delta Air Lines, which abandoned its Seattle-Haneda run earlier this year.
Australia travelers take note: Border and immigrations officials are due to strike on Monday (November 9). Expect long lines at passport controls all day at international airports.
Starwood Finally Gets Some New Properties Open
Starwood Hotels has been on the sale block all year after firing its chief executive and recent scuttlebutt has both Hyatt and Chinese hotel operators interested in the company. Meanwhile, however, Starwood is finally getting some new properties open, which is notable since its anemic growth rate is one reason the company is in play. New this week are Aloft hotels in Louisville, Kentucky (175 rooms), and both Raleigh (135 rooms) and Durham (134 rooms), North Carolina. There's also a 150-room Sheraton in Jakarta and a 395-room St. Regis in the Lower Parel district of Mumbai.
Hyatt has opened a 325-room Hyatt Regency in Houston's Galleria Plaza development. A Hyatt Place hotel is due to open in the development early next year.
Marriott continues to build out its lower-priced brands. New this week are Fairfield Inn properties in Omaha (81 rooms) and Clinton, Mississippi (85 rooms), as well as TownePlace Suites locations near the Houston Galleria on South Rice Avenue (120 rooms) and Sioux Falls, South Dakota (92 rooms).
Hilton is also racing to expand its lower-priced operations. Its newbies this week include a Homewood Suites in Issaquah, Washington (122 rooms), a Hampton Inn in Corpus Christie, Texas (101 rooms), and Home2 Suites in Oklahoma City (84 rooms) and Tallahassee, Florida (132 rooms).
Business-Travel News You Need to Know
Gogo, which controls the vast majority of domestic in-flight WiFi connections, continues to pay for its ludicrous strategy of sky-high prices for its awful and unreliable service. According to figures released with its third-quarter financial results, just 5.6 percent of travelers logged on. That's down from 6.2 percent in last year's third quarter. For the first nine months of the year, Gogo's "take rate" is a cumulative 6.2 percent, down from 6.7 percent in the first nine months of 2014.
Amtrak now sells $20 day passes for admission to its Club Acela lounges in the Boston/South and Philadelphia/30th Street stations. Passes aren't available for purchase at the New York/Penn or Washington/Union stations, however.
WiFi blocking continues to carry a financial penalty for hotels trying it. The Federal Communications Commission this week says it'll fine Hilton $25,000 for blocking personal WiFi signals at hotels in Anaheim, California.
Expedia, the huge online travel agency, will pay $3.9 billion to acquire HomeAway, a predecessor to and major competitor of Airbnb. HomeAway also controls the VRBO and VacationRentals.com brands.
This column is Copyright © 2015 by Joe Brancatelli. JoeSentMe.com is Copyright © 2015 by Joe Brancatelli. All rights reserved. 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.