The Tactical Traveler By Joe Brancatelli
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Business-Travel Briefing for Early May, 2016
The briefing in brief: Airfares really are falling--a little. Marriott now guarantees late checkout for its top elites. Lufthansa dumps first class on many routes to Munich. JetBlue launches a pseudo-shuttle between LaGuardia and Logan. Delta's phony SkyMiles "facts." And more.
You're Not Imagining Things. Your Fares Are Falling a Little.
Even as the airlines reported hefty first-quarter earnings this month, they were decrying falling PRASM, passenger revenue per available seat miles. Worse, at least from their point of view, PRASM is also expected to fall dramatically in the second quarter. The causes: more capacity and more pricing flexibility thanks to extremely low jet-fuel prices. And, of course, that'll mean lower prices for us. But the fares we've been paying have been moderating for at least a year. According to figures released by the government this week, the average domestic fare in last year's fourth quarter was $363, down 8.3 percent from $396 in 2014's fourth quarter. That's the lowest average fourth-quarter fare since 2010. For all of 2015, the average fare was $377, down 3.8 percent year-over-year from 2014 and 19 percent from 2000, the high-water mark for airfares. One caveat: Fares now represent just 75 percent of the revenue airlines extract from us. A quarter of their passenger revenue now comes from fees, up from just 12 percent 25 years ago. By the way, in case you think these numbers are strictly academic, consider: Southwest Airlines this week lowered seven-day advance-purchase fares by at least $5 each way. And at least three fare hikes--two initiated by United on transborder routes and one launched by Delta on domestic runs--failed this week.
Cowed by Criticism of Its Late-Checkout Plan, Marriott Reverses Course
Marriott Rewards was hammered last week for trying to woo skeptical Starwood Preferred Guest elites with a non-guaranteed late checkout plan made to look like the SPG benefit of 4 p.m. departure time. But Marriott now says that it will guarantee late checkout until 4 p.m. for Marriott Gold and Platinum elites. The hotel giant claimed the change was a "clarification" to its originally announced policy. That's spin, of course. Marriott abruptly reversed course when it realized that the only thing worse than not offering elites a late checkout was making believe that it did. The benefit launches May 16 at all Marriott properties except resorts and convention hotels. The verbiage has even been changed on the Marriott Rewards promotional page.
Hilton HHonors players have two new warm-weather award options. A 141-room Hilton Garden Inn has opened in Key West, Florida. It's a conversion and upgrade of a property formerly known as the Lexington and the hotel is a Category 7 redemption. Meanwhile, the Hotel La Jolla, which until recently operated as a Kimpton, is now part of Hilton's Curio Collection of independent properties. The 110-room property north of San Diego is also a Category 7 redemption.
American AAdvantage players have another Caribbean route on which to burn miles. American Airlines is launching a weekly nonstop between its New York/Kennedy hub and Providenciales, Turks and Caicos. The route starts November 5 using Boeing 737 aircraft.
Lufthansa Eliminates First Class Cabins on Many Munich Routes
Lufthansa insists that it remains committed to flying first class cabins on long-haul international routes, but it continues to rip it off an increasing number of routes. Next to go: many flights into and out of Munich, its secondary international hub. On December 1, first class will disappear from routes to Munich from Charlotte and Montreal. On January 3, Boston goes. In February, the Munich routes from Washington/Dulles and Miami lose first. Lufthansa's best international cabin will not operate from New York/Kennedy and Chicago between January and March, either. Some of these routes will get Lufthansa's soon-to-be-delivered Airbus A350s configured to 48 business class beds, 21 premium economy chairs and 224 coach chairs. Other runs will get Airbus A340 aircraft reconfigured without first class. The worse news? If you're a Lufthansa first flyer otherwise disposed to bust down to business, you'll find the German carrier's newest iteration of business class is substandard compared to the product offered by many of its competitors.
Air Canada has spent nearly three decades trying to establish routes to India. Despite the large population of Indian expats in Canada, the airline has launched and abandoned routes to the subcontinent since the mid-1980s. But the relaunch of Toronto-Delhi service last year seems to have gone well and now Air Canada is adding three weekly flights between Vancouver and Delhi. Flights begin October 20 using Boeing 787-9 aircraft configured with 30 business class beds, 21 premium economy seats and 247 coach chairs.
JetBlue Will Launch a Pseudo-Shuttle Between Logan and LaGuardia
The Air Shuttle markets between New York/LaGuardia, Boston/Logan and Washington/National airports have been declining for decades. The guaranteed-seat premise is gone, the walk-up-and-fly policy is gone, the massive mileage bonuses are gone and so are many flyers. These days, the shriveled routes belong to Delta and American airlines, but now JetBlue Airways wants in. It will launch a pseudo-shuttle on the LaGuardia-Logan run and offer six roundtrips on weekdays and two or three roundtrips on weekend days. Service starts on October 31 using JetBlue's 100-seat E190 aircraft.
Munich Airport has added a 27-gate satellite building to Terminal 2. That should reduce the number of "hard stand" departures and arrivals requiring bus transfers.
Newark Airport, soon to be freed from slot restrictions, will get more flights from primary carrier United Airlines. Starting in July, there'll be 50-seat regional jet flights to Bangor, Maine; Flint, Michigan; and Lexington, Kentucky. Starting in September, there'll be daily flights to Chattanooga and Fort Wayne, Indiana.
Greensboro, North Carolina, has a new hotel. A 150-room Hilton Garden Inn has opened across Interstate 40 from the airport.
Business Travel News You Need to Know
United Airlines says the switch to Illy Coffee on flights will begin on July 1. The Italian brew has been served in United Clubs for several months since the airline changed suppliers shortly after the arrival of Oscar Munoz as chief executive.
Delta Air Lines has ordered at least 75 Bombardier CS100 aircraft. If all goes according to plan, the narrowbody aircraft will begin appearing in the fleet early in 2018. The planes are configured 3x2 in coach and will replace some 50-seat RJs, larger regional jets and older traditional jets.
Starwood Hotels has opened a 246-room Aloft in El Segundo near Los Angeles Airport. It's located on the site of the former Hacienda Hotel on the corner of Sepulveda and Mariposa. The Hacienda was home to the legendary Mariposa Diner, featured in a column I wrote in 2003.
Carlson Hotels, which operates the Radisson and Country Inns chains, is being sold for an undisclosed price to a Chinese company called HNA Group. Never heard of the HNA Group? It is the parent company of Hainan Airlines and has been on a buying spree lately, snapping up Swissport, an air-cargo firm, and Gategroup, the airline-catering company. It has bought into Azul Airlines of Brazil and several other hotel chains and has acquired office buildings and golf courses in prime locations around the world.
Lies, Damned Lies, Statistics ... and SkyMiles 'Facts'
Delta Air Lines recently launched a publicity machine called the Delta News Hub. The propaganda operation even has its own Twitter feed, which means Delta's dubious "facts" get re-tweeted and, by dint of endless repetition, sometimes attain the weight of apparent truth. But even by Delta's fast-and-loose standards, the News Hub's claims about the first year of SkyMiles as a revenue-based program are outrageous. It claims award prices declined 10 percent compared to 2014. The truth: Delta introduced one-way pricing for the first time last year and that should have driven down average prices much more than 10 percent. The sleaziest assertion is that Delta held ten award sales last year. How can there be a "sale" when Delta no longer publishes award prices and insists that award seats actually have no set price at all?
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