The Tactical Traveler By Joe Brancatelli
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Business-Travel Briefing for December 8-22, 2016
The briefing in brief: The DOT approves the Alaska Air-Virgin America merger. New hotels in prime destinations where you can burn points. Air Canada adds flights to four U.S. cities. United slashes more Europe routes. Old hotels, new names. Delta upgrades coach snacks. And more.
Alaska Airlines Gets the Virgin America Merger, But Must Gut Its American Code-Share
In what is sure to be its last major act in the Obama Administration, the Transportation Department this week cleared the merger between Alaska Airlines and Virgin America. Announced this spring, the deal will cost Alaska, though. Besides the $2.6 billion purchase price, widely considered to be a huge premium over Virgin America's value, Alaska Airlines will have to pony up lots more. The DOT is making Alaska gut the most lucrative parts of its American Airlines code-share The hit to Alaska's bottom line? Perhaps $100 million. The good news? Alaska wasn't required to drop its code-share with Delta Air Lines, surrender any routes or give up any airport assets. That means the combined airline will leapfrog JetBlue Airways into the Number 5 slot on the U.S. airline depth chart. And that does create a heftier competitor to battle the three network airlines, American, United and Delta, as well as super-size discounter Southwest Airlines. Alaska promises the deal is still on track to officially close by the end of the year. What's the plan after that? Other than the assumption that Alaska eventually will jettison the Virgin America name--Richard Branson gets a 70-basis-point licensing fee on sales--no one really knows what the combined carrier will look like. Stay tuned.
A New Batch of Hotels Where You Might Want to Burn Points
Planning for some sun? You're in luck. Hyatt has opened a Hyatt Centric hotel in the former Waikiki Trade Center on Kuhio Avenue in the Waikiki area of Honolulu. (That means not on the beach.) It is a Category 5 redemption in Hyatt Gold Passport. Meanwhile, Hilton HHonors has a new option in Bali. The Hilton Bali Resort, located on a cliff in Nusa Dua, is a Category 5 redemption. And if you're looking ahead to spring in Europe, watch for two new London options in the Luxury Collection, now a part of Marriott Rewards. The Westbury in Mayfair and the Wellesley in Knightsbridge will both be joining soon. The Luxury Collection will also pick up the Cristallo Resort and Spa in Cortina, Italy, and Hilton's Curio Collection will add the La Bagnaia Golf and Spa Resort near Siena in Tuscany. More details on those in the weeks ahead.
United MileagePlus will be giving fewer upgrades on Hawaii flights. Effective immediately, flights from its Denver and Chicago/O'Hare hubs have added flat-bed seats in business class and thus are off-limits for free upgrades. That policy is already in effect on Hawaii flights from its Newark and Washington/Dulles hubs. That means only Los Angeles and San Francisco flights, which still have older cradle seats, can be upgraded at no charge.
Air Canada Really Wants You to Hub in Toronto--or Montreal
Air Canada is making a play for U.S. traffic to Toronto--and onward connecting service to Europe and Asia from its largest hub. On May 1, it'll launch daily regional-jet flights to Toronto from San Antonio, Memphis and Savannah. Later in the month, on May 26, it'll add flights from Dallas/Fort Worth to Montreal, its secondary hub. Speaking of Montreal, Air Canada has reopened its Maple Leaf Lounge there. The 10,000-square-foot club is located between Gates 52 and 53.
Priority Pass, the global network of airport lounges, has added three new locations: the Aspire Lounge in the International Terminal at Calgary; the First Class Lounge in Terminal 2 at Cairo; and the Layover Stay lounge in Quito.
Los Angeles is losing one of its flights to Guadalajara. Delta drops its route on January 31.
Old Hotels Get Renovated and Adopt New Names and Brands
See, this is why we have metaphoric hotel scorecards. Hotels are changing names and brands and concepts so fast that you really have to write this stuff down to keep track. In Sydney, for example, Hyatt has opened an 892-room property adjacent to Darling Harbour. The Hyatt Regency is now the largest property in Australia's largest city. It's a former Sheraton Four Points hotel that has undergone a $250 million renovation. Meanwhile, in London, the 708-room Kensington Close Hotel on Wrights Lane has been rebranded as the Holiday Inn London-Kensington. And in Edinburgh, the former Royal British Hotel on Princes Street has been transformed into a Hotel Indigo. The 64-room hotel is now the second Hotel Indigo in the Scottish capital. Back here at home, the historic Mayfair Hotel in St. Louis has been renovated into the 182-room Magnolia Hotel. It's also become part of Tribute Portfolio, the soft-brand chain that is part of Marriott.
Extended-stay hotels are now the fastest-growing segment of the lodging industry, according to a recent market report by a major consulting group. Which explains these newbies: an 85-room SpringHills Suites from Marriott in Cedar Park, Texas; a 122-room StayBridge Suites from InterContinental in Maryland Heights, Missouri; and new Home2 Suites from Hilton in West Monroe, Louisiana, and Eugene, Oregon.
United Continues to Quietly Shed Europe Routes
United Airlines is getting hammered on international routes and the carrier admits its transatlantic load factor fell 5 percent in October. What United isn't telling anyone publicly is that it continues to bail on secondary routes. It has already dumped flights from Newark to Newcastle, Belfast and Hamburg as well as service from its Houston hub to Munich. Now come more cuts. United previously turned two routes--Newark-Oslo and Washington/Dulles-Manchester--into summer-only flights. But even those are gone permanently as United has dropped the routes.
TAP Air Portugal continues its revival. The Star Alliance carrier announced this week that it'll return to the Toronto-Lisbon run on July 10. TAP hasn't flown between Canada and Portugal since 1994. There will be five weekly Airbus A330-200 flights in the summer and three weekly flights in the off-season.
Norwegian Air has won U.S. government approval to establish an Ireland-based subsidiary to fly between Europe and the United States. As a result, Norwegian has already announced a major buildup, including daily flights from Los Angeles to London/Gatwick and twice-daily service from New York/Kennedy to Gatwick. Norwegian also says it will now establish two U.S. bases at Northeast airports.
Business Travel News You Need to Know
Delta Air Lines is upgrading its snacks in coach. Effective December 14, Delta's private-label offerings will be replaced by Snyder's pretzels, Squirrel peanuts and NatureBox snack bars. The airline will also continue to serve Biscoff cookies. Separately, Delta confirms that it is testing free meals in coach on some transcontinental flights. Like other U.S. carriers, Delta dropped free coach meals during the last decade, but it has slowly restored some perks as profits soared in recent years.
Chase Bank chief executive Jamie Dimon says the launch of the bank's Sapphire Reserve card will cause a $200-$300 million hit on third-quarter earnings. Chase launched the $450-a-year card in August with a 100,000-point acquisition bonus.
Pakistan International Airlines Flight 661 crashed Wednesday (December 7) en route from Chitral to Islamabad. There were no survivors among the 47 passengers and crew aboard the ATR-42. It was the tenth fatal accident at PIA since 2000.
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