The Tactical Traveler
A BUSINESS-TRAVEL BRIEFING
FOR FEBRUARY 15, 1999
BY JOE BRANCATELLI
This week: Fair notice on fare increases--not; the cost of (labor) war and peace; one premium class or two; a Courtyard (by Marriott) in Midtown Manhattan; and more.
COUNTER INTELLIGENCE: Fair Notice on Fares
If you've felt the knife plunged into your stomach a little deeper than usual lately, it's probably that across-the-board fare increase pushed through on January 29 by the nation's major carriers. What may be even more painful is the identity of the airlines that made the fare increase possible. Although all major carriers eventually matched, the 2-4 percent fare bump was introduced by Delta Air Lines. The carrier floated the price increase just 10 days after announcing results for what Delta chief executive Leo Mullin called a "truly remarkable" 1998. Delta racked up record net operating income, net income, operating revenue, cash flow and operating margin. And five days after raising fares, Delta reduced service. Besides taking the sandwich out of its coach class "SkyDeli" bag on hundreds of daily flights, Delta eliminated full meals in first class on many flights and ended first-class snack service on hundreds more. Yet Delta's fare increase wouldn't have stuck unless it was matched by Northwest, which had been holding out during the last year against across-the-board price rises. Just three weeks after it stranded thousands of passengers on abandoned planes for up to nine hours on runways and tarmacs at Detroit Metro Airport, Northwest enthusiastically embraced Delta's fare increase.
CYBERTRAVELER: Another Bird
Add Cardinal Airlines to the list of start-up airlines I mentioned in the January 28 edition of The Brancatelli File. Besides the information you'll find at the Cardinal website (http://www.flycardinal.com), you might want to know that the carrier is based at Melbourne International, the underutilized airport not far from Orlando. As you might suspect, Cardinal will paint its planes bright red; it hopes to launch eight daily flights to Baltimore-Washington International Airport later this year. Cardinal says its unrestricted fares will be around the level of the other airlines' advance-purchase prices. Service would be operated with two MD-80s outfitted with 112 seats in a 2x2 configuration.
EXECUTIVE SUMMARY: The Cost of (Labor) War and Peace
No one seriously argues the fact that American Airlines is the nation's best-run carrier and--on a flight-by-flight, day-by-day basis--the country's best airline. But the chaos resulting from last week's pilot's sickout shows that American management has a tin ear when it comes to labor relations. When Don Carty took over last year as chairman and chief executive, Carty insisted his first priority was improving labor relations, which has turned toxic during the final years of Bob Crandall's tenure. Yet Carty admitted last week he was surprised by the pilot sickout and American management seemed paralyzed as pilots stayed home and flight cancellations mounted. Worst of all, the sickout will cost American more than giving in to the demands of the pilots, who have squabbled with management for years and are currently unhappy with American's plans for Reno Air. According to American's own figures, the cost of integrating recently-acquired Reno into American on the pilots' terms would have cost an additional $50 million. Wall Street analysts estimated that American had already lost that much in revenue by last Wednesday. And with pilots showing no particular inclination to return to work even after Wednesday's court order, American's total loss of revenue may have already reached $100 million.
THE ANSWER: One Premium Class or Two?
Airlines are struggling with a conundrum: do international business travelers want two traditional classes of premium service--standard business and first class--or the singular "super" business class cabin offered by carriers such as TWA, Continental, KLM and others. At the same time, frequent flyers have learned that the service in the super business classes is better than standard business class and often surpasses the offerings in many first-class cabins. To learn why "super" business classes are better than traditional business class, we checked in with Clive Reed, general manager of training and development for Emirates, the Dubai-based airline which flies aircraft configured with both types of business class. "The quality of attention you get in the business class of a 2-class plane is much higher than you get in business class on a 3-class plane," he says. "Part of the reason is the numbers. On my 777s, for example, I have a total of 15 cabin crew. In a three-class configuration, I dedicate four of those crew to first class. That leaves 11 to take care of business and coach class. On my two-class 777s, I still have 15 cabin crew and just two cabins to serve. So, naturally, the passengers in that business class get more personalized, more attentive service."
THE WEEKLY WONDER: Courtyard in the City
A once-bustling Manhattan office building at 866 Third Avenue has been converted into the 306-room Courtyard by Marriott Midtown East. Guest rooms are gigantic by New York standards and now the 3-month-old hotel is offering special rates through the end of March. Weeknights are $179 and weekend nights are $149. For more information, call 800-321-0800.
This column originally appeared at biztravel.com.
Copyright © 1993-2007 by Joe Brancatelli. All rights reserved.