The Tactical Traveler By Joe Brancatelli
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Business Travel Briefing for July 27-Aug. 10, 2017
The briefing in brief: InterContinental tightens cancellation policy--and Hilton hints at even more changes. United tries Denver-London again. Fly the Friendly Skies of DeltaAirFranceKLMVirginAtlanticChinaEastern. TSA tests annoying new electronics rules. And much more.
Fly the Friendly Skies of DeltaAirFranceKLMVirginAtlanticChinaEastern
If you needed any more proof that the world's largest carriers are intent on stamping out any iota of competition or creative disruption, consider the cascade of events today (July 27):
Air France-KLM, the parent company of the French and Dutch airlines, is buying a 31 percent stake in Virgin Atlantic. As you recall, Delta Air Lines, Air France and KLM's partner in the SkyTeam Alliance and a transatlantic joint-venture agreement, already owns 49 percent of and has a joint-venture agreement with Virgin Atlantic.
Delta and China Eastern, another SkyTeam partner and a carrier in which Delta holds a minority stake, are each buying 10 percent of the Air France-KLM parent company.
Air France, KLM and China Eastern will begin cooperation on flights to and from Europe and China Eastern's Shanghai hub.
Air France-KLM will create a joint venture with Virgin Atlantic and Delta.
When you throw in Delta's financial interests in GOL of Brazil and Aeromexico and Delta's intent to create a joint venture with Korean Air, the world is shrinking very fast. And that's not good for us because shrinking competition means higher fares and much less creativity.
InterContinental Tightens Cancellation Policy--and Hilton Hints at Even More Changes
InterContinental Hotels never reacted three years ago when much of the lodging industry switched to 24-hour cancellation fees. Even now the chain's big brands--including Holiday Inn Express, Hotel Indigo, Staybridge and Candlewood Suites as well as InterContinental itself--mostly still permit no-fee cancellations until 4 or 6 p.m. on the day of arrival. But with Marriott and Hilton moving to their 48-hour rules, InterContinental is tightening its policies. The chain said this week that it would begin phasing in a worldwide 24-hour cancellation policy. Europe hotels are expected to adopt it tomorrow (July 28), properties in the Americas on August 4 and the rest of the world in September. Major exceptions: China, where same-day cancellations will remain, and at InterContinental's Kimpton division. Kimpton properties already have a 48-hour cancellation rule for most reservations. Meanwhile, Hilton chief executive Christopher Nassetta said this week that his chain is experimenting with even more radical shifts. Hilton might adopt a new policy later this year that basically echoes airline pricing policies. Most prices will require a seven-day advance cancellation, but there will also be fully flexible walk-up rates, too. Stay tuned.
Marriott continues to expand rapidly overseas. A 224-room Aloft has opened in Perth, Australia, in the Springs Rivervale district adjacent to the city's central business district. A 58-room AC Hotel has opened in a renovated historic building in Mainz, Germany. Meanwhile, the 326-room Sheraton Cairo has reopened after a major renovation. And an independent hotel opened in 2009 in Venice's Mestre district has been reflagged as a 168-room Four Points hotel.
If You Don't Get PreCheck Now, Your Life Is Gonna Be Hell ...
Although it backed off a large electronics carry-on ban, Homeland Security seems intent on making our airport lives miserable for no other reason than the fact that the TSA is completely unable to find contraband. The TSA is testing an all-electronics-out rule at security checkpoints in ten airports, include Detroit/Metro, Fort Lauderdale, Los Angeles and Phoenix. Travelers are required to remove any device larger than a cell phone from carry-on bags and each device must be placed in a separate screening bin. So, for example, if you're traveling with a laptop, a tablet and a book reader, each one must go in its own bin and nothing else is allowed in those bins. TSA says it soon will expand the policy nationwide. The sole exception: PreCheck lanes. PreCheck travelers will continue to be allowed to pass through security with those devices in their carry-on. So get PreCheck already and make sure your Known Traveler ID is reflected in all of your airline profiles. What other incentive do you possibly need? And a reminder: PreCheck is included with Global Entry, the Customs bypass program. Besides, the $85 (PreCheck) or $100 (Global Entry) fee is rebated by many credit cards.
United Tries Denver-London Again
Despite its status as a major hub, Denver isn't that great a market because its "catchment area" is weak. (Catchment area is the term of art the industry uses to define the number of potential travelers within about a two-hour drive of the airport.) That has meant Denver doesn't get as many nonstop international flights as other airport hubs. But United Airlines is going to try again with a Denver-London/Heathrow route. United launched the route in 2008 only to dump it in 2011. Now it will return as a seasonal service using Boeing 787 Dreamliners. Daily flights resume on March 24 and continue through October 28.
Air France is resuming flights to Nairobi from its Paris/CDG hub. The airline dumped the route 17 years ago, but it returns next March. There'll be three weekly flights using Boeing 787 Dreamliners. This is good news especially for Delta Air Lines and other SkyTeam flyers who can now connect to the Kenyan capital via Paris. There are currently no nonstops between the United States and Kenya although Kenya Airways is hoping to add flights next April.
Delta Continues Filling in the Dots on Its Route Map
Delta Air Lines continues its push to dominate or compete in virtually every U.S. market. At Los Angeles, for example, it will add daily nonstops to Mexico City. The flights using Airbus A319 aircraft launch December 1. And it'll add Delta Connection flights from LAX to Albuquerque even earlier. That route will operate six times a week using E175 regional jets beginning October 1. It'll also add E175 flights to Medford, Oregon, from its Seattle-Tacoma hub. Those daily flights will begin on October 2. It's even adding flights at Boston/Logan where it is a distant third to JetBlue Airways and American Airlines. Effective on October 1, there will be at least one daily nonstop from Logan to Pittsburgh using CRJ900 regional jets.
Jacksonville, Florida, now has a branch of Firehouse Subs. That's notable because it is the 1,100-restaurant chain's hometown airport. The airport branch, located in the JAX food court, offers the chain's first-ever breakfast menu.
Business Travel News You Need to Know
The Department of Transportation has fined three airlines for a cornucopia of consumer abuses. Delta Air Lines was fined $200,000 for lying about lost-bag rates from 2012 to 2015. American Airlines was fined $250,000 for stalling on ticket refunds. And horrible, awful, no-good Frontier Airlines was slapped with a $400,000 fine for basically ignoring DOT rules for denied boarding.
Average domestic fares decreased to $352 in the first quarter of 2017, the lowest in the 22 years that the government has kept records. But the number is a cheat since it only includes fares, not the endless array of ancillary charges the carriers now apply. In fact, fare now represents only 73.7 percent of the revenue airlines extract from travelers.
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