The Tactical Traveler By Joe Brancatelli
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Business Travel Briefing for September 7-21, 2017
The briefing in brief: The high cost of Harvey for the Houston-hubbed airlines. Hypocrisy, thy name is Delta's new Indianapolis-Paris route. The immediate future of U.S. lodging in one word? Marriott. Air Berlin chops its U.S. nonstops to Berlin. Amtrak's "soft" upgrades. And more.

The High Cost of Harvey for Houston-Hubbed Airlines
With the monstrously large Hurricane Irma bearing down on Florida, it's hard to remember last week, when Harvey was whacking Houston and Southeast Texas. It will be months, perhaps years, before we know the full extent of the damage in Texas, but the bill is already coming due for United and Southwest airlines, Houston's largest carriers. Southwest Airlines, which controls more than 90 percent of traffic at Houston/Hobby, said this week that Harvey will reduce third-quarter revenue by $40-$60 million. At least that's the company's initial estimate. The numbers are much higher at United, which controls more than 70 percent of Houston/Intercontinental traffic in concert with its commuter carriers. United says its third-quarter revenue will be hit by at least $150 million. The airline cancelled more than 7,400 flights in a 12-day period and won't restore its full Intercontinental schedule of about 500 daily flights until tomorrow (September 8). "It's the largest operational impact we've had in the company's history," United chief financial officer Andrew Levy said this week.

Hypocrisy, Thy Name Is Delta's Indianapolis-Paris Route
Delta Air Lines has been screaming bloody murder about having to compete with the Gulf Carriers, which Delta claims are heavily subsidized by their governments. So it's interesting to note the back story on the nonstop route between Indianapolis and Paris/CDG that Delta announced this week. Three weekly flights will launch May 24 with Boeing 767-300ERs configured with 25 business class beds, 29 Delta Comfort+ seats and 171 coach chairs. The Paris end of the route has an obvious explanation: CDG is the hub of its joint-venture partner Air France. But Indianapolis is a small market with no previous transatlantic flights and little chance of passenger feed from Delta's meager IND schedule. But what the Indianapolis-Paris run has going for it is a subsidy. Over the next two years, Delta will receive as much as $5.5 million of state economic-development funds to operate the flight.
      United Airlines says it will launch an ultra-long-haul nonstop between its Houston/Intercontinental hub and Sydney, Australia. Flights are scheduled to begin January 18 using Boeing 787-9 Dreamliners configured with 48 of United's old business class beds, 83 Economy Plus seats and 141 coach chairs. The Sydney flight clocks in at 8,596 miles and requires 17 hours and 30 minutes westbound to Sydney and 15 hours and 45 minutes eastbound to Houston.

The Immediate Future of Lodging? Marriott and Lots of Its Limited Service Hotels
Wondering about the immediate future of lodging? The answer only requires one word: Marriott. According to the consulting firm Lodging Econometrics (LE), Marriott has the most properties in the United States under construction, in the pipeline, scheduled to start construction and in the early-planning stages. In fact, a third of all hotels in the U.S. pipeline carry one of the Marriott brands. According to LE, Marriott has nearly 1,300 new hotels in the works representing a staggering 166,000 rooms. The fastest-growing Marriott brands? Fairfield Inn, Residence Inn and TownePlace Suites. Marriott's torrid growth pace is nothing new, either. More than one in four new U.S. hotels opened in the first half of the year flew a Marriott flag. That covers 120 hotels with more than 14,000 rooms. The fastest-growing brands in the first half? Fairfield Inn, which opened more than one new property a week, and Courtyard, which opened one hotel every ten days.

Berlin Loses Most U.S. Nonstops as Bankrupt Air Berlin Contracts Before Sale
This is not a very good time to be flying to or from Berlin. The "new" airport, Berlin/Brandenburg, is six years behind schedule and sitting idle due to a series of construction foul-ups. And now the overwhelmed and outdated Berlin/Tegel is losing most of its flights to the United States. Bankrupt Air Berlin, which is still flying thanks to a bridge loan from the German government, is due to be sold next week. But before its sale, Air Berlin is shedding transatlantic flights from its Tegel hub. Flights to New York/Kennedy and Chicago/O'Hare end on October 1. Seasonal flights to Miami will not resume and the seasonal flights to Los Angeles and San Francisco are ending October 1 instead of the end of the month. Air Berlin's flights to the United States from its Dusseldorf hub remain on the schedule, but are only bookable in full-fare coach or business class after November 1. That's a good indication that Air Berlin may dump them, too, if a new owner wants to cut costs quickly.

Business Travel News You Need to Know
Some good news for Amtrak riders in the Northeast Corridor and the Midwest: The railroad has committed to a mostly soft-goods upgrade of its fleet. According to Amtrak, many cars in its fleet will receive new seat cushions, carpeting, reading lights and curtains. Dining cars will also get a redesign. The $16 million overhaul will take until next summer.
      United Airlines has decided that it is giving too much value to high-yield customers, so it has decided to slash some elements of its first class dining. The niggling cuts on flights shorter than three hours include eliminating bread at breakfast and ditching hot options at lunch. Dinner flights nationwide will now offer a hot and a cold meal choice rather than two hot options. Most red-eye transcons will lose sandwiches and salads and offer only snack baskets.
      Alaska Airlines, which operates an all-Boeing 737 fleet, nevertheless says it will retain the Airbus A320 equipment it picked up when it purchased Virgin America. Those planes will stay in the fleet until at least 2025 when the leases expire.
      Ryanair is limiting passengers to just one small carry-on bag unless they purchase the carrier's "priority boarding" option.


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