The Tactical Traveler By Joe Brancatelli
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Business Travel Briefing for November 10-23, 2017
The briefing in brief: Qatar Airways buys into Cathay Pacific and dreams of global grandeur. TSA proves its incompetence--again. U.S. extended-stay hotels arriving in Europe. Island Air folds in Hawaii and Southwest Airlines is on deck. Flying Blue devalues. How much? TBD. And more.
Qatar Airways Buys Into Cathay Pacific and Dreams of Global Grandeur
Ever-acquisitive state-owned Qatar Airways this week shelled out $660 million for a stake in Cathay Pacific, the well-regarded Hong Kong-based airline that has been hard hit by discount carriers, rising fuel costs and several corporate missteps. That tidy sum represents a 9.6 percent stake in Cathay, the third-largest share after privately held Swire Pacific (45 percent) and state-owned Air China (30 percent). As you may recall, Qatar already owns a 20 percent stake in International Airlines Group (IAG), the parent company of British Airways and Iberia, and a 10 percent stake in LATAM, the Latin American combine that owns LAN of Chile and TAM of Brazil. What do these carriers have in common? Like Qatar Airways, they are members of the Oneworld Alliance. In fact, Qatar now has its corporate finger on just shy of 50 percent of Oneworld's global capacity. (Qatar also recently purchased 49 percent of unaligned Meridiana, an Italian carrier.) Qatar's chatty, aggressive chief executive, Akbar al Baker, makes no secret of his desire to cobble together a global virtual airline. The problem there? He was rudely rebuffed earlier this year in his attempt to buy a stake in American Airlines, U.S. anchor of Oneworld. In fact, American's anti-Gulf Carrier rhetoric seems to have ratcheted up since al Baker's move, so it will be interesting to watch how things develop. And, of course, to wonder if any of this financial manipulation makes our lives any easier.
U.S.-Branded Extended-Stay Hotels Arriving in Europe
Longer-stay travelers used to the space and amenities offered by extended-stay hotels in the United States are often frustrated that similar accommodations are hard to find in Europe. But fear not, they are coming. Residence Inn by Marriott now has three locations: a property in Edinburgh opened in 2011, a new hotel in Aberdeen, Scotland, and an 87-room branch near Tower Bridge in London. A second Residence Inn in London, near Earls Court, is due in February. An Amsterdam outpost is due around the same time. Meanwhile, Hyatt has opened two Hyatt House hotels in Europe in the last three weeks. A 102-room branch opened in Dusseldorf's Andreas Quartier late last month and a 158-room Hyatt House opened last week in Gebze, Turkey, 10 miles from Gokcen International, Istanbul's second airport.
InterContinental has opened its second hotel in Los Angeles, a part of the new Wilshire Grand Center. The 889-room hotel is situated on the top floors of the 73-story, 1,100-foot-high tower, which developers claim is the tallest building west of Chicago. Wilshire Grand is owned by Korean Air.
Surprising No One, the TSA Spectacularly Fails Routine Testing--Again
Two years after routine internal tests found that the TSA failed to detect 95 percent of fake guns and dummy explosives placed in carry-on luggage, the agency flunked another test with, um, well, flying colors. At least 50 percent and as much as 80 percent of test contraband got past TSA agents at airport security checkpoints. "The agency you run is broken badly," Rep. Mike Rogers (R-Michigan) told TSA administrator David Pekoske this week during the public portion of a Congressional hearing. Well, duh ...
Kansas City voted Tuesday (November 7) in favor of a $1 billion new terminal at the city's airport. The proposal, for a single building to replace the city's mostly underused multiple terminals, passed with 74 percent of the vote.
Phoenix has ended an early bag-check program available for five years at the East Economy parking complex at Sky Harbor Airport.
Newark flyers take note: United Airlines has closed its club near Gate 120 in Terminal C. It is being converted to a Polaris Lounge. A pop-up, limited-service club is open near Gate C124. The United Club near Gate C74 is unchanged.
Aloha, Island Air. Get Ready for Inter-Island Southwest Airlines
Island Air stops flying Saturday (November 11), less than a month after it declared for Chapter 11 bankruptcy. The state's No.2 inter-island carrier, which started life as Princeville Air and spent most of its 37 years as a commuter carrier for defunct Aloha Airlines, accounted for about 13 percent of Hawaii's traffic. After a string of failures, don't expect a new local player to spring up. Most likely candidate to compete with entrenched Hawaiian Airlines on inter-island runs: Southwest Airlines. The 800-pound sumo of discount carriers says it will start Hawaii flights from the mainland next year and hasn't ruled out operating inter-island flights as "tag-on" runs. Stay tuned.
Yemenia, the flag carrier of Yemen, has suspended flights due to a blockade imposed by Saudi Arabia. It's unlikely the war-torn state will see new flights any time soon.
Get Ready for a Big Hike in Flying Blue Award Costs
The Flying Blue program operated by Air France/KLM is switching to a revenue-based system of earnings and it is heavily devalued and incredibly convoluted. Think I'm kidding? Check the details here. Changes are effective April 1. But let's be honest. Most U.S. flyers don't accrue in Flying Blue. They transfer points from Chase Ultimate Rewards and American Express Membership Rewards and claim seats on Air France, KLM and other SkyTeam carriers. So what's happening to reward prices in the new Flying Blue? No one knows because Air France hasn't said. Much like Delta hid the award charts of SkyMiles when it first went revenue-based in 2014, Air France/KLM is playing hide the salami with its new charts. The inescapable conclusion? The new charts are ugly and will include massive price increases. Stay tuned--and maybe start looking for other uses for those Amex and Chase points.
Hilton Honors and American Express will roll out several refreshed credit cards. Now Hilton's exclusive credit card partner, Amex will offer a total of four cards: the basic and business cards; Ascend, a rebrand of the existing Surpass card; and Aspire, a new premium card. It'll have a $450 fee but offer a $250 annual airline statement credit; a $200 annual Hilton statement credit; Priority Pass membership; and Honors Diamond status. Aspire will also offer 14 points per dollar spent at Hilton properties. The card will be available early next year. Separately, Citibank, which has lost its piece of the Hilton portfolio, is ending transfers to Honors from the ThankYou program. The last day to transfer ThankYou points to Hilton is December 12.
Business Travel News You Need to Know
Roanoke travelers take note: Amtrak has revived rail service to the Virginia city in the Blue Ridge Mountains. It's on the railroad's Northeast Regional trains. The trip to Washington takes five hours.
Delta Air Lines is testing pre-ordering for some business class passengers on international flights from its New York and Atlanta hubs. If you've been chosen, you'll get an E-mail six days before departure and can choose your menu.
Priority Pass has added another dining option, something we discussed last month. When you're in St. Louis, you can receive a $28 per person credit at the Pasta House restaurants in Terminals 1 and 2.
World Airlines may be the next dead airline to be revived. A consortium of investors has acquired the name, which flew from 1947 to 2004, and claims it will operate as a low-cost international airline. The investors group is fronted by Ed Wegel, who most recently ran the failed revival of Eastern Airlines. So, you know, stoke the fires to burn the cash ...
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