In other airline, hotel and travel industry news this week…

  • All Nippon Airways (ANA) took delivery of its first Boeing 787 this week and it flew to Tokyo’s Haneda Airport on Wednesday. Regularly scheduled service doesn’t begin until November 1st, but the carrier plans to fly a charter flight from Narita to Hong Kong on October 26th. The Dreamliner will be seen initially flying regionally with long-haul service from Tokyo to Frankfurt beginning in January 2012.
  • Lufthansa has ordered two additional Airbus A380s and 10 other aircraft in a deal that carries a list price of about $1.3 billion. The carrier says the increased capacity is necessary for “short-term requirements.” The other additions are one A330-300, four A320s for regional intra-Europe flying and five Embraer 195 regional jets. Once delivered, Lufty will have a fleet of 17 A380s.
  • The Air Line Pilots Association at United Airlines sued the carrier claiming pilots weren’t given enough time to learn, train and implement a new procedure when a jet is caught in a strong wind gust. The procedure in question is currently used at Continental Airlines and requires pilots to let the autopilot make the necessary adjustments vs. pilots taking control in those instances. Courts ruled with the airline allowing the changes to go ahead. Something tells me, though, that pilots against the change might disobey procedure and take over control of the airplane. Just a hunch as it’s something I might do.
  • Courts also sided with US Airways this week forcing pilots to quit engaging in work slowdowns that have caused delays and cancellations impacting the carrier’s ability to handle reaccommodation of passengers. When the suit was filed, the US Airline Pilots Association claimed the carrier’s allegations were “categorically false” and instead said they were performing a “safety campaign.” The judge disagreed after reviewing the evidence and issued an injunction against the union.
  • Many hotels require you to cancel a reservation by 6pm the day of arrival, or some even 24- to 48-hours out. It’s nothing new, but one hotel in Packwood, WA has a vague policy stating, “If Manager is able to re-sell Guest’s dates at net rates of at least equal to those charged to Guest, Manager will refund Guest’s Use Fee less a Re-Booking fee as specified by Manager.” Chris Elliott thinks hotels might adopt airline-like rebooking fees on some rates in addition to the already existing non-refundable ones. It’s an interesting concept where hotels could create a new revenue stream, but I don’t think it will catch on.
  • Hilton HHonors revealed its fourth quarter promotion offering either double points or a free night certificate after four qualifying stays or 10 nights. Registration is required for stays between October 1st and December 31st this year. The list of non-qualifying properties is lengthy and includes two I have bookings at in October. As such, I signed up for the double miles since it wouldn’t pay off to do a couple of mattress runs just to get a free night.
  • Even with the current economic downturn, it’s being reported business travelers are returning to booking premium cabins on airlines. Corporate travel managers saw a five percent increase this year in North American companies that allow premium-class travel. 56% of companies here have such a policy, with 46% of European firms, up from 34% last year. I always feel fortunate to get a complimentary upgrade on United’s A319 fleet with only 8 seats in First Class, but my luck might change should these figures continue to rise.
  • Finally, Virgin Atlantic was fined $25,000 by the U.S. Department of Transportation for violating the rules for advertising taxes and fees clearly. They found the carrier, “displayed internet ads that did not provide direct access to information on taxes and fees that were in addition to the base fare.” If you clicked on the ad, the fees were there, but fairly well hidden in the fine print. This will all change come January next year, though, as all advertised prices will be required to include the fees.

Posted by Darren | No Comments

Yesterday at the JP Morgan Aviation, Transportation & Defense Conference in New York, Jeff Smisek gave a presentation on the status of United Airlines, the merger with Continental, and the future of the industry. A lot of it was high-level CEO talking points about the carrier and the future, but he did reveal a couple of interesting tidbits during his speech and afterwards in the Q&A session. Matthew provides an excellent summary over at his blog, and includes links to the audio and presentation slides. In addition to his notes, here are a few of my own:

  • Consolidation. Jeff began the talk speaking about the fragmentation of the industry & mentioned consolidation is good for the industry and hopes it will continue. I doubt that means more for United, though.
  • Fuel Efficiency. Frequently throughout the talk he brought this up. The carrier today is 32% more fuel efficient on a RPM (revenue passenger mile) basis than in 1992. He also joked that the APU (auxiliary power unit used while the aircraft is at the gate and to start the engines) is “the world’s most expensive coffee maker.” Knowing how focused United was in 1993 when I interned in Flight Dispatch (EXODD), it’s amazing to hear a 32% increase in efficiency. Granted, a lot of the gas-guzzlers have since been retired from the fleet.
  • Business Travelers. The slide showed 65% of the total revenue comes from business travelers, who represent probably around 40-45% of the total traffic. He also mentioned United has had tremendous success in getting corporate contracts due to their network, and that of Star Alliance. Back in 1993 I had a chance to sit in on a talk Stephen Wolf, United’s then CEO, gave to a group of pilots. At that time, I recall the figures being more in the neighborhood of 30% of the traffic generated 70% of the revenue.
  • Frequent Flyer Program. He calls it spectacular and huge with more members than the citizens of France worldwide. The full 2012 program will be announced later this year, and did mention it will bring enormous value to customers, What that means remains to be seen, and he closed the topic by saying, “It’s not your grandfather’s frequent flyer program.”
  • FareLock. Jeff mentioned the Continental Airlines FareLock service I blogged about previously has been a successful product. Not a huge revenue earner, but successful nonetheless. This leads me to believe it will continue at the new United.
  • Technology. He admitted they’re not using the best technology platform out there for reservations and back-end processes, but they’re using the one that allows them to integrate both carriers with the least issues. He didn’t call it out by name here, but is referring to the SHARES reservations system as I also blogged about previously. After a successful integration, he then said they’d be looking at the best solution out there.
  • Premium Service (p.s.) JFK-LAX/SFO. These high-yield markets with dedicated aircraft will receive “significant upgrade to the interiors,” including lie-flat seats. This has stirred a lot of speculation on the boards of FlyerTalk and MilePoint with regard to p.s. going to a two-cabin format, and a possible reduction in the amount of premium seats. Last November the SAG/AFTRA contract was revised restricting actors to flying only business class domestically (unless they have enough clout for first), so we might just see the Continental BusinessFirst model onboard the p.s. flights in the future. How many seats remains to be seen, but I would have to assume they’d dedicate more real estate to the premium cabin than the standard domestic 757 versions.
  • Ancillary Fees. Jeff thinks unbundling is here to stay permanently, and United will continue to seek out ways to offer features and services with “great value and high margins.” Read that as you will, but he did at least go on record as saying United will never charge for onboard bathroom use or seatbelts!

Posted by Darren | No Comments

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