- A judge ruled American Airlines’ antitrust suit against Orbitz, Travelport and Sabre may proceed after finding reasonable grounds that the companies orchestrated a boycott of American. All parties, however, agreed for a stay as they seek renewed negotiations.
- Avis is dropping their “We Try Harder” slogan, used for 50 years, for “It’s Your Space.” They say it’s targeted to busy business travelers, but I just don’t get it. Bad move, in my opinion.
- Air New Zealand posted a NZ$71 million (US$57 million) net income for its full fiscal year, down 12%. The airline expects to more than double its earning for 2013, however, through “improvement initiatives” and alliance synergies with Virgin Australia and ANA.
- The Miami Dolphins experienced a delay as their chartered American Airlines jet clipped another AA aircraft at DFW early today. Their 767′s wing clipped the tail of an MD-80.
- Several airlines are offering last minute Labor Day airfare sales. So far I’ve read about sales at US Airways, United and Virgin America, mostly via email or Twitter.
- Earlier this month, a woman gave birth on an Emirates flight from Dubai to Manila. While I’ve heard about babies being born inflight before, I’ve never heard about the newborn being named after the airline. The parents named the boy “EK,” Emirates’ airline code. I thought it was cute at first, but now… not so much. Maybe as middle name instead?
Wednesday, August 29, 2012
Tuesday, August 28, 2012
Monday, August 27, 2012
In other hotel and travel industry news last week…
- Hilton Hotels & Resorts completed renovations of the former International JFK Airport Hotel and officially opened its doors last week as the Hilton New York JFK Airport. This marks the chain’s sixth property in the New York metro area (excluding New Jersey). The JFK hotel features a total of 356 rooms, which includes 64 Executive Level rooms and 11 suites. Separately, Hilton will reportedly open 500 new restaurants at its properties during the next three years. Included among the options being considered is Ruth’s Chris Steak House at hotels where it would make sense based on guest demographics. Yes, please!
- Still more than two years from opening, Hyatt Hotels & Resorts released a rendering of their planned Park Hyatt property in Bangkok. Shaped like a coil, it will mark the chain’s third property in Thailand and feature 222 rooms with a top-floor restaurant and lounge, along with more than 15,000 square feet of meeting and convention space.
- Starwood Hotels & Resorts plans to open 20 new properties this year through a combination of conversions and new construction. Twelve of the new hotels will be located in China, all of the Sheraton brand. According to Starwood’s President of Global Development, Simon Turner, “Sheraton’s impressive global pipeline is being fueled by phenomenal demand in China and India as well as by a surge in high-quality conversions in developed markets.” Eight new Sheraton Resorts will also open this year.
- On the car rental front, both Hertz and Dollar-Thrifty reported impressive fourth quarter results for 2011. Hertz enjoyed a $52.1 million net income for the period versus a $23.6 million net loss the year prior, and Dollar-Thrifty reported a $33.9 million net profit for the period this year. Dollar’s CEO, Scott Thompson, feels optimistic about the first quarter in 2012 mentioning he expects the “rental rate environment to improve in the first quarter of 2012 versus the fourth quarter of 2011.”
- As widely reported and blogged, United’s switch to the Shares GDS is right around the corner and it was reported last week that the conversion will temporarily deactivate the ability to book United’s Economy Plus seats for users of Sabre and Travelport. This is actually a pretty big deal given the volume of corporate agencies that subscribe to the impacted GDSs. There is no ETA for when this critical ancillary and loyalty mechanism will be restored.
- It was reported another ’30 Rock’ star had an issue while flying American Airlines a week ago. Katrina Bowden tweeted on February 21, “Flight attendant on American just refused to give me more water because ‘I had enough already’ what the what?! These people are the worst!” While I’ve never been refused water, I have in the past noticed a bit of attitude when asking for more. This is total speculation, but I think many FAs like to bring “extra” full bottles of water with them from the galleys on their layovers and tend to horde them near the end of longer flights. This might have been what happened to Katrina.
- And finally, the airline-traveling idiot of the week goes to a Saudi teenager who refused to turn off his e-cigarette when a flight attendant advised him to do so. The Continental Airlines flight from Portland to Houston turned around and the man was arrested upon landing in Portland. The disruptive passenger also allegedly took a swing at one of the attendants and “sang of bin Laden.” Eek!
In other airline, hotel and travel industry news this week…
- Delta Air Lines will be laying off 200 employees, the majority of which from their headquarters in Atlanta. This combined with another 2,000 employees taking voluntary buyouts, the airline claims soft demand, fuel prices and reduced capacity make the workforce reductions necessary.
- Engineers at Qantas have proceeded with one-hour work stoppages causing 17 flights to be delayed or cancelled this past Monday. Brisbane was the first city where the mini-strikes were held, with Adelaide, Sydney and Melbourne planned to follow. I didn’t, however, read of any other cancellations or delays for the rest of the week. As they should, the carrier is refusing to pay engineers overtime pay for the planned hour work stoppage. Come on unions… stop being so childish.
- The first Boeing 747-8 in Lufthansa colors rolled out of the Boeing paint shop. She’s a sexy bird in my opinion and I’ll look forward to booking a trip on it as the 747 is still my favorite airplane. Lufty ordered a total of 20 of the now longest passenger jet in the world and will begin taking delivery of them next spring.
- The first Disney property opened in Hawaii last week on the western side of Oahu about 25 miles from resort heavy Waikiki. Obviously catering to families, the price point for the Aulani resort is pretty steep with the lowest rates in October being $549 per night for a single as compared to the nearby JW Marriott Ihilani resort of $269 to $459 per night. The first ever teen-only spa at the property features frozen yogurt, Xbox Kinect fitness activites and even manicures and pedicures.
- While American Airlines and Sabre have extended their content agreement, the carrier filed a new complaint with the courts alleging the GDS “organized an unlawful group boycott against American.” The papers are heavily redacted, so there’s no publicly available detail into exactly what that supposed boycott entailed. No court date has been set for the original complaint that claims Sabre biased fares, blocked direct connect abilities and raised booking fees among other items.
- U.S. Homeland Security Secretary Janet Napolitano claims we’ll eventually be able to leave our shoes on here in America when passing through security. Many news outlets jumped on the story and I’m afraid some of them made it sound like it would be happening very soon. The original plan was to have a shoe scanner system in airports by 2015, but no decision has been made as to whether or not they’ll proceed with that technology.
- The U.S. Transportation Security Adminisration will be continuing full speed ahead with the Federal Air Marshal (FAM) and federal flight deck officer programs (FFDO). While no actual threats have been averted due to the programs, the TSA claims both are “success stories” and part of the “nation’s multi-layered approach to transportation security.” I’m all for the volunteer pilots who carry weapons, but think it should be extended to international flights. Restrictions by foreign countries prohibit the practice.
- US Airways is in talks with Airbus to see if the A321neo (new engine option) could be modified to become the replacement for the carrier’s aging 757 fleet. Currently, the A321 doesn’t have the range, power and fuel capacity for some of the carrier’s longest haul markets such as Phoenix-Honolulu, Charlotte-Dublin and Philadephia-Lisbon.
In other airline, hotel & travel industry news this week…
- Continental Airlines will be recertifying Koito-manufactured seats on 278 aircraft to meet FAA airworthiness compliance. It was discovered in 2010 that the seat manufacturer falsified test data, sending the industry into a frenzy and causing aircraft delivery and overhaul delays for airlines around the world. Beginning with 757s, Continental states they will go above and beyond FAA requirements to ensure seats meet or exceed compliance levels.
- WikiLeaks released a document that showed the U.S. was seriously considering downgrading Australia’s air transportation safety rating in 2009. At issue was, “the availability of trained air safety inspectors and excessive delegation by the Civil Aviation Safety Authority of regulatory functions to airlines.” A second review was to occur in April 2010, so given no official news hit the wires they obviously passed. Had it been downgraded to a Category 2 rating, the U.S. could have frozen operations of Australian carriers to the U.S. and terminated codeshare agreements.
- As widely reported and blogged, the board of directors at Boeing gave approval to proceed with a re-engined Boeing 737 instead of developing a completely new aircraft. Aiming to compete against the Airbus A320neo (new engine option), Boeing is claiming between a four to seven percent advantage in fuel efficiency than that of the new A320. The Boeing 737 “Max” family will use CFM International Leap 1-B engines.
- American Airlines and Sabre have agreed to extend their content arrangement “well into 2012” due to prolonged legal proceedings for which no trial date has been set. American sued Sabre claiming they were negatively biasing the carrier in the GDS due to American’s attempt to force Online Travel Agencies to commit to a direct connect technology which would bypass GDSs.
- On a more positive note for American, the carrier is upgrading premium class amenities on “select” international flights in First Class and Business Class. Flights bound for London’s Heathrow will be the first to experience the new luxuries, which for First Class includes a quilted bed topper custom-designed for the Flagship Suite, pajamas and slippers, a lightweight day blanket, new duvet and pillow, and a new Eames Office designed amenity kit featuring Dermalogica skincare products. You can bet I’ll be reviewing that kit in a future installment of Amenity Kit Reviews.
- United Airlines has scaled back flight schedules from Denver by 13 percent for the rest of the year, but the carrier insists the hub is not in danger of de-hubbing. According to United spokeswoman Christen David, “In response to the rising cost of fuel, earlier this year we announced capacity reductions for the third and fourth quarters. Denver also experiences an annual capacity reduction during the slower fall travel season.”
- Beginning next March, Cathay Pacific will introduce Premium Economy on flights between Hong Kong and Sydney, Singapore, Toronto, and Shanghai. It will eventually roll out to the rest of the long-haul fleet. The seats are described to be the equivalent of regional Business Class seats and the cabin will indeed be “Premium” with enhanced services over simply a better seat. It is also being reported that Cathay will eliminate First Class in the future instead focusing on its greatly enhanced Business Class product recently rolled out.
Finally, I hope everyone has a fun & safe Labor Day holiday here in the U.S. I’m posting this from an International First Class lounge, so might not get back to regularly scheduled blogging (and comment moderation) until the middle of next week. This trip will certainly turn into a fantastic multi-part trip report, so stay tuned.
Here’s a recap of additional news from this week that caught my attention:
- Delta Air Lines introduces the ability to track your checked bags online, as well as at self-service kiosks at its largest stations around the U.S. These upgrades also allow you to submit a missing bag report electronically, where in the past you had to work directly with an agent at the airport, or fax the information in from home. Included with the service is a “Delayed Bag Fee Rebate” in the form of travel vouchers for $25/bag up to two bags if they don’t arrive within 12-hours.
- The battles between Global Distribution Systems (GDSs) and airlines keep making the news, now with US Airways suing Sabre. The carrier claims the GDS refused to allow them to pursue other distribution platforms & threatened to remove their flights from the system if they did. Given that 35% of US Airways revenues flow through Sabre, the carrier had no choice saying, “it would not survive long” without a presence in Sabre. American chimed in, happily pointing out that “American does not stand alone in trying to bring new technologies to the distribution of airline products in the 21st century.”
- Hilton Hotels officially introduced a new lobby design to eventually be rolled out across the flagship brand. The Hilton McClean Virginia Tysons Corner Hotel has the honor of being the first with the new lobby, featuring community spaces designed to plug in and work on your mobile devices or meet with others in a comfortable lounge-type setting. An 18-hour bar is also prominent, offering time-of-day appropriate food and beverage options.
- As widely reported at most news outlets, American Airlines and United Airlines posted first quarter 2011 losses of $436 million and $213 million respectively, citing fuel costs and the events in Japan as major contributors. Additional capacity cuts are in the works at both carriers. Meanwhile, Southwest Airlines did manage to eek out a $5 million profit for the quarter ended March 31, 2011.
- Finally, quite a bit of airline news in Australia has been interesting to monitor this week. There are hints at V Australia entering the San Francisco market after Qantas’ departure, Strategic Airlines is seeking approval to fly to the United States (likely Hawaii), and it’s looking as if the new Virgin Blue will take the name of Virgin Australia, as recent web domain ownership activity suggests.
Since I last posted about the battle between American Airlines and Online Travel Agencies (OTAs), an even bigger player entered the mix. Sabre, the global distribution system (GDS) birth child of American in the 1960s, initially downgraded American’s flights in their displays and eliminated discounts to the carrier last week, but American won an injunction in court to postpone that disruption.
While they aren’t directly naming and claiming allegiance with the OTA fight, Sabre is critical of American’s Direct Connect technology and also claims they are withholding information necessary to pass through to consumers. Their contract with American expires in September, and before the court stopped them, had begun altering American’s availability displays in the system and eliminated American’s booking fee discount.
The situation with Orbitz and Expedia seemed to be more of an annoyance for American, and they simply issued the standard FAQ to satisfy public concern over the news arriving in the mainstream. They even went so far as to directly include the issue on Internet advertisements. Yes, they do have the responsibility to respond and issue statements and releases, but I guess I’m most amazed at the continued spin. And not just from American.
The heart of the matter is the fact that the industry is changing. The GDSs are threatened by new technology that will make them obsolete, and American just happens to be the first carrier to substantially challenge that history. Also, Sabre is the GDS market-leader around the world, and claims 31.5% of the market share here in the United States according to one recent survey. Likely too large of an impact to sales, the entrance of Sabre to the distribution battle got American running to the courts.
While I suppose this remains a relative behind-the-scenes battle to most, I am particularly fascinated with it and will continue to post developments in the coming days and weeks.
Travel agents and other third parties who supply and sell airline tickets were winners and losers this week.
United Airlines reversed its policy that restricted some U.S. travel agencies from using the carrier’s merchant service account when processing airline ticket payments with credit cards. These fees, which generally represent between 1 and 3% of the total transaction, were being passed along to select agencies since the middle of 2009, thereby further eroding any possibility of a profit for simple airline ticket sales. Commission rates for travel agencies have been slashed over the years, so any type of new fee is simply reducing the dime or quarter they might make to a penny or nickel. The Business Travel Coalition this week credited the combined United-Continental management team for the change.
Meanwhile, American Airlines is giving out coal this holiday season to Orbitz and flyers in general. The behind-the-scenes-until-yesterday battle between American and Orbitz has been focused on American’s demand to use its Direct Connect technology. It basically bypasses the Global Distribution Systems (GDS) like Galileo and Sabre used by just about all large third-parties to book airline reservations, and thereby saves American per segment fees in those systems. Orbitz refused to comply, so American followed through with its threat to pull their flight availability and fares. While I can’t blame American for trying to cut costs, they really took it to the next level by totally eliminating a revenue stream worth a reported $800 million annually. (I wonder how Expedia, Priceline and Travelocity currently connect to American?)
Critics of American’s decision are claiming the airline is trying to limit transparency to the lowest fares, and while that may be a side benefit for the carrier, I have to imagine the root of the matter is the cost savings. My prediction, though, is that we will again see American flights on Orbitz in the near future after both sides come to some sort of agreement.
Ho Ho Ho.