• 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?

Previous news:

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 last week…

• Virgin America announced Philadelphia will be the carrier’s newest destination beginning in April 2012. Three daily LAX-PHL flights will commence April 4^th and two daily turns SFO-PHL will follow starting April 10^th. If history repeats itself, we should see some pretty decent fare wars in these markets. Presently, both United Airlines and US Airways offer Philly flights from SFO and LAX, and Delta also flies LAX-PHL nonstop. Based on Virgin America research, “50% of travelers flying from PHL to the Los Angeles market now use connecting flights and 45% of those traveling from PHL to the San Francisco Bay Area are connecting passengers.”
• Frankfurt Airport broke passenger records in 2011 by handling 56.44 million people during the year, up 6.5% from 2010 and making it an all-time best. Contributing to the success was the opening of the airport’s fourth runway and Germany’s stable and slightly growing economy compared to other parts of Europe. Air freight, however, took a hit with Fraport handling 2.8% less metric tons in 2011 as compared to 2010.
• William Shattner has been the Priceline spokesperson for 14 years, but that’s about to change. Beginning today, commercials will be airing showing the “Negotiator” (Shattner’s character) plunging to his death off a bridge after saving a bus full of passengers. Priceline’s CEO, Christopher Soder, said a change is needed “to reflect the company’s broader strategy.”
• AAA released the names of the newest Five Diamond Award properties to grace the company’s elite list. The additions are: Aria Sky Suites at Aria Resort & Casino in Las Vegas, The Inn at Palmetto Bluff in Bluffton, SC, Jumbay Bay in Antigua, the Mandarin Oriental in Miami, FL, Montage in Beverly Hills, CA, Ocean House in Watch Hill, RI, The Ritz-Carlton, Lake Tahoe, CA, The Ritz-Carlton, Toronto and the St. Regis Houston, TX.
• In hotel news, the current Crowne Plaza near Cleveland’s convention center will be undergoing a $64 million renovation and reopen next year as a Westin property. It will house 481 rooms and 26,000 square feet of meeting space. Also opening next year will be New York City’s first SpringHill Suites property, a Marriott brand. It will feature 137 rooms in the 19-story hotel Herald Square property.
• Anyone heading to Australia in the next couple of months during peak season? One website I follow occasionally posts a comparison of hotel prices and this one features Aussie hotel rates from January through March 2012. If you’re headed to Sydney in February, for example, and staying in a four-star property, you can expect a minimum rate of US$97.03 per night for the Great Southern Hotel. A five-star hotel, their example as being the Hilton Sydney (not five stars in my opinion), will set you back US$148.13 per night.
• Finally, I keenly watch the Global Distribution System (GDS) world, namely, those reservation systems both airlines and travel agencies use to sell airline tickets and other services. Travelport, GDS provider of Apollo (my favorite), Gaileo and Worldspan, previously rolled out a change to its Agility suite of programs last month that would have cost some agencies $35 per terminal per month to use features they’re currently using today for free. Travelport rolled back the fees after agency backlash, but CEO Gordon Wilson says their relationship with agencies needs to change in order to provide them with the tools they need at a price adaptive with the marketplace. I smell a bit of B.S. here and merely think GDSs are beginning to see their dominance in travel distribution on the wall.

In other hotel, aviation and travel industry news last week…

• Last year, Chicago took the top spot as being the city that charges the most taxes to travelers in the country and effective January 1, 2012, they’ve raised hotel taxes another percentage point. It brings the hotel portion on par now with New York and Las Vegas. Another article, however, states they don’t see “any move to raise taxes on the travel industry.”
• Checks are beginning to arrive in mailboxes across the country with refunds of fees charged for using credit cards overseas. A class-action lawsuit that required filing a claim back in 2008 is finally being settled and people are getting surprises in the mail ranging from $18.04 to thousands of dollars. I quite honestly don’t remember if I filed a claim. I hope so, because the travel period was from February 1, 1996 through November 8, 2006 and I was overseas quite a bit during those 10 years. Were you?
• The Department of Transportation extended the deadline for airlines to advertise fares inclusive of taxes and fees by two days. Now effective January 26^th, American Airlines requested the delay since they claimed Tuesdays are the busiest day of the week for their website and the previous January 24^th requirement would have been too burdensome. No other airlines objected.
• Boeing orders are up 52% this year compared to last, in part due to a record-setting year for the 777. The manufacturer delivered 477 aircraft in 2011, but has a backlog of 3,771 unfilled orders. President and CEO Jim Albaugh stated, “As our current commitments become firm orders and we add even more customers, I have no doubt that 2012 will be the ‘Year of the 737 MAX’.”
• A subsidiary of Delta Air Lines, MLT Vacations, is now the travel wholesaler selling Air France Holidays and Alitalia Vacations. They also run the Delta Vacations brand. Vacation packagers receive bulk fare contracts from airlines, hotels and other travel providers and then combine them to sell complete vacations at a price cheaper than what you’d be able to book individually with each unit. I worked for a couple of these outfits in the 1990s and really enjoyed a unique side of the industry not known by many.
• Online retailer Overstock.com launched a travel page on their popular website. Powered by Priceline, you can book complete vacation packages or individual air, car and hotel reservations. It really acts like a portal, though, because as soon as you enter any type of search criteria, it redirects you to Priceline.
• On January 1st, the former Las Vegas Hilton rebranded as The Las Vegas Hotel & Casino, ending its more than 40 years as a chain hotel. This past Tuesday, workers removed the Hilton logo from the side of the building.
• GDS firm Travelport modified their planned re-pricing of certain functionality within Apollo, Galileo and Worldspan that would have cost travel agencies approximately $35 per month per terminal. Not unlike airlines, the company unbundled several integral features of the systems that were once free and wanted to start charging for those services. After backlash from agency groups, they relented and modified their planned changes.
• Finally, a proposal for a third runway at Hong Kong’s airport has been submitted to the government for consideration. Cathay Pacific and Dragonair, as well as the Association of Asia Pacific Airlines, backed a study supporting the expansion to keep Hong Kong as “the regional and international leading aviation center.”

In other airline and travel industry news last week…

• Southwest Airlines placed a monumental order for 208 Boeing 737 aircraft this week that includes 150 of the manufacturer’s newest Max version, making the carrier the official launch customer. The first delivery to Southwest won’t occur until 2017. At list prices, the order value is $19 billion and $4.7 billion for the aircraft and engines respectively.
• In addition to his new role as CEO of American Airlines, Tom Horton has been elected Chairman of the oneworld alliance this week. He offered to have another of the alliance carriers’ executives take the post, but “the unanimous view was that the alliance would benefit greatly at this time from the continuity in our leadership that Tom represents – while at the same time underlining the commitment of oneworld to American while it undergoes its restructuring.”
• Cathay Pacific opened their new lounge at San Francisco’s International Airport, the first CX-owned facility in the United States. A grand opening reception was held this past Thursday and Loyalty Traveler has a great review of it. The carrier also introduced details of its new Premium Economy Class product that will be rolled out beginning in March next year. The seats will feature 38 inches of pitch, enhanced recline, footrests, in-seat power and much more.
• Hearings for the dispute between Qantas and the pilots union won’t occur until June next year due in part to the complexity of the matter. The carrier has until March 19^th to submit key witness statements and expert evidence to the panel of “workplace umpires,” while the pilots union has to do the same by April 30^th. Other hearings will take place earlier between the carrier and baggage handler and engineer unions.
• The FAA granted certification to the passenger Boeing 747-8 Intercontinental this week, green lighting deliveries to begin early next year. Lufthansa is the launch customer for the passenger version. The FAA also approved extended operations (ETOPS) of Boeing 777s to 330-minutes, up from 240-minutes this week. This will allow carriers to fly more direct routes between airports and reduce carbon emissions.
• On the passenger front, a Frenchman was arrested this week for his excessive pilfering of items from Air France First Class cabins, which he then resold online. Among the items stolen were napkins, glasses, plates and blankets. The article claims he made about 10,000 euros off the sales of the items during the past three years. I’d be lying if I said I didn’t take a glass or two over the years, but I never resell the tiny amount of stuff I’ve taken.
• Speaking of fraud, the Airlines Reporting Corporation has seen a “marked increase” in unauthorized airline tickets issued. Last year, 18 of these incidents were reported, but the figure to-date for 2011 is 113 and those tickets are valued at more than $1 million. Phishing scams are the main culprit where travel agents receive what they think is official communication from trusted GDS companies and click the link to enter their credentials.
• Finally, staying on the GDS front, Travelport will begin charging travel agencies more for services they currently use for free. Beginning January 1^st, the company’s Agility program that allows agents to use certain client databases, PNR search capabilities, fulfillment services, queues and more will come with a $35 fee per terminal per month. Agency incentives for using GDS technology still remain, but new costs such as this are pointing to a changing landscape in the GDS-Agency relationship.

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

• Late last Friday US Airways filed a lawsuit against… its own pilots. Upset with what they’re calling an “illegal slowdown” by some East (read: US Airways) pilots, the carrier claims their West (read: America West) pilots are far more efficient in minimizing delays that impact on-time performance. Having taken weather and other non-pilot factors out of the equation, US Airways claims the percentage of flights arriving on schedule by East pilots has declined 11% since May. As it is, both geographic pilot groups have been at odds with each other since the merger of America West & US Airways over seniority issues. Still though, is a lawsuit against your own pilots the productive way to resolve the issue?
• Staying with US Airways news, one of the carrier’s former mechanics was sentenced to two years in prison and ordered to pay full restitution for stealing $586,000 worth of equipment, some of which he sold on eBay for approximately $350,000. Items included torque wrenches, headsets, airplane landing lights, seat belts and a large hydraulic jack. Sadly, he had a 30-year career with the carrier and an otherwise clean record. Claiming disgust with being demoted and having his pay and retirement cut, he sought to reclaim his losses through theft.
• The battles between American Airlines and Orbitz are ongoing, but both parties have entered into an agreement that will keep the carrier’s flights on the OTA “into 2012.” The court order that required American to restore flights on Orbitz dictated it be maintained that way until a new court order, or September 1, 2011. In likely cooperation with each other to avoid additional litigation, they appear to have agreed for a mutual extension for the time being.
• In coincidentally related news, Travelport (who has a 48% controlling stake in Orbitz) has extended a content deal with American Airlines ensuring the carrier’s full availability, fares and other content will continue beyond the current expiration in the Worldspan global distribution system (GDS). Travelport operates three GDSs, namely Apollo, Galileo and Worldspan, and the day after the Worldspan announcement, they confirmed full-content agreements for Apollo and Galileo would also be extended. The GDS world is often confusing to the regular traveler, and I intend to devote a future post into explaining the systems, their origin and current controversy in the industry. Oh, and separately, United Airlines Economy Plus seats can now be sold by agents booking through Travelport GDSs.
• Delta Air Lines began new nonstop service on the Los Angeles to Oakland route on Monday. Operated by SkyWest, Delta is hoping to capture some of the Southwest Airlines traffic in that market and offers five round-trips daily. American Airlines via their Eagle regional subsidiary will begin daily LAX-Aspen flights this ski season beginning December 15, 2011, continuing until April 2, 2012. Lastly, Etihad Airways, the flag carrier of Abu Dhabi (UAE), is looking to expand their Australian presence beyond Sydney & Melbourne to possibly include Perth and Adelaide in the future. My opinion… probably an add-on segment to existing flights.
• Finally, I was pleased to see many companies in the industry I follow post profits for this recent quarter and/or half-year. In addition to the major carriers (sans American), Allegiant Air posted a net income of $11.9 million for the second quarter and the carrier is all but certain to begin service to Hawaii in 2012. Hertz saw a $55 million profit in the same quarter compared to a $25 million loss in the same quarter of 2010. Hyatt Hotels citing strength in “select-service brands” (e.g., Hyatt Place and Summerfield Suites) posted a net income of $37 million. To finish, and perhaps to American Airlines’ digust, GDS provider Amadeus saw its six-month net income grow 12.2% to a whopping $377 million.

Here’s a summary of other news that caught my attention this week:

• United Airlines brings close-in award ticketing fees back for trips booked less than 21 days before departure, and modifies fees to change or cancel award tickets. Global Services and 1K members still enjoy a no fee policy across all changes. Premier Executives and below now incur tiered close-in ticketing, change and cancellation fees depending on status. Changes take effect June 15, 2011, with full details found here.
• American Airlines sues Orbitz and Travelport claiming they engage in “exclusionary and anticompetitive business practices.” This is all related to American pulling their flights & fares from Orbitz as I mentioned here, and their inability to get the OTA to commit to Direct Connect technology. Travelport is named since they provide Orbitz with incentives to refrain from using the technology as I posted here.
• The head of the federal Air Traffic Control system resigns after more controllers were caught sleeping on the job. Hank Krakowski and his predecessor, Russ Chew, were both pilots and “airline people,” according to FAA head Randy Babbitt, but that experience doesn’t translate into adequate leadership to manage the skies over America.
• United Airlines and the San Francisco Giants have signed a Letter of Agreement for the carrier to transport the team to all road games, and provides advertising opportunities with a “significant presence” at home stadium AT&T Park. They had previously used Delta for charter flights, and this partnership makes more sense given United is the largest carrier at SFO.
• American Airlines gives you a chance to win up to 25,000 AAdvantage miles by entering their current Fortune Cookie Promotion. You’re limited to one entry per email, and most winners, including myself, have reported earning 200 miles for their effort. My effort? Well… I’d say I won on my ~80^th try. I wasn’t going to give up!

And finally, some of you may have noticed a few strange things happening to my blog throughout the week. I’ve been tinkering around with new themes and custom header images (mostly offline), and will be officially changing the look of Frequently Flying shortly. My apologies in advance should this cause temporary formatting and/or readability issues, but the new look will be a fantastic improvement. This change comes with my slightly increased web skills, and will allow me to expand to include new features and services down the road. Stay tuned!

At the turn of the New Year, Expedia, the country’s most visited Online Travel Agency (OTA), pulled American Airlines flights from their site after American pulled themselves out of Orbitz, another OTA. In a rare show of solidarity with a competitor, Expedia didn’t like the cards being dealt to Orbitz, namely sign up for a direct-connect platform to access American’s flights & fares, or else “bu-bye.”

As of yesterday, however, American’s flights are back for sale on Expedia after signing a letter of intent committing to access American’s products via a modified direct connect technology in the next 12 months.

The technology in a nutshell bypasses the traditional Global Distribution Systems (GDSs) used by just about every travel agency (online or brick & mortar) out there. The GDS systems are rather archaic, and were initially developed by the airlines to facilitate ticket sales. The airlines pay fees to the GDSs on a segment basis, ranging anywhere from around $3 to upwards of $6 per reservation depending on the amount of flights in an itinerary, among other factors. Compound that by the sheer volume of reservations out there, and you can imagine how high these distribution costs are to the airlines.

It’s was a bold move by American to spearhead a potential industry changer in the way airline tickets are sold, and as the months have progressed, they really haven’t backed down. I would imagine the other airlines are peaked with interest, and are quietly appreciative of American’s first strike in shaking up a controversial legacy & costly booking system.

You still cannot book American on Orbitz, however, where the situation is a bit different. Travelport, the operator of Apollo, Galileo & Worldspan GDSs, has the largest controlling share of Orbitz, so their hand pretty much dictates how Orbitz proceeds. As it is, they provide incentives to the OTA by keeping American’s flights off-sale and by refusing to sign a direct-connect contract with the carrier.

While I can’t blame American or any airline in wanting to reduce distribution costs, it really comes down to how it impacts the traveling public. My subjective analysis would be that if most people price shop across multiple OTAs and/or airlines, the impact is negligible. Reality, however, might show a different result, and it has been the claim by GDSs that direct connect technology will do nothing but hurt consumers ability to choose and reduce transparency to the lowest fares.