The economy hotel tier in Europe will see a new player come March 2014: Moxy Hotels. The brand, backed by Marriott, expects to open the first of their new properties in Milan roughly a year from now, kicking off plans for 150 properties across Europe over a 10 year period, 50 of them in the next 5 years. The brand is focused on the millennial generation, with an emphasis on stylish design, connectivity and an affordable price. They want to grab the intersection of the backpacker and jet set markets.
Arne Sorenson, President and CEO of Marriott International, sees great potential for the new brand:
MOXY HOTELS is the essence of the next generation traveler, not only Gen X and Y but people with a younger sensibility, for whom contemporary style is paramount. Every aspect of the hotel was thoughtfully researched and crafted to reflect and deliver on the changing lifestyles and expectations of this fast-growing customer segment. We believe Marriott will lead the way in redefining the traditional economy hotel experience throughout Europe.
After Milan the brand plans to open in Frankfurt, Berlin and London. Other locations will be targeted in Germany, Austria, United Kingdom, Ireland, Belgium, Italy, The Netherlands, Denmark, Finland, Norway, and Sweden.
The hotels will be medium sized – the goal is 150-300 rooms at each property – with a focus on welcoming common spaces as much as in well appointed rooms. In this way the Moxy brand hopes to offer the social aspects of hostels while going a step or three up the ladder on amenities and privacy when the guests want it. And with free wifi throughout the properties and USB ports at every outlet the company is clearly taking a fresh view on features, at least in some areas. And for guests who want something a bit more traditional there will still be large LCD TVs in the rooms.
For budget travelers who are also points-focused the Moxy chain offers the best of both worlds. Their participation in the Marriott Rewards program will allow guests to accrue and redeem points similar to other Marriott-backed properties. And with only 20% of the budget hotels in Europe currently brand-affiliated this new product opens up a lot of possibilities in the space.
The way they describe the properties I can see some appeal for my travel habits, despite being quite a bit older than the "millennial" target market. That said, looking at the photos on their website I’m clearly not in the same circles. Not quite hipster and not quite euro-trashy; I don’t exactly know what they are going for, but it does have me intrigued. And, while I don’t really love visiting Milan, I suppose I can plan a trip for next spring anyways, just to see how it is.
After several weeks of speculation Delta, Singapore Airlines and Virgin Atlantic have come to an agreement which will see Delta acquire a 49% ownership stake in Virgin Atlantic for $360mm. Delta’s stake will come from Singapore Airlines; Virgin Group, headed by Sir Richard Branson, will retain their current 51% share and control of the company. The Virgin brand and operating certificate will remain intact. The deal is still dependent on approval from regulators on both sides of the Atlantic. The airlines expect the deal to close by the end of 2013.
Delta and Virgin Atlantic also intend to establish a joint venture operation for trans-Atlantic operations. The joint venture will not, at least for now, include other SkyTeam partners. It will, however include:
- A fully integrated joint venture that will operate on a "metal neutral" basis with both airlines sharing the costs and revenues from all joint venture flights.
- A combined trans-Atlantic network between the United Kingdom and North America with 31 peak-day round-trip flights.
- Enhanced benefits for customers including cooperation on services between New York and London, with a combined total of nine daily round-trip flights from London-Heathrow to John F. Kennedy International Airport and Newark Liberty International Airport.
- Reciprocal frequent flyer benefits.
- Shared access to Delta Sky Club and Virgin Atlantic Clubhouse airport lounges for elite passengers.
The joint venture will definitely give the combined carriers a leg up in the ultra-competitive London market. That said, the combined lift between London and New York City and Newark still doesn’t begin to reach the frequencies at British Airways/American Airlines offer. The 23 total flights daily between the USA and Heathrow will place Delta/Virgin in a solid second place, ahead of United’s 16 but well behind BA/AA’s nearly 40 daily operations.
From a passenger perspective the overall product should be very competitive in both economy and business class. Both Delta and Virgin Atlantic currently offer flat beds for all passengers in their business class cabins. For economy class the AVOD systems on both carriers should provide sufficient entertainment to distract the passengers from their tighter seating quarters. Virgin Atlantic has a proper premium economy cabin which Delta does not offer; there may be some work to reconcile that difference at some point. On the ground the Virgin Clubhouse lounges are some of the nicest business class operations, particularly in New York and London. Delta’s SkyClubs are not at the same level but in shared markets customers will have the benefit of access to both.
Delta has been looking for a way to get at more slots into Heathrow. They picked up a couple when British Airways was forced to divest them following their acquisition of bmi but that wasn’t enough to significantly change their operations. The partnership with Virgin Atlantic will open up access to many more slots eventually. And the price point was quite reasonable. Of course, Virgin Atlantic has been losing money in recent quarters so it might become a more expensive investment over time, but at least initially it looks like a positive opportunity for both carriers.
It is no secret that Singapore Airlines has tried to divest themselves of their 49% ownership stake in Virgin Atlantic from time to time. Might they have found a willing suitor in Delta Airlines? That’s what is being reported in the London media this weekend. To make the transaction work Delta would purchase the 49% stake, the maximum permitted by non-European parties, and Air France/KLM would purchase an additional stake. The SkyTeam partners would then hold a majority of the shares giving them control of the company. For Sir Richard Branson, the airline’s founder and public face it would represent the first time since he started the carrier nearly 30 years ago that he would no longer be in charge.
The move is almost entirely focused on gaining access to Virgin’s slots at London‘s Heathrow airport. The consolidation of British Airways and bmi has changed the competitive landscape at Heathrow making it even more difficult for Virgin Atlantic to compete, particularly without local and regional feed to their operations. A SkyTeam takeover of the slots and routes could see major changes to the destinations served and operational style.
Two years ago Virgin Atlantic hired outside advisors to help them explore options. Two years ago Deutsche Bank was hired to help the carrier consider different scenarios. Delta was linked to the discussions at that time as well but nothing came from it. Perhaps this time around the outcome will be different. Given the recent rumblings that Virgin Atlantic is looking to join one of the major alliances (and my guess that SkyTeam is the best fit) it really isn’t all that hard to see how having the carrier merge into the other airlines rather than just be a partner would offer some competitive advantages.
Keep your eyes and ears open; this one could be interesting…
The frequent flyer program of Hawaiian Airlines doesn’t have a ton to recommend it. The earning rates aren’t great. Neither are the elite benefits. And, most notably, the award chart has very few great values to it. By many accounts there was actually only one tremendous award they offered: North America to anywhere Virgin Atlantic flies in Upper Class for 140,000 points. Note the use of the past tense there. The Virgin Atlantic partner award chart was updated in the past couple days (the old one was definitely there 3 days ago when the Virgin America partnership was announced), devaluing the awards by huge margins.
Here’s the old award chart, courtesy of MileValue.com:
And here’s the new award chart from the Hawaiian website this morning:
For starters, awards appear to be priced as to or from London, not from the mainland USA destinations Virgin Atlantic serves. This means getting past London from the USA now requires adding two awards together, one to get to London and then another to continue onwards. The Upper Class award from Los Angeles to London in Upper Class went from 100,000 points to 160,000; from New York City the rate only increased 25% to 125,000 points.
But if you want to continue on, say from New York City to Hong Kong or Mumbai, the rate is now 285,000 points, an increase of more than 100%. From San Francisco that rate is 320,000 points.
It is very, very rare that points ever increase in value. It has happened maybe once or twice that I can recall in the past decade. That’s why hoarding millions of points is rarely a smart move. But it is also rare that such dramatic devaluations as this one happen. Not unheard of, but definitely rare. All the more reason to spend ‘em when you get ‘em.
As London-based carrier bmi was wrapping up operations there was a bit of a battle over who would get the opportunity to own the remnants of the company. British Airways ultimately acquired the carrier, along with its highly coveted landing slot portfolio at Heathrow, but not without loud protestations from Virgin Atlantic. In the end, BA "won" the battle. Sortof.
Authorities in England have decided to award to all the slots BA parent company IAG is divesting as a condition of the merger to Virgin Atlantic. It is only 12 slot pairs, versus the 40+ pairs which IAG will get to keep and distribute amongst BA and Iberia. But the associated burden for acquiring the slots is also much lower. Virgin Atlantic doesn’t have to deal with folding up the bmi operations or the debt that came with the acquisition.
Virgin Atlantic has indicated that the final details of their schedule will take a bit of time to iron out but they intend to launch short-haul feeder service to their Heathrow hub with these slots. They will contract with another airline to operate A320 aircraft for them on the routes, including multiple daily frequencies to Edinburgh and Aberdeen, Scotland. This service is in addition to the previously announced plans to fly to Manchester.
Maybe Virgin Atlantic didn’t win the battle. But is also doesn’t seem that they completely lost either.
Seeking greater access for their customers into mainland China markets, Air New Zealand announced an agreement with Cathay Pacific to launch a strategic agreement in December 2012. The two carriers will coordinate their schedules for service between Auckland and Hong Kong, including code-sharing on flights. Additionally, connections to mainland China on Cathay will be coordinated with the Air New Zealand schedule, allowing better access to those markets for the Kiwis. The partnership will include reciprocity on frequent flyer points earning and elite status benefits, including lounge access and other priority services.
At the same time, Air New Zealand has announced that they will be dropping service between London and Hong Kong as of March 2013. The carrier will redeploy much of that capacity on flights to North America. Long-haul markets have been a sore spot for the carrier’s profitability in recent years and, according to CEO Rob Fyfe, the Hong Kong – London route showed no signs of reversing that trend anytime soon.
Of significant note in the new partnership is that the two carriers belong to separate global alliances. Cathay is a founding member of oneworld and Air New Zealand is a member of Star Alliance. Despite participating in different alliances the two carriers have managed to establish a bilateral agreement which should prove beneficial to their respective customers. Just another example of partnerships growing outside of the alliances. And these new partnerships, for the most part, work in favor of the customers.
You, American Airlines, should no longer be flying across the Atlantic. You do not have the know-how. You do not have the equipment. And your employees have clearly lost interest in the endeavor. Like the country whose name graces the hulls of your flying ships, you are exhausted and shorn of purpose. You need to stop.
That’s how author Gary Shteyngart starts his trip report from a recent Paris – New York voyage on American Airlines. Well written and certainly gripping, though I’m not really sure it deserved to be published in the New York Times. But apparently this is pick on AA month and the NYT is getting in the game.
The short version of the story is a mechanical diversion led to an overnight in London, some trouble getting through immigration (because, as we all know, AA controls immigration queues at Heathrow), and then a second cancelation. Certainly not a great day for AA and not a great trip for the passengers, but also rather short of kafkaesque, the term used in the headline.
I have no idea why the Times thought this was worth publishing, other than that the first paragraph is pretty well written. And it was in the opinions section so I suppose he’s entitled to his. I’m just not sure why they thought the rest of us care about it so much. Or why the anti-America (the country, not American the airline) aspect is so tightly wound with his travel experience. Quite bizarre, indeed.
Looks like it is time to schedule a trip to Houston. United Airlines announced in an internal memo yesterday the routes they will be flying with their first Boeing 787 Dreamliner aircraft. While the Denver-Tokyo route was the first to be loaded into the system for sale it won’t be the first operated. The plane will visit a number of other destinations in the coming months. Here’s what was written in the United Daily briefing:
The places we’ll go on our 787s
Amsterdam, Tokyo, Lagos, London and Shanghai are the first international cities we’ll serve with the newest addition to our fleet, the Boeing 787 Dreamliner. This weekend, we’re loading the 787 into our schedule for the following routes:
• IAH to AMS (Amsterdam) between Dec. 4 and March 29, 2013
• Daily service between LAX and NRT, beginning Jan. 3, 2013
• IAH to LOS (Lagos, Nigeria), five days a week, beginning Jan. 7, 2013
• IAH to LHR (London Heathrow) between Feb. 4 and March 29, 2013
• Daily service between LAX and PVG (Shanghai), beginning March 30, 2013
The 787 will replace other aircraft types on each of these existing routes and will be reflected in our published schedules starting on Saturday.
The previously announced new service between DEN and NRT, which starts March 31, 2013, is already out for sale.
“The 787 is the right aircraft for these routes because of its many passenger-friendly amenities and superior operating economics,” Network SVP Greg Hart said. “With 50 787s on order, we look forward to the many new route opportunities that we will be able to offer to our customers in the future.”
As a mid-size aircraft with a long range, the 787 offers about the same capacity as a Boeing 767 but it can travel as far as the larger Boeing 777-200ERs. We will leverage the 787’s fuel efficiency and environmental advantages to serve markets that can’t support larger aircraft.
We will soon announce plans for 787 domestic flying, which will precede international flights.
No surprises here at all. The routes announced are in line with previous statements and rumors. still, nice to see it official. Bookings should open on August 25 for all these flights.
Having lost partner bmi to British Airways, UK carrier Virgin Atlantic is looking to recover some the domestic feed it uses to fill long-haul flights. Starting in March 2013 the carrier will operate thrice-daily service between London‘s Heathrow airport and Manchester using leased Airbus A319 planes. British Airways currently operates 13 daily flights on the same route.
Virgin Atlantic is hoping to secure some of the coveted take-off and landing slots at Heathrow which British Airways must divest as part of the bmi merger. In the mean time, however, they will use some of their existing slots to handle the scheduled service. This means other routes may be trimmed; the affected flights have not been detailed at this time.
There are approximately 1800 daily passengers in the London – Manchester market and 60% of those continue on to long-haul flights according to Virgin Atlantic CEO Steve Ridgway. With bmi no longer able to help feed traffic into the Virgin Atlantic network it is necessary for the carrier to find another way to get some of those passengers into their long-haul routes. Running their own planes seems to be the way to get it done.
Given the frequent "fun" competition between British Airways and Virgin Atlantic it will be interesting to see what happens in the market as this service is launched. Things could get interesting.
With Olympics travel heating up this weekend there will be plenty of folks arriving at one of the six London airports. And for those curious about how to best get from the airport into town or between the airports Kerwin McKenzie, a fellow travel junkie, has put together an eBook published for Kindle to help navigate the transit options available. While it is quite reasonably priced in general, Kerwin is giving it away for free through July 28th to help people headed to the games. Even if you’re not headed to London this week, grab a copy. The information is solid and free is always nice.