Return to Business Travel Updates
Passageways Business Travel Updates
 

Passageways Business Travel Updates Title Underline


BUSINESS TRAVEL UPDATE - OCTOBER 2007

NORTHWEST NEWS

Additional Service in Michigan

  • Northwest Airlines has announced new daily nonstop Northwest Airlink regional jet service to New York's LaGuardia International Airport (LGA) from Heartland markets Des Moines, Iowa; Flint, Mich.; and Madison, Wis., beginning Nov.4, 2007.
  • Northwest is making it even easier to get to Las Vegas with nonstop service from twelve cities, including exclusive nonstop service from Madison, Memphis and Grand Rapids.

Northwest Airlines Allows Domestic Nonrefundable to Refundable Ticket Exchanges

As part of its continuing effort to improve the overall travel experience for our customers, Northwest will allow a wholly unused domestic nonrefundable ticket issued on/after October 1, 2007, to be exchanged for any Northwest or KLM refundable or nonrefundable ticket.

Currently, Northwest only allows wholly unused domestic nonrefundable tickets to be exchanged for any Northwest or KLM nonrefundable ticket. Northwest does allow the value of a wholly unused international nonrefundable ticket to be exchanged for any Northwest or KLM refundable or nonrefundable ticket of higher value and different rule number.

The new policy will allow a wholly unused domestic ticket issued with a nonrefundable fare to be applied toward the purchase of another Northwest or KLM domestic or international fare of higher, equal or lower value. The nonrefundable value of the original ticket remains nonrefundable for any subsequent ticket exchange and should be documented as nonrefundable in the endorsement box of the exchanged ticket.

Skyteam Strengthens Global Network With Addition of Three Associate Airlines

SkyTeam has welcomed Air Europa, Copa Airlines and Kenya Airways as the first official SkyTeam Associate Airlines. As of September 1, passengers traveling with Air Europa, Copa Airlines and Kenya Airways receive the same benefits offered to passengers traveling with the 10 current SkyTeam member airlines including frequent flyer programs and improved access to airport lounges.

SEC Filing Reveals Northwest Gets Bigger Chunk of Midwest

As previously reported Northwest is a signigicant investor in the group that purchased control of Midwest.

According to a Midwest Air Group filing with the Securities and Exchange Commission Sept. 13, Northwest would own 47% of the group under the merger deal Midwest signed with TPG Capital in August.

The amount of Northwest's investment, $213.3 million, making it a minority investor, is a lot more than previously suggested when Midwest announced the agreement Aug. 17.

TPG's share of the offer is $238.1 million, or 53%. TPG, formerly known as Texas Pacific Group, is a global private equity group best known in aviation circles for its investments in Continental, America West, Hotwire, Sabre and Ryanair.

With the TPG-Northwest combined $451.4 million offer, they outbid AirTran for Midwest and are offering Midwest shareholders $17 a share. (copyright 2007, Travel Weekly)

Northwest Airlines and Midwest Airlines Sign Codeshare Agreement

Northwest Airlines announced that it has signed a codeshare agreement with Midwest Airlines for tickets purchased beginning Nov. 3 with travel starting on Nov. 17, 2007.

The first phase of the codeshare agreement will include Northwest’s Hawaii-bound flights from Seattle, San Francisco and Los Angeles with travel beginning on Midwest Airlines in Milwaukee, Omaha and Kansas city. The Northwest operated flights will also be identified in reservations systems and airport flight displays by the Midwest Airlines two-letter YX code.

“This is just the first step in expanding the networks of both carriers by opening up 250 city pairs and more than 1,000 new flight options for customers,” said Nathaniel Pieper, Northwest’s vice president – alliances. “Codesharing allows Northwest to offer our customers the expanded reach of two airlines while enjoying the convenience of a single ticket and check-in.”




DOT AWARDS DELTA, UNITED NEW CHINA ROUTES FOR 2008

Source: Travel Weekly copyright 2007

The Transportation Dept. awarded the carrier a new Atlanta-Shanghai route. The carrier plans to offer daily service on 777 aircraft, probably beginning next March.

United, meanwhile, was selected to serve a new San Francisco-Guangzhou routing, also effective in 2008.

At the same time, the DOT rendered tentative rulings on several other U.S.-China routes to be opened in 2009, proposing American for Chicago-Beijing, Continental for Newark-Shanghai, Northwest for Detroit-Shanghai and US Airways for Philadelphia-Beijing.

These ruling are expected to be finalized after further proceedings.

Northwest plans to use the Boeing 787 for the new service. Northwest is the North American service launch customer for the 787, a fuel-efficient aircraft that will usher in a new era of customer comfort and convenience. The 787 will be one of the most environmentally-friendly commercial planes in the sky.

The route awards were made possible by a new agreement between the U.S. and China in July to accelerate the opening of additional air routes between the two countries.

CURRENT CHINA ROUTES

  • American
    Chicago-Shanghai
  • Continental
    Newark-Beijing
  • United
    Chicago-Beijing
    San Francisco-Beijing
    San Francisco-Shanghai
    Washington-Beijing
  • Northwest
    Detroit/Honolulu/Los Angeles/Minneapolis/Portland/San Francisco/Seattle-Tokyo-Beijing/Shanghai/Guangzhou
    (Non-stop to Tokyo from seven U.S. cities and then nonstop to three cities in China)
NEW 2008
  • Delta
    Atlanta-Shanghai
  • United
    San Francisco-Guangzhou
NEW 2009
  • American
    Chicago-Beijing
  • Continental
    Newark-Shanghai
  • Northwest
    Detroit-Shanghai
  • US Airways
    Philadelphia-Beijing



BRITISH AIRWAYS TO SUSPEND DETROIT-LONDON FLIGHTS IN 2008

Source: Travel Weekly copyright 2007

British Airways will discontinue its daily flights between Detroit Wayne County Metropolitan Airport and London Heathrow Airport, effective March 30.

According to the airline, the service will be discontinued due to low profits on the route.

BA noted that the aircraft will be utilized "on other routes where it can make a profitable contribution to the airline's bottom line."

British Airways plans to start nonstop service to the U.S. from key European destinations outside of the U.K. next summer, starting with flights to New York from two or three European cities.

The service becomes possible under the U.S.-European Union open skies deal that takes effect March 30. The agreement lets any E.U. carrier offer nonstop service to the U.S. from any country in the E.U. instead of just its home country.




SOUTHWEST KEEPS OPEN-SEATING POLICY, BUT WITH SOME CHANGES

Source: Travel Weekly copyright 2007

Southwest Airlines, after months of testing various alternatives, is changing its boarding procedure while keeping its open-seating policy in place.

Starting in November, Southwest passengers will be assigned a letter and a number, such as A32, on their boarding pass when they check in for a flight. The number/letter code indicates the passenger's boarding group and their position in line within that boarding group.

The same would be true for passengers in B and C groups.

Once on board, customers may choose their favorite seat anywhere on the plane.

Southwest believes the new boarding procedure will "improve the customer experience and increase customer productivity," while eliminating the "cattle call" effect at its gates.

The new procedure stops short of actually assigning passengers to specific seats, retaining its 36-year old, signature, open seating policy.




OUTGOING FAA CHIEF WARNS AIRLINES ABOUT POOR SCHEDULING; NORTHWEST RESPONDS

Sources: Travel Weekly copyright 2007/usatoday.com/startribune.com

In a Sept. 11 farewell speech, Marion Blakey, the outgoing head of the Federal Aviation Administration, warned the airlines they could face FAA-imposed restrictions on the number of flights to some congested East Coast airports if they failed to make the changes on their own.

The problem, several industry officials told Travel Weekly in response to her remarks, is that the airlines are prevented by antitrust laws from collaborating on flight reductions and by market realities from making unilateral reductions. Thus, even a couple of airlines have recently suggested that government intervention is the most reasonable solution to the snowballing problem of flight delays.

Even with other measures the FAA is taking to try to reduce delays, Blakey told the Aero Club of Washington just two days before her five-year term as administrator ended, "I predict passengers will continue to be fed up with delays, and that's got to be taken more seriously by our airlines. No, you can't control Mother Nature but airlines can control their own schedules."

Air Transport Association spokesman David Castelveter added that any discussions about schedule reductions would have to encompass other delay-reduction methods as well, such as simultaneous cuts in corporate jet flights in the same airspace, better use of airport runways and perhaps use of the satellite-guided flight approaches that have been successful at the Dallas/Fort Worth and Atlanta airports.

Northwest Airlines CEO Douglas Steenland recently said he favors an industry agreement to trim schedules at the USA's most congested airports, but he warned that reducing flight delays that way would result in higher airfares.

"We're not likely to see a lot more runway space or terminal space at a lot of these airports, so congestion is going to be a long-term issue for this country," he said.

For airlines to significantly roll back their schedules in some of the most popular markets, they need a grant of antitrust immunity to meet and agree on how many flights each would cut. That's because airlines would be loath to unilaterally reduce service in key markets and risk losing critical market share to competitors who don't do likewise. Airlines have been given antitrust immunity to discuss matters several times before. But none of the parties that would be involved, including the FAA, have asked for an immunity grant.

Steenland said the "Darwinian forces of competition" remain at work and Northwest must offer customers a modern fleet, a broad route network and "dedicated and committed employees with pride in the airline for which they work."

He did not estimate how much higher fares could cut demand. Northwest said that its overall capacity for this year will grow no more than 1 percent. In an earlier business plan, the carrier had forecast 4 percent growth. Northwest reduced its domestic flight capacity in August in response to a pilot staffing shortage this summer, which was a major cause of flight cancellations.

On the fuel front, Northwest has hedged about 50 percent of its price exposure for the September to December period. "Forty percent of the exposure is hedged using dollars with a floor of approximately $56 per barrel and a ceiling of approximately $75 per barrel".

The remaining 10 percent is hedged using swaps priced at $62 to $65 per barrel.

Julius Maldutis, president of New York-based Aviation Dynamics, said he was impressed with Steenland's presentation. He noted that a key problem for the industry -- congestion in the air traffic control system -- is not as great a problem for Northwest.

Steenland said Northwest's hub airports in the Twin Cities and Detroit have fewer delays than many airports on the East Coast.




MARRIOTT SEES 2008 CORPORATE RATE HIKES AS HIGH AS 8 PERCENT

Source: Business Travel News online

Marriott International expects its corporate negotiated rates will increase in the 6 percent to 8 percent range after negotiations this year, Marriott CFO Arne Sorenson said today in a conference call to investors.

The hotel company is now finalizing negotiations with corporate customers as property-level negotiations are just beginning, he said. Marriott's expectations are slightly above the overall expectations for 2008 corporate rates put out by PricewaterhouseCoopers.

Marriott announced its corporate rate expectations as it reported performance results for the third quarter of 2007. Compared with the same period in 2006, Marriott's net income was down about 15 percent to $122 million, which Marriott said was a result of higher taxes and a drop in timeshare profits. Worldwide revenue per available room increased by 7.7 percent for the quarter. North American RevPAR was up 7.2 percent, and international RevPAR was up 12.9 percent, boosted by a 10.8 percent increase in average daily rate.

Sorenson said group bookings also are strong into 2008. Marriott expects to open 30,000 rooms this year while removing 11,000, and it expects to add the same number in 2008 while removing only 5,000, according to Sorenson.




Copyright © 2007 Passageways Travel Services, Inc.