Airlines

Fare Hike May Stick
The five- and ten-dollar fare increases introduced in late February by Northwest Airlines and American Airlines and matched by other legacy carriers, as well as by a few low-cost carriers, may stick. That’s something new, according to Joe Brancatelli, who edits and publishes the weekly online newsletter, BizTravelLife. Brancatelli says that carriers have tried such weekend fare hikes at least 30 times in the past five years but have always withdrawn them. Why does he think these hikes will stick? Because they sit atop a fare structure that consumers understand. That relatively rational fare structure is Delta Air Lines’ SimpliFares, which it introduced in January and which other legacy carriers adopted, with some variations. SimpliFares itself, which eliminated Saturday night stay requirements, capped last-minute fares and halved the cost of ticket-changing fees, emulates the simpler fare structures used by low-cost carriers such as Southwest and JetBlue. Consumers can understand a $5 or $10 price hike when it’s laid upon a fare structure that makes sense, says Brancatelli. (Source: Joe Brancatelli, The Wall Street Journal).

Industry Closes Ranks Opposing Air Traveler Security Tax
More than a dozen travel industry groups, including airlines, consumer advocates and travel industry officials, have united against a Bush administration proposal that the groups say would double aviation security taxes, costing travelers and U.S. carriers $1.5 billion. The groups, which include the Air Line Pilots Association, the Air Transport Associations, the Air Travelers Association, the National Business Travel Association, the Travel Industry Association of America and many others, say that the new tax will kill jobs and economic growth and jeopardize local air service to small- and medium-sized communities. The group also says the proposed tax breaks the federal government’s 9/11 promise to pay for aviation security as a matter of defense. They are urging Congress to reject the proposal. (Source ALPA, ATA, ATA, NBTA, TIA news releases).

JetBlue Adds Still More Trans-Continental Service
JetBlue is adding more coast-to-coast service in addition to new flights it announced last month. It plans three daily nonstop flights between Bob Hope Airport in Burbank, CA., and New York’s JFK, beginning May 24. It will start new daily service to Portland, Ore., from JFK beginning May 17, and add a second daily nonstop between Seattle and JFK starting June 17. (Source: JetBlue press release)

Airlines Cut Comfort
American Airlines began removing pillows from its cabins in the middle of last month, saving $375,000 a year. Delta Air Lines moved all pillows to the back of the plane to speed boarding; passengers now must ask flight attendants for pillows. And this month, Northwest Airlines will begin eliminating free food in coach in domestic flights, replacing it with $3 snack packs and $5 sandwiches. (Source: American Airlines, USA Today and The Wall Street Journal).

Independence Air Restructures
Independence Air, which began flying last June 15, has restructured, according to its parent company, FLYi, Inc. The restructuring includes agreements with a majority of the airline’s aircraft creditors to reschedule aircraft rent payments and reduce the total number of 50-seat CRJ aircraft in the company’s fleet while continuing to add more 132-seat Airbus A319 aircraft. Kerry Skeen, FLYi’s chairman and CEO, said that Independence service out of Washington Dulles has made the airport the largest low-fare hub in the nation in terms of total departures. The airline plans to roll out nonstop transcontinental service from Dulles to Las Vegas and five West Coast cities this spring. The new service includes San Diego (April 14), San Francisco, Los Angeles, Seattle and San Jose (May 1). (Source: FLYi press releases).

Solving Baggage Woes
Increasing passenger numbers and tighter security measures are the main causes of mishandled baggage and delayed flight departures, which are costing the world’s airlines an estimated $1 billion annually, according to a report from SITA, Inc. SITA provides IT solutions to the air travel industry. It proposes replacing bar-coded luggage tags with Radio Frequency Identification Tags (RFID), tiny chips that transmit digital information over secure wireless networks. SITA says that using such chips instead of the bar-code tags could reduce the number of read errors from 10 to 15% to under five percent. (Source: SITA press release).

Hotels

Manhattan Hotel Rates Up 10%
An expanding economy, a business travel recovery and an increase in the number of air arrivals in New York City mean that Manhattan hotel rates, which increased 10.8% to an average daily room rate of $223.64 and occupancy rates of 83.2 % in 2004, will continue to increase in 2005 and 2006, according to the Pricewaterhous Coopers Hospitality & Leisure practice. That’s a peak not seen since 2000, when the average daily room rate topped out at $222.60 and occupancies reached 83.7 %. In 2006, occupancy is expected to reach 85.1 % and average daily room rates are expected to reach $244.79. (Source: PricewaterhouseCoopers press release).

Starwood to Add 70 New Hotels
Starwood Hotels & Resorts, whose brands include St. Regis, the Luxury Collection, Sheraton, Westin, Four Points by Sheraton and W, plans to open 70 new hotels this year and next, with more than half of them outside the U.S. A half dozen Luxury Collection or St. Regis properties are opening this year, including hotels in San Diego, San Francisco and Fort Lauderdale. Some of the cities in which new Westins are opening include New Orleans, Irving, Texas, Ballston, Va., Bellevue, Wash., Raleigh, N.C., Boston and Memphis. (Source: Starwood press release).

Security Update

Biometric Passports
Biometric passports, described by some as a global identification card, are just around the corner. Viewed as an important tool for tracking potential terrorists and illegal immigrants, personal data soon could be made available to authorities you are unaware of. Regular travelers may get snared more regularly in security measures aimed at enforcing European border protection and information could be shared among European countries to track suspicious movements. Spain, France, the UK, the Netherlands, Germany and Italy have been leading the way. However, there is opposition to biometric identification. Some say measures could affect travelers’ basic human rights and do little to improve security. (Source: CNN.com).

Spotlight on…
Business Travel Upswing

After a five-year decline, business travel began gaining ground in 2004, growing more than four percent, a trend that is expected to continue for the next few years, according to the 2004 Business and Convention Travelers Report from the Travel Industry Association of America and the National Business Travel Association. However, there is a greater emphasis on travel policies to control spending and an increasing use of technologies such as web, tele or video conferencing as a substitute for some travel.

There are a lot of business travelers—38 million of them went on 210.5 million trips in 2003, accounting for $153 billion in travel spending. Business travelers account for 18 % of total travel volume, but 31 % of all travel spending. A small group of business travelers take the majority of trips; 17 % of business travelers take 64 % of all trips.

Marathon Travel & Cruise Shops is committed to providing you with useful information on the latest developments in the travel industry. The following information has been compiled from a variety of sources and is updated monthly.

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