Wednesday, March 31, 2010
American Airlines to add 23 new flights to and from NYC
Samantha Bomkamp, AP Transportation Writer, On Wednesday March 31, 2010,
10:55 am EDT
NEW YORK (AP) -- American Airlines plans to add 23 more flights to and from seven new destinations out of New York's JFK and LaGuardia airports by the end of the year.
The carrier, based in Fort Worth, Texas, has also pledged more than $30 million in terminal improvements at the two airports.
Combined with earlier announcements, American and sister carrier American Eagle will add 31 total flights and 13 additional routes to and from the two airports by the end of 2010.
American, a unit of AMR Corp., also is partnering with JetBlue to offer their passengers connections to American's international flights in and out of New York and Boston.
JetBlue customers will be able to connect on flights to 12 of American's international destinations from JFK and Boston. On routes where the carriers don't already compete, American customers can book nonstop JetBlue flights from JFK and Boston to 18 domestic spots.
As part of the deal, American will transfer eight slot pairs at Ronald Reagan National Airport and one slot pair at Westchester Airport in White Plains, N.Y. to JetBlue. In exchange, JetBlue will transfer 12 slot pairs at JFK to American. A slot is an interval of time during which an airline can takeoff or land at an airport.
JetBlue plans to launch service at Reagan National in November. The airline, based in Forest Hills, N.Y., said Wednesday it will initially offer at least eight daily departures from Reagan to East Coast cities.
The carrier already operates at the two other Washington-area airports, Dulles International Airport and Baltimore/Washington International.
In addition to the eight daily departures, JetBlue has also asked the Department of Transportation for approval to get slots from US Airways that would give JetBlue five more takeoff and landing times at Reagan.
American, JetBlue Hook Up in Northeast
By Ted Reed 03/31/10 - 09:46 AM EDT
In return, JetBlue gets a dozen slots at Washington's Reagan National Airport, a key Northeast airport where it does not currently fly. JetBlue now has three separate efforts underway to build a presence at National.
In a time of intense airline industry deal-making, this agreement offers vast advantages for both carriers. The slot transfers require regulatory approval.
American has been under assault in New York from Delta(DAL), which has a bigger hub at Kennedy and is seeking to build a second hub at LaGuardia airport. American would get a bigger presence at Kennedy, with feed from the airport's biggest domestic carrier, as well as more feed at Boston Logan.
JetBlue, already the biggest domestic carrier at Kennedy and Boston Logan, would get entree to National. Starting in November, it will offer at least eight daily departures to East Coast destinations it has not yet named. "We are thrilled to finally be entering the DCA market," said Robert Land, JetBlue senior vice president of government affairs, in a prepared statement.
JetBlue stands to gain additional slots at National if a pending slot exchange deal between Delta and US Airways(LCC) is approved. In that deal, Delta would trade slots at National for slots at LaGuardia. To satisfy regulators, the two carriers have proposed spinning off slots at both airports to four low-fare carriers.
Moreover, JetBlue said Wednesday that it has petitioned the Federal Aviation Administration for access to unused slot pairs in the early evening and late evening.
The American/JetBlue deal also involves a relationship at Logan, where JetBlue domestic passengers will connect with American's international flights.
Additionally, American will transfer a slot pair at White Plains, N.Y. to JetBlue. The carriers say they are also exploring "other commercial cooperation." Terms of the slot transfers were not disclosed.
"Our successful transition to Sabre, along with our new Terminal 5 at JFK and growing presence in Boston, have positioned us to take advantage of important partnership opportunities," said JetBlue CEO Dave Barger, in a prepared statement.
Added American CEO Gerard Arpey: "This new agreement with JetBlue complements our domestic and international network."
-- Written by Ted Reed in Charlotte, N.C. .
Monday, March 29, 2010
Crews Protest United/Aer Lingus Joint Venture Inaugural Flight at Dulles
CHICAGO, March 26 /PRNewswire-USNewswire/ -- United Airlines Flight Attendants, represented by the Association of Flight Attendants-CWA, AFL-CIO (AFA-CWA), will picket at Washington Dulles International Airport in protest of a joint venture between United Airlines and Aer Lingus that outsources flight attendant jobs. The inaugural flight from Washington Dulles to Madrid, marketed by United and transporting United passengers, will take off from Dulles Sunday, March 28th on an Aer Lingus plane.
"United Airlines current management is exploiting the Open Skies agreement with the European Union for profit at the expense of our jobs," said Greg Davidowitch, president of AFA-CWA at United Airlines. "While thousands of United Airlines flight attendants and pilots are still on furlough management is siphoning off even more of our jobs to a foreign airline. That is just plain wrong."
While some flight attendants will picket, others will leaflet United passengers calling attention to the injustice and new threat to middle class jobs. The leaflet also asks passengers to call on their member of Congress to co-sponsor the Aviation Jobs Outsourcing Prevention Act, H.R. 4788. The legislation would require, when airlines enter into revenue-sharing agreements, the amount of revenue the airline receives is proportionate to the amount of flying the U.S. airline actually provides its workers.
Picketing and leafleting at Washington Dulles International Airport:
•1:00 p.m. – 3:00 p.m. in front of United check-in
•Local Contact: Andreas Curlee at 571-209-7943
"United management proudly proclaims the joint venture will create 125 jobs. They neglect to mention that those jobs and work could have been done by existing employees – or those who are waiting to be called back to work," Davidowitch stated.
More than 55,000 flight attendants, including the 16,000 flight attendants at United, join together to form AFA, the world's largest flight attendant union. AFA is part of the 700,000 member strong Communications Workers of America, AFL-CIO. Visit us at www.unitedafa.org.
SOURCE Association of Flight Attendants-CWA, AFL-CIO
Sunday, March 28, 2010
by Charlie Leocha on February 10, 2010
Have no doubt about it, in the current “negotiations” between American Airlines and its flight attendants, the flight attendants union, Association of Professional Flight Attendants (APFA), have already shot themselves in the foot. The the airline knows that it has a ready, willing and able workforce of ex-TWA flight attendants who will happily break any APFA sanctioned strike.There is no love lost between ex-TWA flight attendants and APFA. The AA union refused to negotiate with the TWA union to blend flight attendants into their ranks when AA bought TWA back in April 2001.
According to AA’s slogan at the time, the purchase would mean, “Two Great Airlines” Sharing “One Great Future.” But after giving lip service to the TWA employees and the U.S. Congress to obtain a fast track approval of the acquisition, the airline when faced with APFA grumblings abandoned the TWA flight attendants. This group of unionized workers are unique in the airline industry in terms of how they were treated by the acquiring airline, its union and the government.
The TWA flight attendants were unceremoniously “stapled” to the bottom of the AA flight attendant list. This is the equivalent of kicking sand in the other union’s face.
Under this cockeyed seniority system original AA flight attendants with only days on the job were ahead of TWA flight attendants with almost decades of flight experience. Some of the TWA veterans were let go just days before retirement.
I don’t believe that even one ex-TWA flight attendant is flying for American Airlines today.
I know plenty of TWA flight attendants who want to fly again and who would love to have a chance to kick some sand back in APFA’s face. Ex-TWA flight attendants felt that they were more mistreated by their new union than they were by AA and TWA honchos. Their careers were stolen from them by a bad union.
And, I’ll bet there are trained flight attendants from other airlines who have been furloughed recently who would take AA jobs in a heartbeat.
Plus, many of the international flights to South America are already crewed (according to contract and bilateral agreements) by non-union foreign flight attendants. Something tells me there are a lot more flight attendants where those came from.
So, no matter what the leaders of the current flight attendant union claim in their negotiations with AA, their eventual capitulation to company demands is baked in the cake.
Monday, March 22, 2010
By Dan Reed, USA TODAY
Delta Air Lines and US Airways made the Federal Aviation Administration a counteroffer Monday in hopes of getting approval for their blockbuster swap of assets at New York's LaGuardia and Washington, D.C.'s Reagan National airports.
But the two carriers' offer falls short of the demands made last month by FAA officials. The FAA has jurisdiction over the assets swap because it involves transferring ownership of "slots," which are time-specific landing and take off rights, at two of the USA's most congested airports. Only a handful of U.S. airports are slot-limited.
The FAA last month told Delta it had to divest 20 of the 125 LaGuardia slot pairs it would obtain from US Airways. On Monday Delta said it has deals to sell 15 slot pairs, 5 each to AirTran, Spirit and Canada's WestJet airlines.
Meanwhile US Airways said it has a deal to sell 5 pairs of Reagan National slots to JetBlue. The FAA ruled last month that it needed to divest 14 of the 42 Reagan National slot pairs it would receive from Delta.
Each plane service at LaGuardia and Reagan National needs a pair of slots: one for landing, and one for taking off.
Furthermore, Delta and US Airways said that they will drop their unprecedented assets swap deal if the FAA does not now approve that deal as revised by the slot divestitures announced Monday.
In August, Delta and US Airways announced a deal that they said would greatly enhance Delta's market presence at LaGuardia and US Airways' presence at Reagan National. They also compete head-to-head in the so-called shuttle market that features hourly, and sometimes half-hourly flights on specialized jets in the heavily traveled Washington-New York-Boston corridor.
Both carriers say they will continue to compete against each other in the shuttle corridor with no changes. But if their assets swap deal is approved, Delta would drop almost all of its non-shuttle service at Reagan National. Likewise, US Airways plans to sharply reduce its non-shuttle flights to and from LaGuardia.
The two carriers also would swap terminal facilities at LaGuardia. US Airways would move its New York shuttle operations to the old Marine terminal at LaGuardia now used by Delta's shuttle. Delta would get US Airways' larger, newer LaGuardia main terminal, which Delta would connect to its smaller main terminal next door at LaGuardia.
The assets swap deal is supposed to allow both carriers to focus their investment and efforts more intently on one market each rather than spread their assets and efforts out over both airports.
US Airways, the nation's sixth-largest airline, long has been the market leader at Reagan National. Picking up more slots there from Delta would strengthen that position. Meanwhile, except for its continuing shuttle operation, US Airways would shrink to a handful of flights a day at LaGuardia, where in recent years it had become second-tier competitor and faces growing low fare competition.
Other than its shuttle operation, Delta has been a second-tier carrier at both Reagan National and LaGuardia. However, it has a large operation at New York's John F. Kennedy Airport that includes dozens of daily flights to Europe. Delta officials' plan is that by increasing Delta's presence at LaGuardia, where there are no international flights except for flight to Canada, Delta will be able to offer a full menu of domestic and international flights, albeit split between the two airports.
Southwest Airlines, the USA's leading low-fare carrier which last year began serving LaGuardia and the New York City market for the first time, was among the airlines at LaGuardia designated by the FAA as newcomers or small incumbent carriers to whom Delta and US Airways could sell divested slots there. But Delta and US Airways left Southwest out in the cold with their proposed counteroffer to the FAA on Monday.
Southwest on Monday filed a quick response to the revised Delta-US Airways assets swap deal, saying that the two carriers should be required to divest the full number of slots ordered last month by the FAA, and that they should be sold via an auction to the highest cash bidder, not through privately negotiated deals.
Of the New York City area's three major commercial airports, LaGuardia is the most preferred by business travelers, who typically pay higher fares. That's largely because it is the closest to midtown Manhattan and the Financial District.
Similarly, Reagan National is more popular with business travelers than either Washington Dulles or Thurgood Marshall Baltimore-Washington Airport because it is just across the Potomac River from downtown Washington.
But both LaGuardia and Reagan National are tiny airports in terms of land space, and they can't be expanded because they are surrounded by development and water. That inability to add more runways, and the high demand for service, led to the creation of slots as a way of limiting the number of flights that can operate at those airports in an hour.
Service at both airports is further limited by perimeter rules that prevent, in most cases, flights to and from cities in the Mountain and Pacific time zones. In most cases passengers traveling to and from cities in those time zones have to use one of the other airports in the New York and Washington areas.
Sunday, March 21, 2010
3/21/2010 7:50 PM
British Airways cabin crews walked off the job for a second day Sunday, but the airline insisted the strike was having less impact than expected.
LONDON — British Airways cabin crews walked off the job for a second day Sunday, but the airline insisted the strike was having less impact than expected and said it restored some flights that had previously been canceled.
The airline — locked in a bitter dispute with workers over a pay freeze and changing working conditions — was forced to cancel or delay hundreds of flights over the weekend as cabin crew launched a three-day strike after negotiations collapsed on Friday.
Many travelers en route to the United States who were supposed to have brief stopovers at Heathrow, the airline's London hub, ended up stranded at the airport and faced long waits to connect with flights home.
But BA said it was coping well with the strike because of its extensive contingency plans and the fact that many crew members ignored the strike call.
BA said almost all the cabin crews at Gatwick airport and about half of those at Heathrow reported to duty Saturday, allowing the airline to reinstate more than a dozen previously canceled flights — including those to Miami and Los Angeles, as well as other short-haul European destinations.
The airline said all long-haul aircraft from overseas airports arrived in London as planned Sunday morning and said there was no evidence of strikes at any overseas airports. In preparation for the strike, BA had retrained some staffers to serve as cabin crew and leased planes and crew from rival carriers to take up some of the shortfall.
Still, about 1,100 out of the airline's 1,950 flights scheduled to operate during the three-day walkout were expected to be canceled.
Union leaders said that nearly 10,000 members did not go to work Saturday, and that as a result, many passengers complained about in-flight food and services.
Unite, the union representing BA cabin crews, said scores of BA planes were grounded, clogging up parking space, and only one of the five regular flights to New York's JFK airport took off Saturday.
BA had said at the start of the strike that it could handle 49,000 passengers a day on Saturday and Sunday — about 65% of the average 75,000 for a normal weekend day in March. Sunday, it declined to provide details of whether that goal was achieved or discuss the number of flights canceled or delayed.
Unite was planning a second, four-day walkout to begin March 27, and it had said more strikes will be scheduled after April 14 if the dispute is not resolved. The union has pledged not to walk out over the busy Easter period.
Friday, March 19, 2010
Melanie Lindner, 03.09.10, 04:40 PM EST
A pickup in business travel helps carriers fly.
With airline presentations at the JPMorgan Chase Aviation, Transportation & Defense Conference well underway Tuesday, shares of the nation's top carriers took off on news of industry recovery.
Shares of AMR ( AMR - news - people ), the parent company of American Airlines, led the airline pack, picking up 83 cents, or 9.3%, to $9.77. Also among the big winners was UAL ( UAUA - news - people ), parent of United Airlines, which gained 64 cents, or 3.7%, to $18.16. AirTran Holdings ( AAI - news - people ) ticked up 42 cents, or 8.5%, to 5.38, and US Airways Group ( LCC - news - people ) jumped 39 cents, or 5.3%, to close at $7.71.
According to Stifel Nicolaus analyst Hunter Keay, the airlines have easy-to-beat volume-based comparisons with this time last year when passenger revenue per available seat mile (PRASM) dropped dramatically as planes flew with many empty seats. "At this time last year airlines had yet to fully capitulate to the economic meltdown, in our opinion, and some were still holding out inventory in the hope that business travel would recover," says the analyst.
Keay tells Forbes that in Tuesday's conference presentations, the airlines showed signs of increased discipline in balancing capacity and demand, an equilibrium that's been out of balance since early 2008. The companies have also noted an increase in corporate bookings, which has helped enhance investor confidence and boost the sector in Tuesday trading.
Analyst Helane Becker of Jesup & Lamont Securities tells Forbes that international business travel has been rising in recent months. She expects Delta ( DAL - news - people ), American Airlines, and Continental Airlines ( CAL - news - people ) to get the biggest boost from this change as they have the most exposure to international travel markets.
While the airlines have been in a stronger technical position in 2010, there is some concern that the economic recovery will not be strong or sustainable enough to keep shares in orbit. Still, as Auerbach Grayson's technical analyst Rich Ross told Forbes in early January, even though names like Continental are trading near their best levels in a year, they still have open airspace before catching up to all-time highs. (See "Technically, Airlines Look Good.")
Kelsey Swanekamp, 03.19.10, 11:20 AM EDT
Aircraft maker accelerates production schedules in anticpation of industry rebound.
Boeing is banking on an airline recovery after announcing that it will ramp up production of two of its commerical jets in anticipation of growing demand.
The aerospace giant will increase production of the 747 in mid-2012 to a pace of two units per month, from 1.5 units, and the 777 in mid-2011 to seven units per month, from five units. The ramp-ups are one year and six months ahead of schedule, respectively.
By accelerating its production timetables, Boeing ( BA - news - people ) is making a bet that airlines, which have been battered by the recessionary drop in discretionary spending and business travel, will dust themselves off in the coming years.
Boeing predicts that the industry will stabilize in 2010 and return to profitability in 2011. "As a result, we anticipate an increase in demand for airplanes in 2012 and beyond," says Randy Tinseth, vice president for marketing. Shares of Boeing gained 1.7% to $72.06 Friday morning.
Airline stocks meanwhile, have been rallying as analysts and investors alike look factor in a recovery.
On March 9, airline presentations at th JPMorgan Chase Aviation, Transportation & Defense conference hinted at a broad industry rebound and sent shares of top carriers on a tear. The combination of easy-to-beat comparisons to recession levels and firmer demand in the business travel market should provide a lift. (See "Airlines Soar On Recovery Hopes.") With its involvement in international travel markets, Delta Air Lines ( DAL - news - people ) is well-positioned to benefit from recovery in business travel.
Thursday, March 18, 2010
March 16, 2010
By Mary Schlangenstein
March 16 (Bloomberg) -- American Airlines' flight attendants requested
federal approval to end contract talks, a step toward the first strike at a
major U.S. carrier in almost five years.
The Association of Professional Flight Attendants asked the National
Mediation Board to declare bargaining with AMR Corp.'s American at an
impasse, union President Laura Glading said. Only the board can approve a
halt to negotiations, putting the parties into a 30-day "cooling-off" period
before a walkout.
Glading's proposal to break off talks made the attendants union the second
labor group at American to try to trigger a countdown toward a strike. The
Transport Workers Union, which represents ground workers, asked permission
last week to be freed from contract discussions.
"I can't imagine anyone really wants to strike," William Swelbar, a research
engineer at Massachusetts Institute of Technology's International Center for
Air Transportation, said before the attendants made their request. He said a
walkout would disrupt cash flow in the busy U.S. summer travel season.
Federal law sets out the mediators' role in airline labor talks. No large
U.S. carrier has suffered a strike since 2005, when 4,200 Northwest Airlines
Corp. mechanics and aircraft cleaners walked off the job. Northwest, which
was acquired by Delta Air Lines Inc. in 2008, responded by hiring
A telephone message left with American's media office for comment wasn't
Talks between American, the world's second-biggest airline behind Delta, and
the APFA began June 10, 2008. The union, which represents 16,550 active
attendants and 1,450 on furlough, has said it will conduct a strike
Attendants, ground workers and American's pilots union are all in contract
negotiations, trying to recoup $1.6 billion in pay and benefits given up in
2003 to save the Fort Worth, Texas- based carrier from bankruptcy. American
wants to reduce its industry-leading labor costs and raise productivity.
Mediators haven't decided on the TWU's March 11 request to be freed from
talks with American. The TWU represents ground workers including mechanics
and bag handlers.
Should the board conclude that further talks wouldn't yield a contract,
American and the attendants would be offered binding arbitration. Rejection
by either side would start the "cooling- off" period, which would still
allow for further discussions.
The board also may order the airline and union to resume talks, or decree a
recess in negotiations.
American refused to "bargain in good faith," Glading said in a March 12
statement. American said yesterday in a Web-site update about the talks that
"we made progress and look forward to getting back to the table and back to
AMR fell 18 cents, or 1.8 percent, to $9.66 at 4:15 p.m. in New York Stock
Exchange composite trading. The shares have gained 25 percent this year.
American has told the Federal Aviation Administration that it was
considering training managers and other employees as replacement attendants
in the event of a strike. In 1993, American trained about 1,300 replacements
to try to keep some planes flying during a five-day walkout.
The strike ended when then-President Bill Clinton intervened. It cost
American about $10 million a day.
By Gary Stoller, USA TODAY
Neil Cornelssen says he misses the free cookies in the evening at one hotel and the daily newspaper outside his door at others.
He's also noticing that bath towels in a growing number of hotel rooms are shabby and need to be replaced.
Cornelssen, a sales manager in Marlton, N.J., is one of many frequent travelers who say they see the tangible effect that the recession has had on the nation's hotel industry. Among them: run-down rooms with fewer bathroom amenities, closed club lounges, fewer concierge staffers, slow room service, reduced hours at restaurants and bars, and infrequent airport shuttles.
"The unfortunate reality of today's marketplace," says Hotels magazine Editor-in-Chief Jeff Weinstein, is hotels are "more focused on saving cash than delivering the best service."
Hit by a declining demand for rooms, low room rates and plummeting revenue, hotel companies have laid off hundreds of thousands of employees and are struggling to maintain quality. A record number of hotels are defaulting on mortgage on mortgage payments. Hundreds have been taken over in foreclosures, and some have closed or are about to.
"Because of the recession and the credit bust," says Ed Watkins, editor of the trade publication Lodging Hospitality, "it's the worst downturn in decades — perhaps ever."
As a result, says Robert Habeeb, president of Chicago's First Hospitality Group, which operates 40 hotels in eight states, "The industry is in survival mode."
The toll on the industry is told by startling numbers:
•In January, U.S. hotels had a record-low 45.1% occupancy rate — the lowest January rate since industry statistician Smith Travel Research began tracking data in 1987. Last year's rate — 54.8% — was the lowest ever recorded by the company.
•About 400,000 U.S. hotel employees were laid off during the past two years, says Joe McInerney, president of the American Hotel & Lodging Association. About 1.6 million hotel and motel employees remain, according to the most recent Bureau of Labor Statistics data.
•New hotel construction has declined significantly, reducing hotel companies' opportunities to grow their brands and increase revenue, says Mark Woodworth, president of Atlanta-based PKF Hospitality Research. Construction began on 78 new hotels in last year's fourth quarter, compared with 158 during the same months in 2007, according to Smith Travel Research.
•The total property value of U.S. hotels has fallen by up to 50% from its peak in 2007, according to Fitch Ratings, which provides ratings and analytical commentary to the world's credit markets. Such a drop has limited the ability of owners to sell hotels and improve their credit profiles, Fitch Ratings says.
•A record 15.7% of securitized hotel mortgage loans were delinquent at the end of last month, according to Trepp, which tracks commercial real estate loans. Securitized loans represent about a quarter of hotel loans.
In California alone, 330 of the state's 10,000 hotels have defaulted on mortgage payments since the start of 2009, says Alan Reay, president of Atlas Hospitality Group, a research and marketing company in Irvine, Calif.
Reay says 76 hotels in California and about 500 nationally have been taken over by lenders in foreclosure since the beginning of 2008. Most have continued to stay open for business.
"Banks don't want to take back the keys to distressed hotels in most situations," says Paul Heney of the trade publication Hotel & Motel Management. "They seem to be doing everything they can to negotiate with the ownership groups — to ride out the rest of this economic stress."
Closing a hotel is a huge risk, Heney says. Some believe "that the day a hotel closes its doors, it is worth 50% of what it was worth the day before," he says.
Some high-profile closures
Upscale hotels have been hit hardest, and some have closed.
The W Hotel in San Diego was turned over to lenders in September after its owner, Sunstone Hotel Investors, defaulted on a $65 million loan payment.
The Wyndham Drake in Oak Brook, Ill., closed a month later.
The Drake had "about $3 to $5 million in deferred maintenance when it was shut down," says Ted Mandigo, a hospitality consultant in Elmhurst, Ill. "It was struggling for occupancy and at a negative cash flow."
On May 2, The Ritz-Carlton, Lake Las Vegas, in Henderson, Nev., will close because of a decline in business, says Vivian Deuschl, the chain's vice president.
Meetings business decreased at many luxury hotels, Deuschl says, after Congress scolded insurance giant American International Group for spending about $400,000 at a luxury California resort following an $85 billion federal bailout in 2008.
Budget and non-luxury hotels haven't escaped the downturn.
Sunstone, which owns various Marriott, Hyatt, Hilton, Fairmont and Starwood hotels, has turned over 13 other hotels to lenders. They include the Renaissance Westchester in West Harrison, N.Y., the Marriott Ontario Airport in Ontario, Calif., the Hilton Long Island/Huntington in Melville, N.Y., and the Holiday Inn Downtown in San Diego.
Citing decreased business-travel spending, Extended Stay last June filed for bankruptcy court protection with a debt of $7.6 billion. Its 684 hotels, which cater primarily to guests staying at least 18 nights, remain open. The company has five hotel brands: Extended Stay America, Extended Stay Deluxe, Homestead Studio Suites Hotels, StudioPLUS Deluxe Studios and Crossland Economy Studios.
Despite the industry's deep financial woes, William Marks, managing director for San Francisco-based JMP Securities, says he doesn't believe the industry has been permanently altered.
"We are just experiencing the cyclical nature of the industry," he says. "Unfortunately, this is a more powerful downturn than normal."
More cuts, fewer upgrades
To cut costs, hotel employees now perform a variety of tasks, says Roberta Nedry of Hospitality Excellence, which provides service training for hotel employees. Some brands have replaced experienced concierges with lower-paid, inexperienced ones.
Hotels also have become more vigilant about turning off lights and lowering thermostats, and are closing wings or floors when occupancy is down, First Hospitality's Habeeb says.
Renovation and upgrades are being delayed, says Heney of Hotel & Motel Management.
"Many hotels just can't go through with upgrades, say to flat-screen TVs in guestrooms, as soon as they'd hoped," he says. "A room may not see new furniture but instead get new bedding, lighting and the like."
Hotels' food-and-beverage operations have also had to adjust.
Noticing a drop in corporate travel and spending, two San Antonio hotels — the Omni La Mansión del Rio and the Watermark Hotel & Spa — increased advertising to local residents.
"We were able to draw on new business that at one time may have been overlooked by our properties," says John Brand, the hotels' executive chef.
Managers at the Barona Resort & Casino in Lakeside, Calif., began noticing two years ago that guests were spending less on food and beverages, and dining more at the resort's less expensive restaurants.
Guests began sharing appetizers, skipping appetizers and dessert and ordering a glass instead of a bottle of wine, says Duncan Firth, a chef and restaurant manager at the resort.
In response, the resort instituted discount menus and half-price entrees for some gamblers. This month, one of the resort's restaurants is offering a $9.99 prime rib dinner and bringing back a 10-year-old menu "with prices to match," Firth says.
The opposite may be occurring at some revenue-starved hotels.
Kansas-based business traveler Robert Bender, chief architect for a technology company, says he's seen a big increase in food and beverage prices at hotels.
For guests: Low rates
In January, the average daily room rate in U.S. hotels was $93.93, a drop from $106.54 in January 2008 and the lowest for the month since 2005, according to Smith Travel Research. Similarly, the average room rate for all of 2009 — $97.68 — was the lowest since 2005.
Though the travel industry expects the number of travelers to increase this year, hotel experts don't foresee rates rising quickly.
"Despite early signs of a recovery toward the end of last year, few properties expect to raise prices," says Scott Booker, vice president of Hotels.com. "This could be another year of significant values for both business and leisure travelers worldwide."
Hotels "took a beating" during last year's fourth quarter from corporations demanding rock-bottom room and meeting rates for employees, says Jeff Higley of HotelNewsNow.com, an online trade publication.
McInerney, the president of the hotel trade group, acknowledges the difficulties negotiating in a buyer's market. But he says the country is slowly coming out of recession, and he sees "a little light at the end of the tunnel."
Executives of big hotel companies also see positive signs.
Though Marriott International had a 38% revenue decline and a $346 million loss for 2009, CEO J.W. Marriott last month said the fourth quarter's $106 million profit "exceeded our expectations" and returned the company to profitability.
Marriott said leisure travelers responded to "aggressive marketing campaigns," and business travel "showed signs of improvement." The company opened 38,000 rooms, trotted out two new brands, Edition and the Autograph Collection, and reduced debt by nearly $800 million in 2009, he said.
Matt Avril, hotel group president of Starwood Hotels & Resorts, says his company cut its debt by more than $1 billion and opened 83 hotels last year. Starwood has nine brands, including Sheraton, Westin and W Hotels.
Avril says the company, which lost $107 million in the fourth quarter, has seen a rebound in leisure and business travel, and has emerged from the recession "a battle-tested and more mature organization."
Watkins of Lodging Hospitality says that unlike the economic downturn in the late 1980s, when the industry operated at a loss, it's expected to turn a profit this year and in 2011.
That's possible, Watkins says, because the industry today is more disciplined, "dominated by large companies and savvy entrepreneurs" who are "more sophisticated in marketing and operational techniques."
"Times are tough," he says, "but many hotel owners are measuring that by the fact they can only order a new Mercedes every other year instead of every year."
Delta Air Lines plans to launch in June almost hourly service between New York and Chicago, already one of the most heavily served routes in the USA.
With 11 new flights a day each way between New York's LaGuardia Airport and Chicago's O'Hare airport, Delta seeks to increase its market strength in the New York travel market. It already offers shuttle service from LaGuardia to Washington and Boston. It has dozens of international flights a day from New York's JFK.
Delta, the world's biggest airline, also is picking a fight with its two closest rivals. No. 2 American and No. 3 United operate large hubs at O'Hare and have significant operations at LaGuardia.
Delta will operate its New York-Chicago shuttle with Embraer E-175 regional jets equipped with 12 first-class and 64 coach seats. American operates 16 flights a day on that route, using larger planes. United has 15 flights a day on that route, 10 on Airbus A319 and A320 jets and five aboard E-175s configured like those Delta will use.
Indirectly, Delta also will be taking on No. 4 Continental, which serves the New York-Chicago market nine times a day from Newark Airport across the Hudson River from Manhattan. United flies 10 times a day between Newark and O'Hare.
Even discount king Southwest Airlines, which last year began serving New York City for the first time, competes in the market. It flies five times daily between LaGuardia and Chicago's Midway airport.
Delta's use of regional jets against bigger jets "is going to be a tough sell," says Bob Harrell, a New York-based business travel price analyst and consultant. "But Delta will attract some frequent fliers here who want to pick up their Delta mileage points" when flying to Chicago.
A flight of two-plus hours between Chicago and New York is long enough to make the comfort issue of a regional jet an important one, said Aaron Gellman, who teaches in the Transportation Center at Chicago's Northwestern University.
Last week, the average price paid by business travelers going between LaGuardia and O'Hare for a refundable fare was $282 each way, Harrell says. The lowest fare on the route last week was $84 each way, but included many restrictions, was non-refundable and not available on many seats. Between Newark and O'Hare, the comparable fares were $482 and $86 each way.
Southwest's fares on its LaGuardia-Midway flights range between $76 and $300 each way.
Thursday, March 11, 2010
Thursday, March 11, 2010
By TERRY MAXON / The Dallas Morning News
The Transport Workers Union asked the Natioinal Mediation Board today torelease it from mediation and start the 30-day cooling off period that couldlead to a strike against American Airlines Inc., the union said.
"We have been at the bargaining table for years and will continue to worktoward agreements," said John Conley, president of the TWU's Air TransportDivision, "but it's time that we moved the settlement process to the nextstep."American Airlines spokeswoman Missy Latham said the carrier was"disappointed that the TWU has chosen this course."
"American continues to believe any talk of 'release' at this time ispremature and thinks that actions such as these can be detrimental to theprocess, undermining the ability of both parties to get a deal thatpositions the company and its employees for long term success," Latham said.American said that it expects NMB mediator Terri Brown, who has beeninvolved in the talks since last year, to schedule more mediation sessionstoday.
Some TWU negotiating units have talks scheduled for late March and early April. It now is up to the mediation board to decide whether the two sides havereached an impasse in their talks. Neither the union, which representsground workers at American, nor the carrier can engage in "self help" untilthe NMB allows it.
American said Wednesday night that it expects NMB mediator Terri Brown,which has been involved in the talks since last year, to schedule moremediation sessions today.
That would forestall any declaration of astalemate.In an update to members, the union indicated that the major sticking pointremaining is American's efforts to outsource work now down by TWU members,such as cleaning aircraft between flights.
"It is the belief of your Negotiating Committee that we can no longer justgive away more jobs, such as the systemwide outsourcing of day line cabinservice," TWU said. " The outsourcing would not only impact those in thatwork group but would also affect members in other areas, including those inmany down line cities.
"The union said it had attempted in talks to get American to recognize theconcessions made by employees in 2003, but "it became apparent the companywas still trying to extract more concessions from the membership."The TWU has been in talks for most of the 11 bargaining units it representsat American and American Eagle since late 2007.
The Association of Professional Flight Attendants, in talks with Americansince mid 2008, has scheduled a meeting next week with the NMB to seek arelease from their talks.
The next step now for the NMB is to inform American Airlines of the TWU'srequest and establish a comment period of 10 days to two weeks.Under the Railway Labor Act which governs airline labor relations, theNational Mediation Board controls the ability of unions or airlines to endnegotiations.
If the NMB thinks that further talks will result in a deal or more progress,it orders the two sides to continue negotiations under a mediator's watch.
But if it concludes that further talks would not be productive, it wouldproffer the airline and union binding arbitration to decide the outstandingissues.If either side doesn't want to accept binding arbitration, the board wouldrelease the two sides into the 30-day period.Absent an agreement during that 30 days, either the carrier or union couldtake action, such as a strike or work slowdown by employees or a lockout orimposed contract by the airline.
Wed, Mar 10, 2010
The Association of Professional Flight Attendants took "serious libertieswith the truth" and was not bargaining in good faith when it said AmericanAirlines' negotiating team walked out on negotiations last week, American'slead negotiator said Wednesday.
In a negotiations update, Mark Burdette, vice president of employeerelations, said the union's version of events misrepresented what happenedat the bargaining table when American and APFA negotiators met for five daysending March 3.
Among other things, the union had said the company had walked out onnegotiations with 10 hours left, that American had refused to consider theunion's last proposal, that American had negotiated in bad faith and thatthe airline's actions were "inexcusable. "Here's an excerpt from Burdette's version of events of what happened March3, the last day:
"Early that afternoon, union negotiators told the mediator that they wereworking on a proposal with a 'new direction' and asked us to stay into theevening to receive it. So we did, with several members of our team missingtheir flights home to honor that request.
"But whether the union changed its mind or was simply testing us I can'tsay, because more than four hours later they emerged with a proposal thatrepresented no change in their position from the day before. The 'new'proposal in fact changed exactly two words, neither of any consequence."
So with nothing new at play and further progress unlikely, the mediatorsignaled the end - two hours after the scheduled conclusion and followinghours and hours of talks. We left disappointed but committed to returningfor another round as soon as a new session was scheduled.
"To our surprise, the APFA had other plans. In a hotline and mediastatements that followed, the union's leadership issued a patently falsecharacterization of the events and a scathing attack on the company'sintentions."Perhaps the APFA leadership planned all along to accuse us of 'turning ourbacks' on negotiations as a way to rile flight attendants, and when they couldn't get us to walk out, they concocted the story that we did."
Perhaps the APFA's goal was to gain leverage by trying to paint thecompany's negotiators in a negative light."Perhaps the APFA opted for the drama of a good tale rather than take on the important task of communicating the details of the proposals on the table, including the company's offer of a wage increase on top of currentindustry-leading compensation."
But whatever the intent, the union responded in a way that was not fair,not accurate, and definitely not in good faith."We'll put up any union response to American's allegations.
The APFA's board has scheduled an April strike vote for members and isscheduled to meet with the National Mediation Board next week to ask to bereleased into a 30-day cooling-off period, a prelude to a possible strike.
Tuesday, March 09, 2010
American flight attendants to vote next month on strike
12:00 AM CST on Tuesday, March 9, 2010
By TERRY MAXON / The Dallas Morning News firstname.lastname@example.org
The union representing flight attendants at American Airlines Inc. has scheduled a vote next month to ask its members to authorize a strike against the carrier.
The Association of Professional Flight Attendants' board of directors, which began its four-day annual convention Sunday in Irving, will send strike ballots to members in early April, an APFA official said Monday.
In addition, APFA leaders will meet with the National Mediation Board next week to ask to be released from mediation, the official said.
If the NMB agrees that the talks have reached an impasse, it could lead to the start of a 30-day cooling-off period. Union members then could walk off their jobs or take other job actions, and the company could impose a contract.
The Transport Workers Union, also in prolonged negotiations with American, said it would hold off until Thursday on its request for a release into a cooling-off period.
John Conley, TWU's Air Transport Division president, warned last month that the TWU would ask the NMB for the release on Monday if the union didn't have an acceptable deal from American by then.
After Conley's comments, the NMB subsequently extended negotiations for TWU's fleet service clerks and other ground employees through Wednesday, which forced TWU to postpone its request.
"NMB Board Member Linda Puchala has asked the TWU and its representatives gathered in Washington today to hold off filing for release from mediation until at least March 11," TWU said in a statement.
"The union is honoring her request," it added.
While the two sides have agreed on a number of items in the latest round of talks that began Saturday, they haven't come up with a final deal.
"We're making good progress this week with the TWU Fleet negotiating committee in Washington, D.C., and both parties continue to work hard at the table," American spokeswoman Missy Latham said. "The TWU was correct to follow the NMB's recommendation, as the mediator-scheduled talks are scheduled to run through Wednesday."
In a message to his members Saturday, TWU Local 562 president Bob Owens said the union's last proposal to American "is concessionary compared to what we had in 2003. Given the economy it may be the best we could hope for but the minimum we should accept."
On the APFA talks, Latham said American's negotiators "are awaiting next steps from the mediator, and look forward to continuing to bargain when the mediator establishes the next set of dates."
Wednesday, March 03, 2010
Phoenix Business Journal
Wednesday, March 3, 2010, 10:05am MST
US Airways Group Inc. Wednesday announced the retirement of Capt. Chesley “Sully” Sullenberger, who piloted Flight 1549 during its emergency water landing on the Hudson River in January 2009, and flight attendant Doreen Welsh, who helped guide 150 passengers to safety on the same flight.
Sullenberger, 59, joined PSA Airlines in 1980, which after a number of acquisition became US Airways (NYSE:LCC). He also was a member of US Airways’ flight operations safety management team.
Welsh, 59, joined Allegheny Airlines, another previous iteration of US Air, in 1970. Both Sullenberger and Welsh are based out of US Airways’ Charlotte, N.C., hub.
Sullenberger was flying his last flight Thursday with First Officer Jeff Skiles, his copilot during the emergency water landing in the Hudson River after striking a flock of geese shortly after takeoff causing a loss of power. All occupants were rescued.