CI Travel's
Business Travel News You Can Use
January 18, 2011
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| Greetings! | 
One headline of interest to all of us involved in the business of business travel struck like a sledgehammer last week: Who Foots the Bill for Recent Actions in the Business Marketplace? The Business Travel Buyer Mike McCormick, Executive Director of the National Business Travel Association (NBTA), discussed issues that have caught TMCs and corporate travel buyers in the middle of a distribution channel showdown between American Airlines, the OTA's (Online Travel Agencies) and GDS (Global Distribution Systems) platforms. The outcome will likely have huge implications on the future of travel product distribution and the control of how and who controls what your travelers buy. To read Mr. McCormick's column, click here.While there certainly is other news happening, I don't see any issue being more important that making sure that our clients have full, unbiased content. NBTA and BTC have other issues they are working on as well; but they all take a back seat to this one. If you are interested in joining NBTA, click here. Thank you for your trust in us! All of the employee-owners at C I Travel wish you a happy and prosperous New Year! Chris Nicholas P.S. - if you have a question or a suggestion for an article, please email me! |
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The Marketing Battle for the Consumer's Mind and Wallet
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Last month we featured an article on American Airlines versus Travelport's Orbitz division over how American Airline's product will or could be sold. (What do they sell? Airline SEATS, Internet Access, Meal Service, Baggage transportation, and other related items that just five years ago were all included in the price of your airline ticket.) The battle has now been joined by Sabre and Expedia as both companies have decided or threatened to stop selling American Airlines flights. Where does that leave the corporate travel buyer and the travelers who prefer to travel on American Airlines? What happens if other carriers or if car and hotel companies decided that they wanted TMCs to connect directly to merchant's inventory without the ability to compare apples to apples? What happens if American and other carriers shift the burden of processing credit card payments onto the TMCs or the GDS systems? Is this another sequel to Back to the Future?
Last week one of our very astute, aggressive corporate travel managers asked me what my thoughts were regarding this new battleground. Below are my thoughts on why this is happening and what will happen. Click here to see a column by PhoCusWright Research's Douglas Quinby that looks at what the possible implications and outcomes are for the consumer. (note that by consumer, they are addressing all travelers, not business travelers specifically. I would argue that when the company is paying the bill, the company is the consumer. After reading the article let me know if you think AA is looking at it that way.
Here are my thoughts:
- AA wants to control what potential buyers see and how they see it. If other carriers went to a Direct Connect, how would anyone be able to efficiently compare apples to apples? What if hotel and car companies decided to pursue the Direct Connect? How many interfaces would have to be built? What would the standards be? Would you, our clients, and your travelers have access to all the information and prices or just what the vendors want you to see?
- AA wants potential passengers to see an airline seat and all their other bundled or unbundled services as "products" rather than as a commodity.
- TMCs and their clients want to be able to compare apples to apples and to display what their customers (corporate travel buyers) want travelers to see.
- GDS companies will soon or already have interfaces built that would allow TMCs to sell seats, collect baggage charges etc, but not all airlines are capable of interfacing those offerings at the present time.
- GDS companies allow for comparison shopping and TMC consultants have the knowledge to advise clients about ancillary charges. Direct Connections would make this procedure inefficient and more costly for your travelers and for TMCs.
- As previously pointed out, American Airlines' scheme is anti-consumer. If they are successful in forcing TMCs and clients to purchase off their website or pay more for the content, chaos and inefficiencies will reign.
We need to be united in our efforts. Please send letters to the CEO of American Airlines and let them hear that you oppose this action.
Mr. Gerald Arpey, CEO
American Airlines
P.O. Box 619616
DFW Airport, TX 75261-9616
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American Airlines Versus Travelport, How Could the Lawsuit Affect Your Travel
|  Judge Rules AA Can Inhibit Orbitz From Printing AA Tickets
Editor's Note: Below is a communication sent by the Business Travel Coalition (BTC) on December 21 regarding the ruling handed down by Judge Agran in the case of AA versus Travelport. The implications that this ruling has on all travelers and expressly for business travelers and their companies are far reaching and troublesome. The inability to display the complete cost of airline transportation (including baggage and other 'airline services') is of great concern to corporate travelers. Please read the entire letter from the BTC. You may want to take the survey mentioned at the end of the letter.
TRAVELPORT - AMERICAN AIRLINES LAWSUIT MERELY THE FIRST SHOT The Battle Over the Ability to Shop and Compare in the Travel Marketplace Is On The consumer is unwittingly at the center December 21, 2010, RADNOR, PA - Business Travel Coalition (BTC) today commented on the implications of the ruling handed down in Chicago today by Judge Martin Agran in Travelport, LP v. American Airlines, Inc. The Circuit Court of Cook County, in Case No. 10 CH 48028, decided in favor of American Airlines. While the outcome unfavorably impacts Orbitz customers and Orbitz For Business corporate clients, by reducing fare searching, booking and servicing efficiencies, travel professionals the world over have recognized that this lawsuit represents merely the opening skirmish in the larger battle for the future of the open marketplace for travel. "The stakes in this conflict are clear: either an improved airline industry and distribution marketplace centered around the consumer, or one that subordinates consumer interests to the self-serving motivations of individual airlines endeavoring to impose their wills on consumers and the other participants in the travel industry," stated BTC Chairman Kevin Mitchell. "Single-supplier direct connect proposals, like the one advanced by American Airlines, can cause massive fragmentation of airfares and ancillary fees depriving consumers of the ability to compare the total cost of air travel options across all airlines." Travelers will pay higher prices. · 98% do not support American Airlines' Direct Connect strategy. According to BTC, the industry and public policy debate over American Airlines' Direct Connect plans has been raging for the past year moving clearly to the consumer forefront with American Airlines' unprovoked assault on Orbitz. Over the course of that debate, American Airlines has repeatedly changed its rationale for why Direct Connect is needed, arguing at various times that it is about cost containment, product customization and technological innovations, among other reasons. The failure of these shifting explanations to convince airline industry stakeholders to embrace the unproven system then led to a new strategy from American Airlines of blunt threats aimed at Orbitz. Mitchell points out, "When an airline must constantly change its rationale for implementing a program, or in the case of Orbitz, resorts to threats to gain acceptance of a new business model, it vividly demonstrates that there is in fact no unmet market need requiring a solution. Whether in North America or Europe, what American Airlines is selling, nobody in the downstream distribution chain, to BTC's knowledge, is saying they want." Interim results from a currently open BTC survey of corporate travel managers point to an overwhelming rejection of American Airlines' attempts to change the distribution system model to its unique advantage while driving corporate travel departments' costs up and undermining their ability to adequately service their travelers. · 94% of surveyed travel managers indicate access to all airfare and ancillary fee information is either indispensably important or very important for their corporate managed travel programs. · 87% believe that in advocating its Direct Connect strategy American Airlines is endeavoring to secure higher fares-paid by undermining the independent travel distribution system and corporate managed travel programs and by driving more consumers to aa.com where comparison-shopping, expert advice and corporate travel policies are non-existent. · 88% of travel managers who oppose American Airlines' Direct Connect believe that the program will result in fragmentation of airfares and fees and that without access to all air travel options NOTE: Travel industry professionals can participate in the survey at http://www.surveymonkey.com/s/direct_connect through the end of December. Survey results and analysis will be published in early January. |
| Risk Management | Security | U.S. Government |
TSA May Test Upgraded Scanners at Airports This Year
Progress is being made on upgraded full-body scanners that display generic figures rather than actual images of travelers' bodies, according to the Transportation Security Administration. TSA Administrator John Pistole said the agency may test the scanners at airports this year. Pistole said the replacement machines would "completely address the privacy, the modesty issue."
TSA Head: Trusted Traveler Program Would Require More Personal Data
Airline travelers who disclose more about themselves upfront with the use of detailed identity profiles could minimize their exposure in airport screening, according to John Pistole, the head of the TSA. Pistole said a trusted traveler program would apply to individuals who are willing to disclose more information about themselves than just the typical name, date of birth and gender now required to board a jetliner.
Travel Security Intelligence, from iJET
Australia - Severe Flooding Continues | details
Brazil - Flooding in Southeastern Brazil Worsens | details
Indonesia - Mandala Airlines Flight Cancellations | details
New Caledonia and Vanuatu - Tropical Cyclone Vania | details
Russian Federation - Severe Winter Weather Across Northwest | details
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| Quick Hits and Quirky News |
 Oil, Economy Top Airline Concerns for 2011(guess they figure they have customer service problems whipped)
North American airlines are expected to report more than $5 billion in profit for 2010, according to an international airline group, but steadily rising fuel costs could lead to a down year in 2011. Continued weakness in parts of the economy could make it hard for airlines to raise fares in order to compensate for higher fuel bills, analysts say. "The recession is not over," notes Michael Boyd, who sees no more than 2.5% traffic growth this year. "Regardless of the pap coming from Washington, unemployment and underemployment are not significantly improving."
Travel Managers Expect Airline, Hotel Rates to Surge
Corporate-travel agencies and consultants are encountering a much different market than they have in the past couple of years as they negotiate airline and hotel rates for 2011. Many insiders expect rates to climb, with significantly higher prices at hotels in New York and other top-tier cities. "Pricing power will swing back to air and hotel suppliers for the first time in two years in 2011," said Christa Degnan Manning, director of research at American Express Business Travel. |
Global Business Traveler Association (GBTA) News
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Ground Transportation News
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Dollar - Thrifty Group Goes All Non-Smoking
Dollar Thrifty Automotive Group Inc., announced that Dollar and Thrifty rental cars are now 100 percent smoke-free as a result of Dollar Thrifty's new policy prohibiting smoking by renters at all U.S. corporate stores and participating franchise locations.
"We're extremely pleased to now offer a 100 percent smoke-free fleet," said Scott Thompson, Dollar Thrifty President and CEO. "We are passionate about providing our value-oriented customers with a rental experience that is consistent with our high standards, and we think that fresh, clean and smoke-free car interiors are essential to achieving our objectives."
Renters who do not comply with the new policy and return vehicles after smoking may face a charge of up to $250. This is necessary to cover the special cleaning required to remove all traces of tobacco residue and smoky odor from a vehicle's interior. Rental cars that have been smoked in will be immediately grounded upon inspection and removed for a thorough detailing before being returned for customer use. All rental cars in Dollar and Thrifty fleets display a "No Smoking" sticker notifying renters of the potential charge for noncompliance.
"We think it is important to follow suit with the rest of the U.S. travel industry's non-smoking approach so that travelers always have a smoke-free means of transportation. We're confident this new policy will not only be widely-accepted by customers, but greatly appreciated as well," Thompson said.
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Lodging News
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Travel managers are finding that negotiations for hotel rates have been increasingly difficult. "Negotiations for 2011 were more difficult than I have seen in several years because the market landscape has changed," said Lisa Maloney of the CWT Hotel Consulting Solutions Group. "The trend is going to be the same or even more difficult for 2012. I recommend you review the program you just put into place and start strategizing for how you can better position yourself for next year."
New Hotels Come on Line in International Cities
Whether you need these new international properties for business travel or are looking for a new place to cash some hotel awards, here are the latest newbies: Hyatt has opened a 290-room Hyatt Regency in Dusseldorf. The property is on the Media Harbour Peninsula. InterContinental has opened a 252-room InterContinental Hotel in Maracaibo, Venezuela; a 184-room Hotel Indigo on the southern tip of the Bund in Shanghai; and has put its Crowne Plaza flag on the 241-room former Pan Pacific in Bangkok. Starwood opened a 160-room Le Meridien in the Xinyi District of Taipei; a 313-room Westin in Hefei in Anhui Province, China; and has added the 70-room Villarrica Park Hotel in Chile to the Luxury Collection. Shangri-La, the Asia-based chain, has opened its first European property. It's an 81-room hotel in the 16th arrondissement in Paris.
More Hotels Offer Hypoallergenic Rooms
Hotels have long tried to accommodate travelers with allergies, but their efforts have shown a marked increase in the past couple of years. The 2010 Lodging Survey prepared by STR for the American Hotel & Lodging Association found that 38% of hotels offer some types of services to cater to guests with allergies. Hyatt is working to create hypoallergenic rooms in all of its North American full-service hotels. "This was a market really underserved," said Tom Smith, vice president of rooms for Hyatt. |
| Airline News | |
News from Delta Air Lines
Delta announced that it would resume nonstop Norfolk-to-Boston flights begining with two daily nonstop flights
between Norfolk and Boston Logan international airports starting April 1. Delta's service will be the airport's only nonstops to Boston. The airline discontinued Norfolk-Boston nonstop flights in 2008.
Delta Unveils Auctions for Passengers Bidding to be Bumped
(Does this pass the smell test for corporate travel management? What company would want their travelers to join the bidding price? Who pays for it?)
Passengers on overbooked flights at Delta Air Lines may now put in bids for the compensation they will accept in exchange for taking a later flight. Delta says the system helps it identify those passengers with the most flexible travel plans while helping the company save money on compensation costs. Experts say the auction system appears to be a first for the airline industry. The Star-Ledger (Newark, N.J.)
News from Continental Airlines
Continental Airlines says it has completed the installation of lie-flat beds on all of its international Boeing 777s. The carrier also says it will put lie-flat beds on most of its 767s in 2011. There was speculation that Continental might retire the old Boeing widebody.
News from Southwest Airlines
Southwest Initiates Fare Increase
Airlines have increased domestic fares three times during the past month, according to FareCompare.com. Late last week, Southwest Airlines increased fares on round-trip tickets by as much as $10. American, Delta, US Airways and other airlines quickly followed suit.
Southwest's New Rapid Rewards Program Says 'Show Me the Money'
Southwest Airlines on Thursday (January 6) unveiled details of its new, long promised and long-overdue Rapid Rewards program. The big news: It is a totally dollar-based plan and travelers earn and burn points based on the price of tickets. The new program doesn't launch until March 1 and Southwest has launched a new Web site to explain the changes. But here are some highlights:
+ Travelers earn six points per dollar for each ticket purchased at the cheapest (Wanna Get Away) fares, 10 points per dollar paid for Anytime fares and 12 points per dollar for Business Select fares.
+ Any seat available for purchase can be claimed as an award without capacity controls, blackouts or other restrictions. If a seat is available at Wanna Get Away fare levels, it will require 60 Rapid Rewards points for each dollar. Anytime seats are available for 100 points for each fare dollar. Business Select fares are available for 120 points per dollar. You won't be able to combine cash and points for a ticket, but you can purchase additional points for $25 for 1,000 points.
+ The A-list level will now require 25 one-way trips (or 35,000 of the new Tier Qualifying Points) and a new A-list Preferred level will require 50 one-way trips or 70,000 TQPs.
+ The much-desired free Companion Pass continues and will require 100 paid one-way trips in a calendar year.
+ Rapid Rewards Points will not expire as long as there is some account activity in a 24-month period.
"The new program is all about your financial value to Southwest," a Southwest executive said. "The more you spend with us, the more you get. It isn't about the number of flights you take or the number of miles you fly. It's about rewarding you appropriately based on the financial contribution you make to the airline."
Southwest Gears Up for Flights to Hawaii and Mexico
Not totally unrelated to its revamp of Rapid Rewards, Southwest Airlines is gearing up for flights to Hawaii and Mexico. The Mexico service is being handled by Southwest's new Mexican partner, Volaris, and the airline has launched a daily service between Guadalajara and Chicago/Midway, a Southwest hub. And how do we know about Southwest's secret plans for Hawaii? The airline is advertising for an ETOPS manager. ETOPS (extended-range twin-engine operational performance standards) is industry jargon for long overwater flights that operate far from a convenient diversion airport. Since Southwest's current fleet of two-engine Boeing 737s don't have the range for flights to Europe, the only other logical place for an ETOPS operation would be Hawaii. So watch this space for more details.
News from United Airlines
United Airlines has begun using hand held mobile computers to scan boarding passes and credit cards to determine if a customer needs to stay in line or can use a self-service kiosk. The devices can also obtain flight information from other airlines. United hopes this new technology will cut down wait times and ease frustrations during the holiday travel season.
News from AirTran Airways AirTran Airways will fly seasonal service to Bermuda from its Baltimore-Washington International and Atlanta hubs. The BWI flights will operate from April 7 to October 24 and the Atlanta service will run between May 26 and September 6. |
| Airport News | |
For the second consecutive month, major airlines in the U.S. did not have any tarmac delays of more than three hours in November despite challenges related to the busy Thanksgiving holiday period. The carriers also reported "only a slight increase in the rate of canceled flights during the month," according to a report from the Department of Transportation's Bureau of Transportation Statistics.
Flight cancellations prompt questions about compensation: Snowstorms in the past month have stranded hundreds of thousands of travelers in the U.S., prompting some to question whether they should be compensated for hotel rooms, food and other expenses incurred as a result of flight delays or cancellations. In Europe, regulations require carriers to compensate passengers in such situations. The U.S. does not, and the Department of Transportation is not planning to add any similar requirements when it finalizes rules on passenger protections.
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C I Travel Management's employee/owners are extremely grateful for your trust in us to assist your organization in achieving a higher return on your travel investment. Our philosophy is that when you grow - we grow. It is our responsibility to help you meet and surpass the goals you've established for your travel programs and to assist your travelers whenever necessary. We thank you again for the opportunity to serve.
Sincerely,
Chris Nicholas
Vice President - Sales
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