Business Travel Briefing
For April 15-April 29, 2021
The briefing in brief: Delta kicks off first-quarter "earning" reports with another loss--but some good news. Southwest devalues Rapid Rewards with no advance notice. Marriott Bonvoy offers points for Uber rides and Uber Eats orders. American puts widebodies on all Miami routes to Los Angeles and New York/JFK. Hyatt may lose 22 hotels to Sonesta. Air Canada gets a bailout. The Hotel Pennsylvania--famous for PEnnsylvania 6-5000--may finally close. And more, including the daily Coronavirus update.

FIRST LOOK AT AIRLINE 1Q RESULTS? BAD, BUT BETTER
U.S. airlines have been losing billions from the moment the pandemic began last year. And despite talk of a travel rebound and tens of billions in bailout funds from taxpayers, 2021 will be rocky, too. First up? Delta Air Lines, which reported first-quarter results today (April 15). Numbers are bad, of course, but a little better than during the depths of the crisis. For the quarter, Delta said its revenue fell 65%. Flip side? Expenses were down 41%. First-quarter operating losses were still an eye-popping $1.4 billion and the net loss was nearly $1.2 billion. The airline averaged a daily $11 million cash burn during the first quarter, but there was a silver lining: In March, Delta generated an average of $4 million a day in cash. The weakest segment of all is, naturally, international long-haul flying, which is just 15% of historical norms. For the second quarter, Delta expects revenue to be down as much as 55% compared to 2019 and seat capacity will be around 68% of 2019 levels. Other U.S. carriers report first-quarter results during the next two weeks.

SOUTHWEST DEVALUES RAPID REWARDS WITH NO NOTICE
I warned you back in 2002 that frequent flyer programs were little more than an unregulated lottery, so this shouldn't surprise you: Southwest Airlines devalued Rapid Rewards this week with no advance notice and no grace period. The immediate devaluation looks to be in the 6% to 7% range on all award redemptions. Looking for further evidence of bad faith on Southwest's part? Consider: The airline last year urged flyers to convert their unused travel credits into Rapid Rewards points. So Southwest didn't just devalue Rapid Rewards, it hacked 6-7% off the value of travel credits that were converted.
        Marriott Bonvoy now offers credit for certain Uber services. You'll receive three Bonvoy points per dollar spent on premium Uber rides (XL, Comfort, SUV and Black rates). Perhaps more interesting, you'll receive six points per dollar spent on Uber Eats deliveries to Marriott-branded hotels. Not in a Marriott if you order Uber Eats? That'll generate two points per dollar. A $25 minimum applies in both cases. To take advantage of the offers, you'll need to link your Bonvoy account in the Uber app. More details are here.
        HawaiianMiles, the frequency program of Hawaiian Airlines, says miles no longer expire. The airline also reduced elite-status requirements. Full details are here.

WILL SONESTA INHERIT 22 HYATT PLACE HOTELS, TOO?
Sonesta Hotels has grown into a major lodging player during the pandemic via hundreds of conversions from Marriott and InterContinental. The driving force: a huge hotel owner called Service Properties Trust (SPT), which also owns a 34% stake in the Sonesta chain. SPT moved more than 200 properties to Sonesta after Marriott and InterContinental didn't meet their contractual payment levels. Now Sonesta may inherit 22 Hyatt Place hotels, too. The Hyatt situation is different, however, because Hyatt in January proactively ended its SPT contract on hotels such as the Hyatt Places at Kansas City, Indianapolis, Atlanta/Hartsfield and Washington/Dulles airports. The Hyatt-Service Properties management deal was due to end last week, but the two sides belatedly agreed to maintain the status quo until May 22. The word now? Some or all of the SPT hotels may stick with the Hyatt Place brand if the two sides can come to an agreement.

AMERICAN GOES ALL-WIDEBODY ON MIAMI RUNS TO JFK, LAX
American Airlines says it will use Boeing 777s on all flights from its Miami hub to both Los Angeles and New York/Kennedy airports. The changes are part of an overhaul the carrier is planning for a summer focused on leisure flyers. It is also launching eight Saturday-only routes to Orlando from cities such as Pittsburgh, Raleigh-Durham and Indianapolis. American says its domestic capacity during the summer will be about 90% of 2019 capacity although there have been drastic changes to the network.
        Los Angeles will get a new Delta SkyClub. It'll be a remodel of the Virgin Clubhouse in Terminal 2, which itself was a remodel of the old Northwest Airlines World Club. The 4,000-square-foot lounge is due to open next month. Virgin Atlantic, now a Delta Air Lines vassal carrier, originally opened its club in May, 2015. The lounge has been closed during the pandemic.
        Priority Pass has lined up a new lounge at Washington/Dulles. The Lufthansa Business Class club on Concourse B will be accessible to Priority Pass cardholders between 2 and 5:30pm daily.

WESTJET BULKS UP IN WESTERN CANADA
It may not be resuming sun-destination flights soon, but WestJet is adding 11 new routes around Western Canada. In June it will launch runs from Edmonton (to Kamloops, Penticton and Naniamo); Victoria (to Winnipeg, Saskatoon and Ottawa); Kelowna (Saskatoon and Regina); and to Comox and Fort McMurray from Toronto/Pearson. Separately, WestJet extended to June 4 its suspension of flights to Mexico and the Caribbean. The Canadian government in January pressured Air Canada and WestJet to drop the flights. WestJet had originally planned to restart service on May 1.
        Air Canada will receive a government bailout worth as much as C$5.4 billion. The cost? Air Canada will pay interest--the bailout is crafted as a loan--and the government will also receive 6% of the airline's shares.

BUSINESS TRAVEL NEWS YOU NEED TO KNOW
The Justice Department is looking into the details of the code-share operations of American Airlines and JetBlue Airways. According to The Wall Street Journal, DOJ is concerned about the concentration of traffic the two carriers command at New York/Kennedy and Boston/Logan airports. The airlines announced the alliance last summer and it was approved in January with minimal concessions by the Transportation Department.
        Norse Atlantic, emotional if not financial successor to Norwegian Air Shuttle transatlantic routes, says that it has acquired nine former Norwegian Boeing 787 Dreamliners for about half their historical cost. The planes will apparently retain their Norwegian configuration, too. Norse Atlantic hopes to launch in December, when it receives its first Dreamliner. The other eight are due during the first quarter of 2022. Complete details of the airline's plans are outlined in a prospectus filed for a stock listing.
        Porter Airlines has again delayed its relaunch. Based at close-in Toronto/City, the airline now says it won't restart flights until June 21. Porter has repeatedly delayed the resumption of flights since it originally shut down on March 21, 2020.

LAST DANCE FOR THE HOTEL PENNSYLVANIA?
Hotel Pennsylvania, the New York hotel whose phone number, PEnnsylvania 6-5000, became a hit song for Glenn Miller, is likely to close. The 1,700-room property has been closed during the pandemic and the owner, Vornado Realty Trust, wants to demolish it and build a mixed-use tower in its place. Located across from Amtrak's Pennsylvania Station, the Hotel Penn opened in 1919, was once owned by Hilton and has been part of three or four other lodging chains over the past 100 years. "The Pennsylvania may have been a grande dame in its time, but it is decades past its glory and sell-by date," says Vornado chief executive Steven Roth. Of course, this might never happen. Vornado has been trying to close the hotel and redevelop the site for more than 20 years. Stay tuned.