Business Travel Briefing
For May 21-May 31, 2020
The briefing in brief: Delta will add flights to Cape Town because it's shrinking. (Yeah, it's complicated.) United chooses Clorox while other carriers block middle seats. The TSA will stop scribbling on your boarding pass. Germany will bail out Lufthansa, but get a 25 percent stake and two board seats. Norwegian is saved. (We think.) Accor and Choice hotels extend elite status. And much more, including our daily Coronavirus update.

The last thing any airline is thinking about right now is expansion, so you might be shocked to learn that Delta Air Lines is hoping to add Cape Town, Africa, to its route map. If Delta gets government approval, flights from its Atlanta hub will begin October 24. And therein hangs a tale of Coronavirus and, ironically, Delta's shrinking footprint. As you may have heard, Delta is retiring its Boeing 777s as it downsizes the carrier's fleet for a post-pandemic world. The problem? The 777s were the only aircraft that could make the approximately 8,400-mile run on Delta's existing South Africa nonstop route between Atlanta and Johannesburg. Even Delta's newest fleet type, the Airbus A350-900s, can't make the run. But the 306-seat Airbus A350 does solve part of the problem. That plane can fly ATL-JNB nonstop. But because Johannesburg's O.R. Tambo International is what the industry calls "high and hot"--it's located at 5,512 feet and the temperature usually warm--the thin air won't allow a fully loaded A350-900 to make the return nonstop. The solution? Take an expensive "weight penalty"--fewer passengers and/or less cargo--or add an intermediate stop. Delta chose the latter, specifically Cape Town. So if all goes according to plan, A350-900s will fly Atlanta to Johannesburg nonstop, then fly to Cape Town and then fly nonstop back to Atlanta. The so-called triangle route won't serve local Jo'burg-Cape Town traffic, however. Stay tuned.

It continues to be hilarious--you know, if you're in the right frame of mind--to watch the actions of hopelessly anti-passenger carriers such as United Airlines. It now has officially eschewed even a temporary policy of empty middle seats to offer a modicum of social distancing. Instead, this week it launched the ridiculously named CleanPlus program, basically branded babble that relies on the Clorox Bleach name. JetBlue Airways, by contrast, announced this week that it will continue to block middle seats on Airbus planes (they're configured 3x3) and aisle seat on its EMB-190s, which are configured 2x2. That policy continues until at least July 6. Delta Air Lines says it'll cap flights at 60 percent of capacity until June 30. That should ensure an empty middle or adjacent seat on most of its flights. Alaska's seat-blocking policy lasts through June 30 while American's is guaranteed through May 31. Hawaiian Airlines hasn't put a date on its blocked-seat plan. Southwest Airlines is the systemic outlier, of course. Although it has pledged to limit ticket sales per flight through July, it does not offer assigned seats, so you're on your own to social distance.

Ever wondered what the TSA "document checker" ostentatiously scribbled on your boarding pass before you go to the security checkpoint? You needn't worry any longer. The farce is being discontinued in the name of Coronavirus safety. According to new TSA edicts released this week, the document-check stations will remain, but travelers will have to place boarding passes on document readers and/or hold it up for the checker to examine. (If you use electronic boarding passes, the process is even less personal.) The TSA also wants carry-on food separated and placed in a plastic bag. And the agency is reminding travelers that they may carry as much as 12 ounces of hand sanitizer in carry-on bags, but a supply that large may require separate screening. You can see all of the TSA's new rules and bureaucratic patter here.

Canada and the United States have extended the closure of the border between the two countries until at least June 21. Only emergency travel, cargo and repatriation of nationals are generally exempt. The restriction, first announced on March 18, has virtually ended flights between the two countries.
        Thai Airways will declare bankruptcy and be reorganized, Thailand's prime minister said this week. The carrier has lost money most every year in the last decade. Under the reorganization plan, still incomplete, the Thai government will retain less than 50 percent of the carrier.
        TAME, the flag carrier of Ecuador, will be liquidated. Founded in 1962, TAME operated about a dozen routes in 2019, including flights to New York/Kennedy and Fort Lauderdale.
        Finnair says it will resume long-haul flying on July 1. Its first route to North America is due to relaunch in August with flights between its Helsinki hub and New York/Kennedy.

Hotel chains continue to bow to reality and extend status for elite guests. Accor, the French giant, says members of all five elite levels of its ALL program have had their status extended through December 31, 2021. Choice Hotels is going a slightly different way. Gold members of Choice Rewards will be upgraded to Platinum level until the end of the year. Platinum members are upgraded to Diamond level. Five stays before December 31 will permit elite members to maintain their upgraded level until December 31, 2021. Otherwise, they revert to their original status through 2021. All existing Diamond members receive automatic status extension through 2021.
        The Edition Times Square Hotel in New York City will close. The year-old property, part of the Marriott chain, is expected to shut its doors permanently in mid-August. Another Times Square hotel, the Hilton on West 42nd Street, is also at risk. The owners said earlier this month that it had written down the property's value below the existing $77 million mortgage and might surrender the hotel to lenders.

Lufthansa and the German government have agreed on terms for a bailout. The airline will receive 6 billion euros as an investment and 3 billion more as a loan. In return, the German government will receive what amounts to a 25 percent stake in the carrier, the first time Germany will have ownership in Lufthansa since 1997. The government also gets two seats on the Lufthansa board and a guarantee no dividends will be paid to shareholders. Lufthansa has spent weeks pressing the case for a bailout and insisting the German government shouldn't dare get involved in managing the airline or receiving a financial stake. But German legislators would have none of it. "The state is not some idiot that will just hand over money and have no say after that," one German legislator explained to Die Welt, a nationwide newspaper.

Norwegian Air says it received a US$300 million loan guarantee from the Norwegian government and convinced investors to convert more than US$1 billion in debt to equity. That should ensure Norwegian will survive through the year and even make it to the planned 2021 relaunch of its transatlantic flights.
        Delta Air Lines chief executive Ed Bastian claims no U.S. airline will go out of business. He insists the CARES Act bailout and a "responsive" Trump Administration will help airlines avoid liquidation. Bastian made his prediction and laudatory comments this week on the Fox Business network because of course he would ...

With exquisitely bad timing this week, the Transportation Department released employment figures for the nation's 22 scheduled commercial carriers. They were for March, bound to be the high-water mark for airline employment. According to the DOT, the industry employed 459,190 full-timers, up 3.2 percent from March, 2019. It was the highest employment since February, 2003, when 460,852 people worked for scheduled airlines. March also marked the 77th consecutive month that the carriers had increased overall employment. It's all downhill--or a bad fall off the steep cliff--from here. The first tranche of layoffs will come when the CARES Act, which underwrote airline salaries, expires on September 30.