Business Travel Briefing
For May 28-June 11, 2020
The briefing in brief: Buffalo is the canary in the hotel coal mine. Service to London is falling fast. U.S. airlines continue to prune airports from their route maps. Hertz and LATAM go into bankruptcy. The United States and China are fighting over renewed flights between the two countries. And much more, including our daily Coronavirus update.

You'll hear a lot about hotel "deflaggings" and "conversions" and repurposing in the coming months, so consider Buffalo, New York, the lodging canary in the chain-hotel coal mine. All three already happened this week in that hard-pressed city, second-largest in New York State. Example One: After more than 36 years as a Hyatt, the Hyatt Regency Buffalo has been deflagged. The Hyatt name will disappear on Monday (June 1). Of course, some of this is moot since the 396-room property has been closed since March when the Coronavirus overwhelmed New York. But the property was expected to reopen Monday and now the fate of the Fountain Plaza landmark, the city's second-largest hotel, is unknown as of Thursday evening. Example Two: The Buffalo Grand Hotel, the city's largest, is scheduled reopen on July 1, but at half its former size. The owner, Canadian investor Harry Stinson, says he's converting around half of the hotel's 484 rooms into apartments. If the names Buffalo Grand and Stinson ring a distant bell, it's because the hotel was one of the last flag carriers of the old Adam's Mark brand. As we explained 18 months ago, Stinson rescued the gigantic property adjacent to Buffalo's convention center even before he knew where all the metaphoric bodies were buried. Example Three: the never-to-be Wyndham Hotel in Buffalo. Before the pandemic hit, an investor group purchased the 20-years-abandoned Adam, Meldrum & Anderson department store building in February and planned to turn part of it into a 340-room Wyndham. They've now abandoned the idea and will try to repurpose the huge structure into a mixed-use development with apartments, retail space and restaurants.

These are, as the television ads keep reminding us, uncertain times. So uncertain that even the certainty of flights to London is, well, uncertain. Although Eurocontrol says Heathrow still has 11 daily flights to New York and that currently makes it the fifth-busiest route from Europe, service across the pond has shrunk dramatically. Virgin Atlantic, for example, has dropped all its London flights to the United States and Canada in June. The airline now says service to Los Angeles and New York is scheduled to return in July. Meanwhile, British Airways has cancelled its flights to Calgary, Alberta, and Charleston, South Carolina. Service to Portland, Oregon, scheduled to launch earlier this year, has been pushed back to September. Delta Air Lines has cancelled some or all flights to London from Salt Lake City, Boston and Portland, Oregon. And expect more cancellations soon as the British government imposes a 14-day quarantine on visitors.
        SAS Scandinavian restores flights to the United States beginning June 10. That's when two weekly Newark-Copenhagen flights begin using A330-300s. The next day, SAS begins two weekly A330-300 flights between Copenhagen and Chicago/O'Hare.

Remember in The Godfather when Sonny wants to know the fate of the stoolie who sold out Don Vito? "Paulie? You won't see him no more," explained Clemenza. I remind you of that pungent analysis when you consider the latest list of airports that U.S. carriers are being permitted to drop. Despite the fact that the route-map rubouts are technically temporary until September 30 under the strictures of the CARES Act bailout, the gloves then come off on October 1 and airlines are under no obligation to restore service. So pull out your scorecards and see which airports airlines have already dumped. You probably won't be seeing them anymore.
        Alaska Airlines has dropped flights to Charleston, South Carolina; Columbus, Ohio; El Paso and San Antonio, Texas; and New Orleans.
        American Airlines has dropped Worcester, Massachusetts, as well as three Colorado ski towns.
        Delta Air Lines has off-loaded service to Bangor, Maine; Erie and Scranton, Pennsylvania; Peoria; Lincoln, Nebraska; and Santa Barbara, California.
        JetBlue Airways has bailed on Albuquerque; Palm Springs and Sacramento, California; Sarasota, Florida; and Worcester.
        United Airlines has dropped flights to Allentown, Pennsylvania; Chattanooga, Tennessee; Hilton Head, South Carolina; Kalamazoo and Lansing, Michigan; Rochester, Minnesota; Key West, Florida; and St. Thomas.

The Coronavirus that first appeared late last year in Wuhan didn't just morph into a pandemic, it's also become a flashpoint in the political, economic and cultural battle between the United States and China. Flights between the two countries all but ended during the winter and the U.S. carriers serving China, Delta Air Lines and United Airlines, quickly bailed on its routes. The timing of the Delta and United shutdowns is now part of a new front in the U.S.-China cold war. In gearing up its aviation sector revival, China ordered carriers to use March 16-22 route map and then operate just one weekly flight to each international destination. Fair enough. But now that Delta and United want to resume passenger flights to Beijing and Shanghai, China's aviation authority says it can't be done since neither airline had flights in the March 16-22 window. That had led the airlines to complain to the U.S. government and, naturally, it's become a Sino-American clusterfark. Meanwhile, China's second-largest carrier, Shanghai-based China Eastern, says it will stick with the one-weekly-flight regimen through August and won't request more robust schedules until September. Delta owns a small stake in China Eastern, which is also part of the SkyTeam Alliance. Stay tuned, folks, this could be messy.

After decades of dreadful management--some imported from United Airlines--and years of dreary customer service, Hertz is now officially bankrupt. The one-time 800-pound gorilla of rentals also put its Dollar and Thrifty brands into the Chapter 11 soup. The company is saddled with $17 billion in debt and missed a key payment last month. The filing late last Friday (May 22) came with standard controversy, of course, because 340 executives received $16.2 million in "retention bonuses." One silver lining: Greenmailer Carl Icahn took the pipe. He held a 39 percent stake in Hertz and sold all of his more than 55 million shares after the bankruptcy. According to a federal disclosure Wednesday (May 27), he received a payout of 72 cents a share. His Hertz stake was valued at $700 million in 2019.
        LATAM, South America's largest carrier, declared Chapter 11 bankruptcy on Tuesday (May 26). Two of the carrier's founding families--it was created by a 2012 merger of LAN Chile and TAM of Brazil--and stakeholder Qatar Airways say they will provide upwards of US$900 million to the keep LATAM running. South America's second-largest carrier, Avianca, filed for bankruptcy earlier in May.

American Airlines told employees yesterday (May 27) that it will slash 30 percent of its managerial and support staff. It's soliciting volunteers but says it will resort to layoffs if the target isn't reached. The airline says 39,000 employees have already taken voluntary leave or early retirement and the carrier says it will operate at least 100 fewer aircraft next year compared to 2019.
        Stuttgart Airport in Germany has been offering a series of one-on-one concerts in recent weeks. Full details were reported in The New York Times.