Business Travel Briefing
For September 3 to 17, 2020
The briefing in brief: The U.S. airlines load up on leisure routes since business travel has all but disappeared. Hyatt adds the Hotel Hana-Maui. Southwest wins all the Long Beach slots that JetBlue has abandoned. Bankrupt Intelsat buys moribund Gogo. Eurostar launches its direct London-Amsterdam train. And much more, including the daily Coronavirus update.
THE FUTURE OF FLYING BELONGS TO LEISURE TRAVELERS
With daily passenger numbers falling
and airlines predicting a major slump in post-summer flying, the carriers are pivoting away from business customers. The new hotness: leisure flyers. United Airlines led the way last month with non-hub flights to Florida
destinations. Southwest Airlines announced today (September 3) that it would soon launch service to Palm Springs, California, and Miami, two airports it previously ignored. Earlier this week, American Airlines loaded schedules for a grab bag of new leisure routes to Mexican destinations from Austin; Charlotte; Columbus, Ohio; Indianapolis; and even Sacramento. Also included: a St. Louis-Cancun run it hadn't served in 15 years. The airline also revived routes to its Phoenix hub from Calgary and Cleveland that it had abandoned five years ago. Alaska Airlines is adding a route to Tampa from San Francisco. Meanwhile, Delta Air Lines is reviving three leisure routes--Boston-St. Thomas, New York/Kennedy-Grand Cayman and Los Angeles-Guadalajara--that it hasn't flown in more than three years. "Not a lot of choice," one airline C-suite executive E-mailed me this week. "It's not like you guys [business travelers] are flying. We have to find somewhere we can generate revenue and leisure travel will outperform business [flights] for the next year or longer."
HYATT PLANTS TWO MORE FLAGS IN UNIQUE PLACES
Before the pandemic, Hyatt
was struggling to keep up with the runaway growth of its competitors such as Marriott and Hilton. But the pandemic has scrambled the board. Although it remains a comparative flyspeck, Hyatt has been most aggressive in keeping its frequency plan, World of Hyatt, relevant. This week it announced two interesting new properties. Via its Destination Hotels
subsidiary, the chain can now plant its flag at the Hotel Hana-Maui
, the 75-unit property at the end of the legendary Hana Highway. The resort dates to the 1940s and was once a Rosewood Hotel and most recently been branded Travassa. It has been closed since the pandemic began and now is targeting an October 1 reopening. For those of you thinking it'll be a great place to burn World of Hyatt points, get ready for the complications. The property is listed as a Category 7 redemption (30,000 points a night), putting it on par with Park Hyatt hotels. The problem will be what constitutes a standard room--most of the hotel's accommodations are bungalows larger than 650 square feet--and lack of availability. I did a quick spot check into May and couldn't find a single night when an award can be claimed. Meanwhile, halfway across the world, Hyatt has opened the 183-room Hyatt Regency Sofia
. It is Hyatt's first hotel in the Bulgarian capital, which had been attracting off-the-beaten-track travelers in recent years. In the heart of town on Vasil Levski Square, the hotel has a spa and a rooftop bar and restaurant. It's listed as a Category 1 redemption, a bargain at 5,000 points a night.
SOUTHWEST WINS 'EM ALL AT LONG BEACH
JetBlue Airways announced in July that it was abandoning slot-controlled Long Beach Airport
and moving all flights 25 miles up the I-110 to Los Angeles
. That left a big gap at LGB and guess who's fixing the hole? Southwest Airlines. Every other airline that had previously expressed interest in Long Beach took a pass, leaving Southwest as the only party interested in the 17 slots that once belonged to JetBlue. And facing the reality this week, Long Beach Airport authorities awarded all 17 slots to Southwest. That means the 800-pound gorilla of alternate carriers will control 34 of the 51 slots at LGB dedicated to commercial passenger flights. (Delta Air Lines has 12, American Airlines has three and Hawaiian controls two.) Southwest, which has been flying from Long Beach since 2016, hasn't said what it'll do with the new take-off and landing positions.
BANKRUPT INSTELSAT BUYS MORIBUND GOGO
Gogo, the much-despised provider of mostly domestic in-flight Internet, has been sold. The buyer is Intelsat, a large satellite operator and Gogo competitor providing in-flight and cruise Internet. Intelsat is actually working its way through a Chapter 11 bankruptcy, which it filed in May. It used $400 million of its $1 billion debtor-in-possession funding to acquire Gogo's commercial-aviation division, which is a perennial financial loser and as well-known for when its service is down as when it functions. On the other hand, Gogo is not bereft of assets. It is installed on 3,200 commercial aircraft and has a chunk of spectrum that may be auctioned as the FCC searches for 5G network assets. Intelsat itself has $14.5 billion in debt and is currently on the hook for more than $1 billion annually in debt service. The deal is projected to close in the first quarter. Down in the weeds, the deal envisions Intelsat buying ten years of exclusive access to Gogo's mostly outdated air-to-ground network. Gogo, the company, will survive as a publicly traded firm that sells Internet to private-jet operators.
BUSINESS TRAVEL NEWS YOU NEED TO KNOW
next month finally launches same-seat service between London/St. Pancras
and the Netherlands. The trains will call in Rotterdam
. Direct trains will run weekdays until around Christmas and then go daily. The bad news: Eurostar says traffic is so weak now that its cross-channel trains won't call at the Ashford
stations again until 2022. That's the same time frame the railroad laid out for the return of its Marseille
says it expects to cut more than 16,000 jobs if carriers are unable to convince Congress to create another bailout. The layoffs would begin October 1, the day after the CARE Act bailout expires.
says its air-traffic control surcharge will increase C$4-$7 one-way. The airline blames increased charges from NAV CANADA, the nation's air traffic control system. The new rates go into effect on Saturday (September 5).
is going back to the retention bonus well. The rental firm distributed $16.2 million in bonuses to 340 employees just before it filed Chapter 11 bankruptcy in May. Now Hertz wants its bankruptcy court to approve $5.4 million in additional bonuses. This time, however, the tidy bundle will be distributed only to Hertz's chief executive and 13 other top managers.