Business Travel Briefing
For Jan. 28-Feb. 11, 2021
The briefing in brief: With business travel at 5-10% of 2019 levels, the U.S. airlines are awash in 2020 red ink. The global hotel industry had an atrocious 2020, too. Southwest adds flights to sun destinations in March. Delta juggles its vacation destination service from New York. Qatar Airways resumes Atlanta flights. A TSA creep gets a jail term. American's Piedmont division has another meltdown in Charlotte. And more, including the daily Coronavirus update.
EARNINGS? NOPE. NEWS? MORE THAN YOU'D THINK.
Delta Air Lines and United Airlines reported their dreary fourth-quarter and full-year 2020 "earnings" earlier this month, but the other major carriers released theirs this week in an orgy of red ink and whistle-past-the-Coronavirus-graveyard optimism for 2021 traffic. There was also some honest-to-goodness news. Here's a quick snapshot of the brutal reality.
reported a 2020 pre-tax loss of $1.31 billion and is furiously racing to erase the Airbus jets in its fleet, the last vestige of the Virgin America merger. Alaska Air retired 40 Airbus A319s and A320s in 2020 and will replace the remaining 21 A320s in its fleet by 2023. All that will remain are ten new A321neos, which Alaska expects to fly until it can figure out what to do with them.
reported a 2020 net loss of $8.9 billion. Business travel is just 5-10% of pre-pandemic levels, but fear not. American has a plan: Squeeze you into aircraft cheek-by-jowl whenever you start flying again. "We [can] produce 2019-level capacity on about 110 fewer airplanes," says chief revenue officer Vasu Raja.
reported a 2020 net loss of $511 million. Its first-quarter capacity will be below 50% of 2019 levels, but could be back to 80% by summer.
reported a 2020 net loss of $1.36 billion, but reaffirmed its plans to launch London flights this year from New York/Kennedy and Boston. It may also fly from its Fort Lauderdale hub if London slots and the appropriate aircraft (Airbus A321LRs) are available.
reported a 2020 net loss of $3.07 billion, its first full-year loss since 1972. President Tom Nealon said Southwest got an $80 million boost in December when it stopped limiting capacity to ensure travelers received an empty middle seat. The carrier says it will resume flying the Boeing 737 Max on March 11.
HOTELS WERE A FINANCIAL KILLING FIELD IN 2020
Airlines drive the bus, as I often lamely say in speeches and columns, and they get the lion's share of travel publicity. But airlines are not the only travel segment suffering during the pandemic. The hotel industry is in global collapse. It's just not as obvious or as publicized. Consider some of these numbers from STR, the hotel industry statisticians:
hotels registered a 2020 occupancy of just 33.1%, down from 87.3% in 2019. Occupancy in the United Kingdom was 40.5% and the revenue per available room (revPAR) was just US$40. (The revPAR is the calculation of the average amount generated by all guestroom available for rent.) Both were the lowest on record. In the Netherlands, there were record lows in occupancy (30%), average daily rate (US$113) and revPAR ($34).
hotels had a 2020 average occupancy of 30%, down from 78.7% in 2019. Hotels in Columbia had an occupancy of 25.5%. It was 26.3% in Ecuador.
hotels registered a 44.7% occupancy in 2020, down from more than 84% in 2019. While average nightly rate fell a relatively modest 11.5% to US$126, revPAR fell by more than 45% as properties were hard-hit by continent-wide lockdowns.
hotels posted a 44.5% daily occupancy rate in 2020, down from about 80% in 2019. Average daily rates fell by more than a fifth and revPAR was cut in half.
hotels were at 45.9% occupancy for 2020, down from more than 76% in 2019. The average daily rate fell to about US$117, down more than 17%.
SOUTHWEST TABS MARCH 11 FOR SUN DESTINATION RUNS
set March 11 as launch day for a batch of new sun routes. From Miami, there'll be two daily roundtrips to Atlanta and one to Dallas/Love Field. Across the state, there'll be a daily roundtrip between Sarasota and Atlanta. And across the country, March 11 is also the date for the start of Southwest's daily roundtrips between Long Beach (LGB), California, and Kahului (OGG), Maui.
Delta Air Lines
will restore flights from its New York hubs to summer holiday destinations. From Kennedy Airport, the airline will resume flights to Martha's Vineyard and Nantucket, two routes last flown in 2017. In 2021, however, it will not operate service to the two Massachusetts islands from LaGuardia, routes it had flown since 2017. From LaGuardia, Delta is reviving its flights to Key West, Myrtle Beach and Hilton Head Island. It didn't fly to any of those places last summer.
FORCE A FLASH AT THE CHECKPOINT, SERVE 60 DAYS
Crime--especially low-rent airport porn--doesn't pay. A TSA checkpoint agent at LAX has been sentenced to a 60-day jail term for tricking a woman passenger into showing her breasts. Johnathon Lomeli, 23, pleaded no contest to a felony charge of false imprisonment stemming from the incident on June 10, 2019. He is also required to take classes to address his sexual assault. According to prosecutors, Lomeli detained the passenger and required her to show her breasts and demanded to look down her pants. Lomeli had already been fired by the TSA before his arrest in February, 2020.
Delta Air Lines
has hired a chief health officer. Dr. Henry Ting was recruited from the Mayo Clinic and begins at Delta on February 15.
BUSINESS TRAVEL NEWS YOU NEED TO KNOW
, the American Eagle subsidiary based largely at AA's Charlotte hub, is in meltdown again. About 50 flights were cancelled yesterday (January 27) and it looks like around 300 will be dumped today (January 28). The problem? Piedmont's fleet of CRJ regional jets. A new FAA inspection regimen, announced a month ago, went into effect this week. But no one at Piedmont took the new rules seriously and the flights were hastily cancelled when the FAA learned of the infraction.
will resume flights to Doha from Atlanta/Hartsfield on June 1. The service has always been controversial since Qatar Air boss Akbar Al Baker has admitted he launched the route to annoy Delta Air Lines, the hub carrier at Hartsfield.
has inaugurated Metro Line 15. At various points, it connects with nine of the city's other metro lines. It brings Shanghai's metro system to 330 miles, all built since Line 1 opened in 1995.