Business Travel Briefing
For March 4-March 18, 2021
The briefing in brief: Airlines are in line for another bailout--and react with awful corporate citizenship. Delta says Nashville, San Jose and Cincinnati are no longer focus cities. Omni Hotels doesn't seem to want your business anymore. United adds buses--seriously, buses--on Colorado routes. Amex juggles its card benefits. Elaine Chao's casual corruption at the DOT. And more, including the daily Coronavirus update.

The Senate is debating the American Rescue Plan--aka the Biden $1.9 trillion Coronavirus stimulus bill--and guess who's in line for another $15 billion bailout? Yup, airlines. And how are the carriers acting now that they're back in our pockets for a third time in a year? About how you'd expect: with lies, bad behavior and raises all around. Consider:
        United Airlines has been fined more than $49 million for committing fraud in postal service contracts related to carrying international mail. The Justice Department says United submitted false delivery data from 2012 to 2015. It led to millions in payments from the United States Postal Service. The Justice Department last week said United has agreed to pay $17 million in criminal penalties and another $32 million to settle a civil complaint.
        Delta Air Lines, armed with a new management incentive plan, is awarding managers, directors and senior vice president one-time payouts ranging from $8,000 to about $250,000. Delta disclosed its new compensation plan in a federal filing before Christmas, but Gary Leff's View From the Wing blog last week got the financial details. Delta lost $12.4 billion in 2020, so, you know, bonuses are certainly justified ...
        American Airlines has granted packets of shares to many of its C-suite executives. Among them: Chief executive Doug Parker received shares valued at $7.2 million, president Robert Isom scored shares worth nearly $4.2 million and chief financial officer Derek Kerr received $2.8 million worth of shares. American, of course, is the worst-performing carrier by many measures, so, again, totally justified payouts.

Before the pandemic hit, Delta Air Lines had a plan to devour the nation's traffic. Besides its expanded network of hubs--Seattle-Tacoma, Boston/Logan and Los Angeles were all added in recent years--Delta created a network of "focus cities." These not-quite-hubs were cities where Delta was adding new point-to-point nonstops to capture business travel demand. Pre-pandemic, Delta designated Austin, Nashville, Raleigh-Durham and San Jose as focus cities. A former Delta hub, Cincinnati, also got the focus city rubric, a nod to the carrier's corporate contracts in the Queen City. But the pandemic has humbled everyone and everything, including Delta. The airline admitted this week that only Austin and Raleigh-Durham will continue to get focus-city treatment. Nashville, San Jose and Cincinnati will all be thrown back on the spoke-city pile. It's hard to say what the change will mean in terms of schedule. But if Austin (Delta capacity is down about a third since the pandemic) and Raleigh (capacity down by half) are still focus cities, don't expect much nonstop love for Nashville, San Jose and Cincinnati. (Or, you know, fly Southwest Airlines, the largest carrier at all three cities.)

Privately owned Omni Hotels doesn't seem particularly interested in making friends or influencing guests. The chain, which had grown to about 60 full-service resorts and hotels, is shrinking rather precipitously. It permanently closed its New York flagship (the Omni Berkshire Place) and continues to keep eight more "temporarily" shuttered, including hotels in Chicago, San Francisco, New Orleans, Pittsburgh (the William Penn), Houston, Dallas, Montreal (Mont-Royal) and Providence, Rhode Island. This week, it confirmed the sale of five properties. All will subsequently rebrand and shed their Omni affiliation, including properties in Austin; San Antonio; Jacksonville, Florida; and the closed Houston and Dallas hotels. While most lodging chains have retreated to a 24-hour cancellation policy for reservations during the pandemic, Omni has re-imposed much more onerous restrictions at its resorts. Most again demand 72 hours advance notice of cancellation and three (in Orlando, at Mount Washington, New Hampshire, and on Amelia Island, Florida) require an eye-watering 7-day advance cancellation. All of which may explain a new marketing and sales tie-up with another independent brand, the smaller Loews Hotels. Many of each chain's properties will appear as an option on the other's respective Web site. After all, having offended so many existing guests, Omni needs to find some new customers somewhere.

United Airlines has made it clear that it considers coach travelers just this side of chattel, so some of its fleet moves in recent weeks won't surprise you. Or maybe they will, since its newest "aircraft" are actually buses. Genuine, honest-to-goodness motorcoaches. Starting next week, you'll see United "flights" between its Denver hub and Breckenridge. Beginning April 1, there'll also be Denver-Fort Collins "flights" on offer. But those shorter, intra-Colorado runs won't be flights at all, but bus rides provided by a firm called Landline. (Landline provides bus-based "flights" for Minneapolis-based Sun Country Airlines.) Of course, buses masquerading as flights aren't new. United has tried it before and Continental Airlines once operated a series of branded bus routes from its Newark hub. The services rarely last long because travelers tend to be irked when airlines abandon all pretense and book them on an actual bus rather than provide bus-like aircraft. Separately, United is also betting heavily on Boeing 737 Max aircraft. It has placed an order for 25 more, which will bring its total Max commitment to 188 planes. It already operates 22 Max-planes. Finally, a bit of good news. United has reconfigured all of its 76-seat United Express regional jets to carry just 70 seats. But this is not about more comfort for you. It was part of a "scope clause" deal it struck with its pilots to maximize the amount of Coronavirus bailout money it could accept. Details are convoluted, of course, but the bottom line is a skosh more legroom on those planes. Better than a sharp bus in the eye, I guess.

Montana airports gets a little more flying love this summer. Alaska Airlines will add seasonal nonstops to Kalispell (from Los Angeles and San Diego) and Bozeman (from San Francisco and San Diego) using EMB-175 aircraft configured for first, premium economy and coach. Flights will operate several days a week between May and September.
        American Express is phasing out the $100 annual credit for airline fees charged to Amex Gold cards. It ends on December 31. Several other Amex cards will get a new benefit, however. A cellphone protection plan will be an additional perk for most Platinum and Centurion (black) cards as well as some Delta-branded cards.
        The FAA is proposing a $27,500 fine for a passenger who allegedly struck a flight attendant last October on a Delta Air Lines flight between Miami and Atlanta. The unnamed passenger has 30 days to dispute the finding and the fine.

The Inspector General of the Transportation Department late last year asked the Justice Department to open a criminal investigation of former DOT Secretary Elaine Chao. The wife of Mitch McConnell, now the Senate minority leader, Chao was accused by the IG of using DOT staff and resources to promote her family's shipping business. The report, released yesterday (March 3), detailed a series of instances where Chao and DOT staff spent federal time and resources to help the Foremost Group, the family shipping operation with extensive ties in China. The Justice Department, then under the control of the Trump Administration, refused to look into the details. Of course, Chao's casual and consistent corruption during her DOT tenure wasn't exactly unknown. Besides her frequent absences from the job, she was regularly doing special favors for McConnell's friends back in Kentucky.