Earn 25,000 MQM Delta miles for Transfering AMEX Membership Rewards:

Amazing Delta Deal announced today:

Earn More by Transferring Membership Rewards points into your Skymiles account.

Once you register, you'll earn a 50% mileage bonus on all the Membership Rewards® points you transfer into your SkyMiles account by December 15, 2010.

And if you transfer 50,000 points or more, you'll also receive 25,000 Medallion® Qualification Miles (MQMs). That's enough to give you Medallion status and benefits like waived baggage fees, unlimited upgrades, preferred seating, and more.

http://www.delta.com/pet/gofarther/pet/main

Humanitarian Airfare: Certificate of Usage Required

Humanitarian Airfare: Certificate of Usage Required via Constant Contact

Humanitarian Airfare Documentation
Most airlines are now requiring a certificate of usage form to be completed and returned to AFCNET at the time of purchase. (Before Ticketing)

Airline Requirements:
Certificate for usage of Global Missionary must be completed and submitted at time of purchase of any missionary/humanitarian ticket. Additionally: Airlines at any point may ask your clients to present proof of affiliation to a humanitarian or religious non-profit.

It is extremely important for your clients to have this when they arrive at the airport. If your clients are unable to show proof, the airline may refuse your passenger with no refund.

Any of the examples below are acceptable forms of proof:

* The travelers non-profit business card
* Credentials from religious organization
* Sponsorship letter from a non-profit

Thanks for your attention to this matter.

Air France Strike

Air France Union has called for a strike beginning tonight on Monday. It will affect travel in Paris most. Air France has said that their long- hauled flights will continue to operate. If you have a connection flight in Paris, as always please check with the airline to confirm the schedule. Otherwise, it's travel as normal.

Southwest Airlines to acquire AirTran

Southwest Airlines announced today it has entered into an agreement to acquire all of the outstanding common stock of AirTran holdings, Inc. – the parent company of AirTran Airways – for cash and Southwest common stock. Here is a fun fact sheet about the two airlines.

I find it interesting that this agreement does not require labor approval. In Southwest's attempt to purchase Frontier, Southwest was all about a pilots’ deal, so the story is much different in this situation. It will be interesting how all of this shakes down.

Southwest is able to build up their New York strength with LaGuardia and begin to get a presence in our nation's capital city and also put pressure on Delta Airlines with AirTran already having a strong presence in Atlanta. Southwest will now be an international airline, servicing Canada, Mexico and the Caribbean.

As we blogged earlier this year, when airlines merge, customers usually come up on the short end. In short, fewer airlines mean less competition and likely higher fares. Fewer airlines mean less availability. That direct flight might now involve a stop (or two) in order to get to your final vacation spot. Less availability could also mean taking flights at times we aren't used to flying – like an early 6:00am flight to catch a connection (often with a long layover) – in order to get to where you are going.

American Express, US Airways and Continental

American Express announced today changes in their relationship with Continental Airlines. Even though most of these changes won't take place until September 30, 2011, they have an impact for cardholders. After September 30, 2011, American Express cardholders will no longer be able to redeem points for frequent flyer miles into the Continental OnePass frequent flyer program. Currently, Platinum and Centurion members also receive complimentary access to Continental Airlines President Club lounges when traveling on Continental Airlines; that benefit will end as well on September 30, 2011.

There is good news, though! Starting December 1, 2010, for those Platinum and Centurion card members there are three new benefits:

A. $200 airline fee credit. This credit can be used in many ways: baggage fees, flight changes fees, in-flight food and airport lounge day passes. This will be $200 each year as well. Card must be enrolled with the airline. (The list of airlines have not been announced yet.)

B. 20% Travel Bonus. When you use your American Express points in the pay-with-points program (through AFC Net you can use your American Express points to pay for your travel), you will receive back a 20% bonus in points. You can use your points in the pay-with-points program for almost any travel -- airlines, hotels, cruises, and vacation packages.

C. American Express App. Those with phones that qualify can download an all-new American Express App which is great for those who travel a little or travel a lot.

American Express also announced they have added the US Airways Club access as one of the benefits for Platinum and Centurion cardholders. There are over 250 of these clubs worldwide.

NEW TSA Requirements

Effective November 1, 2010, traveling will require full Secure Flight Passenger, a program started in 2009, for those traveling to/from/within/over the United States on any of U.S. carriers regardless of their ultimate destination. The TSA said there WILL BE NO exceptions to this new policy; 100 % compliance is necessary by all airlines and travelers.

What will you need to provide to the airline or travel agent?

• · Your full name as it appears on the government-issued I.D you plan to use when traveling
• · Date of birth
• · Gender
• · Redress number (if available)

It is a good idea check with the airline and/or travel agency that this information has been placed in your reservation. For more information check out the TSA website or contact AFCnet and we can help answer any questions or concerns you might have.

AA is charging everyone for seats, again. Introducing "Express Seats"

American Airlines announces today their new "Express Seats" option. Instead of allowing their best "elite" customers the ability to pre-reserve the bulkhead - or the 1st few row of coach - American Airlines is now only offering these seats within 24 hours of check-in, only via the Check-in kiosks @ the airport, and only after you pay a service fee. The fee (based on distance) will range from $19 - $49 per person per flight.

AAvantage Elite customers will still be offer "preferred seats" - but these will be behind the "Express Seats."


See: AA News Release

All you can Fly Pass

Both JetBlue and Sun Country today announced all-you-can-fly pass for Sept/Oct travel.

Sun Country (based here in Minneapolis) is offering their pass for $499.00 for unlimited flights between Sept. 7 and Oct. 13 (plus taxes). The pass -- must be purchased by Aug. 24 or while supplies last. Reservations must be made at least three days in advance, and fees apply for no-shows or for changes made within three days of a flight's schedule departure time.

JetBlue's pass base price: $699.00
The pass covers travel between Sept. 7 and Oct. 6. (If you are willing to travel only 5 days a week - Excluding Fridays and Sundays - the pass is only $499.) JetBlue says pass holders will have no boundaries -- every available seat on every flight between Sept. 7 and Oct. 6 will be available with no blackout dates -- to travel to more than 60 international and domestic destinations in JetBlue's route network as often as they like. Domestic taxes and fees are included in the price of its pass, though taxes and fees for international flights and flights to Puerto Rico are not included.

The Fine Print(rules): Both offers...Pass holders must book flights at least three days prior to their desired flight's scheduled departure. Pass holders can cancel or make changes to pass reservations for free if done more than three days in advance. Changes or cancellations made within three days of a flight booked under the pass will incur a $50 fee. No shows incur a penalty of $100.00

Happy Travels.

Delta SkyMiles Upgrades

Being a Diamond, Platinum or God Medallion member of Delta Air SkyMiles program just got a little better. You can now request an upgrade on either an award ticket or a "pay with miles" ticket. It's already happening for people who have these types of tickets. In addition, Delta is rolling out many other enhancements this fall and into early 2011. You can read about them at the Delta website.

Speaking of Delta’s website, it has undergone a "face lift" and now features a brand-new look. Be sure to check it out.

Travel Industry Overview: A summer review

Travel Industry Overview (from AMEX):

The travel industry continues to stay on a recovery track. In the airline sector, travel demand continues to build, leading to rising airfares and growing revenues for carriers:

• International air travel rose 11.9% in June, the second month of growth recovery following the ash cloud crisis in April.

• Passenger volume on Asia-Pacific airlines surged 25.2% in June, the eighth consecutive monthly increase.

• Congress approved aviation safety legislation addressing pilot qualifications.

• The average domestic airfare rose 4.7% in the first quarter of 2010 to $328, the second highest first quarter level since 2001.

• Passenger revenue for U.S. airlines rose 25% in June, the sixth consecutive month of revenue growth.

• The airline industry is working to develop global standards specifying when it is safe to fly through plumes of volcanic ash.

• Airlines are continuing to contain capacity growth in spite of growing demand as part of their policy of prudent management in the face of rising fuel prices.

• U.S. airlines see a multi-billion-dollar benefit from the financial reform legislation signed into law, predicting it will cut their fuel costs.

• A rebranded version of the Registered Traveler Program will be debuting at Indianapolis International Airport.

• Full-body scanners are being rolled out at airports throughout the country.

The hospitality sector continues to build recovery momentum:

• U.S. hotels posted gains in all three key performance measurements for the first three weeks of July.

• The luxury segment in the U.S. recorded the strongest lifts in all three performance metrics, including a double-digit revPAR rise for the month of June.

• A rise in business travel is sparking a summer rebound for U.S. hotels.

• While U.S. hotel values are projected to dip this year, they are expected to rebound strongly in 2011.

• Smith Travel Research data suggests that to date, Arizona’s hotel industry has been relatively unscathed by the state’s new immigration law.

• Satisfaction among hotel guests has improved notably in 2010, according to the J.D. Power and Associates 2010 North America Hotel Guest Satisfaction Index Study.

• Hotel markets in eight out of nine global regions registered year-on-year increases in revPAR for the first half of 2010.

• London’s hotel industry recorded a 14.9% increase in profits for June.

• Hotel markets in six out of ten major European cities registered gains in profit levels for June.

• Sparked by stabilizing fundamentals in the hotel industry, investors are gearing up for acquisitions.

• Hotels are increasingly targeting teenagers on summer vacation with their families.

• Economy and mid-scale hotels are adding value to their free breakfast offerings.

Tourist destinations worldwide are on the rise despite challenges:

• In a positive sign that travel spending is rebounding, American Express reported brisk growth in travel sales for the second quarter of this year.

• The U.S. Travel Association has recommended the creation of a marketing campaign designed to alleviate the impact of the oil spill on tourism to the Gulf Coast.

• The Jamaica Tourist Board credits travel agents with playing a key role in preventing the riots in Kingston from negatively impacting Jamaica’s tourism industry.

• In a Harris poll, more Americans indicated they would vacation in Italy rather than in any other country outside the U.S. if cost was no object.

• Israel tourism set two records for visitor volume, one for this June and one for the first half of 2010.

• International tourist arrivals to the Asia-Pacific region picked up strongly in the first five months of 2010 with a 10% rise.

• Total spending by tourist arrivals to Hawaii surged dramatically to $948.9 million in June 2010 compared to only $131.7 million in June 2009.

• In spite of political turmoil in Thailand, international arrivals to the destination surged 13.7% in the first half of this year.

• Vietnam is anticipating robust growth in tourism.

The cruise industry continues on a steady recovery track:

• The world’s three largest cruise companies recorded favorable financial results for the second quarter of this year.

• Cruise companies are reporting that cruise fares are rebounding.

• President Barack Obama signed the Cruise Vessel Safety and Security Act into law.

• Worldwide, the cruise industry is currently facing what one industry insider terms a regulatory “minefield.”


Aviation Industry


Robust Rise for International Air Travel in June
The International Air Transport Association (IATA) reports that demand* for international air travel was up a brisk 11.9% in June, the second month of growth recovery following the ash cloud crisis in April. Capacity increased by only 5.9% keeping the load factor in line with historical highs at 79.8%. For the first half of this year, a 7.9% demand rise outpaced a 2.0% capacity gain to yield a load factor of 77.1%.

Results for International Air Travel by Global Region in First Half 2010
• “The industry continues to recover faster than expected, but with sharp regional differences. Europe is recovering at half the speed of Asia with passenger growth of 7.8% compared to the 15.5% growth in Asia-Pacific (for the month of June 2010).” -- Giovanni Bisignani, IATA’s Director General and CEO

• North America posted growth of 10.8% in June, comparable to the 10.9% recorded for May. Brisk growth and the industry-leading load factor of 86.6% are contributing to strong second quarter financial results for the region’s carriers.**

• Asia-Pacific posted double-digit gains for both June (15.5%) and the first half (10.5%).

• Europe lags behind other regions with gains of 7.8% in June and 3.3% for the first half.

• The Middle East registered the strongest surge for the first six months (20.1%).

• Africa had the strongest growth in June (21.3%) due to the FIFA World Cup.
Year-on-Year Change in International Air Passenger Demand* for First Half 2010
Global Region June Jan.-June
North America 10.8% 5.9%
Asia-Pacific 15.5% 10.5%
Europe 7.8% 3.3%
Latin America 14.7% 10.2%
Africa 21.3% 13.2%
Middle East 18.0% 20.1%
Industry 11.9% 7.9%

*Demand is measured in terms of revenue passenger kilometers (RPKs).
** As reported in the previous issue of this newsletter.
Source: International Air Transport Association Press Release – 7/28/10

Travel on Asia-Pacific Airlines Surges in June
The Asia-Pacific zone continued to spearhead global recovery in air travel during June. The Association of Asia-Pacific Airlines (AAPA) reports that the number of international passengers on AAPA member airlines was up 25.2% for the month to 15.1 million, the eighth consecutive monthly increase. Passenger volume for the first six months of this year rose 14.9% to 89.3 million.

Demand Growth Outstrips Capacity Gains to Yield Robust Load Factors
• In June, a rise in demand* of 19.0% far outpaced a capacity rise of 6.4% to yield a surge of 8.5 percentage points in the average load factor to 79.5%.

• For January - June, a demand increase of 11.9% far outpaced capacity growth of 1.8% yielding a gain of 7.1 percentage points in the average load factor to 78.2%.
International Travel on Asian Airlines in 2010
June January - June
Passenger Volume (000) 15,134 89,252
% Change Year-on-Year 25.2% 14.9%
Passenger Demand (in millions)* 57,744 338,570
% Change Year-on-Year 19.0% 11.9%
Seating Capacity (in millions)** 72,666 432,863
% Change Year-on-Year 6.4% 1.8%
Passenger Load Factor 79.5% 78.2%
Change Year-on-Year 8.5 pp*** 7.1 pp***

* Passenger demand is expressed in terms of RPKs (revenue passenger kilometers).
** Seating capacity is expressed in terms of ASKs (available seat kilometers)
*** Percentage points
Source: Association of Asia-Pacific Airlines Press Release – 6/23/10

Congress Passes Air Safety Bill
On July 30, Congress approved aviation safety legislation developed in response to a commuter airline crash in western New York last year. The safety measures apply to all airlines and are the first comprehensive attempt in decades to revise rules governing pilots. They would require airlines to hire more experienced pilots, investigate pilots' previous employment more thoroughly, and train them better. The legislation also requires a major overhaul of rules governing pilot work schedules to prevent fatigue.
Source: The Washington Post – 7/30/10
Source: The Wall Street Journal – 7/30/10

Domestic Airfares Rise in First Quarter
The average domestic airfare rose 4.7% year-on-year in the first quarter of 2010 to $328, according to the U.S. Department of Transportation. This was also a 2.8% increase over the fourth quarter of 2009 and represents the second highest first quarter level since the $348 amount recorded in 2001. In the 15 years from 1995, the first year of records, air fares rose 10.5% compared to a 43.7% inflation rate.
Source: U.S. Bureau of Transportation Statistics Press Release – 7/28/10

U.S. Airlines Post Six Months of Revenue Growth
The Air Transport Association of America (ATA) reports that passenger revenue for U.S. airlines rose 25% in June, the sixth consecutive month of revenue growth. For the 12 months ending June 2010, passenger revenue was 0.5% greater than calendar year 2000 levels. 1.4% more passengers traveled on U.S. airlines in June while the average price to fly one mile rose 20%. International passenger revenue rose 38%. “It is clear from these positive results that the recovering U.S. economy is enabling airlines to dig out from the very deep hole of a year ago,” said ATA President and CEO James C. May.
Source: Air Transport Association Press Release – 7/21/10

Airline Industry Still Striving for Ash Cloud Standards
Stung by the ash cloud crisis, European airlines have been pressing for development of global standards specifying when it is safe to fly through plumes of volcanic ash. However, three months after volcanic ash temporarily closed nearly 80% of European airspace, aircraft and engine makers don't appear any closer to agreement on such standards. The task has proved to be a daunting one, partly because each eruption produces different size particles with unique chemical compositions.
Source: The Wall Street Journal – 7/23/10

Airlines Continue Capacity Restraints Despite Rebound
Despite a strong financial showing for this year's second quarter and the promise of similar results through the rest of the year, airlines are still keeping a lid on capacity growth. Airline executives said the economic recovery is still fragile and they cannot plan on substantially increasing capacity as long as fuel prices continue to roller-coaster. Especially troubling, executives said, are the fuel increases this year compared with last year. Consequently, airlines are not hurrying to replace the capacity that they took out of their networks during the 2008 fuel spikes and subsequent recession.
Source: Travel Weekly – 7/23/10

U.S. Airlines See Benefit from Financial Reform Law
U.S. airlines see a multi-billion-dollar benefit from the financial reform legislation signed into law on July 21, predicting it will cut their fuel costs. A provision in the measure limits the size of trades, or futures contracts, for anyone not hedging with the intent of taking delivery of fuel. Airlines have argued that speculation in recent years caused volatile oil price swings and higher costs that drove some carriers under while severely testing the financial stability of others. Industry officials are optimistic that the new limits in the law will contain such volatility by curbing speculative commodities trading.
Source: Reuters – 7/21/10

New Version of Registered Traveler Program to Debut
On August 16, Indianapolis International Airport will be the first U.S. airport to launch a rebranded version of the nationwide registered traveler program that once had thousands of members until it shut down a year ago. The new iQueue Priority Access program is expected to appeal to business travelers and frequent fliers willing to spend $169 annually for an identity card; the card can be used to pass through express lines leading to airport security checkpoints Two other airports have announced plans to launch similar programs by the end of the year.
Source: The Indianapolis Star – 7/30/10

Major Rollout of Full-Body Scanners Underway
The new imaging technology known as full-body scanners is being rolled out at various airports throughout the U.S., according to the Department of Homeland Security. About 450 machines will be used in airports nationwide by the end of the year, and 142 have already been installed in airports such as Boston, Dallas-Fort Worth, New York’s JFK, San Francisco, and Miami. The machines debuted at Pittsburgh International Airport on July 20 and will be appearing at Los Angeles and Houston. Passengers’ concerns over graphic images generated by the equipment have prompted federal authorities to take steps to assure anonymity. Passing through the equipment is optional.
Source: WPXI-TV (Pittsburgh) – 7/20/10
Source: Houston Chronicle – 7/20/10
Source: Daily Breeze (Torrance, California) – 7/20/10


Hospitality Industry:


U.S. Hotels Continue Performance Gains in July
Smith Travel Research (STR) reports that U.S. hotels are posting increases in all three key performance measurements. As shown below, while the industry began registering growth in both occupancy and revPAR in March 2010, room rate was still negative through April. In May, however, room rate was flat -- the first month in almost two years that room rate was not negative. In June, room rate edged up 1.0% and continued marginal gains in the first three weeks of July. In the most recent two-week reported (July 11 – 24), revPAR rose by an average 8.8%, driven by a 7.3% rise in occupancy:
% Change Year-on-Year in U.S. Hotel Industry Performancece
Time Period Occupancy Room Rate RevPAR
January-December 2009 -8.7% -8.8% -16.7%
January 2010 -0.4% -7.1% -7.4%
February 2010 0.9% -4.5% -3.6%
March 2010 5.9% -2.0% 3.8%
April 2010 4.7% -1.2% 3.5%
May 2010 7.1% 0.0% 7.1%
June 2010 6.9% 1.0% 8.0%
July 4 - 10, 210 3.9% 0.4% 4.3%
July 11 - 17, 2010 7.3% 1.6% 9.0%
July 18 - 24, 2010 7.3% 1.3% 8.6%

Source: Smith Travel Research data as reported in various “Hotel News Now” releases

U.S. Luxury Hotels Outperform Other Segments in June
STR reports that among the seven chain-scale hotel segments in the U.S., the luxury segment generated the largest increases in all three key performance metrics for June 2010; the segment’s occupancy rose 9.4% to 70.2%, room rate was up 4.7% to $236.59, and revPAR surged 14.6% to $166.20. Four of the seven chain-scale segments reported increases in all three key performance metrics. Overall, the U.S. hotel industry’s occupancy was up 6.9% to 65.0%, room rate edged up 1.0% to $98.33, and revPAR rose 8.0% to $63.87.
Source: Hotel News Now – 7/20/10
Source: Hotel News Now – 7/21/10
Source: Hotel News Now Reports on First Half 2010 Results for U.S. Hotel Industry

Signs of Summer Rebound for U.S. Hotels
The hotel industry in the U.S. appears to be rebounding this summer, mainly because of strengthening business travel, according to business analysts. So far the biggest beneficiary is New York, though other East Coast cities are reporting gains as well. Upscale, full-service hotels that are favored by business travelers are said to be benefiting more from the upturn in demand than midlevel brands; STR describes the rebound as “top-down,” meaning the more expensive hotels are recovering the fastest.
Source: The New York Times – 7/26/10

U.S. Hotel Values Expected to Fall in 2010, Rise in 2011
According to projections in the Penn State Index of U.S. Hotel Values, the average value of a U.S. hotel room will be down 2.2% this year to $74,787 and then rise 7.5% in 2011 to $80,424. Among six hotel segments, the luxury segment is projected to dip 1.3% this year to an average room value of $249,906 and then increase 6.4% in 2011 to $265,930. The widest anticipated fluctuation is in the economy segment which is expected to plummet 11.2% this year to $15,797 and surge 11.0% next year to $17,531.
Note: This article includes a suggested formula by which hoteliers can evaluate room value.
Source: Hotel News Now – 7/27/10

Arizona Hotels Unscathed from Immigration Law to Date
Although Arizona’s tourism industry has been threatened by the state’s new immigration law, STR data suggests that Arizona hotels have been relatively unscathed so far. Occupancy in the state is up 5.2% for 59.0% for the first half of this year and increases have actually been improving since the beginning of the year. Room demand for hotels in Arizona is up 7.9%.
Source: Hotel News Now – 7/29/10

Survey Shows Notable Rise in Hotel Satisfaction
As the hotel industry recovers from the economic downturn, overall satisfaction among hotel guests has improved considerably in 2010 from 2009, according to the J.D. Power and Associates 2010 North America Hotel Guest Satisfaction Index Study. Each of six North America hotel segments posted gains in satisfaction levels in 2010 over 2009, with extended stay properties and mid-scale full service hotels generating the largest increases. Across all segments, satisfaction with the costs and fees, reservations, and guest room measures improved most notably.
Source: J.D. Power and Associates Press Release – 7/27/10

Favorable Performance Results for Global Hotel Markets in First Half
STR Global data shows that hotel markets in nine global regions generally posted favorable performance results for the first six months of 2010:

• Seven regions posted occupancy gains; Asia-Pacific had the highest growth: 12.8%.

• Five regions posted room rate gains; Southern Africa had the highest growth: 25.3%.

• Eight regions posted revPAR gains; Asia-Pacific had the highest growth: 24.8%.

• The results for North America (and the U.S. within the region) show positive trending for a region that has been lagging behind the recovery in other regions.

• The results shown for Europe reflect variable results across European sectors; Hotels in Western and Northern Europe led the way in revPAR gains while Southern and Eastern European hotels could not convert strong occupancy gains into improved room rate increases.

• Asia-Pacific was the only region to register double-digit gains in all three performance measurements.

• Although the Middle East was the only region to record declines in all three performance measurements, it had the highest room rate ($201) and revPAR ($125) levels of any region.
% Year-on-Year Change in Global Hotel Performance: January - June 2010
Global Region Occupancy Room Rate RevPAR
North America 4.4% -1.2% 3.2%
United States 4.4% -2.0% 2.3%
Caribbean 2.0% 3.7% 5.8%
Central America 9.4% -2.1% 7.1%
South America 9.3% 8.8% 19.0%
Europe 5.4% -1.4% 3.9%
Middle East -1.9% -7.6% -9.4%
Northern Africa 9.3% 6.6% 16.5%
Southern Africa -2.9% 25.3% 21.6%
Asia-Pacific 12.8% 10.6% 24.8%


Mixed RevPAR Trending for Global Hotel Markets in June 2010
STR Global data shows variable results for nine global markets in terms of revPAR trending in June compared to the first six months of this year:

• Five global regions show improvement in revPAR growth in June while four regions show lower growth levels.

• North America (and the U.S. within the region) improved by 5.8 percentage points in June revPAR growth compared to the first half.

• Europe, impeded by the ash cloud crisis in April among other factors, fell 5.0 percentage points to post a drop in revPAR of 1.1% for June.

• Southern Africa, sparked by the World Cup games in South Africa, generated a gain of 57.5 percentage points to record a stratospheric 79.2%
revPAR gain in June.

% Year-on-Year Change in RevPAR for Global Hotel Markets
Global Region June 2010 Jan.-June 2010 Change*
North America 9.0% 3.2% 5.8 pp
United States 8.0% 2.3% 5.7 pp
Caribbean 4.1% 5.8% -1.7 pp
Central America 3.5% 7.1% -3.6 pp
South America 11.4% 19.0% 7.6 pp
Europe -1.1% 3.9% -5.0 pp
Middle East -7.3% -9.4% 2.1 pp
Northern Africa 14.9% 16.5% -1.6 pp
Southern Africa 79.2% 21.6% 57.6 pp
Asia-Pacific 27.0% 24.8% 2.2 pp

Note: Monetary values represented above are based on U.S. dollars. Results vary by currency referenced.
*pp = percentage points
Source: STR Global Hotel Performance Data for First Half 2010

Profitability Surges for London Hotels in June
The latest Hotstats survey from TRI Hospitality Consulting shows that London hotels generated a 14.9% increase in Gross Operating Profit per Available Room (GOPPAR) for June. This result was driven by the highest room occupancy levels of the year in June at 87.5%, a year-on-year increase of 3.4 percentage points, plus an 11.2% rise in room rate to £131.23. The resultant lift in revPAR was 15.8%. Despite snow in January and the ash cloud in April, GOPPAR for London hotels rose 12.0% for the first half of this year.
Note: Currency in this report is measured in pounds.
Source: Hotstats Report for June 2010 by TRI Hospitality Consulting

Mixed Profitability Results for European Hotels in June
Of the hotel industries in ten major European cities reported in the latest Hotstats survey by TRI Hospitality Consulting, six of the cities posted gains in GOPPAR while four registered declines. Three cities generated double-digit gains: Berlin (42.7%), Brussels (23.7%), and London (14.6%). Notably, Paris was down 0.7% in GOPPAR. For the first six months, eight of the cities generated GOPPAR increases while two recorded declines. Five cities posted double-digit GOPPAR rises for the first half.
Note: Currency in this report is measured in euros.
Source: Hotstats Report for June 2010 by TRI Hospitality Consulting

Trend: Hotel Investors See Mounting Recovery
The consensus of hotel experts is that after hitting bottom last year, the hospitality industry has embarked on a modest, yet steady, recovery. The upturn is marked by rising occupancies and stabilizing room rates after an extended period of free-fall. With fundamentals stabilizing, firms with the capital on hand such as REITs and private-equity funds are gearing up for acquisitions to take advantage of attractive valuations and still-limited bank financing. "We consider this a very good time to buy. We expect to be active acquirers over the next 18 months," says Russell Urban, senior vice president of acquisitions and development at HEI Hotels & Resorts.
Source: Lodging Hospitality Online – 7/27/10

Trend: Hotels Targeting Teens on Summer Vacation
Hotels and resorts are increasingly catering to teenagers on summer vacation with their families. In particular, properties are offering activities that can help teenagers fulfill their goal of breaking away from their parents for awhile. Hotels are now realizing they need to offer customized options for teens. Such programs include Wii contests, sushi-making lessons, poker nights, and dedicated ‘hang-out’ spots. The key to attracting teens, hotels say, is providing grown-up experiences while setting limits.
Source: The Wall Street Journal – 7/29/10

Trend: Hotels Enhancing Free-Breakfast Offerings
Economy and mid-scale hotels around the world are adding value to their free breakfast offerings with the addition of waffles, eggs, sausage, and other foods this year. Holiday Inn Express properties in the United Kingdom and Ireland, for example, added scrambled eggs, bacon, sausage, and warm pastries to their complimentary breakfast offerings in May. In June, Hampton Inn rolled out self-serve waffle makers as part of its free breakfast at properties in the U.S., Canada, and Latin America.
Source: Hotel News Now – 7/21/10



Tourism News


Surge in American Express Travel Sales for Second Quarter
In a positive sign that travel spending is rebounding, particularly in the business sector, American Express reported brisk growth in travel sales for the second quarter of this year. Corporate travel sales for the company rose nearly 28% to $4.6 billion for the period while the company’s overall travel sales rose 25% to $5.7 billion. The results reflect growth in transactions as well as strengthening of airline pricing.
Source: Business Travel News – 7/23/10

Campaign Recommended to Reinvigorate Gulf Coast Travel
The U.S. Travel Association has recommended the creation of a marketing campaign designed to alleviate the impact of the oil spill on tourism to the Gulf Coast. According to Oxford Economics, the oil spill could inhibit travel to the Gulf Coast for three years and cost the region $22.7 billion. The association feels that a campaign to attract visitors could reduce the economic cost by $7.5 billion. The association has proposed that federal officials procure $500 million from BP to fund the campaign.
Source: U.S. Travel Association Press Release – 7/22/10


Travel Agents Bolster Tourism Resilience for Jamaica
John Lynch, chairman of the Jamaica Tourist Board, credits travel agents with playing a key role in minimizing damage to the destination’s tourism industry during the crisis that started in late May. Despite a two-month travel alert issued by the U.S. State Department as a result of riots in Kingston, travel to the country didn't suffer. “The travel agents, in particular, stood out as a real friend to Jamaica,” Lynch said. “They all knew what was really happening in Jamaica and that it was still safe to go there. This is where our relationship with the travel industry really proved big.”
Source: Travel Agent Central – 7/28/10

Poll Shows Italy as Top Foreign Vacation Choice for Americans
In this year’s Harris Interactive survey of travel preferences, more Americans indicated they would vacation in Italy rather than in any other country outside the U.S. if cost was no object. The destination rose from number two on the list last year. Conversely, Australia dropped from number one in last year’s ranking to number two this year, only the second time since 1997 it has vacated the top spot. Ireland, the United Kingdom and France rounded out the top five selections.
Source: Travel Agent Central – 7/22/10


Israel Sets Visitor Records for First Half
Israel tourism set two records for visitor volume, one for this June and one for the first half of 2010. The destination generated 259,000 tourist arrivals from around the world in June, a record level for the month of June. 28% of these visitors, 73,188 travelers, were from the U.S. – making June the best month ever for U.S. travel to Israel. The number of tourist arrivals to Israel in the first half of this year surged 39% to a 1.6 million. The U.S. is Israel's primary tourism source market with Russia, Germany, and France following.
Source: Travel Pulse – 7/26/10


Asia-Pacific Tourism Continues Robust Growth through First Five Months
The Pacific Asia Travel Association (PATA) reports that following a 3% drop in 2009, international tourist arrivals to the Asia-Pacific region picked up strongly in the first five months of 2010 with a 10% rise. Although the ash cloud crisis inhibited arrivals to and from Europe in April, total arrivals for all Asia-Pacific were still up 7% for the month and were back to more robust growth in May with a rise of 16%.

Gains in International Arrivals for Asia-Pacific Sub-Regions: January - May 2010
• South Asia was up 15% for the first five months of this year, the highest growth rate of any Asia-Pacific sub-region. South Asia was up 4% in April and 19% in May, sparked by a continuously improving safety and security situation. Sri Lanka, one year after the end of a decades-long civil war, generated surging growth rates of 47% in April and 42% in May.

• Southeast Asia was up 13% for the first five months. Tourism growth slowed to 8% in both April and May, weighed down marginally by the ash cloud crisis and the political turmoil in Thailand; arrivals to Thailand fell 0.2% in April and 13% in May.

• Northeast Asia, the largest sub-region in visitor volume, posted a rise of 10% for the first five months. The ash cloud crisis subdued growth to 7% in April but then the sub-region rebounded vigorously with a 19% surge in May. Notably, arrivals to Japan skyrocketed 26% in April and 49% in May, marking six consecutive months of double-digit gains for the country, following a long slump.

• The Pacific grew by a more modest 2% for the first five months. This was the only sub-region to post declines in visitor volume for April and May due to the ash cloud crisis. Notably, arrivals to Australia and New Zealand were down 6% in April and 4% in May, as the visitor flow from Europe was disrupted by the airspace closures.
Source: Pacific Asia Travel Association Press Release – 7/21/10

Dramatic Rise in Hawaii Tourism Spending for June
Tourists are increasingly visiting Hawaii and spending more on their trips, according to the Hawaii Tourism Authority. Arrivals to the destination rose 13.6% in June 2010 to 625,522 visitors, the seventh consecutive month of arrival increases. More dramatically, total spending by these visitors in June 2010 surged to $948.9 million from only $131.7 million in June 2009. This marked growth in tourist expenditures for Hawaii is based on a 7% increase in the amount spent by the average visitor to $161 per day.
Source: Pacific Asia Travel Association News Release – 7/31/10

Thailand Tourism on the Upswing for First Half
The Tourism Authority of Thailand reports that in spite of the political turmoil that has plagued the destination, tourism is on the rise. International arrivals rose 13.7% in the first half of this year to 7.52 million visitors. Phuket and other beach destinations in the Kingdom continued to see an upswing; according to the Airports of Thailand, disembarkations from international flights were up 49% for Phuket and 26% for Chiang Mai in the first half.
Source: Pacific Asia Travel Association News Release – 7/27/10

Vietnam Projects Tourism Surge
Vietnam is anticipating robust growth in tourism; according to forecasts, revenue gains from tourism will reach US$8.7-million by 2013. The tourism industry reportedly contributes an estimated 13.1% of the country’s GDP. Last year, Vietnam’s tourism industry accounted for 44.7% of the country’s foreign direct investment.
Source: Pacific Asia Travel Association News Release – 7/29/10


Cruise Industry



Three Largest Cruise Companies Post Favorable Financial Results
Royal Caribbean Swings to Second Quarter Profits
Royal Caribbean Cruises reversed last year’s second-quarter loss, reporting a $60.5 million profit for the second quarter of 2010; the company reported a $35.1 million net loss in last year’s second quarter. Second-quarter revenue surged 18.5%, to $1.6 billion. Passenger ticket revenue climbed 21.2%, while the increase in onboard and other revenue grew 12.7%. "Despite ongoing uncertainty with the economy, our profitability continues to improve and our booking environment continues to be remarkably stable,” said Royal Caribbean Chairman Richard Fain.
Source: Travel Pulse – 7/23/10

Carnival Registers Revenue Gains for Second Quarter
Carnival Corporation generated a 10.3% increase year-on-year in revenue to $3.2 billion for its second quarter ended May 31. Passenger yields were up 2%. These results enabled the company to report net income of $252 million for the period. Although this was a 4.5% decline from the second quarter of 2009, it exceeded the company's March guidance. “We were encouraged to see revenue yields turn positive for the first time since late 2008,” said Carnival Chairman and CEO Micky Arison.
Source: Travel Weekly – 6/28/10


Norwegian Cruise Lines Records Improved Net Yields for Second Quarter
Norwegian Cruise Line reports that net yields improved 6.6% from higher ticket prices and increased onboard revenue per capacity day for the second quarter. NCL said that If not for a $33.1 million cost related to a foreign-currency contract associated with financing the Norwegian Epic, it would have made a profit of $18.2 million, ahead of the $15.4 million it made in last year's second quarter; due to the charge, however, NCL registered a $14.9 million loss for the quarter. NCL's revenue was $478 million for this year’s second quarter, a virtually flat result compared to last year’s second quarter.
Source: Travel Weekly – 7/26/10
Source: Travel Pulse – 7/27/10

Cruise Fares on the Rise
Cruise companies are reporting that after plunging during the downturn, cruise fares are rebounding. Royal Caribbean International CEO Adam Goldstein told Wall Street analysts that pricing is about a third of the way back to where it was before the economic downturn began in 2008. He said improving demand and bookings from both North America and Europe were contributing to the recovery in pricing. Norwegian Cruise Line said in a statement that "the second half of 2010 is showing solid improvements in pricing from 2009 levels."
Source: USA Today – 7/26/10


Discounted Cruises on the Decline as Booking Window Expands
Discounted cruise prices are gradually evaporating as demand builds. Cruise Critic expects prices to rise between 5% and 7% in the near future. Concurrently, the booking window, which contracted notably in the last 18 months, is expanding back to normal. With fewer last-minute bargains available, cruise lines will be encouraging travelers to book early rather than late.
Source: TravelMole – 7/29/10

President Signs Cruise Safety Legislation into Law
President Barack Obama signed the Cruise Vessel Safety and Security Act into law on July 27, 2010. Sponsored by Senator John Kerry (D-MA) and Representative Doris Matsui (D-CA), the law contains a host of provisions designed to enhance safety and security onboard cruise ships as well as insure accountability by cruise companies. The Cruise Lines International Association (CLIA) has expressed its support of the law noting it already does, as standard practice, much of what is required in the new law.
Source: Cruise Industry Facts – 7/27/10


Cruise Industry Facing Regulatory “Minefield”
Worldwide, the cruise industry is currently facing what one industry insider terms a regulatory “minefield.” In addition to the cruise safety legislation cited above, there are several other U.S. laws and international conventions that regulate the industry’s activities. What makes compliance difficult for the industry is that one of its greatest assets, the mobility of its ships, presents a challenge when it comes to jurisdiction; ships constantly move through different territorial waters, encountering different laws and standards to which they must conform.
Source: Travel Weekly – 7/20/10

WSJ.com - Shopping for Perks Among the Big Airline Alliances

From: Wall Street Journal




Airlines pitch their global alliances as seamless networks, yet there are so many hitches that consumers may want to shop around.

Alliances have existed for more than a decade as airlines have sought to market themselves jointly. But the companies have found that splicing together computer systems and competitive instincts has been difficult and is still evolving. As a result, perks and policies vary among each of the three big alliances—Star, oneworld and SkyTeam.

Certain Air France fliers can't earn Delta miles, though both are in the same alliance.

"There are still really deep pockets of incompatibility. It's not always what it's cracked up to be," said Randy Petersen, publisher of frequent-flier magazines and founder of the website FlyerTalk.com.

For example, using mileage points for a free ticket or to upgrade from a coach ticket to business class is generally easier if you're flying one of the member airlines in Star Alliance than in oneworld or SkyTeam. Meanwhile, access to fancy lounges is often better for elite-level frequent fliers at oneworld. And the simple act of earning miles for flights isn't the same across all alliances, or even among airlines within the same alliance.

If you're a Delta Air Lines Inc. frequent flier, for instance, and you pay $1,297 to fly to Europe on Delta's SkyTeam partner Air France, you probably expect to collect Delta miles. But there's a catch: Delta doesn't give you miles if your ticket, like this one, is among Air France's five lowest fare classes.

A Delta spokesman said the airline follows Air France rules to align with what partner airlines offer their own customers. Other carriers in other alliances do the same. "It is something on our list to improve as we align pricing and fare classes," the Delta spokesman said.

For airline alliance members to be able to coordinate fares and schedules and operate joint ventures, they must have antitrust immunity from the U.S. Department of Transportation. Key airlines in the Star and SkyTeam alliances already have this.

Big airlines in the oneworld alliance including AMR Corp.'s American Airlines, British Airways Plc and Japan Airlines Corp. are likely to soon win antitrust immunity, perhaps by the end of this month. DOT has already granted preliminary approval. This will make oneworld more competitive with the other alliances, especially to Europe. Currently American and British Airways can't offer frequent-flier miles or awards on each other's trans-Atlantic flights—a significant disadvantage for oneworld customers.

For frequent travelers, alliances have gotten so important for earning and redeeming miles and offering perks that picking an alliance may be more important than picking an airline.

"Competition used to be strictly between airlines. But competition is really happening between alliances now," said Christian Klick, a Star Alliance vice president.

For consumers, the biggest perk of alliances is mileage: You can earn miles in your home airline's frequent-flier program and redeem them on lots of carriers around the globe, and you can fly on far-flung airlines and still earn miles and status in your home airline's program.

There are other benefits. Top-tier frequent fliers—those in the higher categories of elite status—typically get access to airport lounges at partner airlines. And your elite-level frequent-flier status gets recognized by other alliance members, so benefits like priority check-in, boarding, standby status and baggage service are good on lots of airlines.

Star, which was the first global alliance with its launch in 1997, is by far the largest of the three alliances with 28 airlines and 1,172 destinations. It gained ground in the U.S. last fall when Continental Airlines Inc. left SkyTeam and joined Star. Star is the only alliance with multiple U.S. members: UAL Corp.'s United Airlines, Continental and US Airways Group Inc.

Oneworld, which has 11 airlines and 727 destinations, says it has focused on quality and not quantity. Cathay Pacific Airways Ltd. and Qantas Airways Ltd. typically get very high marks among travelers for premium service, reliability and facilities, for example. Oneworld also claims big airlines in key business-travel markets: London, Hong Kong, Tokyo and New York.

One place it is lacking: mainland China, where oneworld has no partner.

SkyTeam, a collection of 13 airlines offering 898 destinations, has adopted a similar stance, saying that while it lacks size, it is made up of "regional champions" such as Delta, the largest carrier in the U.S., and Air France-KLM, the largest in Europe.

Which alliance is best for you really depends on what you want when you fly. Here's a guide, and picks of top choices in different categories, based on a close study of alliance policies, discussions with alliance officials and consultation with several frequent-flier experts.

Upgrades-Top Choice: Star Alliance

Using miles to upgrade a coach ticket to business class, or even business class to first class, is one of the best benefits of frequent-flier programs. Most airlines offer it, but the ability to use miles to upgrade on alliance partners is much more difficult.

Star Alliance has the most liberal policy. You can use miles to buy upgrades to business class from most coach fares on 17 of the 28 Star airlines.

Oneworld doesn't allow any upgrades using miles on partner airlines. SkyTeam allows some upgrades using miles, but only if you first buy a full-fare coach ticket.

Lounge Access- Top Choice: Oneworld

For road warriors who want the showers, food, bars and comfortable work or rest spaces of fancy airport lounges, travel experts say oneworld currently has the strongest offering, though Star is close.

Oneworld gives top-tier elite members access to fancy lounges, even when they are flying coach. And the lounges that oneworld can offer are exceptional: British Airways, Cathay Pacific and Qantas are all known for outstanding airport clubs.

"Oneworld is excellent as far as elite benefits go," said Ben Schlappig, a connoisseur of frequent-flier programs who writes the One Mile at a Time blog at BoardingArea.com.

Star also offers lounge access to top-tier frequent fliers when flying abroad. Neither Star nor oneworld offer lounge access to the lowest level of elite frequent fliers, typically those that fly at least 25,000 miles a year.

SkyTeam can be more restrictive. In addition to the lowest level of frequent fliers, some mid-level elite members also are excluded from lounge access, such as the gold level at Delta, which requires earning 50,000 miles a year.

Redeeming Miles for Award Tickets - Top Choice: Oneworld

If it's free tickets that you really want out of an airline, then you'd be wise to consider Star Alliance. It is considered to have the best availability of frequent flier award tickets by dint of having the most airline members.

That's a key thing since travelers often complain about airlines being skimpy with frequent-flier awards. The ability to redeem seats with miles on other airlines makes it easier to actually use your miles.

Star Alliance increasingly makes it easy for members to book award tickets online on partner airlines. Through a computer system called StarNet, Star Alliance partners post all the seats they make available to mileage awards, and most airlines incorporate that into their own websites. If you can't find seats to Europe on Continental, United or US Airways, you may have better luck with Lufthansa, Swiss, Austrian, Scandinavian or LOT Polish.

"There's little question that Star Alliance is the best for award redemption," said Gary Leff, the member-elected president of FlyerTalk.com. "They're the biggest alliance and in general their award availability is the best."

While most Star Alliance members make all open award seats available to customers, United is an exception. It blocks some availability from StarNet. When airlines let you use your miles on partners, they typically end up having to pay the partner for providing the transportation. So it can be cash out the door.

A spokesman for United says Star Alliance members set the price United must pay for each award flight flown by a member of United's Mileage Plus program.

"There are occasions when Mileage Plus may limit the number of award seats available on Star Alliance carriers," the spokesman said. "These occasions primarily occur when United has direct or connecting service to the destination and United award seats are available."

Oneworld says its members have agreed to make reward seats equally available—if one carrier offers the seats, all must offer them. The alliance hopes that can be a "competitive advantage," said spokesman Michael Blunt.

Comparing Global Alliances

Which airline alliance is right for you? A look at what the big three offer.

	STAR	ONEWORLD	SKYTEAM
Airlines	28	11	13
Airports served	1,172	727	898
Key members	United, Continental, US Airways, Lufthansa, Singapore, ANA, Air Canada, Thai	American, British Airways, JAL, Iberia, Cathay Pacific, Qantas, Finnair, LAN	Delta, Air France-KLM, Korean, Alitalia, Aeroflot, Aeromexico
Lounges; lounge access	990; all elites except bottom level	550; all elites except bottom level	447; only top-tier elites
Can you use miles to upgrade?	Most airlines	No	Only on full-fare coach tickets
Redeeming miles for award tickets	The alliance has the most airline members and offers widespread sharing of inventory among partners.	Restrictions on American Airlines and British Airways limit options to Europe	Delta and Air France both had low availability in a recent awards test
Do key airlines have antitrust immunity?	Yes	Likely soon	Yes
The Middle Seat's overall grade	A-minus	B	B-minus

Sneaky Delta Skymiles Award Ticket Change:

Without warning or a Press Release Delta is changing its Skymiles Award Ticket rules:

Minimum Stay (Effective in August 2010)

A minimum of a Friday or Saturday night stay will be required for Award tickets booked within 21 days from departure. Minimum stay will not apply to the following:

* Awards booked by Diamond, Platinum and Gold Medallion members
* Awards booked by Delta Reserve, Platinum and Gold primary cardmembers
* Awards priced at mid or high tier levels

SkyTeam Celebrates 10 years

13 different airlines make up the SkyTeam global airline alliance. Ten years ago four airlines started this alliance-AeroMexico, Air France, Delta and Korean Airlines. However, today SkyTeam carriers has more than 13,000 daily flights to almost 900 destinations in 169 countries. Wow, that is a lot to choose from. As always miles can be earned and redeem on any one of the 13 airlines that are part of SkyTeam alliance.

Vietnam Airlines joins SkyTeam Alliance

Delta Air Lines welcomes Vietnam Airlines as the newest member of the SkyTeam Alliance. Now you can earn SkyMiles on Vietnam Airlines while traveling to such cities as Hanoi and Ho Chi Minh City. You can read more by visiting the SkyTeam website.

Delta Wi-Fi update:

Direct from the Delta BLOG:

This is actually quite an amazing accomplishment. Simply avoid DC-9’s and you’ll have Wi-Fi (and lets be honest – DC-9’s SUCK for other reasons as well).


Wi-Fi: The 500

It’s been a while since the last Wi-Fi update but this one’s a big ‘ol juicy one…let’s call it WI-FI: THE 500. That’s right…this week marks the 500th Wi-Fi installation, a really impressive feat on the part of Delta TechOps, Aircell/Gogo and the installation teams. Since our first installation in December 2008, we’ve been averaging one install about every 1.5 days.

In addition to the 500 installed aircraft, we also have 32 installations that have been partially completed but they’ll require some additional engineering work to find alternate locations for the antennas. Supplemental Type Certificate (STC) amendments are in work and these planes will be routed back for the second phase of installation upon STC issuance. Our Engineering teams are targeting a date later in the summer for the start of the completion line due to FAA approval time and cable lead times.

Questions? Send ‘em my way. I have answers!

Hope you’re enjoying the Wi-Fi!

FLEET DEETS:

A319: 49 of 49 (100%)

A320: 64 of 69 (94%)

DC9-50: 9 of 34 (25%)

MD88: 117 of 117 (100%)

MD90: 17 of 17 (100%)

B737-700: 10 of 10 (100%)

B737-800: 71 of 71 (100%)

B757-200: 120 of 123 (98%)

B757-200 ETOPS: 17 of 17 (100%)

B757-300: 16 of 16 (100%)

B767-300: 10 of 10 (100%)

SCOPE ADDITIONS (increasing the total to more than 550 Wi-Fi-equipped aircraft):

MD90: +12 (new deliveries)

B737-800: +2 (new deliveries)

B757-200: +7 (returning from storage)

B767-300: +4 (adding the domestic ETOPS birds)

Chris B.
Sr. Product Manager, In-flight Entertainment

New BA Student Fares on AFCNET.

AFCNET is in the process of updating our database - shortly you'll see very competitive student fares on British Airways on www.afcnet.com

Delta SkyMiles Award Tickets

Redeeming your airline miles just got cheaper. Delta Air Lines announced this morning that they are eliminating SkyMiles Award ticket redemption fees. This could be a savings of up to $150.00. If you're a Platinum Medallion member, life got better too as Delta is waiving all redeposit and reissue fees for your SkyMiles.

Detroit to Seoul and Hong Kong Nonstop service begins today

Delta Air Lines began new service today from its Metro Airport in Detroit to Seoul, South Korea, and Hong Kong. Both of these flights are nonstop and will operate five days a week. In a recent interview, Delta CEO Richard Anderson said, "When you think about where Detroit is located geography-wise, it is the perfect gateway for Asia, for the eastern half of the United States."

Delta also has plans to begin nonstop service between Detroit and Sao Paulo, Brazil, beginning in October 2010. This will mark Metro's first nonstop flight to South America.

Continental plans service from IAH to Auckland, New Zealand

An odd route addition - and quite honestly WAY to early of a route announcement. United used to fly a 777 from LAX-AKL - but this was canceled after Air NZ started to code-share with UA on all West Coast - AKL flights. Obviously - by the time this route is started it will be United Airlines:

From Continental Airlines:

Continental Airlines Inc. on Wednesday unveiled its revamped Terminal C at its Houston hub and announced plans for new nonstop service from Houston to Auckland, New Zealand starting in 2011.

Pending government approval, Houston-based Continental (NYSE: CAL) said it will begin offering nonstop Boeing 787 flights to Auckland on Nov. 16, 2011, making it just one of three carriers offering nonstop flights between North America and New Zealand.

Auckland will be added to the 63 international destinations that Continental currently serves nonstop from Houston, and will become the 26th destination in Continental’s Pacific network. Continental claims to serve more destinations in the Pacific region than any other U.S. carrier.

Continental also said it's the world’s first airline to formally announce specific, initial route plans for its Boeing 787 Dreamliner fleet. The airline has firm orders for 25 Dreamliners.

The 787 is a new-technology composite aircraft which touts lower operating costs, better environmental performance and an improved cabin environment for customer comfort. Deliveries to Continental are expected to begin in August 2011.

The airline also on Wednesday revealed what it describes as a more modern and expanded customer check-in facility in Terminal C at its Houston hub at Bush Intercontinental Airport, also known as IAH.

Holden Shannon, Continental’s senior vice president of system operations and real estate, said the firm expanded the ticketing and check-in lobby by more than 15,000 square feet to more than 57,000 square feet and added 56 self-service kiosks, more than double what it did offer, to make the check-in process more efficient for customers.

The $65-million redevelopment project was a partnership between the city of Houston and Continental-- the renovations were funded by the city while the construction was managed by the airline. The infrastructure remodeling was the first major overhaul to Terminal C since the facility opened in 1981.

Continental announced on May 3 plans to merge with Chicago-based United Airlines (Nasdaq: UAUA). The deal, pending shareholder and regulatory approval, is slated to close in the fourth quarter.

AFCNET.COM - How to Book

AFCNET.com - How to Make Payment

$10 Airfare on Jet Blue: Everyone Must GO! All Remaining Seats on All JetBlue Airways Flights Tuesday and Wednesday on Sale Now for $10 Each Way

Brilliant Marketing and Promotion:

This week, as part of JetBlue Airways' year-long celebration of 10 years of service, the airline is telling customers to pack their bags, because everyone must go! All remaining non-stop seats on all JetBlue flights operating on Tuesday, May 11 or Wednesday, May 12, 2010 (a) to 59 destinations across the U.S., Caribbean and Central America are available for $10 (a) each way when purchased online at www.jetblue.com/deals/ten-years/ through 11:59 p.m. ET tonight.

Not too sure how many seats are available - but the gimmick is a fabulous idea.

Free Checked Bags?

Who says nothing in life is free?

Delta Airlines has announced that as of June 1, 2010, anyone with a Gold, Platinum or Reserve Delta SkyMiles credit card from American Express will automatically get their first bag checked for FREE upon check-in for all Delta and Delta Connection flights.

What’s more, this free bag waiver also applies to up to eight travel companions within the reservation.

Continental Airlines has a similar offer with their Chase Preferred debit card.

Learn more here for Delta or here for Continental.

While American Express typically charges an annual fee of anywhere from $95 to $450 (usually waived the first year), the new savings on checked luggage may help offset these fees, depending on how much one checks bags during travel.

Offering free checked luggage for certain card members is an excellent move on Delta's part, considering the recent moves by some airlines to charge for not only checked but also carry-on luggage. It’s reasonable to speculate that one of the reasons Delta did this was to free up overhead space. More and more carry-on luggage is becoming the norm for domestic travel.

What Airline has the best mileage program?

A comparison of Mileage Programs from Erik Skoog:


In many cases - I see people immediately assuming their hometown carrier is whom they should align themselves with - they'll join and work hard to attain elite status.

Oh, how very far from the truth this is. Today's example involves Sytemwide Upgrades. Systemwide upgrades are the "holy grail" for elite travelers - reserved exclusively for the top tiers of all airline programs. I have clients that will take a weekend trip to London for the sole sake of keeping their top tier status for the next year and with that earning their "systemwide upgrades" as well.


But not all "upgrades" are created equal. All three "majors" (Delta, United and American) give their top tired flyers 6 one-way systemwide upgrades per year…but take a look at the fare required to upgrade below. I did a test search of weekday July flights departing from a Midwest city.


Delta’s Upgradeable fare to China: $3710.00

United’s Upgradeable fare to China: $1931.90


Delta’s Upgradeable fare to London: $2666.80

American’s Upgradeable fare to London: $1426.80


Delta’s Upgradeable fare to Buenos Aires: $2322.20

American’s Upgradeable fare to Buenos Aires: $1313.20


Delta’s Upgradeable fare to Sydney: $3771.30

United’s Upgradeable fare to Sydney: $1888.30

Notice a trend? In every case Delta’s “systemwide upgrades” require over $1000 – in some cases almost $2000 more than American or United. Amazing is it not? Now with Continental and United merging - it might be the time to reconsider your loyalty alligence.

Introducing the World's Largest Airline:

United and Continental merged: what does this mean?
Our thoughts:

1. Higher Prices
2. Lower Customer service.

It is a fact - anytime you eliminate competition from the market - you'll end up with higher prices. At this point -US Airways will have no choice but to combine with American - this will leave the USA with 3 major network carriers...this is dangerous.
Sounds like the automobile industry. The "Big 3" American automobile companies got lazy, fat and guess what: Americans simply bought more imports and we know who now owns both GM and Chrysler (FYI: Obama)!

Well - foreign carriers cannot fly domestic USA route - so how is this going to happen?
Replace "Import Automobiles" with Low Cost Carriers.

Southwest and other Low Cost Carriers will flourish. Network carriers are designed for one purpose: To ferry customers to their international hubs and fly them across the world. LCC's focus on simple, highly trafficked point to point routes. If you live in a major city you are safe: prices to other major cities should stay cheap. If you live in Fargo and you need to fly to Louisville: this will get more expensive.

What does this mean for AFCNET?
We are optimistic. United is a big believer in specialty fares, nets and such. Continental is not. If the merge truly mean than United is the legacy, and Chicago remains its headquarters - its safe to say many of the pricing and revenue functions of the "New United" will remain with the old United formats. United does know how to run a profitable Pacific network, as well as a profitable joint venture on the Atlantic with its alliance partners. Continental was always the odd-man-out and therefore it did things its own way. It remains to be seen - but our belief is the Continental way of revenue and pricing will simply disappear under the new merger.


The new United Airlines International Network:
(very impressive indeed!)

When airlines merge, consumers usually lose

From USA Today:

By Bill McGee, special for USA TODAY

For weeks now, even the European ash cloud hasn't kept aviation-holics from blogging and speculating about the on-again/off-again potential mergers between major U.S. airlines. Is a deal between United and US Airways really dead? Was it just a negotiating ploy to get Continental to the table with United? Or maybe, as Dan Reed reported last week, all three will combine into a mega-mega-carrier? No doubt we haven't heard the last of Airline Mergers 2010.

The arguments concerning such consolidation are well-documented. Airline executives and financial analysts claim such mergers lead to greater efficiency and service. Labor officials claim they lead to job cuts. And consumer advocates claim they lead to fewer flights and higher fares.

The U.S. General Accounting Office, a non-partisan research service, has reported on airline consolidation and identified several potential threats to consumers, including:

• a decrease in vigorous competition in certain markets

• a greater threat of travel disruptions due to labor or financial crises (imagine the nationwide effects of a strike or shutdown)

• a loss of service in certain communities

• additional barriers for new-entrant airlines

A 2008 report from the GAO concluded: "Mergers and acquisitions can also be used to generate greater revenues through increased market share and fares on some routes."

So what actually transpired after the most recent mega-mergers were implemented?

A closer look

Over the last decade, three major domestic carriers were completely absorbed by their merger partners: TWA with American, America West with US Airways (actually a "reverse merger" in which America West did the acquiring) and Northwest with Delta. From a labor perspective, this consolidation led to thousands of lost jobs while a handful of executives received hefty compensation packages. But what effect did these mergers have on the flying public? Here's a closer look at how passengers have been affected, particularly at former hubs.

Service cutbacks

Shortly after American acquired TWA's assets in 2001, the airline began reducing service in certain markets, particularly at TWA's former hub in St. Louis. According to the latest DOT statistics, total passenger traffic in STL fell from 23 million in 2002 to 12 million last year. This surprised no one, since analysts predicted the demise of that hub nearly a decade ago. In fact, it represents a pattern.

American gradually cut daily departures out of St. Louis from a peak of nearly 500 by implementing more regional flights and shifting service to its existing hubs in Chicago and Dallas. Things worsened last year, when American announced further reductions—from 83 daily flights down to just 36—prompting St. Louis Mayor Francis Slay to blog: "I think American Airlines is making a mistake today." The mayor claimed that last round of cutbacks came about even though American's passenger loads out of St. Louis were high. The only good news for local travelers is that Southwest has been increasing its presence in that market.

Meanwhile, just a few years after aligning with America West, the new US Airways dramatically reduced service in Las Vegas last October, cutting daily departures from 64 to 26 (down from a peak of about 140 as an America West hub). This prompted Sen. Harry Reid (D-Nev.) to write to Chairman Doug Parker of US Airways earlier this year, calling the decision "shortsighted."

Slashing these flight schedules has affected entire communities. A total of 12 cities lost nonstop service from St. Louis this year, while 10 cities are no longer served by nonstops from Las Vegas. Overall, the Airports Council International reports that among the busiest facilities in the world for passenger traffic, Las Vegas ranked 12th and St. Louis ranked 25th in 2000; this year Las Vegas ranks 23rd and St. Louis is no longer in the Top 30.

As for Delta and Northwest—which melded operations in January—it's not hard to predict the near future. Currently the airline's website lists seven domestic cities as hubs but the relative proximity of five of those airports—Minneapolis/St. Paul, Detroit, Cincinnati, Memphis and Atlanta—has already led to downsizing. This February headline from the Consumer Traveler website says it all: "Delta Reneges on 'No Hub Closure' Promise, Closes Cincinnati Base."

The potential match-ups of United and/or US Airways and/or Continental would produce obvious redundancies as well. This is particularly apparent throughout the Northeast corridor, from Newark to Philadelphia to Washington, D.C.

Conclusion: When merger partners' route maps overlap, certain cities will lose service, with fewer flight frequencies and loss of nonstops.

On-time performance

As for efficiency, any improvements obtained by mergers seem to be short-lived and the recent record shows eventually the less punctual partner exerts the greater influence. Back in 2001, the DOT ranked TWA 2nd among all U.S. carriers in on-time performance, while American ranked 7th. One year later, after TWA was absorbed by the larger airline, American shot up to the 2nd spot, but by last year it had sunk to 16th in the rankings.

Similarly, America West ranked 4th in on-time flights in 2005 while future partner US Airways ranked 13th. The following year, US Airways ascended to the 4th spot. However, by last year it had fallen back and was ranked 7th.

It's way too early to predict how Delta will perform now that it has absorbed Northwest, but the initial results are that so far this year it has ranked 11th in on-time flights. That's down from the same period in 2009, when Northwest ranked 7th and Delta ranked 10th.

As for other performance measures, the partner with weaker customer service skills seems to win out as well. In 2005, the last year America West was ranked by the DOT for consumer complaints, that carrier secured the 11th spot, while future partner US Airways was dead last at 19th. A year later, US Airways crept up to 18th place, and by 2009 it had barely budged up to 17th in the rankings. As for American, its acquisition of TWA had little long-term effect on its consumer complaint rankings.

Conclusion: Ignore talk of "synergy" and "efficiencies;" airline mergers don't improve customer service.

Competition and airfares

Airline execs always pledge that fares won't rise after a merger, while many pundits claim the opposite. The truth is the GAO was right—to a point.

I found examining average fares at a given airport doesn't work, because one airline's exit can mean another airline's entrance. Take St. Louis, where the legacy carrier TWA folded into American, which prompted low-cost carrier Southwest to increase its presence and therefore drive down prices. But even the largest of low-fare airlines usually don't offer as comprehensive a route map as a legacy hub-and-spoke carrier. So it makes more sense to examine specific routes where head-to-head competition between the two former rivals suddenly evaporated.

Take St. Louis in the fourth quarter of 2001, at the time TWA merged with American. I dug out the DOT's Domestic Airline Fares Consumer Report to find the routes from St. Louis where these two airlines competed most vigorously prior to becoming partners. My findings are in the chart below.

FOURTH QUARTER 2001
ROUTE	AVERAGE ONE-WAY FARE	MARKET SHARE
STL-Dallas	$172	TW: 51%; AA: 34%
STL-Washington	$215	AA: 49%; TW: 38%
STL-Baltimore	$125	TW: 40%; AA: 13%
STL-Boston	$271	TW: 50%; AA: 24%
STL-Santa Ana	$247	TW: 57%; AA: 24%
STL-Seattle	$233	TW: 60%; AA: 17%
FOURTH QUARTER 2004
ROUTE	AVERAGE ONE-WAY FARE	MARKET SHARE	INCREASE/DECREASE
STL-Dallas	$201	AA: 91%	$29
STL-Washington	$240	AA: 71%	$25
STL-Baltimore	$141	Southwest: 56%	$16
STL-Boston	$264	AA: 64%	($7)
STL-Santa Ana	$206	AA: 65%	($41)
STL-Seattle	$216	AA: 64%	($17)

Of the six St. Louis routes dominated by both TWA and American prior to their merger, average fares rose on half those city-pairs within three years. In fact, the 34% year-over-year increase on the St. Louis-Dallas route in late 2004 was the seventh-largest fare increase nationwide that quarter. Average fares fell on the remaining routes, primarily because of the increased presence of low-cost carriers such as America West, Frontier and Southwest. Even better news: By late 2006, the average fare on the St. Louis-Dallas route posted a 45% decrease—down to just $95—after Southwest aggressively increased its market share to 36%.

Meanwhile, after the 2007 US Airways-America West merger analysts wondered if ticket prices would rise in Las Vegas and Phoenix, former hubs for low-cost carrier America West. Happily, fares on many Las Vegas routes are kept low by the presence of several discount airlines. Out of Phoenix, however, America West and US Airways jointly dominated two routes, to Washington, D.C., and Colorado Springs. In 2008, one year after the merger, the average fare on the PHX-Washington route had shot up by $51 from $293 to $344, before falling back to $289 last year. But don't bother looking up fare info for PHX-Colorado Springs, since US Airways pulled out of that market entirely.

Conclusion: When one airline suddenly dominates a route where it previously competed with a merger partner, ticket prices are likely to rise—often considerably. If a low-cost carrier begins flying on that route, then fares undoubtedly will drop. But that's a big IF.

Here we go again?

If we've learned from recent history, then the patterns of airline mergers indicate we already know what will occur when the next mega-deal is approved. Let us know what you think of all this consolidation talk.