Essential Travel News for 2/05/07

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AIRLINES

Will end of US Airways’ Delta bid stifle merger efforts?

By now you probably know that US Airways withdrew its hostile bid for Delta last week, after Delta’s unsecured creditors backed that airline’s plan to emerge from bankruptcy as a stand-alone company. After US Airways dropped its effort, columnists, business reporters and airline-watchers were all debating about whether this means the major carriers will not now be swept by a wave of merger activity. When US Airways was pursuing Delta, the speculation was that Northwest might step in as an alternate Delta suitor; and/or that any combination of other mergers might proceed if US Airways-Delta happened – United/Northwest, American/Continental, Northwest/Continental, etc. Now, opinion is split as to what might happen next – if anything. Some writers predict US Airways will seek out another target; others say Delta can’t make it on its own and will still have to merge with someone; and still others see a lengthy breathing space before any more merger plans emerge. The only other active merger effort, that of AirTran for Midwest Airlines, is still going: Last week, AirTran extended for another month, until March 8, its tender offer for Midwest shares at $13.25 each. As for Delta, it said last week it has secured $2.5 billion in exit financing from a consortium of banks as it continues to expect a spring 2007 emergence from Chapter 11. And Northwest CEO Doug Steenland said last week his airline plans to emerge from Chapter 11 as an independent, un-merged company, and to stay that way throughout this year.

New ExpressJet operation eyes 24-city network

ExpressJet, the regional carrier that operates as a Continental Express partner, has revealed details of the routes it will serve when it begins an independent airline operation in April 2007. On its website, the new entity is referred to as Xjet (http://xjet.com); it will fly 50-seat Embrear regional jets to 24 secondary and tertiary cities. The company’s business plan is to operate in city-pairs that currently have no non-stop service and don’t have enough traffic to justify using full-size jets. The airline said it will offer passengers 100 channels of XM satellite radio in-flight as well as valet carry-on bag service, snacks, and full-service meals on longer flights. The busiest point on Xjet’s route map seems to be Ontario, Calif., with flights to 14 other cities. The airline will operate nine non-stop routes from both Austin and San Diego and half a dozen or more routes out of Raleigh/Durham, New Orleans, Albuquerque, Sacramento, Oklahoma City, Tulsa, Kansas City and San Antonio. Other cities to be served include Birmingham, Ala.; Boise, Idaho; Colorado Springs, Colo.; Corpus Christi and El Paso, Tex.; Fresno, Bakersfield and Monterey, Calif.; Jacksonville, Fla.; Louisville, Ky.; Omaha, Neb.; Spokane, Wash. And Tucson, Ariz. To see an interactive route finder, go to http://xjet.com/why_xjet/route_map.htm.

Virgin America reveals start-up route plans

As it struggles to win Transportation Department certification in the face of opposition from incumbent major airlines, start-up carrier Virgin America revealed more of its business plan last week – specifically, where it intends to fly. Initially, low-cost Virgin America had only said its first route would be between its San Francisco base and New York JFK. Now the carrier said that within nine months of beginning service, it also intends to fly from San Francisco to Washington Dulles, Los Angeles International, San Diego and Las Vegas. “Virgin America expects to serve as many as 10 cities within a year of operation, and up to 30 cities within five years,” the company said. And to bolster its legal effort to win government approval, Virgin America has taken on some heavyweight assistance: Its newly hired vice chairman is Samuel Skinner, who was Transportation Secretary during the George H.W. Bush administration.

Comair strike threat gets dragged out

The possibility of a pilot strike at Comair/Delta Connection remains alive after a judge last week ordered the airline and the pilots union to keep negotiating on a new agreement at least until Friday (February 9). Earlier, the deadline had been February 1; if no deal had been reached, Comair was set to impose its own wages and work rules on the pilots, who were prepared to strike – unless the court barred them from doing so. The judge still hasn’t ruled on the legality of the pilots’ threatened strike either. Comair, like its parent company Delta, is operating under Chapter 11 bankruptcy.

Northwest Airlink/Mesaba gets a new lease on life

Bankrupt Mesaba Aviation, which operates as a Northwest Airlink feeder partner for Northwest Airlines, will become a wholly owned subsidiary of Northwest. Mesaba parent MAIR Holdings recently agreed to the deal, and Mesaba filed the plan as part of its reorganization proposal with the bankruptcy court. Currently, Mesaba only has one regional jet; the bulk of its flying is with Saab 340 turboprops. But with the acquisition by Northwest, Mesaba will take over operation of 36 new regional jets – 76-seat CRJ900s, which should be delivered starting this spring. Northwest is also starting up another regional subsidiary called Compass Airlines that will feed Northwest hubs with a fleet of 36 Embraer 175 regional jets.

All American Airlines seats are again available through Expedia

A few weeks ago, we reported that American Airlines had stopped selling international and domestic first and business class tickets through the giant online agency Expedia.com, and was only using Expedia for domestic coach ticket sales. Well, the two companies have patched things up and all types of American tickets are again being sold through Expedia.

FAA/SECURITY

Transportation Dept. raises lost baggage liability limit

Effective February 28, the Department of Transportation is raising the liability limit of U.S. airlines for lost or damaged checked baggage on domestic flights from $2,800 to $3,000. That will be the new maximum amount that carriers would have to pay for a lost bag. Passengers could still buy their own insurance for more valuable checked luggage. The rule does not apply to domestic air taxi or commuter flights. The liability limitations for lost bags on international flights, including domestic segments, are set by international treaty (the Montreal Convention), not by DOT.

INTERNATIONAL

Oneworld adds three new members April 1

Members of American’s AAdvantage program – and of the frequent flyer plans at other Oneworld alliance airlines – will have more options for global travel April 1, when the alliance embarks on its biggest expansion since it was formed eight years ago. On that date, Japan Airlines, Malev Hungarian and Royal Jordanian will all become full members of Oneworld, giving AAdvantage members the ability to earn and burn miles on their flights, and to use airport lounges appropriate to their membership levels. Also joining Oneworld as new affiliate members that day will be Japan Airlines partner carriers JALways, Japan Asia Airways, JAL Express, J_Air and Japan Transocean Air. Incumbent Oneworld carriers are American, British Airways, Cathay Pacific, Finnair, Iberia, LAN and Qantas. Aer Lingus, currently a member, will drop out April 1, since its new “focus on low-fare point-to-point passengers” is “no longer in line with Oneworld’s strategy of providing services for premium, multi-sector, frequent international travelers,” an alliance spokesman said. Waiting in the wings to join as affiliate members later this year are Hong Kong-based Dragonair (recently acquired by Cathay Pacific), LAN Argentina and LAN Ecuador.

Lufthansa will extend, expand Private Jet services in Europe

Lufthansa has extended for five more years its contract with NetJets to serve as the provider of the German carrier’s booming Lufthansa Private Jet service. The Lufthansa operation lets its customers book private jet flights to hundreds of points in Europe and the Russian federation, and to connect from Lufthansa intercontinental flights to private jets at Munich, Frankfurt and Zurich. In 2006, Lufthansa said, the number of private jet flights it operated jumped by 13 percent, using up to 10 planes a day. Long haul/private jet connections “also increased significantly since mid-2006,” a spokesman said. With the extended NetJets contract, “more jets will be on call daily in order to accommodate increased demand for the Lufthansa Private Jet service,” he said, and larger aircraft – the Falcon 2000, with up to 10 seats – will also be available. Lufthansa Private Jet customers have access to first-class lounges and airport services of Lufthansa and Swiss.

BA sets new policies on checked, excess baggage

Effective February 13, British Airways is changing its policies for checked bags and excess baggage. On long-haul flights, First Class and Club World (business class) passengers will be allowed up to three checked bags of 50 pounds each at no cost; the free allowance is two bags for World Traveller Plus (premium economy) and one bag for economy flyers. However, economy passengers traveling to or from the U.S. or Canada, or connecting to or from flights from those countries, will still be allowed two checked bags up to 50 pounds each at no charge. For flights between the U.K. and Europe, the free checked bag allowance is two for Club Europe class and one for Euro Traveller. The free checked bag allowance for domestic flights is one bag. Long-haul travelers who exceed their allowable limit will be hit with an excessive baggage fee of a whopping $236 per bag over the limit.

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