Essential Travel News for 5/07/07

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INTERNATIONAL

Virgin eyes expanded routes as U.S, Europe sign new open-skies pact

Officials of the European Commission were in Washington last week for the historic signing of a new aviation agreement between Europe and the U.S. that is expected to open up a number of new transatlantic routes after it takes effect in March 2008. The so-called “open skies” pact essentially creates a single aviation market for the U.S. and European Union member countries, relaxing investment regulations and ending route restrictions so that an airline from any of the countries could fly between any two points within the open market. Virgin Group chairman Sir Richard Branson, whose companies include Virgin Atlantic Airways, told Bloomberg News that once the agreement takes effect, “You’ll see Virgin planes taking off from all over Europe to America.” Currently, his airline only files to the U.S. from London. Branson said Virgin has its eye on new service to the U.S. from Paris, Frankfurt and other major European cities. He added that Virgin would be “delighted” to use the new San Francisco-based Virgin America as a feeder for the expanded international routes – but he stressed that was up to Virgin America’s management. Virgin America, in which Virgin Group is a minority investor, had a tough time winning U.S. operating approval because of concerns it is under Branson’s control.

MAXjet plans all-business-class Los Angeles-London service

MAXjet Airways, which operates all-business-class, 102-seat 767s from New York JFK, Washington Dulles and Las Vegas to London Stansted, said it plans to begin a Los Angeles-London route on August 30. One-way fares will start as low as $699 plus tax for the LAX-London service, which will operate four times a week, on Mondays, Thursdays, Fridays and Sundays. The service is already available for booking on the airline’s web site (www.maxjet.com). MAXjet said it will revive its temporarily suspended Washington Dulles-London Stansted service on May 24, with Monday, Thursday, Friday and Sunday departures. “Due to bookings ahead of expectations, Washington Dulles service is now year-round instead of seasonal,” a spokesman said. The carrier also plans to increase service on its Las Vegas- London route to four times a week effective September 2, adding a Sunday flight to the existing Monday, Thursday and Saturday departures. “In addition, MAXjet is currently evaluating new transatlantic routes that could be added to the airline’s route network this fall or winter,” the spokesman said.

United will add two key international routes this fall

United Airlines said last week it plans to begin service in October on two new non-stop international routes: Los Angeles-Hong Kong and Washington Dulles-Rio de Janeiro. The daily LAX-Hong Kong service will use a three-class 747, and will also provide direct service beyond Hong Kong to Ho Chi Minh City. The Dulles-Rio service will be seasonal, and will use a three-class 767, United said. The non-stop IAD-Rio route will replace United’s current one-stop service to the Brazilian city.

Northwest adds WorldPerks partner in India

Northwest Airlines has taken on India’s Kingfisher Airlines as the newest airline partner in its WorldPerks frequent flyer program. Kingfisher, based in Bangalore, operates a fleet of 26 Airbus planes to 28 destinations within India. Under the agreement, members of WorldPerks can now earn and redeem program miles on Kingfisher. Northwest, through its KLM partnership, operates from Amsterdam to Mumbai, Delhi and Hyderabad, India. The partnership also provides for electronic ticketing and through check-in for connections to Kingfisher flights, and gives Northwest WorldClub and World Business Class members access to Kingfisher’s airport lounges.

AIRLINES

Delta, Comair exit Chapter 11; Northwest likely to follow next month

Both Delta Air Lines and its regional subsidiary Comair emerged from Chapter 11 bankruptcy protection last week, after more than 19 months of major cost-cutting efforts, labor anxieties (including the loss of 6,000 employees), cutbacks in Delta’s domestic route network, and a failed takeover attempt by US Airways/America West. Delta noted that it completed its financial transformation plan a year ahead of schedule, improving its cost structure by $3 billion annually. The company last week closed on a $2.5 billion exit financing deal, the last step in its court-approved transition back to normal operating status. All of Delta’s old common stock was cancelled, and new shares were issued – many of them destined to go to creditors as part of their settlement. Delta’s corporate strategy for the future will continue a plan that it started during bankruptcy: Growing reliance on higher-revenue international markets and less focus on domestic routes that are ever more crowded with low-cost competitors.

Chief operating officer Jim Whitehurst noted that “In just over 19 months, we have undertaken the largest international expansion in Delta’s history.” And in an interview last week with the trade publication Air Transport World, Whitehurst and CEO Gerald Grinstein said the focus on long-haul overseas flights will continue – to the point where as much as 50 percent of Delta’s business could be international, according to Grinstein. (Although he won’t be around to watch – a new CEO is expected to be named soon.) Delta’s 2007 schedule calls for the airline to add service to 13 new international destinations during May and June. Whitehurst told Air Transport World that as many as 35 more aircraft could be switched from domestic to international routes. He noted that Delta will add eight 767-400s to overseas routes this summer, as well as 13 757-200ERs that will be based at New York JFK for deployment to secondary cities in Europe. Whitehurst told the publication that Delta also wants to expand routes to Asia, the Middle East and Africa. Meanwhile, now that its wholly-owned Delta Connection partner Comair has also emerged from Chapter 11, there were reports that Delta might be planning to sell off the Cincinnati-based carrier, which has an all-regional-jet fleet.

Northwest Airlines, which entered Chapter 11 the same day as Delta in September 2005, recently announced it has finally reached a new contract agreement with its flight attendants’ union, the last remaining labor group to come to terms with the company. Northwest officials said that could clear the way for the airline to emerge from bankruptcy sometime in June. Northwest’s first quarter results showed that the airline posted a pretax profit of $100 million, before figuring in reorganization-related costs of $393 million. CEO Doug Streenland said the first quarter numbers “met our expectations. The year-over-year comparisons clearly indicate that the restructuring actions that have been accomplished over the past 19 months are positioning Northwest for long-term profitability.” The airline’s creditors are currently voting on its proposed restructuring plan, a process that should be finished this week.

American offering new portable video players on some domestic routes

American Airlines said it is starting to offer new personal entertainment devices this month to first class and business class passengers on transcontinental flights. The company started making the new devices available this month on 767-200 and 767-300 flights between New York-Los Angeles and New York-San Francisco, and will add them to 767-300s on the Miami-San Francisco route next month. The media players have seven-inch touch-screen monitors, and will be supplied along with Bose QuietComfort 3 Acoustic Noise Canceling headphones. Users can select from up to 12 movies, 15 hours of pre-loaded TV programming, 50 music CDs and 14 audio channels. American said that it has also started a four-month test with similar media players on its eight daily MD80 flights between Chicago O’Hare and Los Angeles. Those media players will have 4.3-inch screens, earbud headsets, and up to five movies, three hours of TV programs, two hours of the Cartoon Network, 50 music CDs and 14 audio channels. First class passengers on the ORD-LAX route will get them for free; coach customers can rent them for a fee.

Frontier will abandon non-hub California routes

Frontier Airlines plans to pull out of some non-hub markets in California this summer, the Denver Post reported last week. According to press reports, on July 10 Frontier will give up its year-old presence in the Los Angeles-San Francisco market, where it faced tough competition from much larger carriers like American and United. On the same date, Frontier will stop flying between San Francisco and Las Vegas, the newspaper said. The airline will still fly from Los Angeles and San Francisco to its Denver home base, and from LAX to Cabo San Lucas. Two years ago, Frontier gave up on an earlier effort to operate non-hub routes out of LAX, with flights to Minneapolis/St. Paul, Kansas City, St. Louis and Philadelphia.

Midwest Airlines says Milwaukee business flyers oppose AirTran takeover

When we asked readers a few months ago if they’d like to see AirTran succeed in its hostile takeover of Midwest Airlines, the replies were a unanimous “no.” Now Midwest has conducted its own survey of frequent flyers in its home market of Milwaukee and came up with a similar finding. The company surveyed 300 local travelers who fly three or more times a year and found that 72 percent were “strongly opposed” to a takeover of Midwest by AirTran. Another r14 percent said they were “somewhat opposed,” the company said. “When asked to describe their attitude toward flying AirTran in the event of a takeover, 16 percent of the respondents said they would definitely not fly AirTran, with another 49 percent saying they would try to avoid flying the airline if they didn’t have to,” Midwest said. Results of the survey are posted at www.savethecookie.com. Midwest’s board has urged shareholders not to sell their stock to AirTran during the latter’s ongoing tender offer.

ExpressJet adds San Diego, Louisville, Raleigh-Durham to growing network

Regional carrier ExpressJet is continuing to expand its independent brand this week with the addition of new service at San Diego, Raleigh-Durham and Louisville. The regional jet airline is due to begin new non-stop service on Monday (May 7) from San Diego to Colorado Springs and Oklahoma City, and will add service in the weeks ahead from SAN to Bakersfield, Boise, Fresno, Monterey, Omaha, Spokane and Tulsa. At Raleigh-Durham, ExpressJet starts flying non-stop on May 7 to Jacksonville, Kansas City and Louisville, with additional routes coming by summer to Birmingham, New Orleans and San Antonio. And at Louisville, the airline begins non-stop service on May 7 to Kansas City and Raleigh-Durham.

AIRPORTS

News Briefs: Kansas City opens car rental facility; Denver, Oakland expand

*Kansas City International Airport has opened a consolidated car rental facility, on the site of a former satellite parking lot. Customers renting cars will take a single shuttle service from the three terminals to the rental facility, which houses the operations of Alamo, Advantage, Budget, Avis, Hertz, National, Thrifty, Dollar, Enterprise and Fox.

*At Denver International, United Airlines’ United Express operations have started using a new regional jet facility at the east end of Concourse B. The 16-gate facility has 13 boarding bridges specially designed for 50- and 70-seat regional jets, as well as seating areas and new food and beverage concessions. The new facility means all United and United Express operations will now operate out of Concourse B; some had previously used gates in Concourse A.

*Work is almost finished on a $300 million expansion project at Oakland International Airport that includes a 108,000-square-foot addition to Terminal 2. The terminal has a larger baggage claim area and seven more gates for Southwest Airlines -- which handles 60 percent of Oakland’s traffic. Work is continuing on expansion of the airport roadways for Terminals 1 and 2.

*At Boston Logan, the FAA has approved construction of a new taxiway between two parallel runways. The new taxiway, which should be finished in 2009, is expected to reduce aircraft congestion and delays, and to reduce the danger of collisions by cutting down on the number of runway crossings.

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