Travel Update-Weekly Edition

August 23rd, 2007

Airline News

 

Midwest Air - Midwest Air, which had been fending off hostile suitor AirTran, said on Friday, August 17, it accepted a raised bid of USD$450 million from private equity firm TPG Capital and Northwest Airlines.
AirTran, which had wanted to combine Midwest's hubs in Milwaukee and Kansas City with its presence on the East Coast, ended its dogged pursuit of Midwest, which began in October. The winning bid, which includes a passive minority investment from Midwest partner Northwest Airlines, represents a nearly 16 percent premium to Midwest's closing share price of USD$14.70 on Thursday. TPG's previous offer was USD$16 a share.  The success of the TPG bid protects Northwest's dominance in upper Midwestern markets by slowing AirTran's expansion on those routes. TPG said it may eventually sell Midwest to Northwest or re-list it on the stock market.  One analyst said the failure of AirTran's bid may be a blessing for the airline.  "The potential revenue synergies could easily have disappeared if Northwest had decided to aggressively defend its turf -- something that looked increasingly likely," said Kevin Crissey, an analyst at UBS Investment Research, in a note.  TPG partner Richard Schifter said he hopes the firm's airline industry experience, together with an expanded alliance with Northwest, will lead to a bigger and better Midwest.
TPG said it bought the carrier based on its stand-alone strategy rather than as part of a plan to merge it with another airline. Northwest had said that although it had no plans to participate in management or control of Midwest, it would continue a code-sharing agreement and could explore cost-reduction measures such as joint fuel purchasing.  AirTran had earlier said Northwest's involvement in TPG's offer could raise antitrust concerns, but TPG said it did not expect to face any such hurdles.  Midwest said its sale to TPG is expected to close in the fourth quarter, subject to shareholder and regulatory approval. As part of the deal, Midwest agreed to pay a fee of USD$13.5 million if the deal collapses under certain circumstances.
 
Qantas - Qantas has opened new first-class lounges in Sydney and Melbourne, Australia. Key features include a Payot Paris day spa offering a range of complimentary treatments from a 30-minute express energizing facial to a 50-minute full body massage; a 48-seat open kitchen restaurant; a vertical garden with more than 8,400 individual plants; and individual marble-lined shower suites with individual stereo volume and lighting controls and radiant heating to reduce condensation on the mirrors and luggage racks. For more information, visit www.qantas.com/us.
 
United Airlines - United Airlines said on Friday it would use part of a USD$1.2 billion capital improvements budget to upgrade in-flight entertainment on domestic flights and conduct deep cleanings of aircraft more often.  The plan, which will replace VCRs with digital servers on narrow-body aircraft, aims to lure more domestic travelers. Domestic flights account for more than 60 percent of United's capacity. "There is no doubt that some of this work is overdue, and these efforts are critically important," UAL Chief Executive Glenn Tilton said on a recorded messages to employees. UAL previously said it would spend USD$1.2 billion -- USD$550 million in 2007 and USD$650 million in 2008 -- to upgrade seats and make other improvements to its fleet. United said it would add the digital video systems to 269 Airbus A320s and Boeing 757s as well as 20 767s and 777s. UAL also said it would increase the number of "deep cleans" of aircraft by about 20 percent over the course of 2007. 
 
 
 

Airport/Destination News 

 

 

American Airlines - Starting Dec. 13, American will add nonstop service to Buenos Aires from its hub at Chicago O’Hare. The carrier will fly one daily round-trip flight using 221-seat Boeing 767-300 aircraft with 30 business class seats and 191 in coach. American already flies nonstop to Buenos Aires from its hubs at Dallas/Fort Worth, Miami and New York JFK. From Chicago, Buenos Aires will be the 21st nonstop international destination served by American and regional partner American Eagle. 
 
London airports- Flights at the UK's two biggest airports could be hit following a vote for strike action by aviation facility workers.  Members of the GMB union employed by the Emcor Facilities Services company at Heathrow and Gatwick have voted by four to one for industrial action in a dispute over pay.  Mass meetings are now planned at both airports on August 29 to determine the next step in the dispute. The staff involved work in facilities management and electrical maintenance in the two airports' passenger areas.  They also maintain the hydraulics on airport vehicles, such as aircraft towing trucks, and their work extends to engineering maintenance, reception desks, cleaning and security.
 
Minneapolis-St. Paul International Airport - One of the four runways at Minneapolis-St. Paul International closed this week for two months, which could result in delays. The south runway, which will undergo reconstruction, is scheduled to reopen in mid-October. The airport is hoping to keep the delays to only one to three minutes on average by using a rarely used runway west of the terminal. Now, it's normally used only during strong south winds and for large aircraft.   However, there have been several longer delays as well as some cancellations this week; especially when weather is also affecting air traffic
 
Russia - On 27 August 2007, Russian airports will impose additional security measures set by the International Civil Aviation Organization. Under the regulations, passengers must adhere to security standards now enforced in Europe, including restrictions on liquids in carry-on luggage. The total amount of liquid cannot exceed 1 l/34 fl oz and must be carried in containers no larger than 100 ml/3.4 fl oz, which are to be packed in a transparent bag. Only alcohol purchased within the secure area at the airport will be permitted on flights. It is not known if the restrictions will apply to general aviation; however, in most European airports, they do not. Reports had previously indicated that the new measures would be implemented in May 2007.
 
San Francisco International Airport - New York-based Verified Identity Pass has started enrolling travelers at San Francisco International in its registered traveler program, which it calls Clear.  For prescreened travelers who pay the $100 annual fee, the fast-pass checkpoints will be open next month.
 
 
Miscellaneous

 

Expedited passport service still slow - Overwhelmed by the public's demand for passports, the State Department, Thursday, announced that travelers paying an extra $60 for speedy processing of their passport applications should check the Internet to see how long they will have to wait. The agency, in a Federal Register notice, said it had changed the definition of "expedited passport processing" from three business days to a more accordion-like standard of "a number of business days."  Rather than process a passport within three days of receipt of an application, the State Department's Web site, http://travel.state.gov, said it would take 10 days for internal processing. That would put door-to-door expedited service at about three weeks, not much different than the two to three weeks applicants have been forced to wait for much of the summer after paying the expedited fee. With passports still in high demand, the wait for routine processing is 10 to 12 weeks, according to yesterday's Web notice.

 

Open Skies Agreement signed - The negotiations are over. The treaty has been signed. The skies across the Atlantic are now open for free movement of flights between European and U.S. cities. Now the battle commences between airlines as they prepare for their new-found commercial freedom when the Open Skies agreement comes into action in March 2008.  The choice of transatlantic routes is set to increases with the advent of the Open Skies agreement.   The main beneficiaries of increased competition between airlines are likely to be business travelers. And while they may not see a dramatic reduction in ticket prices, they can look forward to a greater choice of flights from a greater number of airlines as well as an increase in business-only services.  Airlines with the strongest brands and best quality products are likely to lure passengers away from European rivals by launching flights from other major European cities.  Open Skies will put an end to the exclusive arrangement granted to British Airways, Virgin Atlantic, United Airlines and American Airlines to fly transatlantic out of Heathrow.  As a result, airlines including BMI, Continental Airlines and Northwest Airlines are all lined up to launch direct transatlantic flights from Heathrow next year. But with the airport currently operating at almost-maximum capacity, it is likely that new flights will be limited.  Airlines operating from other airports, in particular the new business-only players such as Eos, Silverjet and Maxjet, will, however, see an opportunity to expand their own services across the Atlantic.  To read the full article on this subject, click on http://www.cnn.com/2007/TRAVEL/08/21/BT.openskies/index.html

 

Unions announce 3 day tube strike - Millions of tube passengers face the possibility of travel chaos after transport unions today announced London underground maintainence workers will hold a pair of three-day strikes next month.  The industrial action will begin at 6pm on September 3rd, a week on Monday, when staff belonging to the RMT transport union stage a 72-hour strike, called after talks with the administrators of tube maintenance company Metronet failed to yield guarantees over jobs and conditions. The union is planning to follow this with another 72-hour stoppage starting at 6pm on September 10th. The RMT said the srikes will disrupt the entire network.  Fellow union Unite is expected to join the FMT for both walkouts, while a third union, the TSSA, is expected to stage a two-day strike on September 4th and 5th. Members of the RMT, TSSA and Unite voted 1,369 to 70 for action over working conditions, threats to jobs and pensions for Metronet employees. The company went into administration last month, four years into a public-private partnership programme.

 

State Dept Travel Warnings and Public announcements - For the full announcements or further detail on Travel Warnings and Public Announcements, please see  http://travel.state.gov/travel

 

Bangladesh - On 20 August 2007, the U.S. Embassy in Dhaka issued a Warden Message which reads in part: "Given past violence associated with large public gatherings, the following advice remains valid particularly in view of the anniversaries of political significance in Bangladesh. For example, 21 August is the anniversary of the 2004 grenade attack at an Awami League rally. Police expect peaceful commemorative events, including wreath laying at the Awami League Party Central Office, Banani Cemetery, and other locations. Road closures and traffic congestion are possible."  Additionally, on 21 August 2007, the U.S. Embassy in Dhaka released the following Warden Message: "The Embassy has received overnight media reports that clashes between Dhaka University students and police resulted in injuries and arrests. We urge American citizens to be vigilant in moving about the city and advise them to avoid the Dhaka University area."


 

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August 16, 2007
August 9, 2007
August 2, 2007
July 26, 2007
July 20, 2007
July 12, 2007
May 31, 2007
May 17, 2007
May 10, 2007
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April 27, 2007
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