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."
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
May 3, 2007
April 27, 2007
April 26, 2007
April 19, 2007
April 12, 2007
April 9, 2007
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