Monday, February 27, 2012

Fasten Your Seatbelts: United/Continental Countdown

On March 3, 2012 at 12:01, which happens to be Saturday, United Airlines will formalize its final merger with Continental as both carriers will become "United" and move their operations to a single platform. As would be expected in such a large scale situation, many passengers may encounter issues when traveling, especially during this upcoming weekend. Because United will be switching to Continental's "Shares" system, they anticipate that the migration will cause an approximate 4-hour shutdown of all access to their reservation system. If all goes well, the system will be up and running for flights departing Saturday morning. As this is a huge undertaking, with a massive database being migrated to a different platform, passengers should expect the unexpected. Premiere Travel has notified all its potentially affected passengers of these changes and offered options for what we know. It will be difficult to predict how long this transition will take and if complications may develop, but this is yet another reason why travel management companies continue to thrive. Changes that will impact travelers include the termination of all Continental codes, flight numbers, as well as possible changes to departure and arrival times, frequent flyer merger, changing aircraft that may impact assigned seating etc... While the initial phase this weekend will be challenging, we expect good results going forward as the combined carrier will offer new improved services and will adopt best practices and innovations that will serve passengers well in the future. www.premieretravel.com

Tuesday, February 21, 2012

Get Ready For More Fuel Surcharges

Price of crude oil and its derivative, jet fuel touched a 9-months high today. International airlines will not waste anytime hiking their "fuel surcharge" in response, and travelers will likely see higher fares on international travel. Domestic carriers do not add fuel surcharges, they simply raise their fares. It is notable that airlines who are quick to raise their fuel surcharges, do not react as quickly to lower them when the prices go down. At this level, airlines that have not at least hedged part of their fuel purchases have no choice but to raise the surcharge. Recommended Action: If you have an upcoming international trip, have your ticket done now as the surcharge increase cannot be applied retroactively. 2012 is on pace to record a double-digit fare increase over last year, plus you can count on additional ancillary fees that the airlines are standardizing. Most "desirable" seat assignments now carry some sort of fees. www.premieretravel.com

Thursday, February 16, 2012

Alliances, Joint Ventures Code Sharing and Partnerships

The race is on! Global alliances, joint ventures, and partnerships are mushrooming everywhere, and travelers are bewildered more than ever. Three major alliances have emerged: Star Alliance, led by United and Lufthansa and 25 other carriers-minus Spanair now. Sky Team: 15 airlines with Delta, Air France and KLM One World: 12 airlines including American Airlines and British Airways. On the surface, the idea is a good one. These alliances provide global coverages that are too costly and impractical for individual airlines to develop on their own. They share their flight networks and facilitate the sale and marketing to achieve economies of scale. The strategies of the alliances vary widely, and some of their partnerships are only nominal. There are major "managing" airlines and others that are solely there to fill geographic gaps. There are big inconsistencies in their corporate identities and cultures punctuated by total lack of synergies that cause issues to surface. Airlines also have different reasons and goals for being part of alliances. Even joint ventures, the strongest form of partnerships will result in the "partners" competing against each other in many situations and routes. www.premieretravel.com

Tuesday, February 14, 2012

An Important Question Travelers Don't Often Ask

If you are renting a car, you would like to know the type of vehicle and the make of it. However, most travelers do not ask what type of airplane they will be flying on, and some still don't know even when they take their seats. So why is this important? For many reasons...seat configuration will be one of the first things to consider. A 2 by 2 configuration will give every passenger either a window or an aisle, which is highly desirable. A wide-body for example, may have a 3-5-2 or 3-4-3 configuration. No, we are not talking soccer formations, it is important to know how the seating chart will look like and the chances to "score" a good seat. Here are more reasons: a turboprop is slower than a jet, so depending on the length of the flight, and given the availability of other choices, you may prefer to be on a newer jet than older props that are being phased out. The older the plane, the more likely that a maintenance issue might arise. There are also the comfort and amenity considerations. Old aircrafts are noisier and lack the audio-visual entertainment options. Airlines realize the importance of deploying the most efficient and environmentally friendly aircraft for specific routes, and the backlog orders at the major manufacturers are very healthy. www.premieretravel.com

Saturday, February 11, 2012

Star Wars: A New Game

Almost everywhere you go on the internet these days, you will find a "star rating" system. Merchandise, restaurants, services, hotels and resorts among other things are rated and categorized by stars. The idea is great: people who use the service or buy the product will write reviews and rate their experiences to share with other potential users. Websites like Tripadvisor has become the "go to" place when travelers are looking for accommodations and are seeking strangers' opinions about these properties. Social networks are also being used to promote and rate (likes). It did not take long for promoters and detractors to game the process. Reviews, positive or negative have turned this into a game and the process so unreliable as many establishments recruit positive reviews while competitors pile negative reviews. You will never know if the 5-star or 1-star ratings (for the same property) are reliable. The truth lies somewhere in between, and the odds of calling a coin-toss is sometimes just as good as checking the ratings from "trusted" websites. Asking friends that have been to these properties would be your best bet. If not, your trusted travel management advisor is another excellent alternative. Spread the word... www.premieretravel.com

Friday, February 10, 2012

Online Travel Agencies Declining Advantage

Here's a business model undergoing a quiet change: The Online Travel Agency (OTA). Many of the giant online agencies are seeing a slowdown in their booking revenue and unique visitors. This is happening for many reasons. Airlines are no longer giving these websites any pricing breaks or advantages, so that is a significant factor that travelers are beginning to notice. Now hotels are also realizing that may be they do not need OTA's as much. Some major hotel chains have collaborated on a new website venture that is meant to compete and take back market share from OTA's. Hotels are also re-inventing the payment methods to cut on the burgeoning distribution costs. Going forward, the best OTA's will be niche players, catering to specific destinations or offering exclusive deals to specific target audiences. The days of one-size-fits-all, and all-things-to-all-people is coming to an end. www.premieretravel.com

Wednesday, February 8, 2012

Mileage Award Trap to Avoid

Thinking of signing on with those tempting credit card offers giving you 40,000, 50,000 or 60,000 miles? Before you sign on the dotted line, you will need to know that Uncle Sam may be waiting to get his cut of the deal when you file your tax return. Citibank just sent out 1099 statements to all those who signed up for their programs. While the I.R.S. has not issued a ruling specific to the treatment of this type of award, an "opinion" letter sheds some light that Citibank is probably right. When you earn miles for travel and purchases, it is considered a rebate and is not a taxable event. However, receiving "free" miles to get a new credit card is considered an award or gift and may subject the holder to income tax. At a hefty 2.5 cents per mile, a 50,000 mile award will effectively increase your taxable income by $1250! Credit card companies will bury this detail in their lengthy fine print, which they know nobody reads. So avoid a bad surprise and consult your tax advisor before you sign up for these offers. www.premieretravel.com

Tuesday, February 7, 2012

No Smooth Sailing For the Cruise Industry

2012 has not been kind so far to the cruise industry. Images of the Costa Concordia submerged on its starboard, off the Italian Coast with at least 18 people confirmed dead was the beginning. Questions about safety and conduct of crew came into light, and cruise lines went back to the drawing board to re-evaluate their procedures. At least three U.S. based cruise ships had to be disinfected after outbreak of norovirus a.k.a. stomach virus. The cruise industry is taking a hit as a result of negative publicity of such incidents. Cruise Lines have done fairly well, but the presence of thousands of people in close proximity for 7+ days with quick turnarounds for the next cruise is bound to cause some issues. It is not possible to scrub and clean giant ships when you have an average of 10 hours between the end and the beginning of each cruise. www.premieretravel.com

Monday, February 6, 2012

Flying Zombies: Airlines on The Brink

Governments in Europe who have been in the past quite generous with their flag carriers can no longer subsidize those airlines that never seem to turn the corner and are the equivalent of the money pit. The emergence of low-cost carriers in Europe was the beginning of the end for some national carriers that are bloated with inefficient methods and high labor costs. This past week saw the end of Spanair, the Catalunian Spanish carrier that ceased operations after a promised funding from Qatar Airways never materialized. Hungarian National Airline Malev followed right after (they matched Spanair) ceasing operations. Both airlines left thousands of stranded passengers in their wake. Many more airlines in Europe and other regions are on the brink, and they either must curtail operations, find new funding and partners or just go down. www.premieretravel.com

Saturday, February 4, 2012

Integration Time: Look Out For Major Schedule Changes

On March 3 is the "targeted" date for "Becoming United", a single platform operation that will integrate passenger service, reservations and the single license. You will no longer see "CO" "005" from that date going forward on new transactions. "Inventory Suppression", code word for schedule changes, changes in flight numbers and other miscellaneous changes will not be easy as the two carriers fully merge their operations. If history is an indicator, this will be at least a cumbersome process. Ticket holders on both carriers might see changes on their flight numbers, flight codes, terminal and schedule changes. The last one is always a major concern, as we have seen that revised schedules may cause mis-connects and/or longer layovers. For a limited time, United has authorized waivers for changes and cancellations to accommodate passengers that may be impacted by this integration. The notification process by United is not full proof as these changes continue to be work in progress. Some deadlines have come and gone or have been extended. We highly recommend that you check and re-check your flight schedules until your date of departure. Airline mergers and acquisition are never easy. It involves multiple levels of integration: 1) New Schedules 2) Single platform reservations and inventory. 3) Accounting system single platform 4) Customer Service 5) Loyalty programs 6) Efficient planning of maintenance of aircraft 7) Streamlining multiple suppliers and vendors 8) Diverse and different cultures of employees 9) Re-negotiating thorny labor contracts www.premieretravel.com

Thursday, February 2, 2012

The Decline of The Recline

Personal space on aircraft is getting more scarce. As airlines keeping devising plans to add more rows into already crowded airplanes, travelers have to cope with more personal space invasion as never before. Aside from the usual shared armrests, kids kicking the back of your seat, smaller seats and overcrowded overhead bins, the reclining seat issue has become quite a problem. With names of gadgets such as "knee defender", this sounds more like war. Several highly publicized incidents required crew intervention, including one that required a United flight to return to Washington/Dulles escorted by fighter jets! So does a passenger have a right to recline his/her seat? Yes, if the seat functions that way, but there should be some discretion/etiquette to be exercised by the reclining passenger akin to a window passenger wanting to use the lavatory: Excuse me, would you mind if I recline my seat a bit?" The mere question and courtesy extended should yield a positive response unless the traveler behind you is 6 feet tall plus. Not comfortable talking to others? By scouting your options with a simple quick glance, you can tell. Another way is to do half a recline and turn around and ask if the person behind you is okay. Some airlines have simply eliminated the reclining seats. They think this is a hassle as flight attendants can save one step of asking to "return seat to the upright position". If passengers however exercise some degree of civility and consideration, reclining seats should stay. Up next: Airlines charge fees for reclining seats! www.premieretravel.com