Business Travel News - October 26, 2009 - (Page 4)

NEWS SWA To Maintain Capacity In 2010 BY SETH HARRIS we’ll certainly take it,” Kelly said. Southwest Airlines plans to keep Kelly also pointed to Southwest’s capacity flat next year from 2009 new EarlyBird Check-In product, levels, following a 5 percent cut in which allows travelers to pay for an available seat miles this year, said assigned boarding position before chairman, president and CEO Gary general checkin. It generated $2 milKelly during the carrier’s third-quar- lion in quarterly revenue and had ter earnings call this month. no effect on the airline’s Business This quarter, it took out consid- Select fare category, which conerable capacity, as announced previ- tributed $18 million, Wright said. ously (BTNonline, April 16). The “Because travel demand was bulk of reductions are occurring this much worse than planned, a nummonth, with a 10 percent drop in ber of audibles were called,” Kelly October 2009 capacity compared said. “Our sophisticated aircraft with October 2008. November and schedule optimization process elimDecember will see 8 percent and 6 inated approximately 10 percent of percent cuts, respecour flights over the tively, CFO Laura last year, which were Wright said. unprofitable, less Meanwhile, Southpopular flights. We west saw record-high decided to keep our load factors nearing fleet essentially flat 80 percent in the in 2009 to prepare third quarter, which for weak travel deended Sept. 30. Sepmand. Even so, we tember load factors produced capacity rose 11 percentage through optimization points from Septemefforts redeployed in ber 2008. “Favorable the past year to MinSWA CEO GARY KELLY year-over-year load neapolis/St. Paul, Called a number of audibles factor comparisons New York LaGuardia are continuing thus and Boston Logan, far in October 2009, with month-to- which fit well within our route sysdate passenger unit revenues up ap- tem. We look forward to adding Milproximately 1 percent from the re- waukee next month.” spective year-ago period,” Kelly said. Southwest’s quarterly operating October’s high load factors came expenses decreased 5.7 percent from leisure travelers responding to from the third quarter of 2008, drivdiscounted fares, said Kelly, noting en by lower energy prices, as fuel that advance bookings for the rest costs decreased 17.4 percent to of the quarter are “quite good.” $2.13 per gallon, including taxes. As He said there are no indications of Oct. 14, it had derivative contracts that business travel will rebound to in place for more than 45 percent of “bail us out. There is no evidence of its estimated fourth-quarter conany significant change in business sumption, which gives an estimattravel demand, i.e. full-fare demand.” ed fuel cost per gallon, based on curThe carrier’s net quarterly loss of rent market prices, around $2.25. $16 million was a vast improvement For 2010, the company has derivover the $120 million net loss for the ative contracts in place for over 65 quarter in 2008. While it had a net percent of its estimated fuel conincome of $23 million, a year-over- sumption, resulting in an estimated year 62 percent decrease, a $27 mil- 2010 fuel cost per gallon, based on lion charge from its early-out em- current market prices, around $2.40. ployee program and a $12 million Kelly said, “I don’t believe the loss associated with fuel hedging worst is behind us, if for no other drove the net loss. “A profit is a prof- reason than higher energy costs.” it and in this terrible environment, ■ sharris@btnonline.com ■ NBTA FORECASTS HOTEL PRICE DECLINES, FLUCTUATING AIR Domestic airfares in 2010 are projected to range from 2 percent lower to 3 percent higher than the 2009 average of $299, according to the National Business Travel Association’s 2010 U.S. Business Travel Buyers’ Cost Forecast, scheduled for release this month. NBTA said ancillary fees could increase ticket costs by 30 percent. The association forecasts hotel room average daily rates to drop 2 percent to 8 percent next year from a 2009 average daily rate of $136. Car rental rates of $46 per day are expected to decrease 1 percent to 3 percent. The predictions are in line with other industry forecasts (see story, page 3). INSIDE TRACK NEW SABRE RES SYSTEM TO GO LIVE IN NORTH AMERICA Sabre Airline Solutions in the coming weeks will cut over WestJet to its SabreSonic Customer Sales & Service reservation system, making it the first North American carrier to complete the migration. In January, JetBlue Airways also will switch over to SabreSonic CSS, which gives carriers the ability to further merchandize ancillary products and services on the front end through its Web site, then account for and fulfill them on the back end. Some carriers outside of North America, including India’s Jet Airways, are testing modules of the CSS platform. Sabre also is developing for SabreSonic CSS reaccommodation capabilities that give airlines “a more granular view than just three frequentflyer tiers,” said Sabre Airline Solutions president of products and solutions Steve Clampett. The system is designed to let carriers identify customers who bring them the most value and give them preference if reaccommodation is necessary. LUFTHANSA TO BRING BACK INFLIGHT WI-FI Lufthansa this month announced it would relaunch its FlyNet inflight Internet service in mid-2010, after more than a three-year gap in service. The launch customer of Panasonic’s new exConnect service, the German carrier next year will equip “a major part of its longrange fleet”with satellite-based inflight Internet and other connectivity options, including text message capabilities for mobile phones. Lufthansa earlier this decade was among the first carriers to offer inflight broadband, but withdrew the service when Boeing scrapped its Connexion product in late 2006. Since then, a new generation of the inflight Internet providers, including Aircell, OnAir, Panasonic and Row 44, have developed onboard connectivity offerings that are cheaper, lighter and easier to install (BTNonline, May 7, 2007). Lufthansa and Panasonic did not disclose pricing for the service, though Lufthansa said that “various price models are planned, ranging from a one-hour flat rate to a monthly flat rate.” Lufthansa also intends to allow frequent flyers to redeem award miles to use the service. STARWOOD TO DOUBLE CHINA PRESENCE Starwood Hotels & Resorts Worldwide this month detailed plans to double its presence in China in the next three years. On Oct. 15, it opened its 50th hotel in China, the Sheraton Jinan Hotel. Its sights set on reaching 100 hotels by 2012, Starwood plans to open four more there this year—the Le Meridien Qingdao, the Le Meridien ChongqingNan’an, Four Points by Sheraton Lianyungang and the Westin Tianjin. Next year, it plans to bring the W and Luxury Collection brands to China. It has signed 18 deals for properties there in the past 10 month. China has the largest pipeline of Starwood properties and contains more of its hotels than any other country outside of North America. Monday, October 26, 2009 www.BTNonline.com Business Travel News http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - October 26, 2009

Business Travel News - October 26, 2009
Contents
Inside Track: NBTA forecasts price declines
Washington Wire: UAL, US Airways face safety fines
Profiles In Travel Mgmt.: Nokia changes behavior
Forum: Will Tate: Category management rocks
EuroBTN: One-on-one with Sabre’s Tom Klein
Car & Ground: Buyers adjust refueling policy
Destinations: Beijing Convention Center to open

Business Travel News - October 26, 2009