Continental Airlines hopes to gain regulatory approval from the U.S. Department of Transportation in May for the carrier's application to form a transatlantic joint venture with United Airlines, Lufthansa and Air Canada, said president Jeff Smisek during the J.P. Morgan Aviation and Transportation Conference in March. Smisek said he doesn't expect the regulatory process to "pose any insurmountable hurdle to us." Continental also sees an opportunity for similar joint venture arrangements with Star Alliance carriers for the Pacific markets and Latin American markets, depending on the success of the transatlantic arrangement. Continental expects to officially leave SkyTeam and join the Star Alliance on Oct. 24, after which it hopes to commence its joint venture with United, Lufthansa and Air Canada. Meanwhile, American Airlines CFO Tom Horton noted the "evolving duopoly of SkyTeam and Star" as he discussed American's bid with British Airways and Iberia to gain immunity through their own joint business agreement. "There are never guarantees," Horton said, "but we expect approval of our application in the second half of 2009."
Meetings Report Forecasts European Price FallsMeetings pricing across Europe will experience widespread decreases throughout 2009 as demand losses at the end of 2008 will accelerate through this year, according to the Grass Roots HBI Meetings Industry Report released in late March. Grass Roots HBI international conference director Robert Bottomley forecasts a year-round pricing reduction of up to 30 percent against the rack rate, which follows a 20 percent decrease in the last two quarters of 2008. The U.K. company's data showed rates up by less than 2 percent to £161.16, exclusive of value-added tax, last year compared with 2007. With training and management centers, which saw an average rate jump of 22 percent, removed from the mix, meeting rates declined more than 3 percent. Average daily delegate rates for 19 major European cities increased from 2007. Grass Roots HBI is forecasting all those cities, except Paris, to see rate decreases this year, including double-digit percentage-point drops in Berlin, Copenhagen, Milan, Rome, Stockholm and Zurich.
Europe Hoteliers Expect Long Decline, BankruptciesEuropean hospitality executives are bracing for lower levels of business travel, widespread risk of chain bankruptcies and no near-term end to the financial downturn, according to DLA Piper's 2009 Europe Hospitality Outlook Survey released in March. The survey, based on responses of 261 top executives in the European hospitality industry, showed nearly 70 percent of respondents reporting a significant reduction of business travel amid the downturn, and just over half of those surveyed expect no rebound until 2011. Only 6.5 percent of respondents expect no hotel chain bankruptcies within the next year.
Judge Approves Southwest's LaGuardia Slot BuyAn Indiana bankruptcy court judge overseeing the restructuring of defunct ATA Airlines approved the sale of assets to Southwest Airlines, paving the way for the carrier to launch service out of New York's LaGuardia Airport. Southwest in December 2008 agreed to purchase its former codeshare partner's 14 slots at the airport, which can accommodate seven daily roundtrips. The transaction, which is valued at $7.5 million, was sparked by ATA's bankruptcy filing last spring
(BTNonline, April 3, 2008).