Inside Track: JetBlue Launches Onboard Wi-Fi Prototype

JetBlue Airways last week became the first domestic carrier to offer free, though limited, Wi-Fi availability on one of its aircraft. Accessing its LiveTV subsidiary's 1 MHz of spectrum purchased at a Federal Communications Commission auction last year, JetBlue made limited connectivity options available through two BlackBerry handheld devices and on laptops that access Yahoo! Mail or Yahoo! Messenger. JetBlue said it plans to expand options on its trial Airbus 320 aircraft. Virgin America and American Airlines also are gearing up to provide Wi-Fi onboard as soon as next year through partnerships with AirCell, which last year gained an air-to-ground broadband license, purchasing 3 MHz of spectrum in the same FCC auction through which LiveTV purchased its 1 MHz. Meanwhile, Alaska Airlines said it would test Wi-Fi with satellite-based supplier Row 44 next spring with the goal of rolling it out fleetwide. Southwest Airlines also is in the midst of signing a supplier to provide inflight Internet as soon as the end of next year, CEO Gary Kelly told BTN last month.

Lufthansa To Buy 19 Percent Stake In JetBlue
Frankfurt, Germany-based Lufthansa last week agreed to take a 19 percent stake in New York-based JetBlue, representing 42 million new shares totaling about $300 million. Both carriers said their boards have approved the deal, which JetBlue said "represents the first significant investment by a European air carrier in a U.S. point-to-point air carrier." The deal does not require shareholder approval and is expected to close early next year after it meets regulatory review, when Lufthansa will gain a seat on JetBlue's board of directors. U.S. law prohibits more than a 25 percent foreign stake in a domestic airline. "Both airlines also look forward to exploring potential opportunities for further cooperation for the benefit of their customers," the carriers said in a statement. "No specific areas of potential cooperation have been agreed upon." JP Morgan analyst Jamie Baker said Lufthansa's investment "is of little industry consequence." He continued, "This deal is about money—JetBlue needs it, Lufthansa has it."

PwC: Lodging Cycle To Remain In Hoteliers' Favor
Travel buyers should expect at least another few years of a hotel seller's market, according to PricewaterhouseCoopers' 2007 U.S. Lodging Industry Report and Forecast, released last week. The forecast indicates that average daily rates would increase by 5.6 percent in 2008, about the same level of growth forecast through the end of this year, and revenue per available room would increase by 5.1 percent, a slight drop from the 5.5 percent increase expected for this year. Occupancy, though down slightly, will remain high, however, particularly in high-demand cities, said Bjorn Hanson, PwC's hospitality and leisure group principal.

AA's David Cush Takes Virgin America's Helm
Former American Airlines senior vice president of global sales David Cush last week began his tenure as CEO of Virgin America. Virgin America had been hunting for a new CEO since the Department of Transportation in May approved the carrier's launch on the condition that CEO Fred Reid—a U.S. citizen viewed by the government as too close to foreign investors—vacated his position. American last week appointed veteran Kurt Stache as vice president and general manager of sales, making him responsible for "all of American's sales activities worldwide with sales organizations throughout American's network reporting to him."

NW To Join U.S. Legacy Competition At Heathrow
Northwest Airlines last week announced it has secured London Heathrow slots from its joint venture partner KLM Royal Dutch Airlines, and plans next year to launch daily service to the airport from Detroit, Minneapolis/St. Paul and Seattle. Now all six U.S. legacy carriers have secured at least one Heathrow slot. Northwest said it plans to launch service next year from Minneapolis/St. Paul beginning March 29; from Detroit beginning May 1; and from Seattle beginning June 1.