Inside Track - 1997-02-24

Amex Tries For More Smart-Card Partners

American Express is in negotiations with three more hotels and two more airlines to test smart card applications in coming months, according to Jud Linville, senior vice president, corporate services. Amex previously announced it was working with IBM and American Airlines to test use of a card for airplane boarding and with Hilton to test use in lobby checkin kiosks. Smart cards also could eventually provide the means for clients to prepopulate expense reports with charge data that ends up in the company's general ledger, Linville said.

In related news, solutions to two hurdles blocking smart card applications-transferring data to personal computers and chip card costs-were offered last week by separate vendors. Naples, Fla.-based Fischer International Systems Corp. announced development of its "Smarty" card reader, which relays the data to a personal computer when inserted into the unit's floppy drive. And Phoenix-based Hypercom Inc. introduced a card called ChipStripe that costs less than $1.


Hogg-BTI Merger Stalled?

Negotiations between Hogg Robinson and its acquisition target, BTI Americas-along with BTI's major shareholder, EDS-are floundering, according to sources. Hogg, the managing partner of the Business Travel International global network, had expected to complete the deal by this month. If the deal isn't wrapped up soon, don't be surprised to see Hogg starting talks with another large U.S. travel agency.

Hogg Robinson's enthusiasm for buying up fellow BTI members has not diminished despite issuance of a profits warning earlier this month. Earnings are likely to come in 3 million (about $5 million) short of expectations because of underperformance not only by the company's transport division but also by the recently acquired Scandinavian BTI partner Bennett Travel.


Study Says BA-AA Alliance Will Boost Fares

Fares between the United States and London will increase by 20 to 40 percent due to the American Airlines-British Airways partnership unless AA and BA give up between 560 and 840 slots at London's Heathrow Airport, according to a new study by the Washington-based Consumer Federation of America. The CFA study is the first comprehensive U.S.-based report on the proposed AA-BA partnership and the first that is not sponsored by AA or one of its competitors. An earlier Consumer Association of the U.K. study revealed essentially the same conclusions as the CFA report.

Mark Cooper, CFA's research director and author of the report, said his "conservative estimate" is that passengers will pay half a billion dollars a year in fare increases if the two airlines do not relinquish slots.


Extended Stay Debuts Third Brand

Extended Stay America Inc. has launched a new brand, Crossland Economy Studios, the group announced late last week. Crossland, a budget extended stay brand with rates of $159 to $189, debuted its first property last month in Independence, Mo., and expects to open three additional hotels this year. Rooms feature cable TV, free local calls and voicemail, dataport, kitchenette, coffeemaker and microwave.


Faberman Airborne Again

Ed Faberman, formerly vice president of government affairs for American Airlines, has joined the law firm of Ungaretti and Harris in Washington, D.C., where he is helping put together the new Air Carrier Association of America. This association of eight low-cost carriers, not including Southwest Airlines, will hold its first meeting Feb. 26, where it will select officers and issue position statements (see story, Page 6). Faberman, who is legal counsel to the the group, said its members have generated new traffic throughout the industry and warned that schemes such as the proposed user-fee scenario might stop those newcomers from traveling.


TWA Offers Transatlantic Companion Deals

TWA recently announced a new promotion for its Trans World One hybrid first/business-class service in which a full-fare purchase earns a half-price companion ticket through March 15. The deal is valid between any U.S. city and Athens, Barcelona, Cairo, Lisbon, Madrid, Milan, Paris, Riyadh, Rome or Tel Aviv via JFK Airport in New York. Travel must be completed by March 15 and tickets must be purchased no more than 24 hours prior to departure. Neither round-trip travel nor Saturday night stay is required.

Iberia Airlines of Spain wasted no time matching the special between New York and Barcelona and Madrid.