<B> Inside Track</B>
<B>GM, Chrysler Pay Up Front For Air Competition</B>
Chrysler Corp. and General Motors Corp. expect to save $1-3 million and $4-6 million a year, respectively, through a new five-year deal they were expected to sign last Friday with Detroit-based startup Pro Air, in which the car companies will pay a monthly fee for unlimited travel. Pro Air flies two B737s from Detroit to Baltimore, Indianapolis, Newark and Philadelphia. As an added bonus, Pro Air has agreed to allow Chrysler and GM employees--as well as their spouses and minor children--personal standby travel for $25 per segment. The airline flies to Fort Meyers and Orlando, Fla., in the winter.
The monthly fee, while undisclosed, adjusts for what the companies were paying before Pro Air's entry a year ago and what they would be paying if the low-cost carrier went out of business. Asked whether the agreement threatens existing deals with major carriers like Northwest, which has a hub in Detroit, Charles Braswell, manager of Chrysler's business travel department, said, "We will honor all agreements." In its policy, Chrysler will "strongly encourage," though not mandate, the use of Pro Air.
<a name="story2"><B>Bill At Use, FlightPay, Pay As You Fly</B>
Via World Network calls it Bill At Use, Continental Airlines has trademarked FlightPay, and for Lufthansa, it's Pay As You Fly. In any language, the concept of direct-to-airline payment at the time of flight is gaining interest among a number of players. Lufthansa, following a two-year test program with Siemens Corp., has offered the program to 15 more German firms and plans to roll it out to some of those later this year. At ACTE X (see story, page 1), meanwhile, Continental's Chris Frawley said the airline is "gearing up for a program for direct settlement using the existing ARC mechanism, as a way of facilitating the relationship between buyers and sellers."
<a name="story3"><B>Prime Hospitality On Track To Double</B>
Prime Hospitality plans to double the size of its three brands through new construction, conversion and recently launched franchising efforts. Concentrating most of its growth on the upscale, all-suite hotel brand Amerisuites, Prime will grow it to a minimum of 200 properties by 2000 using new construction and franchising in major business destinations like Chicago, Los Angeles and New York. Most city-center Amerisuites will allot 30 percent of their room inventory for business class suites that include a pull-out couch, "L"-shaped desk, ergonomic chair, business amenities and complimentary snacks.
Prime's extended-stay brand, HomeGate Studies and Suites, and the mid-priced limited service hotel brand, Wellesley, each will reach 100 hotels by 2000 using new construction, conversion and franchising. Franchising agreements will have a 10-year maximum.
<a name="story4"><B>Putting Their Heads Together In Philly?</B>
Insiders are saying that Philadelphia-area neighbors Travel One and Rosenbluth International are the latest to talk agency merger. Rumor has it that Rosenbluth will use the proceeds of a planned initial public offering (see story, page one) to fund the acquisition. Sources at the two family-owned agencies had no comment, though Hal Rosenbluth said the market reaction to Navigant's upcoming IPO will have no bearing on his plans.
<a name="story5"><B>Travel Tech Consolidation Ahead?</B>
Travel technology movers and shakers see a lot of upcoming consolidation among CRS vendors and corporate and consumer online booking providers. Two-thirds of 110 participants at the fifth annual Travel Technology Association's Predictions Dinner foresee the survival of only three major computer reservation systems next year and the demise of at least one of the leading corporate booking systems. All participants agreed that other airlines will follow the lead of American, United and Delta in capping online commissions at a flat $10. When it comes to identifying the airline strategy that will be most effective in lowering the $12 billion industry distribution tab, one-third predicted it will be lower commissions, a fourth said e-tickets, 17 percent said selling direct to customers and only 8 percent said CRS bypass. Another 17 percent thought the airlines will use other means to drive down these costs.
<a name="story6"><B>Continental Expands Small Co. Offerings</B>
Continental Airlines is sprucing up its RewardOne program for smaller accounts by sending new customers a welcome package that includes discounts for Continental airport clubs, special Internet rates from MCI, free membership in Avis' preferred renter program and special offers from Airborne Express. The program, launched in March (<I>BTN</I>, March 16), tracks performance using passengers' frequent flyer numbers. Companies earn one point for every $1,000 spent; points can be redeemed for various soft-dollar benefits.