<B> Inside Track</B>
<B>Nippon Joins Star, Oneworld Suffers Setback</B>
As expected, All Nippon Airways, Japan's second largest carrier, will join the Star Alliance in 1999. Allies Air Canada, Lufthansa, SAS, Thai Airways, United and Varig, also will add Air New Zealand and Ansett Australia next year. Meanwhile, Singapore Airlines inked a second Star codesharing partnership with SAS, following its earlier deal with Lufthansa.
The American Airlines-British Airways Oneworld alliance, however, still finds itself mired in government review after more than two years. The latest developments--cancellation of U.S.-U.K. bilateral talks and the Department of Transportation's antitrust hearings--do not bode well for the partnership, although AA and BA executives remain committed to the deal.
<a name="2"><b>Air France To Choose Between Continental and Delta</b>
A Continental Airlines source after meeting with officials at Air France said that the French carrier plans by year-end to choose between Continental and Delta, its current U.S. codeshare partner. An Air France spokesman declined to comment on Thursday.
Delta CEO Leo Mullin said that pursuing antitrust immunity with Air France is key to Delta's plans for emerging from "one of the weaker alliance structures in the industry." Scott Yohe, Delta's vice president of government affairs, said if Air France wanted it, antitrust immunity with a U.S. carrier and open skies between France and the U.S. would be established "in short order."
<a name="3"><B>TWA's Business Traveler Strategy Falters</B>
Trans World Airlines last week announced a net loss of $6 million for the third quarter, largely because the airline's strategy for attracting higher yielding business travelers (<I>BTN,</I> June 23, 1997) hasn't worked as well as anticipated. "We reduced the number of seats in our advanced purchase fare category," chairman Gerald Gitner said, "and this seems to have adversely affected our load factor versus the industry."
Limiting advance purchase seats increases the number available to last-minute business passengers, but the airline failed to attract as many of those customers as it hoped. Over the past year and a half, TWA has made a series of changes to become more of a business traveler's airline, including more first class seats, a full coach to first class upgrade program and miles for every dollar spent.
<a name="4"><B>United Calculates Internet Potential</B>
Talking about United Airline's e-commerce strategy last week, director of distribution planning Sue Fullman said 2 percent of United's revenues are sold through the Internet, but 20 percent of customers are using the medium to look. The average cost of distributing via the Internet is 6 percent of sales, versus a travel industry average of 17 percent. Beyond trying to reduce its $2.6 billion distribution tab, United also is striving to enhance customer service and convenience. "We're not saying everything will move to the Internet, but there are a lot of opportunities," she said. "The percent of tickets estimated to be sold on line is 10 percent by 2002. Personally, I think that's conservative."
<a name="5"><b>Navigant Announces Stock Repurchase Program</b>
Navigant International, the Denver, Colo.-based publicly held mega agency, last week said that its board of directors has authorized the repurchase of 1.3 million shares of its outstanding common stock for one year. The stock, trading at 4 7/8 last week, is "tremendously undervalued. This is probably the best investment with their funds right now," said Brad Cohen, New York-based Sands Brother & Co. senior analyst. Stock prices are low because the market is in flux and "it's a function of it being a small capitalization stock and a function of its spin-off from U.S. Office Products," he noted.
Meanwhile, Navigant earlier this month bought Jarvis Travel Ltd., a Calgary, Canada, agency with $33.4 million in air sales. The all-cash deal boosts Navigant's Canadian presence. "By integrating Jarvis Travel with our existing operations in Vancouver, Atlas Travel Services, we have strengthened our position in a strong business market," said Navigant CEO Edward Adams.
<a name="6"><B>Pegasus Offers E-Bookings to Independent Hotels</B>
Pegasus Systems, based in Dallas, last week partnered with Intermezzo Systems to provide e-booking capability to small or independently owned hotels. Hotels will be available for online booking through travel-related sites powered by Pegasus. The reservation capability will be offered to about 250 hotels already online, but not bookable through Pegasus' travel site, TravelWeb.
<a name="7"><B>Wyndham CEO To Address Corporate Travel West</B>
Wyndham International CEO James Carreker will give the keynote address on hotel negotiating at the Santa Clara Convention Center for BTN's Corporate Travel West show, Nov. 2 and 3. For details, call (212) 615-2744.