Negotiators for the European Union and the United States on Friday agreed on a draft aviation agreement, to be presented to the EU Transport Council and the U.S. Congress, that appears to address European concerns about U.S. airline ownership and market access. "By eliminating the bilateral agreements and their restrictions on traffic rights," Jacques Barrot, European Commission vice president of Transport, "we can already obtain a reduction in the cost of tickets for companies and private customers, with consolidated economic benefits of between €6.4 billion and €12 billion over a five-year period."
AirTran's Offer For Midwest To Expire This WeekAirTran Airways' deadline for shareholders of Midwest Airlines to consent to a merger expires on March 8, but the Midwest management team and board of directors remain committed to thwarting a deal. "We continue to believe that your offer is inadequate, and that Midwest shareholders should reject the offer and not tender their shares," Midwest's board wrote in a letter to AirTran chairman and CEO Joseph Leonard last month. Midwest senior vice president and chief marketing officer Scott Dickson said the carrier is persuading shareholders that Midwest's stand-alone plan—not nuptials with AirTran—offers more value. Tactics to thwart the deal could include issuing stock making the carrier less affordable to AirTran. With regard to the possibility of issuing the poison pill, Dickson said, "It's in the arsenal, along with the laws in the state of Wisconsin, which are pretty unique about unsolicited or unwelcome takeovers of businesses. We have a fair amount of protection in this state. The best defense is to execute on our plan."
Private Equity Group To Buy Hilton's Scandic HotelsHilton Hotels Corp. expects to close in April the €833 million sale of its Scandic Hotel chain to a private equity group. Hilton and EQT, a private equity group operating in Northern Europe and China, announced late last week that they have exchanged contracts for the sale of 132 hotels in Scandinavia, 128 of which are operating under the Scandic brand. Pending approval from European Union regulators, Hilton will use the proceeds from the sale to pay down debt. The sale reflects a Hilton strategy to generate a higher proportion of income from management and franchise fees and strengthen its credit profile, as 121 of the hotels in the sale are leased, said Hilton CFO Robert La Forgia. After the sale, Hilton's only presence in the region will be six hotels in Finland, Sweden and Denmark.
SkyTeam To Seek Another Round Of AntitrustSkyTeam may dust off its antitrust immunity application and refile with the U.S. Department of Transportation as soon as this year, Northwest Airlines CEO Doug Steenland said last month. SkyTeam's most recent attempt at furthering its immunity was not successful, as carriers in 2005 withdrew their request following regulatory resistance. The alliance partners said they would, at a later date, pursue their request
(BTN, Jan. 23, 2006). "In our judgment, we thought that the DOT decision a year ago not granting us antitrust immunity was not the correct one," Steenland said. "We would anticipate at some point making a follow-up filing to provide another opportunity for antitrust immunity to be granted to Northwest, Delta, KLM and Air France. It could be this year." In 2002, DOT gave antitrust immunity to SkyTeam carriers Air France, Alitalia, CSA Czech Airlines and Delta.
US Airways Follows Delta In China Route ApplicationUS Airways last month said it plans to file an application with the U.S. Department of Transportation to begin nonstop service to Shanghai from Philadelphia in March 2008, which would be its first route to Asia. This carrier said it "is close to making a decision on acquiring aircraft suitable to fly Philadelphia-Shanghai nonstop and has ample time and financial resources to do so." The carrier follows Delta Air Lines, which in January filed an application with the DOT for authority to fly nonstop service between its Atlanta hub and Shanghai in 2008. Delta and US Airways were the only two legacy domestic carriers to sit out last year's contested bid for Chinese route authority. DOT last month approved United Airlines launch of service between Washington, D.C., and Beijing on March 28.
NBTA Plans Upgrades For Hotel RFPThe National Business Travel Association's hotel committee is considering significant changes for its 2009 standard request for proposals form, according to NBTA spokeswoman Courtney Leigh Beisel. Next year, the committee is considering adding dynamic pricing, providing international standardization and creating an optional shorter form of the RFP, she said. The only major change to the 2008 RFP, which NBTA released last week, was the addition of a budget tier to the existing luxury, upscale, midprice and economy tiers in the document.