<B>InsideTrack</B>
<B>Consumers Expected To Pay For More Fuel Hikes</B>
The highest fuel prices in nearly a decade are expected to continue throughout 2000, forcing airlines to find ways to recoup costs. According to the Air Transport Association, overall fuel costs for the industry will jump 40 percent, or $4.4 billion, this year compared with 1999. Citing an overall industry net profit in 1999 of $4.85 billion, ATA's chief economist David Swierenga said, "Airlines have no choice but to pass these increased costs, as much as possible, on to the consumer." Since the upward trend in prices began earlier last year, carriers have added a fuel surcharge and attempted several fare hikes. In fact, after derailing the year's second fare hike earlier in the month, Northwest last week posted an overall fare increase of $20 to $40 on most routes and was matched promptly by most other majors.
<B>P&G Establishes Corporate Shuttle</B>
Procter & Gamble, in cooperation with Boston-based charter company FlighTime.com, has created a new corporate shuttle for flights between its Cincinnati base, Brussels and a few other European destinations. The company this month will begin using a reconfigured Airbus 320 with all first class seating four times weekly. "We determined that a private corporate product would save P&G a significant percentage of its negotiated yearly travel budget," said Jane McBride, CEO at FlightTime.com. P&G, with a 1999 U.S. booked air volume of $130 million, has had to rely on Delta and its allies for service between Cincinnati and Brussels. Ironically, Belgian carrier Sabena, which recently parted ways with Delta, will end nonstop service to Cincinnati later this week.
<B>Delta Brings BusinessElite To America</B>
Following last year's launch of its first class-business class hybrid on international routes (<I>BTN</I>, Oct. 5, 1998), Delta Air Lines on May 1 will begin offering BusinessElite on domestic transcontinental routes. Initial rollouts include New York JFK to Los Angeles and San Francisco aboard B767-300 aircraft, as well as on its new daily JFK-San Diego service. BusinessElite, similar to other hybrid cabins, offers sleeper-style seating, personal entertainment sytems, dataports and phones and enhanced menu options.
<B>BA's Ayling Is Out</B>
Following what is expected to be British Airways' first full year in the red ever, its board last week ousted chief executive Robert Ayling, ending his 15-year career at the carrier. BA chairman Colin Marshall, the previous CEO, temporarily will the lead current management team until a successor is found. In his four years in the cockpit, Ayling is credited with introducing cost-cutting measures that saved the company $1.6 billion. Still, analysts predict the carrier probably will cut jobs in the coming months in the face of heavy competition and skyrocketing fuel costs. Wall Street expects BA to lose close to $400 million for the year ending March 31. The carrier immediately began a search for its next chief executive. Early rumors suggested that both Stephen Wolf, current US Airways chief, and James Strong, top man at Qantas, have been approached. BA denied such reports.
<B>Hilton Consolidating Res System</B>
With its recently acquired Promus brands set to begin participating in its HHonors frequent guest program early next month, Hilton Hotels Corp. is moving on to combining reservations systems and, beyond that, yield management systems. Doubletree, Embassy Suites and other former Promus brands gradually will begin using the Hilstar reservations system with all brands scheduled to be online by the end of 1Q01. Doubletree, meanwhile, will be the first brand to adopt its new parent's yield management system. Also with a nod to the future, Hilton has included a series of new prototype guest rooms in the midprice Hilton Garden Inn LAX/El Segundo, which opened this month in Los Angeles. The rooms, including one specifically dubbed Hilton's "room of the future," allow the company to test new ideas, technology and designs for all its brands.
<B>Dot-Com Co. Buys Corporate Travel Consultants II</B>
Aden Enterprises, the parent company of Cheapfares.com, has acquired Corporate Travel Consultants II of Miami for $5.25 million in cash and $3 million in stock warrants. CTC's CEO Jim Collins said he "turned away a lot of serious buyers, but pursued this deal because the plan is to have online business-to-business and business-to-consumer products that will go straight up against Priceline." Aden chief Tom Woolston, has filed a patent infringement complaint against Priceline, claiming he holds the rights to "buyers' auction" technology. While awaiting a decision from the U.S. Patent Office, Woolston told BTN, he "may or may not" buy more agencies in the $100-million-air-volume range.