<B>InsideTrack</B>
<B>Galileo Weighs Ownership Options, May Stay Public</B>
Galileo International's ownership fate may be determined by the end of June, said chairman, president and CEO Jim Barlett at the company's shareholders meeting last week. By that point, Galileo and advisors at J.P. Morgan Chase will have concluded their evaluation of Galileo's strategic options, which, Barlett said, "include, but are not limited to, a leveraged buyout, a sale to a strategic buyer or remaining a publicly held company." According to Merrill Lynch analyst Jenny King, "I don't think anyone wants to acquire them. If anyone would have acquired Galileo, it would have been earlier when the shares were in the teens." Galileo now is trading near $28. King said a merger with Worldspan is unlikely, citing regulatory concerns, but CIBC World Markets analyst Paul Keung would not rule it out. "Since November, we have examined many scenarios and are talking with interested parties, but no final decision has been reached," said Barlett.
<B><A NAME="2">America West Preparing New Corp. Offerings</B>
America West Airlines soon will begin offering a Web-based program to midmarket corporate accounts and onsite checkin at offices of larger accounts. The midmarket program, expected by the end of the second quarter, will target accounts between $300,000 and $1 million in America West flown revenue. "There is a massive market out there and we have wanted to put together a highly automated program without taking up lots of resources," said vice president of sales Ron Cole. Beta experimentation on remote checkin at corporate locations will begin within 60 days. Also, the carrier this summer expects to begin testing self-service airport kiosks.
<B><A NAME="3">KLM Developing New Corp. Purchasing Methods</B>
KLM Royal Dutch Airlines is working with GetThere and others on direct links into KLM's res system for large, multinational firms. "Development is in a progressive state; we already are testing with three companies," said Michiel Verhaagen, KLM director of global account management. Also in the pipeline is an internal booking tool for small and midsize companies that want true direct links through the Internet. KLM also is developing a corporate card "as a vehicle to sell and perform services, combine loyalty programs, etc.," Verhaagen said. "In the end, you won't need a boarding pass." KLM already has implemented its Universal Air Travel Plan card in the Dutch market and will be rolling it out soon to other markets. The carrier, meanwhile, is looking to third parties for contract performance monitoring. Without stating particular interest in The Prism Group of Albuquerque, Verhaagen said "We are looking to maximize our alignment with Northwest and Continental Airlines." Continental uses Corporate Insight, furnished by Prism, and Northwest is considering a similar arrangement.
<B><A NAME="4">Airline Union Groups Labor On</B>
Pilots at Delta Air Lines subsidiary Comair overwhelmingly rejected a tentative contract earlier this month and continue a nearly two-month long strike. Management has cut thousands of jobs, trimmed operations and unloaded dozens of planes. Delta, losing millions a day, has indicated it will seek an alternate means of serving Cincinnati if a complete shutdown of Comair is necessary. Comair has canceled all flights through July 15. Delta's mainline pilots are continuing to review their tentative contract. Results aren't expected until the middle of next month. Meanwhile, Southwest Airlines and its Transport Workers Union on Saturday reached a tentative agreement for a new contract with the assistance of the National Mediation Board. American Airlines and its flight attendants union will resume negotiations this week with NMB officials. Earlier in the month, Northwest Airlines' mechanics approved an industry-leading contract that reportedly will cost the carrier $230 million this year. Lufthansa has faced a series of weekly pilots strikes that has grounded thousands of flights.
<B><A NAME="5">Pegasus To Provide Hotel Info To KDS</B>
Dallas-based Pegasus Solutions Inc. in the third quarter will provide Paris-based Klee Data Systems' Wave suite of corporate booking tools with inventory, property information and real-time reservations for more than 40,000 hotels. Pegasus works similarly with E-Travel, while other U.S.-based corporate booking vendors access a less robust set of hotel content through the global distribution systems, said a Pegasus spokeswoman.
<B><A NAME="6">Bleak Second Quarter Projected for Hotels</B>
Bear Stearns lodging industry analyst Jason Ader last week said he sees the decline in the U.S. lodging industry continuing, with second quarter expectations below weak first quarter actual results. Ader cited falling occupancy rates and room revenues, as well as airline profit disappointments and announced corporate travel cutbacks.