WorldTravel Likely To Get Fidelity
WorldTravel BTI is the agency most likely to benefit from the bust-up between Boston-based Fidelity Investments and American Express, in which the former this month terminated both its travel and corporate card relationships with the latter. First reported in the Boston Herald on March 13, the decision followed by just a month an executive raid in which several portfolio managers left Fidelity for a new satellite Amex office in Boston. WorldTravel, which officially has not been named as Fidelity's travel management provider, was the runner-up in a recent year-long agency bidding process. Fidelity in 2000 had $56.6 million in U.S. booked air travel and $129.7 million in U.S.-based overall T&E, according to Business Travel News' Corporate Travel 100 research.
AWA To Launch Agency Compensation Program
In becoming the seventh major carrier to eliminate travel agency base commissions (see story, page 1), America West Airlines late last week introduced a new agency compensation program based on performance. Dubbed Agency AWArds, the program will categorize and compensate agencies based on business booked on the Phoenix-based carrier. "Elite-level" agencies that "perform at a significant market share premium," for example, will earn the highest compensation payments of 5 percent. America West said all U.S. agencies approved by the Airlines Reporting Corp. are eligible for the program, but must enroll by Friday. At press time, the only majors not matching Delta Air Lines' move to wipe away base commissions were Alaska Airlines and industry maverick Southwest Airlines. As it announced the move, Delta said it would individually negotiate agency compensation for performance, but America West is the first to formalize a tiered program in the zero commission era.
Air Alliances Eye Additional Adhesion
Delta Air Lines and SkyTeam partner Korean Airlines this month filed an application for antitrust immunity with the U.S. Department of Transportation. If approved, SkyTeam will be the first global alliance to secure immunity among North American, European and Asian members. Delta and the European SkyTeam participants—Air France, CSA Czech and Alitalia—were granted immunity in January. Meanwhile, Swiss—the reincarnation of Swissair readying an April 1 launch—tomorrow will introduce its brand at a news conference in Zurich. The airline is expected to announce a decision as to which alliance it will join, ending months of speculation suggesting Oneworld will be the choice. A company spokesperson would not confirm that decision, but said, "Oneworld certainly is the likely candidate." Alternatively, Swiss may decide to develop a bilateral transatlantic link with a U.S. carrier, potentially reconstructing the now defunct American Airlines-Swissair partnership.
SAS To COnvert To One-Class Service
Scandinavian Airlines System, the national carrier for Sweden, Norway and Denmark, is to become the first mainstream airline in Europe to move to a one-class service. Called Scandinavian Direct, it will be introduced on June 1 for all flights within Scandinavia. The airline also is considering bringing certain aspects of Scandinavian Direct to its other European routes. The new concept includes a simplified, four-tier price structure based on the degree of flexibility and the advance purchase period. The airline claims the restructuring will reduce business travel fares by up to 30 percent. SAS will continue to offer a substantial breakfast but other meals will be downgraded to sandwiches—which already is common on such other full-service airlines as KLM Royal Dutch Airlines. Other changes by SAS include the introduction of online checkin for all passengers with electronic tickets. SAS is responding to a move behind the curtain on its own services—business class passengers are down 17 percent from last year—and to the arrival of low-cost carriers in Scandinavia. British Airways also is poised to introduce a radical overhaul of its short-haul service on June 1, but details have not been announced.
JetBlue Readies IPO
Successful startup JetBlue Airways soon will offer 5.5 million shares of common stock in its forthcoming initial public offering on the Nasdaq stock exchange. The airline initially will list its stock at $22 to $24 per share, generating as much as $132 million. JetBlue, which last month turned two years old, originally planned the IPO for Sept. 11, but of course was forced to postpone. It will be traded under the symbol JBLU.