AA, BA To Begin Code Sharing, Change Seat ConfigurationsAmerican Airlines and British Airways, after receiving final approval from the U.S. Department of Transportation, plan to begin "as soon as possible" codeshare services to nearly 300 destinations beyond the carriers' respective transatlantic gateways. The expanded alliance does not include cooperative services in London nor does it call for antitrust immunity. Meanwhile, AA after accomplishing a fleetwide reconfiguration of all coach class seating by expanding leg room, this fall will begin reverting to "standard seating" on 23 percent of its aircraft. Those planes impacted, Boeing 757s and Airbus A300s, primarily serve leisure markets accounting for 20 percent of daily departures. British Airways, like some of its competitors
(BTN, March 24), plans to remove first class seating on certain transatlantic flights. "The days will be gone when we have first class on every aircraft," said BA CEO Rod Eddington. "First class is important but on quite a few routes that have the four-class configuration, we have had an empty or a near-empty first class." Impacted markets likely will include Denver, Phoenix and San Diego.
Online, Navigant Takes A Step Forward And Another BackNavigant International "will elaborate before NBTA" (referring to the Aug. 11 National Business Travel Association convention in Dallas) on the implications of its April purchase from Germany's I:FAO of the technology, facilities and people associated with the Powertrip corporate online booking tool. I:FAO had bought the software two years ago from Xtra On-Line
(BTN, June 25, 2001) to address the midmarket. Observers believe Navigant and potentially other agencies will use it to compete with Expedia and other Web-based players. The Powertrip sale allows I:FAO, which has been disappointed with its U.S. operations, to focus mainly on multinational clients who use its Cytric booking tool for heavy travel management. Navigant said the acquisition was made by its Aqua Software Products subsidiary. In an unrelated development, Orbitz is making Aqua wait for the U.S. Department of Transportation's final GDS regulations
(see story) before it can consider booking functionality in its AquaQuest tool that connects agencies with Orbitz. According to a spokesperson, that's "not exactly what we wanted to hear." Aqua and Navigant officials had hoped to install booking capability by the end of this quarter, in response to a recent BTN questionnaire.
Speculation Centers On Holiday Inn SaleSpeculation continues that InterContinental Hotels Group is interested in selling its 1,500-property Holiday Inn chain. More than one hotel company CEO appearing at last week's NYU Hospitality Investment Conference mentioned being approached by investment bankers about a possible acquisition. "Why would I want another midprice chain when I already have nine of my own?" said Henry Silverman, chairman and CEO of Cendant Corp.
EC Ready For New Transatlantic Aviation Treaty Talks The Transport Council of the European Commission last week issued a mandate for the EC to engage the United States in negotiations on a new transatlantic air agreement covering all 15 member states. The mandate was part of a package of decisions that also calls for liberalized airline investment regulations that could trigger long-awaited cross-border consolidation. "We aim to launch negotiations with the United States within a month on an agreement that will bring together the two largest aviation markets in the world," said Loyola de Palacio, EC vice president and transport commissioner. European Union transport ministers also agreed that existing ownership rules "must be dismantled within the European Union to permit the emergence of pan-European airlines."
Amex CEO Candid About Card Industry ChangesAmerican Express president and CEO Kenneth Chenault in a speech last week asserted that Amex has been shut out from Visa's and MasterCard's contractual exclusivity with payment card issuers, adding that the payment card industry is "clearly at a turning point" in Amex's favor. "The 'old way' of doing things—the consistently restrictive, insular practices the associations have built over time—is being seriously challenged," he told investors. A big piece of that challenge came in the form of a U.S. Department of Justice antitrust lawsuit against Visa and MasterCard, which—after an initial ruling in 2001— demanded they repeal bylaws that restrict issuers from working with Amex. Visa and MasterCard have appealed the ruling. "Once restrictions are lifted, banks will choose to work with us," Chenault said. He said further legal action against Visa and MasterCard continues to be an option. "Although American Express has done well over the past decade," Chenault said, "the profits lost as a result of being prevented from working with U.S. banks have been significant."