JPMorgan Chase, Bank One MergeJPMorgan Chase and Bank One last week announced plans to merge, creating the second-largest bank in the United States following Citigroup. Still awaiting regulatory approval, the merger's impact on corporate card offerings—which each bank issues—is not yet clear. "We don't know the impact on the commercial card business," said a source who requested anonymity. "Until the regulatory approval, we can't even start discussions with those issues." However, a statement released by JPMorgan Chase said, "The combined company will continue to use both brands in their respective markets and products, while research is conducted to determine a long-term retail brand strategy." Bank One is the world's largest issuer of Visa cards, with a foothold in the corporate market. JPMorgan Chase, an issuer of both Visa and MasterCard, claimed 14,900 commercial card accounts at year-end 2002, according to Business Travel News research.
Ariba Acquiring AllienteAriba Inc. this month announced it would acquire Colorado Springs, Colo.-based Alliente Inc., a business process outsourcing firm. Expected to close this month, the acquisition expands Ariba's presence "for managed procurement services," the company stated. Ariba's offerings include expense management software, with such clients as Merrill Lynch, PNC Bank and Lincoln Financials. Alliente's largest travel customer, Lucent Technologies
(BTN, Oct. 30, 2000), outsourced procurement and travel to Alliente, becoming the first company of its size to move the entirety of its travel operation to another firm.
U.S. Airlines Expected To Post Narrower LossesCiting stronger revenue trends partially offset by persistently higher fuel costs, analysts predicted the U.S. airline industry lost between $700 million and $900 million during last year's fourth quarter, on a net basis, a significant improvement from the multibillion-dollar industry loss one year earlier. "Perhaps the magnitude of prior losses has deadened our senses, but we consider these to be fairly respectable results," said J.P. Morgan Securities analyst Jamie Baker. UBS analyst Sam Buttrick estimated a fourth-quarter operating loss of $110 million and said, "This is what passes for recovery in the U.S. airline industry." Delta Air Lines thus far is the only major carrier to report fourth-quarter and full-year 2003 numbers—net losses of $327 million and $773 million, respectively. Though narrower than those posted a year ago, Delta's losses are expected to be the largest reported by any U.S. airline.
Navigant Shares Jump On Stronger Earnings ExpectationsShares of Navigant International hit an all-time high of $17.40 this month after the company on Jan. 5 said that it expects its fourth-quarter 2003 earnings per share to reach the high end of guidance it provided in October. The company anticipates strong client retention and total 2004 transactions to return to 2002 levels. Navigant will report fourth-quarter and full-year 2003 results early next month.
DOT Report Cautions On Mounting DelaysA report this month issued by the U.S. Department of Transportation Office of the Inspector General warned that "economically driven changes in airline operations are likely to pose new challenges to airports, en route airspace and air traffic control," despite systemwide decreases in air traffic delays and flight cancellations. IG noted that Chicago O'Hare and Newark Liberty International already have experienced increasing delays. "The effects of congestion in major hubs are likely to cascade into the rest of the system," the report predicted. "The Federal Aviation Administration should proactively approach solutions to preempt the return of the same debilitating conditions experienced by system users in 2000." United Airlines next month will increase block times for the bulk of its O'Hare schedule to offset airport congestion and improve operational performance.
Airlines Seek Rights for Long-Haul Washington NationalSeveral airlines this month submitted to the U.S. Department of Transportation proposals to begin long-haul, nonstop service from Reagan Washington National Airport. The applicants seek to take advantage of the Vision 100 Federal Aviation Administration reauthorization bill that calls for 12 additional slot exemptions for services from the airport to destinations beyond the current perimeter of 1,250 miles. Alaska, American, America West, Delta, Frontier, United and US Airways were among those requesting slots for nonstop service primarily to cities in the western United States. DOT's selections are expected this spring.