Diners Inks Acceptance Pact With MasterCardDiners Club North America and MasterCard International last month announced they signed a final agreement to enact an alliance that bolsters Diners Club global acceptance from 8.3 million vendors to 22 million. The two payment players this year will phase in new Diners Club cards branded with the MasterCard logo. Diners, beginning in November, will transition Canada-based cardholders. By year-end, Diners expects to issue the co-branded cards to new U.S. clients, followed by existing U.S.-based clients. Diners, with existing clients including AIG, BP, Deloitte and KPMG, would not provide a specific timeline nor comment further on the deal. As such, financial arrangements between MasterCard and Diners, as well as which card supplier will provide reporting to clients, are not yet clear. The vendors in April confirmed they were pursuing an acceptance alliance
(BTN, April 26), which followed years of dwindling volume and marketshare for Diners. Corporate customers noted the benefit of expanded acceptance, which prior to the deal was estimated as the lowest among corporate card issuers.
Visa, MasterCard Ruling Expected To Be UpheldAn antitrust ruling against Visa U.S.A. and MasterCard International this month is expected to be upheld, giving American Express authority to partner with U.S.-based banks to issue its cards. The U.S. Department of Justice in 2001 mandated Visa and MasterCard drop exclusionary bylaws that forbade issuing banks to issue Amex or Discover cards. The suit since has been tied up in appeals, and Visa and MasterCard posed the case to the Supreme Court, which is expected to pass on further review, upholding the ruling. Amex this year announced an agreement with consumer issuer MBNA, which is expected to take hold once Visa and MasterCard abandon restrictions. Other partnerships are expected to follow. The move already has rippled through the industry. Since Amex can and will pay more to its bank issuers on a transactional basis, Visa and MasterCard in April increased the rate they pay to commercial card issuers, enhancing issuers' revenue and giving buyers an opportunity to share in that income through rebates
(BTN, March 15).AWA Cancels Agency Incentive Program, Pushes E-PortalAmerica West Airlines late last week terminated its Agency Awards compensation program, encouraging travel agents to use the HPAgentLink online portal where 5 percent commission payments are available. "We are happy to pay commissions, but we need the bookings to go through the direct channel," said Chris Stanley, senior director of Internet and reservations systems distribution. He said the airline plans to further improve the travel agency portal by adding within a few months the ability to handle voided tickets and better back-office integration. Despite development of several lower-cost, direct reservations channels, including a corporate portal, Stanley said AWA has no plans to change its global distribution system relationships. The airline established the Agency Awards program more than two years ago as domestic base commissions were eliminated
(BTNonline, March 22, 2002).U.S. Carriers Vie For China ServiceSeveral U.S. majors applied to the U.S. Department of Transportation for rights to begin new services to China, following an expanded air transport agreement signed this summer by U.S. and Chinese officials
(BTNonline, July 26). American Airlines seeks authority for daily nonstop flights between Chicago and Shanghai, beginning May 1. United Airlines wants to launch daily service in March between San Francisco and the new Baiyun International Airport in Guangzhou, via Tokyo, and upgrade the route to nonstop service in 2006. United already operates several nonstop Asian routes from San Francisco, including services to Beijing and Shanghai. It also flies on the Chicago-Beijing route and on Oct. 31 will launch Chicago-Shanghai flights. Continental Airlines requested approval for nonstop Newark-Beijing flights starting next spring and nonstop Newark-Shanghai service one year later. Delta Air Lines proposed to begin daily Atlanta-Beijing flights in 2006.
American Airlines Eyes More Leg Room ReversalsAmerican Airlines expects to "reach a conclusion shortly" on whether to add seats back to additional aircraft types that had been outfitted with the carrier's more room in coach offering, according to AMR president and CEO Gerard Arpey. Speaking last month during a Society of Airline Analysts conference, Arpey said the earlier decision to reverse course on Boeing 757, Boeing 737 and Airbus A300 aircraft
(BTN, May 21, 2003) "corrected a mismatch between what we were offering and what customers are willing to pay," and generated $60 million in incremental revenue this year.