EXECUTIVE TRAVEL SKYGUIDE E-ALERT 05/23/05 Welcome to EXECUTIVE TRAVEL SKYGUIDE E-ALERT for the week of May 23, the weekly e-mail of essential business travel news! To sign up for the e-Alert, click here. It's Official: US Airways, America West will merge United faces May 31 deadline with unions S&P sees continuing grim outlook for legacy carriers Continental gets a new partner in Hawaii DOT Secretary says low fares are draining Aviation Trust Fund Newspaper says long waits at airport security are declining MSP approves larger expansion plan for 2007 and beyond Hotel news briefs: Starwood eyes Meridien; Marriott to debut HDTV AIRLINES It's Official: US Airways, America West will merge The much-anticipated merger of bankrupt US Airways and America West was formally announced last week - a development that will create the nation's fifth-largest airline, and will elicit a sigh of relief from US Airways Dividend Miles members who worried about the future of their accounts given that airline's shaky status. The combined company will be called US Airways, but it will be run by America West CEO Doug Parker and a 13-member board that includes only four current US Airways directors. Headquarters offices will be consolidated into America West's Arizona facilities; for flight operations, the combined airline will maintain primary hubs in Charlotte, Phoenix and Philadelphia; secondary hubs in Las Vegas and Pittsburgh; and focus cities at Boston, New York LaGuardia, Washington D.C. and Ft. Lauderdale - basically what the two airlines have now. It could be a while before the merger is complete. It must be approved by the government and the bankruptcy court. The companies said that both airlines will maintain separate operating certificates for a "transition period" of two to three years. But they will "coordinate schedules, frequent flyer programs and other marketing programs as soon as practical," a spokesman said. As for the mileage plans, "Both airlines' frequent flyer programs will ultimately be combined once the merger is complete," he added. "Members of both programs will retain all of their miles and elite status designation, and will receive similar benefits in the merged airline's frequent flyer program. Other customer amenities will include access to airport clubs, assigned seating and first class upgrades." The new US Airways will be "the first national low-cost, hub-and-spoke network carrier," the companies said. It will also get some new partners. Among the investor groups kicking in some $350 million in new financing are a holding company that owns Air Canada, and another that's owned by Air Wisconsin. Today, the two airlines combined have a mainline fleet of 419 planes; that is expected to drop to 361 as they "rationalize" their route networks, scaling back overlapping service and switching to smaller regional affiliates' aircraft on some route. They also plan to add service to Hawaii, they noted. Officials noted that the merged airline's "new relationship" with Air Canada could mean "the eventual expansion of the Star Alliance agreement, which could include code-sharing with Air Canada." There was no immediate word about the merger's impact on US Airways' existing mileage partnership with United Airlines. United faces May 31 deadline with unions The judge overseeing United Airlines' bankruptcy has postponed until May 31 a ruling on whether the company can terminate its contracts with the Aircraft Mechanics Fraternal Association and the International Association of Machinists and Aerospace Workers. That will give management more time to negotiate a new contract with the latter union. The AMFA already has a tentative new pact, and its members are currently voting on it. If the talks with the IAM are fruitless - and/or if the IAM members reject their new contract - the court could decide to void the contracts anyway and let United impose new wages unilaterally. If that happens, the affected unions could strike. S&P sees continuing grim outlook for legacy carriers A new report from Standard & Poor's about the U.S. airline business predicts the industry overall will add even more red ink in 2005 to its combined deficits of $33 billion from 2001 to 2004. The so-called legacy carriers "can no longer withstand the massive losses they have sustained over the past four years," S&P said, but their recovery is still in question due to fuel costs, excess capacity, "poor balance sheet health" and ongoing concerns about terrorism. The low-cost carriers, on the other hand, are "largely profitable," S&P said, and "may be poised to take over the lion's share of the industry in the future." Continental gets a new partner in Hawaii Continental Airlines said it will begin code-sharing this fall with Honolulu-based Island Air, allowing OnePass members to earn and spend miles on the carrier. Continental said it will put its CO code on Island Air flights from Honolulu to Kahului and Kapalua on Maui; Kona and Hilo on the Big Island; Lihue on Kauai; and to Lanai and Molokai. FAA/SECURITY DOT Secretary says low fares are draining Aviation Trust Fund Lower air fares are great for consumers, but they aren't so good for struggling legacy airlines. And U.S. Transportation Secretary Norman Mineta pointed out last week that they have another downside: They are hurting the government's ability to maintain and improve the airport and air traffic control infrastructure. Speaking in Durham, N.C., Mineta noted that by the end of 2004, average ticket prices were 9 percent below their 2000 levels. And that's a problem, he said, because the Aviation Trust Fund - which pays for the infrastructure that keeps commercial aviation moving - gets its money from the passenger ticket tax, and the ticket tax is fixed at 7.5 percent of the ticket price. So as ticket prices drop, so does the Aviation Trust Fund's budget. Mineta said the current ticket tax is good through 2007, but he suggested Congress might want to restructure the financing of the Aviation Trust Fund before that to fix a growing shortfall. Newspaper says long waits at airport security are declining USA Today said its analysis of Transportation Security Administration records shows that long waits at airport security lines are declining. During the first three months of 2005, the newspaper said, the number of security lines that required a wait of 40 minutes or more dropped to 299, down from 1,140 during the first quarter of last year. The longest waits tend to happen from 6:30-8:30 a.m. and 3:30-5 p.m., the newspaper said. The airport with the most frequent instances of long waits was Los Angeles International, followed by Washington Reagan National and Miami International. AIRPORTS MSP approves larger expansion plan for 2007 and beyond At Minneapolis-St. Paul International, the Metropolitan Airports Commission has given the green light to a $983 million expansion plan. The new blueprint is more elaborate - and expensive - than an earlier growth plan the commission had been working with. The new plan calls for the construction of 4,700 additional parking spaces at the airport's Humphrey Terminal by 2007, or three times as many as the earlier proposal. It also proposes building 12 additional aircraft gates at the Humphrey Terminal in the next two years, vs. half as many in the earlier plan. The construction would permit Northwest and its partner airlines to consolidate their presence in the Lindbergh Terminal (which would also get 36 more gates over time), and all other carriers to move to the Humphrey Terminal. HOTELS Hotel news briefs: Starwood eyes Meridien; Marriott to debut HDTV • Starwood Hotels - the parent of Westin, Sheraton, W, Luxury Collection and St. Regis - is in negotiations to acquire Le Meridien, which has 130 hotels in 56 countries. • Marriott said it expects to install 50,000 flat-panel, 32-inch digital HDTVs in hotel guest rooms over the next four years, mainly in JW Marriott, Marriott and Renaissance properties. The first hotels to get the TVs will be the Cleveland Marriott Downtown at Key Center and the Baltimore Marriott Waterfront. • Microtel Inns & Suites, with 275 locations open or under construction, said it plans to debut free local and long distance phone calls for guests, as well as free wireless high-speed Internet in every room and advance online check-in and check-out. AIR ROUTES DETROIT (DTW). Royal Jordanian on May 23 will replace its one-stop Detroit-Amman flights with non-stop service. The flights operate twice a week, and are code-shared with America West. NEWARK (EWR). On May 26, Continental Airlines adds its newest transatlantic route - a daily non-stop between Newark and Belfast, Northern Ireland, using a two-class 757. NEW YORK KENNEDY (JFK). Yet another transcontinental route will appear on JetBlue's map May 24, when the low-cost carrier kicks off new non-stop service between JFK and Bob Hope Airport in Burbank, Calif. JetBlue will offer three daily roundtrips, adding a fourth on July 15. The airline already flies from JFK to Ontario and Long Beach. THIS WEEK'S DEALS AND SPECIALS FOR BUSINESS TRAVELERS Guests at Econo Lodge and Rodeway Inns properties (800-424-6423; www.choicehotels.com) who belong to Southwest Airlines' Rapid Rewards program will be eligible to earn triple Southwest program credits for stays from June 1 through August 31. You have to notify the front desk at check-in that you want the Southwest triple credit. Got business in Boston? The Onyx Hotel there (866-660-6699; www.onyxhotel.com) has a new plan called the "No Monkey Business Package" for road warriors. Priced from $229 a night, it includes a room, buffet breakfast, 24-hour tech support, executive car service to the financial district, a shoeshine, copies of the Financial Times and New York Times at your door, WiFi Internet access, in-room printing service and use of a fax machine, a martini in your room and an energy bar. It's available through December. To prime the pump for its new non-stop flights (791/790) between New York JFK and Bangkok, Thai Airways (www.thaiairways.com; 212-949-8424) has a business class special available for booking through June 30: Two persons can travel for the price of one regular business class ticket, or $7,463 roundtrip. Tickets are valid for six months; both persons must travel together on the outbound leg, but not on the return. For links to other websites where you can search for bargains, click here: www.executivetravelonline.com/reference/deals.html By Jim Glab To sign up for the e-Alert, click here.