Ultramar > Travel Management

November 20, 2007

Southwest Unveils 'Business' Fare Class
Southwest Airlines this month announced a new fare class for business travelers, called Business Select, that allows passengers to board and find seats ahead of general boarding. The special fares, which are $10 to $30 more than regular one-way tickets, are listed in the global distribution systems under K class, a fare category previously used to indicate non-revenue travel. Business Select participants also earn bonus frequent flyer points and are given a free cocktail during their flight.

Delta Open to Merger
Delta Air Lines CEO Richard Anderson in a statement last week refuted media reports that the carrier was in merger talks with United Airlines, but said a positive merger "could generate significant value for our shareholders and employees, and strategic options should be evaluated." Record high oil prices of more than $90 a barrel has prompted the airline to consider a merger as part of its long-term planning process, Anderson said.

Satisfaction with Car Rental Declines
Taxes, fuel costs and fleet conditions this year have taken a toll on the car rental industry, according to the 12th annual J.D. Power and Associates 2007 Rental Car Customer Satisfaction Study. Customers reported lower levels of satisfaction than they did last year, in all six categories: cost and fees, pick-up process, rental car, return process, reservation process and shuttle bus/van. One-third of business customers said price is the top factor in choosing a rental car provider, while 20 percent of respondents make their decisions based on previous experiences and 16 percent said provider selection is based on their company's travel policy. Enterprise Rent A Car ranked as the highest provider for overall satisfaction, followed by Hertz and National.

Chains Open New Properties
Carlson Hotels Worldwide said three new Radisson locations have opened in the United States since August--in Bloomington, Ind.; Albuquerque, N.M. and Bloomington, Minn. The company also opened seven new Country Inn & Suites around the country since August. Meanwhile, the first Hyatt Place in Massachusetts opened last week in Medford, near Boston. InterContinental Hotels Group opened its newest Staybridge Suites in Sacramento, Calif., and Embassy Suites Hotels opened a property in Valencia, Calif.

Continental Plans Heathrow Flights
Continental Airlines announced last week it would offer twice-daily nonstop service to London Heathrow Airport from both Newark and Houston, beginning March 29, 2008. The flights, subject to regulatory and slot approval, would fly into Heathrow's terminal 4 along with other SkyTeam alliance carriers.

ARC Sales Up Nearly 9 Percent
October sales by U.S. travel agencies jumped 9 percent over the same month last year and totaled $7.1 billion, according to ARC. Domestic airline ticket sales were up nearly 4 percent to total $3.4 billion, and international sales were up almost 15 percent to $2.8 billion.

Travel Industry Advocate Groups To Merge
The Travel Industry Association of America and the Travel Business Roundtable have announced a new partnership that will lead to the two groups merging in 2009. The partnership, which also includes the Discover America Partnership, will feature a joint public affairs program, stronger internal government relations capabilities, a new grassroots program, a public policy research center and, eventually, a new name for the combined organization. The two groups have previously cooperated on facilitating travel to the United States through reforms to the U.S. visa and entry processes and the creation of a sustainable, nationally coordinated promotion program.

NBTA Addresses Secure Flight Concerns
The National Business Travel Association last week filed comments with the Department of Homeland Security asking the agency to address concerns over the Secure Flight program. NBTA urged DHS to extend the implementation period, improve information security protocols and consider enhancing the redress program for travelers mistakenly placed on terrorist watch lists. "We are pleased to recognize that since the original Secure Flight testing phase in 2004, some progress has been made in addressing several recommendations made by NBTA in previous comments," said NBTA executive director and COO Bill Connors. "However, enhancement efforts must continue to ensure the safety of passengers and efficiency of travel, while protecting the security of the United States."

Busy Holiday Travel Prompts Gov't Action on Delays

SITA Survey Shows Airline IT Trends

Airlines are adding more online check-in capabilities and self-service kiosks, according to a recent survey. More than half of the 100 airlines responding to the ninth annual Airline IT Trends Survey by air transport IT services company SITA said they offer online check-in, with that number rising to a projected 89 percent in two years.

Messages from Ultramar

Ultramar would like to thank those clients and friends that visited our booth last week (Nov. 12-15) at the CONCUR INTERNATIONAL USER CONFERENCE held at the Marriott Desert Ridge Resort in Phoenix. Some 1,100 people gathered to hear about Cliqbook developments, expense management and going global. We were thrilled to get some really great endorsements from our clients that spoke at the conference about Ultramar's contribution to their program. We had some great traffic at our booth which kept Evan and Barbara really busy. We hope to see even more of our clients at next year's conference!

We are pleased to announce that The Culinary Institute of America (CIA)--which offers bachelor's and associate degrees in Culinary Arts Management and Baking and Pastry Arts Management, as well as continuing education, conferences, travel programs, and e-learning--has selected Ultramar as it's travel management partner. The CIA selected Ultramar because of our expert integration with Cliqbook and Concur Expense Management. The finance committee evaluated several TMC's and Expense Management/Reporting solutions and found that the Ultramar/Concur offering was the best solution to accomplish the CIA's goals of achieving efficiency, savings and accuracy.

Widespread delays are expected this holiday week as 27.3 million passengers take to the skies during the 12-day period from Nov. 16 to Nov. 27, according to the Air Transport Association. That volume represents a 3.9 percent increase over last year and will generate a 90 percent average load factor for airlines. This year has already been the worst on record for flight delays and cancellations, and the federal government has repeatedly indicated that it would intervene if the industry fails to improve performance.

President George W. Bush last week announced a five-day allocation of military airspace to commercial operators for a "Thanksgiving Express Lane" along the East Coast. He also laid out longer-term plans to ease congestion at major airports. For example, the Department of Transportation and the Federal Aviation Administration are evaluating mandatory contingency plans to aid stranded passengers and penalties for chronically delayed fights that would take effect by next summer. Bush also proposed to double denied boarding compensation for passengers.

Bush also proposed "market-based incentives" with congestion pricing. Airlines would therefore have to pay higher fees for flights at peak hours, and airport take-off and landing slots could be auctioned to the highest-value flights. Airlines have strongly resisted congestion pricing and scheduling caps, but Air Transport Association president and CEO James May issued a statement applauding the efforts of Bush and federal agencies "for the numerous operational steps they are taking to improve air service and reduce delays."

The Association of Corporate Travel Executives, however, called the efforts "a Band-Aid on a broken arm."

"While additional compensation to delayed passengers and extra steps taken to assist stranded travelers both sound good, the White House is sidestepping the major source of congestion, the ATC infrastructure that has failed to keep pace with passenger demand," said ACTE executive director Susan Gurley. "Furthermore, the administration's new steps barely hint at the FAA's long-term responsibilities, and shift the blame to congress and 'market-based' solutions."

Bush acknowledged the need to modernize the air traffic control system, but said the related congressional bill would take time to approve and implement.

The Transportation Security Administration also laid out its plans to deal with the busy holiday travel week with new public service announcements encouraging travelers to pack in a way that allows security officers to quickly determine whether a bag carries a security risk. Travelers are also encouraged to arrive at the airport early to allow for extended security checks.

Currently, more than one-third of passengers use those alternatives to avoid long lines at airport check-in counters. The survey showed that 21 percent of customers currently flying on respondent airlines use the Internet to check-in. That figure is expected to rise to 35 percent by the end of next year. Forty-nine percent of passengers expect to use self-service kiosks by the end of 2008.

Within the next two years, 76 percent of respondent airlines said they would offer mobile check-in for flights. Use of electronic tracking tags for luggage is currently limited to just 2 percent of carriers, but that figure is expected to double by the end of the year and exceed 20 percent within two years.

According to the SITA survey, 41 percent of respondent airlines plan to offer Internet access on board within two years, and 28 percent expected to offer inflight mobile phone connectivity within that time. Among other current initiatives in place or planned for the near future, carriers also named passenger notification services, self-boarding systems, lost baggage self service and registered traveler programs. Passengers have also embraced electronic tickets, with a 71 percent penetration rate reported among respondent airlines.

More than half of the surveyed carriers said they were spending more on IT this year than they did in 2006, while 44 percent expected to increase spending in 2008. The priorities for that increased investment were primarily for "projects with proven payback/cost savings," but also for improving customer service, simplifying passenger processes and enhancing network security and compliance.

"It's not surprising to find airline IT spending very much focused on projects with proven payback and/or cost savings," according to SITA chairman Paul Coby. "These were the highest priorities for 92 percent of survey respondents; last year the comparable figure was 83 percent. IT in the airline business these days is about making the whole airline more efficient and effective, not just the 2 percent of the cost base that IT represents."

Contact:
evan.friedman@ultramartravel.com