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Week in Review - 2/17/20

By Industry Intel posted 02-17-2020 00:00


West Coast airline alliance back on. They've had an off-and-on relationship during the past few years, but American and Alaska airlines last week agreed to expand code sharing and establish full loyalty program reciprocity. To better connect American's long-haul network to Alaska's extensive West Coast operation, AA intends to add service from Seattle to tech-heavy Bangalore in October, and from Seattle to London in March 2021. The cooperation doesn't go as far as an antitrust-immunized joint venture encompassing coordinated sales, so corporate clients of the two carriers can't ask for combined contracts. That will change if Alaska joins AA in the Oneworld alliance, as planned for summer 2021. Though alliance contracts joining non-immunized airline partners aren't as integrated as JV deals, they offer some utility for corporate programs.


Fee for all. Airlines for America implored Congress to reject proposed increases in air travel fees that President Donald Trump included in his fiscal 2021 budget request. Airlines for America specifically objected to a $1 hike, to $6.60 per one-way trip, in the Transportation Security Administration Passenger Security Fee for FY2021, and another 25 percent increase, to $8.25, for FY2022. The trade group also criticized proposed increases in fees levied on those subjected to inspection by U.S. Customs and Border Protection. "Increasing taxes in any form" would, among other things, "curtail job growth and limit air service options to small and rural communities," the group contended.


Not-so-simple simplification. For those on a quest to simplify managed travel programs, the biggest hurdle is getting attention internally, according to an ACTE survey. Forty-six percent of 227 corporate travel buyers polled in September and October indicated that competition between priorities within their organizations was the primary factor inhibiting program simplification. Next were limited personnel/staff (42 percent) and a lack of time (38 percent). Travel policy (cited by 22 percent) and data privacy (16 percent) drew the fewest responses of all factors listed in the survey, which HRS sponsored.


Not-so-firm beds. Hilton Worldwide Holdings CEO Christopher Nassetta last week discussed "weaker than expected" business transient performance at his company's hotels during the fourth quarter of 2019. He cited "softer business investment trends," uncertainty regarding the U.S. presidential election, slowing economic growth in China, trade tensions and protests in Hong Kong. Those are all weighing on the demand environment this year, as is the coronavirus. Based on limited data showing a modest pick up in U.S. corporate transient activity in early 2020, Nassetta said he was "hopeful" about the remainder of the year. Hilton CFO Kevin Jacobs noted current business transient weakness across Canada and Mexico, and softer transient demand in the United Kingdom. He shared an "expectation for relatively steady macro trends" overall.


Content aggravation to aggregation. The Company Dime reported that BCD Travel is paying Microsoft $20 million to build a new agent desktop system that would provide service capabilities for bookings made outside global distribution systems, along with multi-GDS searching and booking. BCD more than 10 years ago gave up a similar project due to its cost and as the threat of airlines removing content from GDS subsided. The re-emergence of that threat comes partly from development of the New Distribution Capability standard. “It’s clear that there’s a lack of understanding on the workflows and the servicing aspect of what’s needed for a corporation and a TMC to embrace NDC and really get it to scale," according to BCD Travel EVP Rose Stratford's deposition video, showed during the United States v. Sabre trial. "The complexity is really about shopping, providing transparency, reporting, duty of care and being able to measure that." The U.S. Justice Department's suit to block Sabre’s acquisition of NDC facilitator Farelogix awaits a judicial ruling.


Green good. More U.S. companies in 2018 disclosed greenhouse gas emissions resulting from business travel than for any other indirect activity. That's according to the 2020 edition of the "State of Green Business," published by GreenBiz Group. More than 80 percent of companies did so that year, up from less than 60 percent in 2014.


States and rights. Texas Attorney General Ken Paxton filed suit in U.S. Supreme Court challenging a California law that prohibits the state from funding or sponsoring official travel to other states deemed to be in violation of nondiscrimination laws. The relevant California legislation, which took effect in 2017, targeted states with laws that voided or repealed protections against discrimination "on the basis of sexual orientation, gender identity or gender expression." California's ban currently excludes official travel to Alabama, Iowa, Kansas, Kentucky, Mississippi, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee and Texas. According to Paxton, California added Texas after it enacted a law that let "faith-based foster care and adoption agencies ... decline placements that violated their religious beliefs." He said that "boycotting states based on nothing more than political disagreement breaks down the ability of states to serve as laboratories of democracy while still working together as one nation — the very thing our Constitution intended to prevent." Paxton wants the court to order California to remove Texas from the banned list.


Compiled by the editors of