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 The Brancatelli File

joe WHEN NEWS BREAKS,
WE FIX IT


BY JOE BRANCATELLI

February 27, 2003 -- I wanted to write a screed about so many different things this week, but there has been so much news breaking in the last few days that I feel compelled to hold my metaphoric tongue and simply pass along the latest developments in the travel industry.

So, without further ado, here is what has happened since last we met.

UNITED LAUNCHES 307 LOW-FARE CARRIERS
Bankrupt United Airlines says its will dismantle the existing carrier and launch 307 separate low-fare airlines in its place.

In a business plan filed with the bankruptcy court on Wednesday, United envisions dividing the assets and employees of the nation's second-largest airline among the 307 start-ups, each of which will serve a separate geographic area. United's Latin American service, for example, will become a new carrier called Macarena. United's current European operations will be spun off into a new airline called Waltz. On the highly competitive North Atlantic routes to London, United will create a low-fare carrier called Skiffle.

Domestically, United plans to launch at least 245 new airlines. Service from its Denver hub will be organized into a new airline called Rocky Mountain High. Flights to major urban areas such as New York, Chicago and Los Angeles will be organized into an airline called Doowop. A new carrier built around United's hub at Washington/Dulles will be called Sousa.

"I've been looking out the window of my company-funded, $18,000-a-month condo on North Michigan Avenue and I see the problem clearly," explained Glenn Tilton, United's new chief executive. "United is out of touch with the young, hip travelers of today. We need to get rockin'."

Speaking at a press conference where he introduced Grammy winner Jimmy Sturr as the chief executive of Polka, United's new low-fare operation for Ohio, Pennsylvania and upstate New York, Tilton rejected criticism that the plan was out of touch with operational realities and current musical tastes.

"I haven't been in this business almost 180 days without learning some hard lessons," he said. "I checked this out with my new homey [Delta chairman] Leo Mullin and consulted those gear guys over at McKinsey. We all agree that this is the kind of think-tank palaver that customers want."

IRAQ AIR SAYS IT NEEDS CONGRESSIONAL AID
Iraq Airways will demand a federally funded cash infusion if Iraq is invaded by the United States and Britain.

"The entire airline industry is already in crisis and we won't survive if war comes without immediate Congressional aid," said Nimzar Hamdoon Ali Hussein, chairman of Iraq Airways and the estranged brother-in-law of Iraqi dictator Saddam Hussein.

Nimzar said the impeding U.S. invasion has imposed staggering costs on Iraq Airways. In recent months, he said, the airline has installed gas masks that drop down from the overhead bins, placed ration kits at each seat and printed out millions of combination U.S. asylum/welfare-request forms.

"We consider these legitimate national security issues and we don't believe that the Great Satan can ask any airline to bear these costs alone," said Nimzar.

A spokesman for the Air Transport Association said the industry lobbying group supported Iraq Airways' position. "A strong and secure aviation sector is in the interest of all Americans," he said.

The request received a chilly reception on Capitol Hill, however. "We have more immediate priorities," said Rep. John Mica (R-FL), chairman of the House Aviation Subcommittee. "We have to reimburse United for Glenn Tilton's condo. We have to fund the bonus program for [Continental chief] Gordon Bethune. Delta needs tax relief so it can continue to pay for the naming rights of the Delta Center sports arena in Salt Lake City. All these things take precedence over a bailout for Iraq Airways. We'll do what we can, of course, but we have to keep the interests of the American taxpayer in mind."

STARWOOD CREATES A NEW HOTEL CHAIN CALLED 'X'
Starwood Hotels chairman Barry Sternlicht believes that he's found a profitable new hotel niche. The man who created the W chain by stuffing Pottery Barn furniture into trashy old hotels thinks a chain of properties called "X" will be a hit with sex-starved business travelers.

"X will be the nexus of in-room pornography, love for sale and sexual pleasure," Sternlicht told security analysts this week. "This is a part of the hotel market that has been ignored and we have the expertise to develop a unique proposition for these travelers."

Sternlicht stressed that X hotels will offer a roster of sex-related services: 137 channels of on-demand pornography in every room; surcharge-free access to phone sex; room-service menus that stress edible underwear and other foods that could be used in sex play; and "sex concierges" who can arrange discreet sexual trysts of all kinds. Every X hotel will also feature an "X Shop," a boutique that will sell sex toys, sexual aids and related supplies.

The first X properties will be drawn from the chain's roster of Sheraton hotels. "We don't think that these hotels will need much renovation," Sternlicht said. "They're already shabby and most have guestrooms that look surprisingly like the bedrooms you see in porno movies."

STATE DEPARTMENT ISSUES TRAVEL WARNING FOR UNITED STATES
In an unprecedented move that reflects the dangerous and uncertain nature of domestic travel, the U.S. State Department issued a "Travel Warning" urging Americans to avoid unnecessary travel in the United States.

"Conditions throughout the United States remain unsettled and dangerous," the document said. "The U.S. government's continuing refusal to cooperate fully with the U.N. Security Council has led to mounting tension between the United States and the international community. The Department of State reminds Americans that U.S. citizens and interests are at a heightened risk of terrorist attacks, including by groups with links to Al-Qaida. Americans should remain vigilant with regard to their personal security and exercise caution while traveling in the United States."

Travel-industry officials immediately decried the State Department's decision and accused the government of trying to destroy the travel industry in the United States.

"Those tin-pot bureaucrats in the State Department are fools," said Continental chief executive Gordon Bethune. "Where do they want red-blooded Americans to travel? Canada? You ever been to Canada? A bunch of hosers skating on the ice and whizzing in the snow after eating at Tim Horton's."

NORTHWEST ANNOUNCES CODE-SHARING DEAL WITH GREYHOUND
Northwest Airlines said Wednesday that it had concluded a code-share and marketing agreement with Greyhound, the nation's largest bus line.

Effective immediately, Northwest said it would put its "NW" code on Greyhound bus routes to and from the carrier's hubs at Minneapolis, Detroit and Memphis. Beginning March 15, Northwest will phase out flights to any city where Greyhound offers competing bus service.

"We're committed to driving down costs and it's more efficient for us to code-share with Greyhound rather than run our own flights," said Northwest president Doug Steenland. "We believe Northwest customers will find that Greyhound offers a level of service consistent with what they have come to expect on Northwest."

In a related matter, Steenland confirmed that Northwest is in conversations with Japan's Yokohoma Lines (YL) about a potential code-share deal. "We're in the preliminary stages," Steenland said, "but we think the opportunity exists to eliminate some of our transpacific flights, rationalize our Narita hub and code-share with YL on their tramp steamers."

This column originally appeared at JoeSentMe.com

Copyright 1993-2004 by Joe Brancatelli. All rights reserved.