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 The Brancatelli File

joe MY FEARLESS FORECASTS
FOR THE NEXT 11 MONTHS AND 11 DAYS


BY JOE BRANCATELLI

January 20, 2005 -- The Reuters wire service on Tuesday described the new Airbus A380 as "overweight, overbudget and still on the ground" and I've quickly adopted that sly turn of phrase as my own personal mantra for 2005. In fact, you're looking at a guy who's so far behind schedule that he didn't even buy his 2005 datebook until this week.

And funny thing about this otherwise plebian little pocket planner: When I flipped to the back to look at the list of travel-related toll-free numbers, I found entries for TWA, Sabena, Swissair, Canadian Pacific Hotels and ITT Sheraton.

I've got a call in to the Gallery Leather Company of Trenton, Maine, and hope to explain to someone there that those airlines are long gone and those hotel firms have merged into other entities and changed their names years ago. But while I wait for a callback and keeping in mind that all predictions--not to mention airlines and hotel chains--are transient, here are my fearless travel forecasts for the remaining 11 months and 11 days of the year.

EXPECT A MANAGEMENT CHANGE AT UNITED AIRLINES
United Airlines is well into its third year of bankruptcy and management has yet to produce a reorganization plan. On top of that, the last figures they released, for November, 2004, show that the airline is still losing an astonishing $6 million a day on operations. Worst of all, unit costs are rising rather than falling. Throw in the fact that the Chapter 11 process itself had already consumed $130 million in legal fees by last June, making United's case one of the most expensive bankruptcies in U.S. history, and you have a recipe for disaster. This is an airline flying blind with a top management that is clueless. Creditors are beginning to grumble, outsiders are floating their own reorganization ideas and, based on some of his recent rulings, it's clear that even the extraordinarily patient bankruptcy judge is losing his patience. Not only don't I think that United will exit bankruptcy this year--that's the latest prediction from management--I don't think that chief executive Glenn Tilton and his boys in the band will still be running the show at the end of the year.

WILL INDEPENDENCE BE INDEPENDENT--OR ALIVE--AT THE END OF '05?
Less than a year after its stupendously ill-advised launch with a squadron of repainted regional jets, Independence Air (fka United Express carrier Atlantic Coast) faces two possible futures: a return to the United fold as the Express commuter carrier based at Washington/Dulles or outright extinction. Since its launch as an independent airline last June, Independence has been met with yawns by the flying public, which has rarely bought more than half of the carrier's seats even with fares as low as $29 one-way. Gushing startling amounts of red ink, Independence started the year by dropping two cities (Dayton and Lansing) and it will eliminate a number of routes from Orlando and Tampa at the end of the month. It's also trimming frequencies in most of its other markets. Some new flights are scheduled for launch in February and March using Airbus A319s, but Independence was the wrong idea with the wrong planes at the wrong time in the wrong places. If its bid to resume its old United Express position doesn't come to fruition, Independence probably won't have enough emotional gas or hard cash to survive the year as an independent.

WHEN BRANSON TALKS, MILLIONS LISTEN--AND ARE FOOLED AGAIN
At the unveiling of the aforementioned, double-decked Airbus A380 in France, everyone's favorite pitchman, Richard Branson, was at his quotable best. He promised to outfit Virgin Atlantic's version of the A380 with double beds and claimed that his U.S. airline, Virgin America, would take to the skies this year. Now I like Branson as much as the next snake-oil salesman, but when does bombastic promotion cross the line into outright lying? Branson has been promising double beds since 1999, the year he got caught napping when his arch-competitior, British Airways, introduced lie-flat beds in its business class. But his claim about Virgin America is even more absurd. He's been predicting a U.S. offshoot since at least 1999, too. And while there are now some start-up teams in New York and San Francisco run by a bunch of Delta Air Lines retreads, even they admit that there is no chance that Virgin America could launch in 2005. Why? Virgin America currently has no funding, no routes, no planes and--most important of all--no U.S. government approval to fly. In fact, Virgin America hasn't even applied to the relevant agencies yet. And keep in mind one other thing: Just weeks before JetBlue Airways launched in 2000, Branson inexplicably pulled out of a deal to be JetBlue's front man and have the carrier named Virgin America. Bottom line: Branson's track record in the United States is about as bad as the ratings for his short-lived reality show on Fox.

WATCH FOR AN INTERNATIONAL FARE-SALE BAZAAR
The airlines plying the Atlantic between the United States and Britain should be announcing their now-standard $99 "London in February" fare sales any day now. This year, however, the London sales are likely to be the prelude to an almost endless stream of international fare breaks. Why? The same overcapacity that plagues the US-London routes will soon afflict many other international routes. Desperate to escape low-fare competition in the United States, the Big Six airlines are expanding rapidly--I would suggest recklessly--overseas. There's likely to be upwards of 50 percent more international capacity in 2005 than there was last year. Are there enough passengers to fill up all those seats that will soon be flying nonstop to Bristol, Belfast and any number of new destinations in Central and Latin America? Of course not. So watch for all manner of sales, promotions and gimmicks to get you to fly internationally. And the sales will include premium-class cabins as well as coach class. Enjoy the bounty while you can.

This column originally appeared at JoeSentMe.com.

Copyright 1993-2005 by Joe Brancatelli. All rights reserved.