DR FREUD TO THE WHITE COURTESY PHONE
By Joe Brancatelli
May 24, 2007 -- Card key in hand, I trudge along a long corridor to my hotel room. The wallpaper is flocked and red. My tie is spotted red. My eyes are bloodshot and red. And I realize: I've forgotten my room number.
I drag my sorry ass back down the corridor to the lobby and ask the concierge for help. "Let me see your key," he says cheerily. I hand over my plastic.
"There's your room number right there," he says, pointing to black lettering on the card key that says: "Wine Bar. Room 917."
And then I woke up on Tuesday morning.
As business-travel nightmares go, it wasn't much. But Tuesday happened to be my 54th birthday. I'm not a shrink, nor do I play one in this column, but a nightmare directing you to a wine bar instead of your guestroom on your 54th birthday may have more than a little cosmic significance.
While I try to figure out what my subconscious is telling me--Drink more? Get off the road? Ask for Room 917 at the hotel tomorrow? A cigar is just a cigar?--here is what has been on my conscious mind this week.
HOW THE AIRLINES COULD GET RE-REGULATED IN 2008
This weekend begins what we all expect to be a horrendous summer air-travel season. You know by now the toxic stew that will cause the chaos: Record traffic, rising fares, understaffed airlines, airports clogged with small planes, unhappy employees, declining service and, to top it off, predictions of a harsh season of hurricanes and thunderstorms.
It seems to me this sorry state of affairs could lead to a rush to re-regulation in 2008. In 2000, after that summer meltdown, the traditional media hurriedly pulled up stakes to cover the Sydney Olympics and the 2000 Elections. But in 2007, the dynamics are quite different. The traditional media isn't facing the immediate press of other major events. Bloggers are now omnipresent, able to bring every local airline failing to national attention. And the Democratic and Republican hordes of presidential hopefuls are looking for an issue to separate themselves from their respective packs.
Can't you see some opportunistic Republican calling for airline re-regulation based on a long summer of delays and outrages? Even better, he can blame the industry's 1978 deregulation on the Democrats in general--and conservative bęte noir Ted Kennedy in particular. After all, it was Kennedy's Judiciary committee (led by its chief counsel, Stephen Breyer, who now sits on the Supreme Court) that cleared the way for deregulation.
But an opportunistic Democratic candidate could jump on the issue with equal vigor. Democrats love to regulate stuff and what Democratic presidential candidate wouldn't look good beating on overpaid, arrogant airline chief executives like United's amoral Glenn Tilton, US Airways' boy wonder Doug Parker or American's tone-deaf Gerard Arpey?
HOW THE BIG SIX ARE MORPHING INTO PAN AM
Speaking of deregulation, remember how it contributed to the death of the already rotting carcass of Pan Am, the one-time "chosen instrument" of U.S. aviation? Right after the airlines were deregulated, major carriers flooded Pan Am's international routes with new competition. Without a network of domestic feeder flights of its own, Pan Am lost many of its most loyal flyers to other carriers.
So why are the surviving Big Six busily morphing into 2007 versions of Pan Am? They are dumping domestic routes with gusto and flying to the most peculiar places in Europe and Mexico. Delta Air Lines is most notable--it has launched about 60 new international routes since its 2005 bankruptcy and slashed domestic flying by about 20 percent--but others are following. Last week, for example, United announced another domestic capacity reduction and a shift of assets to international routes.
The big swing to international service is even more suspect given the fact that Big Six overseas routes are now more susceptible than ever to attack from both the top and the bottom of the market. All-business-class competitors such as Eos, Maxjet, Silverjet and L'Avion are fighting for premium-class customers with better prices and more perks. And a new wave of low-fare, low-frills carriers such as Flyglobespan, Oasis Hong Kong, Eurofly and Zoom are working to steal price-sensitive flyers.
Of course, no one ever accused the Big Six of learning from--or even reading--history.
THE LEGACY OF OFF-WITH-HIS-HEAD FRED
Speaking of history, the Department of Transportation's (DOT) decision last Friday to allow Virgin America to begin service later this summer came with a caveat: Chief executive Fred Reid will have to depart the airline six months after its launch. Reid was hired by Richard Branson, who created Virgin America, and was perceived to be a tool of Branson, a foreign citizen who's not allowed to control a U.S. carrier.
Other than its first route (New York-San Francisco) and some sketchy details of its two-class service, we don't know much about the kind of airline Virgin America will be. But we have plenty of history on Reid. Consider, for example, this choice bit of verbiage from his Virgin America biography:
Among his recent achievements at Delta, he oversaw the creation of Song, Delta's low-fare airline brand, and headed Delta Connection, the world's largest fleet of regional jets. He was instrumental in building SkyTeam, the world's most integrated global airline alliance, and directed the successful acquisition of regional carriers ASA and Comair.
Well, lessee now. Song tanked after consuming at least $65 million in start-up funds and lord knows how much in operating losses during its three-year run. Delta sold off Delta Connection carrier ASA in 2005. Delta Connection carrier Comair has been an operational and financial black hole since Delta bought it. It, too, is for sale. And both ASA and Comair routinely languish at the bottom of the DOT ratings for on-time performance and checked-bag efficiency.
MEANWHILE, BACK AT THE AXIS OF EXCESS
The Fred Reids, Glenn Tiltons, Doug Parkers and Gerard Arpeys of the airline world have done a wonderful job reviving the aviation industry's axis of excess. But what is going on at Northwest Airlines as it prepares for its exit from bankruptcy next month is nothing less than a national disgrace.
As you may recall, Northwest convinced its bankruptcy-court judge to allow it to rip up its valid contract with flight attendants and impose $195 million in annual concessions on them. When flight attendants tried to strike, Northwest got another federal court to rule that they must work under a contract they never approved and, in fact, had twice rejected.
Whipsawed by two federal courts, the flight attendants eventually accepted the massive concessions. But it is worth noting what Northwest is doing with some of the money that it beat out of the flight attendants, who earn about $36,000 a year after 15 years of service:
· Chief executive Doug Steenland will be given restricted stock and options worth $26.6 million.
· Four executive vice presidents will receive stock grants worth between $10-$13 million each.
· When the airline exits bankruptcy, 395 other top executives will get stock that may be worth the equivalent of almost $1 million each.
· Outgoing chairman Gary Wilson, who bought Northwest with debt, then took it public and sold most of his stock before bankruptcy, will receive $2 million in cash as a parting gift. He'll also get lifetime medical and dental coverage, free travel and a $75,000 annual budget for office expenses.
· Hedge funds and other investors who bought worthless Northwest shares after the airline declared bankruptcy will be paid $5 million.
Enjoy the Memorial Day weekend. I think I'll take a long nap. At least my nightmares make some kind of sense…
ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.
THE FINE PRINT All of the opinions and material in this column are the sole property and responsibility of Joe Brancatelli. This material may not be reproduced in any form without his express written permission.
This column is Copyright © 2007 by Joe Brancatelli. JoeSentMe.com is Copyright © 2007 by Joe Brancatelli. All rights reserved.