DÉJÀ VU ALL OVER AGAIN
By Joe Brancatelli
March 13, 2008 -- I've been covering business travel for 25 years now and I have this creepy, crawly feeling that I've seen it all before, written it all at least twice and had a bellyful of the silliness and the fundamental idiocy of it all.
This eerie feeling struck me again today as I opened a folder with my notes for today's edition of The Brancatelli File. It was a real Yogi Berra "déjà vu all over again," Crosby, Stills and Nash "we have all been here before" kind of moment. See if you don't agree with me.
THE $1,200 SOLUTION
Exactly five years ago today, one of my favorite Brancatelli File screeds posted. It all began with an astonishing, two-sentence bit of insanity from Gordon Bethune, who was then running Continental Airlines. "If you have to be in San Francisco for a presentation tomorrow, you are going," Bethune said. "If I say it's $1,200 or it's $800, you are still going." The idiocy and arrogance of that remark was self-evident and the column went on to show how any right-thinking business traveler could turn a Bethune-like flight--Cleveland-San Francisco on Continental for $1,159 one-way--into a more cost- and time-effective trip.
Exactly five years later, Continental's current management team has apparently realized that business travelers are not as stupid as Good Old Gordo thought we were. If you have to be in San Francisco for a presentation tomorrow, Continental's nonstop from Cleveland is $409 one-way in coach and $599 one-way in first class.
Of course, being an airline executive means never having to say you're sorry. Bethune eventually lost a power struggle with a big investor and was forced out of Continental. These days, however, he earns upwards of $25,000 a day dispensing his wisdom to like-thinking airline executives and working for a hedge fund trying to make merger lemonade from its investments in Delta and United.
BRANSON BROACHES THE TRUTH
Speaking of gum-flapping airline executives, I see where Richard Branson admitted last week that Virgin Atlantic isn't going to launch an all-business-class transatlantic airline anytime soon. Considering that Branson has never spun a phony tale that he wouldn't keep repeating for years--Remember his nonexistent double beds in Virgin's Upper Class and his eight years of promises that the launch of Virgin America was just 60 days away?--he deserves credit for coming clean on the truth about his never-was, probably never-will-be all-business-class carrier.
But here's a question for my friends in the media: How many times are you going to report Branson's outrageous and obviously self-serving lies before you learn your lesson? Branson will say anything, especially when lumbering, bureaucratic British Airways beats him to an innovation. The media really shouldn't help him spin his fantasies. Our job is to cover these guys, not promote them, be their secretaries or help them burnish their images so they can jack up their franchise fees.
WHAT'S IN A NAME?
The latest airline to carry the Pan Am name has folded. This latest (and worst) incarnation of the erstwhile "Chosen Instrument" never amounted to much, but it should serve as a warning to anyone else who wants to start an airline. We don't need anyone to revive Eastern or Pan Am or Braniff or Ozark or New York Air or Republic or Southern. If you want to start any airline, think up a new name.
THE SOUTHWEST STUFF
Here's what I know: The Federal Aviation Administration (FAA) wants to fine Southwest Airlines $10.2 million, a record amount, for flying planes several years ago that were not properly inspected. Several Southwest executives and FAA bureaucrats have been implicated in a paper-pushing attempt to wink away whatever problems there were. Yesterday, Southwest briefly grounded almost four dozen planes when some other inspection issues came up. And Southwest has never had a crash-related fatality in its 37 years of operation. To be honest, all the other stuff confuses the hell out of me. I've never seen a more complicated, convoluted situation. I truly don't understand what is happening, which is usually the case when airlines and regulators fight over paper trails.
OIL FOR ONE AND ONE FOR OIL
Oil hit another new high, $110 a barrel, this week. So guess what the big airlines have been doing? Reducing their fuel hedges. According to an Associated Press survey of government filings, all of the Big Six except American have fewer hedges in place in this year's first quarter compared to last year's first quarter. Some examples: United is 15 percent hedged now compared to 33 percent last year; Continental is 20 percent hedged now compared to 30 percent last year; and Northwest is 18 percent hedged now compared to 40 percent in last year's first quarter.
If current prices hold, the airline's own trade group estimates that the carriers will pay about $20 billion more for fuel in 2008 than they had estimated.
Of course, this really shouldn't surprise anyone. After all, when United exited bankruptcy in February, 2006, the bosses based the airline's entire five-year business plan on $50-a-barrel oil. At the time of that projection, oil was already selling north of $65 a barrel and the likelihood of $120-a-barrel oil had already been discussed at the World Economic Forum in Switzerland.
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.
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