The Brancatelli File



June 22, 2006 -- Happy first weekend of summer. I hope you're going to be at home, up on the roof, under the boardwalk, down by the sea--or anywhere but on the road.

In fact, I wish that for you all summer long. This is likely to be a lousy season on the road, even by our own diminished standards. Any trip you can avoid this summer is a little bit of your sanity that can be salvaged.

That said, let's also realize that there aren't many of us who actually can sit out the summer. A client beckons. A prospect awaits. A project commands our presence. Even in summer, the road is where we live. The back of our necks will get dirty and gritty.

So what's the summer agenda gonna look like? Here are some things to look for during the next 90 days.

Hotel and car-rental rates are up, of course, and, in some cases, up dramatically. But there are always options: a different hotel brand or another property. And car renters disgusted with on-airport prices can always do business with a nearby off-airport firm or take a cab into town and rent at an in-city rental location, where prices are often much lower. But airfares are different. The Big Six move in lockstep and, as proven by last week's $50 hike on walk-up coach and first-class fares, they seem intent on repeating the insane soak-the-business-traveler tactics that got them into financial trouble in the first place. Since January, 2005, when Delta Air Lines briefly capped walk-up coach fares at $499 each way, last-minute one-way prices have risen an astonishing $200 in most markets--and even more in city pairs where Delta doesn't compete.

When the Big Six report second-quarter earnings next month, something miraculous might happen: All six carriers, including bankrupt Delta and Northwest, may report a quarterly profit. That has never happened since the Big Six became the Big Six in 2000, after TWA disappeared. And if you stretch the timeline back to the Big Seven days, there hasn't been an across-the-board quarter of profit in more than a decade. Does that mean that happy days are here again for the legacy carriers? Hardly. If it happens, an across-the-board quarter of profit will likely be a one-time-only event. For starters, the Big Six target-the-business-traveler fare tactics are self-defeating: When walk-up prices get too high, business travelers stay home, forcing airlines to discount frenetically to lure more leisure travelers. Besides, more capacity is coming into the system. JetBlue Airways, now convinced that it can't endlessly add flights to Florida or on transcon routes, is expanding into high-fare business markets once totally dominated by the Big Six. Southwest continues to expand, too. Virgin America is waiting in the wings and its arrival next year will push down prices, too. And come next year's first quarter, when international traffic always plummets, the Big Six will be discounting like crazy again.

A perfect storm of factors will make this summer one of the least timely, most frustrating seasons on record. The Big Six have slashed at-the-airport staff, meaning there are fewer people than ever to get planes and passengers moving. (They employ about 100,000 fewer people today than in April, 2002, according to government statistics.) The Big Six are also trying to get more flying out of their existing fleets; that's led to unrealistic "turn" times for aircraft boarding and unloading and absurd connecting schedules. Each delayed flight will reverberate through the system even before the inevitable weather-related disruptions take their toll. The delays will be worst around the end of each month. Why? The Big Six will be required to cancel flights because the cascading delays will eat up the crews' federally mandated maximum monthly duty times and no back-up personnel will be available. And let's not forget our friends at the Transportation Security Administration (TSA), which has slashed screening staffs at many large airports.

There's been a sharp and sudden upswing in aircraft mechanicals in recent weeks. The problems have required what seems to be a record number--hard and fast statistics are hard to come by--of in-flight diversions, returns to the airport and outright cancellations. The reason: The aforementioned desperation of the Big Six to squeeze more flying time from its aircraft. It's simple math: The more times you put any one plane in the sky in a day, the higher the chance that a mechanical will force it to malfunction in some way. Add the math to the operational reality: Repairs to less-crucial systems are being deferred to the absolute maximum time allowed by federal regulation. Then throw in the fact that the Big Six are flying aging planes because they have deferred delivery of new aircraft. That's a recipe for mechanical unreliability.

Once upon a time, the TSA promised a nationwide rollout of a registered-traveler security bypass program by Tuesday (June 20). Then it admitted it would only be prepared to name 10 or 20 airports by Tuesday. Surprise! Tuesday came and went without even a public acknowledgement of the deadline by the TSA. Not only won't there be a nationwide rollout, the TSA hasn't even decided on final standards for and benefits of Registered Traveler. Only one airport, Orlando, has a working Registered Traveler plan and no one knows if its procedures will meet the TSA's final standards. Three other airports have signed up with Orlando's private-sector Registered Traveler operator, Clear, but one of those airports (San Jose) has already been told by the TSA that it will not be one of the airports chosen for the next phase of the plan. In other words, don't believe anything you read during the summer about Registered Traveler. It won't help alleviate delays this summer--or any time this year.

Lastly, a bit of good, albeit deferred, news. You're going to hear a lot about new business-class cabins in the months ahead. Delta Air Lines, which has ripped its route network and fleet apart to remake itself as an international airline, has already begun a stop-gap effort to spruce up its aging, and never particularly good, BusinessElite cabins. About a half-dozen of the new planes--with 60 inches of legroom and greater recline on its chairs, upgraded seat coverings and tray tables and improved food and entertainment offerings--are already flying. The rest of the international fleet will be reconfigured over the next year. American and United will reveal the long-overdue renovation plans for their outdated business classes at a trade show next month. LAN, the well-regarded Latin carrier based in Chile, said this week that it is scrapping its existing first-and business-class offerings in favor of a combined Premium Business class. The service will offer lie-flat beds, 15.4-inch video screens and on-demand video and audio programming. And British Airways, which introduced the concept of lie-flat beds to business class six years ago, will announce details of its next-generation C-class cabins.

Copyright 1993-2006 by Joe Brancatelli. All rights reserved.