FEBRUARY 2009 BUSINESS TRAVEL FOOTNOTES

Airlines

Airfares Show Some Decreases
Domestic airfares are starting to dip. The average domestic fare fell to $428.29 in December from $525.63 in November according to airfare tracking company Topaz International’s national database. And the average fare for the fourth quarter was $497.69, down from 526.18 for the third quarter. Airfares have been climbing steadily throughout the year, hitting a high of $633.44 in June and trending downward subsequently. (Source: Topaz International Monthly Airfare Index).

IATA Figures Show Air Travel Continues Decline
The International Air Transport Association (IATA) reported that international traffic dropped 4.6 percent in December from December 2007, but that the 4.6 percent decline was far less dramatic than cargo’s 22.6 drop from the previous December. Year-end leisure travel booked in advance kept passenger numbers from falling as dramatically as cargo. Still, a 1.5 percent cutback in supply could not keep pace with falling demand. That meant planes weren’t quite as full. “Airlines are struggling to match capacity with fast-falling demand. Until this comes into balance, even the sharp fall in fuel prices cannot save the industry from drowning in red ink,” said Giovanni Bisignani, IATA’s general director. He pointed out that premium travel—the profitable front of the plane--declined 11.5 percent in November. (Source: IATA press release).

Air France-KLM Invest in Alitalia
Air France-KLM is taking a 25 percent minority stake in Alitalia. The partnership will be based on a multi-hub strategy, adding Rome Fiumicino and Milan Malpensa to Paris Charles-de-Gaulle and Amsterdam Schiphol. The airline said Alitalia’s acquisition for Air One has strengthened its position in the domestic market; the carriers say they will plan to create synergies using network optimization and revenue management. (Source: Air France-KLM press release).

United, British Airways Keep Passengers Connected in the Air
Both United Airlines and British Airways are keeping their passengers connected in-flight on certain routes. United Airlines will begin offering in-flight internet service to customers onboard its p.s. transcontinental service between New York and California starting in the second half of this year. The service will be available in all classes for a flat $12.95 fee on all 13 of the Boeing 757s United flies between JFK and Los Angeles and San Francisco. British Airways will launch text and mobile services on its all-business class service between London City Airport and JFK later this year. Customers will be able to access the internet and send emails from laptops with GSM data cards as well as their mobile phones and PDAs. Voice service may be offered in the future, depending on customer demand and feedback. (Source: BA, United press releases).

California Fare Wares Mean Cheaper Flights
Southwest is expanding its California service, adding five new nonstops between San Francisco International Airport and John Wayne International Airport starting May 1 and kicking off the service with a $69 fare. That followed Virgin America’s announcement that it was starting service between San Francisco and John Wayne International April 30 with a $59 introductory fare. The airfare monitoring website FareCompare.com reported that American Airlines and United Airlines responded with $59 fares April 30 through June 10 and said that a year ago, the two were charging $125 for one-way fights. (Source: Southwest and Virgin America press releases, FareCompare.com blog).

JetBlue to Start Service Out of LAX to New York and Boston in June
JetBlue Airways will begin service out of Los Angeles International June 18. It is JetBlue’s third Los Angeles airport. It will offer two daily nonstops to New York’s JFK and two daily flights to Boston’s Logan International. (Source: Jet Blue press release).

Hotels

Hotel Occupancy Rates Drop, Putting Pressure on Room Rates
There’s more room at the inn for U.S. travelers, with the U.S. hotel industry finishing 2009 with an occupancy rate that was 4.2 percent lower than at the end of 2007, according to hotel consulting company STR. The industry saw a decent start to the year, but became “extremely negative” during the past four months. Although occupancies fell, average daily room rtes actually increased by 2.4 percent. STR says the hotel industry will stay at this level for the next few months, but will see some improvements in the second half of the year. Only two cities saw occupancy go up—New Orleans (8.6 percent) and Houston (2.6 percent). Rates actually went up in many major cities, including Houston (9.4 percent), Denver (6.3 percent), San Francisco (5.4 percent). Ultimately, however, declining occupancies are going to put considerable pressure on hotels to lower their room rates, according to Lodging Econometrics, which covers hotels. (Source: STR Global press, Lodging Econometrics press release).

Starwood, Hilton Add Bonuses to Loyalty Programs
Starwood is celebrating the tenth anniversary of its Starwood Preferred Guest program and Hilton is kicking off the 22nd year of Hilton’s HHonors loyalty program. Both are offering bonuses until spring. Starwood is offering members 10,000 bonus Starpoints for every 10 nights stayed now through April 30. Hilton HHonors, whose members can earn points and miles for the same say is offering double base points at the more than 2,400 participating Hilton family hotels through April 6. Register for the program at www.HiltonHHonors.com/globaldoublepoints. (Source: Hilton, Starwood press releases).

Car Rental

Avis Budget Introduces Satellite TV in cars
You can keep backseat drivers occupied with ATT CruiseCast, a new satellite television service that brings news, family, sports, comedy and music channels to the back seat of your car. Starting later this year, the service will cost $8.95 per day or $62.65 per week. It stores p to there minutes of content so obstructions such as overpasses or tall buildings will not interrupt a program. Channels include MSNBC, CNN Mobile Live, the Disney Channel, Comedy Central and many others. (Source: Avis Budget press release.

Spotlight On… Expense Management in Tough Times

A recent American Express study of Fortune 500 companies and their expense management practices found one of the most effective strategies—and the least expensive to implement—was holding employees accountable for their corporate spending. There were three simple ways,

(Source: American Express press release )

The Travel Authority is committed to providing you with useful information on the latest developments in the travel industry. The following information has been compiled from a variety of sources and is updated monthly.