MARCH 2014 NEWSLETTER Public Says No to Inflight Cell Calls PAGE 3 Red Roof Introduces 'Plus' Hotels PAGE 5 DELTA MAKES CHANGES TO SKYMILE PROGRAM PAGE 2 1 INFocus Newsletter Delta Introduces 2015 SkyMiles Program with New Mileage Earning Structure those less frequent leisure customers Delta Air Lines has taken another SKYMILES MILES MILES EARNED TOTAL PROGRAM PER WITH CREDIT MILES PER who purchase premium fares. The step in its ongoing commitment to STATUS DOLLAR• CARD•+ YEAR move is consistent with a trend in the improve the travel experience by General member 5 +2 7 travel industry of rewarding customer unveiling changes to the SkyMiles behavior based on price. Customers program. The 2015 SkyMiles program Silver Medallion 7 +2 9 will continue to earn additional miles will introduce a shift from today's Gold Medallion 8 +2 10 for purchases with a Delta SkyMiles current model in which customers Platinum Medallion 9 +2 11 Credit Card+. earn redeemable mileage based on SkyMiles members will gain distance traveled to one based on Diamond Medallion 11 +2 13 even more redemption options with ticket price. The program updates will + on Delta spend the introduction of up to a five-tier be effective Jan. 1, 2015 and will also structure to give them a wider variety five and 11 miles per dollar spent based include a new mileage redemption structure that will improve Award on their SkyMiles status, and continue of Awards and improve overall availability seat availability at the lowest mileage to earn up to an additional two miles per at the lowest price points. The lowest level requirement levels, offer One-Way Awards dollar* when using their Delta SkyMiles for SkyMiles Saver Awards will remain at at half the price of round-trip, provide Credit Card, for a total of up to 13 miles 25,000 miles for an Economy Class Award additional Miles + Cash Award options, as per dollar. The updated program will ticket for travel within the U.S. and Canada well as make significant improvements to better reward the customers who spend excluding Hawaii. All of Delta's worldwide delta.com and Delta reservations Award more with Delta and give them improved redemption charts will be updated to reflect the new options in the last quarter mileage-earning opportunities. shopping tools. "The introduction of a new model of 2014 and will be effective for new Award A New Mileage Earning Model Today's method of earning redeemable for earning miles will increase rewards bookings beginning Jan. 1, 2015. miles based on the distance a customer for those who spend more as well as In addition to offering multiple new flies will change to a model of earning differentiate the SkyMiles frequent flyer redeemable miles based on the price of program for our premium travelers," said redemption levels, the SkyMiles program the ticket purchased. Delta is providing 10 Jeff Robertson, Delta's vice president – will also introduce One-Way Award tickets starting as low as 12,500 miles within the months advance notice of the upcoming SkyMiles. The updated mileage-earning plan, for U.S. and Canada excluding Hawaii and program changes so that customers have travel beginning Jan. 1, 2015, will better will offer customers the ability to redeem ample time to make travel plans. Customers will be able to earn between recognize frequent business travelers and CONTINUED ON PAGE 8 2 INFocus Newsletter United Airlines cracking down on carry-on bag size By Scott Mayerowitz, Newsday United Airlines is getting tough on passengers with oversized carry-on bags. The Chicago-based airline has installed new bag-sizers at most airports. It also emailed its frequent fliers, reminding them of its rules on carry-on size. United says there is no change in policy -- just a campaign to improve passenger awareness. Some of United's new sizers are located before security checkpoints. As of Saturday, employees contracted by the airline are sending passengers whose bag exceeds the dimensions for carry-ons back to the ticket counter, where they check the bag and pay a $25 fee. Airlines have traditionally asked people with oversized bags to check them at the gate, but waived the $25 fee at that point. Some travelers are suggesting this is part of a larger attempt by United to collect more fees. The airline says it's simply trying to speed up the boarding process. The size limits on carry-on bags have been in place for years, but airlines have been inconsistent in enforcing them. Passengers are allowed one carry-on bag that needs to be 9 inches by 14 inches by 22 inches or smaller to fit in the overhead bin. They can also bring along one personal item such as a purse or laptop bag that fits under the seat in front of them. In 2008, U.S. airlines started charging $25 to check a suitcase. To avoid the fee, more passengers started bringing their suitcases -- many of them overstuffed -into the airplane cabin. Suddenly there wasn't enough room in the overhead bins for everyone's bag. Although more United passengers may end up paying a $25 fee, having fewer bags on board could also have its benefits. "I've been whacked more times than I can count by people loaded down with their life's worldly possessions," says Brian Kelly, an industry watcher who writes about flying trends at ThePointsGuy.com. U.S. Flying Public Really Doesn't Want Inflight Cell Phone Calls By Jay Boehmer, Business Travel News The U.S. Department of Transportation this week began soliciting public comments on a straightforward question: Should the government lift a ban on inflight cell phone calls? "NOOOOOOO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!," was the full response from one commenter. It was representative of many public submissions that implored the federal government to keep the ban intact. Here's another: "NO WAY! This is a horrible idea!" As of midday Wednesday, more than 99 percent of the 492 comments filed this week encouraged DOT to maintain the ban. Only 12 commenters were in favor of allowing inflight calls, with an additional three submissions suggesting lifting the ban but with caveats. Some commenters were anonymous, some identified themselves as frequent travelers and others claimed to be flight attendants or pilots, but virtually all were united in opposition. In addition, many shared what they viewed to be a deteriorating inflight experience that only would be exacerbated by phone talkers. Many others commented on what they viewed as widespread erosion of etiquette, onboard and off. "As a regular business flyer, I find the current state of the plane environment to be stressful, uncomfortable and confusing," wrote Fred Bruno. "Permitting the use of cell phones by passengers would only increase this level of discomfort and add a truly annoying activity within a confined space. Obviously, I am against allowing cell phone usage on aircraft." "In a cattle-car environment of economy class, voice calls will make an already unpleasant experience unbearable," noted one anonymous commenter. To some, allowing calls inflight would pose a safety hazard, as it could lead to passenger altercations and interfere with crew instructions. "This is a safety issue because someone is going to punch someone for talking too loudly," commented Nathanael Bray. One anonymous commenter noted that "people already argue about seat backs and tray tables and paying for food." One commenter identified as a flight attendant indicated it's hard enough to share safety and other relevant flight information with passengers. It only would get harder if flyers were on phones. Patrick Obregon, meanwhile, didn't view the question as "a safety issue so much as a social contract and common decency issue." Among the very few in favor of lifting the ban, the prevailing rationale was that airlines, not the federal government, should make the determination. "As it stands now, cell phones are not banned in similar situations on other forms of transportation, and it seems to be an unreasonable intrusion into the freedom of both the airlines and their passengers for the government to ban their use," according to Matthew Walters. "I believe that voice calls should be allowed on aircraft," noted Jason Rabinowitz. "Many airlines across the world have had this feature for years with not a single recorded instance of abuse or passenger fights." The Points Guy, a frequent flyer blogger, identified a number of international airlines CONTINUED ON PAGE 5 March 2014 3 United Culls Noncompliant Contracts, Delta Sustains 'First-Mover Advantage' By Jay Boehmer, Business Travel News The new watchword from United Airlines on corporate contracts is "compliance." That is, corporate accounts not delivering on negotiated commitments might not stick around. Presentation slides accompanying remarks delivered Monday by United chief revenue officer Jim Compton at the J.P. Morgan Aviation, Transportation & Industrials Conference in New York noted that the airline during the last three months of 2013 "reduced [the] number of noncompliant corporate contracts by 25 percent" from the preceding quarter. "One of the indicators that is firming is this concept of compliance," Compton told investors. "You can get corporate contracts really, really easy," he said, but added, "What's really important is: Is the deal working for you? Is it working for them?" Meanwhile, Compton noted that revenue management adjustments made in the fourth quarter have helped the airline capture fewer far-out bookings in favor of close-in bookings. The latter are more likely to be booked by business travelers at a higher fare. 4 INFocus Newsletter United previously attributed its industrylagging third-quarter 2013 revenue performance to flawed demand forecasts baked into its revenue management systems. That appears to be on the mend. "Tickets issued 21-plus days out for travel in January and February were down 3 percent" year over year, Compton said Monday. "Tickets issued within 20 days were up 11 percent in the first two months of the year." While Compton did not detail corporate revenue trends for the first two months of 2014, he disclosed that full-year 2013 corporate revenue was up 5 percent from the prior year. The growth rate accelerated throughout the year, he said, and was up 7 percent in the fourth quarter from the prioryear period. 'First-Mover Advantage' Key To Delta's Corporate Success Delta Air Lines, meanwhile, continues to post solid gains in corporate revenue. According to presentation materials from the conference, ticketed corporate revenues this year are tracking 6 percent ahead of the prior-year period. Delta reported the largest year-over-year revenue gains among clients in financial services (15 percent increase), automotive (11 percent), media (10 percent), business services (10 percent), banking (7 percent), technology (6 percent) and health care (6 percent). Ticketed corporate revenues from accounts in the defense and manufacturing industries, however, are down from the prior year by 1 percent and 4 percent, respectively. J.P. Morgan airline analyst Jamie Baker during the conference said Delta's corporate share gains have "proven to be impressive," but questioned whether the recently merged American Airlines and US Airways could disrupt the success. In an exchange with Bastian, Baker highlighted "corporate share that American has ceded to you and others," but stands to win back as the merged entity "gets its network act back together." Delta president Ed Bastian responded: "Well, you know, American never left the market. We've always been competing with American Airlines and US Airways. I CONTINUED ON PAGE 8 Virgin America plans to compete with Southwest at Love Field By Jerry Limone, Travel Weekly Virgin America will capitalize on the expiration of restrictions on long-haul flights from Dallas Love Field by launching three routes from the airport, if the carrier acquires the gates it needs. Starting in October, the airline plans to fly to New York LaGuardia and Washington Reagan National four times per day. Virgin America intends to begin twice-daily service to Chicago O’Hare in 2015. The gates needed for the service are being divested by American Airlines, a condition set by the Department of Justice to allow the carrier’s merger with US Airways, Virgin America said. In addition to the new service from Love Field, Virgin America said it wants to move existing daily service to Los Angeles and San Francisco from Dallas/Fort Worth to Love Field, and increase the frequency from three to four daily flights to both California cities in 2015. Virgin America said Love Field’s “centralized location makes it a more convenient choice for Dallas-based and Dallas-destined business travelers.” Virgin America will go head-to-head with the largest airline operating out of Love Field, Southwest Airlines, in three markets: Los Angeles, Washington Reagan National and New York LaGuardia. Southwest, too, will fly to Chicago but to Midway. Last month, Southwest unveiled its Love Field expansion for October, when the Wright Amendment restrictions on longhaul flights from Love Field expire. Virgin America pointed out that it would be the only carrier at Love Field to offer premium-class service. Red Roof Inn introduces 'Plus' delineation By Danny King, Travel Weekly Red Roof Inn this year will introduce a hotel descriptor, Red Roof Plus, indicating additional amenities. Red Roof Plus hotels will have added modern furniture, flat-screen TVs and upgraded bedding. The hotels will also offer “premium” rooms with amenities such as snack boxes, in-room coffee and tea, an ironing board, a mini-fridge and a microwave. INFLIGHT CELL CALLS CONTINUED that allow phone calls, at least on some flights. An Emirates executive, for example, previously told BTN that its allowance of inflight calls was not disruptive to other passengers. Even so, some U.S. airlines including Delta and Southwest indicated they're not interested in enabling inflight phone calls—with or without a ban. While opposed to onboard phone calls, quite a few commenters were in favor of The economy chain, which has about 360 U.S. properties, said it will introduce 31 Red Roof Plus hotels during the early part of this year. The hotel descriptor is similar to a strategy initiated by Best Western International. Since 2010, that company has brought its Best Western Plus and Best Western Premier delineations to North America. Best Western Plus properties include amenities such as mini-fridges, in-room coffee and tea and fitness center. In addition to those touches, Best Western Premier hotels have upgraded linens and flat-screen TVs. Of Best Western’s more than 4,000 properties, about 1,100 are Plus and about 150 are Premier. enabling inflight texting. "Data access is fine," noted Brian Thorn, "but I don't want to listen to Joe Hotshot Businessman talking about his latest deal, nor do I want to listen to Teenybopper Suzie talk about the last totally rad party she just attended." A few were in favor of lifting the ban, but with various conditions. One recommended allowing phone calls as long as they don't interfere with avionics and if "flight attendants are [allowed] to confiscate a cell phone" if a passenger is disruptive. Another was in favor of allowing inflight calls for select periods of flights, perhaps "only during the last portion for when it might be more urgent to arrange ground transport, etc." DOT on Monday issued its advance notice of proposed rulemaking, and through March 26 is "seeking comment on the effects and implications of adopting a rule to ban voice communications on passengers' mobile wireless devices on flights within, to and from the United States." That public feedback initiative is in response to a U.S. Federal Communications Commission proposal that if adopted would revise its current "prohibition on the use of cellular telephones" onboard aircraft. CONTINUED ON PAGE 6 March 2014 5 RED ROOF CONTINUED have no doubt that once they get their act together, as you mentioned, they will be a much stronger competitor, and that is certainly our expectation." Bastian spotlighted what he called Delta's "first-mover advantage in this space," citing the airline's work to restructure under bankruptcy protection, merge with Northwest Airlines and move "quickly to improve the quality of the products and offerings" ahead of the competition. "We are not impacted by the distractions," Bastian said. "We all know, those are tough mergers and tough integrations to accomplish. That's not impacting our performance. What we're able to do is spend all of our time with our corporate customers and invest in the products, the services and the technologies that they prefer." When United and Continental sealed their merger, Delta faced similar questions as Baker's. Yet, even after United eclipsed the Continental brand, "You've seen that we've continued to make progress," said Bastian, "and I think you're going to see some of that same performance. It's a big market out there, and the corporate markets are robust. We're looking for not trying to steal share going forward, but certainly at least to be able to maintain our share, and that should provide us some nice improvement opportunities for the future." Americans using public transit in record numbers Americans are boarding public buses, trains and subways in greater numbers than any time since the suburbs began booming. Nearly 10.7 billion trips in 2013, to be precise — the highest total since 1956, according to ridership data reported by transit systems nationally and released Monday by the American Public Transportation Association. Transit ridership has now fully recovered from a dip caused by the Great Recession. With services restored following economydriven cutbacks, ridership numbers appear set to continue what had been a steady increase. "People are making a fundamental 6 INFocus Newsletter shift to having options" aside from a car in how they get around, said Michael Melaniphy, president and CEO of the public transportation association. "This is a longterm trend. This isn't just a blip." Expanding bus and train networks help spur the growth. Ridership on Los Angeles County Metropolitan Transportation Authority lightrail trains increased six percent over 2012, as the public took advantage of an expanded network of lines. Overall, LA Metro gained nine million trips to reach 478 million in 2013, the transportation association said. Among the other transit systems in California with record ridership was the Caltrain commuter rail service that connects San Francisco with Silicon Valley. Houston, which has been more notable for its sprawl than its public transportation offerings, had a large ridership gain. So did Seattle, Miami, Denver and San Diego. The New York area's behemoth transit network saw the greatest gain, accounting for one in three trips nationally. Transit advocates argue that the public increasingly values the ability to get around without a car. They offer as evidence the nation's urban shift and the movement to concentrate new development around transit hubs. RED ROOF CONTINUED Founded in 1972, Red Roof Inn was acquired from Accor in 2007 for $1.3 billion by a group lead by Citigroup. The company, which as recently as 2009 defaulted on its mortgage loan, last year completed a $150 million renovation program. American Airlines, JetBlue ending agreement American Airlines and JetBlue Airways Corp. are ending an agreement that allowed travelers to add connections to their itinerary on each other's aircraft. The termination of the interline sales agreement is effective Monday. The companies also said that they are ending a reciprocal frequent flyer program accrual agreement. Travelers won't earn miles or points when traveling on eligible routes run by the other airline beginning April 1. All American AAdvantage miles or JetBlue TrueBlue points already accrued through the partnership will be credited to customers' accounts and are not affected. Last month Delta announced changes to its frequent flier program. Starting next year, Delta customers will earn miles based on how much they spend, not just miles flown. American Airlines Group Inc. is the holding company for American Airlines and US Airways. Southwest announces potential flights from Dallas Southwest Airlines Co. is raising the ante over Dallas Love Field. The airline said Monday it'll begin flying next year from Dallas to Boston; Oakland and San Jose, Calif.; Portland, Ore.; and Panama City Beach, Fla. A law banning those flights with large planes like Southwest's Boeing 737s expires in October. Southwest recently announced the first 15 cities it'll serve. Southwest says that if it gets two more gates that American Airlines must sell, it'll fly to San Francisco and Sacramento, Calif.; Seattle; Minneapolis; Philadelphia; Newark, N.J.; Detroit; Indianapolis; Memphis, Tenn.; Charlotte and Raleigh- Durham, N.C.; and Charleston, S.C. Delta Air Lines Inc. and Virgin America also want the gates. The Justice Department will decide. American agreed to sell them to settle a government lawsuit against its merger with US Airways. Choose the newly transformed Hyatt Regency Cincinnati and experience a hotel offering every possible convenience under one roof, including: Twenty-two story atrium with an abundance of natural light Red Roost Tavern—Brand new farm-to-table restaurant The Market—Grab and Go items Glass enclosed indoor pool and outside sun deck 24 hour StayFit@Hyatt health club and full self-serve business center March 2014 7 DELTA SKYMILES CONTINUED Miles + Cash to provide more Award booking options for tickets purchased at delta.com or through Delta reservations. "We've had thousands of direct conversations with SkyMiles members over the past three years and they've told us that Award redemption is the most important attribute to any successful rewards program," Robertson said. "With improvements to delta.com, even more Awards seats at the lower price levels, One-Way Awards and Miles + Cash options, Delta will deliver an improved award redemption experience for all customers." Customers will continue to have access to every seat on any Delta flight as an Award seat with no blackout dates. In 2013, frequent flyers redeemed more than 271 billion miles in the SkyMiles program for more than 11 million Award redemptions. 8 INFocus Newsletter Delta is the only major airline that offers elite perks such as unlimited complimentary upgrades, no mileage expiration, no Award fees, a published Diamond Medallion tier and rollover Medallion Qualification Miles. In January 2013, Delta announced changes to SkyMiles Medallion qualification and introduced new, userfriendly tools for customers later in the year at delta.com and its popular Fly Delta apps to help them track their progress. Medallion qualification guidelines are not impacted by the changes to mileageearning or redemption options. Now in its 33rd year, SkyMiles is one of the longest-running and most successful loyalty programs in the travel industry. Delta offers many ways to redeem frequent flyer miles, including airline tickets on Delta and 28 partner airlines, mileage upgrades, car rentals, hotel stays and Delta Sky Club memberships, and is the only major airline with miles that don't expire. For more information on the SkyMiles program, Medallion status and mileage-redemption options, visit delta. com/skymiles. With billions of dollars invested since 2010, Delta continues to improve the travel experience onboard its aircraft with the recent announcement that it will add access to power on 225 of its domestic narrowbody aircraft, as well as improve technology and facilities including its new Terminal 4 at New York-JFK and the Maynard H. Jackson Jr. International Terminal in Atlanta. Additionally, customers have seen Delta's investment in its more than 50 Delta Sky Clubs throughout the system, installation of power poles in gate areas at more than 40 airports and updates to the popular Fly Delta app which has been downloaded by more than 10 million customers. For full terms and conditions, please visit delta.com/skymiles2015. All SkyMiles program rules and membership guidelines apply.
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