Sara Hinkson, email: [email protected]

High-Fly Drama: Spirit Airlines Soars into Uncharted Territory with Pilot Strike!

Airlines / By

UAL Corp.’s United Airlines has made headlines with a monumental announcement on Monday, unveiling plans for a merger with Continental Airlines in a transformative deal valued at $3.2 billion. This strategic move solidifies the position of the newly-formed entity as the largest airline globally, a title previously held by Delta Air Lines after its merger with Northwest Airlines in 2008.

The amalgamated company, flying under the United banner and featuring the Continental logo, is poised to become a formidable force in the airline industry, projecting an impressive annual capacity to serve over 144 million passengers and connect to 370 destinations spanning 59 countries. The merger, hailed as a strategic maneuver to navigate the ever-evolving and fiercely competitive airline landscape, aims to leverage the complementary strengths of both carriers.

Jeff Smisek, the Chief Executive Officer of Continental, underscored the synergies between the two companies, stating, “Continental is strong where United is weak; United is strong where Continental is weak. Putting these two carriers together is a match made in heaven.” The sentiment resonates with the notion that the union is poised to address operational gaps and enhance overall efficiency.

Under the terms of the agreement, Continental shareholders stand to receive 1.05 shares of United common stock for each share of Continental common stock they hold. The ownership structure post-merger is expected to tilt in favor of United shareholders, who will command approximately 55% of the combined entity, leaving Continental shareholders with around 45%.

Forecasts for the merged company include robust annual revenues of $29 billion and ambitious cost-saving targets ranging between $1 billion and $1.2 billion over the next three years. The financial stability and improved performance of United, evidenced by a narrower first-quarter loss of $82 million and a notable 15% increase in revenue to $4.2 billion, have played a pivotal role in shaping the negotiations.

Assuming regulatory approval, the merged airline will be headquartered in Chicago, the current base of United, with Houston set to serve as its largest hub, reflecting Continental’s existing headquarters. The holding company will adopt the moniker United Continental Holdings, while the airline brand itself will retain the familiar United Airlines name. Jeff Smisek is slated to lead the newly consolidated company as its CEO.

Addressing concerns about potential fare increases, Glenn Tilton, UAL’s CEO, emphasized the competitive nature of the airline industry, stating that individual carriers do not unilaterally set airfares. Industry observers, however, speculate that the merger could impact pricing dynamics, particularly on international routes and flights to and from smaller cities, where the combined entity may exert more significant pricing control.

Despite potential challenges, industry consultants express overall support for consolidation within the airline sector, citing the necessity for a financially stable industry to best serve the needs of consumers. Recent discussions between United and Phoenix-based US Airways hint at further consolidation possibilities, although analysts caution that the likelihood of additional mergers may hinge on the trajectory of fuel prices, which could exert additional pressure on the industry. The evolving landscape of the airline sector promises both challenges and opportunities, with this historic merger poised to shape the future of air travel on a global scale.

High-Fly Drama: Spirit Airlines Soars into Uncharted Territory with Pilot Strike! Read More »

Rise, Fall, and Reckoning: The Untold Tale of Howard Johnson’s Closure in 2009 – A Riveting Journey Through Local Hotel Turmoil

Hotels / By

HOUMA — Local hotel proprietors faced a challenging period of low occupancy rates in late 2009 due to diminished business travel, with Thibodaux’s Howard Johnson ultimately succumbing to closure on January 15, concluding its four-decade run in the industry.

David Jones, who served as manager and part owner for 19 years, acknowledged the impact of the recession, stating, “We just couldn’t make it work anymore.”

Following hurricanes Katrina and Rita, the Houma-Thibodaux area experienced a surge in business travel, driven by a flourishing oilfield and an influx of hurricane-recovery personnel, leading to a proliferation of hotel construction. Since 2005, Terrebonne’s hotel rooms more than doubled, and Lafourche’s increased by approximately a third, excluding ongoing construction projects like Wingate by Wyndham and Courtyard by Marriott in Houma.

However, current trends reveal a growing number of unoccupied rooms. Although specific occupancy figures were not immediately available from local tourist bureaus, sales-tax data from both parishes indicated a significant downturn in hotel business over the latest three months for which information is accessible.

In Lafourche, hotel sales-tax collections dropped by 38 percent in October, 54 percent in November, and around 47 percent in December, compared to the same months in 2008. Terrebonne experienced a similar decline, with collections down 58 percent in October and 37 percent in November and December.

Howard Johnson, which traditionally maintained an occupancy rate ranging between 55 and 60 percent in a typical year, witnessed a dramatic fall to as low as 20 percent in the final months of 2009, leading to the difficult decision to close its doors. This decision also resulted in the displacement of approximately 30 employees.

Despite recent renovations amounting to $150,000, the aging Howard Johnson faced stiff competition from newer establishments like the Hampton Inn and Days Inn, according to Jones.

Hospitality professionals, including Blair Stancliff, the general manager of the Hampton Inn in Thibodaux, acknowledged the industry-wide challenge. While the first three months after opening in January met expectations, the facility ended 2009 with an average occupancy below 50 percent.

Rene Claudet, manager at Houma’s Quality Hotel, highlighted the challenging period for everyone in the industry, emphasizing that the region’s hotels heavily rely on business, especially from oilfield-related activities. Despite recent difficulties, both Claudet and Stancliff expressed optimism for a rebound, noting positive signs in bookings for the upcoming months.

In contrast, the fate of Howard Johnson remains uncertain, as the building is currently seeking a new tenant. Jones expressed gratitude for Thibodaux’s support and wished that circumstances could have allowed the iconic establishment to continue its operations.

Rise, Fall, and Reckoning: The Untold Tale of Howard Johnson’s Closure in 2009 – A Riveting Journey Through Local Hotel Turmoil Read More »

Navigating Travel Frustrations: Consumers Seek Relief Amid Booking Challenges

Travel / By

In the complex landscape of travel planning, a new report from Forrester Research suggests that the worst part of a trip may not be the journey itself but rather the booking process on the web. The study, set to be released by Forrester Research, reveals a growing dissatisfaction among consumers with the complexity of planning and booking travel online.

Henry H. Harteveldt, a Forrester travel analyst, underscores this frustration, noting that while other websites, such as retail, banking, and media, have become more user-friendly, the travel sector is lagging behind in improving the planning and booking experience.

Consumers find themselves grappling with additional fees, deciphering fine print, and navigating industry jargon, adding to the already challenging task of educating themselves about destinations, flights, and hotels. According to Mr. Harteveldt, travel companies often expect consumers to act as travel agents, raising questions about the user-friendliness of their websites.

Interestingly, the report suggests a growing inclination among consumers to explore offline travel agencies as an alternative. Mr. Harteveldt notes that more people are considering the use of good offline travel agents, signifying a shift in sentiment towards the online booking process.

Further underscoring travel-related frustrations, J. D. Power & Associates released an annual airline survey indicating a decline in customer satisfaction for the third consecutive year. Despite recent fare cuts, customer satisfaction with costs and fees has diminished, with fees for checked bags and phone booking erasing potential savings on ticket prices.

While airfares have experienced a notable drop from their peak, the impact on passenger satisfaction remains questionable. Dale Haines, senior director for the travel practice at J. D. Power, emphasizes that the reduction in fares may not resonate with passengers if accompanied by increased dissatisfaction with costs and fees.

On the hotel front, the latest J. D. Power hotel survey rates the industry more favorably, scoring 756 out of 1,000. This suggests a more consistent performance in comparison to the airline industry, which faces challenges in meeting customer expectations.

The American Customer Satisfaction Index also provides insights into the overall dissatisfaction within the travel industry, with airlines scoring 64 out of 100 and hotels receiving a slightly better score of 75.

Amidst these challenges, the U.S. Travel Association recognizes the financial impact of what they term the “frustration factor.” A survey conducted in May 2008 revealed that more than a quarter of travelers had avoided at least one trip due to frustrations with the air travel system.

Geoff Freeman, senior vice president for public affairs at the U.S. Travel Association, emphasizes the root cause of the problem as outdated air traffic infrastructure and urges Congress to finance projects to update air traffic control technology. These initiatives aim to reduce delays, but their development may take years.

As the travel industry contends with a potential prolonged passenger decline, addressing consumer frustrations becomes imperative. Analysts argue that companies are under increasing pressure to tackle these concerns, emphasizing the need to enhance the overall travel experience.

Henry H. Harteveldt raises a crucial question for the industry: “Do you really want to run a business where you’re annoying one out of three of your customers?” The concern is that this frustration could escalate, underscoring the urgency for the industry to reevaluate and improve its current practices.

In an evolving market, the industry’s main trade group, the U.S. Travel Association, has recognized the financial impact of what could be called the “frustration factor.” Its survey in May 2008 found that more than a quarter of travelers had avoided at least one trip in the previous year because of the air travel system.

“Before the recession hit, you couldn’t turn on the nightly news without more discussion about flight delays and other air travel hassles people were having,” said Geoff Freeman, senior vice president for public affairs at the association.

The trade group says the root of the problem is an outdated air traffic infrastructure, and has been pushing Congress to finance projects to update air traffic control technology to reduce delays. Some of these initiatives, which could take years to develop, are included in Federal Aviation Administration reauthorization bills under consideration.

In the meantime, despite some improvements in airline performance because of a decline in the number of people traveling, Mr. Freeman acknowledged that frustrations remain — especially among the customers the industry counts on for its survival.

“Those who travel the most frequently are those who are most frustrated with the inefficiencies in the process,” he said. “As a society, we need to be thinking, what is the cost when someone says it’s not worth it to travel?”

Navigating Travel Frustrations: Consumers Seek Relief Amid Booking Challenges Read More »