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Volume 6, Issue 38, September 24, 2008 |
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United Airlines’ attempt to hedge its bets against fuel increases backfired, as the price of oil per barrel plummeted from its $147 a barrel peak to less than $100 a barrel. Last week the airline announced that it expects to lose $544 million on fuel hedges this quarter, which includes $72 million in realized losses and another $472 million in unrealized losses, according to an Associated Press article by Joshua Ford. The article also stated that those positions forced United to put $400 million into restricted cash for the parties on the other side of its oil-price bets. United's fuel bill in 2007 was reportedly $5 billion.
UAL Corp., parent of United Airlines, added to the plus side of its ledger, however, by amending its co-branded card marketing services agreement with Chase Bank and its credit card processing agreement with Chase/Paymentech. The agreements increase United's liquidity by approximately $1.2 billion, said United, including $1 billion in the short term and an additional $200 million over the next two years.
"This is one of the many steps we are taking to improve our liquidity and increase the amount of cash we have on hand to strengthen our business for all our stakeholders in this volatile fuel environment," said Jake Brace, United's CFO.
With its amended credit card processing agreement, United realizes a return of more than $350 million of restricted cash back to the company compared to its prior reserve requirement. 
Air Canada is eliminating the $25 second checked-bag charge that it initiated last May. Beginning Sept. 23, the fee will be eliminated on all North American Tango and Tango Plus fares.
"Although the cost of fuel remains highly volatile and far above historic norms, the recent retreat in oil prices is enabling us to reinstate our previous baggage policy.... Further, Air Canada is making its pricing more transparent by removing add-on fuel surcharges for flights within North America and instead adjusting its base fares to cover the total cost of fuel," said Ben Smith, executive vice president and chief commercial officer.
United took the opposite approach and raised its second-checked-bag fee to $50 one-way for travel beginning Nov. 10 within the U.S. and to or from Canada, Puerto Rico and the U.S. Virgin Islands. Travelers in first or business classes, "Premier" frequent fliers and active-duty military personnel traveling on orders will be exempt. United estimated the $50 fee would apply to about one out of every seven customers.
JetBlue and Delta have announced new flights to the Caribbean this winter. JetBlue will start flights from Fort Lauderdale (FLL) to San Juan, Puerto Rico (SJU), beginning Dec. 18. A second daily flight will be added starting Jan. 6. Delta begins daily service from Atlanta (ATL) to Puerto Plata, Dominican Republic (POP), Dec. 20, plus a second daily flight Dec. 20-Jan. 4 and Feb. 14-April 19. An additional Saturday Atlanta to Punta Cana (PUJ) flight is scheduled Jan. 5-Feb. 12 and April 20-June 30.
Forewarned is forearmed when it comes to planning air travel in today’s volatile market. Last week Greece announced it would close Olympic Airlines and restart it as a private company. On Monday, a government-appointed administrator invited new bids for state-owned Alitalia in an effort to avoid the carrier’s collapse after unions rejected an offer by Compagnia Aerea Italiana, an Italian investor group.
Tourists held at gunpoint until they paid hotel bills was just one striking sidebar in the fallout from the collapse of XL Leisure Group, one of Great Britain’s largest tour operators. The stand-off at a hotel in Sharm El Sheikh, Egypt, made news in England after a Barnsley man on a prepaid XL tour reported he was ordered to pay a hotel bill of £1,000 before he was allowed to leave the hotel. Apparently the hotel wanted £3,000 but the travel company negotiated a lower price. He was one of some 85,000 people stranded abroad by XL when it grounded 21 planes Sept. 12.
The last time I was in the Honolulu airport, I was 5 years old. During that time, in my unwary mind, I felt an awe toward the open-air establishment and neglected to realize that I was about to vacation on one of the most beautiful islands in the Pacific with my family. To me, the Honolulu airport was like a large mall with lots of beautiful outdoor access. After walking through the airport, I had no interest in what the rest of Hawaii had to offer. Years later, without much more to recall from my 5-year-old memory, I was able to notice that the Honolulu airport has expanded a lot over the years. However, with more restaurants, flights and shopping opportunities, the Honolulu airport is very much like a large shopping mall with lots of beautiful outdoor access, simply put. After the nostalgia subsided, I fervently made my way to Continental’s Presidents’ Club Lounge.
In terms of island-style, I always appreciate the louvered style doors and cabinets, which were present in the theme of Continental’s lounge. Although completely enclosed indoors, the Presidents’ Club Lounge gave off that same breezy feel, which is usually the last thing that anyone feels when making their way through an airport.
The snack bar was lacking, as cheese, crackers, chips, grapes and pineapples were my only options. After five hours on a plane, I was hoping for sushi. The pineapple, however, was delicious. Other positives included an open bar, free WiFi, comfy leather couches, chairs and a large flat-screen television tuned to CNN. The receptionists were welcoming and informative.
Score: ••••• Courtney Centeno
The SPG® You Choose promotion lets members choose from reward options for stays at participating Starwood hotels and resorts between Oct. 1 and Dec. 31. Simply make your choice and register by Nov. 15. Choices include bonus Starpoints, Elite status point, free nights and gift cards.
The new waterfront Four Seasons Seattle hotel is expected to open in late October. Standard room rates from $365 a night, with an introductory offer of a third night free from $365.
The Park Central Hotel and The Hotel, two historic Art Deco properties on Miami’s South Beach, invite guests to Fall Back in Time. Valid Oct. 1-Nov. 30, the special promotion includes complimentary room upgrade, a guided tour of the Art Deco District, a book about Art Deco architecture written by former Miami News editor Howard Kleinberg and complimentary access to The Wolfsonian, a museum specializing in art from the late 19th and 20th centuries. The two-night Fall Back in Time package is priced at $490 at Park Central Hotel and $680 at The Hotel. Advance reservation is required. The package is offered based on availability. For reservations call 1-800-727-5236 or visit www.thehotelofsouthbeach.com and/or www.theparkcentral.com.
Effective for travel on or after Jan. 1, 2009, OnePass members will earn the actual miles flown rather than a minimum of 500 miles per flight for tickets purchased on or after Nov. 15, 2008. This affects base miles and elite qualifying miles on flights operated by Continental Airlines, Continental Micronesia, Continental Express (operated by ExpressJet Airlines, Inc. and Chautauqua Airlines, Inc), Continental Connection and most OnePass airline partners. Customers will continue to earn the 500 mile minimum on all Aero República, Copa Airlines, Hawaiian Airlines, Island Air, US Helicopter and SNCF segments traveled. OnePass accruals on eligible Amtrak operated segments will not change. Tickets purchased prior to Nov. 15, 2008 will earn a minimum of 500 miles on segments flown regardless of travel date.
American Airlines’ AAdvantage members can receive a one-time award of 250 bonus miles for a minimum $50 donation, or 500 bonus miles for a donation of $100 or more to the American Red Cross. For details visit American Airlines Supports Disaster Relief Efforts.
