BTC Alert

American Airlines parent AMR Corp. reported full-year 2007 net income of $504 million, more than double the $231 million earned in the prior year, despite a fourth-quarter net loss of $69 million that it attributed largely to "record fuel prices." The quarterly loss was reversed from a profit of $17 million in the year-ago period and ended the carrier's streak of six straight quarters in the black. But Chairman and CEO Gerard Arpey noted that AMR posted back-to-back profitable years for the first time since 1999-2000 despite "enormous challenges from unprecedented weather disruptions, air traffic control problems and record fuel prices."

Air France-KLM could provide strategic or financial help in Delta Air Lines' pursuit of a merger with another airline, a newspaper reported on Thursday. A US congressman on Wednesday said Delta has begun merger talks with Northwest Airlines, and media reports have said it was also talking to United Airlines parent UAL. The Wall Street Journal report, quoting people familiar with negotiations, said Northwest was more likely to emerge as Delta's "preferred partner" and that Air France-KLM may back up that bid.

Airline stocks rallied last week on news that Delta Air Lines was mulling a takeover of either United Airlines or Northwest Airlines, suggesting that many investors think airline mergers are a brilliant idea. Airline Merger Match-Up The rally was an especially strong endorsement of mergers because it was broad — all the big carriers’ shares rose, on the assumption that one merger would lead to another. But close scrutiny of the business rationale for airline mergers suggests that any improved profits from consolidation will likely be short-lived, at best.

Washington area travelers will soon be able to speed more quickly through airport security if they are willing to pay a fee, provide personal information to the government and allow their fingerprints and eyes to be scanned at checkpoints. The Metropolitan Washington Airports Authority, which operates Reagan National and Dulles International airports, awarded a contract yesterday to a company that operates the federal government's security program, which is known as Registered Traveler.

The EC's proposals to de-regulate GDSs in Europe without naming Air France, Lufthansa and Iberia as parent carriers were "bizarre." The charge was made by Bryan Conway, head of EMEA for Travelport. He told 110 delegates at the Focus Partnership Meeting (the group representing independent UK agents) that the EC had drawn up a new code of conduct with safeguards which required all airlines and GDSs to participate equally. But he added: "There appears to be some confusion as to the take up of parent carriers. It suggests that the code regarding parent carriers might not apply to Air France, Lufthansa and Iberia which own nearly 47% of Amadeus."

easyJet was accused of ripping off agents by charging €12 for return bookings made through the Amadeus and Travelport GDSs. The accusation came from the UK Guild of Travel Management companies (GTMC). It said one suggestion from its member was to boycott bookings of the low cost carrier on the GDS and "screen scrape" instead. "That will mean extra work, and there will be a cost to our clients, but it won't be anything like the €12 rip-off that is currently being proposed," Philip Carlisle, the Guild's ceo, said.

Air passenger rights is a hot topic in the travel industry, especially as airport and air traffic congestion trigger lengthy delays, but a federal government request for public comment on customer service rules thus far has not drawn a commensurate response. A seven-point proposal from the U.S. Department of Transportation published in the Federal Register on Nov. 20, 2007 at press time had garnered about 170 public filings, most of them a form letter coordinated by the Coalition for an Airline Passengers' Bill of Rights. Interested parties have until Jan. 22 to provide feedback.

Date: November 28th 2009

Dear Travel Industry Colleague,

As you may have read recently in the news, the Association of European Airlines (AEA) is calling on the European Commission to organize a Stakeholder Summit regarding the crisis gripping the European commercial aviation industry. That is an excellent idea, provided all stakeholders have a seat at the table.

BTC was asked to address a similarly focused U.S. Department of Transportation Stakeholder Forum on 12 November. We work with European travel organizations and with Directorates-General TREN, COMP and SANCO on a variety of issues and will be transmitting the letter pasted in below to Transport Commissioner Antonio Tajani on Wednesday, 2 December.

If you would like to be included as a signatory to this letter, please so indicate at http://surveymonkey.twi.bz/n by the close of business on Tuesday, 1 December.

Kind regards,

Kevin Mitchell
Chairman, Business Travel Coalition

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SIGNATORY LETTER

2 December 2009

Mr Antonio Tajani
European Commissioner for Transport
B-1049 Brussels

Dear Commissioner Tajani,

We travel industry representatives write to express our deep concerns about the perilous financial state of the European airline industry and the loss of jobs every day and to urge you to support a Stakeholder Summit in Brussels at the earliest possible opportunity. All prospects to ease current and proposed regulatory burdens and to increase efficiency for European airlines must be reviewed with the greatest sense of urgency by the Commission and airline industry stakeholders.

The crisis gripping the airline industry is without precedent in the history of commercial aviation. It comes at a time when the health of regional economies is inextricably linked to a financially viable air transportation system, for example, to move just-in-time manufacturing parts, or to ensure mid-size European communities have efficient access to important European and global business centers. The airline industry has become the one industry that virtually every other industry has come to depend upon to service its own customers and grow its businesses. A socially and ecologically sustainable civil aviation industry should be an important goal for Europe.

In recognition of the airline industry crisis, the U.S. Department of Transportation on 12 November conducted a one-day stakeholder forum and is now forming a Federal Advisory Committee on the Future of Aviation to identify threshold-problems and to build stakeholder-consensus around solutions and action. We believe stakeholders in North America and Europe would benefit if Washington and Brussels conducted parallel problem-solving processes as airline alliances, among other interlinked commercial aviation elements, have necessitated a harmonized approach to regulatory regimes. What’s more, such a corresponding process would provide the opportunity for the exchange of best practices with respect to including all stakeholders’ interests in smart air transportation policy development and regulatory oversight.

We believe a productive Stakeholder Summit should include a corporate travel manager group, a consumer group, a travel agency association, global distribution system representatives, labor, no-frills airlines, major network airlines, representatives from mid-size and large airports and economists. Its objectives should be to reduce current difficulties for all aviation sector stakeholders, work on solutions, increase performance, preserve and create quality jobs and secure social rights for employees. In order to establish a level-playing field, the regulation of the labor market is needed and the harmonization of the highest working conditions is required.

We hope that you will urgently support the convening of a Stakeholder Summit so that we can stabilize the business and help expedite a return to growth and services to an industry that is an economic fulcrum across all our economies.

Sincerely,

[signatory]
[signatory]
[signatory]

Copy:

Mr José Manuel Durão Barroso, President, European Commission
Ms Meglena Kuneva, Commissioner for Consumers
Ms Neelie Kroes, Commissioner for Competition Policy
Mr Stavros Dimas, Commissioner on the Environment
Mr Günter Verheugen, Commissioner for Enterprise and Industry
Mr Jo Leinen, Chairman of the EP Committee on the Environment, Public Health and Food Safety
Mr Brian Simpson, Chairman of the EP Transport Committee
Mr Siim Kallas, Commissioner for Administrative Affairs, Audit and Anti-Fraud

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