You may have read by now that United and Continental Airlines are planning to merge. Pending Federal Anti-trust approval, this could be completed by 4th Quarter 2010. With the recent approval of the Delta – Northwest merger, approval should not be far away.

What does this mean to the traveler, corporations or associations? If you are a United or Continental frequent flier, you should be very happy about the additional number of flights and reach in both carrier’s systems. Frequent flier programs could be more attractive, but be aware of potential changes the carriers could make during this transition.

Simple economics: when there are fewer players and demand increases, prices will increase. That will certainly play out in this scenario and most certainly in non- competitive markets. Domestically, look for opportunities for the low cost carriers to expand into the markets dominated by United and Continental.

Internationally speaking, the combined resources of the carriers will expand their reach, but we don’t expect fares to decrease. Also, this merger could ultimately decrease the number of flights to global locations. This could result in a decrease in options and will impact those required to utilize US carriers bound by the Fly America Act.

What do you think?

As you have heard in many circles, Spirit Airlines announced they will charge for carry on luggage starting August 1st while American, Delta, JetBlue, United and US Airways have all announced they will NOT charge for carry-on bags.

Okay, let’s think about this one. Actually, this makes some sense. The airlines live by on-time schedules and outside of weather and mechanical issues, what typically causes delays are slower boarding times with passengers trying to stuff everything into the overheads. So, if the reverse logic is used, travelers should pay for carry-on luggage and not be charged for checked-in luggage hopefully enabling the flight to depart from the gate quicker.

Actually, maybe what really happened is Spirit was the sacrificial lamb and picked the shortest straw to charge such a controversial fee. Let’s guess which airline comes out (or chooses the next shortest straw) next with a different fee. What do you think?

There is a new Global Entry Program that sounds interesting if you happen to be a frequent international traveler. This new program is similar to the Clear Program that was offered for domestic travelers, and could be a time-saver for busy international travelers.

Travelers go through a background check and interview, give fingerprints and a photo, and pay $100 a year. In exchange, they use a kiosk to return to the United States instead of having to wait in the long lines to clear customs. Go to the kiosk, swipe your passport and go to baggage. If you have items to declare you cannot use the kiosk and have to stop and talk with the customs officers.

Many major U.S. airports do offer this program and the complete list can be found here.

As discussed in previous newsletters, Continental Airlines will be joining 24 other carriers next month with the Star Alliance. Meanwhile, the good news for frequent flier members will be the ability to earn miles and reward travel on all partner airlines.

Of course, this type of alliance will result in changes to the current Continental OnePass program. The changes will be staggered and take place with the switch to the Star Alliance Oct. 27^th and others effective Dec. 15^th and Jan. 1^st . For easy reference, we have listed a few of the changes:

Summary of Continental’s New OnePass Policies:

Effective on Oct. 27, 2009

Effective on Jan. 1, 2010

Source: Continental Airlines website

There’s certainly a lot of talk about the impact of the economy on meetings and conferences these days.  Between government choices that are setting examples of where and how not to have meetings, and the economic impact on certain cities that go beyond the average revenue decline, Las Vegas being at the top of that list.  But how exactly is this economic situation affecting the typical meetings that corporations and non-profits continue to hold?  

Meetings are still happening, and will continue to take place.  Organizations certainly need to look at things differently to protect themselves from a possible drop in attendance and decrease in sponsorship/exhibitor revenue, but beyond the protection – they need to realize that things are different, and it’s not all bad.

Because of the situation hotels throughout the country are faced with – they need your business like they haven’t needed it in many, many years.  This means low room rates that have been unheard of in recent years, negotiations that wouldn’t have been considered are now being suggested by hotels, and hotels that would have had no interest booking a small meeting with minimal revenue potential are looking to fill their rooms however they can.  Organizations just need to know what to ask for and what to expect.

Even for existing contracts, our experience has been that hotels are working with us to renegotiate.  They want a win-win for all, and a stressed client who ends up paying attrition fees is not ideal for anyone.  Don’t be afraid to renegotiate your contract if you fear your rooms won’t be sold – it’s to everyone’s benefit that you’re successful.  Just be ready to give something back in order to successfully renegotiate. 

If your meeting involves marketing for attendees and sponsorships or exhibit sales – then it’s vital that you realize that people are still going to meetings and conferences.  They’re still traveling and paying registration fees.  They’re still exhibiting and sponsoring events.  But…they are making choices that they haven’t had to make in the past.  Where they may have attended three meetings each year, they’re only attending one or two.  Where tradeshows were a powerful part of their sales plan, they’ve cut back to limit the shows they participate in.  So the lesson here is to make your event the event they choose.  Be creative.  Think outside of the box.  Understand that your messaging is more important than ever and your value proposition must be powerful.  Don’t do simply what you’ve always done – because you won’t get what you’ve always gotten.   Times are different, but this also creates opportunity for the organizations that plan their meetings correctly and aren’t afraid of change.

We can help with all aspects of your meetings.  Please e-mail clientservices@safeharbors.com or call 443-923-1417 for more information

Survey Question: Are you using personal frequent flier points to upgrade on a company purchased ticket?

Interestingly, 52% of Safe Harbors clients responded saying they use their own frequent flier points to upgrade while the other 48% do not. This is clearly a sign of the times where in the past, points were typically used for personal use only. What do you think?

We have almost completed half of the year and it does not appear the travel industry vendors are seeing the turn around. Unfortunately, some industry watch dogs are predicting further tough times for the air carriers, car companies, and hoteliers. The latest estimates predict a $9billion dollar loss for all carriers globally. In fact, Richard Branson of Virgin Atlantic Airways predicts that a major US carrier will fail this year.

It is difficult to forecast the resilience of an industry so sensitive to outside influences and so reliant on consumerism. However, one thing is certain, whatever may lie ahead, vendors are looking for ways to win your loyalty.

For example, through our “Top 10 Travel Management Tips”, we offer you Tip #8. Does your company spend at least $20,000 per quarter on one airline? Many of our corporate clients are taking advantage of airline soft dollar programs and if your company travels this much it can earn free tickets and other benefits to offset travel costs. Please keep in mind; these programs do not interfere with personal frequent flier award programs.

If you are unsure or need help with the airline programs, we would be more than happy to assist. Please send and e-mail to clientservices@safeharbors.com and we can help identify your programs and eligibility.

Let us know your thoughts about the state of the travel industry!