Emerging Markets Will Drive Business Travel Growth Over Next Decade

Emerging Markets Will Drive Business Travel Growth Over Next Decade

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China and Myanmar will experience strong business travel growth in the next decade. A mall in Shanghai is pictured here. hans-johnson / Flickr

Skift Take: While emerging economies in Asia and Africa will see the greatest business travel increase over the next decade, according to WTTC forecasts, the U.S. and China will remain the largest global business travel markets.

— Andrew Sheivachman

Despite the current climate of uncertainty surrounding business travel, the World Travel & Tourism Council (WTTC) projects that global business travel growth will chug along at a solid 3.7 percent yearly through 2027, according to a new white paper released in conjunction with Travelport.

Asia-Pacific is expected to drive global growth, with a 6.8 percent growth rate. China is expected to lead the world in growth with a 9.5 percent annual increase, followed by Myanmar (8.7 percent), Hong Kong (8 percent), Cambodia (7.4 percent) and India (7.2 percent).

“Travel and tourism generates $7.6 trillion in GDP and supports over 292 million jobs,” said WTTC president David Scowsill. “Business travel is a vital part of the sector, and it is a key catalyst for global growth. It drives the relationships, investments, supply chains and logistics that support international trade flows.”

While emerging markets are experiencing rapid growth, the largest business travel markets in the world are expected to remain the U.S., China, UK, Germany, and Japan, respectively, over the next decade.

The regions that have experienced the most business travel growth over the last five years are South Asia, the Middle East, and Southeast Asia.

Interesting, the share of business travel as an overall part of global travel is expected to reduce slightly as the line blurs between business and leisure trips.

“Global share of business travel is expected to dip slightly from 23.1 percent in 2016 to 22.4 percent in 2027,” reads the report. “As the nature of work changes with more contract or flexible labour, advances in automation and robotics moving people out of jobs, without intervention, increases in geopolitical volatility, strengthening protectionist and localisation policies may bring a slowdown to global trade, negatively impacting business travel.”

Here’s a breakdown of the countries expected to see the greatest business travel growth through 2027.

Business Travel Real Growth 2017-2027 % Share of Total T&T 2016 % Share of Total T&T 2017 Share Increase 2016-2027
China 9.5% 19.2 23.3 4.1
Myanmar 8.7% 39.9 46.1 6.2
Rwanda 8.5% 70.2 81.1 10.9
Gabon 8.5% 26 33.7 7.7
Greece 8.2% 6.7 9.7 3
Hong Kong 8% 16.1 18.8 2.7
Tanzania 7.9% 14.5 16.8 2.3
Cambodia 7.4% 15.1 16.2 1.1
Solomon Islands 7.3% 31.5 40.2 8.7
India 7.2% 5.4 5.4
World 3.7% 23.1 22.4 -.07

You can read the full report below.

Download (PDF, 6.24MB)

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April 27, 2017 at 12:32AM

Alaska Air Focuses on Customer Experience and Loyalty as it Integrates Virgin America

Alaska Air Focuses on Customer Experience and Loyalty as it Integrates Virgin America

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Alaska Airlines

Alaska Airlines is switching to a smaller plane, the Embraer E175, on some flights from Dallas Love Field. The company has been reaching out to customers who may be upset. Alaska Airlines

Skift Take: Alaska Airlines has always taken customer experience more seriously than other carriers, but historically, that’s been easier, since Alaska has been smaller than its competitors. It’s good to see Alaska still placing a major emphasis on customer satisfaction after its Virgin American acquisition.

— Brian Sumers

Earlier this month, in a bid to boost revenues, Alaska Airlines said it will cancel some Virgin America flights from Dallas Love Field over the next year, replacing them with smaller jets operated by SkyWest Airlines under Alaska’s brand.

It was a move Alaska, which finalized its acquisition of Virgin America in December, said it had to make. Virgin America’s flights to New York, Washington, D.C, Los Angeles, and San Francisco have been losing money, both because of stiff competition from Southwest Airlines, and because the carrier was using Airbus A320s with too many seats. Changing from 149-seat jets to 76-seat Embraer E175s on many New York and Washington-bound flights should help profitability, Alaska executives said.

Merging airlines swap aircraft often, and usually executives don’t worry whether passengers will mind flying on another airline owned by the same company. But Alaska wants to retain as much of Virgin America’s loyal customer base as possible, so it tried something unusual — it had reservations agents contact affected customers. Passengers booked in the first class even got their ticket costs refunded, but were permitted to stay in first class on the Alaska-branded flights.

“We actually called everyone personally,” said Shane Tackett, Alaska’s vice president for revenue management and e-commerce. He said most of the interactions were “super positive” and passengers did not mind switching airlines.

In an industry that has become increasingly impersonal — that’s what happens when just four U.S. airlines control the vast majority of the domestic market — Alaska, now the fifth-largest carrier, is trying to stand out by emphasizing customer experience and loyalty. Speaking Wednesday on the company’s first quarter earnings call, executives said they plan to continue to counter trends that have led many airlines to offer detached service and remove loyalty perks from all but their most profitable customers.

Again on Wednesday, Alaska’s Chief Commercial Officer Andrew Harrison defended the airline’s decision to not copy every other U.S. airline and change its policy for how customers acquire frequent flyer miles. Alaska still awards miles based on how far a customer flies, not how much money a passengers pays for the ticket. The most frugal consumers tend to do best under this system, which American, Delta and United all had as recently as two years ago.

Customers seem to be responding well, Harrison said. In March, he told analysts, the Alaska’s MileagePlan enrolled more new members than in any month in the history of the program. Many of the new members were California based, and they may have flown Virgin America in the past. (Virgin America’s loyalty program will disappear next year.)

“We have a huge percentage of our guests who are earning miles and using miles, and that’s equally as important as how much you actually paid for that ticket,” Harrison told analysts. “We all have different business models but at the end of the day, we believe that a generous loyalty program for our business …. will be a very very good thing for us longer term and for our investors.”

Alaska has a similar philosophy on first class upgrades. Alaska executives said Wednesday the carrier is still selling only 35 to 40 percent of all first class seats. At another carrier, such as Delta Air Lines, which in late 2015 said it wanted to increase its paid first class load factor to 70 percent by 2018, Alaska’s paltry first class sales would be a disappointment.

But Alaska executives insist that giving first class seats to road warriors — even ones who buy cheaper tickets — drives loyalty. “The philosophy for us is to have a generous upgrade policy,” Harrison said.

Operational challenges

To be sure, not everything is rosy at Alaska. CEO Brad Tilden said Alaska and Virgin America struggled with on-time performance in the first quarter, with Alaska completing 78 percent of flights on time, and Virgin America completing just 65 percent of flights on time.

Tilden said Alaska’s hubs in Seattle and Portland had five times as much freezing rain and snow versus last year, but suggested the airline still could have handled it better. “Even accounting for this, our performance is still disappointing,” he said.

Executives said the company is evaluating its winter operations plan, and may make changes to how it de-ices aircraft.

“We are committed to doing a better job getting our guests to their destinations on-time regardless of the weather,” Tilden said.

On the call, Tilden credited the company’s social media team for its work during irregular operations, saying it responds to most customer queries in fewer than five minutes. Other airlines, he said, take more than an hour to respond.

He said the quick response should help Alaska’ retain key West Coast customers.

“When the operation is under pressure, guests often post on social media and they expect a quick response,” Tilden said. “Given the tech savvy nature of many of our West Coast guests, this is an important and growing part of the customer experience and it’s one we remain focused on.”

Profitable Quarter

For the first quarter, Alaska reported net income of $99 million on revenues of $1.75 billion. Its passenger revenue per available seat mile — a closely watched metric that shows much much money an airline makes for each seat it flies on mile — decreased 4.9 percent, year-over year. Non-fuel costs decreased slightly, but Alaska paid 38 percent more for jet fuel than in the same period last year.

Alaska executives predicted a strong second quarter, and they said they expect PRASM will increase substantially, year-over-year. Harrison said the airline is seeing “solid demand,” and noted that other airlines are adding new fewer flights in Alaska markets.

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April 27, 2017 at 12:03AM

Video: Noma and VizEat COOs Explain the Changing Dynamic of Food Tourism

Video: Noma and VizEat COOs Explain the Changing Dynamic of Food Tourism

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Skift Take: Tourists plan entire trips around food with increasing frequency. This has changed the idea of a restaurant as travelers seek immersive dining experiences outside of the traditional seated dinner.

— Kristen Hawley

Dining is quickly becoming the main attraction for global travelers, far beyond the notion of a typical restaurant.

At Skift Forum Europe in April, Ben Liebmann, chief operating officer of Copenhagen’s Noma restaurant and Camille Rumani, co-founder and chief operating officer of VizEat discussed the new face of food tourism in conversation with SkiftX Editor, Greg Oates.

“Rene unlocked a local cuisine that perhaps the world hasn’t seen,” said Liebmann of Noma’s noted chef, Rene Redzepi. The restaurant’s focus on local ingredients and inventive cuisine in Copenhagen has also translated into a new model as the team opened pop-up restaurants in Tokyo, Sydney, and most recently Tulum, Mexico, where $600 tickets for dinner sold out in two minutes. So while Noma is consistently lauded as one of the best restaurants in the world, it challenges the notion of “restaurant” as it becomes an outright tourist destination in cities around the world.

Similarly, VizEat is changing the notion of “dining out” while traveling, connecting tourists with locals for immersive food experiences like in-home dinners, cooking classes, and market tours. “Travelers want to know how locals live,” says Rumani. “What’s behind the door?”

You can watch the full discussion below.

Note: Initial planning is in full-swing for our flagship event Skift Global Forum, which will be held September 26-27 in New York City. We wanted to make sure our most loyal Skift readers were able to purchase their tickets early and were rewarded for doing so. That’s why we’ve re-opened up our previously sold out early bird discount for an additional 35 tickets. Attendees can now save $800 per ticket on the largest creative business conference in travel.

Read more coverage of Skift Forum Europe 2017.

At this year’s inaugural Skift Forum Europe in London, travel leaders from around the world gathered for a days of inspiration, information, and conversation on the future of travel.

Visit our Skift Global Forum site for more details about 2017 events, including our New York City event September 26-27.

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April 26, 2017 at 11:35PM

United Takes Added Steps to Win Back Customers and Avoid More Ugly Events

United Takes Added Steps to Win Back Customers and Avoid More Ugly Events

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United said that passengers who have boarded flights should never have to give up their seats, except for safety or security problems. The airline also said that it would no longer ask law enforcement officers to remove passengers from its planes over booking issues and that all crew members traveling to other flight assignments would be booked into seats at least an hour before departure, two changes it had announced previously.

United said it would also create a new automated check-in process that gives customers a chance to express their willingness to relinquish their seats in exchange for compensation. And starting on Friday, United will increase the maximum sum offered to passengers who voluntarily give up their seats to $10,000 from the $1,350 cap that most airlines use.

In raising the cap, United is following the lead of Delta Air Lines, which announced on April 14 that its supervisors could offer up to $9,950 in compensation to passengers who voluntarily gave up their seats. Industry officials said that compensation offers would still start at a few hundred dollars, and that payments close to the new caps were likely to be rare.

Security officers dragged Dr. Dao off a United plane in Chicago to make room for an airline employee trying to get to work in another city. The episode has been a public relations disaster, pushing United to undertake a broad examination of how it treats customers.

“Our goal is to reduce incidents of involuntary denial of boarding to as close to zero as possible and become a more customer-focused airline,” the airline said in the report.

United also plans to reduce how much it overbooks some flights and to create a special call-center team that can come up with solutions for overbooking problems. Maggie Schmerin, a United spokeswoman, said that rather than simply trying to switch passengers onto other flights to their destinations, the airline could fly travelers to nearby airports and pay for car services to take them the rest of the way.

In a further bid to regain its customers’ faith, United said it would address another cause of frustration among passengers — compensation for lost baggage — that is unrelated to the episode involving Dr. Dao. According to the report, United will pay customers $1,500, no questions asked, if it loses their bags. Customers whose baggage is worth more than that can still file for additional compensation, the airline said.

Why We Feel So Squeezed in the Skies

Here is what happens when people fly more often, in fuller planes and pay higher fees.


The changes United is making now “are steps in the right direction,” said Douglas G. Kidd, executive director of the National Association of Airline Passengers in Vienna, Va. But, he said, “Someone could have just used their head with Dr. Dao and said, ‘If you’re a doctor, and you need to see patients the next day, let me see if we can find somebody else.’”

Mr. Demetrio, Dr. Dao’s lawyer, said that he and his client both thought that United’s plans represented “an excellent start in a short period of time” toward solving the problems that passengers face with many airlines. He said he hoped that expanded training for United employees would include “how to defuse the situation instead of throwing gasoline on it.”

The episode involving Dr. Dao has also upended United’s top leadership ranks. The company’s board decided on Friday that the chief executive, Oscar Munoz, would not ascend as planned to the role of chairman. The board is also adjusting its incentive compensation program for senior executives to make it “directly and meaningfully tied to progress in improving the customer experience.”

Shortly after the episode, Mr. Munoz appeared to blame Dr. Dao for causing the problems. But Mr. Munoz soon reversed himself, apologizing repeatedly to Dr. Dao and saying he felt “shame” over how the situation had been handled.

Mr. Munoz, in a statement released on Thursday with the report, said he realized that “actions speak louder than words.”

“Today,” he added, “we are taking concrete, meaningful action to make things right and ensure nothing like this ever happens again.”

United’s report includes a description of what happened in the April 9 episode, though it contains few new details.

United released much of the same information on Wednesday in written answers to questions from the Senate Commerce Committee.

Dr. Dao and dozens of other passengers had boarded a United Express flight to Louisville in the late afternoon when the airline determined that maintenance issues with another plane might keep a four-person flight crew from reaching Louisville in time for a flight they were scheduled to work the next morning, according to the airline’s report.

The airline said it was worried that it might have to cancel the flight out of Louisville, disrupting 100 other passengers, if the crew was not there on time. So it offered an $800 travel credit to any passengers who agreed to give up their seats on the flight leaving Chicago.

When no one took the offer, gate agents invoked the airline’s involuntary denial-of-boarding process. According to the report, that meant customers who had paid the lowest fares, were not connecting to other flights and had checked in the latest were at the top of the list to be removed from the plane. Whether a customer had frequent-flier status was another consideration, the report says.

United officials have said they followed this procedure in selecting Dr. Dao, his wife and another couple from removal from the flight. The other couple agreed to accept compensation and leave. After Dr. Dao declined to leave, United officials called police officers with the Chicago Department of Aviation to try to persuade him to go.

But according to passenger videos and aviation police reports released on Tuesday, Dr. Dao tried to keep the officers from pulling him out of his seat before being dragged out of it.

Continue reading the main story

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April 26, 2017 at 11:33PM

Wyndham Is Finally Harnessing Its Global Scale Via Loyalty

Wyndham Is Finally Harnessing Its Global Scale Via Loyalty

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Wyndham Hotel Group

Wyndham is relying on its popular loyalty program, Wyndham Rewards, to boost its other businesses, which include timeshares and vacation rentals. Wyndham Hotel Group

Skift Take: Wyndham might not have 30 hotel brands like Marriott, but it does have the world’s largest timeshare business and a pretty robust vacation rental business, too. Leveraging the power of all three of its businesses just makes us wonder: Why haven’t they tried to do this before?

— Deanna Ting

Wyndham Worldwide’s first quarter earnings were, as CEO Stephen P. Holmes noted, “right in line with our expectations” and those expectations support a major strategy designed to synergize all three of the company’s businesses: hotels, timeshares, and vacation rentals.

The Numbers

For the first quarter of 2017, Wyndham Worldwide reported earnings totaling $1.3 billion, up 1 percent from the same period last year. Net income was $141 million, compared to $96 million in 2016.

The Wyndham Hotel Group saw revenues of $298 million, compared to $295 million in 2016, boosted by higher fees from franchise properties and more sign-ups for the Wyndham Rewards credit card program. However, the company lost some $3 million from lower occupancy numbers at the company’s owned Wyndham Grand Rio Mar Beach Resort & Spa in Puerto Rico, which the company attributed to lingering consumer fears regarding the Zika virus.

The Wyndham Destination Network had revenues of $391 million in the first quarter, up 2 percent from last year’s $385 million. Vacation rental revenues alone were $184 million, up from $183 million last year.

Wyndham’s timeshare business, the Wyndham Vacation Ownership, had first quarter revenues of $648 million, a slight bump up from $641 million in the first quarter of 2016. Although the number of people taking timeshare tours dropped 1.7 percent in the quarter, the amount of spend per guest, or volume per guest, was up 4.9 percent because of higher average close rates and transaction sizes.

The Strategy

Given these stable results for the first quarter, Wyndham Worldwide is more committed than ever to using what CEO Holmes called its “blue thread,” the Wyndham Rewards loyalty program, to generate more business for all of its businesses, especially timeshares.

The company plans to rely heavily on its loyalty program to generate more timeshare tours among its hotel guests, which could potentially lead to increased timeshare sales.

The Wyndham Rewards program, which was relaunched in 2015 to appeal to “everyday travelers,” now has more than 50 million members, 79 percent of whom are redeeming their points through the program. Since its revamp the program has received a number of accolades for its simpler, more straightforward approach to hotel loyalty.

Currently, Holmes said, a little under 5 percent of Wyndham Vacation Ownership owners are hotel guests and he wants that number to increase dramatically.

“We’ve built the world’s largest timeshare organization without a connected loyalty program, and now we have one,” Holmes said during an investors presentation.

Later, he noted, “Why haven’t we done this before? The reason we haven’t done this before is that we didn’t really have a loyalty program. We had a rewards program that was more rewarding people for staying at the hotels. … With this remake of the loyalty program in 2015 we have now created something that is truly a loyalty program. We needed to have that kind of baseline built before we could start to do what we can now do which connecting hotels to timeshare and vacation rental businesses. It’s been a long time coming. We’re now at the point where we can execute on that.”

Work on implementing this “blue thread” has already begun. In October, Wyndham Rewards expanded its program to allow members to redeem their points at the company’s portfolio of more than 25,000 vacation rentals and timeshares.

Another focus for Wyndham includes maintaining and, in some cases, lifting the quality of its brands and properties globally. Work on this initiative began last year, Holmes noted, when all of Wyndham’s 18 hotel brands underwent a “brand analysis” and marketing repositioning.

“Every hotel company is trying to improve the quality of their brands by bringing in stronger ones and getting rid of weaker ones,” he said.

Further strengthening the company’s timeshare business will be the main responsibility of newly appointed Wyndham Vacation Ownership CEO Michael D. Brown, formerly of Hilton Grand Vacations. Brown replaces Franz Hanning, who stepped down in November.

Is a Spin Off on the Way?

One lingering question on investors’ minds involved whether or not Wyndham Worldwide would eventually spin off its timeshare business as its peers Marriott, Starwood, and Hilton have done.

Holmes said that no matter what eventually happens, the company’s board of directors wants to “maintain optionality” and that it is “dissatisfied with our valuation relative to our peers” and is “actively considering all alternatives.”

And if a spinoff of Wyndham’s timeshare or vacation rental businesses does take place, what will happen to the company’s “blue thread” strategy? Holmes said that pre-negotiated contracts would ensure that loyalty connection remains in place.

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April 26, 2017 at 11:06PM

United Details Policy Changes Following Bumpgate Incident

United Details Policy Changes Following Bumpgate Incident

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While United’s initial statement following this month’s Bumpgate incident was quickly met with harsh criticism, CEO Oscar Munoz chimed in with a stronger follow-up a few days later, which, in part, outlined the airline’s plan to avoid a similar situation in the future:

It’s never too late to do the right thing. I have committed to our customers and our employees that we are going to fix what’s broken so this never happens again. This will include a thorough review of crew movement, our policies for incentivizing volunteers in these situations, how we handle oversold situations and an examination of how we partner with airport authorities and local law enforcement. We’ll communicate the results of our review by April 30th.

Now, with that April 30 deadline quickly approaching, United is ready to share the details of its plan, “announcing changes to how we fly, serve and respect our customers.”

First, though, the report began with a recap of the events that led to Dao’s removal, with United clarifying that the four crew members who booked at the last minute were simply moved from an earlier flight from Chicago to Louisville that had been delayed due to a maintenance issue.

Before boarding, flight 3411 was overbooked by one customer. Despite early attempts by United, via website/kiosk and multiple announcements at the gate asking for customers willing to take later flights, there were no volunteers. As a result, one customer who had not yet been given a seat assignment, was involuntarily denied boarding. The customer received a check as compensation and was booked on another United flight. The other customers were then called to board the plane.

At the same time, an earlier flight to Louisville, originally scheduled to depart O’Hare at 2:55 p.m. CDT was experiencing a maintenance issue (it was unclear if this issue could be fixed, but regardless, it would depart after flight 3411). Booked on this flight were four crew members, scheduled to operate the early Monday morning United Express flight from Louisville to Newark. Without this crew’s timely arrival in Louisville, there was the prospect of disrupting more than 100 United customers by canceling at least one flight on Monday and likely more. With this in mind, the four crew members were booked on flight 3411, creating the need to identify four customers who would note be able to take the flight.

The recap then outlined the involuntarily denied boarding (IDB) process, which you can see detailed in the report at the bottom of this post. There’s one key takeaway for TPG readers in particular, though:

Customers with frequent flyer status will not be involuntarily denied boarding, unless all of the remaining passengers have frequent flyer status, in which case the lowest status will move to the top of the IDB list.

So, except in extraordinary cases, United elite members shouldn’t expect to be denied boarding.

As for what’s to come, the airline created an infographic to communicate its changes, which I’ll break down below. There’s also a detailed “Review and Action Report,” which you’ll find at the bottom of this post.

While the victim in the case of flight 3411, David Dao, was removed by airport security officers rather than airline employees, United had contacted the officers to request assistance. Going forward, United has confirmed that, as of April 12, “law enforcement will not remove customers from a flight… except in matters of safety or security.” Additionally, customers already on the plane will not be forced to give up their seat (this went into effect today).

united-info-removal

Another challenge in Dao’s case was that the airline only offered volunteers up to $800, which was not enough compensation to convince other passengers to give up their seats. As of tomorrow, agents will be able to offer up to $10,000 in travel credits (though it’s unlikely we’ll see the airline reach that figure in practice).

united-info-10k

Here are some interesting facts related to denied boarding, according to United’s report:

  • Last year, 95.6% of “denied boarding customers” were volunteers.
  • Based on DOT stats, 3,765 customers were denied boarding involuntarily, of the airline’s 86.8 million customers last year.
  • Some seats may need to be left empty due to weight restrictions, typically as a result of winter weather conditions.
  • Smaller aircraft may be substituted to avoid canceling a flight, resulting in as many as 50 overbooked seats.
  • United is sometimes required to deny boarding in order to accommodate flight crews and avoid canceling another flight, as was the case with flight 3411. As of April 14, these crews must book a flight at least 60 minutes prior to departure.
  • Approximately 4% of United flights end up with more passengers than seats due to overbooking. United’s reports states that “adjustments have been made to reduce overbookings” — details can be found below.

united-info-other

United is adding a special “customer solutions team” to help deal with these denied boarding issues. This team “should be operational by June” and will be able to assist gate agents by identifying alternate airports, rebooking customers on nonstop flights or offering ground transportation to customers and crews when practical.

Then, later this year United will launch a new automated system that “will gauge a customer’s interest in giving up his or her seat on overbooked flights in exchange for compensation.” A customer could then receive the compensation amount they requested at check-in at the airport or via the United app, which sounds like the bidding system Delta already has in place.

Additionally, the airline is launching a new “in the moment” app that’ll allow flight attendants (beginning in July) and gate agents (later in 2017) to offer mileage, travel vouchers or other compensation in response to service issues. And, while unrelated to Bumpgate, United will begin compensating passengers with a $1,500 check if the airline “permanently” loses a checked bag.

Below you’ll find all 11 pages of the Review and Action Report:

United Flight 3411 Review and Action Report-01 United Flight 3411 Review and Action Report-02 United Flight 3411 Review and Action Report-03 United Flight 3411 Review and Action Report-04 United Flight 3411 Review and Action Report-05 United Flight 3411 Review and Action Report-06 United Flight 3411 Review and Action Report-07 United Flight 3411 Review and Action Report-08 United Flight 3411 Review and Action Report-09 United Flight 3411 Review and Action Report-10 United Flight 3411 Review and Action Report-11

Click here for more United Bumpgate coverage.

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April 26, 2017 at 11:06PM

Six Flags Is Adding Water Parks to Wring More Money From Visitors

Six Flags Is Adding Water Parks to Wring More Money From Visitors

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Scott Ableman  / Flickr

Shown is the Tornado slide at Six Flags America’s Hurricane Harbor Water Park in Maryland. Six Flags Entertainment wants to acquire more water parks near existing theme parks. Scott Ableman / Flickr

Skift Take: Six Flags Entertainment is continuing to look for ways to bring visitors to its parks without shelling out a ton of money on expensive new construction. We’ll be interested to see how many existing water parks the company can bring into the fold — and how crowds will respond.

— Hannah Sampson

Six Flags Entertainment is looking to make a bigger splash in the world of water parks.

The regional theme park company, which already has water attractions within or near  most of its properties, wants to add more as a way to drum up additional season pass sales at higher prices and boost attendance without making significant new investments.

“I’m especially excited about the potential to bundle our existing theme parks in a market with a nearby water park to offer combo theme-and-water park season passes,” president and CEO John Duffey said.

During a quarterly earnings call Wednesday morning, executives with the Texas company said they had seen a big uptick in sales in Mexico for season passes that include Six Flags Mexico and a just-opened water park in Oaxtepec roughly 50 miles away. They’d like to do the same elsewhere, and with 19 parks in the U.S., Canada, and Mexico, there are still opportunities. Only parks in San Francisco and Montreal have no water park element.

Duffey said that in Mexico, the company took over operations of an unprofitable water park at no cost and committed to investing $18 million in upgrading it. In other cases, he said, the company may acquire or lease a standalone water — or even theme — park and boost its profitability by bundling season passes with an existing Six Flags park.

Adding nearby parks would also allow Six Flags to leverage its local management teams, marketing efforts, and supply chain, Duffey said.

“Taking over the operation of existing water parks allows us to expand our capacity and attendance with minimal investment providing a quick payback and high return on invested capital,” Duffey said. “We will look to accelerate this strategy in other markets as opportunities arise.”

Calling the idea “interesting” and “something we haven’t really thought about much,” analyst Barton Crockett of FBR Capital Markets asked if the strategy could work at those locations that already have water activities.

Duffey said yes.

“We think that there’s opportunity even at those locations that have existing water parks where we could potentially acquire a water park maybe in one of the outer markets so it would basically expand the size of the market for us,” he said.

The company discussed the new strategy as they lauded the “excellent start” to 2017. First-quarter numbers were lower than the same time last year because Easter and related school breaks fell during March in 2016 instead of April this year.

Revenue fell from $115 million last year to $100 million this year, and the company posted a net loss of $57.5 million for the quarter, when most parks were not yet open. Attendance dropped by 296,000 to 1.9 million. Executives said 380,000 visits shifted from March of 2016 to April of 2017.

After announcing during the first quarter an agreement for two Six Flags parks — one theme, one water — to be built in Bishan, China, Duffey hinted that more announcements about international licensing agreements were on the way.

“We have multiple ongoing discussions with high-quality potential partners around the world, some of which we intend to announce very soon,” he said. “These deals are very high-margin for Six Flags and have minimal financial risk since they do not require us to invest any capital.”

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April 26, 2017 at 07:34PM

Ride-Hailing Company Gett Is Buying Juno to Better Compete With Uber

Ride-Hailing Company Gett Is Buying Juno to Better Compete With Uber

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Skift

Ride-hailing company Gett, whose app is pictured here, is buying rival Juno to put up a stronger fight against Uber. Skift

Skift Take: Rivals are joining forces as Uber continues to face bad press. Is the ride-hailing giant getting nervous yet?

— Hannah Sampson

Two small ride-hailing companies are combining in an effort to slow the march of Uber Technologies Inc. around the globe. Tel Aviv-based Gett Inc. said it’s paying $200 million to acquire Juno, a New York startup that endeared itself to drivers by offering company stock and better pay than Uber.

The Gett app is available in about 100 cities and is among the most popular ride-hailing services in Europe. But Uber has been gaining ground quickly there and is dominant in Juno’s sole market, New York City. Gett said the team behind Juno will oversee the combined U.S. group, which includes Gett’s operations in New York. The deal was reported earlier Wednesday by TechCrunch.

Juno’s strategy of catering to drivers has been effective in New York. Drivers said they like that Juno takes a lower commission than Uber or Lyft Inc. and appreciate the ability to take a stake in the business. By last summer, Juno had nearly overtaken Lyft by total drivers in New York, although it began to lose ground in the fall, according to statistics kept by the local taxi regulator. In recent months, Juno has been exploring an expansion into other American cities.

The deal marks the end of Juno’s program to distribute restricted stock units to drivers, according to Keren Kessel, a spokeswoman for Juno. She said eligible drivers will receive a payout “based on an independent valuation” of their stock. She declined to provide details on how much drivers should expect to receive. Drivers won’t be offered stock units in the future but may be eligible for cash bonuses based on how much they drive, Kessel said.

Juno sent emails to stock-eligible drivers on Wednesday with payment estimates, saying more information would be provided in the next few days. Juno also told drivers that the U.S. Securities and Exchange Commission had previously asked the company to make changes to comply with federal law. Three messages reviewed by Bloomberg showed modest payouts. One driver who said he’s been driving full-time since June was told he’d receive $251.

—With Eric Newcomer

©2017 Bloomberg L.P.

This article was written by Joshua Brustein from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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April 26, 2017 at 05:34PM

Someone Tried to Bring A Live Lobster Onto A Southwest Flight

Someone Tried to Bring A Live Lobster Onto A Southwest Flight

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Do live lobsters count as carry-ons? Service animals?

That’s the question several Southwest Airlines gate agents had to ask themselves this weekend when a crustacean showed up at the gate — in the arms of a passenger.

Both lobster and human managed to make it past security screening where it was OK’d as a carry-on item, or perhaps declared as an emotional service animal, it’s not quite clear.

The only facts that Southwest’s spokesperson was able to confirm was that “A customer did attempt to board the aircraft with a live lobster, which did not meet TSA regulations as a carry-on item. The lobster was checked in the cargo bin, and the customer and lobster made it to their final destination.”

What’s even more surprising? Flying with live lobsters isn’t really all that uncommon, and they’re even allowed to travel with you on the plane on some airlines. Of course they’re normally packed securely in specialized containers.

So when confronted with a live, loose lobster, TSA agents had to make a call to headquarters to find out exactly what they should do.

The verdict? The lobster was allowed on the plane but it had to be put into a container, and checked as baggage on the flight.

Internal document relating to the ‘Lobster’ delay on Southwest Airlines. Image: Southwest Airlines

Both lobster and human passengers made it to their destinations on time and unharmed. No one was dragged, burst into tears or involuntarily bumped, which makes this good kind of a good PR moment in a month where several airlines have struggled with it (save this adorable dog in a bowtie on a Delta flight that I hope I have the good luck to be seated near one day).

h/t: Runway Girl Network

 

That’s it from this corner of improbable airline news. What’s the strangest thing you’ve ever had to bring with you on a plane? Let us know in the comments section. 

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April 26, 2017 at 04:54PM