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GO News>
GO News
September 13, 2004
This weekend’s big travel news was the bankruptcy filing of
U.S. Air, its second in two years. United is still
operating under bankruptcy and rumors are flying that Delta
is not far behind. Why is all this happening and what can
we do about it to protect ourselves?
There are several causes. Low-cost carriers have siphoned
off business. Business travelers are much less willing to
pay the higher fares they’re charged for not staying over a
Saturday. In fact, we suspect that the drop in business
travel that has occurred over the past three years is
structural and that businesspeople are doing more business
through email, teleconferencing and the like, causing the
business travel market to possibly never rebound to its
previous level. And finally, higher fuel costs have
increased costs in an environment when prices cannot rise
to cover them. The bottom line, then, is that the major
carriers in general have costs they cannot support with
their revenue.
United earlier announced their intention to stop paying
into their pension plan. U.S. Air announced that one
reason for their filing was that the pilots would not
accept their proposed 20% pay cut and 50% pension
reduction. When these companies avoid their pension
liabilities, the government will typically step in to cover
the loss. It seems clear to us that if U.S. Air and
United, and perhaps Delta, are able to not pay pensions and
cut their costs in other areas, the other major carriers
will be placed at a serious cost disadvantage. We would
therefore not be surprised to see Northwest, Continental
and American feel they have to follow their competitors
into bankruptcy.
What should you do about this? First of all, by following
the business press you should be able to gain some insight
as to which of these might actually cease operations and
which are viable post-bankruptcy. You should try to avoid
booking your groups on those you feel will not survive.
Second, we now have very affordable one-rate group travel
insurance available, which will protect your travelers in
the event of an airline liquidation. And finally, you have
increased protection if you pay for your tickets with a
credit card.
Teleconference
Our next teleconference will be held on Friday, Sep. 24, at
1PM Eastern time. The session will be led by Mike Marchev
from GO and he will be joined by travel veteran Dan
McManus. Dan will share 9 Low-cost Marketing Tips, some of
which are actually no-cost. There is no charge, but you
must register at www.goexperience.com. If you are unable
to attend, the CD will be available for sale in the GO
Books and CDs section for $12.
GO On the Road
This is the first of our GO member study trips. It will be
to Greece on March 2-8 and visits Athens, Corinth, Olympia,
Patras and includes a one-day cruise to three small Greek
islands. The price is only $899 per person double for
members and includes air from Chicago or New York. The
suppliers hosting the trip require that you qualify to go.
Basically, they’re looking for members who would be
inclined to actually book their group to Greece. Drop me
an email at johnk@premiertourismmarketing.com and I’ll
forward the application to you.
GO Conference
We will be holding our first GO conference on Sep. 16-18,
2005, at Indian Lakes Resort in suburban Chicagoland. We
anticipate a great lineup of educational seminars, speakers
and networking opportunities. Mark your calendars now and
plan to be there!
Looking for a Receptive
One of our members is looking for a recommendation for a
good receptive for Chicago. Go to the GO Forum online to
help him out.
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