Kuwait Air Considers New U.S. Route Despite Travel Restrictions

Clément Alloing  / Flickr

Kuwait Airways wants to expand abroad, perhaps even in the United States. Pictures is an Airbus A320. Clément Alloing / Flickr

Skift Take: We wish Kuwait Airways well, but some of the most powerful airlines in the Middle East are struggling now. It’s hard to see how Kuwait Airways can thrive.

— Brian Sumers

Kuwait Airways Co. is considering adding a flight to Washington D.C. or Chicago despite mounting U.S. travel restrictions, as the Gulf carrier revives long-standing efforts to better compete with its more prosperous regional rivals.

The additions, which may also include new service to Seoul, Manchester, Sarajevo or airports in China, Morocco and Saudi Arabia, are part of a wide-ranging restructuring as Kuwait Air aims to return to profit and lure more high-end customers, Chairman Sami Al-Rushaid said in an interview.

There will be a “moderate expansion,” said Al-Rushaid, noting some routes may start as early as this year. A reinstatement of a U.S. travel ban on people entering the country from six predominantly Muslim nations won’t halt the deliberations. “We will continue with our expansion plans regardless.”

Kuwait Airways, one of the Persian Gulf’s most successful airlines before the 1990 Iraqi invasion of the country destroyed many of its planes, has been trying to counter the growth of its bigger rivals Emirates and Etihad Airways for years. Its ambitions are being hampered by some of the toughest business conditions in decades, with challenges ranging from U.S. travel restrictions to reduced spending power in the region due to low oil prices.

In a bid to compete more effectively in a crowded aviation market, Kuwait Airways has been aiming for a privatization since parliament authorized a sale in 2008. That plan was recently delayed again after a parliamentary committee in June said it wants the company to remain under government ownership. If a full sale doesn’t go ahead, the carrier may decide to sell individual units such as cargo and ground handling instead, Al-Rushaid said.

“I’d like to see the privatization process proceed,” said Al-Rushaid, who took charge of the airline in April. “We are looking at different approaches.”

Al-Rushaid is revising the carrier’s restructuring plan and expects it to post a profit by the 2020/21 fiscal year. Kuwait Airways previously targeted profitability in 2019.

Longest Route

To help drive the turnaround, Kuwait Air plans to focus on improving its service and financial performance by adding more lucrative routes. In recent years, Kuwait Air has introduced a new first-class cabin on its Boeing Co. 777 and added a premium economy class. Its expansion comes as established carriers have been trying to make up for slowing growth by charging extra fees and cutting jobs.

Kuwait Air, which competes on short-haul flights with the locally-based Jazeera Airways, currently flies to 38 destinations, including the biggest European hubs and southern Asian cities such as Mumbai and Bangkok. Its longest route serves New York via Shannon, Ireland.

The carrier’s new long-haul routes would be served by Boeing 777 planes that it already owns or has on order. Kuwait Air, which still expects to take delivery of three more 777-300ER models including the final one in August, will finance the deals through an initial sale and leaseback agreement signed this month with Kuwait-based Aviation Lease and Finance Co.

The airline also still expects to take delivery of 15 Airbus SE A320neo planes and 10 A350-900s, whose financing will probably be a mix of bank loans and leasing, according to Al-Rushaid. Aircraft deliveries should be completed sometime in 2021 and there are no plans for any more orders.

–With assistance from Deena Kamel Yousef

©2017 Bloomberg L.P.

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

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Spanish Entrepreneur Offers Venue for Power Naps to Update Siesta Tradition

Siesta & Go

New Madrid venue Siesta & Go provides both private and shared rooms for napping for a fee. It’s an effort at restoring the traditional siesta, or afternoon nap, culture in Spain. Siesta & Go

Skift Take: Spain’s national brand is about striking a balance between work and leisure, as epitomized by the siesta, or afternoon break. Ironically, statistics reveal a grumpier reality. But new trends offer hope.

— Sean O’Neill

There’s little that’s more Spanish than the afternoon siesta.

As the mid-day sun goes up, businesses in small town Spain pull down their shutters for a traditional nap. In big urban centers, modern business trends and record tourism have ended that habit, leaving many Spaniards who work long hours exhausted.

Now, Maria Estrella Jorro de Inza has found a way to bring back the siesta, making money while her countrymen nap. Bankers, lawyers and consultants catch up on their sleep at Siesta and Go — Madrid’s first nap-bar located in Azca, in the heart of the city’s financial district that’s home to firms like HSBC, Google and Deloitte. The concept is simple: for just 14 euros ($16) an hour, you get to unwind and take a power nap in a private bedroom before heading back to work.

“It’s funny that we’re known for the siesta, but we haven’t been professional about it,” said De Inza, the nap-bar’s 32-year-old founder. “We get a lot of men in suits who just want to relax and women wanting to take their heels off. Lunch break is the busiest time.”

Tokyo Connection

The idea is, of course, not original. De Inza came upon it while on a trip to Tokyo. The Japanese capital, famous for its short-stay options for space-starved citizens like “capsule hotels,” also has what are called nap cafes. The cafes offer clients the option of a short snooze during the day — a practice some Japanese claim has enormous health benefits.

It struck De Inza that the Japanese offer fit nicely with her own country’s traditions. The Spanish workday is often divided into blocks, with lunch breaks that can drag on for over two hours, meetings that run into the late afternoon and days that end late into the night. Spaniards racked up 1,695 hours at work last year, beating neighboring Germany and France, according to data from the Organization for Economic Cooperation and Development. Only Italy and Portugal pulled longer hours out of the main euro-area economies.

That’s left Spaniards who like to stay out late stuck in a form of permanent jet-lag, a feeling that hasn’t been helped by dictator Francisco Franco’s decision to the move the clock forward an hour in 1940 in line with allies Germany and Italy. The daily grind of Spaniards trails the sun, which often translates into late dinners and less sleep.

siesta & go madrid bar

Too Long

“When Europe sleeps, Spain is still awake; we’re in the wrong time zone, the whole country runs late and the corporate culture is rigid,” said Nuria Chinchilla, professor of People’s Management in Organizations at the IESE Business School in Barcelona.

Workers are exhausted because shifts are too long, she said. “It’s about putting long hours and not leaving until your boss has left the office,” Chinchilla said.

It makes workers less productive and can be linked to the country’s low birth rate. she said, “because Spaniards simply don’t have the time or energy once the workday is done.”

Chinchilla, who wants Spain to turn the clock back by an hour to be on the same time zone as Portugal and the U.K., came up with research in 2012 that showed how following the sun would boost Spanish productivity.

The issue became so acute, it landed on the steps of the Spanish parliament with the major parties promising measures to get Spaniards to cut work hours. Prime Minister Mariano Rajoy pledged to end the working day by 6:00 pm during last year’s election campaign, while centrist party Ciudadanos suggested moving the clock back. Neither proposal has progressed much.

For tired Spaniards, De Inza’s siesta bar offers a sanctuary. Her nap-bar has 19 beds, and guests are provided with fresh sheets, earplugs, slippers and a coffee area to freshen up. She gets about 30 people daily for her 19 beds, mostly junior employees in their 20s and 30s, and men in their 50s.

The center, which opened in May, is still something of a novelty and De Inza expects business to really pick up in the Fall. While she’s keeping an eye open for other locations for similar ventures, for now she may just keep the current center open later.

“We’ve been asked to extend our hours, we close at 7:00 p.m., ” she said. “If we see an appetite for more late-night naps, we’ll consider it.”

 

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

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Cuba Sees Reservation Cancellations Since Trump’s Policy Reversal

Ramon Espinosa  / Associated Press

President Trump’s new Cuba policy has winners and losers. Pictured is a man walking past a television set showing Trump signing the new Cuba policy, in a living room festooned with images of Cuban leaders at a house in Havana, Cuba. Ramon Espinosa / Associated Press

Skift Take: Cancellations from U.S. travelers at Cuban bed and breakfasts could portend a downturn as some airlines will undoubtedly be cutting capacity, too. But for people that had hearts set on going to Cuba before Trump’s announcement, they’ll adapt as travelers always do.

— Dan Peltier

President Donald Trump’s new policy on Cuba travel has winners and losers: Group tour operators hope to sell more trips, but bed-and-breakfast owners in Cuba say they’re losing business.

Five of 12 private bed-and-breakfast owners in Havana and Cuba’s southern colonial city of Trinidad told The Associated Press that they received cancellations after Trump’s June 16 announcement .

“It’s contradictory that (Trump) says he wants to help civil society, the Cuban people, but what he’s doing is hurting them, hurting bed-and-breakfast owners in this case,” said Tony Lopez, who rents rooms for $30-$50 nightly in a three-bedroom, 16th-floor apartment in Havana’s trendy Vedado neighborhood. Those canceling included two Americans worried about legal requirements, including documenting their spending.

“We get a lot of Americans. We’re alarmed,” said Eliset Ruiz, manager of a nine-room bed-and-breakfast in Trinidad. “We’ve had a lot of cancellations for June and July.”

Alex Bunten of Charlotte, Vermont, hoped to go to Cuba with his girlfriend in August “without the hassle of tour groups and schedules and such. We like watching the world go by, eating good food, not being herded by an umbrella-holding, annoyingly interesting tour guide.”

But Bunten nixed the idea because under the new rules, only licensed tour operators can take Americans to Cuba on “people-to-people” trips. That’s “too much of a hassle,” Bunten said.

Group Tour Boom or Public Confusion?

Tour operators “should be opening Champagne” because of the new policy, said John Caulfield, former chief of mission of the U.S. Interests Section in Havana and co-founder of the nonprofit Innovadores Foundation , which seeds innovation in Cuba.

In theory, the new rules should spur “an increase in demand,” said Access Trips CEO Tamar Lowell. But some Americans “will be confused by the new policy,” wrongly assuming that all Cuba travel is now off-limits.

“The travel operators are going to have to do some work to make people aware that if you go with us, it’s OK,” said Caulfield.

“Are we going to see business fall off?” said Classic Journeys President Edward Piegza. “We could. But it could be good for us.”

Ban on Business With the Military

The new rules also ban Americans from doing business with entities controlled by Cuban military and intelligence agencies, including some 50 hotels.

Many tour operators say that’s no problem because they already use privately owned villas, casas and eateries, and engage with local guides, entrepreneurs and artists.

Caulfield said the Cubans can also fill up hotels that are off-limits to Americans with tourists from other countries, thereby freeing up rooms elsewhere for U.S. groups.

Meanwhile, small bed-and-breakfast owners plan to create informal associations of neighboring businesses so they can accommodate larger American groups.

Piegza said lodging costs increased last year but are coming down, allowing Classic Journeys to drop tour prices from $4,995 for four days in Cuba to $3,995.

But Lowell thinks prices could go either way. With fewer individual Americans traveling, private lodging options could increase, driving prices down. But if tour groups forced out of military-controlled hotels start booking private homes, prices could stay high.

Hotels aren’t an issue for cruises because passengers sleep on the ships. But Carnival Corp. says even its activities on the ground in Cuba already comply with the new rules. “Many of our current tours have been designed with small family-run operations to give our guests an authentic Cuban experience,” said Carnival spokesman Roger Frizzell.

Others are revising itineraries. “We have had to redesign our women’s trip to Cuba,” said Phyllis Stoller from The Women’s Travel Group which plans a trip for 15 in March. “Our original operator had us visiting some rural areas that are apparently owned by the military.”

Meanwhile, private entrepreneurs worry the government may not allow U.S. tour groups to simply shift their business from state-run hotels to the private sector, at least not without hefty commissions. In the decade since President Raul Castro began allowing more private-sector activity, the government has viewed entrepreneurs as both vital sources of economic growth and as dangerous competitors for sluggish state-run businesses.

Because tour groups are required to use government buses and guides, the government controls their movements and requires many private businesses that receive tour groups to sign contracts that include commissions for the government.

Visits to major tourist attractions like Ernest Hemingway’s estate and the Tropicana nightclub shouldn’t be affected by the new U.S. rules, since neither falls under military auspices. U.S. Sen. Marco Rubio, R-Florida, a Cuban-American who supports travel restrictions, suggested in tweets that he’d like to ban attractions run by other Cuban government agencies, like the ministries of culture and tourism. But it will be months before the U.S. Treasury Department announces details on which sites are off-limits.

Support For the Cuban People

Rubio also suggested that independent travel might continue. Rubio tweeted that the new rules allow “individual Americans” to “travel to Cuba under Support for the Cuban people category” as long as they use “privately owned lodging.”

That’s heartening to companies like ViaHero, which creates personalized itineraries connecting individual Americans with artists, entrepreneurs and other Cuban locals. ViaHero CEO Greg Buzulencia thinks ViaHero trips will qualify under the “support for the Cuban people” category of travel permitted by the U.S. because ViaHero’s itineraries “start conversations and promote independent businesses and activity” in Cuba outside of government-run spheres.

ViaHero’s model is also affordable, as little as $400 for a week in Havana — plus a $25-a-day trip-planning fee — compared with group tours charging $5,000 for a week.

Chad Olin, president of Cuba Candela , says his company’s people-to-people tours qualify under the new rules because all lodging, drivers, restaurants and cultural activities are from Cuba’s private sector. But he also thinks Americans can travel independently using the “support for the Cuban people” category, as long as they patronize private businesses and connect with locals in meaningful ways.

This article was written by Beth J. Harpaz and Andrea Rodriguez from The Associated Press and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Trump Travel Ban Violates Supreme Court Instructions, Says Hawaii Challenge

Bloomberg

The Trump travel ban went into effect June 29, 2017 in the run-up to the July 4 holiday weekend in the U.S. Bloomberg

Skift Take: It’s clear the Trump administration wants to ban as many people from Muslim-majority countries as possible so it took the Supreme Court’s instructions and twisted them, where possible.

— Dennis Schaal

Hawaii asked a court to clarify the scope of President Donald Trump’s travel ban, saying the government’s latest restrictions go further than the U.S. Supreme Court allowed.

The Supreme Court on Monday allowed Trump to implement his legally-fraught ban on travel from six Muslim-majority nations, but the justices exempted travelers with “bona fide” ties to the U.S. They left it to the administration to define those ties, and it did so Wednesday.

Hawaii, which brought one of the previous legal challenges that stalled the president’s March executive order, now is taking issue with how the government is defining family ties in the implementation of the ban scheduled to take effect at 8 p.m. in Washington.

“A few hours ago, after days of stonewalling plaintiffs’ repeated requests for information, the government announced that it intended to violate the Supreme Court’s instruction,” Hawaii said in a filing Thursday in Honolulu federal court. “It will apply the executive order to exclude a host of aliens with a ‘close familial relationship” to U.S. persons, including grandparents and grandchildren, brothers- and sisters-in-law, fiancés, aunts, uncles, nieces, nephews and cousins.”

Hawaii submitted its emergency request for clarification to the same judge, Derrick Watson, who previously blocked Trump’s March executive order from taking effect.

The state’s attorney general, Doug Chin, said if the judge can’t immediately provide clarification, the state wants an order barring the government from using the State Department’s definition of family ties.

“Our concern is that when you read their definition of what constitutes a close family relationship, they’re cutting out a lot of people,” Chin said in a statement.

 

©2017 Bloomberg L.P.

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

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Business Travel Startups and Services for Those In-Between Moments

Hydra New York

Hydra New York, which offers shower spaces for booking in unused commercial real estate, bills itself as filling the gap between the locker room and the hotel. Hydra New York

Skift Take: A series of innovators are trying to address the moments between arrival and check-in, work and play, and other found moments.

— Colin Nagy

Starbucks famously built its brand as being the “third place” between home and office — a space to convene, relax and enjoy the coffee and Wi-Fi. The idea seems very old now, with the growth of the brand and the expansion of the category.

But the idea of places for downtime and in-between moments in cities and for business travel is valid, and innovators are running after the white space.

Solving the red-eye dilemma

I recently caught up with Richard Hatter, general manager of the Hotel Icon in Hong Kong. I arrived after a flight in from the United States, and used what’s called the Timeless lounge. It is a spa facility and rest area that is incredibly comfortable and useful for the times where your flight gets in early and your room isn’t ready.

Now, other hotels do this, but this was very well executed and allowed a refresh, workout, and a quiet place to read. It wasn’t just going to the gym. The experience was more considered.

In a conversation with Hatter, we discussed how this could be a bigger concept to be fleshed out. Among the ideas were expanding the space and adding materials and resources such as a beautiful array of print media.

The Timeless lounge might be positioned as a competitive benefit against other local hotels which pat you on the head and tell you to come back at 3 p.m. to check in.

Shower on the go

A startup that is still in its infancy is taking a similar approach to Hotel Icon, but in cities. Hydra New York is building small shower facilities in unused areas of commercial real estate. The concept is smart: You can run to work and shower before you head in, or freshen up between work and an event afterward.

The founders also told me that the rise in boutique workouts and the subsequent cram for showers at Soulcycle and other such facilities serve the Hydra business nicely.

The concept, as it stands, will offer more private, cabana-style suites for half hour or hour increments, as well as a more public locker room-style area not dissimilar to what you’d see in a gym.

Breathing room

Breather is a concept that allows for on-demand meeting spaces. A recent trial of it found a clean, well-designed room not far from where I needed to be. Everything is bookable through an app, and the company positions its service for times where you need a breakout session out of the office, or you are in transit from the big meeting and when your flight departs later that night.

Bed by the minute

Many companies have tried to make the incremental stay business work. Recharge is the newest entrant, aimed at what the company says is a mix of families, business travelers, commuters and red-eye travelers looking for a crash pad.

Recharge enables customers to instantly book rooms in New York City and they only need to be booked for the time you need.

With an investment from JetBlue’s tech incubator, JetBlue Technology Ventures, Recharge officially launched in 2015 in San Francisco and recently opened in New York at the Arlo and Ace hotels, as well as higher-end options like the Pierre.

How this works with the logistics of room turnover and housekeeping is unclear, but it seems like a concept worth keeping an eye on.

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A Busy Week for Ban News — Skift Corporate Travel Innovation Report

Nam Y. Huh  / Associated Press

In this Sunday photo from 2015, travelers line up at a security checkpoint at O’Hare International Airport in Chicago. The past week brought news about the Trump administration’s travel ban and restrictions on large electronics. Nam Y. Huh / Associated Press

Skift Take: As external forces disrupt the world of corporate travel, we think it’s wise for travel managers to check in with employees and see how satisfied they are with travel policy.

— Hannah Sampson

The Skift Corporate Travel Innovation Report is our weekly newsletter focused on the future of corporate travel, the big fault lines of disruption for travel managers and buyers, the innovations emerging from the sector, and the changing business traveler habits that are upending how corporate travel is packaged, bought, and sold.

Team Skift was out most of this week in Montreal participating in some bleisure activities — OK, mostly leisure — for the company’s annual retreat. But that didn’t keep news from breaking (frequently).

Monday brought a decision from the U.S. Supreme Court to hear arguments on the executive order by President Donald Trump banning travel from six Muslim-majority countries. The court will take up the issue in October, but in the meantime, part of the ban will go into effect. Travelers with “bona fide” connections to the U.S. — close family, business, or academic — should not be blocked from getting visas under the current decision.

So what does that mean for business travel? We expect less chaos at the airports, but confusion remains.

Greeley Koch, executive director of the Association of Corporate Travel Executives, offered this reaction in a statement: “There are reasons to be heartened by the Supreme Court’s decision [Monday], in particular the provision that would allow travelers with legitimate ties to the U.S. to continue to enter the country. But the key to successful implementation—and to minimize the impact to businesses—is clearly defining the ‘significant business or professional obligations’ that will allow travelers with proper documentation to enter the U.S. and keep the economic engine running. We will be eagerly awaiting clarity until this issue can be definitively resolved.”

On that other ban front, the threat of an in-cabin “laptop ban” appears to be giving way to a policy of increased security around the world for all U.S.-bound flights. Again, specifics are scarce. In another statement, Koch called the new procedures “far preferable to an outright electronic device ban” for business travelers, but cautioned that the details are important.

“How onerous will these new protocols be for travelers and airlines?” he asked. “What if an airport or airline has difficulty complying—does that lead to a ban on electronics in the cabin? Until we have the details, this policy has the potential to become a de facto device ban.”

Uncertainty around security restrictions can affect traveler satisfaction, as can a multitude of other factors. It seems like a given that travel managers should know how satisfied (or not) road warriors are. A new study, however, shows that 31 percent of North American travel managers who responded to a survey never measure traveler satisfaction.

Given the state of the world and the rapidly evolving forces that impact corporate travel,  we think that’s a conversation worth having.

— Hannah Sampson, News Editor

Business of Buying

Hotel CEOs Love Direct Booking But They Have Varied Views About Strategy: Whether you choose to view it as a war or not, it’s fairly unanimous that nearly every hotelier wishes he or she would have more direct bookings versus bookings made through an online travel agency. Read more at Skift

German Hotel Booking Giant HRS Tilts Further Toward Corporate Travel: We applaud Germany’s largest travel tech company for trying to help business travelers check in and check out of hotels more quickly by investing in app-connected sensors at hundreds of hotels. Read more at Skift

Amtrak’s New CEO Is Delta Air Lines’ Old CEO: Before Richard Anderson took over Delta, the airline was a mess. Now, it’s considered by many as the best-run airline in the United States. We’d love to think Anderson can do something similar here, but fixing Amtrak will be a much more challenging task. Read more at Skift

Are Travel Managers Missing Out When They Don’t Solicit Business Traveler Feedback?: Many travel managers do not solicit feedback from their travelers, which seems like a missed opportunity. The evidence, however, shows that reacting to traveler feedback doesn’t necessarily lead to more satisfied travelers. Read more at Skift

Safety + Security

Trump Travel Ban Partially Upheld by Supreme Court in Temporary Ruling:
The stage has been set for a showdown in October that will have serious ramifications for the U.S. travel industry. Read more at Skift

Supreme Court Travel Ban Ruling Not Expected to Create Airport Chaos: While the U.S. Supreme Court-allowed version of the travel ban is more limited than earlier versions and unlikely to create mass chaos, the travel industry will still have to deal with the fallout of the Trump administration sending a non-welcoming message about international travel. Read more at Skift

Airline Laptop Ban Will Be Relaxed if Additional Security Measures Are Achieved: Despite the big talk about enhanced screening, this is a retreat by the U.S. and a win for airlines that pushed a more strategic approach to security. Read more at Skift

Disruption + Innovation

Etihad To Let Passengers Bid for Adjacent Seats Among Series of Revenue Moves: Etihad may be able to squeeze some extra revenue by giving passengers the option of stretching out a bit more in the seats next to them but selling the seats would be a lot better. Read more at Skift

Google Picks Avis to Run Its Self-Driving Car Fleet Pilot Program: Using car rentals to get consumers familiar with the technology is a smart move. Smart enough that Apple had the same idea at the same time. Read more at Skift

Apple Partners With Hertz for Self-Driving Car Trials: This is clearly an idea with legs, given all the news in one week alone. We just want to know how long it will take for public sentiment — and corporate travel policy — to embrace the option once the technology is ready. Read more at Skift

COMMENTS

Skift editors Hannah Sampson [hs@skift.com] and Andrew Sheivachman [as@skift.com] curate the Skift Corporate Travel Innovation Report. Skift emails the newsletter every Thursday.

Subscribe to Skift’s Free Corporate Travel Innovation Report

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Pilots Group Says Proposed Training Changes Would Lead to ‘Pilot Puppy Mills’

Stephen M. Keller  / Southwest Airlines

Pictured is a Southwest Airlines pilot. The U.S. House of Representatives is considering a bill to require less hours in pilot training. Stephen M. Keller / Southwest Airlines

Skift Take: The 2009 crash of Colgan Air flight 3407 was linked to pilot exhaustion and a lack of training. Training for regional airline pilots was made more rigorous in the years after the crash, and now the U.S. House of Representatives wants to loosen things up again. That’s a big fail.

— Dennis Schaal

A Republican-led Senate committee on Thursday backed an aviation bill that omits one of President Donald Trump’s goals — turning air traffic control operations over to a private company.

The legislation would increase spending for airport improvements and would protect passengers from being forcibly removed from a plane once they are approved to board.

The plan to reauthorize federal aviation programs through Sept. 30, 2021, has support from Republicans and Democrats, and passed the Senate Commerce, Science and Transportation Committee by voice vote.

Still, a major fight is brewing over a provision that would expand the type of training that co-pilots could receive to meet the 1,500-hour requirement necessary to hold a pilot license.

A House panel this week approved legislation that would split off air traffic control operations from the Federal Aviation Administration — at odds with the Senate version.

Sen. John Thune, R-S.D., the committee chairman, said he was “open-minded about the idea,” but appreciates that concerns existed, so the proposal would be considered more when the bill advances to the full Senate.

Several Republicans fear the impact on rural airports from privatization, and many Democrats oppose the change.

Sen. Bill Nelson, D-Fla., was adamant about opposition to privatization, saying that no matter how hard various interests pressed, the proposal lacks broad support at the committee level and in the full Senate. He described the proposals as “simply not there as a sound idea for the safety of travelers, taxpayers, the economy and the security of this country.”

The union representing air traffic controllers supports a split from the FAA. In opposition are various aviation groups that often rely on smaller airports for business travel, recreation, pilot training and crop spraying. They fear the board operating the nonprofit company could be controlled by the major airlines and that the smaller airports would become a lesser priority.

On pilot training, Thune said his proposal could help ease a shortage for regional airlines. Democrats warned that the change would undermine safety.

Congress directed improved pilot training and experience requirements in 2010 after a crash near Buffalo, New York, that killed 49 people on the aircraft and one person on the ground. Since those rules were enacted, there have been zero fatalities on U.S. passenger airliners.

Thune said the law already allows some academic training to be counted toward the 1,500 hour, flight time requirement.

“This provision would simply allow for other quality training opportunities over potentially less valuable amassing of flight hours,” Thune said.

Sen. Tammy Duckworth, D-Ill., said any accident that occurred with a pilot who had received training through the new standards “will be on us.”

Nelson told committee members that he was instructed by Minority Leader Chuck Schumer, D-N.Y., that if the bill contained Thune’s proposal when it reached the Senate floor, he would use every parliamentary tactic available to block it.

The Air Line Pilots Association International opposes Thune’s proposal. It said his amendment would allow for “pilot puppy mills.”

“These types of second-rate institutions and the substandard pilots they were producing were exactly the reason Congress mandated improvements in pilot training,” the union said.

Thune said after the vote that he’s willing to work with Democrats to ease their concerns.

“But I do think that we have a serious crisis brewing in rural areas of the country, smaller communities and smaller airports,” Thune said regarding a shortage of certified pilots.

One area where lawmakers are united is in providing passengers with more protections from the actions of the airlines, particularly to prevent the forced removal of passengers unless they pose a health or safety risk. That’s a direct response to a United Airlines passenger who was violently dragged off a flight out of Chicago earlier this year.

The bill also would eliminate the caps on compensation passengers can receive if they are involuntarily bumped from a flight.

__

This article was written by Kevin Freking from The Associated Press and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Travel to Russia Surges Despite Geopolitical Tension

Dmitriy Fomin  / Flickr

Tourism to Russia is booming as the country has worked to improve its offerings for travelers. Military aircraft over Moscow during a 2015 celebration. Dmitriy Fomin / Flickr

Skift Take: Russia is experiencing a huge tourism Trump bump, and tour operators are slammed with demand from U.S. travelers.

— Andrew Sheivachman

Greg Tepper typically sends 1,500 travelers to Russia every year. Since he founded his company Exeter International in 1992, he’s been one of the foremost leaders in the United States of luxury travel to Russia. And this has been his best year in a very long time—maybe ever.

“I haven’t seen demand for Russia like this since 1989, which may have been the greatest time ever for Americans in Russia,” he said. “It was perestroika. It was Gorbachev. People wanted to see the place that they kept hearing about.” Now, in the aftermath of a tanking oil industry, the collapse of the ruble, American sanctions, and Trump-driven political scandals, Russia is back in the headlines—and, at least where travel is concerned, back in the money.

According to data from the Moscow branch of JLL Hotels & Hospitality Group, an advisory firm for hospitality investors, the hotel occupancy figures for the first quarter of 2017 are the highest they’ve been in five years. Tatiana Veller, head of JLL’s Russia group, says the highest gains were posted in the midscale sector, which has added 11 percent to its bottom line so far this year, thanks to a high volume of domestic, leisure, and group travelers.

Tepper’s Florida-based company has posted even more impressive gains. He says its Russia inbound business grew 30 percent from 2015 to 2016, and bookings in 2017 are already on pace to break that record by an additional 12 percent.

Also posting double-digit, year-on-year growth are luxury specialists Ovation Vacations, high-end group tour purveyor Tauck, bespoke outfitter Abercrombie & Kent, and the mass-market behemoth Globus, which, according to the industry publication Travel Pulse, is seeing 38 percent growth in Russia-bound travelers thus far in 2017.

Even airports and airlines are on track to set growth standards. In the first five months of 2017, Russian airlines carried 35.81 million passengers—up 22 percent year on year—according to Federal Air Transport Agency figures, with a record high of 8.672 million arrivals in May alone.

Russians Rediscovering Russia

Russia’s travel spike is the result of a few factors. For several years in a row until the late 2000s, Moscow had been among the top three of the world’s most expensive destinations, explained Veller. “ You could pay $300 or $400 for a Courtyard Marriott.” A luxury hotel could cost you $1,000 a night—that’s the average nightly rate that the general manager of the Park Hyatt Moscow once bragged he’d hit. “Coming back to 2014, prices dropped dramatically,” Veller continued. “Now, for $350 or $400, you can stay at the Ritz-Carlton or sometimes even the Four Seasons.” That added value is what initially catapulted Tepper’s Russia-bound business by 30 percent to 40 percent.

And now, in the aftermath of  U.S. and E.U.-led sanctions , domestic travel inside Russia is experiencing a significant renaissance. “Because of the slightly separatist policies of our government, it has become impossible or undesirable for a lot of government-related workers on a high level to travel outside of the country,” Veller added diplomatically. Those are the people with the most dispensable income, she said, and the ones who would otherwise decamp from Moscow to Greece, Spain, or Turkey in the summertime. Instead they’re heading to Sochi, which is benefiting from what Veller calls a “free captive market,” and traveling domestically within their own countryside.

This isn’t limited to government officials. While Russians have cut their spending on international travel by roughly 30 percent since 2015, according to the United Nations World Tourism Organization, domestic airport arrivals increased 10 percent in the past year alone. In other words, Russians are rediscovering Russia.

The sanctions that catalyzed Russia’s domestic travel market were largely Obama’s doing. But the spike in American interest? That’s all Trump. Both Tepper and Veller say they’ve seen an anecdotal correlation between the level of Russo-American tensions and the number of U.S. luxury travelers landing in Moscow. “It’s reversed to what would be common logic,” said Veller, “but upscale and upper luxury hotels are looking at a higher share of American guests since the tensions started.”

The Revival Movement

Another way sanctions have benefited Russian travel is by forcing a Russian renaissance. “There’s a new attitude in Russia that says, ‘we don’t really need the West anyway, we can do it all ourselves,’” explained Tepper. “All this stuff you hear from Putin about the decadence of the West being evil, that’s all about turning inward and being a real Russophile.”

Looking inward—and avoiding projects that rely too heavily on international sourcing—has spurred several new tourism attractions that make a trip (or a return visit) worthwhile. In St. Petersburg, New Holland island is a long-abandoned shipyard built by Peter the Great that has reopened this month as an urban entertainment center, complete with food and dining concepts, retail, public parks and playgrounds, and a concert venue. “It’s the hot thing right now in St. Petersburg,” said Tepper.

The Hermitage, also, has recently introduced a new wing in the former General Staff building across the square from the Winter Palace. It houses a collection of large-scale Impressionist paintings that had been held in storage for decades. To take it all in, book into the historic Hotel Astoria, which Tepper calls the best location in town.

In Moscow, the Russian Revival is even more apparent. Such new hotels as the Four Seasons and the recently redone Park Hyatt are popping up. (Tepper prefers the latter, unless you splurge for a room with a view at Four Seasons.) The Bolshoi is fresh off a top-to-bottom, $800 million renovation.

And as part of a massive beautification initiative, a new 32-acre park will soon open next to Red Square, showcasing Mother Russia’s seven climactic zones, from the tundra of Siberia to the steppes of Eurasia. It’s rumored to be among the most expensive parks in the world, with an estimated price tag of nearly half a billion dollars. It’s being designed by Liz Diller and Charles Renfro, the same team that was part of creating New York’s High Line.

A Russian food movement has also taken root, with such places as World’s 50 Best-rated White Rabbit elevating the nation’s cuisine beyond your standard borscht or beef stroganoff. At the steakhouse Voronezh, it means a focus on southern Russian cuts, known for their excellent marbling; at Dr. Zhivago, it means creative twists on the dumplings called pelmini, which are stuffed with locally hunted venison and duck rather than minced beef.

Even Russian embroidery and design are getting a rethink: Tepper sets up guided studio visits with upcoming fashion names such as Natali Leskova and Yulia Zhuravleva, who take their cues from traditional Russian arts and architecture.

It all adds up to a rich cultural experience that cements Russia’s artistic legacy for the 21st century—and it’s as far from the Cold War hangover image as you could possibly imagine.

©2017 Bloomberg L.P.

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

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Many United Airlines Awards Flights Will Soon Cost More Miles

Ted S. Warren  / Associated Press

United is raising the prices for some award travel. Picture is a United Boeing 787-9. Ted S. Warren / Associated Press

Skift Take: Starting July 1, United started hawking Chase-branded credit cards on board, with flight attendants earning a $50 commission for each approval. Will the flight attendants remind customers that they’ll need a lot more miles for some trips starting later this year? We doubt it.

— Brian Sumers

Want to use United MileagePlus miles for travel on popular domestic flights?

It may soon cost you more miles. On Thursday, United said it will copy most other U.S. airlines, including American Airlines and Delta Air Lines, and raise prices for the most sought-after trips. However, if a flight is not in demand, United promised to keep prices relatively low.

The change, which takes effect on November 1, makes United’s program more complicated for domestic flights.  For now, on all but the shortest trips, United has two levels of coach award pricing — either 12,500 miles or 25,000 miles one-way.

Under the new system, 12,500-mile one-way tickets will remain for less-in-demand flights. But if a flight is popular — think holiday or summer travel, or even a flight on Thursday afternoon, when many business travelers prefer to fly — United will charge more miles.

The reason is simple. Airfares change constantly, and United, like its competitors, has calculated it’s not sound business to offer every domestic seat for two set prices. In addition to Delta and American, Southwest Airlines and JetBlue Airways also require more points based on a flight’s popularity.

“Since flight prices fluctuate based on a variety of factors. We’ve decided to take those same factors into consideration for award travel pricing,” United said in a question and answer memo to employees.

For travelers, the good news is that United will cap what it charges. In the lower 48 U.S. states, United said it will require no more than 32,500 miles for one-way coach seats. It recommends customers who want the cheapest price consider “planning ahead and booking early.”

Zach Honig, editor-in-chief of the ThePointsGuy, evaluated United’s changes and said they are not as “egregious” as American’s, which last year charged as many as 75,000 miles one-way for domestic economy class flights over the Thanksgiving holiday. American made significant changes to its mileage tickets in 2016, when its president was Scott Kirby, who now has the same job at United. 

Honig credited United with being more transparent than Delta, an airline that has often raised prices of award tickets without notice. 

Business class tweaks

United also will require more miles for many business class tickets both within the United States — on some transcontinental flights and flights to Hawaii — and worldwide.

To many international destinations, United will require 2,500 to 10,000 more miles for business class, each way, for the cheapest awards. Prices will go up on United flights and flights flown by the airline’s partners.

United also made charges that will be welcomed by more worldly MileagePlus members. Most program members don’t redeem flights in Europe, but United will be reducing the number of miles required for short nonstops, such as Frankfurt to Paris. Savvy travelers, like Honig of the PointsGuy, often capitalize on offers outside the United States.

Still, Honig said MileagePlus will no longer be as lucrative for travelers.

“Could these changes have been a heck of a lot worse?” he said. “Absolutely. But there’s no question that this latest round of updates represents a significant devaluation.”

You can find United’s entire new award chart here. 

Ryan Wolkov

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Are Travel Managers Missing Out When They Don’t Solicit Business Traveler Feedback?

Global Business Travel Association

Are travel managers and corporations missing out by downplaying employee feedback? Pictured is a woman at an airport. Global Business Travel Association

Skift Take: Many travel managers do not solicit feedback from their travelers, which seems like a missed opportunity. The evidence, however, shows that reacting to traveler feedback doesn’t necessarily lead to more satisfied travelers.

— Andrew Sheivachman

Travel managers want their travelers to be effective and happy on the road, but they also want them to book inside company policy.

A recent survey from the Global Business Travel Association (GBTA) asked 313 travel buyers and managers in North and Latin America about the role traveler well-being plays in determining corporate travel policy.

The survey found that traveler well-being is a major concern for travel managers, of course, and that the more satisfied a traveler is, the more likely they are going to stay in policy during a trip.

Despite this, many travel managers don’t rely on traveler feedback when tweaking their policy; 31 percent of the North American travel managers said they never measure traveler satisfaction.

How Often Do North American Companies Measure Traveler Satisfaction
After Every Trip 7%
Monthly 7%
Quarterly 17%
Yearly 39%
Never 31%

“Travel managers must balance traveler well-being and satisfaction along with many competing priorities from cost-savings and compliance to duty of care and keeping up with the latest technology,” said Monica Sanchez, GBTA Foundation director of research. “Business traveler well-being efforts can take on a variety of forms focusing on efficiency, comfort, choice and service. Collecting traveler feedback can inform travel programs what areas to pay the most attention to, and this study indicates that traveler well-being and policy compliance do not have to come at the expense of the other.”

When companies do look at feedback, they mainly ask about the traveler’s experience with customer support provided by travel management companies, online booking in general, and online booking tools.

In their feedback, travelers are saying they are more satisfied now than two or three years ago, perhaps the result of better technology tools making their lives easier.

“Travel programs must balance well-being and satisfaction with their other priorities,” concludes the report. “It is not clear, however, that they face a significant trade-off. High compliance travel programs have similar—if not higher—traveler satisfaction compared to lower compliance programs, according to travel managers surveyed. This suggests that traveler well-being/satisfaction efforts may not undermine compliance – and in fact may even improve it.”

Ryan Wolkov

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