The UK Wants to Develop a New Aviation Strategy

Christopher Jasper  / Bloomberg

The government wants to help the UK aviation industry grow. Christopher Jasper / Bloomberg

Skift Take: It seems strange to be launching a consultation on the UK’s future aviation strategy when so much still remains up in the air. Although given backed by the government, a new runway at Heathrow faces plenty of opposition and no-one is sure exactly what will happen when the country leaves the European Union.

— Patrick Whyte

Britain’s strategy for boosting the aviation sector will seek to enhance connectivity as it quits the European Union, tighten noise and pollution curbs, tap new anti-terrorist technologies and improve the travel experience with everything from personal baggage collection to smoother border controls.

The plan would also seek to safeguard Britain’s aerospace manufacturing base, advance the development of a homegrown space industry and encourage new developments such as drones and personal “flying taxis” while maintaining a rigorous regulatory regime, according to a call for evidence issued by the Department for Transport Friday.

At the heart of the strategy, intended to guide policy making to 2050 and beyond, is a commitment to build a 16 billion-pound ($21 billion) third runway at London Heathrow airport. The study will also consider how best to utilize spare capacity at other hubs before the new strip opens in 2030, especially as Britain seeks to safeguard and extend air links before quitting the European Union.

“In the short term, post-referendum, the government is focused on the 44 countries including EU member states, the U.S. and Canada, where our market access is via EU-negotiated agreements,” the 82-page DfT document says, adding that “new arrangements are a top priority for the government.” The settlement with the EU on maintaining air access will itself be separate from the strategy plan.

Britain has the world’s biggest air transport and aerospace sector after the U.S., worth 22 billion pounds annually to the economy, while London has the busiest airport system, with flights to more than 370 destinations in 100 countries.

Also under consideration is the impact of Britain’s air-passenger tax on competition, whether the system for allocating operating slots at busy airports might be improved, and if current rules on state aid are “correctly balanced.”

Virgin Atlantic Airways Ltd. said that while the consultation is welcome, the final strategy must focus on the needs of the consumer and enhancing competition. What the carrier called “the world’s highest long-haul flying tax” should be reduced and new slots at Heathrow, where capacity will be expanded to 135 million passengers a year, should be allocated in a way that makes British Airways less dominant, it said in a statement.

Airports and airlines should seek to alleviate so-called “pinch points” in the travel experience, according to the proposals. That could include luggage portering, with bags collected from the passenger, and in-town check-in, both already on offer in Asia. The Hong Kong Airport Express lets travelers drop luggage at the station two days before flying and collect it at journey’s end.

U.K. Transport Secretary Chris Grayling will launch the public discussion Friday at Manchester Airport in northern England, where a 1 billion-pound program to double the size of the hub’s Terminal 2 is set to begin. The expansion aims to increase annual passenger numbers from 27 million to 45 million.

 

©2017 Bloomberg L.P.

 

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

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Cash-Back Biz Travel App Raises $7 Million: Travel Startup Funding This Week

Dosh

Dosh’s app debuted in the Apple App store in April 2017. Some of the team poses for a celebratory picture here. Dosh

Skift Take: Dosh says it has 55 people working on letting travelers earn cash back on the money they spend on business trips, while Hoperator has debuted to bring AI tools to hotel chat. Each has promise.

— Sean O’Neill

Each week we round up travel startups that have recently received or announced funding. The total raised this week was more than $8 million.

>>Dosh completed a Series A round by raising an additional $7 million. Investors include Goodwater Capital. This round brings the total it has raised to $13.5 million.

The Austin, Texas-based company’s pitch is that it lets a person book work-related travel on their corporate card but get cash back on their personal card. The app also works for other retail purchases unrelated to travel.

Travelers have to book through the app to get the cash back. Amounts of reward vary. Some recent deals included 5 percent of the purchase price back on Avis rental car rentals, and 18 percent back on the value of Hyatt hotel stays.

On the plus side, the app credits your credit or debit card without requiring promo codes or mail-in rebates. On the down side, it has not signed up as many travel merchants yet as it touts, according to Skift checks of the app for use in New York and Philadelphia. It’s unclear what merchants get out of participating other than a promise of data sharing. Merchants risk cannibalizing existing sales unless deals result in incremental business.

Dosh, which says it has 55 full-time employees, only has deals in the U.S. card-link offers on Dosh are all for restaurants

>>Hoperator is a messaging service provider for travel companies that has received a Series A round of funding from artificial intelligence software company Veteran Technology Group.

The St. Louis, Missouri-based company provides live chat to hotels, hostels, B&Bs, tour operators and vacation rental owners.

Founded in December 2015, the company has tested its product for hotels and hostel in Venice, Italy, relying on $250,000 in angel investment.

Co-founder Chris Douglas says, “aside from partnership integrations and more robust analytics, we’re working on developing our AI, we’re adding integrations with Facebook Messenger, Skype, SMS, email, etc. so that hotels can use Hoperator to manage all of their communication channels. We’re also working with a partner to allow a business to chat with visitors on an OTA’s website.”

Check out our previous startup funding roundups, here.

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Business Travel Spending Is Expected to Gain Steam Globally by 2018

staalnakke  / Flickr

Spending on business travel across the globe is expected to increase 5.2 percent this year. The Grand Hyatt in Shanghai is pictured here. staalnakke / Flickr

Skift Take: While growth prospects for business travel spending look strong for next year into 2020, there is still enough uncertainty that experts are adding lots of caveats to their forecast.

— Hannah Sampson

Spending on business travel around the world puttered along in 2016, rising a less-than-expected 3.5 percent to $1.26 trillion, according to a new report this week.

The outlook, according to the Global Business Travel Association, improves somewhat this year and more moving into 2018 and beyond — but as recent history has shown, those forecasts could be dashed by unexpected global events.

“Stronger footing in emerging markets and continued economic stimulus in the developed world has supported global stability leading to a positive forecast that is unfortunately clouded with more uncertainty than we have seen in decades,” GBTA executive director and chief operating officer Michael McCormick said in a statement.

After increasing nearly 4 percent in 2015, spending was expected to grow 5.2 percent last year but fell short. The new outlook calls for 5.2 percent growth this year, accelerating to 6.1 percent in 2018 and about 7 percent the following two years. Those expectations are “pending many global uncertainties,” however, including the threat of terror, geopolitical tensions, immigration crackdowns, and trade policy changes.

“The renewed optimism for business travel activity is being driven by an uptick in global trade, expected improvements in the manufacturing sector, economic improvements in emerging markets and shifting currency dynamics,” the report says. “Many downside risks remain, however. Most notably, public policy in the U.S and abroad has the potential to drastically change the global business travel environment.”

The outlook points out that some unknowns in the U.S. could turn out to be good for business travel: President Donald Trump’s intentions to lower corporate taxes, reduce regulations, and invest in infrastructure could all spur more business travel.

But restrictions on trade policy, travel bans, and restrictions on electronics — which just gave way to stepped up security measures — could be harmful, GBTA said.

“Policies that would have an incredibly negative impact on business travel activity include any policies aimed at reducing the free movement of goods, services or people,” the report said.

In the UK, the worst fears about the decision to leave the European Union have not been realized as the economy has continued to grow even while the value of the pound has dropped.

But the Brexit impact won’t be clearly understood until negations between the UK and European Union member states are completed.

“Less restrictive trade policies that mirror exiting agreements, so-called ‘soft Brexit,’ would help to ensure that business travel activity remains on a healthy trajectory. This is thought to be the most likely scenario,” the report says. “Should the UK go the ‘hard Brexit’ route, with more restrictive trade policies, business travel activity would likely suffer.”

Still, the outlook expects the UK to join India and Indonesia in averaging double-digit business travel spending growth over the next five years. Other European countries including Norway, Sweden, Spain, France and Germany are also expected to see strong growth.

In a separate report, released this week with Carlson Wagonlit Travel, GBTA’s education and research arm said travel prices are expected to rise next year.

The 2018 Global Travel Forecast indicates that airfares worldwide are expected to be up 3.5 percent, while hotel room prices will increase 3.7 percent. Ground transportation costs should be more stable; they are forecast to rise 0.6 percent.

“The higher pricing is a reflection of the stronger economy and growing demand,” Kurt Ekert, president and CEO of Carlson Wagonlit Travel, said in a statement. “The global numbers from this forecast should be considered strong leading indicators of what 2018 will mean for global businesses, as we anticipate higher spending.”

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Marriott and Hilton’s New Cancellation Policies Won’t Impact Corporate Travel as Much as You Think

Marriott International

Marriott International recently implemented a new cancellation policy for its hotels in the Americas. Marriott International

Skift Take: Forty-eight hours isn’t too bad, but things might be tougher for everyone, corporate and leisure travelers alike, if the policy stretches to 72 hours down the line.

— Deanna Ting

Despite initial concerns from the corporate travel community regarding Marriott’s new 48-hour cancellation policy, one corporate travel services provider says these new booking policies won’t hurt corporate travelers and their companies much.

TripBAM, a platform that tracks hotel rates and rebooks them at a lower rate for its corporate clients, mostly mid- to large-size companies, said the financial impact of these new cancellation policies from Marriott and, soon, Hilton, to companies isn’t nearly as bad as you may think.

TripBAM examined its more than 10 million annual hotel reservations within the last year and found that of those bookings, only 4.9 percent of travelers, on average, canceled or changed their hotel reservations within 48 hours of check-in. If each of those changes were to result in a cancellation penalty, TripBAM estimated the cost would be $179 per occurrence.

“If you have 100 bookings, approximately five corporate travelers will cancel within that new booking window,” TripBAM CEO Steve Reynolds explained. “It’s not that big a deal. It’s not going to impact you that much. But it’ll really impact you [companies] if you have a preferred relationship with those hotels. Before, the hotel used to give you day of check-in to cancel, and now they give you 48 hours.”

Reynolds’ analysis is a direct contrast to a recent poll conducted by the Business Travel Coalition, which asked 216 travel manager and travel management company executives from 12 different countries to weigh in on Marriott’s new cancellation policy, which charges a one room-night penalty for cancellations made within 48 hours of check-in. That poll found 59 percent of respondents saying they would likely book away Marriott properties, and 30 percent saying they would consider a travel policy change that restricts travelers from booking a Marriott property.

Why Hotels Are Doing This

This shift in cancellation policy simply makes good business sense for hotels.

Said Reynolds, “It’s a revenue stream. What they are trying to do is reduce some of the volatility round their occupancy. If I have people cancel last minute, that’s a lot of rooms I have to sell last minute. It gets really painful, and they want less volatility three to five days out as much as they can.”

He added that these 48-hour rates have existed long before these new policies went into effect and that the party most likely to be impacted by them will be leisure travelers, not corporate travelers.

Marriott announced its new policy, which impacts hotels in the Americas across all brands with the exception of Design Hotels and Marriott Vacations Worldwide, on June 15. A Marriott spokesperson issued the following statement regarding the change in policy, saying this is not only better for the hotels but for other guests seeking accommodation, as well.

“The revised policy allows us to make rooms available to guests that would have otherwise gone unoccupied due to a last-minute cancellation. While cancellation policies vary by hotel, hotels whose policy is to allow guests to cancel their room reservations on the day before arrival without incurring a fee are faced with a significant number of unsold rooms due to last minute cancellations. Guests will now be required to cancel their room reservation by midnight 48 hours prior to arrival in order to avoid a fee. This will allow hotels a better chance to make the rooms available to guests seeking last-minute accommodations.”

Fifty-three percent of respondents from the Business Travel Coalition survey also said they anticipate other companies will follow suit, and they’re not wrong: Hilton will soon implement its own version of this cancellation policy by the end of this month for its hotels in the U.S. and Canada.

A Hilton spokesperson issued the following statement to Skift regarding the change in policy: “Right now, there are no changes for our guests, but we have proposed an update to our policy guidance for U.S. and Canada hotels that will begin on July 31st. We have proposed updating the default house cancellation policy to 48-hours (72-hours in select locations only) for our managed properties and have suggested the same for franchised hotels. The decision to participate will be made at the property level for all franchise hotels.”

“What are the reasons behind the update? Our goal is to provide exceptional experiences: every hotel, every guest, every time. We regularly review guest booking and cancellation patterns across our 5,000+ properties, and have seen cancellation rates rise the last few years. These insights have led to the proposed update, which will allow us to maximize the number of available rooms for guests seeking accommodation. Business travelers, leisure travelers, and hotel owners will all benefit from access to rooms that would previously have gone unused.”

Reynolds, for one, thinks the cancellation window will stretch to 72 hours within the next two-and-a-half-years. “It went to 24 hours five years ago,” he explained. “Five years later now it’s 48. In two and a half years, it’ll be 72 if they can. I don’t blame them. If I had to fill up a hotel, I’d need to fill it up as soon as possible, and I would do the same.”

What Companies Can Do

Reynolds had the following advice for companies concerned by this new cancellation policy at Marriott and Hilton.

“If you have a contract with a hotel where you promise so many room nights and they give you a discounted rate in return, you need to make sure you pay attention to the cancellation policy, especially if you think your travelers are likely to cancel within 48 hours of checking in,” he said.

Reynolds advised asking for more lenient cancellation policies in negotiated rates, encouraging corporate travelers to use preferred hotels, and contacting hotels to obtain waivers whenever possible.

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The Future of Business Travel — Skift Corporate Travel Innovation Report

Andrew Sheivachman  / Skift

The corporate travel ecosystem is looking to innovate. Pictured is a general session at the 2017 Global Business Travel Association Convention in Boston. Andrew Sheivachman / Skift

Skift Take: New tools streamlining booking and expenses are here from big travel management companies, but they still lag behind consumer products in many ways. Regardless, enhanced connectivity and responsiveness are positive steps forward.

— Andrew Sheivachman

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.

The 2017 Global Business Travel Association Convention is now in the books, and the big travel management companies were on site in Boston touting new programs and technologies easing pain points of travelers and travel managers alike.

The revolution in how business travelers plan trips and manage them on the road, however, has yet to occur.

You can check out my GBTA notebook here, reflecting on the trends and news that really matter.

This week we also have important articles on the shifting behavior of travelers related to how they travel for business and how travelers view airline loyalty programs (most don’t really care about them).

Finally, Skift travel tech editor Sean O’Neill looks into the case of iCars, which launched around GBTA last year and has apparently had some trouble ramping up its operations. Look below for the real story.

— Andrew Sheivachman, Senior Writer

Business of Buying

U.S. Business Travelers More Likely To Drive Than Fly to Meetings: It can be easy to forget that most U.S. business travelers aren’t road warriors hitting multiple cities in a week. Sometimes we fixate too much on those who travel the most instead of the majority, who spend a day or two visiting clients or potential customers. Read more at Skift

The Real Reasons Business Travelers Don’t Get What They Want: Beyond limiting company spending, there are financial reasons why business travelers feel so constrained by corporate travel-booking policies. It’s time for everyone to be honest about them. Read more at Skift

New Research Suggests It Doesn’t Always Pay to Book Direct for a Hotel: Maybe it really is better to keep clicking around if you’re hoping to save money (and you don’t want to be a member of a hotel loyalty program). Read more at Skift

U.S. Travelers Shun Airline Loyalty Programs: Many airlines have rewritten loyalty rules in recent years to make their programs more profitable and reward the most lucrative travelers. But our data show many U.S. travelers don’t want to play by those rules and aren’t loyal to any airline. Read more at Skift

Safety + Security

U.S. Asks Appeals Court to Block Travel Ban Liberalization While Supreme Court Decides: It is doubtful that the U.S. Justice Department will get anywhere with the Ninth Circuit Court of Appeals, which has made its views known in opposition to the Trump travel ban on several occasions. Read more at Skift

Supreme Court Protects Grandparents From Trump Travel Ban: The U.S. Supreme Court says what families have been arguing for weeks: Grandparents and grandchildren of those already in the country should be considered “close relatives” and not kept out under the travel ban. Justices will allow the Trump administration to keep restrictions on refugees. Read more at Skift

Disruption + Innovation

DerbySoft Prepares for a Hotel Distribution Free-for-All: DerbySoft has thrived as a vendor that helps global hotel groups with distribution partly because its top boss Ted Zhang called the rise of Booking.com early on. Zhang’s latest predictions about what’s next for the industry may ruffle some feathers. Read more at Skift

iCars Denies That It Is Spinning Its Wheels in Corporate Ground Transport: In theory, the merger of iCars and Limos.com promises a thriving black car service for corporate travelers. In practice, there is circumstantial evidence this investment vehicle hasn’t yet left the repair shop. Read more at Skift 

U.S. Airline Passengers Increasingly Buy One-Way Tickets Rather than Roundtrips: This has been true for awhile. In competitive markets, airline passengers often save money if they buy two one-way tickets. But remember that this can be be a risky move, because cancellation fees tend to be higher with this approach. You’ll have to cancel two tickets, not one. Read more at Skift

GBTA Notebook: The Future of Corporate Travel Is Basically the Same as the Past: Another year, another GBTA. It seems like corporate travel is heading in the direction of offering more options to business travelers, but progress remains slow. 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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U.S. Destinations Preparing For Overtourism Burst During Total Solar Eclipse

Amy Meredith  / Flickr

Cities such as Madras, Oregon in the path of next month’s total solar eclipse are preparing for large influxes of tourists eager to experience the spectacle. Amy Meredith / Flickr

Skift Take: Cities like Madras, Oregon and others in the path of next month’s total solar eclipse have lessons to offer other destinations about hosting once-in-a-lifetime events and the kinds of decisions and processes that it takes to welcome throngs of visitors.

— Dan Peltier

On Monday morning, August 21, a 70-mile-wide swath of America from Oregon to South Carolina will plunge into darkness during daytime hours.

The total solar eclipse—the first fully visible from the U.S. since 1979 and the first coast-to-coast total solar eclipse in 99 years—will reveal plasma flares on the sun visible from earth as the moon passes directly between them.

It will also drive an expected 100,000 people to the tiny town of Madras, Ore.—current population a little more than 6,000.

Twenty-four of the visitors will stay at Lysa Vattimo’s house.

“It’s organized chaos,” Vattimo said with a laugh. She is the lead member of the City of Madras Solar Eclipse Planning Group, a team formed more than two years ago after city organizers realized they could have a serious logistics problem on their hands. Their first tip-off was even earlier—four years ago when a travel agency called Continental Capers bought out the entire Inn at Cross Keys in anticipation of this year’s event. In such a tiny locale, such a purchase generated plenty of curiosity.

“Apparently, some astronomer said that Madras was the premier location for viewing the eclipse based on its high altitude, big plateau, and the weather compared to other locations across the path,” Vattimo said. “He could barely get anybody [here] to pay attention to him. But when all the hotels started booking up years in advance, we realized this was a big deal.”

The Premier Viewing Spot

Madras is far from the only location along the flight path. Idaho Falls, Idaho; Lincoln, Neb.; Nashville, Tenn.; and Columbia, S.C., are among the nine other cities NASA lists as ideal for watching. The first point of contact will be Lincoln Beach, Ore., at 9:05 a.m. local time; “totality,” as astronomers call it, begins there at 10:16 a.m. Over the next 90 minutes, the darkness will cross through Idaho, Wyoming, Montana, Nebraska, Iowa, Kansas, Missouri, Illinois, Kentucky, Tennessee, Georgia, and North and South Carolina, ending in Charleston at 2:48 p.m. Eastern Daylight Time. Its longest duration will be near Carbondale, Ill., where the moon will block the sun for two minutes and 40 seconds.

As the smallest and some say optimal viewing spot along the route, the ranching town 12 miles from Warm Springs Indian Reservation will experience the onslaught of eclipse chasers quite dramatically. With its high elevation, flat plateau land mass flanked by pristine snow-covered mountains, and crystal clear desert skies, it’s perfectly suited to stargazing.

As for the eclipse itself, ask a science lover why it’s compelling, and he or she will respond in disbelief that you even have to ask.

“It hasn’t happened like this in a century, and it’s the only one we’ll see in our lifetime,” said Molly Baker, the head of communications at Arizona’s Lowell Observatory. “It’s going to be incredible when it gets dark and to see the nocturnal animal activity.”

Lowell Observatory and Oregon State University are sending dozens of scientists to Madras to observe and record the event; NASA is sending a cadre of astronomers. They expect to observe and document unusual animal activity in addition to the plasma flares and other celestial activity during the eclipse. (When unexpected darkness falls, many animals, such as birds, think night has fallen and take to roost.)

Baker and her 30 colleagues attending, plus additional volunteers, plan to stay mostly in campgrounds and RVs. She did admit to some trepidation.

“I’m looking forward to it, but I’m also nervous,” said Baker, who will arrive a couple days prior to the event. “It going to be pretty hectic.”

Handling the Hoards

On their side of things, Vattimo and her team didn’t waste time. They contacted the Oregon state police, transportation authorities, and local business owners and residents to talk about how the region would sustain such an influx. “We knew we needed to lock arms, get to know each other really well, and get prepared,” she said.

Madras’s chamber of commerce has held dozens of town meetings to urge business owners to stockpile cash, gas, and wares. The town and surrounding campsites have rented nearly 700 portable toilets, including some from Idaho, to meet demand, with garbage trucks scheduled to run nearly 24 hours a day to transport trash to huge dumpsters before it begins to smell in the summer heat.

St. Charles Medical Center of Madras & Bend has loaded up on such supplies as gauze, bandages, painkillers, and other sundry items that medics would need to treat the general casualties frequent at any other large gathering, such as a music festival, say, or Burning Man. Doctors there have canceled vacations; pregnant women close to their due dates are being told to leave to avoid getting stuck, according to local reports. Restaurants such as regional favorite Black Bear Diner have bought five-weeks’ worth of supplies for one week of customers.

(Speaking of Burning Man, yes, there are multiple more free-spirited festivals planned for near Madras during the time of the eclipse. Expect those to have the same free-living energy—minus the corporate baggage—as the annual Black Rock Desert retreat.)

Where People Are Staying

Since area hotels sold out long ago, many farmers are renting out camping spaces on their land in plots with such names as Sunset Solar Campground, Solar Celebration, Solar Eclipse on the Farm, and Totality Awesome. Campsite rates run roughly $300 a night, with a three-night minimum; RV packages are running scheduled shuttles will move campers from the farms to restaurants and grocery stores in town. Music, food, and entertainment are all planned for display at a nearby fairground.

Christina Carpenter has 275 reservations to stay on her 100-acre farm, Organic Earthly Delights —and could accommodate twice that if she had to. She has hired 40 people to build decks, fences, bunks, tables, outdoor showers, and the like. Her Organic Earthly Delights will feature sustainable farming and bee keeping sessions, cooking demonstrations, movie screenings, and host Joel Salatin, the popular holistic farmer, author, and lecturer, during the week of the event.

She’s also importing experts for guided astrology lessons.

“The astronomers are so excited,” Carpenter said on the phone. She had just finished planting a cover crop of grass perfectly timed to flourish by the time of the eclipse. “They’re coming in from Hawaii, and they already sent their telescope ahead of them.”

Other residents as far away as Bend (43 miles away) and Prineville (30 miles away) are making a killing on Airbnb and VRBO bookings, either renting out rooms in their homes or renting the whole house for the weekend in a matter of minutes. Rates on Airbnb range from $500 to $1,500 for a room for one night; entire houses are listed for $2,000 and more. You can stay on a pontoon boat in a nearby lake for $2,850, though you must bring your own lifejacket, which is required for the stay.

“There is a sense of panic,” said Beth Rasmussen, a Bend native. Rasmussen and her husband, Jesse, are the language arts and social studies teacher at Pilot Butte Middle School and vice principal of Jewell Elementary, respectively. As the parents of two young girls, they plan to stay put for the event, if only to avoid an anticipated six- or eight-hour drive back home along Highways 97 or 26.

“ They are telling us to expect one million people to come to Central Oregon,” Rasmussen said. “Everybody knows about it. There is definitely a lot of hype.”

The Deluge

In fact, large billboards along the two-lane highway into and out of town have advertised the event for years. Rick Hickmann, who has lived in nearby Bend since 1976, said he was dumbfounded when the billboards appeared two years ago. “I laughed when I saw it,” he said. “The sign was in the middle of nowhere, in the hot desert, with not a tree in sight. I thought, who in the world would go to Madras for that ?”

Fast-forward to July 2017 and the Oregon Department of Transportation is predicting “the biggest traffic even in Oregon history” and posting humorous bulletins in efforts to stave off vehicular calamity. (Two examples: Don’t be a luna(r)-tic: Arrive early, stay put, and leave late; If travelers plan ahead and come prepared, we’ll all dance together for two unforgettable minutes as the sun throws the moon’s shadow over us. If travelers don’t plan ahead, we’ll all go nowhere together for many forgettable hours probably throwing shade at each other.”

How to Do It Right

Not scared off yet? It’s not too late to get to Oregon to see the event. Flights into the nearest airport of any size, Redmond, the Saturday prior can still be had. They don’t cost as much as you might expect—nearly $700 from New York and $600 from Los Angeles, which is up slightly from routine fares but not, say, double what travelers might usually pay.

But don’t expect to get anywhere fast, and travel with plenty of water, gas, food, and any essential prescriptions. There’s plenty of room once you get there, as long as you’re OK with a lot of fresh air.

“You just have to be willing to camp,” Vattimo said. “There is glamping, or you can rent an RV and bring it out, or pitch a tent.”

On some of the farms around town, a friendly rancher will even set up the tent for you. It’ll beat staying with 23 others in a crowded home—though that might be a lunatic time, too.

 

 

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

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United Airlines Is Disappointing Investors With Its Mediocre Outlook

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Investors are getting cranky about United’s growth plans and outlook. A United plane is shown in flight. Simon Dawson / Bloomberg

Skift Take: United laid out plans last year that haven’t come to fruition, and investors are not pleased. Will they wait a little longer for results or abandon the airline?

— Hannah Sampson

United Airlines’ promise to catch up to Delta’s profits may be haunting the carrier as some investors grow impatient that the target may be slipping away.

Analysts grilled United managers about their plan for fast growth and their disappointing outlook for the third quarter. The shares fell the most in almost a year.

“What is the point of growing faster than GDP, faster than your peers, while your margins are still declining?” Evercore ISI analyst Duane Pfennigwerth asked during an earnings conference call Wednesday.

Chief Executive Officer Oscar Munoz last year pledged to narrow the profit gap with Delta, but the disparity appears likely to expand. Delta Air Lines Inc. last week said its passenger revenue for each seat flown a mile would increase as much 4.5 percent this quarter. United Continental Holdings Inc. forecast no more than a 1 percent gain — and maybe a 1 percent decline.

Munoz is under increasing pressure to show that his aggressive move to increase connecting flights this year at United’s major U.S. hubs and recapture lost market share will pay off in higher earnings. The risk is that the increased capacity instead weakens fares. United executives said their plan is on track will show better results by year’s end.

The shares fell 5.9 percent to close at $74.24 in New York, marking their biggest decline since August and the fourth-sharpest drop in the S&P 500 Index.

United’s middling outlook for this quarter obscured good news for the previous one. Revenue for each seat flown a mile, or unit revenue, climbed 2.1 percent in the second quarter. It was the first gain in two years. Revenue is rising in most global regions again, aside from Asia, where competition from Chinese airlines is fierce.

The Chicago-based carrier has started dozens of additional flights — many of them to small cities with relatively little competition — to try to win back what President Scott Kirby calls its “natural share” of the market. Because the added supply of seats is keeping a lid on fares, United expects U.S. unit revenue will be flat this quarter.

Bare Bones

United’s introduction of low-fare, Basic Economy tickets hasn’t yet helped earnings, despite the airline’s assurances that it would add to profit immediately. Some airlines haven’t yet rolled out their own versions of Basic Economy beyond a few markets. That means some rivals are selling seats with a full range of amenities at the same price that United is selling bare-bones, Basic Economy tickets.

The dynamic should reverse later this year as other airlines offer low-fare tickets more broadly, Kirby said.

T. Rowe Price analyst Andrew Davis said investors fleeing United had unrealistic expectations off an immediate turn when Kirby joined the company as president last summer. That United’s stock sells for $74 and not $15 indicates the carrier’s progress over the past five years, Davis said.

“Is United Airlines worth 6 percent less as a business than it was yesterday? No,” he said.

But a profit drop from last year has cast doubt on United’s progress, Barclays analyst Brandon Oglenski said on the call.

“Your investors are looking for that earnings improvement,” he said. “What are some things that could change in the future if that traction doesn’t develop?”

 

©2017 Bloomberg L.P.

 

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U.S. Steps Up Electronics Screenings on Inbound International Flights

Adam Schreck  / Associated Press

New security procedures will inspect the large electronic devices of some travelers to the U.S. In this March 22, 2017, file photo, an Emirates plane taxis to a gate at Dubai International Airport at Dubai International Airport in Dubai, United Arab Emirates.
Adam Schreck / Associated Press

Skift Take: More intense screening procedures on big electronic devices will lead to longer lines in security for travelers to the U.S. And if you’re singled out and have forgotten to charge a device, you may have to dispose of it in order to get through security.

— Andrew Sheivachman

Travelers flying to the U.S. from nearly 300 international airports, including those in Mexico and Canada, are now subject to stepped-up security measures that include stricter screening for electronic devices larger than cellphones.

The regulations could include asking passengers to present larger electronic devices for inspection and prove that they can be powered on.

The Homeland Security Department demanded last month that airlines around the world step up security measures for international flights bound for the United States or face the possibility of a total electronics ban for planes. The deadline for some of those changes to take affect was Wednesday.

Airlines and aviation authorities responded by warning passengers to expect longer security screenings at airports.

“Enhanced screening measures are in effect,” read an alert on the Canadian Air Transport Security Authority’s website. It said that passengers flagged randomly for additional screening will be asked to remove electronic devices from protective cases for inspection, and possibly show they can be powered on.

Mexico’s aviation authority advised passengers on flights bound for the U.S. to arrive at the airport three hours early to comply with the new screening measures.

Toronto-based Porter Airlines, which operates numerous flights a day between the U.S. and Canada, informed frequent travelers of the new security measures in an email Wednesday.

“As of July 19, if you’re traveling to the U.S., the U.S. Department of Homeland Security requires you to take your personal electronic devices larger than a smartphone, such as your laptop and/or tablet, out of their protective cases and to turn it on, if asked,” they advised, adding that devices that failed to comply would not be allows onboard.

The new rules apply to roughly 180 foreign and U.S.-based airlines flying from 280 airports in 105 countries. The Department of Homeland Security says more than 2,000 international flights land in the United States each day.

This article was written by Jill Colvin 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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Airports Still Await Takeoff of Air Traffic Control Privatization

Cliff Owen  / Associated Press

FAA Air Traffic Controllers work in the Dulles International Airport Air Traffic Control Tower in Sterling, Va. A plan to privatize the nation’s air traffic control operations has hit turbulence in the House, raising questions about whether one of President Donald Trump’s infrastructure priorities can survive. Cliff Owen / Associated Press

Skift Take: Privatization of the U.S. air traffic control ought to make travel more efficient. But will there be enough funding? Will it be drawn from levies on flights rather than on passengers? Who will set the fees?

— Sean O’Neill

A plan to privatize the nation’s air traffic control operations has hit turbulence in the House, raising questions about whether one of President Donald Trump’s infrastructure priorities can survive.

The concept of splitting off air traffic control from the Federal Aviation Administration faces even longer odds in the Senate, but supporters were counting on backing from the president and House Speaker Paul Ryan, R-Wis., to move the legislation forward and keep prospects for privatization alive.

The bill to extend federal aviation programs was expected to come to a vote in the House as early as this week. But leadership has not yet scheduled a vote. The question is why.

“I think it’s on life-support personally,” said Rep. Tom Cole, R-Okla.

The bill’s sponsor, Rep. Bill Shuster, R-Pa., disagrees. He said lawmakers are just now beginning to focus on the legislation and need some time to wade through the bill’s many provisions that would affect airports and the traveling public in their home districts.

“So now they’re sitting down and talking to us, trying to understand what they’re hearing, what they’re seeing, what’s true and what’s not true,” Shuster said. “It’s a process and the process always happens this way.”

Trump has endorsed privatization of air traffic control operations and the president’s budget calls Shuster’s bill “an excellent starting point.”

The vast majority of Democratic lawmakers oppose efforts to split off air traffic control operations from the FAA, a move that would affect some 14,000 controllers and thousands more technicians and engineers. The agency would remain responsible for regulating aviation safety, including the work of the new company.

So, Republicans can only afford about two dozen defections. Cole said the bill won’t get many votes from the Oklahoma delegation. He said the training center for air traffic control workers is in Oklahoma City and the center employees he has spoken with oppose privatization.

The union representing air traffic control workers has endorsed Shuster’s bill. But aviation groups that often rely on smaller airports for business travel, recreation, pilot training and crop spraying oppose it, fearing that the new company running air traffic control operations would favor the commercial airlines over other interests.

“This plan is bad for rural America,” said Rep. Ralph Abraham, R-La., who spoke on the House floor Monday.

To secure support, Shuster exempted general aviation flights from the user fees established to fund the new, non-profit company that would oversee air tariff control operations. He also expanded the board to make it harder for any one interest group to dominate.

His bill also requires the government to review and approve any proposal from the new company to alter use of airspace in a way that might restrict access.

The changes helped win over Rep. Sam Graves, R-Mo., a pilot who has served as a leading voice for general aviation interests in Congress. Graves voted against last year’s FAA bill that included privatization, but said he “got everything he wanted and then some” in the latest version, including more money for airport improvements.

But Graves’ conversion hasn’t translated into support from general aviation groups such as the Aircraft Owners and Pilots Association and the National Air Transportation Association, a trade group representing charter providers, flight training and other aviation companies. Dozens of general aviation groups have announced their opposition to the House bill and are pressing lawmakers to vote against it.

“They’re afraid of the unknown,” Graves said.

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Frontier Is Said to Be Delaying IPO as U.S. Airline Competition Intensifies

A. Doumenjou  / Airbus

Frontier Airlines is likely delaying its initial public offering, sources told Bloomberg. Pictured is the carrier’s first Airbus A320neo. A. Doumenjou / Airbus

Skift Take: As we said earlier in the week, Frontier and United likely will have a nice battle for customers in Denver — and that’s good for airline passengers seeking cheap fares. Keep an eye on this one.

— Brian Sumers

Frontier Airlines pushed back its initial public offering, people familiar with the matter said, as competitive tensions flared between the no-frills carrier and United Airlines.

The share sale could slip until September or later, said the people, who asked not to be identified because the matter is private. Frontier Group Holdings Inc., which is backed by private equity firm Indigo Partners, had been planning to hold the IPO as soon as the second quarter, people familiar with the matter said in March.

The delay comes as Frontier prepares to more than double routes — an expansion that drew a warning from United President Scott Kirby. He vowed to stave off any attempt by Frontier to grab a bigger share of the Denver market. The discount carrier is based in the city, which is the most profitable hub for United, the third-biggest airline in the U.S.

Frontier on Tuesday detailed plans to add 21 cities to its network and more than double total routes by mid-2018, while offering limited-time fares for as low as $39.

On Wednesday, Kirby said the expansion means that Frontier is moving toward a network more like United’s, with connecting flights through major airports instead of focusing on the point-to-point service typically favored by low-cost carriers.

‘Our Turf’

Frontier’s plan suggests “that the old business model has run out of growth opportunities in the middle of an IPO process,” he said in a conference call after United reported earnings.

“They’re now competing on our turf and trying to be a network carrier in Denver,” Kirby said. “That is a battle I guarantee United will win.”

Frontier already offers connecting flights over Denver, so there’s no change in its business strategy, said Jim Faulkner, a spokesman for the carrier. Competition from such discounters prompted United, Delta Air Lines Inc. and American Airlines Group Inc. to offer a basic economy fare that doesn’t come with the normal amenities of a coach ticket.

“Kirby’s statement simply isn’t true,” Faulkner said.

Frontier in March filed for a U.S. IPO of $100 million, a placeholder amount subject that typically changes and is used to calculate fees. Frontier and Indigo Partners, which acquired the carrier in December 2013, plan to sell shares in the offering.

Representatives for Frontier and Indigo declined to comment about delaying the IPO.

Citigroup Inc., Deutsche Bank AG, Evercore Partners Inc. and JPMorgan Chase & Co. are leading Frontier’s offering. The company plans to list under the symbol FRNT, it said in a filing without specifying a stock exchange.

Indigo is led by veteran airline executive William Franke, who has extensive experience overseeing discount carriers. The firm once controlled Spirit Airlines Inc., which went public in 2011. Indigo is also the largest shareholder in Wizz Air Holdings Plc, a low-fare operator serving Eastern Europe.

©2017 Bloomberg L.P.

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

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