Tag Archives: Corporate/Industrial News

US Southwest says leisure travel rebounds as summer season approaches | Instant News



This week, major airlines reiterated their confidence that the travel market, at least for leisure, is rebounding from heavy losses suffered during the coronavirus pandemic. They hope the trend continues through the summer vacation season. Airlines executives said Thursday that travel demand reached an inflection point in February or March, after languishing for most of last year. Airports were busy with travelers during spring break and future vacation bookings began to increase. Airlines including Southwest and American are recalling pilots and flight attendants who had not been needed for months as they prepared for what could be a busy summer, carrying people on vacations and tours to friends and relatives whom they had to postpone for months. American said it plans to hire 300 more pilots at the end of this year. “While the pandemic is not over, we believe the worst is behind us, in terms of the severity of the negative impact on travel demand,” said Southwest Managing Director Gary Kelly. American Airlines on Thursday reported a quarterly loss of $ 1.25 billion, a smaller loss than in previous quarters of the past year. Photo: Douglas R. Clifford / Zuma Press Southwest said he expects by June his operation will stop losing more cash than it brings in. The airline’s first-quarter profits were increased by $ 1.2 billion in federal assistance covering salaries and benefits during the quarter. . Taking this and other one-off items into account, Southwest reported a loss of $ 1 billion. Airlines have already seen their hopes for a rebound in travel dashed. Whenever it seemed like Covid-19 cases had stabilized and demand started to rise in the past year, another surge has wiped out the lukewarm surge in demand. Even as the number of cases has started to climb again, airline executives are hoping the widespread vaccination will mean increases in passenger bookings will stay this time around. Airlines executives have said they don’t expect business travel to pick up in earnest until at least later this year, when more companies are expected to bring their employees back to their offices. U.S. executives told analysts and investors on Thursday that there were signs of growing demand, especially from small businesses, while some large corporate clients said they plan to resume travel in the third quarter. . WSJ Headquarters Columnist Scott McCartney is compiling the data for which airlines performed best and worst in 2020 on things like on-time arrivals, complaints and flight cancellations. Photo: Getty Images The recovery trajectory has lit a gap between airlines that rely heavily on business travel and international markets, like American, United Airlines Holdings Inc. and Delta Air Lines Inc., and those that still have been geared more towards leisure travelers. The southwest’s largely domestic network has helped insulate it from the effects of border closures and government travel restrictions that have increased international traffic. The airline has embarked on an aggressive expansion program that includes adding 17 new cities to its network and plans to return to normal flight levels in the coming months. Its flight capacity was down nearly 40% in the first quarter from 2019 levels, but by June, the airline plans to complete 96% of its pre-pandemic schedule. SHARE YOUR THOUGHTS At this point in the pandemic, do you feel comfortable traveling by plane? Why or why not? Join the conversation below. American is also forecasting a sharp increase in flights this summer, adding dozens of new domestic routes and anticipating an overall flight capacity of 75% to 80% of pre-pandemic levels. “As our world advances daily in COVID-19 vaccination efforts, customers are returning to travel and there is no doubt that the pace of the recovery is picking up,” Doug Parker and CEO Robert Isom wrote Thursday. and US President. United, which earlier this week said it lost $ 1.4 billion in the first quarter, said it needed commercial and international traffic to return to 65% of pre-pandemic levels to turn a profit. Both segments are down about 80% now, as many international borders are closed and many companies are still keeping workers at home at least later this year. While United is also resuming recruiting of pilots and adding more flights to capture more of the domestic leisure demand, CEO Scott Kirby said the airline would take a slightly more conservative approach than its rivals this summer. Bet on Travel Recovery “It’s really hard for me to make the math work and say that 90% or 100% of the schedule is the optimal answer,” Kirby said this week. Discounter Spirit Airlines Inc., which primarily serves vacationers, said Thursday it plans to fly almost as much in the second quarter as it did before the pandemic, operating 94.5% of its capacity in 2019. Its financial outlook is also improving , with expectations that the airline’s adjusted pre-tax and interest margins could break even. Southwest’s adjusted net loss of $ 1.72 per share was narrower than the $ 1.85 per share analysts expected. Including one-time items, American’s net loss was $ 4.32 per share. Analysts polled by FactSet had expected an adjusted loss of $ 4.30 per share. Write to Alison Sider at [email protected] Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8.



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Travel and tourism brands drive marketing and tailor messaging | Instant News



A new ad from Expedia will launch the online travel agency’s costliest brand marketing effort in five years today. In the ad, actress Rashida Jones portrays Expedia as the companion of a woman traveling alone in a foreign country. Ms Jones transforms the traveller’s dismal hotel room into a bigger, nicer space with the snap of her fingers and helps her out of a precarious situation involving women taking selfies. The marketing effort, which also includes the introduction of new travel insurance and route planning products, was inspired by research showing not only growing demand for travel as pandemic restrictions decrease. , but also the desire of consumers for travel agencies to provide more than offers. said Shiv Singh, senior vice president and general manager of Expedia, a unit of Expedia Group Inc. “The travel space in some ways was more transaction-oriented. This is where you find the best deal, you go for the cheapest ticket, ”Singh said. “It has changed now. People think of value differently. Expedia’s campaign won’t be the only one: TV commercials promoting travel websites have more than doubled in the 50 days ended April 12, compared to the previous 50 days, according to the company. iSpot.tv media measurement. Other travel and tourism marketers are also stepping up their marketing as the industry moves to reassert itself after a year of lockdowns and movement limits. They re-evaluate and recalibrate their pitches in the process. Some brands deliver messages about safe collection, while others focus on promotional ads that feature offers. CMO Today Newsletter Sign-Up CMO Today delivers the most important news of the day to media and marketing professionals. “Over the past 13 months we’ve seen an unprecedented reduction in advertising budgets in the travel industry,” said Kevin Kopelman, analyst at financial services firm Cowen, which covers travel agencies in line and hotels. But a recent surge in demand has led travel companies to ramp up their marketing spend – although not necessarily to pre-pandemic levels – while strategically thinking about setting the right tone for their message, Kopelman said. An Expedia Group Vrbo campaign that began operating in December, for example, encourages families to come together again without mentioning the pandemic that has separated so many. For families stuck at home during the pandemic, on the other hand, Universal Orlando Resort has a 40% off commercial offer to entice them. Expedia described its new marketing push as a change from its messaging in recent months, when it tried to set a more inspiring tone. A cheerful TV commercial that aired in March showed a lively couple whose furniture turns into travel experiences. Marriott International Inc. spent the first quarter of this year posting content on social media designed to inspire consumers to dream of travel and running automated digital ads to capitalize on any new demand. The company will now focus on brand marketing which can increase demand, said Brian Povinelli, senior vice president of brand, loyalty and portfolio marketing at Marriott International. “More than ever, the past 12 months have challenged us to be much more flexible and agile in our marketing approach and execution,” Povinelli said in an email. Travel and tourism brands, such as popular U.S. tourist destinations, are eager to get travelers spending money again, said Alex Leikikh, global managing director of MullenLowe Group, an Interpublic Group of Cos advertising agency network. who works with a number of travel marketers including JetBlue Airways Corp., Royal Caribbean International and Wyndham Hotels & Resorts Inc. “These industries and the destinations and hotels in these states – they’ve been suffering badly for 12-14 months and need income now, ”said Leikikh. Promotions that feature deals can generate income while building brands over time, especially with “a boost from government and people returning to work,” he said. Some tourism and entertainment organizations are looking at agencies that can meet their advertising or media needs. The Las Vegas Convention and Visitors Authority and Visit California are currently in the process of hiring new agencies, according to people familiar with the matter. Concert giant Live Nation is also leading a process to hire an agency capable of handling its $ 130 million media account, people familiar with the matter said. “Everyone’s trying to figure out how to enter the market first with the right message,” said Casey Burnett, managing partner and founder of agency research and marketing consulting firm Burnett Collective. “It’s all about market share.” Write to Alexandra Bruell at [email protected] Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8.



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Travel boom is coming, Expedia CEO says: ‘Hotels are going to scream back’ | Instant News



Peter Kern became CEO of Expedia Group Inc. last April, during the travel industry’s worst crisis in decades. It was a precarious time: Calls to the company’s call centers had jumped 500%, with consumers canceling flights and hotel rooms. Expedia burned money by issuing refunds. To deal with the recession, he struggled to raise about $ 4 billion in capital last spring. Expedia has had problems pre-pandemic. A strategic clash between its board and management led to the resignation of Expedia’s CEO and CFO in December 2019. Barry Diller, chairman of the company, called Expedia “sclera and bloated” as he was struggling to compete with the growing Google presence in the travel booking industry. He enlisted Mr Kern, a 52-year-old vice president of Expedia and longtime head of media and private equity, to help him run the day-to-day operations of Expedia before appointing him CEO at last spring. Mr. Kern has sought to simplify the structure of the company and make his business less reliant on Google search. While shedding thousands of jobs, the company is also gearing up for an expected rebound in travel. Along with the Expedia brand, the company owns Orbitz and Travelocity, as well as Vrbo, a rival of Airbnb Inc. which benefited from travelers’ desire to rent homes during the pandemic. Mr. Kern recently spoke with The Wall Street Journal by phone from a home office in Wyoming. Here are edited excerpts :.



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NRA CEO LaPierre reportedly told travel agent to hide certain stops on his private jet flights | Instant News



A travel consultant who testified in the National Rifle Association bankruptcy case said chief executive Wayne LaPierre asked her to omit certain flight stopovers from invoices she sent to the human rights group. firearms for Mr. LaPierre’s private jet trip, a disclosure that NRA lawyers are disputing. keep out of court record. The travel counselor testified, in a video filing released in bankruptcy court Thursday, that some invoices she sent to the NRA omitted stopovers in Nebraska and the Bahamas, at Mr. LaPierre’s request. Some of Mr. LaPierre’s relatives who frequently traveled on private jets paid for by the NRA live in Nebraska. The NRA chief previously said he travels frequently to the Bahamas to stay for free on a 108-foot yacht in the Bahamas with family members, provided by an NRA vendor, for safety reasons. Testimony that Mr LaPierre sought to hide some private jet stops from the NRA’s own accountants could be evidence that he knew what he was doing was wrong and that he was deliberately hiding it, legal experts have said . “If this is true, it appears to be a clear and documented example of misusing NRA assets and covering up this abuse,” said Elizabeth Kingsley, a Washington nonprofit lawyer. .



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Travel and leisure topped list of evolving corporate credit ratings during pandemic | Instant News


The COVID-19 pandemic has been disrupting not only lives and businesses around the world for over a year, but also the credit ratings of major corporations. Corporate credit ratings are a key measure of creditworthiness, but can also determine borrowing costs. They range from AAA to blue chip companies like Johnson & Johnson JNJ, -0.39% and Microsoft Corp. MSFT, + 1.34% to D for defaulting companies. Increasingly, credit ratings may also point to a potential path of recovery for industries hard hit by the protracted public health crisis. Take, for example, travel and recreation, an industry that has seen half of all blue chip companies in the world transition to high yielding, or “junk” status during the pandemic, according to a new report from Credit Benchmark . Even as parts of Europe remain stranded to contain the coronavirus, travel and leisure has seen the highest share of ‘fallen angels’ (at 11.1%) revert to investment grade status during the crisis (see graph below). Fallen Angels, Rising Stars Credit Benchmark The report identified 1,051 fallen angels out of 6,895 companies sampled around the world, or about 15% of the total. He found that about 5% went back to the investment grade. The retail, oil and gas, and auto and parts sectors have also been volatile on the credit ratings front over the past year, according to the report, with migrations between the two main tranches being now a key objective for investors. Read: The next rising stars in the debt world? Probably the Fallen Angels of Businesses Upgrades and downgrades can make a big difference to a business in terms of borrowing costs. The average yield on bonds issued by investment grade US companies is now in the 2.21% range, while it is almost double for those in speculative grade territory at around 4.21%. These rates are important, especially in the past year, as cruise lines including Carnival Corp CCL, -1.52%, Royal Caribbean Group RCL, -1.37% and Norwegian Cruise Line Holdings Ltd NCLH , -2.20%, borrowed billions because their ships were largely idle. See: White House pushes back cruise industry efforts to restart in July, as Florida sues Biden administration But with other ‘clawback’ deals, Carnival shares rose 31.9 % year-to-date Thursday, while those of Royal Caribbean and Norwegian were up about 20%, according to FactSet data. This compares to the Dow Jones Industrial Average’s DJIA, + 0.17%, up 9.5% for the same period, while the S&P 500 SPX Index, + 0.42% was up 9.1%. .



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