U.S. DEPARTMEN T OF HOMELAND SECURITY
The U.S. Transportation Security Administra- tion took center stage in 2010 with its in- trusive pat-downs and its aggressive rollout
of “naked” body scanners. Although TSA endured
much congressional and media heat, Department
of Homeland Security secretary Janet Napolitano
pushed for these changes to airport security screening along with other measures, such as Secure Flight,
that heavily influenced the travel community.
Napolitano “has a huge amount of authority be-
cause Congress [has] given [DHS] that blanket
authority without much accountability back to
Congress,” said consumer advocate and former pres-
idential candidate Ralph Nader. “She is probably the
single most powerful secretary over her department,
over any other department, including the Depart-
ment of Defense.”
Using Recovery Act funding, DHS accelerated the
rollout in more than 75 airports of 500 advanced im-
aging machines or full-body scanners that generate
images of passengers as they pass through security.
Spurring controversy across the country, travelers
voiced concerns about the dose of radiation received
when passing through the scanners, and travel man-
agers began conversations about whether these scan-
ners should be addressed in duty-of-care policies.
“Where we are always asking questions is whether
we are being as efficient as we can be, as effective as
we can be and whether there is a better way,” said U.S.
Travel Association senior vice president of public af-
fairs Geoff Freeman. “Domestically, we think there
is. The current security-screening process is not the
most efficient process that America can build, and a
majority of Americans believe that too.”
In 2010, DHS completed a 9/11 Commission rec-
ommendation that “100 percent” of passengers on
flights from, within or bound for the United States
be screened against a terrorist watchlist. The recom-
mendation called for passenger names on tickets to
be identical to those on identification documents.
For travel agencies and global distribution system
operators, this meant their systems needed to be
updated to process Secure Flight requirements. For
travelers, it meant providing at the time of booking
or within 72 hours of departure their full name as
it appears on their identification, their date of birth,
gender and DHS redress number, if applicable.
SOU TH WES T AIRLINES
Southwest Airlines CEO Gary Kelly entered 2010 at the helm of a carrier whose growth had been stunted for the first time in its history. By the end of the year, however, he was poised
for something more than a typical growth spurt—a pending acquisition of Air Tran Airways, the nation’s seventh-largest airline.
Expected to close early this year, the deal would send Southwest
down a heretofore untapped international expansion path (
Air-Tran operates to Mexico and the Caribbean) and provide a sizable
presence at the nation’s largest airport, Atlanta.
Kelly in September cited a “struggling economy” and stagnant
demand as catalysts for the $1.4 billion deal. “Air Tran provides us a
unique opportunity and that is to strategically expand our network
by 25 percent, and to do that profitably,” he said.
The deal would distance Southwest from its competitors as the
largest operator in the domestic U.S. market. “From a domestic U.S. perspective, they’re the new dominant
player,” Advito vice president Bob Brindley told BTN last year. “Carriers like United-Continental, Delta and
American have de-emphasized the domestic market, as they’ve shifted a lot of domestic flying to regional
feeder carriers, and that’s opened the door for Southwest and other carriers to grow.”
While the deal would significantly expand the Dallas-based carrier’s route network, it also would serve to
gut Air Tran’s more business-friendly practices: Air Tran offers business class but Southwest does not; Air Tran
has fuller participation in global distribution systems than Southwest; and Air Tran offers assigned seating,
while Southwest is known for its “cattle call” boarding. To maintain the hallmarks of the Southwest brand and
business philosophy, Kelly said he expects to dispense with those attributes of Air Tran’s operation.
This time last year it appeared quite possible that
Japan Airlines would
abandon its position
in the Oneworld alliance, jilting partner
American Airlines in
favor of an antitrust-immune joint venture with Sky Team member Delta
Air Lines. Following more than two months of indecision—during which JAL filed for the Japanese
equivalent of bankruptcy and installed a new management team—JAL chairman Kazuo Inamori announced the carrier would stick with Oneworld and
forge even deeper ties with American.
The two carriers promptly filed for antitrust immunity so they could more closely align schedules, set
fares and negotiate with corporate clients for transpacific services. Following regulatory approval last fall,
American and JAL this month announced they would
officially launch the joint venture on April 1.
For decades a captain of Japanese industry as the
founder of Kyocera Corp., which produces semiconductor parts and ceramic consumer products, and
telecommunications firm DDI Corporation, now
KDDI Corp., 78-year-old Inamori in the past year also
has overseen key aspects of JAL’s reorganization—the
largest such restructuring in Japan’s history.
Under Inamori, JAL has worked to become a leaner, more nimble competitor by cutting roughly 30
percent of its global workforce, retiring more than
100 aircraft and “completely” eliminating unprofitable routes, which so far number in the dozens. The
company also last year unloaded its hotel portfolio,
which included the luxury Nikko Hotels International brand and the business travel-focused Hotel JAL
City brand, to Tokyo-based Hotel Okura Co.
Universal Air Travel Plan in 2010 for the first
time added a non-airline
supplier to its merchant
network: La Quinta Inns
& Suites. This pioneering deal came about largely at the
urging of longtime UATP customer Wal-Mart Stores, led
by director of global travel Mary Sharp.
Wal-Mart previously paid hotel invoices manually
but sought a more efficient method. Early negotiations
resulted in buy-in from UATP and La Quinta, one of
Wal-Mart’s major preferred hotel vendors. The deal also
required cooperation from American Airlines, whose
UATP account Wal-Mart now uses to centrally bill payments to La Quinta.
“When you look at your computer, you have the Intel
sticker,” UATP CEO Ralph Kaiser told BTN last year.
“We’re like that: We’re the ingredient brand. We make
things run, but we’re not the main driver. This came
from Wal-Mart and American coming to us and ask-
ing, ‘Can you do this?’ We said, ‘Of course.’ ”
The deal potentially will do more than make Wal-
Mart’s hotel billing process more efficient. The behe-
mouth retailer itself has indicated it would like to get
other preferred hotel suppliers on board. UATP similarly
said it’s seeing interest for centrally billed hotel programs,
both from other corporate clients and hotel suppliers.
MICHAEL B. BAKER
WALMAR T S TORES