News Wrap: U.S. Thanksgiving travel nears pre-pandemic levels

In our news wrap Wednesday, millions of Americans were on the move as Thanksgiving travel neared pre-pandemic levels, despite higher gas prices and a new surge in COVID-19 infections. U.S. unemployment claims are at their lowest since 1969, and inflation at its highest since 1990. Three major parties have agreed to form a coalition government in Germany, two months after national elections.

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Thanksgiving challenges airlines as US travel nears pre-pandemic levels | US news

Maliha Aziz was understandably nervous about her 19 November trip from St Louis, Missouri, to her native city of Karachi, Pakistan, for her nephew’s wedding.

Aziz, a former principal of an Islamic Sunday school in St Louis, and her husband traveled to three weddings over the summer and experienced numerous flights delays and cancelations.

On a Friday in June, they were stuck at a gate at the St Louis airport for more than two hours and missed a rehearsal dinner in Omaha. Then while at the wedding, Aziz received a text informing her that the airline had canceled their return flight and rebooked them for a flight more than 24 hours later.

“None of those were pleasant trips,” said Aziz, 61, who lives in a St Louis suburb. “Even simple trips, when they should not have any problems, either they did not have enough crew to fly the plane, or the plane is there but they don’t have enough staffing, or the luggage is in the plane, and it can’t come out because they don’t have enough staffing.”

Aziz’s summer travel experience and worries about Thanksgiving – she is flying back to the US on 28 November – are not unique among the tens of millions of people hoping to see friends and family for the annual holiday.

That’s because while people are expected to again travel at levels similar to a pre-pandemic Thanksgiving, airlines are still contending with staffing shortages, which could lead to additional flight cancelations.

“It doesn’t really matter if a travel disruption is coming from a lack of staffing or shortage of routes or weather, it’s still something that is very frustrating for customers,” said Lindsey Roeschke, travel and hospitality analyst for the Morning Consult, a market research firm.

In spite of the Covid-19 pandemic, Thanksgiving flight bookings in the United States are up 78% from 2020 and 3.2% from 2019, according to a Adobe Digital Economy Index report published earlier this month.

“When it is busy, it’s very possible that [flights] will be over capacity – and that means the possibility of things going wrong is very high,” said Narendra Khatri, principal of Insubuy, a travel insurance company.

Over the Halloween weekend, American Airlines canceled more than 2,000 flights because of weather and staffing issues. In letters to employees, David Seymour, chief operating officer of the airline, described the weekend as a “brief irregular ops period” and said that “on the schedule front, we’ve ensured that November and December are built to meet customer demand and that they are fully supportable by our staffing”.

Southwest Airlines also canceled hundreds of flights over an October weekend.

Both airlines have since offered staff increased pay to work over Thanksgiving, Christmas and New Year’s.

A union representing American Airlines flight attendants accepted an offer for 150% pay to fly during peak holiday periods and an additional 150% pay for attendants who do not call in sick between 15 November and 2 January.

But a union representing American Airlines pilots rejected an offer for 50% additional pay on peak travel days during the holiday season because of the pilots’ frustrations with the airline’s scheduling system, among other issues.

When weather forces a cancelation, the airline has struggled to fix the schedule, which has spiraled into further cancelations, said Dennis Tajer, a spokesperson for Allied Pilots Association, the union for the airlines’ pilots.

The union would like to see the airline allow pilots more flexibility to swap flights so that when a pilot’s flight from St Louis to Dallas is canceled, a pilot already in Texas can pick up that pilot’s next flight from Dallas. That often can’t happen because of issues in the information technology system and limits on how much a pilot can fly each month, Tajer said.

An American Airlines spokesperson declined a request for an interview.

“This recovery has just really pulled back the covers on the infrastructure problems at American Airlines,” said Tajer, who is also a pilot. “We know where the solutions are – they probably have solutions – but they are not even willing to talk about them.”

In spite of the uncertainty, not all analysts predict that Thanksgiving will be a mess.

In the wake of the Halloween weekend cancelations, Seymour reassured staff that almost 1,800 flight attendants had returned from a leave of absence and that the airline would hire 600 new flight attendants by the end of December.

Mike Malik, chief marketing officer at Cirium, an aviation data firm, attributes the airlines’ October meltdowns to the fact that some companies “wound down too fast” when air traffic slowed. As people have again begun traveling, they are still working through issues in trying to meet that demand, he said.

“The hits that have been taken in the last month or so, the airlines have adjusted for that, and I think they are very much geared up for Thanksgiving,” said Malik.

Ajay Jain, a 23-year-old software engineer, also has confidence in American Airlines despite the recent issues. He follows the industry closely through social media and websites such as the Points Guy and has seven flights booked with the airline before the end of the year, with the goal of achieving Gold status for 2022, meaning he would receive free upgrades.

He has flown about 30 times since he started traveling again after being fully vaccinated against Covid-19 and has not had any flights canceled. But in May, he missed an American Airlines flight from Austin to Dallas when an airline reservation system operated by Sabre, a technology company, went down.

Jain was able to catch a flight an hour later, but other passengers’ plans were more disrupted. Jain said he explained to some what had happened, that it wasn’t American Airlines’ fault, and they calmed down.

That hasn’t always been the case during the pandemic – and the hectic holiday scene at airports could prove especially volatile. Passengers have yelled at and assaulted flight attendants when asked to put their mask on. Others have spent hours on the phone trying to rebook cancelled flights.

In the end Aziz, the former Sunday school principal, and her husband made it to Karachi without any issues. They were looking forward to the wedding, even though it would only have about 200 people – as compared to more than 700 for her Pakistani family’s weddings in non-Covid times. Before their return flight 28 November, they must figure out where to get a Covid test, as is required for passengers traveling entering the US.

“Praying we won’t miss our flight from Chicago to [St Louis],” Aziz texted from Pakistan.

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Delta’s Domestic Corp. Travel Recovery Nears 50 Percent Mark

Delta Air Lines’ corporate travel volume in recent weeks has grown to its highest point during the Covid-19 pandemic recovery, with domestic business travel volume last week nearing 50 percent of pre-pandemic levels, CEO Ed Bastian said Wednesday in Delta’s third-quarter earnings call.

For the overall third quarter, domestic corporate travel volumes were about 40 percent recovered, which is 10 percentage points higher than their recovery rate in the second quarter, Bastian said. While corporate travel recovery “paused” in August and early September while Covid-19 case counts grew with the spread of the delta variant, spurring many companies to delay return-to-office plans, demand since Labor Day once again has picked up, he said.

Delta’s most recent survey of its corporate customers indicated that 90 percent expect their travel volumes in the fourth quarter to be equal to or higher than third-quarter levels, according to Bastian. About 60 percent of Delta’s corporate customers said they have reopened their offices, and an additional 10 percent said they would do so before the end of 2021.

“We anticipate meaningful acceleration in business travel starting at that point,” Bastian said. “We hear regularly from our corporate customers that they’re ready to get back to travel, see their clients face-to-face, renew business relationships and develop new ones.”

Business travel volumes from unmanaged programs are running five to 10 percentage points ahead of managed programs, with “smaller, hungrier companies out there hitting the road sooner than some of the bigger multinationals,” Delta president Glen Hauenstein said.

International business travel also is showing signs of recovery, he said. In the second and third quarter, corporate travel to Europe was running at about 15 percent of pre-pandemic levels, but that has improved to 30 percent in recent weeks with the news that the U.S. will open to vaccinated foreign visitors next month. Long-haul travel to South America, previously “pretty much nonexistent,” also has started to recover, and the Pacific region could be next in line, according to Hauenstein.

“We are expecting those to improve significantly … as the vaccination rates in important places for us like Korea and Japan are now approaching between 70 percent and 80 percent,” he said. “Hopefully, we get some good news out of that region of the world starting in the next few months.”

Domestic leisure travel, meanwhile, has made a “full return” to 2019 levels, Bastian said. Delta’s passenger revenue for the third quarter was $7.2 billion, 37 percent of 2019 levels, and total third-quarter operating revenue was 27 percent of 2019 levels, boosted by a 39 percent increase in cargo revenue compared with 2019.

Delta executives noted that premium travel revenues have been strong even with the lower rates of business travel and indicated that Delta would look to increase premium seating capacity in the future.

“We’re selling [premium seats] 10 points higher than we did pre-pandemic,” Bastian said. “We always ran relatively full in terms of load factor, but a lot of those are complimentary upgrades, and we’re seeing people are willing to pay us for those seats. That’s why we want to create more over time.”

Delta reported net income of $1.2 billion for the third quarter, which included the benefits from federal aid due to the pandemic. Excluding that and other special items, Delta still reported net income of $194 million for the quarter, its first such profitable quarter since the pandemic began.

Bastian said he expected the carrier would see a “modest loss” in the fourth quarter due to rising fuel prices.

RELATED: Delta Q2 earnings

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As summer nears and restrictions lift, local travel planners see travel interest rise | WJHL

BLOUNTVILLE, Tenn. (WJHL) — According to local travel planners, a lot of people are itching to travel once again, but that travel may not be right away.

“As people get more comfortable with traveling, as the vaccine gets more prevalent and more people are getting vaccinated, we are seeing people are much more comfortable traveling in general,” said Gene Cossey, Executive Director of the Tri-Cities Airport.

“You’re looking into 2022 for the most part because people want to feel a little more comfortable that we are going to get to take this trip hopefully,” said AAA travel consultant Cecilia Campbell.

Travel consultants are seeing a trend of where people are headed in the nearer future.

“We have a lot of interest in the United States, obviously, and I have a lot of people that are leaving in the next couple of weeks on domestic tours that are doing like the national parks that sort of thing, so those are going well, but it’s slow,” said Campbell. “In this area, you have a lot of people that are trying to stay closer to home, I mean they might be going to Florida, places like that.”

The traffic at the Tri-Cities Airport tends to confirm that.

“We can see on Allegiant a lot of people are going down to Orlando and St. Pete where we connect to,” said Cossey.

Although Cossey says not everyone is traveling just for fun.

“People that are working from home realize they can work from anywhere, and so they have a tendency to go ahead and bring their laptop, bring their phone and go wherever they want to work,” said Cossey. “We’re seeing people come here to work, and we’re seeing people from here going other places to work. Which is great because it’s just continuing to stimulate the demand that we see, which means that the airlines are filling up their seats, which encourages them to add more seats to the market.”

If you’re going to book, travel experts say you better do it soon.

“I would say right now we’re pushing around 75-80 percent of that capacity and we’re hoping that through the summer we’ll get right back up to that full capacity,” said Cossey.

“For those of you booking new trips or even rebooking trips, do it as soon as you can because people who had booked last year that have been cancelled twice now started rebooking then,” said Campbell. “The airfare has been good, but I’m seeing it gradually increase, and I’m suspecting that in a few months it’ll probably be back to where it was in 2019.”

Campbell also says she sees a lot of people anxious to get back on cruises, but for cruises and international travel she’s advising people to wait until 2022 or even 2023.

For those looking to book trips, Campbell says now more than ever it’s important to get insurance.

“Even though most of these companies do not cover the pandemic, like if you decided ‘we can’t go because of the pandemic,’ they don’t cover that. But if you happen to get the virus while you’re on the trip, it does cover that,” explained Campbell. “Some of the companies have come out with cancel for any reason.”

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Company seeks judge’s approvals as deadline nears


Naples businessman David Hoffmann and the Hoffmann Family of Cos. has agreed to allow Hertz to store its idle rental cars on the arena grounds at no cost.

Fort Myers News-Press

A federal judge hearing Hertz Global’s bankruptcy case has put off crucial decisions on the company’s reorganization plan. 

Not for long, however.

On Friday, the judge postponed decisions on the plan after an alternative offer surfaced to fund the company’s exit from bankruptcy a day earlier, giving Hertz little time to adequately review it.

Hertz attorney Tom Lauria, with White & Case, characterized the offer as a “classic bear hug,” and an “11th-hour uninvited proposal leaked to the press.”

The Wall Street Journal ran a story about the competing plan, ahead of the court hearing after getting a news tip about it from the investors behind it.

Investment firms Knighthead Capital Management and Certares Management have strengthened their bid, in hopes of beating out the group Hertz chose over them a few weeks ago.

Knighthead and Certares made the initial offer to sponsor the reorganization plan, but lost their stronghold after the other group stepped forward with a more favorable one in the eyes of Hertz and its creditors. 

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Hertz hoped to get the judge’s sign-off on a disclosure statement related to a new stock offering and an equity purchasing commitment agreement needed to move ahead with its current plan with a sponsorship group made up of a trio of companies — Centerbridge Partners L.P., Warburg Pincus LLC and Dundon Capital Partners LLC 

Judge Walrath ruled to put off those key decisions after Stephen Hessler, an attorney for Knighthead and Certares, asked for a brief pause in the case.

One of Hessler’s biggest arguments? The commitment agreement with the chosen group includes a break-up fee valued at upwards of $77 million that it could collect if Hertz decides to switch gears again — and go with his clients’ enhanced proposal instead.

‘We are driving an exit process’

Several attorneys, speaking on behalf of creditors, said they had no problem with a short delay and welcomed the time to review the new funding proposal for themselves — and to give Hertz time to “kick the tires” on it to see if it’s more suitable for the company and all of its stakeholders. 

Hertz objected to the delay for multiple reasons.

One of those reasons: The judge’s approvals would have allowed the company to infuse capital into its European operations almost immediately, through a bridge loan, Lauria said. Hertz has fought hard to keep those operations solvent and out of bankruptcy, but they’re starved for cash.

Under the current reorganization plan, all European debt would get paid off in full, Lauria said.

Hertz also objected to a delay because it’s working on a tight timeline, so it can emerge from bankruptcy by the end of June.

“We are driving an exit process,” Lauria said. “I think everybody would tell you that we have been merciless in holding people’s feet to the fire, and we plan to continue doing so.”

By the third quarter, Hertz anticipates the demand for its cars to be much stronger, as it usually surges with travelers seeking summer getaways, so it doesn’t want to lose out on that business, Lauria explained.

The sooner Hertz can get out of bankruptcy the better, he said, because the process is so costly — and the company desperately needs cash to rebuild its fleet and remain competitive.

The bankruptcy forced the company to sell off roughly 200,000 vehicles to help pay off the lenders who financed them.

Previously: Troubled Hertz announces reorganization plan that would put it under new ownership

And: Hertz wins approval to pay out more than $12 million in bonuses, but only if it achieves ambitious goals

Under the current plan, the company has secured $7 billion for the purchase of vehicles through 2022 and 2023, and a grand total of $12.4 billion of “fully committed capital to fund our exit,” with many of its creditors paid in full, or close to it, Lauria said.

“It’s really quite amazing,” he said. 

As amazing as the favored deal is for creditors, however, it still gives existing shareholders nothing.

Hertz has clearly stated under that plan “existing equity will be cancelled and receive no distribution.”

Ahead of last week’s meeting, the ad hoc group of shareholders objected to the plan, arguing there had to be a better one out there.

The plan by the competing group would pay unsecured bondholders in full, while offering existing shareholders equity in the reorganized company.

Under that plan, Hertz carries a higher enterprise value — at $6.2 billion.

May marks year since Hertz filed for Chapter 11 bankruptcy 

Hertz fell into bankruptcy after taking a huge financial blow from the coronavirus pandemic.

Just as it appeared the company had turned the corner on an ambitious turnaround plan, the pandemic hit, stopping the rental car giant in its tracks in March of last year.

Hertz lost most of its revenue when travel shut down due to COVID-19. The company has fought to make a comeback ever since.

At the time of its Chapter 11 filings last May, the company had accrued nearly $20 billion in debt.

In addition to its namesake brand, Hertz operates the Dollar and Thrifty car rental services.

In May 2013, Hertz announced the relocation of its global headquarters from New Jersey to Estero, following the acquisition of the Dollar Thrifty Automotive Group.

The new multimillion-dollar headquarters opened in 2015.

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Travel Vouchers Set To Expire As Anniversary Of COVID Shutdown Nears – CBS Los Angeles

LOS ANGELES (CBSLA) – As we approach the anniversary of the COVID-19 shutdown, those who cancelled travel early on in the pandemic may see their vouchers expire soon.

Scott Keyes with Scott’s Cheap Flights says many airline travel vouchers will expire after a year.

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He says the biggest mistake hesitant travelers can make is waiting until after their voucher expires to ask to extend it.

Keyes says you have to reach out beforehand.

“The original expiration date is really more written in pencil than in pen,” he said. “The airlines and hotels won’t proactively extend them for you, but there is a squeaky wheel gets the grease kind of situation.”

Experts say it’s good to be persistent when asking for a refund or extension – but be polite.

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If your voucher already expired, Keyes says it’s still worth calling the hotel or airline because you may be able to still get all or some of your credit back.

Keyes also provided us with a list of the current airline voucher policies:

On United, travel certificates are valid for up to 24 months after the date they were issued while future flight credits for tickets issued between May 1, 2019 and March 31, 2020, are valid for 24 months after the original issue date. This means you need to book by the expiration date but you can travel after it.

On American, a flight credit is good for travel within one year from the issue date with the caveat that if your credit expires before March 31, 2021, it can be used for a travel date through December 31, 2021. A voucher must be used within one year of issue (the travel date doesn’t have to be within the year).

And on Delta, vouchers usually must be used within the year. But, for tickets purchased before April 17, 2020, for original travel by March 31, 2021, you can use your voucher for travel until December 31, 2022.

MORE NEWS: Some Experiencing Increased Anxiety As Reopening Plans Come Into Focus

Southwest puts credits into travel funds which normally can be used for a flight that takes place within one year of issue. But for pandemic-era flights, it extended the travel date to September 7, 2022.

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