It's 1990, and a new decade is beginning. But the economy is looking bleak, businesses are starting to feel growth slowing, and on the political front, pressure from the Middle East is building. All of this combines to cause a short-term recession in the United States that could have long-term effects on the travel industry, especially airlines. Airlines will struggle to return to profitability for at least five years, which will result in a lot of mergers and acquisitions in the first half of the decade.
But at the cinema, we ignore uncertainty with heartwarming films like Pretty Woman or get pumped with blockbusters like that year's Oscar winner, Dances with Wolves. Quentin Tarantino fired us up with Pulp Fiction. We save our Thursday nights for The Simpsons and Twin Peaks, voguing with Madonna or questioning the legitimacy of 9/11 with Public Enemy.
And after the movie, I'd go to a Blockbuster for a cheap Friday night at home, grab my Walkman and head to the nearest Camelot Music, probably taking my loyalty card. Punch cards and points were redeemable for free popcorn, and Camelot “repeat performers” gave out a free CD for every 20 purchases. Blockbuster was actually late to the points game, not introducing Blockbuster Rewards until 1998. But here's one thing I noticed:
Enjoy your journey back to 1990!
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The airline industry is skeptical of the Bush administration's move to raise airfare taxes from 8 percent to 10 percent to fund airport and air traffic control improvements, and the administration added a proposal a few weeks later to increase passenger facility charges from $1 to $4.
Northwest Airlines has begun prioritizing corporate customers who use agencies that operate under the PARS CRS, and appears to have made a deal with Ford to discount all corporate rates instead of being tied to just meetings.
Department of Justice approves Delta-PARS deal, creating joint venture Worldspan (and ultimately Travelport)
Southwest Airlines has introduced a $59 one-way fare on its route between Oakland, California, and Burbank, to compete with major airlines, which charge an average of $372 round-trip from San Francisco International Airport to Los Angeles International Airport. United Airlines was the first to cut mainline fares in July, but other airlines have since followed suit.
Diners Club Introduces Corporate Club Rewards
Eastern Airlines predicts $330 million loss in 1989
The FAA launched an Aviation Safety Initiative that waives fines for safety violations if airlines voluntarily discover and correct the violations.
ACTE's trade show management partner lost confidence in the organization's ability to pull off a second event and pulled out, surprising ACTE, which vowed to continue hosting its educational conference.
CEOs of leading agencies will meet at a forum hosted by BTN to discuss new revenue streams and service models for group travel and meetings management.
Thomas Cook launches “touch-tone” bookings for corporate travelers after sensing low demand for its “PC-based products”
Marriott has created its first corporate sales department, which has about 10 employees, in response to a growing industry shift to working directly with companies.
TWA began a desperate move to salvage its financial situation: leasing its domestic routes to America West Airlines and investing the profits in international routes.
InterContinental has introduced a corporate discount plan and plans to further improve business amenities on its corporate floors, including the installation of copy and fax machines in guest rooms.
System One has launched agency scripting capabilities via Prism, allowing shortcuts for repetitive multi-step functions in the booking pathway, the third CRS to do so, lagging only behind Worldspan.
National Car Rental has backed away from its experiment with complex agent fees after three years and reverted to a flat commission rate structure.
IVI invested in corporate card partnerships and launched its T&E program a year ago.
The Department of Transportation established the Office of Intelligence and Security in response to a presidential commission that investigated the 1988 Pan Am bombing over Lockerbie, Scotland, and found deficiencies in U.S. intelligence.
Carlson Travel Network deploys hotel low rate search software that includes both client-direct and in-house negotiated accommodations to discover market rates below negotiated prices.
The DOJ will launch an antitrust investigation into hub structures to determine whether they impede competition in certain markets.
United Airlines has introduced a bulk purchase of miles for individual employees, called “United Pass Plus,” which is nearly identical to the existing American Airlines program. United charges $7,000 for each block of 25,000 miles that must be used within a year.
American Airlines acquires Eastern Airlines' Latin American routes.
National Business Travel Association sets goal of becoming legislative body in Washington, DC
Seattle Bank has introduced a corporate card rewards program that awards points only with airlines recommended by the company, rather than travelers signing up directly with airlines for their points programs.
Eastern Airlines was indicted on 60 counts alleging it falsified maintenance records and forced employees to sign off on work that wasn't actually done.
Covia has launched a dedicated meetings division with about 10 employees.
The Gulf Crisis, a precursor to the Iraq War, begins to affect business travel as airlines raise fares due to rising fuel prices and canceling routes that have become liabilities. The government investigates possible unfair price fixing by airlines but finds nothing and begins discussions on ways to work with airlines on jet fuel.
Companies begin evacuating employees and their families from the Gulf Coast region.
TravelPros’ Sunrise 2100 distributed data processing system allows BLANK’s CRS partners to begin the process of collecting real-time data for their agents and ultimately generate management reports.
There are growing indications that key air personnel may be needed to support operations in the Middle East.
As the two countries finalize their flight schedules under a 1989 bilateral aviation agreement, nine airlines have asked the U.S. Department of Transportation for allocations of lucrative U.S.-Japan routes.
Covia will begin marketing directly to corporate travelers so they can influence the CRS that agents use to service their accounts.
Travel managers are outraged as major airlines move to eliminate advance booking fares three and seven days in advance and same-day discounts after previously raising fares by an average of 5.3 percent.
Worldwide Travel Services, Little Rock, Arkansas, is the first to enable touchless bookings using an embedded email form to collect itinerary requests and then using a database to email back itinerary options. The service is called “Quality Agent.”
Dallas/Fort Worth Airport is preparing for expansion just 16 years after opening as the nation's largest airport.
Topaz said it has seen a 100 percent increase in audit activity among its clients, a sign of a crackdown on travel as costs rise and the economy begins to falter.
Radisson has discontinued its frequent guest program to focus on serving its travel agent and travel manager customers.
United Airlines is moving to buy Pan Am's London route for $400 million, and American Airlines is launching a bidding war to protect its own ambitions on the London route that it has not yet converted through other deals.
American Express Travel Related Services has launched a standardized international management report for its clients, specifically to support negotiations between buyers and suppliers.
Carlson Travel Network has laid off a corporate account services representative as the economy continues to soften.
Hickory has announced plans to provide its member agencies with low-fee checker technology and management reporting capabilities.
The collapse of a proposed deal between System One and Ross Perot-owned information technology company Electronic Data Systems dashed hopes that Continental's lagging CRS could catch up with competitors.
As airlines' financial situations deteriorate and they seek stable corporate profits, the buyer-supplier relationship begins to change dramatically.
Continental Airlines has filed for bankruptcy, citing pressures from rising fuel costs and high interest rates on debt, though the airline has assured travelers and travel managers that operations are “business as usual.”
American Airlines followed TWA's lead by reducing airline surcharge rates in 1991 because of fuel costs, which meant the companies were able to earn less from revenue-sharing agreements.
American Airlines agreed to buy TWA's six routes to London Heathrow and Gatwick for $445 million in an effort to catch up with United Airlines. Ultimately, the Department of Justice limited the acquisition, which was in the approval process until May 1991, to just the three Heathrow routes, but TWA demanded the full purchase price. This demonstrated the competitiveness of international routes, especially those to London in the United States, amid growing airline consolidation in 1991.
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Elizabeth West is Editor in Chief of the BTN Group. She has reported on the business travel and meetings industry for 24 years. Beth served as Editor in Chief of Meeting News from 2006 to 2008 and as Director of Content Solutions for ProMedia Travel from 2008 to 2011, when ProMedia was acquired by Northstar Travel Media and merged with BTN. She became Editor in Chief of BTN in 2015 and Editor in Chief of the BTN Group in 2019.
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