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Bits: IAG and LATAM sign new price fixing deal, Ramada loses two of its best UK hotels

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News in brief:

British Airways and Iberia announce price fixing deal with LATAM

IAG, the parent company of British Airways and Iberia, announced last week that it has applied for permission to operate price fixing with LATAM (owner of LAN and TAM) on flights between Europe and South America.

They don’t call it price fixing, of course.  It is a ‘joint business agreement’, similar to the one which BA, Iberia, Finnair and American Airlines have for flights to North America.  BA has a similar deal with JAL for flights to Japan.

The four airlines (BA, Iberia, LAN, TAM) will pool their transatlantic services into one special purpose entity.  All flights will carry a flight code from each airline.  Fares will be harmonised.  Schedules will be adjusted so that flights do not compete directly against each other.

Frequent flyer benefits will be also be aligned.  This means that the earning rate in terms of Avios and tier points will be identical whichever airline you fly, which will be an improvement.

The deal will require regulatory approval which will take 12-18 months, although there is no obvious reason – given precedent – why it should be refused.  The only issue is the potential lack of competition compared to, say, UK to North America routes.

Two key UK Ramada hotels switching to Marriott

Wyndham is the biggest hotel group in the world.  It has achieved that despite having only a paltry UK presence which consists of a handful of Ramada and Days Inn properties.

If you ever stay in either brand, you will find my overview of Wyndham Rewards and its recent changes here.

It is about to have an even smaller presence.  Two of the most high profile Ramada properties – Birmingham City and Manchester Salford Quays – are jumping ship to Marriott and have already been removed from the Ramada website.

Once refurbished, they will become the first UK hotels to be operated under the ‘AC Hotels by Marriott’ brand.  AC Hotels is a Spanish group which Marriott acquired a few years ago.  I would love to tell you what is special about it compared to the many other Marriott brands but I honestly have no idea.  It is apparently a ‘design led, lifestyle brand’.

I was quite taken by the canal-side rooms of the Birmingham hotel in The Mailbox although the only reason I stayed there was because bmi British Midland was offering 5,000 miles for a single Wyndham stay in a promotion once upon a time.

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Category

British Airways and Avios, Marriott Bonvoy, oneworld alliance partners

Comments (37)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Chris says:
    17 Jan17 January 04:17

    The last eighteen months haven’t been too good for Wyndham in the UK.

    On top of those two London West, Docklands and the the Encores at Crewe, Barnsley and Haydock have also been reflagged.

    Glasgow airport was sold recently as well, I wouldn’t be surprised if it were to go as well.

  • Paul says:
    17 Jan17 January 08:49

    This latest price fixing deal needs to be opposed. The current ones simply mean UK consumers are paying substantially more for flights than near continent citizens and BA are now one if the most protected airlines in Europe with total dominance at LHR and a monopoly on domestic services. It’s shocking that I need to go to DUB, OSL or a myriad of other EU cities to get a good deal on flights, often returning to LHR to sit on the same plane And same seat, at fares which are often half the fare ( or less)I can buy by flying direct.
    This is even before we discuss the scandal of redemption fees BA charge on for flights on carriers with no such charges.

    • harry says:
      17 Jan17 January 09:57

      I think a lot of ex-EU flyers here would have an equal but opposite view to yours 🙂

      The price-fixing helps BA’s profitability in its core market UK, where it has a stranglehold on LHR slots.

      This frees up BA to offer enticing prices in secondary & tertiary mkts ie EU.

      Which many people here love for their value 🙂

      Let FTSE 350 pay top dollar, let independent travellers savvy enough to seek out cheaper prices benefit.

      • Mikeact says:
        17 Jan17 January 11:28

        Agreed, he obviously doesn’t know how the airline industry works, and that’s not just BA.

        • Lady London says:
          17 Jan17 January 16:23

          Nor how the car industry used to work. For years the UK market was known as “Treasure Island” for the car industry. We used to pay so much more for our cars here. I’m guessing the fact that the UK is most of the cars that need right hand drive in Europe rather than left hand drive was claimed to be of an exorbitatant extra cost by the car industry infrastructure.

          Somehow despite this we now have mostly very competitive car prices within Europe.
          It was dismantled for the car industry.
          So it might be dismanted for the aviation industry.

          Like Harry this would disappoint me greatly as arbitrage opportunities for those prepared to make some sacrifices would be lost.

          Lastly, if this price fixing agreement goes through, as TAM is a Star Alliance airline whereas the other ‘partners’ are Oneworld I can see a lot of people finding out after their flight they haven’t earned any award miles at all if they are on a codeshare flight operated by a nonearning combination of operating and marketing airline.

          • Andrew says:
            17 Jan17 January 16:45

            TAM haven’t been in Star Alliance for a few years now. They’re Oneworld just like the rest of the partners

          • Rob says:
            17 Jan17 January 22:33

            Yes, either LAN or TAM had to switch due to the merger and it was TAM who had to jump.

      • Callum says:
        17 Jan17 January 11:39

        How does any of this have anything to do with price fixing? It’s a transatlantic price arrangement, not UK-US. It applies from DUB and OSL just like it applies from LHR…

        • harry says:
          17 Jan17 January 21:41

          point being it’s very different pricing depending on which country you fly from (eg from European countries flying to the same destination with the same airline)

          • Callum says:
            17 Jan17 January 21:55

            That doesn’t answer the question. How does that have anything to do with price fixing?

          • harry says:
            17 Jan17 January 22:12

            IAG & LATAM to agree on identical pricing, we call that fixing prices

            they were previously competitors

          • Rob says:
            17 Jan17 January 22:27

            Why do you think it took a decade for the BA / AA JBA to be agreed? Remember the Virgin ‘No Way BA / AA’ campaign? It is price fixing dressed up.

            If Asda and Tesco sign a document agreeing to co-ordinate where they open stores, to close stores in towns where they compete, to charge the same prices as each other and to share their profits at the end of the year, I doubt it would go down well. This is exactly what is happening here.

            All of the non-price fixing bits are simply window dressing to confuse the issue.

          • Callum says:
            18 Jan18 January 01:35

            What on Earth are you two talking about!? I’m well aware what price fixing means. The claim was made that price fixing is responsible for prices being lower from Dublin and Amsterdam than London – explain please.

  • James says:
    17 Jan17 January 08:55

    I stayed at the encore Doncaster airport recently and it was quite poor. I also wasn’t impressed at the blurb about wyndham rewards to be honest.

  • Lloyd says:
    17 Jan17 January 09:09

    The Ramada hotel at the Mailbox in Birmingham was originally a Days Inn before moving to Ramada and now Marriott. The hotel is completely closed as is the whole of the ‘shop front’ area which featured a Starbucks so certainly no transition period to the new brand.

  • JamesP says:
    17 Jan17 January 09:24

    The Ramada Salford Quays shares the same location of an Ibis Budget, the buildings share a wall. I wonder if this will disappear too, can’t imagine Marriott will be too happy with it being next door.

  • Brian says:
    17 Jan17 January 09:45

    I signed up for Wyndham Rewards simply because I had a stay at the Excelsior hotel in Berlin. Two nights at about 60 odd euros per night, including breakfast. Never stayed again, but when it was time for my points to expire, I looked at the redemption options and was able to get an M&S voucher – i think it was either 10 or 15 pounds. That’s actually not a bad return.

  • Andrew H says:
    17 Jan17 January 09:56

    I hope this new agreement doesn’t change the fantastic price for Business Class on LAN between Madrid and Frankfurt.

    • Lady London says:
      17 Jan17 January 16:28

      nor certain other rather interesting LAN pricing on routes where they are not as competitive currently…. All this would disappear if this price fixing er… joint business agreement goes ahead.

  • mark2 says:
    17 Jan17 January 09:57

    OT
    End of Tesco quarter is 28th January.
    Will we get the pet insurance points (probably not)?

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