U P F R O N T

More Earnings Woes for Airlines
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In the first wave of quarterly earnings reports, American released dismal 4th-quarter and full-year financials. During the final quarter of last year, American lost $529 million. And for the year, not including special items, the loss was $2 billion. Including special items, the world's largest airline lost a whopping $3.5 billion.

American CEO Don Carty called the results "unsustainable."

Proving, I suppose, that American's problems are largely of its own making, Southwest posted a $241 million profit for the year. While that's less than half their 2001 profit, it extends Southwest's unbroken record of profitability to 30 years.

More on the U.S. airlines' results next week...

New CO-DL-NW Alliance Spites Feds
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The major airlines weren't too busy losing money to make new enemies.

Already in contentious relationships with their workers, their lenders, their shareholders, and their customers, 3 of the 5 largest U.S. airlines are now butting heads with the federal government as well.

At issue: the 3-way alliance among Continental, Delta and Northwest.

Last week, after a prolonged review, the Department of Transportation ruled that the alliance could proceed, but only if certain concessions were made in the interest of preserving competition. The carriers mulled over the DOT decision and announced on Tuesday that the alliance would indeed go forward, but without the changes ordered by the DOT. Next step: the DOT and the airlines will argue their cases before an administrative law judge.

There's a lot at stake here. Over and above the 3 airlines' participation in each other's frequent flyer programs, a key aspect of the tie-up, there's the effect on the global alliances. If, as expected, Continental and Northwest are invited to join the Delta-led SkyTeam group, currently an alliance also-ran, it would be a blow to the Star (United, Lufthansa, etc.) and oneworld (American, BA, etc.) alliances.

We'll keep you updated as this story plays out.

In the meantime, in this new era of smashmouth alliance-building, can't we all just... well, you know.

M I L E S & P O I N T S ~ sponsored by Hertz

Alamo, National Will Quit US Air Program
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Effective Mar. 1, Alamo and National Car Rental will no longer participate in the Dividend Miles program.

Coming as it does in the wake of the announcement by ANC, parent company of Alamo and National, that all airline-program participation was being reviewed, the move suggests that additional tie-ups may be severed as well.

By press time, Alamo had not responded to our request for information about their plans to maintain -- or not -- their other airline relationships.

Best Western, Amex Offer Free Companion Ticket
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Gold Crown Club members who stay twice at Best Westerns between Jan. 15 and Mar. 31 and charge the stays to their Amex cards will earn a complimentary companion ticket "valid between most major airports and on most major airlines within the continental U.S."

Offer is valid for residents of the U.S. and Canada. Registration is required, and must take place in advance of qualifying stays.

Register here or by calling 1-800-237-8483, promotion code AECFEM.

Continental Extends Extra Mile Offer
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Continental has extended the deadline to sign up for the Extra Mile. The new deadline to participate: Feb. 15.

The Extra Mile program awards OnePass members with a 50% mileage bonus on every paid Continental flight through Dec. 31, 2003, and retroactive to Jan. 1, 2003.

Enroll at 1 of 3 available levels: up to 5,000 extra miles for $50, 10,000 miles for $100, and 15,000 miles for $150. Bonus miles do not count toward elite status.

Offer is available to residents of the U.S. and Canada.

> More...

From Northwest: Mile-a-Palooza
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The headline touting Northwest's new Mile-a-Palooza promotion promises up to 200,000 bonus miles.

In theory, maybe. But to do so, you'll have to suffer through reams of mind-numbing terms and conditions, and bend over backwards while whistling Dixie.

During the promotion period -- Jan. 31 - May 31 -- registered WorldPerks members will earn points for any of 16 designated activities. The points will be converted into a maximum of 200,000 bonus miles.

The number of points earned varies according to the transaction. At the high end, earn 390 points for flying trans-Atlantic or trans-Pacific in business class. At the low end, earn 5 points for stays at partner hotels or for checking in via nwa.com.

You'll need a scorecard, literally, to figure out what the points are worth. Amounts between 20 and 49 points convert to 1,000 miles, and 2,000 or more points are worth 200,000 miles. A roundtrip domestic ticket, whether in coach or first class, is worth 100 points, or 3,000 miles.

Register prior to qualifying activity but no later than Apr. 30. Qualifying activity must be completed by May 31, 2003.

For complete details, including a list of qualifying activities and a points-to-miles conversion chart, and to register, go to http://www.nwa.com/promo/mileapalooza/.

Sprint, Sprint, Sprint for Miles, Miles, Miles
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Remember when MCI was the king of the miles-for-telecom hill? No more.

With the collapse of its parent company, WorldCom, MCI abdicated the mileage throne. While there have been some incursions into the space by AT&T and Verizon, the new lord of the mileage manor is Sprint.

We've reported in past issues on Sprint's recent tie-ups with Alaska Air, Midwest Express, and United. This week, there are 2 more airlines on Sprint's partner list, America West and US Airways.

Members of America West's FlightFund and US Airways' Dividend Miles can now earn up to 5,000 bonus miles for signing up for Sprint long-distance service, plus an additional 1,000 miles for signing up online.

Bonus miles are awarded over the course of 6 months -- 2,500 miles after the 1st and 6th Sprint invoices. On an ongoing basis, members earn 5 miles per dollar spent on Sprint long distance.

America West participants can call 1-877-382-8410 or visit http://www.sprint.com/americawest for more. US Airways members should call 1-800-856-0351 or visit http://www.sprint.com/usairways.

Earn 5,000 Bonus Miles for HI Flights
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Between Jan. 8 and Feb. 9, Mileage Plus members will earn 5,000 bonus miles for qualifying roundtrips (F, Y, B, M, H, Q and V fares) between any United city in the 48 contiguous states and Hawaii (Honolulu, Maui, Kona or Lihue).

This offer can be earned up to 4 times during the promotion period. Registration is required.

> More...

United-US Air Update
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Two recently announced dates will be of interest to members of the United and US Airways programs.

Mar. 1 - United Mileage Plus Premier members and US Airways Dividend Miles Preferred members will have their elite status recognized when flying on either of the 2 carriers.

Apr. 1 - Members of each program will have the ability to redeem awards on itineraries that are partly or totally operated by the other airline.

US Airways Doubles, Triples Miles
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Between Feb. 1 and Apr. 30, Dividend Miles members will earn triple miles for first class, Envoy class and select coach fares (F, A, J, P, C, Y, B, M and U classes) and double miles for other coach fares on US Airways flights.

Register before commencing travel at http://www.usairways.com/dm/5757.

S T E A L S & D E A L S

Deal Alert from SmarterLiving.com
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This week's hot deals from SmarterLiving.com...

Winter and spring travel to Hong Kong from $589 R/T
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Head to Hong Kong in time for the Chinese New Year or for an early spring vacation, with sale fares from Cathay Pacific. Fly from Los Angeles or San Francisco starting at $589 roundtrip, or from New York from $699, not including additional taxes and fees.

Travel is valid on any day of the week from Feb. 1 through Apr. 30. Book tickets online only and by Feb. 10. No advance purchase is required.

> More...

Caribbean airfare savings from $285 R/T
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Trade in cold winds for warm breezes with savings to Jamaica and the Caribbean from American, for travel through June 5. Book tickets online only, at least 7 days in advance, and by Thursday, Jan. 23. Air Jamaica has matched these fares.

> More...

R E A D E R R A N T S & R A V E S

This Week's E-mail Bag
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"I echo John's complaints about Delta's changes to their FF program. After several years of loyalty to the USAir program, I switched to Delta last year figuring I'd be better off since their system covers a much greater part of the country. Upon switching I found time and time again that, since my company demanded I get the cheapest fare possible, I was ineligible for upgrades. Nonetheless, I reached Gold and looked forward to those benefits.

"With the changes, there's no way I'll make Gold next year, and I continue to wind up in coach 90 percent of the time; in comparison, I was being upgraded 40-50 percent of the time as Gold on USAir. I'm seriously considering switching back to USAir; at the very least, when I can get somewhere on USAir now without connecting (i.e., Pittsburgh or Philly) I'll be taking that flight rather than dedicating my business to Delta."

- Brian

S I T E 2 S E E

AnitaVacation.com
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The spotlight at AnitaVacation.com is on cruises -- the who, what, where, why and how-much of 'em. But anything travel-related is fair game and fairly covered.

The Anita behind AnitaVacation is Anita Dunham-Potter, a former flight attendant for US Airways. Her husband still flies as a pilot for that same airline. So she understands the business of travel from the inside out, as well as from the outside in. She has an unrelenting consumer focus, and her reader Q&A -- something I do a lot of myself and take very seriously -- is top notch.

Visit the site. Sign up for the newsletter. Tell her Tim sent you.

> More...

Until next week...