Issue #29 -- January 28, 1999
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US Airways' Changes for Better, for Worse
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US Airways apparently has been busy revamping Dividend Miles, with mixed results.
>> New Ways to Qualify for Elite Status
Dividend Miles members now can earn Preferred status after flying 30 segments, Preferred Plus status after flying 60 segments, and Chairman's Preferred, the highest level of the program, after flying 100 segments. Members can still fly 25,000, 50,000, or 100,000 miles to earn Preferred, Preferred Plus and Chairman's Preferred status.
>> Reduced Mileage for Domestic Coach Awards
Under the new award structure, a standard Coach Class award ticket will require only 20,000 miles, a 5,000 mile reduction, for travel in the U.S. and Canada during the off-peak period between September 15 and the last day of February. Peak period travel remains at 25,000 miles.
>> Saturday Night Stay Required
The bad news: As part of these changes, US Airways will introduce a Saturday night stay requirement for travel within the U.S., and for travel between the U.S. and Canada, for reservations made after March 31, and for travel September 15 and beyond.
>> New Lower Europe Award
US Airways will reduce the number of miles needed from 60,000 to 50,000 miles for standard European peak coach class travel between May 1 and September 30. European off-peak award travel remains 40,000 miles.
>> Anytime Awards
In addition to US Airways' coach class, first class and envoy class standard awards, for reservations booked after March 31, and for travel originating September 15 and beyond, Dividend Miles members can use a higher number of miles to travel in all classes with no restrictions on the number of award seats available, and no minimum night stay requirement.
>> First Class Upgrades
Effective April 1, 1999, Dividend Miles members will be able redeem 10,000 miles for a first class upgrade when traveling roundtrip within the U.S. using an unrestricted coach class fare, and 20,000 miles when upgrading from a restricted coach class fare.
>> Other program changes effective immediately
-- Preferred members now earn a 50 percent mileage bonus on all US Airways flights, up from 25 percent.
-- Dividend Miles members now earn a 50 percent mileage bonus when traveling US Airways' Envoy Class service to and from Europe, up from 25 percent.
-- Blackout dates do not apply for award travel by Preferred members.
-- Two additional First Class upgrades for travel in North America will be awarded for each 20,000 miles earned after achieving Preferred status.
>> Expiring Mileage
More bad news... Beginning January 1, 2000, mileage will expire if a Dividend Miles member does not fly again on US Airways within three calendar years from the time that mileage initially is earned. Any miles earned prior to January 1, 2000, will not expire.
>> The Verdict: Cheers & Jeers
Where the program has been improved, in most cases it's in areas where improvement was needed to remain competitive. And the negatives (Saturday night stays and expiring miles) largely offset what positives there are. Given the confusion such changes engender, and the lack of any substantial net benefit, it may have been better to make no changes at all.
>> More <<
o US Airways
o MetroJet
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Oneworld Launches Next Week
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Beginning February 1, the latest of the global alliances, Oneworld, takes its place on the airline alliance stage.
Comprising five airlines--American, British Air, Canadian, Cathay Pacific, Qantas--the group will phase in a range of services designed to provide their 174 million customers with improved levels of service and benefits, and increased opportunities for rewards and recognition when flying to any of the 632 destinations worldwide served by the Oneworld carriers.
These include:
-- closer linking of their frequent flyer programs to enable members of the five airlines' frequent flyer programs to earn and redeem miles on any eligible flight operated and marketed by a Oneworld alliance carrier, with these miles counting towards frequent flyer top tier status.
-- co-branding frequent flyer cards with new Emerald, Sapphire and Ruby symbols, to ensure that members receive the recognition and service to which they are entitled no matter on which of the five airlines they are flying.
-- access to more than 200 of the airlines' airport clubs and lounges to eligible members of their frequent flyer programs, no matter on which of the five airlines they are traveling, along with priority check-in, standby and waitlisting.
-- smoother transfers for passengers traveling across the global networks of the five carriers.
-- greater support, with employees of each airline equipped to assist and care for customers traveling with any of the Oneworld airlines.
-- greater value, through a range of round-the-world products, including the launch of Oneworld Explorer fares.
Oneworld competes with the other global grouping, the Star Alliance, which includes United Airlines, Germany's Lufthansa, Sweden's SAS, Air Canada, Brazil's Varig, Thai Airways and Singapore Airlines.
>> More <<
o Oneworld
o American
o British
o Canadian
o Cathay
o Qantas
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Double ClickMiles from February 2
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Qualified purchases at ClickRewards partner sites will earn double ClickMiles from February 2.
ClickMiles can be earned for online purchases at barnesandnoble.com, garden.com by Garden Escape, Music Boulevard, Office Max, Preview Travel and other merchants. ClickMiles can be redeemed for airline miles in the programs of American Airlines, British Airways, Continental Airlines, Delta Air Lines, Northwest Airlines, United Airlines, and US Airways.
Look for further details on the ClickRewards website in the next few days.
>> More <<
ClickRewards
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New Starwood Program to Debut
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On Wednesday, February 3rd, the new Starwood frequent guest program will be launched, supplanting existing Westin and Sheraton programs, and covering stays at other Starwood-owned properties as well.
With its extensive portfolio of hotels, and with the high standards set by Hilton HHonors and Marriott Rewards as benchmarks, Starwood is in a position to leapfrog its competition if it chooses to make its program an industry-leader rather than an also-ran.
Stay tuned.
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United + America West = ?
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While there has been no further news concerning United's proposed acquisition of America West since last week's announcement, there has been an outpouring of negative reaction to the tie-up.
"The pending acquisition of America West by United Airlines is yet another catastrophic step towards excessive concentration in an industry that is already offering few, if any, options to business travelers," said Ivan Michael Schaeffer, President and Chief Executive Officer of Woodside Travel, a major travel agency.
Schaeffer noted that over the past year, concentration continued to increase in the industry, with the purchase of Reno Air and Business Express by American Airlines and the de facto implementation of the Northwest and Continental merger.. Even before these changes, statistics showed that the U.S. airline industry was at an excessive level of concentration. And concentration, economists argue, leads to higher prices and lower levels of service.
According to a Solomon Smith Barney report from March 1998, based on a weighted average of airline market share at each of the 50 largest airports in the United States, the concentration for the airline industry is at 3,949 HHI. (The U.S. Department of Justice (DOJ) uses the Herfindahl-Hirschman Index (HHI) to determine industry concentration. It classifies industries as the following: unconcentrated (HHI below 1,000); moderately concentrated (HHI from 1,001-1,800); and highly concentrated (HHI above 1,801).)
It should be noted that while the interests of travel consumers and travel agents are in alignment against excessive industry concentration, travel agents' concern is driven by declining commissions (which is likely to be exacerbated by industry concentration), rather than by rising ticket prices. So agencies' posturing as the guardians of consumer interests is disingenuous.
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Delta Ticket Surcharge... Not
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Delta Air Lines' surcharge for tickets NOT booked on its website--announced earlier this month with a bang--has been rescinded with barely a whimper.
The surcharge was criticized as a de facto fare increase, discriminatory against non-computer-users, and another airline ploy to drive consumers away from travel agents.
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LAX - SFO Gets Competitive
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For too long, the Los Angeles - San Francisco corridor has been effectively monopolized by the United Shuttle. The lack of any real alternative has allowed United to run the operation with little regard for its customers, delaying and canceling flights with impunity.
That changes on March 1, when Reno Air increases service between Los Angeles and San Francisco to eight daily roundtrip flights--enough frequency to give travelers a real choice of carriers on the route. The airline will add five flights in each direction, plus re-time its current three flights to offer service every two hours throughout the business day. The new flight schedule will appear in computer reservations systems on January 24.
The new flight schedule between Los Angeles and San Francisco is as follows:
Welcome... it's about time.
>> More <<
Reno
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Double Dollar Miles for WorldPerks Members
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Dollar Rent A Car is offering Northwest WorldPerks members double bonus miles on leisure-rate rentals through February 28, 1999.
The offer rewards WorldPerks members with an additional 500 Bonus Miles when they rent a compact size car or larger for two days or more, with the rental beginning on a Sunday, Monday or Tuesday. With the 500 WorldPerks Bonus Miles, members already receive for a Dollar leisure rental, during this offer, they will receive a total of 1,000 Bonus Miles.
To receive the bonus, when arriving at the Dollar counter, customers should cite "NWA2" to receive their mileage bonus.
>> More <<
Dollar
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Dollar Double with United, too
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Dollar is also offering double miles to United Airlines Mileage Plus members--but this offer is limited to rentals at seven Dollar locations. The promotion is in effect through March 15, 1999.
Mileage Plus members renting a compact size car or larger for two days or more from Dollar locations in Los Angeles, San Diego, Chicago (O'Hare), Washington, D.C. (either Reagan National or Dulles), Baltimore or Kansas City, will receive double mileage when citing promotion code "UAP2."
>> More <<
Dollar
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Thrifty Joins LatinPass
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Thrifty Car Rental will become the newest car rental partner for LatinPass, a frequent flyer program for a consortium of 10 Latin American airlines whose membership represents frequent travelers in virtually every country in Latin America and the U.S., effective February 1.
To promote the new partnership, Thrifty will offer double miles beginning March 1 - April 30, 1999, allowing LatinPass members to earn up to 1,000 miles with any worldwide rental.
The program applies on all Thrifty rentals worldwide. No flight segment is required to earn LatinPass mileage.
>> More <<
Thrifty online
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Freddies' Frequent Flyer Faves
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Continental OnePass and Marriott Rewards took top awards in the 11th annual Freddie awards, sponsored by InsideFlyer magazine, MCI WorldCom, American Express SkyGuide, MaxMiles and ClickRewards.
Over 82,840 frequent travelers cast over 954,000 votes this year. Eighty-two percent of the Freddie ballots were cast via the Internet, compared to 10 percent cast online in 1995.
In addition to the Freddies, the "Randys" are presented by Randy Petersen and are determined by editorial decision rather than by ballot. These awards honor the programs and individuals that have had, or will have, the biggest impact on the industry in coming years. This year, Industry Impact Awards were presented to the Star Alliance and United College Plus. Rising Star Awards were given to ClickRewards and American Express Membership Rewards Canada.
>> More <<
The WebFlyer website
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Air Transport World Picks Winners
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Results of the annual Air Transport World (ATW) awards are out.
The monthly trade publication selected Atlanta-based Delta Air Lines as its Airline of the Year for 1998. The editors praised Delta for "its dynamic leadership, superb profit margins and renewed commitment to passenger service, which is reflected in its return to the top ranks of U.S. airlines in terms of on-time performance, baggage handling and passenger satisfaction, as measured by the U.S. Dept. of Transportation."
According to ATW Editor-in-Chief J.A. Donoghue: "Under President and CEO Leo F. Mullin, Delta is investing millions of dollars in improving Delta's service products while maintaining a strong commitment to the airlines' stockholders and reaffirming its loyalty to its employees."
Other award winners include Tyrolean Airlines, of Innsbruck, Austria, which was selected as ATW's Regional Airline of the Year. According to the magazine, Tyrolean "has been consistently profitable, inventive and growth-oriented since beginning operations in 1980." Belying the notion that regional airlines skimp on service, ATW noted that Tyrolean spends more money on catering and service than on fuel in order to meet the exacting demands of the business flier.
Air Canada received the magazine's Passenger Service Award.
"From the warmth and professionalism with which its staff greet customers to the quality of its cabin safety briefings, Air Canada has few peers," ATW noted. The magazine praised Air Canada's Executive First premium product while citing its economy-class service as well.
Southwest Airlines was recognized for its excellent labor relations, "the best in the industry," according to ATW. "Southwest and its people have worked together to create innovative, flexible contracts that tie wages to productivity while profit-sharing and stock ownership let employees benefit from their efforts," said Donoghue.
Virgin Atlantic Airways received ATW's Market Development Award. "Virgin's ability to reinvent the rules for transatlantic competition and its adaptation and further development of a globally-recognized brand name makes it a worthy recipient of this award."
Airbus Industrie, the European aircraft manufacturing consortium, was selected for ATW's Technology Achievement Award for the development of the widebody twin-engine aircraft. "This Airbus innovation, originally conceived for short-haul, high density routes, has become the high-efficiency design of choice for all but the biggest aircraft and the longest routes," observed Donoghue. Today's successful widebody twins include the Airbus A330 and Boeing's 777.
(Is it just me, or do the ATW commendations come across as over-the-top gushing, as though ATW were simply restating the winners' own P.R. hype? Seems a bit unseemly for a trade publication to wax so hyperbolic.)
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Online Research vs. Online Purchasing
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Fewer than one-third of visitors to airline sites are purchasing tickets online.
That's according to a poll by NPD Online Research of more than 13,000 visitors to American, Canadian, Continental, TWA and United Airlines websites. The survey revealed that males were significantly more likely than females to have purchased a ticket on an airline site, and web users with two or more years of online experience (70% of those polled) and experienced travelers (six or more flights in past 12 months) were also significantly more likely than other visitors to have purchased a ticket online. Positive overall opinion ratings for these sites ranged from 58%-78% among the five airline sites whose visitors were surveyed; excellent ratings ranged from 11% to 25% among the sites.
It's no secret that airlines want customers to buy tickets online, preferably directly from their own websites (rather than from an online travel agency like, for instance, Travelocity). The reasons for this preference have been well articulated by bricks-and-mortar travel agents, whose livelihood is increasingly imperiled by the airlines' shift from traditional distribution channels to their own online channels: lower costs, and higher profits, for the airlines.
I have no quarrel with the airlines' attempts to squeeze inefficiencies out of the distribution system. There are, though, at least two ways in which online direct-from-the-airline ticket purchases are a disservice to consumers:
1) It is difficult to find the best price on a particular airline, relying solely on that airline's website. I have on several occasions found the "best price" on an airline's website, only to call the airline's reservations number and have the agent quote me a lower fare.
2) Furthermore, using a particular airline's website doesn't allow for comparative pricing among different airlines.
With the above in mind, I wonder, and worry, about that one-third of visitors to airline websites who ARE making online bookings: are they sure they got the best price available on that airline? And are they sure they couldn't have gotten a better fare on another airline? I hope so, but suspect not.
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Site Suggestion
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This week, we're recommending an article on frequent flyer programs (what else?!) that appeared in the Portland Oregonian's Sunday edition and is available on the Oregonian's website.
The article draws extensively from interviews with me, and with my more successful "big brother," Randy Petersen of InsideFlyer. The author, Julie Tripp, does an admirable job of distilling a lot of information down into cogent, useable advice.
>> More <<
The Portland Oregonian
Until next week...
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