Bankruptcy Watch

As the price of fuel continues to increase, the prospects for the country's weaker airlines dim accordingly.

According to a recent report from Merrill Lynch, every $1 increase in the price of crude oil translates into a $450 million decrease in the airline industry's pretax profits. Assuming crude prices average $51 per barrel during 2005, Merrill predicts a $5 billion loss for the year.

In connection with the fuel-related bad news, and other industry problems, we reported last week on grim forecasts from Delta and Continental, the former predictable, the latter surprising.

The latest surprise is American, which had its debt outlook lowered from "stable" to "negative" by Chicago-based Fitch Ratings.

American chief Gerard Arpey warned that no relief was in sight: "With the cost of oil at these levels, fares should be rising much faster than they are and capacity should be coming out of the market."

American's problems are by no means the worst. In a MarketWatch interview, Calyon Securities' airline analyst Ray Neidl ranked the 4 legacy carriers not already in Chapter 11 according to their financial health, from best to worst: American, Northwest, Delta, Continental. Absent a decrease in fuel prices and an increase in ticket prices, Neidl expects 1 or more liquidations by year's end.

Lastly, and more of a novelty item than a real concern to Crier readers, the operator of the Queen Mary luxury liner, permanently docked in Long Beach harbor as a tourist attraction, has declared Chapter 11. At issue: $3.4 million in back rent the city of Long Beach claims it is owed.

FrequentFlier Forum Topics

As always, there's plenty of activity on the FrequentFlier Forum.

In the "Airline Programs" Forum, Sonora reports that the benefits of elite are still worth pursuing: "I had lost my elite status for a year, prior to which I never had any problem upgrading. I got it back this year -- AA Gold, and I have only not been upgraded once."

Also in the "Airline Programs" Forum, Sibby Lou poses the following question regarding inheriting miles: "My best friend's husband suddenly passed away in Jan. 05. Can she use his frequent flyer miles?"

In the "Credit Card Programs" Forum, pyyoon faces a familiar quandary: "I am looking for a credit card (with which I will be paying all my travel expenses and even living expenses) that would bring me the most benefits like free flight tickets and free hotel stays.

"Currently, I am enrolled in HHonors (Hilton), AAdvantage (American Airlines), Skypass (Korean Airlines), and Priority Club Rewards (InterContinental) program.

"Do I have to carry all these program cards whenever I travel?? Is there a card which 'consolidates' all these programs???"

And much more... Questions, answers? Post them to the Forum!

More: http://frequentflier.com/forums/index.php

AAdvantage Miles for Bose Products

AAdvantage members can earn 2 miles for every $1 spent on Bose products, including their noise-cancelling headsets, purchased through the AAdvantage eShopping website.

More: http://aadvantageeshopping.com/details.jsp?mrc=103&plc=147&src=bose1

Continental Bonus for Sandals Vacations

Continental OnePass members can earn up to 25,000 bonus miles for booking a Sandals all-inclusive package of 6 or more nights at participating resorts in Jamaica, the Bahamas and Antigua with Continental Vacations.

Offer applies to bookings made by May 31 for trips completed by Dec. 15.

More: http://www.covacations.com/promotionDetail.aspx?code=6839

Delta Doubles LGA, ATL, DFW Miles

Through June 9, SkyMiles members will earn double miles for Delta/Delta Connection flights between New York's La Guardia Airport and Atlanta or Dallas/Ft. Worth.

Registration is required.

More: http://delta.com/skymiles

Delta Changes Rules on Mileage Transfer

Between Mar. 15 and June 30, SkyMiles members living in the U.S. and Canada may transfer more miles per transaction and more miles per year with a smaller minimum transfer requirement, as follows:

The minimum transfer has been reduced from 5,000 to 1,000 miles.

The maximum number of miles transferred in a single transaction has been increased from 10,000 to 30,000.

The maximum number of miles transferred has been increased from 50,000 to 150,000 miles per calendar year.

The cost to transfer miles remains the same: $0.01 per mile, plus a $25 processing fee per transaction.

More: http://delta.com/transfermiles

Earn Bonus Miles from Hawaiian Air

Through June 30, members of Hawaiian Airlines' HawaiianMiles program will earn 1,000 bonus miles for their first roundtrip flight between the mainland and Hawaii, and 125 bonus miles for every 1-way inter-island trip.

To qualify for the bonuses, bookings must be made online at Hawaiian's website.

More: http://hawaiianairlines.com/specials/hal/bonusmiles_promo.asp

Hertz Eliminates Blackouts on Discounts

Through Dec. 31, dollars-off coupons can be used any time, without regard to blackout dates, for Hertz rentals at all corporately owned airport and suburban locations in the U.S., Canada, Puerto Rico and the U.S. Virgin Islands.

Two discounts on offer through July 31: $20 off a weekly leisure rental of car classes A-F (economy - full-size cars) and $25 off a weekly leisure rental of car class G and above (premium cars and above). Cite Promotion Code 966011 for car classes A-F or 966033 on car classes G and above when making reservations.

More: http://www.hertz.com

Double Miles at Radisson Hotels & Resorts

Members of American's AAdvantage and United's Mileage Plus programs will earn double miles -- 1,000 instead of the usual 500 -- for stays at more than 150 Radisson Hotels & Resorts in Europe, Asia, Australia, Africa and the Middle East between Apr. 1 and June 30.

More (American): http://www.radisson.com/2xaa
More (United): http://www.radisson.com/2xua

TripRewards Is New Points.com Partner

An agreement between Cendant's TripRewards program and Points.com affords new options for exchanging TripRewards points for miles and points in other participating loyalty programs.

Examples: 10,000 TripRewards points convert to 1,674 Delta miles; and 10,000 Alaska miles convert to 1,980 TripRewards points.

The example points up a persistent problem with the Points.com service: the complicated hodgepodge of bilateral options. E.g. TripRewards points convert to Delta miles, but not vice versa.

More: http://points.com

More US Air Miles for Diners Club Points

Through May 31, Diners Club cardholders will receive a 25% bonus when converting Club Rewards points into miles in US Air's Dividend Miles program.

More: http://www.usairways.com/dividendmiles/9574.htm

Deal Alert from SmarterTravel.com

1) Sale Fares on Southwest from $39 Each Way

If you're looking for a 1-way ticket or a flexible fare, check Southwest's latest systemwide sale before booking. Prices start at $39 1-way, and destinations include Chicago, Seattle, Tampa, and more.

Travel is valid through Aug. 3. Book tickets at least 14 days in advance, and by Apr. 21. Fares may be combined for roundtrip travel.

More: http://www.smartertravel.com/air/deal.php?id=8532

2) British Airways' London Sale from $278 (Book by Mar. 24)

Travelers to London can save on both airfare and sightseeing by booking British Airways' latest offer. The airline is offering a free 2-day London Pass along with sale fares starting at $278 roundtrip. The London Pass offers discounts on various attractions, tours, dining, and shopping around London.

Travel at the lowest prices is valid on Mondays through Wednesdays from Mar. 15 through May 1. Book tickets by Mar. 24. Fares require a Saturday-night stay. Travel must be completed by Oct. 26.

More: http://www.smartertravel.com/air/deal.php?id=8481

Win Trips to New York, Florida from Delta

Enter Delta's "Apples & Oranges" sweepstakes by Mar. 31 for a chance to win 2 separate trips -- 1 to New York, the other to Panama City, Florida. Both include air and accommodations.

More: http://www.delta.com/hgtvsweepstakes

[Visit http://frequentflier.com/sweeps.htm for more travel sweepstakes.]

Feedback from the Frontlines of Travel

"Last summer I booked a flight through a travel agency on British Airways from Berlin, Germany, to New York City via London. The agent provided my American Airlines membership code and all was processed as usual. Only once I had paid the approximately $800 and completed the flight did I learn:

"1. from American Airlines, that they do not credit flights on partner airlines when the route is one that American Airlines also flies (namely, the London-NY run)

"2. from British Airways, that the flight was not one on which they give mileage credit.

"So I paid top dollar and got no mileage credited at all for the flight. I even provided to the airlines my travel agent's record of having given them my AA membership code. Nothing helped.

"Do you have any suggestions, short of my not flying on either of these airlines again?" (Toby - Berlin)

[Editor's Note - In my view, the non-compete agreement between American and British Airways on transatlantic routes is unethical if not illegal. But the mileage restriction is explicitly spelled out in the terms and conditions of both airlines' loyalty programs. So technically, there's no after-the-fact recourse in this situation. The best strategy (unfortunately): escalate the request to an airline supervisor, and hope she'll be sympathetic, given the circumstances. Also worth trying: have the travel agent (who may have more pull with the airline) pursue the matter on your behalf.]

"Tap has just joined the Star Alliance which includes, among others, US Airways. However, prior to doing so, TAP had an agreement with Continental whereby customers of each company could earn miles on both airlines.

"Nothing has been said or written by TAP about the status of this arrangement in light of the new Star Alliance partnership. It seems that one can assume that by flying TAP one can earn miles with both Continental or US Airways. But should one be able to earn miles with a non-Star alliance member by flying a Star Alliance airline?

"I was wondering if anyone has any thoughts on this. When calling TAP, the above was confirmed. But, I just have a feeling that when showing up at the tarmac my Continental card will be declined." (Ilya. - NYC)

[Editor's Note - Ilya's logic is sound, up to a point. In the shifting world of airline alliances, it is often the case that an airline's inclusion in a global airline alliance signals the end of that airline's cooperation with other carriers in competing alliances. So Tap Air Portugal's recent entry into the Star Alliance, co-anchored by United, would indeed cast doubt on their continued association with Continental, a member of the competing Star Team alliance, co-anchored by Delta. But at least for the time being, Tap will continue participating in the programs of both United (and other Star partners) and Continental. Members of Continental's program can expect to receive advance notice, at least 3 months, if the Tap-Continetal relationship is severed.]

"Just a tip from a frequent flyer.

"KLM has reduced the prices of all the European flight since this year. KLM brands these special rates as Take Off Fares. This obviously is good news for travellers. The bad news however is that Flying Dutchman (FD) members do NOT earn FD level miles (or flights) on these flights. This makes it more difficult to stay in the Elite levels.

"Apart from the fact that this has not been announced (properly) to FD members of the program, it's a shame.

"Hope this information is of any use to you." (Rene - Alphen aan den Rijn, The Netherlands)

Until next week...