U P F R O N T
Another Big-News Week
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First, the good news: US Airways successfully executed its plan to reorganize under Chapter 11 bankruptcy. The carrier emerged from bankruptcy protection on Monday, on schedule, as a leaner, meaner airline, having shed 25% of its flights, 30% of its seats, and 36% of its employees.
Still, US Airways is by no means out of the woods.
As has been widely reported, the economic and "geo-political" environment remains daunting. In the words of US Airways chief David Siegel: "We're just drowning, but closer to the surface."
One factor undermining their prospects: a significant piece of US Air's survival plan is based on their deep and wide alliance with United, and ultimately on US Air's participation in the Star Alliance. But United's own survival plan may have fatal flaws (the low-cost airline-within-an-airline idea, for starters). And even if United is a long-term survivor, the Star Alliance's preeminence may be short-lived (see below).
House of cards? In the fullness of time...
Also encouraging: American secured, subject to final approval, wage and work-rule concessions from its unions worth $1.8 billion -- narrowly averting, at least for the short term, its own Chapter 11 bankruptcy filing.
Occupying the gray area between good and bad news is the DOT's approval of the 3-way code-share agreement among Continental, Delta and Northwest. The danger of price-fixing when 3 of the 5 largest airlines cooperate is huge. Presumably, the DOT will be diligent in exercising its consumer-protection duties.
More interesting than the collusion concerns is the prospect of a new market leader among global alliances. How? First, add Continental and Northwest to the Delta-led SkyTeam. Then assume that KLM (a longtime Northwest partner) would join SkyTeam as well.
With United on the ropes, the Star group's future is in doubt. And oneworld (AA, BA, et al) has never mustered the enthusiasm and focus to overcome rival alliances.
If SkyTeam had publicly traded stock, I'd be a buyer.
As predicted in last week's Crier, the Federal aid package for U.S. airlines is shaping up to be of decidedly modest proportions.
Appropriations panels in both the House and Senate are proposing aid packages of approximately $3.5 billion, far less than what the airlines and their supporters have requested. And the Bush administration has signaled that it opposes even such modest assistance.
North of the border, Air Canada's CEO Robert Milton took the world's 11th-largest airline into Canada's version of Chapter 11 bankruptcy, explaining that "the business model is broken and it must be fixed without burning any more furniture."
Aeroplan, which operates as a semi-independent subsidiary, is not covered by the filing, and so far there's no word on how the move might affect Aeroplan members.
M I L E S & P O I N T S
Redeem Best Western Points for More NWA Miles
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Between Apr. 1 and May 31, Best Western Gold Crown Club International members will earn a 25% bonus when redeeming GCCI points for WorldPerks miles.
Offer is available to GCCI members residing in North, Central & South America, South Africa and Asia.
> More...
Song Sings SkyMiles
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Song (the new Delta low-fare carrier which launches service on Apr. 15) began accepting online bookings on Apr. 1, raising the question: Can SkyMiles members earn and burn miles for Song flights?
According to a Delta spokesperson, "SkyMiles program benefits are applicable for travel on Song. Accrual rates for mileage and medallion qualification miles are calculated the same as on Delta flights. They should have something on the website soon."
> More...
Save On WorldPerks Awards
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WorldPerks members can save 1,500 miles by booking award trips online at nwa.com. Offer is in effect through Apr. 30 and applies to award flights operated by Northwest, KLM and Alaska Airlines.
> More...
Northwest Offers Bonus for Tokyo Flights
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WorldPerks members will earn 1,000 bonus miles for Northwest flights to, from or through Tokyo Narita between Apr. 14 and Apr. 30.
Advance registration is required, using promo code 8172.
> More...
Spanair Joins Star
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Effective Apr. 1, Spanair joins the Star Alliance group of airlines, which includes Air Canada, Air New Zealand, ANA, Asiana, Austrian, bmi, Lufthansa, Mexicana, SAS, Singapore, Thai, United and VARIG.
A key aspect of Star membership is frequent flyer program reciprocity among all participating airlines. I.e., members of any partner's program can earn and redeem miles for flights on all other alliance members.
> More...
United-US Air Frequent Flyer Ties Complete
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Effective Apr. 1, the final piece of the UA-US frequent flyer tie-up is in place.
Members of both programs can now redeem miles for award flights on either airline.
Earn Triple Dividend Miles for Qantas Flights
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US Airways Dividend Miles members will earn triple miles for roundtrip Qantas flights between the U.S. and Australia, New Zealand or Fiji, between Apr. 15 and Aug. 31, 2003.
Bonus is valid on qualifying paid published fares in any class of service, for tickets originating from and purchased in North America.
> More...
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...
Sale fares to/from Florida and the South from $124
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Fly to Florida this spring and summer from either coast, and pay less with sale fares from AirTran, America West, and US Airways. You can also fly at low prices to/from Atlanta, New Orleans, and other southern cities. Delta is offering a similar sale, but only for flights to/from Atlanta.
Book tickets online only, at least seven or 14 days in advance, depending on your airline, and by Thursday, Apr. 3. Other airlines have matched these fares.
> More...
Caribbean sale fares on American from $282
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If you're ready to feel sand between your toes and swim in warm ocean waters, take advantage of American's spring sale fares to the Caribbean. Travel to any of 10 destinations is valid through June 16. Book tickets online only, at least 3 days before departure, and by Thursday, Apr. 3.
> 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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"Just a few comments on this week's Crier....
"- I was surprised that you didn't mention Continental's announced intention to pull their Ohio hub due to weak regional demand.
"- The latest I heard about gov't relief was that it would be (1) security reimbursement AND (2) gas tax relief (nothing overwhelming there).
"- Surprised you didn't touch on UAL's announcement that they met their first cash burn/NOL benchmark as of Feb 03, in conjunction with Gary Chase's recent public declaration that UAL has a 50/50 shot of getting liquidated."
- Glenn
S W E E P S & F R E E B I E S
From McDonald's: McMillions of McMiles
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Any sweepstakes which gives away 10 prizes of 1 million United frequent flyer miles each, and that's not even the Grand Prize (of which there are 4 -- $100,000 each -- followed by 20 2003 Corvettes) has a legit claim to the title of Mother of All Sweepstakes.
Through Apr. 21, enter the McDonald's "The Winning Time" sweeps to win any of 20,074 prizes. Entries are received for selected food purchases, but can also be obtained by mail, with no purchase required.
> More...
F R E Q U E N T F L I E R F U N N I E S
True (Funny) Travel Stories
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Caller to an airline reservations agent: "Do you people fly to Area Code 304?"
[FrequentFlier Funnies are true stories told by pilots, reservations agents and other travel industry professionals, reprinted with permission from William Joric's "Air Sick Humor."]
Until next week...
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