This Week's Travel Industry Newsbites

The pace of change in the airline industry sometimes seems painfully slow. But then, suddenly, those myriad incremental adjustments crystallize into a major realignment of the overall picture.

US Airways, which seemed for several years to be on a long, slow shuffle into oblivion but is now an odds-on favorite to survive long term, is a recent example. The latest case in point: Northwest.

It wasn't so long ago that Northwest was on everyone's short list of airlines which were navigating a sure-handed course through the industry's chaos and turmoil.

Now, after a drawn-out series of wrenching cost cuts at other airlines, Northwest finds itself at a competitive disadvantage, displacing US Airways as the carrier with the highest labor costs. Strike threats loom large. The carrier's largest private investor, Gary Wilson, has been selling off his shares. And bankruptcy is suddenly a very real prospect.

And speaking of stories which have unfolded unbearably slowly, the latest installment in United's apparent escape from the jaws of death is a sudden surge of interest by outside buyers in taking over the company following its emergence from bankruptcy.

According to a report earlier this week in Crain's Chicago Business, interested parties include Texas Pacific Group and investor groups headed by 2 former airline chiefs, United's own Gerald Greenwald and Continental's Gordon Bethune.

Such interest constitutes a vote of confidence in United's assets and a vote of no-confidence in United's current management team, headed by Glenn Tilton.

Feature: Frequent Flyer Programs by the Numbers

Analyzing airline financial reports is a dirty job. Luckily, Jay Sorensen of IdeaWorks saved us the eye (and brain) strain and undertook the accounting detective work himself.

Based on his findings, we grapple with some of the key questions that keep mileage program aficionados awake at night. E.g.:

• How much revenue is generated by mileage programs?
• How much does it really cost airlines to give away free tickets?
• What percentage of their seats do airlines devote to mileage awards?
• What's the average spoilage factor of the major airline programs?

If you know the answers to those questions, you know that the future of mileage programs is virtually assured.

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FrequentFlier Forum Topics

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

In the "Airline Programs" Forum, Marathon Man raises the issue of upcoming changes to miles-for-dining programs: "Does anyone know the new requirements to get to whatever levels or tiers one must be at in order to dine as we know it for miles? I have heard all this mumbo jumbo about it changing and totally revamping all things we know in terms of assigning and reassigning our CCs to get miles..." (Changes take effect July 1.)

Also in the "Airline Programs" Forum, Chris reports that more than 100,000 United miles expired. Lively discussion ensues.

In the "Hotel Programs" Forum, Travlynn has the details of a Best Western promotion we weren't aware of (see "Miles & Points" below for more).

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

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From AirIncentives: Miles for Sale

Points.com, the company which facilitates mileage conversion among participating programs and whose software powers many airlines' online miles-for-sale offerings, will launch yet another play on mileage programs beginning July 1.

AirIncentives permits companies to buy blocks of miles for use as consumer or employee incentives from any of 6 U.S. airlines (Alaska, Midwest, America West, Northwest, Delta, US Airways). Miles are priced at between 2¢ and 2.5¢ each, plus 7.5% Federal Excise Tax and processing fees.

Since miles can already be purchased directly from the airlines, AirIncentives' principal benefit is the convenience of aggregating sales of the 6 airlines' miles and allowing purchases of miles from multiple programs in a single transaction.

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American Bonus for Flights to Ireland

Through July 31, AAdvantage members will earn bonus miles for full-fare flights between Chicago O'Hare and Dublin and between Boston and Shannon.

Bonus: 15,000 miles for roundtrip travel in business class; 7,500 bonus miles for roundtrip travel on selected economy fares (Y, B or H).

Register using promotion code IE15K.

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Triple AAdvantage Miles at Texas, Colorado Starwoods

Through Sept. 5, AAdvantage members will earn 1,000 bonus miles and receive free breakfast for stays at selected Starwood hotels in Texas or Colorado.

Participating properties: Sheraton Suites Market Center, Four Points by Sheraton Denver Cherry Creek, The St. Regis Houston, The Westin Park Central Dallas, The Westin Tabor Center, The Westin Galleria Dallas, The Westin Galleria Houston, The Westin Oaks, The Westin Riverwalk, The Westin La Cantera, The Westin Stonebriar Resort, and Four Points Denver Southeast.

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Redeem Best Western Points for More Miles

Through July 31, Gold Crown Club Int'l members will receive a 25% bonus when redeeming their points for airline miles. With the bonus, 500 points net 1,250 miles in the programs of participating airlines.

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Continental Will Increase First Class Seats

Good news for OnePass members who covet upgrades: Continental plans to double the number of first-class seats offered on its Boeing 757-300 aircraft.

The reconfigured planes, which will begin seeing service later this summer, will have 24 first-class seats. Continental will also expand its Boeing 757-300 fleet from 9 to 17 aircraft.

Bonus Miles for Continental Vacations in Mexico

Through June 30, OnePass members will earn a 10,000-mile bonus when booking a 5-night vacation or longer at Palace Resorts in Mexico with Continental Airlines Vacations for travel through Oct. 31, 2005.

To receive the bonus, cite promotion code COV1PSPAL when booking.

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Double Miles for Delta Credit Card Charges

Between July 1 and Aug. 31, SkyMiles members will earn double miles for every eligible dollar spent using a Delta SkyMiles credit card from American Express. Up to 10,000 bonus miles may be earned during the promotion.

Registration is required.

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Preview New Gold Passport Site, Earn Bonus Points

Through June 22, Hyatt Gold Passport members can earn 1,000 bonus points for viewing a demo of the new goldpassport.com website and then updating their profiles.

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Log On with AOL to Earn Starpoints

Starwood Preferred Guest members can earn up to 3,000 bonus Starpoints for signing up for AOL Internet access.

After the free trial (1,175 hours for 50 days), new customers will receive 1,000 Starpoints for every paid month of AOL service, for up to 3 months.

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United Guarantees Timely Arrivals with Miles

Through the end of the year, United is offering 500 miles to compensate passengers delayed by at least 30 minutes on flights to and from Chicago O'Hare and 7 destinations: Philadelphia; Boston; New York's La Guardia; Newark; Minneapolis-St. Paul; Dallas-Fort Worth; and Ronald Reagan Washington National Airport.

The offer applies even for flights delayed by bad weather or air traffic control problems.

The guarantee is part of United's new Business1 service, which aims to optimize flights frequented by business travelers from O'Hare by relocating departure gates closer to security checkpoints and offering free newspapers on morning flights.

Registration is required to receive the miles.

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Deal Alert from SmarterTravel.com

1) Scotland Sale Fares on US Airways from $333

Fall travel to Scotland is on sale with US Airways' latest offer, with prices from $333 roundtrip.

Travel at the lowest prices is valid Mondays through Thursdays from Sept. 1 through Oct. 20. Travel through Aug. 31 is valid at higher prices. Book tickets by June 22. Fares require a Saturday-night stay, and the maximum stay is 1 year.

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2) Canada Sale Fares on American from $262

American's Canada sale features Calgary, Montreal, Toronto, and other cities north of the border. Prices start at $262 roundtrip.

Travel is valid daily through Dec. 31. Book tickets at least 21 days in advance. American has not listed a booking deadline.

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Win a Million TripRewards Points

Through Sept. 15, enter Cendant Hotels' "Stay a Spell" sweepstakes for a chance to win 1 of 4 grand prizes of 1 million TripRewards points each, or 600 gas cards worth $100 each.

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

Feedback from the Frontlines of Travel

"I was booked on UA flight 831 from Chicago to SFO. The scheduled departure was 10am. As me and family (wife + 2 kids of 6 years and 2 years) were in line to check in our luggage, I got a call on my cell phone at 9:00am. I missed the call and ended up listening to a voice mail. It was a recorded message from UA stating that the flight has been rescheduled to 8:00 am!!!!!! So we were being informed of the schedule change AFTER the flight had left.

"I called customer service and was told that there is another flight at 10am, but it is full. There were flights every 2 hours, but all they could give was 4 pm. So there we were; 6 hours at O'Hare with 2 kids.

"After reaching SFO, I called Customer Service. The first reaction was, we sent you an eMail and left you a voice mail. I asked them what time; he said 9 am. I asked what time was the flight, he said 8 am; and then realized how foolish this was. So he promptly THANKED me for 'sharing' my experience with him. He also asked me to call Customer Care, who would take care of me.

"I called Customer Care, and repeated the whole saga again. He ALSO went through same cycle of 'we informed you....' to 'ohhhh.....'. He thanked me for sharing my 'experience' which will help them improve in future. He then offered me $75 worth of coupons for all 4 travelers. I asked him if he could change my return date by a day (from May 23 to May 24). He said, he will look into it and offered to waive $100 change fee. I reminded him that 3 of the 4 tickets had no change fee associated!!! He agreed and tried to change my dates. He then informed me that the class of service was not available on 24th. I asked him if there were seats in general. He said yes, but not for our tickets. I said, how about help me here and we are even for the inconvenience. He said, this is like giving free tickets; I said not really because seats were empty anyway and I had paid for them for the 23rd. And I asked him how come you throw rules in my face when it is convenient; what happened to rules when you cause inconvenience.

"He said: 'Ohhhhh, I thought you called only to help us. You actually want free tickets. This is not COMPENSATION department. Maybe you should talk to them or our lawyers.' I just realized why this airline is going bankrupt; it is their employees. I almost called my lawyers. But that is too much hassle; instead I just pulled the business of 100 traveling consultant employees of my business. And I thanked my stars that I had moved personal loyalty to American Airlines long back; now I have done so for all of my business travel." [Akash J.]

Until next week...