U P F R O N T

United, US Airways Plan Marketing Co-Op
============================

Never let it be said that the travel industry is dull.

US Airways and United will -- after passing muster with federal regulators -- enter into a deep and wide marketing alliance, including code sharing, reciprocal frequent flyer program participation, airport lounge sharing, etc. The close relationship with United would also likely lead to US Airways' eventual inclusion in the Star Alliance, the most powerful of the global airline alliances.

As we predicted some time ago, frequent flyer program co-op is an integral part of the planned relationship. With the addition of the world's second largest airline, United, as an earning and awards partner, the Dividend Miles program gets bigger and better in 1 fell swoop. And longer term, if a Star relationship materializes, Dividend Miles would benefit further with the addition of the entire Star family of airlines to the partner roster.

While no announcements have yet been made, it's a safe bet that United's current frequent flyer tie-up with Delta will not survive a United-US Airways union. Which by my reckoning makes the frequent flyer deal, taken in isolation, a net negative for United. US Airways' program tie-in with Northwest will probably be terminated as well. But having United onboard more than compensates for the loss of Northwest.

Looking at the larger picture, an alliance with United goes a long way toward shoring up US Airways' marketplace position, and helping insure its long-term survival.

Budget Takes a Breather; Vanguard Tanks
============================

During the past week, the number of casualties on the travel-industry battlefield increased by 2.

Budget Group, parent company of 3rd-ranked Budget Rent a Car, filed for Chapter 11 bankruptcy protection on Monday. And Vanguard Airlines, which was denied an emergency loan by the Air Transportation Stabilization Board, has announced plans to do the same. Both companies cited 9/11 as a major factor in their profitability predicaments.

In Budget's case, operations continue while the company restructures its debt and shores up its balance sheet. Bespeaking more dire circumstances, Vanguard ceased flying altogether in advance of its bankruptcy filing. According to the Vanguard website:

"Vanguard Airlines has cancelled all flights through Wednesday July 31, 2002, and suspended all scheduled flights indefinitely. Vanguard Airlines intends to file for protection under Chapter 11 under the federal bankruptcy code.

"Customers may email any inquiries to ch11@flyvanguard.com"

And, buried deeper in the notice, the coup de grace: "It is likely that this is a permanent shutdown."

At press time, agreements were in place with Frontier and National to accommodate customers already ticketed for travel on Vanguard. Both airlines will waive advance-purchase restrictions, and National is offering stranded Vanguard ticketholders a "special discount." But discounted or not, affected customers will incur real costs to rebook on alternative carriers.

And the notice to employees -- displayed on Vanguard's website for all to see -- is chilling in substance if not in tone. Basically, they're summarily terminated; outstanding wages may or may not be paid; and any Vanguard stock they own is now utterly worthless.

Reality bites!

> More (Budget)
> More (Vanguard)

Midwest Express Attendants Threaten Walk-Out
============================

Midwest Express flight attendants could begin random walk-outs as soon as Aug. 30. The threat follows a failed effort by the National Mediation Board to broker an agreement between the airline and its flight attendant union.

Negotiations will continue during the 30-day cooling-off period.

O N S I T E

Two Minutes of Your Time, Please
==========================

We don't sell anything. And we don't charge fees to access FrequentFlier.com or to subscribe to this newsletter. So we depend on advertising revenue to support our publishing efforts.

Please help us insure that the ads we do run are relevant to your needs and interests: Take our online subscriber survey.

It will only take 2 - 3 minutes to complete. You will not be asked for your name or any other identifying information. All responses are confidential and will be used solely to develop a profile of our "average" newsletter subscriber.

Thanks!

New on the FrequentFlier Forum
==========================

Tim B. reports that Milespree has quietly changed its award-payout rate. Rony wonders: How can I maximize my miles when purchasing a new car? Magicman has the skinny on Starwood's enrollment and referral bonuses. And more...

Do you have mileage-related questions, answers, anecdotes? Post them (and read others') on the FrequentFlier Forum.

M I L E S & P O I N T S

Mostly Mozart, Mostly Cancelled
====================================================

If you're a OnePass member who redeemed miles to attend a Mostly Mozart concert at Lincoln Center, you may have to change your plans.

Due to a strike by the Mostly Mozart Festival Orchestra musicians, most of the Festival concerts have been cancelled. Check the Lincoln Center website for affected concert dates.

> More...

Delta Puts Miles-for-Sale Online
===========================

SkyMiles members can now purchase miles online, both for their own accounts and for gift-giving to others. The new online capability (from MilePoint, which powers Northwest's online mileage sales as well) also extends to Delta's SkyRewards program, which allows businesses to purchase miles for use as sales and performance incentives.

Individuals can buy miles for $0.0275 each, in increments of 1,000, plus 7.5% tax and a $25 processing fee. Annual purchase limit: 15,000 miles.

For SkyRewards, which requires a minimum purchase of 60,000 miles, the price per mile is $0.022, plus 7.5% tax and a $75 processing fee for the first purchase.

> More...

Exchange Midway Credits for US Airways Miles
====================================

Since reporting last week on Midway's suspension of service and planned relaunch as a US Airways Express carrier, the promised mileage-transfer procedure has been put into place.

Midway Frequent Traveler members' credits are convertible to miles in US Airways' Dividend Miles program as follows. Each unexpired credit in the Midway program can be exchanged for 500 Dividend Miles. And unused and unexpired Midway award travel vouchers can be converted to 6,000 Dividend Miles.

To convert credits, Midway members must send proper documentation to US Airways via mail, AND THE SUBMISSION MUST BE POSTMARKED NO LATER THAN AUGUST 15, 2002.

Details of the conversion process are online here.

Shop for Double Miles at WorldPerks Mall
================================================

From Aug. 1 through Sept. 30, 2002, WorldPerks members will earn double miles at more than 30 participating WorldPerks Mall retailers, including Barnes & Noble, Cooking.com, eBags, OfficeMax, etc.

Register prior to shopping to receive the bonus.

> More...

Sao Paulo Trips Earn WorldPerks Bonus
===================================

Between Aug. 15 and Nov. 15, 2002, WorldPerks members will earn 3,000 bonus miles when they fly to Sao Paulo, Brazil on Copa Airlines AND stay at the Grand Hyatt Sao Paulo.

> More...

Hyatt Offers Triple United Miles for Resort Stays
==================================

Between Aug. 15 and Nov. 15, 2002, Mileage Plus members will earn triple miles (1,500 per eligible stay) at the Hyatt Regency Tamaya Resort and Spa (near Albuquerque) and the Hyatt Regency Scottsdale Resort at Gainey Ranch.

Call 1-800-55-HYATT and ask for "Sunshine on Sale" to receive a free night with a minimum stay. And show your Mileage Plus card and request offer TRPLUA at check-in to receive the triple miles.

Coming & Going - Program Partner Changes
==========================================

> Tie-Ups
American AAdvantage: AT&T Wireless, Europcar, Midland National Life Insurance. Delta SkyMiles: Ameritrade, Jumeirah International Hotels, Signature Nationwide Auto Club, Tokyu Hotels. Northwest WorldPerks: AT&T Worldnet Internet access, Malev Hungarian Airlines. United Mileage Plus: Asiana (date TBD), LOT Polish Air (date TBD), SkyTel wireless, Spanair (date TBD), US Airways* (date TBD). US Airways Dividend Miles: FTD.com, Nevis Express, United* (date TBD).

> Break-Ups
American AAdvantage: Asiana (eff. Jan. 1, 2003); MGM Grand Las Vegas (eff. July 1). America West FlightFund: Continental (eff. Sept. 24). Continental OnePass: America West, Frontier (eff. Sept. 24). US Airways Dividend Miles: Deutsche BA (eff. Oct. 25).

* More details elsewhere in this issue

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

Deal Alert from SmarterLiving.com
=================================

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

Savings to the Caribbean and Bermuda from $183 R/T
-------------------------------
American, Delta, and US Airways are offering savings from cities throughout the U.S. to the Caribbean and Bermuda. Travel is valid from Sept. 3 through Dec. 12. Book tickets at least 3 days before departure and by Friday, Aug. 9.

> More...

Coast-to-coast sale fares from $218 R/T
--------------------------------
Fly cross-country this fall with sale fares between selected cities from America West and American. Travel is valid from Aug. 6 through Oct. 31. Book tickets online only and by Sunday, Aug. 4. A 7-day advance purchase is required.

> More...

S W E E P S & F R E E B I E S

Win a Week's Car Rental from Thrifty
======================================

Enter Thrifty Rent a Car's sweepstakes by Aug. 31, 2002, to win a free week's car rental in the U.S.

To enter, fill out the form on Thrifty's website. Open to legal U.S. residents, 21 or older, with a valid U.S. driver's license. (If you entered Thrifty's spring sweepstakes, you're automatically entered in this one.)

> More...

[Other travel-related sweepstakes and giveaways are online at http://frequentflier.com/sweeps.htm.]

Until next week...