Issue #53  --  August 5, 1999

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Forum Sighting
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Through Monday, you can catch FrequentFlier Crier editor Tim Winship on the newly launched Frequent Flier forum on the Smarter Living website.

The good folks at Smarter Living take a value approach to travel, as do we. And they've been a sponsor of the FrequentFlier website and newsletter. So we're happy to be helping them help their visitors.

Join us at the Smarter Living Forum.

<< M I L E S >>

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AAdvantage Miles... Forever
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"May Your Miles Never Expire" is the tagline we use for both the newsletter and the website. And it's a little less relevant today than it was on Wednesday, before American shook up the frequent-flyer world with the announcement of a new mileage-expiration policy.

Effective immediately, American Airlines AAdvantage miles will no longer expire, provided a customer has any type of qualifying AAdvantage activity at least once every 36 months.

Repeat: AAdvantage miles will no longer expire. The "provided..." clause is hardly worth mentioning since the qualifying activity can be virtually any mileage-earning transaction. In a program with as many accrual opportunities as AAdvantage, that's a very low hurdle indeed.

Under the new guidelines, all miles in an AAdvantage member's account will be extended through Dec. 31, 2002. Beginning on Jan. 1, 2000, each time qualifying activity occurs in a member's account, that activity date will serve as the start of a new 36-month rolling non-expiration term.

Qualifying activity is defined as flights on American Airlines, American Eagle and more than 20 other airlines participating in the AAdvantage program, as well as mileage earned with participating hotel companies, car rental firms, the Citibank AAdvantage credit card, MCI, and thousands of other service providers offering AAdvantage miles and award redemption.

American is in the process of updating customer accounts accessed via AA.com and AAdvantage DIAAL-IN to reflect this change, but there will be a brief transition period before individual accounts reflect the new expiration date. Complete details, answers to commonly asked questions, and AAdvantage program rules are available to consumers immediately on American's website.

AAdvantage has over 35 million members and more than 70 airline, hotel, car rental and service providers participating in the program worldwide.

Oh, and if you have any ideas for a replacement tagline, we're open to suggestions.

>> More <<
American online

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Waiting (Hoping) for the Other Shoe to Drop
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Prior to American's announcement, the entire industry was sitting on the fence, mileage-expiration-wise.

While most U.S. airlines had discontinued mileage expiration, or never instituted it at all, as long as the two largest carriers--United and American--continued expiring their members' miles, the door was left open for other carriers to adopt mileage-expiration policies.

With American's move, that door is effectively closed. Non-expiring miles are now (once again) the industry standard. Which begs the question: when will United--the lone holdout--follow suit?

How out of alignment is United's policy with the rest of the industry? Here's the big picture:

                                  Expiring Miles?
   Alaska..................................No
   American................................No
   America West............................No
   Continental.............................No
   Delta...................................No
   Midwest Express.........................No
   Northwest...............................No
   TWA.....................................No
   United.................................YES
   US Airways..............................No

Hopefully, United will act before Mileage Plus members publicly express their displeasure at being the only members of a major U.S. frequent flyer program singled out for what has become, with American's move, conspicuously unaccommodating treatment.

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United

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Northwest Adds Car Rental Partners
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Northwest Airlines announced that Avis and Hertz are new WorldPerks car rental partners. The airline also announced enhanced, simplified procedures for earning WorldPerks miles by renting vehicles.

WorldPerks members can earn 50 Bonus Miles per rental day on all qualifying car rentals at participating locations with any of Northwest's car rental partners. Also, it is no longer necessary to have a qualifying flight within 24 hours of renting a car to earn WorldPerks Bonus Miles.

In addition to Avis and Hertz, WorldPerks car rental partners include Alamo Rent A Car, Budget Rent a Car, Dollar Rent A Car, and National Car Rental.

To promote the addition of Avis and Hertz to the Northwest WorldPerks program, WorldPerks members can earn double bonus miles from Avis and triple bonus miles from Hertz.

>> More <<
o Northwest
o Avis
o Hertz

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New ClickRewards Partners
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ClickRewards has added a number of new partners, enlarging the universe of Internet merchants offering ClickMiles for online transactions. (Some of the following offers are limited-time introductory promotions.)

>> CookExpress.com
Earn 500 ClickMiles with your first order. After that, earn 100 ClickMiles for every order above $50, and 200 ClickMiles for every order above $75.

>> Qpass.com
Register with Qpass.com and download your free PowerWallet, and earn 100 ClickMiles.

>> Disney
Earn one ClickMile for every dollar spent on Walt Disney World and Disneyland Resort theme park passes. Visit Disney Travel for details.

>> iOwn.com
Compare rates from more than 25 top lenders, and apply online. Apply online and close your home loan with iOwn by 9/30/99, and earn 10,000 ClickMiles.

>> KBkids.com
Earn 300 ClickMiles when you spend $50 or more at KBkids.com.

>> More <<
ClickRewards

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Frequent Flyer Credit Cards Rated
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In a just-released J.D. Powers study, Citibank AAdvantage ranked highest in cardholder loyalty among the various reward cards (including but not limited to mileage-earning cards).

               Cardholder Loyalty Index Scores

              Citibank AAdvantage 108
              Mileage Plus First Card 106
              Delta SkyMiles 103
              GM Card 103
              Chase Shell 103
              Industry Average 101

    Source: J.D. Power and Associates 1999 Comprehensive
    Credit Cardholder Study

Finishing below industry average in alphabetical order were: Associates Amoco, Citibank Driver's Edge Card, Discover and Private Issue Card.

>> More <<
J.D. Power and Associates

<< S T E A L S & D E A L S >>

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Sale, Sale, Sale
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We began by writing up Northwest's fall fare sale, announced earlier this week.

As so often happens, the sale fares were matched... first by United, then by American. Thereafter, pretty much all carriers fell in line. So while the details may vary somewhat from carrier to carrier, this is essentially an industry-wide 25% fare sale.

>> Details
There are variations, but following are the sale conditions adopted by most participating carriers:

* Tickets must be purchased by August 13.
* Travel must be completed by December 17.
* Advance purchase is required.
* 14-day maximum stay.
* A Saturday night stay is required.
* Tickets are nonrefundable.

Overall, fares have risen a dizzying 11% for the year, so this reduction is welcome relief.

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Southwest: $39 Each Way Within California
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Southwest Airlines today announced a fare of $39 each way in all Intra-California markets with travel good from August 16 through September 30.

Tickets must be purchased within one day of making reservations and at least seven days before departure, but no later than September 23, 1999. Fares are each way with roundtrip purchase required. Seats are limited and won't be available on some flights that operate during very busy travel times and holiday periods such as Labor Day. Tickets are nonrefundable but may be applied if unused toward the purchase of future travel on Southwest Airlines.

Fares are subject to change until ticketed, and any change in itinerary may result in an increase in fare. Fares do not include airport taxes of up to $12 roundtrip or a $2 per segment fee. A stayover of at least one night is required.

Southwest serves nine cities in California, including Ontario, Los Angeles, Orange County, San Diego, Burbank, Oakland, San Francisco, Sacramento, and San Jose.

>> More <<
Southwest's website

<< T R A V E L O N L I N E >>

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Online Travel... Up
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Nearly one-third of Internet users who visit travel-related websites have made online reservations using those sites, according to a new study by NPD Online Research.

NPD reported that more visitors to airline, hotel and car rental websites are booking online than ever before. In 1999, 31% of individuals who visited airline sites booked their reservations on the web, compared to only 21% in 1998. Twenty-eight percent of visitors to hotel sites booked online in 1999, opposed to 21% the previous year. And 28% of visitors to car rental sites booked online reservations in 1999, compared to 19% in 1998.

In another finding that bodes well for the online travel industry, among those Internet users who booked travel online, satisfaction with the buying experience was reported as very high. In fact, NPD found that Internet travel bookers were more satisfied with their online experience than those Internet users who use the web to only check travel prices and travel availability. A full 89% of those who actually reserved airline reservations online reported either being "extremely" or "somewhat" satisfied with their transaction. Satisfaction with hotel and car rental site buys was slightly lower at 84% and 82%.

"Our data supports expectations for continued growth in travel bookings online," confirmed Allan Baldinger, a vice president for NPD Online Research. "We have found that the more time a consumer spends online, the more likely they are to purchase online. In fact, credit card concerns that prevent most online purchases from being made drop dramatically among experienced Internet users. For those Internet travelers who browse Web sites, it is just a matter of time before they change from lookers to bookers."

Among Internet users who buy travel online, a core group of heavy bookers is beginning to emerge. According to NPD, 7% of Internet travel buyers can be considered heavy bookers, those who have made at least one online airline, hotel and car rental reservation. Heavy bookers tend to travel more frequently for business and pleasure, and are more likely to be "Net Vets" with over two years of online experience. SABRE-owned travelocity.com and Microsoft expedia.com were reported as the most frequently visited online travel sites for heavy bookers, followed by the sites priceline.com and previewtravel.com.

Despite the fact that more individuals are booking travel online, NPD found that a majority of Internet travelers continue to divert the confirmation of their travel reservations to traditional agents and providers. Fifty-six percent of online travelers reported having completed travel reservations with a traditional travel agent after visiting a travel-related website. Pricing and credit card security concerns continue to stop newer Internet users from booking travel online, while the need for human contact and assurances that reservations are correct prevent more experienced Internet users from booking on the Web.

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NPD

<< I N D U S T R Y N E W S >>

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United's Economy Plus
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United Airlines today announced that it is reconfiguring the first six to 11 rows (depending on the type of aircraft) of its United Economy class aircraft cabins to create an Economy Plus product that provides the most loyal customers with significantly more legroom. Economy Plus seating will have 35 to 36 inches of legroom compared to the standard 31 inches. United becomes the first U.S. airline to offer this product for U.S. domestic customers.

Advance assignment of Economy Plus seating will be available on a first-come, first-served basis to Mileage Plus members who have Premier status or above. Premier status is achieved when Mileage Plus members travel 25,000 paid miles on United or Star Alliance members, or 30 or more segments in one calendar year. Customers who are traveling on a full fare economy booking class can also receive a pre-assigned seat in Economy Plus. Also qualifying are all Star Alliance Gold and Star Alliance Silver travelers.

The number of seats in Economy Plus will vary from 36 to 89, depending on the type of aircraft. Reconfigured aircraft will include United's fleet of 727's, 737's (excluding United Shuttle), 757's, A319's, A320's, and two-cabin 767-300's and 777A's. United plans to reconfigure approximately 450 aircraft by April 2000. Economy Plus seat pitch will be 36" in Airbus A320s and Boeing 757s; and 35" in all other reconfigured aircraft types.

The introduction of Economy Plus will limit United's systemwide capacity growth to 1.9% in the year 2000, and U.S. domestic growth will actually decrease 0.8%.

We give United a few zillion FrequentFlier bonus miles for this move. It's proactive; it's customer-focused; it's on target; it's a winner. Let's hope that this is the opening volley in a war among the airlines to better serve the customer.

>> More <<
United

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United Rolls Out New Partner Benefits
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"United Airlines today became the first U.S. airline to announce that it plans to offer partner benefits to its employees and retirees."

That's the lead in United's press release touting its new employee-benefits policies, which extend spouse benefits to gay and lesbian partners of United employees. From the tone and content of the release, you might infer that United had adopted the policies on its own initiative, from its own enlightened sense of ethics and fairness. Not so!

In fact, United was acting under orders from a federal appeals court which, just hours previously, had upheld a lower court decision that United (and other airlines) must comply with San Francisco's two-year-old Equal Benefits Ordinance. The San Francisco law--considered onerous by many businesses--mandates that any company doing business with the city provide the same benefits to employees with domestic partners as they give to married employees.

What struck me was United's disingenuous attempt to make the best of what it obviously thought was a bad situation. The hypocrisy was positively blinding.

Quite aside from United's bad-faith P.R. attempt, there are some interesting issues here.

First, there's a tail-wagging-the-dog aspect to this that I find troubling. United, a global company with close to 100,000 employees, is being forced to substantially alter its personnel policies by a city ordinance. (I happen to support partner benefits. But in principle, if I operated a national or multinational business, I wouldn't want to have to kowtow to the whims of every Podunk township in which I did business.)

Next, there's the question of heterosexual partners of United employees. United (commendably) will offer some benefits to partners who could legally marry (i.e., heterosexual partners who choose not to marry), but an expanded package of benefits to partners who cannot legally marry (i.e., homosexual partners). In other words, there's a double standard, and double standards are always problematical and, potentially, divisive.

And finally, there's the prospect of all those additional partners competing for limited seats and upgrades. Because, yes, travel benefits are included in the packages of both classes of partners.

To be eligible for the benefits, an employee will have to submit a notarized affidavit of a domestic-partner relationship and proof of joint residence and financial interdependence (e.g., a mortgage or lease agreement or checking account).

United expects to make the benefits available in the U.S. in May 2000, after the company completes a comprehensive round of changes to its record-keeping, benefit-enrollment, tax-reporting and other internal procedures. While it is United's intent to offer domestic partner benefits worldwide, additional time will be needed to accomplish this.

>> More <<
United online

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Ammerican's Food SAAvers Program
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American is doing some corporate chest-beating of its own, commending its own civic-minded self for a newly launched community affairs program.

American this week officially introduced Food SAAvers, a program which reclaims unused food from domestic flights and donates it to local food banks.

The program, which was started on a test basis at Dallas/Fort Worth Airport on May 26, has generated donations of more than 10,000 pounds of food to the North Texas Food Bank in a period of just over two months.

The program's success convinced American to expand Food SAAvers to other cities, including Chicago and Miami.

Food SAAvers works like this: flight attendants collect sealed and non- perishable items such as packaged cereal, granola and breakfast bars, pretzels and chips, dried fruit, packaged cookies and brownies and individual jams and jellies and place these items in special green Food SAAvers bags. The bags are removed from the aircraft by the caterer, LSG Sky Chefs, and transported to the caterer's kitchen, where they are stored for collection by the food bank.

American operates more than 530 daily departures at Dallas/Fort Worth Airport, 330 at Chicago, and 180 at Miami. American plans to expand the Food SAAvers program to several additional cities later this year.

It's all too tempting to say something along the lines of airline food being better than nothing... but not much. Seriously, this program passes the FrequentFlier sniff test and earns Good Corporate Citizen points for American.

<< R E A D E R R A N T S & R A V E S >>

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Dining-for-Miles
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[The following is from Jennifer, responding to a letter in last week's Crier suggesting that customers should be permitted to earn miles-for-dining in two or more programs for the same meal.]

Hi there.

I'm writing in response to the rant from 'Steven' in this week's Crier. It contains such a glaring fallacy that I am a little shocked that it was printed without a reply. I am quite certain that no airlines pay a cent for dining promotions that award miles. Whether they participate for the marketing value only or actually receive compensation for the miles provided, I don't know. The restaurant/business that offers miles in exchange for patronage is the one paying to participate. It's much like the Entertainment book, the restaurant pays to have their coupon published in order to entice more customers. (Notice the most elite, established, and/or popular restaurants in any city are never listed? They don't have to!) This understood, it should be obvious why double miles are not allowed. Instead of giving up some of their profit to get you to try them out, multiple promotions could result in restaurateurs actually going in the red just for the privilege of feeding you. !

Not only does that not make good business, it may even be "unjust".

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Northwest
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Just when we thought Northwest would start cleaning up their act (in response to the January snow storm hostage crisis), it seems they are back to their old tricks. I was on flight 1028 from Minneapolis to Dallas on Thursday, July 29.

First, the flight was well oversold. I, having a confirmed seat, knew I would get on board, but not without the cost of bumping some other passenger.

Then, the flight was 3 hours delayed. Of course they delayed it in 30 minute increments so that no one was able to leave the gate area or even think about switching airlines.

After 2 hours, they boarded the flight. Once everyone was on board and the air conditioning cart was removed, the pilot announced that they had neglected to fuel the plane. During the 45 minutes it took to get the fuel truck over to the plane and actually top off the tanks, the grounds crew refused to reattach the air conditioning cart. This left the passengers struggling to stay cool in the over 100 degree heat of the plane.

To add insult to injury, after the plane was fueled the Captain announced that they had neglected to cater the flight and if we wanted dinner (3 hours late) we'd have to wait another 15-20 minutes in the heat.

Of course, the pilot apologized profusely to the passengers for Northwest's "dropping the ball," but he was powerless to do anything. The only good thing that happened on this flight was that the Captain remarked "I realize that you all are sick of the heat." Just then a passenger yelled, "No, we're just sick of Northwest." I could not agree more.

NorthWorst brings a new low to an already low grade of customer service available in the airline industry.

 - Andrew

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MCI
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I was rereading your comments about MCI and frequent flier miles in the July 15th FF Crier. I had been an MCI customer until recently, but I switched to Sprint (they were offering 7 miles per dollar spent and 12,000 bonus miles to Silver Elite members). One problem with MCI is that the service is horrible--the cost and plans offered are fine and competitive, but if you ever try to get through to customer service to resolve a dispute or send them a letter regarding a customer service issue, you will be totally frustrated. They make you wait for a very long time on hold before getting through to a live individual to speak to. I stayed with MCI as long as I did only because of inertia (to paraphrase your remarks!), but I can't recommend them because of their terrible service. The mileage wasn't worth it, especially since Sprint offered me a competitive package. Anyhow, I just wanted to warn you before you switch to MCI. I really enjoy your newsletter!

 - Rebecca

Until next week...