U P F R O N T
Just What US Airways Needs - Bankruptcy
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US Airways did the B-thing on Sunday, and everybody's in a tizzy.
'Bankruptcy' is a scary word. And in fact, no untroubled company files for protection under Chapter 11. But we knew US Airways was on the ropes. They have been for years. Their most recent quarterly loss was just the latest in a series of losses stretching back 8 consecutive quarters.
So while the bankruptcy filing is new, their troubles are not. The question this week is the same as the question last week: What are their odds of surviving long term? I happen to think they have a better than even chance, and better prospects today than before they filed with the Bankruptcy Court. Here's why.
US Airways' longstanding problems have been twofold: incompetence at the top, and greed at the bottom.
The carrier's management problems lie squarely with Steve Wolf, still the company's chairman and, for much of the period since 1996, its president and CEO. Wolf's goal was to position US Airways as an attractive takeover candidate and sell the company. United, for example -- which, remember, was sold to its employees under Mr. Wolf's stewardship -- would purchase US Airways, investors would do fine, and Mr. Wolf would walk away with a fat bonus. Customers and employees... well, they'd be the problem of the purchasing airline. When that exit strategy failed, it was all too apparent that Wolf had put all US Airways' eggs in 1 basket; and it was the wrong basket.
If recent developments are any indication, the management incompetence issue has have been addressed with the appointment of David Siegel in March. Siegel and his appointees have made intelligent moves in 2 critical areas, cost reduction and revenue enhancement.
While Siegel has made progress, US Airways still badly needs more from its unionized workers, in salary concessions and productivity improvements. The bankruptcy filing gives the carrier the leverage to exact those concessions, either by hook or by crook.
Two problems; progress in both areas; and the likelihood of more to come. In a word, I'm hopeful.
[If you're panicked about the eventual fate of your Dividend Miles account, an article posted on the website in Oct. lays out your options.]
O N S I T E
Two Minutes of Your Time, Please
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New on the FrequentFlier Forum
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Chuck73 wonders: "Anyone familiar with E-Rewards? Is it worth doing?" My condolences to Adele, who posts the following: "Our family and friends have accumulated enough miles to vacation together to the Caribbean next summer, hopefully on a Saturday. What are the odds that AAdvantage will allow 12 people to travel together on free seats?" According to my calculator, the odds are somewhere between infinitesimally small and zilch. 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
New for SkyMiles Members: Amex Business Card
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The new Platinum Delta SkyMiles Business Credit Card is aimed squarely at small business owners.
New cardholders receive 10,000 miles when enrolling and 5,000 base miles (which count toward elite status) when using the card for the first time. Thereafter, every year spending reaches $25,000, a bonus of 10,000 base miles will be added to the user's account. Plus, there's a free companion certificate awarded each year the card is renewed.
As with the consumer version of the SkyMiles card, most charges earn double miles. And unlike most consumer-oriented cards, there's no mileage cap on annual earnings.
The card's annual fee is $135, or $80 for those who already have a charge card from OPEN: The Small Business Network from American Express. APR: Prime plus 9.99%. For more information or to apply call 1-800-NOW-OPEN.
Hilton Offers New Visa Card
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There's a new credit card option for Hilton HHonors members, the HHonors Visa Signature Card from Citibank.
The card offers 10,000 Hilton HHonors bonus points after the first purchase, 2 HHonors bonus points for every $1 of net purchases, 3 bonus points for each $1 spent at Hilton HHonors hotels, and complimentary HHonors Silver VIP status for the first year of cardmembership.
The card carriers no annual fee, and has a 0% APR on purchases for the first 6 months, Prime + 7.99% thereafter.
> More...
New from TrueBlue: Miles for Nada
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This morning's e-mail included the following from JetBlue:
"Congratulations on being one of our first TrueBlue members!
"To thank you for your business and for participating in our customer appreciation program, we are adding 10 bonus points to your TrueBlue account. You do not need to do anything to claim your bonus."
As much as I like JetBlue, it isn't because of their TrueBlue program. As I've said elsewhere, heaven help us all if TrueBlue portends the future of mileage programs.
Memo to JetBlue: I don't want something for nothing. What I do want, at a minimum, is a program with long-life miles (12 months is simply untenable), and extra rewards and benefits for the most frequent customers. After that, feel free to shower me with freebies.
I remain, as ever, yours truly, and bluely, but not TrueBlue-ly.
Midwest Express Miles for Sale Online
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Members of the Midwest Express Frequent Flyer program can now purchase miles online, using the new online Purchase Miles feature.
Miles can be purchased for personal use or as gifts for others in increments of 1,000 -- up to a maximum of 15,000 per account per calendar year. Soon Midwest Express will also launch Business Miles, allowing businesses to purchase miles for use as incentives.
Costs range from $29.38 for 1,000 miles to $440.63 for 15,000 miles. Unlike most airlines, Midwest's prices are gross, reflecting 2.5 cents per mile, plus 7.5% excise tax, plus a processing fee of $.0025 per mile. Other carriers disguise the real cost of the miles by quoting a net per-mile price, and mentioning in the fine print that processing fees and excise tax are extra.
> More...
First Flight Bonus from Northwest
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New WorldPerks members, who enroll online using source code VP2P, will earn 4,000 bonus miles for their first qualifying roundtrip. You must enroll prior to travel but not later than Dec. 31, 2002, and travel must be completed by Feb. 13, 2003.
To earn 1,000 bonus miles as an existing WorldPerks member, register online and enter registration number 5075. As with the new-member offer, register no later than Dec. 31, and complete travel by Feb. 13.
This offer is valid only for WorldPerks member whose WorldPerks mailing address is in the contiguous 48 United States, and roundtrip travel must originate in the U.S.
> More...
From Star: Multi-Carrier Awards
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Members of United Mileage Plus, or of any other Star Alliance airline's frequent flyer program, can now redeem miles for award travel using multiple Star carriers and a single award ticket.
For example, members can now redeem 50,000 miles for a Denver-Vienna roundtrip award, using a combination of United and Austrian in 1 one direction (via Chicago or Washington Dulles) and Lufthansa on the return. Previously, the same award trip would have required 70,000 miles and 2 separate tickets.
The new capability also makes possible robust round-the-world awards.
> More...
Coming & Going - Program Partner Changes
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> Tie-Ups
American AAdvantage: AT&T Wireless, Europcar, Midland National Life Insurance. America West FlightFund: Hawaiian Air. Delta SkyMiles: Ameritrade, Jumeirah International Hotels, Signature Nationwide Auto Club, Tokyu Hotels. Hawaiian Airlines HawaiianMiles: America West. 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
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This week's hot deals from SmarterLiving.com...
Latin American savings as low as $370 R/T
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Head for destinations throughout Central and South America this fall and winter with a sale from American that has just been extended. Sale fares are valid for midweek travel through Dec. 9.
Purchase tickets at least 3 days before departure for travel to Central America, and at least 7 days in advance for travel to South America. Book tickets online only and by Friday, Aug. 27.
> More...
Labor Day weekend flights from $29 one-way
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Whether you want a Labor Day weekend getaway in San Diego or you're barbecuing with your family in Baltimore, Southwest can get you there for as little as $29 one-way. Sale fares are valid for travel on Sept. 1 only, but you may combine these fares with other discounted fares for a roundtrip ticket. Make reservations online only, at least 7 days in advance of travel, and by Sunday, Aug. 25.
> More...
R E A D E R R A N T S & R A V E S
No Frills in South America
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"Just to add, in relation to the no-frills carriers, in Brazil the same thing is happening: while Varig, the 75 year old Brazilian "flag carrier" struggles to survive, Gol Linhas Aereas http://www.voegol.com.br , an airline created 2 years ago based on the WN (Southwest) model has recently got the third position in Brazil, leaving Vasp behind. Number two is now Varig because TAM has transported more passengers within Brazil than Varig. First time ever. No tickets, no in-flight service, no leg-room but the prices are almost the same of interstate buses, especially on long-runs."
- Bruno in Brazil
New Triple A Club from Australia
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"Thought you might be interested in the "blue chip" program aimed at conservative (i.e. previously stung) Ansett members, complete with trustees and bank accounts: http://www.tripleaclub.com.au/index.cfm
"The priority pass bit sounded good until I read it would still cost $48 per visit for self and spouse every time we wanted to visit a lounge ... thanks, we'll just browse through the duty free shops like the other plebs!"
- Owen in Australia
[Editor's note - A novel business model, this. It's basically a points-for-purchases portal which allows members of Ansett's now-defunct Global Rewards program to "resurrect" the points lost when that program was terminated.]
No Seats on Spirit
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"Boy, were you late on the Spirit posting - sending the info to me at 5 p.m. when it was sold out at 8 a.m. the same day!"
- William in Moose, Wyoming
[Editor's note - Apologies to anyone who tried in vain to take advantage of Spirit's 9/11 free seat offer. Apparently they were selling out just as we pressed the "Send" key for last week's newsletter.]
Until next week...
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