U P F R O N T

Airlines: Who Will Survive?
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Which airlines will be left standing 6, 12 or 24 months from now? (And the corollary: what about my frequent flyer miles?)

If I had a nickel for every time I've had that question posed to me recently, I'd be on Easy Street. While it's tempting to indulge in some playful handicapping, I began sidestepping the issue after several economics-savvy industry watchers, including Professor Alfred Kahn, declined to speculate, citing the complexity of the situation and such inscrutables as the economy, a war on Iraq, terrorist events, and so on.

So ask me now and I'll tell you true: I dunno.

Forbes, by contrast, has the moxie, the editorial mandate and the expertise to weigh in on the airlines' future, and did so in the current issue. For each of the 8 major U.S. airlines, they succinctly outline the carrier's problems, suggest solutions and predict the airline's condition 2 years hence.

Without getting into specifics, Forbes expects all the current players to still be on the field in 2 years. The article is here.

Industry Newsbites
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In the past week, several securities analysts have revised their estimates for the industry's full-year loss. The latest projections: approximately $7 billion in red ink for the U.S. airlines alone.

Midwest Express and its flight attendants union, the Association of Flight Attendants, will resume contract negotiations on Sept. 19. While strikes were threatened, to date no flights have been disrupted.

In a speech before an industry trade group, US Airways chief David Siegel referred to the proposed Continental-Delta-Northwest alliance as the "Axis of Evil" and called Delta chairman Leo Mullin "Dr. Evil."

Speaking at a meeting of the SkyTeam alliance in Atlanta, Delta CEO Fred Reid said low-cost carriers will increase their share of the travel market from 20% currently to 40% "in the near future."

Had it with low-service/high-stress travel? Have a Rembrandt! Next month, Amsterdam's Schiphol Airport will open a branch of the Rijksmuseum, displaying artwork from the museum's respected collection.

B-A-A-A-A-D D O G G I E

In the Doghouse: Continental
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Effective Jan. 1, 2003, Continental is placing new restrictions on upgradeable fares and increasing fees for issuing and changing award tickets and for redepositing miles in members' accounts.

Non-Elite members will no longer be able to use miles for first-class upgrades when flying Continental within or between the 48 contiguous U.S. and Alaska and Canada on T, Q or V class economy fares.

Fees for award bookings made within 3 days of travel will be $75 for non-elites, $50 for elites; and fees for bookings 4 through 14 days prior to departure will be $50 for non-elites and $35 for elites. Currently, there's a $35 fee for certificates issued within 10 days and for paper tickets issued within 7 days of travel.

Fees to redeposit miles and change award tickets, currently $35 and $0 respectively, will rise to $50 for non-elites, remain at $35 for Gold/Silver elites, and be eliminated for Platinum elites.

As we've said before, airlines unquestionably have the legal right to modify their programs. The issue here -- and what's landed Continental in the doghouse -- is timing. The above changes were posted to Continental's website on Sept. 18, with an effect date of Jan. 1. That's 3-and-a-half months' advance notice.

Reminder to Continental (and other airlines contemplating abrupt changes): Guidelines issued by the National Association of Attorneys General recommend that negative program changes be announced at least 6 months prior to implementation. The revisions in question clearly violate those guidelines.

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

America West Bonus for Multi-Partner Activity
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Through Oct. 31, FlightFund members will earn 5,000 bonus miles by flying America West and using the services of selected FlightFund partners. To earn the bonus, register (link below), then complete all 3 of the following steps --

1. Fly 2 roundtrips on America West or America West Express. Tickets must be purchased online at americawest.com.

2. Earn miles for 2 transactions with 1 or more of FlightFund's hotel or car partners. Exchanging Radisson Gold Reward points to miles counts as 1 transaction.

3. Sign up with any 2 of the following FlightFund partners: FlightFund Visa credit card, FlightFund Visa check card, MCI's The Neighborhood local and long distance services, Earthlink Internet access, Peoplefirst.com auto loans.

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Fairmont Stays Earn AAdvantage Bonus...
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Through Dec. 31, 2002, AAdvantage members will earn bonus miles for stays at multiple Fairmont Hotels & Resorts locations.

After the initial stay, the second stay, at a different hotel, will earn 1,000 bonus miles. The third stay, at yet another hotel, will earn a 1,500-mile bonus. The fourth earns 2,000 bonus miles and the fifth and subsequent stays earn 1,000. Bonuses are in addition to the normal 500 miles per stay.

Qualifying stays are at published rack, corporate or package rates. For more information or bookings, go to http://www.fairmont.com/aadvantage or call 1-800-257-7544.

... As Do Omni Hotels Stays
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Through Oct. 31, stays at Omni Hotels earn double AAdvantage miles -- 1,000 instead of the normal 500.

To earn miles, you must be a member of Omni's Select Guest program. Enroll at http://www.omnihotels.com or call 1-800-FOR-OMNI.

Continental Extends Online Award Discount
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Originally scheduled to expire on Sept. 30,

the 20% discount for booking OnePass award travel online has been extended through Dec. 31.

The discount -- from 25,000 to 20,000 miles -- applies to roundtrip economy-class award tickets for travel on Continental within North America.

Delta Adds AT&T to SkyMiles Lineup
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Members of Delta's SkyMiles program can now earn miles for using AT&T residential long distance and local services.

New AT&T customers earn up to 5,000 miles when signing up for AT&T Long Distance or Local Service. Both new and current AT&T customers can earn 5 miles for every $1 spent on qualifying AT&T services.

To enroll or for more information, call 1-888-FLY ATT 1 (1-888-359-2881) or visit http://delta.com/skymiles.

Fall Cash & Miles Offers from Northwest
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WorldPerks members residing in the U.S. 48 can combine cash and miles for travel within North America, to Europe and to Asia.

Domestic roundtrip tickets begin at $109 plus 10,000 WorldPerks miles. Trans-Atlantic trips begin at $249 plus 20,000 miles. And Trans-Pacific trips begin at $260 plus 20,000 miles. Purchase tickets by Oct. 31 and travel by Dec. 18.

Tickets must be purchased at least 14 days in advance of travel and a Saturday night stay is required.

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United Offers Bonus for Denver Flights
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Earn 1,000 bonus Mileage Plus miles when flying roundtrip between Denver and Baltimore, Boston, Chicago, Newark, New York La Guardia, New Orleans, Oklahoma City, San Antonio or Tulsa. This offer is also valid between Colorado Springs and Chicago. Travel must be completed between Oct. 1 and Nov. 19.

Offer may be earned a maximum of 3 times, for fares in first (F and A class), business (C and D class) and selected economy fares (Y, B, M, H, Q, V, or W booking classes).

Register by Nov. 19 online, or call 1-800-447-6772 and enter offer code 877.

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 on domestic, Caribbean travel from $78 R/T
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Whether you want to pick apples in New England this fall or stretch out on a beach in the Caribbean this winter, take advantage of US Airways' systemwide fare sale. Travel is valid through Dec. 11 for most domestic destinations, and through Dec. 12 for travel to the Caribbean. Book tickets by Friday, Sept. 20.

> More...

Fly to Tokyo this fall or winter from $531 R/T
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Buy your tickets now for travel on American or Delta to Tokyo (Narita), Japan. On American, fall sale fares are for departure between now and Oct. 27, while winter fares, which are slightly lower, are for departure between Nov. 1 and Dec. 7. Book tickets online only and by Thursday, Sept. 19.

> 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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"The airlines are constantly complaining about their losses, even prior to 9/11. With the amount of discounted fares they offer to the same destination is costly. It takes employees and money to create these fares with there rules. If they went back to basics as they had not all that many years ago which were simple at least to me who was a traveler as well as a part time travel agent helper. The advance booking of 7/14/21/30 days with no Sat. night stayover. It seems from what I have been reading that they are trying to penalize customers who buy discounted nonrefundable tickets, if not used on the day they are booked or would forfeit their tickets. If that is the way to alter the problems, then I feel they are in for a big surprise and are going to lose more clients and more revenue. Why do they not just cancel out the nonrefundable tickets and just offer simply coach or first class, that way people will have no choice or use the advance I mentioned earlier in this letter. The big airlines must also remember that there are smaller discount airlines out there looking to take away their clients by offering better fares and in some cases no restrictions or limited ones."

- Ricki

"It would be nice, every once in a while, if you told us how we can USE ALL the frequent flier miles we have instead of all the deals on double ff miles, the bonus miles, who is now giving miles for rentals or overnites, how we can add even more miles to our accounts, etc. I have 700,000 ff miles accumulated with USAir and AA... and other than planning my family trip each year, I rarely ever see (from you) what great opportunities exist to USE the blasted miles I HAVE NOW."

- Mike

[Editor's note - Guilty as charged. We'll try to put more emphasis on the redemption side of the equation in future.]

S I T E 2 S E E

WorldPerks Awards Made Easy
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The WPAA Lister is the unofficial Word Perks Award Availability Lister.

The site does what Northwest's own site should do, but doesn't. It displays the availability of all WorldPerks award seats for flights over 7 consecutive days. Compare that to using the award-booking function on the official Northwest site, where you're forced to search again and again to review alternative flights.

What it does, ultimately, is put Northwest and other airlines to shame for NOT doing what the WPAA Lister proves is not only possible but easy.

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Until next week...