Issue #62  --  October 7, 1999

<< U P F R O N T >>

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And the Winner Is...
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... Us!

As this week's issue of The Crier goes to press, we're in New York to accept a rather prestigious Internet publishing award. We'll have to wait until next week to share the details, as the awarding company has asked that we observe a news blackout until tomorrow, Friday. Suffice it to say that we are thrilled and delighted, especially since these awards reflect voting by the many, rather than the opinions of the few.

More in the next issue...

<< M I L E S >>

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Miles for Sale at United
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As of Friday last week, United Airlines Mileage Plus members can top off their accounts by buying up to 15,000 bonus miles online. Members may visit the web site and purchase Personal Miles for $.025 per mile (plus an excise tax and processing fee). These miles are added to existing miles in a Mileage Plus account and may be purchased online by credit card. Customers should allow 2-4 weeks for the mileage to be credited to their accounts.

In addition to Personal Miles, businesses may also purchase Electronic Reward Miles online as a promotional incentive for customers or employees. Businesses may buy a minimum of 250,000 miles for $.02 per mile (plus excise tax and processing fee) and electronically transfer the miles to employee or client accounts.

We're happy to see United getting into the miles-for-sale business big time. Naturally we'd prefer to see unlimited miles offered for sale to Mileage Plus members, and at $0.02/mile rather than $0.025. In addition, it seems unnecessary to place a minimum on the business miles since there's a processing fee. Overall, though, the pluses far outweigh the minuses. And United has really outdone itself (and everyone else) in having a dedicated website for mileage purchase transactions.

>> More <<
United miles for sale

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Amex Expands Membership Rewards
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American Express is expanding the Membership Rewards program to include two new program levels that the company hopes will appeal to different types of consumers.

In addition to the existing Membership Rewards program, Amex is introducing Membership Rewards Plus and Membership Rewards Options, as follows:

>> Membership Rewards Plus (available in late October)
Membership Rewards Plus is designed for Cardmembers who travel frequently and value maximum flexibility and choice of rewards. These Cardmembers will now have an opportunity to enjoy the highest level of rewards offered by American Express.

For $35 more than it would cost to register a regular Amex card in Membership Rewards, cardmembers enrolled in Membership Rewards Plus receive the benefits of the existing Membership Rewards program plus two new features:

* "Your Ticket" allows enrollees to obtain airline tickets to any destination in the world from any airline without blackout dates and frequent flyer seat restrictions. Program enrollees need to make these travel arrangements through Membership Rewards Plus by calling a dedicated toll-free customer service number.

* "Your Reward" allows enrollees to use Membership Rewards points to pay for any item charged on their American Express Card, including the Card's annual fee. For example, an enrollee who purchases $100 worth of computer software would redeem 20,000 points to pay for the item and receive a credit on their bill the following month.

The annual enrollment fee for Membership Rewards Plus is $75 ($35 for Platinum Card and Rewards Plus Gold cardmembers).

>> Membership Rewards Options
Membership Rewards Options is designed for those cardmembers who want to redeem points more quickly and at lower levels or those who have not yet enrolled in a Membership Rewards program. This alternative has a lower annual fee and on the reward side focuses on readily attainable merchandise.

The program offers a choice of rewards from 50 retailers, airlines, hotels, and car rental companies. For example, with 1,400 points, enrollees could choose a $10 gift certificate at Champs Sports or Foot Locker; they could redeem 3,500 points and receive a Vivitar 35mm camera or a $50 discount for travel on Continental or TWA; or they could redeem 7,000 points for a $50 certificate at Coach.

With an annual fee of $15, Membership Rewards Options points earned have a different redemption value compared to the other Membership Rewards programs. A $25 gift certificate to Champs Sports or Foot Locker, for example, would require 3,500 points for Membership Rewards Options enrollees and 2,500 points for Membership Rewards enrollees.

You may remember us carping about the extra degree of confusion engendered by Amex's rollout of its new Blue card. Here's more carping along the same lines...

The Amex strategy seems to be "Maximize share by being all things to all people." And it is using a "Be different things to different people" tactic to achieve that goal. All, different? Blue, green, gold, platinum? Upscale, downscale? Online, offline? Frequent traveler, infrequent traveler? Choice is a great thing. But there comes a point at which too many options simply overwhelm the consumer (at least this consumer), ultimately impairing his ability to choose a product which meets his needs.

>> More <<
American Express

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Northwest, America West Broaden FFP Relationship
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Northwest and America West are expanding their frequent flyer partnership.

Effective immediately, WorldPerks frequent flyer members will be able to earn miles on all America West and America West Express flights between the US and Alaska, Canada and Mexico. And America West FlightFund members will be able to earn frequent flyer miles when they fly Northwest Airlines to Alaska, Mexico, Canada, and to the Caribbean.

>> More <<
o America West
o Northwest

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Delta Miles-for-Charity Exceed 150 Million
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Delta Air Lines' SkyWish program, which enables Delta frequent flyers to donate unused miles to charity, has surpassed the 150 million mark in total SkyMiles donated.

Initiated in 1995, this program allows SkyMiles members to contribute miles to the following five charities: Make-A-Wish Foundation of America, Make-A-Wish Foundation International, CARE, The United Way of America, and The United Way International.

The donated miles are then traded for award tickets to support each respective charity.

Now through Thanksgiving, SkyWish miles donated to United Way International will be used primarily to help ongoing earthquake relief efforts. Donated miles will go towards flying relief personnel to the crises sites or transporting injured people in need of advanced medical care to locations outside of the disaster area.

Donations can be made in 5,000-mile increments with a 5,000-mile minimum, and Delta will add 1,000 miles for every 5,000 miles donated. Donations are not tax-deductible for Delta or SkyMiles members.

To donate miles: Members should submit in writing the amount of mileage they wish to give and to which charity; include their SkyMiles account number; and send via fax to 404-773-1945 or via U.S. mail to Delta Air Lines, Inc., Dept. 745, SkyMiles Service Center, P.O. Box 20532, Atlanta, GA, 30320-2532. Mileage will be deducted automatically from the member's account and reflected on the next mileage summary.

We used to suggest that frequent travelers donate miles to SkyWish (and to similar programs offered by the other airline programs) as a way of putting to good use miles that would otherwise expire. Mileage expiration is now a non-issue in most programs, but we're still recommending that you seriously consider donating miles to those in need.

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Aer Lingus Leaves SkyMiles
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Effective November 5, 1999, Aer Lingus will no longer participate in the SkyMiles program.

Mileage credit can be earned through November 4, 1999. Award requests for travel on Aer Lingus must be postmarked/requested by November 4, 1999.

>> More <<
Delta

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

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Star Alliance Auction
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On October 8, 1999, Internet users will be able to bid for 44 air tickets to 30 destinations covered by the Star Alliance. Prices for the economy class tickets will start from as low as 10 Singapore dollars. Registration is now open via the Star Alliance website.

Though the auction is open to all Internet users around the world, it will favor Singapore Internet surfers as all flights depart from, and return to Singapore. (We're hoping this is just the first of many such auctions, with departures from other countries to look forward to.)

The auction includes flight combinations on Star Alliance Partner Airlines including Air New Zealand, Ansett Australia, Air Canada, Lufthansa, SAS, Thai International, United Airlines, All Nippon Airways and Varig.

The tickets are for the following destinations: Auckland, Brisbane, Melbourne, Christchurch, New York, Copenhagen, Tokyo, San Francisco, Rio De Janeiro, London, Bangkok, Osaka, Seattle, Prague, Paris, Rome, Sao Paolo, Beijing, Montreal, Nadi, Krabi, Trang, Sapporo, Okinawa, Orlando, Los Angeles, Frankfurt, Iguassu Falls and Madrid.

Internet users wanting to bid for the tickets must register in advance via the www.star-alliance.com website to receive a user ID. Once registered, the potential bidders can view the auction schedule (flight destinations and bidding times) from the site a few days prior to the auction. When the online auction room is opened, the users can enter with a mouse click and will be invited to place their bid by the Star Alliance auctioneer.

Run in conjunction with Singapore Internet Service provider company, Pacific Internet, the auction will begin at 9am and close at 8:30pm (Singapore time: GMT + 7) The bidding for each pair of return flight tickets will start from S$10.00 and the bid increments are S$10, S$20 and S$50. When a successful bid has been made, the winner will be announced after the third strike of the virtual hammer. Successful bidders will receive confirmation of their purchase by e-mail and telephone.

>> More <<
The Star Alliance website

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Qantas's "Millenium Madness" Fares
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Qantas Airways is offering discounted fares for the millennium to Sydney, Australia; Auckland, New Zealand; and Nadi, Fiji from Los Angeles and San Francisco.

In order to take advantage of the fares offered in the "Millennium Madness Fares" special, travel must commence between April 17 and June 14, 2000 with a minimum stay of seven days and a maximum stay of one month.

Passengers who purchase their tickets before November 30, 1999 can fly Qantas non-stop from Los Angeles to Sydney for $799 and non-stop to Auckland for $699. Non-stop flights to Nadi are also available for $599 on Qantas' codeshare partner, Air Pacific. The fare is also available for travel from other points in the U.S. for an additional cost.

Special fares may be purchased for travel within Australia and New Zealand. Tickets must be issued within 14 days of confirmation of reservation, but no later than Nov. 30, 1999, whichever comes first.

Cancellations, rerouting or re-booking are not permitted once a reservation has been ticketed. All fares are subject to change without notice and other restrictions apply.

>> More <<
For reservations and additional information, contact Qantas at 800/227-4500 or visit the QF website.

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

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Pan Am Tries Again
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At 0830 hours today, Pan Am returned to scheduled passenger service with the on-time departure of Flight #1 from Portsmouth, NH to Orlando/Sanford. The scheduled passenger flight was the first for Pan Am since February of 1998.

Beginning in mid-November, Pan Am will begin scheduled service to Chicago through the Gary/Chicago Airport.

According to a Pan Am official, "Our business strategy is to slowly add destinations based on market demand and the ability to locate at under-utilized airport facilities. Overall, we believe that there is a growing market for both business and leisure travelers who want to avoid cramped cabins, long lines, delays and expensive parking."

The new Pan Am was acquired by the owners of New Hampshire-based Guilford Transportation Industries under a Plan of Reorganization approved by a Miami, Florida Bankruptcy Court judge in June of 1998. The new owners relocated the company's headquarters from Ft. Lauderdale to Portsmouth in December of 1998. At Portsmouth, the company operates a 220,000 square foot maintenance facility, as well as other aviation related businesses.

No word yet on frequent flyer tie-ups.

<< H O L I D A Y T R A V E L T I P S >>

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Reducing Holiday Travel Mishaps, Stress
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As we approach the holidays, travel predictably escalates, giving rise to the inevitable: long check-in lines, full flights, delays... the worst that travel can be.

Equally predictably, the season brings out the travel pundits: airlines, travel agents, associations... all providing counsel on ways to minimize the hassle of holiday travel.

First in line this year is Carlson Wagonlit, a major travel agency franchiser, with the following list of must-do's for year-end travelers.

    (1) Book your ticket as soon as possible -- Holiday plane seats come at a premium the longer you wait. With additional seats on flights immediately after Christmas going to millennium revelers, some travelers may experience difficulty in finding lower fares on return trips from Christmas visits. If circumstances force you into booking at the last minute, remember, you have options. Last minute travelers who are open to a variety of options will be more successful in securing Holiday travel plans. The key to securing the best deal is flexibility

    (2) If possible, book your seat in advance -- Keep in mind that most carriers have now eliminated advance boarding passes, while others do not allow for any advance seating assignments.

    (3) Get to the airport early, as many flights are oversold during the Holiday season -- With airport parking being difficult, if not impossible, during the peak Holiday travel period, and with the likelihood of long lines and the possibility of the airline overselling the flight and bumping passengers, it is important to give yourself extra time by getting to the airport early. Those arriving earliest on an overbooked flight stand the greatest chance of staying onboard.

    (4) You may want to opt for a paper ticket during the Holidays, and especially over the change of years -- Consumers may want to consider the merits of asking for an actual printed ticket. If you are holding an electronic ticket and your flight is canceled, you will have to go to the airline ticket counter and have a paper ticket issued before you can be reaccommodated on another carrier. In addition, if you have purchased an e-ticket for someone else and you will not be present at the airport to show your credit card (unless you purchased the e-ticket through a travel agency), you may encounter difficulties at the gate, or be denied boarding privileges.

    (5) If you get bumped from a flight, know your rights -- When an oversale occurs, the Department of Transportation (DOT) requires the airlines to first ask for volunteers willing to go on later flights. If you are bumped involuntarily, the DOT requires each airline to give you a written statement describing your rights as well as providing you with alternative travel plans and compensation if your new arrival time is more than one hour later than your scheduled arrival.

    (6) Know baggage limits and make sure gifts remain unwrapped, in case of an inspection -- To avoid problems, particularly when carrying items on board such as gifts, make certain that those items remain unwrapped in the event that the items require inspection. Be sure to tag all carry-on and checked baggage, with name, address and phone number. In addition, there have been numerous changes in the rules regarding carry-on baggage, and limits vary based on your destination, type of aircraft, and even your airline.

     (7) Keep a close eye on all your belongings -- Just as airports are extremely crowded during the peak Holiday travel period with travelers, they can often be fraught with thieves who are working the airports. It is important to be aware of your surroundings and maintain a close watch over tickets, wallets, purses, and other belongings at all times.

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

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Travelocity and Preview Travel to Merge
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In what may presage a flurry of further consolidation in the Internet travel space, 2 of the 3 top online travel providers will merge.

Travelocity and Preview Travel on Monday announced that they will combine forces, leaving Microsoft's Expedia a distant second.

The new company will operate under the Travelocity name, as Travelocity.com. Sabre will retain 70 percent ownership of the new company with the remaining 30 percent owned by Preview Travel stockholders. The new company will benefit from a new, five-year contract with America Online, Inc. that makes Travelocity.com the exclusive reservations engine for all travel-related services within the AOL service, AOL.COM, CompuServe, Digital City and Netscape, and provides Travelocity.com with a share of specified travel-related advertising revenues. In addition, Yahoo! Inc. has extended its existing contract with Travelocity.com and has agreed to invest in the new entity.

The merger creates the largest player in the online travel market, itself the largest retail e-commerce category--projected to grow from $7.8 billion in 1999 to $32.1 billion by 2004. The new, combined company will have more than 17 million registered memberships and more than eight million unique monthly visitors -- making it 50 percent larger than the next largest online travel agency site, Expedia. Travelocity.com will have established distribution relationships with America Online/Netscape, Yahoo!, Lycos, Go Network, Excite, @Home and CompuServe, among other leading Internet sites. Combined travel sales for the two companies in the first half of 1999 totaled more than $467 million. The new company is projected to be the third largest e-commerce site after Amazon.com and eBay4, and one of the top ten travel agencies based on 1999 booking estimates.

The merger has been approved by both Sabre and Preview Travel boards of directors, and is expected to close in first quarter 2000. The transaction is subject to regulatory approval, customary closing conditions and requires approval by Preview Travel's stockholders.

As is the case whenever the largest players in an industry merge, the question for consumers is whether there remains sufficient competition to keep the other players responsive to consumers' needs and wants. My take: While the new Travelocity may rule the online travel segment, there is--now and in the forseeable future--plenty of competition to keep the mechanisms of the free market working in consumers' favor. (Although, having said that, I must confess to having said the same of the airline industry several years ago. And I no longer believe that the airlines are responsive to free-market forces in quite the way that traditional economic theory would suggest.)

Until next week...