Issue #63  --  October 14, 1999

<< U P F R O N T >>

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And the Winner Is...
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In last week's issue, we mentioned (breathlessly) that we'd won a major Internet award but (coyly) couldn't divulge specifics until next issue... this issue.

What we won was the BOOT (Best of Online Travel) award, sponsored by TRIP.com.

What makes the BOOT awards especially meaningful is the selection process: More than 1 million voters weighed in with their favorites, in different categories. FrequentFlier.com won in the "Mileage Maniac" category, against some very competitive (i.e., well funded and staffed) sites. Winners in other categories included American Airlines, Marriott, Hertz and Sony. So, we were in good company.

Here's what the awarder had to say about the awardee:

"FrequentFlier.com was the #1 choice of our mobile professionals this year. The site keeps them flying high with original newsletters, tips on maximizing mileage programs, program profiles and registration information and direct links to airports around the world. Our travelers know who to turn to for maximum mileage."

Thanks to our readers for being part of the success of FrequentFlier.com and The FrequentFlier Crier.

>> More <<
TRIP.com's BOOT award winners

<< M I L E S >>

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America West, Virgin Link Programs
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America West and Virgin Atlantic have entered into a reciprocal frequent flyer program agreement.

With this agreement, which takes effect Oct. 15, 1999, America West FlightFund members will be able to earn frequent flyer miles when traveling on all Virgin flights. They will also be able to redeem FlightFund miles for awards on flights to all Virgin's destinations.

Virgin Atlantic's frequent flyer program members can also earn and redeem mileage on all America West flights.

To promote the new partnership, Virgin Atlantic is offering FlightFund members two special introductory offers:

    1. FlightFund members who purchase Virgin Atlantic's Upper Class fares will earn a total of 40,000 miles on each round-trip itinerary. The offer applies to travel commencing on Nov. 1, 1999 and completed by Feb. 29, 2000.

    2. FlightFund members will be able to redeem a Value Coach award to London for 40,000 miles instead of the usual 60,000. This offer if valid for bookings made before Apr. 1, 2000 for travel completed by June 30, 2000.

>> More <<
o America West
o Virgin

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Win 1 Million AAdvantage Miles for Oneworld Flights
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Travel with a Oneworld airline this fall and you could win 1 million AAdvantage miles.

Each time you fly American Airlines, British Airways, Canadian Airlines, Cathay Pacific, Finnair, Iberia or Qantas on an eligible ticket between October 1 and December 31, 1999, you will be automatically entered into a drawing to win 1,000,000 AAdvantage miles.

You could also win one of five pairs of First Class tickets valid for travel to any one of more than 600 destinations served by the Oneworld carriers.

In addition, you can earn bonus miles when you purchase an eligible ticket and travel with three or more different Oneworld airlines between October 1 and December 31, 1999, as follows:

* 25,000 mile bonus if you travel on 3 different Oneworld carriers
* 50,000 mile bonus if you travel on 4 different Oneworld carriers
* 100,000 mile bonus if you travel on 5 or more different Oneworld carriers

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American

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Air France Flights Will Count toward SkyMiles Elite
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SkyMiles members who fly on qualifying Air France flights will earn base miles and segments which will count toward Medallion status, effective Oct. 1, 1999. Additionally, SkyMiles may be accrued on all Air France coded flights worldwide and redeemed on all Air France operated flights.

Delta also announced that the transatlantic class-of-service bonus miles, earned with paid First Class, BusinessElite or Business Class travel between the U.S. and Paris or Nice, France will count toward Medallion status. This special bonus offer is valid from Oct. 1 through Dec. 15, 1999.

The Delta-Air France partnership gives Delta passengers easy access to Africa and the Middle East including Johannesburg, Cape Town, Cairo, Nairobi, Tel Aviv and Amman, as well as island destinations in the Indian Ocean including Madagascar, Mauritius and the Seychelles.

As an additional benefit, Delta's Platinum Medallion members and First and Business Class passengers traveling on Air France-operated flights will have access to Air France lounges. Air France offers non-stop service from 10 U.S. cities.

>> More <<
o Air France
o Delta

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New ClickRewards Partners
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ClickRewards has 4 new ways to earn ClickMiles..

1) CompuBank

Open your first CompuBank account and earn 500 ClickMiles. Additionally, earn 1 ClickMile for every dollar spent on a qualified purchase made with the CompuBank Check Card. (A purchase is qualified if it's made without using your secret PIN code).

2) SelfCare.com

SelfCare is a provider of information, community support, and health and wellness products.

Earn the following ClickMiles for SelfCare.com purchases:

. Spend up to $50 and earn 50 ClickMiles
. Spend $50.01 to $100 and earn 125 ClickMiles
. Spend $100.01 to $150 and earn 200 ClickMiles
. Spend $150.01 to $200 and earn 300 ClickMiles
. Spend over $200 and earn 400 ClickMiles

There's no minimum purchase.

3) Capital One CD's

Earn 1,000 ClickMiles for every $10,000 you invest in a Capital One CD. Print their application form and mail it in with your deposit. Check the most up-to-date rates by clicking the deposit rates button on the Capital One site.

4) Miadora.com

Miadora is an online retailer selling contemporary jewelry. And during the month of October, earn double ClickMiles for every dollar that you spend.

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ClickRewards

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

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Air Canada Discounts
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Air Canada has announced a "Spread Your Wings" seat sale with fare reductions up to 40 percent on selected routes. The sale began on October 13 and continues until October 27, 1999.

Travel can begin as early as October 20, 1999, and all travel to most Canadian, U.S. and international destinations must be completed by December 17, 1999. Prices and booking conditions vary according to destination.

Sample roundtrip fares for travel from the U.S. to Canada:

.. Los Angeles to: Toronto $308
.. San Francisco to: Toronto $314, Montreal $328, Halifax $397, Calgary $294, Vancouver $184
.. New York to: Toronto $150, Montreal $287, Ottawa $136, Calgary $273, Vancouver $369
.. Washington to: Toronto $150, Montreal $239, Montreal $174, Halifax $314, Vancouver $399

Tickets must be purchased by October 27, 1999, and completed by December 17, 1999. Tickets are 100% non-refundable. Seats are limited and subject to availability. Day of week, time of day restrictions may apply. Fares may vary depending on date of departure and return. Seven day advance purchase, minimum/maximum stay and other conditions apply.

>> More <<

Air Canada

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

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United, Other Airlines Lower Agent Commissions
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Late last week, United once again took the lead in cutting the commissions paid to travel agents for issuing tickets. The move has since been matched by most other U.S. carriers and looks to be the new industry standard.

Specifics of United's (and most others') new commission policy are as follows:

>> Domestic
    The new U.S. base commission program is effective for all tickets purchased in the U.S. (including Puerto Rico, Washington D.C., and the U.S. Virgin Islands) for travel to/from and within the U.S. The domestic policy pays a base rate of five percent (5%) with a maximum pay out of $50 (USD) for round-trip travel and a maximum of $25 (USD) for one-way travel.

>> Canada
    The new Canada base commission program is effective for all tickets purchased in Canada for travel to/from Canada and within the U.S. (including Puerto Rico, Washington D.C., and the U.S. Virgin Islands). The policy pays a base rate of five percent (5%) with a maximum pay out of $70 (CAD) for round-trip travel and a maximum pay out of $35 (CAD) for one-way travel.

>> International
    United also is introducing a new U.S. and Canada base commission program for international tickets purchased in the U.S. (including Puerto Rico, Washington D.C., the U.S. Virgin Islands) and Canada for itineraries including any destination outside these points. The new international base rate pays five percent (5%) with a maximum pay out of $100 (USD) or $140 (CAD) for round-trip travel and a maximum pay out of $50 (USD) or $70 (CAD) for one-way travel.

United estimates that the lower commissions will result in an annual savings of $150 million to the airline.

Travel agents have traditionally played an important role in the distribution of travel services. Travel consumers could, by and large, depend on their agents to understand their personal criteria (the relative importance of such factors as price, schedule, comfort, special requirements, etc.), and to make their travel arrangements accordingly. In other words, agents acted on behalf of their customers. And they did it at no cost to the customer, because the agent was compensated through supplier-paid commissions.

With the commission cutbacks, most of those travel agencies which have not already begun doing so will be forced to charge their customers transaction-based fees. And agencies which already charge fees may be forced to raise them. In other words, the commission cuts amount to a price increase to consumers: United's $150 million "savings" will likely translate into a roughly equivalent increase in travel agent fees paid by you and me.

With the Internet, consumers have direct access to much of the same information that was once the exclusive domain of the agency community. Add to that the prospect of being charged a fee for travel agents' services, and the future of travel agents looks bleak. And indeed, most agents will tell you that the airlines' overriding goal is to shift sales away from agencies and toward the airlines' websites. In addition to lowering the airlines' distribution costs, agents will tell you, the direct-with-the-airlines purchase model leaves the consumer without an advocate in the planning and purchasing process.

My personal feeling is that we are not (yet) at the point where the average consumer can do as well for himself as an agent could do for him. Because:

* Online agency sites like Travelocity and Expedia are cumbersome to use, and don't always provide the best price.
* The airlines' own sites cannot be depended upon to provide comprehensive, neutral fare information necessary to make informed choices among competing airlines, fares and flights.
* Real-time customer service just isn't widely available over the Internet.

Until the above deficiencies are addressed, there's real value to be derived from a good travel agent's counsel.

In the meantime, mama, don't let your sons (or daughters) grow up to be travel agents.

>> More <<
United

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"Rising," Falling
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By early 2000, United will be "Rising" no more.

The by-now-familiar ad campaign, run across all media by the largest airline, is being discontinued.

It was always my sense that the campaign was intended not only to promote the carrier to past and prospective customers, but also to send a not-so-subtle message to United employees. And the message was that the airline depended on them for its success, and that they needed to improve... to rise to the challenge.

My guess is that no such rise was evident, and that the campaign's internal communications failure is at least partly responsible for the decision to abort.

JOMHO (just one man's humble opinion).

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Delta Divorces Swissair, Austrian and Sabena
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Delta has officially terminated its Atlantic Excellence Alliance agreement with Swissair, Sabena and Austrian Airlines in order to concentrate on building its global alliance with Air France and AeroMexico.

The alliance with Sabena, Swissair and Austrian Airlines was founded in February 1997 and was intended to increase the partners' market shares on transatlantic routes and destinations beyond. Code-share flights for the four carriers will end on August 5, 2000.

A Delta spokesperson admitted that efforts to efforts to include Swissair, Austrian and Sabena in the new Delta-Air France-AeroMexico grouping had been unsuccessful.

Austrian has announced plans to join the Star Alliance, and Sabena will partner with the Oneworld group. Swissair heads up the Qualiflyer group of European carriers, and shows signs of interest in Oneworld via its developing relationship with American.

Existing frequent flyer program tie-ups will remain in place for the foreseeable future.

>> More <<
o Austrian
o Delta
o Sabena
o Swissair

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

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Priceline.com Sues Expedia
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When we reported in the September 9 edition of The Crier on Microsoft Expedia's new "name your own price" hotel booking feature, we noted that various aspects of Priceline's competing service had been patented. We further noted that Expedia's was a carbon copy of Priceline's. All of which begged the question: would Priceline sue Microsoft?

That question was answered in the affirmative this week, as Priceline filed suit in U.S. District Court against MS for patent infringement, and for engaging in unfair trade practices.

This promises to be a real nail-biter of a contest.

First, it turns out that Expedia's launch of Hotel Price Matcher came on the heels of no less than 8 months of intensive partnership discussions between MS and Priceline. The suit portrays MS squeezing Priceline for proprietary information--ostensibly in the interest of furthering the 2 companies' relationship--and then using that same information to build and deploy an exact replica of Priceline's service. Whatever the reality, and however the dispute is judged legally, the appearance of impropriety hangs heavy over MS. And even if MS is absolved of any wrongdoing, they will have suffered another public relations hit--which might, you can't help but think, have been avoided but for their unrelenting arrogance.

Secondly, and more generally, there is the issue of the patents themselves. How enforceable is a patent which covers a business model? Is it the process that's protected... the code... the concept? These are questions that could have an enormous impact on how companies do business on the Internet.

Until next week...