One of the techniques I use in booking international award travel is to "think outside your country"; that is, if you can't find award availability flying US to international, try flying international to international.
Case in point, I would like to go Australia and New Zealand next January. To get to these countries from the US, it would cost 135k miles for a "saver" award ticket in business class, or 160k miles in first class. The problem: I'm wanting to go during high season, and finding premium class award availability for these times is usually next to impossible.
My solution: Book an award ticket departing from Asia where it not only requires fewer miles (just 90k for business class), but also award availability is comparatively ample.
I did exactly this last night, when I found ample award availability to Australia and New Zealand departing from Singapore. I now have a ticket that has me flying Singapore to Sydney on January 5, with an eight day stopover before heading to Auckland on January 13, and finally from AKL to SIN via Sydney on January 19. The ticket is a mixed Singapore Airlines/Air New Zealand itinerary, with both SQ231 and 232 in their new business class, so I'm looking forward to it.
Obviously I would have to purchase a ticket to Singapore in January, but past experience has shown that SWU-upgradeable fares to SIN are fairly reasonably priced in winter. Ultimately, I'd have to determine if the cost of a ticket to SIN (and the miles I'll receive for flying it) is worth the 45K miles savings of booking a ticket from Asia vs. from the US.
Until I buy that ticket to Singapore, I can still look for award seats departing from the US; I still have about 135K miles in my account, and if award availability opens up for SFO/LAX-SYD or LAX-AKL in business class, I will pounce on it. One of the huge perks as a 1K is the ability to change award itineraries without penalty, so I know that I could change or cancel my original award ticket (and reclaim the 90K miles) at any time.
But I'm not holding my breath. And the way I see it, in the "worst case scenario" in which I do buy a ticket to Singapore, I get to visit a third country, I'll get a 20K miles head start towards requalifying for 1K status in 2011, and a extra 40K redeemable miles for even more award travel in the future. It's not a horrible trade-off by any means.
Monday, July 20, 2009
Wednesday, July 15, 2009
Bankruptcy fears: Why your miles are safe
The airlines have started posting their Q2 results, and the outlook is quite bleak. AMR Corp has just posted a $390 million loss, with the other legacy carriers expecting to announce losses as well. Analysts are expecting bankruptcy filings to occur by winter if economic conditions do not improve, with American, United, and US Airways being the most likely contenders. The airlines are going through their worst crisis yet, and I would be surprised if by the end of 2010 there are still five legacy carriers in existence.
But what does this mean if you've collected a lot of frequent flyer miles with a doomed carrier? This article suggests that your miles are in serious risk. I, on the other hand, completely disagree. Sure, there's a slight possibility that all your miles would be completely worthless if your preferred carrier were to bite the dust. But it's not very likely, and I wouldn't lose sleep over it.
Here's why:
For one thing, frequent flyer programs are a significant revenue stream for the major carriers. Besides the obvious customer loyalty that these programs generate, the airline industry makes billions of dollars by selling their miles to credit card companies, hotel chains, car rental companies, etc. In fact, airlines have formed more or less a symbiotic relationship with credit card companies, to the point that one will not let the other go under: Ever seen those kiosks at major airports with people trying to get you to sign up for airline-affiliated credit cards? For many banks, these credit cards are among their most profitable products, and to continue offering them, the airlines need to stay afloat.
Also, from 2002-2006, we've seen four major airlines (US Airways, United, Delta, and Northwest) file for Chapter 11 bankruptcy. Under reorganization, these airlines had to make a number of changes: route frequencies were reduced or eliminated, service cuts were made, employees were laid off, labor contracts were renegotiated, etc. But the frequent flyer programs were virtually untouched. After all, why get rid of the only part of the business that has consistently been profitable?
The real cause for concern is if a carrier were to file Chapter 7 bankruptcy (liquidation). In this case, yes, there is a possibility that your miles will be rendered worthless. But even then, there's still a good chance of another airline stepping up to honor the frequent flyer program of the failed carrier, which is exactly what American Airlines did when TWA went belly up years ago. The legacy carriers each have tens of millions of customers in their respective loyalty programs; if one were to go under, its competitors will almost certainly take measures to pick up all these new potential customers.
Now, does this mean that you should be hoarding your miles? Absolutely not. It would be foolish to "save" miles as you would any other currency; you can't accrue interest on them or expect them to appreciate in value. If anything, miles devalue, particularly when airlines increase the number of miles needed to book award tickets. So if you have miles, spend them. But even then, if you have fears that your hard-earned points are going to be lost, there's really little to worry about.
That said, if United were to file Chapter 11 bankruptcy tomorrow, I would not be terribly worried. In fact, there's usually a bright side: airlines tend to have the most generous miles promotions during Chapter 11. I'll have a contingency plan, of course, and prepare to have my status matched with another carrier if things continue to look dire. But other than that, business as usual as far as I'm concerned.
But what does this mean if you've collected a lot of frequent flyer miles with a doomed carrier? This article suggests that your miles are in serious risk. I, on the other hand, completely disagree. Sure, there's a slight possibility that all your miles would be completely worthless if your preferred carrier were to bite the dust. But it's not very likely, and I wouldn't lose sleep over it.
Here's why:
For one thing, frequent flyer programs are a significant revenue stream for the major carriers. Besides the obvious customer loyalty that these programs generate, the airline industry makes billions of dollars by selling their miles to credit card companies, hotel chains, car rental companies, etc. In fact, airlines have formed more or less a symbiotic relationship with credit card companies, to the point that one will not let the other go under: Ever seen those kiosks at major airports with people trying to get you to sign up for airline-affiliated credit cards? For many banks, these credit cards are among their most profitable products, and to continue offering them, the airlines need to stay afloat.
Also, from 2002-2006, we've seen four major airlines (US Airways, United, Delta, and Northwest) file for Chapter 11 bankruptcy. Under reorganization, these airlines had to make a number of changes: route frequencies were reduced or eliminated, service cuts were made, employees were laid off, labor contracts were renegotiated, etc. But the frequent flyer programs were virtually untouched. After all, why get rid of the only part of the business that has consistently been profitable?
The real cause for concern is if a carrier were to file Chapter 7 bankruptcy (liquidation). In this case, yes, there is a possibility that your miles will be rendered worthless. But even then, there's still a good chance of another airline stepping up to honor the frequent flyer program of the failed carrier, which is exactly what American Airlines did when TWA went belly up years ago. The legacy carriers each have tens of millions of customers in their respective loyalty programs; if one were to go under, its competitors will almost certainly take measures to pick up all these new potential customers.
Now, does this mean that you should be hoarding your miles? Absolutely not. It would be foolish to "save" miles as you would any other currency; you can't accrue interest on them or expect them to appreciate in value. If anything, miles devalue, particularly when airlines increase the number of miles needed to book award tickets. So if you have miles, spend them. But even then, if you have fears that your hard-earned points are going to be lost, there's really little to worry about.
That said, if United were to file Chapter 11 bankruptcy tomorrow, I would not be terribly worried. In fact, there's usually a bright side: airlines tend to have the most generous miles promotions during Chapter 11. I'll have a contingency plan, of course, and prepare to have my status matched with another carrier if things continue to look dire. But other than that, business as usual as far as I'm concerned.
Sunday, July 12, 2009
Beef or Chicken? First class style
My observation: The worst whiners in the sky are the frequent flyers.
There’s something about flying in first class that makes one’s inner preschooler (I want, I want, I want!) and inner celebrity (Do you know who I am?) manifest themselves, such that even the most taciturn, kind-looking gentleman could become a whiny brat when the plane reaches cruising altitude. I don’t want to give the false impression that everyone sitting in the front of the plane is like this, but I have seen this sort of behavior many, many times to the point that it deserves some commentary.
You see such asshattery a lot during meal service. These days, most airlines board just enough meals to cover a full first/business class cabin, with finite numbers of each selection available. Getting your choice of entrée is rarely an issue if the cabin is not full, but if the cabin is full then there’s the high chance of the popular choice running out, leaving the flight attendants with the precarious position of denying the first choice to some people.
On United, flight attendants sort meals by status and fare paid. The official protocol is to have flight attendants ask what passengers’ first and second choices are, after which they sort out who gets what in the galley. Global Services (members of UA’s VIP program) get their choice first, followed by full-fare ticket holders and 1Ks, then down the status pecking order until they get to the non-revs.
I was once on a flight from ORD to BOS: it was on a 737 (with only 8 seats in First), and on a Thursday night, which tends to be a high traffic time for business travelers. The two meal choices were either a salad topped with shrimp or a hot pastrami sandwich. I had the misfortune of sitting next to a Global Services member, who threw a fit at the flight attendant because his first choice (the salad) had run out. After playing the DYKWIA card, the flight attendant actually had to show the man the manifest, essentially telling him that there were four other GS members ahead of him in the pecking order. The guy refused the sandwich and sulked the rest of the flight. (Relax, old man. I’m just a lowly 1K and I didn’t get my first choice either.)
I’m especially amused when I see people simply not give a second option, playing the DYKWIA card from the get-go, and basically telling the FA “Give me the shrimp salad or give me death.” In many cases, these passengers don’t get their choice, after which they revert to preschooler mode and pout the rest of the flight. (Perhaps after the flight they could write the airline and get a $200 e-cert.)
To be honest, I’ve been guilty of similar behavior, particularly when I was a newly minted 1K and I thought I was king of the world. Then it dawned on me that it’s really not worth crying over what is essentially reheated food. Nowadays, I just let the flight attendant know that if anyone makes a scene, they’re welcome to take my first choice. (Unless, of course, the second choice is something I simply can’t stomach.) I’ve also been experimenting with pre-ordering special meals. This has led to interesting results, like me getting a Kosher meal even though I’m not Jewish and I’m the biggest bacon fan in the world (the Kosher breakfast, by the way, is terrible).
Still, the issue of food choice seems to rank pretty high on traveler’s minds. American Airlines uses a FEBO system (front even, back odd), in which meal choices are taken from the front in even-numbered flights and vice-versa. So in the days approaching the flight you see lopsided seat maps with people selecting seats as close to the front (or back) as possible to ensure they get their first choice.
What I’d really love to see, though, is a means to preselect meals. This could be done online up to 24 hours before the flight, and could give the caterers a more accurate count of what meals should be boarded onto the planes. I doubt this would ever happen on a US-based carrier, given the costs of implementing this sort of IT system, and given the number of last minute ticket buyers and upgraders, but it would be nice. I will say that Singapore Airlines does this with their “Book the Cook” program on some of their international flights, and it works quite well. And I do recommend their lobster thermidor.
Friday, July 10, 2009
How anti-trust immunity affects the frequent flyer
The Department of Transportation has just granted Continental Airlines immunity from anti-trust laws; as a result, Continental will not only be able to work more closely with its future Star Alliance partners, it will also be able to form a joint venture with United, Air Canada, and Lufthansa for trans-Atlantic service. The full docket is located here.
While this is certainly great news for Star Alliance, few travelers really realize the implications the anti-trust laws (or immunity from them) have on their flying experience. And if you're a frequent flyer, the implications are huge.
As an example of how anti-trust immunity works for the benefit of frequent flyers, Star Alliance carriers United (UA) and Lufthansa (LH) have had anti-trust immunity for years. Not only are they able to tightly integrate their schedules, they are also allowed to codeshare on each other's flights, reduce costs, and share revenues on their trans-Atlantic operations. For customers, this means shorter connection times and a lot more routing flexibility: An American traveler could take one of the many flights UA and LH operate to Frankfurt or Munich, and quite easily connect to any of Lufthansa's destinations in Europe, Asia, or Africa. The same holds true for the European traveler, who gains seamless access to UA's flights within the United States, as well as UA's trans-Pacific flights to Asia and Australia. The alliance between United and Lufthansa is in fact so close that the frequent flyers reap really good benefits; if I were to take a trans-Atlantic flight on LH, as a United 1K, I would get the same 100% redeemable miles bonus that I would get if I took a similar flight on UA. I could even use my System Wide Upgrades on Lufthansa flights, albeit on a standby basis and for one flight segment only.
In contrast, look at American Airlines and British Airways, both of whom Oneworld carriers. These two airlines had sought anti-trust immunity years ago, but were denied on the basis of the landing rights both carriers had at London Heathrow (LHR). This has led to some silly rules within both carriers' frequent flyer programs: Codeshare flights are not allowed over the Atlantic between the two airlines; an AAdvantage member cannot accrue (or redeem) miles when traveling over the Atlantic on BA, and vice-versa. Unlike the case with UA and LH, the lack of anti-trust immunity hurts the frequent flyer; it severely limits one's travel options. It should come as no surprise, then, that these carriers are still seeking anti-trust immunity. With the Open Skies agreement between the US and the EU now in place, the LHR argument should now be moot, and there should be no reason now to deny these carriers anti-trust immunity.
Certainly, there are some caveats to anti-trust immunity, as it could hurt competition on certain international routes, which, as the Department of Justice complains, could lead to higher fares. Indeed, if you look at the official document regarding Continental's inclusion in the anti-trust immunity agreement, the Department of Transportation has already "carved out" exceptions; these include certain flights to and from the US and Canada, as well as all flights from the US to Beijing. So there is still some room for healthy competition; if we were to see a low-cost carrier fly some routes from the US to Toronto, fares will go down, not up.
Regardless, I find the potential effect this immunity agreement will have on the competitive landscape to be absolutely fascinating, and I look forward to Continental's inclusion into Star Alliance later this year. (Believe me, I'm already looking forward to the Micronesia and Latin America routes!) For Continental frequent flyers, I hope the transition from Skyteam to Star Alliance will be easy and seamless; we welcome you with open arms.
Tuesday, July 7, 2009
Why I go after elite status
This matrix shows the degree to which you will likely enjoy flying, based on the existence of airline status (how often do you fly?) and why you fly (business or pleasure?).
Maintaining United 1K status entirely on leisure travel has given me a unique perspective of the flying experience. It takes a very rare sort of traveler to purposely seek out elite status, and I always get surprised looks from people when I tell them I spent a weekend flying to London and back on a cheap ticket just for the elite qualifying miles. But here is my rationale:
You'd get no argument from me if you were to say that air travel can be a pain in the ass. You wait long lines to check your bags, only to find you have to pay $15-$20 per bag to do so. You wait in an even longer line for security, and deal with surly TSA agents who bark orders and expect you know their protocols, which happen to differ at each airport. You sit at the departure gate with nothing to do but wait for your flight, and once you do board, you hope there's enough overhead bin space for your carry on bag. In the plane, you're stuck in a cramped seat hoping that the person in front of you doesn't recline. If you're on a domestic flight you could pretty much forget about getting free food, so you'd need the foresight to either bring food on board or fork over the cash for an overpriced $6 snack box. Et cetera, et cetera...
This is precisely why I go after airline status, as about 80% of your flying-related headaches disappear once you prove to the airlines that you're not a fly-by-night customer. Depending on your level of status, you could avoid long check in and security lines and at the same time avoid a lot of the annoying fees the airlines have been charging (like checking bags). You get to board early, giving you little competition for overhead bin space and more time to sit and relax before departure. Seat reclining isn't as much an issue if you get an upgrade to first class, or if you have a choice seat in coach like the exit row.
Now obviously, most people who have airline status do so because they are required to travel for work or other reasons. The status "levels" set by the airlines, are, after all, merely marketing ploys that offer perks in exchange for customer loyalty. Most people I know who frequently travel for work absolutely hate it; they may have the highest tiers of status with their airlines of choice, and may work for companies that pay for the premium cabins. But if given the choice to travel or not travel for their job, I know many of these very people would choose not. It's not because they don't enjoy the perks of elite status when flying; it's just that when you travel to the same extent they do, you're bound to encounter problems. Having airline status and a paid first class ticket isn't going to help you one bit if you have to be in Boston for a meeting this afternoon and all the flights are delayed at O'Hare because of a snowstorm. And all the upgrades in the world wouldn't make up for the time most business travelers have to spend away from their loved ones.
As a leisure traveler, however, I fly on my own time; I do not have to operate within the time constraints that most business travelers have to deal with, so I could take delays/cancellations/irregular operations/etc. in stride. Suppose I missed a connection at Chicago O'Hare because of a weather delay and I'm forced to stay overnight. It's inconvenient but not a biggie: most of the time I'd be put up in a hotel (a 1K perk, as most airlines don't cover passengers for weather-related delays) and be rebooked on the next flight. What if my flight is oversold? Well, I could be reasonably certain that I won't be denied boarding. But since I have the time, sure, I'll volunteer my seat, and stay overnight if I have to: just pay for my hotel, meal vouchers, and $600 in travel credit, and I'm good to go. In addition, I book most of my flights months in advance; I could check online to see if upgrade space is available, choose my flights accordingly, apply my upgrade certs, and have confirmed business class tickets to Tokyo months before departing. Business travelers, many of whom have to book flights at the last minute, simply do not have this luxury. Even booking award travel can be difficult if your vacation time is finite and your dates are inflexible.
So, the way I see it, elite status could easily be summed up in this manner: For the leisure traveler like me, status makes traveling for fun even more so. For the business traveler, status makes a necessary evil a little less uncomfortable. And without elite status, air travel is just painful.
Maintaining United 1K status entirely on leisure travel has given me a unique perspective of the flying experience. It takes a very rare sort of traveler to purposely seek out elite status, and I always get surprised looks from people when I tell them I spent a weekend flying to London and back on a cheap ticket just for the elite qualifying miles. But here is my rationale:
You'd get no argument from me if you were to say that air travel can be a pain in the ass. You wait long lines to check your bags, only to find you have to pay $15-$20 per bag to do so. You wait in an even longer line for security, and deal with surly TSA agents who bark orders and expect you know their protocols, which happen to differ at each airport. You sit at the departure gate with nothing to do but wait for your flight, and once you do board, you hope there's enough overhead bin space for your carry on bag. In the plane, you're stuck in a cramped seat hoping that the person in front of you doesn't recline. If you're on a domestic flight you could pretty much forget about getting free food, so you'd need the foresight to either bring food on board or fork over the cash for an overpriced $6 snack box. Et cetera, et cetera...
This is precisely why I go after airline status, as about 80% of your flying-related headaches disappear once you prove to the airlines that you're not a fly-by-night customer. Depending on your level of status, you could avoid long check in and security lines and at the same time avoid a lot of the annoying fees the airlines have been charging (like checking bags). You get to board early, giving you little competition for overhead bin space and more time to sit and relax before departure. Seat reclining isn't as much an issue if you get an upgrade to first class, or if you have a choice seat in coach like the exit row.
Now obviously, most people who have airline status do so because they are required to travel for work or other reasons. The status "levels" set by the airlines, are, after all, merely marketing ploys that offer perks in exchange for customer loyalty. Most people I know who frequently travel for work absolutely hate it; they may have the highest tiers of status with their airlines of choice, and may work for companies that pay for the premium cabins. But if given the choice to travel or not travel for their job, I know many of these very people would choose not. It's not because they don't enjoy the perks of elite status when flying; it's just that when you travel to the same extent they do, you're bound to encounter problems. Having airline status and a paid first class ticket isn't going to help you one bit if you have to be in Boston for a meeting this afternoon and all the flights are delayed at O'Hare because of a snowstorm. And all the upgrades in the world wouldn't make up for the time most business travelers have to spend away from their loved ones.
As a leisure traveler, however, I fly on my own time; I do not have to operate within the time constraints that most business travelers have to deal with, so I could take delays/cancellations/irregular operations/etc. in stride. Suppose I missed a connection at Chicago O'Hare because of a weather delay and I'm forced to stay overnight. It's inconvenient but not a biggie: most of the time I'd be put up in a hotel (a 1K perk, as most airlines don't cover passengers for weather-related delays) and be rebooked on the next flight. What if my flight is oversold? Well, I could be reasonably certain that I won't be denied boarding. But since I have the time, sure, I'll volunteer my seat, and stay overnight if I have to: just pay for my hotel, meal vouchers, and $600 in travel credit, and I'm good to go. In addition, I book most of my flights months in advance; I could check online to see if upgrade space is available, choose my flights accordingly, apply my upgrade certs, and have confirmed business class tickets to Tokyo months before departing. Business travelers, many of whom have to book flights at the last minute, simply do not have this luxury. Even booking award travel can be difficult if your vacation time is finite and your dates are inflexible.
So, the way I see it, elite status could easily be summed up in this manner: For the leisure traveler like me, status makes traveling for fun even more so. For the business traveler, status makes a necessary evil a little less uncomfortable. And without elite status, air travel is just painful.
Thursday, July 2, 2009
New non-stop MCI-SFO service
For years I've been hoping that United would offer a nonstop from Kansas City to San Francisco, and it appears my wishes have come true. Looks like it'll be effective October 25.
The caveat: It's not mainline service. It'll be a United Express flight (operated by Skywest), on a Bombardier CRJ-700. I did a dummy booking for the flight on united.com, and the MCI-SFO nonstop will be close to four hours long (1,498 miles). OUCH! This is one flight where I'll be on the upgrade list every time.
Still, it's nice to see UA testing the market; there's certainly demand for the non-stop, and a number of area businesses will benefit from it. The schedule also works well with UA's trans-Pacific operations out of SFO, and it'll be nice to not have to connect in Denver every time I go to the west coast.
The caveat: It's not mainline service. It'll be a United Express flight (operated by Skywest), on a Bombardier CRJ-700. I did a dummy booking for the flight on united.com, and the MCI-SFO nonstop will be close to four hours long (1,498 miles). OUCH! This is one flight where I'll be on the upgrade list every time.
Still, it's nice to see UA testing the market; there's certainly demand for the non-stop, and a number of area businesses will benefit from it. The schedule also works well with UA's trans-Pacific operations out of SFO, and it'll be nice to not have to connect in Denver every time I go to the west coast.
Wednesday, July 1, 2009
Compensation Fail (or Win?)
Dear United,
I'm old, gimme gimme gimme!
PS. I am not a crackpot!
It seems that lately United's complaint center has been extremely generous in giving compensation.
Case #1:
An international first class flight from FRA-ORD (on my way back from Cape Town in March).
The FRA-ORD flight departed from gate A57, but UA's Red Carpet Club (and consequently, the first class lounge) were in the C gates, about a 20 minute walk and security checkpoint away from the departure gate. The only lounge close to A57 was a Lufthansa Senator lounge, so there was nothing exclusively for first class passengers.
Also, the food on the FRA-ORD flight was atrocious. I ordered a pork chop that was so tough my knife couldn't cut into it, and had it replaced with an overcooked filet mignon. The salad croutons were soft and chewy, bread was stale, etc.
Complaint letter sent. Compensation given: A system wide upgrade, and 4 500-mile domestic upgrade certs.
Case #2:
MCO-IAD-MCI: Checked-in bags didn't arrive with my flight, and had to be delivered to my house 2 days later.
Complaint letter sent. Compensation given: $200 travel e-cert.
Case #3:
DEN-MCI a couple weeks ago. The flight attendants didn't offer a pre-departure drink in first class.
Complaint letter sent. Compensation: Another $200 travel e-cert.
For Cases #1 and #2, I could certainly understand where compensation is due, but Case #3 continues to baffle me; it seems to me like they're giving these e-certs for every little complaint they receive.
I have a couple hypotheses:
1. Ever since United shut down its "Customer Service" hotline, they've been inundated with complaint e-mails. The customer service reps (most of whom are outsourced) don't have the time to read every single complaint they receive, so UA authorizes them to give out e-certs willy nilly. It makes sense from a business standpoint; e-certs aren't a liability to UA, and they come with restrictions (for domestic round-trip flights only, and no excess credit given if the amount of the e-cert exceeds the price of the flight). They also give the customer the distinct impression that they've gotten something of value, while at the same time ensuring continued patronage: a win-win situation.
2. United is so desperate to maintain customer loyalty that they'll compensate their high-status passengers for even the smallest shortcomings in service. Compensation is based on status, and I'm sure that if a general member (or a non-member) of the Mileage Plus program had written UA with the same complaint, they wouldn't have gotten much more than an "I'm sorry" e-mail.
Don't get me wrong, I'm happily accepting the travel certs, and in fact I'm using them to see my parents for the holiday weekend. But where's the checks and balance system? What's keeping customers from taking advantage of UA and demanding compensation for every little instance of perceived bad service? Oh wait, this doesn't happen until after the fact.
Or better yet, where are the customer service "enhancements" UA has been promising for years, to ensure that we don't ever need to complain?
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