MSNBC reports:

NEW YORK – The head of JetBlue Airways Corp. said Tuesday the low-cost carrier expects to boost its noncore revenue by 60 percent this year, in part by charging passengers extra for more legroom.

“What we want … is the ability to upsell,” Chief Executive David Barger said.

Speaking at an investment conference in New York, Barger said “demand is solid across the JetBlue network,” and he assured analysts the carrier is “in the middle of a momentum story,” in spite of industrywide worries of a slumping economy and sharply rising fuel prices.
….
Barger said JetBlue, based in Forest Hills, N.Y., soon expects to roll out a program called “even more legroom” that will offer passengers in the first few rows and emergency exit seats of its larger aircraft additional space for an added fee. A spokeswoman declined to provide details of the plan, but Barger made it clear the single-class carrier is not planning to start offering business-class service.

Man, the airline industry has no shortage of stories in the past few days, and I see no end in sight. No doubt JetBlue is a great carrier in their category, and their legroom is probably the best in the US. The issue here comes with the fact that the back of the plane has 34″ of pitch while the front has 36″ inches. Unless they plan on adding other services, I doubt you’ll see many people willing to buy-up from JetBlue’s already generous pitch for just 2″ more. I’m curious to see what the exact details are, but something tells me this wont work too well…

USA Today as well as many other news outlets are reporting this today, something I am predicting will be the beginning of a trend over the next few weeks/months, at least on the capacity reduction end:

ATLANTA (AP) — Delta Air Lines (DAL) says it will offer voluntary severance payouts to roughly 30,000 employees — more than half its workforce — and cut domestic capacity by an extra 5% this year as part of an overhaul of its business plan to deal with soaring fuel prices.

Executives at Atlanta-based Delta said in a memo to employees Tuesday that the airline’s goal is to cut 2,000 frontline, administrative and management jobs through the voluntary program, attrition and other initiatives.

A spokeswoman says that if more than that amount agree to take the voluntary severance, that will be allowed. The severance program primarily affects mainline Delta employees.

Delta had 55,044 total full-time equivalent employees as of the end of last year.

 My dad called me about an hour ago and said “Did you hear that Delta is laying off 30,000 people?” I explained to him it was actually only 2,000 people that they wanted to leave, but it seems like the news outlets might be portraying it somewhat differently. I don’t know about others, but I think the headline is somewhat misleading. I’ve never been in Corporate America so don’t understand a lot of this mumbo-jumbo, but I’m wondering if there’s a reason they’re offering it to 30,000 people when they only want to lay off 2,000. I’m guessing there are 30,000 people in the departments that the layoffs will be coming from (probably almost everything except for pilots and FA’s), but at the same time I think it would be better to say “Delta looking to have buyouts for 2,000 employees.” I’m curious whether 2,000 people will accept the offer, or whether it’s substantially more or less. In addition it’s interesting to note that they’ll be cutting 5% capacity, just a tad bit more than United.

Good luck to the airline industry, I think they need it!

Reuters reports:

CHICAGO (Reuters) – UAL Corp (UAUA.O: Quote, Profile, Research), parent of United Airlines, will shrink its fleet by up to 4 percent this year to combat the skyrocketing cost of jet fuel, the chief executive of the No. 2 U.S. carrier said on Tuesday.

In a message to employees, Glenn Tilton said the airline aims to eliminate 15 to 20 of its older, less fuel efficient narrow-body planes. United’s fleet currently has 460 aircraft.

The airline industry has been battered by rising fuel costs, which are directly linked to the price of oil. A barrel of crude touched a record high on Monday of $111.80 CLc1.

“Continued uncertainty about the overall U.S. economy with the price of fuel at historically high levels has put significant pressure on all U.S. carriers,” Tilton said.

United and other airlines have attempted to offset the fuel burden with fuel surcharges, fare hikes and charging for services that previously were including in the fare. But some experts say airlines may find it harder to pass the expense to travelers if a weaker economy erodes travel demand.

OK, seems to make sense. I’m curious to see which planes they eliminate (hopefully the ex-Shuttle 737′s!) and whether or not they replace them with regional aircraft or just choose to cut frequencies and maybe even some routes. Certainly the coming months (especially after the summer season, when travel really slows down) will be challenging for US airlines, especially now that merger rumors have slowed down quite a bit. That’s not to say that nothing will happen anymore, but like I said from the beginning, it’s not over till it’s over, and I think almost everyone was predicting a merger to be done by now just a month ago.

I think price increases are almost inevitable, and I’m guessing they’ll be achieved by substantial capacity reductions. That really seems to be the only way to go, at least until we see some mergers. I also think now more than ever if there is a merger we’ll see the new carrier basically be the size of the larger original carrier and just take the best qualitative aspects of both. While it wont stop the problem in the industry, reducing capacity is a must.

Another thing I’ll never understand is that airlines have such a hard time passing on fuel surcharges to the customer. Yes, I understand the market is very elastic, but come on, I think we all realize that oil is at a record high and there’s not much that can be done. It seems like the airlines have introducted about 100 different fuel surcharges which were all repealed within a day, which makes little sense to me. It would see to me that if the airlines were smart they would all introduce surcharges around the same time (of course not collaborating but as soon as an airline introduces a fuel surcharge the others should follow). Of course I HATE to see this as a consumer, but the airlines do need to survive and from their perspective it amazes me that they haven’t done so already.

And worst of all, and I shudder when I say this. I really don’t want to post this, actually, because the thought of it makes me want to cry, but I’ll do it anyway. Four words- fuel surcharges on awards. Brrrrrrr……

So what does my crystal (probably totally wrong) ball say? I’m predicting substantially higher fares in the fall due to fuel surcharges than we’ve seen in the beginning of this year, but I think we’ll see lots of promos to offset those. Since the load factor should drop off quite a bit, the airlines have little choice but to offer some good promos to give people an incentive to fly, so it’s not all doom and gloom in my book!

Triple Your Miles

See the sites and triple your miles. Fly out of or into Charlotte, Philadelphia, or Phoenix now through April 17, 2008 and earn triple bonus miles in paid First Class—or double bonus miles in paid Economy Class. It’s that easy.

Terms & Conditions

Bonus Offer:
Purchase and fly on Delta and Delta Connection® carrier marketed and operated flight segments into and/or out of Philadelphia/PHL, Phoenix/PHX or Charlotte/CLT between March 17, 2008 and April 17, 2008 and earn triple bonus miles for First Class travel (F, A fare classes); earn double bonus miles for Economy Class travel (Y/B/M/H/Q/K/L/U/T fare classes). Other codeshare flights are excluded from this offer.

Offer Eligibility:
To participate in this offer, eligible members must register online and fly between March 17, 2008 and April 17, 2008.

Travel Period:
Travel must be between March 17, 2008 and April 17, 2008. All travel must be completed by April 17, 2008.

Flight Validity:
Bonus miles only valid on nonstop or thru flights (thru flights defined as flights with one or more stops without a change in flight number). Connecting flights with a change of flight number only receive credit for flights directly in or out of qualified airports.

Award Travel:
Taxes and fees for Award Travel are the responsibility of the passenger and must be paid at the time the ticket is booked. Award Travel seats are limited and may not be available on all flights or in all markets.

Miscellaneous:
Your bonus miles will appear automatically on your SkyMiles statement. Allow up to six weeks after qualifying travel is completed for credit to appear. Offer is void where prohibited by law. This SkyMiles offer is subject to change or withdrawal at any time without prior notice. Bonus applies only to the traveling SkyMiles member. This offer cannot be combined with other offers. Partner offers subject to the terms and conditions of each individual offer. All SkyMiles program rules apply. To review the rules, see Membership Guide & Program Rules. Please refer Delta customer service representative to 97062324.

Now I’m not a big follower of either US or DL, but it doesn’t take an expert to figure out what Delta is trying to do. I’m not sure if they’re having some kind of a back and forth battle, but it’ll be interesting to see if US offers some bonus miles to ATL and CVG. Don’t get me wrong, bonus miles are always a good thing for us, but I really wonder if they make sense for the airlines, at least in cases like this…

OK, usually I wouldn’t make a post without factual information and/or a reliable source, but tonight is different so please cut me some slack. I didn’t know whether to laugh or cry when I read this story, but it is quite unbelievable (again, for all I know it could be made up or could be true, but it’s worth a chuckle). The full story can be found here.

Woman files lawsuit against AMR because passenger next to her masturbated while she slept

A 21-year-old Harris County woman filed a $200,000 lawsuit against American Airlines alleging employees on a flight to Los Angeles from Dallas/Fort Worth Airport failed to protect her while she slept from another passenger who masturbated to her and ejaculated in her hair, according to a lawsuit she filed last week in Tarrant County.

…………

When the woman opened her eyes, she saw that an unknown man had moved into the seat next to her and was staring at her as he masturbated, the suit states.
The woman turned toward the window in embarrassment and in an act of nervousness began to run her fingers through her hair where she noticed “a substantial amount of an extremely sticky substance in her hair,” the suit states.
The woman began to cry and tried to get the attention of a flight attendant, but was unsuccessful, the suit states. Finally a passenger in the row in front of the woman comforted her and verified the semen in her hair, the suit states.
When the plane landed, employee called airport police and the man was arrested.

OK, and this lady is filing a suit against AMR because they saw him move seats? Hmm, I don’t know about AA, but at UA there’s no policy against changing seats as long as you stay in the same cabin. Is it different at AA? There’s so many comments I could make on this but I’ll restrain myself and leave it the imagination of my creative readers.;)

And for the quote of the day on FlyerTalk by Val:

This must be why SouthWest doesn’t want pretty girls on their planes.

As promised, here’s the result of my dad’s experience which I blogged about this past Wednesday. He called Citi Amex to cancel his American Airlines card since he has three types of AA cards right now (between business and personal), but was open to keeping it longer if they offered some type of bonus.

So when he called and explained that other cards were offering him better deals and that he had no incentive to use his current card the agent said there was nothing she could do, but transferred him to an “account manager” to see if there was anything she could do. The account manager once again said there was nothing she could do but tried to convince him to keep the card. He then said “please just transfer me to the cancellation department so I can cancel the card.” Well the agent he got transferred to didn’t seem to give in either, so offered him either $25 off his next bill or a free companion ticket, but said they “didn’t do bonus miles anymore.” Not so sure how true that is, but he took the $25 and will now keep the card for another month. We’ll see what they say in a month, but he really has very little use for the card and wants to close it up soon so he has less open accounts.

Still, $25 is great for a five minute phone call, especially since he’s just about ready to cancel the card. Next on the list to sign up for is the Hilton Amex (as stated in an earlier post) and the Citi Visa AA business card for another 25,000 mile bonus!

The WSJ has an article today with the details of the three tiers of awards Delta has been hinting at for a few weeks now.

Delta also plans to increase the number of “tiers” in its SkyMiles plan this spring. Instead of offering domestic tickets for either 25,000 or 50,000 miles — with many more tickets available for 50,000 miles — the airline will offer 50% of its total seat inventory for 40,000 miles, while maintaining the same amount of seats in the 25,000-mile tier. Most remaining seats will fall into the 60,000-mile tier.

Hmm, I think this gives Delta a lot of leeway to play games. On one hand the fact that even 60,000 miles wont get you any seat on a plane is pathetic (for 50,000 every other legacy carrier still offers it), but at the same time there might be a bright side, that shady area between a traditional “saver” and “standard” award. While I’m not certain what exactly is meant by “50% of its total seat inventory”- does that mean of seats available for awards, of seats available for sales, or what?- this might mean that there’s decent availability for 40,000, which could benefit those with travel patterns where they can’t plan months ahead but at the same time not last minute either. Of course knowing the airline industry I’m betting this also means less saver awards, so we’ll basically see the 25K award as rare, 40K as the former saver award, and 60K somewhere in the middle.

Only time will tell, but I don’t think it’s all bad… as long as other airlines don’t follow Delta’s lead, or at least that this stays within SkyTeam!

 Thanks to my friend Peter for the heads up on this.

On March 13, China’s aviation authority announced that passengers were no longer allowed to take liquids onto domestic flights. The move was part of efforts to tighten security with the summer Olympics only five months away. The new measures came after a woman carrying a suspicious liquid attempting to crash a plane was caught en route from Urumqi to Beijing on a China Southern Airlines flight. (source)

Oh, isn’t that just dandy? Everytime I see a story about liquid restrictions I immediately think of the hilarious TSA parody from SNL last year (that’s the only website I could find it on, might not be totally suitable for work). I’m not sure if I totally understand this though, why doesn’t this apply to all flights to/from China? Are liquids somehow less of a threat on international flights? Oh, or maybe because I’m connecting through PVG in summer coming from SIN and continuing to YYZ and I sure as heck would change my travel plans if I couldn’t take liquids, making them lose quite a bit in airport taxes, and I’m sure I’m not the only one?

While I have no plans to fly within China for quite a while, I do hope they lift this stupid rule after the Olympics. I totally understand the emphasis on safety, but I really think the efforts should be focused in places other than liquids…

I made a post about a month ago regarding people that keep earning miles without really redeeming them, and someone just left a comment which I’d like to address:

Lucky,

If one has a lot of UAL miles, what recommendations can you give, the best way to use them both in value and benefit. Do you take *Alliance trips like SIN or UAL flights? I need to start planning to use the miles, any recommendation is much appreciated. Thanks

TravelaLot

Ah, one of my favorite questions, and I’ll try to keep my answer as focused as possible. I consider myself to be a bit of an expert on awards, especially international premium awards, as I really enjoy using my miles to the fullest extent possible.

The short answer to this question is that the best use of miles is whatever makes you feel like you got a good deal. Of course that answer doesn’t help anyone, but it’s nonetheless important. We all have different uses for our miles due to various factors, which is great since availability for the types of awards I like would be next to zero if everyone else wanted them too! My real answer below is totally based on an ideal world, as I am guilty of redeeming miles for a domestic award once in a while too! Hey, sometimes it’s a great deal (for example when a domestic fare is $1,000 and available as a saver award for 25,000 miles), but I try to avoid it in general.

So, that being said, here we go. When I have enough miles in my account and am ready to book another award there are three important factors I consider, in the following order:

• Where do I want to go, and most importantly is it a good deal on miles? For example, fares to Singapore could be pretty good and upgradeable, which it might not be a good idea to use miles for. At the same time fares to places like Bali, Queenstown, Sydney, etc, might be very expensive. So in addition to figuring out where you want to go, it’s also important to evaluate if it’s a destination that it makes sense to use miles on.
• What’s the availability like? This can almost immediately be a deal breaker. As I posted about last month, Air New Zealand has virtually zeroed out their award inventory in BusinessPremier to New Zealand from North America, so even though I’d love to go there, my miles wont get me there, at least for now! Of course I have the option of taking UA to SYD, which can be very hard to find, and then backtracking, but it’ll probably still be a challenge to get a full itinerary that works.
• Pick a carrier you really want to try. This is often a tie breaker for me when I can’t decide on a destination. For example, let’s say I want to see two cities, one which only has First Class available on United and one which only has First Class available on Singapore Airlines. I would probably end up going with Singapore Airlines even if the destination is slightly less interesting for the superior in-flight experience. There’s simply something special about SQ, regardless of how often I fly them, and I go out of my way to take them whenever possible.

There are a few other important considerations for me when it comes to awards:

• Take full advantage of your free stopover! This is something most revenue fares don’t allow without a surcharge, and something that can make award tickets truly more valuable than revenue tickets. For example, in my recent awards I have had a stopover in AKL from which I visited many of the major cities in NZ and then continued on the same award to SYD. Similarly I’ve done awards with stopovers all over the place, including an award ticket to BKK with a stopover in ICN, an award to SIN with a stopover in BKK, an award to VCE with a stopover in FRA, etc.
• As much as we complain about the international call centers, they can be a blessing when it comes to awards. Some of them aren’t very well trained geographically or with the rules of an award, and will often allow routings which otherwise wouldn’t be allowed. For example UA charges 90,000 miles for an award from North America to SE Asia via the Pacific, but I managed to get EWR-DUS-ZRH-SIN-NRT-SIN-ZRH-FRA-EWR all in business, including the new SQ Business, for only 90,000 miles. A US agent would have picked up on that in a heartbeat.
• I really love flying airlines that represent various cultures. I truly believe that airlines tell you so much about the culture of a country as a whole, and serve as a great introduction. Heck, the distinctive service styles of Asiana, ANA, Thai, and Singapore alone are amazing, and that’s only addressing a very small portion of the world. An airline says a lot about a culture, so try out as many carriers as you can, IMO!
• One of my favorite 1K benefits is the ability to make changes to awards without a fee. Being the perfectionist I am when it comes to awards, it’s not rare for me to make a dozen changes on an award ticket as the date of the trip gets closer and availability gets better. This benefit just allows so much flexibility as far as awards go, something which is vital to me in this era of limited award availability.

Hmm, that’s all I can think of for now but I’m sure I’ll come up with more later. If I do I’ll be sure to add it to this post. So I guess that makes the SparkNotes version of my answer to use miles for premium cabin travel on foreign airlines to a place you want to visit.

Gary over at View From the Wing posted today about the sign-up offer for the Hilton American Express Credit Card, so instead of rehashing what he wrote I recommend everyone check it out. Most importantly though, the Hilton Amex allows one to take advantage of the AXON award, probably the best hotel award out there. Normally category six hotels are 40,000 points a night, but on an AXON award it’s only 125,000 points for four nights, a 35,000 point discount.

While the Hilton HHonors program isn’t as strong as some of the other loyalty programs in terms of promotions (which are essentially non-existent, at least the really good ones like Hyatt’s Faster Free Nights and the double stay credits SPG and Hyatt have been offering for the first quarter of the year) and upgrades for elites (even a Diamond at Hilton only technically gets club access and not a suite upgrade, unlike SPG or ICH), it does have some real strong points. For example mid-tier Gold members get basically the same in hotel benefits as Diamond’s, so without that many nights required you can get a really good deal as a Gold!

Typically I’m more of a fan of airline credit cards rather than hotel credit cards since I typically find award redemptions to be more valuable for flights than hotels because I can get a first class award which would retail for $20,000, while a hotel room would only net me a room that’s maybe $500-600 a night. Nonetheless when trying to determine the relative value it’s important to remember that it’s all about what you would otherwise be willing to pay for the product and not necessarily how much it would actually cost. I would never ever ever ever ever ever ever think about paying anywhere near first class prices for flights, at least out of pocket, while I would consider staying at a more expensive hotel, although probably not one that’s $400/night. Let’s also remember that in some cities $400/night is a bargain, and you’re left with very few options, so a hotel award can add a lot of value to your points “portfolio.”

So while I’m doing a great job of rambling and being off topic, let me get back to the point of this post, the HHonors credit card. Obviously the bonus points that can be earned (52,500 points for things I could do anyway) are quite valuable, not to mention the FIVE points per dollar on stays at Hilton hotels, groceries, gas, and wireless bills, things that I’d use another card for otherwise. So doing a quick breakdown of the AXON award, which is 125,000 points for four nights, we’ll realize that it’s really 31,250 points a night, putting it over four nights of course (you can’t do half an AXON for 62,500, for example). That also means that assuming I’m only using my credit card for stays at Hilton hotels, on gasoline, on groceries, and on wireless bills, I would need to spend $6,250 (31,250/5) for a free night at one of the many great Hilton family hotels in the world. When you compare that to the 6,250 miles I would otherwise earn, not even enough for half of a domestic upgrade, I think it’s hard to argue against it. Best of all Hilton honors elite benefits on award stays and this card doesn’t have an annual fee!

I think I’ll largely be using HHonors points for the Conrad Hong Kong, a great hotel in my favorite city in the world. Add the great hotel to the free upgrade to an Executive room for Gold/Diamond members and it’s quite a steal!