Posted by Seth on May 28, 2010 under News | 
Continental Airlines and United Airlines have made no secret of the fact that they are aligning their operations. United has changed their upgrade scheme to more or less match that of Continental and Continental is moving to offer System-Wide upgrades, a revenue-based top tier, non-hub routes and charging for the seats with the most legroom, similar to United’s Economy Plus program.
That last one, Economy Plus, is the cause of much angst based on the announced merger plans between the two carriers. Continental’s management has stated on many occasions that they don’t see the profit margins in such an offering while United has made quite a bit of money – and built quite a brand – offering such an option. The announcement yesterday of the new Houston – Auckland route on the Boeing 787 Dreamliner from Continental included an interesting note regarding the seating on the aircraft, one that appears to significantly raise the chances of Continental offering an Economy Plus cabin on the new aircraft.
The bit in question from yesterday’s release is this:
The aircraft will have 228 seats, including 36 of Continental’s new flat-bed BusinessFirst seats for the best rest on long-distance flights.
The line seems somewhat innocuous at first blush, but the numbers, along with the dimensions of the 787-8, lead to slightly different conclusions.
The 787 is approximately 27.5 feet longer than the 767-200 that Continental currently operates (138 feet, 9 inches v. 111 feet, 3 inches) and 2.5 feet wider. The current Continental 762 configuration (shown at right) allocates about 950 inches of seat space given the number of rows and the reported pitch. Assuming that the space between the two forward doors is about the same and that the space there is fully consumed by the 36 BusinessFirst seats – which will almost certainly be 2-2-2 across, similar to the 777-200ERs – there are about 608 inches of pitch assigned to coach seating in the back of the 762. Adding 27.5 feet (330 inches) to that length is a ton of extra space. Assuming that some of it is used by galleys and lavatories and that only 200 inches are added to the economy section there are still about 800 inches of cabin space allocated to the coach cabin.
To get to 192 seat in coach would require either 21 rows of a 3-3-3 configuration or 24 rows of a 2-4-2 configuration. If you take 21 rows and spread it through 800 inches of cabin each row would have about 38” of pitch. That would be, by far, the most generous coach cabin seating arrangement in the industry, though quite narrow seats. Should they opt for the 8-abreast configuration and 24 rows the average pitch would be over 33” distributed through the cabin. If we assume that Continental will match the existing 32” pitch from the 767s (or even worse, the 31” pitch from the rest of the fleet) then those extra inches can be allocated to an Economy Plus-esque configuration. Maybe 6 rows of 37” pitch and 18 rows of 32” pitch. That would actually represent a quite comfortable cabin configuration, still one of the best in the industry, even for the folks in the non-E+ seats.
There is also a chance that there was a typo in the release and that they are planning on including 228 Coach seats PLUS the 36 BusinessFirst seats. At 25-28 rows required in the same 800-ish inches of space things would be a bit tighter, though it would still be 32” pitch through the cabin at 25 rows. It is also worth noting that for the interior dimensions I’ve been rounding down, trying to assume that there is something wrong in the calculations or in the measurements. But I cannot find where that is. I’m still looking for it, but I’m not sure that I’ll ever find it. It sure would be nice for Continental to actually offer a cabin that would be so spacious and comfortable, but their history suggests that it isn’t their style, even if the dimensions of the plane suggest that it is possible.
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Posted by Seth on May 27, 2010 under frequent flyer, News, points |
Folks seem to be reasonably obsessed with frequent flyer points and airlines make a lot of money selling them to just about anyone they can find. Why not combine the two and sell the points to passengers as a “bonus” during the trip? After all, getting double or triple miles would be great, right?
American Airlines has introduced a program to do just that. Mileage Multiplier will permit passengers to buy miles in addition to those they will otherwise be receiving on their flight, either double or triple the base number. The program is similar to one that United Airlines operates and apparently such programs are quite profitable for the airlines.
The devil is in the details, however, and digging into such details it would seem that the new program from AA is actually a horrible deal for passengers. They are pricing the miles at $0.03 each, rounded up to a round dollar, plus a 7.5% excise tax. And customers are limited to only 2x or 3x of the actual flight miles. For JFK-SFO that would be roughly an extra 2,500 or 5,000 miles for the passenger. The 2,500 mile level would cost approximately $75, plus tax while the 5,000 would cost roughly $150 plus tax. But American already allows customers to buy miles directly from the airline, and at a much better rate than $0.03/mile. Buying 5,000 miles would cost $137.50 + tax + a $30 processing fee. Yes, the processing fee makes a bit of a difference, but you don’t have to pay the original base airfare either when buying the reward miles direct so there is some savings there, too. The break-even point is actually right around 6,000 bonus miles being purchased where going direct is a better deal.
So if you only need a handful of miles to top off an account or get to that next reward level – and you are flying anyways – the value of the new program isn’t terrible. But if you’re just looking at the abstract cost of points it is a pretty horrible deal. I’m sure plenty of folks will still pay for the new program and AA will profit from it, but that doesn’t mean it was a smart move for those passengers.
Update (9:10pm EDT, 27 May 10): Of note on this topic is that AA actually filed a request with the IRS over a year ago asking about the tax implications of this offering. I even wrote about it back in January (though forgot about it until just now when reading through some older posts). The worrisome part to me is not that they went down this path but that some of the other things in that IRS brief might come in to play.
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Posted by Seth on May 27, 2010 under frequent flyer, points |
When airlines do not publish their reward seat inventory on their websites it is a pain for their program members. Having to call in to check for reward inventory sucks. And with the update to their website in conjunction with the migration to the Sabre booking system back in January JetBlue removed the search engine for old TrueBlue rewards from their website. Combine that with annoyingly long hold times – 50 minutes to get to the right department to redeem my voucher tonight, only to find nothing available – and redeeming the passes is almost more trouble than it is worth.
Almost.
After all, the passes still represent a significant savings on a flight if you can find the space and putting in a little bit of effort to find a seat is a worthwhile effort. Unfortunately, up until recently access to the inventory bucket that represents the award seats was apparently hidden from public consumption. That is no longer the case. The award inventory comes from the Z bucket and a quick check of a few different sources last night showed that inventory listed out in the open. A couple minor tweaks to an existing tool I’d previously written and I’m now able to present and share access my JetBlue TruePass Availability Search Engine.
Punch in the cities you’re interested in and the date and click the button. It is just that easy. If there are flights with award seats available you’ll be presented with them in the matrix. If not, come back and try again later. Once you’ve found availability then you can commit to the hour of time on the phone to make the booking.
The tool is applicable for rewards from the original TrueBlue program (TruePasses) as well as promotional free tickets like the ones given out during the 10th birthday celebrations. New TrueBlue points are redeemable on any flight, assuming you have enough.
Happy Jetting!
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Posted by Seth on May 26, 2010 under Flying, News |
Continental Airlines has announced their first planned route for its 787 Dreamliner deliveries: Houston – Auckland, New Zealand. It will be the carrier’s first route form the mainland USA to Oceania. It will also be a great test of the theory behind the 787 design – service on long, thin routes as that is a pretty good description of the IAH-AKL market: long and thin.
Sure, there will be some connecting traffic along the way and probably some cargo, too, but the O/D traffic flying is likely to be rather low. Lots of folks had been hoping for a return to Sydney rather than Auckland but the move makes sense based on connectivity with Star Alliance partner Air New Zealand in Auckland.
There’s also the pesky issues of a potential merger with United Airlines and hopes of no further delays on the delivery schedule for the 787. But assuming those do not get in the way it looks like Auckland is on the route map for Continental now. Service is expected to start in November 2011 and tickets will go on sale in December 2010 at the earliest.
The news does come at an interesting time. Yes, Continental is the “first airline in the world to formally announce specific, initial route plans for its Boeing 787 Dreamliner fleet” and the press release has some rosy language from CEO and announced UA/CO CEO Jeff Smisek about “the emphasis we place on continuing to expand Houston’s role in domestic and international aviation. This hub has ongoing growth opportunities because it has a strategic location, space for expansion, support from the community….” But it is also being announced almost 18 months in advance and 6 months before they can even sell tickets. Where is the value there, other than to distract regulators from the fact that the merger is going to move a major company headquarters out of Houston?
So the optimist here says “Horray for the new route!” while the pessimist is wondering if it really will ever happen. I’ll try to remember to report back in 18 months when the time comes.
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Posted by Seth on May 25, 2010 under News |
Let’s say hypothetically that your company offers up for sale millions of dollars of inventory to its customers. But, due to an error on your part, the price of those items – some of which regularly sell for up to $1,000 – is artificially capped at $49.95. What happens when you realize the mistake?
First, you fix the pricing issues. That’s a given. In this case the glitch was only open for about six hours. But then what? You have to choose between fulfilling the orders and taking the hit, and taking responsibility for the fact that it is your system that messed up or simply canceling the orders and blaming your customers for not being smart enough to know that it was obviously a mistake and not just a sale.
If you’re Zappos you play it smart, sucking up the loss and making it clear that you respect your customers.
While we’re sure this was a great deal for customers, it was inadvertent, and we took a big loss (over $1.6 million – ouch) selling so many items so far under cost. However, it was our mistake. We will be honoring all purchases that took place on 6pm.com during our mess up. We apologize to anyone that was confused and/or frustrated during out little hiccup and thank you all for being such great customers. We hope you continue to Shop. Save. Smile. at 6pm.com.
If you’re British Airways, on the other hand, you simply insult your customers, ignore that the exposure was lower and the revenue was higher, ignore that the mistake was not nearly as obvious and generally accuse your customers of being schmucks. And then, after you’ve already fulfilled the orders (the tickets were issued) you go back on the issuance, revoking the tickets and lying to everyone about the story for the first couple days. Not cool at all.
Blaming your customer when you make a mistake simply is not smart business, particularly not when the customer doesn’t have similar means of redress. Other airlines have made similar mistakes over the years. In the vast majority of the cases they used the mistake as an opportunity to build better relations or otherwise market their services. Apparently British Airways is too good for that sort of thing.
Alas, the British Airways event is over and at least a few people made them pay for it in court. But their total lack of respect for their customers doesn’t make me so keen to patronize them in the future. They’re going to have to be offering quite a deal – and actually honor it – for me to go there again.
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Posted by Seth on May 21, 2010 under News |
Cashing in those hard earned (or just accrued through credit card sign-up bonuses) miles for upgrades used to be a great deal. One could purchase a relatively inexpensive ticket and still fly up front without too much extra spend. Then the airlines caught on and realized that they were leaking revenue so they tightened up the rules. Flying on a cheap fare upgrading with miles became either impossible (Delta, US Airways) or required a co-pay (Continental, United Airlines, American Airlines, etc.). The co-pay basically covered the difference – and sometimes even more – to get the fare up to a higher level of total revenue for the airline, plus you were still paying the miles. Certainly the cash outlay was less than most paid business class seats but the cost wasn’t nearly as good.
United Airlines has announced that as of yesterday their elite frequent flyer customers will no longer have to pay those fees on a specific subset of routes. The routes exempted include those within the Lower 48, Canada and Alaska. Flights to Hawaii as well as most international routes will still require a co-pay for the upgrades. The co-pay fees were only introduced in January as part of a shift to permit upgrades from all fare classes. It didn’t last long for the elites.
This policy is strikingly similar to that of Continental, United’s new best buddy and hopeful merger partner. The two carriers have been aligning their frequent flyer programs and benefits for the past several months and adding this into that process isn’t all that surprising. Some of the other program alignments are noted in the links below.
This is a small give-back for a small set of customers, but it is certainly nice to se the airlines do something good for customers every now and then.
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Posted by Seth on May 20, 2010 under News |
I have to admit that I have VERY frequently dreamed of effecting this exact same “prank” here in New York City. Walking down the sidewalk behind a group of folks five abreast who frequently stop or are otherwise impeding the flow of pedestrian traffic is one of those things that simply drives me bonkers. Particularly in a city like New York where so many locals are out walking on the street all the time and where the average speed of those folks is much faster. Someone finally did it.
There was a line painted down the middle of the sidewalk on 5th Avenue between 22nd and 23rd Streets in Manhattan this morning. One side was designated for tourists and the other for locals. Of course, no one actually paid attention to to the “rules” but the dream lives on….
More on this from the NY Daily News here.
Posted by Seth on May 19, 2010 under News |
Alaska Airlines joins the ranks of airlines with in-flight internet service today with their first Aircell gogo equipped aircraft taking to the skies. The service will be available initially on their Boeing 737-800 and 737-900 aircraft. The older –700 and –400 types will be equipped later this year. Similarly, coverage will be available initially for flights in the Lower 48 with service to “key destinations” in Alaska early next year.
The service will be priced similar to how other carriers have been with the introductory bonus, sponsored by Visa, of free service through July 31 using the promo code ALASKAVISA on the logon screen.
Always good to see more connectivity in the air…
Posted by Seth on May 17, 2010 under News |
It is rather uncommon for customers to be happy about an increase in fares. But if the expected new government coalition in the United Kingdom can actually deliver on their platform it stands that the airfares departing UK airport are quite likely to go up, and it might actually be a good thing for many customers. Indeed, it is possible that raising the airfares will result in lower total costs for many passengers.
Following the most recent round of elections there has been a bit of a scramble to establish a coalition government. One set of negotiations – between the Conservatives and the Liberal Democrats – resulted in the publication of their positions on a number of issues. Buried in point number 11, the section discussing environmental policy, is this bit:
The parties agree to implement a full programme of measures to fulfil our joint ambitions for a low carbon and eco-friendly economy, including: …
The replacement of the Air Passenger Duty with a per flight duty.
So how can one tax replacing another make any sense as a good thing for the passengers? In this case it actually does. The APD is assessed on a per-passenger basis currently. The rates are exorbitant for long-haul flights and doubly so for passengers traveling in the premium cabins. Moreover, the APD, as a tax, is charged individually to all customers even on reward bookings. As such a ticket between the UK and the USA can incur more than $200 in taxes alone.By removing the APD as a line-item that the individual passengers must pay it can be expected that the tax burden as an assignable, per-passenger cost will decrease significantly.
The airlines will still have a cost to bear on the per-flight taxes. And to meet this cost it is almost certain that the fares will increase. But that increase won’t be reflected on reward seats. And the airlines will actually be able to legitimately compete on fare pricing, choosing how to price their tickets and still meet their responsibility to the Crown rather than having such a large portion of the fare dictated to them.
Posted by Seth on May 17, 2010 under frequent flyer |
It is always a shame when the airlines make cuts to their loyalty programs. Certainly the value of the points in your accounts is likely to never be better than it is right now, but when the cuts happen they still sting a bit. Continental Airlines has been on a bit of a tear lately with cutting benefits from their offerings. These cuts are affecting both their most frequent customers – those with elite status – and the every day random customers as well. They really all pretty much suck.
So, what are the cuts in question? Some are relatively old news, like charging non-elites for the seats with more legroom. Of course, when they made that announcement they also made it clear that:
Extra legroom really means extra legroom. The seats that we’ll be selling have at least 7 inches of extra legroom. Specifically, our mainline aircraft will offer 10-12 extra inches on average.
So what happened in reality? They realized that they could also sell seats that have nowhere near that much extra legroom for more money, too. They’re charging for access to the bulkhead seats now on mainline aircraft, seats which have nowhere close to 10-12 extra inches. On top of this, those seats are now blocked from assignment prior to the day of travel. So even elites who can get them for no up-charge cannot actually book them in advance. This offers a small benefit to folks booking at the last minute as they have a chance for a decent seat, but it is a pretty raw deal for everyone else. I am looking at potentially flying to Los Angeles for a meeting on Wednesday and I see the bulkhead seats available but I cannot choose them. Not knowing that I can get a better seat has me seriously considering just skipping the flying and calling in instead.
Next up on the chopping block? Complimentary upgrades on flights to and from Lima, Peru. For the past several years (at least 5) flights between Lima and both Houston and Newark were eligible for complimentary upgrades. That benefit disappeared last week with the announcement that upgrades would now incur a mileage charge and likely a cash payment as well, depending on the fare paid for the ticket. What do customers get in exchange for this increase in cost? An ice cream sundae, assuming you’re going to Newark. There will be a minor upgrade in catering on the Newark flights. Folks going to and from Houston actually get nothing different than they do today, other than a guarantee that they’ll be riding in the back of the plane. The airline did actually upgrade everyone with a previously purchased ticket, essentially honoring the complimentary upgrades for folks who bought when that policy was in effect. This was a nice touch to be certain, but new purchases must pay the higher costs going forward. Sure, it is just one route, but that ice cream sundae is pretty damn expensive now.
Finally, there is the issue of their call centers. It was a few months ago that they announced their intention to shutter one of their three facilities, removing about 500 agents from their role. And now trying to get through to actually talk with someone is a tremendous challenge. Yes, the volcano is affecting a number of flights causing more calls than usual. But for a customer to be greeted with a recording stating that too many people are already on hold and that they should call back later, followed by the call disconnecting, is bad for business and bad for the customers. Sure, they’re saving a few bucks on the expense side of the ledger but the costs on the revenue side may eat up those savings and more.
Maybe it is no wonder I haven’t flown on Continental all that much this year. Sure, I’m still collecting points in their OnePass program, but I’m not particularly inclined to pay their asking prices for flights these days; the value simply isn’t there.
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Posted by Seth on May 16, 2010 under frequent flyer, News, points |
I always enjoy reading Chris Elliott’s columns, sometimes because they are really good and sometimes because they are entertainingly bad. He writes them weekly and is syndicated in a number of papers around the country. And his attitude is always a bit, ummm, aggressive towards folks who express extreme loyalty to travel providers. This week’s column is no different. He attacks the concept that the loyalty programs can provide a return on the investment that the members make and even goes so far as to attack a couple airlines for their behavior with regard to their programs.
One of my favorite bits is where he brings in a “consumer advocate” to educate his readers on the fact that the loyalty cards often have a higher interest rate for folks carrying a balance. This isn’t at all new news, but apparently there are enough people blinded by the allure of those free trips all over the world that they are willing to pay extra – a TON extra, really – simply to earn a few points. Those are the people who need the sort of advice that Chris is offering. I wonder if they read his column.
The end of the article, however, drops off quite badly. Elliott cites a couple examples of instances where the airlines provide shoddy service as examples of why loyalty is bad. Should the airline refund a service fee if they cannot actually provide the service? Absolutely. Is their failure to do so a reason to not collect miles? Not that I can tell. Amazingly, he actually continues that same example to suggest that having sufficient loyalty to actually get status on an airline is a bad idea. The only problem in his logic there is that the fee in question is not waived for folks with status. Would someone with status be treated better in that particular scenario? I’m guessing probably not, actually. Does that mean having status is a waste? Again, not usually.
Knowing what you are getting and being rational about it is important. Simply giving up on any loyalty schemes at all because all the airlines have craptacular service these days isn’t the solution. Knowing how to focus your efforts so as to be in a position to get better service is. If I’m traveling that much anyways, you’d better believe I’m going to see if I can get more out of it than just the actual transportation. Maybe not a ton more, but if I can – and, most importantly, if the opportunity cost of that gain is lower than its cost – then I’m absolutely going to go for it.
Incidentally, I’ve accrued over 50,000 elite qualification miles on my primary carrier so far this year; I’m halfway to the top tier qualification level. But I haven’t really been flying them all that much. I’m not willing to pay the higher fares they’re charging. So I fly with partners and credit the miles there. Elliott might not think that there is a rational way to approach the situation but I’m pretty sure I can prove him wrong. Or, as I mentioned to him in an email conversation leading up to this week’s column (none of which was used in the actual column):
For folks who are travelling shorter hops and less frequencies the loyalty doesn’t pay nearly the same returns. For a lower-tier elite the benefits are very thin and they’re probably spending proportionally more of their travel budget on loyalty than they should be, especially with the limited return on that investment. And for the non-elite the benefits of loyalty are almost zero. Sure, you might eventually accumulate the miles for a reward over multiple years or through credit card transactions, but at what cost versus other schemes, such as cash back or other affinity programs?
Giving too much value to the points is a terrible mistake, one that the airlines and hotels and credit card companies have worked very hard to ingrain in the fabric of our society. At dinner the other night I was sitting at the bar and watched as the bartender rang up every tab. Card after card after card passing by and EVERY SINGLE ONE was an affinity card. I really hope all those folks are actually getting value back in excess of what they’re spending. I’m guessing they are not, at least not all of them. But I can hope.
