Posted by Seth Miller on May 22, 2013 under frequent flyer, points | 
Want to save hundreds of dollars in fuel surcharges on Qantas award flights between Australia and Europe? Turns out it is a trivial task.
Photo from the Qantas/Emirates flyover of Sydney Harbour courtesy of Qantas
Thanks to the recent partnership between Qantas and Emirates has created a number of interesting arbitrage opportunities for members of the Qantas Frequent Flyer program. Included in that is a sizable gap in the fuel surcharge the two carriers levy for similar trips:
Travellers wanting to fly economy from Australia to London return have been able to escape paying $610 in fuel surcharges by redeeming their frequent-flyer points on an Emirates flight rather than Qantas.
…
A passenger flying one-way in economy or business on Qantas from Australia to Europe has to pay $380 in fuel surcharges, while on a flight to the US it is $340 and to Asia $175.
In contrast, Emirates charges $75 in fuel surcharges for a one-way economy ticket to Europe, and $30 to Asia. For business class, the surcharge for Europe is $230 and for Asia $165.
And the part where Qantas made searching for Emirates award seats incredibly easy by integrating such into their online award booking engine isn’t hurting the situation either.
The bad news for customers is that the two carriers are set to meet in the coming weeks to discuss this issue, among other things. Apparently they recognize the issues they’ve created for themselves.
Of course, this is not the only place where similar routes can attract widely varying fuel surcharges depending on the operating carrier of the routes. American Airlines will pass on the YQ from British Airways when redeeming AAdvantage points on BA metal while a similar flight on AA metal has no surcharge. ANA’s Mileage Club or Aeroplan have similar variations for partner flights. Certainly not a fuel dump in the traditional sense of the term, but the net savings apply in roughly the same manner.
If anything is unique about the Qantas/Emirates situation it is that they are apparently trying to address it rather than just hoping for the best.
Related Posts:
Posted by Seth Miller on May 20, 2013 under frequent flyer, Hotel, points |
When hotel booking engine PointsHound started up late last year there were some notable limitations to the service. Most significantly, like other OTAs, bookings made through the site would not earn points or stays in the hotel loyalty programs. While that’s no problem for some customers (like me) it is a deal-breaker for others. Earlier this year the company quietly introduced a limited collection of hotels where they are now able to offer elite benefits and points earning for stays, in addition to the airline miles for bookings. It turns out Hilton HHonors is no longer the only way to “double dip.”
That initial work was more a proof of concept than a final product. This past weekend the PointsHound team finished a major update to their site and one of the big changes was that they now have more than 3,200 hotels across 115 US markets where their customers can “Double Up” on bookings.
Searching their list of hotels you may come across an orange icon at the bottom of the entry which looks like this:
Book that hotel and you’ll earn both the airline points from PointsHound for the booking and also all the traditional benefits which come from direct booking through the hotel’s website.
Here are the rates for a PointsHound-only room and a double earning rate (and, just for fun, the direct booking rate) at a couple hotels on the same night for the same room:
A Westin:
For the same per-day rate you can walk away with 2600 free United Points (based on being a Level 2 PointsHound user). Or take slightly fewer points and a non-refundable rate and save some cash on the nightly price.
A Hyatt Place:
A Marriott:
In the case of the Hyatt Place stay you are potentially giving up 100 airline points in favor of earning your Hyatt Gold Passport points. In the case of the Marriott you actually get MORE points by booking it as a stay which also earns Marriot Rewards points. And in each case you’re getting more benefits than just booking directly through the hotel’s site directly.
Of course, there is the rather notable catch that the option doesn’t exist in all cities, much less all hotels in any given city. Still, if the option works for the location you’re in and the property you’re interested in that’s a nice win. In cases where the price and earnings are otherwise the same this might even be enough to sway someone like me – a skeptic on the value of hotel points – to go for a booking engine which allows lots of earning options.
Also worth noting is that PointsHound has a promo out for some bloggers now whereby you can get a 60-day trial of Level 2 status (more points earned per night) and 250 bonus points for signing up completing your first stay and the blogger gets 250 points. I’m pretty sure Gary even negotiated that the user can get all 500 if you want to sign up there. If you want the bonus points and Level 2 status you can use my referral link here. The main link atop the post is a generic one.
Related Posts:
Posted by Seth Miller on May 17, 2013 under frequent flyer, News |
‘Tis the season for changes to flight change fees, it would seem, and JetBlue got in on the action this week. Yes, the change fees went up 50% ($50->$75 for cheap fares and $100->$150 for more expensive tickets) but the news isn’t all bad. There is now a tiered fee schedule for flight changes which is arguably more fair than most airlines (short of not charging any fees). And, for their Mosaic members the new rules are even more generous – no more fees.
For regular customers there is now a 60 day cut-off point where the fees change in price. Here’s what the schedule looks like now:
For customers who fly JetBlue enough to rate the Mosaic badge elite status, the changes are even better. No fees at all. Ever. Even if you cancel the ticket for a full refund credit.
Beginning with bookings made on May 17, 2013, Members with a valid TrueBlue Mosaic badge will not pay the applicable JetBlue change/cancellation fee when they change or cancel their JetBlue flight or JetBlue Getaways vacation reservation by calling JetBlue. The change/cancel fee will also be waived for any traveler on the same reservation as the Mosaic member…. Mosaic members must call JetBlue to change or cancel their reservation in order to receive the fee waiver benefit; any change or cancellation made online will not qualify for this benefit.
This new policy is a step up from matches that of Alaska Airlines, the other carrier with a published policy of fee waivers for top elites. In the Alaska Airlines case it is only a waiver of change fees, not for canceling a trip, too. Even Southwest won’t refund tickets (just no change fee). JetBlue has essentially made every ticket fully refundable for their top elites. That’s huge.
JetBlue continues to respect that change fees more than the fare itself are silly, so that’s a good thing. And the 60-day split is likely a more accurate reflection of the resale challenges of that same space, made a bit more challenging because JetBlue doesn’t overbook as a matter of policy. But the biggest winners here – by far – are the Mosaic members. No more fees ever makes it incredibly easy to justify buying more of their tickets on JetBlue more often.
Also, there is still the free repricing of the same flight for a credit if the fare goes down which is available to all customers.
Related Posts:
Posted by Seth Miller on May 16, 2013 under frequent flyer, News, points |
For nearly the past decade earning points for flights within Norway was not possible thanks to laws designed to encourage competition and prevent one airline from using their loyalty program to unduly attract or retain customers. Apparently (at least according to them) the rule worked and there is now sufficient competition in the market such that the rule has outlived its usefulness. It is not clear when the airlines will start to permit accrual on these flights (or, in the case of SAS, when their Star Alliance partners will update the rules). From the Google translate version of the announcement:
Government shares the concern expressed Competition for competition in the aviation industry, particularly in rural areas, when bonus ban repealed. But today there are two major players in the Norwegian market, and competition is more robust than when regulation was introduced in 2007.
Norwegian Air is the second carrier and they have grown significantly in both the domestic and regional markets. They’re introducing long-haul service this summer to Bangkok and New York City, too.
Also in the same announcement is this bit:
The Government will also examine the possibility of laws on the bonus points earned in employment attributable to the person paying for, normally the employer. The purpose of this study will be to examine whether it can reduce the administrative burden of enforcing taxation of the private use of bonus points earned on business travel as well as any negative competitive effects of repeal regulations.
Apparently letting the traveler keep the points rather than crediting them to the company buying the ticket raises tax issues. Hopefully the IRS doesn’t get any similar ideas.
Related Posts:
Posted by Seth Miller on May 10, 2013 under frequent flyer, Wandering Aramean Travel Tools |
Ever find yourself thinking about a trip and not really caring about where you’re going, so long as you can get somewhere across the ocean? Me, too. Of course, finding that seat is often an iterative process, figuring out what routes to check and plugging them all in to your favorite award search engine, hoping to get back a hit. I figured there was probably a better way and, leveraging the data I’ve been compiling about what non-stop routes are available across the Atlantic, I’ve managed to put something together which I think is a pretty cool award alert option. In short, you pick one of the 60 Star Alliance TATL gateways and a date and it will search all the options for you.
Here’s what my search parameters look like (figure a couple weeks in Europe for Christmas/New Years):
And here are the results I got for my query
Not necessarily flights I’d go out of my way to book, but it definitely gets me closer to figuring out where to visit and what to check for the local positioning flights to make it happen.
To set up such a search you can use the new Star Alliance (ANA) search method I’ve added to the Wandering Aramean Travel Tools site this week. Just leave the to or from city blank for the wildcard search to work. Note that you must pick a gateway city and it will only search the routes served TATL from that gateway. If you pick a non-gateway city and leave the other half blank you’ll get an error.
You can also use it as an alert option for other routes by specifying both ends of the trip; that functionality is obviously a bit different but it should be working as well.
These new features are very much in beta right now and I know there are a couple things which aren’t 100%, mostly with respect to searching specific carriers or flight numbers. I hope to have that addressed in the next few days. In the meantime, however, I figured this was worth getting out there so people could start to play with it a bit.
One other thing about these new searches: They are much more resource-intensive versus the other Star Alliance searches/alerts. Because of that I have to limit the use. For regular subscribers that means a maximum of 2 ANA-based alerts active at any time. For First Class members the limit is 10. I’ll keep an eye on the system performance and see about upping the allowance if things are running OK but that’s where I’ve got to be for right now.
If you’ve got any questions feel free to ask. And if you find any bugs please do share.
Posted by Seth Miller on May 3, 2013 under frequent flyer |
It is no secret that the best conversations at larger events happen in the margins. Smaller conversations among more intimate groups naturally tend to be more interesting, more educational and more valuable than huge lectures. That’s not to say that the big sessions are bad; it is just a function of the way events like that run. This past weekend at FTU outside DC was no exception to that rule (even though I do think my presentation was pretty good). I had a great time talking with old friends in the halls and at the bar and also in meeting new friends throughout the weekend. There were three specific women I met, however, who completely blew my mind.
I was sitting in the lobby bar around 7:30 on Saturday evening, chatting with a couple guys when the three women sat down at the other end of the couch area we were in. One was holding a sign from the event they had been at earlier in the afternoon. It turns out that they were in town celebrating their 55th high school reunion and the sign was a photo of one of them from that year. Upon realizing this I insisted that she let me take a photo of her with the older photo; she obliged. And then we got to chatting. They figured out that we were talking about miles and travel and such and they were curious about the details. I’m never one to shy away from the opportunity to tell a story so we started chatting.
Explaining to someone the crazy which is mileage running, credit card churning and flying to Perth just for dinner is often an awkward situation. Most folks either don’t get it or just don’t want to. And that’s fine, but it does mean that story-time can be a bit awkward. Fortunately, being that awkward guy rarely stops me. I had only barely begun to start explaining when one of the three piped up that she was a 3MMer with American, mostly from commuting to Argentina and back for many years. Another shared that she had been a flight attendant for Pan Am at one point and still travels a ton, though she was also frustrated by challenges in redeeming her SkyMiles. The third was sitting on a pile of US Airways points and was worried about the merger and what that might mean.
It turns out they were mileage junkies, just like us.
Hearing them talk about their CC habits – Chase Sapphire Preferred for travel/dining charges and AmEx Platinum for the lounge access – was awesome. They were certainly not the most advanced users in the room, but they were also far from beginners. I invited them to join us in the morning for the Sunday sessions and one actually did. She was engaged, asking questions and truly interested in learning more about this crazy hobby we all share.
So next time someone suggests that there is a specific stereotype which makes up the frequent flyer community I’d suggest opening your eyes a bit wider. Turns out that just about anyone can be in on the game and have a lot of fun doing it. These three certainly were.
Posted by Seth Miller on May 2, 2013 under frequent flyer, News, PaxEx, points |
Airlines are looking to cut costs in just about every way imaginable. For Frontier airlines a major focus on that front has been encouraging customers to book on their website rather than through 3rd party sites (OTAs). The OTA bookings cost the airlines a lot of money and saving those margins can be significant, particularly for a smaller airline which is struggling as it is.
Last September Frontier cut mileage earning on OTA tickets to 50%. At that time they also increased most fees by $50 for fares not booked directly. It was hoped that would help increase direct bookings. In March of this year Frontier pulled their inventory from Expedia, cutting distribution costs but also reducing the potential bookings. And, this week, they’ve taken this a step further, announcing that they have "Enhance[d] Services for Customers Using FlyFrontier.com." Yes, they used the word "enhance" in the ironic form.
The latest changes see more cuts for customers booking OTA-issued tickets. Carry-on bags will now come with a fee – up to $100 at the gate – for the cheapest fares booked through 3rd party sites. "With this change, we are ensuring that our most loyal customers – Ascent and Summit level members of EarlyReturns®, those who book Economy, Classic and Classic Plus tickets, including all customers who book through FlyFrontier.com, will have more space onboard the aircraft for their carry-on bags,” said David Siegel, Frontier’s chief executive officer. The effective date for the carry-on charges has not yet been set.
Charges are also coming for in-flight beverages. Effective July 1, 2013, customers who purchase Economy or Basic fares will be charged $1.99 for coffee, tea, soda and juice. On the plus side, that $2 will entitle customers to the whole can of soda or to unlimited refills on coffee. No word on if they’ll charge again if you want more hot water for your tea. Customers who purchase a higher fare or who have elite status will need to show their boarding pass or elite card to have the beverage fees waived.
And, on the mileage front, the fares which were earning only 50% when purchased through an OTA will see that number further reduced, down to 25%.
There’s a whole lot of hurt in this latest round of changes. It is hard to believe that things will end well for Frontier out of these moves. Maybe it will shift the consumer behavior but I get the feeling more customers are going to buy their tickets through an OTA, get annoyed at the lower service levels and then choose a different carrier on the OTA rather than change their buying habits. I suppose we’ll see soon enough.
Related Posts
Posted by Seth Miller on May 2, 2013 under frequent flyer, points |
As part of the FTU event last weekend I presented a session on maximizing United’s MileagePlus program. I don’t think that there is anything particularly groundbreaking in the content, but I do think that it is a good reminder of how their award chart works (or doesn’t in some cases) and how a bit of thought can help you book some pretty incredible awards for the same price (or less!) as a more traditional award.
At the beginning of the session I asked the crowd what they were in the program for. I was quite surprised – and pleased – that domestic upgrades were at the bottom of the list. That’s a good thing in the United program as those upgrades are less forthcoming than with other airlines. Most people were interested in the awards and routing rules and I think that is still an area where United shines. Maybe too much, and I don’t expect it to last forever, but for now the opportunities truly are grand.
I’ve posted the slides online here. I’m not entirely sure that they’re actually going to be completely useful without the conversation as they’re more of an outline than a detailed analysis of what to do and how to book the awards. But I do think they can get you started on where some of the sweet spots are in the awards and how to think about the travel options so that you can get more from the trips you’re taking. If nothing else, they’re a good way to start a conversation on just what can be done.
Give them a look if you’re interested and let’s have that conversation, either in the comments here, on FlyerTalk, on MilePoint, via email or however else works for you.
Posted by Seth Miller on May 1, 2013 under frequent flyer, points |
How do you react when the head of a major airline loyalty program so bluntly states their case? More to the point, what do you say to the person wondering why they don’t get retention bonuses comparable to sign-up bonuses on an annual basis. Do you believe the programs when they say something like, "Every time we tweak [the benefits] we try to take off something that not many people are using and add something that we think more people will use."
Both the headline of this post and the above quote were offered up by Jeff Robertson, VP SkyMiles, during a session last week at the Executive Travel Summit outside DC. Robertson also offered insight as to why a less valued customer – one who doesn’t hit the spend requirements for Medallion status, for example – can suddenly become valuable enough to rate the status with $25,000 spend on a credit card. Unsurprisingly, it is because Delta will have made a lot of money based on that spend, pushing the customer past the value tipping point into being considered worth rewarding.
Throughout the five days I was at the sessions it was interesting to hear the different views of the parties involved. Sure, consumers want more and airlines want to give less. Airlines say the costs to provide the benefits are going up (as are airfares and load factors, so not too hard to believe). Customers say they want long-term loyalty to be rewarded, among other things. What was particularly interesting to me was hearing the view the credit card companies have on the topic.
Sure, the CC folks are incredibly biased. But that doesn’t mean the ideas they have cannot be solid. David Rabkin, SVP Consumer co-brands for American Express offered up a few views which seem pretty similar to the two-way street discussion, but which also have me wondering about which types of loyalty are the ones really worth rewarding. Using two different examples Rabkin quite clearly indicated that share of wallet is more valuable from a loyalty perspective than total revenue. In one instance it was a simple comment about credit card spending, "Someone who gives a high percentage of spend is loyal, even if it isn’t as much money as someone who spends a lot of money but across different cards…. The guy who only has a small wallet and gives you all of it is golden; give him all the rewards you can."
The second example offered up three hypothetical customers:
- Very frequent domestic lowest-fare customer
- Multiple long-haul F customer, but who also flies on competitors
- Credit card user who pulls your co-branded card out thrice daily
Of these, Rabkin made the argument that #3 was the best customer for the airline in terms of loyalty. Or, as he stated in the session (slightly paraphrased):
We love that guy who is flying in the back of the plane but he’s not making us any money. We love the $10k fare but he’s not loyal. We have to focus on the guy who is bringing us the best revenue.
I certainly agree with rewarding the best revenue more than the other options, but I’m not nearly as convinced that share of spend matters so much as total volume. That’s not to say either is 100% important or not, but earning the majority of revenue from a customer based on 3rd-party transactions is a strange way to believe they’re loyal to me. At another session over the weekend there was some discussion of lesser-known loyalty programs and how some of them (BMI was the big name in this space previously) were shells which seemed to be associated with an airline but where the bulk of the points activity seemed to be wholly third party. There are a couple still out there today. What happens when the operations of the loyalty program become so completely disconnected from the operations of the airline? Is that a sustainable way to run the business? Sure, the airlines get to manufacture the award inventory on their own planes, but when partners get involved there are a lot of variables they don’t control, and that can be a challenge.
Ultimately, considering that 60% of points earning these days happens outside of flying (I thought the number would be higher) it isn’t all that hard to believe that Rabkin is correct in who the most valuable customer is. But does that make them the most loyal? And is that the loyalty to be rewarded?
And then there is the final theme which was pervasive throughout the sessions, "Miles are a relic of history. In the next 5 years, maybe 3, programs will be revenue based." That’s a direct quote from an industry insider and I think that the timeline is probably about right.
The industry is entering into a period of significant change in the coming years. There is significant pressure to reward the right types of loyalty, not just time on a plane and not just absolute spend. There will be moves to shore up programs, ensuring that they remain revenue positive for the airlines while also not losing too much in the competitive landscape. Then again, with less competition, that is much easier to do. It isn’t like there are any programs out there which are ridiculously generous across the board.
Posted by Seth Miller on April 30, 2013 under frequent flyer, points |
I had the opportunity last week to sit in on an industry conference focused on loyalty programs, points and consumer behavior. Not surprisingly, a decent amount of the conversations were around credit cards and how they are shifting (or have already shifted) the market. One of the sessions offered a comparison of airline versus bank rewards cards and the results were, to some extent, surprising to me. Here are a couple of the results they showed:
Of course, the numbers are based on certain assumptions, and those assumptions are based on averages, not the extremes. And even the average numbers they’re using are flawed, I believe (assumes $18K annual CC activity). But the overall concept is still interesting. The general conclusion reached is that the cash-back cards are more valuable than points-based cards when the end goal is domestic leisure travel. And, quite frankly, I cannot argue that conclusion.
The real differentiation point, in my view, is what the customer is actually looking to get out of their travel rewards spending. That aspect of the equation is often overlooked in these sorts of reports. Analysis which starts given a certain set of assumptions will invariably reach those conclusions. This report starts with the assumption that only domestic seats bookable online are desired by customers and, unsurprisingly, gets to the result that the co-branded cards from airlines are pretty bad at providing that benefit. Ironically, the airlines can (at least in theory) provide the benefits at a lower cost given their control of inventory and the ability to offer only distressed inventory towards award redemption.
On the plus side, the analysis is pretty good at showing the disparity between year one and subsequent years. That’s as good a way as any to remind consumers that their loyalty is being bought, and that they should consider being sold on a regular basis. Somewhat ironic that they are so up-front about this when at the same time the airline folks at the event were saying things like, “Loyalty has to be a two way street; otherwise it is just bribery and that’s not sustainable.”
If you want to read the full report it can be found here.
