Posted by Seth on March 16, 2010 under frequent flyer, points | 
You never know when frequent flyer miles are going to take center stage in a conversation. I’m sure that it is more often than it should when I’m around, though I have been better lately about trying not to always talk about travel. Still, when I sat down at the dentist a few months back and started chatting with my new hygienist the conversation turned to travel. She mentioned her recent engagement and honeymoon planning and my brain went into overdrive. I couldn’t resist.
We started talking about all the options available, which programs made sense (she was already pretty tied to Continental’s OnePass program and Hilton’s HHonors program) and which destinations offered the best bang for the spend. I don’t actually remember the cleaning that day so much or even if it happened (though I have the bill to suggest that it did). We talked about sign-up bonuses for credit cards and bank accounts. We talked about buying points through the US Mint dollar coin program. So much fun for me because she actually wanted to hear it all as opposed to my of my victims.
Six or so months later and I’m back in the office for another cleaning. The first thing out of her mouth was a huge thanks for all the help I provided. We spent the next ten minutes or so going through the itinerary (Hawaii and Fiji) and discussing how they got to use all the points that they earned from the last round of promotions (upgrades all the way through the trip). We chatted about hotels on Waikiki beach (Hyatt being MUCH better than the Hilton Hawaiian Village), a few of my favorite off-the-beach restaurants and things to do other than sitting on the fake beach there.
Finally, when scheduling my next appointment the receptionist mentioned that it will be just after the hygienist returns from the honeymoon, meaning I’ll get the follow-up report, too. It is always fun to have the conversation when the other person in them actually is interested in the information being shared, and hearing about the successful bookings makes it even better. I’m looking forward to hearing about the trip in a few months.
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Posted by Seth on March 3, 2010 under News, frequent flyer |
Continental’s announcement this morning that they will begin charging non-elite members for the seats with the most legroom has raised a number of questions. The company released an internal memo to all employees explaining some of the details behind the program. Here’s what it had to say:
Questions and Answers about CO’s Premium Seat Program
Why not just continue giving the better seats away for free? It has worked for years.
CO is focused on making money, and we aren’t going to be able to do that by doing the same things we have done in the past. There is additional revenue from new products, like extra legroom seats that are already in our coach cabin, that we have not effectively unlocked in the past. It makes no sense to give away the best seats in coach to non-Elites for free. So we are changing that, and will bring in new sources of revenue we’ve not tapped in the past.
Will our customers be willing to pay for extra legroom on the aircraft?
Yes. Certain customers strongly value having more space on the aircraft. On the other hand, some customers don’t value extra space. Customers will pay for the things that they value, and extra legroom is one of those things. Many other airlines like United, Virgin America, Singapore and British Airways have successful programs selling extra legroom.
Which seats on our aircraft are classified as premium seats with extra legroom?
Initially this program is focused on selling seat assignments for exit row seats that have extra legroom. We expect to start selling bulkhead seat assignments in the future. The exact seats that will be available for sale will vary by aircraft type. For example, not every exit row seat has extra legroom, and those seats would not be included in the program.
How much will the premium seats with extra legroom cost?
Pricing will vary based on numerous market characteristics, including length of the flight. We’ll experiment with various prices, and that will give us solid data upon which to base future pricing decisions. For example, extra legroom seats between IAH and EWR might be offered at $59. Certain days like holidays or weekends might get discounted pricing. All check-in applications like continental.com and kiosks will have the prices of seats at check-in.
If the only seats left on the aircraft are premium seats, will we force passengers to pay extra for them?
This is a pretty unlikely scenario, but if it happens, we won’t require a passenger to pay extra to obtain a seat assignment.
Will pass riders have to pay in order to obtain a seat with extra legroom?
No. Pass riders will be given these seats for free when they are available. Charging non-Elite revenue passengers for these seats should increase their availability to pass riders, as there will be customers who don’t value the extra legroom enough to pay for it.
None of the answers are particularly surprising – except for where they expect folks to pay $59 for an exit row from Houston to Newark – but the tone of the email definitely is. Continental’s inclusion of British Airways and Singapore Air in the list of companies that sell extra legroom is also quite interesting considering that those airlines actually have a wholly separate product that they are selling, not just a couple seats on the plane, and their Premium Economy product comes with other benefits as well. And while the bulkhead seats generally offer extra legroom there are also compliance issues with selling those seats. Continental will need to be very careful about that while ensuring that they can meet their obligations for passengers with limited mobility.
Also of note is the comment about bringing in “new sources of revenue” that have not been previously tapped. This leaves the door wide open for the airline to start charging for even more individual benefits than they do today. From the complimentary “meals at mealtime” to carry-on baggage, it is hard to take anything off the table at this point.
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Posted by Seth on March 3, 2010 under News, frequent flyer |
Continental Airlines announced today a new plan to charge for some of their most coveted seats – those with extra legroom. The seats will remain available for top-tier elites to assign in advance with no charge. Non-elite customers who want to sit in them will have to pay during the check-in process to have access to the seats. Pricing has not been announced but it will vary based on the amount of extra legroom, seat recline and flight duration, among other things.
Most interesting in the announcement was this bit:
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, whereas our Continental Express aircraft will be closer to 7 extra inches
There are only two on the 737-700s, three on the 757-200s and 9 on the 757-300s. The 737-800 and 737-900 planes will have 12 seats each in this configuration. Not too bad, though most of these seats are likely to be filled with OnePass elite members. Plus, I’m not really convinced that the exit row seats on the 737-800 and 737-900 planes really have 10″ of extra legroom. I’ll be bringing my tape measure next time I’m on board.
The seats will be available for purchase starting on March 17, 2010 and will only be available at check-in, not in advance.
Of course, this does open the window for an Economy+ style operation similar to what United Airlines offers. United’s E+ does not offer as much extra legroom as Continental is suggesting and it will be difficult for Continental to maintain this offering while increasing the number of seats available in this setup; their 10-12 inches minimum extra space would be very difficult to accomplish without removing a lot of other seats. Still, the opportunity – and the billing infrastructure – will be in place.
Posted by Seth on February 21, 2010 under frequent flyer |
I’ve not spent very much money to maintain hotel status over the past several years. Since I switched my travel to all personal from a mix of personal and business my total hotel spend has decreased significantly while the number of nights I’m in hotels has stayed the same or increased. That raises a tough issue: Is it worthwhile to pay extra to have the status that loyalty programs bring?
The question has been brought to the forefront for me this week with an email I received from Marriott. They are offering the opportunity to buy back elite status for their Marriott Rewards members and they’re discounting the number of points required for that renewal right now. As Gary has reported, Gold buy-back can be had for 25,000 points, a discount of 15,000 points off the regular price. In my case, the offer is to buy back Silver status for 7,500 points, a 12,500-point savings.
And I still think that both offers are a pretty cruddy deal. The 7,500 points for Silver is the equivalent of one night in a Category 1 level hotel. That’s not all that much money in spend but the value for the spend is pretty much nothing. The value for Gold status is somewhat higher but it still doesn’t make much sense to me. If you’re not actually staying enough to use the benefits why pay extra to have them? Maybe if the interruption in travel was a one-time thing due to a change in travel patterns or something like that, but for me it makes no sense at all. I’m not going to get the value and I know it. No need to spend extra for it.
Posted by Seth on February 3, 2010 under News, frequent flyer, points |
Frequent traveler loyalty programs often like to subtly point out their advantages over competitors. Whether it was bragging about no blackout dates back in the day (most programs offer that these days) or pointing out variations in upgrade policies, raising the differences help the programs differentiate themselves and attract customers. The comparisons are generally rather passive; no need to outright attack the other programs.
Priority Club, the frequent guest program for Holiday Inn, Intercontinental and several other brands, has decided to skip the subtlety with their latest promotion. They’re attacking Hilton’s HHonors program with a full frontal assault and they aren’t shy about it at all. The promo is titled “The Luckiest Loser.” It goes after Hilton’s recent rewriting of their reward charts where, on average, the value of HHonors points dropped about 20%. Priority Club is offering folks who are feeling a bit jilted by the devaluation an opportunity to get some of those points back in the form of Priority Club points. Here’s how the promo works:
- We’ll automatically "give you back" 1,000 Priority Club points
- If you’re one of the top 20,000 "Lucky Losers," you will gain back up to 20% of your current HHonors balance in Priority Club points (up to 20,000 points)
- If you’re "The Luckiest Loser," you’ll win 2 million Priority Club points
It is a pretty smart promo in terms of what they are offering and generating some buzz. And the way they are going after HHonors directly is definitely more aggressive than programs have been in the past. It will be interesting to see if this sort of aggressiveness carries over to other programs.
Read more on the Priority Club promo here.
Posted by Seth on January 29, 2010 under frequent flyer |
Nearly a year ago American Airlines sent a letter to the IRS defining about 40 different “services” that the carrier offers to its customers. They asked for specific rulings on each of the 40 with respect to § 4261 of the IRS code, the section that covers the specific activities for which the airlines are required to collect and remit taxes. In general such a document wouldn’t be all that interesting, but there are a couple things that this particular one has in it that are worth noting. The impact on taxes for baggage fees has already been covered, and that is reasonably interesting, but there are two specific entries in the services list that describe potential future offerings. These are the two bits that piqued my interests most.
- Service P allows Members to purchase “bonus” Miles (i.e., double or triple miles) on certain flights to be credited to the Member’s Account. Currently, this service is occasionally offered to members free of charge on a limited-time basis. However, Taxpayer is preparing to offer Service P for a fee.
United Airlines currently offers a program similar to that identified as “Service P” above. They call it their Award Accelerator and it is generally a pretty bad deal; the points are too expensive. Continental also offfers something similar with their “Extra Mile” promo every year. So American wouldn’t be breaking new ground with such a more. Still, it would be an interesting move to see American attempt to further monetize their frequent flyer program and cash in on the obsession with points.
- Service CC allows Members to redeem Miles for the purchase of air transportation on Taxpayer’s website. At the time this letter ruling request was issued, Taxpayer was not charging a fee for Service CC. Taxpayer is, however, contemplating implementation of a fee for this service. The fee would be charged at the time of ticketing.
This one is a bit more worrisome from the consumer perspective. It suggests that AA is considering adding a booking fee for reward ticket reservations made through the website. Currently most airlines charge for such reservations when they are booked through the call center. Extending that out to bookings made online would be quite a leap. Currently there are a couple airlines that have such “convenience fees” for bookings but it would be quite a shock for a legacy carrier to start down that route. The verbiage is sufficiently different – “contemplating implementation” versus “preparing to offer” – that it doesn’t seem likely such charges are imminent, but it is out there now and intriguing enough to raise an eyebrow or two.
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Posted by Seth on January 28, 2010 under News, frequent flyer |
jetBlue is making major changes to their systems this weekend, starting on Friday afternoon and scheduled to finish on Saturday, that are expected to interrupt their operations throughout their network. These upgrades are for the reservations and flight scheduling systems that run the back-office functions at the carrier, and the upgrade is nothing short of huge. The new system, SabreSonic, allows for a number of new features to be included in the booking, ticketing and operational processes that the carrier deals with on a daily basis. It means that things like interlining and codesharing with other carriers will be possible, allowing for tighter integration with partner Lufthansa, for example.
Just how significant are the interruptions to operations during this upgrade? Very is an understatement. Here are some of the details that jetBlue provided to their customers:
- Travelers will be unable to book flights or make changes to reservations. If your matter is urgent and you need to book a flight or make changes to flights during this period, you can do so only at the airport.
- Flight status will be unavailable.
- Online check-in will be unavailable.
- Reservation agents will be unable to book flights or make changes to reservations. If your matter is urgent and you need to book a flight or make changes during this period, you can do so only at the airport.
And that’s just for making new plans. At the airport things are going to be pretty bad, too. Again, from jetBlue:
- Check-in and bag-drop lines will be longer during and immediately after the transition.
- We recommend that you arrive at the airport:
- Two hours before your scheduled departure for domestic flights.
- Three hours before your scheduled departure for international flights.
It is going to be a rough weekend for customers and the fact that it is snowing in New York City right now probably isn’t helping things. Of course, the carrier will be monitoring the weather situation and can always pull the plug prior to starting the changeover. No matter what, this change needs to happen and the carrier will come out of the deal in a better situation. Here’s hoping that they can make the transition with minimal pain for their customers.
Fortunately I’ve got 6 weeks until my next jetBlue flight, plenty of time for them to work the kinks out.
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Posted by Seth on January 27, 2010 under News, Trip Reports, frequent flyer, media coverage |
Back in November when me and 220 other aerophiles were jetting around in a chartered Boeing 757-300 there were a couple reporters along for the ride. They each focused on different aspects of why all all of us were there and what motivates us to travel as much as we do. Some of them got it and some of them most certainly did not. But none of them managed to relay the story quite as eloquently as Greg Lindsay, writing in the February 2010 issue of Condé Nast Traveler magazine.
His article, Triumph of the Air Warriors captures the spirit of that specific trip as well as the joy that many frequent flyers find in hunting down deals, identifying loopholes and otherwise fighting back just a little bit against a system that is decidedly stacked against the customer.
"I call it Airworld," Bingham says in the novel by Walter Kirn on which [Up in the Air] is based. "The scene, the place, the style. . . . Airworld is a nation within a nation, with its own language, architecture, mood, and even its own currency—the token economy of airline bonus miles that I’ve come to value more than dollars. Inflation doesn’t degrade them. They’re not taxed. They’re private property in its purest form."
For you, Airworld is the nowhere you pass through on your way to a meeting or a vacation. It’s the series of tubes from security to your gate, and to the rental car lots, chain hotels, and fast-casual restaurants. At every stop, if you’re savvy, you earn precious miles. American Airlines launched the first frequent-flier program almost 30 years ago on a lark; United followed suit a week later. Therein lies the tale—and many free trips to Hawaii. These led to real-life Clooneys endlessly chasing miles—and who knows what else.
And that’s what it is for me. The chase of the miles. The hunt for bargains. The chase for new cities, airlines, aircraft or just random trips that I’m just crazy enough to take. Lindsay spoke with a couple dozen “Air Warriors” – residents of AirWorld – about their adventures. And the stories we tell are full of frivolity, challenges and conquests. From one guy’s tale of his earliest memory – falling down the stairs of a 747 as a three year old – to a story of a mass revolution against an airline’s declining product quality, the stories are great reads.
Plus, I’m quoted a few times in the article; I’m sure that contributes to my appreciation of it.
You can read it here (http://www.concierge.com/cntraveler/articles/502250) or pick up a copy on the newsstands. The print version has a pretty awesome photo, too.
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Posted by Seth on January 18, 2010 under News, frequent flyer |
It has been barely six weeks since the new management team stepped in at bmi, the British carrier that Lufthansa took full ownership of several months ago. But the new management team hasn’t wasted any time in making rather drastic changes to the airline, its service offerings and its frequent flyer loyalty program. First there were the cuts to the mid-haul service and the announcement that the Airbus A330s would be returned after the lease expired in early 2010. Then there were the announcements of the Dublin crew base closures and cuts to the service between that city and London. And then they started strictly enforcing some of the previously unenforced rules of their loyalty program, trimming a bit of value out for folks looking to redeem in premium cabin service.
Today’s announcement, however, seems to be a rather major milestone in the efforts to completely reform the carrier into less of a stand-alone brand and into more of a regional feeder carrier. As of January 27, 2010 – only 10 days out – the carrier is cutting business class service on all its domestic UK and Dublin flights, switching to an economy-only product.
They will be introducing “Flexible Economy” fares as part of the cuts. These fares seem to be comparably expensive – less the APD tax differences – and earn the same Diamond Club miles as the business class seats did. They come with complimentary snacks and drinks and seats in the front of the plane. They even include access to lounge facilities in most destinations. In other words, they’re just like the business class seats used to be but without the name “business class” attached.
So roughly the same product with a slightly different name probably shouldn’t raise too many red flags for most folks, right? Well, except for the few very loyal domestic bmi customers you’d be right. The perks being cut affect the few customers who were generally paying more to fly on bmi than on competitors based on the benefits that the program offered in the form of upgrades and free snacks on the flights, two things that used to be a big part of the elite benefits for those flights. They’re gone now and that leaves a lot of customers wondering where the benefits are for the increased spend.
Ultimately this actually seems like it is the right move for the carrier to make. The service wasn’t really anything like an actual business class product so at least they won’t have disappointed customers who thought they were buying one thing and end up get something rather different. And the “out-the-door” price of the flights drops by about £20 thanks to the APD cut. That’s going to work out well for them from a competitive pricing perspective. But it is also yet another in a series of recent changes that have slowly chipped away at the value of the bmi product and loyalty program. It isn’t much of a surprise that this is happening – Lufthansa is in charge now and they actually want to change the carrier into a profitable organization – but it also raises some concerns about what may be just around the corner for folks holding a lot of Diamond Club points. They’re almost certainly going to become Miles & More points sooner or later and the pace of these other changes suggests that the case is likely to be sooner.
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