As a general rule I hate the idea of buying points directly for cash. Even with the occasional US Airways 100% bonus I’m not completely convinced that it is the right move, at least for me. I’m not entirely sure why (or even if) I’m broken that way, but it just doesn’t seem the same. Still, every now and then a deal comes along which screams out to be at least tried. It seems like today is one of those days.
I see this whole obsession as a game of arbitrage, acquiring the points at a discount and redeeming at a higher value. Sometimes that’s not entirely possible. At least not directly. So when an opportunity to play the game in multiple steps comes along I get even more interested, particularly as the associated challenges make it more fun to me. In today’s example it seems that a two step process can yield rather impressive results.
The Icelandic economy collapsed a couple years ago thanks to unfortunate arbitrage plays so maybe their airline is just trying to catch up on the fun. It seems that they’ve got quite the deal available for redemptions on Alaska Airlines flights. Reading OnlineTravelReview this afternoon I came across the details of this deal. Very interesting, indeed. Not only is the current exchange rate from Icelandic Krona to USD or EUR rather favorable right now to folks not in Iceland (arbitrage #1), but the redemption rates of Saga Club points on their partner Alaska Airlines is also quite favorable (arbitrage #2). A glorious deal in the making.
The gist of it is that 30,000 Saga Club points is enough for a first class return ticket on Alaska Airlines metal. Anywhere they fly. And from now until September 28th you can purchase points in the Saga Club program and get a 20% bonus. The cost to purchase 25,000 points – netting 30,000 with the 20% bonus – is only about USD $328. That’s a tremendous bargain. Assuming availability (I’m a bit less inclined to book from the East coast because of that) a trip to Hawaii in first class is going to run you roughly $370. That’s not bad at all.
More details and the original math can be found here.
Alaska Airlines and in-flight internet provider gogo have announced a promotion for passengers to receive 15 minutes of free connectivity in-flight on most of the carrier’s routes. The promotion is valid throughout August 2012 and covers flights on the west coast and in Alaska.
The promotion covers all flights operating wholly within or between the Pacific and Alaska time zones. That’s the lion’s share of the Alaska Airlines route network which means plenty of opportunities for passengers to enjoy the connectivity, at least for a few minutes.
UPDATE: Thanks to the folks pointing out that it is through August, not only in August. In other words, valid now, too. Dunno how I missed it before.
Blah, blah, blah bag fees, blah, blah incremental revenue. Quite frankly, most of these reports reads the same over and over again. It is happening and it isn’t necessarily pretty (nor cheap – $100 for second bag now on United Airlines or Delta between USA and Europe). It is, however, a trend in the industry and one which doesn’t seem to be slowing down any time soon. There have always been some exceptions to the rules which have made things more palatable, especially for folks flying more frequently or in first class. Alaska Airlines has changed that.
The carrier announced this past week that they will begin to charge some first class customers for checked bags, assuming the seat up front came via an upgrade. Those passengers will now be charged $20 for each of their first two checked bags:
Most upgrades will still go to passengers with elite status, passengers who are still exempt from the fees. But this is definitely something of a watershed moment in the chipping away of benefits for first class passengers. Then again, United used to deny upgraders lounge access on some routes but give access to paid customers so maybe it isn’t so new, just a different view of the same old game. Either way, definitely a downgrade in the service on offer.
The wait is over. A couple months after carriers applied to provide service for four new slot pairs at Washington’s Reagan National Airport the DoT has announced the winners of the coveted operating permissions. And the winners are exactly what I predicted back when the applications were revealed:
JetBlue won their first choice of routes, adding service to their quickly growing operation in San Juan, Puerto Rico. Alaska Airlines won their first choice as well, with service to Portland, Oregon being approved. Austin, Texas had two different applications for service; both Southwest and JetBlue indicated that they wanted to add the destination. Southwest was awarded that authority. Virgin America won their only application, adding service to their hub in San Francisco. The route to SFO will be the only of the new operations with direct competition on it; United Airlines is also going to be operating on that route. Southwest will face competition on the proposed through-service aspect of their Austin service to San Diego from US Airways which will operate that route with a non-stop flight.
So no real surprises in the route authorities awarded. Probably for the best; the routes picked were the favorites because they made the most sense based on the economics of the markets. Still, every now and then I do wonder if the DoT has a sense of humor and would award something like the Colorado Springs application Frontier put out there.
Virgin America wants things to be different. Very different. David Cush, the carrier’s CEO recently was interviewed by Scott Mayerowitz from AP and there are a few interesting bits in the Q&A that offer up a rather unique view of how he sees the company fitting in the market and how his old company, American Airlines, is doing these days. Here are a few of the bit I found most entertaining.
Q: How much more are people willing to pay for [food & entertainment on demand] services?
A: The model is getting them to pay the same amount with a much lower production cost.
For a guy who thinks he’s looking at the bigger picture and the long-term view of the airline it is not at all clear how he plans to maintain this approach. Every airline starts out with lower costs initially. The problem is that maintaining that cost structure is incredibly difficult as labor seniority (and the correlated costs) only go up over time. Yes, the new fleet means decent fuel efficiency but that will erode (or require major capital expense) over time as well. Doesn’t seem to be a particularly useful approach to long-term survival.
Q: How can you attract business travelers when your miles can’t be redeemed for Hawaii, Europe or other places you don’t serve?
A: The mile problem will be solved early next year. We have basic agreements with Virgin Atlantic and Virgin Australia that will be fully reciprocal. We also have agreements with Cathay Pacific, Singapore and Emirates that will develop into frequent flier relationships.
This is quite interesting and certainly will be a welcome change. Even if the reciprocity rates aren’t particularly great – and I’d bet they will not be – having more earning and redemption partners is a great thing for customers. Of the independent US-based carriers Alaska Airlines has done the best at this (and they’ve also been around the longest to figure it out) while JetBlue has a minimal partnership with American Airlines. Growing those relationships is about more than just having an interline agreement for ticketing and baggage; it is nice to see Cush recognize that value.
Q: In Dallas, you’re telling fliers to "dump your older airline for a younger, hotter one." American responded by slashing fares to San Francisco and Los Angeles. Can you survive this fare war?
A: We’ll survive. At current fares, it will not be a profitable route but it wouldn’t be such a loss-making one where we would consider any type of reduction. You have to be in Dallas-Fort Worth if you’re going to be a business airline.
This is a particularly interesting view on the value of certain markets (elsewhere in the interview there is also discussion of pulling out of the Toronto market). Apparently there are some markets so important that losing money over a long period of time while serving them is OK. He doesn’t note just how much they’re losing or for how long they’re willing to keep losing that money, but it is quite a claim. Definitely makes me wonder about the long-term plan once again.
Q: Do you think that American is on the right path?
A: It’s hard to tell. There’s a culture there that is perhaps a bit risk-averse. In the past, it was always an airline that was willing to accept risk. The industry’s consolidated around it and all of a sudden American finds itself in third place. I don’t know if they have the answer. I do know their top guys. They’re smart, capable but at some point you need to stick your neck out a little bit if you’re going to get out of a rut.
Well, cutting chunks of the route map is one version of sticking ones neck out, I suppose. For a guy so keen to run a very limited airline with a very limited route network, it seems that telling others who are running a much more complicated setup that they’re not trying hard enough is an entertaining stretch. That’s not to say I think the AA plan is particularly great, but they also cannot really effect wholesale change just by flipping a switch. There’s a lot of momentum to be dealt with there.
Q: Mile for mile, airplanes burn more fuel than cars, trucks or trains. Do you think this poses a problem for the industry?
A: If we don’t find a way to clean up air travel, we’ll become a pariah. We’ll be what the coal companies used to be.
How about, "Planes are ever improving in efficiency and they allow for connectivity in the world and great advances that cannot be had any other way," as a response rather than shying away from the problem with your tail between your legs?
Q: In ten years, do you see Virgin America being a full-blown national airline?
A: That’s not our goal. The biggest discipline we need to have is not outgrowing the model. That means maybe 100, 150 aircraft, probably no more. The goal would be to be consistently profitable, the highest quality airline where we can hopefully make a few hours of people’s day a little bit nicer.
This is perhaps the most interesting of all the responses. It makes sense from one point of view, but that is a very simplistic approach. No airline is going to be all things to all people; the numbers simply don’t work out. At the same time, however, artificially limiting yourself to only serving major cities or only serving limited frequencies is a sure fire way to make sure that you’re not going to meet customer needs. And when serving those markets becomes a matter of entering into markets that area already rather competitive the revenue pressures are going to be even harder. I respect the theory but I don’t think it maps to the real world very well.
It seems to me that most of the answers Cush offers up are rather small-ball or short-sighted views of the market and how to operate successfully in it. Maybe I’m wrong, but I’m certainly not feeling all warm and fuzzy about the company’s future reading his views.
Read the whole story here if you want more.
My decision to finally pick up my first flight on Alaska Airlines was driven mostly by the fact that they operate non-stop flights between Alaska and Hawaii. I think the lines look cool. Apparently that is more than enough to get me started on booking flights. The fact that I had a voucher expiring that I could use for positioning didn’t hurt either.
Pretty much the entire experience I had with Alaska Airlines was a treat. Booking online was easy. When I decided an hour later that I wanted to change the travel date the guy in the call center was more than happy to help out with that. Online check-in worked well, though the mobile site didn’t offer the option to change seats. I took care of that with the full site and snapped up seat 6A on the 737-800. That’s the window at the bulkhead between coach and first and offers plenty of legroom and no hard wall so under seat storage, too.
Dealing with the airport at Anchorage was incredibly easy. I arrived at the airport rental car facility at 1:25pm and was at the gate by 1:35pm. Considering that the flight was at 2:10pm maybe I was cutting it a bit close, but it worked and I got to have lunch with a friend up in Anchorage so it was well worth the risk. I probably even had time to hit up the Board Room and grab a drink before boarding but I was busy planning other shenanigans so I just headed to the gate and then boarded the flight.
Once on board pretty much everything is a paid transaction other than sodas and juices. Want some in flight entertainment? That’s $10 to rent the digEplayer. Food runs $7 for the hot entrees, though I will say that the chicken teriyaki looked pretty good. Booze is $6 which is pretty standard these days for US-based carriers, though there was a nice surprise towards the end of the flight.
The carrier also treats the flights to Hawaii a bit special. The flight attendants have leis and shirts to note the special service and there is a "Flight Plan" card on each seat highlighting the series of in-flight services that will be happening throughout the flight.
The service was friendly and pleasant, though the digEplayer sales did take a while, delaying the first beverage service a bit. There was also a special treat of sorts on this flight: I was buying the first round of drinks for anyone who ordered one. Maybe that skewed my enjoyment of the flight (OK, I’m sure it did a bit) but the flight overall was still quite pleasant.
Had I been in first class (I tried to buy up but it was sold out) I would have received the IFE for free as well as a full meal. I did manage to score a dessert from the F meal and I have to say that it was the best I’ve had on a domestic flight. Even better than the ice cream sundaes.
It was then time for the third service run on the flight. In addition to all the regular drink options this one included a special bit special for Hawaii service: Free Mai Tais! Yeah, it is just the Trader Vic’s plastic jug stuff, but it is still a very nice treat to help make sure that everyone is in the Aloha spirit heading into the descent. There is also a small pack of macadamia nuts as part of the service.
And then, an hour later, we were on the ground in Honolulu. I was off the plane and on my way to theBUS quickly and in my hotel about 75 minutes later.
Yes, I know that my experience isn’t completely typical of an Alaska Airlines flight. Not all of them go to Hawaii and I’m pretty sure there isn’t someone trying to spend a couple hundred dollars on booze every time. Still, I can see why the carrier has such vocal and loyal fans. I would imagine that if I lived on the left coast I’d be one of them.
Anyone ever tried to buy a round of drinks for an entire airplane? I did today and the logistics were surprisingly complicated. Maybe that’s because no one ever does this sort of thing. Or because it is ridiculous. But that mostly just describes me so I gave it a go.
American Express offers a $200 credit to platinum charge cardholders to offset the various fees airlines will hit you with these days. The catch is that it can only be used against one airline and once you choose the carrier you’re stuck with that choice for the whole year. Most of my flying is on airlines where I have status and I rarely check a bag, even when I don’t have status. Plus I get upgraded a fair amount so food and booze are often part of the deal. Nearly a year into the program’s existence I haven’t figured out a scenario where I could reasonably spend that $200.
Sitting a lunch with a friend in Anchorage I decided that today would be the day. I was going to commit my $200 in "fees" credit to Alaska Airlines and get my money’s worth. It is my first flight ever on Alaska and probably my last for the year so committing to spending the $200 on my own is too tall a task. But with a little help it shouldn’t be much of an issue. After all, it is a flight to Honolulu and folks should mostly be pretty happy about that, right? A free drink should make it even better.
After stowing my bag in the overhead bin I made my way back to the galley to explain my plan to the flight attendants.
Me: Hi there! I’ve got a strange situation here. I want to buy drinks. A lot of them.
Me: I want to buy the first round for the whole plane. That’s probably 40-50 drinks, right?
OK, so the quotes aren’t entirely verbatim, but the confusion expressed by the FAs was pretty close. We spent the next 10 minutes chatting about my scheme and trying to figure out the best way to handle the logistics. One option was for her to run the card 30+ times and have me hand the receipts to the lucky drinkers. We threw that one out pretty quickly as way too much work. Eventually we agreed that they’d just do a normal beverage service but rather than charge everyone they would just tally the total drinks consumed and I’d pay the bill at the end of the service.
Because the offer was only revealed after the drink was ordered the initial damage was actually rather limited. We didn’t quite get to the $200 threshold on the first pass. This, of course, raised another issue of trying to figure out how to spend the rest of the credit on board. I made a sign, figuring I’d walk through the cabin offering up the drinks that way.
Ultimately, however, that seemed less friendly. So I just started asking folks if they wanted a drink. I’m wearing a Hawaiian shirt that is similar in color to that of the flight attendants so A few people confused me for that; I even had one ask how to fill out the agricultural declaration form. But once I explained that I’m just a guy buying drinks for anyone who wanted one I did manage to get a few takers. Pretty soon my sales efforts were rewarded and the $200 credit (and a few dollars more) was over. I was willing to keep going (a bit) but the third beverage service is about to start and that means free mai tais for everyone!
I had entirely too much fun on this flight. I don’t know why but flights to Hawaii make me want to have more fun than most. Also, a special thanks to the crew from Alaska Airlines who were willing to help me out on this ridiculous bit of entertainment.
Everyone has a theory on what the best method is for boarding an airplane. Back to front, outside in and random are just a few of the commonly used methods by airlines. And there is no shortage of opinions – both from customers and the carriers – on which is best. Add to the list of folks with an opinion Dr. Jason Steffen. His new method is now being touted as a means to improve boarding times by up to 40%.
The Steffen Method suggests boarding from the outside in (windows first) but also by sequencing passengers back to front and skipping rows along the way. Essentially it creates a system where customers don’t get in the way of each other while in the aisle. That approach eliminates the battles in the aisle as customers put their bags away and take their seats. It looks like this:
Rather than just running computer simulations these researchers actually put the design to test in an almost real-world environment. Sortof. They rented out a movie studio’s 757 mock-up that includes 12 rows of seats. The hired 72 locals to board the plane in 5 different ways and timed the results. In the end the numbers look like this:
So, yes, the Steffen method is fastest, assuming you can get folks to line up in order. But that simply doesn’t happen.
Only Southwest has a boarding where passengers have a specific sequence number rather than just being in a group. The Southwest policy can be best approximated as the "Random" method in the study, though the Random method still had assigned seating so it still doesn’t really map. The authors of the study do acknowledge this, suggesting that without assigned seats the passengers would likely self-select seats that reduce the interference instances and speeding things up.
Block boarding – the historical model of loading passengers in sets of rows back to front – is incredibly inefficient in the manner most airlines implement it. As noted in the study:
Clearly, boarding in blocks of four rows does not help the enplaning process. Blocks of 12 rows, on the other hand, clearly does—the difference between back to front and random boarding (almost 90 seconds) shows this…. [O]nly other considerations would serve to justify its use.
Ultimately none of the results in the studies surprise me. Alaska Airlines recently stated that they found their current boarding process notably less efficient than alternatives but that they also found they could not change to the more efficient means due to the need to provide priority boarding to certain customers. While the study had three parent-child pairs which always boarded first, most airlines who pre-board any group of customers have a much higher percentage of the total number in that pre-boarding group.
And it is those passengers – namely elites – who ultimately ruin the statistics for everyone.
By boarding the elite customers who are scattered throughout the cabin in an inefficient manner the process effectively becomes the equivalent of two or three random boarding groups and then another boarding by whichever policy the particular airline subscribes to. By mixing the boarding styles even greater inefficiencies are introduced into the process.
I would be more interested in the results if the aircraft size being simulated was closer to that of an actual commercial plane. I’d also be more interested if they bothered to include the concept of elite boarding in the process since it seems highly unlikely that will ever go away. In the meantime, however, this certainly makes for a bit of interesting reading.
Check out the full report here (PDF).
JetBlue is launching seasonal service between their focus city in Long Beach, California and Anchorage, Alaska for the 2011 summer. The service, which will operate between 26MAY11 and 05SEP11, will be an evening flight northbound and a redeye southbound.
Fares on the route start as low as $119 each way on the west coast. Connections from the east coast are not priced particularly aggressively but there is still time for those fares to drop in the coming months before the service actually starts. This pricing will be competing with the $347 one way fares that Alaska Airlines currently charges between Anchorage and Los Angeles. Competition appears to be a good thing for the consumer in this case.
Booking is available now at jetblue.com.
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…