Posted by Seth on May 20, 2011 under frequent flyer, points | 
United Airlines has finally stepped up in the ever escalating battle over the San Francisco/Los Angeles-Chicago market, adding a targeted double EQM promotion for locals flying between those cities. The new promotion, however, has sufficient fine print that it isn’t nearly as good a deal as it could have been or that American Airlines is offering. The promotion is valid through the end of August 2011.
Like usual, United is only offering the bonus to itineraries ticketed after the bonus was announced (19 May 2011). This is unfortunate but given the goal of driving new revenue it is somewhat understandable. And the offer is targeted at Mileage Plus members living in California and Illinois only. Also restrictive but most promotions are more targeted than not these days so not particularly surprising. The other significant clause, however, is much more limiting:
Offer valid on nonstop flights between Chicago O’Hare (ORD) airport and Los Angeles (LAX) or San Francisco (SFO), on roundtrip itineraries for travel solely between Chicago O’Hare and Los Angeles (LAX) or San Francisco (SFO) and not on any connecting or additional city on the ticket.
That last bit is pretty severe. Historically this sort of promotion has been available so long as the passenger is flying between the cities mentioned, even if they continue onwards at one end or the other. By setting up the rules this way United is effectively increasing the costs of participating in the promotion. Hard to blame them for trying to be as specific as possible in rewarding targeted behavior, though it does mean that the promo is not nearly as useful for many folks.
Registration is required: http://united.com/offer/mpd771.
Posted by Seth on April 13, 2011 under frequent flyer, Mileage Run, points, Trip Reports |
There’s really nothing quick about this trip. The Pan Am Clipper could make it from New York City to Seattle faster than I will. But the itinerary sure is an entertaining one.
It all started when there was a mistake loaded in the routing rules for Continental flights between the two cities. Most fares are limited to non-stop flights only or just a couple connections in a specific sequence. This particular fare, however, had pretty much no rules. If you could dream it – and if you could get a booking engine to process it – then you could connect pretty much anywhere in the Americas en route between the two cities. It was, in Mileage Run terms, a gold mine, particularly given that multi-stop routings are harder and harder to find.
Connections in Bogota, Panama City, Panama and Florida worked. So did connections in Hawaii. And that is how I find myself passing over the Golden Gate Bridge, headed westbound to Honolulu, on my way to Seattle. Some folks managed to be even more creative than I was, with multiple trips between the mainland and Hawaii on the same ticket. Me? I’m settling for a six-segment routing that covers Hawaii, Texas, Florida, Ohio and Illinois.
The look on the ticket agent’s face when I asked her to print my boarding passes was fantastic. As she traced my itinerary segment-by-segment and counted off the connecting cities, each more the wrong direction than the next, the confusion changed to shock and then disbelief. The part where she called me crazy was pretty entertaining, too. And the fact that she’s not wrong doesn’t hurt the situation.
All told, I’m flying somewhere around 12,000 miles instead of the normal ~2,400 miles to get there. Definitely not normal, but for the price it is hard to beat. Most the segments got upgraded and I’ve got power at my seat so I’m getting some work done and relaxing. A friendly group of flight attendants, one of whom recently celebrated her 40th anniversary with the company and who is still hustling up and down the aisles, certainly helps the time pass quickly as well.
Six hours down, thirty to go, and the trip is great so far. We’ll see how I feel tomorrow after a few more hours inside the aluminum tube.
Tags: Chicago, Continental, Florida, frequent flyer, Hawaii, houston, Mileage Run, New York City, Panama, points, Seattle, Trip Report, upgrade
Posted by Seth on April 7, 2011 under News |
Yesterday had a bit of a buzz on the internet regarding a piece about airfare pricing from Nate Silver that was published on his NY Times politics blog. The post, filled with mathematical analysis, attempts to use statistics to determine which airports have unfairly high fares relative to others providing comparable service. And I’m sure the math involved is accurate. I have no doubt that someone as statistically gifted as Silver got the regression analysis correct when he ran the numbers. But the findings are still miserably flawed.
Why? Because several of the assumptions made simply do not apply to air travel.
Silver acknowledges that most the other folks who have tackled this topic have made specific flaws in their assumptions. He aims to correct these but instead makes some tragic assumptions of his own.
Let’s take a look at the factors he considers:
The first factor is the distance traveled — we use the distance from the origin airport to the destination as though it were a nonstop flight, whether or not there was a layover along the way….
The first factor cited – distance traveled – is probably one of the last things that actually comes into play when airlines are figuring domestic market pricing. Should they? I can see that argument being made, but it ignores the general concept of market pricing and supply/demand dictating the going rate for a ticket. If the airlines wanted to price everything based on distance they could, but they’d be leaving a lot of money on the table for the shorter flights and they’d never sell the longer ones. Even just using the average costs to operate a flight as a price basis you’d be looking at $600+ on average for a round-trip transcontinental flight. They seem to sell a lot better in the $300 range, at least in major markets.
Silver chose to ignore whether there is a connection or not. While that is reasonable for calculating the distance traveled, it ignores perhaps the single greatest factor that drives travel bookings for business travelers, the folks paying the higher fares: schedule. When you’re a business traveler hopping between cities and trying to get to that next appointment on time and then home as quickly as possible you pay more for a non-stop flight. Should you? Maybe, maybe not. But you do. This pricing function is probably more directly traceable in cargo numbers and there is a ton of data available on that, including in Greg Lindsey’s Aerotropolis, a pretty good read. But the same concept absolutely applies to passenger travel as well. There is a very real value in speed out in the real world; there apparently isn’t one in Silver’s.
Silver found that Newark was about 25% more expensive than JFK based on his data. And there is no doubt that is the case on some routes. But when you also consider that Newark has quite a few more domestic destinations available as a non-stop flight than JFK does that price premium isn’t nearly as surprising. After all, folks pay for speed.
Certainly demand factors into the pricing as well:
Second is a variable representing the demand for travel at both the origin and destination airports. Demand is assumed to be a function of the number of origin-and-departure passengers that an airport handled (not counting passengers who passed through the airport on a layover), but with a modification for average ticket prices. In other words, if the average fare at an airport was high, the model assumed that more people would have wanted to fly there but were deterred by the cost, and if the average fare was low, that some passengers would not have flown if the fares had not been such a bargain.
Indeed, one can expect that fares to smaller destinations will be higher. And they generally are. But assuming that more people really want to be traveling to smaller cities but choose not to because the airfare is too high misses the point. They are smaller cities with lower demand for travel because they have fewer businesses, fewer residents traveling (or being visited) and generally less volume. They aren’t seeing lower air traffic because they are too expensive, they are seeing lower traffic because they are small. Lowering fares may translate to a small increase in volume but it most certainly is not a linear path.
Moreover, the ability for a new entrant to operate in a market requires a certain base level of demand. No matter how cheap the fares, you aren’t going to survive long as a startup carrier if your hubs are in Columbus, Ohio and Greensboro, North Carolina, for example; just ask SkyBus. This means major metropolitan areas see the up-starts, and those up-starts bring lower fares because that’s how they attract customers. Their fares go up over time – JetBlue and Southwest have proven this – but that’s where it begins. And that explains a lot of the pricing trends that are seen today.
Finally, Silver looks at the most important factor, competition:
The regression analysis also accounts for three other factors that have significant effects on pricing. These are, respectively, the market share at the origin and destination airports held collectively by the five “legacy carriers” (United, American, Delta, Continental and US Air); the market share held by Southwest Airlines; and the market share held by the largest single carrier at that airport (for instance, Delta and its affiliates are responsible for about 66 percent of all traffic at Atlanta).
…
Passengers at Newark paid an average of 12 percent more than those at J.F.K. for their trips to Los Angeles, 49 percent more for those to Chicago, 65 percent more to Dallas, and 118 percent more to Washington, D.C.
Given those numbers, it is probably useful to take a look at the competition in those markets. There is zero competition between Newark and Washington, DC. National airport is only served by Continental and Dulles is served only by Continental and merger partner United Airlines. Plus, those routes are not generally reasonable to fly with a connection. The travel time is so short that when you add the connection it is silly to fly when total travel time is important, as it often is. The Dallas route sees a bit of competition from American Airlines, as does the Chicago route. Los Angeles has a tiny bit of competition but it also has the advantage of being a long enough trip that making the schlep over to JFK to save some money on airfare doesn’t actually completely ruin the speed=value margins. Ditto for connecting flights that add a smaller percentage of time to the travel experience.
Somewhat ironically based on the first factor Silver names, longer distances traveled can actually drive down prices as the impact of connections or less desirable departure or arrival airports is decreased as the total travel time increases.
It is actually surprising that Silver didn’t note the disparity on pricing in the Newark/JFK – Boston market. For quite some time now Continental has held a monopoly on that route. Similar to the DC runs, it rarely makes sense to connect for such a short trip and Continental exploited that price disparity. Right up until JetBlue announced their entry into the market. The fares dropped quite quickly at that point. Hardly a surprise, really. Competition, not the airport, drove the pricing.
Here’s a much more simple way to figure out if an airport is expensive or not:
- Is it a mostly leisure destination? If the answer is yes then it is almost certainly not going to be as expensive on average. Atlantic City, Las Vegas, Ft. Lauderdale, Orlando and most the rest of Florida all come to mind, and not surprisingly they’re all on Silver’s list of good value airports.
- Is it dominated (60%+) by a single carrier?
- If that carrier is United, Continental, US Airways, Delta, American or Southwest then odds are it will be a more expensive airport.
- If that carrier is AirTran, Spirit Air, JetBlue or Allegiant (and, to a lesser extent, Frontier) then odds are it will be a less expensive airport.
- Is it a particularly large metropolitan area? If not, fares are going to be higher because demand is lower.
Three easy questions that don’t take statistical regression or misguided assumptions. Silver actually gets some of these, particularly regarding the competition factor. But he also has a couple huge misses, especially around distance traveled and the price/demand curve.
It would also be interesting to compare the actual costs of travel versus just the base fare data. Spirit has a pretty incredible ancillary revenues per passenger – to the tune of an extra $35/head on average – so those "cheap" airports can come with significant surprises once the customer gets to the airport. Indeed, the airlines are quite keen to sell these ancillary bits to their customers and many are now stating explicitly that these fees are where their profits are. The airlines even want to control the way those fees are marketed to the customer by cutting the GDSes out of the pricing loop. Not a good deal for consumers.
Oh, and the suggestion he links to about searching for the best airfares on weekends is horribly wrong, too. Tuesday or Wednesday mid-afternoon is the time you’re most likely to find deals. On the weekends the airlines are raising fares and limiting the cheaper inventory in an effort to cash in on folks shopping for their vacations while their home with their family.
Silver should stick to baseball and politics, two things that he appears to understand a lot better than air travel.
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Tags: AirTran, American Airlines, Atlanta, Boston, Chicago, Continental, Delta, fees, Florida, Flying, Frontier, JetBlue, Las Vegas, Los Angeles, Southwest Airline, Spirit Air, United, Washington DC
Posted by Seth on January 13, 2011 under frequent flyer, News, points |
The past week has been a busy one for carriers in the Middle East and Central Asia. In addition to the move by Saudi Arabian Airlines to join the SkyTeam alliance (covered here and here), Turkey, Pakistan and Iraq have gotten in on the action.
In Iraq a consortium of investors will be working with Greek charter carrier Viking Hellas to establish frequencies and destinations between Iraq and Europe. Most of the service will be focused on moving passengers between Western Europe and northern Iraqi cities located in the Kurdish Regional Government Area. This is notable mostly because it shows a continued growth and recovery of that market. Air service to Iraq has been quite limited for a long time now and seeing that move back a bit towards normal is quite a positive sign.
The other significant announcement this week involves the major shift in traffic between THY Turkish Airlines and Pakistan International Airline. PIA will be cutting service to New York City, Chicago, Spain, Germany and the Netherlands. Customers looking to reach those destinations will now be routed on Turkish Airways-operated flights via Istanbul under a new joint venture that the two carriers recently signed.
PIA will be keeping one long-haul destination in the West with 3x weekly service to be operated from Istanbul to Houston. It is also expected that PIA will add seven weekly service frequencies to European destinations from Istanbul, either in addition to or in place of Turkish service.
Other notes from the announcement include:
- Both airlines will exclusively use catering facilities of the partner airline, when applicable, on flights between Pakistan and Turkey.
- The operating carrier will arrange special food, reading material to the taste of marketing carrier’s passengers.
- The two airlines will cooperate in maximum utilisation of each other’s engineering, maintenance and training facilities.
- The two airlines will immediately test/integrate interline e-ticketing.
- Both airlines will provide all assistance/transit/business class lounge facilities to passengers at their home stations.
So there are obvious back-office benefits to an agreement such as this one. In some ways this is just another code-sharing agreement and some minor shuffling of flight hardware to better serve passengers at both ends of the trip. But the announcement also includes this little tidbit
The two airlines will also integrate their frequent flyer programs for mutual benefit of the airlines and passengers travelling on two airlines.
Certainly it is too soon to claim that the frequent flyer programs are merging or that anything major is happening here on that front, but it does open up a number of quite interesting possibilities. Most significant, perhaps, is that aligning the loyalty programs and integrating interline e-ticketing brings about the very real possibility that PIA could make a move to join a global alliance, with Star Alliance being the most obvious target given Turkish’s membership there. The Central Asia region doesn’t have a lot of coverage from the alliances and this sort of move would be a major change on that front.
Also of note is that, while Chicago is largest global gateway in the United States for Star Alliance, Turkish does not currently offer service there. With the PIA service being cut in favor of Turkish this seems like a route that just significantly improved its odds of being announced.
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Posted by Seth on December 15, 2010 under News |
As part of the merger between Continental and United Airlines, Southwest picked up 18 slot pairs at Newark. The first of those slots become available in March and that service was previously announced: 6x daily to Chicago Midway and 2x daily to St. Louis. The balance of the slots become available on June 5, 2011 and today the airline announced 4 new cities that will receive service at that time.
The new service is “connecting the dots” for Southwest in a big way. The carrier will serve Phoenix, Houston (Hobby), Baltimore-Washington International and Denver, all cities with significant existing presence. Perhaps most significant, however, is that the move puts Southwest in competition with the new United in a very direct way. Although they cannot compete on frequencies, Southwest will be offering direct competing service to four hub cities that the new United serves. Sure, Midway and Hobby are different than O’Hare and Intercontinental, but there is still going to be competition on routes that haven’t seen much in quite some time.
Chicago – Newark is priced with a significant premium for passengers on short, mid-week trips. With the new competition in place odds are that the new United will have to respond or see a decent chunk of business head to the south side. Houston is similar; this is the first time in recent memory that another carrier will ply the Houston – Newark route.
When JetBlue announced new service on the Newark – Boston route the pricing impact was significant. The prices for the initial launch sale in these markets are not quite as low as those JetBlue fares were, but with a max of $129++ each way there certainly is going to be some real price pressure in these markets and quite likely in many others that Southwest can provide connecting service to. It will certainly be interesting to watch for the Continental/United response to this move.
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Posted by Seth on October 2, 2010 under frequent flyer, Mileage Run, points, Trip Reports |
Every now and then there are fares that attract swarms of folks out looking for miles. When a $140 round-trip transcon comes along, for example, it is rather common to see folks buying a couple of them to accrue a collection of points and make their elite status for the year. It gets even better when one of the flight attendants working on the flight is also a junkie, intimately familiar with the crazy that is the mileage run mentality. Today’s trip to Ontario, California is a prime example of making such a situation work.
Settling in to 3A at 5:30am is a mixed bag of emotion. Happy because the upgrade cleared but stupid tired because of the 4:45am wake-up call. I seriously need to stop booking sunrise flights. Still, we settled in to our seats and started chatting only to have the guy in front of us turn around and ask us what our names were on FlyerTalk. Apparently it was obvious.
Sunrise was nice, as was the quick nap I caught on the flight after breakfast. And then on to Houston where we met another guy flying this weekend on a quick run to San Francisco. A quick chat at the gate and then we headed into the Presidents Club for another snack and to enjoy the layover.
Our flight from Houston to Ontario had at least six folks in it just for the miles. Three of them are returning on the same plane back eastward while three of us are headed onwards towards other adventures. One guy just has a different routing back to Chicago and two of us are headed to Palm Springs for some fun before heading home on the redeye. We spent most of the last hour of the flight in the forward galley having a blast with one of the most professional men in the industry. Great time.
As we boarded the flight I was greeted by name by the flight attendant. Apparently I’m just that famous (not really). Still, it was a warm greeting following the email I received last night warning me that he knew I was coming and that he’d have the bar cart ready for me. Apparently being infamous isn’t so bad after all.
Posted by Seth on July 22, 2010 under News |
Virgin America is suggesting that they intend to offer service to Chicago’s O’Hare airport in early 2011. As part of their announcement of a major aircraft purchase – 40 firm orders and 20 options on Airbus narrow-body planes – the carrier also noted that “We still have a lot of places to expand, but Chicago remains high on the list, as we hope to inject some healthy competition into a market that is still dominated by just a few legacy carriers.”
This may sound all to familiar to fans of the carrier and it should. Virgin America suggested that they’d offer service to Chicago in 2008 as well but ultimately chose not to, citing the inability to acquire gates at the airport. Of course, there were gates available but they were in the international terminal, not the main terminal complex. That would mean an extra tram ride to connect to the main airport facilities in many cases, something that Virgin America did not want to deal with. This time around it is not clear that there are specific gates available to the carrier in the main terminal complex, but there is a caveat in the negotiations.
The airline is negotiating for an “economically viable” deal with O’Hare officials. In other words, if they come up with anything that they don’t like about the negotiations – including the gate arrangements – they can walk away form the discussions. Again.
On the plus side, passengers will get to use an awesome new in-flight map system that Google has developed for the airline’s RED in-flight entertainment system. It shows much higher levels of detail and permits panning, zooming and other features through the touch-screens on the plane.
Posted by Seth on June 30, 2010 under frequent flyer, News, points |
After a relatively quiet spring for frequent flyer points bonuses on travel, the summer is heating up quite nicely. There has been plenty of competition in the New York City – Chicago market, mostly started because Delta added shuttle service on the ORD-LGA route starting just a couple weeks back. And now, for some reason, Los Angeles has become a target for promotions as well, with JetBlue announcing a triple miles promo for non-stop flights from LAX.
There are only two routes covered by the latest promotion from JetBlue – New York’s JFK and Boston – but the promo is valid for all new purchases through October 31. Registration is required: https://trueblue.jetblue.com/web/trueblue/lax-triple.
I’ve been looking to book a flight out to LA for a wedding in October and the triple points – as well as the 34” pitch, free snacks and free LiveTV – might just be enough to swing my business that way, especially since I’m not going to get upgraded otherwise on that route for free and the price is right.
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Posted by Seth on June 24, 2010 under Trip Reports |
I travel a decent amount, but apparently not particularly broadly. I thought my list of 40+ countries visited so far was pretty decent but with my most recent booking I’m also realizing that perhaps I’ve visited as many as I have because they have been relatively easy. And then along came a deal that I couldn’t say no to.
I needed to be in San Juan, Puerto Rico in mid-August. Airfare was running around $300ish round-trip. Not great but reasonable for the route. I was pretty close to booking that trip until I noticed that there was, perhaps, a similarly priced deal that would get me a ton more frequent flyer points. Instead of just flying to San Juan and back I’ll be flying in via San Francisco, Chicago, Brussels, Accra and Philadelphia.
Yeah, I’m going from New York City to Puerto Rico via Ghana.
This won’t be my first trip to Africa – I visited Egypt over Christmas last year – but it certainly will be the first trip into what I consider a “hard” country to visit. Among other things, the list of vaccinations required is pretty significant. Typhoid, Tetanus, Hepatitis A & B, Meningococcal Meningitis and – the big one – Yellow Fever. So on Tuesday I found myself hopping between clinics, getting vaccinated and giving blood to test antibody levels for some vaccines. I’m guessing that I’ll need a few more shots in a couple weeks when I get home, but the big one has been taken care of. I got my Yellow Fever vaccination and the certification card that will serve me for the next 10 years.
I’m not a huge fan of needles, but if this is what it takes for me to explore Ghana, Benin and Togo in August and other more adventurous destinations in the coming years, so be it. My obsession with travel is much, much stronger than my aversion to needles.
Tags: Accra, Belgium, Chicago, Egypt, Flying, frequent flyer, Ghana, New York, New York City, Philadelphia, points, Puerto Rico, San Francisco
Posted by Seth on June 10, 2010 under frequent flyer, News, points |
Delta has announced a triple miles promotion for the summer. The promotion covers three routes – all the Delta Shuttle operations – and offers the bonus on both reward miles and Medallion Qualifying Miles. Registration is required (you can do so here).
The promo is valid for all travel between New York City’s LaGuardia and Boston (BOS), Washington, DC (DCA) and the new service to Chicago’s O’Hare (ORD). The new Shuttle service to O’Hare includes 11 daily round-trip flights on weekdays. The promotion is valid from June 14th – the launch date of the LGA-ORD service – through August 31, 2010.
In order to qualify the flights must be operated by Delta or a Delta Connection carrier and must be on the non-stops between the cities in question. Also, the 3x calculation is based on the actual miles, not the 500 mile minimum for elites.
More details on the promotion can be found here.
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