American Airlines announces four club closings

Posted by Seth on April 19, 2012 under News | 3 Comments to Read

As part of their bankruptcy restructuring American Airlines will be closing four Admiral’s Club locations, the company has announced. The closings are happening reasonably quickly – one at the end of June and three at the end of July – and in three of the four locations there is not a partner lounge alternative on offer.

The lounge in Panama City, Panama will be closing at the end of June. With only four daily departures, all on 737-800s, apparently the necessary volume of premium customers to justify the cost of maintaining the facility wasn’t there. United Airlines and Copa jointly operate a lounge in Panama City still but that isn’t affiliated with American or its partners. No word yet on whether premium cabin passengers will be invited to use that lounge but it seems unlikely.

The July closings include the lounges at Dulles, Kansas City and Santo Domingo. Similar to Panama City, the flight frequencies do not appear to support the lounges. At Dulles there is still a British Airways Terraces Lounge so passengers can take advantage of those facilities. Santa Domingo has a lounge operated by oneworld partner Iberia which should be able to handle some overflow of customers, depending on operating hours. American currently operates the only lounge in Kansas City so there are no other options for passengers looking for such a facility.

On top of the announcement of the closing of a call center in Tucson this is not a particularly positive week for the AMR workforce.

Decoding Avios, part 2

Posted by Seth on February 9, 2012 under frequent flyer, points, Wandering Aramean Travel Tools | 18 Comments to Read

Since the introduction of the Avios loyalty program from British Airways and Iberia there has been much gnashing of teeth, frustration and – occasionally – excitement about the redemption options that the program offers. Short-haul flights, in particular, can be a tremendous value, as can regional flights within Europe and even a few long-haul flights where a non-stop routing is available. When a connection is involved, however, the points required can span quite a range meaning that identifying the smarter connection point is more of a challenge and not something that British Airways does a very good job of publishing on their website.

Good thing I like building tools to help clarify frequent flier program data like this. Welcome to the Avios Redemption Calculator.

Put in your preferred city pair and the tool will search connections based on published routes and the Avios award schedule and spit out various non-stop and single connection routing options and their costs.

It is definitely interesting to see how the cost can vary by more than 100%, depending on the routing chosen.

The tool is still somewhat a work in progress as I’ve got a few more bits I want to add to it, especially more partner carriers, but the base functionality is up and running and pretty solid in my initial testing. Give it a try and see what you can come up with.

The debacle that is Avios, and a few gems it offers

Posted by Seth on November 18, 2011 under frequent flyer, News, points | 9 Comments to Read

When British Airways and Iberia announced a couple months back that they were integrating their loyalty programs under the Avios moniker there were a whole bunch of folks (mostly based in the USA) who were pretty upset at the potential issues it could raise. At that time I took a somewhat measured approach, suggesting that there are a few areas in which folks might see benefits, mostly for those in the UK or Europe. Now that the details are out and we can look at the numbers I’m still not certain, but the program mostly seems to be a debacle unless you live in the UK or Spain and only fly on simple trips.

You didn’t want to connect, did you?

The single-partner award chart isn’t nearly as bad as previously expected, with a catch. Awards on a single partner now do not permit connections. If you require a connection for your itinerary then you redeem an award for each flight. That means JFK-EZE on AA would be one price (25K one way in coach) but connecting via Miami would add 7,500 to that total; connecting via Dallas is 10,000 more. So if you can position yourself to get to a hub gateway (or if you are lucky enough to actually live in one) then the numbers can be quite reasonable still. I queried ~150 city pairs on routes operated by wide-body aircraft by Cathay Pacific, Qantas and LAN and found a few routes where the numbers aren’t completely awful. But that assumes you’re at the gateway and want to go to the hub. A pretty significant catch to be sure.

Also on the connection front, it appears that folks based in Europe are going to feel the pinch of award prices rising. A trip from Istanbul to Paris sees a 4,500 point surcharge over a trip from Istanbul to London. Not all that surprising considering the rate on London-Paris is 4,500. In other words, even if you stay on BA metal for the journey you get hit with a connection penalty. This applies to flights originating in the USA as well, and the up-charge might be even more than you’d expect (ORD-LHR is 20,000; ORD-CDG is 25,000 while MIA-LHR and MIA-CDG are both 25,000). In other words, the award charts are very inconsistent and nearly impossible to decipher with any reasonable sense of reason.

Multi-partner Awards

The multi-partner award chart is unchanged and is shown below. With this scheme you are permitted up to 8 segments on an award, including an open jaw stopovers so long as the stopover is on the direct point of travel. That basically means only at hubs, which is also not particularly great, but also not atypical.

Some "gems"

So, what are these "gems" I referenced in the thread title? There are a couple to talk about.

If you’re looking for flights operated by international configured aircraft and hoping for a bargain there are a few routes that come up as quite reasonably priced. Some have gone down from the prior charts, though, again, no connections are permitted any more so there’s that problem. Still, take a look at some of these routes with the decent redemption pricing (o/w, economy):

Comparing those numbers to other carriers I’ve compiled data on suggests that the program isn’t a complete fiasco, so long as you can avoid that pesky connection problem.

Also, it is possible to redeem 10% of the regular Avios award price for an infant in lap which is a nice feature and most certainly not one that most programs offer. But that’s a pretty small consolation.

Upgrade or downgrade?

In the end, I believe that the overall changes to the program are quite negative for most customers. Yes, there are a few bright spots where award costs have gone down and those should be celebrated, but for most customers the connection penalty will be a rather steep price to pay to make the Avios retain value. That said, if you live in a hub or in a spoke with good frequencies there is the slight chance that the program can be made to work for you.

I’m quite happy that I’m not sitting on a pile of Avios right now, even being in NYC where I have the advantage of many non-stop options. If it comes to that I’ll just move some Membership Rewards points over and leverage the program that way.

Check out some other views on the changes from these noted loyalty bloggers:

• Lucky’s posts
• Avios points not pricing correctly – One Mile at a Time
• British Airways clarifies some Avios changes – One Mile at a Time
• TPG’s thoughts:
• British Airways Avios Program Worse Than I Expected

Related Posts:

• Updates to the British Airways program coming soon

New destinations–and bonus miles–from American Airlines

Posted by Seth on April 6, 2011 under frequent flyer, News, points | Read the First Comment

American Airlines launched 10 new destinations from Los Angeles yesterday. The new routes, mostly served but their American Eagle regional subsidiary, are all offering double miles for travel until June 30, 2011.

The biggest addition of service is the non-stop flight from LAX to Shanghai, China. This flight represents the only non-stop service by a US-flagged carrier on the route. Passengers flying between LAX and Shanghai can receive up to triple miles for their travel between now and June 30, 2011. Business and First class fares will receive triple miles while economy fares will receive double miles. Registration is required for this promotion.

The other nine destinations being added place American into direct competition with a number of other carriers. Of the nine, all are currently served by at least one other carrier and most have two or three others, namely United Airlines and Southwest; US Airways serves a couple of the routes as well. The destinations are:

• Albuquerque, NM (ABQ)
• Boise, ID (BOI)
• El Paso, TX (ELP)
• Houston, TX (IAH)
• Oklahoma City, OK (OKC)
• Phoenix, AZ (PHX)
• Salt Lake City, UT (SLC)
• Sacramento, CA (SMF)
• Tucson, AZ (TUS)

All of these routes are eligible for double miles through the end of June. Similar to the Shanghai promotion, registration is required.

Challenging incumbent carriers by adding capacity as fuel prices are rising and the industry struggles to control seat inventory is an interesting move. Going head-to-head in markets that include three competitor hubs by offering regional jet service is even more interesting. Time will tell if American can come out of this experiment profitably or not.

Finally, oneworld partner Iberia is launching service between LAX and their hub in Madrid, Spain. AAdvantage members can earn double miles on this route as well. Register for this promotion here.

Lots of excitement at LAX of AAdvantage members. Here’s hoping the routes actually stick.

US DoT approves anti-trust deal for American, British Airways, Iberia

Posted by Seth on July 21, 2010 under News | 7 Comments to Read

Following on the approval granted by the EU last week, the US Department of Transportation has approved the request from American Airlines, British Airways, and Iberia to have anti-trust immunity on their service in the highly competitive and lucrative transatlantic market. The approval was granted 12 years after AA and BA initially requested such permission and after being denied repeatedly for most of that interim period. The approval is not without conditions, but generally they are minimal compared to the benefits that the airlines will receive from this approval.

The airlines will be required to give up 4 daily slot-pairs at London’s Heathrow airport, two of which will be ear-marked for service between London and Boston. This divestiture requirement is less strict than that required by the EU and significantly less than some competitors, namely Virgin Atlantic, would have liked to see. The DoT dismissed Virgin Atlantic’s concerns rather abruptly,

Furthermore, Virgin Atlantic’s analysis of the constraints at Heathrow airport does not prove that the agreements are anti-competitive and should, therefore, be disapproved. We directly addressed the issue of Heathrow access in the Show-Cause Order. Even though the immunized oneworld members will collectively hold almost half of Heathrow slots, there are still a number of other competitors at Heathrow. There are also some important mitigating factors that Virgin Atlantic does not adequately consider. First, since the provisional application of the U.S.-EU open-skies agreement, at least three major airlines have begun serving the United States from Heathrow, and the overall U.S.-Heathrow market has enjoyed an expansion and diversification of services.27 The new entrants have enhanced competition and will continue to exert competitive discipline in the market when the joint venture is implemented.

The DoT is correct that there have been a number of new entrants into the Heathrow market but those companies have paid a sizable sum for those slots. Moreover, fares have increased significantly in the US-London market. It is not clear that competitive discipline has truly remained even with the competition, and this approval will reduce competition in the market.

Also interesting in the filings is the support that the oneworld partners received from parties who are exposed to potential harm from the move in terms of reduced competition. The Dallas-Ft. Worth airport authority supported the application even though BA and AA are the only carriers offering non-stop service to Heathrow from the airport. The fact that is is a major hub for AA certainly doesn’t hurt the claim, but ultimately both the airport and the DoT are supporting the idea that connecting traffic is sufficient to preclude anti-competition concerns.

As DFW pointed out in its reply, the connecting services available in the nonstop overlap markets discipline the fares charged for nonstop service. For example, in the case of the Dallas/Ft. Worth-London route, which concerned Virgin Atlantic because it will effectively have one competitor in the nonstop market following the transaction, we determined that approximately one-quarter of the passengers already use connecting services in the overall city-pair.

The approval of this request was not at all unexpected, though the very light divestiture requirements are somewhat so. The DoT has previously approved similar deals for SkyTeam and Star Alliance; continuing to deny similar benefits to oneworld would amount to a regulatory competitive disadvantage being applied to the carriers. Fares will be higher in many cases, not lower. It is rare that reducing competition results in anything else; that the DoT can suggest otherwise is disheartening. It is even more confusing when considering the restrictions that the DoT applied to the proposed Delta/US Airways slot swaps which would have similar impact on competition.

The DoT release can be found here and the full report here.

Related Posts

• British Airways – Iberia merger and ATI approved by EU
• The Skies are Open!
• Slot swaps galore in New York and Washington, DC

British Airways – Iberia merger and ATI approved by EU

Posted by Seth on July 14, 2010 under frequent flyer, News, points | 2 Comments to Read

In a move that will create the third largest airline in Europe, EU regulators have approved the merger of British Airways and Spanish carrier Iberia. The approval was expected for some time now and does not come as much of a surprise. The two carriers will continue to operate as distinct brands in their respective markets. No word on whether they will be combining their loyalty programs or which other back-office operations will be combined, though many are expected to be.

In addition to the merger approval the EU has also approved – with conditions – the ability for the new British Airways to operate with their USA-based partner American Airlines with anti-trust immunity (“ATI”). The ATI deal gives the OneWorld partners the ability to coordinate schedules, inventory and fares on transatlantic markets where the carriers operate, including the European Union, the United States, Canada, Mexico, Puerto Rico, Norway and Switzerland.

The approval of the ATI brings OneWorld into the same arena as the other two global alliances, SkyTeam and Star Alliance. Those two have recently increased their TATL ATIs (Alitalia just joined the SkyTeam group in the past couple weeks) so this move will have all three on a level playing field as they compete for much coveted traffic in the TATL market. But, as noted above, the approval does come with some strings attached.

Over the next ten years the OneWorld ATI members will have to cede airport slots at New York City’s JFK airport and also at London’s Heathrow or Gatwick airports. New entrant airlines looking to start service into London or Spain will also be guaranteed “favorable terms” for add-on segments on the BA or Iberia networks for onward travel once they get to Europe. From the EU Commission release:

Concretely, the parties offer to make available landing and take-off slots at London Heathrow or London Gatwick airports, at the entrant’s choice, on routes to Boston, New York, Dallas and Miami. The number of slots will allow one or more competitors to operate a total of 49 more return flights a week between London and the four affected destinations in the US.

On the London-New York city pair, the parties also propose to provide the competitor with slots at New York John F. Kennedy airport.

In addition, BA, AA and IB undertake to provide access to their frequent flyer programmes on the relevant routes, allowing passengers of new entrants approved by the Commission to accrue and redeem miles on the parties’ frequent flyer programmes.

The parties also propose to allow fare combinability and offer special prorate agreements in relation to the routes of concern, which would enable competitors to offer tickets on the parties’ flights and facilitate access to connecting traffic.

Neither of these approvals is much of a surprise. Other airlines and alliances have passed the BA/AA behemoth by in recent years in terms of coordination of operations and this move lets the two start to catch up. The conditions levied on the ATI are not all that burdensome, either. Giving up a total of seven daily slots in London isn’t too much of a burden on the carriers that control such a significant portion of the market there. The JFK slots are actually likely more of an issue for those carriers but they do have enough to make it work when the requests come in.

No word yet on whether AA and BA will be able to remove the limitations on their frequent flyer programs that preclude earning or redemption on flights between the USA and London on the other party or what other synergies they expect to realize. Still, this move definitely will give OneWorld a bit more leverage in the market.

Another major alliance marketing effort launched

Posted by Seth on August 16, 2008 under Uncategorized | Be the First to Comment

Of the three major international airline alliances, only two have significant joint-venture marketing agreements for trans-Atlantic service.  StarAlliance has a deal with nine of their airlines with Continental trying to add themselves into the program, and SkyTeam has six in their deal.  But OneWorld has no similar arrangement.  It is actually even worse than that.  Its two main carriers, British Airways and American Airlines are actually prohibited from having some benefits for their customers flying on the other carrier on trans-Atlantic routes in an effort to prevent them from operating in a monopolistic fashion since they dominate the market, particularly into London Heathrow.

OneWorld has finally decided to fight back, filing paperwork to establish a joint venture agreement between AA, BA and Iberia.  It won’t be quite as pervasive as the other carriers’ but it should be beneficial to them to have operating.  Plus, with the Open Skies treaty now in place Heathrow is wide open for competition, though BA will still have the majority of the slots there.  I can’t imagine that the application will be denied, so expect to see the new marketing start to take shape in the near future. 

I think that this is good for folks who fly OneWorld, and has no material effect on others.  Overall a good thing for the industry.

A merger, European style

Posted by Seth on July 29, 2008 under Uncategorized | Be the First to Comment

British Airways has announced their intention to merge with OneWorld alliance partner Iberia in an all-stock swap.  This isn’t the first time that merger rumors have come up between this pair, but it looks like it might actually have legs this time.  Last time they were discussing merger possibilities, back in November ‘07, BA walked away after Iberia saw some significant local investment within Spain drive the price up.

The route maps are rather complimentary across the two, which is good, and they can certainly save a lot of money by reducing overlap in their administrative functions and in some of their fleet maintenance facilities.

It remains to be seen whether this merger will involve the Iberia brand being subsumed into the BA brand or if they will continue to operate both brands, similar to the KLM/Air France arrangement.  Unless they plan a serious overhaul of the service and amenities it would probably make sense to keep Iberia apart from BA to ensure that the BA brand keeps what cache it has.

Membership Rewards adds an airline partner

Posted by Seth on July 16, 2008 under Uncategorized | Be the First to Comment

The American Express Membership Rewards program has been around for a long, long time, allowing the accrual of points for redemption on a variety of airlines, hotels, stores and even casino chips at one point.  The participating airlines seem to vary at any given point in time depending on whether AmEx is willing to pay and whether the airline is willing to sell the points.  In the past week or so AmEx has quietly added a new airline transfer partner to the US-based Membership Rewards program – the Spanish carrier Iberia.  Iberia is the second Membership Rewards partner to participate in the OneWorld alliance, bringing another means of accessing redemptions within that alliance to the Membership Rewards program.  That’s the good news.

American Express will transfer your points to Iberia at a ratio of 1,400:100.  The reward charts are pretty granular, with flights within Spain or to the Balearics or Gibraltar only 900 points for a round-trip ticket (so only 12,600 AmEx MR points) in “Tourist Full” class, which seems to have no inventory controls.  Flights are 1/3 cheaper for “Blue Class” which is limited inventory from what I can tell.  Flights from Spain to the USA, Canada, Mexico, the Caribbean and Central America are only 4,750 points (or ~66,000 MR points), again in the “Tourist Full” class which seems to not be inventory restricted.  They also offer one way rewards, with some fares just being 1/2 of a round trip and some (the transatlantics) having a premium attached.  But these are only on Iberia-operated flights.  When you start getting into partners the numbers go up pretty quickly, which is the bad news.

The redemptions are based on total miles traveled and class of service, with the breakdown looking like this:

The numbers at the top of the chart aren’t terrible, but when you start getting into ‘Round The World ticket distances, particularly in the premium cabins, the numbers are pretty bad.

So if you’re looking to get around within Spain or between Spain and something nearby, this looks like a decent option.  For longer flights or partner flights the numbers aren’t so great.  Then again, the rates of redemption in Mexicana, the other OneWorld partner don’t seem to be all that great either (70K in coach between N. America and Europe versus 44,800-77,000 on Iberia), so this might not be so bad.

More options is always good, even if not all the redemption values are terrific.

Happy Flying!