Posted by Seth on February 3, 2012 under frequent flyer, News | 
Kingfisher was dealt a potential death blow yesterday when the airline was suspended from IATA’s ticketing clearinghouse due to reported non-payment. The clearinghouse is used by hundreds of airlines to process payments for interline tickets and other multi-carrier transactions. Roughly 80% of interline transactions worldwide are settled through the system so being suspended is a huge blow to the carrier.
The company claims the suspension was triggered automatically by the IATA systems when a technical glitch prevented their scheduled payment from reaching the clearinghouse:
As a result of a recent internal system failure, certain credits did not hit our ICH account in time, triggering an automatic suspension. Kingfisher would like to confirm that all its dues via ICH have been settled in full and it has absolutely no outstanding due as of date,
Despite claiming to be current it appears that IATA has not yet commented or reinstated the carrier to the systems.
Adding fuel to the fire is the announcement today that the planned February 10, 2012 ascension of Kingfisher into oneworld is being delayed, with no revised date yet announced. FlightGlobal is carrying the story, with quotes from both oneworld and Kingfisher executives on this latest development. Said oneworld CEO Bruce Ashby:
These are turbulent times for the airline industry in India and many other parts of the world. We have been working closely with Kingfisher Airlines over the past months and it has become increasingly clear recently that the airline needs more time to resolve the financial issues it is confronting before it can be welcomed into Oneworld. Will work with Kingfisher Airlines with the aim of setting a new joining date once it is through this current period of turbulence.
This delay is somewhat reminiscent of the frequent delays that Air India suffered in their attempts to join Star Alliance over the past few years. Those efforts were eventually scuttled after multiple delays.
Without access to interline booking revenue is seems unlikely that Kingfisher will be able to realize the revenue needed to pull themselves out of their financial morass. With many unpaid or severely delayed bills the future of the carrier is very much in question. It is not surprising that the alliance is not interested in bringing the carrier on board as their liabilities for interline travel could be significant.
This is a serious blow for oneworld, as another member carrier, Malev, ceased operations today, also under financial pressures they could not overcome.
Not a good day in the aviation world at all.
Hat tip to Flying With Fish for the head’s up on this one.
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Posted by Seth on February 3, 2012 under News |
Hungarian flag carrier Malev has ceased operations following demands from creditors that certain balances be paid immediately or in advance. The carrier has been struggling for many years; those debts finally caught up. The move grounds the airline’s fleet, stranding several thousand passengers and leaving the company’s ~2,600 employees with an uncertain future. The shutdown was apparently precipitated but ground handlers in Tel Aviv demanding payment up front for services. Similarly, a plane in Dublin was not permitted to depart, supposedly citing the company’s accumulated debt as the reason.
The airline is relatively small, but they do hold 27 routes out of Budapest where they are the sole carrier. While it is likely that other carriers will step in to pick up some of those routes such changes will take time and in the interim a number of passengers will be inconvenienced by the service termination.
The move is also a blow to global alliance oneworld, of which Malev is a member. The group is adding other carriers, including Air Berlin and Kingfisher, but those carriers are also struggling somewhat financially.
This cessation follows that of Spanair from last week. Truly a sad time in the skies over Europe.
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Posted by Seth on January 26, 2012 under News |
There have been a few stories today about the unveiling of the American Airlines 777-300ER cabin interior configuration. Most of them (including Ben’s) have been rather effusive, raving about the new Business and First class cabins. And, no doubt, the press photos of those look pretty nice.
But there is a third photo included in the press release, the shot of the economy cabin:
The good news is that the photo shows a pretty nice individual IFE screen, universal power plugs and a handset to control the IFE, meaning reduced likelihood of someone tapping on the back of your seat the whole flight. And those are all good things, but there’s one really big bad thing, too. The seating configuration appears to be incredibly tight. Based on this point of view it appears that the cabin will have a 3-4-3 configuration, bringing American in line with Emirates and Air France for offering one of the most cramped coach cabin configurations in modern aviation. The aisle actually looks ridiculously narrow, too, making me wonder if this is even a real shot of the cabin, but if it is that looks like a VERY uncomfortable coach experience.
Some back of the napkin math based on the size of the power ports and the representation of things in the image suggests that the seats are about 17" wide, maybe a tiny bit less. That’s quite a bit tighter than their current economy products, especially compared to their current long-haul configurations. And they’re articulating – or "slidey" – seats, which means the legroom gets worse when reclined. Ouch.
There was some suggestion that there is going to be a "Premium Economy" product rolled out as well, but no details on that in these photos or in the release. That leaves me a smidge skeptical. Adding that to match their oneworld alliance partners would make sense in many ways. It is also the fastest growing segment of seating in the industry. Then again, when starting from zero relatively recently, it is easy to make "fastest growing" show up. It would be a first for a US-based carrier, so it is worth keeping an eye on.
The premium cabins look quite nice. Matching Cathay Pacific for the business class seat is particularly nice. But most passengers are going to be stuck in those economy seats and it looks painful. I hope it is better than that makes it appear.
It also seems that American has decided in the past 8 weeks to shift the planes from the originally announced service to London, putting them on the Dallas-Sao Paulo route instead. That’s a pretty inefficient utilization plan for the newest, nicest, planes, so they must think they’re going to drive some serious premiums on the route. Good luck.
Posted by Seth on January 18, 2012 under News |
American Airlines is changing their beverage service policies, adding free wine and beer to the menu for economy cabin passengers on long haul flights starting in February 2012. The policy will apply to flights between the USA and Europe, Asia, Argentina, Brazil, Chile, and Uruguay.
"Offering complimentary beer and wine to our loyal customers in all classes of service allows American to better align our product offering with fellow oneworld® alliance members and is another example of our commitment to enhance the travel experience," said Rob Friedman, American’s Vice President – Marketing. "Our customers asked for complimentary beer and wine, and we listened. Starting Feb. 1, when a customer travels internationally onboard American, we invite them to have a drink on us."
This makes a lot of sense with respect to aligning the product with oneworld members where the flights are covered by the antitrust immunity deal which is supposed to give passengers the same experience, regardless of which carrier operates the flight.
Bottoms up!
Posted by Seth on December 20, 2011 under frequent flyer, News |
Kingfisher and global alliance oneworld have set a date for the Indian carrier to join the alliance. But there still appear to be many hurdles that must be surmounted for that to actually happen. Assuming everything goes as planned the join date is February 10, 2012.
But that’s a rather significant assumption given the way things are going for the carrier lately. They’ve been slashing routes, struggling to pay fuel bills, seeing flight cancelations and otherwise having trouble running their operations. As if that wasn’t bad enough, it was reported today that the company has not been paying its taxes. They’re in the hole $25MM – two years worth of payroll tax withholding – to the Indian government, on top of all the private debt they’re holding. Supposedly there are investors looking to offer a new loan but they’re awaiting reports on the viability of the company. This latest news certainly won’t help those reports.
Not good news at all, either for the airline or the alliance. Oh, and for oneworld there are also the issues of the American Airlines bAAnkruptcy, Air Berlin’s financial struggles and new ownership stake from Etihad and the labor strife at Qantas. Really a lot of uncertainty in that alliance these days.
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Posted by Seth on October 7, 2011 under frequent flyer, News, points |
In advance of German airline Air Berlin joining the oneworld alliance they are setting up the necessary agreements with other members for frequent flyer earning and redemptions. The partnership with the American Airlines AAdvantage program went into effect this week. This is mostly good news, but there are definitely some facets of the new partnership that are less than rewarding.
Business class fares will earn 100% base miles and an additional 25% class of service bonus. OK, the bonus isn’t the best out there but at least there is something. And most coach fares credit at 100%, too. The real bummer, however, is at the low end of the charts:
Only 25% earnings for the discounted coach fares is a rather unfortunate rule. Looking at a few fares on common routes the cost to buy-up to the higher fare to get the full credit can be rather significant. One route I checked – Munich to Reykjavik – sees the base fare jump from $108 to $435 to move from the lowest fare that earns 25% to the lowest that earns 100%. If you’re looking to earn points on Air Berlin flights expect to pay a tidy sum to get any reasonable number of them.
On the redemption side things are a bit better. With partners the AAdvantage redemption chart is still region based so the only requirement will be finding award inventory on Air Berlin flights. And the company offers a few additional destinations that are otherwise not served by alliance partners as well as additional frequencies and routing options for many destinations.
Overall, more partners is a good thing and this definitely fits that bill. But the earning rates are brutal at the low end of the spectrum – just like with many other European carriers – so caveat vector.
Posted by Seth on September 24, 2011 under frequent flyer, News, points |
The proposed merger of South America’s two largest carriers, LAN and TAM, precipitated many questions. Perhaps the most significant from frequent fliers was the future of the loyalty program. LAN is a member of the oneworld alliance while TAM recently joined Star Alliance. A merged program will have to pick one of those with the decision having great significance in the South American travel market.
Thanks to the Chilean government it appears that the decision has been made and that the carrier will be remaining in oneworld.
The Chilean Tribunal de Defensa de la Libre Competencia (Court of Defense of Free Trade) handed down their approval for the two carriers to merge this week with a laundry list of conditions attached. Here are details on a few of the most significant conditions:
Numbers 1 & 4 require that LATAM give up 4 landing slots in Sao Paulo to allow another carrier to establish service on the Sao Paulo – Santiago route in order to maintain a competitive fare environment on that route. Additionally, LATAM is prohibited from dumping inventory onto that route within 15 minutes of the newly scheduled service once the new entrant has declared their interest in operating the service. Rule 13 also prohibits the new carrier from raising fares on the route versus their aggregate historical averages for one year.
Number 9 requires that LATAM not oppose any foreign carrier’s application to operate with additional freedoms on domestic Chilean routes or to provide service that would otherwise be seen as cabotage. This would effectively allow tag-on flights for long-haul carriers or regional flights within Chile for other airlines in South America. LATAM is required to endorse such requests without demanding reciprocity.
And then there is number 6:
Latam deberá renunciar, dentro de un plazo que no exceda 24 meses contados desde la fecha en que se materialice la Operación consultada, al menos a una de las dos alianzas globales en que a esa fecha participan sus partes, LAN y TAM. En ningún caso podrá pertenecer a aquélla en la que también el grupo Avianca/Taca sea miembro o asociado, o se encuentre en proceso de ingresar.
Within 24 months of realizing the merger the airline is required to resign from at least one of the two global alliances in which is currently participates. Moreover, the carrier must not be in the same alliance as Avianca/Taca, the other powerhouse merging carrier in South America. With Avianca/Taca moving rather quickly down the path of joining Star Alliance this clause leaves oneworld the only rational result.
The other options are to go independent, a tough move to make in that region, or to try for SkyTeam. But with Aerolineas Argentinas set to join SkyTeam it doesn’t seem likely that the competition courts would be too happy to see such a move. They could also try to thwart the entrance of TACA/Avianca from Star Alliance if they want to stay with the group. That would be a most interesting political move and a most unlikely one as well.
The court ruling lays out a pretty clear framework for the carriers to work within and a reasonable timeline through which the changes must be made. Unless the Brazilian government comes up with a major surprise on their conditions for the merger it looks like this one is ready to happen in early 2012 with all the details finally falling into place.
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Posted by Seth on September 20, 2011 under Flying, News |
Every now and then I find myself wondering if there isn’t a better way to get access to some nugget of data related to travel. More often than not I’m disappointed to find out that the answer is generally that the tools aren’t available. When I can, I try to change that. Welcome to my latest effort: The Round-the-World Fare Comparison Tool.
The tool holds nearly 13,000 data points for fare pricing from 197 different airports around the world (one per country for most countries). There are nearly 100 different fare types in the system, including not only RTW fares but also some regional options like Circle Asia, Circle Pacific and Circle Japan options.
That’s a whole lot of data that needs to be managed and filtered. I certainly won’t go so far to claim it is perfect yet – the site is very much in beta right now – but there are options to sort by point of origin, fare type and cabin of travel available right now and more in the works.
Currently there are six different airlines being used as data points for the fares, two each from the three global alliances. In nearly every case the fares match but there are enough quirks and variances that I’m keeping all the data in there and available. The fares do not include taxes, fuel surcharges or aircraft-specific fees but the goal of the tool is to facilitate comparing prices between alliances or to figure out the best place to start a trip rather than get to final pricing.
Here’s what it looks like if you choose a specific origin country/airport:
The different cabins are color-coded so you can quickly see the different types of fares available to you.
Want to search by fare product. Here are the nearly 100 available to you:
Pick one and you’ll get a clickable, color-coded map:
The green icons represent the cheapest 20% of the markets for that specific fare while the red are the most expensive 20%.
I’m still working on options for other ways to "slice and dice" the data. Got a suggestion or an idea of a view that would be useful? Leave a comment and I’ll see what I can do.
In the mean time, give the tool a whirl and let me know what you think. And check out some of the other tools while you’re on the site. You might be surprised at how useful they can be.
Posted by Seth on August 24, 2011 under frequent flyer, points |
For many months now the rumor mill was been swirling with thoughts on changes to the lifetime elite status program offered by American Airlines‘ AAdvantage program. Today those rumors – most of which were accurate – are laid to rest as the company has announced the details of their new lifetime qualification requirements and benefit levels. The new rules go into effect on December 1, 2011.
First up, the qualification requirements:
Base miles earned by flying on American Airlines, American Eagle® or the AmericanConnection® carrier or any eligible AAdvantage program participating airline will count towards Million Miler status. Also, as a limited time offer, one mile for every dollar spent on eligible purchases using the new Citi ExecutiveSM / AAdvantage® World Elite™ MasterCard® credit card that post to billing statements through December 2012 will count toward Million Miler status*. The Citi ExecutiveSM / AAdvantage® World Elite™ MasterCard® credit card account must be open and in good standing by December 1, 2011.
Second, the benefits for reaching those levels:
- At 1,000,000 Million Miler miles, AAdvantage members will receive lifetime AAdvantage Gold® status and 35,000 AAdvantage bonus miles (which, as you know, can be exchanged for eight 500-mile upgrades if that’s what you prefer)
- At 2,000,000 Million Miler miles, AAdvantage members will receive lifetime AAdvantage Platinum® status and four one-way systemwide upgrades
- At each additional Million Miler mile mark, AAdvantage members will receive four additional one-way systemwide upgrades
Finally, any points accrued to your lifetime balance prior to the rules change will still be there.
As noted above, these changes do not come as much of a surprise to anyone paying attention to the program recently. And the changes bring the program much more in line with their competition. That’s not necessarily a good thing for consumers, particularly as previously American offered the easiest qualification to lifetime status of any program out there. Still, it is not hard to understand their desire to move in this direction based on the costs of servicing the ever growing elite population. AAdvantage President Maya Leibman commented to that point rather explicitly in a round table discussion in April.
The qualification options are still reasonable, however, including base miles flown on all AAdvantage airline partners, not just oneworld partners. It does not, however, include any class of service bonus points that might be accrued for flying in premium cabins or on full-fare tickets.
There is also a one year window for earning points on the credit card, assuming you have the right card and the account was open prior to the rules changing on December 1, 2011. The AA American Express cards are excluded from this earning.
Overall, the program is still reasonably competitive. Not nearly as lucrative as it used to be, but also not horrible. And there has been a decent amount of notice provided prior to the downgrade.
Not a great day for folks trying to be lifetime elite on AA without flying, to be sure, but I can think of many ways it could have been worse.
Update (5:33pm EDT 24 Aug 11):
I just realized that only the $450 annual fee credit card gets the spend to still count. Comparable to Continental and their top-end card, though still likely too pricey to justify. I guess it is a bit worse than I previously thought.
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Posted by Seth on August 1, 2011 under News |
Star Alliance and Air India announced yesterday that the long-pending integration of the airline into the world’s largest global alliance has been suspended. This is the latest in a series of delays announced regarding the carrier’s intention to join the group.
Star Alliance CEO, Jaan Albrecht said: "With the collective decision to put the integration efforts on hold today we aim to contribute to Air India’s flexibility to concentrate on its ongoing strategic reorientation. In this process our member carriers will continue to provide assistance to Air India wherever required."
It was just a couple months ago that the carrier stated they felt ready to finally join the alliance. Apparently that was all bluff, however. Given the financial turmoil the carrier is currently in the midst of it is not particularly surprising that this move came about.
The real question now for the alliance is what happens in India. Kingfisher has already committed to the oneworld alliance. There had been additional rumors of Jet Airways joining with Star Alliance but that was apparently on hold until Air India could get things figured out. With this latest suspension of the Air India efforts could that open up the opportunity for Jet to make a move?
The air travel market in India is huge and growing rapidly. Getting partners in that market is a very important move for these alliances. Sadly, it seems that Star Alliance latched on to the wrong initial partner and is now paying the price for that decision.
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Posted by Seth on June 6, 2011 under frequent flyer, News |
In what is likely the most significant frequent flyer-related news to come out of the annual IATA World Air Transport Summit meetings this year, the oneworld alliance announced that they will be adding Malaysia Airlines to their fold in late 2012. Malaysia Airlines currently offers codeshare flights with future oneworld partners Royal Jordanian and Cathay Pacific; these partnerships will expand in the coming months leading up to the full membership in the alliance.
Malaysia has been the subject of alliance talks off and on over the years with most rumors touching on the SkyTeam alliance which has very weak coverage in the SE Asia region. There are many rumors about why that never happened but few official statements have been made. With this move to oneworld Malaysia now closes that chapter of its history and joins a group with a strong global presence. This also means that it will be even harder for SkyTeam to expand in the region as there aren’t many other carriers left there large enough to have a significant impact on an alliance’s footprint.
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