Posted by Seth on January 10, 2012 under Flying, frequent flyer, News | 
As part of their bankruptcy reorganization efforts American Airlines has announced that they are cutting the longest route in their network, the flights between Chicago and Delhi, India. The flights are being terminated as of March 1, 2012. Live from a Lounge (a local on the India side) and One Mile at a Time (a quite vocal AAficionado) have both weighed in on the topic, mostly with disbelief. To me the surprise is really that it took the bAAnkruptcy to do the route in.
At least one analyst out there says the route was losing $40MM annually. And naturally you’re going to cut anything that isn’t profitable in a reorganization, right? The problem with that approach is that, at this point, nearly everything American touches is not profitable; they’ve got the inverse of the Midas touch. The real question should be whether a route can be profitable, not whether it is right now. And in the case of the Delhi flight, the answer is still no.
It is the longest route in their system, roughly 7500 miles in the air each way. That’s a whole lot of fuel that needs to be carried so the plane can make it to the destination, and that fuel has increased significantly in cost since the route was launched in 2005. It seems that even if the company could get the labor costs down, their stated goal in the bankruptcy process, the other fixed costs of the route are still too great.
The same analyst who asserts the $40MM annual losses also suggests that there are a few other routes which are hemorrhaging cash and which seem primed to be cut: New York-London, New York-California, Chicago to Delhi, Beijing and Shanghai and Miami to Buenos Aires. Seems unlikely to me that all those are going to be touched. The London routes gets the advantage now of ATI, something that was far too late in being granted by the authorities on both sides of the Atlantic. That should help significantly for margins on that service. The transcon market is an interesting one and I could see some changes come, but I doubt they’ll fully retreat. And the South America service seems to have way more potential than the Asia routes, putting it squarely in the "potentially could be successful" category.
Could the Beijing and Shanghai routes be on the out? Loads to China are down and the yields are likely following. At the same time, however, getting back into that market is incredibly challenging. Plus, there aren’t particularly great onward connections if you look to partners. It seems much more likely that the China routes could be profitable and that they’d stick around a least a bit longer.
The other consideration for American, more than individual routes, is the combined effect of cutting too much on the route map. Their international network was already somewhat anemic outside of Latin America and further cuts won’t help that. Even with partners and the ATI agreement, it is hard to market and sell flights to corporate contracts when you don’t actually have service to the destinations they need to serve. And a merger with US Airways, JetBlue or Alaska Airlines isn’t going to solve any of those problems.
Related Posts:
Posted by Seth on December 6, 2011 under News |
American Airlines has made reduction of costs the cornerstone of its bankruptcy reorganization plans. From the very beginning they’ve made it clear that they expect to cut costs pretty much across the board. This includes returning some aircraft to lessors and getting out of some real estate deals and also, hopefully, renegotiating labor contracts. That last part likely just got a lot harder.
A nine-member panel was appointed to represent unsecured creditors of the company and three of those seats are held by representatives of the company’s unionized workforce. The pilots, flight attendants and ground workers each received a seat on the panel, along with Boeing and other creditors. Having that strong a union voice in the courts as recommendations are heard is going to make it much more difficult for the company to pull a fast one on the employees, but that also seems to be their only plan for getting out of the bankruptcy so that could hinder those efforts.
In other bankruptcy news, some analysts are suggesting that American should scale back operations at Chicago, Los Angeles and New York City and focus on their fortress hubs in Miami and Dallas-Ft. Worth. Fortress hubs are great, I suppose, for the business. But when that’s all you have you’re horribly susceptible to competitors showing up and fighting. And that sort of fight isn’t what an already struggling company needs to be faced with.
Always interesting to see what’s next…
Posted by Seth on November 22, 2011 under frequent flyer, News, points |
April 2012 is going to be a busy month for Star Alliance. That’s when Copa and Avianca-Taca are expected to become full members of the global alliance, culminating a process that has been ongoing for many months now. The official invitation to join was extended just earlier this month and it seems that the integration process will be completed incredibly quickly by global alliance standards. Normally the integration takes 12-18 months (or even longer if you’re Air India) but these carriers plan to do it much faster.
For Copa the process shouldn’t be too hard. They already use the same OnePass loyalty program as Continental and that will merge into the new MileagePlus program from United. There will still need to be bilateral agreements drawn up with the other alliance members and some adjustments on the inventory and computer systems side of things but they are pretty far ahead in the game.
For Avianca-Taca there is definitely some more work involved. Although the carrier has frequent flyer relationships with Star Alliance members United and Lufthansa there are still more steps required to get fully integrated. Still, Copa CEO Pedro Heilbronn confirmed that join date for both programs so it looks pretty good, at least for now.
One interesting bit about Copa joining the program is that, as of today, there are no long-haul flights into the Panama City hub from overseas. There are connection options from Dulles, O’Hare, Los Angeles, Houston and Newark, giving great integration to the United Airlines network, but not much beyond that. It will be interesting to see if joining into Star Alliance can bring some more long-haul traffic into that hub.
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Tags: Avianca, Chicago, Continental, Copa, frequent flyer, houston, Los Angeles, Lufthansa, Newark, Panama, points, Star Alliance, Taca, United, Washington DC
Posted by Seth on November 18, 2011 under frequent flyer, News, points |
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.
| Avios costs for multi-carrier reward flights |
| Miles in your journey |
Avios needed for an economy flight |
| 0-1,500 |
30,000 |
| 1,501-4-000 |
35,000 |
| 4,001-9,000 |
60,000 |
| 9,000-10,000 |
70,000 |
| 10,001-14,000 |
90,000 |
| 14,001-20,000 |
100,000 |
| 20,001-25,000 |
120,000 |
| 25,001-35,000 |
140,000 |
| 35,001-50,000 |
160,000 |
|
Business class reward flights: x2
First class reward flights: x3
|
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):
| AMM |
DTW |
30000 |
| AMM |
JFK |
30000 |
| AMM |
ORD |
30000 |
| AMM |
YUL |
30000 |
| AMS |
HKG |
30000 |
| BOG |
MIA |
10000 |
| CCS |
MIA |
10000 |
| CDG |
HKG |
30000 |
| CUN |
MIA |
4500 |
| CUN |
SCL |
20000 |
| FCO |
HKG |
30000 |
| FRA |
HKG |
30000 |
| HEL |
SIN |
30000 |
| HKG |
PVG |
7500 |
| HKG |
HND |
10000 |
| HKG |
ICN |
10000 |
| HKG |
KIX |
10000 |
| HKG |
NGO |
10000 |
| HKG |
LHR |
30000 |
| HKG |
MXP |
30000 |
| HKG |
YVR |
30000 |
| HKG |
JFK |
35000 |
| ICN |
TPE |
7500 |
| JFK |
LIM |
20000 |
| KIX |
TPE |
7500 |
| LIM |
SCL |
10000 |
| MAD |
SCL |
30000 |
| MIA |
PUJ |
7500 |
| PUJ |
SCL |
20000 |
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
- TPG’s thoughts:
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Tags: British Airways, Cathay, Chicago, frequent flyer, Iberia, Istanbul, LAN, London, Membership Rewards, New York City, Paris, points, Qantas, Spain
Posted by Seth on September 1, 2011 under News |
Fuel dump [fyoo-uhl duhmp] (noun):
1. An airfare construction designed to reduce the YQ fuel surcharge that airlines place on certain routes. Used by passengers to save potentially hundreds of dollars per ticket.
2. A tax avoidance scheme perpetuated by airlines via shell companies to avoid paying millions of dollars annually to the city of Chicago
A nod of the cap to Frequently Flying for mentioning this story yesterday. Basically American Airlines and United Airlines have both set up shell companies in Sycamore, IL where they buy lots of jet fuel. Sycamore is just over an hour west of O’Hare and doesn’t really have much to do with airport or airline operations, other than that the city government there was nice enough to set up a great kick-back system for the airlines.
When jet fuel is purchased in Illinois it is only taxed at the retail level. By placing the wholesaler in Sycamore the airlines are able to avoid a 1.75% Chicago city tax on fuel. Even better, however, is that the city actually refunds part of the city tax paid. Of the 8% sales tax charged only 5.25% goes to the state. The city gets to decide how they want to spend the other 2.75%. And the city has decided to give most of the cash back to the airlines in exchange for hosting the operations in Sycamore. The city keeps only about $400,000 of the funds and is "thankful for the revenue stream."
Makes me feel a bit less bad about trying to trim a couple hundred dollars of fat from a few fares every now and then.
Posted by Seth on August 22, 2011 under Flying, News |
The purchase of AirTran by Southwest was, in large part, to gain access to significant gate and slot portfolios at a few major airports where the company had previously had difficulty establishing a presence. So it should come as no surprise to see those operations leveraged in a way that better integrates with the route and operational structure that Southwest has built over the years. Southwest CEO Gary Kelly announced a number of new routes from Atlanta today at a meeting with local business leaders, kicking off the first notable shift of legacy AirTran resources to fill gaps in the Southwest network.
Starting on February 12, 2012 the company will add 15 daily frequencies out of Atlanta to five airports, four of which serve as hubs for the company’s operations. The new routes include service between Atlanta and:
- Austin – two daily nonstop roundtrips
- Baltimore/Washington – four daily nonstop roundtrips
- Denver – two daily nonstop roundtrips
- Houston Hobby – three daily nonstop roundtrips
- Chicago Midway – four daily nonstop roundtrips
Certainly not a major overhaul of the route network or even scratching the surface of the capacity the carrier has to work with in Atlanta. But it definitely shows the beginnings of the integration of Atlanta into a major point on the combined carriers’ network and how passengers will flow through the other hubs for onward connections. Expect to see similar moves at the other big airports the purchase came with (e.g. LaGuardia and Washington National) soon.
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Posted by Seth on June 15, 2011 under News |
Want access to the priority security lines at the airport without elite status or buying a first class ticket? Looks like it is time to start flying JetBlue. The carrier announced today the 15 airports at which their new "Even More Speed" program will be implemented, allowing customers access to the "priority" line that other carriers afford to elites or premium cabin customers. With JetBlue this perk will be an additional benefit of the Even More Legroom seats which are being rebranded as well as part of the move.
The initial airports for priority screening are:
Priority screening is also coming to Boston in the next 4-6 weeks as the reconfiguration of the checkpoint there is completed.
In addition to the priority screening access the company is changing the Even More Legroom moniker to Even More Space. The impetus for this change is the addition of early boarding for those customers, providing them the first chance to get at the overhead bins. The early boarding benefit isn’t particularly new but the branding is. Maybe they got a bulk discount on trademark registrations with "Even More" in the name.
Overall this is a nice addition to the offerings that JetBlue has. Combined with the previous indications that some sort of "elite" program (though they refuse to use that word) is coming and that some of these benefits are likely to carry over, it seems clear that JetBlue is working hard to woo the business traveler segment more than ever.
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Tags: Boston, Chicago, elite status, JetBlue, Las Vegas, Los Angeles, New York City, Newark, San Francisco, Seattle, TSA, Washington DC
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.
Related Posts
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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