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 December 19, 2011 under frequent flyer, News |
Etihad has purchased a 29.21% stake in German airline airberlin, becoming the single largest shareholder and taking two seats on the board. The move is not surprising – outside investment in the struggling carrier has been expected for some months now – while the full impact remains to be seen. Perhaps the most significant immediate aspect of the partnership is that Etihad has committed $255MM to ensure aircraft deliveries in the near term.
Among other effects of the move, airberlin will be shifting their Middle East connectivity (only 4x weekly) from Dubai to Abu Dhabi to link up with the Etihad hub there. That’s a drop in the bucket compared to the 25+ flights that Etihad operates to Germany each week from their hub, but it does shift the market a bit. The two carriers plan extensive code-sharing across their networks initially with hopes of receiving anti-trust immunity in the near future.
The two carriers will also be aligning their loyalty programs, permitting earning and burning across carriers and reciprocal elite recognition and earning.
Finally, the two intend to investigate joint procurement opportunities to reduce costs in fleet deployment and procurement, MRO and other functions.
Gaining access to the German market has been something of a challenge for the middle-eastern carriers and Lufthansa has expended a lot of energy protecting the market from Emirates, Etihad and others. This investment shakes up those efforts quite a bit.
Posted by Seth on April 27, 2009 under Trip Reports |
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| Freddie Awards emcee and all-around frequent traveler guru Randy Petersen prepares to take the stage at the 21st annual awards ceremony |
The purpose of last weekend’s trip (as much as I can claim it had a purpose) was to attend the 21st annual Freddie Awards in Ft. Lauderdale. The awards ceremony is run by the folks at Inside Flyer and is designed to recognize and celebrate the loyalty programs of the airline and hotel industries. It operates in association with the Frequent Traveler Marketing Association annual meeting so that brings a lot of folks in to town for the event. Most are associated with one of the loyalty programs, one of the retail reward providers (the folks from SkyMall were a major sponsor, for example) or the folks who actually design and build programs and operate them for the carriers (more on that in another post). And then there was me and about 75 other frequent travelers. Inside Flyer is kind enough to open up the award ceremony to the travel community at large, and that means I got to attend and rub elbows with all of the above industry professionals. I was able to ask a lot of questions and even get answers to some of them. It was very interesting.
Oh, and they gave out some awards, too. Some of the results were very logical and some were quite surprising. Here are some thoughts on a few from each of those categories.
In the Americas Alaska Airlines won the award for program of the year. This was not a huge surprise to me. Their program is great for folks who fly on a variety of carriers (as long as they are an Alaska partner) and that partner network is pretty broad. There is definitely value to be had there.
The surprises (to me) came from the wins in the programs outside of the Americas. Etihad (United Arab Emirates), Virgin Blue/V Australia (Australia) and Jet Airways (India) all won awards; some of them won more than one. These programs all seem to have moved away from what would be considered a traditional reward structure in the United States or Western Europe. Travel rewards are still a significant part of the programs, but the programs are increasingly augmenting their programs by offering retail merchandise and other benefits to their members. The retail rewards may not have the flash and glamour of long-haul premium cabin rewards (generally the best cash value rewards out there) but they are something that they customers can get with smaller numbers of points, without inventory limitations and generally they seem much more readily accessible.
Ten years ago frequent flier programs were much more focused on providing incentives to continue or increase travel on a particular carrier, but they were targeted at the folks who were already traveling a lot. Today the programs have a much broader target audience and that has significantly changed the focus and the types of rewards out there. And if the results from the Freddie Awards are any indication, the masses are not looking at travel rewards as their main redemption target. That is good news for the carriers – the retail rewards are generally actually profitable for the carriers to redeem – but bad news for travelers looking for the high value travel rewards. As more programs shift towards cash-value type reward schemes the premium tickets become ridiculously expensive, even if the inventory is greater.
US-based programs are acknowledging this development in the market in a big way. Virgin America built their eleVAte program around this concept and every indication I’ve see so far suggests that jetBlue’s new incarnation of their TrueBlue program due out later this year will follow this path as well. The legacy carriers are rolling out shopping malls, auction sites and and other retail redemption options. Marriott has long had retail redemption as a prime option for their points and American Express’s Membership Rewards program is geared toward merchandise redemption almost more than they are towards travel rewards. Things are not moving quite as quickly in this direction for the legacy programs, but they definitely recognize the value of this approach and they are certainly happy to get the points off their books while not losing money doing so.
Such a shift does pose a significant risk to the programs, particularly the airlines. For several carriers the best income stream they have these days is their credit card partners and the revenue they realize from selling those points to partners. Billions of dollars are moving around on those transactions. Should the public decide that the value of the points no longer justifies collecting them the airlines will suffer as the credit card companies buy fewer and fewer miles. Of course, with more and more people choosing to redeem their miles for merchandise and the like the risk may not really be so significant. But it is definitely something the carriers have to account for.
The industry is definitely showing trends of shifting and the proverbial writing may be on the walls, or at least starting to appear. Of course, in the mean time I’ll still be redeeming my miles for more travel. After all, I don’t really want more “stuff;” I want the adventures and memories that travel offers me.
Posted by Seth on July 25, 2008 under Uncategorized |
I was at the airport a bit early for my flight on Monday (which made the delay all that much worse). But I managed to pass the time watching the planes coming and going. Better than a poke with a sharp stick.
Virgin Atlantic landing behind Ethiad 
The Eagle has landed. Sorry – I couldn’t resist. 
Passing on the taxiways 
Climb out from JFK, looking down on Delta’s T2/T3 complex 
Posted by Seth on July 17, 2008 under News |
This past week the Farnborough Air Show has been going on. This is one of the major shows, where the airlines and the vendors all show up to announce deals, developments and other fun stuff. I’m sure I’ll make it to a show like this eventually, but in the mean time I have to live vicariously through the other reporters/bloggers/fans there. Some of my favorite bits from the week…
The Boeing 787 Dreamliner was a big topic of conversation. In their update to the press Boeing reiterated that things are looking pretty good on the most recent timetable. There is a small chance that the software that controls the braking system will have delays, but those delays are based on issues with traceability in the code and getting it certified, not in the brakes actually working. I guess that’s a good thing, though it’d be nice if the brakes word AND we can prove it. There also is a delay in some fuselage components in South Carolina, but thus far that delay can be handled with slack time built in to the schedule. Boeing still is pretty confident in their Q4 target for first flight. Boeing is also considering adding a second assembly line to help deal with the backlog.
“Going Green” is always a good way to get press, and for airliners it is pretty hard to claim to be going green when your product burns a lot of fuel. Bombardier, a Canadian airplane manufacturer, announced their CSeries, the “greenest” passenger jet ever at the show. The CSeries is designed to seat 110-130 passengers and use 20% less fuel than comparable sized planes. That being said, there are very few comparable sized planes in the market today. Some older 737 models (the –300 and –500) both qualify, but Boeing hasn’t been selling those new for a while now, preferring to focus on the slightly larger 150-180 seat 737NG models. On the plus side, there is a good chance that these CSeries and the similar Embrear 190s (100 seats) will start to replace the smallest regional jets that are particularly cramped and uncomfortable to ride in.
Planes are pretty. This guy took some great pictures during the show. So did this guy.
And, as I mentioned above, lots of deals announced as well. Embraer announced 22 planes sold. Etihad announced a huge purchase sheet: 35 Boeing 787-9 and 10 777-300ER aircraft, 20 Airbus A320s, 25 A350 XWBs and 10 A380s. That’s more capacity than a LOT of airlines out there these days, and they’re just up the Gulf from Dubai where Emirates has a ton of planes and more coming.
Lots more happened, but these are some of the highlights that I thought were useful.
