Posted by Seth on May 14, 2010 under News, frequent flyer, points | 
AirTran is no stranger to poking fun at other airlines and doing what they can to poach frequent flyers from those carriers. They basically have no shame in that regard. And why should they? Marketing is all about going after the customers, right? Being able to do so with a sense of humor is an added bonus. In the case of their latest promotion, they’re going after the Midwest/Frontier combination in Milwaukee, and once again they’re being creative about it.
For starters, they are offering a status match to anyone who holds Midwest Miles Aspire or Executive status. Those customers can become AirTran A+ Elite simply by submitting a request. Considering the reciprocity between the AirTran and Frontier programs that is now coming to an end this makes sense as an effort to hold on to those customers.
And then there is the creative part. AirTran is also offering Midwest Miles members the opportunity to earn AirTran A+ credits simply by redeeming their Midwest miles. Yes, there are some restrictions. Midwest Miles members must redeem their miles for a charity donation through the Midwest program. Credit in the A+ program will only be earned at the 50,000 and 100,000 levels of donations/redemptions. But if someone chooses to redeem their miles that way they essentially can convert the reward miles from one program to the other – causing a donation to be made in the process – and the devaluation of the points isn’t all that horrible.
Like I said, quite a creative way to gain customers. And now that the new Midwest/Frontier is no longer Milwaukee’s hometown airline there is decent motivation for those customers to go looking.
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Posted by Seth on October 1, 2008 under Uncategorized |
Southwest has announced plans to start service to Minneapolis – St. Paul International Airport (MSP) in March ‘09. The only route that has been announced so far is to Chicago Midway, but this is clearly an attack on Northwest and a pretty big bet on Delta scaling back MSP service in the coming months after the Delta/Northwest merger closes.
Considering the success Southwest has had in Denver going after United and Frontier, I am going to bet on them succeeding rather well on this bet. The biggest risk they face is Northwest/Delta getting into a pricing war and trying to undercut the fares and beat them out of the market. Prior to the merger Northwest would have never let it happen without a serious fight. But with Delta taking over this will just be a good excuse to show “lower demand for flights” and make “appropriate adjustments in the service frequencies” in Minneapolis.
This will be great for passengers there as long as Southwest ramps up service commensurate with demand, which I think they will do. They certainly have the fleet and route network available to do so.
Posted by Seth on June 4, 2008 under Uncategorized |
United Airlines is planning severe cuts to their fleet, their route capacity and their staff, according to sources; the formal announcement could come as soon as today.
Most domestic US airlines are planning some sort of capacity reduction these days; AA announced similar 10-20% reductions in capacity and an evisceration of their San Juan hub. Still, United’s plan looks to ground 94 of the 460 planes the company operates (all the 737-300 and 737-500s) and also reduce their 747 fleet. These cuts are expected to take place over the next 12-18 months, but things are looking pretty grim.
As part of the cuts, United will be (finally) retiring their Ted product. Initially crafted as a low-cost carrier within a carrier, the concept of all-coach seating and reduced meal service never was really able to reduce costs sufficiently to compete with other LCCs in the market. And it turned off a lot of business travelers since their upgrades went away. Those planes are now expected to be refit with F cabins and the Ted brand retired.
The biggest loser in this whole deal may be the company’s Denver hub. With SouthWest nipping at the edges and pushing Frontier – another Denver-based carrier to the edge – United may suffer a similar fate at that airport. I hope the flights don’t disappear from DEN too quickly; I have EWR-DEN-HNL booked for this fall and I want to cross Denver off on my airports list, but I’ll definitely be keeping an eye on that one.
This is also pretty much an admission of defeat for the United CEO, Glenn Tilton. He was brought in during the bankruptcy to help form the company into an attractive merger target. Continental walked away earlier in the year, and even US Airways, generally considered to be the red-headed step child in the US aviation market, couldn’t come up with an agreement to merge with United. So Tilton failed at his job and is now actually being put in a position where he has to run the company rather than apply lipstick onto his pretty pig.
Posted by Seth on April 11, 2008 under Uncategorized |
Yet another airline struggling with cash-flow issues, Frontier Airlines, based in Denver, has filed for Chapter 11 bankruptcy protection this week. Unlike the last few, Frontier plans to continue operations for the immediate future, so things aren’t all bad, but it is still a bad sign for the company’s shareholders and somewhat worrisome for passengers.
Frontier used to be profitable and is pretty well established, unlike ATA and SkyBus. Plus, the reason they cited for the filing is an interesting one. It isn’t that their expenses have spiraled out of control or other similar issues. The problem is from one of the credit card merchants. Every time an airline shuts down you hear everyone say to just go to the CC company and get the charge refunded. The reason that works is that the CC companies basically hold a sizable amount of the payments due to the airline in escrow; they don’t actually pay the airline all the money. So if the airline shuts down then the CC company has the money still and can pay the consumers back, without it hurting the CC company’s bottom line. In the case of Frontier, apparently one of the CC companies is getting a bit nervous and had asked to increase the amount held in escrow, effectively hedging their bets on Frontier ceasing operations. And that triggered the bankruptcy filing. And the filing will trigger concern from many passengers about the stability of the carrier and slow down bookings. Fewer bookings will result in less revenue and profit, and that has the potential to actually put the carrier out of business. In other words, the CC company must be right, because their actions will actually cause the effect that they were trying to act to protect themselves from. Sure, that is a bit of an over-simplification, but it is similar to runs on banks back in the Depression of the ’30s, where banks were put out of business because of rumors that they might go out of business. Watch Sneakers (a fun movie in its own right) for an entertaining conversation about the effect if you want more.
Anyways, this is certainly worrisome for a number of people, and time will tell how it plays out. I sure hope they keep operating, but competing against SouthWest and one of United’s hubs can’t be easy.
