Posted by Seth on July 27, 2010 under News | 
They say that bad things come in threes. Southwest Airlines seems to think so, or at least their recent policy changes are playing out that way. First it was the changes to their “travel bank” funds policy. Then there was the claim that mechanical problems aren’t really their fault. And today it is strike three: Many drink coupons will lose their value this weekend.
Southwest has had a VERY lenient policy regarding drink coupons over the years. Most notably was that, although there was an expiration date printed on the coupons, they were always accepted. As of Sunday, August 1, 2010 that will no longer be the case. Starting in the new month no chits will be accepted past their printed expiry date. Additionally, chits that do not have an expiry date printed on them will inherit such a date: August 31, 2011. Finally, the drink coupons that customers receive for buying Business Select fares – the most expensive fares Southwest offers – will now only be valid on the day of travel; they cannot be saved for future use.
There are also some changes expected with the next round of drink chits that get issued. Most notably they have the customer’s name and Rapid Rewards member number printed on them. No word yet from the company on why they will be personalized but it will certainly limit the 3rd party market value of the chits. Selling a drink chit on eBay is much less likely to happen if it has a name and member number on it.
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Posted by Seth on July 25, 2010 under News |
Airlines generally stack the deck against their customers. Most rules are written such that should anything go wrong, the airline will likely benefit more than the passengers do. In some cases this is reasonable – an airline certainly isn’t responsible for delays caused when weather happens – but in many cases it is not. Historically airlines have accepted that maintenance of their aircraft is something that they are responsible for and that a mechanical failure of a plane is something that they should have avoided in the first place, leaving them on the hook to care for passengers during any associated delay or cancelation.
Southwest has decided to push the envelope on this issue, however, declaring that mechanical failures of their aircraft are force majeure events in their newly revised Contract of Carriage (CoC):
Force Majeure Event means any event outside of Carrier’s control, including, without limitation, acts of God, meteorological events, such as storms, rain, wind, fire, fog, flooding, earthquakes, haze, volcanic eruption or any other event, including, without limitation, government action, disturbances or potentially volatile international conditions, civil commotions, riots, embargoes, wars, or hostilities, whether actual, threatened, or reported, strikes, work stoppage, slowdown, lockout or any other labor related dispute involving or affecting Carrier’s service, mechanical difficulties, Air Traffic Control, the inability to obtain fuel, labor or landing facilities for the flight in question or any fact not reasonably foreseen, anticipated or predicted by Carrier.
Tucked away at the bottom there is the phrase “mechanical difficulties.” Having those two words in this section of the CoC essentially means that Southwest has significantly fewer obligations to their customers now should there be an aircraft breakdown. Southwest is the only major US-based carrier to include that phrase in the force majeure section of their CoC. Maybe this only applies if the whole fleet is affected – think DOT maintenance directive or something similar – but that certainly is not clear from the way the Contract is written. Moreover, there are a number of seemingly conflicting sections in the CoC that Southwest may or may not hold responsibility in the same instance. These gray areas are dangerous territory for customers.
Combined with the move to limit the use of travel credits for canceled reservations, the new Southwest CoC takes a significant step backwards in customer flexibility and care. The airline has made a name for itself in many ways because of the reputation it carries for customer care. These changes portend a very unfortunate change in such customer-focused service.
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Posted by Seth on July 19, 2010 under News |
No, it isn’t a real bank, but Southwest Airlines sortof operates like one with respect to their fares and change fees. How so? Buying a ticket is essentially making a deposit into that bank and the money in one’s account could be applied to any future ticket with the only limitation being the expiry of the funds based on the date of the initial deposit. The tickets themselves are non-transferable, but the value associated with them could be assigned to another passenger. This is no longer the case.
Airlines and their operations are governed by many different things, but when it comes to interaction with their customers the Contract of Carriage (“CoC”) is king. Regardless of what is mentioned in marketing materials, what an agent tells you or what you might think you are supposed to receive, it is the CoC that ultimately determines what will or will not happen. Airlines generally don’t tinker with their CoC very often and when they do it is generally a minor tweak. Southwest quietly issued an updated CoC last week, their 7th major revision in the company’s nearly 40 years of operations. Among other things, this change to the “Bank of Southwest” is included in the latest CoC update.
Refundability and Transferability of Funds
While the vast majority of tickets that Southwest sells are nonrefundable, the carrier makes it possible to “bank” the value of those tickets for future travel in case plans change. With the July 14, 2010 revision of the CoC a new phrase has been inserted into the clauses describing the value of these Ticketless Travel Funds (“TTFs”): “for the originally ticketed Passenger only.” The previous CoC §90(B) read:
Nonrefundable tickets – Passengers who purchase restricted, nonrefundable tickets are not eligible for refunds…the fare paid for unused nonrefundable tickets, upon surrender of the usused ticket or portion thereof, or with the Ticketless Travel confirmation number and proof of purchase sufficient to Carrier, may be applied toward the purchase of future travel, without penalty, provided that travel is completed within the ticket’s eligibility period.
The new version §4(C)(3)(ii) reads:
Travel Credit. Unless otherwise stated by Carrier, the fare paid for unused nonrefundable Tickets, including taxes, security fees, and Passenger Facility Charges, may be applied toward the purchase of future travel on Carrier for the originally ticketed Passenger only.
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Posted by Seth on May 4, 2010 under News |
The Department of Transportation (DoT) issued a ruling this afternoon denying the attempt by Delta and US Airways to dictate the terms of landing slot divestitures as part of a mega deal between the two carriers. The initial deal was announced last August, with Delta to gain over 120 slot pairs at LaGuardia and US Airways to gain more than 40 at National Airport in Washington, DC. The DoT had issues with that plan and suggested that the two carriers would need to divest some of those slots to offer other airlines the ability to become more competitive in the NYC and DC markets.
So then, in late March, the two carriers announced a plan to offer a number of slots to competitors. No, they didn’t offer quite as many as the DoT initially requested, but it was pretty close. And the swaps announced did offer a lot of competition. Most notable was the US Airways deal with JetBlue, bringing that carrier into National for the first time. But, in a ruling today, the DoT has stated that the plans drawn up by Delta, US Airways and the other five carriers are insufficient.
Why? Because the slot divestiture was not conducted as a blind auction. In other words, the two carriers should not have been permitted to negotiate with other airlines to get the best deal possible for the slots they are being forced to give up. They must, instead, simply place them up for grabs and hope that the revenue they realize is good enough. Odds are the prices will be similar enough, but it is hard to know for sure.
The other objection, one raised most vocally by Southwest, is that the airlines should not be allowed to choose their competitors. This makes a bit of sense coming from Southwest; they are not shy about their desire to acquire more slots at LaGuardia. But there is also nothing stopping them from pursuing those slots on the open market. If the price is right someone will be willing to sell the slots, right?
And so it is back to the drawing board, and the courthouse. Delta and US Airways have announced their intentions to appeal the ruling.
There are no winners in this decision – consumers lost, communities lost and our employees lost. Even our competitors lost.
Yeah, they’re not too happy about this at all. And I’m guessing that a few others are pretty annoyed, too, including JetBlue. The good news is that JetBlue still has eight slot pairs that it acquired in a deal with American Airlines. But those extra five would have been pretty nice to have.
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Posted by Seth on April 23, 2010 under Trip Reports |
Most folks want oceans, mountains, lakes or other beautiful nature when looking out of their hotel rooms. I like that stuff, too, but if I’m staying at the airport hotel I’m hoping for a room with decent views of the runways. At an airport like Los Angeles International, where the airplanes coming and going are more varied that desire is even stronger. I love that I got to watch a Yangtze River Express 747 freighter land this morning as the sun was coming up and that I got to watch the sun disappear into the sea just off the end of the runways last night as planes came and went. Besides, the LAX runways have mountains (ok, hills) and ocean surrounding them so everyone wins.
A Southwest 737 prepares for takeoff with a Virgin America Airbus right behind.
A Southwest B737 just off the ground with an Air China B747, Air France B777 and Alaska Air B737 in the foreground
A B747 freighter arriving from China
Look up a bit from the horizon and you cannot even tell it is an airport.
Yeah, it may not be for everyone, but this is a room with a view that is pretty much perfect for my somewhat “different” outlook on the world. For those curious, room 1438 at the Sheraton Gateway LAX.
Posted by Seth on April 14, 2010 under News |
The in-flight internet connectivity market has lost a competitor with the news that the Kiteline product is officially shelved. Kiteline was initially launched as a lower bandwidth cellular solution to in-flight connectivity, essentially the same concept as the Aircell gogo product, but with limited features – only certain websites would work – and a lower price point to both the airlines and the end-users. Since the launch of the original plane with the product, JetBlue’s BetaBlue, several years ago the development of the product has languished in development. Despite an announcement of a trial in Q2 2010 with Continental Airlines an updated the product has never seen the light of day. The Continental trial was delayed indefinitely and now the Kiteline project is, by some accounts, dead.
Ultimately the problem with the product came in the inability for LiveTV to source an antenna to mount on the aircraft that would meet the performance, weight and cost requirements.BetaBlue operates on a legacy Airfone antenna that was hacked together to provide data connectivity to the aircraft. It was functional enough to prove the concept but not viable in the long term. That’s where the need for the new antenna system came into play. That effort was contracted out to a Canadian company. That company, however, was unable to deliver a working model. Ultimately, after a number of delays in the development cycle, the contract was terminated. No further development is expected in the near-term. The future of the frequency allocation that LiveTV holds for the service is uncertain at this time. LiveTV officials offered no comment when queried.
So, what’s next in the world of in-flight connectivity? There’s still Aircell, the leader in the US market, with deployments active in roughly ten airlines. Row44, leveraging a Ku-band satellite solution is still in the market with their Southwest deployment in progress though, much like AIrcell, the business plan that they are operating under seems somewhat questionable. There is also the Panasonic Ku-band solution that Lufthansa has committed to for its long-haul fleet.
And then there is the dream of a Ka-band solution. Promising significantly higher speeds and dramatically lower costs versus the Ku-band options Ka seems to be the holy grail. Of course, no one has a functional product out there yet, but the idea continues to draw interest from various parties and is the target of perhaps the most R&D efforts at this point. There is nothing stopping the folks at LiveTV from moving into the satellite-based service space, though they haven’t made any formal announcement of such a change.
It is always a shame to see a competitor drop out of the market, especially when they promised so much. Then again, perhaps it was such bold promises – particularly with no history of developing a similar product – that should have been a red flag on the Kiteline dream. Hopefully they come back with another option in the future. Gogo is great but on the expensive side and the market adoption still lags when it isn’t being given away through a promo of some sort. When only 20% of the passengers are using it on flights when it is free that is not a tremendous vote of confidence in the commercial viability of the product.
So, what’s the next big thing in in-flight connectivity? Hard to say for certain, but it looks like a terrestrial-based product from LiveTV is not in the cards.
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Posted by Seth on April 13, 2010 under News, frequent flyer |
US Airways has announced an apparently targeted (though I got the email) double miles promotion for the spring. It includes both reward and elite miles, a first in this type of promotion in recent memory. The promo applies to newly-issued tickets for travel between April 13 and June 15, 2010.
Registration is required.
This promo is even more desperate than the Southwest double Rapid Rewards promo that just launched as that one didn’t cover their A-List status in the bonus points. The inevitable debate on which other airlines will match has begun. Hard to know which other carriers will take US seriously on this sort of thing. I guess we’ve got a few days to wait it out and see if anyone else blinks.
Update: Most definitely not targeted.
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Posted by Seth on April 10, 2010 under News, frequent flyer |
I like when the airlines offer frequent flyer promos for a number of reasons. First off, there’s the opportunity to earn a ton of extra points. But most promos don’t apply to most customers so there is another aspect to it that I find interesting. The promos are often used by the airlines to improve bookings on routes where there is heavy competition or where the loads are otherwise not performing all that well. When the promos are system-wide it is an even stronger signal that the airline is looking to drum up business in an hurry.
A few weeks back there were a rash of bonuses announced on the Baltimore – Boston route as Southwest, JetBlue and AirTran began fighting in earnest for market share on the route. In the past couple weeks another set of routes has seen a targeted bonus pop up: premium cabin trans-continental routes. Delta fired the opening shot in that battle offering up huge numbers of miles for service in their relatively new BusinessElite product on flights between New York City’s JFK and both Los Angeles and San Francisco. Passengers buying paid business class tickets can earn 50,000 points for each round trip flown on the routes. For passengers with slightly less deep pockets there are 25,000 mile bonuses available for folks flying on the most expensive coach fares, most of whom will be riding in the BusinessElite seats anyways. The promo is valid for travel from April 1 to May 30.
American Airlines responded earlier this week, essentially copying the Delta offer. At least they didn’t have the gall to call their regular economy seating “premium economy” fares.No word yet on whether Virgin America or United Airlines – the two other carriers with a premium product on the transcon routes – will be responding to this fight. Some additional coverage of the NYC transcon promos can be found here.
It seems that business travel is recovering a bit but perhaps not as many companies are offering paid premium cabin travel for the domestic transcons anymore, pitting the carriers against each other in an effort to grab the lion’s share of that shrinking market.
American has also launched a rather creative tiered promotion for service to their newest destinations. The carrier is adding service to 17 destinations in the coming months and passengers who fly to more than one of those destinations will receive progressively more bonus points, up to 100,000 if they can get to 10 of the airports. This promo also requires registration and runs through the end of July.
And then there’s Southwest Airlines. Forget targeted promotions. Rapid Rewards has a wide-open promo running right now. All fares and all routes are eligible with the lower fares receiving double credit (one bonus point for each itinerary) and Business Select fares receiving 2.25-3 credits per itinerary depending on distance traveled. The promotion is valid for travel through May 26, 2010. Wholesale promos like this hearken back to the crazy promotions that most the legacy carriers were running double elite miles promos in an effort to build new bookings. The Southwest promo is only good on new bookings so they’re doing what they can to generate more revenue in the short term. Is this a bad sign for Southwest? Are future bookings and revenue numbers that weak? We won’t really know for a couple months yet when the financial reports come out, but seeing promos like this are always a red flag to me regarding a carrier.
Lots of opportunities to earn a ton of points right now, assuming you’re flying on these carriers and on these routes. Have fun!
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Tags: AirTran, American Airlines, Boston, Delta, frequent flyer, JetBlue, Los Angeles, New York City, points, San Francisco, Southwest Airline, United, Virgin America
Posted by Seth on March 26, 2010 under News |
One of Southwest’s recent commercials has a bunch of their baggage handlers flashing their painted chests at an AirTran plane with the slogan “Bags Fly Free” spelled out. Cute, right? Well, the folks at AirTran have a bit of a sense of humor about the situation and they’ve responded online with this “ad” that they would run if they really cared. Or so they claim.
I love when the airlines have a sense of humor about themselves and their competitors. Behaving too seriously just isn’t believable.
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Posted by Seth on March 25, 2010 under frequent flyer, points |
Who knew that the Boston – Baltimore route was so coveted? Apparently Southwest, AirTran and jetBlue are convinced it is. The three carriers have launched a bit of a price and points war on the route this week. For starters, there is the fare – starting from $49 each way plus tax. That’s not too shabby, especially considering the pretty wide open availability of seats at that price unlike some sale fares that are quite limited.
On top of the good price, however, all three airlines are also offering bonus miles on the route. AirTran is offering double A+ Reward points while jetBlue is offering triple TrueBlue points. Southwest is also offering a bonus. Registration is required for both promotions.
Neither offer is enough to get me to go out of my way to fly the route, but always good to know that there are still some pockets of competition where the airlines are vying for your business.
UPDATE: Updated noon Friday EDT to reflect Southwest’s participation in the fun.
Posted by Seth on March 2, 2010 under News, Trip Reports |
A few months back the news came out that the Department of Transportation would be issuing significant fines against airline operators when they had flights delayed more than three hours between the runway and the gate. The rule hasn’t actually done into effect yet – there are a couple weeks left until enforcement begins – but several airlines appear to be already running their operations in line with the new rules? The net effect of the change in the airlines’ behavior? Thousands of canceled flights across the country.
This should not come as much of a surprise to the traveling public but apparently it is. It seems that the airlines are choosing to cancel flights much more aggressively now when faced with a severe weather situation and they are doing so without any real obligations to their customers. It is not a good thing at all. But it is apparently what society thought they wanted so it is what we’re now faced with.
It is interesting to hear the spin that airlines are putting on their new policies. Take the line from Continental President and CEO Jeff Smisek about the company’s Operations Center policies:
During difficult weather our [Operations] team … works to pre-cancel flights in order to minimize inconvenience for our customers.… [The plan] not only allows Continental to minimize disruptions for passengers during irregular operations, it also permits us to return our operations to normal as quickly as possible after a weather event.
And there is no doubt that parts of this is actually true. It does appear that the airlines are able to get back to normal operations generally pretty quickly after a weather event, though it isn’t completely obvious that it is any better than before. There are, however, some parts that don’t seem to quite live up to the expectations being set. Things like the airlines simply canceling out all of their regional and express operations for a days at a time are not good for customers. When the ability to actually complete travel is frequently delayed two or more days from the weather event it is hard to see how that is minimizing disruptions for passengers. When airlines are unwilling to pay the cost of accommodating their customers on the airlines that are operating the situation becomes even more difficult, especially when the reasons given for the cancelations are less than wholly accurate.
And it isn’t just one or two airlines that take the wholesale cancelation approach. In the past month there have been a number of weather events in the Mid-Atlantic and Northeastern United States and many carriers have taken this approach to handling the situation. Southwest, Delta, jetBlue, United and US Airways have all done it at one more more airports for one or more days. That’s hundreds of thousands of passengers displaced because of thousands of flight cancelations.
But it could be worse. More troublesome than just canceling all the flights and telling everyone to go home is when a carrier cancels all their flights across the board and then starts putting a few back into operation. There are simply too many moving bits to keep track of to keep everyone informed. At Newark last Friday I watched as thousands of passengers, self included, were given the run-around while flights were reinstated, moved to new gates, delayed or canceled again and otherwise left with misinformation.
For my own flight a call from the lounge to the gate indicated that I was the only passenger who had not yet boarded the flight and that they were getting ready to depart without me. A quick sprint to the gate showed a much different reality. They were still trying to find a full crew to get on the plane and get us out of there. I’m not sure if the agent in the lounge just didn’t want to deal with me anymore, if the woman at the gate was less than truthful or if no one knew what was going on at all. But it truly sucked from a passenger perspective.
And I was one of the lucky ones. I actually made it on to my flight with only a 5.5 hour delay and with an upgrade. Two other friends in the airport had no reasonable choice other than to cancel their travel plans completely. Ditto for two other guys supposed to make the trip out to Las Vegas for the weekend with us. So what is good for the customer about these new policies?
There are plenty of problems in the airline industry today but this new approach doesn’t solve many of them, other than to avoid DoT fines. Thanks for looking out for the consumers there. Y’all screwed up on this one pretty good.
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