Adios, Spanair

Posted by Seth on January 27, 2012 under News | 4 Comments to Read

Spanish regional airline Spanair is apparently ceasing operations effective immediately, shutting down their network of flights with virtually zero notice. The move comes as Qatar Airways has cut off talks with the carrier about becoming an investor and infusing cash to help keep the airline afloat. Additionally, the Catalan government has decided to cease providing additional loan funds to the carrier. Most reports from Spain suggest that the company will not be flying any more at all, though there are also a few updates trickling out which suggest there might be additional flights tomorrow. Most of the reports are in Spanish and I’m depending on Google Translate to get the gist of the situation but I’m guessing I’m not getting everything completely correct.

This move also cuts out a chunk of service for Spanair’s partners in Star Alliance. The carrier often had good inventory for awards and also generally a good regional network for connecting passengers on the Iberian peninsula. Then again, this is the same company which repeatedly sold codeshare inventory on US Airways metal at ridiculous discounts (or errors) to the point that US Airways cut off their codeshare agreement not too long ago.

Sad to see an airline fail and so many folks newly unemployed (estimates suggest ~4,000). Good luck with accommodation if you’ve got Spanair flights booked.

The debacle that is Avios, and a few gems it offers

Posted by Seth on November 18, 2011 under frequent flyer, News, points | 9 Comments to Read

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.

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):

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
• Avios points not pricing correctly – One Mile at a Time
• British Airways clarifies some Avios changes – One Mile at a Time
• TPG’s thoughts:
• British Airways Avios Program Worse Than I Expected

Related Posts:

• Updates to the British Airways program coming soon

New destinations–and bonus miles–from American Airlines

Posted by Seth on April 6, 2011 under frequent flyer, News, points | Read the First Comment

American Airlines launched 10 new destinations from Los Angeles yesterday. The new routes, mostly served but their American Eagle regional subsidiary, are all offering double miles for travel until June 30, 2011.

The biggest addition of service is the non-stop flight from LAX to Shanghai, China. This flight represents the only non-stop service by a US-flagged carrier on the route. Passengers flying between LAX and Shanghai can receive up to triple miles for their travel between now and June 30, 2011. Business and First class fares will receive triple miles while economy fares will receive double miles. Registration is required for this promotion.

The other nine destinations being added place American into direct competition with a number of other carriers. Of the nine, all are currently served by at least one other carrier and most have two or three others, namely United Airlines and Southwest; US Airways serves a couple of the routes as well. The destinations are:

• Albuquerque, NM (ABQ)
• Boise, ID (BOI)
• El Paso, TX (ELP)
• Houston, TX (IAH)
• Oklahoma City, OK (OKC)
• Phoenix, AZ (PHX)
• Salt Lake City, UT (SLC)
• Sacramento, CA (SMF)
• Tucson, AZ (TUS)

All of these routes are eligible for double miles through the end of June. Similar to the Shanghai promotion, registration is required.

Challenging incumbent carriers by adding capacity as fuel prices are rising and the industry struggles to control seat inventory is an interesting move. Going head-to-head in markets that include three competitor hubs by offering regional jet service is even more interesting. Time will tell if American can come out of this experiment profitably or not.

Finally, oneworld partner Iberia is launching service between LAX and their hub in Madrid, Spain. AAdvantage members can earn double miles on this route as well. Register for this promotion here.

Lots of excitement at LAX of AAdvantage members. Here’s hoping the routes actually stick.

Changes to service in the Middle East & Central Asia

Posted by Seth on January 13, 2011 under frequent flyer, News, points | 3 Comments to Read

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.

Related Posts:

• Saudi Arabian Airlines to join SkyTeam

Flybe to remove award destination options

Posted by Seth on November 10, 2010 under frequent flyer, News, points | 5 Comments to Read

Flybe, a regional carrier based in the United Kingdom, has announced that they will be removing all destinations in three countries from their award redemption scheme. All destinations in Spain, Portugal and Croatia will be ineligible for award seats in the Rewards4all program effective March 31, 2011. The carrier has made this move citing high demand for said reward seats:

[O]ver the past few months we have become increasingly aware that the heavy demand for flight redemptions on what is actually just a small number of the routes Flybe operates is putting huge pressure on some of our most popular ’sea and sun’ routes such as those to Spain and Portugal….

[A]s our network evolves over the next few years this situation is unlikely to change.

This move comes on top of the regular inventory restrictions that the airline (and most others) places on award seats and it is a rather uncommon move in the industry. While some airlines may have routes or destinations that are inaccessible via award based on regular inventory controls, in this case Flybe is admitting that they simply aren’t going to bother. If you want to fly to one of those destinations you’ll have to pony up the cash.

Announcing such a change significantly devalues the loyalty program. Most customers collect points to redeem on aspriational trips. These are splurge destinations for a holidays trip that otherwise is unlikely to happen. By choosing to remove access to arguably the most desired destinations in this category the airline is essentially telling its customers to not bother working towards building up that balance because the trip will never happen. Definitely a strange move on the part of their loyalty marketing group.

US DoT approves anti-trust deal for American, British Airways, Iberia

Posted by Seth on July 21, 2010 under News | 7 Comments to Read

Following on the approval granted by the EU last week, the US Department of Transportation has approved the request from American Airlines, British Airways, and Iberia to have anti-trust immunity on their service in the highly competitive and lucrative transatlantic market. The approval was granted 12 years after AA and BA initially requested such permission and after being denied repeatedly for most of that interim period. The approval is not without conditions, but generally they are minimal compared to the benefits that the airlines will receive from this approval.

The airlines will be required to give up 4 daily slot-pairs at London’s Heathrow airport, two of which will be ear-marked for service between London and Boston. This divestiture requirement is less strict than that required by the EU and significantly less than some competitors, namely Virgin Atlantic, would have liked to see. The DoT dismissed Virgin Atlantic’s concerns rather abruptly,

Furthermore, Virgin Atlantic’s analysis of the constraints at Heathrow airport does not prove that the agreements are anti-competitive and should, therefore, be disapproved. We directly addressed the issue of Heathrow access in the Show-Cause Order. Even though the immunized oneworld members will collectively hold almost half of Heathrow slots, there are still a number of other competitors at Heathrow. There are also some important mitigating factors that Virgin Atlantic does not adequately consider. First, since the provisional application of the U.S.-EU open-skies agreement, at least three major airlines have begun serving the United States from Heathrow, and the overall U.S.-Heathrow market has enjoyed an expansion and diversification of services.27 The new entrants have enhanced competition and will continue to exert competitive discipline in the market when the joint venture is implemented.

The DoT is correct that there have been a number of new entrants into the Heathrow market but those companies have paid a sizable sum for those slots. Moreover, fares have increased significantly in the US-London market. It is not clear that competitive discipline has truly remained even with the competition, and this approval will reduce competition in the market.

Also interesting in the filings is the support that the oneworld partners received from parties who are exposed to potential harm from the move in terms of reduced competition. The Dallas-Ft. Worth airport authority supported the application even though BA and AA are the only carriers offering non-stop service to Heathrow from the airport. The fact that is is a major hub for AA certainly doesn’t hurt the claim, but ultimately both the airport and the DoT are supporting the idea that connecting traffic is sufficient to preclude anti-competition concerns.

As DFW pointed out in its reply, the connecting services available in the nonstop overlap markets discipline the fares charged for nonstop service. For example, in the case of the Dallas/Ft. Worth-London route, which concerned Virgin Atlantic because it will effectively have one competitor in the nonstop market following the transaction, we determined that approximately one-quarter of the passengers already use connecting services in the overall city-pair.

The approval of this request was not at all unexpected, though the very light divestiture requirements are somewhat so. The DoT has previously approved similar deals for SkyTeam and Star Alliance; continuing to deny similar benefits to oneworld would amount to a regulatory competitive disadvantage being applied to the carriers. Fares will be higher in many cases, not lower. It is rare that reducing competition results in anything else; that the DoT can suggest otherwise is disheartening. It is even more confusing when considering the restrictions that the DoT applied to the proposed Delta/US Airways slot swaps which would have similar impact on competition.

The DoT release can be found here and the full report here.

Related Posts

• British Airways – Iberia merger and ATI approved by EU
• The Skies are Open!
• Slot swaps galore in New York and Washington, DC

British Airways – Iberia merger and ATI approved by EU

Posted by Seth on July 14, 2010 under frequent flyer, News, points | 2 Comments to Read

In a move that will create the third largest airline in Europe, EU regulators have approved the merger of British Airways and Spanish carrier Iberia. The approval was expected for some time now and does not come as much of a surprise. The two carriers will continue to operate as distinct brands in their respective markets. No word on whether they will be combining their loyalty programs or which other back-office operations will be combined, though many are expected to be.

In addition to the merger approval the EU has also approved – with conditions – the ability for the new British Airways to operate with their USA-based partner American Airlines with anti-trust immunity (“ATI”). The ATI deal gives the OneWorld partners the ability to coordinate schedules, inventory and fares on transatlantic markets where the carriers operate, including the European Union, the United States, Canada, Mexico, Puerto Rico, Norway and Switzerland.

The approval of the ATI brings OneWorld into the same arena as the other two global alliances, SkyTeam and Star Alliance. Those two have recently increased their TATL ATIs (Alitalia just joined the SkyTeam group in the past couple weeks) so this move will have all three on a level playing field as they compete for much coveted traffic in the TATL market. But, as noted above, the approval does come with some strings attached.

Over the next ten years the OneWorld ATI members will have to cede airport slots at New York City’s JFK airport and also at London’s Heathrow or Gatwick airports. New entrant airlines looking to start service into London or Spain will also be guaranteed “favorable terms” for add-on segments on the BA or Iberia networks for onward travel once they get to Europe. From the EU Commission release:

Concretely, the parties offer to make available landing and take-off slots at London Heathrow or London Gatwick airports, at the entrant’s choice, on routes to Boston, New York, Dallas and Miami. The number of slots will allow one or more competitors to operate a total of 49 more return flights a week between London and the four affected destinations in the US.

On the London-New York city pair, the parties also propose to provide the competitor with slots at New York John F. Kennedy airport.

In addition, BA, AA and IB undertake to provide access to their frequent flyer programmes on the relevant routes, allowing passengers of new entrants approved by the Commission to accrue and redeem miles on the parties’ frequent flyer programmes.

The parties also propose to allow fare combinability and offer special prorate agreements in relation to the routes of concern, which would enable competitors to offer tickets on the parties’ flights and facilitate access to connecting traffic.

Neither of these approvals is much of a surprise. Other airlines and alliances have passed the BA/AA behemoth by in recent years in terms of coordination of operations and this move lets the two start to catch up. The conditions levied on the ATI are not all that burdensome, either. Giving up a total of seven daily slots in London isn’t too much of a burden on the carriers that control such a significant portion of the market there. The JFK slots are actually likely more of an issue for those carriers but they do have enough to make it work when the requests come in.

No word yet on whether AA and BA will be able to remove the limitations on their frequent flyer programs that preclude earning or redemption on flights between the USA and London on the other party or what other synergies they expect to realize. Still, this move definitely will give OneWorld a bit more leverage in the market.

Going Gaudi at Guell Park in Barcelona

Posted by Seth on January 1, 2010 under Trip Reports | Be the First to Comment

Barcelona is, from a tourist perspective, a huge Gaudi museum.  His influence on the city is remarkable and tons of the sites are out in public, making life as a visitor quite easy.  The line at the Sagrada Familia, Gaudi’s famous Cathedral, was insanely long today so we went for another option, visiting Guell Park.  The park is a short metro ride up from the waterfront/La Ramblas area and was reasonably tolerable even with a pretty big crowd today.  There are the more popular spots and they were definitely crowded but there were also rather empty sites quite close by.

I really want some of whatever Gaudi was on.  I think it is unfair to say that he was living in a parallel universe.  There is nothing parallel about it.  Still, there is an amazing beauty to much of his work.  You have to be willing to let go from “normal” and appreciate the way everything flows together.  You also have to be willing to accept the rather trippy style.  I suppose drugs could make that easier but simply forgetting what you think of as normal and going with the flow seems to work pretty well, too.

The tile work throughout the site is amazing.  Gaudi wasn’t content to simply use beautiful tiles.  There are amazing mosaics set on both concave and convex curved surfaces.  I cannot imagine what the workload was like to make all of them.  Hardly a surprise that the park construction was halted because the project was not financially viable.

The site also has the great advantage of being up on a hill side.  This means that the 1.2 kilometer walk from the Metro station is mostly uphill, steeply so at the end of the walk.  It also means that the views are phenomenal.  Simply off the charts amazing.  The winds were whipping around pretty good today but the view down to the waterfront and beyond was awesome.

The park is a must-see site for any visit to Barcelona and with good reason.  I’d love to go back and spend some more time just soaking in the atmosphere, away from the crowds.  The paths and woods are truly calming and peaceful.

Embarking on a truly ridiculous journey

Posted by Seth on December 29, 2009 under Trip Reports | Be the First to Comment

I sit in the airport in Luxor, Egypt pondering the absolute insanity of the trip I’m beginning.  Nothing quite like a 36+ hour adventure to travel from Luxor to Barcelona, Spain.  It is just across the Mediterranean.  It really isn’t that far.  But I’m crossing the Atlantic Ocean twice – three hours apart – to make the trip.  Yeah, it is crazy.

versus

Back over the summer Delta offered up a sale for flights to Spain so we bought a couple for the weekend over New Years.  Celebrating in Barcelona seemed like a good idea.  A few months later, we learned that my wife got a few extra vacation days for the time between Christmas and New Years.  Use ‘em or lose ‘em, so we used them.  A quick search of various reward inventory showed Egypt as a destination with premium cabin seats available and a destination where the country doesn’t shutdown over the Christmas period.  Plus, it is a pretty soft introduction to travel in Africa.  We were sold, and the trip was phenomenal.

But we still had to be back in New York City in time for our flight to Spain.  No need to spend any extra time there.  Three hours should be more than enough for an international to international connection.  So we’re off.

We’ve got an 11:10pm flight from Luxor to Cairo followed by a 3:30am flight from Cairo to Istanbul and then a 10:30am flight from Istanbul to New York’s JFK airport.  All in premium seats including the first class suites of the Turkish Air 777-300 wet-leased from Jet Airways.  That should be quite nice.  We follow that up with coach seats on a Delta 767-300ER.  Probably one of the worst long-haul products out there today that crosses the Atlantic (likely still better than a Lufthansa 747-400 in the back), but the price was right.  And there is plenty of potential fun and crazy along the way.  Just the way I like to travel.

Images from Great Circle Mapper