Posted by Seth on September 29, 2011 under Flying | 
I’d love to use the 20% off any flight code I just got from Virgin America but the travel period ends a week prior to me next west coast trip. As such, I’ve got a one-time use coupon code that needs a good home. The flight must be booked by midnight pacific time on the west coast on 30 September 2011. The travel must happen by October 27, 2011.
The fine print says that the coupon is only available for non-refundable tickets in the S, L, M, U, E, H, B, or V fare buckets.
If you can use the code leave a comment as to what you’d use it on and I’ll pick one and send it via email mid-day tomorrow.
Posted by Seth on August 12, 2011 under frequent flyer, Mileage Run, points |
The rumor mill is running strong these past 24 hours with Lucky pointing out a possible new scheme for elite status on United Airlines. Yes, it is a rumor, but the framework is pretty well defined so let’s take it for a spin and see just how crazy it is.
The basic qualification requirements would shift from a simple metric – how often/far you fly – to a rather more complicated one. It would still include miles/segments flown (EQMs) but on top of that there would be a count of flights taken on United metal. Most recently Air Canada announced that they would require a certain number of segments as part of their qualifying requirement and several other programs have similar requirements. This is not a particularly controversial change to the program and the number of segments required is pretty low.
And there would be a spend metric.
Yes, after years of wondering when a program would finally start to consider spend as part of their elite qualification it seems that United is going to be first to give it a try. And I actually think it is a smart idea. The spend thresholds are not trivial: 8 cents/mile is the number being rumored. Personally I probably would not qualify at the top level given that number as I do not think I spend $8,000 in airfare on United in any given year. But I’m also not so sure I’m the customer that the airline should be rewarding.
By every rational metric spend should have always been included in calculating the value of a customer to a carrier. Many airlines have done little things here and there to approximate such value (e.g. more points for higher fares) but until recently no one has gone 100% in that direction. And United is not proposing a 100% shift in that direction either, but spend will play a significant role in the qualification process.
When talking about spend rates to requalify for status or to earn points there are a lot of thresholds tossed around. Three or four years ago it would not be uncommon to find deals in the 2.5cpm range without too much trouble. These days those same deals are in the 3.5-4.5cpm range. And there are certainly some people (self included) out there flying on them and accruing a ton of award miles and elite status, too. And the airlines treat those customers the same as the business traveler who is buying full fare tickets and who is actually profitable. That is hardly a rational way for a business to behave.
Just looking at the average numbers, the cost to fly a seat on United last quarter was $0.1423. That’s averaged across all the available seats, not just the occupied ones. If you include the 84.1% load factor (n.b. all numbers from the Q2 2011 10-Q filing) then the cost of operating a filled seat was about $0.1692. It costs nearly 17 cents per mile to operate the seat on average and they’re willing to consider you a loyal customer if you’re paying just under half of that over the course of a year. Maybe I was wrong. Maybe the plan is completely irrational because the threshold is still too low.
When JetBlue announced their revamp to the TrueBlue program 18 months ago spend was almost entirely what the focus was on. Virgin America‘s Elevate has a similar structure. The new Rapid Rewards program from Southwest is similarly focused on spend, though still with some variation in the minutiae. Of these, only Southwest currently has an "elite" program and they permit qualifying via spend. So does the Hilton HHonors hotel program. It isn’t like this sort of policy is ground-breaking.
What is revolutionary about it is that the company might just finally be willing to step up and cast off the hangers on. The leeches. The folks who are not profitable to their operations. In other words, Me.
I know that I’m not a profitable customer to United. I realize benefits far in excess of the value I bring to the company. And if this policy becomes real then I’ll be looking at the numbers and deciding if I can meet them or if I’ll be finding another program from which to leech. Certainly the folks at United will not be sorry to see me and my STLKNG fare habit that gets upgrades 80%+ of the time disappear. And anyone who has a similar purchase pattern and believes the company will miss their departure is delusional.
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Posted by Seth on May 6, 2011 under Internet, News |
American Airlines announced this week that they are extending their partnership with in-flight internet provider Aircell, the company behind the gogo service. There are two main components to the announcement, one covering internet connectivity and the other addressing streaming media. On the internet front the company has committed to expanding their gogo deployment to cover more than 140 additional aircraft in domestic service. The streaming media offering, however, is an industry first.
The service will leverage the wifi network that the gogo service currently operates on and will provide access to movies and TV shows via a locally cached copy that resides in the airplane. Users will access the media through their own wireless devices rather than through in-seat or overhead screens on the aircraft. This move is essentially a bet that in-flight entertainment is now no longer dependent on the screen that the airline can provide and instead focused on the content which can be delivered on any screen that the customer might happen to have with them. By focusing on the content rather than the delivery mechanism the company can offer greater content variety while keeping both the weight and costs of the system down.
One challenge that American will face with this approach is that many consumer devices will need power to stream the media for the duration of a flight and, to date, the carrier has only had limited power outlet distribution through their aircraft. The first planes to have the streaming service are 767-200s used on transcon routes and they do have power so that should help, at least initially.
On the wifi deployment side of the game, American announced that they will be deploying the gogo service on 93 of the company’s 757 aircraft as well as 50 more MD-80 series planes. The installation will start this summer and is in addition to the previously announced plans to fit all of the carrier’s 737-800s with the service. By pursuing the fitting of essentially their entire domestic fleet American has joined Delta, Virgin America, AirTran and Southwest in the plan to offer wifi on all domestic flights.
Of course, all the wifi deployment is only useful to the airlines if it actually makes them money, and thus far evidence suggests that still isn’t happening. Recent reports are still noting that wifi adoption rates are hovering in the 5-10% range, depending on the report. Those reports are also suggesting that the demand for screens still outweighs the demand for wifi, though the numbers are shifting in the favor of wifi. Only time will tell if having the early deployment of the connectivity will provide the airlines with a benefit versus the later adopters, notably JetBlue and Continental/United Airlines which are banking on Ka-band satellite services rather than the cellular or Ku-band options currently available via gogo or Row44, respectively.
Posted by Seth on March 28, 2011 under Book Review, Review |
There are three main lessons that I learned from reading Aerotropolis: The Way We’ll Live Next:
- Logistics and speed are unstoppable forces that will define the next several generations of economic development globally;
- The United States has already lost most any chance of keeping pace; and,
- The global economy may never actually cash in on the investments it is making.
The first of these observations is not particularly surprising and the conclusions there are pretty reasonable. The second and third scare me to no end. Indeed, reading a couple steps down the line in the global economic environment laid bare in Aerotropolis, it is quite easy to see the whole system collapsing on itself in a matter of years, assuming we make it that far. That small bits have already experienced such a decline is of little comfort.
The premise of the areotropolis is rather simple. Rather than try to explain it myself I’ll let you understand it in the words of its greatest proponent, John Kasarda through the lens of author Greg Lindsay:
…[R]ather than banish airports to the edge of town and then do our best to avoid them, we will build this century’s cities around them. Why? Because people once chose to live in cities for the wealth of connections they offered socially, financially, intellectually, and so forth. But in the era of globalization we choose cities drawing closer together themselves, linked by fiber-optic cables and jet aircraft.
…
In essence, the aerotropolis of [Kasarda’s]imagination isn’t necessarily a city but a superconductor, a piece of infrastructure promising zero resistance to anyone wanting to set up shop there. Examine [Kasarda’s] initial sketches for one – with the carefully arranged waves of white boxes and office cubes – and you’ll find a city expressly planned on behalf of the companies expected to populate it. An aerotropolis isn’t an airport either, and building one isn’t a matter of having the longest runways or the largest landmass. Frictionlessness is the product of a whole host of attributes, many of which are invisible: tariff-free trade zones, faster customs clearance, fewer and faster permits, and a right-to-work workforce that knows what it’s doing. ‘It’s the way you reduce time, the way you reduce costs, the way you reduce space,’ Kasarda says. ‘The aerotropolis is where the elastic mile, the friction of space, community without propinquity, and trade routes all come together.’
…
[A] third of the value of all the goods made in the world, three trillions dollars’ worth, travels by air while composing barely 1 percent of their weight. Air cargo’s growth outpaced world trade’s by a factor of four-to-one over the last thirty-five years, and blew past global GDP growth by nine-to-one, meaning more and more of what’s worth making and moving (including half of American exports) is aloft. In the Instant age, Kasarda says, ‘The price of oil matters less than the price of speed.’
Building an aerotropolis is a relatively easy thing to do, assuming no political or environmental concerns. Find a plot of land, clear it out and build a world-class airport in the middle. From there, add on industrial, commercial and residential bits in the appropriate ratios and then watch as industry beats down the doors to show up and open shop inside your free-trade zone. Free of tariffs and , in many cases, free of local laws, these aerotropolii represent the free market economy at its most basic level.
The problems that arise are, of course, plentiful. Starting with the political and environmental concerns, there are plenty of reasons for many in the western world to object to such developments. Still, looking at the present evidence, there is no doubt that such developments have been successful. Louisville and Memphis are essentially subsidiaries of UPS and FedEx, respectively. The area surrounding Amsterdam’s Schipol airport is a testimony to the efficacy of global trade and just-in-time delivery of flowers on a scale that is yet to be matched, though Addis Abba is one of several hoping to edge in on that market.
Dulles, Denver and Dallas-Fort Worth are all representative of this not-so-new approach to urban planning. Centralize around a transportation hub, just like ports in the days of yore and train terminals in the not quite so distant past. Today that hub is the airport large enough to easily handle frequent service from Boeing 747F freighters laden with cargo inbound from manufacturing hubs in southeast Asia or agricultural hubs in South America. It is not at all difficult to see how this progression has been made and Lindsay does a phenomenal job of explaining in detail some specific examples of why certain areas have succeeded and other have failed in developing these aerotropolii.
The concept of what makes an aerotropolis is just half the story, however. The economic impact that they can bring to the developing world is the other half, and it scares the hell out of me.
Asia, Africa and the Middle East are the main development targets today. China is in the midst of an unprecedented infrastructure build that is dedicating a tremendous portion of their GDP to highways, high-speed trains and airports. Many of those airports are destined to be aerotropolii. Thailand started a similar effort with Suvarnabhumi, the new international airport in Bangkok. Ho Chi Minh City is doing the same with their new international airport.
In China the development is easy. The local, provincial or national government decrees that an airport will be built on a specific plot of land and that’s the end of the story. It happens – quickly – and those currently there are relocated. In Thailand, however, a similar set of plans resulted in relatives of ministers suddenly operating real estate and logistics operations. When word got out of the coming aerotropolis everyone tried to get in on the deal and real estate prices shot through the roof. The recent coups can be related, in part, to the failure of these plans to get off the ground or the revolt of the people against the abuse of that power.
So there is the risk of political upheaval as the working class feels they’ve been wronged. This potential is more pronounced as those same workers start to profit from the business that the aerotropolii bring in now have the means to afford to protest, rather than to accept whatever they are told to do. And now that the protesters know that the airports are the life-blood of their economies (e.g. the recent Bangkok protests that saw both sides seize airport terminals at various points to stymie the ruling party) the risk is that much more real.
But that isn’t the part that worries me the most. What scares me is the potential for all this investment to be a very efficient and expedient means to spend billions of dollars of someone else’s money in hopes of a return that is impossible to realize. And Lindsay outlines exactly how that will come to pass as the aerotropolii develop and multiply.
There are currently scores of such projects in various stages of development. Can they all possibly be successful? Dubai already almost collapsed once as the highly leveraged construction efforts there saw money and credit dry up in the recent financial crisis.
In effect, Dubai was a giant arbitrage play, a pure experiment in funneling and funding globalization. A tiny city-state with literally nothing – no oil, few people, and little education – sought to become a global capital in a single generation…. That’s why everything was so oversize, including Dubai’s ambitions.
Bangkok failed to move swiftly enough and to avoid corruption, leading to the failure of the aerotropolis there, though not to the collapse of the economy. FedEx has been wooed by China to move their Pacific sort hub from Subic Bay to Baiyun International Airport near Ghangzhou.
First, [the Chinese] drained the pond covering the site – the only reason urban scrubland hasn’t subsumed it already. Then they diverted a river, paved over its marshes, and pumped concrete into caves underneath. FedEx had sought equally drastic changed to China’s legal code, rewriting customs and aviation statutes to grant itself an unlimited number of flights…. True to form, doing so required a year of tortuous negotiations with more than a hundred agencies and bureaucracies. Once given the green light, construction of the six-lane highway linking the hub to the Delta’s factories had taken all of six months.
But what does such a shift mean to Subic Bay? Or to the other local facilities that have been operating as regional cargo hubs? For now, they are struggling to fight back, to find tenants for the space and to keep their economies alive. Why have similar projects in Hanoi or Saigon failed (or not been as rapidly successful)? They can offer cheaper labor, but the total pool of raw materials and labor is still larger in China. So the Vietnamese versions strain to get sufficient traction and businesses in their aerotropolii. But the cost of developing them is already sunk.
But even the shift of FedEx into the airport is no guarantee. There are still other areas desperate for similar growth and they are somewhat ruthless in their pursuit of the business.
As the Hong Kong economist Steven Cheung once explained their attitude, ‘You want a business license? The locality will assign someone to do the walking and talking for you. Want a building permit? They will give you one with money-back guarantees. Unhappy about that dirty creek passing through the site? They may offer to build a small lake for you…. They sell their cheap electricity, sell their parks and entertainment, sell their easy transportation, sell their water supply, sell their glorious history and even sell how good looking their girls are – no exaggeration!’
There are hospitals operating in India that see themselves as the far end of a long-haul commuter healthcare road. Just like the Polish doctors who commute to England to work the weekend shift and are home Monday morning on a cheap flight, these hospitals are luring in patients from abroad with the promise of top-quality healthcare at bargain prices. Infrastructure is being built but there is no guarantee that the Ray Kinsella-styled plan will come through. What if they build it and no one comes?
The danger is that someone else will siphon [patients] away with lower costs and better connectivity in the form of nonstop flights; layovers are not an option when you’ve just come out of traction.
Indeed, Hyderabad is already trying to steal the market from Mumbai and Bangalore. The brand new airport in Hyderabad was built with an eye towards being a Healthport, among other things.
The book highlights tells several other stories, from a man-made city built literally in the middle of the ocean in Korea to the amazing fresh flowers market that is centered in Amsterdam, though showing signs of sprouting in Africa and China. And in each example precious little attention is paid to what happens to the legacy locations as the new sites go up. No book can cover everything, but at least mentioning the potential for billions of dollars of invested funds to end up with no return is a worthwhile acknowledgement to make in my book.
And that’s what ultimately has me scared. Not all of these aerotropolii will be successful. There are simply too many competing to offer the same services in concentrated regional centers. Some will almost certainly succeed and it will provide a boon to the local economy of the winners. Right up until the competitor down the road offers up cheaper, faster and better services a couple years later. Moving the factories is an expensive undertaking, with short-term effects on to the balance sheet of the company in question and with potentially devastating long-term repercussions to the aerotropolis that loses the business.
The book is an interesting read and definitely worth checking out, both from a global economics and a aerophile perspective. And I actually believe that most of the predictions of growth are likely to come true; all current evidence certainly supports them. I just fear for the fallout that comes with those developments and its impact on the global economy. For someone to win big in these efforts someone else is likely to lose badly.
Posted by Seth on January 28, 2011 under News |
Sure, nobody likes to pay the various fees that airlines seem to come up with on a daily basis. Still, as much as folks complain about paying the fees it is clear that they are being paid. And some of them are being paid more willingly than others.
In the case of JetBlue, just one of those fee categories – the upcharge for "Even More Legroom" seats – accounted for $85MM of revenue. Considering the net profit for the year was $97MM it can be said that the incremental fees are the difference between profitability and not for the airline. Breaking down just what the impact of EML sales are for the company provides some interesting numbers.
On the Embraer 190 aircraft there are only 4 EML seats available; on the Airbus 320 aircraft there are 36. A lot of fuzzy math going on because I don’t have inside data on the actual fleet operations but generally speaking one can say that about a third of the 600 daily departures are operated by the E90s and the other two-thirds are operated by the A320s.
That’s somewhere in the range of 15,000 EML seats flying daily. Lots of multiplication and division suggests that means that each EML seat earns, on average $15 per flight. Obviously the amount actually earned from each sale is higher as those seats do not always sell.
Similar analysis across the total number of flights daily suggests that the airline is realizing nearly $400 in additional revenue solely from EML sales per flight. The A320s will be earning much more than that on average, more like $550 based on my calculations, while the E90s are closer to $60 per flight. With an average fare of $140 during 2010 adding this additional revenue is akin to putting 3-4 more passengers on the A320s every time they fly. That’s darn impressive.
Much of the increase in the revenue from EML sales can be attributed to the company’s ability to be much more flexible in the pricing of the upgrades. The variable pricing started only in April 2010 so we can expect that the revenues will be even higher for the carrier next year.
Neither Virgin America (Main Cabin Select) nor United Airlines (Economy Plus) nor Continental (Extra Legroom) break out the revenue they realize for their "premium" economy seats so it is hard to do an apples-to-apples comparison. Still, it is clear that these programs are making money, lots of it.
Customers may not like all the fees out there, but there are absolutely some that they are willing to pay quite readily and the airlines are loving that.
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Posted by Seth on January 6, 2011 under frequent flyer, News, points |
There has been much speculation and hand-wringing about Southwest’s Rapid Rewards program for over a year now since the company first intimated that they would be updating their frequent flyer program. That update was delayed a couple times but it has now been set; the new Rapid Rewards program will launch on March 1, 2011.
The program is a major change from the status quo (and probably not a good one for you).
Earning Points: Rather than earning based on segments or distance flown credits will accrue based on fare paid. This is similar to the TrueBlue program from JetBlue and the Elevate program from Virgin America, among others. Unlike the other two programs, however, the new Rapid Rewards will reward higher fares with increased earning rates. The lowest, Wanna Get Away fares will earn 6 points per dollar spent. Anytime fares will earn 10 points/dollar and Business Select fares will earn 12 points/dollar. Loyalty programs should reward the best customers more and this sliding scale certainly accomplishes that goal.
Redeeming Points: Similar to the earning options, redemption options will be dollar-based and variable based on the type of fare purchased. The 6/10/12 ratio for Wanna Get Away/Anytime/Business Select will remain but redemption will be at a 10x multiplier to earning. A $100 WGA fare will cost 6000 points to redeem ($100*10x*6 = 6,000). A $400 BS fare will be rather more expensive to redeem at the rate of 48,000 points ($400*10x*12 = 48,000). This is a significant change from the current program where last minute redemptions are, at most, only 2x the regular reward rates.
On the plus side there are no blackout dates or restrictions on the redemptions so every seat will be available. But those last few seats on the plane – or just those booked close to the day of travel – will be much more expensive.
In addition to redemption on Southwest it will be possible for folks who also hold a co-branded credit card to buy awards for international travel, hotels, cruises, rental cars and other travel benefits. Details on this program are not yet published so it is not clear just how valuable these points will be, but if precedent from other programs is followed they will not be a particularly useful option.
Point Expiration: Points will never expire so long as there is earning activity in the account in the previous 24 months. While redemption will not count as activity for the sake of extending the life of the points all partner activity will, so a hotel or rental car credit will keep those points alive. And the 24 month window is probably long enough to cover most folks who ever have a chance of really getting value from accumulating the points anyways.
Elite Status: With their A-List and Companion Pass programs Southwest has rewarded folks who fly a significant amount during any year. Those programs will remain, with the qualification requirements and benefits changing a bit.
- A-List qualification will be 25 one-way trips or 35,000 base points in a calendar year. Members who reach this status will earn 25% bonus points on top of their regular earning. They will also have priority on standby travel, Fly By priority security access and a dedicated phone number.
- A-List Preferred, a new level in the program, can be earned at 50 trips or 70,000 base points in a year. In addition to the A-List benefits members will earn 100% bonus points and also receive free in-flight internet access. The free WIFi is a unique benefit that Southwest will be offering.
- Companion Pass qualification is set at 100 trips or 110,000 points. Unlike the A-List and A-List plus it seems that the points qualification here is any points earnt, not just tier points that come from flying or CC spend. Just like today a Rapid Rewards member reaching that level will be able to designate a companion who can travel fare-free on the same itinerary for the year.
The base point qualification levels for these tiers seems high, expecting an average fare of over $230 each way for Wanna Get Away earning rates. A Business Select customer will almost certainly earn the status based on points rather than segments but not all that much faster than the person buying the cheapest fare. In the San Francisco – Los Angeles market, for example, it will take 18 one-way trips based on the current Business Select fare ($166) to reach A-List while only 25 trips at the $59 discount fare. Certainly there are other benefits to purchasing the Business Select fare but getting status significantly faster does not appear to be one of them in many markets.
What it all means
Clearly there is a lot to digest here and there are a lot of changes that will vary in value based on the type of customer you are. For the folks (like me) who travel on the cheapest available fares the changes are pretty horrible. The earning rates are limited and the redemption rates are magnified. At worst (earning only on WGA fares and redeeming on BS fares) the value hits about 5%. If you only every pay for BS fares and manage to redeem on WGA fares then those numbers switch around, making the value something like 20% which is rather respectable. And if you’re flying enough to hit A-List Plus (about $5,800 in spend on BS fares) you’ll be earning at a 2x rate due to the 100% bonus. That can drive the value up to 40% if you’re still able to redeem on the WGA fares. Most folks will never realize that high a rate and odds are it will be somewhere around the nominal 10% rate for most customers. Not horrible but not great. And, more to the point, much harder to game.
Compared to the new TrueBlue program the “Rapid Rewards 2.0” system seems more mature and developed. The existing partner infrastructure certainly helps in that but Southwest has also maintained their elite program and even improved it in a few ways. While JetBlue does reward increased spend over time in $500 increments Southwest starts at a slightly higher point value and provides the bonus on all spend, not just at the threshold points, once you hit the status level. Southwest also has established a number of other useful benefits for their elite members beyond just point earning (priority security & phone access and free WiFi are the main ones).
The folks who spend money with the airline are going to come out of this change doing quite well. It makes sense for the company to reward that. The key will be convincing the occasional traveler that there is still value in the program. The extended expiry policy will actually do that to some extent while the advertising of no black-out dates and last seat availability will make things appear good to many customers.
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Posted by Seth on September 22, 2010 under Internet, News |
JetBlue has made a big splash today with their announcement of an impending in-flight internet offering. The service, leveraging the Ka spectrum of satellite connectivity form provider ViaSat, will offer significant bandwidth and a broader coverage footprint than that of ATG provider Aircell, the company behind the gogo product. Company CEO Dave Barger sums it up nicely in the press release issued today with the announcement:
This system will be designed for the 21st century, not just for today’s personal connectivity needs, but with the bandwidth to expand to meet tomorrow’s needs as well. In just the three years since we launched BetaBlue, the first commercial aircraft with simple messaging capability, technology has advanced by generations. Rather than invest in current technology, designed to transmit broadcast video and audio, we elected to partner with ViaSat to create broadband functionality worthy of today’s interactive personal technology needs.
Great news, right? Sortof. There’s a catch (actually a few).
![674451208_dBNgv-M[1]](http://boardingarea.com/blogs/thewanderingaramean/files/2010/09/674451208_dBNgvM1.jpg)
The announcement is based on a Memorandum of Understanding (MoU) not a formal contract. Maybe that’s splitting hairs, but in the end it could make a difference. The MoU is non-binding and a full contract is expected by the end of the year.
Additionally, the technology is new – VERY new. So new that it doesn’t really exist in a form that can actually be installed and won’t for two years. The first trial installations are not expected to occur until mid-2012.
Not only are there many potential pitfalls along the way with getting the technology functional for commercial air service – and let’s not forget that getting a functional antenna was part of the death knell for the Kiteline service that JetBlue & LiveTV tried to bring to market previously – but VIaSat is also new in this market. The JetBlue MoU represents ViaSat’s entree into the commercial aircraft connectivity market.
And then there is the fact that between now and mid-to-late 2012 JetBlue will have no connectivity. While Delta (70+ seat aircraft only), Virgin America and AirTran will have fleet-wide coverage in span and other carriers will have something, JetBlue will have nothing. Having the best product is great but if it takes so long to deploy there is something lost in terms of customer value in the interim.
There is also the consideration of potential partner connectivity offerings. LiveTV was supposed to be providing connectivity options for Continental, too. Those plans went out the window when Kiteline died and Continental also delayed the gogo trial that was supposed to parallel the Kiteline effort. Can LiveTV convince the new world’s largest carrier to hold off on expanding the gogo deployment that they’ll have through the United Airlines p.s. offering for nearly three more years, offering nothing in the interim? Yes, the ViaSat/LiveTV Ka-band offering will be the best out there, but do customers today really need that or just something to get the job done?
There are no official details published by Aircell nor Row44 about the uptake on their products. No one knows just how compelling the in-flight connectivity availability is in terms of driving bookings to one airline versus another. So maybe it isn’t a big deal at all. But a two or three year wait to find out is something of an eternity in the airline industry.
More in-flight connectivity options is always a good thing. There is no denying that. Hopefully this one happens on schedule and isn’t too late to the market.
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Posted by Seth on August 10, 2010 under frequent flyer, News, points |
Alas, the coupling isn’t nearly as sexy as it could have been.
Virgin America and Virgin Atlantic are slowly moving forward in their relationship, with the British half announcing today that customers flying on the American carrier’s flights will be able to credit their travel to the Flying Club frequent flyer program rather than Elevate if desired. This is a nice improvement, especially given the breadth of other partners that Flying Club has for good earning potential. Still, it is limited in several ways to the point of being less than great news.
For starters, flying on the less expensive fares will only earn half credit; only the most expensive fare classes like refundable Main Cabin fares or Main Cabin Select will earn full credit. That’s unfortunate but somewhat understandable, especially considering the similar limitations that Virgin Atlantic applies to their own flights and to other partners. Additionally, the partnership is only for earning: no redemption on Virgin America yet. Plus, it is only in one direction: no earning in Elevate for Virgin Atlantic flights. Turns out that you can earn in Elevate for flying on Virgin Atlantic, too. The rates are miserable – as low as 10% on some fares and maxing out at only 60% – but at least the option is there.
Still, for someone who doesn’t mind the fuel surcharges that Flying Club charges on redemptions and who has lots of Hertz rentals and Hilton stays, the ability to rack up points in Flying Club isn’t all that horrible. And being able to add the occasional Virgin America flight to that pool rather than abandoning it in Elevate is a nice option.
Growing partnerships are always nice to see, even if they are not perfect. This development certainly falls in to that category.
Posted by Seth on July 22, 2010 under News |
Virgin America is suggesting that they intend to offer service to Chicago’s O’Hare airport in early 2011. As part of their announcement of a major aircraft purchase – 40 firm orders and 20 options on Airbus narrow-body planes – the carrier also noted that “We still have a lot of places to expand, but Chicago remains high on the list, as we hope to inject some healthy competition into a market that is still dominated by just a few legacy carriers.”
This may sound all to familiar to fans of the carrier and it should. Virgin America suggested that they’d offer service to Chicago in 2008 as well but ultimately chose not to, citing the inability to acquire gates at the airport. Of course, there were gates available but they were in the international terminal, not the main terminal complex. That would mean an extra tram ride to connect to the main airport facilities in many cases, something that Virgin America did not want to deal with. This time around it is not clear that there are specific gates available to the carrier in the main terminal complex, but there is a caveat in the negotiations.
The airline is negotiating for an “economically viable” deal with O’Hare officials. In other words, if they come up with anything that they don’t like about the negotiations – including the gate arrangements – they can walk away form the discussions. Again.
On the plus side, passengers will get to use an awesome new in-flight map system that Google has developed for the airline’s RED in-flight entertainment system. It shows much higher levels of detail and permits panning, zooming and other features through the touch-screens on the plane.
Posted by Seth on July 19, 2010 under frequent flyer, News, points |
JetBlue has added another earning option for points in their TrueBlue loyalty program: Getaways vacation packages. The bundles – air plus hotel, car, transfers or excursions – will now earn points based on the total value of the package purchased, less taxes and fees. TrueBlue customers will earn three points per dollar spent with JetBlue American Express card holders earning an additional two points per dollar spent rather than the normal one point for purchases.
To celebrate the launch of the program JetBlue is offering a double points promotion through August 31, 2010. All packages purchased between now and August 31 will earn three bonus points per dollar spent, doubling the regular earning rate. This bonus is based on when the booking is made, not travel dates.
Because the TrueBlue program earning scheme for points is based on spend rather than on distance traveled it is uniquely positioned to be able to offer earning on vacation packages such as these. Virgin America is the only other airline in the USA that has a similar revenue-based model for point accrual but their vacation packages earn only based on the flight component, not on the total package value. This differentiation is a great feature of this new JetBlue Getaways earning program.
JetBlue also provides for “Go Big” and “Go Long” bonus thresholds in the TrueBlue program. These are based on total ticket spend and long segment flights, respectively. For tickets purchased through the Getaways package deals the air component will still count towards these bonuses; the hotel, transfers, car and excursion components will not. In some cases this may mean it is better to book discrete components rather than the package to maximize the points accrual once the current double earnings bonus expires. The air travel component will also count towards extending the life of points in the existing TrueBlue accounts.
Like I always say, seeing new ways to earn points is always a welcome change. And in this case it appears that JetBlue has put together a very strong offering. They are leading the industry on this front.
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