View from the Wing

Free Maker’s Mark golf balls, free coffee sample, and free condom sample, free oyster sauce, and free floaty pen.

And then there’s free after rebate: TS1100 Spillproof 104-Key PS/2 Keyboard for $6 - $6 rebate, penny shipping and Air Duster (10 ounce can for $5 - $5 rebate, penny shipping.

A computer reservation system offers 79 million fares and 6 million schedules. It processes 1.2 million fare changes each day. Sabre alone processes 48 million transactions a day, including all shopping, pricing, and and availability queries.

ComputerWorld offers a glimpse into the challenges that Sabre faces in handling all of this computing at a reasonable cost.

In order to rein in escalating processing costs and offer customers more options, Sabre is completely overhauling the software used by airlines, travel agents and passengers to find and book flights. In stages, Sabre is replacing its old mainframe assembler code with modern languages running on cheap commodity computers and open systems, including Linux.

…

Three forces hugely increased the processing demands on Sabre systems over the years. After airfares were deregulated in 1979, travel agents began shopping based on both price and schedules, not just schedules. Then, in the late 1980s, travel agents began using PC-based automated search tools that continuously scanned Sabre databases for the lowest fares. Finally, in the mid-1990s, consumers on the Internet joined travel professionals in shopping for flights. Sabre’s processing economics took an ugly turn as the “look-to-book” ratio soared. Looking for the best schedules and fares generates data-processing costs but no revenue; it isn’t until someone books a flight that anyone makes money.

…

But, Murphy says, while the look-to-book ratio skyrocketed and pricing and scheduling options proliferated, three technological forces came to the rescue: Moore’s Law, open systems and ubiquitous standards. Moore’s Law — which states that the amount of computing power available per dollar doubles every 18-24 months—enabled Sabre to assemble a scalable farm of powerful servers built around cheap commodity processors and huge memories.

…

Murphy says the cost of the project will exceed $100 million, but he won’t be more specific. Results so far have been encouraging. “We sold the project on the basis of reducing total cost of ownership by 40%,” he says, “I actually think we’ll surpass that. Running a query—Dallas to Chicago, say—on the new system is about 80% cheaper.”



And, he says, developers are getting 100% productivity gains because they are working in higher-level languages—Java and C++—and because the application architecture is so much easier to debug, change and enhance than the old mainframe assembler code.



Finally, airlines are getting the ability to put in new options and features quickly and cheaply. Last year, Sabre announced SabreSonic, a suite of services that enable airlines to tap into Sabre systems and databases in order to offer passengers new services, such as streamlined airport check-in.



“Changes are much easier to do, and much less expensive,” says Gianni Marostica, president of Sabre Airline Solutions. “This allows us to implement things airlines think of on the fly.”

“We have to be in an environment where our cost, two years from now, is half what it is today on a per-unit basis,” Healy says. “The air-shopping problem will be more complex, there will be more Internet users and there will be more [users] internationally. The only way we can meet that demand is by riding Moore’s Law.”

The Bellagio is offering Sunday-Thursday rates from May 31-September 9:

Deluxe Room $139/nt (including lakeview upgrade at no charge)


Bellagio Suite $299/nt


Penthouse Suite $499/nt (Includes limo service, VIP check-in and fresh flowers in room)

Make reservations on the La Quinta website or call their reservations line at 1-800-531-5900 and use promotional code SWA50 for a 50% discount on La Quinta stays between now and March 31,2005.

The discount comes from a card sent out by Southwest Airlines with the following terms and conditions:

Offer is based upon availability and is valid on one paid stay only per customer. A stay is defined as one or more consecutive nights at the same property. Offer not valid with any other discount, promotion or with use of a free night certificate. With the discounted rate, Rapid Rewards members who are also La Quinta Returns members are able to receive 0.5 credits per qualifying stay.

Not sure how they will limit anyone to one paid stay per customer, as the discount doesn’t say you have to physically present the card at checkin to be eligible. This could be useful.

Not to be left behind, Northwest is offering 2,500 bonus miles per roundtrip (earn up to 6 times) in and out of the three DC-area airports between June 15, 2004 and September 30, 2004. Registration is required.

And found this laptop for $700 including shipping and this DVD player for only $28.

Sign up for the Upper Crust Club and receive a free personal pan pizza coupon.

To the first 500 who sign up.

While it lasts…

Several other magazines are also available free:

• Best Life
  

• Black Entrepreneur
  

• Golf World
  

• Field & Stream
  

• Ski magazine

United is bringing out the big guns in DC in anticipation of Independence Air’s launch. They’re running huge promos like their Round-the-World promo and 15,000 bonus miles. They’re sending out e-mail hit pieces to their membership. And all Independence Air has done is complain to the government.

I walk into bars and hear people talking about United’s round the world promo. It has an incredible aspirational value that gets average folks talking, and that’s without my being in the conversation at all.

I wonder what Independence Air is paying to be the official airline of the Redskins. That’ll get some notice, but it’s pretty ephemeral.

They need to offer a clear value proposition and hammer that value proposition home.

• Always low fares on brand new jets
• The most flights out of Dulles, taking you where you want when you want

Then I’d add real changes to their frequent flyer program. I’d offer a redemption option for things like metro cards or dinner at local well-known restaurants. I’d make them a real hometown airline, since all of their flights so far begin or end at Dulles. I’d also give an online booking bonus to the person making travel arrangements, which isn’t necessarily the traveler.

And I’d add elite status with an elite security line (desperately needed at Dulles), some sort of discount parking that makes valet service the same price as long-term parking, and complimentary lounge access. (They used to operate a free lounge for United 1Ks and Premier Executives.) This status would make members real “Dulles Elites.” I’d tack on free drinks onboard and have flight attendants thank elites for their business on every flight. A little bit of recognition goes a long way. Oh, and I’d offer an elite status match to United’s elites in the DC area.

I would advertise on the metro and in the Washington Post’s “Express.” I’d also give away the free Express paper in the boarding area. “Our Flights Are So Quick And Efficient You Wouldn’t Have Time to Read the Whole Paper.”

The James Carville voiceovers are pretty good, but I think there message is a bit off. And I’d do it on radio rather than TV… and have him be more in his own character, identify himself at the beginning of the ad rather than the end…

SmartMoney carries a piece on credit card rewards outside of the standard mileage-earning options.

The best one in the article seems to be the no annual fee MBNA Fidelity Investment Rewards Card offers a 1.5% rebate (up to $1500 per year) deposited into any Fidelity brokerage account.

Tyler Cowen writes that hotels have a fairly captive audience for consumer attention, and have found some success selling items in the room.

This is certainly true, and if you recall fondly the amenities of your hotel room you can shop online to purchase the items from your room at a Westin or at a W hotel.

Westin Hotels not only offers to sell you the bed from your room, but their signature “Heavenly Dog Bed” as well. There’s even a bridal registry.

But the phenomenon of pricing items in a room also serves as a deterrent for guests to simply take the items. If the item is for sale, it isn’t meant to be free. And since hotels usually charge a premium over what a consumer might pay elsewhere, the threat of seeing the item added to a hotel bill at checkout is further deterrence against swiping a bathrobe or clock. Holiday Inn turned this on its head by offering towel amnesty last summer.

Frommer’s points out that since Priceline has acquired Travelweb, the two sites will be integrating their hotel rating systems. It’s not completely there yet, but useful to determine possible hotels that would come up on a successful bid.

Travelweb’s hotel star ratings will soon be the same as Priceline’s, with one important exception. Travelweb doesn’t use half-stars, so Priceline’s 2.5-star hotels will show up on Travelweb as 3-star hotels.



Priceline and Travelweb are still working out some glitches in their system. For example, Travelweb rates the Four Points in New York City’s Chelsea neighborhood as a 3-star hotel, while Priceline calls it a 2-star. Priceline’s Brian Ek assured us that the ratings will soon be brought in line.



“If there’s a discrepancy, I’d attribute it to updates not having completely worked their way through the two systems,” he said. “Priceline taking ownership should address that as our folks proceed to integrate the two organizations.”



So later this summer, if you want to know what Priceline considers, say, a 4-star hotel in Denver, you’ll be able to go to www.travelweb.com, click on “Advanced Search” and ask for four-star hotels.



While that still won’t help you divine exactly which hotel you’ll get on Priceline, it’ll be a useful bit of help for smart bidders.

(Hat tip to WillTravel)

American has launched an online shopping portal, AAdvantage Shopping.com, joining the ranks of existing shopping portals like those of:

• United

• Northwest
• Continental
• USAirways
  
• America West
  
• Delta
  
  
  And many others.

This is only news because American is so late to the party, but they’re certainly an important addition.

Inside Flyer ran a cover story in December about earning miles for online shopping.

According to MSNBC,

Had to put this one up right away, as the cabins are going fast. But a cruise discounter called Cruise Travel Outlet has managed to convince Norwegian Cruiselines to let it throw a fire-sale for this weekend’s sailing to Bermuda. The $99 fare is for the May 30 (that’s Sunday!) aboard the Norwegian Majesty, and glory be, the $99 price applies to singles as well as those who’ll be sharing a double room.



Now, there are some downsides here. First off, you’re going to have to pack quickly as you’ll be boarding in less than two days, in Boston. Secondly, the price is a bit higher than $99 once you factor in all of the port charges and taxes—you’ll actually end up paying $380. But this is still a seriously fine price for this nice ship (just recently stretched, she’s added two more restaurants, a new casino and pool) and for pricey Bermuda. As well, your $380 could buy you an oceanview stateroom—they’re giving away the best available cabins at this price. When we called, we were offerred a very large, oceanview room. We didn’t take it so that you can, so hop to it!

MSNBC also notes that USAirways has Baltimore and Charlotte flights to the Bahamas for $160 roundtrip for travel through November 9th.

Independence Air is filing a complaint with the Department of Transportation over United’s email to its DC frequent flyers comparing Mileage Plus to iClub.

The complaint just causes me to roll my eyes. United lays out its logic in full detail, and the median frequent flyer — to the extent they care — is smart enough to understand the nuances.

Whining to government just makes me want to yell at Independence Air that they ought to grow up and compete. And if they don’t like unfavorable publicity for their rewards program, maybe they need a better rewards program — and then just explain the benefits to customers instead of trying to muzzle United.

Reader David writes:

Hey there. This is a question for your blog.



I’ve heard about Delta’s financial troubles, and for the first time heard them mention the “B” word.

Since I really concentrate on accumulating Delta FF miles, I was wondering what would happen to them if they went bankrupt — heaven forbid.

What’s happened historically in other airline bankrupcy situations. Any insight on that?

I wouldn’t worry about your Delta miles. United and
USAirways recently went through Chapter 11 (United is still there) and their miles are still being put to good use.

I have no worries about United miles at all.

USAirways miles are a somewhat different story — they may have to re-enter bankruptcy, and their future as an independent carrier is a bit murkier. Even so, all hope is not lost there, and USAirways is in alot more trouble than Delta.

First, mileage programs themselves are
independently profitable. Airlines sell miles to credit card companies, phone companies, mortgage companies, and make a profit doing so. Even when an airline can’t make money by flying, it can make money selling its miles. So the programs themselves are an attractive asset. And that’s apart from the hugely valuable marketing database that these accounts represent. There’s some chance that even if an airline
ceased to be in business that their miles would be honored (such as with Pan Am/Delta and TWA/American). This
isn’t 100% assured, of course - the Midway Airlines
bankruptcy left mileage balances stranded.

But Delta just isn’t at a place where it’s necessary to be thinking about such things. They aren’t at risk for liquidation. They just pay their pilots too much.

United has already reduced pilot costs in bankruptcy. If Delta had United’s pilot costs last quarter they would have made money. Bankruptcy is a controlled business strategy under consideration for the airline, not a weigh station on the road to Skymiles extinction.

Bottom line: Don’t sweat it!

It’s another fare basis starting in UA, UA0INNQ.

There’s no minimum stay, maximum stay, Saturday night stay, or even advance purchase required. The fare is valid to or from Washington’s Dulles or National airport.

Delta doesn’t fly non-stop. I’ve seen connections in Delta’s Atlanta hub and Dallas. The fare even seems to work with Delta codeshare flights on Continental aircraft through Houston and Cleveland.

Spot On links to a personal chef service that will come to your home, prepare all of your meals, and store them to be reheated in minutes.

This is capitalism at its greatest, offering specialized services that give people more of the most precious commodity, time. Rather than a “fast food nation” perhaps we’re evolving to be able enjoy time with family without sacrificing health or quality.

Fine Dining Solutions in the Washington DC area offers some great meals, but no miles.

If I were a chef I’d offer miles. But that’s why all of our contributions are unique.

Expedia Business Advantage will give you $5 in coffee for signing up by May 31st (free) and another $20 in coffee with your first air or hotel booking by June 30.

Here’s their ad:

An Expedia