Monthly Archives: May 2013

A Question about Mis-Connects

Tonight my wife was flying Dayton – Dulles – LaGuardia on United metal. Her flight into Dulles was a few minutes late, and when she arrived at the gate for the flight to LaGuardia, they told her they just shut the doors (10 minutes before departure) and she could not get on. This was the last flight of the night out, and the plane was spending the night at LaGuardia.

My question: is this normal procedure? I’ve never misconnected on the last flight of the night, so I wasn’t sure.

Don’t Be Paralyzed By Points

I’m in the middle of booking a trip for our family to Hawaii, and I realize that each time I go to book a trip I become somewhat paralyzed by points — by the idea that I’m somehow not getting a mythical “optimal” value for the points that I have. I always spend a ton of time debating whether I should burn miles for a trip because I’m afraid I won’t have enough for some insane trip (yeah right) that I’m taking later. Part of that comes from writing about miles and points and knowing that there are some awards that offer greater value than others, and part is by the constant drumbeat on lots of other blogs (and perhaps occasionally on this one) that you’re basically a complete moron if you’re not using your miles and points for international first class air travel.

Let me say this for the umpteenth time: there is no bad use of the miles you have. Of course, there are some award redemptions that get more “value” than others (we can argue about how you define “value” — although a business class ticket to Europe costs $5,000 I wouldn’t say that it provides 7x more value than a $700 coach ticket, which is why for many people redeeming points for 2 coach tickets to Europe offers far more value than 1 business class ticket, especially if that means bringing your spouse along or not).

The only terrible use of miles is storing them up and not redeeming them. How many of us (my hand is raised) were stockpiling Hilton points for some hypothetical future trip because they were so easy to acquire? Great call – until Hilton devalued those points by 2-3x on redemptions on top hotels. That brilliant strategy doesn’t seem so smart now that I’m sitting on several hundred thousand Hilton points – I was probably better off burning them off little by little at 3-star properties and enjoying the free nights rather than stockpiling for a trip that, it now turns out, I won’t take.

All of those posts out there about the “value” of points in various programs are doing all of us a disservice. It makes us all feel like unless we’re getting that much supposed “value” out of the points that using them is a bad idea. That is nonsense. First (and most importantly) it’s your money — and if you don’t have to spend your money, that’s a good thing.

Secondly, the “value” of the points varies by person. If I am never going to use the miles to fly to Bangkok in First Class, then the miles don’t have any value for that. I can’t sell the miles (really) to someone else to use for a first class trip to Bangkok. So their value really depends on how I’m realistically going to use the miles. And only YOU know that.

So yes, using those hotel points for the overwater bungalow in the Maldives is an amazing use of those points…but only if you’re ever going to go there. If you’re not, 20 free nights at the Hampton Inn might generate a ton of value for you because you don’t have to pay cash out of pocket.

I just thought I’d take this morning to re-iterate: use those points. Don’t worry about wringing every last penny of supposed value out of them. Take a trip you’re happy with and keep the cash in your pocket to spend on food once you’re there (get the hell out of the hotel concierge lounge and go eat a meal!)

Happy travels.

Perhaps a Better Way Than Transfers to Virgin Atlantic to Use Ultimate Rewards Points for Hilton Stays

Rather than just complain endlessly about the changes to the Hilton program, I thought I’d share a way to use fewer points than you might expect for stays at top-tier Hilton properties.

I’ve been looking at rooms at the Grand Wailea in Maui, and they now start at 95,000 Hilton points per night. Hawaiian Airlines and Virgin Atlantic both allow you to transfer miles to Hilton at a 1:2 basis, which is why many people get the Hawaiian Airlines credit cards. That’s fine. Theoretically, though, Hawaiian will not allow you to transfer points into the Hawaiian program and then out to Hilton (you’d have to earn the Hawaiian miles through flying or credit cards). Virgin Atlantic, however, doesn’t have any issue with that.

So you could transfer Membership Rewards points or Ultimate Rewards points into Virgin Atlantic. In this case, it would take 47,500 UR points for a free night.

But what if you just bought the room and paid for it with Ultimate Rewards points? I know that we bloggers tend to dismiss the 25% bonus you get by booking travel through UR and using points to pay for it. However, in this case it may make sense: A room including breakfast is $453. You can pay using UR points and it’s only 36,248 points per night – 10,000 fewer than if you booked an award night using those points.

The Hilton Bora Bora is, gulp, 166,000 HHonors points per night – 83,000 UR points transferred to Virgin Atlantic. Or you can pay with UR points and it’s 48,000 points per night.

The Ritz-Carlton Kapalua is 50,000 UR points (transferred to Marriott) or you can buy a room for 27,800 UR points.

My larger point is this – the 25% point bonus is always worth a look, especially with the Hilton program because of the ridiculous amount of points they charge for top-tier rooms.

A Recommendation for Help with Your Russian Visa

I’m headed to Moscow in 2 weeks and because of reasons that aren’t important I was quite late getting started with the whole Russian visa process. What Russian Visa process? Oh, the one that involves a multi-page application (what countries have you been to in the past 10 years and on what dates?), photographs, an interview, an official invitation, etc. And apparently if you have any discrepancies between the various materials you have to submit, you will be rejected.

I had a bit of a freakout when I realized that getting to the Consulate in New York for the required interview (yes, interview) was not going to be possible. Also, I’d read that even if you go early they won’t necessarily take you that day. Lovely.

There is an official alternative: a company called Invisa can help you through this process, and they only charge $30 to submit the application for you. That’s pretty great, but you need to schedule time to go down to Lower Manhattan and visit with them, which wasn’t possible in my timeframe (because of Russian holidays they were closed for 5 days in May).

After a bit of digging, I saw a recommendation on FT for Visahq. There are lots of other visa-expediting services out there, and I haven’t used any of them. I can tell you, however, that Visahq was fantastic. I printed out everything I needed and brought it to their office in Manhattan (though you can mail it to them, of course), and a guy named Val kinda laughed when he saw my application, which was missing information and, in general, a mess.

His first comment was, “you don’t need us to do this for you” which I appreciated but, it turns out, I did need them to do it for me because I was not going to run around New York city getting this processed. Also, I forgot to mention: if you go to the Consulate to drop off your visa application you need to have an interview. But for God-knows-what-reason if you go through a third party, no interview is required.

Anyway, Val said not to worry (it was clear I was worrying, because I didn’t see how they would possibly get this done in time) and said he’d fix everything and deal with it.

Lo and behold, in a week the visa was in my apartment. Visahq charged $90 to expedite which, in my book, was more than worth it.

I’ve now learned a bit about the whole ridiculous process so I’m happy to answer any questions.

Turns Out Frontier Customers CAN Get Free Bin Space and Frequent Flyer Miles When They Book with a Travel Agent

Frontier Airlines received a fair amount of media attention from a press release they put out a couple of weeks ago saying that the only way to earn full frequent flyer miles on coach tickets and NOT have to pay to use overhead bins is to book with Frontier Airlines’ website.

Last year, Frontier put out a press release saying that the only place to purchase their Classic and Classic Plus fares was on their own website.

Turns out, neither of those things is true (thanks, Travel Weekly).

Travel agents are able to book both Classic and Classic Plus fares for their clients. And they’re able to book the fares that allow for full frequent flyer credit and free overhead bin space.

The airline created a new fare type called “Basic” that is only available in the GDSs used by travel agents. It’s 10 cents cheaper than the Classic fares, but it does not come with full frequent flyer credit or free overhead bin space. And because it’s 10 cents cheaper than the Classic fares, it’s the default fare that comes up on a GDS when an agent searches a fare on Frontier. Pretty tricky. Agents are able to book the Classic fare (earning full credit and bin space) for their clients, but it apparently involves a bit of a workaround.

Said a Frontier rep about the misleading press releases, “The press release last week and the one in September were meant for the general public who book through third-party sites, not for travel agents booking through a GDS…”

That is just nonsense.

A Little Friday Morning Roundup

– Amtrak announced that is has upgraded its wi-fi service on Acela, Capitol Corridor, Pacific Surfliner and San Joaquin trains, with additional Northeast Corridor service to be added this summer. If you have taken the Acela and used the wi-fi, you can attest that Amtrak’s wi-fi service is the Amtrak of wi-fi service.

– American Airlines will allow passengers with no rolling bag (ie, only bags that fit under the seat in front of you) to board in Group 2, which is basically ahead of most others in Coach. But here’s the more interesting part: if you have a rolling bag and you get to the gate, they’ll let you gate check the bag for free so you can board early. Read that again: DO NOT CHECK YOUR SMALLER BAGS ON AMERICAN. They will let you check them for free at the gate and board early. American said that since they started charging for checking bags, people have (no surprisingly) been carrying on more bags than ever. This slowed down the boarding processes. They’re hoping the new system will alleviate some of the pressure on boarding. I contend that no airline really knows the best way to board a plane, that it’s a complex problem with no optimal solution. I do know the worst boarding process I ever encountered: years ago a friend and I were flying China Airlines from San Francisco to Taipei. They announced First Class to board the 747. 10 people go to the gate. Then they announce Business Class. 15 people go to the gate. Then they say, “We are now boarding Economy Class.” And 472 Taiwanese, me, and my friend Dave start a stampede at 1 o’clock in the morning so that I can go sit in 62H.

(Completely unrelated, though on the same trip: We land in Taipei at 6am on a Sunday morning, and I called my friend Jim in Detroit. We had the usual “where are you/what time is it” conversation and I managed to convince him that because it was 6am in Taiwan (7pm Saturday night or so in Detroit) that I was able to have already watched the live episode of Saturday Night Live that had not yet been on in the US.)

– The Onion says that “Spirit Airlines Is the F***ing Worst

Is the US Airline Industry in the Best Shape Ever?

I had written a comment in a post a little while back noting that the stocks of several US airlines have been fantastic investments recently (US Airways, Spirit and Allegiant, specifically – full disclosure, I own shares in US Airways and Spirit). Those airlines have long been operational powerhouses, banging out profits quarter after quarter, even as their larger cousins have been all over the place.

But since the US Airways/American merger it’s beginning to appear that the US airline industry is, quite possibly, in the best shape it’s been in since deregulation (the pre-deregulation years were a completely different business for airlines, and it’s almost not worth looking at data from those days. But after nearly 30 years of turmoil, the industry is riding a wave of great financial results.)

Check out this chart showing profits/losses for the US airline industry by quarter since 2000. 2012 showed the best financial performance (for domestic flying) in those 12 years. Remember how well the airlines were doing in early 2000, when ridiculous dot com growth fueled a major expansion in both service and fares? (Remember paying $2200 to fly from Newark to Dallas? Yeah, me too). In the 2nd quarter of 2000 (when we had more airlines, mind you) airlines showed a profit on domestic flying of $2.7 billion. In the 2nd quarter of 2012, they showed a profit of $3 billion. For 2000 as a whole they showed $5.3 billion vs. $7.5 billion in 2012.

The chart is also interesting because while many people have blamed 9/11 for the woes the industry faced for years, it was getting quite bad before that — Q2 2001 profits were more than $3 billion less than the same quarter in 2000. It was already terrible before 9/11.

Well, that incredible profit growth must have been driven by higher fares, right? No. Check out this chart. In 2012 dollars, average fares in 2000 were $77 HIGHER than they were in 2012. What about fuel? Oh – fuel cost roughly 70 cents a gallon in 2000, vs nearly $3 in 2012.

So what happened? I was a bit disingenuous when I said that fares were lower in 2012 — they were, but that does not take into account the $3.5 billion in baggage fees and $2.6 billion in change fees the airlines generated last year. Ancillary fees — which, ironically enough, were started by the low fare carriers — have been an enormous help for airlines who felt a bit restricted with how much they could raise fares (2012 fares were only 3% higher than 2011). But consumers, though they complain about them, will pay ancillary charges, and that’s fueling profitability.

Plus there were, as many have said in the past, simply too many airlines since deregulation. Typically, new entrants would lower fares to levels where no one could be profitable, drive down everyone’s profitability, then go out of business. That’s a terrible way for an industry to run. Plus, larger carriers — because there were so many of them — fought for market share by lowering fares, which simply drove profits lower. Consolidation has driven airlines to make much smarter pricing decisions (something the America West/US Airways team is, at least in significant part, responsible for), which has allowed the airline to – gasp – make money while offering a reasonably priced service.

In addition, the not-particularly-smart lowfare carriers have disappeared, leaving very, very smart airlines like Allegiant and Spirit to run businesses profitably while offering significantly lower fares than those offered by legacy airlines. That actually BENEFITS legacy carriers, because those airlines offer a differentiated product — plenty of people don’t want to fly Spirit, so they’ll pay a premium to fly United (or whomever).

Add the ability to print frequent flyer miles through credit card signups and the industry – for consumers and the airlines themselves – is about as healthy as it’s been in 30 years. (I don’t want to hear about how planes are more crowded – they are, but get over it — if you’d like an empty seat next to you, buy a second seat). And the security stuff sucks, I get it – it’s not the airlines’ fault. Enjoy your cheap flights, unlimited upgrades, and 75,000 mile credit card bonuses.

2 Notes from a Quick Flight to Boston

2 quick things to pass along from a flight on the US Airways Shuttle to Boston.

– I was offered a $49 upgrade to first class when I checked in. I turned it down (empty flight for 35 minutes) but I believe that is the least expensive upgrade I have ever been offered.

– I had to pay a small fee to standby on an earlier flight, which annoyed me for a second until I remembered that I own a few shares of US Airways, so I thought of it as paying myself a small fee. I suggest buying 1 share of every airline stock so you won’t be mad about paying ancillary fees. You’re just paying yourself!

2 New Routes Worth Noting

I paused a bit when I saw these two new routes announced yesterday:

– Qatar Airways will launch nonstop service to Philadelphia (?) at some point in the near future. That unlikely destination was chosen because Qatar will join Oneworld, and US Airways has a large(ish) presence in Philly. It’s kinda weird to write that US Airways is part of Oneworld, by the way.

– JetBlue will launch nonstop service from JFK and Ft. Lauderdale to Port Au Prince, Haiti beginning in December. JetBlue’s 1 daily flight from JFK will join Delta and American Airlines serving Haiti from New York. They’ll offer 2 daily services from Ft Lauderdale, presumably because they like going after routes that Spirit already flies.

Are There Credit Cards You Should Wait to Apply For? (Apologies for Dangling Preposition)

On a post on another site about the 75,000 point bonus for the Amex Premier Rewards Gold Biz card, I saw that a reader had written a snide comment about how that particular blogger had included that card on his “best signup bonuses” list the prior week when it was 50,000 points and how can it be the “best” when a bigger bonus came along, etc. Snotty implications of that aside, I thought it might be helpful to list out the credit cards that do seem to have occasional bonus promotions so you can decide whether you should wait for it before applying for these cards in your next churn.

– Amex Premier Rewards Gold card has a normal offer of 25,000 points after minimum spend. But several times over the past year they have run a bonus for 50,000 points. I would wait for those to come along.

– Amex Premier Rewards Gold Business card. That also used to have a 25,000 point bonus after minimum spend, though it’s been at 50,000 points for a few months now. That said, several times a year they run a 75,000 point bonus (as they are right now). I would wait for the bonus.

– Amex Starwood business and personal cards. Each of these have a 25,000 point bonus after minimum spend, but late summer/early fall they generally run a promo bumping that up to 30,000 points. 5,000 points doesn’t mean a whole lot, but they’ve run this promo like clockwork so unless you absolutely need the points now, why not wait til August?

– Amex Delta gold card. There’s a 30,000 point offer on this all the time, but they ran a 70,000 point promo in the past year, and have targeted 45,000 point promos out there now. And there were 35,000 point bonuses floating around for a while. I’d wait to see if you qualify for a few months.

– Virgin Atlantic Amex. The normal offer is 25,000 points after minimum spend, but they have regularly offered a 45,000 point bonus for the past couple of years. I’d wait.

– United Explorer has a 30,000 point bonus, but many people are offered a 55,000 point deal. If you do not get that offer now, and you plan on flying United in the next few months, I’d wait to see if it becomes available to you. If you don’t plan on flying United, I would just take the 30,000 points.

– Southwest Visa. Their regular offer has been for 1 free flight, but they have frequently offered a deal for 2 free flights after minimum spend. I’d wait.

– Alaska Airlines’ credit card offers a 25,000 mile bonus, but they used to have a 40,000 mile offer available during promo periods. Unfortunately that seems to have gone by the wayside. I’d just take the 25,000 miles.

– Chase Freedom card has a 10,000 point offer, though they used to offer as much as 35,000 points. Unfortunately, it seems like those offers are gone. I’d just take the 10,000 points.

What’d I miss?

– Per a reader: The Amex Platinum card usually offers 25,000 points (though their Mercedes Benz version offers 50,000 points). Earlier this year there was a 100,000 point public offer — that’s level of offer is rare, though they do send out 100,000 point targeted offers frequently. If you’re in the market for a Platinum, I’d wait a few months and see if you receive a targeted offer — if not, and you’re an Amex member, it doesn’t hurt to call them and ask if you’re eligible for any 100k offers.