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Category Archives: Recent Stories
And Now a Response to All Those Who Were Personally Offended by American Airlines’ Recent Policy Changes
I’m on vacation this week in the Dominican Republic so I thought I’d use it to respond to all those blog posts (and comments) where people said they felt personally betrayed by American Airlines’ lack of loyalty and respect to customers when they announced immediate changes to their frequent flyer program last week.
I will do that in the form of a fake open letter from American:
Dear Frequent Flyer Members:
We have been pretend saddened by the all of the recent, rather strong sentiments we’ve read online lately regarding the recent updates to our frequent flyer programs. We have been especially moved by all of the people who said that they felt our sudden changes betrayed them, betrayed their loyalty, and showed a complete lack of respect for our customers.
We take those charges to heart, and I would like to respond to them in this forum.
First, that is the most laughable bunch of crap I have heard in a long time. Loyalty is a two-way street, my friends. Oh, you’ve been loyal, you say? Hm…I’ve been reading the same message boards as you and when there’s a mistake fare, what’s the first thing someone writes? Is it, “Please – the airline has been so good to us over the years, be sure to give them a call or shoot them a note on Twitter to make sure they’re aware of the error that was no doubt due to a typo keyed in by a 24-year old in the pricing department?”
What? No? That’s not the response? Oh right – Everyone says, “Whatever you do, don’t call the airline!” Then the threats about lawsuits start. Yes, those are our loyal customers. And at HQ we all just start whining about how terrible you customers are – “how can they treat us this way?” Actually, no we don’t because we’re adults and we know this is a business and we know that our customers will take advantage of us in every way that they can. That’s fine – we don’t whine about it, and you shouldn’t either.
Second, why should we put customers first? Let’s take a look at airlines in the US. Who do people complain about the most? Spirit, by far, right? Yeah – they’ve been profitable for what, 28 straight quarters in a row or something? How about Allegiant? You think they give a rat’s ass when they cancel their twice-monthly service from Timbuktu Falls, Idaho, to Phoenix? No, they don’t. Also they’ve been profitable pretty much for 7 or 8 years.
So why should we go out of our way to make customers happy? We shouldn’t. We should tell customers what they can expect from us (basically safe transportation) then let the cash roll in. I’ll blame it on my predecessors at AA, United and Delta for pretending that we offer anything beyond a safe trip. I’m not going to lie to you anymore: you’ll get safe transportation, and that’s it. The fact that we even have a frequent flyer program is just a bonus. You think ours sucks because we no longer allow a ridiculous domestic stopover? Great – go fly JetBlue and tell me how awesome their frequent flyer program is. Enjoy the free TV.
Third – we INVENTED THE FREQUENT FLYER PROGRAM (well, sort of…) It’s ours, and we can do whatever we want. You don’t like it? Oh – please, go switch to Delta. You’ll find their miles to be extremely useful….on Saudi Arabian Airlines.
We at American (and if we’re being honest, every other airline) give a crap about exactly one thing: getting you where you’re going safely. That you’re getting miles at all is only a testament to the fact that our credit card and bank partners will buy a zillion of them and hand them to you for basically doing nothing. Do you know how hard it is to actually fly 100,000 miles? That takes most of our customers more than 4 years or trips to Dallas or wherever. Or you can sign up for exactly one credit card. Who do you think we care the most about? Exactly.
The US airline industry is the healthiest it’s ever been. You liked cheap fares, empty planes and available award seats? You know what that cost? That cost the livelihood of just about every airline. There used to be dozens of airlines flying around the US – there are fewer than 10 of any size. Why? Because it turns out you can’t give away your seats and make money. Imagine that.
So sure – we’re in a bit of a conundrum — we print miles because banks will buy them, but we don’t have enough seats flying around to give the seats away like we used to. So we have to tweak that…and hoo boy, you sure don’t like that.
Oh, you’re so loyal to us. I have some bad news: we don’t care. Go, fly Spirit. Have fun. You’ll enjoy that. You want to buy cheap fares? They’ve got them. That’ll open up seats to people who either want to fly us (why?) or have to because of corporate agreements. Oh, I should’ve mentioned that – we do care about our corporate customers. That is, we care about the corporations who agree to have their flyers travel on our airline. But you? No, you don’t matter so much.
That’s not a bad thing for you – you can fly other airlines all you want. Fly whoever is cheapest. Or whoever has live TV or wi-fi or whatever it is you’re looking for. I know you’re not loyal. “Whatever you do, don’t call the airline” – whew, does that piss me off.
So let’s stop pretending we have a healthy relationship. Treat us like you do your groceries – buy whatever brand is cheapest, and just consider any miles you get to be gravy. In return, I’ll stop pretending that we offer you a 5-star hotel experience in the sky. Because we don’t.
Let’s hug it out.
The opinions expressed in this pretend piece are exclusively those of pretend American Airlines management and only represent about 90% of what the OTR believes.
One question that has come up a few times when people talk about Vanilla Reloads (and other reloadable cards) is what, other than manufacturing spend, those cards are actually supposed to be used for. This week’s issue of the New Yorker offers an explanation in an article about corruption at the Baltimore City Detention Center:
Inmates paid for drugs and other contraband by texting fourteen-digit numbers to load money onto Green Dot MoneyPak cards belonging to Black Guerrilla Family members inside and outside the facility. Gang leaders, in turn, used the Green Dot cards to pay their suppliers and enjoy their profits. White bought a BMW and a Mercedes-Benz while he was an inmate.
So there you have it – reloadables are useful for mile hoarders and prisoners buying drugs.
An Italian court told Emirates that it would no longer be able to fly the New York – Milan route that it had launched last year, agreeing with a complaint filed by an association of Italian airlines alleging that the trans-Atlantic service violated the terms of a bilateral air agreement between Italy and the United Arab Emirates.
Emirates extended one of its Dubai – Milan flights to continue to New York last year, and it quickly became the market share leader on the route. The move scared the living hell out of basically every airline in the world, as it meant that Emirates had its eye on expanding well beyond its Dubai base. And Emirates’ CEO has said that he has been approached about launching similar non-Dubai service by airports in the UK, Sweden, Denmark and Spain to the US and South America.
Emirates said they are looking at whether they should appeal the ruling, but no announcement has yet been made about when they will cancel flights between the cities.
For flights through the rest of the year, Alaska Airlines will be offering double miles on trips between Seattle and:
San Jose, Calif.
Vancouver, British Columbia
And they’ll offer double miles between Seattle and Fairbanks & Seattle and Juneau from June 1 to September 1st.
Hm – I wonder if this has anything to do with Delta…
You have to register to earn the double miles.
The travelblogeteria(tm) is chock full o’ complainin’ today about the admittedly annoying changes US Airways and American made to their programs yesterday, with much of the complaining focused on how it isn’t “fair” for the airlines to do this, and that airlines need to be more “respectful” of their program members.
That is absolutely hilarious.
A few thoughts here:
- These are public companies, and their first responsibility is to their shareholders. Sure, some companies will tell you that without happy customers they can’t run a profitable business. That has not been the case for airlines. Southwest Airlines has very happy customers and from May 2011 to this month, their stock when from roughly $12 to roughly $24. Spirit’s stock went from $11 to $60 during that period (they IPO’d in May 2011). Delta, who has had the industry-worst frequent flyer program, saw its stock triple during that period. You can love (or LUV) your customers, or you can get great stock returns. You pick.
- I know everyone in frequent flyer programs are referred to as “members” but we are not “members” – we are people who are hoarding a highly speculative currency. As I wrote last year:
First, they are not loyalty programs. A loyalty program would reward loyalty. Airline and hotel points programs do not reward loyalty; they issue a currency…and, like all currencies, they can be devalued (or overvalued) over time. We are always surprised, shocked, and offended when airlines and hotels change the value of the currency, and on some level I blame them for it — if these are loyalty programs, is our loyalty now less valuable? Well, no – because they’re just issuing currency, not rewarding loyalty. Starwood is basically the Central Bank of the Republic of Starwood.
Airlines have printed points like, as I’ve said before, they’re Zimbabwe’s finance minister…we cannot possibly expect their value to hold when points are so readily available. And there’s literally nothing keeping airlines from devaluing the points, changing the rules for the points, or adding fees to using the points. It’s in the fine print, but it’s in there. I’m not sure why this is surprising – we have been kidding ourselves if we think that we have all been good soldiers and we can’t believe that we are being betrayed. Please. You think there’s no cost to Vanilla Reloads and credit card churns? THIS is the cost.
- How many people complaining about this have earned these miles through credit card churn, and not through airline loyalty, by the way?
- Fly coach…there are no changes there.
- I was actually serious yesterday when I wrote that you should buy shares in the airlines you fly as a hedge against these moves. Sure it’s annoying when airlines change their rules, but if they’re doing it to boost their bottom line, why wouldn’t you take advantage of the upside there? Airline stocks have been gangbusters over the past couple of years now that they’re actually running good businesses and charging fees where they can. I know that’s annoying as a traveler; but I’ve hedged that by buying shares in US Airways & Spirit Airlines. Suddenly that $3 water on Spirit isn’t so annoying. Plus, if hoarding points IS currency speculation (which I argue it is) then I SHOULD have a hedge against it. Which I’ve done.
- And perhaps, then, shame on all of us who write about miles for not stressing more clearly that miles have no value until used. I’ve danced around that idea (as I appear to be the only person telling people not to take advantage of the US Airways mileage sale the other day), but speculatively buying points always seemed crazy to me. Yesterday I was reminded why that is.
- And finally…for all of the virtual ink that was shed on this and how unfair it is and how badly we’re treated, I just wanted to remind everyone that the CEO of General Motors has been in front of Congress trying to explain why they didn’t bother recalling cars that they knew had caused the deaths of 12 of their customers. Eliminating a free stopover and charging for upgrades seems like a petty complaint in comparison.
I Won’t Add Any More Fuel to the Fire about the US Airways/American Airlines Devaluation, Except to Say These 2 Things:
- US Airways’ 90k North Asia business class award is now 110k miles.
- You can no longer add on the “free one way” with a stopover at the domestic hub.
- There are now 3 tiers of redemption.
- Oneworld Explorer tickets (which were useful on round-the-world tickets) are no longer possible.
Those are the “highlights” – you can read the details in the linked articles above. People are pissed because there was no notice.
But here are the 2 things I wanted to say:
1) Remember yesterday when I said everyone should calm-the-hell-down about buying US Airways miles for 1.1 cents each and wait until they have a specific trip in mind to purchase them? This is another reason…
2) As a hedge against news that is going to make you angry, you should buy shares in each of the airlines you fly. That way, when they make decisions that will benefit shareholders while upsetting travelers, you’ve hedged yourself.
India’s equivalent of the FAA (which they call the DGCA, the Director General of Civil Aviation) asked lowfare carrier SpiceJet to stop selling its Rs 1 (2 cents) tickets, because it considers the practice to be “predatory” and “a malpractice.”
SpiceJet’s announcement caused a virtual stampede to their website, causing it to crash as Indians looked to grab basically free tickets around the country.
Other airlines have no responded, though none with 2 cent fares.
SpiceJet on Wednesday defended its position, saying market stimulation with low fares is an essential strategy for LCCs. “As a low-cost airline in a market where demand is currently soft, and being in a market where costs are structurally high, we are trying our best to be innovative and adopting best practices from global LCCs in order to attract more customers and improve our revenues,’’ the airline said in a statement.
Wait – costs are high, so the way to combat that is by lowering fares to zero? Obviously!
I’ve been traveling a fair amount recently, and the slightly ironic part of writing a blog about traveling is that when I’m actually traveling it’s more difficult to write stuff about traveling (did that make any sense at all?).
Here are a few stories I wanted to share over the last few days that I thought, perhaps, you wouldn’t have found elsewhere:
- Have you ever needed to fly from Montego Bay to Kingston, Jamaica? Yes? Good news, interCaribbean Airways (?) is offering $29 introductory fares on its new 16 weekly flights between the two cities. Guess how long it takes to fly between those 2 cities…go ahead, guess. Don’t cheat and look it up. What fun is that? What’s your answer? What? No, that’s wrong. It’s 35 minutes.
- Canadian North has introduced its own frequent flyer program called Aurora Rewards. Since you’re not going to be flying to Kitikmeot anytime soon I won’t share the details here, but just know that you can double-dip, earning both Aeroplan points and Aurora Rewards points for a given flight. If you need to know the details of the program written in Inuktitut, then visit this link. I don’t know what Inuktitut is, but it’s either a language spoken by natives of Northern Canada, or it’s an elaborate April Fool’s Day joke.
- Lufthansa has begun putting their new lie-flat business class seats in its A380s. Only 1 has been retrofitted, but the rest of the A380 aircraft in their fleet will follow. It was always a bit odd that those new planes had old business class seats, but that will be fixed.
- Longtime charter operator World Airways has shut down. North American Airlines, which is owned by the same company, is currently still flying Department of Defense charters with 2 of its 767s, but that carrier is now for sale, so if you’re interested in starting an airline with 2 old 767 aircraft, now is probably as good a time as any to jump in.