The Flying Critic

Ted's Revenge (or how United is making a HUGE mistake)

An upcoming major announcement by United leaked yesterday.  It comes from a flight attendant newsletter and details some major changes to United's on-board meal services.

You might think of it as the return of Ted.  Or at least Ted's Revenge.

No more hot meals in 3-cabin business class on domestic routes.  That means if you fly LAX-IAD-FCO-IAD-LAX in business class for ~10 grand you can look forward to the same buy-on-board box that the economy passangers can buy.  But you get your drinks for free.  So it's still good service.  Right?  :(

Speaking of service.  The other major thing you might not notice is that United is dropping their flight attendant staffing levels down to FAA minimums and/or other lower levels because of the reduced meal service because of the buy-on-board services.  Expect frustraited flight attendants and slower service.

They are also dropping free meals in economy on many international routes and charging more for the buy-on-board and other food offerings.

This screams of desperation by United.  And they are desperate.  All of the airlines are.  But this seems like a major tactical error by United.  So much for United's premium international service advertising campaign that they've been spending big bucks on during the Olympics.

I'm not alone.  Cranky Flier posts most of the leak on his blog and he just gave United a Cranky Jackass Award in response.  One Mile at a Time thinks this may be the end of United (at least if they can't get new management).  View from the Wing worries that Mileage Plus might be next.

No Free Ride a Parody by Bruce Hopman

Bruce e-mailed me today asking if I would share his new parody about the fee mania that has consumed the airlines.  You can also check out his parody blog at parodyandson.blogspot.com.

Delta to Fly Atlanta to Mumbai Nov. 1, Will Drop JFK-Mumbai

Delta just announced their new non-stop flight between Atlanta and Mumbai that will replace their previous non-stop JFK-Mumbai route:

Delta Air Lines today announced a new daily nonstop flight between Hartsfield-Jackson Atlanta International Airport and Mumbai, India, starting Nov. 1, 2008.  The new flight will connect the world's largest airport with one of the world’s fastest-growing economies.

Delta's recently acquired Boeing 777-200 Long Range (LR) aircraft will make the 17-hour, 55-minute westbound nonstop flight possible.  The world's longest range commercial jetliner bolsters Delta’s ability to connect customers and cargo between virtually any two cities around the globe, nonstop.

Delta's first two 777-200LRs joined the fleet earlier this year as the first of 10 such models to be delivered through 2010.  Since April, these aircraft have been serving the New York-JFK-Mumbai route, which will be discontinued with the start of nonstop service between Atlanta and Mumbai. 

The schedule for the new daily route is:

DL 184

Depart  Atlanta at 7:15 p.m.
Arrive Mumbai at  10:35 p.m. (one day later)

DL 185

Depart Mumbai at 1:05 a.m.
Arrive Atlanta at 8:30 a.m.

American Airlines To Charge New Fees to Upgrade With Miles

American Airlines sent the follow e-mail this morning announcing their new fees (aka co-pays) to upgrade one-way to business or first class with miles (upgrades using stickers or vips are still fee-free):

Effective October 1, 2008, Upgrade awards from most Discount Economy fares will change as follows:

• Upgrade within the continental U.S. and Canada, within and between the continental U.S. / Canada / Mexico / The Caribbean or between North America and Central America will require 15,000 miles plus a $50 co-payment.
• Upgrade between North America and Europe, Japan, China, Argentina, Bolivia, Brazil, Chile or Uruguay will require 25,000 plus a $350 co-payment
• Upgrade between North America and India will require 40,000 miles plus a $350 co-payment

The current award structure will apply to members who request upgrade awards prior to October 1. For complete information regarding award changes, visit www.aa.com/awardchanges.

Gary from a View from the Wing speculates that United may be next:

Personally I’m waiting for the other shoe to drop on my program of choice, United, they still don’t have online minimum award booking fees, award fuel surcharges, upgrade cash co-pays, and it’s been a couple of years since they’ve increased mileage redemption levels.

Wi-Fi On Delta's Entire Domestic Fleet By End of 2009

According to PC World, Delta will add wifi to their entire domestic airline fleet:

GoGo will cost Delta flyers $9.95 on flights of three hours or less, and $12.95 for flights that are longer than three hours. Delta says it expects to begin to offer in-flight Wi-Fi early 2009.

The plan is to upgrade Delta's MD88/90s during the first half of 2009 and the 737s, 757s, and 767s in the second half of 2009.

Airlines are Wrong to Devalue Frequent Flyer Programs

US Airways stopped awarding a minimum of 500 miles on short flights in May.  United starts today.  Most of the airlines recently added, or are adding, new fees for booking award tickets.  US Airways shocked their elites a few weeks ago by announcing the end of the elite mileage bonuses that gave very frequent flyers double miles for all flights.

The airlines are making a mistake devaluing their loyalty programs.

Instead of alienating their frequent and loyal customers by removing benefits and resorting to nickel and diming the airlines should be using their frequent flyer programs to create new, and maximize existing, customer loyalty.

We all know the airlines are in trouble.  Their previous business plans do not work with $130+ oil.  Oil now costs more than most leisure travelers are used to spending for their entire tickets.  And don’t forget labor and overhead.  The airlines are bleeding to death with costs far exceeding their revenue.  They can not survive without change. 

Ticket prices need to go up, way up.  Route frequencies and capacity need to drop. 

Make people feel like they are getting more for their money through increased frequent flyer program benefits and the higher fares and reduced routes will be easier to swallow.  Keep cutting frequent flyer benefits and customers will not be able to continue justify paying a premium to stay loyal to their primary airline.

Delta's New Award Fuel Surcharge Doesn't Make Sense

View from the Wing points out that Delta just introduced fuel surcharges on award tickets originating from the US and Canada.

From Delta's press release:

Effective Aug. 15, 2008, the SkyMiles program will add:

• A $25 surcharge for Award Travel between the 50 states and Canada
• A $50 surcharge for Award Travel between the 50 states/Canada and all international destinations, including the Caribbean, Latin America, Puerto Rico, the US Virgin Islands, Trans-Atlantic and Trans-Pacific.

This fuel surcharge will not impact existing ticketed award itineraries or award tickets issued prior to Aug. 15, 2008, regardless of the date of travel.

One Mile at a Time thinks this isn't such a bad move by Delta:

I know some might think I’m crazy for saying this, but I think this is a good thing. No, I hate to see new fees, but I’m relieved that it’s “only” a maximum of $50. Many (including me) have long been predicting award fuel surcharges for US carriers, and let me tell you, I’m damn relieved that it’s only $50!

Some may think $50 is a lot, but try redeeming with any non-US FFP. For example, a recent award from EWR-FRA-MLA-FRA-EWR cost $350 in fees, taxes, and surcharges, and that’s on the low side.

I get what One Mile at a Time is saying that with Delta setting the bar at $50 it is unlikely that the other USA carriers are going to set a higher fee and that it is means consumers in the USA will pay less compared to other international airlines.  But is it really in everyones best interest to only charge $50?

I'm not opposed to airlines raising their fares and covering their costs.  They are crazy not to with fuel skyrocketing.

What I don't like about this fee - and many other fees by the airlines recently - is that they aren't actually tied to the airlines increased costs.  It is just an arbitrary fee.

When the airlines create fees that aren't rationally related to the services they are providing it feels like the airlines are trying to trick us by hiding the true cost of their services in a multilayer fee scheme.

If this new fee by Delta is actually a fuel surcharge shouldn't it be proportional to the amount of fuel consumed by the flights covered by the ticket? 

A flight from Atlanta to San Juan, Puerto Rico uses a fraction of the fuel that a flight from Atlanta to Dubai uses yet both have the same $50 fuel surcharge.

I know most of you would hate to see a fuel surcharge based on the cost of fuel related to number of miles you fly because it would likely be more than $50 per award but doesn't that make more sense? 

Of course that only works if the fuel surcharge actually fluctuates with the cost of fuel.  When fuel goes up the surcharge goes up.  But just as quickly when fuel goes down the surcharge goes down. 

I think that sort of plan makes sense for award tickets where you don't want the number of miles that people are aiming for to be constantly changing but the airlines need to cover their constantly fluctuating costs.

There is an argument to be made that award tickets shouldn't have a fuel surcharge or any other fees associated with them because award tickets are filling seats that would otherwise go unsold (and the impact on fuel burn by one person isn't significant). 

That might have made sense last year.  But this year capacity is getting slashed.  And for those of you who toiled to find award seats last year it is going to get worse.  A lot worse. 

But how worse does it have to get?  Reasonable fuel surcharges on awards might reduce the need to drastically cut capacity on award availability.  If airlines know that their award seats will at least cover rising fuel costs with a variable fuel surcharge, in combination with an appropriate number of miles redeemed for the flight, the airlines should be able to keep more award seats available for redemption than they otherwise would with capacity dropping.

 

Go! Adds $25 Fee For 2nd Checked Bag on Interisland Hawaii Flights

The Star Bulletin reports that Go! Adds $25 Fee For 2nd Checked Bag:

Mesa Air Group Inc., the parent of interisland carrier go!, said yesterday it will charge $25 for a second piece of checked luggage on all flights starting July 15.

According to Go!'s Baggage FAQ:

A $25 second-checked-bag fee takes effect for travel that begins on July 15, 2008. go!Express         customers exempt from paying the fee are:

• Corporate members;
• Customers traveling on government fares;
• Customers traveling on or after July 15, 2008 who purchased their tickets prior to June 25, 2008;
• go!Express passengers traveling from Kapalua, Maui; Kona, Big Island, Lana`i City, Lana`i and Ho`olehua, Moloka`i; and
• Customers flying on the same reservation as someone with exempt status (except for group bookings of 8 or more).

Customer checked-in items exempt from the bag fee are:

• Child car seats, carriers and strollers; and
• Wheelchairs, walkers and other personal assistive devices.

Customers are able to pay the second-checked-bag fee via the go! Reservations Department or at go! ticket counters.     Second-checked-bag fees paid via the go! Reservations Center are non-refundable.     Ticketed customers calling the go! Reservations Department to pay in advance for a second-checked-bag fee     will not be charged the $5 reservations call center fee.    

                      

 

Continental To Partner With United & Join Star Alliance

Big news from Continental today.  They hope to leave SkyTeam and join the Star Alliance.  Continental will also create code-share agreements with United.

From Continental's press release:

Announcement:

Continental Airlines (NYSE: CAL) and United Airlines (Nasdaq: UAUA) today announced a framework agreement to cooperate extensively, linking their networks and services worldwide to the benefit of customers, and creating revenue opportunities and cost savings and other efficiencies. In addition, Continental plans to join United in the Star Alliance, the most comprehensive airline alliance in the world.

How they made the decision:

Teams from the two organizations worked intensively over the last several weeks exploring creative solutions for how the two companies could achieve efficiencies and synergies that expand beyond the well-established benefits of codesharing. Their work focused on plans for significant cooperation on frequent flier programs, lounges, facility utilization, information technology and procurement. This work was assisted by the efficiency opportunities identified and relationships developed during the parties' earlier merger discussions.

"The teams worked well together to identify opportunities to create a unique and competitive partnership extending well beyond a traditional code share agreement," said Glenn Tilton, chairman, president and CEO of United. "On behalf of the Star Alliance, I am very pleased to invite Continental to join as a member. Continental will bring significant new assets to our global alliance, and our two companies will work together effectively with our partners to provide the best overall network in America and the world."

Creating a Revenue Sharing Agreement:

Initially, Continental will request the U.S. Department of Transportation (DOT) to allow it to join United -- along with Lufthansa, Air Canada and six other carriers -- in their already established antitrust immunized alliance. This will enable Continental, United, Lufthansa, Air Canada and other immunized Star Alliance carriers to work closely together as other antitrust immunized alliances do, and to establish trans-Atlantic and other international joint ventures so they can deliver highly competitive flight schedules, fares and service. The planned trans-Atlantic joint venture, in which Continental, United, Lufthansa and Air Canada will pool revenue, will permit the carriers to compete more effectively with the proposed joint venture involving certain SkyTeam members that was recently granted antitrust immunity. The trans-Atlantic joint venture will combine the strength of the carriers to create a more efficient and comprehensive trans-Atlantic network for the carriers' customers.

Joint ventures are also planned for the Latin America and Asia/Pacific regions, involving Continental, United and other members of the Star Alliance. Both antitrust immunity and code-sharing are subject to receipt of approvals from applicable national authorities.

Creating Codeshare and Sharing of Frequent Flyer Program Reciprocity

In the United States domestic market, where antitrust immunity for solely domestic travel would not apply, the two airlines plan to begin broad code-sharing, which facilitates the creation of itineraries using both carriers, as well as frequent Flier program, elite customer recognition and airport lounge reciprocity. These cooperative activities are subject to regulatory notice to applicable authorities and Continental exiting certain of its current alliance relationships. Under code-sharing, customers will benefit from a coordinated process for reservations/ticketing, check-in, flight connections and baggage transfer.

Frequent flier reciprocity will allow members of Continental's OnePass program and United's Mileage Plus program to earn miles in their accounts when flying on either partner airline and redeem awards on both carriers. Travel on either carrier will count toward elite customer recognition. Similarly, each carrier's customers will have access to both Continental's Presidents Club network and United's Red Carpet Club network of airport lounges.

Continental Must Wait 9 Months After Delta/Northwest Merger to Leave SkyTeam:

Continental's plans to join the Star Alliance and the other planned cooperation are subject to receipt of certain regulatory and other approvals and the termination of certain contractual relationships, including Continental's existing agreements with SkyTeam members that restrict its participation in another global alliance. Continental intends to terminate its existing agreements with SkyTeam members and obtain the necessary approvals to enter the Star Alliance, although Continental may not be successful, and the time period for doing so may be out of Continental's control. For example, a principal contractual restriction will not terminate until nine months after the closing of the proposed Delta/Northwest merger. Continental intends to transition out of SkyTeam and into the Star Alliance in a customer friendly manner.

EgyptAir to Join the Star Alliance on July 11, 2008

According to BMI's Diamond Club news:

"...EgyptAir – who have routes across Africa, Asia, Europe, North America and Australia – [will] join the Star Alliance network on 11 July 2008."

Another article confirms the July 11, 2008 date.  EgyptAir already has a plane with the Star Alliance livery.

This date comes as a bit of a surprise as last October when EgyptAir's pending admission to the Star Alliance was announced it sounded like it might take 18 months for EgyptAir to gain membership. 

Members of Star Alliance frequent flyer programs should be able to look forward to redeeming their miles for EgyptAir flights and earning miles in their local program when flying EgyptAir starting on July 11, 2008.

$3 for a soft drink coming soon to US Airways?

According to an Arizona Republic story posted at usatoday.com:

On the revenue side, US Airways is said to be seriously considering charging for soft drinks ($3) and pillows and blankets ($5 apiece.)

United Airlines announces Dubai (DXB) and Moscow (DME) service from Washington-Dulles (IAD)

United just announced new service from Washington-Dulles (IAD) to Dubai (DXB) and Moscow (DME).  The service is set to start on October 26, 2008.  They plan to use 767s for Moscow and 777s for Dubai.

The proposed schedules are (times will change with daylight savings):

United 976 IAD-DXB 10:02pm - 6:50pm+1

United 977 DXB-IAD 11:30pm - 6:44am+1

United 964 IAD-DME 4:45pm - 9:30am+1

United 965 DME-IAD 11:20am - 3:35pm

Government approvals are required before they can start the services but I don't expect any problems. 

For those looking to use miles on the new routes United considers Moscow part of Europe and Dubai part of the Middle East.  So saver awards will be 50k coach / 80k business / 120k first for Moscow and 75k coach / 115k business / 140k first for Dubai (standard awards without capacity restrictions are 100/180/220 and 120/200/240 respectively).

Inflight WiFi? Several airlines have announced plans to start testing

The San Francisco Chronicle published an article today on the status the testing of inflight WiFi on airplanes in the USA.  It's an interesting read.   Here is their list of the status of WiFi testing by US domestic airlines:

-- Alaska Airlines: Testing wireless Internet access this summer

-- American Airlines: Testing service on 15 planes by mid-year

-- Continental: Testing limited wireless next year

-- JetBlue: Currently testing one plane offering limited Yahoo e-mail, IM chat and BlackBerry e-mail service

-- Southwest Airlines: Testing service on four planes in late summer

-- Virgin America: Testing service late this year

I question the reality of AirCell's claim regarding speed and network capacity:

The company said the setup can deliver 3 Mbps to the plane, which is compressed and allows travelers to share the equivalent of a 15 Mbps connection.

I have a hard time believing that they can deliver network capacity that is equivalent to a 15Mbps connection when the plane only will have 3Mbps of bandwidth.  Most pictures and other components of web pages are already highly compressed.  Compressing an already compressed file doesn't generally make it any smaller.

This service will work great when there are only a couple of people using it - but the more popular it becomes the worse it will be.  Don't get me wrong, I think inflight WiFi is a great idea and should be pursued.  I just don't like vendors who make promises they can't keep.