Travelfli Blog for Frequent Flyers

We {Heart} Airlines More This Year

I’m writing this blog post from the LAX airport en route to Hawaii for a wedding. This morning en route to the Denver International Airport, I received a phone call from United informing me that my 8:30 AM flight to LAX had been canceled due to mechanical problems and I had been re-booked on the same flight tomorrow. The wedding, coincidentally, is tomorrow, so this was NOT AN OPTION. A series of phone calls later, United customer service provided the general consensus that every flight to LAX was booked until tomorrow. At that point my fate seemed sealed and it appeared as though I would have to teleconference into the wedding. In the flash of a 747 jumbo jet, an airline agent finagled me onto a full waitlist and I was hustled onto an earlier flight seconds before the doors closed. THANK YOU UNITED.

Before my gratitude wears off, I thought I would use this opportunity to share some good news with you regarding the airlines’ ability to service their customers. Apparently I am not the only one who feels satisfied with the airlines’ service from time to time (like today). New data provided by the American Customer Satisfaction Index indicates that passenger satisfaction with the airlines went up this year for the first time in SIX YEARS. The study, developed at the University of Michigan, reported a gain of 3.2% to 64 (on a scale of 1-100), “ending a downward slide that, with few interruptions, began in 1994,” the report concluded. Here are the cliff notes from the findings:

1. American wins the award for the least progress with a drop of 3% to 60.
2. Southwest, the darling of the airline industry, leads the charge for the sixteenth straight year, with a gain of 3% to 81. They also hold the record for being able to get passengers from A to B with their luggage intact (SIDE NOTE: Southwest lost my luggage in April on a flight from DEN>SFO. They did, however, apologize profusely and issued me a $50 voucher so all ill wills were forgiven).
3. Continental improved 10% to 68, Delta is up 7% to 64 and US Airways crawled over the halfway mark with a gain of 9% to 59.
4. United reported no gains or losses, which secured them a solid LAST PLACE FINISH at 56 (and to think I tried to throw them a bone just several sentences ago! ;)

Arguably these gains may be due in part to shrinking passenger loads, which naturally results in shorter lines, fewer pissed off patrons, less grumpy staff, and an overall better experience. Airlines as an indsutry still placed at the bottom of the totem pole, beneath full-service restaurants, which secured the high score of 84, or hotels at 75. But honestly, improvements in airline customer service are always worth a blog post. Keep it up!

Redeeming Miles on American Just Got Easier

American Airlines this week launched One-Way Flex Awards, which allows members of AAdvantage to book a one-way trip using miles. the cost of one segment equates to half the number of miles of a round trip award redemption (starting at 12,500 miles for travel in the U.S.) Travelers can also combine several different types of one-way awards to make up a round trip, such as booking a MileSAAver award with AAnytime awards, or flying one way in economy class awards and the other in First or Business Class awards.

The ability for frequent flyers to use miles on one leg provides several benefits to travelers:

1. Lowers barriers to entry for AAdvantage members. Now frequent flyers can utilize account balances as low as 12,500 to get free travel, rather than waiting until the 25,000 mark for miles to be useful.
2. Increases opportunity to redeem miles for award seats because frequent flyers can now book round trip flights by mixing and matching levels of service, unrestricted and restricted flights, and cash/miles combinations.

Awards have historically been offered by most carriers only on a round-trip basis. Air Tran and U.S. Airways (by phone call only) offer segment-based redemptions, but not with all of the options and features that American’s new program boasts. Let’s hope that other airlines (United, please take note) follow suit.

Don’t Let The Swine Flu Steal Your Vacation!

The initial Swine Flu alarm, exacerbated in part by the media, has died down as businesses in Mexico reopen and the United States officially reverses a mandate that required schools with even one infected student be shut down. It appears now that the “H1H1” virus may not be nearly as potent and is less likely to lead to a pandemic (infecting up to 2 billion people worldwide).

The newest numbers report total global deaths at 53 —- 48 in Mexico, one in Costa Rica…and three in the U.S. To put that in perspective, each year about 36,000 people in the U.S. alone die from the regular flu.

However, as President Obama echoed in a recent speech, “We’re not out of the woods yet.” Health experts from the World Health Organization caution that the virus is capable of evolving into a real killer as we move into flu season this Fall.

The swine flu has definitely made travelers nervous, particularly while captive in the confines of airline cabins. In fact, I was just in LAX last week and experienced a bit of anxiety myself when I saw dozens of people donning face-masks to protect themselves from this human-to-human transmitted disease.

That being said, we think it’s premature to encourage travelers to push the panic button and stop flying altogether, but it’s important to stay on top of the latest threats and to particularly know your options when flying to Mexico (although the Centers for Disease Control and Prevention (CDC) reports that only 10% of Americans with Swine Flu contracted it on trips to Mexico).

First and foremost, be sure to keep up with the latest information releases from the U.S. Centers for Disease Control and Prevention and the World Health Organization. Currently, the WHO is not recommending any travel restrictions related to the swine flu, although it has been confirmed in 30 countries.

If you have booked a ticket to Mexico already, most of the airlines have released lenient policies for exchanging/canceling/postponing plans that waive the change fees. Most of the major hotels (including Starwood, Marriott, IHG and Hyatt) are also waiving cancellation or change fees. Pay special attention to their date restrictions because they vary by supplier:

Air Tran
American
Continental
Delta
Frontier
United
US Airways

On the bright side, corporate travel is picking up despite the flu scare, according to Andrea Shpall, President of Polk Majestic Travel Group, which specializes in corporate travel. She predicts that travel will be much better in the second half of this year because corporations are realizing that travel is good for business. We couldn’t agree more. So get out there and take a vacation….just remember to cover your mouth when you cough!

Up to 10% of Passengers Fly For Free!

There are currently more ways than ever before to accumulate frequent flyer miles and points. Airlines have dedicated a plentiful amount of time and effort into expanding their network of partners - and now virtually any business can buy and resell miles from the airlines; from Chase Manhattan to the mom-and-pop florist down the street.

However, when it comes to actually putting those hard-earned miles to use, it’s a common perception among travelers that the airlines are trying harder than ever to make it impossible to redeem them for seats in a plane.

Even to ‘industry insiders’ the strategy behind award seating designation remains a mystery at best. Although we know that airlines generally release award seats 330 days prior to departure, we have no idea at what point they withdraw them from public consumption and how they decide when to reissue them based on demand, cancellations and excess inventory.

Fortunately the airlines are mandated to provide some level of aggregate award data to the U.S. Securities and Exchange Department in their annual 10-K reports. Although they don’t divulge the number of seats they make available for award redemptions, they usually provide the percentage of passengers who flew on awards. The information from last year is pretty compelling and provides proof that the airlines aren’t nearly as tightfisted with their award seats as one might imagine.

American Airlines reported that 3.1 million miles were used in 2008 for award travel, or about 9.7% of the total number of passengers flown. This is the single highest number of awards to be given out by any airline in the long history of frequent flyer programs! Put another way, approximately 1 out of 10 American Airlines passengers in 2008 was flying on miles – and this doesn’t include upgrades or award tickets issued with partner airlines.

United Airlines Mileage Plus passengers redeemed 2.3 million miles last year, which accounted for 9.1% of total passengers flown. Continental issued 1.6 million miles to members, representing a 6.6% increase from 2007 and 8.5% of passengers flown. All of the legacy airlines increased their award redemptions in 2008, and not a single airline saw their redemptions decrease. The low-cost carriers issued less awards as an overall percentage of passengers, but this could be in part due to the fact that their loyalty programs are much younger and don’t have quite the reach that a loyalty program like AAdvantage can boast (that, by the way, issued 196 BILLION miles miles last year, half of which went to partners like credit cards).

My beautiful chart below illustrates the percentage of passengers flying on awards in 2007 and 2008 for each reporting airline. It may come as a shock to you how many people were actually flying for free last year! I think this demonstrates that although awards are out there, it’s still awfully hard for the average frequent flyer to obtain them. It takes persistence, planning, and a lot of patience. And with the economy in the gutter, people are even more desperate to put those miles to use. We know TravelFli will be a huge help to all the travelers out there with this problem, but until then keep your head up and remember that there are awards to be had - you just gotta be smarter than the next guy to get them!

***Thanks to the folks at InsideFlyer for compiling a lot of this info in the April, 2009 issue.

Achieving Elite Status Is Easy…Right Now

Spring season usually signals the end of many airline frequent flyer promotions and bonus offers as the carriers prepare for a busy summer season of flying. This year is markedly different and is shaping up to be a banner year for achieving elite status in any major program.

American Airlines started the elite-qualifying mile bonus frenzy with an exciting promotion that changed the status quo this year. Upon registration, AAdvantage members receive double elite qualifying miles on any flight flown from March 18 through June 15 on American Airlines, American Eagle and AmericanConnection flights.

In fear of losing elite flyers (the industry’s most profitable customers), United and Continental quickly matched AA’s offer. United’s program runs from March 19 to June 15 and is offered only on United and United Express flights. Members must register online to earn double qualifying miles during the period. Continental’s program runs from March to June 15, registration is required, and EQMs are only valid for elite qualification and cannot be redeemed for award travel.

Delta stalled for a few days and came out with a promotion that at first glance, seemed to outflank their competitors with a TRIPLE mile offer towards elite qualification. After reading the small print, however, it is clear that the triple offer is only eligible with first class flights, while the mid-priced coach flights earn double miles. Deeply discounted fares (the ones many of us purchase for leisure travel) don’t even earn a bonus. Boo, Delta!

US Airways launched an equally complicated promo that provides just as little value to the typical traveler. The promotion runs from April 8 to June 30 and the “bonus” doesn’t even kick in until after the fifth round trip flight is completed. At that point, a Dividend Miles member will earn 5,000 bonus miles (1,000 per trip), and continue to earn on average 1,250 miles per trip until they reach 10 round-trip trips and 25,000 bonus miles.

The airlines say these bonus programs are a defensive mechanism to prevent their customers from switching to a low-cost carrier during a bad economy. However, the low-cost guys aren’t just snoozing at the wheel (or shall we say the control stick). Southwest just launched their own bonus program, which runs between April 2 and June 15. Rapid Rewards members can earn A-List elite status by flying five round-trips on Southwest, when normally it will take 16 trips in a 12-month period.

If you don’t already enjoy elite status and think flying sucks, then take advantage of some of these offers. Having elite status with a major airline greatly reduces many of the pains associated with travel. Perks include free upgrades, reduced or waived fees (including baggage, changing flights, etc.), quick security lines, priority check-in and boarding, and access to airport lounges.

Frequent Flyer Sues Continental

We’ve heard a lot of grumbling in response to the changes airlines are inflicting on their frequent flyer programs to make it more costly to redeem miles for award seats. But one guy took his frustrations to a whole new level by deciding to SUE Continental Airlines for failing to honor it’s OnePass frequent flyer program guidelines.

Apparently it all started when David Simon tried to book a flight between Cleveland and Los Angeles for 25,000 miles. The airline required him to either spend 50,000 miles to get the ticket or pay $75 for booking within three weeks of travel with a partner airline.

David filed a class-action lawsuit seeking compensatory and punitive damages for those who were charged more miles or fees for using Continental’s OnePass program.

I commend this guy for trying to stand up to the airlines, but I don’t think he’s got a case. Continental clearly states that it’s awards may be subject to capacity controls and are limited in availability - so just because some routes may be available for 25,000 miles, it doesn’t guarantee anything. Moreover, it lists the additional charges on it’s site for members who book award travel within 21 days of the departure date. All of the information was there if David had dug a little deeper.

I think the bigger issue here is how hard it continues to be for airlines to effectively communicate complex program guidelines to their members. I don’t think Continental was trying to deceive David, but perhaps if there had been a better way to share this information with him then he wouldn’t have ended up feeling so mistreated.

Until there is a better way (which we’re working on), it’s up to you to keep up with the news surrounding your loyalty programs. Here are a few tips to follow so you don’t end up frustrated and in court like David!

1. Set up news alerts with Google Alerts or (even better) Filtrbox, so information from your program is sent to your inbox each day. You can enter keywords such as the program or airline name, and you will be able to quickly scan updates about your program each day. This is also a great way to learn about bonus deals.
2. Engage in FlyerTalk, the largest frequent flyer online community in the world, with over 11 million posts! You can learn a lot from these fanatic elite travelers, as they post detailed information on everything you could ever want to know about programs, rules, deals, etc.
3. Visit your program’s sites. It’s all there and if you make an effort to stay informed about recent announcements, you will know when new fees are added or mile requirements change. Make sure you update your email and sign up to receive newsletters and other program information.

It will be interesting to see how the courts rule on this case. Good luck, David!

Watch Out TripAdvisor…Here Comes TravelPost!

TripAdvisor recently announced the launch of a flight metasearch engine, which effectively positions it directly in competition with Kayak. And from what we can tell, TripAdvisor is prepared to give Kayak a run for it’s money. Although the flight search product is still in beta, it flaunts several features that Kayak doesn’t already have, including a fee estimator that helps users determine the true costs of a particular fare. It calcualates the hidden costs of a fare after asking a few simple questions, such as how many bags you’ll be checking, if you’re a member of the frequent flyer program, or even if you’re going to splurge for an alcoholic bev on the plane (a rule of thumb I always follow). TripAdvisor also has the advantage of being MASSIVE, with over 8 million U.S. visitors a month.

As soon as TripAdvisor dropped it’s bombshell, rumors started flying that Kayak had a “competitive comparable” up it’s sleeve, which would be announced fairly quickly. Sure enough, last week Kayak detailed plans to relaunch TravelPost, a hotel review site that was part of the acquisition of Sidestep back in 2007.

We were excited to hear the news that Kayak is going head-to-head with TripAdvisor using the revamped TravelPost product. Why? Because our very own VP of Engineering, Jim Donohoe, was the lead developer on the site and worked closely with our friend Sam Shank, the founder and CEO of TravelPost, until it got acquired by Sidestep in 2006. Sam and Jim obviously did a lot of things right because they were able to top over 700K unique visitors, reach profitability, and build the second largest hotel reviews site on the web (behind TripAdvisor, obviously).

Kayak is applying the same metasearch model it uses to aggregate fare results from all over the web to expand the reach of TravelPost’s reviews. The site will relaunch this Tuesday, March 24th as a hotel search engine that will pull 1.4 million guest reviews from over 200 websites and room rates from five to ten websites. It will also allow users to search by demographic data so you get reviews back from people who are your age, share your same interests, etc. IMHO, this will be a huge advantage because it’s absolutely mind-numbing to sift through the hundreds of thousands of reviews on TripAdvisor without having a way to filter them out.

It will be interesting to see if Kayak can influence a shift in behavior, as most people habitually check TripAdvisor for reviews. However, we’ve seen the aggregator model work in fare searches, and Uptake’s strong executive team has already taken an solid stab at lodging and activities. Kayak entering the fray intensifies the battle for  market share in an exciting space.

Check out Sam’s article for his two cents on the challenges and opportunities that lay ahead for Kayak in their quest to bring down the behemoth!

Attn CEO’s: Jet Blue To The Rescue!

Jet Blue released a series of funny videos poking fun at CEOs for falling on hard times and having to trade in their cushy, private jets for travel with ‘regular people’ on commercial airlines. The videos are aimed directly at the CEO’s and are a mix of self-promotion (free snacks, leather seats, private entertainment system) and sattire (checking in is easier than writing off a toxic asset!)

I think this campaign is a pretty brilliant way to make light of an otherwise depressing economy right now and I hope people will appreciate their humor. I know I did.

Delta & Midwest Link Frequent Flyer Programs, Pose Risk to AirTran?

Delta announced yesterday a new partnership with Midwest Airlines that will permit frequent flyers to earn or redeem miles through Delta SkyMiles, Midwest Miles and  Northwest WorldPerks, due to the acquisition of NWA by Delta last October.

The partnership will benefit Midwest frequent flyers by giving them access to the largest flight network in the world. It will also expand the existing Midwest-Northwest airport club membership agreement to include Delta Sky Clubs.

It will be interesting to see what kind of competitive advantage this will give Midwest over AirTran, the other regional carrier that has been biting at Midwest’s heels since their hostile takeover bid in 2006. AirTran aggressively fought for ownership of Midwest’s Milwukee hub, increasing their bid several times from $78 million to $445 million - only to be rejected each time. Midwest ultimately managed to fend them off by selling to TPG Capital, a private equity fund, for $450 million in August 2007.

It’s been a rocky ride for Midwest since the sale, judging from announcements in September that it would shed most of it’s fleet and cut routes. AirTran has scrambled to fill the void by announcing the expansion of flights into Milwaukee by 40% and new service to Denver, Minneapolis, St. Louis and Branson, Mo. AirTran predicts their entrance will result in a fare drop by as much as 60% on some of the new routes. This will only add to the pain Midwest is already feeling.

However, this new partnership with Delta helps Midwest’s value propostion and may help them rebuild the small airline and secure Milwaukee once and for all. A Midwest spokesperson explained that Delta had a choice as to whether or not they wanted to partner with Midwest. “What makes this unique is that as Delta was acquiring Northwest they had to make new, separate decisions as to whether they wanted to be a partner with Midwest.” He says the carrier’s Milwaukee hub was part of the attraction. “We have a larger customer base here, so, in a way they are expressing optimism about the future success of the airline.”

Perhaps, but not if AirTran has anything to do with it!

Travel in 2009: It’s Not All Bad

The recession has certainly affected travel. But just what kind of influence are we talking about? Every day media reports that airlines continue to reduce routes and lay off employees, hotels clamber with dropping occupancy rates, and cruises continue to slash cabin prices to fill their ships. It’s easy to assume, given these facts, that people aren’t traveling anymore. But after taking a closer look, we’ve found that people just aren’t traveling THE SAME WAY anymore.

Let me explain.

Google and Compete just came out with a study that had some interesting findings for travel in 2009. They surveyed a sample of Compete consumers who had completed leisure travel in the past 6 months or planned to do so within the next 6 months.

One of the questions in the survey asked how much they planned on traveling for leisure in 2009. Surprisingly (to some), only 15% of the travelers surveyed said they were planning on cutting back on travel, and a much greater portion (85%) said they were planning on traveling the same or more this year.

So maybe it’s not a case of people not traveling period, but rather a behavioral shift that comes with a poor economy.

According to a recent report by the Associated Press, people are seeking out smaller, less expensive cities for destination travel and going back to the basics. So for instance, instead of taking a two week vacation to Europe or a 10 day ski trip to Aspen, families are seeking out National Parks and other more affordable, closer-to-home vacation spots.

Second tier cities like Tucson, AZ, Fort Myers, FL, and Charleston, SC are experiencing major growth as travelers take advantage of affordable domestic airfare and schedule shorter weekend trips. Many amusement parks are offering affordable family package deals that include accommodations, admission into park, and a free night’s stay.

In fact, travelers today are much more receptive to add ons, extras, or the use of awards/points/miles for travel. Value-adds will do a much better job of converting lookers into buyers when money is tight and travelers are looking for deals. In the Google survey, freebies, add-ons, and other non-rate incentives had wide appeal across the board.

In closing, it is clear that people will continue to travel - even in a bad economy. However, travel businesses that can adapt to their changing travel patterns in 2009 will emerge as leaders. There is still plenty of travel business to be had, it’s just becoming more important to understand your consumer and deliver deals that are in line with their new-found priorities and interests.