Delta Airlines
Delta Airlines has cemented its status as the network U.S. carrier with the worst frequent-flier program, further devaluing its long-cheapened SkyMiles. The leadership of the program or the airline — or perhaps both — doesn’t seem to understand what the loyalty business in 2011 is about. It may be time for a new team at the top.
For more than a year, Delta failed to publish an award redemption chart for most of the world, resulting in lack of transparency about how many miles were really needed for an award ticket.
When it finally unveiled a chart this week, the mileage rates on many routes were increased significantly. Many loyal SkyMiles members felt cheated and disrespected, calling Delta’s move a “stunt” in comments posted on FlyerTalk, the largest online travel community.
If you wondered why Delta announced last week the elimination of miles’ expiration, my guess is that it tried to soften the blow of what was coming — and to claim that it cares about its customers. In reality, almost everything SkyMiles has done in recent years has been decidedly customer-unfriendly. I’m not an active SkyMiles member and have no dog in this flight, but I’ve been appalled enough to write about it.
In comparison to its two largest competitors, American and United, Delta’s upgrade and award policies are the most restrictive and inflexible. Its system-wide upgrade certificates are only valid on tickets booked in Y, B and M class, and are not transferable. American’s upgrades can be used on just about any fare and gifted to other people. United’s certificates exclude only the lowest booking classes and can also be transferred.
In 2008, Delta devalued its miles by adding a third award tier, in an attempt to mask its very poor award availability at the lowest level. A year later, it devalued its elite status when it introduced a fourth tier, Diamond, on top of Silver, Gold and Platinum. If that’s not bad enough, Delta also charges some fees that are hard to justify, such as $50 for booking an award originating outside the United States.
The main reason frequent-flier programs exist is not to make customers happy, but to make money — and most of them do. I’ve never considered that a problem. A successful business deserves all the rewards it can get. My problem has been with the way airlines have been trying to make money through their so-called loyalty businesses. For decades, they have had an utterly peculiar philosophy, which can be best described at a “screw the customer” approach, which I explain with a misguided view of what the loyalty business is about.
Fortunately, a few airline executives recently saw the light, and things are starting to change. I’ve written several times about what Graham Atkinson did when he was president of United Mileage Plus for less than two years, beginning in the fall of 2008. He understood the essence of customer loyalty and showed that what’s good for the company doesn’t necessarily have to be bad for customers. While he wasn’t able to end StarNet blocking, he actually listened to customers and reversed decisions based on their feedback.
American’s AAdvantage program also has progressive leadership that rewards top fliers appropriately and has tried to make it easier for members to use their miles. There is still a lot to be desired, but it’s on the right track.
Delta, on the other hand, has been stuck in the 20th century. It seems it’s working hard to perfect the “screw the customer” approach.
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If you are a frequent flier, you know there is a war raging between American Airlines and third-party travel providers, such as online agencies and Global Distribution Systems (GDS). It appears things might get worse before they get better, leaving millions utterly confused. So I’ve created a new addition to the “On the Fly” curriculum to help you through the hard times.
The two-hour live seminar, FLY 203: The travel-booking war and the future of airline data distribution, will be first offered in Miami and Honolulu next week, and in Washington, San Juan and San Francisco next month, followed by other cities around the country. If you are not in any of those cities, you can join in from anywhere for an hour-long webinar version, FLY 115: Weathering the travel-booking storm, on Feb. 10.
I’m not advocating any particular position in the current dispute, and my only goal is to give you all relevant information, so you can make the best decisions when it comes to booking your travel.
The new seminar offers a detailed description and explanation of the current airline data distribution model and the fundamentals of today’s booking system. It also looks at the events of the last several weeks and provides a factual rundown of the arguments and positions of all sides involved in the dispute.
Most importantly, the session examines how the current conflict affects travel agencies, companies and individual travelers. It offers specific advice on what they can do to avoid being caught in the crossfire, and to make sure they don’t increase costs and sacrifice convenience and comfort.
Late last year, American banned Orbitz from booking seats on its flights. Earlier this month, Expedia stopped selling American tickets. Meanwhile, Delta removed its data from eight less popular sites. Sabre, the GDS American created more than four decades ago and current owner of Travelocity, announced its intention to drop American data later in the year. In response, American sued, and last week it won a court order temporarily blocking Sabre’s move.
Thus began the very public war — and possibly the start of a new trend in the distribution and sales of air travel products. Airlines incur significant costs by having their flights booked on a GDS, which also prevents them from selling additional products, such as preferred seating, priority boarding and doubling or tripling your frequent-flier miles for a fee. American wants both online and traditional travel agencies to use its DirectConnect channel to lower costs and increase revenue.
The significance of American’s move is much bigger than a dispute with a couple of third-party sites. It seeks to shake up the longtime airline data distribution system, including the GDS model. Travel agents haven’t received airline commissions for years, except for the largest agencies, though a part of the GDS fees airlines pay goes back to agents. American wants to reduce or scrap those fees.
In an indication of where things are going, American CEO Gerard Arpey said in 2009 that third parties should be paying the airlines for access to their data, “rather than us paying them to distribute our product.”
American has imposed “booking source premium” fees on some GDS users. Those fees will have to be either absorbed by travel agencies or passed on to passengers. Critics accuse American of trying to suppress transparency and deny consumers the opportunity to compare various airlines’ fares on the same screen, potentially forcing them to pay higher prices. But American points out that a change in the GDS model — establishing direct channels with airlines — would secure customers’ continued comparison-shopping ability.
So it’s messy out there, and the new seminar will try to make it less so in your mind by giving you specific tools that will help you follow the best booking process for you.
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Long before the current American Airlines campaign to shake up the data distribution system, airline agents often refused to change tickets issued by travel agencies and third-party websites, such as Expedia and Orbitz. Dealing with those companies’ agents can be frustrating, and many fliers call the airlines for help directly, only to be sent back to the “original booking source.” Why?
Because once the airline takes control of the ticket, it effectively releases the original booking source from its responsibilities as the issuing agent — and when the booking source loses control of the ticket, it will no longer keep track of your reservation.
So if there is a schedule change, that source won’t alert you, because it won’t know itself that a change has affected you. In other words, the link between the booking source and the airline will be broken, and the source won’t act as your agent. Instead, the airline will have to assume responsibility not only for notifying you of any changes, but also for rebooking you and reissuing your ticket.
Airlines don’t want that responsibility. The reasoning they offer customers usually is that the issuing agency may not have transmitted the passenger’s correct and full contact information, and they don’t want to be blamed in case you weren’t informed of any changes. That can be easily taken care of when the customer calls to voluntarily change a ticket, but there is a more serious reason, which airline agents almost never mention.
It comes down to money. Here is the airlines’ argument: They will be happy to keep track of your reservation, notify you of schedule changes (whether they actually do is another issue), rebook you and make any other changes, if the particular fare allows them. But if this is what you want, you should book your ticket directly with them. They pay web travel agencies to display their flights. If you booked your Delta ticket on Orbitz, why should Delta, which is paying Orbitz, have to bear the labor and other costs of changing your ticket?
Now, Delta will charge you the $150 or $250 change fee either way, depending on your fare rules, but that’s a different issue. This is about spending the time of a reservations agent — and possibly other airline employees. Delta prefers to use those employees’ time and effort to help direct Delta customers, not those booking through a middleman.
So don’t be surprised if an airline agent declines to deal with your reservation and sends you back to Travelocity or Priceline — or wherever you booked your ticket. That other agent may not be as well-trained as an airline employee and may have a limited capacity to help you, but you should think about that before you buy a ticket.
When might an airline agent agree to help you? Most likely, after travel has begun or if you are affected by severe weather and the airline has issued a change-fee waiver. Some agents may take mercy on you if you’ve been battling in vain with an online agency’s outsourced customer-service representatives in India or other overseas locations. It’s fashionable to pick on India, but did you know that Expedia has an English-speaking call center in Egypt?
As with any exceptions you want made for you, your chances of succeeding are much higher if you are an elite member of the airline’s loyalty program. Just ask politely — not as if you are entitled — and ensure the agent that you understand it’s your responsibility to check your reservation’s status from time for time and stay informed about any schedule or other changes.
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I’ve always brushed off suggestions that airline websites are deliberately programmed to increase the fare if you don’t take their initial offer immediately. But I’ve become suspicious since Air Canada’s site recently jacked up a ticket price on me by hundreds of dollars in seconds, even as its lowest published fare and the flight inventory remained unchanged.
Airlines have gone to great lengths in recent years to encourage customers to book tickets on their websites, and that can certainly save travelers time and hassle in the event of any changes to a ticketed reservation. However, to their utter shame, many carriers haven’t built reliable and user-friendly sites.
In fact, some airlines, such as South Korea’s Asiana, have outsourced their entire online booking process — at least in the U.S. market — to a third-party travel agency, which charges its own booking fees. And some of us thought a carrier’s own website was the one place we could go to avoid fees.
Other airlines have made their sites so difficult to navigate that one needs a day off to figure out basic booking features and frequent-flier program rules. Not to mention that many, such as Qatar Airways, never display the most important element of a reservation: ticket numbers.
And then there are those carriers whose sites look all modern and dandy, only to go nuts on you once you begin using them. A case in point is Air Canada’s site, which went out of control last month when I tried to price out a trip from Washington to Tokyo via Toronto, as part of the research for my forthcoming book.
At first, I got a total of $1,014.82, booked in L class on all four segments. The site cancels the pricing page automatically after 10 minutes if you don’t make a purchase — I didn’t — and sends you back to the home page. I thought I’d simply rebuild the same itinerary.
To my astonishment, this time the site broke the fare into W and S classes, producing a total of $1,611.82. I checked the tariff and the inventory on ExpertFlyer.com, which I use to access raw real-time airline data, to make sure nothing had changed in the past 15 minutes, and it hadn’t. I also called Air Canada to verify that. There was no reason for the site’s odd behavior.
I started a new search with the same elements, and a new surprise followed just seconds later. Now the booking classes were M on the outbound and L on the return, for a total of $3,794.82. I tried again, and this time I got a through M fare on the outbound and broken S/W on the way back, for a total of $4,088.82.
I’ve been skeptical about suggestions that airline deliberately increase prices on unsuspecting customers because I know how airfares work. For a particular fare to change, one of two things has to happen: a change in the tariff or the inventory. If they both stay the same, there is no reason for the price to jump by hundreds or thousands of dollars within seconds. That was the case here.
So what was the Air Canada website doing? Did it remember my data and play tricks on me? I tried closing my browser and reopening it, but that didn’t help. I checked back a couple of days later, and the same shenanigans repeated. In another couple of days, I rebooted my computer, and I finally got the initial and proper fare — at $1,015.29, it was 47 cents higher because of currency fluctuations.
I decided to do the same experiment again and performed three additional searches, just a couple of minutes apart. Sure enough, the fare came back higher every time: $1,612.29, $3,795.29 and $4,089.29.
I called Air Canada and spoke with a very polite reservations supervisor named Monalisa. At first, she thought I was doing something wrong and confirmed the $1,015.29 fare on her system, and also verified the tariff and the inventory, which still showed nine seats in L class. Then she went to the website and did exactly what I’d done — she was as surprised as I was to see those outlandish prices. She promised to report the problem to the appropriate department.
It could be just a software glitch — after all, the fare difference should be more subtle than $600 if deliberate — but it certainly looks suspicious. If Air Canada doesn’t want to drive customers away and into the arms of third-party sites, such as Expedia and Travelocity — or worse, other airlines — it should offer a much stellar booking experience on its own site.
But that wasn’t Air Canada’s only problem. I noticed that the penalties for changes and cancellations displayed under the priced itineraries were unusual for heavily discounted international tickets. Moreover, they never changed even as the fare kept going up.
They said the tickets were refundable for C$200 — there is currently near-parity between the U.S. and Canadian dollars — and “cancellations can be made up to 45 minutes prior to departure.” Changes could be made “prior to day of departure” for $100 each way, “plus applicable taxes and any additional fare difference.” On the departure day, changes were permitted at the airport for C$100 “plus applicable taxes (no charge for fare difference) for same-day flights only.”
I didn’t trust what I saw, so I checked the actual fare rules on ExpertFlyer, which are published by none other than Air Canda. As I suspected, the L fare was nonrefundable, and the change fee was $250. I went back to the carrier’s website and discovered a hardly noticeable link at the bottom of the page to the proper fare rules, which matched the information on ExpertFlyer.
These were big discrepancies, and I suspected they were causing serious problems, so I mentioned them to Monalisa. Unlike the fare-rising problem, she was aware of this one. “I’ve made several complaints in the last several months [to the website people], but they apparently this isn’t a priority for them,” she told me.
She also explained that the rules shown on the Air Canada site are typical for domestic Canadian tickets, and they use the same template for the much more diverse international rules, instead of creating new content. If a customer who has booked a nonrefundable ticket on the website wants to cancel it, Monalisa said they will honor the incorrect rules displayed on the site.
So until they bother to fix the problem — perhaps that would be more expensive than refunding tickets — travelers will keep taking advantage of the mistake. If you are one of them, make sure to print out those made-up rules.
Similar examples can be found on many other websites. Delta Airlines, for instance, has put the following text on a page titled “Ticket Changes”: “For travel outside the United States, the change fee is typically $250, but can vary based on location and type of fare. Changes are usually permitted only to the return portion of an international itinerary.”
No issue with the first sentence, assuming travel originates in the United States. As for the second, I can’t even imagine who and why came up with such a misguided blanket statement. All you need to do is read the actual rules of any international Delta fare to realize that, if any changes can be made, they are in fact allowed on both the outbound and return portions.
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There are so many travel-industry rankings at year’s end, it’s hard to keep track. It’s even harder to figure out which — if any — of them are credible and meaningful. Looking at some of the results, one has to wonder when some of the respondents last flew on the airlines and through the airports they assessed.
Rankings are usually administered by various magazines — one exception are the new Frequent Traveler Awards. In the last several years, I’ve made it a habit to look at the Global Traveler Magazine‘s so-called Tested Awards, most of which make sense. However, as I was reading this year’s results during a flight last week, I couldn’t help but gasp in astonishment at some of the results.
Many of the categories are certainly subjective, and different people’s experiences could easily be different. For example, the in-flight service on the same airline could vary depending on the cabin crew — or even your particular flight attendant.
Still, Lufthansa’s second place for best First Class is surprising. For comparison, Emirates is fifth, Korean Air sixth, and Singapore Airlines eighth. Seriously? Lufthansa is a great airline and it deserves to be in the top 10 — it came out fifth overall in the “Best Airline in the World” category.
But anyone who has flown in Lufthansa First Class in the last couple of years knows that its hard product lags behind most of its competitors. The most glaring example of that is the tiny TV screen. On the carrier’s Boeing 747 aircraft, First Class is on the upper deck, with 16 seats in a 2-2 configuration, which is the standard for Business Class on most other airlines operating the same aircraft type.
To its credit, Lufthansa has recognized the limits of its product and has undertaken steps to improve it. The above-mentioned 2-2 configuration is about to change to 1-1, which will no doubt disappoint some fliers because it will reduce the number of First Class seats by half, but eight seats is the industry standard and makes a lot of sense.
Lufthansa has finally come out with a new First Class seat on its Airbus 380 planes. Could it be that Global Traveler readers were evaluating those seats? No, because surveys were collected between January and August, and the first Airbus 380 didn’t enter service until late August.
There is one First Class feature on Lufthansa that beats all other airlines to the punch: its First Class Terminal in Frankfurt. But it’s used almost exclusively by Frankfurt-originating passengers, so it’s unlikely its weight in assessing the overall product was predominant for all survey respondents.
Lufthansa was also ranked fifth for best Business Class. Again, if you’ve had a chance to compare its hard product with other Business cabins, you’d probably disagree. One could argue that Lufthansa’s service is better than that of United Airlines, but United’s truly flat seats are among the best in the industry. Lufthansa made the short-sighted decision to install the old Business seats on the Airbus 380, but later announced it would roll out a new hard product next year.
United is the only U.S. carrier in the top 10 of any of the leading overall global categories, taking 10th place for best Business Class and best Business seat design, and fourth place for best First Class design. Its “new” hard product, which was first introduced three years ago, has so far been installed on less than 60 percent of its long-haul fleet.
Deservedly, Lufthansa is missing from the top 10 in any of the best-seat categories. But another perplexing presence in the best Business seat category — ahead of United — is South Korea’s Asiana Airlines. Not only are its current seats not truly flat, but they are less comfortable than comparable products on other carriers, such as Thai Airways. Asiana’s service is, of course, superb, but this is strictly a seat-related category.
In the best global airport category, another surprising result: in third place, Amsterdam has beat out Hong Kong and Munich. In North America, Atlanta came out ahead of San Francisco. Really?
Oh, and did you know that Delta Airlines has the best airport lounges in the world? That’s right, and Lufthansa and Singapore Airlines have been shut out of the top 10 completely. If that’s not madness, I don’t know what is.
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