While most U.S. airlines have learned to be relatively honest with their best customers, many of their foreign peers have not yet realized that travelers are not as stupid as to fall for their PR spin and questionable practices.
It’s time for those carriers to wake up to the fact that it’s the end of 2011, and much in the airline industry is rather transparent to those of us who pay attention. Trying to persuade customers that bad news is actually good may be an essential PR trick, but in today’s hyper-connected world, it’s not hard to figure out someone’s true intentions.
Among the airlines still using the old playbook is British Airways, which is surprising for such a major and quite good global carrier. Last month, it drastically devalued its award redemption chart, but it tried to present that negative change as a positive one.
The clue came with the usage of the world “revitalizing” to describe the changes to the carrier’s frequent-flier program, Executive Club. At least they steered clear of “enhancement,” which is what many U.S. carriers used in the past, inviting much derision from frequent fliers.
British Airways announced a few weeks before the changes took effect that they were coming, but what those changes actually were going to be remained a secret until the very day they were implemented. That move showed gross disrespect for the company’s best customers who deserved much better for their loyalty.
In contrast, many U.S. airlines and hotel companies publish their new charts, as well as other program changes, months in advance. One recent exception was Delta Airlines, which didn’t really have an official global chart for more than a year, until it finally published one in February, effective immediately — actually, much of it was already in use unofficially.
Apparently, British Airways was afraid that many Executive Club members would rush to burn their miles before the last change — after all, there were plenty of miles on its books, partly thanks to its giving away 100,000 miles as a credit-card sign-up bonus. So it said that the number of award miles required for “97 percent of our routes” will stay the same or even go down.
In fact, that turned out to be false. In an attempt to save face when the new chart came out, the airline said it had meant 97 percent of the nonstop routes out of London.
While some of those nonstop routes have indeed become cheaper, there are many Executive Club members outside London who earned their miles hoping to use them for trips to cities other than London. Unfortunately, they are the big losers — the increases in those cases can be over 80 percent. Substantial premiums have been added to connecting and partner flights across the board.
Those changes, along with the huge amounts British Airways charges in taxes and fees on award tickets, have drastically devalued its miles. Just this week, I booked award tickets to Asia for two clients, and I really wanted to help them burn their British Airways miles. However, that particular award had almost doubled in price, and the taxes were over $1,200 per person. So I booked with another airline for nearly half the miles and $85 in taxes.
British Airways in certainly not alone in thinking that customers are stupid. Air Canada quietly started charging fuel surcharges on some partner award tickets earlier this fall. Did it hope no one would notice that they were asked to pay hundreds of dollars more than before? Finally, after Air Canada was exposed on various blogs, it admitted what it was doing and said that even more partner flights would be included in the new program.
And then there is the scandalous behavior of the United Arab Emirates’ Etihad Airways last month.
For two days in October, it advertised a First Class fare from Spain to Australia on its website for less than 400 euro. According to Spanish media reports, about 300 people bought tickets. The first of them traveled 10 days later, when an agent in Brussels noticed the fare and alerted the appropriate department. It was then determined that the fare was a mistake, and the passenger was downgraded to coach without any compensation. The rest of the tickets were canceled.
I’ve written about mistake fares before, but the issue here is not whether Etihad was wrong not to honor the tickets. I said scandalous because of a letter the airline sent to the passengers who decided to put up a fight and wanted to defend their rights through the media.
Etihad hired a law firm in Spain that in no uncertain terms threatened those customers in writing with litigation, if they dared to go to the media. The last time I checked, Spain was a democracy with freedom of speech, and the United Arab Emirates was something quite different. I don’t believe anything has changed since.
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You may have seen TV commercials featuring American Express or Capital One credit cards that promise points or miles with the clout to get you any seat on any airline without blackout dates. Those financial services companies try to distinguish their own loyalty schemes from airline programs, which restrict access to award seats.
Non-airline programs are not affected by award seat limits, because they don’t need award availability to book you on a flight. Instead, they sell you a regular revenue ticket, charge the ticket price on your credit card, then credit the cash amount back to your card and take miles or points out of your account, whose number is based on a standard formula.
Let’s say that you want to use your Capital One miles for a free ticket. The Capital One website performs a flight search and you choose a flight that costs $100. Once the ticket is issued, 10,000 miles will be deducted from your account.
While Capital One values $1 at 100 miles, the American Express Membership Rewards program converts $1 into about 80 points, though the precise number varies based on the type of card you have.
By any measure, that is a lot of points. If we assume that the average U.S. domestic round-trip ticket costs about $500, Capital One will charge you 50,000 miles and American Express 40,000 points. In comparison, you need only 25,000 miles from most airline programs — if there is award availability, which is a big if.
Of course, many airlines will also give you any open revenue seat on any flight, but for double the miles required for a “saver award” — they call it “standard” or “anytime” award. If you need a First or Business Class ticket, the airlines will actually give you a better rate even on a “standard award.” Such an award from North America to Europe in Business Class will be about 200,000 miles. Assuming that the average revenue ticket costs about $5,000, Capital One will charge you 500,000 miles and American Express 400,000 points.
It’s worth noting that the airline mantra about giving you the last available seat on a flight as a “standard award” is changing, and that privilege is no longer available to everyone. For example, it’s one of the benefits of United’s new Mileage Plus Explorer Visa card from Chase, which means that customers who don’t have the card — and are not elite fliers — won’t have access to that last seat.
The real advantage of the tickets purchased with non-airline miles or points is that they earn miles, because they are in effect revenue tickets — the airlines will never know that you didn’t pay money for them.
That same model is used by some hotel loyalty programs, including Starwood and Priority Club, which allow points to be redeemed for flights. Even some airlines offer such options, in addition to their regular award redemption opportunities. For example, United’s Mileage Plus Choices program is very similar to Capital One’s scheme, valuing $1 at 100 miles — only miles earned from Mileage Plus co-branded credit cards can be used for such tickets.
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Volunteering to get bumped from a flight is an issue often raised by participants in the events on my book tour. As is the case with most situations I discuss in “Decoding Air Travel,” I advice travelers to think carefully before giving up their seat and examine the alternative ways to get to their destination — and to know exactly what they would get in exchange.
U.S. airlines, which overbook flights all the time, offer discount vouchers valued at as much as $400 for bumps on domestic flights, and up to $800 on international flights. Those certificates are very tempting and can save you lots of money. In fact, many travelers take certain trips only because they have vouchers to use.
However, unless you are familiar with alternative flights that will get you to your destination, you may be asking for trouble.
I’ve never volunteered to get bumped. Comfort and convenience are very important to me during travel, so I’m unlikely to give up a Business or First Class seat for Economy.
I was prepared to relinquish my seat on a flight for the first time late last month, and even put my name on the list, but then I removed it. I was to fly nonstop from Denver (DEN) to Milwaukee (MKE) on a coach-only Canadair regional aircraft, and I could afford to arrive in MKE as much as four hours later than scheduled. I also knew my flight was oversold.
During online check-in the day before the flight, I was asked whether I’d give up my seat if it were needed, and I said yes. Later that night, however, I decided to take a look at my options. The only other nonstop flight to MKE was not until 8 p.m., which was too late for me, so I’d have to connect in Chicago (ORD). I checked out the DEN-ORD flights — there were two I could take, but one was sold out, and on the other one I would be stuck in a middle coach seat.
As soon as I got to the airport in the morning, I asked to be taken off the volunteer list.
Had I stayed on the list, I would have negotiated with the gate agent exactly what I would have received for diving up my seat, on which alternate flight I would have been rebooked, and whether I would have sat in Economy or First Class.
Even though most U.S. carriers are moving toward the discount-voucher approach, some agents might still try to give you “a free round trip anywhere in the United States.” Before you accept it, keep in mind that those certificates come with many restrictions, such as advance purchase and minimum-stay requirements. They must be booked in a certain coach booking class, which may not be available on the flights you want. In addition, you won’t earn any frequent-flier miles on that trip, and it cannot be upgraded.
A discount voucher, on the other hand, is just that — it will take $400 or more off a future ticket for you or someone else designated by you. Any restrictions depend on the rules of the fare you purchase, and any published fare is eligible. You will earn miles, including elite-qualifying ones, and you can upgrade your ticket.
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In my 18 years in journalism, I always believed that the media’s role is to inform, entertain and educate. These days, the education part seems to be missing in many cases, and one area where that’s quite evident is air travel. With the airline system being so complex and frustrating, should the media be more helpful in guiding travelers through the maze?
I asked myself that question as I was preparing for an interview about my book, “Decoding Air Travel,” on NPR’s Weekend Edition last week. The overwhelming positive response to the interview and the sales numbers — more than 500 books sold in two days — show that the public badly needs help in navigating the airline universe.
But does the media have a responsibility to provide such help? When it reported recently that a frequent flier had flown 10 million miles on United Airlines, should it have used the opportunity — or news peg, as we call it — to tell readers or viewers how they can achieve elite status and accumulate a lot of miles? When it covers various problems passengers experience during a trip, should it offer advice on how to avoid those problems?
That was exactly my intention when I began writing my “On the Fly” Column in the Washington Times three years ago. The newspaper format required me to cover news at times — and not quite “news you can use” — but I did my best to produce columns that educated travelers, based mostly on my own experience and the extensive knowledge I’d acquired while flying around the world for a decade.
I also started paying more attention to other travel writers, which I hadn’t done before because my primary job was covering diplomacy and foreign affairs. I was astonished how little many writers knew about the airline system — and even more astonished that they didn’t realize it.
I later learned that the main reason for that is their limited experience as normal travelers — people like you and me who travel for work or leisure. Those writers get lots of free trips from the industry, and many call in favors during personal travel as well. Most of them have never had top-tier elite status, haven’t had to strategize how to get upgrades or figure out how airfares work.
I keep reading stories that don’t make a difference between nonstop and direct flights, as well as statements that a certain airline will begin to fly to a new destination when it has simply signed a code-sharing agreement with another carrier to put its own number on already existing flights.
The airline system is dysfunctional enough for the media to be adding to the confusion and just entertain the public instead of educating it.
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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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