Frequent Fliers
The Star Alliance’s 15th birthday this month reminds me that a global airline alliance is one of the most fascinating concepts in the history of commercial aviation. It’s also an example of the airline industry’s creative thinking aimed at increasing revenues. However, unlike some of the questionable practices I described in “Decoding Air Travel,” this one has dramatically improved the customer experience.
It’s fascinating for me personally, because it combines my two passions and areas of expertise, international affairs and air travel. In fact, what alliance executive teams do every day is nothing short of diplomacy. International negotiations and dispute resolution are two of their specialties, and a big part of their duties is selecting new members, not unlike NATO and the European Union.
When Star was formed in 1997, the idea was not only to represent its members’ best interests — that’s primarily the job of trade associations — but to boost business by feeding passengers from one carrier to another in the smoothest possible way. Soon, airline diplomacy began in earnest — first among alliance members, which after all are rivals in a fiercely competitive industry, and then with airports, transportation authorities and governments around the world. The other two global alliances are Oneworld and SkyTeam.
“Much of what we do is diplomacy,” Jaan Albrecht, Star’s former CEO, told me when I first met him in the alliance’s Frankfurt office in 2008. “We try to educate airports, publics and governments about the benefits that come from a network like ours.” Albrecht is now CEO of Austrian Airlines, a Star member.
The benefits for customers that come with an alliance membership are both tangible and intangible. The first category includes interline ticketing and check-in, harmonized schedules to provide seamless connections, worldwide lounge access, mileage-earning and redemption opportunities, as well as elite-status recognition across the alliance, and round-the-world and other special-fare products.
It’s also important to appreciate the intangible benefits. The most important to me is that the experience on an alliance’s various carriers is so similar and yet so different. I like the predictability created by consistent and aligned policies — knowing how things work and what to expect gives me comfort at the airport and in the air. At the same time, I love the individual touches that each airline adds to the travel experience, based on its national, cultural and even corporate uniqueness.
For example, Scandinavian Airlines and Thai Airways are both Star members, and technically there is no difference which one you are booked on — you will earn miles, check-in all the way through to your final destination and access their lounges anywhere in the world. But when you enter a lounge or board a plane, you will never confuse Scandinavian with Thai.
Critics of the alliance concept usually argue that consumers suffer, because closer cooperation among airlines leads to higher fares. They refer to special arrangements, known as anti-trust immunity exceptions, which are granted to some carriers so they can coordinate fares, schedules and inventory on certain routes. The largest members of the three alliances have received such waivers on intercontinental routes. Some have gone a step further, securing approval to operate certain routes as a joint venture. Price-fixing is illegal, so these carriers needed the exceptions to publish identical fares — and if you compare their tariffs, you will see they are indeed identical.
When granting the immunity, the Department of Transportation is careful to exclude routes on which the only existing service is provided by the carriers seeking the waiver — those exclusions are known as “carve-outs.” So the government is supposed to protect consumers, and it seems it’s doing its job. Overall, there is no question in my mind that airline alliances have had a positive impact on customers.
All three alliances have had troubles lately, as member-carriers have experienced hard times, filed for bankruptcy or disappeared all together. But that’s the nature of the airline business. My only criticism is that none of the groups has done a good job at reaching out to a broad audience to explain and promote the benefits I described above.
Here is the current membership of each alliance:
Star Alliance
Adria, Aegean, Air Canada, Air China, Air New Zealand, All Nippon, Asiana, Austrian, Blue1, Brussels, Croatia, EgyptAir, Ethiopian, LOT Polish, Lufthansa, SAS, Singapore, South African, Swiss, TAM, TAP Portugal, Thai, Turkish, United, US Airways.
Accepted future members: Copa, Eva, Shenzhen, TACA.
Oneworld
AirBerlin, American, British, Cathay Pacific, Finnair, Iberia, Japan, LAN, Qantas, Royal Jordanian, S7.
Accepted future members: Kingfisher, Malaysia.
SkyTeam
Aeroflot, AeroMexico, AirEuropa, Air France, Alitalia, China Airlines, China Eastern, China Southern, Czech, Delta, Kenya, KLM, Korean, Tarom, Vietnam.
Accepted future members: Garuda Indonesia, Aerolíneas Argentinas, Saudi Arabian, Middle East, Xiamen.
Continue reading about Why airline alliances are good for fliers
American Airlines has finally decided to take advantage of the problems many United Airlines fliers have experienced since the merger with Continental Airlines was completed on March 3. In an extremely rare move, American is now offering conditions-free top-elite status match to United’s most loyal customers.
Having read and heard about many United customers’ troubles after the carrier adopted Continental’s reservations system — and having encountered some problems myself — I e-mailed American spokesman Tim Smith on March 16. Smith has been the best PR person to deal with at any airline since I started writing my column in the Washington Times in 2008. I asked him whether American had any intention of capitalizing on United customers’ dissatisfaction by stealing some of them away through a status-match offer.
He involved his colleague Stacey Frantz, who works directly with American’s AAdvantage program. She said she couldn’t comment on “marketing strategies,” but it was apparent from her and Smith’s messages that American wasn’t considering such a move at the time. More than a month later, however, it decided to follow my suggestion — not that I’m taking any credit.
When the promotion first started last week, elite United fliers at all levels were eligible, but on Friday, American decided to limit participation only to United Premier 1K members, the highest published level. A memo was sent out to customer service agents on that day. So if you are a 1K, you can get Executive Platinum status on American.
The carrier is not advertising the promotion, so you need to call AAdvantage Customer Service to request an e-mail outlining the offer. Status is valid through February 2013, and all you have to do is submit proof of your current elite status with United. On the rare occasions when American has offered matches in the past, it has extended challenges, meaning you had to fly a certain number of miles during a certain period to qualify. There are no conditions this time. Challenges to Executive Platinum have been even rarer than to other levels.
But is Executive Platinum better than 1K, and is American better than United? Let’s review.
Executive Platinum advantages
This is truly American’s top elite level. Concierge Key, the unpublished super status that George Clooney’s character had in “Up in the Air,” is awarded only by invitation to very few hyper-frequent and high-paying travelers. In contract, United’s Global Services status has been given to so many people — albeit still “by invitation” — that it has somewhat devalued the 1K level.
Executive Platinum members are the only ones eligible for complimentary domestic upgrades that clear as early as 100 hours before a flight — at United, all elite fliers are, and lower-level elites on full-fare tickets trump 1K members on discounted fares. United also aggressively sells domestic upgrades at check-in for as little as tens of dollars to non-elites, while elites linger on waiting lists. As a result, the upgrade rates for 1Ks have gone down significantly.
As for international — or systemwide — upgrades, American is much more generous than United. Executive Platinum members get eight of those so-called eVIP certificates each year, compared to six for 1Ks. More importantly, on American, they are valid on all published fares, while United excludes its five lowest booking classes — S, T, L, K and G — requiring at least W class. That means you need to pay hundreds of dollars more on W class, and if your upgrade doesn’t clear, you’ve wasted your money.
American has the best domestic First Class soft product. It’s the only airline to still use linens and menus during meal service, as well as pillows and blankets on transcontinental flights. United used to have linens, pillows and blankets before the merger with Continental, but it lost them. The food also tends to be better on American. Many of its domestic planes have no in-flight entertainment at all, though wi-fi has been installed on a big part of its fleet.
As an Executive Platinum, you get Emerald status on the global Oneworld alliance, which gives you access to First Class lounges on foreign Oneworld members, such as Cathay Pacific and Qantas. The Star Alliance has only two levels, instead of Oneworld’s three, so United Gold, Platinum and 1K members get the same access to Business Class lounges.
American has dedicated agents working on the Executive Platinum phone line, and they are not only the best trained agents in the airline industry, but also the ones given the most authority and discretion to help customers in any way possible, even if that means sometimes bending the rules. United’s so-called 1K Desk is not really a dedicated desk — those agents service all callers, but 1Ks get priority in the queue.
No one knows if any of the above might change as a result of American’s Chapter 11 restructuring or in a potential merger with US Airways, but this is where things stand right now. For me, American’s main disadvantages are the limits of Oneworld, whose size is about half the Star Alliance’s, the hefty fuel surcharges imposed on award tickets with British Airways flights, and those old McDonnell Douglas planes American still flies. In addition, if you live in a United hub, it might be hard to give up nonstop flights to many destinations in favor of connections on American. That said, American often offers very low fares out of United hubs, while United does the same out of American hubs.
Premier 1K advantages
United offers 1K members so-called regional upgrade certificates, which can be used to confirm an upgrade on North and Central American flights at the time of ticketing — just like using miles or systemwide upgrades. Unfortunately, this year, United reduced the regional certificates from eight to four a year. It also eliminated the two upgrades million-mile fliers used to get annually. It’s worth noting that the Executive Platinum exclusive perk of complimentary upgrades on American compensates for the lack of certificates to a large extent, though those can be confirmed only within 100 of departure.
United offers instant upgrades without requiring any “instrument” to 1Ks on domestic M fares — all elites get the same benefit on the higher Y and B fares — as soon as the time of ticketing. The inventory is controlled separately and is not the same as regular First Class availability (it books in PN class).
United waives same-day confirmed changes on domestic flights for 1Ks, while American doesn’t for Executive Platinums. United also waives award booking, change and redeposit fees on tickets issued with 1K members’ miles — regardless of who the passenger is. American does so only if the Executive Platinum member is the passenger.
United allows stopovers on round-trip international award tickets. American permits those only in U.S. gateways — the city where you leave or arrive in the United States.
The biggest advantage United has is its membership in the Star Alliance, which has 25 member-carriers, including some of the best in the world, such as All Nippon, Asiana, Singapore, Air New Zealand and Swiss.
The biggest problem with United is that its new management doesn’t value long-term loyalty nearly as much as American’s — or United’s previous leadership team, for that matter. Unfortunately, my prediction in 2010, based on warnings from departing United executives at the time, came true after the merger was finalized. The current management apparently cares much more about making a quick buck. It prefers to sell an upgrade seat from Seattle to Washington Dulles to a non-elite flier for $99, as reported on FlyerTalk by a passenger who took advantage of that offer, rather than give the seat to a 1K member who spends tens of thousands of dollars on United a year. So much for complimentary upgrades.
At the end of the day, the choice is yours. If I’ve missed anything on either airline, feel free to let me know.
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Continue reading about American tries to entice top United fliers
By Nicholas Kralev
The Washington Times
December 21, 2009
Chris Guillebeau has never had a “real” job. At 31, he makes a living by advising others how to make a living without having a “real” job.
Mr. Guillebeau started out as a blogger less than two years ago, but he is already on track to earning six figures annually by selling self-published manuals on “life, work and travel.” That’s his projection for 2010. This year, he estimates he has earned up to $80,000.
“I help people live unconventional lives — to think differently, question assumptions and authority, find out what they are passionate about and overcome gatekeepers,” he said. “For me, a large part of challenging authority involves looking for alternatives to the way most people do things.”
His blog, “The Art of Non-Conformity,” is still free, but his manuals have attracted enough interest so he doesn’t need another income to live on.
“About 95 percent of the people who read me will never buy anything, and that’s totally fine. But the model is able to sustain itself because 5 percent do invest in the products,” he said. “Next year, it should be a six-figure business. I don’t need to grow it beyond that — I’m not trying to get rich.”
Mr. Guillebeau, who lives in Portland, Ore., said he has “personally connected” with about half of his 20,000 readers — mostly by e-mail, but also meeting many of them during his travels across the country and around the world. Travel is one of his passions, and he has visited more than 100 countries so far.
Ben Lopatin, business director of Wellfire Interactive, a Web-design firm, said he was initially familiar with Mr. Guillebeau’s travel blog posts but “kept reading because of his writing about entrepreneurship and unconventional perspectives on work life.”
“He’s not preaching a ‘Get rich quick’ message,” Mr. Lopatin said during one of Mr. Guillebeau’s “meet-ups” on a recent trip to Washington, where about three dozen of his fans showed up. “He’s offering tips and perspectives on rethinking how to work for the things that really matter to you.”
Elliot Susel, another reader who works for the consulting firm Accenture, said it was “abundantly clear” from his conversation with Mr. Guillebeau that “he practices what he preaches.”
“Although he’s able to provide highly individualized guidance, he instead focuses on empowering each individual with the tools that they need to make tough decisions,” Mr. Susel said.
From Mr. Guillebeau’s writing, one wouldn’t know he is a high-school dropout — after a year, he decided that, while he liked learning, he disliked everything else about high school. He began taking classes at a community college in Alabama at 16.
“They never asked for a high school diploma, and by the time they realized I didn’t have one, I’d finished one quarter and had good grades, so they let me keep going,” he recalled. When he transferred to a four-year college, he was attending classes at three schools at the same time, then pulled all his credits together and graduated in two years with a degree in sociology.
Around that time, Mr. Guillebeau got the closest thing to a “real” job — working the night shift at Federal Express in Memphis for a couple of months. Next, he started importing coffee from Jamaica and reselling it to U.S. distributors. He also sold things on eBay.
“In 1998, you could put anything on eBay and sell it. You could go to the store, buy things and people would pay more for them, just because of the novelty of it,” he said. “I went from making $20,000 to $200,000 a year.”
Having made some money, in 2002 he moved to West Africa with his wife, Jolie, whom he married at 18. He became a volunteer for a medical charity, but he “didn’t have any skills,” so his “job for the first year was to carry boxes around,” he said. Later, he moved up and was in charge of 120 people. He was also “a liaison between the organization and host governments, meeting presidents and hanging out with warlords.”
After four years in Sierra Leone and Liberia, Mr. Guillebeau returned to the United States and earned a master’s degree in international relations from the University of Washington in Seattle.
He started his website in early 2008, writing mostly about his travels, but soon “realized there would be a limited audience for that.”
“I had a message to share and wanted to establish a career as a writer; how do I do that? I wrote to every person I knew about the site and to fellow bloggers and other writers. This was going to be the most important thing I do, so I wanted to focus all of my creative energy on making it happen,” he said.
He also wrote his “flagship manifesto” with the deliberately provocative title “A Brief Guide to World Domination.”
In the past 15 months, Mr. Guillebeau has self-published five manuals, ranging from $39 to $129, on self-employment, on how to build a small business, on how to succeed as an artist without relying on established norms, on using social media and on how to play the frequent-flier game.
“The most important thing [in starting a small business] is creating a product or service with an active group of people who are already interested in the topic. This is much easier than trying to convince someone they need something they haven’t heard of before,” he said when asked for an example of the kind of advice he offers.
The best sort of entrepreneurship “focuses not on trading time for money,” as is the case in consulting, “but on developing systems that earn money while you sleep,” he added.
“The typical paths in life — school to college to entry level to mid-level to professional — don’t work for everyone,” he said. “I want to help people avoid some of the unnecessary steps to get closer to what they really want.”
This story was first published by The Washington Times
U.S. carriers have made major progress in listening to direct customer feedback in recent years, while foreign airlines have been less aggressive in pursuing new creative approaches. Finnair, however, is trying to change that. It’s looking for “quality hunters” — fliers who will spend two months on flights around the world and report their findings.
Product-testing and sampling is certainly not a new concept, but the scale on which Finland’s largest carrier plans to implement the program is rare — as is the public way it has chosen to recruit the four travelers it needs.
Finnair, which is a member of the Oneworld alliance, calls them “independent advisers, whose task is to travel to various destinations in Europe, Asia and the U.S. to investigate the elements that determine quality in travel.” They “are expected to communicate their impartial views and recommendations to the company on a regular basis throughout the two-month period” in October and November, the airline said in a press release this week.
In an attempt to improve its products and services in a very competitive environment, Finnair has launched a new project and created a website called Rethink Quality. This is where you can apply for one of the four slots by Sept. 26, if you can make yourself available for the duration of the exercise. That same site will feature blogs by the “quality hunters” once they begin their travels.
“The recruitment of the quality hunters is one means for Finnair to focus more
closely on issues that are important to today’s travelers,” Antti Nieminen, global marketing communications manager at Finnair, was quoted as saying in the press release.
As often happens, the release didn’t answer some of the obvious questions about this experiment: How and by whom will the winners be selected? Will they be compensated? Will they earn frequent-flier miles for the flights they take? Will they fly in economy or business class?
So I asked Nieminen and quickly received the answers. A 10-member panel of judges from Finnair and its PR agency will choose the “hunters” based on “creativity, excellent writing skills, ability to use modern technology, no-fear attitude and open mind to explore quality and provoke conversation.”
“The hunters will be paid compensation,” he said. “The exact amount is confidential contract information but can be compared with an average salary. No miles are granted to the hunters as they are flying on duty. They will be flying in both business class and economy class, since we want them to blog in a versatile manner from all angles related to flying.”
Nieminen also said that “Finnair staff will not be warned about them in advance,” so they shouldn’t receive special treatment.
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Continue reading about Finnair tries creative customer feedback
These are some of the participants in the first official “On the Fly” Seminars in Washington last week. Everyone who came was extremely satisfied — in fact, none of my students had expected to learn nearly as much as they did.
As you can see from the comments on the seminars’ website, they were called “a traveler’s dream,” “incredibly revealing and extraordinarily valuable,” and “a mandatory tool to save money for frequent fliers and corporations.”
“These are perfectly practical methods to make the system work to your advantage — just a few steps to get inexpensive flights, ideal itineraries, upgrades, no fees, and free flights,” said David Aidekman, founder of Adventurati, a group travel company.
Charles Zhang, who came all the way from Princeton, N.J., to attend one of the DC seminars, said he has had top elite status with a couple of airlines for a while, and flies more than 150,000 miles a year. “But I still learned lots of new things from your seminar, which I had never heard before,” he said. “I will use my skills from you seminar toward my future flights, and enjoy my travel more.”
Of course, I couldn’t be happier with the feedback, but it seems I have a serious challenge to overcome: It’s clear the seminars are extremely valuable for those who attend, but the problem is that they don’t know that until they come. Despite the detailed curriculum and syllabuses I’ve posted, last week’s participants said they had no idea that much of what I taught was possible and available to all travelers.
So it seems I need to come up with a catchier way to compress material that takes hours to teach into a few soundbites and paragraphs. Wish me luck!
In the meantime, I’m pleased to announce that the next seminars in Washington will take place on July 23 and 24. Before that, I’ll be offering a seminar in Anchorage, Alaska, on July 6. I’m also looking into doing the same in New York, either in July or August.
Continue reading about Lessons from ‘On the Fly’ Seminars, and July dates announced
