US Airways
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 Concierge Key, the unpublished super status that George Clooney’s character had in “Up in the Air,” is awarded only by invitation to very few hyper-frequent and high-paying travelers.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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The decision by United Airlines’ management to use Continental’s Shares reservations system for the merged carrier has been causing serious problems since its implementation last weekend. So the news that the airline is working on a new version of its IT platform, integrating some of the features of the pre-merger United’s Apollo system, is very welcome, indeed.
It was hardly surprising that CEO Jeff Smisek and his team chose to keep Shares, given that most policies and practices of the combined carrier have followed the way Continental did business under Smisek. But in this case, the decision made good financial sense — Continental has owned Shares for years, while United paid Travelport, the company that owns Apollo.
As I completed the last research trip for my upcoming book on the U.S. Foreign Service on Sunday, I was worried much less than many passengers and United employees, who had warned me not to fly during the first days of the integrated system. The merger was first announced in May 2010, so the company surely had plenty of time to prepare — and if not, it would have delayed integration, I thought.
I was wrong. On the first day of the new era, March 3, I monitored the situation from Frankfurt, where I overnighted on my way back from Iraq. Delays were widespread, which the United employees I talked to the next day attributed largely to their inability to board passengers automatically by scanning boarding passes — each person had to be boarded manually.
The other reason for the problems was how unprepared pre-merger United agents were to use Shares. They had been trained, but obviously not quite enough — actually, it may be more a matter of experience than training.
The real issue is Shares’ complexity, clumsiness, use-unfriendliness and lack of intuitiveness compared to Apollo. That was my first impression when I initially looked at it at three different airports, and it was confirmed by several longtime United employees, some of whom showed me long multiple-page instructions for basic functions, which resembled complex formulas.
Some agents are still having trouble printing boarding passes for flights for which I’d checked in online — one said, “It would have taken me five seconds in Apollo.” Others find it challenging to decipher seat maps.
I didn’t want to make a final judgment on Shares without consulting Continental employees, who have been using the system for years, and I had a chance to do that yesterday. Those agents had been sent to pre-merger United stations to help their inexperienced new colleagues — but from what I could see, there was much more demand than supply.
Those Continental agents, who also had some knowledge of Apollo, agreed with my first impressions of Shares. They also told me that Continental hadn’t invested much in modernizing Shares, but that was about to change. In a few months, they said, there will be a new version combining current features with some of the best Apollo functions.
One can only hope. The question is, why couldn’t integration wait until then? Those poor pre-merger United agents have to learn one system now, and another — apparently less complicated — in a few months?
I asked a corporate contact at United about the new plans and received the following response: “I think you’ve been hearing about a new GUI [graphical user interface] that will be added to Shares later this year. It will make it more user-friendly for our agents. We didn’t want to postpone the customer benefits that were gained by going to one passenger service system — one frequent-flier program, one website, any agent able to help any customer, etc. — by waiting until the GUI was in place.”
A task of this magnitude will always be accompanied by problems, especially at the world’s largest airline. At least for me, however, those problems have been much worse than I expected. Perhaps this is due in part to the higher numbers of pre-merger United employees compared to Continental’s — after all, United was the bigger airline.
Shares is incapable of performing some vital functions that Apollo offered. For example, upgrades using miles or certificates can no longer be waitlisted less than 24 hours before departure. So if your international flight, which you have upgraded with miles, is canceled and you are rebooked on another flight, you won’t be put on an upgrade waitlist on the day of travel. If, however, there is an available upgrade seat, you should be able to get it.
Another problem that is affecting thousands of passengers has to do with upgrades waitlisted in Apollo before the conversion. All segments waitlisted in NF booking class, which United used for upgrades to First Class, converted into ON in Shares. ON inventory exists only on three-cabin aircraft. On two-cabin planes however, the correct code is R. So if you are waitlisted in ON on a two-cabin domestic flight, you will never clear, because there will never be availability in that booking class.
United has a representative on FlyerTalk who monitors various comments, and she has indicated the carrier is aware of the incorrect conversion issue but hasn’t yet found a solution.
One of my favorite features of the old Continental website, which United’s didn’t have, was the information about where your aircraft is coming from. I was very happy it was preserved on the new site, but my happiness has been seriously tempered this week. The tool is offering plenty of erroneous data.
Just one example: Today’s flight 984 from San Francisco to Portland, OR, is operated on a Boeing 757. According to the website, the plane is coming from Monterey, CA. The problem is that the aircraft flying back from Monterey is an Embraer regional jet.
Here is the silver lining in all this: Whatever the problems at the new United, they pale in comparison to the systemic breakdowns that occurred during the US Airways-America West merger in the middle of the last decade.
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The 10th anniversary of the Sept. 11, 2001, terrorist attacks this week reminded me of how much can go wrong in the airline industry to no fault of its own. Despite everything outside the airlines’ control, there are many reasons to criticize their performance. But how much slack should we cut them?
I’ve written several times about the increased scrutiny of the airlines by both the media and the public, compared to other industries, simply because of the nature of their business. A commercial carrier has more front-line employees than almost any other company, and it’s easier to complain about a person we see in front of us than about an invisible — and sometimes anonymous — representative.
In addition, the airline industry gets more media attention than other types of businesses by default, as many more people are believed to be interested in aviation than in the workings of a cable company or the food industry, for example — even though the latter two affect no fewer consumers than airlines do.
Let’s face it, an aircraft in any position — sitting on ground, soaring in the sky or, God forbid, engulfed in flames — makes for much better photos and video than a food-processing chain.
Bashing the airlines has been common for decades, but it has become even easier in recent years, thanks for social media and the travel blogs that have mushroomed on the Internet.
All that attention has improved customer service, as well as other parts of the airlines’ performance. I’m not talking about the on-board service, which no longer includes free drinks, meals, pillows, blankets, etc. I mean employees’ desire and ability to resolve problems. There are certainly still those who just shrug shoulders and pass you on to someone else, but the helpful ones seem to be more these days.
As my book, “Decoding Air Travel,” and all my columns can testify, I’m by no means an apologist for the airlines. I criticize them and expose their dishonest practices when they deserve it, but I also praise them when they do things right. I’ve also urged other consumer-oriented businesses to learn from the customer-friendly policies of many airlines.
So I’m more than willing to cut the airline industry some slack — not only in situations beyond its control, but also when honest mistakes have been made. For example, late last month, I had a schedule change on a future ticket, which had to be reissued. The agent I spoke with on the phone was supposed to send the reservation to a certain “queue,” but as I learned a few days later, she sent it to the refund queue. As a result, the entire itinerary was canceled, and of course no one notified me. Good thing I called back.
Things happen, so I didn’t get angry in this case. This week, however, I did get mad at US Airways for its failure to invest in a modern website — not a new issue, about which I’ve also written before. That site is probably one of the worst in the industry.
I tried to check in online for a flight from Washington Reagan National Airport (DCA) to New York’s LaGuardia (LGA). Before that, I had attempted to get a seat assignment, but that’s not allowed on shuttle flights until check-in, even in First Class. I did see on the seat map, however, that my preferred 2F was available. So I began the check-in process, but the seat map didn’t open. I tried several times, to no avail. I finally exited, only to find out that the system had automatically assigned me seat 1F.
I didn’t want the bulkhead, but there was no way to change the seat I had. Web support couldn’t help, either, telling me it could only be done at the airport. Of course, by the time I got there the next day, all other seats were gone.
Why is it so difficult for US Airways to offer a working seat map during online check-in? Why is it so hard to allow changes to seat assignments? Why can the websites of United, American and many other airlines provide that service? Is it really rocket science? Almost every airline website has its problems, but US Airways’ beats them all. Its CEO, Doug Parker, needs to realize that it’s 2011.
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The U.S. Department of Transportation (DOT) seems semi-serious about false airfare advertising. It fined several airlines this week for violating its rules of disclosing taxes and fees, but it still tolerates the disgraceful “one way based on a required round-trip purchase” manipulation practiced by some carriers.
Continental Airlines was fined $120,000 for failing to include fuel surcharges in fares listed on its website. US Airways and TACA, the Central American company, must pay $45,000 and $55,000, respectively, for the same wrongdoing — indicating that fares didn’t include taxes and surcharges, but not disclosing actual amounts.
“Consumers have a right to know the full price they will be paying for airfares,” said Transportation Secretary Ray LaHood. “We established airline price advertising rules to protect the consumer, and will take enforcement action when these rules are violated.”
Starting on Oct. 24, DOT will require airlines to include all taxes, surcharges and government fees in advertised fares — not just using asterisks and fine-print explanations.
However, advertising only half of a ticket price will continue. As I’ve written before, I have nothing against listing one-way fares — when they can be truly bought as such. To this day, American Airlines, Delta, British Airways, Lufthansa and others promote only half of mandatory round-trip purchases on their websites.
In fact, Lufthansa doesn’t even bother to spell out the words, using instead “OW based on RT purchase.” The German carrier doesn’t do those gimmicks on its European sites because of strict European Union rules.
In March, I wrote that United Airlines became the first major U.S. carrier to begin advertising predominantly round-trip fares on its site. Continental has since followed suit. US Airways still uses a mixed method.
One would hope this item will be next on DOT’s agenda.
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One by one, airlines are waking up to the sobering reality of the modern Global Distribution System (GDS) model, which they created decades ago. Two carriers have now taken legal action, and this is only the beginning. If more airlines want to see changes and lower costs, they should join forces instead of watching from the sidelines.
Judge Miriam Goldman Cedarbaum of the United States District Court for the Southern District of New York is about to become an expert on airline data distribution — in the 82nd year of her life. You can see her name stamped on a complaint (pictured above) filed last week by US Airways against Sabre, the largest GDS in the United States.
Sabre should take this lawsuit very seriously. Cedarbaum is not just any judge, and she is certainly not to be trifled with. One of the many high-profile cases she has overseen was against would-be Times Square bomber Faisal Shahzad, who was sentenced to life in prison without parole in October.
The most important reason for Sabre to prepare for a serious fight is the actual merit of the US Airways complaint, which the GDS predictably dismissed in a press release after the court filing. The airline accuses Sabre of monopoly, unfair practices and stifling competition by “locking travel agents” into using the GDS, so they “effectively become unable and unwilling to provide their customers with alternative, more efficient” booking channels.
“Rather than compete on the merits, Sabre has used its massive power over airlines such as US Airways to entrench its antiquated and inefficient technological systems, to preserve its supra-competitive booking fees, and to harm competition,” the carrier wrote in its complaint.
“Sabre’s technology has hardly changed from your grandfather’s distribution system, and was long ago left in the dust by new, innovative solutions that are web-based and take advantage of the networked economy,” it added. “These new offerings, however, have been stifled by the GDSs’ grasp over travel agencies and the exercise of their market power over airlines.”
The airline is referring to the technology I’ve written about before, known as a “Direct Connect” model, which allows carriers to host their data and make bookings independently of a GDS. Airlines prefer that model because it lets them control their data and offer non-airfare products, and it also saves them lots of money.
As I explained in February, about 60 percent of the roughly 1 billion tickets issued worldwide each year are sold through a GDS, according to Farelogix, a technology company mentioned in the US Airways filing. The average GDS fee paid by the airlines is about $12 per ticket, or more than $7 billion a year in distribution costs, Farelogix CEO Jim Davidson told me. In contrast, Farelogix’s “Direct Connect” allows carriers to spend only between $2 and $3 per ticket, saving about 80 percent of the current costs.
In its court filing, US Airways said that 35 percent of its revenue, “amounting to
over $3.5 billion annually, is booked through Sabre.” That’s exactly why no airline wants to be taken off a GDS — whether Sabre, Travelport or Amadeus. That’s also the reason why US Airways is only the second carrier — after American Airlines — to stand up to a GDS.
Having just written about a hybrid model that would make it possible for GDS portals to provide access to a carrier’s “Direct Connect” channel, I was surprised when US Airways signed a new agreement with Sabre several weeks ago. Instead of joining in America’s efforts to change the GDS model, US Airways is simply caving in, I thought.
Earlier this month, American reached an agreement with Expedia to implement a hybrid model, and then sued Travelport and Orbitz, claiming violation of antitrust laws. Online travel agencies like Expedia and Orbitz rely almost exclusively on GDS use, and some of them are owned by GDS companies.
Now US Airways has reconsidered and decided in favor of a fight. In its complaint, it says that Sabre forced it into their latest contract with “numerous oppressive and
anti-competitive terms.” The carrier “had no choice but to sign the agreement, which it did under protest, or face a complete shut off from Sabre’s network,” it said.
One of the most draconian clauses is that US Airways is banned from offering fares on its website unless it also makes them available to Sabre. In addition, Sabre penalizes travel agents who book tickets through any other channel.
As my record in this column shows, I’m a frequent critic of the airlines. But their complaints against the GDS companies are legitimate and need to be addressed. What the GDS management teams are doing is nothing short of business bullying. Worse yet, they pretend to be victims, trying to trick consumers into supporting them by falsely claiming that their model is the only way to ensure comparison-shopping.
Instead, they should be less greedy and let go of their unrealistic dreams of enormous and easy profits. Resisting inevitable change as a result of advanced technology is a recipe for extinction, not prosperity and longevity. The sooner the GDS companies realize that, the better for all parties in the air travel system, including consumers.
For their part, airlines should unite in their opposition to the current GDS model if they want to see results they like. They shouldn’t leave it to American and US Airways to fight their battle alone and then benefit from the outcome — and I’m sure the outcome will ultimately be more favorable for the airlines than the present state of data distribution.
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