Airlines

Category Archives for Airlines.

Will California’s New Privacy Law Require American Airlines to Tell You Your Eagle Rating?

by Gary Leff

american airline plane
Nov 05 2019

Here’s how American Airlines scores its customers. American Airlines has a system called Helix that it uses to tell employees when to go ‘above and beyond’ for a customer. It’s used by reservations, agents at the airport, customer relations, baggage services and others as a way to know when it’s ok to spend more on a customer.

The goal of the system is to accommodate high value customers who are at risk of defecting to a competitor. Helix will display an Eagle ranking from 1-5 for each customer. This ranking is updated each day and depends on a combination of revenue and how badly you’ve been treated by the airline. You’re only going to get special treatment if your ranking is 3 or higher.

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New Push to Unionize Delta Flight Attendants

by Gary Leff

delta plane
Nov 05 2019

CEOs of American and United are pumping their fists in the air with news that the Association of Flight-Attendants-CWA has launched an effort to unionize Delta flight attendants. Finally, they’re thinking, their more profitable competitor may be saddled with the same onerous work rules that United and American face – and perhaps the better service flight attendants provide will go away in the long run, too.

Delta flight attendants can choose a union, with the costs and job protections that provides. However they can expect profit sharing to fall, the raises they’re getting without negotiation to go away. They won’t keep these things because the higher cost of unionization will trade off with wages (the value of the wage can’t exceed the value of marginal product) and because Delta will have to signal to mechanics that unionization doesn’t deliver benefits.

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I Flew the Spirit Airlines Big Front Seat: A Whole Different View of Travel

by Gary Leff

Nov 03 2019

I finally had my first taste of the Spirit Airlines Big Front Seat. On my way home Chicago O’Hare to Austin after United Airlines Media Day I flew Spirit Airlines. I bought my one-way in a “Big Front Seat” (a domestic first class-ish seat without extra benefits) for $118.29. A coach seat on American or United would have been $225 and I’d have had to wait around the airport two and a half hours longer for either. Spirit seemed like a no-brainer.

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Why Spinning Off Frequent Flyer Programs is a Bad Idea

by Gary Leff

cash
Nov 02 2019

On Wednesday morning I debated Stifel Managing Director Joseph DeNardi on whether or not to spin off frequent flyer programs at the Airline Information MEGA event in Florida.

Joe is the best-known face of the argument that loyalty programs are the primary drivers of revenue and value for airlines, and he’s argued that the overall businesses are undervalued because investors don’t clearly see how much good, high margin revenue is coming in from credit card partnerships versus from the airline as old-line industrial. He was charged with defending the idea of spinning programs off into a separate business, and I was charged with arguing against this.

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Today United Breaks Trust With Customers Who Bought Lifetime Club Memberships

by Gary Leff

food in bowls
Nov 01 2019

United has held firm that they can take a customer’s money for a lifetime service and change the terms (the “our fingers were crossed” rule). Unlike Delta and American, people who purchased lifetime United Club memberships cannot continue to use United Clubs unless they’re flying United or designated partners same day.

To me United’s decision undermines CEO Oscar Munoz’s credibility to claims that the airline is motivated by a desire to do the right thing for customers. It all come down to trust. But then what do you think their elimination of award charts means?

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