Airlines

Category Archives for Airlines.

America West and USAirways to Merge

by Gary Leff on May 19, 2005

May 19 2005

The press release is here. As expected, USAirways is essentially being acquired by America West, though the airline will operate with the USAirways name. Significant cash will be added to the merged airline through the deal, including $75 million from Air Canada. This participation suggests to me that the combined airline will be a member of the Star Alliance. Of particular interest to me, $300 million in a signing bonus and a loan from prospective affinity credit card providers for the merged company. Negotiations with credit card companies are still in progress. Bank of America currently issues the affinity cards for USAirways and America West both. Now, this is the part of the press release that I simply don’t believe: The $600 million in anticipated annual synergies are the result of route restructuring, revenue synergies…

What would a USAirways-America West Merger Mean for the Two Frequent Flyer Programs

by Gary Leff on May 19, 2005

May 19 2005

Randy Petersen has a new post up on his blog, imagining what an America West-USAirways tie-up would mean for integration of the two airlines’ frequent flyer programs. He believes a merger or acquisition would be on the whole good for members miles would be far safer integration would happen over a couple of years with reciprocal space available upgrades for elites introduced quickly new redemption options would be introduced partners would be streamlined so some current relationships would disappear

Air Canada Aeroplan Spinoff May Be Imminent

by Gary Leff on May 18, 2005

May 18 2005

Air Canada may be on the verge of spinning off its Aeroplan frequent flyer program with details being finalized as soon as the end of this week. They tried this a couple years ago, but details of their bankruptcy and reorganization financing stood in the way. Word is the program is being valued at about US$1.18 billion, down slightly from earlier estimates.

Airline Elite Beyond Elite

by Gary Leff on May 10, 2005

May 10 2005

Chris Elliott’s latest column, published in today’s New York Times is on airline status beyond the published benefits of elite frequent flyer programs. The gist is that high spenders receive rewards greater than those provided to an airline’s 100,000 mile flyers. On United and on other airlines, members of the secretive, invitation-only clubs are met at the airport by employees and whisked past the check-in line. They wait for their flights in unmarked V.I.P. lounges and are offered liberal upgrades and personalized attention by airline employees. And at a time when airlines are obsessed with improving their on-time records, it is not uncommon for a plane to be held for a super-elite member who is stuck in traffic. Chris gets some of the details wrong. He says that the Global Services designation requires only $20,000…

When First Class is Really Coach

by Gary Leff on May 2, 2005

May 02 2005

I don’t usually fly American. With the exception of an American Eagle flight booked as a Northwest codeshare in late 2004, I haven’t been on American metal in nearly two and a half years. And my review is this — American Airlines’ domestic first class can be summed up with a your choice of two words: either “ghetto” or simply “coach.” One three of four flight segments, no pre-departure beverages were served. No coats were taken. The MD80 seats are incredibly worn and dirty. Pen markings are on display everywhere, and on one flight duct tape was holding the meal tray cover onto my seat. The ‘meals’ they’re serving look like the food that used to be offered in coach. And by used to I’m not harkening back to the long-gone days at the beginning…

What would an America West-USAirways Merger Mean for Frequent Flyer Mileage Redemption

by Gary Leff on April 26, 2005

Apr 26 2005

Keith Alexander speculates on what would happen to frequent flyers in an America West-USAirways tie-up. He quotes Randy Petersen saying that USAirways members could finally relax about the future and stability of their miles. Separately, if the combined corporate entity remains as USAirways, and its existing partnerships continue, then America West flyers will gain access to international awards like they’ve never known before through USAirways’ membership in the Star Alliance. Currently, America West’s premium international redemption options are hugely limited. Of course, this is all speculation. If a merger were to go through, and if it were to cause the combined entity to exit the Star Alliance (after all, America West is a significant competitor to United on the West Coast of the U.S. and to the best of my knowledge America West management hasn’t…

Air Canada to Spin Off Aeroplan

by Gary Leff on April 23, 2005

Apr 23 2005

Air Canada has confirmed its intention to spin off its Aeroplan frequent flyer program as a separate unit. Mr. Milton did not close the door to selling part of Aeroplan to a private buyer. But he said buyout firm Onex Corp. is not in the picture as a potential purchaser. Onex had a deal with Air Canada to buy a 35% stake in Aeroplan for $245-million before that fell apart with the airline’s bankruptcy protection filing. Onex said recently that it was still interested in the unit. Mr. Milton offered no specific timing for the sale. He said the company is working on legal and regulatory issues to ready its public debut. Aeroplan is worth in the range of $1.3-billion to $1.9-billion. In January Randy Petersen wrote that Air Canada would likely be the first…

Thoughts on USAirways/America West Merger Rumors

by Gary Leff on April 20, 2005

Apr 20 2005

Rumors of an America West-USAirways linkup have been all over the news. The two carriers are certainly in talks. There’s a certain logic to it: USAirways has a strong East Coast route network, America West has a strong West Coast route network, together they’d be a true national carrier (the nation’s 6th largest). But America West is close to profitability and is winning analyst plaudits. USAirways remains in bankruptcy for the second time since 9/11, is short on cash and on life support. USAirways has a much more senior workforce than America West. Integrating union labor pools is always a difficult task and one which can lead to significant acrimony. It’s really unclear to me how America West would make USAirways’ assets profitable. Rumors of the two carriers combining go back to 1997 (or at…

Delta to Give Passenger Data to CDC

by Gary Leff on April 9, 2005

Apr 09 2005

Via Tripso Daily, Delta is going to start turning over passenger data to the government. This time it’s not for security. They’re sending the information to the Centers for Disease Control so the government can track the whereabouts of passengers who have been exposed to illnesses. Says one airline representative, “there are privacy concerns.” Gee, ya think?

United Introduces Hotel and Car Rental Awards for Elite Members

by Gary Leff on April 5, 2005

Apr 05 2005

United elite members can now redeem Mileage Plus points for hotel nights at Marriott and Radisson and car rentals with Avis, National, Alamo, and Hertz. This is good progress, to be sure, although the certificates are paper and take four to six weeks to obtain and it looks like blackout dates and capacity controls will apply. In general the hotel nights represent a fair value for non-airline redemption, in some cases you’ll get a full penny per point. Rental car redemption strikes me as somewhat absurd, with pricing running from 10,000 to 12,500 miles per day. Nothing like the good old days when flight awards came with hotel nights and rental cars, or even when — once that practice ended — award redemption came with complimentary hotel and car rental discount certificates. But it sure…