Has Delta SkyMiles Finally Devalued to the Point That It Will Hurt the Airline?

by Gary Leff

Jan 19 2016

Delta’s astonishing arrogance is covered in a piece by Benét Wilson for Airways News that basically asks whether Delta CEO Richard Anderson is an evil genius.. or just evil?

While frequent flyer programs may have been overly generous, especially coming out of the Great Recession, and no longer need to be as rewarding to fill incremental seats on planes — and Delta could extract surreal amounts of cash from American Express after their co-brand issuer lost its deal with Costco — research suggests they may have wrung out way too much value from the SkyMiles program and could be on the verge of hurting themselves by it.

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Japanese Airlines Look to Drop Absurd Fuel Surcharges, Are Award Tickets Going to Get Cheaper?

by Gary Leff

Jan 18 2016

Fuel surcharges don’t matter much to most consumers. They’re advertised as part of the paid fare when buying a ticket. They even earn credit in revenue-based frequent flyer programs. They really only matter to consumers who have airfare discounts that don’t apply to the surcharges, and to frequent flyers booking awards.

Since fuel prices have dropped, and fuel surcharges are now absurd on their face, several airlines have just renamed ‘fuel surcharges’ as ‘carrier-imposed surcharges’. In the US that’s important because in the US fuel surcharges unrelated to the price of fuel are considered by the DOT to be illegal.

Now there’s literally no justification for the surcharges. They’re just a fee for nothing. They’re ‘carrier-imposed’ (of course, who else sets fares?) but don’t cover anything in particular. That begs the question, why do airlines do this?

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Time to Book an Emirates First Class Award, With Wide Open Availability

by Gary Leff

Jan 18 2016

Emirates has become one of the world’s largest airlines, and shows profits, but it has quite a few Airbus A380s without necessarily having routes robust enough to support the aircraft.

They’re taking the A380 off of the Dallas route (which they face competition to and through the Gulf region from Etihad and Qatar) and off the Houston route (the energy sector isn’t performing well…).

So they’re adding A380s to Washington Dulles and a second Los Angeles flight.

New routes and upgauged aircraft are often ripe with award space. Two A380s on the Los Angeles route is quite a lot and indeed Washington Dulles was downgauged from a 777 to a 787 by Etihad. With that kind of capacity perhaps award availability will be quite good over time.

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Just How Pathetic is Business Class in Europe?

by Gary Leff

Jan 17 2016

“Seat pitch” is the distance between seat back to seat back. It’s not the same as legroom, exactly — you aren’t always getting the same legroom with the same seat pitch because some airlines use thicker and thinner seats — but it’s the most generally accepted proxy for legroom.

It’s shocking to me that both Lufthansa and British Airways offer the same legroom in economy and business class for their intra-Europe flights. And that’s 30 inches, which is tighter than what the US majors offer in coach. British Airways “Club Europe” is coach with a blocked middle seat and a cold meal tray.

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Uber’s Confidential Financials Revealed. They Lose Money On Every Ride But Make it Up on Volume.

by Gary Leff

Jan 17 2016

Uber is ostensibly valued at over $60 billion. To really be ‘worth’ that they have to grow rapidly, and arguably beyond on demand ridership into a ‘transportation logistics company’ moving goods and not just people. And they have to actually make money.

While there are certainly network effects — the more consumers use Uber, and the more drivers offering rides on their platform, the more valuable they are. The first person with a fax machine had a useless piece of equipment. There was no one to send them anything, and they couldn’t send a document to anyone else. The fax machine became more valuable the more people that had them. But even there, when’s the last time you sent a fax? I believe I’ve sent two in the past year.

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