Alex Tabarrok of Marginal Revolution notes some interesting tidbits about airlines today. For one, he mentions the practice of advertising different prices in different languages, targeting poorer communities with lower fares. Similarly, consolidators serving low income communities may have lower fares than other agents. Just price discrimination, like requiring Saturday night stays and advance purchases for lower fares, or requiring a higher fare to qualify for a frequent flyer upgrade. Actually, different people can buy the same flights for a whole bunch of reasons. While it’s already well known that two people sitting next to each other on a plane will likely have paid a different fare, many folks don’t realize that flights from Australia to the U.S. are often far cheaper than flights from the U.S. to Australia. Same thing happens with flights to…
America West FlightFund Changes for 2004
America West, winner of the 2003 Freddie Award for Best Elite Program, has announced some minor trimming of its elite program.The major change is reduced flight bonuses. Platinums will receive a 100% bonus on miles flown, down from 125%. Golds will receive a 50% bonus down from 100%. Silvers will receive a 25% bonus down from 50%. In addition, Platinums will no longer be offered “Reduced Top Value Awards.” No more reduced mileage for capacity control-free redemptions. On top of the elite changes, America West has announced higher redemption prices for awards. Used to be you could redeem a 20,000 mile award for a coach ticket. That option is now gone. Flights under 750 miles start at 15,000 miles and flights over 750 miles start at 25,000 miles. A first class coast to coast flight…
Don’t already have elite status? Now for $14.95 you can…
… only it’ll be with Pizza Hut through their VIP program. It’s actually a reasonably lucrative reward program, except that you have to eat Pizza Hut pizzas to get rewarded. As a Pizza Hut VIP you get a free pizza for every two you order. I guess if you don’t join the program, you risk getting TWO free pizzas for every two you order, or something similarly traumatic.
What goes around comes around, baby
Elizabeth Hurley flies British Airways alot — enough to demand an upgrade for her boyfriend on one flight, and to try to join the mile high club on another. But even the well known actress is not immune from being downgraded when flight operations necessitate. She was, apparently, none too pleased over the ‘indignity’ of flying Business Class rather than First.
USAirways wants higher Pennsylvania taxes
USAirways wants lower airport costs in Pittsburgh as a condition of maintaining their flight presence. Since the airport authority is debt-laden, and debt servicing is a substantial cost that is passed along to airlines servicing the area, USAirways suggests raising taxes to pay down debt. US Airways has asked state and county leaders and the airport authority to consider raising state sales, car rental, and hotel taxes to raise $31 million a year to pay down debt, a proposal Gov. Ed Rendell and county Chief Executive Jim Roddey have rejected. However, Rendell has said he would consider using a portion of potential revenue from slots gambling, assuming it is legalized in Pennsylvania, to help pay down the debt.
But can I get Wrestlemania CXII?
Frontier is considering adding pay per view video at each seat on its Airbus aircraft.Already Frontier offers a video product similar to JetBlue’s at a cost of $5 per flight. More than half of passengers on long haul flights and a quarter of passengers on short haul flights make the purchase, accounting for $700,000 in revenue last quarter. Beyond direct sales revenue, the offering distinguishes Frontier from its main competitor in Denver, which is United.
JetBlue’s Increased Legroom
JetBlue has completed removing a row of seats from all its aircraft, adding two inches of legroom behind row 10. Placement of the emergency exits is the main driver of unchanged legroom at the front of the plane. JetBlue’s pitch is now competitive with American’s More Room Throughout Coach and United’s Economy Plus (which is limited to the front of their aircrafts, and limited to full fare or elite passengers except on a catch as catch can at the airport basis). It’s a superior product to coach on Continental, Northwest, Delta, USAirways, etc.For all but the elite traveler who will be upgraded to first class anyway, JetBlue is increasingly a superior product when its route network coincides with a passenger’s travel needs.
Earn 25% Bonus United Miles from iDine for all of 2004
iDine, which offers substantial miles for eating at selected restaurants with a litany of airline programs, has been running a sleuth of promotions recently. One of the better ones is that they’ll give you a 25% bonus on all of your mileage earning for 2004 if you dine 4 times at participating restaurants between November 1 and December 31, 2003. You have to register for the promotion and create a ‘dining profile’ if you haven’t already.Personally I keep several credit cards signed up with different iDine accounts so that I can choose which airline program I’m earning miles with at any given time, as well as take advantage of different promotions. Thanks to my friend Samir for the pointer. Gary Steiger lists a litany of other iDine promotions on his Free Frequent Flyer Miles webpage…
Airline cost problems remain
The CEO of USAirways announced the need for new cost cuts next year. Most of these cuts will come from labor. Northwest has labor cost problems, too — although theirs are perhaps even greater because they haven’t used the bankruptcy process to restructure their labor expenses.The interesting thing is that across the board, most of the labor cost savings of the last year have come from a smaller workforce rather than lower pay. In other words, the airlines have done a fairly good job of wringing featherbedding out of the contracts. Southwest Airlines remains profitable even though it is just as unionized as the other major carriers. The difference in labor contracts is workrules. JetBlue, also profitable, has a huge cost advantage in labor. The contract with their pilots is less than thirty pages. The…
Delta’s new enhanced coach product
Delta is experimenting with an improved coach product that includes leather seating, more legroom, snacks, and complimentary newspapers and coffee in the morning and cocktails in the afternoon.They’re trying out the concept on the Atlanta-Houston and Atlanta-Kansas City routes where they go head to head with Airtran and are using planes that used to fly on the DC-New York-Boston shuttle routes, so no retrofitting is necessary.Delta is clearly feeling squeezed by Airtran and feels the need to offer a differentiated product. This is an inexpensive, easy way to do it. And they’re even offering 2000 bonus miles for booking these flights, so they’re trying to leverage their frequent flyer program as well.Airtran is giving American Airlines fits as well.
