Bob Crandall blasts codesharing in this morning’s New York Times (link via Julian Sanchez). He thinks the government ought to crack down. The piece contains numerous half-truths. He identifies 1983 as the start of INTERNATIONAL codesharing. But the practice of codesharing dates back to the 1930s when Western Airlines flew from Los Angeles to Salt Lake City, and United flew from Salt Lake City to the East Coast. Neither could fly coast to coast on their own because the government granted all route authorities back then. But Western, for its financial survival, was given permission to coordinate with United and they operated each others planes and shared crews. For 70 years codesharing has both been about the economics of leveraging large capital investments (planes) and about navigating regulatory waters. It still is! As Crandall observes,…
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New America West Coast to Coast Service
America West is going to begin offering non-stop transcon flights from New York’s JFK to Los Angeles and San Francisco and from Boston to Los Angeles and San Francisco. I believe these will be the only flights that don’t originate or end at one of America West’s two hubs in Phoenix and Las Vegas.These are currently high revenue routes not served directly by discounters. JetBlue flights JFK to Oakland and Long Beach but not LA and San Francisco. America West will offer similar fares as JetBlue but into these primary (and higher operating cost) airports.This is bad news for the major carriers currently flying these routes, good news for consumers as the majors will likely be forced to match fares at least for flights at similar times, and an open question for America West’s bottom…
Miles for Mortgages
I may be a bit behind the times, but there appears to me to be a new and more generous player in the miles for mortgages game. I saw an offer for Alaska Airlines miles this morning: 1300 miles (rather than 1000) for each $10000 in financing and 3000 miles per 10000 for buying/selling plus miles for moving, miles for using more than one service, and bonus miles for AS elites. Then I modified the URL to find the same offer with Delta, United, and Continental.
Free Continental Silver extended
Get free trial Silver Elite on Continental from August 1st to October 15th. Sign up or call 1-800-346-6090 and use promotion code 54015.If you fly 3 qualifying round-trip flights: you get Silver Elite until February 2005. If you fly 6 qualifying round-trip flights: you get Gold Elite until February 2005. Only flights on Continental and Continental Express (not on partners like Northwest, Delta, Alaska, etc.) qualify, and then only on mid and high fares (not Q, S, T and L fares).They made this offer earlier this summer, and though it was targeted it seemed to work for everyone — at least anyone who called could get upgraded to silver instantly. Since I’m not signing up for this myself, I don’t yet know whether folks who didn’t receive the offer will be able to take advantage…
Redux: Don’t get too excited about those airline profits
USAirways, which recently emerged from bankruptcy, posted a “profit” last quarter. It’s $13 million in the black included $214 million from the federal government, so this news doesn’t say too much about the airline’s business effectiveness. So call me skeptical when the company’s president says “We have made great strides in executing the key elements of our restructuring plan related to increasing revenue, reducing costs and improving liquidity, all against the backdrop of a challenging industry environment” Continental, Northwest, and Delta are all in the same boat.
Competition is Good
In order to differentiate themselves and win more business, the three largest online travel booking sites are introducing new features and offering more information.While no one site is uniformly best, and travelers often check more than one sites before booking, each is trying in their own way to offer products that consumers most want.In my own experience, Orbitz consistently finds the best fares on complex and last minute itineraries. That isn’t because Orbitz has the best agreements with the airlines that founded it, either. It’s because Orbitz has the “best math” — the best search functions that are able to piece together flights that the other sites don’t think of. I’ve often found cheap flights on Orbitz that other engines couldn’t find, and then picked my flights one by one on Expedia only to find…
Musings
This week’s newsletter from David Rowell is uniquely good, so I’m going to reproduce some interesting snippets: VS also enjoy having provocative slogans on the side of their planes. Not long ago, they had the slogan ‘Ours is Longer’ painted on their new A340 planes – presumably referring to the fact that the A340-600 is longer than a 747-400. And now they are painting the slogan “BA Can’t Keep It Up” on the side of its aircraft, – presumably referring to BA’s refusal to sell the Concordes to Virgin. VS will keep the slogan until the Concorde ceases flying in October. … Delta..has announced that it will eliminate its quarterly dividend, while forecasting a loss of $200 – $250 million in the upcoming third quarter. … Russia’s Aeroflot announced a net profit for 2002 of…
Internet banking
Now that Netbank has gotten into the mileage game by offering United and Delta miles, I decided to take a look at an online checking account. I actually didn’t sign up with Netbank, though. Instead, I signed up with BankDirect. Both give miles for checking accounts and other financial products. The (2) drawbacks to NetBank are: They don’t give very many miles (I was only going to earn 4500) and mileage is a one-shot deal — there’s no continued earning. They don’t reimburse ATM fees. So while they don’t CHARGE you to use an ATM, in most cases the machine you use will. BankDirect solved both of those things. Now, BankDirect has two disadvantages: A $15/month fee on checking accounts with balances under $2500. A lower interest rate than NetBank. So I studied hard and…
Government Handouts Skew the Numbers
American lost a whole lot less than it would have otherwise, and Continental, Delta, and Northwest all reported quarterly profits that would have been losses without one-time events including government handouts. None of these airlines made money off of their airline operations. Delta and Northwest had help for their bottom-lines from the sale of the Worldspan Computer Reservation System.And as Northwest disentangles from Worldspan, they have struck a deal to give Sabre (a competing reservation system) access to its web fares that are currently only available on its own website and on Orbitz in exchange for lower booking fees.Remind me again why the government thinks we need to regulate these distribution vehicles?
What to do with a million Membership Rewards points?
Reader William writes: My father has been banking American Express miles for the last 15 years. To date he has accumulated 1.3 Million AMEX miles. By the time he retires, in about two years, he thinks he will have nearly 2 Million miles. He uses his card for major purchases at his firm. His plan is to use the miles to fly and vacation with after he retires. I am worried that keeping your miles in one place – especially that many – might mean he could also lose them all at once. For example if AMEX drops a FF partner he would like to fly or a hotel chain he wants to stay at – he would then be out of luck. Should he start moving them into certain programs or just leave them…
