News and notes from around the interweb:
- United already destroyed its frequent flyer program as a means of rewarding actually flying on United. Now, as if there was any doubt this would happen, they have updated its charts showing the points you’ll earn for flying on its partners. And it isn’t pretty. In general you have to fly on one of the upper tier coach fares to earn full 100% flown miles. Most coach fares on partners will earn 50% or 75%. Even premium fares may not be bonused like they used to. (HT: Joe C.)
- The perfect storm? After a six hour delay on Virgin Atlantic at New York JFK, passengers were sent back into the terminal… after the New York City ban which kept transportation off the streets. Customers were given $15 vouchers for McDonalds.
- One thing I like about American’s Doug Parker is that he speaks candidly, and when he’s off the cuff he may be a little too honest. Now he’s getting heat for saying that he doesn’t expect ‘customers to be happy with everything.’ This is in the context of falling fuel prices that are not (yet) being met by falling fares. He’s simply – honestly – explaining something I wrote back in October, that fare levels are driven by demand rather than cost.
- The FAA a $1.3 million fine against United for “at least 120 violations” related to its cargo operation. It seems to be mostly paperwork-related, but paperwork detailing when certain cargo could be hazardous.
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Is the United SA partner changes effective immediately? Changes without warning? I was also under the impression that it was the partner airlines themselves that controlled the fare class earnings, and not United. For example, when you book a ticket or fly on a SA carrier, you needed to double check what that fare class was to determine the earnings (e.g. deeply discounted economy would earn say 0-100%, depending on the carrier). Is United now dictating the amount earned?
The Doug Parker story is ridiculous, as media (and reporters) sometimes are. During the earnings call, the AP reporter asked him a loaded question of whether he was telling customers “to be happy” with an improved product because they weren’t going to be using lower fuel prices to lower fares. Parker rightfully snapped back with “We’re not trying to ask our customers to be happy with anything,” and then noted that the airline was using some of its fuel gains to improve the product, and that it prices to demand not cost.
As silly a kerfuffle as it gets. BTW, I haven’t seen this “blow up” in the larger, mainstream media.
The Jeff Smisek Playbook
1. Gut your award chart: Check.
2. Gut your points earning ability: Check.
3. Gut partners points earning ability: Check.
4. Gut your co-branded credit cards’ points earning ability: To do when credit card agreement comes up for renewal.
Fly the Friendly Skies!
” fare levels are driven by demand rather than cost” demand can drop if a competitor is willing to lower their prices (due to lower fuel costs) to increase market share
@Doug: my playbook:
1) Get *A Gold from other *A carrier: Check
2) Zero account balance by transferring whichever left over to Marriott: Check
3) Send now useless Premier gold card to Smisek: still contemplating