Tuesday, December 1, 2015

The Only Constant in the Universe is CHANGE. Post-merger changes to AAdvantage.

Like the title says, the only constant in this universe is change.  Luckily, change isn't always a bad thing.  American Airlines, following the completion of its massive merger with US Airways,   Management seems to have seen how the last two mega-mergers in this industry ended up and are doing everything they can to not end up as the latest and most hated.  The changes American is making to it's industry-creating AAdvantage program only make the program better, and more suited for the global airline American is.  Let's get going through the new face of AAdvantage.

Beginning January 1, 2016; gone are those weird Elite Qualifying Points (EQP's) that you never knew how or why they were accrued.  The structure for Elite Qualification is much more simpler, dealing only with Elite Qualifying Miles (EQM's) and Elite Qualifying Segments (EQS's) for those travelers that do a lot of short haul but don't rack up the miles.  Also, the time length is changing.  Elite members now have until January 31 instead of January 1 to qualify for Elite Status.

What doesnt change is how you earn the EQM's and EQS's, on all eligible flights by American Airlines/American Eagle, oneworld(TM) carriers, Alaska Airlines and other American Airlines codeshared flights such as on Air Tahiti Nui, Cape Air, El Al, Hawaiian Airlines, WestJet and more.  Oh, and dont forget about using the Citi AAdvantage MasterCard, giving you an automatic 10,000 EQM's upon approval and issuance.

To reach the first threshold Gold Elite (oneworld Ruby), it's still 25,000 EQM's, or just 30 EQS's.  2 trips from the West Coast to Europe and a Transcon oughta take care of that, depending on the fare level booked.  Other perks include complimentary automatic upgrades on flights of 500 miles or less, a 25% bonus of EQM's, 50% off Main Cabin Extra seats before check-in, complimentary upon check-in, complimentary access to preferred seats, and 1 free checked bag.

Platinum Elite (oneworld Sapphire) is 50,000 EQM's, or 60 EQS's.  With the 25% bonus you get as a Gold Elite member, reaching Platinum is not that difficult.  Complimentary upgrades happen from 72 hours before departure, a boost to 100% bonus EQM's (you go, Mr. Road Warrior of the sky!), access to Main Cabin Extra and Preferred Seats, as well as a second complimentary checked bag.

Top Tier, Executive Platinum (oneworld Emerald) Status is the Apex of the AAdvantage program.  To reach this vaunted level, our fearless flyer needs to rack up 100,000 Elite Qualifying Miles or 120 Elite Qualifying Segments.  One incredibly awesome perk is the 4 one way systemwide upgrades (with the ability to earn 4 more more), upgrades requested and confirmed up to 100 hours before departure, the same awesome 100% bonus miles, complimentary Main Cabin Extra and Preferred seats, and 3 free checked bags.

Now that we got the thresholds covered, let's get back to the new changes.  

When before you could get 8 one way systemwide upgrades, now you are automatically issued 4, with the ability to earn more (2 for every 50,000 EQM's earned) throughout the year as you reachieve Executive Platinum status.

The price of 500-mile upgrades increases to $40, either online or from American Airlines, or if you want to use miles, you'll have to shell out 40,000 miles for 8 upgrades.

Award redemption changes on March 22, 2016, include a new lower redemption rate for the new MilesAAver awards beginning at 7,500 miles for flights under 500 miles.

That's about it for now, I'll come back to this in the 3rd Quarter of 2016, when the majority of changes have occurred, and when American finishes the changes to AAdvantage.

Monday, November 23, 2015

Houston, here we come! A Gold Standard look at Houston, TX part III

Now that we've covered most of the greater Houston area, let's finish this series off by covering the rest of this awesome city.

We'll start off on the West side of town, in the tony and posh Galleria/Memorial Park/River Oaks area.  THE hotel to stay at here is the Hotel Derek.  Now, I know what you're saying, "But George, there's TONS of hotels in the area, like the JW Marriott, the Westin, or the Sheraton Suites!"  Yes, but those are chains that look pretty much the same everywhere you go.  The Hotel Derek is decidedly Texan, but upscale and chic.  It is such a destination hotel, Forbes Magazine has awarded it four stars.  It is also the only boutique hotel inside the 610 Loop, two blocks from the Galleria.

The Hotel Derek has several incredible styles of rooms and packages (such as the Pampered Pooch package, which includes an exclusive amenity and donation to the Houston SPCA, all while staying on a dedicated floor designed with easy access for walks and constitutionals).  My favorite rooms though, are the Sky Deluxe rooms, which are located on the top two floors of the hotel, with some incredible views of either downtown or uptown, and the ultra-chic platform king bed.

The other room I adore is the Penthouse Suite.  Clocking in at 1,200 square feet, it is by far the most expansive and incredible room on property.  With floor to ceiling windows overlooking the Galleria or Downtown, a massive private balcony, and 2 separate bathrooms.  If you're trying to get some work in, there is a spacious office alcove with a huge glass desk to get the job done.

Now that we've got our digs out of the way, lets mosey on over to the Galleria area.  With 2.4 million square feet, 4 levels, 2 hotels, 1 indoor ice rink, 1 rooftop jogging track, and 375 retail shops to play around in, the Galleria is one of the largest malls in the United States.  The only Tesla Motors and Prada stores in Texas call the Galleria home.  Surrounding the Galleria are several other shopping areas to complete one's spree in Houston.  Dillard's, Neiman Marcus, and Zone d'Erotica all have anchor stores in the complex and are consistently their highest grossing locations nationwide.

There are also several museums and art exhibits in the area as well.  From the Arader Galleries, the Beer Can House (I implore you, check it out!), to the Rienzi Mansion, an arm of the Museum of Fine Arts, Houston, and the Houston Arboretum and Nature Center,  there is something for everyone's taste.  If it's golf you want, Memorial Park has not just one golf course, but there is also the neighboring River Oaks Country Club.

Now that we've kind of covered the greatest city in Texas, it's time to catch your flight home.  If you're leaving from the George H.W. Bush Intercontinental Airport, it'd be a great idea to spend your last night in the city at the on-airport Houston Airport Marriott at George Bush Intercontinental.

Conveniently located smack in the middle of the Intercontinental Terminal area, there is an underground tram connecting the hotel to every terminal, or you can take the hotel's free shuttle van to your terminal.  The rooms are you standard Marriott equipped rooms, but you cant complain being situated so close to the terminals.  Makes your morning departure out that much better.  One thing though, they used to have a revolving restaurant up top the main tower, but I've heard that was closed and the excellent restaurant that was up there has been reopened on the lobby level.

Well, that was a short look at Houston, Texas; now giddey up and c'mon down!

Thursday, November 12, 2015

Clutch City, Baby! A Gold Standard Look at Houston, TX Pt. II

Now that we’ve taken a glance Downtown, let’s head on out to the highway (shameless Judas Priest plug), down the I-45 freeway (that bane of most Houstonian drivers), to Clear Lake, Kemah, and Galveston. 

First up is Clear Lake, home to the National Aeronautics and Space Administration, or NASA for us laypersons.  Clear Lake is home to the Johnson Space Center, which houses Mission Control, Space Camp, and other divisions of NASA.  Boeing and Lockheed-Martin also have sprawling facilities in Clear Lake.  Because of these high tech industries such as Space Exploration, Oil, and Mining, Clear Lake has a high population of engineer level employees.  Some notable residents of Clear Lake are WWE Hall of Famer Booker T, Princess Mary of Denmark, and Ellison Onizuka, one of the 7 astronauts on the ill-fated final launch of the Space Shuttle Challenger.

Clear Lake City, or a good portion of it, was developed on top of the former Clear Lake City STOLport (Short Takeoff/Landing), a private airfield run by Houston Metro Airlines, and was located on Highway 3, just South of Houston's Ellington Field (where you can see the Wings over Houston Airshow).  The airline once ran up to 22 daily roundtrip flights between the STOLport and Houston's Intercontinental Airport, but shut down in 1993.  The airfield was abandoned and now no trace of it remains in Clear Lake.  

Aside from the Wings over Houston Airshow, other goings on in Clear Lake are the Bay Area Houston Ballet and Theatre Group's performances, as well as the Clear Lake Symphony's music.  The annual Ballunar Festival takes place for the hot-air balloon fans, as well as the annual Gulf Coast Film Festival for movie buffs.  For the nature lovers out there, there is the Armand Bayou Nature Center, the largest urban wilderness preserve in the United States.  Its 2500 acres is home to 370 species of birdlife, mammals, reptiles and amphibians.

Staying in the area is a less costly than downtown, but that's not to say you'll be shacking up in a cheap motel on a dark desert highway!  My personal favorite place to stay around NASA is the Hilton Houston NASA Clear Lake (say THAT 3 times fast!), and their spacious rooms and great line of amenities and services.  Just across the street from the Johnson Space Center entrance, the Hilton strives for excellence with its lakefront setting just 20 minutes from Hobby Airport or 45 from Bush Intercontinental Airport (in good traffic of course!).  

Down the road from Clear Lake is Kemah, and its infamous entertainment venues.  Believe it or not, Kemah had its start in tourism during the 1920's  as an "investment" from the Maceo crime syndicate, which also ran Galveston Island around that period.  The syndicate built lavish casino venues on the boardwalk which prospered until the Maceos were brought down by the Texas Rangers in the 1950's.  Along the same time, commercial fishing fleets began to call Kemah home as the Clear Creek Channel opened.

In the 1990's tourism once again boomed in Kemah, thanks in part to the opening of several Landry's Restaurants chains.  The restaurants opened up right on the Boardwalk where casinos used to stand.  More restaurants came, then amusement rides began running on the Boardwalk (my personal favorite is the Boardwalk Bullet, a Roller Coaster that rises 96 feet high and goes faster than 51 mph), oh, and right smack dab in the middle of the Boardwalk...the Boardwalk Inn.

Each one of the 52 rooms comes with its own balcony so you can look out over the Boardwalk waterfront and even out towards the Galveston Bay channel.  I haven't had a chance to stay here yet, but its on my bucket list!  I have however, traversed the Boardwalk from one end to the other, and it has been rightfully picked as one of the best entertainment areas in the United States!

Moving right along!

Head down the Gulf Freeway to its very end and you come to Galveston Island.

The original "Island of Doom", named thus by explorer Cabeza de Vaca after being shipwrecked there in 1528, Galveston has been making seaworthy news ever since.

Originally established by Mexico in 1825, and its first Customs House built in 1830, Galveston has always been a burgeoning seaport and even served as the capital of the Republic of Texas in 1836 when interim President David Burnet temporarily moved the government there.  Along with being the first Port of Entry into Texas, other firsts include the first Post Office and Naval Base in 1836, the first Masonic Order in Texas in 1840, the first cotton compress was built in 1842, the first Insurance Company was formed on the island in 1854.  Galveston is also the site of the deadliest natural disaster in US history.  On September 8, 1900, a hurricane made landfall on the island, and after all was said and done, somewhere between 6,000 and 12,000 people were lost.  In most official reports though, the number lies around 8,000.  As a result of the storm, a seawall was built 17 feet high and 10 miles long.

During the 1920's and 1930's, Galveston broke out as a major tourist destination, even though Houston to the north had developed into the major metropolis following the Great Storm of 1900.  Under the influence of the Maceo syndicate, the island exploited the Prohibition of alcohol and gambling, offering adult entertainment to wealthy Houstonians and out of towners.  Along with prostitution, Galveston has become the "Sin City of the Gulf".

After World War II, along with the major withdrawal of US Armed Forces being based at Galveston Airfield, and multiple massive raids by the Texas Rangers, tourism to the island dropped significantly, crashing the local economy.

Enough history, let's get to whats going on now.

Since the 1950's preservation of the past and new growth for tourism has exploded on the island.  Attractions, restaurants, and hotels were built, and crowds, both local and out of state, made Galveston their second home.

So now you want to visit Galveston?

Let's start with lodging.  I've stayed at the very best property on the island.

Welcome to the fabulous Moody Gardens Hotel, set in the massive 242 acre Moody Gardens education tourism park.  The rooms are set with a tropical ambiance and are spacious and quite comfortable.  Depending on your room, you have amazing views of the Moody Gardens pyramids, Galveston Bay, or the inner island.  My favorite perk of this hotel is the 12PM check out, allowing the guest to sleep in after a day of adventure on the island or in Moody Gardens.  Also, the nightly rates are not bad at all!

So now we have our lodging, what's there to do besides the Galveston State Park and its beaches, or the amazing Moody Gardens?  Well, you have the Galveston Arts Center, which just moved back to its original location in the First National Bank building on the Strand, built in 1878.  There's also the huge Schlitterbahn waterpark, and if you're on the Island at the right time of the year, there's the ArtWalk that covers several areas of the island, although the majority is centered downtown.  You've also got the Galveston Symphony Orchestra and the Galveston Ballet as well.

So, if you're looking for somewhere outside of Downtown Houston with a beachfront, come on down to the "Playground of the South"!

Friday, October 23, 2015

Down on the Bayou: A Gold Standard look at Houston, Texas Pt. 1

A lot has been written about big cities in the United States such as New York, Boston, Washington D.C., Dallas, Los Angeles, and so on.  But let me tell you about one of my most favorite cities, one I was proud to call home for 2 years, and still consider myself an implant of.  It's also called Space City, Clutch City, H-Town, Magnolia City, or the Energy Capital of the World.  It has a higher percentage of Fortune 500 companies based in its city limits than Dallas, Chicago, and Boston combined.  A population of six and a half million people.

Welcome to Houston!

Founded in 1836 on the banks of the Buffalo Bayou, Houston was named after Republic of Texas President Sam Houston, who was also a commander of the Texas forces and largely responsible for the victory of the Battle of San Jacinto, about 25 miles East of where the city was established on June 5, 1837.  Due to its location, shipping, oil, cotton, health care, and numerous other industries have popped up, not to mention a vast melting pot of cultures have adopted Houston as a home away from home.

Depending on how you enter the city, whether it be by air (2 airports to choose from, Bush Intercontinental Airport to the North of the city, home to every airline but Southwest, which calls Hobby Airport South of town it's domicile), by road (I-10 from East to West, I-45 from Dallas and points North), or rail (Amtrak has tons of service), you'll soon find the hub and spoke loops of the 610, and Beltway 8 among the myriad exits heading into the city or the outlying suburbs that seemingly stretch for miles.

Aside from the urban sprawl and mind numbing traffic, Houston is my favorite US City for its myriad activities and goings on, and some of the down right most hospitable people in the entire state of Texas, and what has to be the most gorgeous city skyline, especially when lit up at night!  In the area, you have an abundance of museums, event venues, world class golfing, the absolute BEST rodeo, a short drive to the Gulf of Mexico and some awesome beachfront, and an amazing collection of cuisine from around the world.

Some of the biggest and best teams in various leagues call Houston home.  For starters, the National Football League's (NFL) Houston Texans reside at NRG Stadium (formerly Reliant Stadium).  The twice-Major League Soccer (MLS) Championship Houston Dynamo punt from their digs at the beautiful new BBVA Compass Stadium just outside downtown, the multi-time NBA Champion Houston Rockets shoot hoops from the sprawling Toyota Center, while the historic Houston Astros blast away from Minute Maid Park (formerly Enron Field), which replaced the former home of the Astros, the Astrodome, in 2000.

A King Bed room at the Sam Houston Hotel
(c) The Sam Houston Hotel
As far as places to stay, it depends on the area you are in.  If we start from downtown and move out, you have some very upscale and chic boutique hotels that are more often than not affordable.  Places like the Sam Houston Hotel at Prarie and San Jacinto streets, or the Magnolia Hotel at Fannin St and Texas Avenue, with their ultra luxe rooftop pool and some killer views of the city.  Or you may want to try the Hotel ICON, a Marriott property, that was built into a bank from 1911.  It sits at the corner of Main Street and Congress Ave, and is well worth the nightly rate.  If you're in town for one of the many conventions at the George Brown Convention Center or catching a game at the Toyota Center or Minute Maid park, the Westin Houston Downtown at Texas Ave and Crawford Street is the place to stay, just across the street from Minute Maid Park, or just a short walk to the other venues, including the amazing Discovery Green park.

And speaking of parks, museums and other places to check out in downtown, there are plenty.  My favorites are Discovery Green, with it's 12 acres of greenery, man made lake, dog runs and jogging trails right in the middle of downtown, the Bayou Place, on the west side of downtown, where the Angelica Film Center, Verizon Wireless Theatre (where I've been to numerous concerts) and Hard Rock Cafe call home, right in the center of the Theatre district.  There's the Central Library at 500 McKinney, across the street from Houston City Hall and Sam Houston Park.  Don't forget the Downtown Aquarium, with a 500,000 gallon underwater sea life complex that houses over 200 species of aquatic life.  Another place I loved walking around and enjoying the view from was the circular skywalk connecting 1400 and 1500 Smith Street, the former Enron towers.

So you've got the sights in, you've got lodging, and now you want food, too?  Well, you're in the right place, the downtown area has some of the best eating establishments in all of Texas.  From the myriad food truck offerings while you walk around downtown (Bernie's Burger Bus, Foodgasm, and Pink Taco Bus are my top 3 faves), to the killer steaks at Vic and Anthony's Steakhouse, or for a true South Texas fillerup, Whataburger has several locations inside the Loop, you're sure to find something to kill that hunger and leave you wanting to come back.

As far as tours go, Houston has you covered.  Take your pick from a myriad of bike tours (either guided or unguided), Segway tours, from points around the city, boat and kayak tours around Buffalo Bayou, behind the scenes tours at Minute Maid Park or the Toyota Center, or the ever popular pontoon boat tours of the Waugh Bridge Bat Colony.  Needless to say, you wont get bored in Space City.

That's a quick look around downtown Houston, stay tuned for part II, where I take you from South Houston to Galveston Island and all points in between, next week!

Tuesday, September 1, 2015

The perils of Pride: Flying the Flag vs. a Known Factor

As a reputable Travel Counselor, quite often I see travelers book tickets on new startup carriers that offer non-stop service or low fares (or both) to their homeland.  More often than not, they don't ask much, and they get there and back safely, and on time.  For a few seasons, anyways.  Then there's the nightmare startups.  The fly by night operators looking for a quick buck being bilked off of their passengers sense of civic pride or frugality, or any other reason under the sun.  Like SkyGreece Airlines. 

SkyGreece started off with good intentions, for sure.  To connect the Greek diaspora in North America to the homeland with, eventually, year-round service.  TONS of PR went out in cities such as Montreal, New York City, Toronto, and in Athens, Greece.  Finally, year round connections to Athens from North America!  Screw Air Canada, Air Transat, Delta and US Airways (now American) for cutting winter flights!  The local Greek populaces were thrilled.  Everything looked like it was on the up and up.  Offices were opened in all of the cities that were being planned on, with headquarters in Athens.  Their first aircraft, a Boeing 767, was painted up with a giant Greek flag on the tail.  Parties were thrown all over Athens and Toronto when the plane did its proving runs.  To gain operational experience, SkyGreece flew charters for NATO and the United Nations out of Athens and Africa to the Middle East. Sure it sounds sketchy, but you have to start somewhere before anyone will let you fly the Transatlantic hops to the US and Canada.

The airline was formed by a former Greek Orthodox Priest and a restaurateur.  Other management types involved lower level airline people who really shouldn't have had that much responsibility thrust upon them.  The Priest could be seen on Greek news outlets touting "authentic Greek hospitality"  and "more luggage allowances than any other airline" or my personal favorite, "Greek Pride in the Sky"!  Revolting to say the least.  Which begs me to ask, what on Earth is a Greek Orthodox Priest doing in business for himself, AND in the TV spotlight?  Better yet, what sort of upper level management experience does this guy or the restaurateur have to think they can make a company as complex as an airline work?

Moving on. 

The airline started flying the Athens-Toronto route on May 23, 2015. Load factors were still off (flights averaged around 20 passengers per flight), but things were looking up.  Advertisements started appearing on Greek TV here in the states announcing new service between Athens and New York/JFK.  The airline launched Thessaloniki-Toronto, some flights operated with a stop in Budapest or Zagreb.  Management was living high on the hog.  Well, as with anything mechanical, things started breaking down.  Armrests went without repair and duct tape was seen applied throughout the plane.  Other problems kept creeping up.

June 14th, 2015 rolled around, with the 767 being readied for departure out of Athens, heading for Toronto.  30 passengers were on board the flight.  According to passengers on the flight, the plane had a hard time taking off, which is not unusual for a fully laden 767 in the middle of summer out of Athens.  What happens next is where things get dicey.  Upon climbing out of Athens, the pressurization never took hold, and from what it sounds like (speculation here), the cabin pressure valve may not have fully closed.  This has been a known issue on the 767-300 and a few other planes.  This kind of depressurization seldom occurs, but when it does, while it can be frightening for the passengers, is easily remedied and Boeing has a fix for the problem.  Whether SkyGreece did anything about it or not, though, is what I'm getting at.  As the plane climbed through 35,000 feet (FL350), the oxygen masks dropped and for sure the master alarm in the cockpit rang out.  From what has been garnered from the passengers, the masks that did deploy were brown, oxygen was NOT flowing, and a lot of tubes were tied together.  Not only is this bad, but it is illegal.  The crew made a rapid descent to 10,000 feet to equalize the pressure and keep the passengers from losing consciousness, all the while initiating a fuel dump to get to the legal landing weight for a return back to Athens. 

Upon landing, as is the custom with most every airline, the flight was met by the ground handling company, GoldAir and parked.  Here's where SkyGreece made mistake #1.  They knew the flight was on its way back.  They should have had their own representative at the gate making arrangements for the passengers along with the Goldair ground staff.  Instead, passengers were left in the dark about their situation.  For the next few hours, they fought with the ground handlers to give them any piece of info on anything ranging from finding alternate transportation back to Toronto, to a hotel stay for the night, or getting them onto the same plane after its been fixed.  No news was to be had from anywhere.  Eventually, SkyGreece did put the passengers up in a nearby hotel, and they returned to Toronto on Air Transat the next day.  The ordeal was something normal passengers don't usually go through, and some thought they might be in more danger and sent text messages to loved ones saying goodbye.  Some passengers have even required psychiatric help coping with the incident. 

During this time SkyGreece also wet-leased (complete with crew) an Airbus A330 to commence Athens-New York/JFK flights.  In all, only 4 complete flights ever flew before the leasing carrier took back the airplane due to non-payment by SkyGreece.  There are passengers out there with future tickets on the JFK leg that still have no idea about the implosion of SkyGreece and they are out their airfares.

Since the June 14th depressurization, the 767 has had a cascading dispatch reliability rate, with flights getting pushed back further and further, leaving hundreds of passengers with shattered travel plans.  On August 28, 2015, the other shoe dropped and SkyGreece stated that they have suspended all operations...temporarily.  In Athens, Budapest, Zagreb, and Toronto, hundreds of passengers had been waiting for the previous 2-3 days for a flight out.  

Several things could've been done by SkyGreece to remedy the backlash they so rightly deserve in the social media universe (check out the facebook group "SkyGreece Troubles", the Greek travel Pages facebook, any airline industry page, etc, etc).  They could have been upfront with their passengers, not just on the inflight emergency, but those with future flights.  Instead, management cowers behind the Canadian Transportation Agency and a small ethnic Greek newspaper called the Montreal Greek Times.  Speaking of this newspaper, the publisher's own words have admitted his association with the management of the airline, go so far as to label the former Priest CEO as the next Jesus Christ.  It really makes me wonder how much SkyGreece has paid this publisher to gloss over every event that has happened thus far.  It's almost as bad as the American media. 

That covers SkyGreece. With management so corrupt, crooked , and vile it is beyond criminal what they have done to the stranded passengers, not to mention the passengers of June 14th. 

Now, what a real airline will do for you when the chips fall.

For example, let's say you book Delta from New York/JFK to Athens. I use the US routing as that is what I'm extremely familiar with, having been an integral part in the launching of Continental Airlines' Newark-Athens flights back in 2008. 

In case of delay, Delta will do anything in their power to keep passengers in all classes updated on the cause of the delay and how long the delay will last, and get you on the way.  Or they will swap an airplane out (still a few hours delay, but better than nothing), waive change fees to other dates within a reasonable timeframe, or in the case of a major problem, they will issue hotel vouchers or put everyone up for the night in a nearby hotel, or at the very least, get people rebooked on Air France/KLM, or Alitalia that night.

In the case of an inflight emergency (thankfully Delta is competent, and these things rarely happen) the plane will return and be met upon arrival by the senior staff of the station and get everyone rebooked, set up for the night, or if possible, on the next flight out with one of the SkyTeam partners.  They will also refund the passengers, OR give them reasonable credits.  They will also dispatch crisis teams to deal with any issues that may arise.

That higher fare suddenly seems a bit more worth it, doesn't it? 

As a Travel Counselor, I do not book ANY clients on fly by night carriers such as SkyGreece.  I don't even put my family on those carriers.  I have flown a few of them though, for my own amusement, and luckily, I always have a backup.    Only once have I ever had to use said backup, but I'm glad I had it.  Instances like this also illustrate how important it is for travelers to purchase travel insurance for ALL International travel, no matter what carrier, no matter what the travel plans are.

Saturday, June 27, 2015

The failure of TWA: Setting the record straight

Nowadays, I go on to these pages where former TWA colleagues meet and chat, and usually, if you scroll down the page for a few seconds, you'll invariably come to an article written about activist investor/corporate raider, and, one time owner of TWA, Carl Icahn.  A handful of the folks who comment afterwards may have clicked and read the article, but, as more comments emerge, most have not.  Just the mention of Icahn's name sends many of the old timers into such a rage there's no reasoning with cold, clear logic or facts, no matter who wrote it.  It gets old.

It's time to set the record straight once and for all about TWA and it's demise.

TWA's corporate history began on July 16, 1930, with the merger of Transcontinental Air Transport (TAT) and Western Air Express, forced by the Postmaster general, Walter Folger Brown, who was looking to consolidate the air mail system into his vision of efficiency and speed.  There were three major transcontinental routes, the north route from New York to Los Angeles via Cleveland, Chicago, Denver, and other major cities, went to United.  The Southern route, through Dallas and other southern cities, went to American.  The central route, which only had Phoenix, Albuquerque, Kansas City and St. Louis as the major cities, with a LOT of small cities in between, went to TWA.

TWA has also had the knack of being the target of takeovers from the most extreme of investors.  From John D. Hertz, to Hollywood heavyweight Howard Hughes, to Activist Investor/Corporate Raider Carl Icahn.  They all had different reasons for their purchases, too.  Hertz was one of the initial investors in TAT and the Pennsylvania Aviation Industries Corporation, which merged to form Transcontinental & Western Air after the merger, run by Jack Frye.

From the very beginning, T&WA showed poor financial performance, losing almost $200,000 a month between 1930 and 1932.  Capital was pouring in from the creditors on record, and enough financing happened for TWA to phone the Douglas Aircraft Co. for a replacement for their aging and obsolete wooden airplanes.  The result was the DC-1, forerunner to the iconic DC-3.  TWA was run on a shoestring until 1939, when Howard Hughes bought a controlling interest, buying out Hertz and several other Board members and shareholders.  As time went on, he would come to own 78% of the total shares of the airline, and his stamp was on just about everything, Speaking of everything the airline had, every asset down to pencils and sharpeners were mortgaged to keep some part of the airline viable and flying.

During Howard Hughes reign, nothing was in the airline's name, except the employees.  The airline did not have one single solitary asset in its control.  Every last airplane, airport property, ticket office, desk was the property of Hughes Toolco.  Hughes was known for delaying flights because of a late running Hollywood starlet, or "borrowing" one of the airline's Constellations and flying it around for weeks at a time, when it was badly needed on the competitive transcontinental routes against American and United, or Trans-Atlantic against the god-awful Pan Am and foreign airlines.  A lot of TWA'ers look at the Hughes time with fondness and remembrance and nostalgia.  I do and don't for a variety of reasons.

Because of the immense amount of Hughes' holdings and iron fist control he had over the airline and every aspect of its operations, banks refused to lend TWA money for various reasons, whether to finance new airplanes, meet payroll, etc.  During the dawn of the Jet Age though, with the new jets being far more expensive than the piston liners they are replacing, the banks forced Hughes to put his shares up in a trust or sell his ownership of TWA, as they were not willing to play ball with him, or Toolco anymore.  In 1966, he was ordered to sell his control of TWA by the US Federal Court since he also owned Hughes Aircraft, and it was seen as a conflict of interest.  The sale emptied $547 million from TWA's coffers and put the airline back on the ropes, with new jet planes though, and a LOAD of bad debt.

Once Hughes' control was relinquished, then Chairman Charles C. Tillinghast, Jr. formed the Trans World Corporation, in order to diversify the airline into other businesses and bring in revenue during all four quarters of the year.  Alongside TWA, and using TWA's income for these purchases, came along companies such as Hilton Hotels International (the non-domestic hotels of Hilton), Canteen Foods, Century 21 Real Estate, among others.

My opinion on Holding Companies for airlines is mixed.  Mega Carriers like United and American are ok with them and work well in those tight confines.  Other airlines, like both iterations of Frontier Airlines, actually failed because of being set up in Holding Company formats, and management lost sight and control of what was going on.  The first Frontier Airlines filed bankruptcy and shut down, while the second Frontier filed bankruptcy and was absorbed by Republic Airways, Inc. and summarily spun off shortly afterwards.  Smaller companies don't need these structures.  TWA, at its size, sure as hell didn't need it either, as hindsight is always 20/20, TWA's revenues and income were what was funding the purchases of all these other companies, instead of running the damn airline.

Onwards.  The 1970's was a relatively quiet time for the airline, aside from massive overcapacity on its domestic 747 and L1011 flights, about the only thing the airline managed to do was change the flight attendant uniforms in rapid fire fashion.  No one at the airline gave the upcoming deregulation buzzing in Washington a second thought, in fact, most of the senior executives laughed it off or said TWA was too strong to be weakened by airlines such as Southwest or Midway, to whom it even sold its DC-9's off to.

TWA's route structure at the dawn of deregulation was anything but ready for the oncoming slaughter.  International flights were all routed through the already too-small Terminal 5 at New York's JFK International Airport, and the domestic system was routed through cities such as St. Louis, Chicago, Pittsburgh, and so on.  About the only thing TWA did during this time was begin building up a hub at St. Louis, and take delivery of MD-80's and 767's, while retiring the venerable Boeing 707's.  It managed to eke out small profits, and the parent company as a whole was profitable.

So profitable was Trans World Corp that it started spinning off the least profitable chunks.  TWA was the first one off the block in late 1984 and very quickly became caught in the cross hairs of Texas Air boss Frank Lorenzo.  TWA's unions and employees were so against Lorenzo owning TWA (he had deunionized Continental in 1983 using the US Bankruptcy System) they were looking for ANYONE else to outbid Lorenzo.  Waiting in the wings, was activist shareholder Carl Icahn, who had quickly grabbed a good 20% chunk of the outstanding stock.

Icahn immediately saw problems with TWA's management, and he publicly chastised upper management and began eliminating those who did not fit with making TWA a better performer for the shareholders.  That's right, companies are also responsible to their shareholders, hell, IT IS THEIR MONEY that keeps a company going.  Employees at the airline at this time couldn't fathom why Icahn was demanding cuts in labor.  In simple economics even a unionized worker bee can understand, there are people out there who will gladly work for less than one quarter of what your tenured paycheck is worth.  Simple economics, you will be paid what the market bears, not what some union shop thug says you need to get so he can hold a job while doing the least amount of work possible.

The spinoff from TW Corp and subsequent buyout with junk bonds couldn't have come at a worse time.  The airline, for the little long range planning that went on, was deep in the middle of converting its operations to a disjointed hub and spoke system with domestic operations centered in and around St. Louis, while the International system stayed at the iconic Terminal 5 (and Terminal 6 for a long while) at New York's JFK Airport.  In hindsight, this was a good and bad idea all rolled into one.  It makes no sense to fly someone to St. Louis, just to connect to a JFK-bound flight and then onwards across the Atlantic.  Lots of potential revenue was lost with this scheme.  Icahn's management knew this, and in the very early 1990's quite a few spokes were added to JFK to various cities, and a mini-hub was created in Atlanta after perennial loser Eastern Air Lines shut down.

A crippling 10-week flight attendant strike, constant hijackings and terrorist involvement, the purchase and merger of Ozark Air Lines and their aging fleet of DC-9's, plus the move to Icahn's private office complex at Mt. Kisco, NY all hampered TWA's success.  The intra-European services were dropped when the 727-100's were supposed to be replaced by DC-9's, but that fell through as the leasing contracts for the DC-9's specified they could not be flown outside the US while Icahn controlled TWA.  Around the time the DC-9 plan fell through, Icahn continued his purchase of TWA stock, both outstanding and privately held, in what amounted to an $1.2 Billion purchase deal, placing each share at roughly $20 each.  TWA went private on August 6, 1987; with the approval of the Board of Directors, all the union heads, and Icahn's private equity fund, as well as the Securities and Exchange Commission (SEC).

Let me interject here, about the pros and cons of taking (or keeping) a company private.  First, you are responsible to no one but your own creditors who helped you purchase the company.  For Icahn that would be almost a third of the Wall Street power banks, plus then king of the junk bond hill, Michael Milken and his brokerage house Drexel Burnham Lambert, who also helped Alfred Checchi buyout Northwest Airlines and Frank Lorenzo build up his Texas Air Empire.  Second, not a single soul on  Earth can tell you how to run your own company, and labor turns into a much larger liability.  There is no Board of Directors oversight, no shareholder revolt, and if the employees whine and go one strike, if you're unlucky enough to be unionized, you can simply shut the company down with zero responsibility.  Also, you and you alone can build the company up to any size you want, and if its good enough, will be profitable.  If not, you'll be another TWA or god forsaken Westinghouse.

On the other hand, seeing as to how highly capital intensive airline operations are, taking an airline private would be disastrous for anyone short of a Bill Gates, or Howard Hughes.  The massive amounts of capital needed to be freely open and accessible are far too much for a private owner for anything larger than a small outfit running 8 seat Cessnas.  Airlines simply cannot be run privately.

To keep a private TWA running, and to pay off creditors, Icahn did what the outgoing TWA Board signed off to.  If the airline does not perform to expected standards, Icahn has the authority and the right to sell off assets to satisfy creditors.  Once TWA went private, he set about doing so.  First went the outstanding orders for Boeing 767's McDonnell Douglas MD-80's, and Airbus A330's to replace the well past their prime Boeing 747's and Lockheed L-1011's.  TWA, from 1987 to 1993, when Icahn was ousted, took delivery of a grand total of 13 airplanes.  Several notes from his earlier purchase of TWA stock had become due, so Icahn had to find the capital somehow, so he emptied out and sold the pension funds, which as a private company, he was allowed to do .  Then notes from Drexel Burnham came due, to the tune of $445 Million.  Icahn sold 6 routes from the United States to London/Heathrow, then publicly stating he was going to use the funds to purchase the then on its deathbed Pan American World Airways.  Nothing doing, he was paying Drexel back.

In 1990 the first Gulf War hit, and the public almost stopped flying across the Atlantic, where TWA had previously been making money.  After the loss of the Heathrow routes, TWA could not make money Internationally if it tried.  So Icahn, trying to cut costs further, made TWA file for Chapter 11 Bankruptcy on February 1, 1992, being the 5th airline in 12 months to file for either Chapter 11 or Chapter 7.  Icahn went public and said "This was not one of my most stellar investments." citing he had also pumped in roughly $200 million of his own funds to keep the airline afloat during the Mideast hostilities.  Bondholders within Icahn Enterprises were asking for blood, the employees were also out for vengeance, and Icahn lost his total control of the airline once the Chapter 11 filing went through.

Under the proposed reorganization, bondholders agreed to $1 Billion in debt for 88% of Icahn's 90% control.  Supposedly that would have left TWA with $700 to $800 million in debt, at far lower interest rates than what the bonds called for.  It would have saved TWA almost $150 million a year in interest payment alone.  Until Icahn reneged and added a further caveat.of an additional $200 million, plus interest just to get him to leave.  The business plan going forward was to have revenues floating around $5.7 million, a virtual impossibility with one real domestic hub and a rapidly aging fleet.  Even Robin Wilson, who was an architect in Western Air Lines' massively successful turnaround in 1983 couldn't fix TWA.  So, on June 29, 1995, TWA filed for its 2nd bankruptcy, had $500 million in debt forgiven, and was saddled with the now famous Karabu Ticket Agreement from Carl Icahn.

What is the Karabu deal, you ask?  Let me tell you.  It actually began in TWA's first bankruptcy, as a way for Icahn's other travel related companies to bilk off TWA tickets at a lower fare for any flight not originating or terminating in St. Louis.  This eroded TWA's ability to control its yield per passenger.  This was one of the agreed upon deals made by then Pilots union rep. William F. Compton.  It made the $5.7 Million annual revenue goal further impossible to reach.  As a caveat to the 2nd bankruptcy, Icahn, by agreement dated August 15, 1995, lowestfare.com LLC, another Icahn subsidiary, was joined as a party to the Karabu deal.  Pursuant to the new deal, Karabu and lowestfare.com could purchase an unlimited number of system tickets.  System tickets are tickets for all applicable classes of service which were purchased by Karabu from TWA at a 45 percent discount from published fares.  In addition to system tickets, lowestfare.com was allowed to purchase bucket domestic consolidator tickets, which are tickets purchased at bulk fare rates, for specific origin/destinations.  These were capped at $70 million per year based on the full retail price of the tickets.  Pricing power evaporated from TWA and it was basically competing with itself.

In July 1996, TWA Flight 800 to Paris exploded on climbout from New York's JFK Airport.  The resultant investigation and cause led management to throw out then CEO Jeffrey Erickson, who had previously started up Reno Air, and replace him with William F. Compton, former pilots union boss.  First thing management did was order 125 new planes it couldn't afford.  Boeing 717's, more MD-80's, 757's and 767-300ER's were ordered, as well as 100 Airbus A320 family aircraft, in order to utilize non refundable deposit cash paid for the earlier A330 order from 1989.  The Europe routes were dismantled, save for London and Paris out of St. Louis, and the Middle East flights from JFK.  St. Louis operations were beefed up, focus cities opened up in San Juan, Puerto Rico; Washington/National, D.C.; and Los Angeles, California.  A massive code share with America West Airlines was initiated.  TWA began winning awards left and right for various reasons, including 3 JD Powers Awards.

As much as the turnaround was positive, there were negatives as well.  A single hub in St. Louis did not make sense for a primarily domestic carrier.  TWA had incredibly bad credit terms on the leases for their new planes and could barely afford to pay for them.  On top of all of it sat the Karabu noose.  When the Internet exploded in the late 90's and people began booking travel online, TWA was one of the last to jump aboard the bandwagon, meanwhile lowestfare.com was filling TWA's planes...and their own bank accounts.  It became clear that by the end of 2000,  not only was the Karabu sucking TWA dry to the bone, but it had sucked out the marrow as well.  The airline, with barely a  few million in cash on hand, and not enough to meet the next month's expenses, went looking for a partner.

In December 2000, it became evident to the Board of Directors that Bill Compton, while he did some good for the airline in the last few years, was not the person to lead the airline into this new century.  They quietly set about looking for a new management team that could garner support, find new financial backing, and instill a VIABLE operating strategy for the carrier as the countdown to 2003 (when the Karabu contract would expire) wound down.

Bill Compton, without the BOD's approval or knowledge, contacted Don Carty of American Airlines.  He brought a deal to the Board that protected not only their investments, but gave himself an equitable golden parachute, while letting American cherry pick which assets it wanted.

On January 9, 2001, the board of Directors at TWA met to agree on a structured purchase plan of certain TWA assets by AMR, Corp. Parent Company of American Airlines, and placed into a shell company named TWA, LLC, as long as TWA first filed for Chapter 11 protection.  Along with the bankruptcy protection was $300 million in cash, and another $200 million DIP (debtor-in-possession) financing from American to keep TWA flying through the bankruptcy proceedings.  When the court approved the sale, American had all of the operating assets of TWA, a vast majority of the remaining employees, and even agreed to partially fund their pensions.  More than $600 million in debt remained after the sale, but, that's a far better cry that $1.2 Billion.  The Karabu contract was invalidated, as were quite a few other bad deals TWA had made in its history.  The last TWA flight was December 1, 2001.  Some employees went to American, some did not, but that's a story for another time.

From what can be foretold here, TWA didn't fail because of one man, rather, it was doomed to fail from the very beginning.  Lack of cohesive management save for two people, Jack Frye, and later on, Ralph Damon.  That lack of  management through almost eight decades of flying are what killed our TWA.

Thursday, May 14, 2015

Aviophobia: A Fear of Flying

I recently helped one of my metalhead friends manage their fear of flying enough to get them to set foot on an airplane.  His fear stemmed from a childhood memory of watching some TV movie on the Air Florida crash in the Potomac River back on January 13, 1982.  Others I know have the fear from the Aloha Airlines roof detachment in 1988.  Very few though, attribute their fear to the cataclysmic events of 9/11 or other terrorist acts such as Pan Am 103's destruction over Lockerbie, Scotland.  

For me, flying is a religious experience.  I have my rituals I do when I get on ANY plane, such as patting the fuselage just behind the entry for my own vanity and good luck.  Also, I always try to get a window seat, so as not to get my knees run over by the carts when they eventually come by.  That, and I love a good window seat with a great view so I can keep my window shade open as the geography unfolds below me while I read my book or listen to my music.  Believe me, there is nothing better than watching our descent into somewhere spectacular like the old Hellenikon Airport in Athens, Greece; the approach into Beirut, Lebanon; or coming in over the hustle and bustle of a gateway like Los Angeles or New York/JFK.  I am at peace with the world while I travel, not so much on the ground.

As far as my friend goes, he was referred to me by a mutual friend, and I started chatting with him.  It's amazing the amount of fear childhood memories can have on grown adults (right, Pennywise?)!  I can understand, though.  You're in an aluminum can tens of thousands of feet in the air, with a little porthole to view out of, if you're lucky, and your life is in the hands of a seemingly competent professional who knows what they are doing.  Oh, and the plane you are on is of a certain age, or not, and you're up against the elements, kinda.  

We spoke at length about planes crash, why some of them did, the financial state of various airlines, how the whole traveling thing works, which airlines are safer, which ones have better customer service, etc. etc.  Me being the air travel guru, I had hopes that I put him at ease.  In most cases, a little education like this goes a long way towards helping someone overcome this phobia, or they get over it and take their first flight.  Others treat it it with drugs or alcohol.  My friend will be getting over it shortly after his first flight, which he booked with Southwest Airlines.  Good for him!

As for me, time to wrap up this blog and plan another trip with my wife, if anybody has any questions or needs help with this, hit me up!

Saturday, April 18, 2015

Flying with Blue: A candid look at jetBlue's A320

**Author's disclaimer:  The following post is my own opinion as an Independent Travel Agent, and not those of jetBlue Airways or Lakonia Asset Investment Company**

My last flight on jetBlue Airways was in 2005, and for good reason.  The same reason why I only flew them once before, in 2001.  The in-flight crews made all 3 segments I was on in both years the absolute worse inflight experiences I've had in my long life of riding around in rarefied air.  These crew of yore made the customers feel like they were the privileged ones to be flying with them, not vice versa, as it should be.  It left such a bad taste in my mouth both years that I swore not to fly jetBlue for a long, long time.

Now it's 2015.  Free flying on jetBlue is part of the perks of working for them.  So earlier this week I listed myself on today's morning flight (March 18th) to Long Beach, California, and returning this afternoon.  I not only wanted to see if the inflight attitude has improved, but also give a fair and balanced review of jetBlue's Airbus A320 offering, seeing as I sell them for jetBlue, and within my own Travel Agency as well.

Check-in in Salt Lake City is a snap, considering how small jetBlue's operation is.  The ticket counter is in the far South Side of Terminal 1, just past Southwest's massive digs.  It's small enough you might miss it if you're not careful.  The kiosks jetBlue use are painless and even if you're flying standby, check in and printing of your boarding pass is simple.  As it should be.

The line at Security was extremely light for a Saturday morning, and I breezed by, and on my way up to the Gate.  jetBlue's gate is A4, a relatively short walk from the Terminal 1 escalators past security.  Plenty of room to stretch out and relax while waiting for one's flight, as the only airlines in that part of the concourse are Alaska Airlines down in the rotunda and American Airlines on the South Side, covering A1, A3, A5, and sometimes A7 (which Alaska uses frequently, and even jetBlue still uses during double enplanement operations).

About 35 minutes before boarding the gate agent showed up, and I went and introduced myself and asked if its possible to find out what seats are open.  He not only told me, but he even assigned my seat right there.  He gave me an excellent window eat, 10A, an Even More Space(TM) seat in the Emergency Exit row.  My traveling cohort, Justin, showed up and got 10C, with the middle seat between us empty.  Awesome.

Boarding went by quickly, and as we got on the flight, we were greeted by the crew, who recognized we were employees and greeted us like long lost relatives.  A far cry from the snobbery of the past.  Justin, his first on a plane in a very long time, got the invite to take a seat in the cockpit of the A320 (did he notice theres no control yoke?) while I took a few snapshots of the empty cabin.  As usual in most jetliners of the A320's size and mission profile, the seating is 3x3, separated by the aisle that is 18" wide.  The normal pitch between seats is 34", while the Even More Space seats are a marvelous 38".  Brilliant for a guy as tall as me.  Oh, and the A320 is also wider than the Boeing 737 and Boeing 757, its closest competitors, translating into an extra 6" shoulder space per seat.

The customers boarded and we pushed back from the gate a full 9 minutes early, and off we went.  After a brief pause on the runway to allow for an aircraft that just departed some space, we hurtled ourselves into the air and turned to the South for the hour and a half jaunt to Long Beach.  We settled back and enjoyed the view and flipping through the 36 channels of Live DirecTV.  I myself kept the TV in front of me pegged to the Inflight Map and the window shade up so I can see the geography of the West spread out underneath.

The cabin crew came by with the snack service, or if you prefer, the buy-on-board options.  I picked one, and, as custom for me, examined it, photographed the box and contents and enjoyed.  One flight Attendant came by and took our drink orders, then came back with a drink tray, much like the ones in use on Virgin America and Air Algerie, among a host of other French carriers.  I was suitably impressed, having been used to the metal carts click-clacking in the aisle and destroying kneecaps.  Another thing I've noticed, the crew have their own zones of rows.  I like this,  Makes it feel a LOT more personal and friendly.  No wonder B6 (jetBlue's two-digit IATA code) keeps raking in the JD Power awards.  Alaska Airlines, take note, you have a few things to learn from these guys!  Also, jetBlue staffs their cities with their own people (except for a few spots not in the public direct, like the ramp), Legacy carriers listen up!!

The seats are all covered in leather, which makes for easier cleaning, and are comfortable.  The 1:47 hop passed by fast and next thing we realized, we were on the approach into Daugherty Field!  The captain must've been ex-Navy, as he slowed our winged chariot FAST and pulled us into the gate a whole 16 minutes early.  Deplaning in Long Beach is a bit different than most major airports nowadays, and hearkens back to a time when flying was glamours, worth getting dressed up for, and a family event.  The stairs were placed against the L3 door, at the rear of the plane, and a ramp was placed at L1, in the front, for those passengers who may have a rough time with the stairs.

All in all, jetBlue has most definitely improved their product since those early years, and is now in its 3rd management cycle (long time CEO and one of the original founders of jetBlue, Dave Barger, just retired from the airline, leaving behind a legacy of growth, thrivability, and record profits while other airlines struggled to keep afloat).  The seats are just right for any flight under 6 hours, and I don't hesitate booking jetBlue passengers on these planes, nor my own high end clients.

Wednesday, March 18, 2015

The "new" American Airlines: Reviving Something Special in the Air

As promised in December 2013, I'd update you on the merger between US Airways and American Airlines.  So far, repainting of the US Airways fleet is continuing, some interesting new routes have popped up, including my personal favorite, Miami-Salt Lake City, with a Boeing 737-800.  It's a red-eye, but it's a start.  With the loads I'm seeing, I'm hoping they'll add a second daily flight in the daytime.
Both carriers have replaced their aging Boeing 767-200ER fleets (American has replaced them with the uber-amazing Airbus A321T on the JFK Transcons) while US Airways have upgauged previous 767 routings with Airbus A330's, while lesser demand routes have the 757.  The Legacy American side is currently in the middle of a protracted retirement plan for the workhorse MD-80's, while US Airways is retiring the oldest 757's and A320's, while taking delivery (with new American colors) of new A321's and A330's, as American keeps receiving new 737-800's, A319's, A321's (both standard layout and 321T layouts), 777-300ER's, 787's, and the amazing new Airbus A350-900 (slated for delivery in 2017).

On the real estate side, both carriers have for the most part either combined their gate areas, or have come next to each other, to make connecting between flights easier (you should see some of the routings I've personally witnessed), while ticket counters and baggage service counters are still either independent of each other until the single certificate is issued, or semi-combined with the new American branding and layout with a smaller tag line underneath stating "Also serving US Airways".  

On Board, American Way magazine has taken over on the US served routes, meal/serving times have all been aligned, and boarding and deplaning have equalized across both airlines.  Elite Frequent Fliers can now use their status from one airline on the other, and upgrades have now been extended to the US Airways Dividend Miles members.

Speaking of Dividend Miles, as of today, March 18, fliers can no longer sign up for the Dividend Miles program and are being directed to apply with American and their award-winning AAdvantage mileage program (https://www.aa.com/AAdvantage/quickEnroll.do), which is one of the best non-revenue based accrual programs out there.  Heck, it made me jump ship from Delta after Delta jacked up their SkyMiles program and watered it down by charging more per mile.

Both airlines are still using their respective websites while they are both still using their own reservation systems, however that will change by the 3rd quarter of this year, along with finally receiving the single operating certificate to become the new American Airlines.  

Is Doug Parker really trying to make American Something Special in the Air again?  Time will tell, but so far, he and his management team, and everyone on down to the last gate agent and ramp rat, are working their asses off to turn this historic company around.  So far, they seem to be do everything right, and have made me a fan. Keep up the good work.

Monday, February 16, 2015

SkyMiles, SkyPesos, or SkyRubles?

I've had it.  I've jumped ship.  I don't give a damn that I live in one of Delta's fortress hub cities, I've ditched them for American Airlines.  Not because of bad customer service, or lost luggage, or anything like that.  I'm jumping ship because Delta does NOT value my hard earned dollar like it used to.  I'm sorry, all my widget-loyal friends, but I cannot stand to see the value of my SkyMiles get watered down further.  I just don't spend that kind of money per ticket, per year, yet.

What do I mean by this rant?  Let me spell it out.  Last March I blogged about Delta announcing changes to its award winning SkyMiles program, one that I was loyal to for a few years, and how it is more loyal to fliers who spend more money per ticket, thereby making the miles worth less per dollar, than to those fliers who don't spend quite so much to amass their miles, such as myself.  

A few days ago, Delta made a few small changes to this new policy, one that has further infuriated frequent fliers, and I haven't stopped hearing of the complaints from my clients.  One change is that Delta has upped the ante and now you have to fly 30 qualifying segments to hit Silver Medallion Elite status, or earn 25,000 qualifying miles PLUS spend $2,500 qualifying dollars.  This may not seem like a lot, but when Delta also announces that each dollar is only worth 2.2 miles, well, it becomes ludicrous.  Let me give you an example:  I'm flying from Burbank to Salt Lake City on March 28, and the fare is $191.  The mileage I'll be accruing is 509 miles, but only 317 are Medallion Qualifying, and only $79 of the fare is Medallion Qualifying.  See how someone could think that is a rip off?  

Luckily, this is the smallest segment of a larger trip to and from New York City.  Am I about to spend my hard earned money on Delta's longer flights?  Not a chance.  I'm flying on US Airways to JFK (due to time constraints), American to Los Angeles (how can you say no to those new A321T's?), and back home on Delta, only because of the time constraints and having to be back at work in the late morning on the 28th, otherwise I'd wait and fly on American or jetBlue up to Salt Lake City.

Another change Delta is making is increasing the fee for using those watered down miles.  This is what is infuriating my clients the most.  Its already pricey to use the miles, why the hell would Delta penalize the lower end just to make a few extra bucks?  Beats me.  But United does the same, and now Southwest has jumped on the bandwagon.  At least, for the time being while the merger is sorting itself out, American is not touching their legendary AAdvantage program, and I like that kind of stability.  It's making it worthwhile for me to earn miles on American, even if I have a lack of nonstop options out of Salt Lake City, I don't mind connecting.

Saturday, January 24, 2015

Alaska Airlines: Has the Eskimo had it?

Things are heating up in Seattle.  Things are heating up in Salt Lake City.  Oh, and in Los Angeles, too.  Delta Air Lines, for the last year or two has been building up a true Pacific Gateway Hub in Seattle/Tacoma, seemingly almost smack on top of Alaska Airlines' route map, with additional Trans-Pacific legs as well.  At last count, quite a few formerly loyal Alaska fliers have jumped ship and begun utilizing Delta more with their vastly larger array of routes, options, and worldwide access.

It all began when Delta announced a downsizing of the former Northwest hub at Tokyo/Narita, and a buildup of Transpacific flights from Seattle.  Some wondered why not do them out of Salt Lake City, where Delta has their fortress hub?  Well, altitude for one.  The A330's, 767's and 777's that serve Asia would ALL have to be weight restricted and cargo restricted on those hot and high summer days in Salt Lake City's elevations.  Seattle, on the other hand, is at sea level, and a much shorter distance to Asia than Salt Lake City is.  Heck, the Salt Lake flights would have to overfly Seattle on their way to Asia anyways.

In addition to starting multitudes of Trans-pacific flights out of Seattle, Delta wasn't going to stop there and hope for the best.  Oh no, how would they feed all those jumbo jets heading to the Far East?  Why, with local traffic, AND connecting traffic too! Delta began flying non-hub cities such as Ketchikan, Juneau, Anchorage, Sacramento, San Francisco, and more, right on top of the flights Alaska Airlines already operated as part of their codeshare with Delta.  Well, when push came to shove, what did Alaska do?  They fought back.

Alaska already had flights to Salt Lake City from Seattle, so why not do a roundabout to Delta and see if we cant kick them where it hurts in one of Delta's most protected hubs, Salt Lake City?  Flights began to Boise, Portland, Las Vegas, San Francisco, San Jose, Los Angeles, and San Diego.  Salt Lake City's Concourse A is bursting at the seams with all the new flights, or is it? Average loads are only in the 30% range?  How can this be?  I'll tell you why, and what's wrong, and what Alaska should do about it.

I have taken a grand total of 7 segments on Alaska in the last 2 months.  This surely does not make me the expert on the airline others most definitely are.  But I was observant from check-in to baggage claim.  I paid attention to the smallest details.  There were things I saw that I liked, and others not so much.  Let's take it from the top.

Outstations like Salt Lake City are outsourced both above and below wing.  You guessed it, all those people you see wearing the Alaska uniform are not actual Alaska employees.  Heck, in Salt Lake City, there's only 2 people who are actual Alaska folks, the City Manager and his assistant.  You'll never see them out at the counters or gates. Depending on who you get to help you check in or tag your bag, you may get the full real Alaska reputation, or, you may get someone who could care less if you fly Alaska or any of the other airlines in Terminal 1.  They are simply there for the paycheck.  They don't give two shits about you, or the Alaska experience, or if they treat you so bad you desert Alaska and fly someone else.  Not a good sign.

Stations that have actual Alaska employees are, for the most part, OK.  But in my travels, I have noticed some of their own self-proclaimed "best" employees, are some of the worst people in front of passengers.  In San Diego for instance, one black employee, who was touted as one of the best, and frequently gets sent to Seattle as a trainer, was so condescending and rude to not just me, but to the rest of the passengers on our flight to San Jose, and onto Salt Lake City.  She made each and every one of us on the flight feel like it was a privilege that we had booked with Alaska and were in her presence, instead of the other way around.  A pure diva princess.  A few weeks later I flew through San Diego again.  Same agent at the ticket counter and at the gate.  SAME ATTITUDE.  I told her straight up I want her fired and will stop to no end to see that it happens, and save Alaska from the heartburn of mysteriously disappearing bookings and dwindling passenger loads.  People like that have no business being in front of the traveling public, especially when your carrier is in a life or death struggle against a far bigger, more powerful and more financially secure competitor.

In late March of 2014, I had the distinct pleasure of meeting Alaska's CEO, Brad Tilden, and having lunch with him.  He said the biggest problem he sees at Alaska is trying to keep the same family style environment that had served the airline so well for decades.  I told him the fastest way to lose it is the outsourcing.  He nodded in agreement, took a few notes and told me that the sub-contracted employees all get sent to Seattle for a week of training in Alaska procedures and style.  I told him straight up that might work for about half of each class, but I'm willing to put money down 75% or more of those subcontractors don't give a shit and will screw around in training, while in Seattle, and when they get back to their station, continue screwing of and not fully giving their all for the Alaska passenger.

So, with all those problems on the ground, what should Alaska do?  First off, get rid of the subcontractors.  Hire their own people from within at those wage levels in each city, with all the benefits other Alaska employees receive, or not, and enlarge the training sessions to a full 5 days with tests at the end of each day, and practice at the terminal at SeaTac.  Continue monitoring them for their 90 day probation, and make sure the consistently live up to the Alaska promises.

That's what Alaska needs to win this war with Delta, and as the airport director in Seattle said, "there's room for both carriers to have a hub".  Will Alaska succumb to Delta and merge or go broke?  It's far too early to tell, and Alaska continues reaping profits, although they continue getting smaller and smaller.  When it comes down to the wire, I certainly hope Alaska turns around and brings all stations in house.  Only then will it win against the mighty Widget.