JUNE 27, 2008

DELTA CHARGES FOR AWARD TICKETS. By now you’ve received the blast email from Delta regarding its new $25 (domestic) $50 (int’l) fee for award tickets for tickets booked after Aug 15. Folks, this is one of a long string of examples of the diminishing returns of frequent flyer programs. As we have said in the past, if you are banking miles for the future, you are losing value. Redeem your miles now, all of them, as their value is going to continue to decline with moves like this. Remember, you have agreed to terms and conditions that allow airlines to make any changes they feel like, even retroactively, with your hard earned frequent flyer miles. US Airways already charges for award travel and we expect other carriers to embrace and match this new fee with vigor. We’re afraid that that whole frequent flyer game is nearing “game over.” Delta’s Jeff Robertson explains the move to TICKET readers: “As you know, we're in a situation where we must work quickly to adjust to the record-high and continually rising cost of fuel. The price of fuel has nearly doubled since this time last year, causing considerable financial stress to our business. We are implementing initiatives across all areas of the company to help mitigate the impact of fuel costs, including adding this fuel surcharge on award tickets. Our hope is that this surcharge is temporary, and should fuel prices subside from current levels, we will reevaluate it.” (emphasis added by us, since we expect this charge to be permanent…) What do you think? LET US KNOW and we’ll post your comments in a future issue.  

PROFITABLE QUARTER FOR AIRLINES? YEP. Despite all the tumult and teeth-gnashing, Delta says that it expects a profitable June quarter. It also said that despite the run on fuel, it expects to end this year with $3.2 billion in cash. Last Spring, Delta CEO Richard Anderson said that airlines would have to increase fares by 15-20% to survive the current spike in oil. Guess what? Airlines HAVE raised prices by an average of around 20% according to multiple sources. Demand has not tanked. The higher fares combined with the new buffet of obnoxious fees lead us to believe that the airlines might be doing a little better than they are letting on. What do you think? LET US KNOW.  

WI-FI IN THE HIGH SKY. We have always been super skeptical of claims by airlines that they were going to offer real wi-fi access on planes—wi-fi as good as we can get at Starbucks or in our rooms at the Hampton Inn. Well, we are thinking that the newest iteration of in-flight wi-fi might be getting close to the real thing, especially after reading WSJ’s techie journo Walt Mossberg’s take on it. Here’s the deal: This month American Airlines is rolling out a new inflight wi-fi system on a single Boeing 767 flying between NY and LA and says more planes will get it in coming months. SF-based Virgin America says that it plans to begin installation of the system on its entire fleet in coming months. Both plan to charge $10-$13 per flight, depending on length. Now THAT’s a fee I’d be happy to pay. (No word from Delta or AirTran on plans to get wi-fi any time soon….)  

DELTA SHANGHAIS CHINA FLIGHTS. Delta’s long sought nonstop service between ATL and Shanghai (awarded just a few months ago) is already getting trimmed, from the current daily service to just five days per week starting Nov 7 2008.  


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SAT-NIGHT-STAYOVER IS BACK. It never went away completely, but the maddening Saturday-night-stayover rule for airlines’ most inexpensive flights is making a big comeback. Starting this October, United will imposed a one- to three- night, or weekend stayover requirement on its lowest fares. While Delta pretty much gave up on the onerous requirement when it installed “Simplifares” early this century, our bet is that they’ll embrace it once again as a way to squeeze more bucks out of business travelers whose work schedules (or lives) don’t allow for multiple night or weekend stays. Good news: Low fare carriers like AirTran, JetBlue and Southwest have not ever, and we don’t think they will start imposing such restrictions. That means Delta will impose them only on routes where they don’t compete with AirTran, which are few and far between from ATL.  In any case, this means a return to the practice of "back to back ticketing" in order to save.

CELL PHONES + DRIVING = ILLEGAL. Many business travelers or vacationers in rental cars might be unaware of new laws banning driving while talking on cell phones. These “hands-free” laws are already in effect in New York, Washington D.C. Chicago and New Jersey, and will start in California and Washington on July 1. Tourists in these hands-free areas must also comply with the new laws, so bring along that earpeice!

SALT LAKE – PARIS NONSTOP MORPHS INTO ONE-STOP. The Salt Lake City Tribune reports that Delta’s highly publicized “non-stop” 767-300 flight from SLC to Paris has actually had to stop in Cincinnati for fuel. Delta blames overweight planes and hot weather for the unscheduled stops…. 

DELTA SLASHES FLIGHTS IN ORLANDO AND LAX. Starting this fall, Delta will dump flights between Orlando and Nashville; Key West; Raleigh-Durham; Birmingham; Columbus, Ohio; Lexington, Ky.; New Orleans; Panama City, Fla.; Richmond, Va.; Louisville and Knoxville. From LAX, Delta’s cutting nonstop mainline jet flights to Boston, Hartford and Columbus. (This pretty much puts a nail in the coffin on Delta’s frequent attempts to make LAX some sort of secondary hub operation…)  


THE TASTE OF THE TICKET. "This was the first time I had experienced Singaporean cuisine, though I generally fancy Asian food.  I was not sure what to expect.  " Want to hear more? Then check out the latest dispatch from our fearless taste-tester in THE TASTE OF THE TICKET!   

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CONSIDER BOOKING HOLIDAY FARES NOW. If you know your plans for Thanksgiving or Christmas already, it might be time to go ahead and book your flights. Some spot checking on flights from ATL to NY during the weeks of Nov 23-30 and again around Xmas on AirTran are in the $300 to $400 range. Delta’s fares are significantly higher—in the $500 range. For Chicago, AirTran’s are $400-ish, but Delta’s are $550-ish. Flights from ATL to LAX and SFO are in the $500 range on both AirTran and Delta. As usual, peak days like the Weds before Thanksgiving or the Sunday after are higher. But with fares expected to continue their fast climb, now might be the time to lock in. (NOTE: Fares mentioned above we found on Friday June 27 and are subject to change.)  

SOUNDS LIKE ATL IN 1996. Remember when everyone in ATL thought they’d cash in on the Olympics and rent out their houses as B&B’s? When hotels jacked rates up wildly? Remember how let down everyone was with the thin crowds? Same thing is happening in Beijing. And they don’t even have someone like ex-mayor Bill Campbell to blame. From a recent AP story on the sorry state of Olympic tourism: “The 17-day games [in mid August]were supposed to generate a buzz throughout the summer, leading to a tourism windfall with fully booked hotels, flush customers and a jubilant atmosphere. Instead Beijing's summer tourism season is slow, with hotels and travel agencies saying many potential travelers are being put off by tightening visa rules, polluted Beijing air and officials who seem more concerned with keeping out foreigners than welcoming them.” 

NEW MILEAGE RATES. From our crack accountants at 10-Key Solutions: “Effective July 1, 2008 through December 31, 2008, the new mileage rate is 58.5 cents a mile for business miles driven [up 8 cents from 50.5 cents a mile now], and 27 cents a mile for medical and moving miles. You should begin to collect two sets of mileage – one for miles driven before July 1 and one for miles from July 1 to the end of the year.  I know you ALL have those mileage books going!”


UPDATE: JUNE 4, 2008

AIRTRAN AND DELTA REPORT RECORD LOADS IN MAY. Who said travel is taking a nosedive? Delta reported record load factors for May (although total enplanements are down, but by less than 2% so statistically irrelevant.) AirTran also reported record loads for May, and an 8% increase in total enplanements. We know that airlines are taking a hit with oil prices, but what is up with all this bad news bears about people staying home this summer? It’s just not playing out in the numbers….

GOT A COMMENT, TIP OR ADVICE YOU'D LIKE TO SHARE? Email us and it could end up in a future issue of THE TICKET! Send yours to ticketatl@travelskills.com. Thanks!

 

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May 2008, THE TICKET Newsletter

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