Wednesday, April 29, 2009

Does the World Need First Class?

Does anyone really need first class seating and service? Wouldn’t it be nice to spread the wealth more toward the back of the plane?

It’s kind of like those arguments that Wall Street has been making saying that without obscene salaries and bonuses, the “talent” will go elsewhere. It’s claimed that the huge compensation packages are necessary to keep all the geniuses from abandoning ship and starting hedge funds. This, of course, referring to the brokers and wizards that got the financial industry into the mess it’s in – these being the same bozos that sank the whole world into the Great Recession.

OK. Now that that’s off my chest....
Qantas has said that they “have too few seats on some of our aircraft.” As reported in ATW Daily News, the airline has or will be removing some first class cabins, and reducing the number of business class seats so it can focus on economy and premium economy.

This makes great sense, even though in the fat times airlines made tons of money off first-class passengers paying thousands of dollars more than the price of an economy ticket. But now reports are that paid first class tickets are rare, and the airlines are filling those seats with upgrade passengers.

But the bigger question is whether the airlines – or the world – really need that level of ostentation. (Showers and casinos for first-class passengers, Mr. Branson?) We can only hope that the world will continue to be “a different world” after this financial wake-up call. We’re skeptical, but a more egalitarian world – with wealth and luxuries ratcheted down a bit and spread around a bit more – would be a wonderful place.

Sunday, April 26, 2009

New Credit Card for Old Northwest Visa Holders (and Others)

With Northwest being absorbed into Delta, the Northwest Visa that was offered by U.S. Bank will be disappearing – just like the terminals, signs, and paint jobs on anything that said Northwest. With that change, the only Delta affiliated credit card will be from American Express.

But U.S. Bank isn’t sitting still. If you’re a current Northwest WorldPerks Visa card holder, you should be receiving a new U.S. Bank FlexPerks Visa card – with the same account number (thus, no interruption in auto payments, etc.). Of course, U.S. Bank will also be offering the card to new customers.

The card is a “fake miles” card, which basically awards points you can redeem for a ticket on “more than 150 airlines.” The Signature Visa earns the equivalent of up to 2% return (“up to $400 ticket value for 20,000 miles”) and carries a $49 annual fee (waived the first year; also waived for $24K annual spending). There are also some bonus point categories and other perks/benefits. U.S. Bank also has a lower-tier Visa, with no annual fee but a reward ratio coming in at 1%. There is also a business Visa available.

It’s not clear how rewards are handled. The U.S. Bank website mentions redeeming via a user’s account page. This may mean that the card redemptions are similar to Capital One or Amex FreedomPass, where you receive a statement credit for a ticket purchase. Alternately, it may function more like the old Capital One or the current Merrill+ plans, where you need to contact the reward center to book a ticket.

Bottom line: 2% isn’t too bad, but you should be able to get that return or better with other cards. With this type of card, you generally need to redeem at the top of each reward level, or your reward percentage effectively declines. (Those 20,000 points are for a ticket “up to” $400 value. If your ticket only costs $250, you’ll still pay 20,000 points.) We’re less than impressed with these fake miles cards, but for some travelers they can be useful travel reward tools. Finally, if you’re a new customer interested in this card... wait a bit. The U.S. Bank website doesn’t yet even seem to have an application page available for this card.

Saturday, April 18, 2009

Capital One Updates

We’re still not huge Capital One fans, yet we get more inquiries about their credit cards than any other topic on this blog. So we thought it was time to re-survey their offerings and post an update.

As we’ve said before, we think their reward schemes are generally unimpressive (not bad, just not great). But they are also one of a very few cards that do not add foreign-exchange fees, making them a top choice for international travel. For most purposes, that’s the only time we use our Capital One cards.

Capital One’s website lists 28 different cards (yes, 28) and most seem like pretty much their old standards, but two new (to us) cards caught our eye.

  • The latest version of the No Hassle Miles Rewards card offers 2 “miles” per dollar after $1,000 a month in spending, with one mile otherwise. (Capital One “miles” aren’t real airline miles that you can transfer into an airline account. They’re simply points you can redeem for statement credit for ticket purchases.)
  • The Orbitz Visa Signature offers Capital One’s usual 1 point per dollar, except it gives you 3 points/dollar for purchases from Orbitz. In general, 1 Capital One point translates to a 1% rebate/travel credit. So if you use Orbitz a lot, this would be equivalent to a 3% return – pretty good in today’s reward environment.

Many frequent-flyer commentators value traditional airline miles at about 1.5 cents each. With real airline miles, you need to make sure you maximize your miles (ie: don’t burn 25,000 miles for a $200 ticket), or you could end up having less value than Capital One’s 1%. We, however, feel we use our airline miles at about 2 cents each, so with other types of reward cards for cash or points, we look for a 2% or better return.

We’ve discussed points/miles/reward cards frequently. Browse through our archives on the topic, and you’ll also see some suggestions for cards for international travel.

Thursday, April 16, 2009

Rip-Off Alert: EarthLink Internet Services

On one of our recent travels, we spent a month in a location where we couldn’t easily get wireless or other high-speed internet service, but which did have a landline phone. We researched options, and settled on EarthLink’s dialup internet – for one month of service.

We did NOT set up recurring service, but EarthLink continues to charge our credit card (and we continue to contest the charge). EarthLink has not responded to our cancellation and refund requests, and their only option for cancellation is via postal mail.

So we’d suggest: 1) As always, Buyer Beware, and 2) Avoid EarthLink. If you’re looking for short-term or dial-up internet options while traveling, look elsewhere.

Wednesday, April 15, 2009

Opinions About a la Carte Pricing

There’s been a lot of back-and-forth lately in the travel media about fee-based ancillary revenue. It’s frequently called an “a la carte” pricing strategy – sell a basic ticket, but charge extra for checked bags, a preferred seat, meals, etc. These being aspects of the travel experience that the airlines now believe are optional.

Some commentators suggest that in many cases the added fees are the only revenues that are keeping some airlines alive. And of course, Europe’s Ryanair has been successful from the beginning with a model that stresses seemingly dirt cheap fares, but the customer pays for EVERYTHING additional – seat selection, baggage, food. It’s gotten so extreme that Ryanair itself had a tongue-in-cheek contest last month asking consumers what they thought the airline should charge for next.

But that’s the Brits, and if you know the Brits, you know that they have different expectations about the travel experience than Americans do. So from a U.S. consumer standpoint, the biggest challenge with varying add-on fees is comparing apples to apples. Only a few new “metasearch” websites are just now beginning to experiment with showing fares plus add-on pricing options.

Our view is that the airlines at some point risk alienating their customers so much that there will be a backlash. But then, unless everyone starts flying Southwest (with their wonderfully transparent pricing and terms), consumers don’t have many options as long as every other major airline is playing the same game. (Of course, domestic dinosaur airlines have been alienating their customers with awful customer service for years now. That culture is so ingrained that it’s hard to conceive of how they can alienate customers even more. Joe Sharkey just posted a great article on that topic.)

So is this an opportunity for one airline to differentiate itself and go back to offering service and amenities all in one package/price? The only current hint of a crack in the armor of the a-la-carte pricing model may be Air Canada. The airline recently booted its CEO, and installed a new boss who publicly claims to be reevaluating the a-la-carte pricing strategy.

Maybe that would be the other way out of this mess – for one of the big airlines to scrap all fees, and become hugely successful as customers rushed to support that airline. Oh, wait, that’s Southwest, isn’t it? And Southwest is expanding aggressively as other airlines are cutting capacity and plunging deeper into unprofitability.

So here’s our only slightly tongue-in-cheek prediction: Five years from now the U.S. will have five dominant airlines – Southwest, JetBlue, Alaska, and two other airlines created from some combination/merger/bankruptcy of the existing five majors (Deltanental? UniCon?). In addition, there will be several new airlines based on the Ryanair and easyJet models (with commodity-level prices and a passel of add-on fees), as well as some existing smaller/regional carriers (such as Spirit, Midwest, AirTran, Allegiant, etc.) that will adopt the no-frills model.

One other possibility is that the U.S. government opens up the domestic airline industry to increased foreign ownership, or allows international carriers to fly within the U.S. Washington seems to be moving toward a governing model that may let some huge businesses fail (GM) or become more foreign owned (Chrysler/Fiat). If the dinosaurs (United, USAir, Continental, American, Delta) are to survive, they may need to shake up their business models by a lot more than adding fees.

Hungry for a great airline meal? That'll be 15 bucks, please.

Monday, April 13, 2009

Canadians vs. Americans in Cuba

We seem to be on a roll with Cuba posts.

Just read an article in the Canadian Globe and Mail about Canadians worried about an “Invasion of the American Tourists” to Cuba. It must have been a slow news day, or some Canadians are really whiney. Or is Canada upset about losing tourist dollars flowing into Toronto and Montreal from the currently “illegal” American tourists to Cuba who fly from those Canadian cities?

From what we saw in Havana and elsewhere, the Italian and German tourists were generally a lot more annoying than were Americans. The Canadians there were certainly “good” tourists, as were the many Scandinavians and Brits we encountered. It really seems disingenuous of the Canadian visitors to Cuba to want to keep it “[their] own little island.” The article does go on to point out that many other Canadians are just fine with American tourism to Cuba.

Travel is great for everyone. It broadens our horizons in much more than a physical sense. Certainly I don’t like some tourists, from any country – but that’s about the individuals, not classing them as a dislikable group. And having lived in tourist towns in the U.S., we have also witnessed the “idiot tourist” mentality first hand – but mostly those folks have given us a laugh much more often than they have disturbed us.

Oh, well, as we said. Must have been a slow news day in Canada.

Saturday, April 11, 2009

Travel Twitter Tips

The world is full of too much noise. The web is full of too much babble. And sites like Twitter just make it worse. We actually like Twitter, but are already getting sick of reading “I went shopping” tweets from folks we like to refer to as “nit-twits.” Here is the best article we’ve read about using Twitter: “Twitter Tips from 25 Tweeting Travelers.” Most of the advice boils down to: Please say something useful or just shut up.

Thursday, April 09, 2009

Airline Brand Naming Gone Very Wrong (or At Least Very Funny)

We just saw the news that a new airline, Baltia, has received U.S. Dept of Transportation permission to fly from New York JFK to St. Petersburg, Russia. The report we saw on indicates the airline will begin operations sometime this summer.

What we find hilarious, though, is the airline’s name for its frequent flyer program – Freeloaders. We really don’t think this is tongue-in-cheek, but rather a cheerful reminder that some things just don’t translate well, even in this interconnected world.

We also wonder if they chose the name “Baltia” simply because the dot-com domain name was available. OK, we get the Baltic part of the name. And we wish them all the success in the world – but we’d also suggest they hire someone for their marketing department.

We can’t wait to sign up and get our Freeloader card.

Monday, April 06, 2009

U.S. to Cuba Travel, a New Blog Poll, and Win a Cuba Guidebook

Ever since we were lucky enough to travel to Cuba several years ago, we’ve been fascinated with the country. Now, with the strong probability of the easing of travel restrictions for all Americans traveling to the island, we thought we’d start a new blog poll. The question: When travel restrictions are finally eliminated for American travel to Cuba, what U.S. airline will be the first to announce non-stop service from the U.S. to Havana?

Vote on the right, but if you’d also like to leave your guess as a comment, we’ll send a Cuba travel guidebook to the first person who guesses the ultimate airline correctly (make sure you leave an email address/contact info so we can contact you if you’re the winner).

Thursday, April 02, 2009

More Misc. Travel News

Results from last month’s “Worst Airline Customer Service” blog poll:
United – 46% of voters
American – 15%
Continental – 7%
USAir – 7%
Delta/Northwest – 7%
They’re all terrible – 38% (Multiple choices were allowed.)
Interesting to note that JetBlue, Alaska, Frontier, Virgin America, and Southwest didn’t receive any votes as the worst. Totally unscientific, but hopefully entertaining.

BAA, the operator of most of the airports in the UK (seven of ‘em), has been ordered by the Competition Commission to sell three of its airports – Gatwick, Stansted, and either Glasgow or Edinburgh.

The Middle Seat blog has a short story on the inevitable – cell phones in airplanes. The EU currently allows it, while the U.S. does not. But we’ll bet with enough pressure from U.S. airlines that want every possible source of extra revenue, that the U.S. ban will eventually give way. If you have any doubt, note that American Airlines just announced it will install WiFi on all planes.