Airline Fanatic

This seems like pretty basic stuff United is missing here.  According to TravelGlitch.com, anyone who buys a $100 e-certificate off ebay or through some other manner, then has unlimited access to other certificates by only changing the URL they use.

That sounds a bit complicated, but lets break it down and see how it works.  First, you buy a $100 e-certificate off ebay for around $10, and then are told to go to a specific URL to claim your reward.  Well part of that URL is your unique certificate number.  It turns out that the first 9 digits of the certificate always stay the same, and only the last 6 change.  All you have to do is start out at the number of the certificate you purchased and start counting up by one.  In 10 minutes of work TravelGlitch was able to find 5 valid certificate numbers that would have given them $500 in discounts.

From one perspective this is pretty awesome news, for a $10 investment you can get hundreds in discounts.  But think about all the people who actually own these certificates but have not yet used them, only to find that their number has already been used once they do actually try to use it. One would think United would have foreseen these issues and built a website secure enough to make sure certificates actually go to those who own them, rather than those who just play with their URL a bit.  United has to do something about this!

[Via TravelGlitch]

Yes you read that headline correctly, US Airways has a GOAL this holiday season of having 60% or its flights leave the gate on time.  Of course that means a full 40% of flights wont leave within 15 minutes of their schedules departure.  And that is just was US Air EXPECTS to happen.

This depressingly low goal was circulated in the Arizona based carrier’s employee newsletter as a background for their Holiday Hustle incentive program.  The 60% ontime departure rate was one goal for which employees can be rewarded, the other is if only 7 bags per 10,000 passengers get lost.  If both goals are completed employees will get a $100 bonus, if only one is completed they all get $50.  Unfortunately for the employees, and given last year’s number, I have a feeling they wont be getting anything this year.  Besides, I don’t think the $100 will motivate those in the position to actually influence whether those planes leave on time and those bags find the right way.

[Via Business Week]

The New York Times is running a piece today about merger talk between the number 2 and number 3 airlines: United and Delta.  The latest news was spawned by Pardus Capital Management, which owns about a 2.6 percent stake in Delta.  According to Pardus, the combined airline would create about $585 million in savings, not to mention creating the world’s biggest airline.

The stimulus for this letter to Delta management seems to be the record rapid rise in fuel prices.  Any money the majors may have been making over the past few years will be completely wiped out it seems by these huge price increases.  Pardus obviously assumes that such a massive combined airline would then be able to reduce capacity to a degree that prices would rise considerably, and revenue along with them.  This is a pretty good assumption, as one less major carrier would reduce the competition on many routes over night, and it would take low cost carriers a while to adapt.

The letter also analyzes potential other merger prospects, but still identifies a Delta-United union (which would be a pure stock transaction) as the best fit.  A combination with Northwest would provide the best cost savings at over $1.5 billion annually, but would not result in a significantly larger network.  I wrote a post a while ago on a Northwest-Delta merger and came to the same conclusion: don’t do it.  Pardus also took a look at Continental and found that costs would actually rise $171 million a year.

We’ve known that Delta has been looking for acquisitions for some time now, but a letter from a larger shareholder such as Pardus may push them a little harder.  That combined with the current price environment may mean we could see movement sometime soon on this.  As always, the politics of labor unions and the airline industry will play a factor here, so we will have to wait and see.

United just announcednew nonstop service between San Francisco and Guangzhou, China, to start on June 18th of next year.  The route will be operated once daily on one of United’s 777 aircraft, nicely equipped with 10 first class “suites” and 45 business class seats.  This should be a fairly lucrative route for United as most Pacific routes are – there should be plenty of business travelers with expense accounts and corporate travel programs who will pony up for business and first class comfort.

United already has good reach into Asia, especially in China.  The new service to Guangzhou is complemented by existing service from San Francisco to Beijing and Shanghai, Chicago to Beijing and Shanghai, and Washington to Beijing.  There are plenty of other US carriers vying to get the rights to enter the Chinese market, but United remains leaps and bounds ahead for now.

There hasn’t been much merger talk in the airline industry since US Airways attempted a hostile takeover of Delta while they were still in bankruptcy. That has fallen by the wayside now though, and this time discussion is ramping up around the once down and out carrier Delta and its possible merger ideas with Northwest (or should I say Northworst?). Business Week is the latest to comment on this, providing a pretty good argument in favor of consolidation. I also feel consolidation between some of the major carriers would be great for the industry as a whole, though it would be bad for passengers.

Having said I’m in favor of airline consolidation, why does the headline say Delta shouldn’t think about going through with this? For many reasons, first and foremost being the fact that combining two mediocre airlines does not automatically mean they will come out on the other end being a great airline. This is the same kind of ill fated logic that brought America West and US Air together several years ago, only to have the combined carriers place last on the Department of Transportation’s complaint list. As someone who has had the unfortunate pleasure of flying on Northwest, I can safely say their customer service and passenger experience ranks among the worst in the entire industry, something Delta would only inherit in a merger.

Speaking of passenger experience, Northwest throws up another giant STOP sign with their aging fleet of over 100 DC-9s. The average age of this group of planes is an astonishing 35 years old. Needless to say the passenger comfort, cabin noise, and environmental standards of these things aren’t what they are today. Any suitor for Northwest would be forced to put up a lot of cash for planes that actually detract from passenger’s overall experience. Not that Delta is the poster child for new planes and clean interiors, but why make your fleet older than you have to?

One of the biggest incentives for a Delta-Northwest merger would be reduction in capacity in the domestic market, which in turn means healthier revenue numbers as prices go up. This drop in capacity wouldn’t happen to any great extent in this merger however, as Delta’s and Northwest’s route structure are largely mutually exclusive. Delta has major hubs in Atlanta and Cincinnati, while Northwest works out of Minneapolis, Detroit and Memphis. Reductions in point to point departures only leave more room for the low cost carriers to take more market share from legacy carriers. Internationally, Delta would gain an extensive network in Asia, which would complement its own network in Europe and make it a truly global airline. Delta has already won approval to start Atlanta-Shanghai service however, and is continuing to rapidly expand its own international offerings. Delta is already in a headlong rush to add its own international service, and so will probably catch up with stagnating Northwest before too long.

Delta should definitely be interested in industry consolidation, but only if doing so would provide any benefit to the bottom line. In my opinion swallowing up Northwest would produce bigger headaches than efficiencies. Instead Delta should take a look at an airline that isn’t as ancient and customer unfriendly as Northwest, such as ATA or Midwest.

This apparently happened a while ago, but it just came across my radar screen. United Airlines has “enhanced” their frequent flier program yet again, by disallowing 500-mile upgrade coupons from rolling over into your mileage account balance.

For years, Premier members of the Mileage Plus program have received “500-mile” coupons (now electronic) that upgraded your North American flights from coach to first class. (You get four of these coupons every time you reach 10,000 flown miles on the airline. One coupon can upgrade you for 500 miles of distance flown; thus the “500-miler” moniker.) If you couldn’t use your 500-milers, they’d expire after one year, but all was not lost: They converted to 500 redeemable frequent flyer miles in your account.

Not any more.

In another “enhancement” of the Mileage Plus program, 500-milers won’t convert to frequent flyer miles upon expiration anymore. They’ll just expire worthless if you don’t cash them in. (And let me tell you from personal experience, they’ve gotten harder and harder to actually put to use.)

And the march towards better customer service continues!

Via Upgrade: Travel Better