Apr 13

Out Of Office Notice

I’ll be traveling over the next several days. Posts will be few and far between. I look forward to seeing you all again in a little under two weeks.

 

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Apr 12

Delta Says That They Are Past Storm Effects

Delta takes a lot of pride in its on-time record and completion factor, but weather happens, even in Atlanta. In a conference call today, though, management said that they were over the effects of the storm and operations were back to normal.

The Imperfect Storm

delta

Really cool photo from Creative Commons

Delta runs an excellent airline operation, but even it can’t defeat Mother Nature. When storms hit Atlanta last week, it was the imperfect storm. Not only was the storm unexpected but the airline was also dealing with spring break traffic. When flights were cancelled, there was no place to put all of those passengers. Delays were counted in hours, not days. And while some passengers were able to benefit from the situation, most dealt with varying degrees of frustration. There’s simply no one to blame in these situations and, without planes in the sky, no remedies, other than time. If you were lucky, you got free pizza. Other than that, you were responsible for your own overnight accommodations.

While operations may be running smoothly again, the phone lines aren’t. Last night, I was told that my wait for an agent would be greater than three hours. That’s a “hang up and call later” situation.

On a good day, traveling is tolerable. On a bad day, well, I don’t use that kind of language. The best advice that I can give is to be prepared, whether it’s before you even get to the airport or, even worse, after you get to the airport.

And, in the continuing saga that is United Airlines, the CEO has offered a more reasonable apology and is sending thank you notes to Sean Spicer for getting him off of “our top story” status on the news. I haven’t seen a travel story get this much news since Carnival stranded a ship in 2013.

 

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Apr 11

When You Really Didn’t Mean To Write That…

Seriously, Don’t Write It Down…

Photo Credit: Creative Commons

One of the first lessons that I learned when starting my job was never to write anything that I wouldn’t want to see on the cover of the New York Times. That thought has kept me from sending out more than one nasty email.

Yet it seems to be something that corporate leaders and politicians have had trouble remembering. In particular, we got an example of it yesterday from United’s CEO, with both a tone-deaf response to an incident on a United flight and an email to his employees.

If you follow the Department of Transportation manual, United Airlines itself did just about everything by the book (Yes, I know how that sounds. Read the footnote for my feelings on “the book.”)*. The involuntary denied boarding** incident was caused by employees who had to be on that particular flight to get to another destination to service another flight. They offered compensation for passengers to take a different flight. They had a system in place to determine who would be “re-accommodated.” The doctor wasn’t picked randomly, as some would imply.

I don’t know how long United employees waited before calling in law enforcement, though and, from what I’ve seen in the past, many airline employees have started to take the attitude of “if the passenger doesn’t do what I say, I’m getting them kicked off the plane.” That’s not all employees and, in this situation, the airline actually had the right to do so. But their past actions certainly don’t help them. They do not get the benefit of the doubt.

Where it went off the rails was when aviation security got involved. The video and actions of the people involved are nothing short of disgusting. Hopefully, somebody ends up getting prosecuted. As far as I’m concerned, they’re the biggest “winners” in the blame game.

United’s biggest problem was its piss-poor handling of the aftermath. I wasn’t there, and I’m sure that there’s plenty of blame to go around, but here’s a hint: If you are the CEO of one of the world’s largest airlines and one of your passengers is beaten on one of your planes, it is best not to send out a public tweet saying that the passenger was “re-accommodated.” Um, no. I’ve never met anyone who would want to be re-accommodated under those conditions. Even worse, the contents of the CEO’s email to the employees was leaked. It was a milquetoast response that deflected any blame, sounding like something the TSA would have written. I don’t think that United should get as much blame as most people do, but you have to accept some responsibility, if for no other reason than PR. If you are the CEO, you have to know that this will be leaked. Make sure it’s good.

Canada Is Way Cool

Even their money looks cool. Purple is totally on-trend.

This has nothing to do with travel, I just thought it was really cool.

Canada is introducing a new $10 bill and, to generate consumer interest, they put an “easter egg” or hidden message, onto the web site. If you visit the page and enter the Konami Code, which involves clicking on the page and entering up, up, down, down, left, right, left, right, b, a, you’ll get some cool audio and visual effects.

 


*The question of whether the book needs to be changed is a perfectly valid one. This situation was not an oversold flight, but I have seen that term being tossed around. I have also seen suggestions that airlines not be allowed to oversell flights. On the surface, it makes sense, but in practice, it would be a disaster. Revenue from passengers that don’t show up is used to subsidize the passengers that do. Eliminate oversells and I guarantee you that ticket prices would go up significantly.

**Beginner’s Hint: An “involuntarily denied boarding (IDB)” situation occurs when more passengers show up for a flight than the airline has seats for. Again, this particular situation was not an oversale, but rather, the result of operational needs. But lets talk about IDBs in the context of oversales: Airlines routinely “oversell” flights (selling more tickets than they have seats), knowing that a certain number of passengers won’t show up. In this scenario, the airline is required to have a system in place to determine who will be removed from the flight. It may be the customer who boarded last or people with elite status may have priority. Airlines must then ask for volunteers to take a later flight and will generally offer compensation to do so. If nobody volunteers, as was the case here, there are also laws protecting those passengers who are denied boarding. It is unlikely that you will ever be in that situation, but bookmark that link, just in case.

Here’s one other thing to know: Oversells are your best friend. I cannot emphasize that strongly enough. If you have any flexibility in your schedule and your flight is overbooked, airlines will often be willing to reward you generously, both because the IDB compensation can be onerous and because the airline is required to report IDBs. Too many IDBs will get you in trouble. I wrote a piece on getting free money from the airlines, but here’s a hint: If you have a seat on a flight on a busy day (e.g., the Sunday after Thanksgiving), they will be asking for volunteers and you can clean up. Once, I got the rare “double-bump;” I volunteered my morning flight, got moved to an afternoon flight and then volunteered on that one, as well.

 

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Apr 10

Earning American Miles Through BankDirect

Last week, I discussed the end of the mileage bonuses at Fidelity Investments. In that post, I referenced BankDirect, a Texas-based internet bank that offers miles instead of interest (Technically, it’s in addition to interest, which is currently a whopping 0.01% for balances greater than $2,500.).

BankDirect: Your New Mileage Bank

bankdirect

It’s not quite a pile of miles anymore, but it does the job

Several years ago, BankDirect, the FDIC insured internet division of Texas National Bank, hit upon a way to gain depositors: Instead of offering big interest rates, they’d offer their customers frequent flyer miles from American AAdvantage. Since banks make their money off the spread between lending and deposits, the decade’s declining interest rates have cause the bank to lower its rewards. Nevertheless, BankDirect remains one of the best ways to earn American Airlines Miles.

bankdirect

Mileage Checking with Interest and Money Market

There are several types of accounts that will earn interest, which you can find on their rate chart, but I’m going to concentrate on the Mileage Checking with Interest (CWI), which is where most people get the best return.

At one point, you received 100 miles per month for every $1,000 you had in the bank. So if you had an account with $10,000, you would receive 1,000 AA miles every month. That was one of the best deals in the market.

Lower interest rates have meant that the bank’s rewards aren’t quite as good, but they’re still better than you can get elsewhere. For the first $50,000, you still earn 100 miles for every $1,000 in your CWI. Above $50,000, the reward is only 25 miles for every $1,000. Less good.

For example, if you have $100,000 in your BankDirect, account, you would receive 6,250 miles every month, or 75,000 per year. It breaks down as such:

The first $50,000 gets you 100 miles per $1,000, or 5,000 miles per month.
The next $50,000 gets you 25 miles per $1,000, or 1,250 miles per month.

The value of that ticket could be worth a pretty penny if you use it for an international business class ticket.

The bank offers other products that pay miles, but none is quite as generous as the CWI. If you collect AA miles and are looking for a place to store your cash, you need to look at BankDirect.

The Caveats

Nothing is perfect, even miles. Here are a few things to watch out for:

  • They recently redesigned the website, but it is still one of the worst that I have ever seen.
  • The rate chart indicates that there is a $12 per month fee. That’s an exorbitant number, but the miles are still more than worth with higher balances. On the plus side, they haven’t actually charged me the fee for the past several months.
  • Interest rates have begun to rise recently. If they continue to rise and BankDirect doesn’t adjust its earnings, it may be worthwhile to go elsewhere for the cash, even after paying taxes.
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Apr 07

American Is Selling Miles. Should You Be Buying?

Years ago, when I first started writing this blog, I was virtually 100% opposed to buying miles directly from the airlines.* Over time, I have not exactly become a fan of it, but have softened my stance somewhat. They’re a good way to round up your balance if you are close to an award, and they can get you a business class ticket on the cheap (relatively speaking).

American Miles As Cheap As 1.8 Cents Each

american aadvantage

Typically, when you buy miles, you have to buy the maximum amount to get the best rate. That’s the case in this deal, where you can buy up to 150,000 miles which, not coincidentally, is the maximum number that they will let you buy in a calendar year. If you buy that amount, they’ll give you another 115,000 miles as a bonus. Smaller purchases get smaller bonuses, both on an absolute and percentage basis.

american aadvantage

You must buy 150,000 miles to get a 70% bonus

Those 265,000 miles (more, if you use an American Airlines credit card) don’t come cheap. You’ll be shelling out $4,786.85 for them. On the other hand, you’ll get some pretty good value. Check out the AA award chart. A one-way ticket in business class to Europe costs as little as 57,500 miles. Tokyo is as little as 60,000. You can get some great value and save a lot of money on tickets that you might have otherwise purchased. Now, you are, of course, giving up the miles on the purchase of the tickets, but you’ll still likely make out well.

So why would American do this? It’s simple: They may not get as much for that seat as they would have if they had sold it outright, but they’re still getting a healthy chunk of change from the mileage sale, and there’s no guarantee that the seat you buy with your miles would have ever sold for cash. It’s the whole bird in hand thing.

The Bottom Line: I’m still not a fan of buying miles, but there may be occasions when it’s worth exploring.

 


*Beginner’s Hint: In terms of pure margin (the percentage of each dollar of sales that the airline keeps as profit), there are few businesses that are more profitable than selling miles. Several years ago, the airlines realized that they could sell miles directly to the consumer, particularly those whose math skills were not up to par. Over time, as consumers have gotten wiser, the prices that the airlines have been able to charge have come down.

 

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Apr 06

Discover’s 5% Category: Home Improvement Stores And Wholesale Clubs

It’s time for the quarterly “you really need a Discover Card” thread. Discover offers some of the most versatile cards out there, with such benefits as excellent customer service and no foreign transaction fees, two features that don’t seem to matter until you need them. They matter. Best of all, Discover pulls it off without an annual fee.

Second Quarter Bonus Categories

Discover Card

Be sure to register for the promotion.

One of the reasons that I like this company so much is that it is one of the few that manages to merge strong hard and soft benefits.* You’ll get cash back (which they sometimes call “miles” but is really cash), the rotating categories and, for most of the cards (excluding the miles cards), access to a special cash back shopping area. The cash back shopping is really the hidden gem, with merchants offering at least a 5% rebate. Added bonus: All your rewards are doubled the first year. There is some really big upside here.

Each quarter, the “Discover It” cards offer 5% back in a particular category. The category rotates, but it’s usually one that involves a lot of spending. This quarter (April through June), it’s home improvement stores and wholesale clubs. As we head into spring, those will both be areas in which it is, unfortunately, easy to spend a lot of money. You’ll receive 5% back in those categories up to $1,500 in spend, or $75 cash back. By playing the rotating categories, it’s easy to earn an extra $300 per year.

All credit cards can be found through the banners on the bottom of the “credit cards for charity” page.

 


Beginner’s Hint: You’ll often hear the term “hard” and “soft” benefits. When it comes to rewards programs, the terms tend to be moving targets, but think of them this way: A hard benefit is something measurable that you earn directly, such as 2% cash back or rotating bonus categories. A soft benefit is one that affects your experience but can’t be measured, such as great customer service.

 

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Apr 05

Up To 30,000 American Miles To Fly To Asia

I wanted to do a more extensive piece today, but I’m operating on sleep deprivation, so it will have to wait. For now, let’s talk about a bonus opportunity on American Airlines

Earn up to 30,000 American AAdvantage Miles

AAdvantage

The promotion might be a bit on the expensive side, but it’s easy enough to earn the miles once you have bought your tickets. You must register first and fly to one of the listed cities, and then you’ll earn miles based on your class of service. Hey, you pay the big bucks, you get the bonus miles. The registration code is ASM17.

Terms And Conditions

AAdvantage

There’s a reason it says UP TO. It’s not easy.

Let’s take a look at the Terms and Conditions:

AAdvantage® bonus mileage offer is only valid for travel on American Airlines marketed nonstop flights (operated by either American Airlines or Japan Airlines) between Los Angeles (LAX) and Shanghai (PVG), Hong Kong (HKG), Tokyo Narita (NRT), Tokyo Haneda (HND) or Osaka (KIX); Dallas-Fort Worth (DFW) and Beijing (PEK) or Shanghai (PVG); Chicago (ORD) and Beijing (PEK) or Shanghai (PVG); New York Kennedy (JFK) and Tokyo Narita (NRT). Flights marketed and or operated by other codeshare partners are not eligible for this promotion.

Offer applies only to AAdvantage® members who receive an email from American Airlines and register, purchase and fly on eligible published-fare tickets between March 30, 2017, and May 31, 2017. Tickets purchased before March 30, 2017 or after May 31, 2017 are not eligible to earn bonus miles for this promotion.

Includes First Class fares booked in F or A; Business Class fares booked in J, R, D or I; Full-Fare or Premium Economy Class fares booked in Y or W; Select Economy Class fares booked in H, K, M, L, V, G, Q, N, O or S on American marketed flights.

Bonus miles will be calculated and awarded based on the booking class purchased and the number of trips taken in a specific cabin. Bonus miles can only be earned for a maximum of 2 round trips and half the round-trip bonus will be posted after each eligible one-way segment. Bonus miles do not count toward elite status qualification or AAdvantage® Million Miler status. Registration prior to travel is required using Promotion Code ASM17 at www.aa.com/offers.

There are a few restrictions. You can fly codeshares on JAL, but that’s it for carriers other than American. Also, the full 30,000 miles requires two First Class paid tickets. Ouch.

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Apr 03

Club Carlson Offering Triple Points (And Then Some)

I’ve often referred to Club Carlson as “the little program that could.” Club Carlson, the owner of brands such as Radisson, Park Plaza and Country Inn & Suites, does not have the world’s best-known hotels, but they tend to make up for it with some fantastic promotions. Their second quarter promotion for 2017 is no exception.

Triple Points Plus 5K

The base promotion alone, which you need to register for, is excellent. You’ll receive triple points on all stays between now and June 30. You typically earn 20 points per dollar spent at their hotels,* but the promotion will kick it up to 60 points per dollar spent (Only base points are doubled.). Standard rooms range anywhere from 9,000 to 70,000 points, so you could end up with a nice vacation out of this promotion. You can also exchange points for airline miles, at the not unattractive rate of 10 points = 1 mile. For the purposes of this promotion, you can triple the number of miles received.

But wait, there’s more! You’ll also earn an additional 5,000 points for each Sunday and Monday night that you stay at their properties. That’s on top of the triple points that you earn above.

The only downside to the promotion: Your total bonus is capped at 100,000 points. That’s equivalent to 50,000 base points earned, or $2,500 in spending. That sounds like a lot of money to spend on hotels but, for those who travel to expensive cities, it’s not as hard as it sounds.

Regardless of the limitation on the total that you can earn, this is one of the best promotions that I have seen in the world of hotels. I’m not normally a Club Carlson customer, but the bonuses that they are offering would make me seriously thing about taking advantage of this promo.

 


*Beginner’s Hint: The actual number of points that you earn per dollar is a largely irrelevant number. Just because you earn 10 points per dollar at Hilton and two points per dollar at Starwood does not make Hilton a 5X better program. The most important number is the number of dollars you need to spend earn a free night. Since Starwood’s free nights also cost considerably fewer points than Hilton’s do, the ratio is much closer than it would appear.

 

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Apr 02

Fidelity Investments (Finally) Kills Its Great Mileage Deal

Fidelity Investments used to offer one of the best mileage bonuses in the business, offering you up to 50,000 miles for opening a new account or depositing money into an existing one. The offer would expire every year on March 31 but, like the swallows who supposedly returned to Capistrano every year, Fidelity would extend it by a year upon expiration. That streak ended this year.

Fidelity Shoots Mileage Offer

fidelity investments

The new screen when searching for Fidelity’s mileage offer

Flyertalk had discussed the possibility of the offer dying this year but, since it had been renewed every year in the past, many hoped that they may do so as well, this year. The offer would give you miles on American, Delta or United, based on how much you deposited. Bonuses for opening brokerage accounts aren’t exactly new, given their hopes that increased assets would eventually lead to trading fees. Apparently, though, those deposits weren’t generating enough cash to offset the cost of the miles. Goodbye, great deal.

Brokers offer other incentives for opening accounts, usually cash. Fidelity was the only one that offered miles, though, and those miles had the potential to generate value greater than the equivalent cash that other firms would give you. There are still plenty of great mileage deals available,* but the Fidelity Investments transfers were always among the most reliable.

 


*Beginner’s Hint: If you have some cash available and want to use it to earn miles, since nobody pays much interest these days, read this thread about BankDirect. BD is an FDIC-insured internet bank that gives you miles based on your balances with them. It’s not as strong a promo as it used to be, but it’s still a way to pick up some fast points. Sadly, they only offer miles on American Airlines.

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Mar 31

Hilton Tells Us Just How Little Their Points Are Worth

As I mentioned yesterday, loyalty programs love to sell points. Usually, they sell the points to merchants, who pass them on to you as rewards for purchases, but occasionally, they’ll sell to you directly. But there’s a problem, of course. Not for the company. For you, the consumer.

Bottom Line: If they’re selling, you don’t want to be buying.

Hilton Honors Points Offer

hilton honors

Hilton’s most recent offer to sell you points

Yesterday, I received an offer from Hilton to buy points directly from them. No staying at a hotel, just whipping out the credit card. As an added bonus, they’ll double the amount of points that I purchase. That’s right, for a limited time, you’ll get two points, not one, for each unit of currency. It sounds like an infomercial.

I’ve always valued Hilton Honors points as worth 0.4 – 0.5 cents per point.* And clearly, I was on the high side. If they’re willing to sell me points at 0.5 cents each (160,000 points for $800), I know that those points are worth less than that number. Why? Because Hilton surely isn’t going to sell me points for less than they’re worth. They don’t even have an incentive to sell me points for fair value, since they eventually need to reimburse properties when I use those points. If they’re going to sell points, they’ll be sure to make a profit on it.

I’m keeping an eye on Hilton. The elimination of their award chart will eventually lead to a devaluation. The Hilton 100,000 point credit card offer looks as good as the Marriott 100,000 point credit card offer, but it isn’t, since Marriott points generally get you more bang for the buck than Hilton. Program cuts happen over time, not all at once. Keep your eyes open.

 


*Beginner’s Hint: While I often go to great lengths to determine a fair value “per point,” it’s generally not as easy as I make it out to be. For a bit more on the subject, read about the impact of substitution.

 

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