Weird Weekend Travel Stuff

I usually like to keep my posts light on Fridays, mostly because we all need something to ease us into the weekend. Naturally, the travel industry never fails to disappoint.

Travel Leading to Love

For you and your soon-to-be spouse

For those of you who always dread what the seat next to you on a plane could bring, this story will hopefully make you feel a little better about the next stranger to sit down.

I couldn’t imagine meeting somebody on the road like that until I remembered that I met my wife at an American Airlines event in Dallas, a city that was home to neither of us. And I knew it was true love when she agreed to stay at three different hotels in the same city over four nights so that I could maintain my Starwood elite status. What more could a guy want?

Travel Leading to A Brush with Fame

Admit it: You have always wanted to see just how much “material” the Material Girl has. No problem. Now, you can stay in one of her former houses, albeit one that she sold 15 years ago. Okay, it’s going to cost you somewhere between $500 and $1,000 per night, but it’ll just be one more item that you can check off your bucket list.

Travel Leading to Industrial Products

They all look alike

And you thought that you were having a bad day. You could be American Airlines passenger Anna Knight, who filed a complaint on Twitter (naturally) that American Airline employees had stolen her bag and replaced the items with airline equipment. Apparently, the most likely possibility, that she had simply taken the wrong bag, never occurred to her. Her panicked tweet proclaimed “I just got robbed by American Airlines . . . ALL MY STUFF IS GONE & replaced with airline equipment! $8000 worth of items GONE! Priceless souvenirs from my trip GONE!!” 

Fortunately, it turned out that she had, indeed, grabbed the wrong bag.

Note to Ms. Knight, as well as everyone else: First, you shouldn’t put $8,000 of anything in your bag. If you have expensive goodies, carry it with you, or find some other way to get it home. Never check anything valuable. And second, you can’t call souvenirs “priceless” and also give them a dollar value. I do not think that word means what she think it means.

 

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Citibank Adjusts High-End Prestige Card. Again.

There’s a continuing battle in the credit card business of benefits versus rewards. Some card companies, like American Express, offer you great benefits for having the card, but not as much in the way of rewards when you actually use the card. Chase, on the other hand, focuses more on offering great rewards when you spend money using its products. And then there’s Citibank, which can’t seem to make up its mind.

Citi Changes Prestige, And It Looks Better

citibank prestige

Citibank launched its high-end Prestige card several years ago to compete with Chase’s Sapphire brands and American Express’s Platinum. The problem for Citi was that they didn’t have a ton of experience competing in the luxury business, and initially produced a product that was so lucrative for customers that the bank couldn’t afford to maintain it. So, being Citibank, they did the only thing that they could think to do. They gutted it. It wasn’t terrible, since they kept two of the best benefits (fourth night free on any hotel stay, $250 airline credit, Priority Pass lounge access), but it made a difference.

And now, Citibank is making some major changes again, with the new set of benefits slated to begin in January, when it starts issuing cards again. Many of these are positive, so let’s take a look.

The Good

  • Rewards for spending are going up. You will now receive five points for every dollar spent on dining or air travel. This is up from three, and represents a new high in the industry. Hotel travel stays at three points. This is huge. You can convert these points to miles on several carriers, so they’re worth racking up.
  • The $250 airline credit will now become a general travel credit, which is good for any form of travel, not just air travel.

The Bad

  • The annual fee is going up $45, to $495.
  • They’re eliminating the 25% bonus you get for spending points through Citi’s travel portal. It was good while it lasted.

The Ugly

  • This will only affect some of you, but for those it does hit, it’s big: Currently, you get the fourth night free on any hotel booking you make through Citi’s travel agency. The bank is now limiting that benefit to 2X per year. That means that if you take a lot of multi-day trips, you could be losing out on some substantial rebates.

Overall, I think the changes are positive, particularly with the upgrade to the rewards. If you are a frequent traveler who uses the “fourth night free” benefit, though, it’s definitely a downgrade.

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Basic Economy: Take Advantage Of ULCCs (Without Flying Them)

ULCCs, or “ultra-low cost carriers” are the airlines that everyone loves to hate. They’re the Spirits and Frontiers of the world, with incredibly low teaser prices but fees for everything, including bags, pre-boarding, a can of Coke, etc. Passengers frequently complain about them, but they are growing faster than any other airlines, meaning that there’s something to the model.

But to take advantage of these fares, you don’t have to fly with them. You just have to be flying the same routes that they fly.

The Basics Of Basic Economy

This past weekend, I had to book a flight from Boston to Charleston, SC. It was a last minute flight and there is not a lot of competition in the market, so the one-way fare cost over $350. And because I was booking at the last minute, most seats had already been booked, so the chances of getting anything but a middle seat would have required paying up to sit in first class. Lovely.

And then, there’s my brother, who flew American from Philadelphia to South Carolina. And here’s what he paid:

ulcc, basic economy

Even now that we’re older, he gets away with everything

So what’s the difference between the two locations, other than a few hundred miles? Simple: Frontier Airlines, one of the largest ultra-low cost carriers, flies a non-stop in his market and the legacy airlines need to compete. To do so, they established basic economy fares. These fares offer many of the same restrictions on the major carriers that you find on the ULCC, such as a charge to check a bag (and potentially even to bring a bag on board), a restriction on seat selections, boarding last, etc.

Having said that, the basic economy product offers some advantages over its ULCC brethren. You’ll get miles on your favorite carriers, still get the can of Coke and have access to the airline’s infrastructure, such as the customer service lines and lounge access at the airport. And if you have elite status on the airline, you probably won’t be eligible for upgrades on these fares, but you may receive some of your other benefits, such as the ability to pre-board. You’ll also be eligible to be re-routed if your flight is cancelled or delay. If you’re flying a ULCC, there’s really nowhere to put you, since they don’t have the network that the legacy carriers do.

Here’s the bottom line: A lot of people will go to Spirit’s or Frontier’s website and book a flight there, assuming that it will automatically be the cheapest. In fact, those sites may be a good place to start your search, since you’ll get a feel for where they fly, and thus, where the network carriers will be forced to match them. If the network carrier as space available at similar prices, even if they’re a few dollars more, book with the big guy.

 

 

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Uber, Lyft, Las Vegas And The Death Of Taxis

I was in Las Vegas last week and, for the most part, got from hotel to hotel by walking. But when I needed to go someplace farther away, I did something that I had never done before (in Las Vegas): I took a ride share. It occurred to me at the time just how quickly one of the city’s primary industries, transportation, was dying. There was no line for taxis, but a pen of people at the ride share station.

Technological Destruction

It is impossible to overestimate the importance of the taxi business in Las Vegas. Unless you are walking along the Strip, the city is spread out, and public transportation is poor. At one time, a taxi strike would have practically shut the city down.

Uber was founded in 2009, but it was 2012 before the first UberX was introduced. Within a few years, the taxi business’s obits were being written.

It was, of course, the industry’s own monopoly that led to its downfall. Like the music industry, the taxi industry had made few changes over the past few decades and had forced customers to operate on its terms. It wasn’t that long ago that taxis didn’t accept credit cards, drivers smoked freely and getting a cab required either luck or a phone call and callback. There was no incentive to give up healthy profit margins.

And then there were the charges. In Las Vegas, taxis were D on Uber’s OA in 2016. Taxis charge $3.50 for the initial pick-up, a $2.00 airport fee, $2.76 per mile and a potential $3.00 credit card surcharge. You could end up paying over $10 as soon as the driver hit the accelerator. On the other hand, Uber has a base fare of $1.50, service charge of $2.75 and a per mile fee of only $.80 (in addition to a $.21 per minute charge). Uber does have the annoying surcharges, but their cost is still low.

By the time taxis introduced convenience changes, such as apps for rides, it was too late. Ride shares had become so pervasive that the cab industry had been disintermediated.

Are Rideshares Eliminating Their Biggest Cost?

uber, lyft

Look, Ma, no driver!

Today, I got a pop-up notification from Lyft asking me if I would be willing to take a self-driving car. As of now, the cars would still have Lyft employees in the front seat, just in case anything went wrong. But it might not be too much longer that all the drivers who have benefited from ride share technology might get disintermediated themselves.

 

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Um, About Those Elite Upgrades…

For those of you with elite status with an airline, particularly those at the top of the pyramid, you’ve probably gotten used to at least the occasional upgrade to First Class or whatever version of “Economy Plus” your airline has. I have some bad news: The airlines are working hard to make those upgrades go away.

Why Give Away The Milk for Free When You Can Make Them Buy The Cow?

delta, revenue management

Delta presentation at the Cowen Investment Conference, September, 2018.

Airlines have spent decades refining and improving their revenue management systems, the technology that helps them determine just how much money they can make. The problem is, discount carriers have come in and wrecked the pricing structure that airlines used to use to price economy class tickets. Thus, the airlines have turned to the only place where they have a differentiated product: the front of the plane. The Wall Street Journal wrote a good article about it recently, although the piece may be behind a paywall.

It used to be that a first class ticket cost multiples of what an economy ticket cost. The result for the airline is that they didn’t sell many of them, particularly domestically, but they did give away a lot of those seats for free to their elite customers.

Over time, though, the companies began to look for ways to increase the money that they got from the premium cabins and began to play with the concept of repricing the seats and upsells. The former was simply Econ 101: Lower the price of the goods and you’ll sell more of them. The upsell process, though, is a direct result of improved forecasting technology. Now, the airline can better guess how many business/first class tickets it will sell at the “regular” price while offering economy passengers the chance to buy up, using either cash or miles. They discovered that the changes had minimal impact on business travelers’ willingness to pay a significant premium but also that economy passengers were willing to pay a reasonable price to guarantee an upgrade, rather than risk not getting it through status (Your definition of “reasonable” may vary.).

This is not a new trend, and we have not reached the end of the line, but it will make sitting up front that much tougher or more expensive. Delta is the most advanced, but I’m sure that its competitors will be in its league within the next 12 months or so. The trends will ebb and flow. Right now, demand is strong, so it’s easier for the airlines to get something for those seats. Eventually, it will soften. But the trend toward monetization isn’t going away.

 

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Marriott 29 Ways To Stay Promotion

Well, we’re back. An undetermined technical error seems to have caused the loss of the last six months of posts, but I’m hoping that the worst is past.

Marriott 29 Ways To Stay

marriott megabonus

Some of the MegaBonus prizes you can win

Marriott is currently running a lousy MegaBonus, with the ability to earn points even worse than usual. Their technical expertise being what it is, the bonus side game, known as “29 Ways To Stay,” was delayed until recently.

The site itself still isn’t functioning, but the game is now, and it doesn’t fail to disappoint (Yes, you read it right.). It’s a matching game and, once you get three matches (You have unlimited tries, so you automatically win.), you win a prize. It could be a stay at one of their 29 brands or a point total, as seen above. You also get an entry into their grand prize drawing.

Here’s where it gets fuzzy. The rules say that you can pick up one instant win prize per person, per day. I assumed that meant that I would be getting 50 points every day, but I haven’t yet spoken with anyone who has earned a points prize after their first day. If the same number of prizes are being awarded every day, that shouldn’t be an issue.

The most interesting fact that I learned from the promo? Marriott values their points at 0.9 cents each, a slight premium to the 0.7 cents that I use as a value for them.

 

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Maintenance Ahead…

Due to some maintenance issues, the site will be down for an undetermined period of time. I’m hoping that it’s not long. Thank you.

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Fly Across The Atlantic In Business For Less

I’ll start by saying this: International business class is almost never cheap. Please don’t equate “for less” with “cheap.”

 

One of the best uses of frequent flyer miles is international travel, particularly in premium classes of service. Airlines have made changes to their redemption policies that have made it more expensive, sometimes prohibitively so, to use miles for the good stuff. 450,000 miles for a single ticket? No thanks.

But there’s a “next-best” option: Combining miles and points on particular routes to recreate a business class ticket.  The case that I’m going to present today has a few requirements to it, but it’ll get you sitting pretty across the Atlantic in Virgin Atlantic’s Upper Class.

Using The Delta/Virgin Atlantic Partnership to Fly in Upper Class

virgin atlantic

The Virgin Atlantic Clubhouse at LHR. Yours free, with an Upper Class ticket.

Delta owns 49% of Virgin Atlantic, which may not mean a lot to you personally, but does establish a handy partnership between the two, including reciprocal earning and burning of miles. In particular, there’s a cheap upgrade across the Atlantic by combining a Virgin America Premium Economy* ticket and Delta miles to get yourself into Virgin Atlantic’s Upper Class. Here’s what you need to do:

  • Check for availability: If you want to buy your ticket right away, make sure that there’s a seat waiting for you in Virgin’s Upper Class. You could always call either airline to see if there is upgrade availability, but who wants to wait on the phone if you don’t need to? Go to Virgin Atlantic’s website and input your dates on the first page as if you are buying the ticket outright. On the next page, it will show prices for your flight. Look at the top of the screen. See where you can toggle between money and miles? Toggle over to miles. If there is availability to buy the flight with miles in Upper Class, there should also be availability to upgrade with miles. According to Delta, you can’t waitlist for a Virgin upgrade with Delta miles, so keep checking for availability if it isn’t there.
  • virgin atlantic

    Toggle to Miles. Sadly, no chauffeur status for award tickets.

  • Then, buy a Premium Economy ticket on a Virgin Atlantic flight on Delta’s website: Go to Delta’s site and book your ticket. Technically, you could also do it through Virgin’s site on a Delta code, but it’s easier just to go to Delta. For example, I booked a ticket from JFK to London Heathrow in Premium Economy for $1,235, or about $400 more than regular Economy.
delta

Yes, there are a heck of a lot of fees built in.

  • How do I know that it’s operated by Virgin, not Delta? Simple: Look for the little “tag” like the one below on the booking screen (It’s not shown above; the above screen is from final the payment):
virgin atlantic

Operated by Virgin Atlantic

The four-digit flight number also gives it away. A Delta flight alone will have a shorter number.

  • Beginner’s Hint: Make sure that the flight you book is in Premium Select, which is the Virgin Atlantic product, not Comfort +. It’s certainly not a bad product, either, if you want to fly it. 2-3-2 seating (two seats together at each of the windows, three in the middle), 38″ of pitch (the distance from seat back to seat back) and 21″ width. It’s similar to domestic US first class. You may also be offered Delta’s Comfort +, which is an inferior product on Delta metal and costs more to upgrade. It comes with 35″ of pitch and 18″ of width. You’ll see the difference in the header:
Delta

Delta cabin types

  • Call Delta and upgrade: Here’s where it gets good. Upgrading from Premium Economy to Upper Class is only 25,000 miles one way (up recently from 20,000). There are no big surcharges involved, since the Air Passenger Duty out of the UK is built into the price of the Premium Economy fare. That’s it. A lousy 25,000 miles to upgrade one way across the Atlantic. The Delta representative should be able to upgrade you right away if the seat is available. Note that some representatives do have trouble with the procedure and may tell you it’s not allowed. If that happens, use your HUCA** strategy.
  • Does this strategy save you money? Absolutely. Let’s say that, instead of upgrading, you wanted to buy the ticket outright. Hey, that works if somebody else is paying for it. After booking the Premium Economy ticket, you’ll have one final option to pay to upgrade it:

 

delta, virgin

My art designer is on sabbatical

Yup, that’s right, over $4,000 for the round-trip upgrade. Sure, you’d get the extra miles for the premium class of service, but you’d be a lot poorer for the exercise. You, on the other hand, are only spending 50,000 miles total in combination with your Premium Economy ticket to move up. Even if we assessed the miles at a very generous value of two cents per mile, your cost is about $1,000.  Heck, if you don’t have any miles, you can even buy 50,000 miles from Delta at the exorbitant cost of just under $1,900, still saving you half of the upgrade cost.

Bottom Line: It’s easy. First, verify with Virgin Atlantic that there is Upper Class award availability on the flight that you want. Remember, it has to be one that is marketed by Delta (Look on their website.) but actually takes place on Virgin Atlantic metal.

From Delta’s web site; scroll down to July 13, 2017

Buy a Premium Economy (aka Premium Select) ticket and call Delta to use miles to upgrade. If there isn’t availability, you can certainly buy the tickets and expect a good experience, but you will have to keep checking back to see if the upgrade does open up.

And finally, enjoy the experience. I don’t think that Virgin Atlantic’s Upper Class across the Atlantic is as good as Delta’s, but it certainly beats sitting in back.

And if you’ve made it this far, you deserve to see the product that should win the internet. It has nothing to do with miles, but how cool is this?


*Premium Economy is Virgin Atlantic’s product in between Economy and Upper Class. It’s actually pretty good.

**Hang Up, Call Again. Get a better representative.

 

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Spirit Airlines Adding Wi-Fi Onboard

I got an email from Spirit Airlines telling me that they had a “big announcement.” Okay, it wasn’t that big, but it was nice to know that, by next summer, Spirit will be joining the 21st century and adding Wi-Fi onboard.

Is Spirit Getting Better?

Spirit Airlines, an ultra-low cost carrier,* is never going to be known as a luxury experience. And that’s good to them. They want to be known as the cheapest airline that can get you safely and on-time from A to B. Under former CEO Ben Baldanza, the airline transitioned to its current status as a ULCC. It based its marketing campaign around “no publicity is bad publicity” and once accidentally replied to all on a customer complaint, saying “Let him tell the world how bad we are. He’s never flown us before anyway and will be back when we save him a penny.” And you can get away with that as long as your fleet does its job.

The problem is, sometimes they couldn’t even do that. Spirit tried to keep costs as low as possible by minimizing staffing and spare planes, meaning that the minute that they ran into trouble, they had no back-up. By the summer of 2015, the airline was only getting 50% of its flights to their destinations on-time and realized that you can only tick off your passengers for so long. Mr. Baldanza was pushed out and replaced by Bob Fornaro.

Bob Fornaro was used to operating an airline on a shoestring budget, having formerly been the CEO of low cost carrier AirTran, which the previous CEO, Joe Leonard, had once told me was “one snowstorm away from bankruptcy.”  Mr. Fornaro immediately put some money back into the airline, eliminated the tawdry marketing campaigns and stopped worrying about growth at the expense of operations. By the beginning of this year, the airline had climbed back into the middle of the rankings for on-time percentages.

The implementation of Wi-Fi is a clear positive. Yes, of course you will pay for it, but it’s at least a customer-service friendly move, one that the airline wouldn’t have spent any capital on a few years ago.

I’m not sure that Spirit will ever be anyone’s first choice for any reason other than price or necessity, and it’s got a long way to go, but the airline is, at least, starting to care.

 


*Beginner’s Hint: An ultra-low cost carrier (ULCC) is one that sells you a ticket and nothing else. Want a seat assignment? It costs extra. Using the overhead compartment? Extra. Can of Coke? Pull out your wallet. The ticket prices are low, but you can end up paying big bucks in other ways.

 

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Boeing Continues To Win The Long-Haul Game

If it seems like somebody’s always announcing an order for a new plane or fleet type, there’s a reason: Somebody’s always announcing an order for a new plane or fleet type. While there are countless  numbers of planes, two manufacturers dominate the market, Boeing and Airbus. And for now, Boeing is winning the war. Of course, that’s no different than it has been in the recent past.

“The Youngest Fleet in The Industry”

boeing

The Boeing 787                                                                  Photo Credit: Creative Commons

Naturally, a new plane can offer a lot of advantages for an airline, each of whom always seems to be bragging about having “the youngest fleet in the industry.”* Newly built planes offer more customization (either good or less good, such as the Slimline seats), significantly better fuel efficiency and more automation. And while anything from a narrow seat to a seat-back video screen can be installed on an older plane, retrofitting is more expensive on a unit basis than installing one on a new plane.

That, of course, doesn’t count for the cost of the plane itself, which can run over $100 million. As a general rule of thumb, big airlines pay about 50% of sticker and get at least some parts and maintenance thrown in for free. Many also have a “most-favored nations” clause, which means that, if the manufacturers give better terms to a competitor of a MFN airline, it needs to lower the price for the first airline, as well.

Boeing Is Leading The Duopoly

In theory, new airplanes should be like a game of leapfrog: Boeing makes a better plane than Airbus, Airbus then passes Boeing, Boeing regains the lead, etc. That’s not the way it works out, of course, since the planes are designed years in advance of their actual launch. The delay means that an airline can post a contingent order and, if circumstances warrant, make changes. A lot of it depends on performance, of course. The Boeing 787 was a plane designed for long, thin routes, meaning trips that were several thousand miles but didn’t have the overwhelming demand of the major cities. For instance, instead of JFK-Tokyo, it flies Boston-Tokyo. Because they hold fewer passengers (Some Japan Airlines 787s hold under 200 passengers.), the planes have to be much more efficient in the air and operate out of higher operating markets. Although there was some initial concern about whether the plane would be practical, it has become one of the most popular widebodies.** Recent orders from American, for example, included significant 787 orders.

If there’s a winner, there’s also a loser. Recently, that loser has been Airbus. Some of it can’t be helped. For instance, American is cancelling Airbus orders from US Airways, which it merged with several years ago.*** But they’ve also had their share of flops. Recent Airbus 330 upgrades haven’t matched the efficiency of their Boeing counterparts, while delays hampered the growth of the Airbus 380, a plane roughly the size of a small shopping mall.

Furthermore, it might be a long time before Airbus wins significant share. Once an airline has a relationship with a particular manufacturer, it tends to keep ordering from them, since they are already familiar with the fleet type and maintenance costs will be lower.

The Bottom Line: Airplane innovation will continue, and it may even accelerate. As airlines spend to acquire the latest and greatest toys, passengers should benefit.

 


*Best as I can tell, no planes are made in Lake Wobegon.

**Beginner’s Hint: Think of widebodies as the two aisle planes, narrowbodies as those with a single aisle.

***Technically, US Airways bought American, but American is the surviving brand.

 

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