Issue #58  --  September 9, 1999

<< U P F R O N T >>

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Thanks
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You may recall that in last week's issue of The Crier, I asked (more or less rhetorically) if anyone knew the Internet address for EVA Air's website. It wasn't a throw-away question: I had run a few search engine queries, and perused a couple of list-of-links sites. And I came up empty.

Within minutes of sending out the newsletter on Thursday evening, half a dozen Crier readers had e-mailed me the elusive URL: http://www.evaair.com.tw/ And by the next morning, a slew of additional e-mails followed.

Thanks to those who responded. And more to the point, thanks for being such a knowledgeable and responsive bunch.

<< M I L E S >>

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Southwest Adds Hotel Partners to Rapid Rewards
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Beginning Oct. 1, 1999, members of Southwest's frequent flyer program can earn credit for hotel stays at Hilton and Marriott hotels.

Rapid Rewards Freedom Reward members (those who have a plastic membership card) can earn a Rapid Rewards half credit for every eligible stay at any of the more than 450 Hilton and Conrad International hotels in 50 countries worldwide.

And at Marriott properties, Rapid Rewards members can earn one credit for every eligible stay at Marriott Hotels, Resorts and Suites and participating Renaissance Hotels and Resorts.

With all due respect to Southwest's keep-it-simple credo, this move is long overdue. A frequent flyer program without hotel partners is like... well, a frequent flyer program without hotel partners.

>> More <<
Southwest online

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Delta Tip Line for Award Travel (more)
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We mentioned Delta's new telephone Tip Line in last week's issue of The Crier, and wondered why they weren't making the service available on their website as well.

Delta was listening, and responded as follows:

"We wanted to make the Award Travel Tip Line available as quickly as possible for our SkyMiles members and the automated telephone system was the best way to do so," said Kevin Pinto, system manager of SkyMiles marketing. "We are aware of the advantages of utilizing the internet and have plans to perfect our technology and eventually offer Award Travel Tips online. Due to the positive response that we have already received, we will be sure to announce this program when it becomes available on Delta's SkyLinks Web site."

Good news for SkyMiles members.

>> More <<
Delta's Tip Line: 888-750-6699

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Hilton to Buy Promus Hotels
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Hilton will buy the Promus group of hotels before the year is out.

We mention this in the << M I L E S >> section because the big bang for travelers will come in the form of added earning and awards opportunities for members of Hilton's HHonors program.

While you may not know the Promus name, you are sure to be acquainted with many members of the Promus family of hotels. Promus is the franchisor/operator of the Doubletree Hotels, Doubletree Guest Suites, Embassy Suites, Hampton Inn, Homewood Suites, Hampton Inn & Suites, Doubletree Club, Red Lion Hotels, Embassy Vacation Resort and Hampton Vacation Resort brands. The Hilton-Promus combination will have nearly 1,700 hotels and approximately 290,000 rooms, and have a significant presence in every important industry category, from the upscale, mid-priced and limited-service segments to extended stay and vacation ownership.

Completion of the merger is expected by year-end 1999. Approval of shareholders of both companies is required.

>> More <<
Hilton online

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America West Miles-for-Groceries
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America West is teaming up with Arizona-based Bashas' markets to offer frequent flyer miles for purchases.

Beginning Sept. 8, 1999, Bashas' shoppers can earn America West FlightFund miles for purchases when using their Bashas' Thank You card at any of the 67 Arizona Bashas' stores. Shoppers will earn one mile for every dollar spent (up to $9,000) at any Bashas' store through March 8, 2000.

Additionally, national brands such as Pepsi, Nabisco and Starbucks are participating to offer bonus miles for the purchase of featured products during the six-month promotion.

To qualify, shoppers must complete an application, including their Bashas' Thank You card number and their America West FlightFund number. Applications are available at any Bashas' store and at the Bashas' website.

Once 500 miles have been accumulated, Bashas' will transfer all earned miles to America West for posting to the member's FlightFund account. After that, miles will be transferred monthly.

A drawing for 2,500 bonus FlightFund miles will be held at each of the 67 Bashas' stores for customers who sign up by Sept. 29, 1999. Additionally, two grand prizes of 80,000 bonus miles and 120,000 bonus miles will be drawn from all customers who signed up and used their Bashas' Thank You Card between Oct. 1 and Oct. 31, 1999.

>> More <<
o America West online
o Bashas'

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LanChile Expands Online Services
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A new alternative to LanChile's regular distribution channels is being launched this week. From now on, it is possible to purchase tickets through the Internet.

Those booking online at the LanChile website through Oct. 31, 1999, will receive bonus LanPass frequent flyer kilometers with their first Internet purchase. A 20,000 bonus will be issued to those booking a round-trip international first or business class ticket and a 10,000 bonus for a round-trip international tourist class ticket.

LanChile passengers earn miles in American Airlines' AAdvantage, as well as LanChile's LanPass frequent flyer programs.

>> More <<
LanChile

<< S T E A L S & D E A L S >>

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Icelandair's Small-Horse Tour
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Leave it to Icelandair to come up with promotions which offer good value for an off-the-beaten track travel experience. And they have a sense of humor about it. The latest involves miniature horses and strict attention to hygiene requirements...

More than a thousand years ago, Viking explorers loaded their ships with all their possessions, along with their livestock, and headed for distant shores. Those early adventurers who landed on a beautiful tree-studded island in the North Atlantic Ocean settled down to raise their families in the country that became known as Iceland. Warm Gulf Stream currents tempered the weather, and the settlers -- and their livestock -- thrived. Just about the end of the first Millennium, the 70- year-old Icelandic Parliament decreed that no more horses could be brought to their country. Now, a thousand years later, travelers flock to that same island to enjoy the descendants of those very same horses -- at an affordable price from just $1099 per person, including round-trip air, airport transfers, 3 nights hotel with breakfast (lunch and dinner most days). Extra nights are available at additional cost.

Modern-day visitors will enjoy touring the exotic countryside of Iceland on the world's smallest true horses with this Icelandair Holidays package, spurred on by popular demand from the attendees at this year's Equitana Horse Show. The riding tour includes a guide and a friendly, sure-footed Icelandic horse, complete with tack and gear. A word to arriving guests: Icelandic law requires that all riding boots brought into Iceland must be brand new disinfected by a health professional; riding clothes must be new or dry-cleaned. A detailed itinerary is available upon request from Icelandair Holidays.

The above price includes Icelandair flights from Halifax, Boston, New York (JFK) and Baltimore/Washington (BWI); add $50 pp for flights from Minneapolis/St. Paul or Orlando. Scheduled tour departures are September 14, 21, and 28 and October 5 and 12, 1999, subject to availability, with 4-person minimum required for each horse-riding tour. Airport taxes and personal insurance not included. Other conditions may apply.

>> More <<
Icelandair Holidays at (800) 779-2899.

<< T R A V E L O N L I N E >>

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Hotel Room? Name Your Price!
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Need a hotel room? Specify your travel dates and destination... name your price... cross your fingers... and hit the "Submit" key.

That's the "your price" model made famous by Priceline.com. Fame, as we know, begets imitators.

In this case, the imitator is no less than Microsoft's travel site Expedia, heretofore a mainstream online travel agency. And their new Hotel Price Matcher is a carbon copy of Priceline's.

Since Expedia is the latecomer to this party, they're offering a launch incentive to get your attention: if you make a hotel booking through Hotel Price Matcher between September 9 and October 6, 1999, you will receive a $25 rebate on your credit card.

This is all about distribution of what is known in industry-speak as distressed inventory. Because hotel room nights (and airline seats and rental car days) are perishable, the pressure to sell the "inventory" increases as the use-it-or-lose-it date approaches. The Priceline model is one way of allowing suppliers to deeply discount unsold inventory. And by doing it at the last minute, they can be relatively confident they're not undermining their official pricing.

There's an interesting side wrinkle to the Expedia initiative. Priceline is known to have patented its business model, as well as some of the technology underlying its delivery. Can a business model be patented? Can the Priceline approach in particular be patented? If Priceline takes Expedia to task for Hotel Price Matcher, the courts will rule on those questions. Could be very entertaining...

In the spirit of investigative journalism, I was going to give the new feature a trial run. Unfortunately, the system is not testing-friendly--if you make a bid, and it is accepted, you are committed. An accepted bid is immediately charged to your credit card, and the reservation is non-changeable, non-cancelable, and nonrefundable.

If any Crier readers have first-hand experience with either Priceline or Expedia, we'd be interested in hearing from you.

>> More <<
o Expedia
o Priceline

<< I N D U S T R Y N E W S >>

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Industry Wavers: Good News, Bad News
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On Tuesday, airline share prices (as measured by the Amex Airline Sector index of airline stocks) dipped 4%, after Merrill Lynch analysts lowered their profit estimates. That's bad news for investors overexposed to this sector.

For travelers, the news cuts both ways. According to Merrill's reckoning, the profit weakness stems from 3 factors: rising fuel prices, air traffic control delays, and increased seat capacity. From the consumer standpoint, fuel prices are important only insofar as they impact pricing. And in this case, prices aren't expected to change substantially. Air traffic delays, on the other hand, mean just that: delayed departures; missed connections; lost time and productivity generally.

The upside is the increase in capacity. As long as the number of available seats increases faster than demand for those seats, the load factor (percentage of seats filled) will decrease. And lower load factors means more elbow room.

So here's the picture: You're flight is already an hour late, and your aircraft is now number 26 in line for take-off; you won't be retiring anytime soon; but the seat next to you is empty.

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A-M-E-X Blue
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American Express, it seems, wants to be all things to all people. Credit cards and charge cards; branded and co-branded; upscale and downscale; green, gold, and platinum. Apparently they have identified another area of unfulfilled demand: value-conscious cyber-purchasers.

Amex this week launched Blue, a new credit card designed to expand the company's revolving credit business. Blue, according to the company, was "custom designed for the 21st Century Consumer."

The new card's features: introductory interest rate of 0 percent for the first six months and an ongoing fixed rate as low as 9.99 percent for revolving balances as long as the customer is in good standing; no annual fee; a web site where customers can pay bills online, download information from Quicken or Microsoft Money, take advantage of online financial tools to calculate net worth, cash flow and retirement goals; Fraud Protection Guarantee; Return Protection; Purchase Protection Plan; Best Value Guarantee.

According to Amex: "Blue continues the American Express tradition of creating custom-designed products that appeal to specific segments of the consumer marketplace. With 64 million adults surfing online regularly and 10 million people shopping online, it is clear that consumers are quickly adopting and adapting to the Internet. But as large an audience as that may be, there are still millions of people who are just beginning to explore the power that technology holds. Blue was designed with both of these consumer groups in mind."

While Blue has a traditional magnetic stripe that can be read at point-of-sale terminals when shopping in the physical world, there are also features that will add convenience and more security when shopping online. First, for those cardmembers who want to make online shopping easier, the company will be offering for free, American Express Online Wallet. Cardmembers enter their purchase information (such as name, card account number and shipping address) into the wallet. When the customer is ready to make an online purchase, all he/she has to do is open the wallet and click on the "complete purchase" button to automatically fill in the merchant's purchase form. Blue cardmembers will be able to register for the American Express Online Wallet in November.

Second, for those cardmembers looking for added online security, Blue has a "smart" chip. Using a smart card reader, which is available for free from American Express, and connects to the user's PC, cardmembers can more securely access their American Express Online Wallet when making purchases online. The chip stores a unique digital certificate that acts much like a key. When the card is inserted into the smart card reader and the cardmember enters his/her PIN number, the certificate is read and the cardmember can "unlock" the wallet. This added level of security helps prevent unauthorized access to the wallet.

The bad news for those who are mileage-driven: Blue (as Amex wants the new card referred to) can only be linked to Membership Rewards if you already have a regular (green, that is), gold or platinum Amex card. That might make sense if you're carrying a company-issued card for business, and choose to use Blue for personal charges. Otherwise, it seems like a disconnect.

Overall, this looks to be an interesting product. The pricing is competitive; the online component goes beyond the standard bill-paying and account look-up features; and the integration with an Internet wallet application is promising. The downside of chasing after every slice-and-diceable demographic is the complexity: Amex has more cards than I, for one, can get my arms around.

>> More <<
American Express

<< R E A D E R R A N T S & R A V E S >>

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America West, etc.
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Is anyone else having trouble flying America West? I've had the misfortune of flying them quite a bit lately, and it seems as though delays and cancellations are rampant on some of their routes. The excuse is always "mechanical" and it's making me a bit nervous that they are having such trouble keeping their planes in the air!
 
In actual fact, a couple of the times I noticed that they cancelled flights with low load factors, when there were partially empty flights a couple of hours either side. This past trip they did this, and I had to leave the house in quite a rush to catch the next earliest flight.
 
You know it's getting bad when their (subjective) service levels are worse than Northwest, whom I also fly quite a bit. If they didn't link with Continental I would probably never fly them again (I'm OnePass Gold Elite, mostly because of America West segments).

[We responded to John's note by relating a similar story, and counting our blessings that we live in an area (Los Angeles) which is served by many airlines and several airports. John responded...]

Yep, you're lucky to live in a "good" hub city (good being a very relative term). Your experience a year ago sounds hauntingly familiar to what I've seen lately.

I recall seeing an article several years ago (not sure the source) that made the case that the way airport gates and/or takeoff & landing slots are given to airlines is a major reason for the situation today (fortress hubs, no incentive for good service, etc.). They were proposing a much freer market on the airport operations end so that one or two airlines could not "lock up" a city. I'm sure residents of Phoenix, Minneapolis, Detroit, etc. would not mind that at all. Might be an interesting point for reader feedback - what do you think?

Thanks for always answering mail - too bad YOU don't head up customer service for an airline. Seems as though a pulse and respiration are the major required skills these days...

 - John

[Thanks for what I think is a compliment, John. In fact, at one point I managed the customer service operation of an international carrier's frequent flyer program. And, without getting into excruciating detail, I can tell you that it's a real challenge balancing the demands of customers, employees, shareholders and management.]

Until next week...