Issue #12  --  September 12, 1998

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Northwest, Air Canada Close to Agreement with Striking Pilots
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Tentative contract agreements have been reached between striking pilots and both Northwest and Air Canada. Assuming the agreements get the thumbs up from union members, operations could resume in approximately 10 days in Northwest's case, and as early as Thursday next week in Air Canada's case.

>> More <<
o Northwest flight updates: http://www.nwa.com/travel/flifo
o Further information on the labor negotiations: http://www.nwa.com/corpinfo/newsc/sm061098a.shtml
o The Northwest reservation line in the United States and Canada 1-800-225-2525.
o Air Canada's website has a special area devoted specifically to strike updates, special policies and procedures, etc.: http://www.aircanada.ca/labour/
o For Reservations, call 1-800-776-3000. For Flight Arrival & Departure Information, call (English): 1-800-488-1800, (French): 1-800-488-1900.

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America West... Miles for Sale
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America West Airlines has introduced the FlightFund Merit Miles incentive program. This new program enables companies to purchase FlightFund miles to build customer loyalty or reward employee performance, giving recipients the opportunity to earn free worldwide travel.

Merit Miles certificates are available in 100, 500, 1,000, 5,000, or 20,000 mile denominations with a minimum purchase of $1,000, plus 7.5 percent Federal Excise Tax. The miles are priced at 2 cents ($0.02) each, so for $1,000 you would receive 50,000 miles, in your choice of denomination.

Certificates are redeemed through America West and credited directly to the recipient's FlightFund account. Individuals who are not already FlightFund members can contact the FlightFund Service Center at 1-800-247-5691 to enroll or sign up on the Internet at www.americawest.com.

Similar programs are offered by American, United, Delta and other U.S. airlines.

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o Customers can call a toll-free number, 1-800-833-2292, weekdays 8 a.m. to 8 p.m. EST to receive complete program details.
o America West Airlines' website: http: //www.americawest.com

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Hyatt Joins America West Program
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Beginning October 1, America West frequent flyers can earn FlightFund miles at participating Hyatt hotels and resorts worldwide. For each qualifying stay, FlightFund members receive 500 FlightFund miles. And, as an introductory offer, members will earn triple miles (1,500) between November 1, 1998 and January 31, 1999 for qualifying stays at the Hyatt Regency Columbus and the Hyatt on Capital Square, both in Columbus, Ohio. To receive the special offer, FlightFund members must mention AWCLT8 at check in.

To receive America West FlightFund miles at qualifying Hyatt properties, FlightFund members simply present their membership card at check in. Individuals who are not already FlightFund members can contact the FlightFund Service Center at 1-800-247-5691 to enroll or sign up on the Internet at http://www.americawest.com.

There are 183 Hyatt hotels and resorts around the world. Hyatt Hotels Corporation operates 109 hotels and resorts in the U.S., Canada and the Caribbean. Hyatt International, through its subsidiaries, operates 74 hotels and resorts in 34 countries. In the U.S., Hyatt Worldwide Reservations for individuals and groups can be reached at 800-233-1234. Outside the U.S., contact the local Hyatt sales office or representative.

>> More <<
America West Airlines' website: http://www.americawest.com

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Million Mile Monday, Maybe
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CBS will award one million American Airlines AAdvantage miles to one viewer, selected in a random drawing, who can correctly answer questions about the five programs premiering on Monday, September 21 on the CBS Television Network.

The new CBS Monday lineup features returning favorites "Cosby" (8:00-8:30) and "Everybody Loves Raymond" (9:00-9:30) and the new "The King of Queens" (8:30-9:00), "The Brian BenBen Show" (9:30-10:00) and "L.A. Doctors" (10:00-11:00), all times Eastern/Pacific.

Viewers will be asked to answer a question about each of the premiere episodes of the new and returning series by watching CBS' primetime schedule on September 21. All viewers are eligible to enter the CBS "Million Mile Monday" sweepstakes, via entry forms in the Sept. 1 issue of American Way, the airline's in-flight magazine, or by mail. The questions and contest rules will also be available on the Internet sites of CBS and American Airlines (see below).

>> More <<
o American Airlines' website: http: //www.AA.com
o CBS website: http://www.cbs.com

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Delta Will Discontinue International First Class
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Delta Air Lines has announced "a new strategy which will redefine intercontinental business travel standards with an innovative, premium two-class service concept designed to provide the world's best travel experience at a business-class fare." Translation: Delta has run the numbers and determined that the profit potential of business class is higher than the current actual profit from first class.

No surprise here. If it weren't for frequent flyer upgrades, first class would be largely empty. So there's clearly a huge disparity between supply and demand, at least for paid first class seats. (Conversely, for free first class seats, there's often more demand than supply.)

Still, it's a risky move. The cost to reconfigure their wide-body fleet ($125 million) is substantial. And if they've misjudged, and customers aren't impressed (or, worse, they're positively outraged, as some frequent flyers may be), then Delta's marketers they'll join the same club as the self-proclaimed geniuses who introduced the New Coke. Another downside scenario: American and
United match Delta's business-class fares, but continue providing their traditional first class service for the lower price.

The new product, which Delta claims will improve upon first class in some respects, will replace existing first class and business class on all transatlantic, transpacific and Brazilian flights. The product launch is scheduled for Spring 1999.

The new business class will feature a "signature" seat specifically designed for Delta, more personalized service, increased meal selections, new wine varieties from Delta's Vinum wine program, and upgraded in-flight entertainment system.

According to Delta, their research revealed the following:

    * 55 percent of business-class passengers surveyed stated they would increase their travel on an airline with a premium business-class product.

    * 96 percent of passengers interviewed stated that superior seat comfort was extremely important or very important when choosing a carrier.

    * 82 percent of all first-class passengers interviewed stated they would try a premium business-class product.

    * In 1997, the intercontinental business-class travel market grew approximately four times faster than first-class.

    * The business-class market for the industry is seven times larger than the first-class market in terms of passengers.

    Delta customers will see the product introduced in phases starting this December.

    * The interiors of Delta's intercontinental fleet, including 42 B-767ER aircraft and 15 MD-11 aircraft, will be redesigned over an eight-month period beginning December 1998. The 12 B-777 aircraft Delta has on order will be delivered with the new two-class interior.

    * The ground and in-flight elements of the product will be introduced Spring 1999.

    * Completion of aircraft modifications and consistent product delivery is scheduled for Summer 1999.

Effective December 1, 1998, Delta will no longer sell first-class (B-767ER and MD-11 aircraft) for intercontinental travel. During the first phase of the transition period, from December 1998 through Spring 1999, Delta's current business-class service will replace first-class service on affected flights.

My best guess: 90% of Delta's customers will never know the difference. The 10% who do notice will be frequent flyers who know and appreciate the difference between first class and business. Unfortunately for Delta, these are the airline's best customers, who earn upgrades to first class by buying lots of expensive, high-profit economy-class tickets for their frequent business trips. And I can already hear them howling.

>> More <<
Delta Air Lines' website: http: //www.delta-air.com