I’m late to the discussion, and others have already hit the main points, so I’m just going to give you the short version and recommend others for the detailed breakdown of the pros and cons.

The biggest news is 1) the introduction of a new (fourth) elite tier at 125,000 miles, 2) the ability to roll over qualifying miles from one year to the next, so you get a running start on status the following year, and 3) upgradable award tickets.

For the most part, the changes are good. The fourth elite tier is a bit annoying, in that it creates greater complexity in an already complex system. Rollover miles are nice, but they come at a price: The following year, there will be a LOT of other travelers with a running start; the upgrade competition will be fierce. And upgradable award tickets? Great idea, but let’s see how it’s executed. (I.e., who gets priority for the upgrade, the Diamond-level elite with an award ticket, or the Platinum with a full-fare paid ticket?)

For full reviews, see these other fine blog posts:

On the “pro” side:
- Henry Harteveldt of Forrester Research is downright ga-ga for the changes.
- Brett over at Cranky Flier calls it good news for frequent flier junkies.
- The Delta Blog is positive. I was really expecting some hard-hitting critiques…

On the “con,” or at least skeptical, side:
- Gary Leff calls the changes “unimpressive.”
- One Mile at a Time notes that United and American top-level flyers already have most of the Diamond benefits, at a lower mileage level.

In any case, it’s going to change the calculus for top-tier fliers in the new Delta. Lower-tier elites and general members are frankly going to see little difference.

Update: Seconds after publishing, I see Jared Blank had the same exact idea for handling this topic as I did.

With few exceptions, EQMs are earned primarily by flying, unlike the redeemable miles that can also be earned through credit card spending, rental cars, etc. So EQMs are a greater measure of loyalty to an airline (and its alliance partners) than redeemables.

The size of the EQM gift ranges from 5000 EQMs (20% of the way to entry-level status) all the way to 15,000, but according to reports on Flyertalk threads (here for Delta, here for Northwest), there’s no obvious rhyme or reason. A traveler with 140K miles under his belt for the year got a 5000 mile bonus (which doesnt’ really change anything) while a traveler with far fewer miles got more. I don’t get it.

Reader Cindy forwarded me a message she received from Northwest, quoted below:

A jump start can be the perfect beginning.

That’s why we’re excited to provide you with 10,000 complimentary Elite Qualifying Miles (EQMs) – which have already been deposited into your WorldPerks account – to help you requalify for Elite status in 2010.

We understand your ability to travel is more restricted this year, due to the economy and other factors, but we hope you’ll continue to fly with us and enjoy your elite status benefits while continuing to add even more Elite Qualification Miles to your balance. Take advantage of our vast new network, serving almost 400 destinations in more than 65 countries on six continents, including new routes to Johannesburg, Sydney, Saigon and beyond. Book a flight today.

You’re the reason we fly,

Jeff Robertson
Vice President – Loyalty Programs

This is bound to please many people who might have lost their status (and the commensurate perks) next year. On the flip side, it’s bound to annoy people who get fewer EQMs than they think they deserve, relative to others. It can equally annoy customers who earned their status through actual flying, instead of bonuses. But hey, it’s a business decision on the part of the airlines, and they think they’ll be able to keep more business this way.

Will other airlines follow suit?…

2 miles to upgrade an international roundtrip? Two?!!

Northwest and Delta both sent e-mails to their lists. Here’s a piece of a Delta e-mail, but the gist is the same for flights on Delta’s subsidiary, Northwest:

You can now upgrade to our award-winning BusinessElite cabin for one mile each way when you fly internationally on a paid Y, B or M Economy fare between June 30 and September 15, 2009.

[...]
Terms & Conditions
Eligible Fares/Booking: All taxes, fees and blackout dates are governed by the rules of the Y, B or M economy class fare purchased. Additional upgrade tax may apply. SkyMiles members can request a one-way upgrade Award for 1-mile for paid tickets purchased in Y, B, or M economy class between the continental United States, Alaska, and Canada and any international destination that offers J class fares (BusinessElite) where upgrade class of service is available on Delta or Northwest-operated flights only. SkyMiles members must call a Delta reservations representative for upgrades. Tickets: Must be purchased and upgrade requested no later than July 13, 2009. Travel Period: Travel must be completed by September 15, 2009. Restrictions: Availability of one-way upgrade inventory is limited and may not be available on all flights. Some markets may have more availability than others. Members may reissue existing tickets to be eligible for upgrade offer, but will need to pay applicable fees. Customers may combine this upgrade Award with other one-way upgrade Awards. Upgrades not available on Air France and KLM or any other SkyTeam® or codeshare partner operated flights. Tickets are nontransferable. SkyMiles accrual will be for class of service originally purchased. Miscellaneous: All SkyMiles program rules apply. To review the rules, please visit delta.com/memberguide. Fares, taxes, fees, rules, and offers are subject to change without notice. Other restrictions may apply. Please refer Delta reservations representative to 970222.

“Additional upgrade tax” ??! Be sure to get a full quote before you finalize anything.

Also, and very importantly: Note that the eligible fares — Y, B, and M — aren’t the rock-bottom cheapie bucket of fares, they’re at the top end — the most expensive range of economy fares.

You may in fact be able to find a cheaper fare confirmed in business class by looking for a business fare outright. (Most likely a fare with a “Z” an “I” or “S” fare code.) Shop around.

All told, though, spending 2 miles for a roundtrip international upgrade is fantastic value. The airlines are obviously having trouble filling seats. Summer months are typically slow for paid business class travel, and that’s on top of the recession’s crimp on high-fare spending.

Take advantage while you can.

American Airlines’ CEO Gerard Arpey dared to dream. He slipped a comment into their recent earnings call which seemed rather off the wall, until Delta CEO Richard Anderson effectively repeated the idea. The proposal? Instead of paying commissions to agencies and websites that sell their fares, airlines would charge those agencies a fee for the right to display and sell their fares.

AA’s Arpey:

“I can see a day, and maybe I’m dreaming here, where those folks who are the intermediary between us and our customer have to pay for access to our product rather than us paying them to distribute our product.”

DL’s Anderson:

“Over time, the industry will evolve,” Anderson told analysts on Tuesday during a conference call to report first-quarter financial results. “People will pay us for our content.”

There’s an odd disjuncture here in the understanding of what it is airlines are selling, and who their customers are. Travelers see airlines as selling transportation services, and that passengers are the customers. But these airlines apparently seem to think they’re selling “content” — their schedule data — and that the agents who sell tickets on the airline’s behalf are the customers. No wonder the airline industry is such a mess.

On the one hand, airline execs are right to be looking for ways to reduce their costs. And when an agency or website besides their own sells a ticket, they’re giving up a cut, largely to the global distribution systems like Amadeus, Galileo, and Sabre that distribute their information to agencies large and small. (Granted, the agent themselves may or may not get a cut, depending on the contract they’re on, with most small agents getting $0.00. That’s why independent travel agents typically charge a “service fee.” The big guys like Orbitz and Expedia get a piece of each sale.)

But charging their sales team — the agencies — for the privilege of even offering fares sounds like a multi-level marketing scam or a 19th century company town. Paging the Pullman Company!

What airlines are missing here is that the bulk of higher-priced tickets aren’t sold via the airlines’ own websites. They’re sold through big agencies, often through corporate travel sites. And even if the US market has moved away from independent shops, the rest of the world is still heavily dependent on agencies. Cutting out other means of distributing their fares could be cutting off their nose to spite their face.

If this really were to happen, it wouldn’t be great for consumers, despite the ostensible cost savings. The problem is transparency. If some airlines would be available for sale through one system but others wouldn’t, it would make meta-search all the more important to find lower fares. (That is, if the airlines allow aggregators to search their sites…)

But honestly, none of this is likely to happen. There’s the fact that the high-revenue sales come through the higher-cost distribution channels, and for all the complaining, the money is too good to just sacrifice.

Plus, even if this happened, and even if we assumed that sales would just revert to the airline’s call centers and website, implementing this would require a ramp-up of airlines’ customer service infrastructure (call centers, web support, etc.), just to do the work that agencies are doing now. Will the commission savings outweigh increased personnel and customer service costs?

Either way, at the very least, American and Delta have ticked off a host of agents. The comments on the TravelWeekly article already number in the hundreds. (419 to be precise, and comments appear to have been closed.) Threats of boycotting AA abound, and there’s ever more bad blood between agents and the legacy airlines who proposed this.

Great move, guys.

(image)

An act of terrorism, caught on film.

Upgraded: Hostels
The NYT has a piece on European hostels, and how they’ve improved over the years, reaching out to travelers who want more privacy (e.g., a double room instead of a bunk in a dormitory) and more luxury (if an ensuite bathroom is your idea of luxury… my bar is a tad higher). Remember, though, that no matter what the appointments are and the increase in private rooms, hostels are designed to bring people together. A (good) night’s rest may be coincidental to the social mission, so if you’re not feeling social, hostels are not for you. Maybe I’m a cranky old fart, but I prefer to choose the moments when I want to be social. Subsequently, hostels are not my cup of tea.

Downgraded: Offshore outsourcing
Airline call centers have famously been outsourced to offshore call centers, but as passenger numbers (and call volume) shrink, the size of the call center operation has shrunk alongside. Delta has now announced that they will no longer send calls to India, where they’ve been routing calls since 2002. Delta will also reduce call center operations in South Africa and Jamaica. Like most people, I’ve dealt with international call centers, but my complaint hasn’t ever been about understanding the person on the other end of the line. Acoustically, I could understand them. But on more than one occasion, they couldn’t understand what I wanted to do, or they were unable to perform any but the simplest reservation tasks. I often wondered if these outsourced call centers were costing the company more money (in disgruntled customers) than they saved in salaries and benefits. It took a while, but perhaps that equation has finally tilted back toward better-trained in-house employees. (Via FlightWisdom)

Upgraded: Hotel deals in Tampa
The sharpest hotel rate declines in the US? They’re in Tampa, with a 31% decrease, year-over-year, according to Hotwire.

(image)

Downgraded: Willingness of friends and loved ones to give you a ride to the airport
Airports’ inventive enthusiasm for new fees rivals that of the airlines, as we’ve seen when airports try to add fees to previously free services like shuttle buses. The latest entry: A passenger dropoff fee. London-Luton Airport will charge a £1 toll to cars bringing passengers to the departures area, with a 10-minute time limit. Dropoff at a parking shuttle bus stop remains complimentary. Birmingham charges double the fee for a 15-minute time window. Great, now they’re not just charging the traveler, but also the family or friends. I realize that this is a way to manage traffic as well as raise money, but I honestly hope we don’t see this set of fees proliferate. (Thanks, Rick!)

Downgraded: Tort law remedies for trapped passengers
A passenger who sued American Airlines for being stuck on a plane on the tarmac for 9 and a half hours (ouch) had her case dismissed by the court. Her charge of false imprisonment didn’t stick.

Upgraded: Buses
Private jets are out. What’s in: Pimped out corporate buses.

Upgraded: Short-term discounts booking Delta or Northwest miles
Delta and Northwest are temporarily reducing the number of miles you need to book frequent flier tickets to international destinations on Delta, Northwest, or KLM. It’s only through April 20, and only for travel abroad, so move quickly. See here for Northwest, or here for Delta. Another sign that traffic across the oceans isn’t exactly brisk… (And remember, you can get bonus miles through April 15 — again, hurry! — for converting your Northwest WorldPerks miles to Delta SkyMiles.)

Upgraded: Mile-high club, part deux
Downgraded: Marketing!
Free flights for taking off your clothes? Yes, a cheesy marketing gimmick is giving away 999 pairs of intra-European tickets for those who show up near-naked somewhere in central London. Oddly, for an unnamed airline. I’m sure some marketing agency thinks they’re being “edgy” or “buzzworthy” with this schtick. And yeah, I’m writing about it, so you could argue that I’m feeding into it. But since I can’t even write about their client who’s sponsoring the semi-nudity, it sure seems like a failure to me.

Upgraded: Midwest Airlines miles
Midwest Airlines passengers have long been able to use their miles on Northwest, and vice versa. Now that Northwest is part of Delta, that partnership is applicable to Delta flights as well.

Downgraded: International flights
Cash cow no more… United and Delta are cutting back further the number of international flights on their schedule. The planes that had previously been full of premium-cabin travelers are now flying empty up front. With i-bankers relegated to coach, the flights aren’t profitable any longer.

“Sir, your pants are cooing.”

Downgraded: Priorities
A new film being made with George Clooney in the lead role is apparently based on the premise of a man seeking to collect 1 million frequent flyer miles. I would rather see a film devoted a person seeking to spend 1 million frequent flyer miles…

Downgraded: “Good luck” cards for illegal immigrants
Staying on the customs-and-immigration theme… A Mexican man attempting to enter the UK, with the intention of overstaying his visa, was flagged as a probable immigrant, rather than a tourist, when a card was found in his luggage containing the sentiment, “Good luck in your new life in the UK!” The UK Border Agency trumpeted that they were sending him “back.” But the man flew to Manchester from Los Angeles… I wonder what his return ticket read.

Upgraded: Advantage Rent-a-Car revived, in death
Bankrupt Advantage Rent-a-Car’s assets are being bought by competitor Enterprise, assuming the courts approve. But with the ongoing slump in the rental market, I’m surprised Enterprise would even want more cars or offices!

Upgraded: Northwest and Delta mileage accounts
I realize I’ve been negligent in not mentioning this before: You can merge Northwest WorldPerks miles into an existing Delta SkyMiles account and receive a 500-mile bonus for doing so, if you do it by April 15, 2009. The miles will instantly transfer over, but the bonus will take a few weeks to post.

Downgraded: Spirit Airlines charging fees again for buying tickets on their own website
I have to say, part of me loves the gall that Spirit Airlines has. Last year, they instituted a “passenger usage fee” of $4.90 for buying tickets on their own website. If this sounds familiar, it’s because it is: The airline tried this last summer, but retracted it within a few days. In the WSJ, Scott McCartney has this summary:

Spirit tried charging a $7.90 passenger usage fee last year, along with a $2.50 “natural occurrence interruption fee” (to cover storm-related costs) and an $8.50 “international service recovery fee” to pay for some taxes and fees the airline pays to foreign governments. But the DOT stepped in and ordered the airline to stop; federal rules require airlines to include airline-imposed charges that all customers must pay in advertised fares.

Spirit was fined $40,000 but remained undeterred. Since then, the airline has been negotiating with the DOT to find an acceptable way under department rules to charge the passenger booking fee. “We will be reintroducing it in a way the DOT is comfortable with,” Mr. Baldanza says.

Offended? Complain. Here and here.

Downgraded: Missing a flight
Downgraded as well: Airline staff who film passengers
A passenger who flipped out when she missed her flight to Hong Kong, and was caught on cameraphone throwing a huge tantrum, has received an apology from the airline that kept her off the plane. Not because she didn’t board, but because the embarrassing video was made by a Cathay Pacific employee. (Notably, they claim the employee wasn’t the one to have uploaded the video to YouTube, but that’s hardly a vital distinction at this point.) I didn’t post the original video when it started making the rounds, because it seemed to be everywhere at the time, but I’ll include it here for context.

Upgraded: Great reviews of awful hotels
Speaking of lousy hotels… how about this gem in Huntsville, Arkansas? Your room may have security cameras trained on your bed. Fantastic! (Thanks, Kim!)

Downgraded: Honesty, and eventually, safety
American and Delta are pulling out of a voluntary pilot-error reporting program with the FAA. The program was designed to allow pilots to admit to mistakes without fear of punishment, in order to improve how the air traffic control system functions. Guess what: The pilots say they’re being penalized by the airlines anyway, so they’re refusing to report errors. Which harms the system in the long run. Less data means the FAA will have a less accurate sense of the problems — however minor — which plague air travel. Management-labor relations, doing damage once again.

Downgraded: Advantage Rent-a-Car
Upgraded: My mood
Advantage Rent-a-Car, my least favorite car rental company in the United States of America, filed Chapter 11, with plans to close nearly 70% of their locations. Good riddance. My experiences with them were uniformly unpleasant, and downright insulting. I’m sure there were good people who work(ed) for the firm, and for those people, I’m sorry. I’m also sorry that I never actually met any of those people at an Advantage Rent-a-Car counter.

Upgraded: EU and Canada strike open-skies deals
The EU and Canada have liberalized the possibilities for air traffic between one another. “Under the deal, which is expected to come into force in the first half of 2009, airlines based in the 27-nation bloc will be able to operate direct flights to Canada from anywhere in Europe.” More competition for routes across the Atlantic should ensue.

Upgraded: Hartford
Northwest canceled the Hartford-Amsterdam flight, but post-merger Delta resumes it. Service is on a 757. Let’s see if they can make it work.

Upgraded: Algae fuel!
Yes, it’s just in the experimental phase, but Boeing is testing jet fuel derived from algae.

Upgraded: Your Merrill Lynch stock
Elite Island Resorts, with several properties in the Caribbean, are accepting stock as payment for your holiday stays. Better yet, they’re valuing the stock at July 1, 2008 levels. Merrill Lynch stock is down nearly 60% from that level. So, a 60% discount off the room rate! And at these levels, it might even be a good long-term investment for the resort. (via NYT)

I’m a silver medallion member of Delta Skymiles, and I’m wondering where things stand with the Northwest merger. The Delta website has pretty vague information. Nwa.com isn’t much better. When will they merge the programs? Will they cut back benefits? Any ideas?

Well, Steven, there is some new information, but we don’t have all the answers.

Delta/Northwest have announced that:

• Delta SkyMiles and Northwest WorldPerks will merge into one program, targeted for the end of 2009. Early 2010 may be more likely.
• By early 2009 (just a few months away!), you should be able to combine miles from the two programs.
• The three elite-status tiers will remain at 25,000, 50,000, and 75,000 qualification miles. Same for both.
• Northwest will follow Delta’s lead and offer international upgrade certificates to top-tier elites.
• The new program will feature three “pricing” tiers for mile redemption, in line with Delta’s watering down of their “SkyChoice” tier last year. Thumbs down here.
• The merged program will allow elite status to be accrued via segments, and not just miles. E.g., fly 30 short segments or fly 25,000 miles, get status. This was the norm for Northwest, but will be new for Delta.

Delta’s merger page is here, with frequent flyer information here. Northwest’s page is here. They are essentially identical, but don’t reflect the information in the post above (yet).

I’ll post updates as they roll out.

United was going to charge $50 for a second bag, but decided to curtail that and roll it back to $25. Good on ‘em.

Then there’s Delta, which recently merged with Northwest and is trying to align policies and procedures. In this case, they’re taking the lower road plowed by Northwest and imposing a fee for the first checked bag.

Readers may recall that I praised Delta’s logic in charging no fee for the first bag, but charging heftily for the second bag. The former policy kept the occasional checked bag part of the base fee, while heftily penalizing those who travel with the kitchen sink. Seemed reasonable then, still seems so now.

Delta suggests it didn’t see any increase in bookings as a result of the free-first-bag rule, so it deduces that customers weren’t “differentiating Delta as the only major airline not charging for a first checked bag,” according to their press release. (Ignore for the moment that they leave out Southwest, which doesn’t charge ANY baggage fees…) In any case, this is too bad.

Note also that paying a luggage fee doesn’t prevent your suitcase from being inspected by zoo animals: A Delta baggage handler recently opened the cargo doors to find a cheetah roaming around inside. The animal had escaped from its cage. No luggage was harmed, though it was almost certainly sniffed. Anyway…

Then there’s this change, governing carry-on bag size:

Carry-on rules also are changing. Continental recently reduced the allowable linear inches (length, plus height, plus width) from 51 to 45. That puts it in line with the linear inches allowed by American, Delta and Northwest. AirTran allows up to 55 linear inches, US Airways’ limit is 51 linear inches and Southwest’s limit is 50 linear inches. Many airlines also limit the weight of carry-ons to 40 pounds.

Expect these numbers to shrink, too, and expect airlines to start adding a fee for “oversize” carry-ons. They know that people are avoiding checked luggage because of the fee, and they’ll want their money one way or the other. That day is coming.

And just for the record, with oil trading around $60 per barrel today, the fuel-expense argument rings hollow for these luggage expenses.

The maximum you can send from one account to another is 30,000. But there are fees attached: 1 cent per outgoing mile, plus a flat $30 charge per transaction. Those fees can add up.

But what if you send miles from one account in your family and then send the miles right back, effectively doubling the miles both ways? Churn it, baby! Would that take the edge off the fees?

Nope. You’ll still shell out some hefty coin if you want to double up those miles. Take a look:

Account 1 sends 15000 miles to Account 2. Account 2 receives 30000.
Account 1 balance is down 15000.
Account 2 balance is up 30000.
Cost to Account 1: $150 + $30 processing fee = $180

Account 2 sends 30000 miles to Account 1. Account 1 receives 60000.
Account 2 balance is back to even.
Account 1 balance is net up 45000.
Cost to Account 2: $300 + $30 processing fee = $330.
Cumulative cash outlay = $510.

So $510 gets you 45000 net miles, at a cost of 1.133 cents per mile. (If you both sent 30K miles to one another simultaneously, the cost would be slightly better… $660, or 1.1 cents per mile.) For me, that’s too much cash to spend, for too little payoff. The only — only !! — way I could endorse this is if you’re using the miles to get some hard-sought, expensive, premium class tickets to far-flung destinations. Only then might this be a good way to score some quickie miles.

Also, note that the base miles transfer within a week, but the double-mile bonus takes four to six weeks to post. So with only a few days left on the clock, you would have to have balances in each others’ accounts already. There are only 5 days left on this promo, after all. (Mea culpa. Had I noticed this when it came out in early October, you would have heard about it earlier…)

Finally, be aware that you can’t get the bonus miles if you open up a new account to transfer miles into. Read the bonus offer terms and conditions carefully:

Transaction must be completed on delta.com between October 1 and October 31, 2008. Bonus mile offer expires October 31, 2008. Bonus miles will be awarded for all transfer miles transactions made during this time period. Bonus miles will be awarded to the recipient of the miles. Offer does not apply to miles purchased under the SkyMiles Buy or Gift Miles program. The bonus is eligible only on transactions completed on delta.com. Bonus miles will be posted to the recipients account 4-6 weeks after the transfer transaction. Transfer Miles may only be donated and received by SkyMiles accounts that have been established for at least 60 days and have a Total Lifetime Balance greater than zero.

(Offer link)