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badice.com ~ musings for the masses

An OpEd in the December 12, 2014 Houston Chronicle by a United Airlines employee really has me scratching my head. In it, Mark Segaloff posits that Emirates’s status as an airline hinges on them being state owned and that they are able to hurt U.S. airlines because of their use of the Import/Export bank to finance their aircraft. He continues, stating that state-owned airlines cause domestic U.S. carriers to lose business and suffer, costing jobs. While my heart is with Mr. Segaloff, my head is not.

Emirates A380 - Mark Harkin

Emirates A380 – Mark Harkin

It is true that there has been some concern about state-owned airlines coming into the U.S. and hurting domestic carriers. Even European carriers have stated that the Middle East carriers pose a serious risk to their business in the region. Here’s the kicker though, the European carriers are really the only ones with skin in the game. They are the ones with multiple flights to multiple destinations in the Middle East. U.S. carriers fall well behind when it comes to service to places like Dubai, Abu Dhabi, Doha, Kuwait City and others. In fact, United could not make their Washington-Dulles to Doha, Qatar (with a stop in Dubai) route work, so they pulled that service.

Mr. Segaloff’s key point is that the Emirates flight will cost Houston jobs. I fail to see any facts in the article as to why that would happen. United offers a once daily flight to Dubai from Dulles. If they want to compete directly for those dollars from potential customers out of Houston, maybe start non-stop service? Maybe offer a product that is not being degraded by installing slimline seats, reducing seat pitch, and generally making the travel experience sub-par. I know that Mr. Segaloff would probably retort, “But they are a state-owned airline with all the money in the world to make service improvements.” to which I would simply give him a link to United making a record profit in Q3 of 2014. There seems to be some money for improvement there, yet United offers 2-4-2 seating in business class on the Dubai flight. No thanks, I would rather take the non-stop from Houston (avoiding Dulles) in 1-2-1 seating on the A380. United does offer a number of one-stop options to a number of Emirates destinations via their antitrust immune joint venture with carriers such as ANA and Lufthansa. Granted, the service standards are not the same as Emirates but there are options that make money for United and their partners.

Something that Mr. Segaloff fails to mention is that the Emirates service to Houston is not new, it is simply bigger now. Truth be told, Emirates used to offer two daily flights to Houston from Dubai and with those two flights they actually had more seats (532) flying to Dubai than they do now with the A380 (489/517 depending on version). Where were the complaints when Emirates was running that second flight?

There have been a number of announcements of service to Houston by carriers that are not state-owned and not from the Middle East but these seem to do little to upset employees. But from an airline business perspective, these new routes are the worrisome ones. Korean has started non-stop service to Seoul, which I had heard was off to a rocky start but is doing better now. ANA announced service to Tokyo, EVA has schedules loaded to Taipei, and there are rumors that British Airways wants to bring an A380 to Houston for one of their two flights a day. ANA and EVA are Star Alliance partners with United, but Korean brings a good product and a fantastic network in Asia. Where is the uproar against that?

The Import/Export Bank is actually a valid concern, especially when the money is not spent the way it was meant to be spent, helping a foreign company grow by buying American goods. However, I do not think Emirates has any problem letting that money fall away. In fact, that money is specifically for Boeing jets, not for the Airbus A380 that Emirates is bringing to Houston.

I think one place where Mr. Segaloff could apply is argument is to the new Emirates flight linking New York City with Milan, Italy. This is a city pair that is served by two U.S. carriers, Delta from JFK and United from Newark. Now you have a third foreign carrier on the route who is trying to bring down the prices but not having much success. But I do not think it’s a question of letting foreign carriers operate routes from the U.S. to their respective hubs but whether or not those foreign carriers should be allowed to operate so called “Fifth Freedom” routes like New York-Milan ad infinitum. A number of carriers do this but use that fifth freedom flight to connect to their hub at the end. Out of Houston, Singapore Airlines flies to Moscow and then onward to Singapore. They are allowed to sell tickets to Moscow or Singapore out of Houston and they fill their plane. It’s a win/win. But when do those flights become anti-competitive? That’s for the FAA and DOT to sort out.

It is one thing to cry wolf when there is a valid concern but to say that Emirates and their A380 is going to hurt Houston is simply fiction. If anything, the Emirates service is helping strengthen the Houston economy by offering one-stop service to places that were previously unreachable without 2 or more stops. It will also continue to keep prices relatively competitive, which is good for the consumer. Sure, United may not like that, but how many passengers are they really flying a day to Dubai? How many are they flying to Europe for Middle East connections? United has a choice to make, they can up their game and focus on becoming a world class international carrier or they can relegate themselves to a middle-tier domestic focused carrier with a product that just barely keeps up with the competition. That decision will dictate the fate of those jobs that Mr. Segaloff is concerned about, not a single Emirates A380 flight a day to Houston.

Just a few days ago it was was announced (speculated) that EVA Air would start service to Houston in June of 2015. On the heels of that, ANA, one of two major carriers in Japan, announced that they will start service to Houston from Tokyo-Narita starting in June of 2015.

ANA Boeing 777-300ER; JA736A@HKG;05.08.2012671eb

ANA 777-300ER By Aero Icarus

Airlineroute.net is reporting the following schedule, which matches what ANA announced in their press release:

NH174 Tokyo-Narita to Houston departing 11:15am arriving 09:30am [Daily]
NH173 Houston to Tokyo-Narita departing 11:20am arriving 03:20pm(+1 day) [Daily]

The service will start June 12, 2015.

Based on the seat distribution that ANA points out in their press release, 8 First Class, 52 Business Class, and 190 Economy Class seats, it looks like they will send the following 777-300ER configuration to Houston. Their economy class seating does have a premium economy section, but more importantly, they have 9-across in regular economy in what most would consider an odd seating arrangement, 2-4-3. This certainly does not mean that from time to time ANA won’t send one of their more denser configurations to Houston, but their schedule has a nicely fitted aircraft planned for the service.

ANA 777-300ER Configuration

The flight will more than likely use Terminal D, which at this point, really needs a makeover when it comes to lounge options and amenities for passengers. The terminal does not have a ton of food options and walking to Terminal E or C, where such options are more plentiful, is not a quick trip. There is also one lounge that is shared by Star Alliance carriers in Terminal D. It is windowless and the last time I was there it was packed to the gills. I have heard it has been expanded but have yet to see the improvements.

Given United’s recent removal of their second daily flight from Houston to Tokyo-Narita, this route announcement is a little surprising. United had trouble making money on the route using a 777-200ER, which is smaller than the plane ANA plans to use, and had trouble again when the service moved to a 787-8, an even smaller aircraft. Clearly United initially saw a need or they would not have started the second flight. So what prompted this shake up?

United and ANA are put of antitrust immunity joint venture across the Pacific. This allows them to share both revenue and risk on new routes. If one carrier thinks it can market a route better or run a route better, then the airlines discuss it and come to an agreement. In this case, I think ANA sat down with United and pointed out that the latter had dropped a number of services out of Tokyo-Narita, namely Bangkok, and that they, ANA, could do a better job of handling a second frequency to Houston while expanding the coverage in Asia. On the flip side, ANA can provide a lot of connecting traffic to United’s mid-morning departures out of IAH to places like Latin America and the southeast United States.

ANA touts this in their press release citing two route increases, Bangkok and Singapore and they include the following table pointing out southern Asia points that can reach the U.S. via Tokyo-Narita using this new service.

Asia-U.S. Network

That’s really the kicker. You can leave Singapore or Bangkok on one of the midnight flights to Tokyo and connect directly to a flight to Houston.

I have to believe that ANA feels that they can market the service better to south and southeast Asian cities better than United can, especially with United’s recent market retreat there. United simply does not have the presence it used to in Asia and if an Asian carrier can convince travelers to fly with them and share that revenue with United, I am sure United is happy to let them do it.

One tidbit not present in the press release is whether or not United will keep their Tokyo to Singapore service. The flight frequently goes out full and for flyers coming from the east coast of the U.S. it’s an easy connection. I can’t imagine United getting rid of the route, but then again, I didn’t see this ANA service to Houston as being possible, so anything could happen.

It is definitely great for Houston to have more international carriers coming into Terminal D. I want to see how it plays out as oil and gas prices continue to tumble. If the market in Houston contracts a little and consolidates, will all of these flights be sustainable? Only time will tell.

*EVA has now made an official announcement of the Taipei to Houston route, so no more speculation.

It appears as though the much rumored EVA Air Taipei to Houston non-stop service is now official. Well, it’s loaded into the schedule it seems.

Airlineroute.net is reporting that the flight will start on June 21, 2015 and will have the following schedule:

BR52 Taipei to Houston departing 10:00PM arriving 11:25PM [Sun, Tue, Wed, Fri]
BR51 Houston to Taipei departing 1:15AM arriving 5:55AM (+1 day) [Mon, Wed, Thu, Sat]

The actual first flight will be on June 19, 2015 and that flight will arrive at IAH at 5:45pm. My guess is that this flight is timed as a positioning flight to get the aircraft to Houston to operate a day later while still allowing daylight for the press and local officiants to give their speeches.

Taipei to Houston is just under 8,000 miles and will take 14 hours and 25 minutes. The reverse, Houston to Taipei, will clock in at 15 hours and 40 minutes due to winds.

As far as service goes, EVA’s product looks really nice with full lie-flat seats in business and a very decent looking economy product. Ben Schlappig has a number of trip reports on his blog at One Mile at a Time and they are worth a look if you are interested in the EVA product.

It is great to have more options to Asia out of Houston and I think this flight is timed perfectly with connections in Taipei to allow you to get just about anywhere in Asia easily. This will also bring a little more competition to United (even though they are Star Alliance members) and maybe we’ll see some fare sales to Asia!

The Financial Times on Why Luxury Air Travel is Taking Off Again

An interesting tidbit:

“Everyone thinks first class must be diminishing, but its quite incredible how more and more airlines are renewing their first-class offer and having more first-class seats on board,” says Nigel Goode, director of the design agency PriestmanGoode, whose recent projects include new first-class cabins for Qatar Airways, Swiss, Lufthansa and Air France. “There is quite a resurgence.”

And yet the picture isn’t straightforward. “Absolute numbers are up, but it’s the composition that is the really intriguing thing,” says John Grant, executive vice-president at OAG. Look at individual airlines and you see big discrepancies. In China, where flying first has traditionally been an important status symbol for executives and politicians, as well as in the Middle East, carriers have rapidly expanded their first-class offering. However European airlines, and US carriers on international routes, have tended to scale back.

Really, it is the Middle East and Far East carriers who are bringing the resurgence. Western carriers are simply trying to keep up and some are doing better at it than others. And I doubt we’ve seen the end of western carriers getting rid of longhaul first class cabins. Maybe the answer is for some western carriers to focus on the business class traveler experience and make it as comfortable and beneficial for flyers as possible while keeping the price in the range of employers.

United's 2016 Elite Requirements

It comes with little surprise that the 2016 Premier requirements on United have increased by 20%, nearly matching Delta’s recent increase almost exactly. To reach the different Premier statuses on United, you will need to spend 20% more cash for each level.

While the dollar amount increases are not insignificant, I understand the business reason for doing it (at least partly). What I do not understand is why United feels the need to simply follow Delta’s every move rather than trying to be an industry innovator or at least be creative with changes to the program.

Customers are drawn to companies that innovate and offer services or a quality that cannot be found elsewhere. Just being lockstep with the competition does nothing to draw people in, regardless of how much modern, clean advertising you shove down people’s throats. You can buzzword me to death but if I see you doing the exact same thing as your competitor and the prices are cheaper with them, sorry, it was nice knowing you (especially after degrading the mileage program).

Come on United, fuel is cheap right now. This is the perfect time to try something new.

Last week flying Portland to Washington-National airport via Chicago for work, I had a very strange experience with an upgrade that really wasn’t. 24 hours before my flight I checked-in online and noticed that I received an upgrade on Portland-Chicago. Great news! There were still a few seats open and I selected 1A. For my second flight, there were not a lot of good seats so I stuck with my bulkhead window.

On the day of the flight as I started to pack for the trip, I decided to look and see if any better seats had opened on my second flight between Chicago and National. That’s when I found my seats completely gone for both flights and if I tried to check-in again, an error occurred. I immediately called United as I was more concerned about not having seats than not being checked-in. The agent reselected my seats, confirmed I was in first class for the first segment and hung up. I was able to check-in with no issue and felt a little relief. I wanted to make sure everything was ok with my reservation so I logged onto United.com via my computer and sure enough, there was still an error telling me to call reservations.

The second phone call was a little more productive. The agent was able to see the problem, a note had been added by airport staff that first class may be oversold and that they would need to deal with it at the airport. I asked if she could preserve the seat choice I had made for the second flight and she stated that she could not but that they should be able to fix it at the airport. I finished packing and headed to the airport much earlier than I had originally wanted, throwing my afternoon plans with my wife off.

When I arrived at the United check-in desks and explained the issue, the agent saw the problem and called the gate. They stated that a first class seat was broken and that I was the only upgrade so I was downgraded. The check-in agent preserved my seat for the second segment but told me the gate would have to get a seat for me for Portland-Chicago.

At the gate the agent apologized and gave me a voucher for $250. That was definitely nice but led me to wonder what seat I was going to get as a result. The conversation after I said “thank you” went something like this:

Agent: hmmm, I can put you on a later flight to Chicago

Me: But then what time would I get to Reagan?

Agent: Oh, your destination isn’t Chicago?

Me: Uhhh, no. I have an hour connection to the last flight of the night to Reagan.

Agent: I see… Well, I can get you to Dulles at 1am by going through Denver.

Me: If there are no other options then I guess Dulles it is.

I was told later than I should have pushed harder at this point because it was painfully obvious that no one had actually looked at my full itinerary when making the changes and that’s what had messed up my connection seat selection. It was also obvious that the Portland-Chicago flight was oversold and this agent was looking for a way out.

The agent ended up giving me a middle seat from Portland to Denver and then first class from Denver to Dulles. She also provided me another voucher for $350. All told, the airline gave me $600 for the screw up and though I would have much rather gone to National, I was willing to put up with a late Dulles flight for the compensation.

Looking at the situation now I wish someone had paid more attention to my reservation when performing the downgrade. It would have saved them a little bit of money and me a headache. I also think they (United) got around the involuntary denied boarding by claiming ignorance about my connection and then offering me a different flight. Based on what I saw, they were out of seats completely in coach so there was nowhere to put me after the downgrade. In addition to that, I saw a young lady show up to the gate late and she was denied boarding since they had closed the door. So in reality, coach went out with an empty seat that I could have taken.

It all worked out but was a headache to deal with, especially having to get to the airport early to sort it out.

In January of 2015, Delta will move SkyMiles, their frequent flier program, from earning miles based on distance flown and your status with the airline to a new system that bases your miles earned on the cost of the ticket and your status. In March of 2015, United’s MileagePlus program will take an almost identical step and turn into a miles earned based on spend and elite status system. American Airlines will keep their current mileage earning system in place for the foreseeable future but when they are done with some of the technical aspects of their merger with US Airways, I see them going to a model similar to Delta and United.

The New York Times has an article about the changes, calling them the “fadeout” of the mileage run. It is less of a fadeout and more of the complete death of the mileage run. The piece does a good job raising the concerns about confusion between redeemable miles earning and elite status earning, which will take place under two separate umbrellas. The more confusion there is for the end user, the more frustration. And while the average flier may not care, someone who does a bit of travel without keeping track of all the news and changes will certainly be a little annoyed. I also agree with the point that Mr. Barro makes about calling them “miles” after these changes. They are no longer based on distanced and merely represent an amount of money spent, making it much more appropriate to just call what you earn “points”. And while the examples of mileage earning and the losses faced by frequent fliers are illustrated in the New York Times piece, I think there are some unanswered questions about if and how basing mileage earning on spend will really be perceived by travelers and also, what it means for redemptions.

The New Earning Charts

In Delta’s case, if you are a non-status flier you will earn 5 miles per dollar spent. A Silver Medallion status flier will earn 7 miles per dollar spent, and so on. This is illustrated below per Delta’s calculator.

United’s changes are almost identical.

United MileagePlus 2015 Changes

It is nice that Delta’s calculator shows what you would earn in the old program and what you will earn on the same fare in the program. It makes it easy for a flier to look at the numbers and see just how good or bad these changes are for them.

Examples

Below are a few anecdotal examples to illustrate the gains and losses that frequent fliers and non-statused passengers will experience with these changes. I took the lowest available fare a month or more out for the different routes. Also, I focused on United, simply because they are who I fly, but the math for Delta would be very similar. I did not include taxes in the calculations as those are not included in the mileage earning for either airline. The fuel surcharges on international trips was included, again, because it is included in the calculations for mileage earning by the airlines.

The first example is a Portland, Oregon to Newark, New Jersey roundtrip. This one is my typical route and while the price fluctuates on this route, the $466 is reflective of a typical 7-day stay.

Sample Route Distance Fare Class
PDX-EWR-PDX 4,866 $466 Coach
2014 (Current) Earnings Member Silver Gold Platinum 1K
4,866 6,082 7,298 8,514 9,732
2015 (New) Earnings Member Silver Gold Platinum 1K
2,330 3,262 3,728 4,194 5,126
Difference Member Silver Gold Platinum 1K
-2,536 -2,820 -3,570 -4,320 -4,606

In this example you see that there is a loss of miles, regardless of elite status. A 1K would need to spend $885 2015 to earn near the same amount of miles that they would have earned in the program in 2014. With lots of competition on transcontinental routes, I see fares staying rather competitive for coach seats, meaning low fares, meaning low mileage earning.

The other side of this is the next example, the exact same route, Portland, Oregon to Newark, New Jersey, but this time, in first class.

Sample Route Distance Fare Class
PDX-EWR-PDX 4,866 $1,068 First
2014 (Current) Earnings Member Silver Gold Platinum 1K
7,298 8,514 9,730 10,946 12,164
2015 (New) Earnings Member Silver Gold Platinum 1K
5,340 7,476 8,544 9,612 11,748
Difference Member Silver Gold Platinum 1K
-1,958 -1,038 -1,186 -1,334 -416

While anecdotal, this example shows that paying more cash and sitting in the comfy seat does not necessarily generate more redeemable miles under the 2015 earnings programs. In fact, if your goal is to earn more miles, you are better off paying for the $1,500 refundable fare and doing an instant upgrade (if an elite on the airline).


 

Next is a long distance business class trip. A San Francisco-Frankfurt roundtrip priced as the average of what I could find for different months. There are spikes in price some months, but I found the $7,060 price to be pretty close to average.

Sample Route Distance Fare Class
SFO-FRA-SFO 11,398 $7,060 Business
2014 (Current) Earnings Member Silver Gold Platinum 1K
17,096 19,944 22,794 25,644 28,494
2015 (New) Earnings Member Silver Gold Platinum 1K
35,300 49,420 56,480 63,540 75,000
Difference Member Silver Gold Platinum 1K
18,204 29,476 33,686 37,896 46,506

In this example, the new 2015 program is extremely lucrative. The business class fare is high enough that everyone sees a significant gain in their redeemable miles earned. The 1K member actually doesn’t realize the full potential of the 11x multiplier because earnings on a single ticket are capped at 75,000 redeemable miles.

I then took the above business class example and made it an economy class booking instead. It’s not a bottom of the barrel example, it’s a mid-tier typical fare to Europe purchased somewhat in advance.

Sample Route Distance Fare Class
SFO-FRA-SFO 11,398 $1,400 Coach
2014 (Current) Earnings Member Silver Gold Platinum 1K
11,398 14,246 17,096 19,946 22,796
2015 (New) Earnings Member Silver Gold Platinum 1K
7,000 9,800 11,200 12,600 15,400
Difference Member Silver Gold Platinum 1K
-4,398 -4,446 -5,896 -7,346 -7,396

Again, everyone loses out on miles. Not incredibly large amounts, but there is definitely a loss.


Lastly, I’d like to look the one place where people will make a mint on miles compared to how many they are earning under the current program: The short distance but relatively expensive ticket. These are usually refundable or flexible tickets but are shorter distances (say, less than 500 miles each segment). It’s a typical business scenario and one that I wanted to explore. In this example it is Manchester, New Hampshire to Washington-Reagan via Newark-Liberty.

Sample Route Distance Fare Class
MHT-EWR-DCA-EWR-MHT 816 $1,366 Coach (Flexible)
2014 (Current) Earnings Member Silver Gold Platinum 1K
1,018 1,220 1,424 1,628 1,834
2015 (New) Earnings Member Silver Gold Platinum 1K
6,830 9,562 10,928 12,294 15,026
Difference Member Silver Gold Platinum 1K
5,812 8,342 9,504 10,666 13,192

What Does This Mean?

In short, the majority of travelers regardless of airline elite status, who fly on discount or regular coach class tickets, are going to lose redeemable miles under the new system. The new system is going to reward those on very expensive business/first class travel and those who have to buy refundable or flexible tickets. The ones who will see some of the biggest increases in miles are the short distance fliers who buy those refundable tickets. They are spending less time in a seat but paying more money for the privilege and the airlines are rewarding that.

Some, who I respect, have this to say:

When asked why:

And while Mr. Harteveldt isn’t incorrect that there is an element of low-yield travel created by gaming the mileage run system, the idea that this makes the airlines completely unprofitable and those passengers are a huge cash sink for those airlines, is a stretch. Truth is, airlines need some of that low-yield travel to fill seats that would otherwise go empty. The difference now is that Delta and United do not want to hand out the same number of miles for that seat. However, this has less to do with “rewarding” someone than it does with simply not putting the miles on the balance sheet.

The Cost of Miles

Regardless of how the airlines word these changes the real issue comes down to cost. The miles that the airlines have a cost associated to them for the airline. The airline records the outstanding miles on their balance sheets as liabilities. At some point, someone will redeem their miles and the airline will either pay a partner for the flight the passenger takes, or they will remove a seat from their own inventory for that passenger to sit in. There is a tangible cost here. In fact, when the Star Alliance recently changed their rules on reward redemption charges allowing carriers to set their own price for their premium cabin rewards, United responded by making partner rewards very expensive. If someone wants to redeem miles for a seat that Lufthansa charges United $5000 for, then United wants to collect more miles from that passenger.

The fact that airlines have millions upon millions of miles outstanding on their balance sheet does not look good to their accountants nor their investors, so in the changes to reward mileage earning, we’re seeing a shift. The newly rewarded miles will essentially be “paid for” up front (at least partially) while the old miles are removed from the balance sheets over time.

Want more proof that this is at least some of the motivation? Look at United’s page discussing the changes.

Mileage Redemption Options

That’s right, you can redeem your miles for Economy Plus seats on a specific flight, an Economy Plus subscription, and a checked baggage subscription. None of those three things has any real cost to United. If you use your miles for an Economy Plus seat on a specific flight, United is only out the $39 or $49 they would have charged someone had no elite member been available to take advantage of that seat as part of their benefits. If you use your miles for a checked baggage subscription, there is no cost to United, simply a slight drop in ancillary revenue on that flight, though even that is probably offset by the fact you spent miles on it. The cost for the airline is minimal while the benefit for them is taking more of the liability off of the balance sheet.

Even more proof of this is Delta’s recent announcement that there will soon be a limit on how many American Express Membership Rewards points one can transfer into SkyMiles (250,000 Membership Rewards points in a calendar year). Delta wants to limit the incoming liability of miles even though American Express has been one of their best partners.

The airlines are tying miles earned to how much you paid for a fare not just because “it’s rewarding” but because it limits their exposure to liability. Plain and simple.

What Do I Do Now?

The answer to this question is simple: Mileage earning shouldn’t be the determining factor of your airline loyalty, especially with these changes.

The argument used to be that a person could put up with the bad aspects of a carrier if the rewards were worth it. With the rewards quickly becoming based on spend and less on miles flown, why fly that airline over another if the price is the same? For example, I give United my business, even with the terrible Recaro seats, on a transcontinental flight because I value those points. With the mileage earning changes, my comfort takes priority and if that means a flight on Delta, so be it.

This isn’t to say that for everyone mileage earning is the deciding factor, in fact, I would say it’s a small percentage of people who actually care about this piece of the frequent flier game. I remember a discussion a long time ago about how most travelers redeem their miles for simple domestic rewards, sometimes paying the higher mileage rate to avoid paying what they considered a high fare.

There is also an option to earn the original redeemable miles as you have all along, the catch is, you have to not care about elite status. In the terms and FAQs of each airline’s new redeemable miles program (United | Delta), there is a statement regarding tickets booked on partner airlines. If you book on a partner’s ticket stock, basically who took your money, then you are still eligible to earn reward miles at the 2014 rates, but you in almost all cases, you will not earn elite miles. So you have a choice, become an elite with Delta or United or earn the 2014 redeemable mileage rates.

You could also play the credit card churning game to earn redeemable miles. I find it too time consuming and a ton of work to keep track of what cards need what minimum spend and which ones I haven’t signed up for yet. Some people love that game but for me, it just isn’t worth the time or the energy.

Another choice would be to start flying American Airlines. They are the last of the large U.S. carriers to have a mileage flown is what you earn rewards program and it will stay that way. Well, until they are done with their merger with US Airways, then I would say the chances are very good they too will move to a points based on spend system. Sure, bloggers will post about how great American is and how they are using their miles to go somewhere far away, but that I feel will be a short lived game. There is a year, maybe two left for the greener pastures on American. Feel free to make that move if you are prepared to make another move or choice when American decides to go to a system similar to Delta and United.

Like I said above, the answer is simple: Fly places, do it affordably and comfortably, and worry less about the miles being earned. That was a little difficult for me to write. I used to see a cheap fare somewhere and say, “a weekend there would be nice and the miles would be nice too” and buy a ticket. The miles were an incentive for me to buy a fare to go someplace new that I may not have been inclined to pay for, now I’ll just go new places knowing the earnings will not be as high.

Is There Any Chance The Airlines Change Their Minds?

The airlines changing their minds on this is unlikely. Why would they? They can now reward fewer miles and even cap them for their most “loyal” travelers. The cap at 75,000 miles on a single ticket is something that blows my mind. You (or your company more likely) drop $8,000 on a business class ticket to Asia and you get capped at 75,000 miles. United and Delta find you loyal, but only 75,000 miles loyal.

I think the only real way any of this changes is if the airlines struggle in the coming years. If people stop flying due to the economy or because of fares or whatever, then I could see the airlines reeling these mileage earning changes back to what they used to be, but even that is unlikely. Another scenario is that corporate accounts start complaining to the airlines. These companies pay a lot of money for their employees to travel and if those employees start complaining, it’s likely the corporate travel sales folks will get wind of it. But, there is nothing keeping Delta or United from sweetening the pot and giving those contracts some kind of mileage bonus every year, so even the idea of corporate contracts getting pulled is a stretch.

Lastly, I do see this changing some people’s behavior and that’s not necessarily a good thing. People who have the freedom to book via airline websites for their corporate travel could get themselves into trouble pursuing more expensive fares to earn more miles. To combat this, companies may enforce their corporate policies more stringently, taking away some money from Delta/United if they are not the cheapest carriers in a particular market.

In Summary

Overall the biggest problem with the new mileage earning programs is that they not only earn less miles for the frequent yet affordable traveler, but they are confusing programs now. You will still earn your elite status based on two criteria, qualifying dollars and qualifying miles, the latter being based on distance flown, but you will earn redeemable miles based on fare paid. It is even confusing to type.

These programs change on a whim. There are rumors (see footnote at bottom of page) that Delta’s Medallion Qualifying Dollars minimum is increasing for next year. It’s unconfirmed but if true, means these programs will get tweaked and changed as the airlines see fit. They will look to cut out the chaff and focus on people who are spending a lot of money. Pundits can say this rewards more profitable fliers but even that doesn’t take into account the caps on what a person can earn on a single ticket. This is about reducing costs and liabilities for the airlines. As the airlines see fit, they will make more changes to reduce those costs.

Focus on the good stuff. See a cheap fare to a place you want to visit and you have the cash? Buy it. Stop focusing on the miles and get out there and see the world. Miles, upgrades, rewards, etc. are all fun things but if they hinder the actual visiting of places, don’t focus on them.

Recently a number of airlines have been offering decent business class deals to Europe during off peak seasons. I have a feeling that this will become a new normal. We will see $1,500 business class fares to Europe from Houston, San Francisco, etc. when the airlines need to fill seats that would otherwise go empty. Take advantage of that. You’ll earn some miles and you will get a nice seat across the Pond.

For me, I am bummed about the move. I loved having a small incentive for a weekend trip somewhere I wanted to visit anyway. I loved being able to burn miles on the few trips my wife and I were able to take longhaul. My plan going forward is to continue to earn elite status simply because I am on the road so much but as soon as I hit a level I am comfortable with, my plan is to switch to booking on partner airlines and earning the old rates for that level that I reached. It’s a hybrid plan but one I think may have some benefits for me. If I was to stick to just flying United tickets everywhere, just like I do now, then I would lose out on around 95,000 miles, possibly more once I do the math for my end of year stats. My company spent a lot of money for my work travel and I spent a fair amount of cash on personal travel but that is only worth so much to United. Clearly, I am a low-yield passenger.

In any case, I hope you make the decision that works best for you financially and travel wise. Happy flying!

Edit: It is now confirmed that Delta is raising the qualifying dollars required for 2016 SkyMiles Medallion elite status.

One of the best reviews of the iPhone 6 and iPhone 6 Plus takes place at Disneyland. Matthew Panzarino takes the phone with him on the visit and spends a few days putting the phones through what could easily fill in for a normal day, browsing the internet, playing a game for a bit, taking pictures, etc.

One of the more impressive bits:

The phase detection autofocus is extremely quick, and the continuous autofocus while video recording is active is absolutely fantastic. The leap in quality over even dedicated cameras can’t be overstated. The image quality is off the charts and the (software driven) “Cinematic Stabilization” is amazing.

Having a piece of equipment that fits in your pocket and takes amazing pictures and videos is one of the iPhone’s killer selling points. The fact that Apple continues to make improvements in the camera, the processing power of it and the quality, is what makes me keep coming back to it.

Southwest unveiled their new livery this morning and while I am not a huge fan of the font or the colors, it seems they really thought about unifying their look. The bubble font is what bothers me the most. I thought bubble fonts were dead and we all said “good riddance”. I guess not.

A new commercial accompanied the livery unveiling and it’s a different marketing approach from previous Southwest spots and I like what they did. They talk about their customers, their commitment and how much their employees matter.