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Aug 1, 04, 11:25 am
Article from Pittsburgh Tribune-Review... http://www.pittsburghlive.com/x/tribune-review/business/s_205941.html
Worries send US Airways' frequent fliers packing
By Steve Halvonik
TRIBUNE-REVIEW
Sunday, August 1, 2004
Lisa Fischetti, a principal in the Pittsburgh public relations firm Veritaspr, recently cleaned out her US Airways frequent-flier account. She redeemed about 120,000 points for two round-trip tickets to Europe for her parents and two to Aruba for herself and her husband.
"I didn't want to save and save and end up with nothing," Fischetti said.
She isn't the only one worried about what's to become of US Airways, the nation's seventh largest airline.
Dozens of customers are dumping their frequent-flier miles, booking flights with other carriers and boycotting US Airways in protest of their abandonment of hub operations at Pittsburgh International Airport, local travel agents said.
"A lot of people really don't like what US Airways is doing to Pittsburgh and the way it's treating its employees," said Victoria Sammartino, an executive with Ponzio-Gordon Travel and president of the local chapter of the American Society of Travel Agents.
The Arlington, Va.-based airline is demanding $800 million in wage and benefits concessions from employees by summer's end.
It also is phasing out hub operations at Pittsburgh International as part of a $1.5 billion cost-cutting drive. By November, it will have sliced service to 240 nonstop daily flights to about 65 cities -- down from 542 daily nonstops to more than 120 destinations before Sept. 11, 2001.
US Airways also may reduce its local payroll of 7,700 by several thousand because of the planned flight reductions, local leaders fret.
If employees don't agree to the wage and benefits concessions by summer's end, airline executives have said the company could default on a government-backed loan and plunge into bankruptcy and possible liquidation. A bankruptcy filing would likely doom the airline's frequent-flier club and strand US Airways travelers who booked vacations or business trips, experts said.
When American Airlines acquired TWA's assets in 2001, it agreed to absorb the St. Louis-based carrier's frequent-flier program into its own.
That may not occur if US Airways is purchased by another airline or sold off in pieces in bankruptcy, said Tim Winship, publisher of frequentflier.com, an Internet site devoted to frequent-flier programs.
The industry is so financially strapped that "airlines are not in the position to step up and accept someone else's liability."
US Airways said in 2003 that frequent fliers last year collected about 1.2 million awards that amounted to about 7 percent of the airline's revenue seat miles, a measure of an airline's revenue based on traffic. That was down slightly from 1.3 million awards in 2002.
US Airways calculated that frequent-flier customers have accumulated enough travel miles to claim more than 6 million awards worth an estimated $85 million.
Some local travelers who have historically relied on US Airways because of airport convenience or perks like frequent-flier points -- which provide free tickets for every 25,000 air miles traveled -- are looking at alternative carriers these days, travel agents said.
Travelers who once booked flights automatically on US Airways, even if the price was slightly higher, are now selecting carriers solely on price.
"It's pure economics," said Joe Weigler, owner of Shadyside Travel in Shadyside.
Pittsburgh International Airport statistics seem to indicate that a shift is occurring. Passenger statistics for April, the most recent month for which data are available, showed that total traffic was up 6.5 percent, with low-cost carriers accounting for most of the gain. US Airways' travel was up 2.8 percent over April 23, but traffic for all other carriers increased by 22 percent.
"The region's travelers are seeking alternative choices in airlines," said Kent George, executive director of the Allegheny County Airport Authority. "This is a positive trend for the airport authority."
US Airways played down traffic erosion at Pittsburgh International. They noted that US Airways will remain the airport's predominant carrier, even with the cutbacks, and predicted that the ramping down of hub operations will lead to more attractive fares to local business and leisure travelers.
Ben Baldarza, US Airways' vice president of marketing, has cast the airline's restructuring as a benefit to local travelers. Once the restructuring is completed, he said, Western Pennsylvanians "will be able to fly where they want to go at fares they want to pay."
Winship said it's probably a good idea for members of any frequent-flier programs operated by traditional mainline carriers to redeem their points for tickets. He said the programs have generally outlived their usefulness -- which was to build customer loyalty -- and will likely be phased out if not eliminated in bankruptcy reorganizations.
Looking to trade points? Be careful
Looking to buy, sell or trade your frequent-flier points?
Go to an Internet search engine and type in "frequent flyer points." There you will find a host of services, with names like frequentflyerpoints.com and frequentflyer.com, that can help.
Beware: While not illegal, these services are unethical and participation could result in penalties if you are caught.
Most airline frequent-flier clubs permit members to redeem points for tickets that may be given to family members. Most airlines, however, do not permit members to sell points to someone else or to transfer them to strangers.
What the Internet services do is act as brokers, connecting frequent-flier members with people interested in obtaining a low-price ticket. The frequent flier redeems points and then forwards the ticket to the broker, which passes it along to the customer -- with a service fee added.
A spokesman for the Pennsylvania attorney general said there was no law prohibiting such transactions and that no consumer complaints have been filed.
However, these transactions are a "violation of terms and conditions" of US Airways' frequent-flier program, said spokesman David Castelveter. "Our restrictions do not allow for the selling of miles."
Tim Winship, publisher of frequentflier.com, an Internet-based resource on frequent-flier programs, said airlines are punishing customers engaging in these transactions. They confiscate the buyer's ticket, leaving the traveler stranded at the boarding gate, and they also shut down the seller's frequent-flier account.
Travelers face detection because the seller's name may appear on the ticket while the buyer's name appears on photo identification, such as a driver's license, needed to pass through security.
"Consumers should steer clear of these services," Winship advised.
Joe Weigler, owner of Shadyside Travel, suggested that frequent fliers instead redeem their points to upgrade to first-class service.
Worries send US Airways' frequent fliers packing
By Steve Halvonik
TRIBUNE-REVIEW
Sunday, August 1, 2004
Lisa Fischetti, a principal in the Pittsburgh public relations firm Veritaspr, recently cleaned out her US Airways frequent-flier account. She redeemed about 120,000 points for two round-trip tickets to Europe for her parents and two to Aruba for herself and her husband.
"I didn't want to save and save and end up with nothing," Fischetti said.
She isn't the only one worried about what's to become of US Airways, the nation's seventh largest airline.
Dozens of customers are dumping their frequent-flier miles, booking flights with other carriers and boycotting US Airways in protest of their abandonment of hub operations at Pittsburgh International Airport, local travel agents said.
"A lot of people really don't like what US Airways is doing to Pittsburgh and the way it's treating its employees," said Victoria Sammartino, an executive with Ponzio-Gordon Travel and president of the local chapter of the American Society of Travel Agents.
The Arlington, Va.-based airline is demanding $800 million in wage and benefits concessions from employees by summer's end.
It also is phasing out hub operations at Pittsburgh International as part of a $1.5 billion cost-cutting drive. By November, it will have sliced service to 240 nonstop daily flights to about 65 cities -- down from 542 daily nonstops to more than 120 destinations before Sept. 11, 2001.
US Airways also may reduce its local payroll of 7,700 by several thousand because of the planned flight reductions, local leaders fret.
If employees don't agree to the wage and benefits concessions by summer's end, airline executives have said the company could default on a government-backed loan and plunge into bankruptcy and possible liquidation. A bankruptcy filing would likely doom the airline's frequent-flier club and strand US Airways travelers who booked vacations or business trips, experts said.
When American Airlines acquired TWA's assets in 2001, it agreed to absorb the St. Louis-based carrier's frequent-flier program into its own.
That may not occur if US Airways is purchased by another airline or sold off in pieces in bankruptcy, said Tim Winship, publisher of frequentflier.com, an Internet site devoted to frequent-flier programs.
The industry is so financially strapped that "airlines are not in the position to step up and accept someone else's liability."
US Airways said in 2003 that frequent fliers last year collected about 1.2 million awards that amounted to about 7 percent of the airline's revenue seat miles, a measure of an airline's revenue based on traffic. That was down slightly from 1.3 million awards in 2002.
US Airways calculated that frequent-flier customers have accumulated enough travel miles to claim more than 6 million awards worth an estimated $85 million.
Some local travelers who have historically relied on US Airways because of airport convenience or perks like frequent-flier points -- which provide free tickets for every 25,000 air miles traveled -- are looking at alternative carriers these days, travel agents said.
Travelers who once booked flights automatically on US Airways, even if the price was slightly higher, are now selecting carriers solely on price.
"It's pure economics," said Joe Weigler, owner of Shadyside Travel in Shadyside.
Pittsburgh International Airport statistics seem to indicate that a shift is occurring. Passenger statistics for April, the most recent month for which data are available, showed that total traffic was up 6.5 percent, with low-cost carriers accounting for most of the gain. US Airways' travel was up 2.8 percent over April 23, but traffic for all other carriers increased by 22 percent.
"The region's travelers are seeking alternative choices in airlines," said Kent George, executive director of the Allegheny County Airport Authority. "This is a positive trend for the airport authority."
US Airways played down traffic erosion at Pittsburgh International. They noted that US Airways will remain the airport's predominant carrier, even with the cutbacks, and predicted that the ramping down of hub operations will lead to more attractive fares to local business and leisure travelers.
Ben Baldarza, US Airways' vice president of marketing, has cast the airline's restructuring as a benefit to local travelers. Once the restructuring is completed, he said, Western Pennsylvanians "will be able to fly where they want to go at fares they want to pay."
Winship said it's probably a good idea for members of any frequent-flier programs operated by traditional mainline carriers to redeem their points for tickets. He said the programs have generally outlived their usefulness -- which was to build customer loyalty -- and will likely be phased out if not eliminated in bankruptcy reorganizations.
Looking to trade points? Be careful
Looking to buy, sell or trade your frequent-flier points?
Go to an Internet search engine and type in "frequent flyer points." There you will find a host of services, with names like frequentflyerpoints.com and frequentflyer.com, that can help.
Beware: While not illegal, these services are unethical and participation could result in penalties if you are caught.
Most airline frequent-flier clubs permit members to redeem points for tickets that may be given to family members. Most airlines, however, do not permit members to sell points to someone else or to transfer them to strangers.
What the Internet services do is act as brokers, connecting frequent-flier members with people interested in obtaining a low-price ticket. The frequent flier redeems points and then forwards the ticket to the broker, which passes it along to the customer -- with a service fee added.
A spokesman for the Pennsylvania attorney general said there was no law prohibiting such transactions and that no consumer complaints have been filed.
However, these transactions are a "violation of terms and conditions" of US Airways' frequent-flier program, said spokesman David Castelveter. "Our restrictions do not allow for the selling of miles."
Tim Winship, publisher of frequentflier.com, an Internet-based resource on frequent-flier programs, said airlines are punishing customers engaging in these transactions. They confiscate the buyer's ticket, leaving the traveler stranded at the boarding gate, and they also shut down the seller's frequent-flier account.
Travelers face detection because the seller's name may appear on the ticket while the buyer's name appears on photo identification, such as a driver's license, needed to pass through security.
"Consumers should steer clear of these services," Winship advised.
Joe Weigler, owner of Shadyside Travel, suggested that frequent fliers instead redeem their points to upgrade to first-class service.