Cathay Pacific Asia Miles - Waiver of elite tier renewal criteria

I just received this from CX
Waiver of elite tier renewal criteria

We understand that your travel plans may have been affected by the outbreak of war and Severe Acute Respiratory Syndrome (SARS) and that many of you may find it difficult to achieve normal elite tier renewal criteria. We have decided, therefore, to waive your elite tier renewal criteria for the next 12 months. This means that any elite tier member whose membership period expires between now and the end of April 2004 will be renewed at the same tier level for another year even if you have not fulfilled the normal renewal criteria. We very much appreciate and value your loyalty and hope that you will continue to fly with us whenever you can.
We always put safety and security first

Safety is always our top priority. We have been vigilant since the first outbreak of SARS and have introduced a raft of precautionary measures to protect our customers and our staff. All Cathay Pacific aircraft are fitted with HEPA (High Efficiency Particle Air) filters which can capture more than 99.9% of airborne contaminants, bacteria and large virus particles. The entire cabin air volume is exchanged every three to five minutes - in each cycle, half of the old air is expelled and replaced by fresh air from outside. The cabin's low humidity is also inhospitable to germs. In addition, we have an extremely rigorous set of aircraft cleaning procedures:

Our aircraft cleaning procedures follow guidelines issued by the Centre for Disease Control (CDC) and Hong Kong Department of Health (DoH), as well as those issued by the aircraft manufacturers.

Interior surfaces including galley counters, passenger tray tables, seat armrests, seatbacks, light and panel controls, adjacent walls and window, toilet counters and other common areas are cleaned with disinfectant following each stop.

Aircraft also undergo a more thorough sanitation procedure on a weekly basis and in a regularly scheduled "Super Clean".

For more details on our other precautionary procedures and daily situation update, please refer to Travel Advisory posted on our web site www.cathaypacific.com. (http://www.cathaypacific.com.)
Schedule changes and flight reductions

Unfortunately, the combination of SARS and war has had a severe impact on travel demand and we have to make significant reductions in capacity on many of our routes. As soon as SARS is contained and business gets back to normal we will start reinstating these flights. In the meantime we ask you to please bear with us during these difficult times. For the latest information on schedule changes, please refer to www.cathaypacific.com. (http://www.cathaypacific.com.)

Finally, many thanks to you for all the support you continue to give to Cathay Pacific and we look forward to having you back on board one of our flights as soon as possible.

Yours sincerely,
Kester Yim

That's very good PR for CX.

Good job.

THANK YOU Marco Polo Club ! Hmmm. Me wonders if SQ PPS will follow suit?

Which may make this the third year that I haven't flown the miles, but have kept the status. Say what you will about the benefits of the other mileage programs, but I've always found that CX actually does respond to their customers in a human way.

Now, if they could only solve this stupid problem, so I can go back to Hong Kong without my kids freaking out.

Mark

YESSSS!! http://www.flyertalk.com/forum/smile.gif http://www.flyertalk.com/forum/smile.gif http://www.flyertalk.com/forum/smile.gif I have not made the miles for renewal on my Diamond level expiring in June. Now I don't have to worry and continued access to FL while flying AA domestically.

Most importantly when I or anyone I influence do fly transpac CX gets the business no question.

I received a similar email from CX about my flight changes, not extended MPC membership (as I'm AA PLT, already scheduled for AA EXP) and really appreciate getting it from them.

I'm with CX all the way! Congrads to the MC members!

[This message has been edited by SHADO (edited 04-15-2003).]

The handling of this situation clearly distinguishes CX from the US majors. While the US majors (UA, DL) upset their most frequent flyers with curtailed elite benefits, CX retains its elite members, knowing that it's the elite members who will contribute to its success.

Bravo, CX.

CX did it with class this time.

I'm with CX all the way like many others. This is the best PR CX has done to date in my memory. The offer is very generous and humane.

I hope CX gets back on its feet soon.

It is indeed excellent news.

What is people's thinking now on where to put miles for the rest of the year? Logically I don't see any reason to put any more on CX - most of my travel is happening in the second half and I might now have enough to get to EXP, and certainlyto retain my AA Plat which I had resigned myself to sacrificing in order to keep the CX Diamond.

I'm in the wrong forum to ask this I guess, but I'm wondering whether AA miles will disappear or be seriously devalued soon...

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by christep:
I'm in the wrong forum to ask this I guess, but I'm wondering whether AA miles will disappear or be seriously devalued soon...</font>So far miles on bankrupt airlines in the US have been safe (unlike the rest of the world). I'm continuing to put the bulk of my miles into AA as it is the most cost-effective ... just putting enough into QF and BA to keep my status there. Making EXP on AA is high value in the first year as you get 16 1-class upgrade certificates (8 now and 8 in 2004) on top of all the other benefits, and there is plenty of seat availability on AA. Ignoring the status and other CX diamond benefits, AA is worth about 3 times as much in terms of free travel, and AA has the best Oneworld terms.

I also find this action by CX quite generous.

I am now thinking about putting some miles into AA from CX flights, though, now that my status is secured for another year with CX. I was going to drop AA EXP this year.

...why don't you show them the same generosity by sticking to their program? I do not have plans to feed another program because CX is being good to me, au contraire. Speaking of which - I haven't received any note from MPC as yet.


[This message has been edited by mhtaipei (edited 04-19-2003).]

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by mhtaipei:
...why don't you show them the same generosity by sticking to their program? I do not have plans to feed another program because CX is being good to me, au contraire. Speaking of which - I haven't received any note from MPC as yet.</font>

Isn't it the exact opposite? By crediting your miles (despite flying CX) to other FFP will reduce the CX's future liability to provide awards. As long as you fly CX, and credit points to other programs, I think CX would be happy.

Or did I miss something?

American has lost $5.2 billion in the past two years and is expected to lose $800 million during the first three months of 2003 as it struggles with a steep downturn in business travel and fierce competition from discount airlines such as Southwest Airlines and AirTran Airways
http://www.chron.com/cs/CDA/ssistory.mpl/business/1874560
so by all means, put the airmiles into AA
and good luck when Chapter 11 appears

Marco Polo,

On what grounds do you feel that going into CHapter 11 will devalue or destroy the accumulated miles? It certainly didn't work like that with US Airways, and probably with the others (I don't know enough of the details to comment)&gt;

I remember a lot of press of disgruntled Ansett Freq Flyers who sued the receiver for their airmiles' benefits after Ansett went belly up
Perhaps a US lawyer can enlighten as to whether a Debtor- in- Possession under Chapter 11 is still liable for airmiles 'debts' and whether other oneworld alliance members might legally refuse to honour the airmiles from a debtor-in-possession organisation.
My guess would be that the Oneworld Alliance would not honour airmiles under this scenario and this will be part of the Oneworld Alliance agreement.
http://www.abiworld.org/media/chapter11.html

That wasn't Chapter 11, that was the Aussie equivalent of Chapter 7. There is a huge difference.

We'll see. best of luck to all with AA airmiles then
"NEW YORK (CNN/Money) - American Airlines' flight attendants union announced it would hold a new vote on $340 million in annual concessions due to outcry over previously unveiled compensation to the airline's management, a move that could force the world's largest airline into bankruptcy. "

What Chapter is Bankrupt ?

http://money.cnn.com/2003/04/19/news/companies/amr_unions/

I am not a legal expert. Both Chapter 11 and 7 means bankruptcy but 11 is for 'rehabilitation' and 7 is for liquidation.

I would not be alarmed at all even if AA goes into Ch. 11.

AC is bankrupt, miles are still there.

UA is bankrupt, miles are still there.

SR went bankrupt, Qualiflier remained a sound entity. Has anyone lost Qualiflier miles?

I have also never kept more than 250,000 miles in one account. I usually burn them whenever I can get a decent ticket.

I fail to see how a bankrupt entity in the hands of an Official Receiver could honour Airmiles' benefits or could possibly do so after paying out the secured creditors, or why its alliance partners would want to honour them. Take a look at the Ansett thread and mhtaipei's query on Ansett airmiles and what they are worth.
American's fate is in the hands of the Gods, or rather the Unions at present.

Marco Polo you clearly do not understand US bankruptcy laws. There are two levels of bankruptcy. It is only if a company enters Chapter 7 (i.e. it is being wound up as Ansett was) that an Official Receiver is involved. What AMR/AA may enter is Chapter 11, which is "bankruptcy for rehabilitation". Most US airlines have been through this status (some more than once). Mileage programmes have always remained more or less unaffected.

christep is right -- the German (and Japanese if I recall correclty) legal system know two forms of restructuring also: "Ausgleich" and "Konkurs", and while they don't mach 100%, Chapter eleven is more like the first, with the express goal to get the company back on it's feet again. Not to be compared with the disappearance of Canadian Airlines or Ansett. What we will see however is a consolidation of the market that will change the benefits consumers can expect from these programs. If UA splits into a long-haul carrier and a domestic low-cost operation, their FF programme will look very different from the one they are running now. The same can be expected at AA, your miles should be safe with double A. (If SARS develops into a real killer disease, they might even be safer with AA than with CX, knock on wood)

I am confused on the miles issue fakecd pointed out -- with CX in trouble, would we really help them by flying CX but accruing miles in another program? It seems to make sense, but since I would redeem the - say AA or QF - miles for CX flights in the end -- wouldn't that negate the benefit for CX? Flying paid CX only, accruing miles only in OTHER program -- and redeeming only on OTHER seems to be the best deal -- are airlines protecting themselves against these imbalances or will the large amount of FFs from different countries just average it out

(I suspect airlines keep good enough track of the miles to strike a balance in the end -- effectively negating fakecd's claim of added benefit for CX)

This is now getting way off the point of the initial post in a CX, not an AA forum. However as for your comment, christep "Mileage programmes have always remained more or less unaffected "
I disagree.

"Looming Bankruptcies Threaten Airline Miles"
What to do when bad things happen to good miles.October 18, 2001
- On September 11, the universe of airlines was, in one fell swoop, separated into three distinct groups: airlines which are not in bankruptcy, airlines which are in bankruptcy, and airlines which soon will be in bankruptcy.
As we go to press, the already-in-bankruptcy list includes Ansett, Midway, Sabena and Swissair. Some of these carriers continue to operate, temporarily propped up by government largesse or private financing. Others have grounded their planes completely, possibly forever.

There are as many bound-for-bankruptcy lists as there are industry prognosticators. But whichever version of the "endangered airlines" list you happen to see, it's likely to be a disturbingly long one, including carriers in every corner of the world.

And while there may be disagreement as to which airlines will survive and which will succumb, there is broad agreement on the industry's current shape and future direction: The world of airlines is shrinking, and will shrink further still. And as airlines disappear, so will frequent flyer miles.

Where Do Miles Go when Programs Die?
Unlike dollars deposited in a checking account, which in most cases are insured by the FDIC, miles come and go with the airlines which operate the mileage programs.

Often in the case of an airline declaring bankruptcy, the miles simply disappear because, when the carrier's assets are sold, miles are viewed as a liability (the eventual cost of transporting a passenger for free). When it ceased operations on September 12, Midway was a partner in the programs of Continental and Northwest but did not operate its own program. So no miles were lost. However, when the original Midway went belly-up in 1991, it did have a program and 700,000 members lost their miles. Another current bankruptcy case: Ansett, Australia's second largest airline. While Ansett continues limited flights, the accounts of its 2.4 million Global Rewards members are frozen.

On the other hand, if a faltering carrier is acquired by another airline -- as happened with American's acquisition of TWA -- the frequent flyer program members, including their miles, may be seen as a positive asset. To insure that TWA's customers -- especially its most frequent and profitable ones -- would transfer their loyalty and business to American after the sale, American is merging all members of TWA's program, together with their miles, into American's program.

What to Do?
Given the unprecedented uncertainty of this post-September 11 period, and the likelihood of airline bankruptcies and lost miles, many frequent flyers are fretting over their options, mileage-wise.

Redeem ASAP
The natural tendency, when faced with the prospect of losing one's hard-earned miles, is to use them before they disappear. The tactic: redeem the miles for award travel on partner airlines, which presumably will still be flying after the airline operating the frequent flyer program has gone bankrupt.

But, as former head of Pan Am's WorldPass program, Joan Benham, cautions, it's a Catch 22 situation: participating in a run on awards from an already-floundering carrier could contribute to that airline's demise.

Exchange Endangered Miles
Another option is to exchange the at-risk miles for miles in a program with better survival prospects. There are three exchange mechanisms to choose from.

First is the Reward Exchange feature of Hilton's HHonors program. Conversion is a two-step process: redeem miles from participating airline programs for HHonors points; then redeem the HHonors points for miles in one of the participating airline programs. The convenience comes at a price: more than half of your original miles will be lost in the conversion.

A second option is Diners Club Rewards, which has both Miles-to-Points and Points-to-Miles capabilities.

As with HHonors' Rewards Exchange, you would convert from one airline's miles to another's, by way of Diners Club Rewards points. And as with the HHonors option, much of your original miles' value will be sacrificed in the conversion process.

The third option is the dedicated mileage-exchange service, Points.com (http://points.com). While the process is highly efficient, only five airlines (not including Delta or United, two of the three largest) participate. And the exchange will leave you with only 10 - 20% of the miles you started with.

The Best Insurance: Insurance?
Proving the maxim that anything and everything can be insured, AwardGuard is insurance for frequent flyer program miles.

The brainchild of Randy Petersen, editor and publisher of InsideFlyer, AwardGuard is one component of PrivilegeFlyer (http://www.privilegeflyer.com/), a package of services designed for the mileage-conscious traveler. The mileage-protection service was introduced in 1991, and currently covers more than 80,000 frequent flyers, 5,000 of whom have signed up since September 11th.

AwardGuard costs $119 for one year's coverage, $214 for two years. If your program goes bust, AwardGuard coverage permits you to redeem your miles at the originally published levels (e.g. 25,000 for a free domestic coach ticket) through the AwardGuard travel center, which will purchase tickets on your behalf up to a combined value of $7,500.

All major U.S. airline and hotel programs are covered, as well as the American Express Membership Rewards and Diners Club Rewards programs.

Petersen cautions that AwardGuard "isn't for everyone." By his reckoning, if your mileage assets are less than 50,000 or more than 800,000 miles, AwardGuard may be overpriced or provide insufficient coverage. Petersen's caveat notwithstanding, in the current volatile environment, $119 seems a small price to pay, even for accounts which lie outside Petersen's guidelines.

Wait and See (and Hope for the Best)
The history of bankrupt airlines' miles, which is a checkered one, suggests that the "do nothing" option may be a viable strategy.

On the negative side of the historical ledger, members of the programs of Braniff, the original Midway and Legend all lost their miles when those airlines shut down.

But there are positive precedents as well. Members of Pan Am's program were merged into Delta's program; Eastern's members were incorporated into Continental's; and most recently, American adopted TWA Aviators members, miles and all. In each of these cases, the affected frequent flyers were arguably better off after the change than before it.

So if you expect your carrier to be among the casualties, you could elect to do nothing with your miles, on the strength of the hope that your program (including the member database and their accumulated miles) will be acquired by an airline which views frequent flyer miles as an investment in future loyalty rather than a contingent liability.

OK. I give up. Can someone else please try to explain in simple terms that Marco Polo can understand? If only to save us from useless postings of inordinate length.

Oh for a killfile in the way of Usenet.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by christep:
OK. I give up. Can someone else please try to explain in simple terms that Marco Polo can understand? If only to save us from useless postings of inordinate length.

Oh for a killfile in the way of Usenet.</font>

I think Marco Polo is confusing bankruptcy with liquidation. An airline going "bankrupt" doesn't mean it is liquidated (i.e. it ceases to be a going concern). It just means that it is unable to honor its financial obligations, and the liabilities have to be restructured to enable the airline to continue being a going concern. Although FF miles are an obligation of the airline, there has been no case (that I know of) where FF miles have been part of the liabilities to be restructured (although I assume they could). My guess is that the FF miles are off the table because putting them in the pool of liabilities to be restructured would actually work against the airline remaining a going concern.


[This message has been edited by Pickles (edited 04-20-2003).]

Quote: Pickles : "Although FF miles are an obligation of the airline, there has been no case (that I know of) where FF miles have been part of the liabilities to be restructured (although I assume they could). "

Quote: Flyertalk's Randy Petersen - (taken from my post above http://www.flyertalk.com/forum/smile.gif "Often in the case of an airline declaring bankruptcy, the miles simply disappear because, when the carrier's assets are sold, miles are viewed as a liability (the eventual cost of transporting a passenger for free)."

Personally I see AA going bankrupt. Their current debts are US 6 billion and the management just mega pixxed off their Unions again.
http://www.miami.com/mld/miamiherald/business/5674180.htm

Christep - files 'kill' themselves if people choose not to reply to them.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Marco Polo:
Quote: Pickles : "Although FF miles are an obligation of the airline, there has been no case (that I know of) where FF miles have been part of the liabilities to be restructured (although I assume they could). "

Quote: Flyertalk's Randy Petersen - (taken from my post above http://www.flyertalk.com/forum/smile.gif "Often in the case of an airline declaring bankruptcy, the miles simply disappear because, when the carrier's assets are sold, miles are viewed as a liability (the eventual cost of transporting a passenger for free)."
</font>

Since when does a bankruptcy imply a sale of the assets to a third party? Continental is gone Chapter 11 twice, and so has US Airways, and I don't think either of them was "sold" to anyone, or their FF programs eliminated. A bankruptcy and sale of the assets (either to a bidder in the same line of business or for "scrap") is considered a liquidation, not a bankruptcy.

With all due respect to Randy, this sentence is factually incorrect, both on the "often" part, and on bankruptcy leading to a sale. It does happen, but it is not a certainty, and in all the cases of outright liquidation after bankruptcy that I can think of (Pan Am, Eastern, TWA), the miles were "honored" in some form or another by the buyer.

I was trying to find Mr Petersen's take specifically on AA miles but couldn't find it. (He has commented on several occasions about the post-Chapter 11 UA miles. I think 'you don't need to burn them now' is his basic line. Please correct me if I am wrong.)

But this is a very recent post by him.

http://www.flyertalk.com/forum/Forum1/HTML/008618.html

Marco Polo may be right. Many people seem to have been hit by Ansett's collapse.

But I personally am not worried at all about AA miles. I am sure anyone keeping an eye on this board would be the first to know if and when AA would indeed be shut down.

Qualiflier was an interesting example, though.

I have left this thread to meander from the topic since this subject is certainly meritorious as well. However, we have gotten past substantive content.

Several people have attempted to explain the differences between reorganization and liquidation - I believe that you are all arguing about apples and oranges, or Ansetts and AAs as the case may be.

Lets try and steer this back to the topic. If you all want to continue this debate, someone start a new thread.

B Watson
Moderator
CX and SQ