US Airways Dividend Miles (Pre-FlightFund Merger) - "US Airways, We Hardly Flew Ye"

This article was in today's Washington Post. I didn't see it referenced in any of today's messages; forgive me if it's a duplicate.

http://www.washingtonpost.com/wp-dyn/articles/A18946-2004Aug20.html

Sunday, August 22, 2004; Page P01

US AIRWAYS, WE HARDLY FLEW YE

US Airways may not be on life support yet, but its condition is critical. Last week, its chairman, David G. Bronner, said that the airline, if forced to seek bankruptcy protection for the second time in two years, has a "1 to 2 percent" chance of surviving. A consultant hired by the pilots' union concluded that without concessions from the airline's unions, it will have to file for bankruptcy protection in mid-September, and will likely stop operating within 180 to 270 days.

So what's a traveler to do?

• Booking a US Airways trip within the next couple of months remains fairly safe, but booking much past the end of the year is dicey. "Until labor makes concessions, I wouldn't advise making long-term bookings after the Thanksgiving-Christmas time frame," said David Stempler, president of the Air Travelers Association. Even if the airline stays solvent, look out for service cuts, Stempler added. And consider travel insurance. (Make sure the policy covers airlines in bankruptcy -- some don't.)

• If you already hold a ticket on US Airways, keep abreast of the news and investigate flight alternatives on other airlines. Federal law currently mandates that other airlines accommodate passengers on airlines that go out of business, but the law is scheduled to expire in November and it's unclear whether it will be renewed. Even if Congress acts to renew, load factors on other airlines are high, and the law promises standby seats only.

• If you're one of the 21 million members of US Airways Dividend Miles program, start using your miles. Randy Petersen, frequent-flier expert and editor of WebFlyer.com, said no airline is going to pick up outstanding US Airways miles if it stops operating. "The industry is starting to take a hard-nosed approach," Petersen said. "They're already stretched to the limit." Consider booking your mileage flight on one of US Airways' 15 Star Alliance partners (www.staralliance.com), which include United, Lufthansa, BMI and Singapore Air. Miles can also be used on partner airlines Qantas and Bahamasair. Once a flight is ticketed, partner airlines will likely honor it even if US Airways has stopped operating.

thanks for posting the article. Very interesting. While not pleasant to see, it seems quite accurate, and the recommendations very sound. Not good for business to have such an article in a major paper in such a crucial market, but the Post has an obligation to publish the truth, even if it is painful.

I'd say, sadly, this is the first official pitch of the bottom of the ninth inning... US has entered the usual self-fulfilling-prophecy spiral in which press coverage like this depresses future bookings, which make revenue forecasts worse, which gets reported in press coverage like this, which further depresses future bookings...

Also, the Post's headline writer is making a play on "Johnny, We Hardly Knew Ye," the sad JFK reminiscence book... and obituary. :(

I'd say, sadly, this is the first official pitch of the bottom of the ninth inning... US has entered the usual self-fulfilling-prophecy spiral in which press coverage like this depresses future bookings, which make revenue forecasts worse, which gets reported in press coverage like this, which further depresses future bookings...

Also, the Post's headline writer is making a play on "Johnny, We Hardly Knew Ye," the sad JFK reminiscence book... and obituary. :(

Bear--i agree with you that all this bad publicity could be devastating, and could significantly hurt bookings. Hope U has some good marketing and PR people who now how to overcome all this awful press.

Rehash from last week.

Don't feed the trolls.

• If you're one of the 21 million members of US Airways Dividend Miles program, start using your miles. Randy Petersen, frequent-flier expert and editor of WebFlyer.com, said no airline is going to pick up outstanding US Airways miles if it stops operating. "The industry is starting to take a hard-nosed approach," Petersen said. "They're already stretched to the limit." Consider booking your mileage flight on one of US Airways' 15 Star Alliance partners (www.staralliance.com), which include United, Lufthansa, BMI and Singapore Air. Miles can also be used on partner airlines Qantas and Bahamasair. Once a flight is ticketed, partner airlines will likely honor it even if US Airways has stopped operating.

I think this is the first time I've seen Randy predict that no one will pick up US miles if they go under. That's pretty alarming. Also, it is still unclear if partner airlines will honor US award tickets if US is gone. From the article, Randy seems to think so, but discussion elsewhere on FlyerTalk seems split. I wonder if partner airlines will hold differing views depending upon whether the award ticket was booked under a US code share flight number or the actual UA flight number? I also wonder whether you can request the US ticket using the UA flight number or if they will default to ticketing the US code share flight number? I wonder if any of this even matters?

Tonight I tried to call US to use some miles to book a ticket on UA for next year. Once you select the option to "book award travel on UA or other partner airlines", you get the message that call volume has increased, everyone is busy, and you should try your call again later. Can't even get a live agent or wait on hold. Depressing. :(

Ouch...

I hadn't seen Randy's recomendation to dump 'em. Still, I'm glad I came to the same conclusion 9 months ago - One F trip to Europe for Mrs. CoMooter and myself down, and one F trip to Asia for us in 7 days...and my DM account will be officially used up/cashed out/done gone dry.

I still think somebody might pick up CP's and maybe GP's accounts - but Ma' and Pa' Kettle might see their mileage go bye-bye this time. Along the lines of SR's (or was it SN - I forget) failure, you also might see a KL type match by someone of your account holdings if you fly a certain amount on the offering carrier within a certain time span.

Randy offers excellent suggestions. Interesting how what he says perfectly mirrors the advice I have been providing on this board for the last several weeks.

Randy offers excellent suggestions. Interesting how what he says perfectly mirrors the advice I have been providing on this board for the last several weeks.

Randy all but works for the airlines.

Randy all but works for the airlines.

I pretty sure iflyswa does too

I dont work for the airlines and I agree about it being unlikely anyone one would pick up the miles. Ive been saying this for a while. On the other hand, as a 1K I have some confidence that UA would honor an award ticket. Maybe not a lot of confidence but that is what I am thinking of trying to do at this point to get some backup. I should say though that I will stick to hitting CP this year. A little insurance wouldnt hurt though.

Randy offers excellent suggestions. Interesting how what he says perfectly mirrors the advice I have been providing on this board for the last several weeks.

I don't find it interesting at all. Go play elsewhere...

Media schmucks have to turn out copy whether or not there is news. They know less than the guys on this board most of the time.

As a rule, I discount all media "analysis" from self-appointed experts.

Sorry to say, just I was getting into the hotel room last night there was a spot on Headline News with some "expert" talking about how US only had a few weeks left before going OB. It was not a positive 3 minutes at all and will scare people away.

PDFTT!!!!!!!!

"As a rule, I discount all media "analysis" from self-appointed experts"

I agree completely. I saw some guy on CNN not long ago and I swear his advice was along the lines of " when going on a trip be sure to pack what you'll need" Duh-

I wonder if the non traveling public takes these folks seriously!

Media schmucks have to turn out copy whether or not there is news. They know less than the guys on this board most of the time.

As a rule, I discount all media "analysis" from self-appointed experts.

Generally speaking, and perhaps in this case as well I would agree with you. However, most people, people who buy tickets listen to these people. Bronner himself has said things that I thought were extremely negative in their tone. This does have the possibility, if it hasnt already happened, of becoming a self-fullfilling prophecy. Personally, Im toughing it out, but I am not happy about it. Nor am I optimistic. I just dont see an alternative, I have purchased enough tickets to hit CP again already. So I will fly the flights then go back to one of my other carriers for revenue flights while trying to burn my miles by using them for UA tickets. I dont see many other options. Hope Im wrong obviously.

Here's what Randy said in today's Charlotte Observer (registration required):

http://www.charlotte.com/mld/charlotte/living/travel/9470675.htm

Book now

Schedule a trip on US Airways or miles partner United Airlines. For travel within the next month or two, you're probably OK to choose US Airways; further out, opt for United, which would honor a ticket once it has been issued, Peterson said. (US Airways has until Sept. 15 to pay about $130 million to its pension plans. It also faces a Sept. 30 deadline to meet requirements of a $720 million federal loan guarantee.)United refused to comment on whether it would redeem Dividend Miles if US Airways ceased operating. Peterson said it probably wouldn't.

If US Airways survives and you decide against the trip, you can cancel your reservation and have the miles redeposited into your Dividend Miles account. You'd pay between $30 and $50 a ticket to do this, Peterson said.

....

Sit tight. Don't panic

Peterson advised against rushing to burn miles on trips you could care less about. He still holds out hope that US Airways will find a way to extricate itself.

Sounds like Randy is also expressing some optimism here too - so take what you will from his statements.

Schedule a trip on US Airways or miles partner United Airlines. For travel within the next month or two, you're probably OK to choose US Airways; further out, opt for United, which would honor a ticket once it has been issued, Peterson said. (US Airways has until Sept. 15 to pay about $130 million to its pension plans. It also faces a Sept. 30 deadline to meet requirements of a $720 million federal loan guarantee.)United refused to comment on whether it would redeem Dividend Miles if US Airways ceased operating. Peterson said it probably wouldn't.

What does this mean?? In the first two lines, Randy states that United would honor a US ticket for travel on UA once the ticket has been issued. In the last two lines, Randy seems to state that United would not redeem US miles if US is out of business. Isn't this a contradiction or am I missing something?

Further, where is Randy getting the information that United would honor a US ticket once issued? Is this opinion or has UA come out and actually said they will honor tickets that are already issued? I'm hoping they do, but don't believe UA or US has said anything about it.

What does this mean?? In the first two lines, Randy states that United would honor a US ticket for travel on UA once the ticket has been issued. In the last two lines, Randy seems to state that United would not redeem US miles if US is out of business. Isn't this a contradiction or am I missing something?

My interpretation is it's o.k. to use US miles for a UA ticket now, and UA will honor that ticket, but if US ceases operations, that UA will not THEN assume the liability of US miles (in other words, they won't take over the program, and if US ceases ops, you won't be able to redeem then).

What does this mean?? In the first two lines, Randy states that United would honor a US ticket for travel on UA once the ticket has been issued. In the last two lines, Randy seems to state that United would not redeem US miles if US is out of business. Isn't this a contradiction or am I missing something?

Further, where is Randy getting the information that United would honor a US ticket once issued? Is this opinion or has UA come out and actually said they will honor tickets that are already issued? I'm hoping they do, but don't believe UA or US has said anything about it.

Randy is suggesting you cash out some miles for tickets on UAL. He is saying that he believes UAL will honor existing tickets even is U liquidates before the actual travel date, though he seems to be somewhat hedging his bet on this. However, he also seems to be saying that once a liquidation occurs UAL will not honor miles that are still sitting in a DM account and have not been cashed out for an award. Those miles will become totally worthless. DM will get absolutely nothing for them.