US Airways Dividend Miles (Pre-FlightFund Merger) - Wash Times: Frequent fliers use up miles on bankrupt US Airways

A few of us US FTers/ FFOCUSers are quoted.

http://washingtontimes.com/business/20041011-101904-8987r.htm

Frequent fliers use up miles on bankrupt US Airways
By Tom Ramstack
THE WASHINGTON TIMES
Published October 12, 2004


Some US Airways frequent fliers are using up their "dividend miles" as quickly as possible, while others are holding on to them in the hope that the Arlington airline will avoid liquidation.
A Washington lawyer, who did not want her name used, said she had used about 80,000 miles since the company declared bankruptcy on Sept. 12.
She took one trip herself and gave another 50,000 miles to her sister and her two children so they could visit her from Tennessee. After she said goodbye to them at Ronald Reagan Washington National Airport, she said she used the miles out of "concern they would become worthless."
Brian Finn, a college student from McLean, said he and his brother used US Airways dividend miles to visit a friend in Buenos Aires.
US Airways' financial problems were "an important part of why we went," said Mr. Finn, a Harvard University economics major. "It was foreseeable that those miles wouldn't be there."
US Airways officials said after the carrier filed for bankruptcy on Sept. 12 -- the second time in two years -- that liquidation as soon as February is a possibility unless they can bring down their costs.
Liquidation would mean the Arlington airline's customers would lose all the frequent-flier miles that they have earned.
Although airlines have honored frequent-flier miles of liquidated competitors in the past, the current climate means that the likelihood of that happening is minimal, said Terry Trippler, an expert on air fares and regulations.
"With that 100,000 miles and $5, you could probably get a cup of coffee and a doughnut," he said. "I just don't see anybody picking it up. I don't think anyone can afford it."
Several frequent fliers were uncertain about what they would do with their unused miles.
"I have to wait to see what happens," said Barbara Kashar, a Sandwich, Mass., resident returning home on a US Airways flight at Reagan Airport after a family wedding in Washington.
"I have to find a place to go," she said. "I'll probably try to go overseas again."
Matt Graham, a Hobe Sound, Fla., engineer returning home after visiting friends, said he has saved 55,000 US Airways dividend miles.
"I do have enough that I could take a flight, and I'm sort of thinking about it," he said.
Tom Bascom, a Manchester, N.H., information-technology business owner and regular US Airways customer, said some customers are reacting irrationally by trying to "save" dividend miles that might be eliminated in a liquidation.
"People are doing ridiculous things to save their mileage, like getting paper tickets and booking trips that they will later change," Mr. Bascom said.
They are "saving" their miles in the sense that they get their tickets while they still can use their frequent-flier miles.
If they change their flights later, they will "incur fees that cost real dollars," Mr. Bascom said. "In some cases, the fees easily cost more than a well-planned paid ticket would. It's wasted money."
US Airways officials say any concern by frequent fliers is unwarranted.
"The program is completely unaffected by our [bankruptcy] filing," said Amy Kudwa, US Airways spokeswoman.
She also said few customers are taking trips only to "burn off" their frequent-flier miles.
"We haven't seen a significant spike," Miss Kudwa said. "We're advising customers to continue using their miles exactly as they would otherwise."
A group of US Airways frequent fliers communicate with others through a Web site at www.flyertalk.com. The group calls itself Frequent Flyers Organized and Committed to US Airways Success.
One of the group's members, Jim Johnston, a Princeton, W.Va., software-company owner, said reaction of the airline's frequent fliers to the latest bankruptcy has been mixed.
"Some are doom and gloomers, some are 'we-hope-they-get-it-together' supporters," he said. "Some I know are hedging their bets and spreading business over other airlines just in case US [Airways] liquidates and no one picks up the [dividend miles] program and status."
Despite their loyalty to the airline, the frequent fliers are concerned that it might not survive as the federal bankruptcy court in Alexandria decides how its creditors will be paid.
"At this point, it's anyone's guess, but I do not think it is in anyone's best interest to liquidate," said Art Pushkin, a Long Island, N.Y., computer industry regional sales manager and owner of 570,000 US Airways miles.
The airline has greater value to its creditors while it is operating than it would have if it is sold off in pieces to pay debts, Mr. Pushkin said.
"As long as US [Airways] has flights available going where I need to go, they continue to be my first choice," he said.

Looks like a FlyerTalk fanfest. I am sorry to hear that Tom just has enough miles to take a flight (What, 500,000 miles). :D

Just saw "Titanic" on cable tv last week. The quotes from the PR flacks remind me of the officer who told the band to keep playing right up to the end...

[QUOTE=jimcfsus]A few of us US FTers/ FFOCUSers are quoted.

http://washingtontimes.com/business/20041011-101904-8987r.htm

Frequent fliers use up miles on bankrupt US Airways
By Tom Ramstack
THE WASHINGTON TIMES
Published October 12, 2004


Some US Airways frequent fliers are using up their "dividend miles" as quickly as possible, while others are holding on to them in the hope that the Arlington airline will avoid liquidation.

Although airlines have honored frequent-flier miles of liquidated competitors in the past, the current climate means that the likelihood of that happening is minimal, said Terry Trippler, an expert on air fares and regulations.
"With that 100,000 miles and $5, you could probably get a cup of coffee and a doughnut," he said. "I just don't see anybody picking it up. I don't think anyone can afford it."

QUOTE]

I just don't think Terry Trippler and others like him understand liquidation precedures and the actual liabiliy incurred by FF miles.

As AA has recently admitted, you can block out zero, zilch, nada seats for FF awards on flights you think you can sell all of your seats on. Therefore, most FF awards end up going for the incremental cost of flying a seat full vs. empty, which averages, what, $25.00?? So any arilinne picking up the DM Mile program will incur very llittly real liability for a great pool of instantly loyal customers. I know they have to carry a much higher libalilty on their books than the FF awards will actully cost them, but that's just accounting BS.

As for liquidation, the BK court will sell everthing anyone is willing to pay anything for. So say the best bid for the entire DM program and Database is only $50K, they will still sell it. If I'm and unsecured creditor, every penny counts, and I'd rather get 5 cents on the dollar than 4 cents. I guess Trippler and others think the DM program is worth less than $0.00, because if it is worth even $1, the BK court will sell it for that. Something tells me the DM program is worth a lot more than a buck to some other airline. And as I said above, the actul liability of all those miles is grossly overstated since the vast majorty of actual awards are seats that would have gone empty otherwise.

True enough, but no one picked up Ansett's program... ;)

I'm not panicing, but I am using my miles in response to US's rather expensive non-upgradable fares to Europe. :)

They will solicit elites, maybe even using other lists which CCY has sold to people like Hertz and Avis. If you bite, they'll make you whole, so long as you can prove you had the miles. Ansett is a poor example. Very regional, in a remote part of the world (with apologies to our friends down under), in a country with fewer people than we have in Ohio.

I'm going to come out from under the rock called a furniture market to respond to this article. This gentleman had an axe to grind and he only wanted to report on those people who were burning miles. I and others who frequent this forum were interviewed. and from the follow up questions to our initial emails and from what was published in this article, it is obvious to me that he had NO desire to present both sides of the story. I also know that the intent used in some of the quotes in the article were not as published. When I get time tonight or in the morning I will post both his questions and my responses to them verbatim. You can then decide. This was a hatchet job and yellow journalism at its best.

The editor of the Times will be getting a letter on this one with proof of the slant of this writer and the desire to publish a negative story.

I and others who frequent this forum were interviewed. and from the follow up questions to our initial emails and from what was published in this article, it is obvious to me that he had NO desire to present both sides of the story. I also know that the intent used in some of the quotes in the article were not as published.


My perception is identical to l4pi's. After obtaining initial answers to his questions, the writer only pursued those items that supported his bias.

Ok, is this something we DIDN'T KNOW? I mean really. We all know people are burning miles, some more than others. Do we seriously need a newspaper article to tell us this? We've heard it all before over and over.

I'm siding with L4PI.

A very slow day at the market so here goes. Ramstacks questions are in bold and you can see my replys. Decide for yourself.

1. Are US Airways' frequent flyers trying to use up their dividend miles
quickly? Why or why not?
I can only speak for myself on this one and what I read on Flyertalk. I am not burning miles at this time. After having gone through this one time already I’m not as concerned as I was two years ago. To be fair I did burn over 1,000,000 miles in about 18 months up until the end of 2003. I’ve believe the transformation plan will work if given enough time and I have a good feeling about the changes that have taken place at US in the last two years. Most of these changes are not seen and not known to the public, but they now have a management team that wants it to succeed and are putting the tools in place to do so.

Most of the flyers I meet on the flights are not concerned either and very few are burning miles.

BTW,If I’m wrong I do not believe any one will pick up and honor my miles.

2. Do you believe US Airways will liquidate? Why or why not?
No I do not. Like I stated above, I believe they have a plan in place that will work if given enough time. I do not believe that US will look like it does today however. I think it will be a smaller airline for a while and then will build upon their strengths and begin to grow 3-5 years down the road.

3. How would you describe the way US Airways' frequent flyers have responded
to the latest bankruptcy and news of a possible liquidation?With support for the airline that defies logic. As you know I’m a cockroach and have been from the beginning. Why? US has the best front line employees in the industry. And I think they have been even better since the filing. I am treated better on US than any other airline. To me any airline can get you from point to point when the skies are blue. The difference is when something goes wrong due to weather, irregular ops, etc. It is at this point that being a CP on US makes all the difference in the world. I’m going to attach a letter I wrote to Deb Thompson on this very subject. You may refer to the letter, but I will ask you not to quote from it in any way. This letter sums up what the US employees are like and have been even more so since the filing. The are simply the best and I speak from experience. I hold status on three other airlines with the highest status being on Delta as a Platinum. I fly over 250-300 segments a year with a little more than half being on US, and will fly around 10 different airlines in the course of a year.

I will fly them until the end and am willing to risk over 235,000 miles at this point in doing so. I earn them faster than I can spend them anyway.

Many of the quotes in the article above were in response to these questions. I have seen many of the responses sent to the writer. I know for a fact they were taken out of context.

So does anybody want to buy a sofa? :D

I just realized this is the Washington Times, not the Post.

This gentleman had an axe to grind and he only wanted to report on those people who were burning miles.

Reminds me of a call from a WSJ reported about alowing cell phone usage on planes. The first question was "So, do frequent travelers think it's a conspiracy by the airlines?" I had no idea what she was talking about, and couldn't even think what they would be conspiring to do. But she obviously had a preconcieved notion and was looking for data to support it.

I just realized this is the Washington Times, not the Post.

Yes, in DC they are definitely #2. ;) Oh, and it's not the New York Times either. :p

Seriously, when I was emailed his questions (BTW, he got the 6 of us from the FFOCUS website because our emails are on the contact page), I figured my answers would be, for the lack of a better word, blah, compared to what l4pi or PB or AB would dish out. The next day I got a VM from Ramstacks wanting to follow up on details (which he got wrong... yes, I own a software business, but I'm a college professor first and made that clear to him... guess he doesn't read his emails for facts). So as a result of all of this and because it was 2 weeks ago since he contacted the 6 of us, I've been very curious what spin this guy was looking for... my OP gives you the answer.

He definitely wasn't looking for anything positive on US (or on anything involving FFOCUS, since he didn't even use the acronym). Since it took him 2 weeks to get this story out, I would guess that he had to really work to get his spin. Privately, the 6 of us have shared our responses, and it is obvious we didn't give him what he was looking for, that is, the responses were too positive towards US for the negative which he was fishing.

l4pi has shared his above, and it is definitely too positive for his snake hunt. You see most of my response to his third question in the article, but I don't think he used any of our responses to the first two questions (since they were too much on the positive side of US). Since l4pi disclosed his response to Ramstacks, I'll add mine for the record...

1. Are US Airways' frequent flyers trying to use up their dividend miles
quickly? Why or why not?

I think the response is mixed. Some people just don't have the time to use them up. (I put myself in this group) Some don't think the airline will last and are using them.

2. Do you believe US Airways will liquidate? Why or why not?

No, I think management knows there are too many ramifications if they give up. Deep down, the US employees I have spoken with in the past couple of months know their jobs are on the line. If they lose their jobs, they will have a hard time finding another. They will do whatever it takes to keep their jobs, no matter what the union wants them to do.

3. How would you describe the way US Airways' frequent flyers have responded to the latest bankruptcy and news of a possible liquidation?

Again, I think it's mixed. Some are "doom and gloom"ers, some are "we hope they get it together" supporters (I'm in this group). The latter group is obviously the more loyal following. Some I know are hedging their bets and spreading business over other airlines just in case US liquidates and no one picks up the DM program and status.

It's just like the media to post crap like this. Media is always drama and depressing. If there is no drama then their is no news.

Sounds like our reporter Tom Ramstack is a doom and gloomer.

Troy

In the original article, the US spokeswoman declares no significant spike.

But didnt they say on the FT chat session recently that 10% of passengers on each flight are award tix? Thats gotta be a spike.

Back of the napkin sanity check...

They board 50M people annually. Around 1MM awards are redeemed annually. An award probably equates to 4 boardings so around 10% doesn't look like a spike to me...

Back of the napkin sanity check...

They board 50M people annually. Around 1MM awards are redeemed annually. An award probably equates to 4 boardings so around 10% doesn't look like a spike to me...

And my statistics background tells me that 4-5 boardings compared to maybe, what, 2 or 3 per flight before this, is definitely not statistically signifigant. Now if they increased to say 10 (say about 15-20% of an E70 or about 5-10% of a mainline jet depending on model)... then we'll talk.

Perhaps I should give this one to my Elementary Stats class. ;)

I also responded to his inquiries. During a follow up conversation, he seemed miffed that he could not find a member of FFOCUS who was trying hard to burn miles. I was afraid there would be a somewhat negative bias to the story, and my comments were taken somewhat out of context. I will post my complete answer to the question of liquidation here--although I said what he quoted, it was part of a larger statement:

1. Are US Airways' frequent flyers trying to use up their dividend miles
> quickly? Why or why not?

Neither I nor most people I know are in any hurry to burn up miles. I
currently have about 570,000 miles in my US account, and I am in no rush
to use them...first I just don't have the time, and second, I really think
US will survive in one form or another.
>
> 2. Do you believe US Airways will liquidate? Why or why not?

At this point it's anyone's guess but I do not think it is in anyone's
best interest (other than perhaps a competitor) to liquidate. I think the
value of individual assets would not provide adequate return to the
creditors, plus there is more value in a running airline than in the
pieces at this point. US Airways has alot going for it....the best
employees in the business, an unbeatable route system, the most loyal
frequent fliers of any airline (which other airline has a group such as
FFOCUS??) and a very marketable name. On many occasions my fellow FFOCUS
members and I have provided insight and suggestions to management on some
positive changes which could be made which could potentially improve
revenue as well as customer satisfaction.

> 3. How would you describe the way US Airways' frequent flyers have
> responded
> to the latest bankruptcy and news of a possible liquidation?

Most of the frequent fliers I have flown with are like me--we continue to
fly US Airways, and continue to show support and appreciation for the
employees we come in contact with regularly. I have flown 12 segments over
the past 2 weeks, with more coming later in the month. As long as US has
flights available going where I need to go they continue to be my first
choice.
Although there are customers booking away, of the most frequent fliers I
think this is a minority. Most of us remain loyal and supportive.

We are pulling for US--and I think that DID show in the story, but almost as a sidenote.

Atlantic Beach and Longing4Piedmont are very correct in their assesments. As someone who does a fair amount of media contact for FFOCUS I was "concerned" by both the phrasing and tone of his questions when we spoke.

The reason I was NOT quoted is "I have enough people who aren't burning miles, I need people who are, can you help?" I told him I was sorry but I couldn't help him and that if he was willing to mention FFOCUS in the article, I'd be willing to discuss our organization at length. He declined.

Needless to say he had a story written long before he contacted anyone. All he wanted were quotes to support his story. Not the best journalism! But at least all of the FFOCUS Members did great!

And my statistics background tells me that 4-5 boardings compared to maybe, what, 2 or 3 per flight before this, is definitely not statistically signifigant. Now if they increased to say 10 (say about 15-20% of an E70 or about 5-10% of a mainline jet depending on model)... then we'll talk.

Perhaps I should give this one to my Elementary Stats class. ;)

Tom and Jim - I hadnt 'run the numbers' like that. If this is the case then I guess it isnt a spike and stand corrected.

Still scary to think that 10% of the bodies on board are flying for free. Do load factors published consider this? I know RPMs do.

There are few, if any, journalists, capable of writing a story on a subject they have determined worthy, that won't cross the line from reporting, to proving they were right in the first place. That's why they supposedly have editors. Then again, it is the Washington Times, which was started by Rev. Moon.That having been said, I personally have drawn down my DM account from 800,000 to under 200.000, much of it used for US20's when I commute to Florida next year. With loads light, these days, and the company only having cash through January, a bunch of those miles are at risk, or even wasted, but, by going out a few months, I at least cleared the space. That's a survey of one, and I have no idea if I am typical, but it demonstrates that redemptions are driven by availability, so how anyone can definitively make judgements on consumption, when the company controls it with availability, is a mystery to me. I don't read that stuff, because I know the FFOCUS people don't cooperate with them. I shall just watch FT. secure in the knowledge that FFOCUS will be told FFIRST when the company decides it will FFAIL. :D

Still scary to think that 10% of the bodies on board are flying for free.

Fly 10 get one free...

I was asked some of the same questions by a different reporter based on a post I made in another thread, andmy answers were very similar to those that have been given above. To the best of my knowledge, the article was never published, as I've not seen any reference to it on FT.

If any of you actually do contact the editor I would be interested in hearing what response you get. Please keep us updated as to whether the paper itself is interested in getting an acccurate article or not.

Fly 10 get one free...


Well not really. Don't forget to take into account all the other ways that you can earn miles.

Well not really. Don't forget to take into account all the other ways that you can earn miles.

Lately, thanks to my wife and the BOA Platinum Visa it's lately been fly 0 get 1 free. She earned me a free 20K all by herself last month with using the card for her store. The way things are going, she'll earn me the 10K preferred bonus in 2005 by the end of February. ;)

Well, I used 360,000 miles for one trip and 20,000 for a gift for someone. The 360,000 miles was something that has been in one form of planning or another for a few years although the problems at US certainly hastened it. But we do plan on using the tickets if we are able. And they were on UA, not US. The 20,000 was a US domestic flight and the trip is ongoing. I would have bought that ticket for a gift had it not been for concern over US. It was pretty cheap. My balance is under 50,000 now. I had been using a lot on international upgrades. When US declared Ch 11 the first time I had about 500,000 miles each on US and UA. The uncertainty and comments of many here, including Randy, convinced me that having large resources in uninsured, non-interest bearing accounts subject to deflation was not such a great idea. Ive been dropping balances since and will likely keep them pretty low.

I'm crawling out from under my flu rock to comment on this thread. As a member of the media myself, I can see how this reporter researched his story. I bet he had a lead about US frequent flyers rushing to redeem miles, and he was looking for some human interest. Of course the FFOCUS guys weren't giving him what he needed for that story, so he either quoted sparsely or simply didn't use the quotes. Also, a story filled with everyone saying the same thing ain't good ink. I'm not going to comment on why he wanted to write that particular story or where he got the lead for that story. However, a good reporter will either dig deeper or write a follow-up story if he finds information that doesn't support his original story idea.

If I were a consumer newspaper reporter, right now I'd be looking for some folks who have gotten the flu after being turned down for a flu shot due to the vaccine shortage. I'm sure I'd run acroos people who either don't support vaccination or feel that the flu shot shortage is a bunch of media hype. (I happen to believe both.) Quotes from those people don't support my original story idea, which most likely I was directed to write by my editor. So I move on to find people to help me with my story. As I'm an ethical and intrepid journalist, I'd file away those other quotes for a possible future story.

I'd suggest using honey instead of vinegar with this reporter. By all means let him know that you aren't happy your side of the story wasn't included. However, offer to help him write ANOTHER story depicting a different point of view. Reporters love helpful sources. Offer him information. Talk more about the grass-roots organization. Turn this negative story into something more positive.