sour grapes on LatinPass?
 

I keep on reading posts from people who state how can LatinPass afford all of these 1,000,000 mile awards? That they underestimated the number of people going after the 1,000,000 bonus and surely they will go bust under the weight of these miles. I would like to point out the following: 1)If LatinPass never intended to give out all of these miles, why did they close the offer to people signing up after the 19th of March? 2)Airlines pay very little for award seats--these are seats that would have gone empty anyway. Even if everyone redeems miles on non-LatinPass members, the cost to the LP is not as high as you think.
3)The "risk" is sharred by the ten different member airlines. Each airline is not giving out 1,000,000 miles but only 100,000 and 4)No one raised these issues when the Oneworld partners offerd the 100000 bonus last Fall. My question-- are people questioning the LatinPass program becuase of who they are or are they throwing out sour grapes becuase they are not participating in this offer?

I overestimated the number of people going for the bonuses. I was surprised to see in the WSJ article that Guy Booth, LatinPass program director only estimates 40 to 50 people going for the 1,000,000 miles. Even if LatinPass was paying 2 cents a mile/$20,000 per million, then $1 Million seems highly reasonable for an ad campaign. Add a couple of million more $ for all the 500,000 and 100,000 mile awards and it seems manageable. I really thought there would be more people going. Then again, the recent media attention may have increased the cost several fold which would not have been so manageable if they hadn't set a membership date cut-off.

[This message has been edited by satori (edited 03-25-2000).]

I don't think it is fair to compare oneworld's 100K with LP's 1 million offer, since any single one of the original OW members is probably bigger than ALL of the LP carriers combined, so whatever the financial effect is actually more serious (a better example would have been OW 1 million versus LP 100K) for the LP carrier. It's true that empty seats may not be worth much and that there are 10 to split the cost, but I also suspect that (1) miles that "stay" in Latin America will be used on only two or three of the larger carriers and (2) the majority of the miles won't actually be used on LP carriers but rather transferred to Hilton or used on KLM/TWA. In the latter case, there would be a really big cost for these really small carriers.

(FWIW, I have been a LP member since its inception and I will try to squeeze in a run in May or June if I have time...I also don't think that LP will go bust from this promo but management will discover that it was "too successful" in signing up newbie business but not very successful in getting yields and revenues up long term)

[This message has been edited by fallinasleep (edited 03-25-2000).]

It is fair to compare the oneworld bonus with Latin Pass. Granted AA/CX/BA are much larger airlines,but what about Iberia, Finnair and CP? CP was about to go under until Air Canada came to the rescue. To give out 2K for an outlay of $1300 (1K on each of two differnt lines) is not a good return on their investment, and they did not get near the publicity that LatinPass is getting. Torwards the end of the Promo the OneWorld Partners buried this promo so it was very hard to find. If the Today Show, WSJ, and Time magazine all ran articles on how cheap it was to get 2K on OneWorld, do you think they would have done anything different?

The last point is why does everyone value these miles at .02/cents a mile????? They may have that value to the customer(and that is what you have to buy them for) but it is wrong to assume the airlines pay/value them at this rate. Miles are like currency and the Airlines are the one's issuing this currency--not buying it!

One other comment: The smallest of the LatinPass airlines is TACA PERU. If you are going on the 1,000,000 run you have to go to Lima to get a flight on TA. Most everyone is taking the 6:00am departure out of LIM for CUZ. Do you really think people would normally take this flight when there are many others leaving at more reasonable times (9am, 10am 10:30am)? Taca Peru can only come out ahead becuase of this promo. Taca Peru will soon start flying non-stops between Lima and Miami. The attention given this airline through LatinPass is well worth any "cost" associated with the bonus miles.

At the moment the calculation would be
1000K / 9 (Saeta not fying)

555K Grupo Taca (Lacsa, Taca, Nica, Taca Peru, Aviateca)
111K Avianca
111K Aeropostal
111K Aces
111K Copa

Saeta will fly again. They ran into some cash flow problems and returned their leased A320's, leaving them with Boeing 737's. The FAA had authorized their A320's into Miami but not the 737's. Once they get FAA aproval they will resume the MIA/UIO/GYE runs using 737's.

I think LP will benefit greatly with this promotion. Great publicity and some real exposure of Latin America to many of those that like to travel, who will spread the word. On the other hand, the program was too rich so they had to cut it off. I think they could have got just about as many takers with about 700,000 for the 10, and 350,000 for the 6 flights. Too bad there are so many complications (various fares that may or may not count, difficult to get airling schedules and pricing, little information on the "travel" info about airports, questions as to some airlines not operating, etc.).

If they really wanted to do the job right, they should NOW 1)post info on how to transit at the various airport, 2) list some local info such as nearby airport hotels, and most importantly, 3) arrange for someone from each airline to meet the planes to help with those transferring to another airline. The 'how to transit' concerns seem to be a major question for most.

This would really help their Customer Satisfaction image and help them get some glowing comments to attract future travel. They have a once in a lifetime opportunity to show the 'gringos' that they can be a helpful, customer friendly program. Too bad they, like others in the past, will likely blow it and not take advantage of all the new travelers that will pass through their gates over the next 3 months. After 1 July, it will be too late.

If memory serves me correctly, getting to Cuzco by air in the afternoon is quite difficult due to the vagaries of the weather at that altitude, so most of the flights from Lima are early morning flights. I would not be surprised if A LOT of people would have taken this 6am flight without the LP mention (they did before and they will long after the promo ends) Also, I still do not see how Taca Peru benefits from this promo if they are responsible for 1/10th of the bonus miles, especially as the Lima-Cuzco route is not all that profitable to begin with.

Another benefit of an early morning departure to Cuzco is that it allows for more time to go to acclimatize oneself and to get to Macchu Picchu, one of the most amazing places in the world (which sadly, only a few people seem all that interested in seeing).


[This message has been edited by fallinasleep (edited 03-25-2000).]