Brancatelli Rumour?
 

This week's Brancatelli email says this.

Has anyone heard anything about this?

Thanks!
=aw

"The page you requested is only available to contributing members."

Joe's wearing the Members Only jacket.

I have not, but I think you can take both UA and AA out of the running, as they are both looking at spinning off their mileage programs for big dollars. In the case of UA, their program could be valued as high as $800 million. Changing the rules would make them less valuable.

Who does that leave? US, CO, DL? Who would the 6th carrier be?

NW?

=aw

Thanks.

I remember the revolt when Delta went to 50% miles on cheap fares about 6-7 years ago, but retreated after complaints from business flyers who mixed business and leisure fares. Wonder if one of them is going to eliminate miles on discount tickets? That would impact a lot of us.

Brancatelli's tease is about existing balances becoming worthless. Something like BA's changes a few years ago would do that (well, not "worthless", but massive erosion on long-haul F and J [especially F]). Can't really see an American carrier doing that without warning (BA gave 6 months or a year), if at all.

=aw

I assume it's the story about Delta. There is also a long ongoing thread (started on Oct. 1) in Delta forum.
Joe is a bit behind FTers with his forecasts of doom...

I dont put any credit into anything this guy write/publishes. I sometimes wonder what he is thinking when he is writing??

Not sure if this is what he is aluding to but...

CO raised most awards in 2008 by a flat 20% and changed rules to read that any change to program (incl. discontinue) can be done with 30 day notice.

Also removed on line booking bonus and a few other perks.

NW is rumored to be good for 2008 still with no major devals rumor'ed

DL has some deval with some changes to awards and removed on line booking/check in bonus

No idea on UA/AA/US but nothing from US is good these days.

Similar discussion in the NWA forum yesterday: NWA may sell (spin off) WorldPerks?.

In post #8, avidflyer makes a very compelling argument. ^

/.

Do a google blog search for:

brancatelli delta

and order the results by date.

Wall street estimated many multiples of that figure.

Thanks everyone, interesting reading. Though I hardly think eliminating "the last seat" renders everyone's points worthless. I could see a doubling or tripling or more of international awards (as BA did) qualifying for such a statement, though it would still be hyperbole in that case.

I wonder if DL will add a new tier, analogous to AC's ClassicPlus. That gives the last seat to everyone, but instead of being twice the points it's a variable amount that seems to end up being 2c/pt (so 500K for a $10K Business Class ticket to AU).

=aw

You're right. It's about the coming restrictions on Delta's SkyChoice awards.

IMHO he's exaggerating big time. Most non-US FFPs never had such unrestricted awards and I wouldn't call them exactly worthless because of that.

Don't know about Joe's claims, although he may have a point, since Delta's change may just be the first step in a growing series of devaluations of miles.

But, IMHO, it does look as though, in the long run, miles are going to be worth a lot less, on any carrier. The best rule of miles appears to "burn, baby, burn." @:-) And, maybe it is time to search for a new, cash rebate card. No one can devalue the dollar! :D

Really?

Not entirely true, though I agree with the sentiment of a cash-rebate card over a FF card. And it's true that if you spend $50000 on a (hypothetical) 2%-back card, you'll always get $1000.

That said, if you're saving up those 2% rebates in a separate fund for a new dishwasher and figure you need to spend $50000 to get the deluxe-est model (a Miele, say ;)), you may well find by the time you've spent the $50000, the price has gone up and you need to spend some more to redeem for the unit. That's especially likely on an imported item if the foreign-exchange markets, um, devalue the dollar. :)

Of course you don't have to save up until you've spent $50000 before spending the rewards, you can spend them whenever they're paid out. And some things will actually go down in price, either because of trends in a specific industry or because the US dollar rebounds (or in our case, because the US dollar goes down and we import directly :)). And that _never_ happens with airline awards, AFAIK (no airline says, "because the US dollar is so strong again, our 50K award has been reduced to only 48K" where that $1000 dishwasher could be reduced to $960).

=aw

They finally got me to take the NW card from US Bank by dangling 28.5K miles in sign-up bonuses earlier in the year, but the one I use is one from my credit union with ScoreCard. For 20K points at $1=1 point you can get $325 credited against any ticket from anyone (though with $25 service fee it's more like $300). This really rewards people who do their own homework and pounce on sales, as the bought ticket earns miles, is upgrade-eligible, etc. Have gotten to Europe twice (before the fuel run-up), plus other trips.

CapitalOne also has variants on the points-based model, though those seem to be less generous and assume that fliers can't book their own trips. Could be the only thing left standing when the dust clears.

It IS amazing how much the whole mess has gotten tied in with credit cards. I still get tons of mail with card offers tied to all my secondary FF programs.

Other than the US government.

Indeed, I shudder at going to Canada with their dollar higher than ours. Last time I went the loonie was around 65 cents and Calgary seemed to be on par with Atlanta on land costs. Today it has to be a different story.

Though I'm sure that's still a bargain compared to Europe. And Tahiti, which tracks the euro and with a hefty slug on top, has got to be unbelievable.

Re: Brancatelli. With Delta it'd seem that the fliers most likely to have the high balances to throw around for unrestricted awards are also most likely to be very heavy-traveling plats who practically live in a plane. Yeah, maybe someone gets in there on credit card miles, but it'd seem that the last group you want to be mad at you is that one. Maybe DL thinks they're all hub-captives, though in ATL you've got a strong AirTran presence and they offer business class on every flight!

I've got some professional background in payment systems and am convinced that this is the golden age of credit card reward programs. There is an enormous class action lawsuit wending its way through the courts against Visa and MasterCard alleging anti-trust violations in interchange pricing. (Interchange represents part of the fees paid by merchants to accept credit cards.)

If the suit is decided in favor of the merchants, as I believe it will be, interchange rates will come down significantly. While this would be great for those who accept credit cards and, overall, good for consumers (interchange fees are baked into prices as a cost of doing business) it would represent the death of generous rewards programs as we know them, as the rewards are funded by the fees received from merchants.

Take a look at the comparatively stingy reward programs tied to debit cards and you'll get an idea of what the future holds.

Enjoy it while it lasts, folks!

It is a major devaluation to those who redeemed such "anytime" awards. And I can see how someone with lots of points might very well decide it is worth spending 100% more funny money rather than pay thousands for a C or F international ticket (or perhaps Hawaii at Xmas). In fact, the anytime awards may be the only option for certain routes (e.g. see my UA post on how there are zero business class saver awards between SFO/LAX-SYD for 330 days out) So eliminating this award may effectively zero out those awards - at any price. It is basically just reimposing blackout dates - or maybe blackout routes. :rolleyes:

That being said, I personally have never redeemed for anything higher than a "saver" award and don't intend to do so. But then again I am now using most miles for upgrades rather than free tix, and the former are always capacity controlled.

The irony is that this move really hits the airlines best customers in the gut - those with lots of miles who probably don't have any desire to spend them on cheapo coach tix.

Just another reason to burn, not hoard. I try never to have more miles in my account than I need to make an emergency trip to Bali.

Mike

Travel Guru's
 

Honestly, I find that most so called Travel Guru's, give out info that I got on Flyertalk days, if not months ago. These big dog and pony shows, and Chicken Little fiestas are just meant to grab headlines. Just as many airline price increases don't go through, because of competition, if a huge FF change happens most informed frequent flyers will revolt.

The significance of there being no saver awards 330 days out on UA is exactly ZERO. I would say that this situation is the norm, in fact.

Contrary to urban legend (which is probably based on how things actually USED to be done), airlines do NOT necessarily release all (or even ANY) of their award inventory 330 days out. Maybe some of them still do, but UA is one that most definitely does not, and has not done so for at least several years.

Instead, inventory management/revenue management is used to release award inventory over the months leading up to the travel date.

So Joe has basically told us that President Kennedy has been shot. It would seem that there is a good business to be had in cribbing info off of FT.

Here is the article.

This is absolutely correct. I am normally :rolleyes: :rolleyes: :rolleyes: when people are posting that they are waiting for the award space to open up 330 days in advance.

Personally I have had very good run on premium awards in F cabin using UA miles booked at the very last minute i.e. 24 to 48 hrs in advance on SQ/LH/TG etc.

That is a devaluation in and of itself for those of us who can or need to plan in advance. :mad: Fortunately AA WN and others do not operate in this fashion.

However, I do not believe it is the norm for all routes - only selected ones where UA doesn't want to give up the freebies.

AA operates this way too. They open up A LOT of seats over time. Most of the time when I can't get a transatlantic flight far out, if I set up Expertflyer flight alerts for award inventory on all possible flights, something will open up I can grabl it.

No program I have experience with does not open up a lot of seats over time. In many programs the most availability is 24 hours in advance. Of course the return can still be an issue.

Now that I have read the article, a few things strike me:

1) Contrary to what Joe states, airlines generally have NOT said that any seat on any flight is available for miles. There has always been an out.

2) Joe, makes it sound like he is such a huge genious in figuring this all out since he heard about it last week. I would really think it gentlemanly if he were to at least admit that the real experts, those on FT have been debating this for weeks.

3) I find it really spooky that they are citing the Nice flight during the Cannes folm fest as that is the example that I have used repeatedly over the years on FT when speaking about "real" capacity controls. Truth be told, no airline has ever really released seats unless they have had to for any sort of award no matter what is said, if it is on a time/route which is hugely oversubscribed for full whack premium travel. No one.

4) While Joe does talk about CO coming up with the "saver" option, truth be told, for most airlines this was only an innovation of the last decade, and for much of the decade before that all had blackout dates where you just simply couldn't fly with miles.

5) I am aainst any changes which are adverse to FF's, however I see this DL move as essentially just a codification of what already goes on.

I suggest if you do that, you at least get one that gives your rewards in a currency more stable than the US dollar, perhaps the Swiss franc.

Who determines when award inventory is made available on other *A carriers using UA miles to redeem, UA or the other carriers, whose seats the butts will go into? I assumed, though not on the basis of anything, that while UA may release more seats for awards as time went by, especially when it was down to a matter of days until departure, the other *A carriers told UA how much award inventory there would be for UA redeemers and that that inventory just went down as the seats were claimed, never up after the initial release. Not the case? Anyone know?