Why Airline Fees Are Bad For Travelers

By: Jason Steele

02/10/2011

Brett Snyder, AKA The Cranky Flier and I share our geeky obsession for all things airlines. We agree on all sorts of areas of the airline business, but not everywhere. Back in December, Cranky tried to explain Why You Should Love Airline Fees. His arguments were based on the marginal cost of the luggage and other items being separated out. In my article, Are Airline Fees Good?, I granted him that the fees helped the airlines, but I thought his piece represented the views of the industry.

Cranky Takes His Good Fees Message To CNN

It is great to hear that someone as knowledgeable about the airline industry as Brett will be writing for CNN, which can use all the help it can get.

His first article for them is entitled Why airline fees are good for travelers. In the spirit of friendly debate, I will attempt to rebut his arguments as I believe that most airline fees are bad for travelers.

Pay Only What You Use?

Let’s start with his premise that you will be paying only for what you use. The logical extension of this idea is that you shouldn’t pay for anything you don’t use. By implication, there should be a charge for speaking with a gate or ticketing agent, receiving frequent flier miles, or even drinking a glass of water. In fact, some airlines have tried these things. Ryan Air charges to print a boarding pass at the airport, Air Canada sells discount tickets that do not earn miles, and US Airways tried to charge for water. Ryan Air faces EU action and US Airways backed down from it’s pay for water policy. Customers simply don’t like this. We do not want to be nickeled and dimed for everything. Restaurants continue to offer silverware free of charge, even though we don’t use it when we eat a hamburger. I studied economics and I understand pricing externalizes and such, but I also understand customers hate this and the customer is always right.

Airlines Lack The Credibility To Convince Their Customers Fees Are Good

Imagine for a moment that the airline charged a fee for luggage that actually represented their costs. We could debate the marginal fuel burn per pound for various aircraft and even include the labor rates and benefits bestowed on hard working rampers , but let’s stipulate that the baggage fees charged by most airlines bore some resemblance to their costs. If that were true, first bag fees might be the only airline fee that correlated with their costs. The public sees airlines as masters of price gouging. Everyone has had the experience of attempting to make last minute travel plans and being quoted at rates that are many multiples the price of an advanced purchase. Then there are all sorts of ridiculous fees that go far beyond the first bag. Why does the third bag cost three times as much as the first? Why does a change fee cost $150 for a few strokes of keyboard? Why does Delta charge $150 for a nearly weightless styrofoam surfboard? Fees for small animals carried on? Fees for ticketing a lap child on an international flight? I could go on all day about outrageous fees, but it is clear that there is no correlation between most fees and the cost of the airline for providing the service. The public knows this and views the airlines like the gas station that doubles their prices when there is a shocking headline about the middle east.

Profits, But No Price Difference For Airlines That Charge Fees

Ever notice that a high end hotel might charge $25 a night for Internet Service while the budget inn across the the street gives you free wi-fi? This is currently the state at the airlines where Southwest and JetBlue give you free checked bags (1 and 2 respectively), but the legacy carriers charge you for bag one. At the same time, it is not like there are many markets where the legacies are beating Southwest and JetBlue on price. The point is that the claim that check bag fees reduce ticket prices rings hollow to people who actually shop around pay for their own tickets. Once you learn that airlines have increased their profits due to fees, you realize that the fees are not really coming out of ticket prices.

Exceptions Erode Perception Of Value

I might believe it actually costs something to transport my bag, if there weren’t so many exceptions. People with elite status, branded credit cards, child strollers, or military ID all get free passes. If you don’t fall into one of those groups, just bring your bag to the gate where they might offer to check it for free if the flight is full. Then there is the biggest exception of all; Check your bag on a Delta flight from Jacksonville to Atlanta, and you pay a bag fee. If you mention that you are continuing on to Johannesburg, the fee disappears. So much for “pay for what you use”. The fact that longer, international flights are exempt from bag fees kills the whole argument.

Fees Create An Adversarial Environment

It used to be that you paid your fare and then felt like you were getting a service in return. Customer service representatives and flight attendants did their best to promote customer satisfaction. Now, the passenger is a source of revenue and the airline personnel are like cops erecting speed traps. At each interaction, passengers are potentially penalized and asked for more money. I have literally had to hide from gate agents who I have seen trying to force people to check bags. I knew my bag met the published size and weight limits, but I also knew that the airline would win the argument when it came down to surrendering my bad or not boarding. The whole arrangement sours whatever customer service had been left at the airlines.

Fees Gum Up Operations

How many times have we seen passengers re-packing their bags at the check in desk in order to distribute their weight and avoid an overweight bag fee. Or perhaps they are consolidating to avoid another check bag fee. Other times, ticketing and gate agents spend valuable time explaining and reiterating the nuances of various fee structures while dozens of passengers wait steaming. They even process payment at the gate sometimes.

It only gets worse when it comes time to board. People carry more roll ons and personal items to avoid the fees, and it can add significant time to the boarding process. Passengers juggle overhead items like squares on a Rubix cube before they take their seats. The same holds true when priority boarding fees allow customers to board in less than optimal order. By comparison, travel on Southwest happens at lightning speed and they get more utilization from their aircraft. Some times I wonder if the slowdown of opperations costs more than the fees collected.

Future Technology?

Cranky argues that in the future, the fees will not bother us as technology will make them more transparent. We will pay different fares for different service levels and we will be content to keep our hands off of our wallet on the day of travel. I see no reason to doubt this eventuality, and indeed there are airlines that currently offer these tiered service levels. I will also grant that this will alleviate some, but not all of the adversarial interactions between passengers and airport staff. I still find that a fee is a fee, regardless of whether I pay it when I book a ticket or at the airport. Sometimes, I just can’t foresee the need make a change or check a bag, and so long as I pay for my own tickets, I will always direct my business to airlines that have lower fees.

Not All Fees Are Bad

When an airline offers a service that had not been previously offered, I have no problem with a reasonable fee. $5 for inflight wi-fi or a movie is not egregious. The problem is that the airlines are not acting in isolation from the rest of the economy. These days, it seems that nearly every transaction involves fees that are ridiculous and/or inadequately disclosed. Rental cars, telecommunications providers, and event ticketing agencies have been doing this for some time. The airline industry is becoming the next TicketMaster, and I don’t see how customers are ever going to like that.

The Stay At Home Mom Debate

By: Jason Steele

02/09/2011

The shocking headline making the rounds these days is that stay at home moms (SAHMs) may be denied credit due to new regulations. Under the CARD Act, the Federal Reserve board is empowered to issue new rules that affect banks issuing credit cards. In it’s latest proposed rule, the Fed is considering whether or not banks should be compelled to consider the income of a spouse when accepting a credit card application. For example, the rules currently say that they must consider child support as income.

Stay At Home Moms Treated Unfairly By Federal Government!

It makes for a great headline, pitting sympathetic mothers against the evil government, but the issue is far more complicated than that. The motivation is to prevent predatory lending, that is the granting of credit to those who have no viable means of repayment. The CARD Act cracked down on the practice as it relates to students, and few people complained about them being denied credit.

I can see both sides of this debate. Forget the heart stings that tug on you when you consider the plight of the SAHM. Is it unfair to deny credit to the non-income earning spouse? For example, my wife is not a stay home mother, she is a graduate student. At the moment, I earn the income for our household, but the roles could easily have been reversed. If I was in school and my wife was working, should I be denied credit?

In our household, we share all of our expenses and income, lest my wife otherwise exist in poverty. For us, the whole concept of what card is in whose name is entirely an academic matter that exists only in the address window of the billing statement. If more bills are in my name, it is only because I have more time deal with them.

For the rest of the world, this would be an issue in the case that a couple manages their finances separately, or in the case of separation or divorce. That brings you back to the case of consumer rights vs. predatory lenders. If a couple is truly separating their finances, should a bank encourage debt by loaning money to someone who is not earning any? Certainly plenty of spouses who manage their finances separately have gotten in over their heads with credit card debt.

There is also the issue of community property in many states, where one spouse’s earnings and assets are automatically the property of the other’s. In these states, I would say that a bank should have to consider spousal income in credit card applications.

Another good point that is often made is that few people are suffering due to lack of credit. Credit card offers frequently go out to children, pets and people in comas, so an unemployed spouse shouldn’t really have much trouble.

Another emotional argument that is often presented is that of the abused spouse. Certainly there are people trapped in relationships where one party restricts money to the other. This is a real problem, but I just have a hard time believing that the answer to this problem is to ensure that the abused party can open up as many credit cards as they want.

My Position

My wife and I really have no concerns about this, as we have no problem opening up joint accounts or obtaining cards in each other’s names. The problem is our economy and in our society is that of too much easy credit, not enough. If a person who has never handled his or her own money now finds themselves divorced or separated, perhaps it is a good thing that they are not flooded with too much credit until they their own credit history and a means of support.

That said, there has to be some mechanism by which people could voluntarily allow banks to consider their household income for credit lines that their spouse applies for. I certainly would not want to see my wife denied credit since our income is not in her name at that moment. Since businesses have an interest in ensuring consumer’s access to credit, perhaps they can work with the credit agencies to create such a system that would satisfy the Fed’s concerns about predatory lending while still enabling spouses to obtain credit based on their household, rather than their personal income. It wouldn’t be too much for a person to notify the credit bureaus that their income can be considered when their spouse is applying for credit. Such an authority could be granted or revoked at will, but it would not affect credit lines that have already been granted.

I am a big supporter of the CARD Act, and I think it is great that our government is continually looking to prevent predatory lending. Hopefully this regulatory process will result in rules that satisfy the concerns of non-income earning spouses while cracking down on predatory lending by banks.

Outstanding Chase AARP Offer: It's Good To Be Old

By: Jason Steele

02/08/2011

Years ago, I had a MBNA card for the Aircraft Owners and Pilot’s Association. I think it was my first reward card. I couldn’t pass up the deal at the time, 5% cash back on all my aviation related purchases. At the time, I owned my own airplane and 5% back was huge. Imagine filling up a 50 gallon gas tank with fuel that costs about $2 more than automotive premium. It is not uncommon for an airplane fill up to cost hundreds of dollars.

AARP Does Better

I am no longer an airplane owner, and that deal is no longer available, but there is a new deal from AARP that is even better. This AARP card from Chase offers 5% cash back for 6 months, and 0% interest for 12 months. Now I am always skeptical about 0% interest offers. o% is the only interest rate I ever intend to pay on my credit card, but somehow there is always some gotcha fine print. In the past, that was the fact that subsequent purchases would continue to accrue interest until the entire balance was paid off. So if you purchased a sandwich after your introductory period, that sandwich and every subsequent purchase would continue to earn interest until everything was paid off, as banks were free to apply payments to the lowest interest balances first. After the CARD Act, they are no longer allowed to do this. That said, I am sure they have some other gotcha clause in there. Even under the best case scenario, you would still have all of those interest free purchases on your credit report as debt. If I were eligible for this offer, I would probably just skip the interest free part.

On the other hand, you can’t beat 5% cash back. There are some cards offering 5% on some categories of purchases occasionally, but I don’t know of another card offering 5% across the board. Heck, it is hard to earn 5% back on your money by investing it, and anyone who can earn that back on their spending is doing real well.

After The Promotion

After the initial 6 months, you would still get a good 3% cash back on travel expenses and a marginal 1% back on other purchases. So this is a decent card, but the initial offer is fantastic.

Who Can And Should Do This

First, you have to be an AARP member to apply. Membership is open to those 50 and above and costs only $16 a year. Members are also eligible for all sorts of other discounts. The card itself has no annual fee either. The more you plan on spending in the next 6 months, the better this deal is for you. It is not hard to imagine a business owner spending $50,000 on whatever card they want, earning $2,500 in cash back. This reward will far exceed the value of 50,000 frequent flier points. It’s also easy to imagine all sorts of schemes were someone is able to purchase gift cards during the promotional period, such as stored value cards. Keep in mind that Chase is one of the only banks that has been known to close the accounts of people who order coins from the Mint.

Scheming aside, I would imagine that I might purchase a host of gift cards for myself during the promotional period for retailers that I know I will visit in the future. This would include gas, grocery, and home improvement stores that I frequent.

So if you are or over, this is probably the best introductory cash back offer you are likely to see for a while. I am sure they offer won’t stick around until I turn 50, some time in the next decade.

The 1-2-3-4 To Making The Score

By: Christina

There’s no arguing that a solid credit score is a powerful financial asset. It helps you get lower interest rates on everything from credit cards to home loans. If you have a low credit score, you could be paying for it, quite literally. However, if you don’t know what your credit score is, it’s impossible to fix it or even know if it’s been damaged.

1. Monitoring Your Credit Score
So, first things first: check your credit score. Once a year you can get your complete credit report for free online. But your credit can change throughout the year. So it’s best if you check more frequently. You can do this by paying a marginal fee to the credit reporting agencies like Equifax (each agency has a separate score), or you can monitor your score for free from a web site like Credit Sesame, which provides you with your free Experian credit score, refreshed every month so that you see mistakes right away rather than when you’re attempting to get a loan.

2. Report Errors
By checking your score every month you’ll know when and if your score changes. If your score goes down and you’ve been paying your bills on time, then it’s time to pull a report. When looking over your credit report check to see if there are any errors. If there are mistakes make sure to send a letter to the credit bureaus to clear things up.

A 2004 study by U.S. PIRG found that 79 percent of credit reports contained a mistake, and 25% of all reports surveyed had errors that could lead to the denial of credit or a favorable loan rate. Common mistakes found include misspelled personal demographic information and listing the same mortgage or loan twice.

3. Keep Account Balances Low
Be wary if you use your card (or cards) to the point where you’re getting close to your limit every month. Even if you pay your bill off in full, this kind of usage can ding your credit score. Typically, you should keep your monthly balance at about 30 percent of your credit limit. This debt-to-limit ratio is important in your overall picture, not just on one card. Your total debt should only represent 30 percent of your total credit. If you are seeing higher balances on a card, try a mid-month payoff to keep the balance artificially low. Sometimes this can seem like a game, but you want it to be you who wins.

4. Build New Credit
When rebuilding your credit, it can be helpful to take small steps. For example, try getting a credit card with a low limit, one that you know that you can pay in full every month. Or, take something that you normally pay cash for, such as gas, and try to obtain a store credit card. Paying your bill in full and on time every month will, over time, lift your score and more than outweigh any hit on your score from opening a new line of credit.

While there are quick fixes to bump up your credit score fast, nothing beats the turtle method of paying on time each month without fail, opening new credit only when you need it, and keeping your balances low, within 30 percent of your credit limit.

Credit Sesame helps people manage their credit, debt and loans- all in one place. It gives you a complete picture of all your debt and analyzes your entire debt situation to find better savings options for which you are actually prequalified. Plus, Credit Sesame gives you your free Experian credit score, refreshed every month, so you always know how lenders see you! It’s 100% free to sign up and start tracking your credit and debt every month.

Some Helpful Beginner's Guides For Loyalty Programs

By: Jason Steele

02/07/2011

Like learning to use a computer, the more you understand how loyalty programs work, the harder it can be to remember how beginners look at the same subject. What is needed are really good beginner’s guides to the more intricate aspects of loyalty programs. Here are a few good places to start if you are just trying to understand loyalty programs that give out points and miles.

Where To Start

The USA Today just printed a good introduction: Frequent flier 101: What you need to know about loyalty programs. They are covering the basics on airline, hotel, rental car, and even shopping programs. Inside Flyer is a subscription based site that has a lot of great information. Paying for access gets you a lot of the details, but there is plenty of introductory level information that is available there for free.

Dealing With Specific Airlines

The blog The View From The Wing has been putting out some fantastic guides in the last few days. I just read their guide to Using US Airways Dividend Miles to Book Star Alliance Awards. This came on the heels of their How to Use Delta Skymiles to Book International Premium Class Awards post. While these posts are specific to the airline named, many of the tricks can be used for other loyalty programs, albeit with slightly different routes. For example, you will always have more success piecing your routes together yourself, leg by leg, then getting an airline’s web site or telephone agent to consider all potential flights.

How to Get the Best Hotel Deals

The View From The Wing also posted another great guide on How To Get The Best Hotel Deals, covering all sorts of sites, codes, and deals. If you want to take advantage of a Best Rate Guarantee program, start at the Best Rate Guarantee Blog and begin with their list of Frequently Asked Questions.

Navigating FlyerTalk

Flyertalk has become the place where all the most experienced loyalty program gurus share their secrets. Although it is laid out very simply, it can be a very intimidating place for newcomers. The three biggest pieces of advice I can give to someone new to FlyerTalk are the following:

1. Consult their New Users Guide first. You should also familiarize yourself with their rules of conduct.

2. Read a lot before posting.

3. Do not make your first post a long, complicated question or complaint. Share some useful information with others first. Only later should you really go out to an airline forum and post questions or complaints. Even then, try to keep everything brief and leave out personal details such as (“I was having a bad day when I checked in for my flight to my cousin’s wedding.)

My How To Guides At Blend.com

I blog quite a bit, and one of my gigs is over at Blend.com. I have written quite a few How To guides for them that are typically at more of a beginner level than what I write here. You can check out such topics as: How To Get A Great Deal On A Rental Car, How To Transfer Frequent Flier Miles or Loyalty Points, and How To Travel With An Air Pass.

What To Look For In A Guide

There are lots of guides out there of varying degrees of usefulness. A lot of it borders on the completely obvious. I want to smash my computer monitor when I see someone write that you should simply pack less to avoid luggage fees. Another problem is outdated information. Airlines are constantly changing their written policies and procedures, while their de fact practices change even more often.

No matter where you turn to for information, becoming skilled at earning and redeeming loyalty awards is a pursuit that will take a considerable amount of reading. I happen to enjoy it, and I have found that my efforts have been paid off many times over.

Delta Rolls Out Premium Economy

By: Jason Steele

As anticipated, Delta will be offering a Premium Economy section on their long haul, international flights. They will be calling the Economy Comfort, according to the press release. Customers will be asked to pay $80 – $160 each way, with Gold and Silver medallions getting some discount off of that while Platinum and Diamonds will get upgraded for free.

What Will They Get

The first few rows of the coach section will be Economy Comfort seats with the following amenities:

4 Inches of Extra legroom
50% more seat recline
Free alcohol
Free personal television service with HBO

Some people are comparing this to what they already get in an exit row. The key difference here is the extra recline feature as some exit rows don’t even recline at all! Early reactions from frequent fliers are mixed. I have family members who are Platinum Medallions who just completed long haul flights in coach. They would have been happy to have had the extra legroom and recline, as well as the seating up front. Others are concerned that Economy Comfort will be treated as a different class of service, with their upgrades going there instead of to their Business Elite service. Right now it is too early to say how this will shake out for the upgrading set, but it seems likely that Delta will do anything and everything to monetize their offerings. If this means requiring paid Economy Comfort for an upgrade to Business Elite, nobody should be surprised.

In the end, Delta is replicating the offerings of their partners KLM and Air France, both of which offer some kind of premium economy. The hazard for passengers is that as newer premium products are offered, there is less and less incentive to upgrade the rest of the cabin. In fact, I have always argued that deliberate downgrading of economy takes place in order to incentive premium purchases. If economy was not hell, why would anyone pay for an upgrade?

Warning: Strange Airline Credit Card Requirements For Check In

By: Jason Steele

02/04/2011

Like many of you, I have a variety of credit cards that I use for different purposes. Some give great rewards on certain purchases while others have no foreign transaction fees. When a bank changes its fees or I find a better deal, I will cancel my card and get a different one. I do not necessarily carry all my cards with me at all times.

I also like to book my travel far in advance. Often it is because at least one person in my party is using an award ticket and the only way to secure award space is by doing so months in advance. In fact, I even purchased a ticket for my daughter before she was even born, I had to call back later to have them put her name on the ticket once we had given her one.

This Is A Recipe For Disaster

It turns out that there are some airlines that have bizarre policies where they ask customers to show their credit card used to their ticket at the time of departure. This is a stupid policy for many reasons. Off the top of my head, I can envision several highly plausible scenarios:

1. A passenger does not bring to the airport the card used to charge the ticket.

2. A passenger has since canceled their credit card used to purchase the ticket.

3. The card used to purchase the ticket was either lost, stolen, or had expired. It is unclear whether or not the airlines are sophisticated enough to link a new credit card number to an existing account.

4. A passenger is traveling without the holder of the credit card. For example, companies and people often purchase tickets for others with their credit card. Even a family traveling together might need to travel on separate flights from time to time. This happened to me when I needed to return from a vacation before my wife and my daughter. It is also common in my family for someone to purchase an airline ticket for another and be reimbursed. Sometimes it is for convenience when I am researching and booking a flight for someone, and other times we like to use a particular credit card to maximize rewards.

5. The mere possession of a credit card might be the least reliable means of identification that I can think of.

So far, I have never faced the problem of an airline demanding to see the credit card used for purchase before permitting check in. Nevertheless, I have read enough horror stories to know that this can happen when you least expect it. Take this article at Chris Elliot’s site. In this case, it was South African Airlines that forced a passenger to a second ticket on the spot, yet failed to provide a refund.

There is also an entire thread at FlyerTalk about United Airlines staff occasionally demanding to see the credit card used for purchase. As is the rule at United, their policy is little understood by their own staff, inconsistently enforced, and can even be circumvented via online check in. Thankfully, no other domestic carrier seems to be playing this strange card game.

Other airlines also have been known to do this. Nicholas Kralev has written about this practice, singling out Singapore Airlines as one of the most stringent enforcers of this policy. In the absence of the credit card used to purchase the ticket, the purchaser is “required to sign a Letter of Indemnity (LOI) and submit it to the nearest Singapore Airlines ticket office.” Naturally there is a Singapore Airlines ticket office on the street corner of your home town, right?

Other airlines out there that have this policy include Turkish Airlines. Their web site indicates: “The credit card used by online sales transaction on our web site must be presented at check-in. If you have made your payment via virtual credit card, then main credit card is required to be presented during the ticket delivery.”

How Do I Avoid This Problem

If you think traveling on an award ticket will work, think again. Singapore Airlines has even been known to request to the see the credit card used for the taxes and fees on award travel, no matter how small. In these situations, proving your identity with a driver’s license or even a passport is insufficient for reasons that no one can explain. In the case of Singapore Airlines, even an offer to pay for the fees again, in cash, was denied!

The only realistic way to protect yourself is obviously, to carry the card with your. You should also investigate the policies of the airlines you are ing tickets from when you are not part of the traveling party. While you should be safe domestically if you don’t fly United (wise advice in any circumstance), all bets are off with even the most well respected foreign carriers. For example, Kralev warns; “Passengers on Germany’s Lufthansa have had problems, but there appear to be no specific rules.”

Just what you want when you check in for your flight from Ulan Bator back home: problems, but no specific rules.

Cranky Covers Cairo Airline Fails

By: Jason Steele

Like most of the world, I have been riveted by the events in Cairo this week. Having been there, I immediately recognized Tahrir square where the Egypt Antiquities Museum is and the center of the protests. Earlier this week, I shared my observations of the chaos at the Cairo airport that predates the current crisis as well as my thoughts on what I would do if I were trying to get out of a country that is overcome by political turmoil.

It turns out that Brett Snyder, AKA The Cranky Flier, has been working with ticket holders to Cairo through his Cranky Concierge business. It turns out that some airlines, like British Airways, are doing everything they can to assist passengers in rebooking or refunding travel that was planned for Cairo. Sadly, others, like Air France, are barely lifting a finger. Brett cites success in rebooking an Air France passenger, but only after using some of his back channel travel contacts.

Lessons Learned

These experiences tell us a few things. First, there is always flexibility in the rules, especially during an unprecedented event like what is going on in Cairo. Too often, a low level customer service agent might not be willing or even able to offer the flexibility, but it doesn’t mean that it is not there. It can be very difficult to get in touch with a sentient being at some airlines. Customer service agents are trained to act like robots, citing and adhering to even the most absurd policies. They will often do this as if their jobs depend on it, as it often does. It can take incredible persistence to break past the first level or two of people who’s job it is to tell you know in order to reach someone empowered to perform actual customer service. If anything, this episode with Air France makes me realize that it is not just domestic airlines that are paralyzed by this blind, rule following mindset.

Lesson number two is how valuable a travel expert can be. Even if you are a travel expert, a service like Cranky’s is still invaluable in a situation like this. A traditional travel agent can also provide assistance, but I wouldn’t expect much from an online travel behemoth like Expedia or Travelocity.

What To Do

If your travel plans include Cairo, or any other region that is experiencing political unrest, do not hesitate to contact your airline immediately. If they are no showing you the flexibility you think they should, don’t give up. Politely end the call and try again with another agent. Ask for a supervisor. Contact their customer relations department. Try other methods of communication such as email. Every problem has a solution, some just take more work to find.

Delta's Award Redemption Calendar Is Still Broken

By: Jason Steele

02/03/2011

Delta’s SkyMiles are often referred to as SkyPesos as their value is in steady decline. Part of the reason is because they are handing them out like candy, and part of the reason is because their award availability is dismal. While these two conditions are probably two haves of the same coin, there is a third factor that further diminishes their value, Delta’s abysmal online award redemption calendar.

It Has Been A Problem

Delta’s problems, which were well know to the frequent flier crowd, were documented in an article in the Wall Street Journal in May of 2010. The Journal disclosed the result of a study showing Delta as ranking last in a survey of award availability among major carriers. At that time, the article said:

Delta says that award inventory has been too skimpy….”We have listened very closely to our customer feedback with respect to award availability,” said spokesman Paul Skrbec. “In order to have an effective loyalty program, we need to have an adequate number of award seats available to make it attractive.” Starting later this month and through 2011, Delta will be rolling out tools on its website to make it easier for customers to find travel awards, he said.

Translation: “We stink, and our award system is broken, but we are planning to fix it next year.

Delta Announces It Is STILL Broken

Delta has a nice blog where they announce all sorts of new and improved things with their company. Today, Delta announced some new features to their award calendar. Buried in the announcement is this sentence: “Functional award calendar improvements are coming to the SkyMiles award calendar soon. ”

Translation: We added some features, but we still haven’t fixed what was broken.

What is still broken? The first commenter to the blog seems to have summed up their shortcomings nicely:

Please consider the following often requested functionality..much of it that used to be in the old NWA platform that could possibly be reinstated here:

1. Able to see miles needed per segment during multi-city award ticketing, rather then just getting the final number at the end of the booking process.

2. Added partner availability options online. Can/will Delta add back Korea Airlines and other Asian partners for award redemptions oN Delta.com

3. Comprehensive award chart showing milesage redemption from points originating and termination outside the USA

4. Fixing the award calendar display to show LOW level when LOW is selected rather then defaulting to medium or high for various reasons

Number four is the real issue. As it currently stands, LOW awards are almost impossible to find. They exist, but you need to employ all sorts of tricks to find them. There is an entire thread on FlyerTalk that explains how to find LOW award space in their BusinessFirst class.

Until Delta and their IT department get serious about making LOW tier awards actually bookable, you do not have to be a cynic to conclude that Delta is fraudulently giving away loyalty points with the false expectation that they can be redeemed for low tier awards.

You Can Now Use AA Miles For BA Flights But It Will Cost You

By: Jason Steele

02/02/2011

American Airlines and British Airways have long had a partnership that has been restrained by anti-trust regulations. You could use your AA miles to fly BA, just not from any US destination. This lead to the phenomenon of AA fliers booking awards connecting to BA metal through Canada or even the Bahamas. Those anti-trust regulations have now been lifted and AA mileage holders are free spend their miles for awards on BA flights out of the US. This is a great thing, as there are many major airports like Phoenix, San Diego, and Baltimore where BA provides the only non-stop, trans-Atlantic service. While BA has had their share of problems in recent years, their global network reaches deep into far flung regions of Africa, Europe, and Asia.

So What’s The Problem?

BA has made an art form out of taking the value out of award redemptions. Their strategy has been to levy enormous fuel surcharges on award flights. What is enormous? A flight in a premium cabin connecting in London to Africa can cost over $1,000 in fuel fees for an award booking. Kind of takes the award our of award travel, doesn’t it. Fuel fees are calculated per flight, by the length of the flight. A flight from Denver to London will have higher fees than a flight from Chicago. Flights in Premium Economy have a higher surcharge than economy and the it only goes up with Business and First Class award redemptions. These surcharges are in addition to the hefty taxes and fees that are levied by London and the UK. Finally, if you are stopping over in London, they will add even more fees than if you were just passing through.

My Advice

Before signing up for a BA credit card, or transferring miles to BA, do your homework and investigate what an award ticket will really cost you. I always have a specific destination in mind when I start accruing miles towards an award. In my case, I looked up what the taxes and fees were going to be, and I made the decision to give up before I even started. The cost of the award flight I wanted in business class was going to be about the same as a paid economy class booking. Yes, I like business class, but I am still able to find award seats on other carriers without paying what would end up being thousands of dollars for me and my family.

BA Ups The Ante For Amex Transfers

Amex is now offering a 40% bonus on transfers from their Membership Rewards program to BA miles. This might change the equation for some people. Amex frequently offers these kind of bonuses to one airline or another. BA does have fairly reasonable reward redemption rates as they have not gone to a tiered system like most domestic carriers. If you can get to your destination with BA miles, and you can get a good value out of your Membership Rewards account, a transfer to BA might still make sense for some people, despite their crazy fees.