Friday, October 24, 2008

Airlines & Hotels going opposite direction in Loyalty!

In this tough economy.. the two major pillars in the Travel industry are going two different directions...

COLLOQUY Article

A travel article in the New York Times asks: "Given that both
airlines and hotels have been hit by the slowing economy, why the
disparity between their approaches to serving their best customers, the
frequent travelers?" The answer has a lot to do with competition. The
article states: "As hotel chains have proliferated, the industry has
become increasingly competitive."

If hotels ran on jet fuel would they, could they be as generous?

Here is a NewYorkTimes article on this topic.

My Views

I think the primary reason being the mix of Fix and Variable Costs and also the competition.

Fixed Cost for entering into Airline sector is so huge that you hardly find any new players entering in the established markets. On the other hand, in the Hotel industry, the Fixed costs are not as astronomical as in Airline industry.

The sheer number of available hotels and rooms make them competitive even for survival.

Airlines know that even if they jack-up prices, new competition is not going to enter the market and for all the existing ones, all are sailing in the same broken boat... so who cares?

On the other hand, though the variable cost in airline industry is considered a small portion (i mean the incremental cost of putting new passenger on a flight is almost nil). But that is true when you have empty seats. And when the jet fuel going through the roof one day and dropping in the sea within 3 months, there is too much uncertainty to keep empty seats. That's why we see so many airlines consolidating flights.. which means no empty seats anymore.

For Hotels, they don't have this problem and their daily running cost is far too less as compared to Airlines.

So given all this, you will see the two industries going completely different direction anyway.


Powered by ScribeFire.

Wednesday, October 22, 2008

When Frequent Flyer points come to rescue in tough economic times

Post from Frequent flyers redeem miles to beat higher fares

"Airline
customers are cashing in more frequent-flyer awards this year, looking
to avoid higher fares and believing that miles just aren’t worth the
same anymore," reports Business Week. "With so many new ways
to earn miles—on everything from car rentals to groceries—savvy
travelers fear it’ll soon become harder to go where they want, when
they want for free."


"The glamour of the frequent-flyer award has faded," says Jay Sorensen, who ran the loyalty program at Midwest Airlines
and is now an airline consultant. "People are realizing that using
miles to go to Hawaii is a difficult objective," a thought reflected by
InsideFlyer publisher Randy Petersen: "They’re going to Boise,
Decatur and Bakersfield. They’re spending miles on family emergencies
or visiting grandma."


Business Week reports: "Continental Airlines
reports that through July, customers had cashed in 1.34 million awards
this year, up 21 percent from the same period last year."



Powered by ScribeFire.

Tuesday, October 21, 2008

US Airlines Market looking down a hole

Some latest research suggest that there are lot of people who are refraining from even thinking to travel.. leave aside actual travel :D

Here is some research done by MarketingChartsTwo-thirds (66%) of Americans are concerned about high costs when
planning air travel - including ticket prices and baggage fees, and
more than half are also concerned about delays (56%) and the
possibility of terrorism (53%), according to a national survey conducted by Ipsos on behalf of Access America.


  • Two-thirds (66%) of Americans are concerned about high costs when
    planning air travel - including ticket prices and baggage fees, and
  • more than half are also concerned about delays (56%) and the
    possibility of terrorism (53%), according to a national survey conducted by Ipsos on behalf of Access America.
  • Women (70%) are more likely than men (57%) to be concerned with costs, including ticket prices, baggage fees, and related fees.
  • Women (58%) have a higher propensity than men (51%) to be concerned
    with delays resulting in missed connections and lost vacation time.
  • Women (61%) are much more likely than men (47%) to be concerned about terrorism.
  • Women (56%) are more likely than men (49%) to be concerned with baggage issues, including loss and delay.
  • 45% of women, vs. 39% of men are more inclined to be worry about
    fewer flights to choose from and the onboard comfort and amenities that
    airlines are currently offering.
  • Women (45%) are also more likely than men (36%) to be concerned about airline bankruptcies.


Powered by ScribeFire.

Thursday, August 28, 2008

Phskar Lele: Hindustani Classical Singer

Pushkar LeleOne of my favorite classical singers with a gifted voice. Fortunately got a chance to interact with him on emails today... so thought of putting together a small placemark with some of his work..
Some links:




YouTube - Some more videos

Monday, August 25, 2008

Worth of FFP Credit Card : Good Article

Good article.. copying from
August 16, 2008
Your Money

Gauging the Worth of a Frequent-Flier Credit Card

One after the other in recent weeks, airlines have altered their frequent-flier mile programs, adding fees, taking away bonuses and raising the number of miles you need for some free tickets.

But lost in fliers’ frustration over the changes is this: It may make more sense to change the credit card you use, not the airline you fly.

Consumers are currently holding about 45 million credit cards issued by United States banks that reward their users with frequent-flier miles, according to The Nilson Report, a payments systems newsletter. That number has held steady for three years.

This may be the year that number starts dropping. After a certain point, it will no longer make sense for many people to pay the annual fees that mileage cards usually charge and pay new fees to book tickets or upgrades. Will they also want to spend tens or hundreds of thousands of dollars on a card just so they can try to redeem miles for a single free plane ticket?

I’ve come up with five questions to ask yourself if you’ve still got a mileage credit card at the top of your wallet, and a number of alternatives for different types of cards. But first, some snippets from the program changes, just in case you’ve missed them:

US Airways has stopped giving bonus miles to members of its Dividend Miles program who have elite status, and the airline also added reward booking fees that range from $25 to $50.

American added a new online booking fee for rewards tickets and is about to raise the number of miles required for many flights. Moreover, its customers will soon have to pay new or increased co-payments much of the time, along with their frequent-flier miles, for upgrades to the front of the plane.

Delta added its own surcharges and also raised the number of miles customers will need to redeem for many free flights. Perhaps most interestingly, it introduced a three-tier price chart. For flights to 49 states (not including Hawaii) and Canada, for example, you could end up trading 25,000, 40,000 or 60,000 miles for a round-trip flight.

That 25,000-mile price for a free ticket has become somewhat sacred. The major airlines have increased the prices in miles for many other tickets, but not this one. How many people will give up on finding available seats at the 25,000 level, then hand over 40,000 or 60,000 miles? It’s hard to say, but Delta probably hopes that it is a lot.

The availability question gets to the heart of the matter. How hard is it to get free seats? And is it getting harder? The frustrating thing about this whole game is that we don’t really know the answers.

We don’t know how often average fliers get their first (or 10th) choice of flight or destination when trying to use their miles or just give up and buy the ticket. The airlines don’t tell us how many seats are available on any given flight or if more will become available later. Joe Brancatelli, proprietor of the business travel site joesentme.com, refers to frequent-flier programs as unregulated lotteries, which gets it about right.

Are fewer seats available for reasonable amounts of miles? Well, most major airlines are reducing the number of seats they fly, often by double-digit percentages. Flights are extremely crowded. But the airlines keep selling their miles to credit card companies and others that want to give them away to their own customers.

That means more miles are chasing fewer seats, even if the airlines aren’t reducing the number of seats on each flight that customers can book with a reasonable amount of miles.

It’s tempting to throw up your hands in despair at the lack of information. But there are several questions that can help you determine whether you want to keep adding miles from credit card spending to the miles you earn on the plane. Start with these:

DO YOU CARRY A BALANCE? If you don’t pay your bill in full each month, you’re excused from this discussion. You’ll do better by using cards with lower interest rates than frequent-flier mile cards, which generally have pretty high rates.

ARE YOUR CHILDREN IN SCHOOL? If they are, you’ll be fighting everyone else who wants to travel at the same time. The airlines, knowing your desperation to get out of town, may make fewer free seats available during school vacations, since the airline will probably sell all the seats on those flights anyway.

DO YOU HAVE ELITE STATUS? Some airlines — like American, Northwest, United and Continental — carve out additional inventory of free seats at their lower mileage levels for some or all customers with elite status. That inventory, plus the bonus miles that most airlines still offer to elite members, make a mileage credit card more attractive.

ARE YOU A BIG SPENDER? If you’re wealthy, or can run business expenses through your card, you can earn six figures in miles from card spending alone each year. A huge mileage balance gives you the ability to exchange those miles for premium-class overseas tickets, which could cost $10,000 or more if you bought them with cash. Miles are worth a lot more if you redeem them for this sort of travel.

DO YOU VALUE UPGRADES? It can be easier to get upgrades from coach using miles than it is to book free seats. Business travelers value the ability to get better seats when employers won’t pay for them, and leisure travelers may be willing to burn piles of miles for upgrades to seats they wouldn’t otherwise be able to afford.

So if you’re a big spending frequent traveler and think the value is still there in trading miles for upgrades, you may want to keep collecting miles via credit card spending. If you’re ready to switch to a new primary credit card, however, here are three other types of rewards cards that will probably be most appealing:

CASHBACK CARDS These cards give you money back based on what you charge. Sometimes the money comes as a credit toward your balance, and sometimes you get a check. You may get the money quickly, or it can take more than a year. The average card gives you 1 percent of everything you spend, but others offer much higher yields.

The American Express Blue Cash card is good for big spenders. Once you’ve spent $6,500 in a year, starting on the date you got the card, you get 5 percent back for purchases at gas stations, drug and grocery stores and 1.5 percent everywhere else. For that first $6,500, you get 1 percent at those three types of stores and 0.5 percent elsewhere. There’s no limit on what you can earn in a year and no annual fee.

If you spend a bit less and patronize merchants who don’t take American Express, the Pentagon Federal Credit Union’s Visa Platinum Gas Cash Reward card is a good choice. You earn 5 percent back for gas purchases you make at the pump, 2 percent back at grocery stores and 1.25 percent everywhere else. There’s no limit on what you can earn in a year.

If you don’t meet the normal eligibility requirements, you can still qualify for PenFed credit union membership by joining the National Military Family Association for $20, a good investment for this otherwise fee-free credit card.

One other footnote here: Issuers of the Delta and United credit cards have made it possible to essentially trade each mile for a penny that can be used to buy seats on a plane. A good cashback card will yield a better return than availing yourself of this particular option, though.

GENERIC POINTS CARDS These cards issue points, usually one for every dollar you spend, that you can trade for travel on many (or any) airlines and for merchandise and other goodies. There are some caveats, though. With many of the cards, there may be a limit on the price of the flight you can redeem your points for, restrictions on the airlines you can use or a Saturday night stay requirement. The points may expire, too.

American Express’s Membership Rewards points program, available on many of its cards, avoids many of these restrictions, and you can also trade the points for real frequent-flier miles on many airlines.

Many frequent-flier programs are creating ways to trade miles for things other than free flights and upgrades, in an effort to make miles resemble these generic points. These new rewards, however, tend not to be as valuable as the traditional freebies.

HOTEL POINTS CARDS The Starwood Preferred Guest American Express card is popular among rewards program aficionados. There tend to be few availability problems when redeeming points at Starwood hotels, like Westin and Sheraton, and you get good value compared with what you’d pay in cash for the same rooms, particularly overseas. You can also exchange your points for miles on many airlines, and you get a 5,000-point bonus when you trade in 20,000 points for miles.

Want to shop more widely for cards based on your own spending patterns? The card selection tool at creditcardtuneup.com takes your data and shows you what you’d earn with a few dozen of the best rewards cards.

Are you keeping your card? Write to rlieber@nytimes.com.

Your Money - Gauging the Worth of a Frequent-Flier Credit Card - NYTimes.com
August 16, 2008
Your Money
Gauging the Worth of a Frequent-Flier Credit Card
By RON LIEBER

One after the other in recent weeks, airlines have altered their frequent-flier mile programs, adding fees, taking away bonuses and raising the number of miles you need for some free tickets.

But lost in fliers’ frustration over the changes is this: It may make more sense to change the credit card you use, not the airline you fly.

Consumers are currently holding about 45 million credit cards issued by United States banks that reward their users with frequent-flier miles, according to The Nilson Report, a payments systems newsletter. That number has held steady for three years.

This may be the year that number starts dropping. After a certain point, it will no longer make sense for many people to pay the annual fees that mileage cards usually charge and pay new fees to book tickets or upgrades. Will they also want to spend tens or hundreds of thousands of dollars on a card just so they can try to redeem miles for a single free plane ticket?

I’ve come up with five questions to ask yourself if you’ve still got a mileage credit card at the top of your wallet, and a number of alternatives for different types of cards. But first, some snippets from the program changes, just in case you’ve missed them:

US Airways has stopped giving bonus miles to members of its Dividend Miles program who have elite status, and the airline also added reward booking fees that range from $25 to $50.

American added a new online booking fee for rewards tickets and is about to raise the number of miles required for many flights. Moreover, its customers will soon have to pay new or increased co-payments much of the time, along with their frequent-flier miles, for upgrades to the front of the plane.

Delta added its own surcharges and also raised the number of miles customers will need to redeem for many free flights. Perhaps most interestingly, it introduced a three-tier price chart. For flights to 49 states (not including Hawaii) and Canada, for example, you could end up trading 25,000, 40,000 or 60,000 miles for a round-trip flight.

That 25,000-mile price for a free ticket has become somewhat sacred. The major airlines have increased the prices in miles for many other tickets, but not this one. How many people will give up on finding available seats at the 25,000 level, then hand over 40,000 or 60,000 miles? It’s hard to say, but Delta probably hopes that it is a lot.

The availability question gets to the heart of the matter. How hard is it to get free seats? And is it getting harder? The frustrating thing about this whole game is that we don’t really know the answers.

We don’t know how often average fliers get their first (or 10th) choice of flight or destination when trying to use their miles or just give up and buy the ticket. The airlines don’t tell us how many seats are available on any given flight or if more will become available later. Joe Brancatelli, proprietor of the business travel site joesentme.com, refers to frequent-flier programs as unregulated lotteries, which gets it about right.

Are fewer seats available for reasonable amounts of miles? Well, most major airlines are reducing the number of seats they fly, often by double-digit percentages. Flights are extremely crowded. But the airlines keep selling their miles to credit card companies and others that want to give them away to their own customers.

That means more miles are chasing fewer seats, even if the airlines aren’t reducing the number of seats on each flight that customers can book with a reasonable amount of miles.

It’s tempting to throw up your hands in despair at the lack of information. But there are several questions that can help you determine whether you want to keep adding miles from credit card spending to the miles you earn on the plane. Start with these:

DO YOU CARRY A BALANCE? If you don’t pay your bill in full each month, you’re excused from this discussion. You’ll do better by using cards with lower interest rates than frequent-flier mile cards, which generally have pretty high rates.

ARE YOUR CHILDREN IN SCHOOL? If they are, you’ll be fighting everyone else who wants to travel at the same time. The airlines, knowing your desperation to get out of town, may make fewer free seats available during school vacations, since the airline will probably sell all the seats on those flights anyway.

DO YOU HAVE ELITE STATUS? Some airlines — like American, Northwest, United and Continental — carve out additional inventory of free seats at their lower mileage levels for some or all customers with elite status. That inventory, plus the bonus miles that most airlines still offer to elite members, make a mileage credit card more attractive.

ARE YOU A BIG SPENDER? If you’re wealthy, or can run business expenses through your card, you can earn six figures in miles from card spending alone each year. A huge mileage balance gives you the ability to exchange those miles for premium-class overseas tickets, which could cost $10,000 or more if you bought them with cash. Miles are worth a lot more if you redeem them for this sort of travel.

DO YOU VALUE UPGRADES? It can be easier to get upgrades from coach using miles than it is to book free seats. Business travelers value the ability to get better seats when employers won’t pay for them, and leisure travelers may be willing to burn piles of miles for upgrades to seats they wouldn’t otherwise be able to afford.

So if you’re a big spending frequent traveler and think the value is still there in trading miles for upgrades, you may want to keep collecting miles via credit card spending. If you’re ready to switch to a new primary credit card, however, here are three other types of rewards cards that will probably be most appealing:

CASHBACK CARDS These cards give you money back based on what you charge. Sometimes the money comes as a credit toward your balance, and sometimes you get a check. You may get the money quickly, or it can take more than a year. The average card gives you 1 percent of everything you spend, but others offer much higher yields.

The American Express Blue Cash card is good for big spenders. Once you’ve spent $6,500 in a year, starting on the date you got the card, you get 5 percent back for purchases at gas stations, drug and grocery stores and 1.5 percent everywhere else. For that first $6,500, you get 1 percent at those three types of stores and 0.5 percent elsewhere. There’s no limit on what you can earn in a year and no annual fee.

If you spend a bit less and patronize merchants who don’t take American Express, the Pentagon Federal Credit Union’s Visa Platinum Gas Cash Reward card is a good choice. You earn 5 percent back for gas purchases you make at the pump, 2 percent back at grocery stores and 1.25 percent everywhere else. There’s no limit on what you can earn in a year.

If you don’t meet the normal eligibility requirements, you can still qualify for PenFed credit union membership by joining the National Military Family Association for $20, a good investment for this otherwise fee-free credit card.

One other footnote here: Issuers of the Delta and United credit cards have made it possible to essentially trade each mile for a penny that can be used to buy seats on a plane. A good cashback card will yield a better return than availing yourself of this particular option, though.

GENERIC POINTS CARDS These cards issue points, usually one for every dollar you spend, that you can trade for travel on many (or any) airlines and for merchandise and other goodies. There are some caveats, though. With many of the cards, there may be a limit on the price of the flight you can redeem your points for, restrictions on the airlines you can use or a Saturday night stay requirement. The points may expire, too.

American Express’s Membership Rewards points program, available on many of its cards, avoids many of these restrictions, and you can also trade the points for real frequent-flier miles on many airlines.

Many frequent-flier programs are creating ways to trade miles for things other than free flights and upgrades, in an effort to make miles resemble these generic points. These new rewards, however, tend not to be as valuable as the traditional freebies.

HOTEL POINTS CARDS The Starwood Preferred Guest American Express card is popular among rewards program aficionados. There tend to be few availability problems when redeeming points at Starwood hotels, like Westin and Sheraton, and you get good value compared with what you’d pay in cash for the same rooms, particularly overseas. You can also exchange your points for miles on many airlines, and you get a 5,000-point bonus when you trade in 20,000 points for miles.

Want to shop more widely for cards based on your own spending patterns? The card selection tool at creditcardtuneup.com takes your data and shows you what you’d earn with a few dozen of the best rewards cards.

Are you keeping your card? Write to rlieber@nytimes.com.

Thursday, July 31, 2008

Airline Cost Cutting: The Axe is on Lounges

"United Airlines announced this month that it was
shutting four of its 38 Red Carpet clubs, after closing three others in
the United States and overseas in the last few years," reports the New York Times. "Delta recently closed nine of its 47 Crown Rooms in the United States and abroad, while both American Airlines and US Airways are closing one club each."


Recent and upcoming closures of at least one lounge:

  • US Airways (Baltimore-Washington International)
  • United (Cleveland; Hartsfield-Jackson Atlanta International;
    Baltimore; Dallas Fort Worth International; Minneapolis St. Paul
    International; Sydney, Australia; and London Heathrow Airport)
  • Delta (Boston; Cincinnati; Kansas City, Missouri; Seattle; San
    Juan, Puerto Rico; Phoenix; Denver; Honolulu; and London Gatwick
    Airport)
Source : Click Here
Source : COLLOQUY