In other words, they are reducing costs at your expense.
What This Means to You:
- Less planes
- Less airline staff
- First checked bag fee $15
- In-flight beverage "purchase" program
- No more bonus miles with Preferred status
“US Airways is also eliminating its bonus miles program for Preferred status Dividend Miles members. Preferred members currently receive mileage bonuses based on their status level. The Preferred bonus program will be discontinued for tickets purchased on/after Aug. 6, 2008.”
- Increased fees for booked at airport or through call centers
- "Redemption Processing Fee" for using Dividend Miles
I hate being the bearer of bad news.
This is just another sign, airlines are moving towards an "a la carte" menu to extract additional dollars from their customers.
In business school, this approach involves extracting additional customer surplus to maximize company profits. By further segmenting the flying population, the airlines can extract additional surplus which it was giving away on a first come, first serve basis. With oil prices at a record high, airplanes are competing to stay in business, not steal away customers from other airlines. By cutting down on flight schedules, seat capacity is now in short supply so there is no concern about flying empty airplanes. In a market with limited competition, the customer will pay the price.
Just when you thought it was over…
Here’s a few choice quotes from the article:
"…the combination of reducing seating capacity within the airline’s fleet, moving toward an a la carte system of charging fliers for such things as checking bags, eating and drinking, along with expense reductions, will save the Tempe, Ariz.-based carrier $500 million annually."
"In addition to charges for baggage and refreshments, US Airways has raised the $15 charge to book flights through its call center to $25 for domestic flights and $35 for international flights. The $20 service fee to buy a ticket at an airport or city ticketing office increases to $35 for domestic travel and $45 for international travel."
"Most airlines except Southwest have announced capacity and personnel reductions, and a la carte charges."
"Fare-paying now looks like the customer is just paying the base price for the flight…You want doors – that’s going to cost you more."
"Right now, you’re dealing with a panicked industry which, after fuel costs, is making about 30 bucks a seat…If they can get an extra $10 out of a passenger, that’s a 33 percent increase. The industry already has sold most of its product for July and August below cost."
Don’t hold your breath - you can expect the other airlines to follow shortly.
This is more evidence why you should be SPENDING your frequent flyer miles whenever possible. At the bottom of this post is an email from USAir. In a nutshell, USAir passengers will receive ONLY the miles that are actually flown. Before this change, the 500 miles floor ensured at least 500 miles per segment. In addition, a new fee will apply when booking flights within 14 days of departure. Remember the days when one of the benefits of frequent flyer miles was for use in emergency late bookings? Those days are long gone.
You just have to love the way they spin this:
As part of our continuing efforts to provide valuable benefits to our frequent flyers, US Airways is making a change to our Dividend Miles program. We’re making these changes to offset record fuel prices and rising airline related expenses while maintaining the benefits you’ve come to expect.
They are definitely doing something, but it’s not increasing your benefits as a frequent flyer.
Don’t fool yourself about the value of your points. They are the first to be de-valued when it comes to cutting costs. The complete text is below.
Beginning May 1, 2008, Dividend Miles will award the actual number of miles flown rather than a minimum number of miles flown for each segment. Also, members who redeem miles for award travel within 14-days of departure on usairways.com will be assessed a quick ticketing fee.
Here’s a summary of the policy changes:
Accrual
- Tickets purchased on/after March 1, 2008 for travel on US Airways on/after May 1, 2008 will earn the actual number of miles flown and will no longer earn a minimum of 500 miles per segment.
- Tickets flown on partner airlines after May 1, 2008 will earn the actual number of miles flown. Tickets purchased prior to March 1, 2008 will continue to earn the 500 mile minimum for travel after May 1, 2008. Accrual on flight segments greater than 500 miles in length are not impacted by this change. Redemption
- Members redeeming miles for award travel online within 14-days of departure will be assessed a quick ticketing fee of $50 per ticket.
A quick ticketing fee of $75 per award ticket will continue to apply for award tickets purchased from US Airways Reservations. Chairman’s and Platinum Preferred members booking within 14-days (both online and by phone) are exempt from the fee.