Southwest Airlines new Rapid Rewards program: what it means for travelers

by McLean Robbins on

Today Southwest Airlines announced changes to its popular rewards program, Rapid Rewards. the all-new program, which promises to eliminate blackout dates and allow redemption for international flights for the first time, will launch March 1 and will will allow members to redeem points for any seat on any flight, with no blackout dates or seat restrictions.

AOL Travel has covered the basic information about the Rapid Rewards program restructuring, but we’re offering a bit more insight into what the program will mean for travelers.

A Brief History of the Rapid Rewards Program

Southwest’s frequent flyer program, Rapid Rewards, previously allowed customers to earn a free roundtrip ticket to any of their domestic destinations after the accumulation of 16 credits per 24-month period. The program also allowed a half-credit for using a Southwest partner to book car and/or hotel stays. Members also earned one credit per $1,200 spent on Chase’s Rapid Rewards-branded credit cards. Select merchants can earn double reward points.

In February of 2006, Southwest issued capacity control limits on its Rapid Rewards redemptions. This potential travel blackout will be removed with the new program. Details of how the Rapid Rewards program will integrate the A+ Rewards program of recently-acquired AirTran Airways have not yet been released.

According to FlyerTalk.com member NSK:

Rapid Rewards 2.0 is a perfect fit with Southwest’s brand as a no-gimmicks airline. The program may not be the most generous, but it is simple and completely free of any hidden catches. Unlike mysterious capacity controls, price-based redemption provides us an excellent ability to predict ability to redeem for free travel.

How Is Rapid Rewards 2.0 Different?

Southwest has assured its customers that existing credits and travel awards will remain available for use after the new system takes effect on March 1. Instead of a one-for-one system, travelers will now accrue points based on the fare and type of fare purchased, and redemptions will work the same way.

Wanna Get Away fares, the cheapest available, will accrue 6 points per dollar; Anytime fares 10 points per dollar, and Business Select fares 12 points per dollar. Travelers can also earn miles from shopping and dining partners.

Members’ accounts will automatically be transferred to the new program on March 1, 2011; no re-enrollment is needed. Points will not expire unless members have no earning activity in a 24-month period.

Truly frequent fliers will benefit from enhanged A-List and Companion pass award availablity. A new status, A-List Preferred, will accure 100% earning bonsuses. A-List Preferred can be achieved by flying 50 one-way trips or accruing 70,000 tier points. The highlight of this elite status is the 100% earning bonus as well as priority standby, sercurity and early boarding status, free Wi-Fi and a dedicated phone line.

Similar to other airline reward programs, members can also purchase points through the new program in 1,000 point groupings. The minimum purchase is 2,000 points.

A major program change is the ability redeem award points any of the more than 800 destinations in the Chase travel program, including internationally. More information about the Chase integration is expected to be released early next week.

Will the New Rapid Rewards Program Mean to Consumers?

Initial consumer feedback indicates that Rapid Rewards 2.0 makes earning and achieving reward travel slightly more complex, but more in line with other major carriers like American Airlines, United and Continental. A positive outcome suggests that because award redemption is now based on length of flight, travelers wishing to redeem awards for short-haul travel won’t feel as if their certificates are used in vain.

The basic component of the program – one free trip for every eight – is still in place.

Frequent flier Mark V. suggests that for long-haul and travelers frequently purchasing Business Select seats, the new program will actually enhance overall customer experience, allowing for faster rewards.

NSK says that “Elimination of extraordinary effective rebate ratios makes [Rapid Rewards] 2.0 much less interesting to FlyerTalkers than programs that still offer such opportunities,” but acknowledges that the program’s greater ease of redemption may be appealing to travelers who “decide that they prefer a program that delivers what it promises without any drama.”

Mark V. champions Southwest Airlines’ transparency in rolling over old credits in to the new program, stating that the shift is “nothing like what other airlines have done in the past. Earning opportunities are still there, and current points are not being devalued like mainline carriers have done in the past.”

NSK admits that “although the new program is significantly less rewarding than Rapid Rewards 1.0 for short-haul discount fare customers, it is financially sustainable and it is customer-friendly enough that we will learn to love it.”

Travelers hoping to use short-haul travel to accrue longer rewards tickets will suffer most, Mark V. notes. “The sport of flying cheap to get free awards is pretty much over.”

Naturally, we at Gadling will keep you updated on new developments as they arise. Feel free to weigh in with your opinion in the comments section below.

[Image via Flickr user ColumbusCameraOp]

Five reasons why you’re wrong about American Airlines and the booking battle

by Tom Johansmeyer on

Everyone seems to think this is about the passengers. It’s not. In true airline industry fashion, nobody cares about the customer.

Okay, now that I have your attention, an analyst note from Avondale Partners was sent to me last night. While most people don’t get excited about this sort of thing, I have to admit that I still do. Nerdy, maybe. Insightful … in this case, it definitely is.

The analyst note gets to the heart of the matter pretty quickly. What’s the deal with American Airlines and the online travel agencies (e.g., Orbitz and Expedia)? Well, here it is in five straightforward points:

1. It’s the economy, stupid: remember that saying? Well, it holds true here. According to Avondale Partners, many press accounts of the dispute “confuse the relationships of the players and miss the underlying economics driving the dispute.” Stop thinking about people and start thinking about how American can save up to $9 per ticket in fees.

2. American will lose before it wins: according to Avondale Partners, “AMR [the airline’s parent company] eventually prevails.” But, it’s going to take some time. Along the way, the analyst note explains, the airline will lose some of its online travel agency customers to its competitors. However, it continues, “should pick up the spilled traffic, given current loads.”3. Ultimately, it’s a break-even: AMR will wind up with the same amount of traffic it has now, Avondale believes, but it will come at lower net costs. Translation: for the same amount of passengers, American will make more money. For a business, that’s never a bad thing.

4. “I like to watch”: that seems to be what the other airlines are thinking. Avondale Partners believes they’ll jump on the bandwagon. As it is, Delta has already pulled out of three smaller online travel agencies – CheapOair, OneTravel and BookIt – though for slightly different reasons. When big, bold moves like this happen, you better believe that everybody’s thinking about it.

5. And, the folks with the most risk are …: it isn’t American Airlines, apparently. Rather, Avondale believes that Travelport and Sabre “have the most to lose,” though stock prices for online travel agencies, according to Avondale, “should continue to suffer from the press.” Translation: this won’t be fun for any of the parties involved for quite a while.

Here’s the full report:

Analyst Note From Avondale Partners Re AA Distribution, 1-6-11

Sabre tells clients of American Airlines drop, booking war is scorching

by Tom Johansmeyer on

Okay, we all saw this coming. The battle that was expected between airlines and online travel agencies as a result of improving market conditions has reached a high level of intensity, centered on American Airlines (with Delta playing a supporting role).

The situation is running deep, as both American and Delta have stepped back from online travel agencies (though for slightly different reasons). American Airlines is eager to push its Direct Connect system, which is what led it to pull out of Orbitz. Expedia, seeing the early stages of a trend, dropped American Airlines, likely as a defensive move to prevent a surprise later. Delta pulled out of three smaller online travel agencies – CheapOair, OneTravel and BookIt – to consolidate its distribution channel and focus on a core group of partners.

This has led to incredible amounts of uncertainty and angst in the airline and travel sectors, as the escalation has been swift and unconstrained. We’re past the early stages of the conflict between the two sectors. A month ago, Douglas Quinby, Sr. Director, Research at PhoCusWright, told me that things were just starting to percolate. Now, he explains, “[W]e saw the tip of the iceberg back in November, when American said it intended to pull its fares and schedules from Orbitz. We are now starting to see more and more of the iceberg,and it is a big one.”

Specifically, global distribution system Sabre has announced that it is terminating its relationship with American Airlines. This is ironic, of course, as the idea for Sabre was hatched on an American Airlines flight in 1953 by American’s president, C.R. Smith and IBM senior sales representative R. Blair Smith. Six years later, they made it a reality (Sabre spun off from American Airlines parent company AMR completely in 2000 following a 1996 IPO).

Quinby continues, “[W]ith Sabre’s escalation, the pressure clearly has to be building on American. What’s next is a near-term compromise that will result in an uneasy truce (with the potential for further escalation before we get there).”
But, that might take a while to reach, as you can see from Sabre’s recent message to its clients, revealed to Gadling yesterday. The company says:

Sabre has taken a set of actions to protect what you have told us is important to you – full air fare transparency and the ability to efficiently operate your business. As part of these actions, we have changed some of our availability and shopping displays to support airlines who value the transparency and efficiency of the proven system our customers use to serve travelers.

Sabre adds:

We have also initiated termination of our global distribution agreement with AA. We have provided AA notice that accelerates the termination date of our current agreement to the extent possible, culminating in early August. We are seeking a new agreement with AA that provides our customers long-term assurances of efficient comparison shopping.

AA’s stated plans regarding its “Direct Connect strategy,” backed up by its recent actions, are an attempt to impose a costly, unproven and unnecessary system that would make it harder and more costly for you to operate your business and for your customers to comparison shop based on full and transparent fare information. Based on AA’s actions, in addition to the steps noted above, we have also given notice that we are eliminating the substantial price discounts AA has enjoyed consistent with its prior long-term commitments to provide full content and support efficient comparison shopping for our agency and corporate customers.

It’s clear that the escalation is continuing, and Sabre isn’t the only player using heated language. In a statement on its website, American Airlines countered that Sabre has “taken a set of punitive actions against the airline and its customers, despite the fact that American has met all its obligations and continues to work in good faith with Sabre.” And, it has lobbed at Sabre the same “anti-competitive” accusation that the online travel agencies leveled at American. For good measure, American adds:

Sabre’s actions are discriminatory and patently inconsistent with both its contractual obligations and its professed goal of ensuring full transparency for the benefit of consumers and travel agents. In contrast, the actions only serve to protect Sabre’s market position and attempt to force airlines and travel agencies to rely exclusively on its legacy systems that only lead to higher fares and fewer choices for consumers.

In a message to members of its frequent flier program, AAdavantage, American said:

While there is much misinformation circulating on these matters, rest assured that tickets for travel on American Airlines and American Eagle – including all international and domestic classes of service – are widely available through a number of outlets, including American’s own website, AA.com, which features our Lowest Fare Guarantee. Tickets, fares and schedules are also available through American’s reservations agents, thousands of travel agencies in locations worldwide, other online travel agencies such as Priceline.com, and travel search engines such as Kayak.com. For more information, please visit AA.com.

There are rumors circulating that Priceline has signed on for American’s Direct Connect program, but nothing has been confirmed – a smart move given how volatile the disputes are getting between American and the other online travel agencies.

Of course, the actions by Sabre have led many to wonder if Amadeus, another global distribution system, is going to jump into the fray. This seems likely, Quinby told me by email: “Amadeus has a pretty small presence in the U.S. so they may sit this one out (with a good bowl of popcorn!)”.

Here’s the Sabre message in full and unedited:

Dear Sabre Customer,
This is to notify you that Sabre has taken a set of actions to protect what you have told us is important to you – full air fare transparency and the ability to efficiently operate your business. As part of these actions, we have changed some of our availability and shopping displays to support airlines who value the transparency and efficiency of the proven system our customers use to serve travelers. Specifically, we have made changes in the Sabre . system that alter the order in which some of American Airlines’ flights appear in availability and shopping displays. The display changes do not apply for points of sale in the EU or Canada due to specific regulations in those markets.
We have also initiated termination of our global distribution agreement with AA. We have provided AA notice that accelerates the termination date of our current agreement to the extent possible, culminating in early August. We are seeking a new agreement with AA that provides our customers long-term assurances of efficient comparison shopping.
AA’s stated plans regarding its “Direct Connect strategy,” backed up by its recent actions, are an attempt to impose a costly, unproven and unnecessary system that would make it harder and more costly for you to operate your business and for your customers to comparison shop based on full and transparent fare information. Based on AA’s actions, in addition to the steps noted above, we have also given notice that we are eliminating the substantial price discounts AA has enjoyed consistent with its prior long-term commitments to provide full content and support efficient comparison shopping for our agency and corporate customers.
We understand that some customers may have concerns regarding the potential impact of these actions on their operations. I want to assure you we decided to take these actions only after very careful consideration of the negative impacts AA’s plans would have on your business and ours. We have a track record of acting in the best business interests of our customers and doing what is necessary to grow the value of the proven and successful system that enables travel agents, corporate travelers and consumers to efficiently and cost-effectively comparison shop.
Sabre is taking these actions as part of our efforts to obtain a new agreement with AA that provides long-term assurances to our customers who prefer to continue using a proven system that provides significant value to both suppliers and buyers of travel. We are committed to delivering this value to our customers for the long term, and we will take the necessary steps to accomplish that objective.
Sincerely,
Chris Kroeger
Senior Vice President, Marketing
Sabre Travel Network

And here’s the message to AAdvantage members, in full and unedited:

Dear Thomas Johansmeyer,

As a valued AAdvantage member, we want to clarify what you may be reading in the press. As a result of a commercial dispute, over the past several weeks there have been changes to how we sell our tickets. American Airlines last month removed its fares and schedules from Orbitz.com, and effective January 1 Expedia.com stopped offering American Airlines fares on its website. Additionally Sabre, a company that distributes airline fares and schedules, made it more difficult for travel agents to find and select American’s flights by moving our fares lower in the display order than they normally would be listed.

While there is much misinformation circulating on these matters, rest assured that tickets for travel on American Airlines and American Eagle – including all international and domestic classes of service – are widely available through a number of outlets, including American’s own website, AA.com, which features our Lowest Fare Guarantee. Tickets, fares and schedules are also available through American’s reservations agents, thousands of travel agencies in locations worldwide, other online travel agencies such as Priceline.com, and travel search engines such as Kayak.com. For more information, please visit AA.com.

We are committed to working with all distribution channels, including traditional travel agencies, online travel agencies and global distribution systems. We will keep you informed of important updates on these developments.

Thank you for giving us the opportunity to address this matter. We appreciate your business very much and look forward to welcoming you aboard soon.

Sincerely,

Maya Leibman
President
AAdvantage® Loyalty Program

Could a return of the travel agent be the key to stress free travel?

by Scott Carmichael on

The always excellent Joe Sharkey of the New York times has a fascinating article on how a travel agent could be your best friend when you are stranded.

Obviously, the nasty snow storms in December are what triggered his article, and in it, he describes how a travel agent can perform miracles most of us have to wait in line for at the airport.

Now, I can clearly remember the last time I used a travel agent – it was the year I got my first cellphone (1992). After that, I always took care of myself. First using a dumb terminal, then with primitive Internet based booking tools, and then moving on to the current generation booking sites.

And to be honest, I thought I’d never look back. In my opinion, the travel agent only did things I could already do myself. When I booked my honeymoon cruise, I tried walking into a local agency, but ended up finding a much better deal online.

So, why the sudden interest in the services of a travel agent? When people found out that the airlines don’t have the resources to deal with a large crisis, they got angry. And rightfully so – some passengers spent five hours on hold, only to be told that their next flight out would have to call back the next day.

[Photo from Flickr/adrian.acediscovery]

Of course, there is a price to pay when you hand over your booking requests to someone else – fees of around $37.50 per ticket. Add that to your baggage fee, fuel surcharges and other charges, and the price may simply be too high.

Additionally, business travelers are usually already protected by their corporate travel booking service – which means the vast majority of customers for a travel agency would be consumers – a group most likely not too eager to fork over extra cash. And of course, there are also top-tier elite members of the airline that have direct access to their own service desk – usually bypassing any long hold times.

Gadling spoke with several travel agents for their views on why booking with them isn’t as crazy as it may seem. Luxury travel consultant John Clifford (@LuxTravel), President of
InternationalTravelManagement.com shares his expert tips:

The “internet information overload” has reached critical mass, and now aside from this overload, we have “crowd sourcing” to take into consideration such as recommendations from friends on Facebook, colleagues on Twitter, anonymous Yelp reviews and the like?

How in the world does anyone cut through the noise and make sense of it all? Sure they may espouse the greatest upgrade they got at a luxury chain hotel but that was because of all their loyalty points. It would not pertain to your stay, so how does that help you?

But trained, travel professionals, or “travel consultants” of today do. They/we’ve made it through the internet boom of the 90’s and redefined ourselves to be “lifestyle guides” that really take the time to listen & learn about each individual, and like a skilled artisan, carefully craft suggestions that are ONLY pertinent to travelers’ needs & wants.

If you consider only the facts of world developments, wars, strikes, natural disasters, storms, etc — that alone is proof enough for many to realize the old saying rings true, “without a travel agent, you’re on your own”.

Self booking is just that – it’s just the BOOKING or the very first step of a trip.

The entire travel cycle of experiences starts that moment and making wrong or uneducated decisions can reverberate through your entire travel experience and if you booked online, you have only yourself to get you out of a jam, out of a hotel room that looked cool on the web but in fact is a dump, or having accidentally booked yourself into Bucharest (Romania) instead of Budapest (Hungary) which a former client actually did and called me to help get him out of it.

Travel is becoming less transactional and more experiential. Even the harrowing experience of this last week where tens of thousands were stranded in NY during Christmas weekend were left without help, gate agents at airports reduced, call centers understaffed due to growth of online booking, web sites overloaded and not functioning and airline agents on twitter posing as customer service angels, when in reality only directing consumers to “be patient”, “wait it out”, and commiserate with those stranded.

I saved numerous clients from the recent storms, even my CPA who has never used me before as his wife likes to “play travel agent”

He was flying NYC-San Diego on an American Airlines flight (and a connection as well) and after holding for hours on the phone, American advised his wife it would be days before he could get home and he could sleep at the airport without any free stays, as “acts of God” are not covered.

After hours, he called and requested my help and getting his message on my iPhone,I immediately sprung to action and snagged him a low cost seat on the non stop JetBlue flight from JFK-San Diego, knowing they’re a smaller airline that is more creative & reliable in a pinch, and one that didn’t have to rely on a hub-and-spoke network to get him home like American did.

He did get home the next day instead of 4 days later.

And Deborah Peniuk, Owner & Travel Writer of AYA Life added:

The internet can be a great place to purchase certain travel products. I consult with clients on their best options for free; help them discover savings that don’t have hidden restrictions. There is a huge difference, so don’t confuse “transportation” with “vacation.” They are generally not interchangeable.

As your travel agent, I can work to immediately reschedule or cancel your trip in the event of a natural disaster (or Mother Nature not playing nice). Less worries for you! I help my clients to avoid online scams and “false” advertisements that are rampant online. I also take considerable time to explain to my clients the logic of travel insurance and recommend it every time!

Good luck trying to get the flight that you are late for changed if you’re in transit. If the WiFi in your airport goes down you’ll need serendipity to successfully maneuver the online morass. I strongly suggest checking the FAQ section; cancellation penalties and restrictions are usually hidden in the fine print. I’ve had clients who have called in a panic with huge apologies, wishing they’d booked with me (for my minimal service fee) instead of the huge dollars they end up paying to change their online booking.

We are consumer advocates: if you have a problem during your trip, as your travel agent I can act on your behalf to see that proper restitutions are made. You have a real person who is a phone call away to go back and complain to. As your travel agent, I will work hard to rectify issues and fulfill the trust you put in me. I add a “personal touch” to your travel planning experience and I offer help and advice that no website can provide. Wouldn’t you rather have a travel expert plan your trip? My Blackberry is never far from my ear!

In other words – you need to determine how much your time is worth – there is no denying that booking through a travel agent will cost a bit more, and it may not be as convenient as heading over to your favorite travel website and clicking “buy now”. The best way to think of the travel agent is as just another insurance – you may make 20 trips without actually needing their additional services, but once a blizzard hits during that 21st trip, you’ll be happy you paid a bit more once your travel agent gets you rebooked in minutes rather than hours.

What do you think? Could the additional services of a travel agent convince you to try them out instead of booking directly with an online travel site or airline booking engine?

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Delta Airlines turns the game of voluntary seat bumping into Ebay

by Scott Carmichael on

Marginal Revolution posted this photo of a voluntary bump screen on a Delta Airlines automated kiosk. Instead of offering bump vouchers to anyone interested, they now ask in advance how much you would be willing to accept for a bump.

Genius.

Pay close attention to the “Delta accepts lower bids first” text – which is a great way for the airline to pay much less than they’d normally hand out.

Inexperienced fliers may be tempted to settle for $100, or even less – just for taking a later flight. But keep in mind that a “normal” bump entitles you to much more. Normally with voluntary bumps, the airline may start at $150, and keep going up. Once they can’t find volunteers and start switching to involuntary bumps, they will have to pay a maximum of $400 ($800 if they can’t rebook you a different flight).

In other words – if the airlines gets enough suckers to settle for $100, they’ll make a fortune. Don’t be one of those suckers. The terminal apparently only settles for numbers under $400, so make sure your numbers are always around that amount. Sure, be competitive with others, and go for $398 (folks on the Price is Right do that all the time), but don’t spoil the system with low-ball offers.

[Via: Consumerist]