Tag: united

Adventures With LifeMiles: South African Airways and United Business Class

TProphet3 Comments

Having secured my outbound flight to South Africa, I needed to figure out how to get back. My first choice was using Avianca LifeMiles because I don’t trust the program, had a substantial mileage balance, and the program doesn’t levy fuel surcharges (which are substantial over such a long distance using other programs). I was starting with 69,000 Avianca LifeMiles. 60,000 of these came from an Avianca Vuela credit card signup (so I got them for free), and the remainder came from a combination of flights credited to the program and credit card spend. Now, LifeMiles is one of the least trustworthy programs of all airlines. This is not a program you want to keep a lot of miles in, and especially not for long. Behind the scenes, LifeMiles is the spun-off (but captive) program of a financially shaky Colombian airline in the midst of a bruising management battle. They have frequently devalued points, sometimes with no notice. In fact, in between the time I booked this trip and flew (just 3 weeks later), there was another program devaluation.

Making matters worse, it’s often very difficult to redeem LifeMiles. You’ll see blogs say stuff like “it isn’t for the faint of heart” (often while trying to sell you a credit card or even worse, purchased miles), but that doesn’t actually mean anything. Here’s what redeeming LifeMiles is like in practice: The Web site suffers from frequent technical issues, so it’s often not possible to book flights that show as available. And when it does, you’re negotiating with Colombians which is like negotiating for anything else in Latin America–patience and Spanish-language ability are both a big help. Unlike with other airlines, calling in won’t help you here: telephone agents just use the Web site for you (and charge you a fee to do it) so if you can’t book it on the Web site, you can’t book it over the phone. So, although I definitely wanted to burn LifeMiles if possible, I was willing to use other miles if it wasn’t possible. As long as I was willing to return January 16th or later, there was plenty of availability in economy class using multiple programs so I was confident in attempting to book with LifeMiles given that I had more than one backup plan.

One recent change in the LifeMiles program is that they now allow mixed cabin bookings, and they also discount a business class itinerary based on the economy class legs involved. This is actually positive because most programs charge you the full business class price if even one leg is in business class. I am not entirely sure how the pricing works, but one example is it was only ~51,000 LifeMiles for a mixed cabin itinerary departing from Johannesburg to Frankfurt in economy class, connecting onward to a United flight in business class to San Francisco. I don’t really understand the logic here because if you took a flight from Europe to the US in business class it’s 63,000 points, but it’s cheaper for a longer journey if you have a leg from Europe in business class on a mixed cabin itinerary. I kept playing with the site and eventually found an itinerary that would get me back to Seattle if I was willing to fly an overnight segment in economy class, connect in Europe, and then connect again in Chicago. It wasn’t ideal but the price was right so I went ahead and attempted to book it.

Not an itinerary I was excited about–except for the price.

Naturally, the Web site choked and failed. Who knows why. It doesn’t matter. I got all the way to the end and it bombed out. This happens often. I called in, and they suggested I try again. No dice. So, I found out from the telephone agent that there is a backdoor procedure you can use with LifeMiles to book. You start by emailing [email protected] with the itinerary you want, and an explanation that you can’t book it online due to technical errors. It helps if you have screen shots of the itinerary and pricing. The LifeMiles support center will email you back a day or so later and ask for a scan of your passport. I sent them a picture. They’ll then forward it to a really friendly guy in Medellin, Colombia. A day or two later, he’ll call you up and ask if you if you still want to book. Best of all, he works directly in the reservations system, and has access to StarNet, so he can book any StarAlliance inventory that is available to partners. This is very different than you’ll normally see on the LifeMiles site, where certain partners (such as South African Airways) appear to be blocked.

He confirmed with me the itinerary I was attempting to book, but it wasn’t actually available any longer. In between the time that I had originally looked and the time that I worked through the email procedures, the inventory had disappeared. However, while we were talking, I was searching (on the United Web site, which still isn’t perfect but does a better job of showing StarAlliance inventory) and I found a better itinerary. It was business class from Johannesburg to London on South African Airways, then from London to Chicago in business class on United, and finally from Chicago to Seattle in economy class.

Still not perfect, but much better than before.

He saw the itinerary as bookable but it wasn’t appearing on the LifeMiles Web site, so here’s the craziest part: we negotiated the price! It’s 75,000 LifeMiles for an itinerary that is entirely in business class. However, since there was a leg in economy class, he agreed to discount the itinerary to 72,000 LifeMiles. This seems like around the right price based on what the site was displaying for similar itineraries, but it’s clear he just manually priced the itinerary and had the ability to charge any price that made sense. Since I had only 69,000 points, he collected $99 for the 3,000 additional points along with the roughly $101 in taxes and $25 booking fee. A couple of days later, I got an itinerary in Spanish that had a ticket number, so I called in to United and South African Airways to pick seats. I still didn’t believe that I actually had a ticket until my boarding passes printed out in Johannesburg and made sure I had two backup plans in the bag. However, the backup plans weren’t needed: the ticket was actually there.

The Economics – In A Nutshell

  • My primary objective was to return in mid-January in a premium cabin on at least one long leg (preferably the Africa-Europe overnight leg), using LifeMiles, and minimizing out of pocket cost. I was successfully able to achieve this objective at an attractive redemption value.
  • Some flexibility was needed. I compromised on airlines and didn’t focus on “aspirational” products. That is all academic when you’re traveling to or from a popular destination like South Africa in the austral summer and a good redemption is–first and foremost–one that gets you on a plane for free. A ticket in hand is worth far more than a dream and a points balance. Would I rather have flown back in Cathay Pacific first class? Sure, but it wasn’t available at all, and can’t be booked with LifeMiles anyway.
  • Neither United nor South African Airways operate the best business class cabins in the world–not even close. However, they do offer lie flat seats on long flights, operated safely and professionally. And this is 90% of what you’re going for when you book in a premium cabin. The other 10% is the trimmings.
  • I needed to be able to think on my feet. LifeMiles is a Latin American program run by people in Colombia and a patient, friendly and flexible approach to business will get you farther than having rigorous American or European expectations.

 

I still didn’t get amazing value for these miles, at least the way I value them. I don’t look at this as a $4,000 ticket (or a 5.5 cent per mile redemption), even though that’s what the flight would have cost in cash. Why? I wouldn’t ever have bought that flight. Instead, I look at this as a $650 ticket, because a roundtrip ticket to South Africa on my dates in economy class would have cost about $1,300 (for a decent logical routing; the cheapest terrible routing through China would have been about $1,000).

Out of pocket, I saved about $425 in cash. That’s 0.6 cents per mile. However, I got most of these miles for free, and the opportunity cost was … well, what, exactly? Another devaluation? More failed redemption headaches? Also, there is value in a business class seat, it’s just not the price the airline charges for it. Is that closer to the 1.7 cents per mile that LifeMiles charges during mileage sales? Probably. This comes in at $1,224, or around double the price of an economy class seat. For an amount of premium cabin flying that pushes 10,000 miles, that’s a pretty fair price.

Wrap-Up

I generally feel pretty good about being able to use LifeMiles for anything at all before they suddenly devalue, so I felt very good about the value I was able to achieve for them in this case. Sure, this wasn’t the world’s most “aspirational” redemption. However, nothing in this market is given the number of points I had.

How And Why I Booked A Round-The-World Trip In Premium Cabins

TProphet1 Comment

Yes, you’re still reading Seat 31B. If you’re a regular reader of this blog, you know I mostly write about travel to unconventional places via unconventional routes, and about squeezing the maximum value out of your points (in terms of money you would have actually spent). You’re a lot more likely to read a review of an economy class flight to Ecuador on the worst seat in a regional jet here than you are to read about Cathay Pacific First Class.

And yet, the latter is exactly what I booked as part of the round-the-world trip I just completed. I’ll be writing a lot about South Africa and St. Helena over the next week or so but the elephant in the room is the long-haul flights. They were all booked in premium cabins and this is fairly uncharacteristic for me so I figured I’d write a post about why I spent my miles this way, and why in this specific case I think it made sense for me, given my personal situation and the opportunities I had. I will also write two “deep dive” articles about the mechanics and economics of booking these flights.

A whooooole lotta flights

The Flights

Getting to St. Helena requires starting from Johannesburg (you can also buy tickets to and from Cape Town, but these currently connect through Johannesburg). It’s a really unique flight in a lot of ways, the operations and marketing are very strange, and that’s an entire article in and of itself but these tickets are only sold ex-South Africa. The largest number of international flights into South Africa (by far) land in Johannesburg, although there are also international flights to Durban and Cape Town. I ultimately decided to book the outbound to St. Helena from Johannesburg and return to Cape Town, both because it was cheaper and because I wanted to visit Cape Town.

So, this meant that I had to get to Johannesburg, one of the most difficult destinations in the world to reach using miles and points. And making matters worse, I had decided almost at the last minute that I was going to take the trip. This is because unexpectedly, due to a threatened lawsuit, business in my company ground to a halt. This wasn’t something that was going to be resolved quickly. The tech industry more or less shuts down from the middle of December through the middle of January (people take off for Christmas and then it’s CES, so nobody really gets back to work until the 15th). So, I found out a week before Christmas that I was going to have about 3 weeks free. I booked everything starting just 8 days beforehand.

Of course, this wasn’t easy. At all. I was looking to fly over the holidays (or “festive season” as they call it in South Africa and St. Helena) when flights are absolutely packed. However, you can sometimes score last minute seats, especially when you only need a single seat. This is because airlines will give away unsold seats to frequent fliers at the last minute, and they will also generally return last minute cancelled seats to inventory.

You don’t always have to book award flights 330 days in advance

The conventional wisdom when it comes to booking award travel is that you need to start 330 days in advance when the booking calendar opens. Like most conventional wisdom there is some truth to it, but it isn’t the only truth. The reality in the current state of the industry is that revenue management systems at many airlines regularly evaluate seat inventory and make seats available to frequent fliers based on anticipated revenue load.

This means that, with many airlines, you have multiple opportunities to score an award seat. Consider a flight where five business class seats were made available for awards. The airline might initially make two seats available 330 days in advance. However, they might open up another two seats 20 days before departure (allowing the seat to be booked, but allowing themselves to collect a close-in booking fee). Another seat might open up 3 days before departure if it has remained unsold, with the final seat made available on the day of departure. People also sometimes need to cancel their flights at the last minute. There is an influenza epidemic this winter. Someone else’s flu misery might be your travel opportunity, because most airlines will put award seats that were cancelled up for grabs.

This is what saved me. I was able to book the whole thing using the mileage currencies I wanted thanks to last-minute inventory becoming available. What was available to book? A mix of the world’s most aspirational and least aspirational first and business class products. In the end, it cost me under $300 in cash to literally travel all the way around the world, in premium cabins, on all but one leg of my journey. If I’d paid cash, this would have cost over $30,000. And if I’d bought a discounted business class fare, it would still have cost me about $7,000.

Why I Booked In Premium Cabins

I normally fly in economy class and look for “sweet spots” on award charts to travel the maximum distance and squeeze the maximum value out of the fewest number of points. However, I consider Africa to be a “sour spot” destination in economy class. Depending on the award program you use, it can cost 50,000 points in economy class for a one-way trip to Africa. And South Africa is really far away. From Seattle, it’s 14,237 miles when routing via Asia.

Meanwhile, the price in a premium cabin to Africa is–depending on the program you are using–almost the same cost as a trip to Europe or Asia. It’s about twice as far, making the value of a lie-flat seat considerably more valuable; however, unlike in economy class, this doesn’t actually cost any (or much) more. It takes a solid 27 hours (or more) of flying to get to South Africa, so this is one of the few places in the world where the upgrade is truly worth the extra miles.

Wrap-Up

I was able to book my trip during absolutely peak travel periods, to one of the most difficult to book award travel destinations, and do it all without paying fuel surcharges. And I was able to redeem the points that are, in practice, the most difficult to redeem for this destination and the most at risk of devaluing. The way that I was able to accomplish this was by being flexible and using multiple points currencies. Award travel booking is part art and part science. I think this was a great redemption, and an amazing trip!

How To Boycott United While Still Flying Them

TProphet0 comment

It was all over the news yesterday. At the behest of United Airlines, Chicago police forcibly removed a man from a plane yesterday. They treated him the way that you might expect police to treat anyone who is a violent terrorist threat to aviation security, beating him unconscious and dragging him down the aisle. I’m not going to embed the video here because it’s simply too disturbing to watch.

Unfortunately, this wasn’t a terrorist. There was no threat of violence. It was a 69 year old Asian-American doctor who had patients to see the following day, had paid for his seat, had already boarded the plane, and United decided to kick off to make room for commuting employees instead.

Make no mistake: United summoned state violence–with all the weight of anti-terrorism laws behind them–for commercial reasons. First and foremost, the flight wasn’t overbooked. United just wanted the seats for commuting employees instead of paying passengers. Nobody wanted the crappy restricted $800 vouchers that the airline was offering, so in order to save money, United then decided to invoke the denied boarding clause of the Contract of Carriage. This, by law, limits the airline to paying $1,350 per passenger in compensation for denied boarding, and it was clear that this was going to be United’s cheapest option. However, it’s questionable whether it was even legal under both the Contract of Carriage and denied boarding regulations for them to do this in the first place given that the passengers involved had already been boarded, so boarding wasn’t actually being denied. Undoubtedly, this will play out in the courts going forward. In the meantime, it hasn’t been good for United stock: the company lost more than $500 million in market capitalization today.

United stock drop chart

This is what happens to your stock after you really screw up

Even before this, United wasn’t making any friends after devaluing their frequent flier program and introducing a new, worse “basic economy” experience. They’re my second least preferred airline, behind Spirit. Fortunately I have a choice not to fly them–Seattle is a highly competitive airport with Alaska and Delta duking it out for dominance and plenty of other options as well. I usually fly Alaska or Southwest, both of whom have friendly crews and passenger-friendly policies. When I fly one of the three majors, I lean toward Delta; their planes are just a little cleaner, the crews are just a little nicer, and the service is just a little more punctual than the other major US airlines. I’ll still fly United occasionally–for instance, if I need a nonstop to Dulles or Houston at times Alaska doesn’t fly–but I’m usually also glad when the flight is over.

However, if you’re a hub captive, you don’t have any real choice. You’re stuck on United, an airline that will literally have you beaten up and thrown off a plane to make room for their employees if it saves them money (unapologetically so, I might add). However, you can still boycott United even while flying the airline. You just need to realize where United makes its money. For the most part, it’s not actually selling tickets: it’s their Mileage Plus loyalty program.

The most valuable part of any airline is its frequent flier program. Loyalty programs drive a ton of revenue, from credit card mileage sales to shopping portals to data mining. Air Canada received a 20x multiple on earnings when it spun off part of Aeroplan in 2005. In fact, when most major US airlines went bankrupt after the financial crisis, a major part of recapitalization plans was mileage sales to banks. I don’t normally link to The Points Guy, but he recently interviewed analysts who reported that up to 50% of airline revenues come from mileage sales to banks. So, ironically, your commercial value to United Airlines lies far less in whether you buy tickets and fly on their airline, and far more in whether you use their loyalty program.

Want to really punish United Airlines, and discourage them from literally beating you bloody on your next flight? Call up Chase and cancel your Mileage Plus Visa. Clean out your Mileage Plus account and take an international trip on a United partner (it’s always nice to visit Japan on ANA, or southeast Asia on Thai and Singapore). It makes sense to do this anyway–miles only devalue over time. Many people who fly United are better off opening a Singapore Airlines KrisFlyer account and crediting their flights to KrisFlyer anyway, because Singapore gives 100% flown miles credit for most United fare classes. If you must use Mileage Plus to book an award, bank your points in a transferable rewards currency like Chase Ultimate Rewards, and only transfer in your points to immediately redeem an award.

United won’t change its behavior or even apologize until people start voting with their feet. But they’ll laugh all the way to the bank if you keep using their loyalty program while no longer flying United. Burn all your Mileage Plus miles. Spend them to zero. And credit your next United flight to another StarAlliance partner. This will ultimately cost them nearly as much as if you didn’t fly United at all.

Mistake Fare Versus Sale Fare: Can You Tell The Difference?

TProphet0 comment

In the past year, I have taken three trips at exceptionally low fares. Can you guess which one was the mistake fare?

  • Phoenix to Quito return, with an overnight stopover in Mexico City, for $398, in February.
  • A lovely fall trip from Los Angeles to Copenhagen return for $545.
  • Los Angeles to Beijing one-way via Europe (an inconvenient routing, requiring multiple stopovers and the airlines I used can’t get you there otherwise) for $450.

If you’re scratching your head trying to figure it out, I don’t blame you. All of these were good fares, but they might have been either a good sale fare or a mistake fare. Only the last fare I listed, from Los Angeles to Beijing, is widely believed to have been a mistake fare. The airline didn’t include any fuel surcharges on the ticket. But it’d be an entirely normal price–or even a bit higher–for a direct flight between Los Angeles and Beijing. The low fare to Quito? An Aeromexico promotional fare to celebrate their newly launched service. And the Los Angeles to Copenhagen fare? A response by Air France to Norwegian Air Shuttle’s promotional fares, the latter having newly entered the market.

In Europe, Ryanair routinely sells flights for as little as one euro. There are $99 one-way flights from Baltimore Ryanair 33 euro flightto Iceland on sale as we speak. I recently flew on a $59 promotional fare from Los Angeles to Seattle, a route where flights often cost 3 times as much. So, if an airline sells tickets at a really low price, there is plenty of precedent: it’s usually a really good sale fare. This is particularly true on airlines such as Ryanair, who make most of their money on ancillary fees such as luggage charges and advanced seat selection. The fare is cheap because it only includes a seat. Nothing else. Seat assignments and luggage are extra. There is even a fee to buy the ticket!

Yesterday, United Airlines was selling business class seats between London and Newark for about $75 roundtrip. Was this a competitive response to the far superior Club World London City service offered by British Airways? A promotional stunt? Or a mistake? United claims it was a mistake and they aren’t honoring the tickets. They have consistently argued with the US Department of Transportation that they shouldn’t have to honor fares they didn’t mean to sell, even after taking your money and issuing you a ticket. Up until now, the Department of Transportation hasn’t agreed.

In pleadings before the Department of Transportation, airlines have argued that travel bloggers are Evil Incarnate, spreading news of mistake fares far and wide and costing them millions of dollars. When there is a mistake fare, they argue, airlines’ financial losses are greater these days because news of good deals just spreads faster. Well, this is definitely true. However, usually it’s not news of mistake fares. Instead, it’s free publicity for the airlines and I don’t think that they should get to pick and choose which kinds of deals bloggers can communicate, and which ones they have to honor. After all, I have personally helped to hand the airlines a megaphone when there are good sale fares they want advertised. For example, I drove tens of thousands of dollars in business to Alaska Airlines with this blog post.

There is also a fairness issue. After all, if you want to get out of something in the airline’s Contract of Carriage, the airline doesn’t offer you any flexibility. So, why should they get to weasel out of the contract when it would benefit them? Nobody has filed a complaint with the Department of Transportation yet about United’s refusal to honor yesterday’s mistake fares, but it’ll be interesting to see whether they allow United to get out of the contract. I hope the government doesn’t hand airlines a license to gin up all the free publicity they want while not actually having to deliver the goods.