Turn Back the Clock Month

Continental comes up big today by bringing back a fan favorite: 500 bonus miles for booking online.

The expiration date suggests that this is a response to OTA's pulling booking fees. However, there's no way to tell just yet if it's an offensive or defensive type of tactic. In other words, has CO seen a drop in online bookings that is offset by higher OTA share? Or is it more like Swine Flu, where fear necessitates some sort of action, even if a direct threat is not yet detected?

Either way, you can be assured that if there's a patron saint for the points-obsessed, travellers are praying that other carriers match.

Don't Call Us...

We need to take a short pause today to commemorate the birthday of one of our greatest leaders. President Lincoln? Sure, him too. We were thinking Jenn, the virtual agent, at Alaska Airlines. We're a touch belated, as she actually turned one a couple days back. [For pure comedic value, as well as some background on the project, read this interview with Jenn that appeared in Travel Weekly last March.]

Jenn

Alaska notes that Jenn has facilitated 1.5M chat sessions in her first year of life. Think of the benefits that provided. Let's assume she improved site conversion, driving a little revenue and possibly removing some channel costs. She has to have saved a few dollars in the call center, answering the easy questions that choke the lines for other customers. Throw on a little free publicity, and we're guessing Jenn's paid for herself already.

Jenn's milestone comes as United Airlines announced it will no longer allow customers to lodge complaints over the phone. Surely this will result in a more consistent, and probably better, response to complaints. Not to mention it probably will save money.

American also AAnnounced new cAAll center AAutomation.

As the industry continues to look for cost savings, and customers adapt to self-service, we expect to see much more fine tuning in the call centers. Especially if consumers start to question the value they are receiving for call center transaction fees.

Ryanair: Apparently Not-So-Low LCC

Hey, it turns out that high fuel prices really hurt airlines' profits. In fact, especially if you think you can give away tickets and make it up on ancillary revenues, you really need to cut costs. At least that is the current state of affairs at Ryanair, who hopes to cut $621-Million in annual costs in various areas, including labor, due to extraordinary high fuel costs.

Yes, Ryanair also hopes to boost the top line through higher baggage and credit card fees. But we have to say, when the poster child of LCC's is talking about a need to tighten the belt, this is not going to be a good year for airlines. You can save yourself a call to Jamie Baker, Robert Mann, or Terry Trippler. You just read it in The FMV.

In-flight e-mAAil

Yesterday's WSJ reported that AA is going to begin testing inflight wireless on their 767 fleet.

Unlike JetBlue's wireless gimmickery, this service will not be free. Passengers will pAAy $10 for WiFi during short hops or $12.95 for flights over 3 hours. We immediately wonder, do you pAAy $22.95 to keep on surfin' LAX-BOS if you stop in ORD? Hmmm...

We kind of hope so, because this service sounds pretty sweet, and AA can probably print cAAsh with it. Passengers can reportedly use any device (e.g. BlAAckberry, lAAptop, iPhone), and access any web site (e.g. company intranets, Fare Market Value, etc.). Plus it sounds like they got some other sucker to pick up the tab for providing the service (i.e. no CapEx).

Mostly we wonder if passengers will be able to purchase the WiFi service at the time of booking their trip. Somehow we doubt it, at least to start. Though we see a day when Elites may get the service for free, or the service is bundled with a premium fAAre. In the meantime, a kind word, hearty handshake, and Shout Out to the first FMV reader that sends us an e-mAAil from 30,000 feet!

OTA Booking Fees: Why?

Intereting realization at Phocuswright that Priceline is no longer charging a fee to consumers for air bookings. Why? To build their brand reputation as a low-price retailer.


They confessed at PCW that, for these bookings, they don't really add service value over a carrier site, and they don't offer the customer care tools of their OTA peers. Bravo! What have we been saying for some time?


Don't look for other OTAs to match, because they've invested too much in pitching their service proposition to throw away that revenue stream. Unless Priceline is able to make up some ground in share of course, which may be unlikely, but actually could happenen. Especially through savvy partnership with meta's.


The important takeaway here for FMV is that this is another chink in the armor of the OTAs. We simply beleive that they are really going to struggle to stay relevant in the long run when: a) meta's are there to provide cross shopping, b) carriers remain commited to driving shift to internal channels, and c) traditional Travel Agent's provide a much clearer service proposition, for a competitive fee...

Standby Confirmed

We don't fly on US Airways very much, so this news fell under the radar a bit. We caught it in the WSJ today. Late last month, US announced that they will no longer charge Dividend Miles preferred members for same-day confirmed standby.


First of all, we love confirmed standby. Anytime you can get your business done and get to the airport early is a win -- and to top that off with a guarantee that you'll actually out of the airport early is a huge value to the business traveller.


That said, we think $25 is a very reasonable charge for this guarantee. Your credit card should crawl out of your wallet on it's own to pay this at the kiosk. Unless...you have elite status, you know the earlier flight's not packed, and you know you're an elite that will clear standby and get a decent seat for free anyways.


Hence, the beauty of this policy revision. It's a nice tip of the hat to loyal passengers, for those times when the guaranteed seat really means a lot (i.e. during a time of heavy loads), but US probably isn't giving much away in revenue. These passengers knew it was many times unnecessary.