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Soaring fuel costs prompts US Airways awards belt-tightening — or does it?

February 14, 2008

The devaluation of mileage programs continues. US Airways just announced it would impose a new fee for redeeming award tickets and cut the number of miles it awards to frequent travelers on short-haul flights. The airline says it is taking the actions to “offset record fuel prices and rising airline related expenses.” But it’s got some convincing to do.

Several readers sent me a full text of the policy revision and there’s an active string on one of the online forums for frequent travelers.

Here are the highlights:

– Tickets purchased on of after March 1, 2008 for travel on US Airways on or after May 1, 2008 will earn the actual number of miles flown and will no longer earn a minimum of 500 miles per segment.

– Members redeeming miles for award travel online within 14-days of departure will be assessed a quick ticketing fee of $50 per ticket.

Why is US Airways doing this? According to the announcement, the airline is “making these changes to offset record fuel prices and rising airline related expenses while maintaining the benefits you’ve come to expect.”

This hits US Airways’ best customers the hardest. Reader Bruce (who asked that I not reveal his last name for fear of retaliation by the US Airways mileage police) puts it this way:

This affects me in a major way, as a Gold Dividend Miles member and Charlotte NC resident. I am on a project that has me flying back and forth from Charlotte (CLT) to Washington/Reagan (DCA) every week. I’ve already done 8 round trips and I’ll do another 12 before this project is over.

I was really looking forward to those twenty 500 mile flights on my account to get me almost to Silver for 2008. (Yay for priority boarding and upgrades.)

When you live in Charlotte, there’s no one else who flys direct to DCA! Even CLT to IAD is all code-shares and CLT to BWI is all USAir and codeshares except two rotten Airtran flights.

But then, they can change the program any time they like, right? Grrrr!

Yes, they can. But that doesn’t give them a license to bend the truth.

What do mileage awards have to do with fuel? Not much, as far as I can tell. Mileage awards are limited by capacity controls, so as far as US Airways or any other airline is concerned, they can have a trillion or so unredeemed miles out there, and it won’t cost them another penny in fuel. I suspect this action has a lot more to do with lowering US Airways’ overall mileage liability. In other words, it’s probably a smokescreen.

I could be wrong, but just wait. When fuel costs fall, do you really think US Airways will reinstate its 500-mile award? Do you think it will lift its $50 “quick ticketing” fee when it returns to profitability?

I doubt it.

US Airways is entitled to make any changes it wishes to its rewards program. But its customers are also entitled to the truth.

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

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21 comments

  • Jasper

    Another example of a company lying for no particular reason. Why don’t they just say that it’s inflation? Or just unspecified costs? Or just not specify it? Just tell customers, they need more miles for a flight?

    Q: Why are they not simply honest?
    A: Because they can.

  • Paul

    They are a bunch of liars. Why not raise fares & settle labor contracts.
    This will bite their you know where.

  • Joe S

    “US Airways is entitled to make any changes it wishes to its rewards program.”
    And, flyers like myself are entitled to make changes to the airlines we use. From tomorrow on, I will not fly US Airways, even though I live in Philadelphia. I will be HAPPY to make connections using Continental, Delta, United, Southwest… anyone but USeless Airways.

  • http://lyke2drink.blogspot.com RickinCLT

    As soon as I got this stupid email from USAir I sent a complaint. I hope I’m not in the minority and that they are getting flooded with emails. I also plan to mention it the next time I check in and when board for flights. I think everyone at the airline has to hear from their loyal customers. I’m “just” a Silver (36 segments last year and already 12 segments this year) and I’ve seen them move to smaller jets, less service in terminals and planes that are not cleaned or maintained well inside. The service on USAir continues to decline. I’ve seen more odd flight cancellations recently. It makes you wonder. I live in Charlotte, so I’m pretty much captive. But there are choices. To charge people extra for trying to use the miles they’ve earned is penalizing their best customers. That move has nothing to do with the cost of fuel. And, they already have high ticket prices and have added fuel surcharges. Frequent Flyers are already paying for these fuel costs. This is a nickel and dime approach from a nickel and dime airline.

  • ccm

    Here’s what I don’t get about this change: these short flights are typically more expensive per mile than longer flights, aren’t they? If so, this change makes no sense, as USAir makes more money per mile but then turns around and reduces the frequent flier mileage for these more expensive (at least per mile) flights?

    USAir also announced another change that didn’t make sense to me. They’ve instituted a fee for “quick” ticketing of award tickets. If you make an award reservation within 14 days of flying, most fliers will be charged $50. Two things about this make no sense. First, of course it costs USAir no more to issue an electronic ticket when the flight is 14 days out. The ticket is issued nearly immediately, like any other. Second, shouldn’t USAir prefer that its customers use award tickets that are available on flights departing soon? After all, this inventory has been made available by the airline and will go unused, potentially. If anything, they should charge an extra fee for using award seats 330 days out, as these seats might be put back into inventory at some point.

  • Van

    I complained….and they ignored them……check this out….and the proof is still in my mail box:

    “DELETED W/O BEING READ”

    _____________________________________________
    From: Eberwein, Elise [mailto:elise.eberwein@usairways.com]
    Sent: Friday, February 15, 2008 7:00 PM
    To: Van
    Subject: Not read: A Sad State Of Affairs…Continues

    Your message

    To: Executive Office; Beakley, Brad; Christ, Travis; Parker, Douglas; Eberwein, Elise; Isom, Robert; Kirby, Scott; Boda, Suzanne; Hester, Kerry; Trenga, Tom; Nocella, Andrew

    Subject: A Sad State Of Affairs…Continues

    Sent: Fri, 15 Feb 2008 12:40:53 -0700


    was deleted without being read on Fri, 15 Feb 2008 17:00:28 -0700

  • http://www.ffocus.org MrBadExample

    Don’t be quiet, Speak out. If you don’t then every airline will follow suit

    Here’s how.

    executive.office@usairways.com – Phone number is 480-693-2341
    brad.beakley@usairways.com – Vice President, Reservations and Inventory Services
    travis.christ@usairways.com – Vice President, Sales and Marketing
    douglas.parker@usairways.com – Chairman and Chief Executive Officer
    elise.eberwein@usairways.com – Senior Vice President, People, Communication and Culture
    scott.kirby@usairways.com – President
    robert.isom@usairways.com – Executive Vice President and Chief Operating Officer
    suzanne.boda@usairways.com – Senior Vice President, East Coast, International and Cargo Operations
    kerry.hester@usairways.com – Vice President Customer Service Planning
    tom.trenga@usairways.com – Vice President, Revenue Management
    andrew.nocella@usairways.com – Vice President, Revenue Management

    What we request is if you e-mail more than one of the above, and we encourage you to do so, that you send them individually not as one e-mail to everyone. Snail mail is even more effective. The regular Customer Relations address is:

    US Airways
    Attention: Customer Relations
    4000 E. Sky Harbor Blvd.
    Phoenix, AZ 85034
    Fax: 480-693-2300

    Address for Corporate Executives

    US Airways Corporate Headquarters
    111 W. Rio Salado Parkway
    Tempe, AZ 85281
    480-693-0800

    Take note of Ms. Eberwein’s title: Senior Vice President, People, Communication and Culture

    Note the word “communication” in the job title. I guess she only communicates with those who agree with her. Let’s keep her busy deleting e-mails from those who pay her salary-IT’s THE CUSTOMER STUPID!

  • jimcander

    Well… as a US flyer in a captive Northeast market, they’ve finally done it. They’ve made me seriously think about making a switch to some other airline even though it would be a huge hassle. As a CP for the past 8 years (all on segments with 150+ segments last year) they have made ALOT of money on me. I figure in excess of $75K a year. A drop in the bucket compared to the whole number, but I would bet the migration to the competition that happened last year is going to make their heads spin now.

  • http://www.ffocus.org Art

    This is another example of the high cost of cheap. I think they are being disingenuous when they blame this on the high cost of fuel. There are a number of other steps they could have taken to save money, but instead they choose to mount what amounts to another frontal assault on high yield customers who provide a disproportionate share of the revenue.

    Instead of UA’s move, which, although somewhat distasteful to the traveling public, is fair because it is aimed at leisure travelers, who typically pay the lowest fares, US has chosen to penalize those who fly the most. Shuttle fares range from $400-$600, yielding in most cases MORE than $1 a mile, while PHL-BOS often prices at $800 or more. On TOP of that, they just announced they will start BUF-ALB again, with B-1900′s at $1100+ per ticket….and THESE are the people they want to penalize?????

    How about settling with labor, and getting one contract for each work group? How much money is being wasted by duplicitous functions because east and west won’t play well together? There are untold efficiencies and savings to be had with a cooperative work force.

    How about thinking about what something will cost long term before taking what appears to be the cheapest option? How about considering the weight of new components of aircraft interiors before jumping at the cheapest option?

    How about telling the truth about why you do things? Like having cash invested in investment instruments which are likely to lose boatloads of money?

    This company is only winning one race–the race to the bottom……..

  • jagadheep

    Totally agree that “fuel costs” is just a smokescreen for this latest change to DM. And you gotta love these folk who market everything as an “enhancement to the program”. It looks like someone did a spreadsheet on the cost of mileage redemption, and decided this would be a wonderful way to save cost. What that someone did not take into account was the loss of revenue when a number of people jump ship to other carriers, which is going to offset by a huge amount what little they are saving by this measure.

  • http://www.ffocus.org Beth

    What I find interesting is that this policy change is an attack on frequent fliers, who are the bread and butter of most airlines, not the infrequent leisure traveler. It seems almost intentional. Why would they want to punish us?

    Based on the reaction/rebellion/jumping ship that this DM policy change has caused, I bet the other airlines will NOT follow suit. They are just waiting for the herds of US short-haul, high revenue business people to come knocking at their doors asking for their status matches and bringing their large business spending in tow.

    If I flew from DCA to LGA very frequently and earned 185 miles each way, but could fly on DL and earn 500 miles each way, I would choose DL, even if though they do have cattle-call boarding and all-coach seating. It is not just about earning elite miles, it is about being able to earn mileage more quickly for a family vacation or a dream trip abroad as a sort of reward for all of the short hauls.

    As a short-hauler who flew 90 segments last year on US and received just one form letter reply from US management in response to the letter I wrote last week, I have learned that unfortunately, we should not have any expectations of being heard or responded to in a thoughtful and personal way. The only thing that speaks to this management is revenue with no consideration for employees or loyal customers. If we take our business away, then maybe they will get it.

  • Paul

    This is just another stupid (or beyond stupid )move by the sand castle.

  • http://www.ffocus.org Beth

    This new policy is a slap in the face to the frequent flier customers who provide the most revenue to the company.

    I wrote a letter to US management and the Executive Offices and received only a form letter response.

    Based on the reaction/rebellion/jumping ship that this policy change has caused, I will bet the other airlines will NOT follow suit. They are just waiting for the herds of US short-haul, high revenue business people to come knocking at their doors asking for their status matches and bringing their business spending in tow. If I flew from DCA to LGA very frequently and earned 185 miles each way, but could fly on DL and earn 500 miles each way, I would choose DL, even if they have cattle-call boarding and all-coach seating. It is not just about the PQMs, it is about being able to earn mileage more quickly for a family vacation or a dream trip abroad.

    Beth, short-haul flier
    90 segments and 48865 miles in 2007

  • http://www.ffocus.org BruceInCharlotte

    This is just one more way of beating on their best and most profitable customers, the elite frequent fliers. USAir continues to weaken the value of their Dividend Miles program to the point that I’m wondering if my loyalty to USAir provides any bonus. Why should I choose to spend my travel budget with USAir compared to Delta or Northwest.

    In just the last few months, US Air has…
    - increased the mileage requirements for domestic upgrades
    - increased mileage requirements for international upgrades
    - added a hidden $5 booking fee.
    - eliminated the 500 mile bonus for online booking
    - eliminated Y/B class-of-service bonuses
    - reduced Gold elite and Silver elite bonus miles by 50% each

    Further, they are watering down their product by
    - reducing the recline pitch on domestic First class seats
    - reducing the number of available First class seats
    - removing closets from First class in some aircraft

    USAir continues to look more and more like one of those no-frills airlines and as they continue to reward me less for choosing USAir over other airlines, they get less of my loyalty. Being a Dividend Miles “Gold” is becoming little different than being a regular customer.

  • Charles

    I have a USAirways credit card which is the one I use most frequently out of all my cards. If I cancel it and tell USAirways I cancelled because of this little stunt they’ve pulled, will it make Douglas Parker cry ?

  • Mike

    In the end this policy change will only survive if other airlines match it. If so, US Airways management will will be able to say that they have accomplished implementing yet another devaluation of the frequent flyer programs and customer experience in the industry. I suspect that they would feel good about that. What a shame.

    The PR spin has become so tiersome. Do they really think that anyone will see this as “maintaining the benefits that you’ve come to expect”? They seem to take more pride in thier ability to manipulate facts than they do in running a good airiline. I feel sorry for people who have that sort of strategy in life.

  • Ed

    This is why I don’t own an airline rewards card or belong to an airline branded rewards program.
    Don’t get me wrong…I have…and use frequently…a rewards card, but my card allows me to redeem my “points” for anything, including airline tickets! After I’ve accumulated enough points, I call the rewards desk up on the phone and redeem the points for whatever I want…usually airline tickets. And most times, I can choose the airline I want to fly on! Back in September of last year, I traded my rewards points for a round trip to Hawaii and a rental car, and redeemed my timeshare week for Maui and spent two wonderful weeks in Hawaii and only spent $800 for a hotel for the other week!
    That’s the way to take vacations…free (or mostly free!)
    Ed
    web/gadget guru

  • http://www.staralliance.com tommost

    What’s left in the program? Priority boarding? Great. Crappy first class seats? Woo. Time for a new airline.

  • FREQUENTLY AGRIVATED

    Its really hopeless to think they will care about their passengers ever, especially when you take a look at how they treat their employees.

  • Elise Eberwein

    I am not trying to become a regular poster here, nor do I want to start a string of debate on this website. However, I was disappointed to see that my forwarding of a note incorrectly indicates that I did not read it at all. I think it’s mrbadexample who states the same, so just setting the record straight if I may. My e mail is set in a view pane (as opposed to opening each e mail individually) so I can read them more quickly. Attachments can also be viewed in this way, not always, but most of the time….so please know that just because an e mail was forwarded does not mean it wasn’t read. If you want to know if I personally read something, ask me. I’ll usually get back to people who take the time to send a note. Might take a few days if I’m traveling but will always try. Our Customer Team is headed up by a fairly new and really energetic and engaging person too, and I know she (Kerry Hester) also takes the time to read inbound comments. Thanks for letting me clarify, and I also appreciate your taking the time to read this note, Elise

  • NikkiT

    Our trip to Barcelona was nixxed by delays on the part of US Airways…Awaiting a reply from management.

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