Burn Those Miles?

[BoeingBoy]

From a USA Today article...

History and US Airways Dividend miles

Many frequent fliers are in an understandable tizzy about the fate of their US Airways Dividend Miles. My advice: Cash out as soon as it's practical. You'll get maximum value for the miles right now.

Do I think US Airways is going to disappear tomorrow? Of course not. Chronically dysfunctional airlines can operate for years even while the financial handwriting is on the wall. TWA, for example, limped along the entire decade of the 1990s without making a profit and was still flying at the start of the 21st century.

But US Airways, by its own admission, is headed down the road of asset sales and no airline that has ever sold assets has survived for long. Check the history books. In their desperate attempts to survive, carriers such as Braniff, Pan Am, TWA and Eastern all sold off parts of their route networks before collapsing. And the reason why airlines collapse despite the sales is simple: They always sell the most desirable assets first, leaving them with a collection of routes and services that no other carriers wants.

So if US Airways starts selling assets to keep the financial wolves from the cockpit door, that inevitably reduces the value of the Dividend Miles program. You may wake up one day soon to learn that US Airways has sold off the hub through which you fly. Or that it has sold off its international routes. That leaves you with a lot of miles in a shriveled program that no longer flies where you want to go.

So burn your Dividend Miles as you can in the coming weeks and months. US Airways still offers a decent number of Caribbean routes and will be beefing up its seasonal Bermuda service. It has announced plans to fly to Glasgow this spring and resume Pittsburgh-London flights. Or you can use Dividend Miles on United or Qantas.

Complete Article

Jim

 

[firstamendment]

Depends if you think the airline will make it or not.

I think that US will NOT sell assets piecemeal! This latest is part scare tactic and part testing of the water for selling or merging the entire thing. Every union and business community leader knows that piecemeal asset sales lead to one place Liquidation. A deal that gets done to preserve US as a free standing entity is in the best interests of US Customers & Employees.

Unlike Gangwal & Wolf, these guys do have Plan B! and C And D. They know where they want to go but the world around them is changing faster than they can adapt. This has always been a problem for US and others as well.

Me personally I'm riding it all the way to shore. Surf's up dude what a ride we have coming.

I agree with you, Piney Bob.

 

[Flying Titan]

Depends if you think the airline will make it or not.

I think that US will NOT sell assets piecemeal! This latest is part scare tactic and part testing of the water for selling or merging the entire thing. Every union and business community leader knows that piecemeal asset sales lead to one place Liquidation. A deal that gets done to preserve US as a free standing entity is in the best interests of US Customers & Employees.

I agree with you too, Piney - BUT - and this is a big but, in their effort to scare the heck (this is a family board) out of the unions, they're also scaring the heck out of their passengers. This game of chicken that's going on with labor has a whole lot of customers sitting in the middle of the road looking right into the oncoming headlights.

Personally, I've drawn my miles down quite a bit in recent months. I'm still flying US, but I've also considered whether I should start looking at somewhere else to shift my loyalty. Problem is - US is the best carrier for my needs and they take care of me well. Still, if it looks like they're going away, it will be time to consider some alternatives soon. Tough call. I hope we see some assurances (and maybe a plan for the future) from CCY sometime soon to put some of us at ease.

 

[wings396]

Either way, it has not been a wise move by Management to make threats thru the Media. Didn't they learn anything last year when the tossed the Liquidation threat out there just prior to the heavy Holiday season? The last thing this company needs to do is put the dwindling few remaining passengers into panic mode. At times I think they want to push this Airline into the ground ASAP. When is common sense not all that common??? They have lost enough revenue by cutting their marketshare, now this should push passengers away to the competition in groves.
Have no fear as the next round of concessions should cover the additional loss.

 

[Flying Titan]

That's one of the reasons I've encouraged unions to break the mold and offer creative solutions. Someone has to.

So true.

 

[BoeingBoy]

Bob,

Here's my take on our recent past, present, and future - if we stay in business.

Past - Since emerging from bankruptcy, management has done little if anything to change the structural nature of our operation. They rely on cost cuts to lower CASM's and are adding high CASM RJ's which free up mainline aircraft to serve presumably higher yield markets - European & Caribbean. Southwest announced their plans for PHL and "the world changed dramatically".

Present - As before, management seems to be relying on further cost cuts (further employee concessions) to further lower CASM's in an attempt to compete in this "dramatically changed world". If successful in obtaining further concessions, we will be faced with the ...

Future - Our PHL yield, already affected by Southwest's operation in BWI and growing LCC competition in PHL, will erode further as Southwest starts their PHL operation. Once again, management will go to the same well that they have used before - employee concessions.

Until the well of employee concessions runs dry, where is the incentive for management to undertake the structural changes necessary to truly be competitive?

In another thread, you said something to the effect that management lurkers are here and might listen. In this thread, you said that the unions (employees) should offer creative solutions. You've been a participant here long enough to know that many ideas have been offered here. So far I've heard of two that actually made the "test market" stage. The first was fare rationalization which Mr. Siegel pubicly ridiculed after AWA announced it. Ironically, Air Canada has just announced that they are implementing this in their United States markets after it was responsible for an 80% increase in bookings in the Canadian market. The second is selling last minute upgrades to empty FC seats, which is just starting to be tested. I'm still waiting to see if either of these make it past the test stage or if others, such as the rolling hub, will even be considered.

Jim

 

[BoeingBoy]

Bob,

I agree. You did say one thing that I considered touching on but didn't...

"the financial weakness of US Airways hampers many things that they would like to do"

By doing so little in the 10 months since emerging from bankruptcy, we are not in a position where the only "quick fix" is concessions. If these come, they will be having an effect when Southwest starts PHL service. I fear that we will then be right where we are now - the only "quick fix" will be more concessions.

Jim

 

[wings396]

This style may give them leverage over the workforce, but it is driving away business at the same time. Does it take a professor to figure this out? When you start takling of Liquidation or asset sales, it spells PANIC to the travleing public, thus forcing them to use another carrier. So they are making a bad problem worse by making all of their threats public knowledge. One would think they would want to INCREASE revenues, not drive them down in this manner. Things may be on the rocks, but the less John Q. Public knows..the better.

 

[GadgetFreak]

As a passenger I havent seen much but discussions of a sell off. I was at nearly a million FF miles between UA and UA when they were both in Ch 11 initially. Ive taken that down to about 300,000 on US and about 100,00 on UA. I have been troubled by the announcements and stories but more importantly I have found that both UA and AA are going way out of my way to get me to fly them and US hasnt. US also has been hardly competetive on price on a lot of what I want to fly. I have booked or flown about 49,000 revenue miles for the first quarter of 2004 and will probably do at least 5000-10,000 more. And a grand total of 1000, at most, will be on US, the rest on UA and AA.

I realize that there is a vicious cycle going on here but in several of the recent articles it was pointed out that the cost cutting went better than expected but that the problem was revenue. But most of what I hear for new plans is more cost cutting. They need to get people on the planes and I havent heard a plan for how they are going to do that.

 

[Winglet]

I'd consider holding FF miles the same as holding the stock, only with no upside potential.

 

[Long Gone]

From this prospective I will book around this sinking ship. I'm burning the miles as fast as I can .The statements from Siegel, Bronner and the U ALPA Chairmen Bill Pollock.

"Providing Siegel with more, Pollock said, would be "like pouring more money into a hole."

I don't believe anyone desires to see their money poured down a hole. If the leader of the pilots has this opinion I'm inclined to agree with my travel dollars. It's hard to separate the posturing from pompousness with the turmoil at USAirways but words like this are a Hugh stop sign for prospective customers.

 

[sss]

First time poster and long time lurker. I am a Gold Preferred for 4 years and have about 500,000 miles. I recently bought my first AA ticket in years and started using up FF awards. I just want to add that this board and statements from ALPA presidents, etc. - even in the press not just here - have little guys like me starting to wonder if my loyalty is wasted. I like the US product, am a paid member of the USAirways Club, and the flights work for me. But I like the miles and the option to take free vacations or upgrades (which i can't afford on my own, and I dont get on Southwest) - and I want to go with a going operation that will assure me the future use of my status and miles. I know the lurkers on this site will understand and maybe the employees won't - but i assume a lot of people who visit these venues love travel (at least personal travel), are intrigued by the industry, and are looking out for their own self interest as people usually do. The other airline sites don't seem so militant and negative. I also note that I usually don't see this negativity when i contact the employees in my travels, but I have to wonder if this site is scaring me a bit too much??

 

[BoeingBoy]

sss,

Let me be the first to say welcome to the "fray" and to thank you for your loyalty as a customer.

As far as the militancy and negativity goes I can only offer a little insight and a suggestion.

I'm sure you realize from "lurking" that the vast majority of active employees have at least a decade with this company. What you're seeing is some combination of frustration, anger, sadness, etc., at both seeing what has become of the company we work for and trying to see how the future may unfold. As you say, this is a different picture than what you usually see in face-to-face interactions with our employees.

If I could be so presumptive as to make one suggestion. I try to see the posts on this board as a form of "venting". Most employees, like all people, need to express the feelings I mentioned above or pay a psychological price. It is much better to have a forum like this than take those feelings out on customers like you, or by kicking the dog, or by yelling at the wife & kids.

Again, welcome aboard. And don't be bashful about putting in your two cents worth.

Jim

 

[ktflyhome]

BoeingBoy, very well said. I couldn't agree more. And sss: thank you for your patronage and your honesty.

 

[diogenes]

sss,

Most all of us are long time employees, and we deeply understand our relationship with you - quite simply, you pay our wages. Moreover, we have formed lifetime relationships with many customers. It has been a genuine pleasure to be of service.

In return, the least we can do is provide you with a safe, comfortable, and friendly journey. At this stage, the Palace cannot stop us from doing that.

However, you have other reasonable expectations. Reasonable frequencies, ample destinations, fair fares. Unfortunately, the factors that determine those expectations are out of our control, and out of control altogether.

It is frustrating to have come from the finest airline aloft to what we have become. And to know, despite the undying efforts of thousands of good and faithful employees, this company is on the brink of extinction due to two decades of mismanagement, the end of which is not yet in sight.

So simply, we are not upset with you. We definitely have a bone to pick with the powers that be.

With regards to FF miles, my crystal ball is no clearer than anyone else's. We have but a few FFM's, and we're getting ready to burn them.