HERE WE GO AGAIN well the loudmouths from ccy did it again...word is frequent flyers are cashing in their chips! 
They're Cashing In
- Thread starter delldude
- Start date
Delldude, you must be a more insightful reader than me. The author indicates that the question came from a single reader (notice the lack of the letter "s" at the end of the word). To me, that comprises one person. Further, there is no mention as to the frequency of the questioners travels. I could not find where "frequent flyers" is anywhere in the article.delldude said:HERE WE GO AGAIN well the loudmouths from ccy did it again...word is frequent flyers are cashing in their chips!
I'm still looking for a mention of any management statements or actions that led to the question. The only recognition of management (and employees!) refers to the "resilience" of the company. Randy also explicitly states that he thinks the company will still be operating for the rest of the year.
Thanks for the link, but the thread title and some comments in the OP seem a bit sensational and flame bait.
OP
- Thread Starter
- #3
AtlanticBeach said:
THANK YOU FOR NOTICING.....
FLAME BAIT
STILL THIRSTY??
Posted on Sun, Aug. 01, 2004
Some frequent fliers fleeing US Airways
Associated Press
PITTSBURGH - Doubts about the future of US Airways have prompted some of its frequent fliers in Pittsburgh to cash in their miles and book flights with other carriers, according to customers and travel agents.
Travel agents in Pittsburgh say they've seen dozens of customers dumping their frequent flier miles and choosing other carriers to avoid being left with nothing if a recent round of cost-cutting by the Arlington, Va.-based airline doesn't keep it flying.
Among the frequent fliers apparently fleeing US Airways - the nation's seventh-largest air carrier - was Lisa Fischetti, a principal in the Pittsburgh public relations firm Veritaspr. She redeemed about 120,000 points for two round-trip tickets to Europe and two to Aruba.
"I didn't want to save and save and end up with nothing," Fischetti told the Pittsburgh Tribune-Review in a story published in Sunday's editions.
Others appear to be boycotting the airline, which controls 80 percent of all traffic out of Pittsburgh, for demoting Pittsburgh International Airport from a hub to a so-called "focus city."
"A lot of people really don't like what US Airways is doing to Pittsburgh and the way it's treating its employees," said Victoria Sammartino, an executive with Ponzio-Gordon Travel and president of the local chapter of the American Society of Travel Agents.
Fighting a return to bankruptcy, US Airways wants to cut costs by $1.5 billion a year, of which $800 million would come from concessions by labor groups. The company has said it wants to have new labor deals ratified by the end of September, when it could be found in default for a $900 million loan from the Air Transportation Stabilization Board.
This fall, US Airways plans to offer fewer flights to fewer destinations from Pittsburgh International Airport. The airline's proposed schedule would cut service to about 240 departures to 65 destinations, down from 370 flights to 102 destinations.
Flight data in Pittsburgh seems to indicate that fliers are fleeing.
According to passenger statistics for April, the most recent month available, total traffic at Pittsburgh was up 6.5 percent from a year earlier with low-cost carriers accounting for most of the gain. While US Airways' travel was up 2.8 percent, traffic for all other carriers increased by 22 percent.
Despite lagging behind other airlines, US Airways still flew more passengers than all other airlines combined from Pittsburgh.
It's unclear what effect, if any, some customers fleeing the airline has had.
Last year, frequent fliers collected about 1.2 million awards that amounted to about 7 percent of the airline's revenue seat miles, a measure of an airline's revenue based on traffic. That was down slightly from 1.3 million awards a year earlier.
US Airways officials said the restructuring will soon benefit local travelers and that the airline will remain the airport's predominate carrier.
Ben Baldarza, US Airways' vice president of marketing, played down the lower numbers. Once the restructuring is completed, he said, western Pennsylvanians "will be able to fly where they want to go at fares they want to pay."
That article certainly makes your case. It would have helped if the original link had been to the Pittsburgh article instead of Randy Peterson in USA Today.delldude said:
ClueByFour
Veteran
I've gone through 300k, about 200k left. This includes award reservations next February, so at least part of me thinks USAirways has a shot. The other part of me made sure all other parts of the travel reservation (hotel & car) are cancellable till 6pm day of arrivalClueByFour said:
It seems most people do not know what is going on with US Airways. The only ones that have some knowledge of the goings on are the ones that live in hub or
"focus" cities and see it on the news or in newspapers almost daily.
The calls keep coming in and people are still buying up a storm as far out as 331
days. Not many if any seem to be worried and few agents are questioned by passengers of the threat of bankruptcy and what will happen to their tickets if chapter 11 or 13 is filed.
So there really is not an award buying frenzy going on as some might suggest.
"focus" cities and see it on the news or in newspapers almost daily.
The calls keep coming in and people are still buying up a storm as far out as 331
days. Not many if any seem to be worried and few agents are questioned by passengers of the threat of bankruptcy and what will happen to their tickets if chapter 11 or 13 is filed.
So there really is not an award buying frenzy going on as some might suggest.
OP
- Thread Starter
- #8
bobcat said:
fyi- the AP article was run in this local newspaper,not the pgh local...so it is system wide.
I'm sitting on 100's of thousands of Dividend Miles. I don't have any worries right now but, as Randy Petersen points out in his article, that situation may change. I'll probably do a wholesale assesment around Thanksgiving and decide if I want to continue to carry a large balance or whittle it down to a minimal level.
Yes. Miles are carried on the books as a liability (though I don't know what value they give to each mile). As a result, miles being cashed in are good for the company, provided that they do not displace a larger amount of paid revenue.Heinrich said:
OP
- Thread Starter
- #12
i'm confused here......how can a large group of customers cash in their miles at a "freebie" if you will and not affect the total rev picture?mweiss said:
if mickey dee's gives away cheeseburgers tomorrow...they ain't makin cash...how can this be good at U?
At one time I read that airlines have some bizarre formula for including miles on balance sheets. For example, I think flyers with very large balances have their balances somewhat discounted balance sheet-wise, as it's highly unlikely many of those miles will ever be used. Ditto for accounts with only a few thousand miles. But, I don't know this for a fact, though, so maybe someone more in the know can chime in.
The value of outstanding miles is in the quarterly reports.
One of those articles says that a liability of around $85 million is associated with 6 million outstanding "awards". That works out to around $15 per award. Figuring an award at 25000 miles you get 0.06 cents ($0.0006) per mile.
One of those articles says that a liability of around $85 million is associated with 6 million outstanding "awards". That works out to around $15 per award. Figuring an award at 25000 miles you get 0.06 cents ($0.0006) per mile.
BoeingBoy
Veteran
- Nov 9, 2003
- 16,512
- 5,865
Tom,
The full 2Q report isn't on the US website yet (and I'm not gonna pay for real-time access to Edgar), but this from the 2003 Annual report....
Dividend Miles. Estimated future travel awards are valued at the estimated average incremental cost of carrying one additional passenger. Incremental costs include unit costs for passenger food, beverages and supplies, fuel, reservations, ommunications, insurance and denied boarding compensation. No profit or overhead margin is included in the accrual for incremental costs.
US Airways routinely reviews the assumptions made to calculate its FTP liability for
reasonableness and makes adjustments to these assumptions as necessary. In January 1999, US Airways announced changes to its FTP. Mileage credits earned prior to January 1, 2000 do not expire. Mileage credits earned on or after January 1, 2000 do not expire provided that the participant earns or redeems any amount of Dividend Miles at least once every 36 months.
As of December 31, 2003 and 2002, Dividend Miles participants had accumulated mileage credits for approximately 6,272,000 and 7,011,000 awards, respectively. Because US Airways expects that some potential awards will never be redeemed, calculations of FTP liabilities are based on approximately 80% of total accumulated mileage credits. Mileage credits for Dividend Miles participants who have accumulated less than the minimum number of mileage credits necessary to claim an award and a portion of mileage credits of Dividend Miles participants who have excessive balances are excluded from calculations of FTP liabilities. The liability for the accumulated Dividend Miles was $85 million and $90 million as of December 31, 2003 and 2002, respectively. Incremental changes in FTP liabilities resulting from participants earning or redeeming mileage credits or changes in assumptions used for the related calculations are recorded as part of the regular review process.
Jim
The full 2Q report isn't on the US website yet (and I'm not gonna pay for real-time access to Edgar), but this from the 2003 Annual report....
Dividend Miles. Estimated future travel awards are valued at the estimated average incremental cost of carrying one additional passenger. Incremental costs include unit costs for passenger food, beverages and supplies, fuel, reservations, ommunications, insurance and denied boarding compensation. No profit or overhead margin is included in the accrual for incremental costs.
US Airways routinely reviews the assumptions made to calculate its FTP liability for
reasonableness and makes adjustments to these assumptions as necessary. In January 1999, US Airways announced changes to its FTP. Mileage credits earned prior to January 1, 2000 do not expire. Mileage credits earned on or after January 1, 2000 do not expire provided that the participant earns or redeems any amount of Dividend Miles at least once every 36 months.
As of December 31, 2003 and 2002, Dividend Miles participants had accumulated mileage credits for approximately 6,272,000 and 7,011,000 awards, respectively. Because US Airways expects that some potential awards will never be redeemed, calculations of FTP liabilities are based on approximately 80% of total accumulated mileage credits. Mileage credits for Dividend Miles participants who have accumulated less than the minimum number of mileage credits necessary to claim an award and a portion of mileage credits of Dividend Miles participants who have excessive balances are excluded from calculations of FTP liabilities. The liability for the accumulated Dividend Miles was $85 million and $90 million as of December 31, 2003 and 2002, respectively. Incremental changes in FTP liabilities resulting from participants earning or redeeming mileage credits or changes in assumptions used for the related calculations are recorded as part of the regular review process.
Jim
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