Letters – March, 30 2006

Letters – March, 30 2006

Blame Game
In reviewing the Inside Look on AAdvantage, you state at the end in “minuses” that it would be great if American would, for a start, award miles on British Airways transatlantic flights.

British Airways and American would love to allow cross-accrual in their programs! Perhaps you forget that it’s the U.S. antitrust authorities which have prohibited the two airlines from allowing cross-accrual or rewards on BA/AA for all U.S.-U.K. flights. Lobby your Congressperson!
David Morton

Editor’s Note: Actually, in our research we don’t come to the same conclusion. We are of the mind that the idea that it is an “antitrust” issue is propaganda from two airlines that simply won’t blink. Why do we say this? Let’s look at the facts: All other similar transatlantic cross-accrual airline relationships have been approved by the “antitrust” agency and have worked for years. The idea that the government is restricting only American AAdvantage and British Airways Executive Club just doesn’t seem to bear out under scrutiny. Need more? British Airways was previously in a similar cross-accural relationship with United Airlines (after they first left the AAdvantage program) as well as with US Airways. In those relationships, these restrictions did not exist. And, when we look back at the original AAdvantage/Executive Club relationship which began in the 80s, members of the AAdvantage program could redeem their miles for transatlantic awards on British Airways.

Granted, they have fooled everyone but InsideFlyer with the “antitrust” issue, but do you remember the 40AA or P40Y awards? 40AA was a one-class upgrade on British Airways between North America and Europe on British Airways using AAdvantage miles, and P40Y was one free economy-class award on British Airways between North America and Europe valid between Oct. 1 and April 30.

Freddie Overload
I wanted you to know that I generally enjoy reading the magazine and find the majority of the articles and features interesting and useful.

One aspect that I don’t understand (nor enjoy), however, is the constant flow of articles about The “Freddies,” and the incessant preoccupation in issue after issue with voting for one’s favorite frequent traveler program.

I, for one, enjoy hearing about the best and worst features of each program, together with your editorial opinion of what should (or should not) be made a part of each. It just seems, however, that almost 25 percent of each issue is devoted to voting, tallying votes, reporting vote results and just plain PR about these “awards.” It gets tiring after a while.

I know what you’re going to say … readers’ opinions influence what goes in (and out) of these programs, and that the airlines and other travel companies are influenced by what people think. Fair enough. With all of the issues out there today (service, seats, routes, fares, award-earning and redemption), however, do we really need to devote issue after issue trumpeting one program’s popularity (as evidenced by “votes”) over another? Does it really make much of a difference to anyone to know what airline was voted “best airline to Canada,” or which carrier garnered the most votes from readers who decided it was worthy of the “best business class to South America?”

Just one person’s opinion, but I vote that one issue’s Freddie news is more than enough!
Mark Bromberg

Editor’s Note: Fair enough statement, Mark. I was intrigued by a few of your comments and thought I’d do some research. The statements which took me off-guard are those about “best airline to Canada,” or “best business class to South America.” The reason I mention those is that the Freddie Awards do not include any of that in our balloting, which leads me to think you may be confusing the Freddie Awards with other airline awards, of which there are many. I can count at least five other “best airline to…” style award programs. But there’s only a single one — the Freddie Awards — that is just about frequent flyer programs.

And I plead guilty — I talked about them briefly in January, February, March and here in April and you’re likely to hear me again in the May issue. The reason I repeatedly mention them is that on a monthly basis we get new subscribers to InsideFlyer, and with the voting going on between January and March, I’m just trying to get the vote out.

I apologize and we’ll try and keep our remarks about the topic shorter.

Diners Overflow
Editor’s Note: In this month’s Inside Look, we review Diners Club Club Rewards. We solicited members for their opinions on the program, and received an overwhelming response. We have included those letters which could not fit in our “Report Card” section here.

Diners Club was always my favorite card and rivaled American Express for benefits and points. I used this card for years for all airline tickets, hotels, rental cars, etc. I also had the benefit of a 60-day period to pay the bill. This is great when you travel a lot and dislike paying bills from a hotel room or while flying.

However, Diners merged with MasterCard and my love affair vanished. Now the fees are frivolous and I no longer use the card. Diners made a mistake with this cardholder.
Diana Voorhees

The program was great until this year. Around July they teamed up with Master Card and the program had gotten even better with increased acceptance.

This all changed for the worse in 2006. I used to love the program because I used Club Rewards to top off my mileage accounts in United and Northwest. Recently United, Diners Club, and Continental left the Club Rewards program. In my opinion, this change trashed the Club Rewards program. For Diners Club $95 a year annual fee, I’m not going to renew this year and will be canceling my card. I hope they lose their Freddie.
Eric Hoegger

As you know “As of January 1, 2006, Club Rewards points will no longer be redeemable for frequent flyer miles on Continental Airlines, Northwest Airlines and US Airways (including America West Airlines). In addition, you will no longer be able to redeem points on United Airlines as of April 27, 2006.”

My apologies if you have already covered this. But I performed the following analysis and it seems that this program has taken a major dive in value.

Basically, Diners is devaluing the points on the above carriers by a factor of 6.

Under the old program one could obtain a United business class ticket RT Los Angeles to London for 150,000 United Mileage Plus miles or 150,000 Diners Club Points ($1 charged = 1 Club Rewards point = 1 mile therefore 150,000 miles = 150,000 points = $150,000 spent). The actual ticket cost is $11,555 so the ratio is about 13 to 1. Fair enough.

Under the new program the same ticket now costs 924,448 Club Rewards Points as under the new formula 1 mile, instead of being worth 1 point is now worth 0.0125 point — therefore to get an $11,555 ticket one needs to spend $924,448 instead of $150,000! The ratio is 80 to 1. This has devalued the program by a factor of 6.16 or 616%.

Not only that; one cannot use points to upgrade as we did under the old regime. We have to buy the ticket outright.

It seems to me I remember reading where American Express is adding United to its program. Is this true and are there any details regarding redemption etc. I don’t see anything on the Amex site.
Frank Dolce

The only reason I haven’t cancelled this card is that we’ve been doing some personal financial things where I want to minimize the turnover on old and new revolving accounts.

Unless you are using one of the few remaining redemption paths, it is nothing more than a more-expensive AAdvantage-branded card.
Steve Levin

Editor’s Note: There is little doubt that our readers are experts when it comes to the Club Rewards program. As long as I can remember, we’ve proudly trumpeted the benefits and advantages of this program, and our readers have followed our advice, which is certainly reflected in their feelings on the recent changes with this program.

The situation for Diners Club is a difficult one to remedy. For the corporate card marketplace, the changes in merchant acceptance because of the alliance with MasterCard cannot be overlooked as one of the greatest additions to the card. But for the individual who bypassed the other credit card products in their adoption of Club Rewards as the best credit card program on the planet, they are unfortunately now finding out how the others have lived — American Express Membership Rewards members who never had American, Northwest or United as mileage redemption partners.

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