The type of thing I usually write about on my frequent flyer blog is a deal like the one that came across in today’s MilesLink Newsletter: Airtran and Wendy’s have partnered to give away credits in the Airtran frequent flyer program when you buy drinks or combo meals.
You earn a quarter of a rewards credit for each combo, 20 or 32 ounce drink purchased at participating Wendys through December 31st.
An Airtran coupon will be printed on the cup. You can only buy five drinks per transaction, so you may need to go stand in line a few times or circle ’round the drivethrough driveway in order to really load up on coupons.
After you have consumed your beverage, carefully cut out the Proof of Purchase/AirTran Flight Coupon along the dotted line. Fill out a 3×5 card with your complete name, street address (no P.O. Boxes) and AirTran Airways A+ Rewards account number and mail in a handwritten business size (#10) envelope along with at least four (4) but no more than one hundred and twenty-eight (128) Proofs of Purchase/AirTran Flight Coupons per stamped envelope to Wendy’s/AirTran Airways Promotion, AirTran Airways Special Services, 1224 Bob Harmon Road, Savannah, GA 31408 to be received by 2/13/06. Extra postage may be required.
Since there’s a cap of 32 Airtran A+ Rewards credits (enough for two roundtrip coach tickets on Airtran, or if you prefer Airtran will buy you a single roundtrip ticket on another airline) you can’t become the next Pudding Guy (and you won’t get a movie made about your mileage exploits). Of course Pudding Guy gave his pudding away to charity and took a tax deduction. In all likelihood, you’ll just wind up eating this.
You’re not going to get much economic theory from me over the few days that I’m guest blogging here. I’m not an economist. Still, some of my undergraduate intro classes prove useful in thinking about frequent flyer miles.
A much-cited factoid, generally attributed to the Economist, is that frequent flyer miles are one of the key world currencies with over 14 trillion miles in circulation. The error in this is that ‘frequent flyer miles’ aren’t a single currency. Skymiles is different than Onepass is different than Worldperks or Mileage Plan. They’re run independently just as the U.S. and Australia operate their own currencies.
Still, the point about the explosion of miles is a good one, and thinking about miles as currency is instructive. Miles are proprietary currencies without any independent federal reserve to keep the printing presses in check. Some restraints were placed on what programs could do with their miles via lawsuits in the late 80s and early 90s, but each mileage plan is generally free to do as they wish with their printing of points and redemption schedules.
For the past couple of years I’ve been sounding the alarm that the mileage required for airline awards — especially premium class international awards — would go up over time. And so far I’ve been proven correct. Last year Northwest increased the mileage cost of its best awards by 25-40%, and some Qantas awards became more expensive — by as much as 192%).
It used to be that folks saw miles as a retirement travel fund. That’s the worst possible strategy. Miles are worth more now than they ever will be in the future. The value of your retirement pool will only go down, not up.
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First off, thanks to Tyler for the generous introduction and to both Tyler and Alex for inviting me to guest blog. It’s a great honor, since I read Marginal Revolution each morning with my coffee. Hopefully I’ll have some interesting things to pass along, and I look forward to reader comments (gleff -at- yahoo.com).
Moving call centers to India is nothing new. On the whole, Americans seem to have a visceral distaste for it (though they may still opt for it if given the choice). So criticizing outsourcing, an effective rhetorical tool, has spread in its uses. In the battle between Northwest Airlines and its flight attendants, the Wall Street Journal uncritically picked up on the language. This Susan Carey piece (link is to a reprint of the Wall Street Journal article) offers a rather odd definition of outsourcing:
Those intra-Asia flights are mostly staffed by nearly 700 Asian attendants from bases in Japan, China, South Korea, the Philippines and other countries. They operate under different pay and work rules but have language skills for Asian destinations as well as English. The current union contract allows this limited but longstanding outsourcing.
(Emphasis mine.)
According to Susan Carey (and the PR voice of the Northwest flight attendants union), staffing planes flying within Asia with flight attendants from Asia is outsourcing.
Northwest has significant operations in Asia, and operates a mini-hub at Tokyo’s Narita airport. The airline was formerly known as Northwest Orient Airlines. They maintain local crew bases for their Asian flights for several reasons, only one of which is wages. The airline saves on per diem and hotel costs. But mostly American union members don’t possess the language skills that local residents do.
The practice isn’t unique to Northwest and stretches back decades. Pan Am had a contingent of flight attendants from Kenya 50 years ago. And it works both ways – non-U.S. carriers generally outsource their US government relations function to Americans….
We have another guest blogger this week, namely Gary Leff. Gary is CFO at the Institute for Humane Studies and Mercatus Center. When it comes to aviation, luxury travel, and loyalty marketing, he is without peer. Inside Flyer magazine called him "one of five experts to listen to" on business travel. The Financial Times, San Francisco Chronicle, Washington Post, and The New York Times all have promoted his work. And he’s Senior Moderator at airline megasite Flyertalk.com.
Gary usually blogs at View from the Wing (http://blogs.flyertalk.com/blogs/viewwing/), which Gridskipper advises "true fanatics" to consult when seeking an airline upgrade. He tells me that until a short Sydney-Melbourne segment in June, he hadn’t flown coach in
over two years.
Many of you have asked, here is the answer. My manuscript-in-progress on the economics of food will have a chapter on barbecue. Eating it three times a day, as I now must do, is not easy. Eating it no times a day, as is the case living in Fairfax, isn’t easy either.
