(Start of 1st session)

MileKing Any word on when UA & US FF programs will combine, assuming the merger goes ahead?

Randy Petersen Not before January next year will there be any announcement. Just the other day in some SEC docs US Airways acknowledged that there will be some additional delay in their schedule...

Randy Petersen What is becoming interesting is that Southwest and Delta have now joined Continental in asking to be allowed to bid on remainders of the proposed merger, especially out of DC. I'm not sure if we should take this to believe that inside the industry they know the towel will be thrown in by the regulators? This will be as interesting as the election in Florida...

wharvey Do you believe the UA and US merger will actually happen?

Randy Petersen I personally don't, but that's not because I'm an expert in this particular matter. It's more that I oppose it from pragmatic reasons of competition.......

rick Last month we heard rumors that AA was going to a four tier FF system. Have you heard anything recently?

Randy Petersen That rumor has been around for some time, both being denied by some in AA and being winked at from others. There's probably good reason for it to happen - it will allow three levels of the program for basis of mileage accumulation and then one level for revenue earn. It will also allow a lower throw away level that AA can use more commonly among their growing list of partners. Giving away any for m of elite to other best customers is always a popular demand....

Randy Petersen I have not heard anything one way or another in the last month. But this reminder means I will be ringing them tomorrow, thanks for the reminder....rick.

MileKing Anything to suggest that AA will change its million miler qualification (i.e. all miles count towards lifetime status) next year?

Randy Petersen Doubtful since most other programs are going the opposite way. Here's the reasoning - while there are so many ways to earn miles, these programs are old enough now that there is becoming a generation of retiree millionaires and that means putting additional pressure on the ability to deliver upgrades and other pre-boarding benefits. Think Social Security for flyers......

ozstamps United told me today the date at which ALL awards and certificates go "electronic", even the coveted 1K system wide upgrades, will be December 17th. No more agents "forgetting" to collect certs. Darn. Do you feel this is a plus or minus for members, based on experience with the other airlines like AA who I understand are fully electronic.

Randy Petersen Good and bad. Good because you really won't loose any with missing luggage, briefcases and such. Good if you are at the top elite status, bad if you are lower end status because lower end people have no upgrades left over to take advantage of. With programs now "sweeping" upgrades when they are due, it means the lower the tier, the lower the chances of ever sitting in front of the curtain. Bad because they have taken away the ability to trade these "baseball card" upgrade certificates around and bad because most programs don't allow companions on the upgrade sweeps which means you still have plenty of work to do. A real mixed bag and if I were any of you - get to Platinum or whatever you can mileage run yourself to because you may be feeling in the future that your tier is called "Fool's Gold Elite."

wharvey Does that mean you believe the other airlines (United?) will be going to allowing all miles counting towards lifetime status?

Randy Petersen No, I mean that only actual flight miles will continue to be the deciding factor. Remember, elite benefits are the remaining vestiges of a real frequent flyer program and while it's a fairly popular idea, the old crown doesn't like sharing elbow space with the "new generation"

svpii much has been said about the need to support the delta issues in hopes that we can avert a herd mentality among all the programs to diminish ff benefits. Do you believe there are any really positive offensive (attracting passengers) moves in the works from any of the airlines or do you perceive them all to be in a defensive position?

Randy Petersen I actually know for a fact that there will be some very positive moves by some airlines to "attract" members in the new year. Interesting enough some of them seem to be designed to appeal to the voters of the Annual Freddie awards because that seems to be where programs think they compete against each other. There will certainly be things we've never seen before in the new year......and some of them pretty good. Remember, these programs are actually flush with cash and it seems it's time to pay up....

chix So when UA upgrades go electronic, does that mean transferability no longer exists?

Randy Petersen Actually, United is doing us all a favor, they will allow upgrade transferability. A detail taken away from us when AA launched their electronic upgrade program. Score one for United.....

Travel Alot Randy, I'm never able to get a room at the Hilton Waikoloa Village in Hawaii using my points. They always tell me that all award availability is gone... Do you have any suggestions? I wanted to go in April...

Randy Petersen It is possible and there's an easy way and a hard way. The easy way is to stay like hell at Hilton and get to their Diamond level because they practice little or no capacity controls at that level. The other way is to call LaDonna at AwardPlanner.com (800/333-5937) and ask her for an opinion. She's one of the best for knowing that property. AwardPlanner is a membership program ($49 a year) that assists people with unlimited award redemption. They are wonders at things like this......

maniac Can you give us any hints as to what some of these new things are that will be coming our way in the New Year?

Randy Petersen At the risk of not knowing what the final, final things might be - let's see that there become more programs offering zone awards. Zone awards are those that are redeemed for lower number of miles but are regionally based - east of the Mississippi, west of the Mississippi or redemption within the State of California or other such geographic limits. I think TWA invented the only one out there now though some of you might remember that the original US Airways program was the last major program to offer them. This is just a sample......as is the idea you may be able to combine miles from a variety of program for award redemption in a sign of program "competition" while still fighting each other for market share......Have I teased you enough?

Eastbay1K United has internally announced a very nice perk for what people have called the "true 1Ks. This occurred yesterday. Apparently they are under edict not to say anything and that "we will find out in the mail." Do you know what this is? The agent clearly knew what it was, and it is "very nice".

Randy Petersen I actually have heard of this in a conversation with one of the VP's but was really sworn to secrecy until they made a public release of it. Because I honestly don't know who might be in the crowd tonight, I think I better pass because there's still some other information I'm trying to milk out of United.....hope you understand, but you'll see something on FlyerTalk in the next day or two.....

MoreMiles I'm sure this is an old question, but I don't know the answer and I'm curious. What, in your opinion, is the biggest change in frequent flyer programs in the last years?

Randy Petersen Oh....good one....i need just a second to answer that....(that really is a good question)......

Randy Petersen I'd say it was the attempt of program to move from standard domestic awards of 40,000 miles (nothing below that) from 1981 to 1988 when they reduced limited access awards to 20,000 miles and then in 1995 raised them up to the current average standard of 25,000. It would have been interesting if they would have held at 40,000 with no capacity controls in 1988 (the same as today) and see what the world would have looked like because back then no one ever complained that 40,000 miles was too much for a free airline ticket.....

freeupgrade Are there any changes for 2001 American Airlines elite levels?

Randy Petersen I'm not for sure on that. I had heard a few minor changes but know they have yet to finalize their terms on it yet. Based on Rick's question earlier, I will call them tomorrow and get the inside word and we'll certainly be able to answer that next month.....

rssrsvp Randy, is there a way to take miles out of DL and eventually have them land up in AA?

Randy Petersen There is and it's fair obvious though not a great way to maintain the proper economics of the miles. You can convert Delta miles into Hilton HHonors points via their RewardsExchange and then request a change to AA of those points......but suffer the devaluation big time - about 67% for this trade. But you could simply leave them as Hilton points and redeem a free airline ticket on AA and suffer less devaluation......

wharvey Specific question Randy: We just moved to Rochester, NY... and of course, limited airline choices. We have many miles on TWA... and no TWA in Rochester. What would you suggest as the best way to utilize those miles? Am now a United fanatic!

Randy Petersen I wouldn't burn off the TWA miles yet, They don't expire and while you may feel they lose value if you don't redeem them, I'd suggest that you look to future partnerships that TWA is certain to get involved with in the months ahead. The announcement today of a full cost share and reciprocal agreement with American West is one positive sign (OK, I hear some chuckles in the background) but I still think there's a trick or two up their sleeve. Wait for the right moment and keep your keyboard glued to the TWA forum on FlyerTalk for the magic sign......I still have a few hundred thousand TWA miles from my New York days in early 1980s and I'm still holding on to them....

Eastbay1K In the interim period at UA, where we still have lots of paper upgrade products, do you know how they are going to allocate what kind of upgrades we are going to use? Do we designate them at time of upgrade? And when do they come out of the "Bank" - at flight time? I assume the system is designed to manually input cert #s at some point.

Randy Petersen Yes, it looks like they will follow the same principle that AA did when converting, you could turn in the paper at any check desk and they would manually enter the numbers if you wanted to go "e" or you could continue for a cutoff date of one year since the inventory can't be older than that....

MileKing Starwood seems to be doing very well with frequent travelers right now. Any insight into how well they are doing with the lack of capacity controls and any changes planned to the program for next year?

Randy Petersen I think the no capacity change captured what group was focused on that and they are all now trying to simply get more for what they have. For Starwood there remains an unanswered credit card problem, and weakening relationship with AT&T and the swirling rumors of the Bass acquisition of them, though that rumor has been fairly quiet for some time now. Best guess is cleaning up their elite tiers for Benefit delivery, which seems to be pretty spotty and probably being an ongoing partner with United. Their Win The World relationship with United recently was a home run and it looks like each hotel chain will attempt to become a favored nation with one big player.....Starwood and United forever, because if they don't, Hilton will own that one.....

chix Have you heard of Milesmall.com? Seems to be a site like Greenpoints where you earn miles per $$$ purchased @ participating online merchants. However, they don't fulfill on their promised miles. With all these new miles.coms, perhaps you could sponsor a rating system on who delivers the best value and customer service (any may be around for longer than a month or two!).

Randy Petersen Hey, there's an idea, but to prevent it from being too subjective, we'll become the Gomez or JD Powers of rating online categories like this. I actually share your concern because even the AllAdvantage players have come and gone with rule changes. I know that only half, if that. if them will be around next year as the funny money dries up.....Good idea and we'll credit you when we introduce that as a "public service" Again, thanks.....

Dan Hi, Randy. It's Dan Saul from SmarterLiving.com. I was wondering your predictions on whether the major on-line agencies such as Expedia and Travelocity will introduce their own loyalty/incentive programs, similar to the one trip.com offered and recently canceled.

Randy Petersen Welcome Dan, you've got a nice site, congrats. There is no doubt that will happen given the first time booking bonuses that airlines are currently offering and the idea of Hotwired and Orbitz, both being talking heads for the airlines themselves. But, I think it may not be strictly bonus opportunities. It looks to me like they will try the "Book three tickets and get this free" scenario since they figure if they can get three, it's above average for most americans. Programs - certainly. When -no sooner than 6 months away.

MileKing What is the Starwood credit card problem you are referring to? Are they looking to sever ties with AMEX?

Randy Petersen Not necessarily, but as you might know, it's still called a "Sheraton Credit Card" and hasn't been open to new accounts on a consistent basis. When's the last time you saw a promo for it from starwood.....It's details and it's direction and with AmeX doing the big thing with the Hilton Platinum lately, maybe Starwood is feeling unloved......

Eastbay1K What is your opinion on the future of airline FF benefits becoming more revenue based? Most or all of the hotel programs have done so (some used to be x points/stay, not x points per $). America West tried it years ago and it bombed and went back to miles. Or perhaps the airlines are doing so already with unpublished benefits? [I'm referring to something more substantial than just the full fare / premium class bonuses already offered at some airlines]

Randy Petersen I'm a believer in that as a trend and you can read more about that in the December issue of InsideFlyer magazine which we close on tomorrow. It is one of the Top Ten Trends for 2001 that I address in that issue.....

BizJet The Sheraton Amex Card (Starwood) sets a cap of points earned from the card at $60K per year, with no exception for Gold and/or Platinum members. I don't know about other hotels, but all the airlines CCs I know of have unlimited mileage earning for their elite flyers. Why not Sheraton/Starwood?

Randy Petersen It's leftover details from and older contract. Those are the types of things I believe will be addressed if and when Starwood relaunches a credit card product. As you know, it's a fairly flexible program for converting points to miles and a great credit card would be like American Express Membership Rewards in sheep's clothing.......

Randy Petersen Thanks all, I'm typed out for this session come back in an hour or see you all next month. In the meanwhile, please all have a great Thanksgiving.........

(Start of 2nd session)

Randy Petersen You've got questions, I'll try and have answers...let the games begin.

FlyByNight I thought that I was planning in enough time for award redemption for this summer. But it appears that every date I pick, I am unable to coordinate my hotel stay and airline flights for award redemption. Any tips?

Randy Petersen The magic of hindsight. You probably need to choose one to master the other. It's probably easier to get the hotel rooms you want, two tips: Get tot he Diamond level of the Hilton program because they don't enforce too many, if any blackout dates for room redemption or totally move into a Starwood hotel because they have won many people over with no blackout dates ever. But if you want to consider it, Hyatt has awards with no blackout dates as do others....for a price. Now if the airline is the problem.....learn the magic of alliances, Continental miles are good on America West and Northwest, Delta on United and so on.....get out the scorecard and keep track of the rejections you get......and be happy with the one that loves you and your miles enough to give you that free seat....

Randy Petersen or for a shameless plug, sign up for AwardPlanner.com where their success rate for getting awards for members is in the high 90 percentile... (800-333-5937) Now the next answer...

hfly Any more rumours flying around re BA jumping from 1world into Skyteam, or any other interesting alliance tidbits?

Randy Petersen Really nothing new on the alliance front. As you know, they make some news and then head for the foxholes to have the lawyers figure out the odds first. Even in Las Vegas there's no book on alliances but the best place to ever hear about them are the daily tabloids in London...those guys know everything......

DoggyDaddy Randy, in your opinion, in which airline is it the easiest to get elite status, and in which one is it the most useful? DD

Randy Petersen Ohhh you are really asking for trouble...for me. Let me type up a few thoughts.....

Randy Petersen The easiest is to simply give up the idea of being special and think big bucks. For the totally shameless, get the Black Card from American Express which comes with many elite level benefits. The only problem is that unless you act right, the regular guys with upgrades in first class will spot you right away......now seriously.....

Randy Petersen According to my trusty 7th edition of The Official Frequent Flyer Guidebook (flyerguide.com), the answer is Air Canada Prestige with only 18,000 miles required, Alaska with only 15,000 miles required. Which is the most useful? I think the Platinum of Delta is pretty good until next year. With lounge privileges, SWUs (right now anyway) and other things... it's pretty complete.

Eastbay1K The Holiday Inn program seems pretty marginal - I'm a SPG Platinum, an HH Gold, and had several HI stays booked and wanted to see if they offered any comps or anything. She read the requirements for their elite status. I emailed them with the request. They replied by telling me the # of stays I'd need. In any event no one seems all that impressed even at the higher levels. Do they ever comp status? What other impressions of this program do you have?

Randy Petersen They do comp basic levels of elite there though it is truly a Road Warrior program. Overall it's one of the more complete programs in the world with more award choices than any other, whether it be miles or merchandise or benefit ammenities. It's problem is it's past. Only until recently did you get credit for full folio and for every dollar at their Express properties and also they have bungled the relationship with Inter-Continental. But they've just landed the head marketing guy from Continental there last month and if we see what acquisition they get (rumors are Starwood or Hyatt) you may become far more familiar with this program than you like.....

Randy Petersen It's a "blue collar" program, nothing fancy but pretty reliable. I'm actually a fan of it...

Sunshine Do you think that Starwood will continue with their no blackout dates next year?

Randy Petersen Sure, you don't spend $50 million for nothing. It works and they have figured out the economics. They are smart and will move on to other ideas and keeping that one - after all, proof of winning the Freddies last year shows that while the competition panned it, the members of program loved it and there's far more members now that with just Sheraton and Westin combines....

hfly Randy, a question totally unrelated to anything I've asked before. Over the last few years, I have written several complaint letters to BA about a variety of issues, they never respond, ever. Some of the letters had to do with serious safety issues (pieces of planes hanging off, 8 hour delays, very rude service,etc.). Who would you suggest that I write to about this (keeping in mind that most flights were not in the US)

Randy Petersen Their frequent flyer service center is not actually handled by BA, rather by Carlson Company in Minnesota. I have the perfect suggestion and can lead you in the right direction. Please contact me later. But your question really brings up a proper point - should not concern of safety issues deserve immediate attention?

Djlawman Any hope that any of the other hotel programs will follow Starwood on the no blackout route?

Randy Petersen That window was only open for about a month afterwards. By now, it has lost most of the competitive comparison and I don't believe you'll see anyone lese match it at this time (major programs only). However, you will continue to see top tier levels of competitive programs offer a close copy.

dof Randy, I heard about this new Web site where you can turn miles into money... can you tell me more?

Randy Petersen If I didn't know better I'd think this was a powder puff question. Simple answer...yes - there are two. First is AOL AAdvantage which is a program sponsored by AOL and American AAdvantage (aolaadvantage.com) and you can turn your AAdvantage miles directly into stuff that money could buy. The second is MilePoint (milepoint.com) where you actually do get "money" for your miles (2 cents per mile) to go shopping on the Internet at select merchants. Still early on with these two, but there's promise. Current discounts at MilePoint are centered around 10-20% discounts, but for any orphan miles you may have, there's probably no better solution, after all, the 3,412 miles I have leftover at TWA have not have value for 10 years.....

Randy Petersen My disclaimer....I am a co-founder of MilePoint (but mentioned AOL AAdvantage first....)

FlyByNight MilePoint started out shaky are they going to make it?

Randy Petersen I could say I resent that, but yes, they are going to make it. Typical story of everything that could go wrong at launch did, from the Web farm hosting the server to corrupt files from the airlines for account balances......(hey, I'll never become a dotcom millionaire if they don't make it - just a joke....). Actually I think by mid-Spring you'll really see a great collection of merchants, real deals and plenty more programs to convert your miles and points from......

dvrich1 Anything on Frontier launching their own FF plan?

Randy Petersen You've been reading my mind, or looking over my notes. That's an interesting question. Frontier has really enjoyed growth as an airline thinks to the help they are getting from United. While they are a partner of Continental, they, like most other airlines their size probably feel insecure if they can't brag about their own program. I might predict they will have their own program before this country has it's next president - but reading my tea leaves tells me that as a new year brings new beginnings, so does it bring a frequent flyer program to Frontier......

Djlawman Randy--how do you think the future looks for TWA right now? Is the pull-back from Europe over? Any plans for expanding back into Europe? How about any other hub?

Randy Petersen A recent study from the Aviation Institute at Georgetown University has a scenario whereby TWA folds its wings and America West takes over it's assets in St. Louis and also acquires Alaska and grows up to compete against the larger carriers. I think many that have held on to the promise are now starting to worry that the nine lives of TWA have been used and just one more hick-up is all it takes. If we look at America West......might TWA not be their "international carrier" right now? I think there's something going on and could there be a reverse merger? I honestly don't know but pride myself in still being loyal to TWA - hey, if it wasn't for them I would have never become a mileage junkie.....

hfly Randy, what do you think about the theory that Dl is getting rid of SWU's to reduce their future accounting liabilities. For example, if there are 142000 Gold and Platinum members at the moment with an average balance of 500,000 miles each, that's quite a lot of miles that DL has down in the books as a future liability, as a matter of fact a liability which could be construed as greater than the current market value of the airline itself (as do many other airlines). Therefore, by getting rid of the SWU's the bean counters would believe that they are in fact increasing the value of the airline in some perverted way?

Randy Petersen In my last true conversation with them on the subject, it went more like this:

Randy Petersen We will not provide benefits that aren't easily achievable in nature. We believe (Delta) that given the extreme success of BusinessElite and the current full capacity of this airline, we are unable to satisfy the demand as we expect an even larger base of members eligible because of our new SkyTeam alliance. We'd rather offer things we can deliver with some sense of success than tease members with all talk....

burkey Last week the webheads at AA.com made a mistake and posted about double miles being offered for ONEWORLD partners SR and SN. My AAngel has found out the webheads made that public by mistake while it was only for internal AA use at that time. Any late word on SR/SN joining ow?

Randy Petersen ahhh , Mr Burkey, always a good question.......word on the street is that it's not really due up yet since oneWorld usually offers an advance date of new airlines joining. I'd say someone misread a directive and i don't think double miles was the move of the last partner into that alliance.....

burkey One more, how about the possible new tier to AAdvantage?

Randy Petersen Very possible as they are thinking that Platinum Exec isn't a true level based on the miles like a 1K at United. Likely they will try and leverage PE to a stand alone level and still keep three on the books with the lower level becoming the throw away. You've got to admit, topping off the miles at 50,000 is pretty easy........Based on a question in the earlier session, I will be talking to AA tomorrow about how close they are on finalizing the new benefits and levels for next year.... my guess is that they aren't done yet.

Djlawman What is happening with US since it has discontinued the US/AA deal? Is it going to join the Star Alliance regardless of whether the UAL merger goes through? (and, as an antitrust lawyer, I do not think it will go through). And is BA pulling out of OneWorld?

Randy Petersen I recently asked the folks at STAR about US Airways and they honestly said that they have not even petitioned Star and United hasn't made an issue of it yet. As for BA, it's in the hands of the governments and no one else.........

dvrich1 Please highlight what you consider to be the "big" upcoming changes to FF programs in 2001

Randy Petersen Zone awards.....I think we might see regional awards at lower levels of redemption but with rules like Saturday night stayovers.....In fact, we might even see awards at the 10,000 mile level. Other things we might see.....

Randy Petersen Competition among carriers in areas they don't compete against each other with. So, might we see an airline sponsored frequent flyer portal that will allow you to combine miles for a premium from several competing programs?

Randy Petersen For more, please read my "Top Ten Trends of 2001" in the December issue of InsideFlyer magazine coming soon.

DoggyDaddy Randy, I know you fly a lot, but how many air miles do you think you fly a year?

Randy Petersen This year has been about average (though i have turned down a lot of travel as of late) and I'll do about 275,000 actual flight miles......my wings are tired.

Randy Petersen I take that back, United canceled another flight on me but i was able to double dip for credit, so really 249,464 actual flight miles......

Randy Petersen Well, last call for...questions...

dimples This is a rather small question, but do you think email statements will be more common instead of paper?

Randy Petersen yes, almost as mandatory as e-tickets. We just published a nice article on that topic in the latest edition of InsideFlyer magazine which you can catch online. Look for our/my report there.....

Randy Petersen Thanks all, it's been great as always. Enjoy a great Thanksgiving and we'll see you all on and offline.....