Monday, July 14, 2008

Airline alliances: A game of musical chairs

More than a month ago, Continental Airlines announced that it would leave SkyTeam in favor of joining the Star Alliance. Everyone covered that announcement, but no one dug into why.

USA Today's David Grossman finally breaks it down for us:
  • Continental's Newark hub competes with Delta's Kennedy hub for transatlantic flights to Europe, whereas Star Alliance has no significant transatlantic presence in New York.

  • Continental couldn't make any big moves without approval from Northwest Airlines, which on account of a previous investment owns a "golden share" in the company and can veto any motion made by Continental's Board of Directors.

  • Once Northwest is acquired or merges with another airline, Continental can buy that golden share back for $100.
In other words, Continental has seen the value in leaving SkyTeam for a long time now, but it couldn't act on that desire until Delta and Northwest announced their merger.

What will this shakeup do to the industry? Well, as Grossman observes, Continental brings immediate value to the Star Alliance by adding a New York hub to the route maps. Continental also has a strong presence in Central and South America, which meshes nicely with United's strong Pacific presence.

At the short end of the deal is perennial loser U.S. Airways. With hubs in Charlotte and Philadelphia, my least-favorite airline has always been a bit pinched by United's hub in Washington D.C. Throwing Newark onto the stack makes U.S. Airways even less desirable.

Of course, U.S. Airways could make its own move, the most likely course of which would be to join American Airlines as a member of oneworld. There's been no word from CEO Doug Parker -- but now that alliances are in motion, does he want to risk being the only one standing when the music stops?

Sunday, July 13, 2008

Why do I like Continental?

You might have noticed that whenever I talk about airlines, I tend to single out Continental as being better than its legacy-carrier counterparts.

So, lest you think that this bias is unfairly slanted, let me provide you with a recent excerpt that illustrates why I feel the way that I do:

Dennis Tierney, alliances director with US Airways, said the airline had been forced to keep prices relatively low to maintain load factors but in-flight services would start to disappear from domestic flights.

"Fuel is the story," he said "We are trying every means necessary to cut costs."

But Mark Erwin, senior vice-president of Continental Airlines, said services would be the last thing to disappear on his airline.

"Continental believes in delivering a higher level of service," he said "One of the reasons we receive such high marks from the consumer is that we focus on blankets and pillows and in-flight entertainment and meals at meal times and priority offerings for our elite customers.

"We believe you have to invest in the consumer to keep them."

The section that I quoted contrasts Continental with what is certainly my least-favorite domestic airline, U.S. Airways. But the article includes comments from other airlines as well, including United -- which last year added the position of Chief Customer Officer to its executive staff specifically to focus on service. And yet, Continental is the airline that is holding the line here. While its competitors add first-bag fees, booking fees, and even charge coach passengers for soda or peanuts, Continental continues to serve meals and provide blankets. That makes Continental special.

Let's be clear: Continental isn't our only good domestic carrier. Alaska Airlines is also outstanding among the lineup of legacy carriers. And most of the low-cost airlines are excellent, including JetBlue, Virgin America, AirTran, and Southwest. The thing is, none of these have the scope that Continental and its "big six" counterparts do, being able to take you around the country or around the world. That makes Continental really special.

And special things deserve recognition. That's why I give them so much credit here.

Monday, July 7, 2008

Secrets of the BoltBus

On May 19, I introduced you to BoltBus, a next-generation bus service that offers service between New York City and destinations in D.C., Philadelphia, and Boston. On June 10, I mentioned BoltBus again as a possible workaround for people looking to travel between NYC and Boston when Amtrak service (my usual preferred route for that trip) was interrupted by the Thames River bridge replacement project.

Well, both of those recommendations were accurate and heartfelt, but they were based on second-hand information. This past weekend, I got the opportunity to do some first-hand research. The BoltBus is every bit as great as I was told; I've also got a few details to add:
  • About half of the seats have power outlets, most of them towards the front of the bus. Look on the back of the seat to see if there's a double outlet there.

  • I mentioned earlier that the BoltBus coach configuration has one fewer row of seats, with the extra space used to give everyone more leg room. It really makes a difference... the leather seats are almost as spacious as Amtrak and I found them more comfortable overall.

  • WiFi is provided as promised, but it's about as reliable as you'd expect from a bus: it isn't always booted properly when the bus starts, and the uplink loses signal from time to time.

  • The bus stops in Philadelphia and New York are literally right next to the train stations. In D.C., the stop is right in front of Metro Center (on the Orange Line), which for most people is more convenient than being at Union Station anyway.
Am I going to start using BoltBus as my exclusive means of traveling to and from New York? I think that I am, at least for non-business trips. A BoltBus ticket for Independence Day weekend cost me $23. Amtrak wanted $125 for the cheapest Regional and $197 for the cheapest Acela.

I probably won't take BoltBus to Boston, because it's such a long trip, but you know what? The NYP-BOS segment is a lot cheaper on the Acela than is WAS-NYP. With service right in front of Penn Station, I'm thinking that the way to go is a $20 ticket to NYP on the BoltBus and a $67 Acela ticket to South Station.

By the way, here's a secret that will amaze you: it has its own rewards program, its own vibe, a pickup business model, a curbside pickup, and couldn't be more unlike its parent company, but BoltBus is actually operated by Greyhound. Seems our de-facto national bus carrier finally realized that it was losing a big part of the market to people who were opting for ad hoc Chinatown buses and figured it could take that challenge head-on.

And you know what? As someone who took Greyhound exactly one time and vowed never to do it again, I can say that they're right. BoltBus is something different, and it's great. Give it a try next time you're looking for East Coast travel.

Wednesday, July 2, 2008

Explore America by Rail

Amtrak has offered a USA Rail Pass for a very long time. For most of that time, though, the Rail Pass was pointedly not available to U.S. residents, a confusing arrangement that is nonetheless typical among rail providers around the world. (Apparently, rail passes exist for international tourists and not to cater to tourists already in the country.)

Now, though, things have changed. Amtrak is offering USA Rail Passes to anyone who wants to buy them, and with gas prices soaring over $4.00 a gallon, traveling by train may be the perfect alternative to the high cost of a traditional road trip without resorting to the discomfort and extremely long travel times involved in long-distance bus travel.

How's it work? Well, first you buy the pass itself, the cost of which depends on three things:
  • Where (West, East, Northeast, or National);
  • When (May-Sept is peak season, while most of Sept-May is non-peak); and
  • How long (15 or 30 days) you want to travel.
The prices are surprisingly reasonable, with a National 30-day Peak rail pass going for just $599 and off-peak prices about 25% less ($469).

Having bought your pass, which you can then pick up at any Amtrak station, the next step is to schedule your travel. You do need to reserve tickets, and there are a limited number of seats on each train set aside as eligible for rail pass holders. That being said, there's no minimum timeframe to book the tickets, and if you arrive at the station and they're still available for that same day, you can scoop them up on the fly--but Amtrak is getting more popular as fuel prices rise, so it's better to plan ahead where possible.

The USA Rail Pass covers Coach seating and isn't valid on the Acela or the Auto Train. You also can't use it in Canada (though there is a North American Rail Pass that includes travel on VIA Rail Canada if you're looking to go farther afield; that goes for $999 during peak season). But you can purchase upgrades to Sleeper or Business Class accommodations where available for a surcharge, and when the cost of a single round-trip flight is as much as a 30-day blank check for rail travel, you have to wonder:

Isn't this a good time to explore America by rail?