FunnyBusiness: Everything About Business Except The Bottom Line

Experts Say The Bottom Line of Airlines Mergers Is Colored Red

At one time in my traveling life I was a devoted NWA Elite Traveler. I thought nothing of paying $150 more for a ticket at a less convenient time. I was focused on the end goal:earn enough frequent flier points to qualify for an ELITE status. 

This morning I woke up feeling badly for NWA ELITE fliers. Your world is about to turn upside down and its not going to feel very good. Been there. Done that.

When you have to "share" premium space with all those Delta privileged fliers--the perks will be harder to come by.

While the merger--if it goes through--- marks the end of an 82 year era in Minnesota --nearly 11 thousand employees are based here -about 1000 in the suburban Minneapolis headquarters --it could also be the end of frequent flier programs as we know them.

It was a rude awakening  for me in 2002 when I no longer qualified for the elite status and had to start boarding the plane with the "normal folk." In a post I called " The End Of The Affair"  I described the feelings of being jilted as a frequent flier.

Ironically the post was based on my experience flying ATA --an airlines that bit the dust last week.

I didn't earn any worldperks on my flight to Chicago yesterday. My affair with Northwest and its frequent flyer program has a chink in its chain.

I not only flew ATA,I signed up for ATA's frequent flyer program. Now codesharing with Southwest Airlines, I can earn a companion ticket by just taking 3 trips. I can earn a free ticket with just 6 round trips. So my 6 trips to Chicago are as valuable to this airline as if I traveled 25,000 miles on Northwest. I like that.

But here's the real reason I'm ending my love affair with Northwest--I've been feeling like a jilted lover for the past couple of years.

I didn't realize it until yesterday. But, I've actually been feel bad every time I fly Northwest. See, I used to be an ELITE flyer but I lost my status when I stopped flying 25,000 miles each year.

It's not easy to be a regular coach traveler after you've lived the life of an ELITE. It's not easy to watch all those other smug ELITES enjoy the perks that I once enjoyed.

I used to be the person that got to board the plane early.

I used to be the person who could tuck their TravelPro in the overhead bin without fear that they'd run out of room.

I used to get upgraded to first class.

Now, I'm nothing more than a peon coach traveler to Northwest. To them, I am now less than.

Of course this fretting over frequent flier points and perks could be a bit premature. A lot can happen before the airline's merger is approved by The Justice Department. In a January article The New York Times reported that mergers are not good for the bottom line.

But close scrutiny of the business rationale for airline mergers suggests that any improved profits from consolidation will likely be short-lived, at best. Any cost reductions, for example, could easily be eaten up by higher wages required to win labor’s support for a deal. And because one big merger could prompt a second — Continental Airlines is expected by many analysts to snap up United, Northwest or another carrier as a defensive gesture against Delta — any advantage provided by a bigger route system might be quickly neutralized.

As I write this, business reporters on MSNBC are saying that Continental and United are in talks for a merger which would make them the biggest carrier.
Oh and that itsy bitsy little detail that Northwest Airlines committed to the state of Minnesota last year that it would keep its headquarters in Minnesota for exchange for financial breaks .

Under a current agreement with the Metropolitan Airports Commission, the new Delta could be forced to immediately pay off $245 million in bond debt if the Northwest headquarters in Minnesota is closed.

News Alert: Happy Flight Attendants on NWA Flight

The demeanor of the flight attendants were so out of character for Northwest Airlines that I was compelled to say something. Turns out I was not alone.

My son Noah ,who was sitting several aisles away from me  on the flight, mentioned as we were waiting for our luggage that the flight attendants were  FRIENDLY.

Oh and they were FUNNY.

This was Monday. Three days before the airlines was scheduled to come out of bankruptcy.

During our conversation I told Noah that they were so nice that I actually said something to them. That's when Noah said he did too. Friendly and Funny NWA flight attendants deserve a comment.

Anyone who has had to travel on NWA during the turbulent last five years, knows that on the customer service side, they've had some mighty cranky flight attendants. Sometimes downright rude. There has been no hiding that these union employees were not thrilled they were pouring "one for the kipper."

But back to Monday's flight. It was ala Southwest Airlines. Joking around. Actually smiling and talking to passengers. It was so off[-putting that I mentioned it to the flight attendant who in an act of absolute generosity not normally seen on NWA, served me an entire can of Bloody Mary Mix sans the vodka

When I said how unusual  it was to see happy flight attendants she said, " we hear that a lot."

While NWA and their shareholders may start smiling a bit more, passengers shouldn't think that my Hartford to Minneapolis trip is an indication of a trend.

Your Global Travel News is reporting that even though NWA has survived its financial struggles, its battle with employees,who are none to happy in giving up $1.4 billion annually in compensation ,could still be its undoing.

"Employee rage swelled this month when the company revealed a management compensation plan that awards Steenland stock and options potentially worth more than USD$20 million.

“Northwest may be emerging from Chapter 11, but it has a long way to go,” said Anthony Sabino, a law professor at St. John’s University in New York.

“Much of the carrier’s unionized work force is tremendously unhappy. And in an intensely competitive and service-oriented industry such as the airlines, the bad blood could cost Northwest dearly, if not doom it altogether,” he said."

On Tuesday, the flight attendants begrudgingly agreed to a new contract. According to the Liz Fedor at the Star Tribune

"It is not a contract that any labor organization wants to pass to their members for a vote," said Andy Wisbacher, vice president of the Northwest branch of the Association of Flight Attendants (AFA).

But Wisbacher said the agreement -- the two sides' third attempt at a contract since 2006 -- passed partly because a rejection would mean the loss of a $182 million bankruptcy claim. He also said union leaders had run into legal roadblocks that prevented them from negotiating a better deal.

"We've been failed by the courts and failed by the National Mediation Board. That caused some flight attendants to vote yes," Wisbacher said."

According to the article, under the new contract a flight attendant with 15 years experience  who flies 75 hours a month will earn $35,433 a year.

Image Credit: Betty In The Sky With A Suitcase.

 

 

Is Northwest Airlines in the middle of a Snowball Effect?

Less than two weeks after Northwest Airlines apologized for suggesting that laid off employees save money by dumpster diving, company spokesman Dean Breest was at it again, " "Northwest apologizes for the inconvenience the delay caused the passengers."

This apology was for keeping 265 passengers stuck on a Northwest airplane at the Duluth, MN airport for 10 hours

The reasons for not allowing the passengers to deplane are sketchy at best. Someone reported that Duluth didn't have a portable stair to fit the plane, but then there was video of a portable stairway ( maybe it was the wrong size).

Northwest is remaining mum on the issue. However, this is not the first time that Northwest has kept folks on a tarmac for ridiculously long periods of time. In 2001, the airlines had to pay out $7.1 million   in a class action lawsuit from some of the 8,000 people who were stranded on planes for more than 8 hours during a snowstorm in Detroit.

At the time the lawsuit was announced in 2001, Northwest had this to say:

       Northwest, in announcing the settlement Tuesday, did not admit that its actions during the Jan. 3, 1999, storm were        inappropriate, or that the alleged claims had legal merit.

       The world's fourth-largest airline said it would rather put its time and money into serving customers and improving        technology than fighting a long legal battle.

Which brings us to last month when Blogher member Liza Sabeter  of Culture Kitchen was on a Northwest Flight trying to get to the Blogher conference.

First off, the flight was delayed yesterday 4 hours due to weather conditions. Ok. I can live with that. But the airline, instead of taking measures to ensure people got to where they were going or stayed in NYC until further notice, they took us hostage in the airplane FOR FOUR HOURS.

Yes people.

I was with hundreds of other passengers for fours hours on a Northwest Airlines airplane. Four hours which they refused to find a way to get us out of the airplane. Four hours they refused to get people to a non NWA gate so they could be at least out of an airplane and on the ground. Four hours which they decided were necessary so they would not have to go through the extra cost of customer service.

Not only that. The flight was supposed to leave at 5:30pm. It's 9:45pm and instead of getting to a gate as instructed, the pilot decides to depart to Minneapolis.

Her story gets worse from there. For Northwest Airlines it's as if they can't do anything right. Some call it the Snowball Effect.

Meanwhile Northwest Airlines Flight attendants are awaiting a ruling from U.S. District Court Judge Victor Marrero who temporarily barred them from going on a "chaos" strike. No word when that ruling is expected.

One thing Northwest can expect is that snowball could  get a whole lot bigger.

 

Image Credit: Flickr Member Sabihmir

Distributor of NWA's "101 Ways To Save Money" apologizes--sort of

As a followup to Wednesday's Post Northwest Airlines Encourages Employees to Dumpster Dive, I contacted NEAS,the company responsible for suggesting that dumpster diving is a great way to save money.

Here is their media response

 

As far as apologies go it is rather pathetic. Instead of acknowledging how incredibly insipid and offensive the booklet is, they apologize for the distribution and then have the audacity to finger-point the real responsibility to some unknown author. Give me a break!

Eventually they get around to saying they  apologize that "some of the information was not appropriate "but the kicker is they end up  this media memo by  putting the responsibility  right back on the folks who were offended by saying
" and was felt to be offensive"

Here's the deal. People didn't just feel it was offensive. It was offensive.

A requests for an interview was denied --the very cordial spokesperson assured me the memo would answer all of my questions and that the company was not issuing any further statements on the issue.

The big question is " If NEAS didn't write the copy, who did?"

Also, the dumpster diving was just one of many ludicrous suggestions. MN Headhunter has the list in its entirety.
 

Yin and Yang of the Airlines' Ban on liquids

Except for H2O ,there are solid substitutes for our favorite sundries. Check out my post at Blogher.