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Chris McGinnis of Travelskills.com Discusses Trends in Flying

Aired August 23, 2002 - 14:16   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ANDERSON COOPER, CNN ANCHOR: I don't know if you have heard this news yet today, but a new airline alliance is in the making. Delta is forging a deal with rivals Continental and Northwest. Now, the plan could allow the trio to tap new resources for cash and offset stronger competition from other airlines. The new sky team alliance would allow consumers to redeem their frequent flyer miles on any of those three carriers.
Some analysts say the airline pact will create unnecessary repetition. The deal also has the potential of increasing regulatory scrutiny of the airline industry.

Chris McGinnis joins us now with his insights.

Chris, what does this mean for the traveler out there?

CHRIS MCGINNIS, TRAVELSKILLS.COM: What the airlines are trying to do is form what's known as a code-share alliance. This is a term that is very confusing to most travelers. It would be hard for most travel agents to explain to you what exactly it is. Basically, airlines are trying to sell each other's seats and buy each other's seats. For consumers, the benefit to this really is only that it is easier to earn and redeem frequent flyer miles. The bad thing is that it is confusing. If you buy a ticket from Delta, for example, in Atlanta and you want to fly to California, you may go out to the airport and get on a Continental plane. It is confusing to consumers.

COOPER: Do you know -- it's very early days in this, and you may not know how this is going to work. But if you have Delta sky miles and you have got Continental airpass miles -- whatever they call them...

MCGINNIS: Right.

COOPER: Are you suddenly going to get a new number, that's all just going to be one number for all those, or are you going to be able to mix and match?

MCGINNIS: I think that each airline will continue to have its own specific frequent flyer program. That would happen if the airlines actually merged, and we are not talking about a merger here; it is simply a code-share or a marketing alliance. So the good thing is that it would be easier to earn Delta miles. So if you flew from Atlanta to Mexico City and Delta didn't do that route, you do it on Continental, but you'd still eastern Delta miles, because you are buying that ticket from Delta airlines. COOPER: There is also some news today that might be of interest to frequent travelers, especially some business travelers. A lot of airlines are trying to squeeze out every last penny they can. I believe Continental and Delta are doing away with something called no favor, no waiver. What is that about?

MCGINNIS: That's right. Well, Delta did this about four years ago, and Continental stepped up to the plate this week and said that they were no longer going to do favors and waivers. This particularly affects frequent travelers, those people that are very good customers of the airlines. They are used to kind of the airlines bending the rules every now and then, and maybe giving a deal at 13 days instead of 14 days, or giving an upgrade off of a fare that typically doesn't qualify for an upgrade. What the airlines have said here is that no, they are not going to do that anymore; if you want these perks, you are going to have to pay for them -- period.

COOPER: And you are going to also have to pay for excess baggage now, even more than you did in the past, right?

MCGINNIS: There is a whole -- what I am calling this is cafeteria style pricing by the airlines. So you are going to have a very basic product offered to you by the airlines. And if you want the perks, you are going to be asked to pay for the perks. So if you want to carry an extra bag, you are going to have to pay for that. If you want a meal, I don't see them in the too-distant future; we'll probably see people or airlines charging people for meals on the flights. They are already charging for cocktails. They are set up to do it. I don't see that as an impossibility.

COOPER: These days, a meal seems like a luxury. You are lucky if you get thrown a bag of peanuts and a half smile.

Southwest Airlines, though, now, kind of counter to the trend, they are saying that they are lowering fares for business class.

MCGINNIS: Right. What they did was they lowered their most- expensive fare, which is their walkup fare. This only applies to about 1 percent of all Southwest Airlines flights, so it is a very small percentage of their business. But it makes a statement to business travelers out there that are tired of paying $1,000 when they walk up and they want to fly from Chicago to Los Angeles, for example. Now they will be able to do that with some type of insurance that the fare is not going to cost any more than $299, at least on Southwest.

Now, a lot of other airlines have matched that. And we'll have to see, you know, how widespread that goes. Right now, they only matched it in markets where they compete with Southwest Airlines.

COOPER: When Southwest did that, I imagined hearing groans from the boardrooms of some of the other major carriers.

MCGINNIS: Because typically, the major carriers make the bread and butter from these frequent travelers that are used to paying $1,000 for a walkup fare.

Chris Mcginnis, thanks a lot.

MCGINNIS: Thank you.

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