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February 2003

Frequent Flyer Program News
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HEADLINE NEWS

In the face of possible conflict in the Middle East that has caused a clear fall in demand for travel to Europe and the target region reflected in relatively low pre-bookings for the first-quarter 2003. Depending on the situation and demand, travel to the Persian Gulf region will be off by 10%-15% and long-haul routes by up to 20% according to frequency.

For only the second time since it was established in 1951, US Dept. of Defense activated Stage 1 of the Civil Reserve Air Fleet to provide civil transport aircraft for military airlift duties. DOD said airlines involved are American Airlines, American Trans Air, Continental, Delta, Hawaiian, North American, Northwest, Omni Air International, United, US Airways and World Airways.

Patricia Friend, International President of the Association of Flight Attendants, AFL-CIO sent the following letter on Feb. 7 2003 to conferees on the Omnibus Appropriations bill to illuminate stealth attempts to weaken vital flight attendant security training provisions and put millions of American lives at risk of another terrorist attack on the airline industry. More than 50,000 flight attendants at 26 airlines join together to form AFA, the world's largest flight attendant union. Visit the AFA @ http://www.afanet.org/.

Travelers now have an answer to the wave of more stringent "no-cancellation" rules that were recently introduced by the airlines: a new Air Ticket Protection Plan from Travel Guard International, the nation's largest provider of travel insurance and assistance services. With many carriers now requiring that changes to nonrefundable tickets be made by midnight of the original departure date, or charging fees as high as $100 for standby on the original day of travel, travelers are at higher risk than ever of losing their travel dollars if forced by unforeseen circumstances to delay or cancel travel. The plan reimburses travelers for up to $100 in ticket change fees and up to the full ticket cost if travel is canceled or interrupted for a covered reason such as illness or injury, severe weather or jury duty. The plan also includes reimbursement for additional accommodations required and expenses incurred due to travel delays of 12 hours or more, and for essential personal items if baggage is delayed for 24 hours or more.

New international arriving passenger manifest information being sought from airlines by the US Immigration and Naturalization Service under a recent notice of proposed rulemaking is duplicative, of questionable value, and illegal in many countries, the International Air Transport Assn. charged. The proposal would create lengthy delays for both US and non-US citizens trying to board international flights to or from the US.

Travel Guard Assistance, Travel Guard's 24-hour, toll-free hotline for assistance with emergency medical needs, cash transfers, replacement of lost travel documents, pre-trip health and safety advisories and live e-mail and phone messaging to family and friends, is also included, as well as Livetravel, Travel Guard's 'round-the-clock hotline for making emergency travel changes such as rebooking flights, hotel reservations and rental cars, and tracking lost luggage. For more information about the Air Travel Protection Plan, travelers can visit www.travelguard.com, call Travel Guard's World Service Center at 1-800-826-4117 or see their travel agent.

A new carrier, Air Arabia, was launched officially this week at Sharjah International Airport. Its establishment was the Sharjah government's response to "the market demand and to fill a void that was felt by the community in Sharjah and the northern Emirates."

Air Berlin will launch twice-daily 737-800 services April 6 2003 between Munich and its expanding hub at Palma de Mallorca. Connections will be offered to Madrid, Barcelona and Malaga as well as to Ibiza on five days. In addition, Alicante, Malaga and Ibiza will be served thrice weekly nonstop from Munich.

Air Canada will operate a daily nonstop seasonal service between Toronto and Copenhagen from May 27 until Oct. 24 2003 using a 767.

Air Canada began flights on a code share basis via Rome to Lamezia, Terme, Catania, Palermo and Venice in cooperation with Air One, a Lufthansa partner airline.

Air France added services on most domestic routes to reflect Air Lib's shutdown. Air Lib's fleet has been grounded since last Thursday Feb. 6 2003 and the court is analyzing the carrier's future. AF also added a daily frequency from Paris Charles de Gaulle to Reunion, while Corsair is adding capacity on Air Lib's other long-haul route, Paris-Guadeloupe-Martinique.

Air Lib's entire fleet stayed grounded yesterday after its operating license expired Wednesday Feb. 5 night when the French commercial aviation authority declined a further extension to France's second-largest scheduled airline.

Air New Zealand is withdrawing its daily Sydney-Los Angeles services from April 27 2003 amid continuing uncertainty about current market conditions, a potential Iraq war and its proposed alliance with Qantas. ANZ will continue to code share on its Star Alliance partner United's services through Sydney to Los Angeles, though this arrangement will be phased out within two years if ANZ gains approval for its commercial and equity tie-up with Qantas.

Air Tahiti Nui took delivery of two firmly ordered A340-300s as part of its "fleet modernization and expansion." They will join A340s already in service on flights to Japan and the US West Coast as well as on one-stop services to Europe and regional routes to New Zealand.

Alaska Airlines will begin daily service between Orlando and Seattle using a 737-900.

Alaska Airlines this week moved to simplify its fare structure and slash its highest business fares by up to 50% in a variety of markets. The carrier said its lowest-priced business fare between Seattle and Boston, which requires only a three-day advance purchase, was cut from $839 to $499. Its equivalent Chicago-Anchorage fare was pared from $1,073 to $574. The new structure also reduces the number of individual coach fares to as few as six, down from as many as 15 in some markets. The move follows similar actions by, among others, Frontier, United, American, Delta and America West.

Alaska Airlines inked a marketing agreement with AT&T Wireless that allows customers to earn 5,000 frequent-flier miles by activating an qualifying AT&T Wireless plan.

Alaska Airlines and Cathay Pacific Airways entered into a partnership that allows members of each airline's frequent-flier program to earn and redeem miles on the other beginning Feb. 19 2003.

Alitalia will begin passenger demonstrations during Feb. 2003 of AirTV's in-flight Internet access following the service's successful validation on one of the airline's 767s. Alitalia demonstrated the AirTV e-mail system during a test flight in Dec. Internet connection was from a seat in Magnifica (business) class using a laptop computer.

America West Airlines will begin a daily nonstop service between Las Vegas and Eugene, Ore., March 1 2003. America West Express will provide the service that will be operated by Mesa Airlines using a CRJ.

America West Airlines will add new daily nonstop flights between Phoenix and Billings, Medford and Pittsburgh beginning in April and May. The airline will add a third daily nonstop between Phoenix and Cleveland in May 2003. Also, America West Airlines will eliminate hub operations at Columbus, Ohio, and as a result will phase 12 regional jets out of the America West Express fleet.

Following in the footsteps of America West and Northwest Airlines, Delta Air Lines will team with Gate Gourmet and test selling branded food items this week in economy class on its New York JFK-Ft. Lauderdale flights to gauge customer preference.

America West Airlines, the nation's second largest low-fare airline, announced Feb 10 2003 that it is eliminating hub operations in Columbus, Ohio, and, as a result, phasing 12 regional jets out of the America West Express fleet.

American Airlines will begin three daily nonstop services Sunday through Friday from Orange County to New York JFK on April 6 using a 757. The carrier will operate two daily services on Saturdays. The move is a response to inroads in the transcon market by JetBlue Airways.

American Airlines began interline e-ticketing with US Airways and Alaska Airlines enabling customers to use a single e-ticket when their itineraries include travel on both carriers. Continental Airlines implemented interline e-ticketing with US Airways. Northwest Airlines launched interline e-ticketing capabilities with Alaska Airlines and Horizon Air.

Asiana, which already code shares with All Nippon and Singapore Airlines, will start code sharing this summer with United Airlines on transpacific routes connecting to major cities in Japan and 20 routes in the US. Asiana President and CEO Park Chan-Bup said code sharing with Air Canada to Vancouver will begin in the second half of the year.

Australian Airlines, Qantas's low-fare subsidiary, will launch its first major expansion with the addition of two 767-300s, boosting its fleet to six. It will commence service to Bali from Sydney and Melbourne by the end of July and introduce international service between Cairns and Sydney from midyear. In addition, it will increase services on some existing routes. Australian is in preliminary discussions with Sabah authorities and is considering the launch of service from Cairns to Kota Kinabalu and on to Singapore. The carrier also said it is considering operating services between Cairns and Shanghai beginning in Oct. Qantas withdrew from China in 2001.

Austrian Airlines Group and Lufthansa teamed up to try to stem the rising tide of budget carriers. The two will launch a fare structure next week that offers low-cost tickets on all regularly scheduled full-service flights between Germany and Austria. Effective Feb. 24, tickets on Lufthansa will be priced from eur139, inclusive of taxes/surcharges, for roundtrip travel on flights from 12 German airports to six in Austria. Expansion of the offer to other European cities is still under study. No minimum-stay or weekend travel conditions apply under the new price structure and fares are unrestricted and open-ended. Today, a typical Lufthansa weekend fare from Frankfurt to Vienna costs eur293 for a flight this Friday with return Monday, while for a same-day return itinerary on Friday the fare would be eur917. Austrian Airlines said the pricing initiative will include flights from Austria to London from eur150 and to Dublin from eur190 plus unspecified taxes/surcharges.

German no-frills startup BerlinJet tossed in the towel and suspended operations on Feb. 20. The company, after numerous delays, initiated flights Feb. 10 2003 from Berlin-Schoenefeld to Munich, Milan and Paris with aircraft leased from Icelandic carrier MD Airlines.

Cathay Pacific and British Airways, both oneworld members, expanded their codeshare agreement to include flights to Copenhagen, Lisbon and Seoul. Beginning March 4 2003, Cathay will place its code on select BA flights between London Heathrow and Copenhagen and Lisbon. At the same time, BA's code will be placed on Cathay's daily flight between Hong Kong and Seoul.

Cathay Pacific's February/March Deal of the Month to Hong Kong and Bangkok makes experiencing these exciting destinations more affordable and convenient than ever before. Priced from just US$649.00 from Los Angeles or San Francisco, and US$699.00 from New York's JFK, (not including taxes and fees ranging from US$57.40 to US$79.50 per person), the current Deal of the Month offers roundtrip Economy Class travel to Bangkok (with free Hong Kong stopovers in both directions) on sale from February 11, 2003 to March 11, 2003 or until deemed sold out. Travelers will experience Cathay Pacific's world-renowned service, and discover first hand why the airline is a recipient of numerous industry awards. Travel must be completed between February 11, 2003 and April 12, 2003. Travel must originate at a Cathay Pacific gateway city in the USA (Los Angeles, San Francisco or New York) and tickets must be purchased online at: www.cathay-usa.com/dotm where additional information is available. Some restrictions apply.

Continental Airlines and Cape Air inked a codesharing agreement on selected flights from San Juan to St. Thomas beginning March 8 2003. Continental will place its code on Cape Air services from San Juan to Ponce, St. Thomas, St. Croix and Tortola. From St. Thomas, codeshare flights will include St. Croix and Tortola. Cape Air operates Cessna 402s with seating for nine passengers.

Continental Airlines, seeking to offset "dramatically high fuel prices," announced a fare increase of $10 each way effective immediately the week of Feb. 17 2003.

Continental Airlines has contracted with ITA Software to provide a pricing system for continental.com that offers customers a broader range of schedule and fare choices that more closely match customers' price-search requests. ITA's search engine displays more choices of schedules and fares available between markets compared to typical pricing systems. "With ITA's powerful airfare shopping and pricing software, our 'Search By Price' feature presents more trip and fare options that more closely match our customers' desired departure times," said Bill Brunger, Continental Airlines vice president of distribution planning and revenue support. "The addition of ITA's system to the new continental.com makes the travel shopping experience for Continental customers the best in the industry." ITA Software, which uses powerful Linux-based technology, optimizes customers' seat availability queries to Continental's inventory system, producing greater schedule and airfare choices for consumers and providing Continental with an economic and efficient way of managing online demand.

Continental Airlines announced Feb. 11 2003 that it will inaugurate twice-daily nonstop service between Northwest Arkansas Regional Airport and Continental's New York hub, Newark Liberty International Airport, effective May 2, 2003. Roundtrip Continental Express service between Northwest Arkansas and the New York City area's most modern and accessible airport will use the new extended-range version of Continental Express' fast, quiet 50-passenger ERJ-145 ExpressJet, featuring a comfortable interior with only window and aisle seating.

Delta Air Lines pledged to "reinvent the airport experience" with significantly reduced check-in wait times at its top 81 airports. As part of the plan, the carrier intends to roll out more than 400 additional check-in kiosks this year and enhance their functionality to include international check-in and fee collection. It also intends to assign more staff to airport lobbies to direct customers as needed. Gate readers will be able to provide customers who have experienced a flight delay or cancellation.

A relaxing getaway trip for two to the Beaches of South Walton, Fla., awaits the lucky winner of a special on-line sweepstakes at flyasa.com and ecityoftravel.com. The travel sweepstakes is provided by Delta Connection, ecityoftravel.com and the Walton County Tourist Development Council. The winner of the Beaches of South Walton Sweepstakes will receive an exclusive travel package for two, including round-trip air travel to Ft. Walton Beach on Delta, Delta Connection or Delta Express; two nights' accommodations at the Hilton Sandestin Beach Golf Resort and Spa; a three-day Avis car rental; a $100 gift certificate to Sandcastles Restaurant; and a complimentary spa treatment for two at Serenity by the Sea Spa, Salon and Fitness Center. Between Feb. 11 and March 28, 2003, customers can enter via flyasa.com to win the Delta Connection Beaches of South Walton Sweepstakes, compliments of Delta Connection and the Walton County Tourist Development Council.

Financially struggling Deutsche BA, operating as dba, said Friday Feb. 7 2003 it is scrapping a total of 500 flights in Feb. and March--the equivalent of parking two of its 737-300s--in response to stagnant demand over its German route network. EasyJet denied reports that its planned takeover of Deutsche BA is on the verge of collapse after talks with pilots union Vereinigung Cockpit failed.

Finnair adds a fifth MD-11 to its fleet the week of Feb. 17 2003 and will launch thrice-weekly flights in Sept. between Helsinki and Shanghai to become the only oneworld carrier to serve the Chinese business/financial center. Weekly Beijing frequencies will rise from five to six in June and go daily from Sept. Hong Kong is served thrice weekly.

Frontier introduced a "new, simplified pricing structure" for all domestic fares into and out of Denver International Airport in an attempt to "leverage" its cost structure to provide savings that will increase demand.

Hawaiian Airlines will install self-service check-in machines at two terminals each at Lihue Airport on Kauai, Hilo International Airport and Kona International Airport. Eight of the machines previously were installed at Honolulu International and six at Kahului International.

Hooters Air will begin operations on March 6 with its inaugural flight from Atlanta to Myrtle Beach, S.C., using Hooters Air One, a 737 painted orange and white. Fares are set at a flat $129 one way. Initially the carrier will provide service only to those two destinations, but service from Newark to Myrtle Beach through Atlanta will begin March 20. Aircraft will be manned by a flight crew consisting of two pilots, three flight attendants and two Hooters Girls wearing traditional restaurant uniforms.

Iberia and British Airways extended their code share agreement to cover additional routes. From Feb. 20 2003 the BA code will be added to Iberia's services between London Heathrow and Seville, Valencia, Malaga, Santiago de Compostela and Bilbao. Iberia will add its code to BA services between London Gatwick and Madrid, Barcelona and Bilbao. The arrangement also will enable Iberia to add its code to nine services operated by BA franchise partner GB Airways: Gatwick to Almeria, Girona-Costa Brava, Gran Canaria, Lanzarote, Mahon-Menorca, Malaga, Seville and Valencia and Heathrow to Malaga.

Interstate Jet today announced Feb. 11 2003 direct service from New York's Stewart International Airport to Los Angeles, California. The service will begin on April 3, 2003 and flights will be daily, except Tuesday. Fares start at a low $99 each way with walkup fares as low as $219 each way. The aircraft is a Boeing 757-200 with 215 seats in single class configuration.

Japan Airlines and American Airlines agreed to expand their code sharing arrangement to include Tokyo-Los Angeles services as well as to increase frequency on the Tokyo-Dallas/Ft. Worth route from April. Under the agreement announced Monday, JAL will place its code on AA services between LAX and Tokyo, increasing JAL's own current weekly total of 16 flights on the route to 30 one-way flights per week. On the Tokyo-DFW route where the two carriers already code share, AA will increase the flight frequency from 22 to 24 per week from April 2003.

JetBlue Airways will add new daily service between Long Beach and Ft. Lauderdale/Hollywood International Airport May 8 2003. Additionally, in a direct challenge to Delta Air Lines, JetBlue will begin three daily flights between Long Beach and Atlanta that day.

JetBlue Airways will launch its fourth and fifth daily flights between New York JFK and San Juan on May 22 and June 12 respectively. Sixth and seventh daily flights between JFK and Buffalo will be added on June 26 2003.

JetBlue Airways added two daily flights, one on Feb. 20 and one on June 26 2003, between New York JFK and Long Beach. Additionally, the airline will launch two daily flights, one on May 1 and the other on June 12, between JFK and Oakland. Also on May 1 a third daily flight between Washington Dulles and Long Beach will be added.

KLM will launch five weekly services between Amsterdam and Thessalonica April 3 2003 with 737s. Transavia formerly operated the route.

Lufthansa was forced to cancel 30 flights, the first week of Feb. 2003, affecting 3,000 passengers owing to a 3-hr. morning walkout by airport ground staff at Berlin's airports called by public employees union ver.di. The "warning strike" shut down Berlin Tegel, Tempelhof and Schoenefeld. In total, 102 flights were canceled at the three airports, inconveniencing 5,000 travelers; other airlines affected included Air France, Air Berlin, germanwings and Hapag-Lloyd Express.

Maersk Air is planning to sell its loss-making UK subsidiary Maersk Air Ltd., The Financial Times reported. MAL has operated from Birmingham as a British Airways franchisee since 1993 and the agreement was renewed for five years in Aug. 2001.

Mesa Air Group will operate as a United Express codeshare partner in Denver under a five-year revenue guarantee agreement detailed in an MOU signed with United Airlines. Mesa will provide 10 Dash 8-200s beginning in July. They will replace Air Wisconsin's Dornier 328 turboprops, which are being retired, but United said Air Wisconsin will continue to provide regional jet service throughout the United Express system. The deal marks a homecoming for Mesa, which was dropped from the United Express franchise in 1998.

Midwest intends to launch a low-fare airline in the third quarter that will serve "high-demand leisure destinations" with a fleet of five MD-80s. Seat pitch will average 33 in. and customers will receive a complimentary snack and beverage. Midwest is a niche airline that operates DC-9 and MD-80 aircraft with a spacious 2-2 configuration throughout the cabin offering true first-class service at economy fares, Midwest was hit hard by the business travel downturn as well as new post-9/11 security requirements that raised the cost of catering. More recently it has come under pressure from AirTran, which began operating into its Milwaukee base last year.

Northwest Airlines imposed a $10-each-way fuel surcharge on all of its published discount fare types systemwide. The surcharge also applies to discounted BizFlex fares. It does not affect full coach, World Business Class, first class, walkup and domestic three-day advance fares, NWA said. Similar moves were made by American Airlines, US Airways and United Airlines. Continental Airlines attempted to impose an across-the-board $10 fuel surcharge earlier but withdrew it when Northwest did not match.

Qantas and Air New Zealand face the threat of disrupted international flights next week as employees plan selective strike action over wage negotiations. Qantas's 4,000 flight attendants, represented by the Flight Attendants Assn. of Australia, will stop work for 14 hr. from midnight Feb. 20 2003 as part of their campaign for a 13% total pay raise and other enhancements.

Ryanair is cutting its daily service between Shannon and Frankfurt-Hahn to one flight a week because the Aer Rianta airport monopoly at Shannon has refused to withdraw its proposed eur6 ($6.46) per passenger cost increase on the route. The airline also concluded a new long-term, low-cost agreement with Kerry Airport and will start a daily return service between Kerry and its German base April 1 2003.

Ryanair, the Dublin based budget carrier also announced that it reached agreement with KLM to buy buzz, the airline's unprofitable low-fare carrier. Buzz currently operates a network of 21 routes from London Stansted to points in Germany, Holland, France and Spain, as well as two French domestic routes.

Singapore Airlines is replacing its four weekly one-stop flights from Manchester to Singapore with daily direct services from March 31 2003 using new 777-200ERs.

Southwest Airlines will introduce new nonstop service between Baltimore/Washington International Airport and San Diego July 6 2003. The carrier also will add its 12th daily nonstop flight between BWI and Providence, creating one-stop service between Providence and San Diego.

Swiss International Air Lines announced the week of Feb. 24 2003 a "package of emergency measures" including elimination of around 700 positions and the grounding of 20 aircraft. The actions are effective March 30 2003, almost a year to the day after the carrier assumed the former Crossair and Swissair brands, and also encompass schedule reductions at its bases at Zurich, Geneva, Basel, Bern and Lugano. The cuts are necessary owing to the "enduringly gloomy economic climate and deep crisis" in the global aviation industry, the airline said.

Out of Zurich the carrier intends to reduce frequencies to 11 cities and discontinue connections to 11 more. Swiss will lower frequencies on routes to seven cities from Basel and connections to 11 will be discontinued. The airline said it will not transfer any destinations from Basel to Zurich. From Geneva, connections to Rome will be increased but frequencies on the Basel and Lugano routes will be reduced. In addition, a morning flight to Zurich from Lugano will be added but the midday flight to Geneva from Lugano will be cancelled. There will be only one daytime connection between Bern and EuroAirport Basel.

Swiss International Air Lines changed the name of its new low-fare service from Swiss Easy Savers to Swiss Europe Savers following threats by Stelios Haji-Ioannou to request an injunction against the airline unless it removed the promotion. Haji-Ioannou argued that the Swiss Easy Savers infringed his trademark and unfairly capitalized on the reputation of his investment vehicle EasyGroup.

United Airlines will expand its code share with Star Alliance partner Mexicana Airlines. Mexicana will place its code on United's five weekly Miami-Buenos Aires flights beginning Feb. 22 2003. United said it will go to daily services after it receives approval from the Argentine government.

US Airways and United Airlines further expanded their marketing partnership with additional code share flights. Through the new phase, United will have access to 131 new flight segments, including US Airways Shuttle service between Boston, New York and Washington. US Airways added 126 new flight segments in the eastern and southeastern US, including Atlanta and Baltimore from Denver and Chicago. The carriers said more code share flights will be introduced later this month.

US Airways began nonstop service the week of Feb. 17 2003 between Boston and San Juan and between Philadelphia and Grand Bahama Island using A319s last weekend. US Airways also said it will introduce Boston-Cancun and Boston-Bermuda service in the spring.

US Airways will add a fourth daily Reagan Washington National Airport-Orlando flight April 6 using a 737-400. It will launch a fourth daily flight between Reagan National and Tampa on the same day using a combination of A319s and A320s.

US Airways introduced daily nonstop service between Philadelphia and Freeport on Feb. 15 2003 using an A319 and US Airways Express will add more frequency of service between Ronald Reagan Washington National Airport and three Florida destinations -- Jacksonville, Tampa and Orlando, beginning on April 6, 2003.

Virgin Blue stepped up pressure on Qantas and Air New Zealand to provide greater incentives for new entrants on transtasman and domestic New Zealand routes.

WestJet will launch daily nonstop service between Montreal and Calgary April 24 2003, four weekly flights between St. John's and Moncton June 16, three weekly flights between Gander and Moncton June 17, three weekday and two daily weekend nonstop flights between Montreal and Hamilton and a seasonal daily nonstop between Montreal and Vancouver July 21 2003.


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Sources: Airlines, Airports,
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