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Politics in Airline Boarding Process

Since 2017, three major airlines in US have made changes to their boarding process, in the face of different layers/tiers, ticket types and other privileges.

Here is a description of the mess before – “Under American’s old boarding call, Group 1 actually was the fifth group called for boarding, trailing the carrier’s elite frequent-fliers and first- and business-class customers who were subdivided into five groups of their own that all boarded earlier.”

 “Group 1 actually was the fifth group called for boarding”

What are the “new” procedures and how airlines value their customers?

American Airlines – 10 segments

Group Boarding pass type
ConciergeKey℠ members ConciergeKey℠
Group 1 First
Active duty U.S. military with military I.D.
(Business on a 2-class international plane)
Group 2 Executive Platinum
oneworld® Emerald℠
(Business on a 3-class plane)
Group 3 Platinum Pro
Platinum
oneworld® Sapphire℠
Group 4 Gold
oneworld® Ruby℠
AirPass
Premium Economy
Citi® / AAdvantage® Executive cardmembers
Travelers who bought Priority boarding
Group 5 (Preferred boarding) Main Cabin Extra (excluding Basic Economy)
Eligible AAdvantage® credit cardmembers*
Eligible corporate travelers**
Group 6 Group 6
Group 7 Group 7
Group 8 Group 8
Basic Economy to / from Europe
Group 9 Basic Economy within the U.S., Canada, Central America, Mexico & Caribbean

Delta Airlines – 7 segments

Pre-Boarding

Customers needing assistance or additional time to board, including families with car seats or strollers

Active Duty U.S. Military personnel with ID

Premium Boarding Zone

Delta One® customers
First Class customers
Delta Premium Select customers
Diamond Medallion® Members

Sky Priority Boarding Zone

Platinum Medallion® Members
Gold Medallion® Members
Delta Comfort+® customers
Flying Blue Platinum and Gold members
Virgin Atlantic Flying Club Gold members
Virgin Australia Platinum and Gold members
GOL Smiles Diamond members
SkyTeam® Elite Plus members

Zone 1

Silver Medallion® Members

Delta Corporate Travelers

Priority Boarding Trip Extra customers
Gold, Platinum and Reserve Delta SkyMiles® Credit Card Members
Flying Blue Silver members
Virgin Australia Velocity Silver members
GOL Smiles Gold members
Sky Team® Elite

Zone 2

Main Cabin Passengers

Zone 3

Main Cabin Passengers booked in T, X and V fares

Zone 4

Basic Economy Passengers (E)

United Airlines – 6 segments

Pre-boarding

  • Unaccompanied minors
  • Customers with disabilities
  • Active members of the military
  • United Global Services® members
  • Families traveling with children age 2 and younger
  • Premier® 1K® members

Group 1

  • Premier Platinum members
  • Premier Gold members
  • Star Alliance™ Gold members
  • Customers seated in premium cabins: United Polaris®, United First® and United Business®

Group 2

  • Premier Silver members
  • Star Alliance Silver members
  • Customers who have purchased Premier Access® or Priority Boarding
  • United℠ Explorer, Club, Presidential Plus℠ and Awards Cardmembers

Groups 3 – 5

  • Economy Plus®
  • United Economy®
  • Basic Economy*

* Customers who have purchased a Basic Economy ticket will be in the last boarding group, except for Premier members, Chase Cardmembers of qualifying cards and Star Alliance Gold members, who will still receive their priority boarding.

..

Just a reflection on the complicated business development efforts and corporate strategies… think about the internal slides behind the schemes

When Trump Didn’t Get The Border Wall Funding…

Source: Author, gofundme.com

A screenshot on Thursday Dec. 21 at around 5:45pm PST, nearly $10mn has been raised for “The Wall”… out of the $1bn target for the project on gofundme.com.

[The wall funding issue has been the center of government shutdown. The dispute around the funding escalated on Dec. 11 when Trump, Nancy Pelosi (leader of the House Democrats), Chuck Schumer (Senate Minority Leader) “publicly clashed” in oval office meeting.]

But Trump insisted on $5bn..  so $10mn is only ~0.2% of his goal.

The campaign creator mentioned that the government projects had been funded by private sectors before, i.e. Washington Monument repair of $7.5mn (kinda tiny compared to $5bn).

The approach was creative tho.

Drones In The Airport

Signature events will move regulation forward.

That is what drones will be facing after a catastrophic shut down of the second largest airport in UK due to a single drone.

While the drone came back every time the airport tried to reopen, the operator(s) hasn’t been found/caught.

An “effective” measure and procedure to prevent similar things will be formulated.

But problems won’t be solved.

I see drone issues more like gun issues – and eventually might be a “to-ban-or-not-to-ban” choice made by countries. Or a strict military control of technology.

This event will certainly make itself in the future history when regulations are put together.

Softbank Telecomm Unit IPO

Shares closed nearly 15% below the ¥1,500 initial offering price

The IPO raised ¥2.65 trillion ($23.6 billion), second only to the 2014 listing of China’s Alibaba. (WSJ article)

SoftBank Group has larger debt and commitments – investment as an obiligation.

Cash is the paramount consideration, especially in an interest rate rising environment.

Connection with huawei and uses of its equipments added to the hit.

Does US have 3% Checking Account?

Robinhood recently prepared to launch its stunning checking & saving offering for cash management with a 3% rate.

That is an astonishing number compared with regular checking accounts (and saving accounts). Industry average is 0.08 percent yield on U.S. checking accounts and the 0.1 percent average on savings accounts (find more about rates here on bankrate.com).

Comparison provided by Robinhood | Source: checking.robinhood.com cached by Google

However, the comparison didn’t last long… as Robinhood pulled back and slowed down it official launch. The center question is that “accounts look like bank accounts, (but) they aren’t.”  Below is the description at the bottom of the website.

Robinhood Financial LLC and Robinhood Crypto, LLC are wholly-owned subsidiaries of Robinhood Markets, Inc. Equities and options are offered to self-directed customers by Robinhood Financial. Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org. Cryptocurrency trading is offered through an account with Robinhood Crypto. Robinhood Crypto is not a member of FINRA or SIPC. Cryptocurrencies are not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC insurance

It is not FDIC protected and it is reported that – “the head of the Securities Investor Protection Corp. (SIPC) told CNBC on Friday that the start-up didn’t contact his office ahead of the product launch, and to his knowledge Robinhood had not contacted the SEC, either.”

While regulation is an issue, another question is – whether 3% reasonable / doable?

Historical CD Interest Rates – 1984-2016 | Source: bankrate.com

US has been through years of low-interest environment; people are not familiar with 10% or 5% interest rate back then. But after Fed’s meeting this week, it is highly likely that there is another 25bp raise, pushing fed funds rate into a range of 2.25 to 2.50 percent.

Here is a brief history of four increases this year (updated in Jan 2019)

Date Increase Decrease Level (%)
December 20 25 0 2.25-2.50
September 27 25 0 2.00-2.25
June 14 25 0 1.75-2.00
March 22 25 0 1.50-1.75

And a history – Intended federal funds rate change, 1990 to present.

I should say 3% in 2019 is not undoable. But the core difference is a marketing issue. Robinhood could invest in higher yield products.

But in consumers’ view, it is truly disrupting and may level up the playground for all players in this field.

The time of easy money is gone. The startups or new initiatives with better and sustainable solutions (usually tech-oriented) are attacking the incumbents. Robinhood may or may not be the one (and this may not be the exact right approach), but the industry needs to be prepared.

What Google Can Tell Us (Amazon & Walmart & iPhone)

What Google can tell us

Source: Google Trends
  • holiday season is king and this year is strong (as expected)
  • Walmart is living well; and it becomes more competitive in Thanksgiving shopping
  • Apple’s iPhone in 2018 not as attractive

*Amazon may have lots of volume directly through its own platform