September 3rd, 2015

Flying with children

After posting about our recent trip, it occurred to me to ask myself, Self, is anyone _else_ blogging about traveling with their kids that doesn't involve finding the absolutely lowest fare and fewest fees possible? Because I don't need to read any more horror stories like that; that was what my childhood involved (also: train travel from Seattle to LA, on a train that had a climate control issue. The heat was stuck _on_ while we were in California. In the summer). Turns out, googling "business first children" finds a whole lot of people who pointed into business or first and then complained about a crying child or children. Not _precisely_ what I was looking for!

There are some sites that provide charts for most family friendly airlines (jetBlue and Virgin America tend to do well in these comparisons. I guess that explains why we always fly jetBlue domestically!). I had not realized that kids-board-first as a policy had pretty much gone away. This article from 2011 at NYT reminded me of a horrifying incident that first sent me to SouthWest and then to jetBlue.

http://www.nytimes.com/2011/11/06/travel/flying-with-children-the-bad-and-the-worse.html?

"Last February, US Airways placed Ms. Black and her two children, ages 5 and 2, in the center seats of three different rows in different parts of the plane for a five-hour flight to Tucson — an experience Ms. Black chronicled in a series on her blog, ChildWild. After a flight attendant insisted that the family take their assigned seats — which caused the children to cry, since they were separated from their mother and sitting between strangers — Ms. Black ultimately managed to commandeer seats for the three of them together, but only after the entire plane had boarded."

I only had one child, an infant in a carrier for whom I had _bought a seat_ when this happened to us. I forget which legacy carrier we had picked to fly east to show off T. to R.'s family (we were living in Seattle at the time, so this would have been 2005 or 2006), but even tho we had pre-picked a row, they changed aircraft, bounced all the seats and we all had center seats in different rows. So a _baby_ in a _carrier_ for whom we had bought a seat was located many rows away from either of us. Flight crew unsympathetic, but we eventually convinced some passengers to move around, probably because they didn't want to be responsible for the infant. I swore up and down I wouldn't fly that carrier or any other legacy carrier (once I realized they all had the same policies) again, and other than flying Delta overseas twice (in the post-fee era, and we always pay for upgrades to make sure this can't ever happen again), instead opting for Southwest to get gang boarding. I figured if we didn't enter a flight that had originated elsewhere, and I bought the ticket far enough in advance to guarantee an early boarding group, that would be safe. We liked Southwest, but started flying jetBlue despite the assigned seating, once I was clear that their policies on rearranging things wouldn't generate the same problem. We have had only one seating problem with them, and it was a ludicrously complex last minute weather related thing in February and they worked insanely hard to fix it so I'm not complaining.

There is an airline that has a child-free (no one 12 and under) section, but it is only on some very long distance flights (Malaysia Air and maybe one other carrier in the same region). There are also airlines which actively market to families -- I've seen at least one carrier serving Australia that had a row of three seats that you could make up as a combo bed that would let one adult (pictured always as a mom) and two kids lie flat. Looked cool, but not on any flights I wanted to take.

This BI listicle covers the Air New Zealand cuddle class seats, which may be the current version of what I remember from some years back:

http://www.businessinsider.com/how-are-airlines-making-economy-class-flights-more-comfortable-2015-6

Lately, I've become a lot more aware of policies that identify something unfortunate, then "solve" that "problem" by trying to make it "go away". These policies can create temporary relief, but often the long term consequences are far worse than just tolerating the unfortunate situation. It's almost always better to try to understand why the unfortunate thing is happening, and then move it to some place where That's Now a Good Thing, or provide whatever is being demanded by the unfortunate, or whatever. Banning children from airplanes is a particularly bizarre thing to ask for, and most people who have suffered through crying children on airplanes understand that it is a bizarre thing to ask for and so they don't. Part of the bizarreness is wrapped up in what should be obvious: a family that can afford to pay (in dollars) for all its members is more important to the bottom line than an individual (who, in a lot of the conspicuous complaints on line, didn't even pay for the seat he was using, at least not with dollars). Further, the family that flies is a family that is producing a future generation of fliers, that will be important to the airlines (apostrophize at will) future existence and profitability. Pissing them off gratuitously is probably a bad idea, especially since adults with young children tend to establish new brand loyalties that then stick for decades and have a good chance of being passed on to the kiddos at least until they hit quarterlife.

"Cuddle Class", Malaysia Airs family cabin on the same flights that ban 12 and under from one section of the plane (why is the family cabin never mentioned? It has extra bathrooms) are both efforts to market to families: rather than "banning" the problem away, it tries to find a way to help everyone be more comfortable. Call it innovation. Call it customer service. I don't care what you call it. But it's sure a lot more appealing that banning kids from airplanes or even "just" business/first.

ETA:

This is a design idea only:

http://thedesignair.net/2014/10/09/thomson-airways-punches-above-its-weight-with-radical-new-cabin-concepts/

This is also interesting: "On-board kids’ club – bringing Thomson and First Choice child care expertise to the skies with a fully trained member of the crew to help parents keep the kids entertained with arts, crafts and quizzes that relate to the destination." If the crew is stuck dealing with kids anyway, train them and charge extra to passengers with kids to pay for it -- or figure the benefit is to all, and roll it into everyone's ticket price.

The family cabin, especially if placed at the rear of the aircraft, could be a real winner, by allowing engine noise to cover the racket coming out of the booth. A lot of babies sleep better near the back also. And a long, long ways from business/first up front, while providing a big premium experience.

ETAYA: This separating of parents from kids thing just doesn't seem to go away. It's weird.

http://www.huffingtonpost.com/corinne-mcdermott/airlines-respond-about-families-planes_b_1547252.html

And it has been an issue for a long time (I encountered it before 2008, when this forum got into it: http://www.flyertalk.com/forum/travel-children/903921-airline-regulation-children-seating.html. Discussion interesting, because the risk is apparently that adults won't exit the aircraft during an evacuation drill without their kid and will disrupt the flow, so they must be near their kid. Kids apparently tend to do okay, altho I cannot believe that is universal and my kids both have dx) -- I had even pre-booked three seats together, which the airline then broke up when they switched aircraft. I should also add, T. was in a carrier, which meant that he _had_ to be in a window seat in order to comply with FAA regs on carriers on airplanes. Yet the airline -- knowing the situation -- had assigned him a center seat.

I will end with a chuckle -- the Boris Johnson story is hilarious, as an FA attempted to move him away _from his own children_ as part of their No Men Next To Unaccompanied Minors policy.

http://www.forbes.com/sites/joshuagans/2012/08/14/who-can-sit-next-to-children-on-flights/

Here's an Idea for Dealing with a Hypothetical Ban on Kids in Business/First

Obvs, the slummy way to do this is just book the kiddos into coach and fly business/first and let the FAs deal with it. But how about this: if the kids are old enough to qualify for Unaccompanied Minor status, book them in coach as UMs, fly Business/First yourself and you've basically _created_ airline supplied child care for yourself. Best of all, you don't need to worry about the airline losing your kid or something at the aiport (http://boingboing.net/2012/08/14/united-airlines-loses-a-10-yea.html) because you can check on them at will.

Why didn't I think of this sooner?

ETA: I ran this idea past my husband and he asserts -- vigorously -- that it would not go well. He is probably right, but I am really tempted.

And Now For Something Slightly Different: Accounting for FFPs

FFP = frequent flyer program

I found this:

http://greenandgold.uaa.alaska.edu/images/weekly/20120516-Accounting-for-Airline-FFP.pdf

There is more than one organization the regulates how airlines (and other companies) account for future liabilities: FASB here in the US and IFRS ... elsewhere. They have never managed to say definitively _how_ airlines should recognize on their books the liability of mileage programs (by contrast, for example, there are rock solid rules for how companies recognize vacation benefits for employees, which is why if you leave a company with a balance of vacation owing you, you get money, and if you were allowed to use more vacation than you had accrued, it will be deducted from your final paycheck -- or you'll get a bill). The method _I_ was familiar with basically says, meh, no one was gonna by that seat, so it's only value is the cost of the meal, snacks and bev we were gonna serve, and whatever additional fuel a 150 lb person and their luggage requires for the flight, aka incremental cost. The method that was the alternative, and which airlines exiting BK have been opting for over the last decade-ish, however, (deferred revenue) treats the initial purchased tickets as two components: you are buying the fare you are buying, and you are buying the mileage bonus. So when you actually _use_ your points, the airline "recognizes" the revenue, moving it from its reserves to its income.

This is also known as "income smoothing". Now, on the one hand, everybody likes income smoothing -- that is why way more people work for a company that can provide steady hours and income, vs working for themselves and dealing with periods of crazy overload interspersed with terrifying droughts of no income. On the other hand, everybody _hates_ income smoothing, because it suckers people into investing in fossilized companies that have been living off their reserves for quarters or years and appear on paper to be a going concern but once the reserves are exhausted there will be absolutely nothing left because there is no actual new business. In this situation, an airline that during an economic boom time used the deferred revenue method would built a pile of money that, during a period of economic slack, they could transfer on their books as "income" while running planes full of exclusively awards fliers. On the good side, at least the point flyers are not displacing people who would have bought the seats with folding Euros or green stuff or whatever. On the downside, an unwitting investor might think that all those flights full of fliers meant the airline was a going concern, when in fact, it was just running down its reserve balance.

I don't know. I look at points programs and I go, too much sugar for a penny. I particularly despise the effects of incremental cost, because the drive to reduce the impact on airlines of rewards flyers means that everyone now has to pay for absolutely everything separately: no free bag, no free lunch, no free anything. But the potential bad side of deferred revenue, especially in the absence of appropriate regulation of reserves, is terrifying. Can't you just see it? It would make corporate raiding of pensions seem like chump change.

And then on top of it, all the credit cards and so forth that pay airlines money for the right to distribute awards points in exchange for running up huge amounts on credit cards are trying to tell airlines how to manage their FFPs -- leading potentially to a day where points fliers occupy all the seats, and if you want to fly, you'd better get and use an affiliate card or you don't even have a chance at flying for any amount of cash (this is the situation that caused me to buy into DVC -- you _can_ get me to play in an insane voucher system, if the good on the far side is sufficiently desirable) unless you first convert it into points.

Credit card surcharge, cash discounting and affiliate programs for FFPs: warning, link fu ahead

This will be edited. Probably.

So, I'm sitting here thinking, you know, you didn't used to be able to offer a discount to induce the customer to pay using other than a credit card ("5% discount for cash!"), but there was a settlement and now the Visa/MC/etc. folks have had to give in and you _can_ charge a surcharge and/or offer a discount for some payment methods, subject to local (state) law.

Yeah.

Okay, so here's where I'm going with this. A _major_ income stream for some airlines (bigger than anything else, apparently) is when they make a deal with an affiliated credit card so that using the credit cards gets miles. The credit card takes part of what they charge merchants and uses it to buy miles from the airline and disburse them to the customer who may or may not ever get around to figuring out a way to use those miles to do whatever it is you do with miles in a FFP. MAJOR income stream. I ask myself, Self, in a world in which merchants can push customers away from credit cards to debit cards, and a world in which millenials are inclined to spend that way anyway, what are the future implications for this airline income stream?

Step 1. Is my recollection about the rule change accurate. Yes!

http://usa.visa.com/personal/get-help/checkout-fees.jsp

Altho if you look at the Massachusetts rules, charging a surcharge to use credit card is ILLEGAL but you CAN discount for cash. I know, right? Kinda makes your head swim, altho this piece of ridiculousness has nothing on all those state laws setting pi = 3 that history is littered with.

Step 2. Any indication that there is an impact on affiliated cards? I tried this (without quotes):

impact credit card surcharge on airline affiliate cards

And got a bunch of helpful sites (joke) plugging airline affiliated cards. All have $95 annual fees (really? really?) and apparently the scams never end.

A sample: http://www.mrmoneymustache.com/credit-cards/
Another sample: http://boingboing.net/2015/01/13/credit-card-hacking-for-the-sa.html

That second one is really kind of horrifying. I really feel like anyone who is that motivated (opening a new affiliate card annually to avoid paying the annual fee on the second year, if he is to be believed) should maybe go direct that entrepreneurial orientation to something more productive than gaming the fuck out of loyalty programs. Because I'm pretty sure he is the _opposite_ of loyal to any of these programs.

This does not help me. Altho I will note that FFP programs are generally moving away from a mileage orientation and towards a complex metric for assigning awards and tiers and crap that factors money spend on tickets more than miles flown (about freaking time, however, I'm sure people will game the new system as vigorously as the old one).

A bunch of these cards offer auxiliary benefits like, no foreign transaction fee (I'll tell you how to avoid that: prepay the big stuff and pay in cash for the rest. The only time we visited an ATM was when R. wanted to see if his no-fee international feature on his debit card actually worked. Seriously. We don't get out much?).

Clearly, I need a new search string, but I think I'm going to have inbound children in a moment.

ETA: A little old, but interesting:

http://www.creditcards.com/credit-card-news/credit-card-surcharges-allowed-1281.php

Expect surcharges in "noncompetitive sectors" first, apparently?

"Cash customers are providing miles and other rewards to credit card customers, and that is wrong," Edmund Mierzwinski, consumer program director at U.S. Public Interest Research Group, said via email.

ETA: Maybe not!

http://www.dallasnews.com/investigations/watchdog/20140920-watchdog-its-illegal-to-add-fees-to-credit-and-debit-cards.ece

Completely illegal fees are being charged on things like c-store purchase of a bagel. Texas enforcement is lax.

I Love All the Fancy Explanations That Amount To, Dude, August

http://www.businessinsider.com/leon-cooperman-on-the-market-crash-2015-9

In this explanation, a bunch of technical traders are blamed for the crash last month.

"Risk parity funds build portfolios around risks: They target a certain exposure to volatility, rather than, say, equities or bonds. That means that when volatility spikes, they sell automatically and indiscriminately.

CTAs meanwhile are typically trend followers, meaning they buy when others are buying and sell when others are selling."

Translation: August is a month when everyone is on vacation and trading is very light. In any other month, kooky stuff gets swamped -- it's noise on top of a lot of signal. But in August, there is no signal, because the signal has gone to the beach.

Explanation for why things will improve?

JPMorgan is quoted: "We don't expect a period of prolonged stress as market volatility normalizes and these technical flows subside."

But that's just a fancy term for, everyone is back from vacation because it isn't August any more.