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    Published on: March 4, 2014

    by Michael Sansolo

    Thanks to syndicated television, we’re all getting a real time lesson in competition and it’s a lesson no one should pass up. Even if it seems a little annoying while it happens.

    The lesson comes courtesy of Arthur Chu, an insurance compliance technician, who is currently blasting his way through the television game show "Jeopardy." Chu has already won more than $200,000 answering the strange mix of questions on "Jeopardy" with a tactical approach never seen before in the game.

    His approach is new, innovative, and effectively vicious. Oh yes, it is also widely hated.

    Then again, innovators frequently behave in ways that upset the status quo. They are disruptive, annoying and require a completely new response. That’s why Chu is delivering a great lesson in competitive strategy for you.

    First, a quick examination of what he is doing. If you’ve ever watched "Jeopardy," you know the basics of the show. Three contestants try to answer assorted questions spread across six categories, with higher dollar values given to increasingly tougher problems. Traditionally, contestants essentially followed the same pattern: they always seemed to focus on a single category of questions moving down the board from easiest to hardest.

    Until Chu, that is how the game was played.

    Chu hops all over the board, moving category to category in a seemingly random pattern. Except his method is anything but random. He has a carefully researched plan, wiping out the highest value questions quickly and making careful calculations on how to maximize the benefit of bonus questions or Daily Doubles. In the process he unnerves his opponents and even, at times, the usually unflappable host, Alex Trebek.

    The fans/viewers seem to hate what he’s doing, even while they tune in. (Well, not this week though, due to a previously scheduled "Jeopardy" special. But Chu will be back as the reigning champion.)

    Yet Chu is doing nothing illegal or against the rules of the game. Rather, all he is doing is tilting the competitive odds in his favor, by disrupting his opponents and giving himself the greatest possible chance of controlling a random game.

    As one of the many articles about winning streak has pointed out, such unexpected tactics are usually hated and then widely copied, whether those tactics are the Oakland Athletics Moneyball approach to baseball, President Obama’s electoral strategies using the social web or countless other instances from love to war.

    It’s all about finding a way to win by doing things differently.

    No matter what business you are in, you owe it to yourself to consider Arthur Chu and his winning streak. Sure, he may not be the most popular game show contestant ever, but he is far better known, more successful and much wealthier than countless others who have stood in his place.

    His unorthodox style should provide an interesting discussion around any workplace on traditional tactics and what alternatives might exist that are both fully legal and capable of throwing convention on its ear.

    It should remind you of a competitive philosophy discussed here in the past from the original Pirates of the Caribbean movie. In scene after scene, Johnny Depp’s pirate captain manages to best the hero, Orlando Bloom, by unexpectedly changing the conditions of every duel.

    When Bloom protests that he’d never lose a fair fight, Depp responds, “That’s hardly an incentive to fight fair.”

    Arthur Chu might agree. You should too.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
    KC's View:

    Published on: March 4, 2014

    by Kevin Coupe

    Can't help myself on this one.

    Longtime MNB friend Marv Imus sent along a story yesterday from Thrillist with an irresistible title and premise:

    23 American Beers To Drink Before You Die.

    Though, to be fair, the article concedes that there are probably are plenty more.

    But here, for your reading pleasure, are the 23 that have been nominated.

    Not sure about you, but best I can remember, I've had four of them.

    Lots of work to do. I trust they will be a series of Eye-Opening experiences.
    KC's View:

    Published on: March 4, 2014

    Bloomberg reports that Kroger has engaged in discussions with Safeway about buying some of its operations around the country. In addition, the story says, Kroger has contacted Cerberus Capital Management, generally conceded to be the lead bidder for Safeway's assets since the company put itself up for sale, about buying Safeway stores that Cerberus may not want.

    While Safeway reportedly is more interested in selling the entire company to one buyer, essentially splitting the company between Cerberus (which also owns the Albertsons chain) and Kroger could go a long way toward alleviating any antitrust concerns that the federal Trade Commission (FTC) might have about a sale.

    None of the three companies is commenting on the Bloomberg report.
    KC's View:
    This would make sense. What seems increasingly clear is that while Safeway has said that nothing is certain, a sale of the company - as a whole or in pieces - is inevitable. It is a matter of when, not if.

    Published on: March 4, 2014

    The Los Angeles Times reports that Kroger and Safeway have announced that they will not sell genetically enhanced salmon, joining other chains - including Whole Foods, Trader Joe's and Target - in banning the product from its shelves even before the US Food and Drug Administration (FDA) has approved it for sale and human consumption.

    According to the story, "The Food and Drug Administration has not yet decided whether to approve the salmon, with DNA retooled so that the fish grow twice as fast as conventional salmon. But the agency already has decided that the fish are safe to eat and are very unlikely to pose an environmental threat if they’re grown, as planned, in land-locked tanks. The FDA’s final decision on the fish has been expected for a long time, and there is speculation that the agency has been holding off mainly because it knows that the public is inclined to look suspiciously on the new product."
    KC's View:
    In a commentary about the subject, the La Times writes…

    The fear is that the genetically modified salmon could breed with wild salmon and out-compete them for resources. Supporters of the product say that is incredibly unlikely to happen, but the past has taught us -- as with the possibility of earthquakes and tidal waves big enough to compromise the Fukushima nuclear plant -- that nature has ways of throwing surprises at us, especially in an arena as untested as this one.

    Another consideration, which the FDA doesn’t talk about, is the opening of a door. This one operation might sound good to the agency (though it sounds like a potential environmental problem to me), but it would be a very small operation. The fish from this one farm would be a blip on the fish-market scene. However, once the U.S. market has been opened to these fish, the business would grow, the proposals would go on and it’s practically a given that not all of the subsequent operations would be carefully designed and run.

    Consumer groups have taken matters into their own hands by appealing to food markets not to carry the fish, and they’re obviously having some notable successes.


    In the end, it will be stores and consumers that will determine the success and failure of GM products. The kinds of moves being made by Whole Foods and Kroger and Safeway will speak volumes about what is acceptable and what is not.

    Though, I still argue that a strong, national and consistent GMO labeling program is necessary so people can make informed decisions.

    Published on: March 4, 2014

    With the fabulous headline "Wish They All Could Be California Hens," the New York Times has a story this morning about how several states are facing off over California's legal mandates about how hens need to be treated by farmers.

    It all goes back to a 2008 law passed by the California legislature that required more comfortable living conditions for egg-laying hens in the state. And, because in-state egg suppliers complained that the law could put them at a competitive and financial disadvantage, the law included a provision that all eggs sold in California had to come from hens treated in a similar manner.

    "Those provisions," the Times writes, "as well as similar laws going into effect in Michigan, Oregon and Washington State and under consideration elsewhere, inspired a national proposal to require more space for laying hens across the country, but Congress dropped it from the recently passed farm bill. Lawmakers and some companies have been responding to consumer pressure (including from several colleges) for better treatment of animals raised for food."

    But now, the story says, "The Missouri attorney general has filed a lawsuit to block the California egg rules, and at least three other states are considering doing the same. The beef and pork lobbies are also lining up against the California rules in an effort to prevent any new restrictions on raising livestock." The charge is that the California rules violate interstate commerce regulations, and the rationale behind the suit is that the rules will cost egg producers millions of dollars to upgrade their facilities, and will result in an increase in egg prices not just in California, but elsewhere in the US.
    KC's View:
    I'm no lawyer, so I have no idea how this will turn out. But as a consumer, I'm not sure that arguing for less than humane treatment of hens, or any other animal, is a sustainable business position.

    Published on: March 4, 2014

    Yesterday, MNB took note of a Politico story suggesting that the Food Marketing Institute (FMI) and Grocery Manufacturers Association (GMA) could be facing off against the Obama administration's plans to update nutrition label requirements, adjusting how serving sizes are calculated and how calories are displayed, among other changes.

    The Politico story noted that FMI and GMA plan to "roll out a coordinated marketing campaign, spending as much as $50 million … to promote their 'Facts Up Front,' the industry’s own voluntary program for providing nutrition information on the front of food and beverage packages." The face-off, the story said, would come as the FDA looks to improve the existing mandated method of communicating nutrition information on the back or side of packages, and FMI and GMA look to promote the voluntary front-of-the box effort that "makes nutrition information quick and easy for consumers. It also makes it easy to highlight vitamins and other nutrients right where consumers can see it, which can also help with marketing."

    Yesterday, FMI and GMA sent Politico a letter objecting to the suggestion that the two approaches are any sort of a collision course. In fact, they said, the fact that both initiatives are moving forward at the same time "is fortuitous," since "the Facts Front program – based on the nutrition facts panel – was designed to be flexible enough to adapt to modifications to the panel." The letter went on to say that "there are many synergies between Facts Up Front and the proposed Nutrition Facts Panel changes, including the emphasis on calories, the streamlining of information, and highlighting of key nutrients. In addition, both programs are grounded in the latest nutrition science and consumer research.

    "Once a final determination is made about what changes will be made to the Nutrition Facts Panel, GMA and FMI will consider what, if any, changes to the iconography are needed to ensure that Facts Up Front remains consistent with the panel, and continues to feature the most critical Nutrition Facts on the front of pack."
    KC's View:
    This also was my sense of the situation, which is what I said yesterday.

    Leslie Sarasin, the FMI CEO, dropped me a note yesterday that reiterated the point:

    "After reading this morning’s MNB," she wrote, "I felt compelled to share with you the response that FMI and GMA have sent today to Politico regarding the piece that you covered.  You are absolutely correct in your assessment that 'there is absolutely no reason that these two approaches to nutrition information should be in any sort of competition, much less at war' and that 'these are just going to be two different initiatives running on parallel tracks but both aimed at helping the consumer make smart decisions.'  I also believe the Administration views it that way too, as evidenced by the fact that Pam Bailey of GMA and I were both invited to attend the announcement of the new Nutrition Facts Panel at the White House last Thursday, and to visit briefly with Mrs. Obama while we were there."

    (Whew. Nice to get one right every once in a while.)

    The thing is, I love reading Politico. It often is enormously entertaining. But I do think that it, like a lot of the media, occasionally spends so much time covering the battles that it sometimes misses the root philosophical arguments … and so it is harder to see when two sides that sometimes are at odds end up agreeing.

    Published on: March 4, 2014

    The St. Louis Post Dispatch reports that Amazon plans to expand its Sunday delivery service to that city within a few weeks, describing it as "a move that’s expected to put additional pressure on local retailers."

    Amazon first launched Sunday delivery last November, offering it in the New York and Los Angeles metro regions and using the US Postal Service (USPS) as its delivery partner. It has promised to expand the service to much of the US in 2014.
    KC's View:
    I've grown quickly to love Sunday delivery. Now, I simply cannot imagine why it hasn't always been available, and why consumers would tolerate anything less.

    Published on: March 4, 2014

    CityWire reports that Walmart is creating a new blog on its corporate website that "will allow public comments on the blog site, which the retailer plans as a discovery portal for its major platforms such as veterans hiring, empowering women, manufacturing jobs, healthy food and hunger, sustainability and global responsibility."

    Chad Mitchell, senior director of digital communication at Walmart, tells CityWire that "there will be blog contributions from across the entire company from marketing, shopper insights, operations, and even the executive circle. On occasion, it’s possible that some news announcements could be made using this forum, which is how Walmart.com typically announces acquisitions, updates on testing phases, and other developments."

    The new blog is said to reflect the priorities of new CEO Doug McMillon, a former hourly employee at Walmart who believes that more open communications represents a return to the Sam Walton playbook.
    KC's View:
    Cynics will suggest, with ample justification, that this is just window dressing. But I'll give Walmart the benefit of the doubt, because I think transparency and open dialogue with consumers is important, and that's what they seem to be aiming for … in part, I think, because in a 21st century competitive environment, there really is no legitimate alternative, like it or not.

    Published on: March 4, 2014

    Bloomberg reports that the US Supreme Court has agreed to review a case in which temporary employees of a temp agency hired by Amazon to work in its Nevada warehouse complained about not being paid for time spent undergoing security searches.

    According to the story, "The high court case centers on the Fair Labor Standards Act, which requires compensation for pre- and post-shift activities that are “integral and indispensable” to an employee’s principal activities … Corporate groups, including the U.S. Chamber of Commerce, urged the court to take up the appeal, saying the issue has widespread significance. Similar claims are being pressed directly against Amazon and against CVS Pharmacy Inc. and Apple Inc."


    • The Chicago Sun Times reports that Pizza Hut plans to test a tabletop touchscreen system that will allow people to build and order their own customized pizzas without interacting with wait staff. The company is said to be considering first installing the system at a pair of prototype stores, in Rhode Island and Nebraska, where the company also is selling pizza by the slice for the first time.


    • Lund Food Holdings plans to open its newest concept, Lunds and Byerly's Kitchen, in downtown Wayzata, Minnesota, this Thursday, describing it as as format that "focuses extensively on freshly prepared foods and features everything from a chef-driven dining experience with a wine and beer bar to a tailored selection of groceries."


    Bloomberg reports that "Unilever has begun the process of seeking bidders for its Ragu pasta-sauce brand by hiring advisers and contacting potential acquirers … Unilever last week contacted many of the companies that were approached when the company sold Wish-Bone dressings last year and expects to sell the brand for between $1.5 billion and $2 billion."
    KC's View:

    Published on: March 4, 2014

    • Ahold USA announced that Tom Lenkevich, most recently COO/senior vice president of retail experience for Save- A-Lot Food Stores, has been hired to be its new president for the Giant/Martin's division.

    Bhavdeep Singh, executive vice president, operations, Ahold USA, has been serving as interim president following the retirement of Rick Herring.

    • Weis Markets announced yesterday that Kurt Schertle, the company's executive vice president, has been promoted to Chief Operating Officer (COO).


    • Bristol Farms said yesterday that Adam Caldecott, senior vice president for marketing and merchandising, has been promoted to the position of executive vice president of retail, retaining his marketing and merchandising responsibilities and adding store operations responsibilities.
    KC's View:

    Published on: March 4, 2014

    Got plenty of responses to yesterday's criticism of Sears CEO Eddie Lampert, who says that his company is where the rest of the industry is headed. I commented that Sears and Kmart would be a lot better off if they were selling whatever Lampert is smoking.

    MNB reader Dave Tuchler wrote:

    Lampert claims to show us the future in its customer-centric strategy: "Sales from Shop Your Way members comprised 72 percent of all sales in Sears Full-line and Kmart stores in the fourth quarter of 2013, up from 58 percent during the fourth quarter of 2012. Overall, Shop Your Way members made up 69 percent of our sales in 2013, up from 59 percent for all of 2012.".

    In other words, a greater percentage of sales coming from their 'engaged' Shop Your Way customers.

    Well, there are two ways to get there - - either your Shop Your Way customers are buying more, or everyone else is going somewhere else.  Sears revenue in the  quarter ending February 1 was down 14%.  I think Amazon is safe for at least another few quarters.


    One MNB user responded:

    This guy is delusional.  To paraphrase a former US president, “it’s about the merchandise, stupid.”  In Sears’ case not only is the content off the mark, so is the service, shopping experience and pricing.  He will never attract sufficiently talented retailers to work for him and, if this miraculously happened, he would never give them the authority and responsibility to do the job properly.  Anyway, he’s used all of the available cash, so there’s no money left for what’s needed.  Terribly sad.

    From another reader:

    Agree with you. I’m calling B__ S___ on Mr. Lampert’s suggestions that Sears is ahead of anything.  You should get a message to him – if Sears doesn’t change (drastically) they will be irrelevant – very soon.

    Oh, yeah. Like he's listening to me.

    And another:

    If Eddie means that brick and mortar retailers will continue to close buildings when he says "... I believe the entire retail industry is headed to where we already are", the he is spot on. I just left the tire fire known as Sears Holdings about six months ago. I managed a location for them for about two years and helped that location have its first positive sales quarter in over seven years- no one noticed. I had to sit in on conference call after conference call being told how we were all missing the mark- once I heard a regional exec say, and I quote... "We've just gotta start selling stuff guys..." The entire organization is dysfunctional - you can't make this stuff up.

    For example…

    At a four-day culture change meeting the last task was to pass a test so that we managers could be certified, so to speak, to deliver this training back in our home stores and districts. Integrity was to be primary core value. As I had completed my test and was just sitting and waiting to hand it in a Regional VP came up behind me, placed his hands on my shoulders and said, "Here (my name),  take this (the answer key), and make sure these guys all pass." That was when I was officially done, and my job became to find another job as soon as possible. For me it has turned out well, but I feel bad for those still stuck in the fire.


    Still another MNB reader chimed in:

    Very ironic that you would write about Sears retail integration this morning.  I was just getting ready to write you an e-mail about my experience at Land's End over the weekend.  As you know, they are owned by Sears.

    I had not shopped at Land's End in years….probably since my preppy era of the early 1980's, but when the Spring catalog arrived a few weeks ago, I noted there was a distinct change in the offerings.  Lots of bright colors and appropriate items for business casual days at the office and for my upcoming vacation.  I ordered several items.  Since I had not owned any Land's End items for years, I wasn't sure what size I would need in their clothing.  I anticipated I would probably have a few returns/exchanges to make once the items arrived.

    I had five items to return/exchange so off I went to the local Land's End store in Minneapolis. I actually assumed I could probably go to either Sears or Land's End, but opted for the Land's End store assuming they would have a greater assortment of items from which to choose.   I had no problem returning two items.  It was the exchanges that really caused a stir.  I found replacement items in the appropriate size, on the sales floor.  When I went to the counter to make the exchange, the store couldn't do it.

    Here was the procedure they told me to go through:  Go over to the next counter, which is for catalog exchanges; present my items to be exchanged; the clerk will then issue a credit for those items; then log on to the computer terminal at that counter and order the appropriate replacement items; which would then be shipped to my house.

    I would understand that procedure if the store didn't have the item in stock that I wanted, however, I was holding the items in my hands which I had just picked out on the sales floor.  They said, "we know it's confusing, but we are two different companies.  If you buy online, you are purchasing from Sears, but if you buy in store, that's Land's End".  And what was really interesting, is that the items, which all had Land's End labels inside of them, actually had different style numbers which indicated if something was purchased online or in a store.  That's how they could tell which company actually got the credit for a sale or the deduction for a return.  The clerk explained that anything I buy online, can only be exchanged in person at Sears, otherwise the above procedure has to be followed, regardless if the product is in a Land's End store or not.

    I tweeted to Land's End when I got home.  Here's how the conversation went.  I'm not sure this is retail integration.   The catalog said: "Land's End".  My order said "Land's End".  The order confirmation e-mail said "Land's End".  The charge said "Land's End".  Until the exchange/return process…..and then it was Sears.  If it's Sears, then call it Sears.

    Me: Very frustrating return/exchange policy in-store @LandsEnd Why can't I just exchange in-store for the sale price I paid online?

    Land's End: Our apologies. We are separate Companies, so keep our own records. We have no access to each others sales receipts.

    Me:  How would shoppers know that & why should we? If they R different companies, they should have different names & stores. #fail

    Land's End: We R Lands' End and they are Sears. Our no exchange @ Sears info is shown on our "Returns" link: http://bit.ly/1pSknvP 

    Me: Catalog says "Land's End", the conf e-mail said "Land's End", the charge was to "Land's End". If it's Sears, then call it Sears.

    Land's End:  We appreciate your feedback and will let our Retail Team know.


    I will acknowledge that the store finally made the exchange for me with the items that I had found in the store, but this was only after I made a bit of an issue of their ridiculous policy.  And with five minutes to closing time, I think they were anxious to just get rid of me so they could go home.


    And from another reader:

    Sounds like Fast Eddie is trying to build a case that the successful retailer of the future will need bricks and mortar as well as an on line presence. I seriously doubt that he has any interest in making the investments required to be that company. His track record as a hedge fund operator turned retail mogul has been to under invest and milk the company to make the numbers. Maybe he hopes that he can convince Wall St that successful retailers need a physical presence. And then Mr. Bezos will make him an offer he can’t refuse.

    Somehow, I'm dubious that Bezos will offer Lampert anything, other that giving him the same treatment that Michael Corleone gave Moe Green.




    Yesterday, I also went off on a rant about American Airlines' decision to end bereavement fares, saying that it represented a total breakdown of any sort of customer service mentality.

    MNB reader Bill Auld responded:

    One of your better rants in MNB History!  Could not agree with you more…here’s an example where some “bean counters” spreadsheet only takes into account “numbers in boxes” and none of the goodwill and customer satisfaction that long term will mean even higher revenues (and eventually profits) for American Airlines.

    My question:  Where’s the leadership here?

    Finally, really like the fire place burning in the background…perfect Winter Setting…Real Wood or Natural Gas?


    Real wood, of course.

    Another reader wrote:

    I agree with your analysis, but doubt if other airlines will duplicate American's action.   I think many, maybe all, will agree with your analysis and explain that they will continue to offer bereavement fares.   Just because one airline is making dumb decisions, it doesn't mean they all will.

    You have more confidence in the airline industry than I do. But I hope you're right.

    MNB reader Keith Jones wrote:

    Just read your report on the change of rates with American Airlines.  A couple of years ago I was on a job interview and was flying on US Air.  My wife had a stroke and was in the ICU not knowing the outcome.  By the way, she was only 47 years old.  When I called to get an earlier flight out they charged my $150 to change the flight because it was more than 2 hours before the flight was to leave.  I paid the $150 to get home earlier to be with my wife.  Now the frustration was when I got to the airport the flight they put me on, told me in needed to pay the difference to guarantee a seat, there were 7 other people on a plane that had a seating capacity of about 60 people.  I now avoid US Air at every opportunity I have.

    Please Rant on.  The airline industry needs to listen.


    From another reader:

    Add to this the insanity of checked-bag fees...why is it so hard to just tell us the price?

    And the F-you from Delta that you earn miles based on ticket prices. Do they not grasp that most of us are flying for business,  and that we don't get the luxury of a higher-priced option?  I've been a loyal Delta flyer for nearly 30 years, but if they are going to make it this clear that my half-dozen transatlantic flights a year (in coach no less) don't matter, I will just go with someone else.


    And another:

    Agree 100% with your comments. After my parents passed away, I contacted three airlines to have their earned mileage transferred. Without naming the airlines, all required documentation to prove that the transfers were legitimate. That was reasonable.

    Only one required a fee.That was unreasonable.

    I did send a check along with the paperwork. The check was made out to the CEO personally, I added a cover letter advising the airline that while I was mourning for my parents I was insulted that I had to pay them on top of that.

    I got a letter back advising me that they were canceling the transfer fee.


    And still another:

    Eliminating bereavement fares is a great example of how to create bad will. Current customers will remember this about American Airlines. They will hold a grudge. American will lose sales short and long term. Somebody there is really stupid…

    MNB reader Pete Deeb wrote:

    I hope your column inspires American Airlines to rethink their  position on bereavement flights. I continue to be amazed by companies and people(after all the decision was made by key people in the organization) who don’t get the world outside their own. Large companies need to invest in a “litmus test” department that they can put these controversial decisions in front of for a real world viewpoint. My guess is we will see a recant of this position quickly! If not and to your point the others follow suit then the FTC needs to reconsider the monopolistic decisions they are making in significant areas of business. Soon we consumers will have very few choices and we will have ourselves to blame for not protesting with our voices and our wallets.

    I've argued for a long time that every company ought to have something that many newspapers have adopted - an ombudsman or "public editor" who is responsible for representing readers and challenging editorial decision-making in a public forum. Somebody ought to be sitting at the table whose job it is not to drink the Kool-aid…

    Another MNB user wrote:

    I have to believe you will get many opinions about the decision taken by American Airlines to stop bereavement fares. I agree with your assessment that AA say it matched US Air’s policy, but they could just have easily taken the high road by introducing that US Air now has bereavement fares, as a result of the merger. Since the bereavement trip would be considered “incremental” (to use a CPG / FMCG term), it’s a new revenue opportunity.

    I realize that sounds like a marketer’s interpretation of the opportunity. I’m guilty as charged. You rightly point out that this decision was likely made by accountants, which proves again that accountants shouldn't make decisions. When a company makes the CFO the leader, it’s nearly always a “sell” indicator.  I respect and appreciate CFO’s.  They are solid, respectable and very necessary to every company.   But, they are not the best leader and rarely can conceive of sustainable, organic growth. Boards make the CFO leader when they don’t have any other options.  It’s all about milking the business rather than growing it.

    MNB’s story yesterday on Eddie Lampert underscores this very point. But, I digress. Dustin Hoffman, in the 1988 movie “Rain Man”, framed Kmart as perfectly today as then.… Again, I digress…even if on point.

    American and other legacy airlines continue to change the business, largely because we’re down to 4 airlines of any respectable size. The alliances are more anti-competitive than fliers realize, particularly for international travel. Delta recently announced major changes that I’m sure have alienated many in the MNB community. A “mile isn’t a mile” starting in 2015; it’s a new formula (miles credited = airfare paid  x status multiplier). Mileage calculations will differ by day, market and flight. A trip cross country (or continent) can be worth less than a Boston – NYC shuttle trip.  Too complicated a formula, I think. And, Delta didn’t tell us the entire plan; they will likely announce the rest of their plan to devalue accumulated miles next year.  Death by a thousand slices…

    Do I understand the new “loyalty model” rationale; sure.  But, I’m now forced to vote with my feet (or in this case my rear) by  putting it in other carriers seats.

    The MNB community needs to encourage new airlines to enter the market. We need for the FAA to ensure new entrants are safe - then get out of the way and allow competition to work. Let AA, DL, UA, SW (who all price similarly; funny how duopolies work…) carry on as they want while Norwegian Air, Ryan Air and others enter. Let’s give the legacy carriers what they want; a focus on revenue instead of their best asset, loyalty. Volaris entry into Mexico is an excellent example of expanding the market (e.g. more people started flying that never had before) by offering value at a time when legacy carriers like Mexicana decided to cut costs / services / value.  Ditto other upstarts in Australia, Asia and Africa. An added plus is that new airlines in the US will be paying taxes, which is not the case for a few of the current legacy airlines who aren’t projected to pay taxes for a few years, due to our current tax code….


    Another reader wrote:

    I 100% agree with you.  I had 3 deaths in our family, in 7 months, all on the east coast (I live in the west).  I found out first hand how ridiculous these so called bereavement fare policies are.  Usually, you can't schedule a death - how inconvenient!  - so you can't have made "advance purchase" to take advantage of better fares.   The so-called bereavement fares were off regular last minute prices so they were absurdly high. Even with 5%.

    So, if you have a death of a loved one, suck it up, people, because the airlines must watch the bottom line at all costs!  Or just don't go to the service, there's an option.

    I finally scraped together some frequent flyer miles and bought others to being the price down and got there (two were in February in New England).  But it definitely showed me how absurd the policy was before this even more ridiculous public relations' snafu.

    Speaking of accounts making PR decisions.... My sister had cancer, was on pain meds, using therm sparingly.  She ran out.  Her doctor renewed the prescription.  She had to argue with accountants to get it filled, had to answer invasive questions, and wait for days, in pain, her body already weak and taxed with chemo.  But the bottom line was protected !!

    And this was prior to the so called affordable health care act.

    Don't get sick or die my friends!  That's the only solution!


    MNB reader Mike Carter wrote:

    Thanks for commenting on this crazy AA policy announcement. When I read the announcement, I was just stunned. I just said to myself “what are they thinking?” And no matter what they are thinking, why are they saying it this way??

    MNB reader Philip Herr actually had a good airline experience to share:

    In November I had an experience with Virgin Atlantic which ended up positively. At 3.00 am on a Sunday morning I received a call from my nephew in London – my sister had died. She had been hospitalized for several months so this wasn’t entirely unexpected.

    For some reason my wifi connection was down, so I got on the phone to Virgin – my go-to airline for London. Because the funeral was to be on Monday, I needed to fly Sunday afternoon. I spoke with a delightful person based in the UK who assured me that after I demonstrated proof of my sister’s passing, Virgin would refund the difference between what I needed to pay (roughly $3,000) and the seven-day advanced fare -- $1,200. I saw this as reasonable and went ahead and booked the flights.

    A week later when I had received the death certificate, I reached out to Virgin. Initially I was told by the refund department that there was no bereavement policy and no refund would be issued. I responded via e-mail telling them that I was upset and that my booking the ticket was contingent on the refund – otherwise I would have found a way to shop for a better rate. Fortunately I had made a note of the name and extension of the woman who helped me initially.

    Three weeks later they issued a refund, pointing out that while the person who helped me was mis-informed they would honor her statement. I responded that her manner and helpfulness was exemplary and in no way should this have a negative impact on her status.  Given this took place when I was distraught and lacking sleep, she was compassionate and very helpful.

    So ultimately Virgin did come through and maintained my loyalty.


    There are two points here that I'd like to make.

    First, it is easy for us all to bash the airlines. To begin with, they do an excellent job of demonstrating really bonehead business thinking that seems to have little to do with customer service, and besides, there are few in the airline business reading MNB. While I think the criticisms are entirely legitimate, let's not forget that there are businesses in every segment - including all of those reading MNB - that make similarly boneheaded decisions because they don't put the customer first, and think only about short-term bottom lines and official policies. So while we can all criticize the airline industry, let's all remember that they can teach us valuable lessons, not just provide an easy target.

    Which leads me to my second point. One of the issues cited in many articles is American's status as a "legacy" airline, which I guess means that this makes it understandably less nimble and responsive than newer companies.

    Well, I'd argue that any company dealing with so-called legacy issues need to do whatever is necessary ban that word and attitude from the company's culture. Just because something is a legacy doesn't mean it makes any sense or should in any way define how a company does business. I hate to go back to an old dependable, but Amazon is the classic case of a company that seems designed to be anti-legacy … because legacies just slow you down and cloud your thinking.

    As Jimmy Malone says in The Untouchables, "Here endeth the lesson."
    KC's View: