Mike FriedmanIt’s been another interesting week in the world of travel. I’d anticipate a lot of smiling around the country. In particular, we’ll look at why people in Atlanta are happy, credit card applicants (or Venetian customers) may be happy and why a lot of passengers may not be happy at some point.
The World Of Travel
Delta Employees Have 1.6 billion Reasons To Be Happy
If the Delta employees on your next flight seem a little extra excited to be there, it could be because they have a huge bonus coming their way.
When the airlines launched the current profit sharing pools several years ago, they viewed it as a way to soothe some of the constant labor tensions in the industries. Airlines have always been boom and bust businesses, and they have frequently offered employees big contracts, only to demand cuts when the economy went south. Management viewed profit sharing as a way to engage employees in the health of the business.
It was controversial at the time, but I’m guessing that the folks at Delta are happy now, as the airline just paid its employees $1.6 billion in profit sharing, which comes out to about two months of salary per person. Delta has changed the formula a few times during the year, but here’s how it currently works:
- For the first $2.5 in pre-tax profits, 10% of the total goes to the employee profit sharing pool.
- After that, 20% of pre-tax profit goes into the pool. Note that there’s no cap, so every dollar that the airline makes contributes to their paychecks.
- Delta picks up taxes, too, which adds 2-2.5% to the airline’s bill at the 10% level and 3-4% above that.
Of course, it’s always nice while the business is profitable. I’m curious to see what happens when it goes the other way.
Against All Odds, Credit Card Bonuses Continue To Rise
We’re at that part of the economic cycle where banks normally get nervous about expanding debt and shrinking net worth. And yet, something strange is happening: Card companies are going after consumers more than ever.
In the past week, I’ve seen two new promotions that are offering the highest sign-up bonuses that I’ve ever seen for two companies
IHG Credit Card Now Offers 140,000 Points To Sign Up. Free Stays At Palazzo Or Venetian, Anyone?
IHG, the parent of InterContinental, Holiday Inn, Kimpton and several other brands (including a partnership with Venetian and Palazzo) has raised its credit card bonus again on the IHG Rewards Club Premier Credit Card. I got excited about this card when it announced an 80,000 point offer. And then 100,000. And then 120,000. I was pretty convinced that they would never go above that, but I appear to have been wrong. Will they go to 160,000 some day? I don’t see how, but apparently, I’m not that bright. Still, if you haven’t taken advantage of it, we’ve now reached ludicrous speed on the bonus. Here’s what you’ll get:
- 140,000 IHG points when you spend $3,000 in the first three months. IHG points have the most volatile value in the industry, but they’re worth a minimum of 0.5 cents each. You should be able to get more.
- Using points to stay four nights or more? The fourth night is free.
- A free night each year on your card anniversary. You can use it at any hotel worth 40,000 points or less (One night costs 10,000-70,000 points.), which should more than offset the $89 annual fee.
- Free Diamond Status with Caesars through a back door status match. Hello, $100 celebration dinner!
The United MileagePlus Explorer Business Card (Who cares if you don’t think you have a business?)
Yes, I know, it’s a business card. Don’t think you have a business? Read this post and learn what counts and what doesn’t. You’ve probably got one and don’t even know it.
My general rule of thumb is that I don’t apply for a credit card if I’m not a big spender of sponsor’s currency. Having said that, the United MileagePlus Explorer Business Card is looking awfully pretty. 100,000 points (worth about $1,500) is a pretty good deal for $99, though, and it comes with a lot of extras:
- 100,000 United MileagePlus miles after you spend $10,000 in the first three months. I value United miles at 1.5 cents each and remember, they can be used on Star Alliance carriers.
- Two miles per dollar spent on United, local transit gas stations, office supply stores and restaurants.*
- 5,000 bonus miles per year if you have this card and a personal United card
- Two United Club passes and free checked bags
- A $100 United travel credit after seven United flight purchases of $100 or more each account anniversary year.
Chase has what’s known as the 5/24 policy. If you’ve received five personal credit cards from any bank over the past 24 months, they will almost always deny you if you apply for a Chase card. That rule does not, however, apply to business cards.
Will Airlines Ever Allow You To Use Your Cell Phone During The Flight?
People have strong issues about this issue, so I think that there should be a compromise: You’re allowed to use your cell phone, but you have to step outside to do so.
*Note: If you’re in it for the double points bonuses, you may be better off with the Chase Ink Business Preferred, which offers triple points in many of the same categories.
