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Soon, air travelers to France will be making a donation toward health care in the developing world. The cost will depend on the distance flown, as well as the class of service:

The French tax, which won’t apply to transit passengers staying in France for fewer than 12 hours, will reach 40 euros on first- and business-class tickets for flights outside Europe, and 10 euros per ticket for flights in Europe. For economy-class tickets, the levy will be 4 euros outside Europe and 1 euro within Europe.

Much like a Tobin tax, the plan potentially has two simultaneous goals: funnel money to health care in the developing world, and discourage frivolous travel.

Addressing representatives of 95 countries gathered at the conference, Chirac called the French tax on air flights a simple and neutral experiment. He said the tax revenues, estimated to be about $240 million this year, would be spent on programs to fight malaria, tuberculosis, and HIV/AIDS in the developing world.

Airlines are, unsurprisingly, opposed to anything that raises the price of tickets without sending more money to their own accounts.

So far, Algeria, Brazil, Chile, Germany, Spain, and the United Kingdom have adopted similar measures. An as-yet unspecified international institution such as the World Health Organization or the World Bank would administer the fund.

tags: travel | air travel | taxes | health | France

The churning sea! The salty air! The whiff of petrochemicals!

All this, in a cozy but luxurious setting, can soon be yours, at top dollar!

Mohamed Al Fayed’s plans to open a hotel on an oil rig in the North Sea received a boost after two oil companies signed up for the project.
The Harrods owner wants to create a 50-bedroom country-house style hotel on a platform in the Cromarty Firth, off Scotland’s east coast, by 2008.

Echoes of James Bond supervillain Stromberg? If there is a supervillain watch list, it’s time put Mr. Al Fayed on it.

Perhaps there will even be room for a Krustyburger franchise?

tags: travel | hotels | luxury country style offshore oil rig hotels

The founders of Ryanair (the Ryan family, of course) inked a deal with the Mexican bus company IAMSA to start a new discount airline. The Ryans took a 49% stake in the new company, allegedly named… (wait for it…)

AeroBus.

With that name, they’re ironically not using Airbus planes. Rather, they’re starting off with two Boeing 737-300s.

Besides intra-Mexican flights, AeroBus is considering flights to San Diego, LA, Las Vegas, Houston, and Chicago.

We can assume that the airline will be aggressive on price, certainly to start. Let’s just hope they offer more legroom than Ryanair. Windowshades and seats that recline even just a smidgen would be nice, too.

tags: travel | air travel | Ryanair | Mexican travel

“Open Skies” agreements are in the news again. How these disputes are resolved may determine the price of future international air travel.

The term “open skies” refers to agreements between governments, allowing international airlines to fly freely to/from the countries in question. Without an open skies agreement, an airline’s decision to fly to/from a given city must be approved by the governments at either end.

In many cases, countries sign bilateral agreements which limit the number of flights between countries, and limiting the companies which are permitted to make the journey. Traffic to and from London’s Heathrow Airport is most famously regulated in this way, allowing for two British and two American carriers only (British Airways, Virgin Atlantic, American, and United).

Open skies presumably bring greater competition and better point-to-point service, thereby lowering costs for travelers. On the other side, airlines that hold exclusive rights to a destination tend to want to keep it that way. (For example, the island of Guam recently petitioned the U.S. Department of Transportation to open the skies, a move which Continental, which operates a hub there, is fighting vigorously.)

Right now, the US and various European Union member states have bilateral agreements in place, but these are technically illegal under EU rules, which require such deals to be made with the EU itself, not with member states. So last November, the US and EU struck a bargain: Open skies between the EU and the US, if the US revises its legal restrictions on foreign ownership of airlines.

This is where the problems arise. The WSJ explains (subscription necessary):

[…] foreigners are banned from owning more than 25% of the voting stock in a U.S. carrier, or 49% of the total stock. The Bush administration and the Europeans would like to raise those caps, but Congress has refused. To get around that, the administration wants to reinterpret a regulation that requires foreigners exercise “no semblance” of control over a U.S. airline. The change would let non-U.S. citizens influence an array of operations, including marketing, routes and types of equipment used. Decisions on safety, security and use of craft to aid the military would remain in U.S. citizens’ hands. The caps on stock ownership wouldn’t change.

With the current political climate opposed to foreign ownership of security-sensitive American assets (such as Dubai’s entry into the seaport management business in the U.S.), protectionist sentiment could break the deal. This would hinder the liberalization of flight routes, potentially propping up prices.

Without open skies, it sounds like we’ll be opening our walllets.

tags: travel | air travel | open skies

A “classic” trick for attempting to circumvent high last-minute “walkup” fares has been to buy a package. Discounters like Site59.com (a subsidiary of Travelocity) are particularly good at this within the U.S. market, though airlines’ own websites increasingly offer good last-minute packages. These air+hotel or air+car packages are often (though not always) cheaper than buying the flight alone.

And, unlike the “opaque” flights offered by Hotwire and Priceline as part of their rock-bottom packages, Site59 and its ilk offer flights that actually earn miles.

Gary Leff recently posted a discount code that makes the last-minute option even cheaper:

$59 off on packages of $700 or more through April 30 with discount code SITE59GETAWAY.

tags: travel | air travel | vacation packages | travel deals

On MSNBC.com, Adam Hunter sounds the alarm again that cellphone use may soon be permitted in flight within the United States. It’s still up to two separate federal agencies — the FAA and the FCC — to come to agreement before cellphone users can burn through their minutes.

Phones have been on board for years, most commonly the Verizon Airfones that are installed in the backs of seats. The cost of making a call has been a deterrent, even when subscribers to a company cellphone plan get a discount.

I certainly sympathize with Hunter’s fear that we’ll soon be hearing more annoying chatter in the cabin. The poll associated with his article, while unscientific, shows that most people agree that cellphones are unwelcome inside aluminum tubes that hurtle through the air at over 500 mph.

But even if normal land-based cellphones are not approved (which I bet WILL happen), wi-fi in flight IS increasingly a reality. Several international carriers have installed Connexion by Boeing on their planes, which allows passengers to purchase high-speed wireless internet access for the duration of their flight. The planes are equipped with a wireless hub and a satellite connection.

Already today, a passenger flying, say, Asiana Airlines from Seoul to Seattle could buy a day pass for “Asiana Airnet,” then plug in a headset, fire up Skype or Net2Phone or any other VoIP service, and start making calls. Perfectly legally.

The next logical step is wi-fi enabled phones on board. In fact, they’re already being tested.

Granted, these are both currently more cumbersome than just dialing your existing cellphone, but the technology is here. Cellphones may be prohibited, but VoIP in the sky is coming.

tags: travel | air travel | connexion | VoIP | cellphones

Last week, I mentioned MaxJet and Eos, two new all-business class carriers on the New York to London route. Both fly to Stansted Airport, instead of Heathrow or Gatwick. MaxJet is also expanding to the Washington-Dulles to London-Stansted route starting March 15.

The lowest NYC-London fare (with restrictions) on MaxJet comes to $1492 with taxes. (Eos’ lowest fare is currently $3048, and requires a weekend stay and 30-day advance purchase.) According to a recent New York Times profile, both players are aggressively courting investment banks and other large premium-cabin customers.

But the MaxJet seat may be a deal-breaker for the business traveler. Sure, it’s more comfortable than coach, and this glowing (and detailed!) trip report of the inaugural flights describes a nice cabin service.

But the seat has one major weakness: No power. This means you’re at the mercy of your laptop battery if you plan to do any work on the flight. Eos, in contrast, offers regular AC power outlets at their seats. All the major airlines offer power at their seats, though they often require an adapter.

This is probably more important on the west-bound segment than the overnight east-bound trip, but even so, how many investment bankers do you know who AREN’T working inflight?

MaxJet seems to be trying to position itself at the upper end of coach and at the bottom end of business class. But it doesn’t sound like they really mean business.

…remember that even the royal family can’t always fly first class. Pity poor Prince Charles:

Among other things, Charles complained about being forced to fly business class while members of the government flew first class.

Who knew that the royals even flew commercial!

tags: travel | air travel | Prince Charles

Christopher Elliott jumps the gun in his “Airlines add surcharges” post. The U.S. Department of Transportation is reconsidering how airlines advertise their fares. Right now, airlines are required to include self-imposed items like fuel surcharges in the advertised base price, and are only allowed to exclude government-mandated taxes and fees. So you;ll see a fare advertised as $179 round trip (plus taxes and fees), which means the ticket will likely cost $199 if it’s nonstop. Since the extras are all government-imposed, this is legit under the current rule.

Now, the DOT is considering weakening this rule. Elliott’s headline is a bit premature. But he is right to warn readers that changes may be afoot. And they won’t be positive. In the extreme, an airline could advertise $1 fares (plus taxes and fees), but the price could be the same $199 you paid earlier ($1 base fare, $20 in government taxes/fees, and $178 in fuel surcharges…)

While Elliott is right that this seems like a dumb idea — it makes prices LESS transparent, not more — it may be much ado about nothing. The effect on consumers buying tickets on the internet may be minimal. When you search the major booking sites, you are quoted the total fare, including all fees. (One exception is Travelocity’s flexible date search, where fares are ranked by the base fare, before taxes/fees.) So the net change for online booking may be nil.

In the end, newspaper advertisements may end up being the most misleading.

What concerns me more is how this rule might affect the fees associated with frequent flyer mile redemptions. Right now, when you cash in miles, you pay a small amount in taxes. If fuel surcharges can be parsed out under the proposed DOT rule, then the airlines might tack them on to the frequent flyer tickets as well. That could potentially devalue the miles a great deal.

Bargain-hunters rejoice! Side by side comparisons of JetBlue fares with the competition are now possible.

A significant number of people are seemingly hard-wired to go straight to the websites of discount carriers JetBlue or Southwest, assuming that they’ll have the lowest prices. This isn’t always true, but many people think it’s true, and it takes some extra legwork (or at least extra pointing and clicking) to figure out which airline really is cheapest.

You won’t find Southwest or JetBlue fares on Orbitz, Travelocity, Expedia, or Opodo, so you can’t compare their fares. The reason: Southwest and JetBlue don’t participate in the GDS’s (Global Distribution Systems) — worldwide computer networks that share fare and reservation information with authorized users like travel agencies and the big online booking sites.

Southwest and JetBlue, much like Amazon.com and WalMart, have trained a large subset of consumers to shop them first, without comparing the competition. But online travel search aggegator Kayak.com,which runs parallel searches on multiple travel websites, recently added JetBlue to the search.

It’s not as useful as having JetBlue in the GDS’s, but it’s a big step toward greater transparency, which helps the consumer.

tags: travel | air travel | JetBlue

Washington Post readers agree: If airlines were to redesign planes’ interiors, they should add more legroom.

Few airlines are listening. The general trend is the opposite: American Airlines once advertised “More Room Throughout Coach,” which gave every coach seat an extra two inches. Four years later, the seats were put back in, conforming to the industry norm of 31 to 32 inches.

Europeans seem to have the greatest tolerance for being jammed into the back of the plane. Discount airlines Ryanair and Easyjet pack them in at a ghastly 29 to 30 inches pitch, as do charter airlines FirstChoice, Brittania, and MyTravel. Ouch.

But, of the major US-based carriers, United Airlines splits the difference. Nearly half the economy cabin is “Economy Plus,” which provides 2 to 5 inches of extra legroom, depending on the aircraft. (The bulk of their 757s have the biggest Economy Plus boost — to 36 inches.) It’s not a separate cabin, like “premium economy” on British Airways, SAS, Singapore, or Virgin Atlantic. You won’t get better food, wider seats, or a legrest, just more space between you and the seat in front of you.

I admit, I’m a big fan. There are four ways to get that extra legroom: 1) Attain elite status with United or any other Star Alliance airline (US Airways, Air Canada, Lufthansa, and over a dozen others). Then it’s free, subject to availability. 2) Buy a year-long pass to Economy Plus for $299. 3) Pay for the one-time upgrade at checkin, usually for around $30 domestically or $75 internationally. 4) Buy an expensive (nearly full-fare) economy ticket.

If you don’t get the Economy Plus seat, you’ll be at 31″ with everyone else. But frankly, I think that this is one of United’s greatest competitive advantages over its competitors, both domestically and internationally. They have even added Economy Plus into a large chunk of their regional jets. No other airline in North America has anything approaching this.

So why isn’t the WaPo mentioning that this option exists?

A recent question:

How can I tell if it’s better to use miles or buy the ticket?

Excellent question. The short answer is: Pay cash when the cash price is less than the value of the miles you’d be redeeming.

But how much are the miles actually worth?

Smartertravel.com recently ran an advice piece that addressed this issue, and they are wise to suggest a range of options for your miles, but some of their tips are off the mark:

Whereas the industry standard of the value of a mile was once two cents, experts agree that it’s dropped to one cent.

ONE cent??!! I respectfully disagree.

For starters, a mile is not a mile. Each airline’s program has its own rules, including its own redemption rates. If a coach trip from the US to Europe costs 50,000 miles on United and the same flight costs 60,000 miles on Lufthansa, then a United mile is worth more than a Lufthansa mile. It’s like comparing American and Canadian dollars; they’re both money, they’re even both dollars, but they’re not worth the same.

Second, smartertravel.com cites “experts” who “agree.” Experts? Experts also agree that I’m the most important blogger in all of Blogistan. Who is saying this?

Not The Economist. Their study, cited in The Guardian, estimated that there were 14 TRILLION frequent flyer miles out there, with an estimated value of $700 million. That’s 5 cents per mile. That seems on the high side, frankly. But it’s not the 1 cent that smartertravel.com deems the consensus figure.

What about the airlines themselves? They sell their miles to hundreds of firms, such as credit card companies, rental car agencies, hotels, and who knows what else. The rate per mile the largest companies pay is confidential, but they reportedly average between 1 and 2 cents per mile. In fact, this is a huge revenue stream for the airlines, estimated at $10 billion worldwide.

Airlines will also sell miles to individuals, usually for around 3 cents per mile. This is nearly always a bad deal, unless you’re just a few thousand shy of that first class trip to Singapore, and this is the only way to top up the account.

And what do the airlines consider the liability of these miles (earned or sold) on their own books?

American airlines ignore all miles in individual accounts until they reach blocks of 25,000 miles (the minimum required for a domestic ticket). Then, for each 25,000-mile block of unredeemed miles, they enter a liability of only $20-25. They also assume, on average, that one third of miles will never be redeemed. Taking all this into account, in 2004 the 14 biggest American airlines posted a total liability of only $3.9 billion to allow for future frequent-flyer mileage redemptions, according to IdeaWorks, a consulting firm.

$25 per 25,000 miles?? That’s a measly 0.1 cents per mile, which they sell for 10 to 30 times that much. Nice margins!

Note also that a full third of all miles are expected to expire, unused. This is an important point. Besides not earning interest, miles are unlike dollars in another important way: they can expire, if you don’t keep your account active. (Rules vary by program.) Don’t let this happen. At a minimum, get yourself some magazine subscriptions, rather than let the miles disappear.

So what should you consider the value of a mile?

Averaging across programs, and assuming that you have the financial wherewithal to choose between spending miles or spending cash, I would consider 2 or more cents per mile to be the target, 1.7 cents per mile to be breakeven, and 1.5 cents the absolute floor.

How do I get these numbers? Basically, from two observations:
1) Many frequent flyer miles are actually frequent buyer miles — they’re miles earned through a mileage-earning credit card. One could choose a different rewards-earning credit card, such as a cash-back card. The value of the rebates I could be getting with such a card is approximately 1.7% of purchases. Thus, if I’m getting 1 mile per dollar charged instead of 1.7% cash back, then, for me to come out ahead of the cash-back card, 1 mile needs to meet or beat that 1.7%. That’s the breakeven level.

2) At the same time, value is impressionistic. When do you feel like you’ve gotten a good deal? At what price does a plane ticket start to sound expensive? These are personal decisions, and it’s up to you to decide when you’d rather spend cash or a “virtual” currency such as miles. For me, I like feeling that my miles have taken me great distances, in comfort, and in lieu of significant cash. 1.7 cents per mile feels okay, but 2 cents feels better. Higher than 2 cents is even better still.

Settling for 1 cent/mile is foolish, unless you have so many millions of miles in your account that you don’t know how to spend them. For example: Looking over my own accounts, I’ve averaged 4.4 cents/mile lifetime on redemptions. The best I’ve achieved in recent memory was a pair of business class tickets to New Zealand, using 90,000 United miles per ticket on an Air New Zealand/United itinerary. Taxes paid: $37.60pp. Distance traveled? Nearly 17,000 actual flight miles. Retail value of the tickets? Approximately $9000 each. About 10 cents/mile, and well in excess of the “experts” left unnamed by smartertravel.com.

Premium-class tickets (especially internationally) are the best use of miles, in my opinion. High cash equivalent, and it feels like a reward, but inventory on these tickets is often tight. Second-best: Last minute tickets, when the no-advance-purchase fares are in effect and the prices are sky high.

So beware the advice that one cent per mile is the consensus. What constitutes good value is, in the end, your choice. But one cent per mile should be your value of last resort. Aim high.

UPDATE: See also Miles or Buy, the guide/tutorial for people figuring out whether to pay cash or use frequent flyer miles for a ticket. Check it out.