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To see how the travel business really works, sometimes it takes a good old-fashioned lawsuit. Vanguard Car Rental, the parent company of Alamo and National, took Orbitz to court, because Orbitz wasn’t listing the Vanguard brands on the first page of search results when customers ran searches on the online travel megasite.

The suit, filed Friday in the Illinois Circuit Court of Cook County, alleges Alamo and National rental offers show up on a secondary page because Vanguard refused to increase the commission rate paid Orbitz for online bookings. That rate was established in a contract that runs through 2008.
[…]
Chicago-based Orbitz called the claims “baseless” in a news release, and said Vanguard was trying to sue its way to preferential placement on the website.

In addition to requesting the higher commission rate, Orbitz demanded $1.5 million in mid-April, Vanguard claimed.

Baseless? Orbitz panned the suit in a press release, but in the process, effectively admitted to doing what Vanguard accused them of, and exposed the nature of their business model: pay to play.

The bottom line is that Vanguard is trying to use a lawsuit to get a sorting result from Orbitz that Vanguard and Orbitz did not agree to. In short, Vanguard is trying to use its lawsuit to get something for nothing.

So the sorting of rental car prices isn’t based on price. Other sites are up front about this, by labeling the first set of results as “preferred vendors” or such. But Orbitz doesn’t do that. They just show results. And those results are driven by — let’s be blunt here — bribes.

So why did the judge throw out the case? After all Orbitz essentially agreed with Vanguard and admitted that they rank results according to who’s willing to pay for the privilege. But all this is seemingly legit, according to the contracts between the agency and the supplier.

At the end of the day, this illustrates that you really need to shop around. Never, EVER use just one site to search for fares or rates. You never know what secret deals are influencing the search results.

(Thanks to Budget Travel’s Sean O’Neill!)

Continental doesn’t like United anymore, but is sorta into the oneWorld alliance headed by American Airlines and British Airways. American Airlines is interested in that, too, but simultaneously also has its eyes on US Airways. United, having just been dumped by Continental, is looking to rekindle an old affair it had with US Airways, too, but now has to worry about American Airlines, which is sidling up. All the while, Delta and Northwest are not a done deal, and with unions getting crankier about the merger, who knows what will happen. And those two, already allies of Continental in SkyTeam, are feeling slighted that their longtime partner is considering joining another clique.

This is all so freaking high school.

I’m not a fan of these mergers, but I realize that this isn’t about consumers, and the fact that none of this will improve prices or service. It’s about companies with unsustainable business models trying to eke out enough corporate life to survive until the CEO retires with huge pay package.

Just get it over with.

Related:
- Mergers: Are your miles safe?
- Reader mail: What will airline mergers mean to consumers?

Eos Airlines, the all-business class class airline that actually approached all-first class service on the New York-London route, shut down abruptly today. Their homepage contains the now all-too-familiar declaration, as seen in the Maxjet and Skybus shutdowns, that future flights are canceled.

The business class wars, so heated just a year ago, are nearing an end. Who knows how long the remaining all-business class carriers — Silverjet and L’Avion — can hold on. The standalone niche all-business class airline just isn’t viable in a recessionary world of $120 oil.

Eos didn’t actually blame oil prices in their last-minute notice that they were shutting down. Instead, they blamed the credit markets.

This announcement is particularly regrettable since we have achieved so much, including having a term sheet in hand for additional financing. Clearly, even in today’s challenging economic and credit environment, investors believe in Eos. Unfortunately, some issues arose that prevented the parties from moving forward.

Nice spin. Maybe the airline’s investors held out hope, but hope is not a plan. And in today’s economic environment, the bankers didn’t see that plan coming together.

Of the three all-biz airlines on the NYC-London route, that now leaves Silverjet. They’re appealing to Eos ticketholders, saying they’ll “honour the price you paid to EOS, subject to seat availability and a minimum price paid” — a minimum of £600 / $1,200 plus taxes one-way or £1,200 / $2,400 plus taxes round trip. I note that they say they’ll honor the PRICE, not the TICKET. I’ve put in a question to Silverjet, to see if this means they’ll be accepting Eos tickets as-is, or if they will require a payment in the amount of the original fare. I’ll update if and when they respond. (Updated: See below.)

British Airways is offering reduced rates to Eos customers for business class fares. No word on how big a discount.

No word yet from Virgin, American, or anyone else on the NYC-London route as to how they’ll approach Eos customers.

If you can’t be rebooked, call your credit card and try to get a refund. With Eos’ pricing being on the higher end, you’ll want that money back.

UPDATE: Silverjet clarifies their policy. “This statement means you will need to purchase new flights from Silverjet and then claim any monies owed from Eos back from them, your credit card company or your travel insurance provider.” In other words, they’ll let you buy a new ticket at the original Eos fare, which, if it was purchased a while back, may be cheaper than a walkup fare today, but they aren’t honoring Eos tickets as-is.

My wife and I try to have at least one city vacation, one beach vacation, and one outdoorsy vacation every year. The latter usually means hiking of some kind, but hardly extreme sports. We’ve done some hikes in semi-precarious spots, in places where you look back afterward and think, “What the hell were we thinking?” Hey, it builds character!

But I don’t think I would have had the stones to do what’s pictured in this video. Filmed in the Makinodromo/El Chorro area of Andalucia, Spain, the clip is a first-person view along a century-old trail that hugs the side of steep cliffs. The trail is neither wide, nor consistently… there. I’m sorry, but two-inch wide pipe, hanging over a free fall into the deep, does not a trail make. I’d be too afraid to take my eyes off the trail, I’d likely miss the views.

Beyond terror, there’s comedy! I enjoy how the filming hiker passes other more timid hikers on the trail, with considerable dispatch.

In any case, enjoy. After seeing this video, I know it’s as close as I’ll ever get to that particular vista.

(Thanks, Michael!)

Flashback to 2001… Enron was making big money trading energy, and (not entirely coincidentally) California was experiencing blackouts. Hotels across the country, but especially in California, were tacking on energy surcharges of $2 or $3 every night, instead of raising the actual rates.

Thankfully, that practice slowly disappeared, as hotels raised rates to incorporate the higher energy costs. (Airlines, on the other hand, subsequently embraced the practice of fuel surcharges, but that’s another issue…)

At this point, there’s no sign of the hotel energy surcharge coming back. Largely, that’s a function of how electricity is priced: Despite increases in fuel costs, electricity costs haven’t gone up for consumers, due largely to state and local regulation.

But hotels are feeling the pinch of higher energy costs another way, it seems, since they’re resorting to fuel-themed gimmickry to attract customers. Apparently fearful of reduced bookings, they’re encouraging guests to stay (and burn fossil fuels to get there) by offering gasoline credits.

The conference and visitor bureau in Costa Mesa, Calif., home to popular Southern California beaches and Disneyland, is offering a $25 gas or airfare rebate for travelers staying at select Orange County hotels, plus a food voucher worth $25 per night, through its “Drive and dine on us” program.
[…]
In New Hampshire, the state visitor’s bureau has a whole page of “gas saving offers” on its Web site.

They include a gas credit of as much as $50 for drivers headed to the The Highlands Inn in Bethlehem - 25 cents a mile or 30 cents a mile if you drive a hybrid.

I realize that hotels run on electricity, not regular unleaded, but the different approaches to increased fuel costs, 2001 vs. 2008, are somewhat ironic.

That said, energy is getting more expensive across the board. And I wouldn’t be surprised if energy surcharges start to reappear on hotel bills in coming months.

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Upgraded: The Five-Finger Discount
Chris Elliott essentially accuses the TSA’s baggage screeners of systematically stealing things from travelers’ luggage. Watch your designer eyewear. (How’s the hate mail from angry TSA employees, Chris?TSA employees aren’t exactly quiet when they’re criticized on the internet…)

Downgraded: Pilots’ comfort zone
Several Continental 757s traveling over the Atlantic have been making fuel stops in Canada on the westbound route. As Jared Blank points out, this isn’t a case of running-on-fumes, but as a passenger, who the hell cares? I don’t want to add a stop in Newfoundland just for kicks. Granted, I’ve never been wild about 757s on trans-oceanic routes, but the low-fuel issue isn’t limited to those routes. Pilots have been complaining that airlines have been pressuring them to fly with less extra fuel than before. After all, fuel is heavy, so carrying more means burning more. But let’s not be penny-wise, pound-foolish.

Upgraded: Advice that no one is heeding
Bob Crandall, former CEO of American Airlines, and now working for an air taxi startup, argues in the New York Times op-ed pages that we “do not need to return to the over-regulation of the past, but some government intervention is required.” This includes blocking mergers and changing bankruptcy laws to prevent airlines from operating under chapter 11. Good luck, Bob.

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The financial wiseguys at Minyanville have nailed it. They’ve pinned down, to a tee, the future of air travel fees.

I like the “Arial Font Fee” best. Can I get a discount for Palatino?

It’s item 4 of the “Five Things You Need to Know” today. The full “ticket” is here.

United Airlines is raising the fee it charges if you want to change your ticket. The fee goes up from $100 to $150.

This is the fee paid whenever you want to alter anything about a non-refundable ticket. And if the new ticket you’re looking for comes in at a higher price, you still have to pay the difference on top of that.

While it’s a sizable jump, I’m not as irked by this fee as I am by other fees. It’s a “per-use” fee, affecting only those passengers who need to avail themselves of its terms. Sure, it would be nice if there were no such fees. But it would be nice to have a pony, too. (Well, maybe the pony isn’t such a hot idea, now that I think about it.)

The airlines are obviously looking for ways to pull in some revenue. With oil getting close to $120 a barrel, they have to pay for that fuel somehow. Multiple price hikes are one way, but fees for luggage, skycaps, aisle seats, and itinerary changes are several others.

The $64,000 question remains: At what point does air travel become too expensive for travelers, both business and leisure? At what point do airlines’ price and fee hikes kill demand? We’re not there yet, but I have the sense that we’re getting closer. And if demand dies, we’ll see some more bankruptcies, for sure.

(Hat tip to Benet Wilson!)

Update: It’s confirmed.

Bonus nugget in the linked article: UA is also re-introducing the Saturday-night-stay requirement for many fares, which adds restrictions to cheaper fares. Oh well. What was I just saying about demand?

US Airways, dead-set on reminding Americans why they should dislike air travel with a passion, and insistent on making the movement from point A to point B just a smidge tackier, adopts Northwest’s 2006 “innovation” of charging a fee for aisle or window seats.

They’re even borrowing the name. Northwest called it “Coach Choice.” US Airways is calling it “Choice Seats”… in coach.

Sure, it’s not every aisle and every window, just the front rows. Sure, elite frequent flyers in the US Airways program get to reserve the seats for free. And sure, if the plane is full and there aren’t suckers willing to pay the extra fee ahead of time, anyone and everyone will get those seats anyway.

But let’s be clear: These aren’t perks. There’s no extra legroom. And these sure aren’t business or first class seats. They’re just regular seats.

For those who are shocked — shocked! — at this new policy, don’t forget that this isn’t a new idea. Sure, when Northwest did this two years ago I expressed my disdain. But that was two years ago. We’re all more jaded now, so I’ll just sigh in resignation.

The value of this program will honestly be minimal for most travelers. Sure, it’s nice to sit in front so you can get off the plane faster, but the front of US Airways economy is not a different seat, as it is on United, so you’re not getting much for your money. So instead of sitting in row 7, you can sit in row 14. Big deal.

The real losers here are other Star Alliance airlines’ elites, who might have gotten these seats for free earlier. But again, it’s not a free upgrade. It’s not a meaningful perk.

So if it’s a perk not worth caring about, why would it be a perk worth paying for?…

Simple. It’s not.

Related:
- Finding decent seats without paying the extra fee
- Northwest to elite members: Drop dead
- Yes sir, I’d just love to pay extra for an aisle seat with no extra legroom!

Travelers to San Francisco who opt for a hybrid rental car at the airport will soon get a $15 refund, in a city-sponsored incentive to encourage wider acceptance of high-mileage hybrids.

On top of that, car rental agencies will receive a 20% reduction in their airport concession fees, if, after one year, they can demonstrate that 15% of their rentals were hybrids.

Overall, good. But $15 per rental, not per day, isn’t that much of a consumer incentive to seek out a hybrid, over and above the fuel savings. But every bit helps!

Related:
- Incentives for adding hybrid cars to your travel plans
- Hertz insults our environmental intelligence with their “Green” collection

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Mergers, acquisitions, airlines shutting down, and miles… People are clearly (and understandably) nervous. A question in the comments on the last thread:

How do mileage programs work during mergers and stuff. I’m pretty deep in the United Airlines Mileage Plus program, but if United/Continental goes through, what happens to those of us that are in the program? Please share if you know…

Well, there are no guarantees in life, but historically, merged airlines have combined miles into one program, with no immediate loss. Note the word: immediate.

If you exclude Southwest and JetBlue (which offer points or credits rather than miles) most airlines’ frequent flyer programs have a similar currency with a similar redemption schedule. Not the same. Similar. Granted, there are differences between programs, but, say, American, United, and Delta all give you a base rate of 1 mile for 1 mile flown and charge 25,000 miles for their average capacity-controlled “saver” domestic award.

According to press releases, Northwest miles will be incorporated into the Delta program 1:1. So far so good.

But make no mistake: Down the line, you’ll lose. Mergers will result in diminished flights — older planes won’t be replaced, unprofitable routes will be retired, and the airline executives’ mantra of “overcapacity” will finally be answered with capacity reductions. But all the miles in the frequent flyer programs didn’t decline in capacity. If anything, they increased in number. So a boatload of miles will be chasing fewer and fewer award tickets.

It’s an inflationary scenario. Unless a miracle happens, going forward, the cost of “free” tickets will go up. Fees will increase. And all that means is your miles will be worth less.

Add to that the fact that such inflation is already underway, even without the mergers. Things don’t look good for miles.

To the reader’s question re: United and Continental, I would expect the same as above. I don’t think you have any immediate worries, but long-term worries are sensible concerns.

Bottom line: Start spending your miles. And if you work for it, you can still get decent value. (My yardstick is still an aggressive 1.7 cents/mile or better. Anyone who repeats the conventional wisdom that you should only count on 1 cent per mile — or worse — isn’t trying hard enough. If they were a financial advisor, it would be like proudly earning you 2% a year. Fire that advisor.)

Merger speculation is no longer speculation
It’s on. Delta is officially offering 1.25 shares per Northwest Airlines share, a 16.75% premium over closing prices of DAL and NWA, respectively. Important to the success of the merger: The pilots’ union, ALPA, gets a seat on the resulting airline’s board and 3.5% equity in the company. The result, if it passes shareholder votes, is the world’s largest airline.

Up next: Continental-United. It’s going to happen, though nothing is official. Northwest’s linkup with Delta makes it possible, since Northwest held a “golden share” of Continental stock and could nix a merger if they wanted. Sigh. With several airlines folding in the past weeks, and with one or two mergers coming up, competition will (at least temporarily) be reduced significantly. Watch for prices to rise. But will rising prices kill demand?…

Who will be next to fall?
Chris Elliott may be making book on which airline will fold next, but it won’t be Virgin America. (I put an exacta box on Alitalia and SunCountry, with a side bet on Mesa and a long-shot on VA. The latter bet may be down the crapper. Thankfully, no money changed hands…) The Branson-powered airline will get another $100 million in capital from investors. Profitability is still 3 years away, they say. Three years for me to win that bet!

More FAA inspections… but no groundings
The FAA, fresh off its attempted legitimacy-building groundings of American’s MD-80s, is ordering the repair of wing de-icing systems, landing gear, and (!) oxygen masks on 1980s-era Boeing 737s. That means Continental, Delta, Southwest, United, and others will have some repairs to make. But it’s obviously not urgent, since the airlines have 36 months to fix things. So, three years from now, if airlines are grounded for these problems, you’ll know why. Bonus: United and the Air Transport Association asked for 48 months, instead of 36. Denied. This really, really, really must not be a big deal.

Peter Greenberg disagrees, after chatting up an FAA inspector responsible for Mesa’s fleet. But Peter, much like with a car, there are degrees of repair. Sure, I should get those wiper blades replaced on the old Honda, as they’re streaking a bit when I wipe the dew off in the morning, but they’re not a danger to me… yet. I agree that repairs should be made, and maintenance is important, but as long as the FAA says it’s minor work and the pilots are willing to put their lives on the line, I’m willing to take the chance and get onboard.

Urinals!
We’ve been promised martini bars, bedrooms, and even weight rooms, so I’ll believe it when I see it, but here’s another in the long line of upgrades to the inflight experience:

Airbus announces the option of urinals in onboard restrooms. That will make turbulence so much less … messy.

But not good enough, Airbus: I demand bidets!