Alliances of global airlines — oneworld, Skyteam, and Star Alliance — are under attack. Attached to proposed legislation to upgrade the air traffic control system, a new proposal could be the death knell for the alliances — or at least the end of their legal presence in the United States.

Rep. James Oberstar (D-Minn.), a longtime critic of the alliance system is harnessing unease in Washington D.C. about the competitive impact of international pacts to back a bill that could have a drastic impact on existing and planned airline cooperation.

The chairman of the U.S. congressional committee that oversees airlines is pushing an aviation bill that would automatically withdraw antitrust approval for alliances within three years, although they could be restarted under more stringent rules.

The bill is attached to a $70 billion proposal to modernize the creaking U.S. air traffic control system, which gives it a greater chance of becoming law.

Its provisions could lead to the rolling back of the antitrust immunity, or ATI, already in effect for members of the Star and SkyTeam alliances. It could also derail efforts to expand these groupings and extend immunity to members of Oneworld, the smallest of the three.

Remember that Oberstar is the same legislator trying to block liberalization of airline ownership rules. I would argue that alliances would never have become necessary if nations — like the US — had more reasonable cross-border ownership rules. The alliances are a way to give the companies backdoor merger benefits (e.g., “revenue sharing” on trans-Atlantic routes) alongside the efficiencies that come with aligned schedules.

So what happens if alliances are declared a monopoly in the US, or elsewhere? Frankly, it could be a good thing for passengers, as long as codesharing isn’t entirely eliminated in the process. Alliances may have benefited travelers where schedule alignment and frequent flyer partnerships are concerned, but they’re legal oligopolies. They admit as much: That’s why they require antitrust immunity in order to function.

If airline alliances were to disappear, international passengers would likely see some inconvenience at first. But how much inconvenience? Global lounge access? Priority tags on your luggage? Really, what would change? And for how long? Over time, airlines would negotiate bilateral partnerships in lieu of broad alliances.

And what about the upside? As it stands, alliances are essentially a legalized price-fixing scheme. They’ve always been for the convenience of the airlines, not the passenger. So eliminating price fixing sounds like an easy win for the consumer.

Oberstar may be wrongheaded with his advocacy of protectionism, but he may be onto something with regard to alliances.

Downgraded: “Fakeproof” passports
I love stories like this: British authorities touted the safety and security of their “e-passport,” effectively a passport with an embedded radio-frequency chip. Hacker-proof, they claimed. It was cracked, cloned, and altered within minutes. Minutes. Not even hours, much less days, or weeks. Minutes. The computer researcher proved his point by changing the data to make the passport appear to be Osama bin Laden’s, complete with passport photo. Just awesome. (Recall that, as posted a couple years ago, the easiest way to destroy the chip inside your passport, if you’re wary of RFID scanners stealing your personal information, is with a hammer.)

Downgraded: American Airlines upgrades
A downgraded upgrade? Indeed. American recently rolled out copayment fees for many of its upgrade awards. See the changes on the award chart here. More evidence of the devaluation of miles, if you needed a reminder.

Upgraded: European booking war hilarity
Britain’s Thomson Holidays, part of the TUI Group, came under heat for offering vacation rentals in Greece or Turkey for £14 a week. At £2 a night, that’s some cheap sleeps. Why was this problematic? Competitors complained that Thomson was changing customer expectations, causing travelers to hold out and wait for the rock-bottom room rate, instead of booking early. Sounds like crybaby talk to me.

Upgraded: Alliance dalliance
It’s not really a surprise, given the urge to merge that’s rampant in aviation today, but American Airlines, British Airways, and Iberia are looking to link up. They’re already alliance partners within Oneworld, and this isn’t a merger (yet), but the three airlines are trying to get antitrust immunity, so they can collude and set fares together. There’s really no benefit to consumers in this, especially if you fly between London and the United States. AA and BA dominate those routes, and the companies want to expand their price-setting power.

Upgraded: Google Maps’ sense of humor
Remember how Google Maps gave directions from the U.S. to Europe which included the instruction to swim across the Atlantic? Those jokesters recently did it again, suggesting you kayak across the Pacific Ocean. (They took it down, alas.)

Upgraded: Your chance to speak your mind on aircraft interiors
Friend of the blog Addison Schonland is doing some market research on aircraft interiors, and what you want to see inside those aluminum tubes. Take his poll, which will hopefully filter through to airline designers and execs attending the Aircraft Interiors Expo show next month.

Upgraded: Stormy weather
Priceline is once again rolling out a cute promotion, which promises to pay the cost of your vacation package if your trip is rained out, through November 16, 2008. The “Sunshine Guarantee” kicks in if a half inch of measured rainfall is present on HALF of the days of your trip. That’s a lot of rain, so don’t count on any payout. Kerala monsoon holiday, anyone?

Downgraded: OneWorld cooperation
American Airlines AAdvantage members will no longer earn elite-qualifying elite-bonus frequent flyer miles when they fly on oneworld partner British Airways. Lovely. Remind me why we have alliances, again? Updated: Several readers have written in (and the Global Traveller has written in comments) that the linked article by Tim Winship is wrong: Elite bonus miles are cut. Elite qualifying miles remain. I note that smartertravel.com pulled the article down from their site. Thanks to all who wrote in!

Upgraded: Motel 6’s reputation
Arthur Frommer offers this tip on finding “a stunning value for the price” in hotel accommodations: Look for ones that feature an interior corridor. “Stunning value”? That’s really quite an endorsement. I appreciate the sentiment — and yes, those with interior corridors are newer than those with exterior corridors — but isn’t it still just a Motel 6? The walls are thin and the bed isn’t that comfy. Sure, it’s better than some alternatives, but “stunning value”? I’ve stayed at Hyatts for $37 a night via Priceline. THAT’S “stunning value.”

Upgraded: In-flight service, Sesame Street style
Next flight, remember: Your flight could always be worse. You could end up with Grover as your flight attendant. Video below… (via FlyAwayCafe)

Is there any difference (in your opinion) in per-mile value depending upon a) alliance (Star vs OneWorld vs Skyteam) or b) individual airline?

E.g. what is better 100,000 Delta miles, 100,000 United miles or
100,000 Continental miles (for simplicity, let’s assume you are
non-elite in all of those and that the above miles are all you have in
each program)

Good question, Anton. Yes, I think there is a difference in value between programs, but it’s not easy to quantify. Prepare to geek out!

Redemption rates
Short answer: Yes, there’s a difference. Different airlines charge different amounts for similar tickets. But one airline may cost more for one route, and less for another, especially on international routes and in premium classes. For example:

• Flying from North America to Europe in economy class costs 50,000 miles for a typical coach ticket on American, United, Delta, and Continental, to name a few. If you’re a resident of Europe, Lufthansa charges 60,000 miles for the same itinerary. Bizarrely, they charge Americans only 50,000.
• Business class for the same US-Europe itinerary is 90,000 miles on most airlines, but for a few short weeks, United still only charges 80,000. (United is raising the price to 90,000 on October 16, so book quickly if you want the lower rate. See here for details.) But Northwest charges a full 100,000 for the same ticket. Europe is no value on NWA.
• Business class from the US to Australia with United miles (post October 16): 110,000 miles. With American miles: 125,000 miles.
• Chicago to New York area airports on American: 15,000 miles (limited time short-hop rate). Continental: 20,000 miles. Everyone else who flies nonstop (United, Delta): 25,000. On a percentage basis, that’s a big difference.

So, some airlines have “bargains” for certain awards, making those miles worth more than others for those awards. And if you fly those routes, you get more value for your miles.

But… it would be nearly impossible to come up with a one-size-fits-all formula that accurately reflects the differences between programs. Why?

Besides redemption rates, I’d suggest that there are (at least) three other variables that affect comparisons between programs: 1) accrual ease, 2) route network, and 3) redemption ability (award supply).

Accrual ease
If you’re looking to choose a program in which to accrue miles, mileage-earning opportunities matter. You want to be able to earn points easily. JetBlue’s program lets you earn miles in one of two ways: flying JetBlue, or by using their credit card. Not a lot of options there.

At the same time, you could make an argument that excessive accrual opportunities are bad for the program in the long run. Miles function like a currency. If airlines increase the number of miles in “circulation” too much, without award supply moving up similarly, then you’ll have more miles chasing fewer awards. This is what’s happening now, actually: People have the points, but can’t get the ticket they want. The imbalance creates inflationary pressure, meaning that airlines will want to raise the “price” of their award tickets to even out supply and demand.

But in your example, Anton, you have 100,000 miles in the program of your choice, and you’re looking to cash things in right now. So, despite mileage accrual’s effects on your experience with a program, let’s put accrual aside.

Route Networks
Where you fly matters, both for accrual and redemption. If your miles don’t get you where you want to go, then who cares? And this throws a wrench into any efforts to create a formula. One program may work great for one person, but not for another.

Let’s say you want to fly regularly from Los Angeles to a city that’s not a huge hub. Like, say… Tegucigalpa, Honduras! In such a case, you’re probably better off joining a program with an airline in the oneworld (e.g., American) or SkyTeam (e.g., Continental, Delta, Northwest) alliances, and not Star Alliance (e.g., United, US Airways). Star Alliance doesn’t fly to Honduras (though United has a separate side partnership with Central American carrier TACA).

Even domestically, route networks vary. You can’t visit North Dakota with Southwest Airlines Rapid Rewards, for example.

For what it’s worth:

• Star Alliance airlines fly to 842 destinations
• oneworld covers “over 600″
• Skyteam claims 728 airports.

Redemption ability/Award availability
You can’t buy anything if there’s nothing on the store’s shelves. But it’s really hard to accurately gauge just how easy it is to grab award seats. And airlines aren’t talking. They’ll tell you how many tickets were redeemed with miles, but how many tries did it take? Was it the first choice? How far in advance were reservations made?

InsideFlyer tried to put airlines to the test, but their methodology isn’t foolproof. So we’re stuck with anecdotal evidence: Some airlines are notoriously difficult for cashing in miles (Continental) while others have a better reputation (American, Southwest).

So whose miles are worth the most? Sorry to waffle, but it really depends on you…

(image: Alex Segre)

A short write-up of around-the-world ticket options in the New York Times today, while generally good, left out some important options.

- Branch out. The article advises checking with the 3 big airline alliance websites (Star Alliance, OneWorld, and SkyTeam) to see flight options. That’s great, but don’t limit yourself to the alliances alone. Some airlines have side agreements outside their alliance that may be appealing, such as the Emirates/United round-the-world ticket.

- Talk to a travel agent. While many airlines can sell you the ticket, it’s often easier to deal with an agent for this kind of thing. Not every airline customer service rep knows the minutiae of round-the-world ticketing. I’d even suggest you talk to more than one travel agent, to compare pricing, routing, and heck, personality.

- Start in Sri Lanka. If you’re going around the world twice or more, consider buying the second (and third, etc.) ticket someplace like Colombo, Sri Lanka. I’m not kidding. You can buy a business class RTW ticket there for about the same price as a coach RTW ticket in the US or most of Europe, on the same airlines. The article mentions this, but it’s really worth driving home.