It’s no secret that the U.S. government wastes huge amounts of money on airfare, and that waste has been institutionalized. So it’s hardly a surprise that Republican presidential candidate Ron Paul has done the same, as an Associated Press story pointed out yesterday.
The reason for the story was the apparent discrepancy between Paul’s crusade against excessive government spending and his own spending. But while he did waste taxpayers’ money, he didn’t break any rules. So perhaps it’s time for the rules to change.
Government employees are usually required to buy full-fare tickets — meaning Y or B booking class — when traveling on business. The main reason for that is to have the flexibility to change and cancel those tickets for free.
Because of the massive amount of business the federal government gives the airlines, they provide it with special fares, which still carry the Y and B codes but are much cheaper than the regular published Y and B fares. For instance, the discount on a round-trip coach ticket to Europe can be over $2,500. I gave a specific example in a column last July.
However, those special fares are still much more expensive than the lowest published fares, which of course come with penalties for changes and cancellations — and while most of them are non-refundable, one can almost always use the amount paid, minus the change fee, for a future ticket.
I would guess that buying regular non-special fares and paying the penalty if necessary would be much cheaper than purchasing full-fare tickets. History shows that changes are not made too frequently.
There is another source of waste. Although the government fares are free to change and cancel, that “free” applies only to the airlines, meaning there are no airline-imposed penalties. Booking government travel is handled by large travel agencies, which charge as much as $90 per transaction — every time one of their agents touches a ticket to issue, change or cancel it.
First and Business Class tickets are usually allowed only on very long intercontinental flights, though each government agency can set its own policy. The rules are often bent for top management, and members of Congress certainly fall in that category.
The AP story said that Paul flew in paid First Class dozens of times since May 2009 on Continental flights between Washington and his Texas district. In addition, even when his office bough coach tickets, he often got upgraded, because Continental offers instant upgrades on Y and B fares, depending on availability.
So while it may be more prudent for Paul to put his money where his mouth is, the much bigger question is whether the current rules for government air travel need a fresh look.
In fact, any government agency could probably save millions if it used the Kralev Method from “Decoding Air Travel.” Pardon the shameless plug, but I’d be happy to teach them.
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United Airlines, already one of the biggest abusers of fake “direct” flights before its merger with Continental, has increased further the number of those flights in its schedule. Its oddest decision was to introduce fictitious “direct” flights, which consist of two or more segments with nothing in common but their number, between its hubs.
If you are shopping for a ticket from Chicago (ORD) to Denver (DEN), be very careful which flight you book. In addition to 10 daily nonstops with flying time of about 2 hours, United currently has three “direct” flights on that route, but they make a “stop” in Minneapolis (MSP), Des Moines, Iowa, (DSM) and Kansas City, Mo., (MCI), respectively.
Watch out for any indication of that, as obscure as it may be. In most cases, those are not just “stops” — the two “legs” are operated by different aircraft, so they are simply connecting flights. For example, the first “leg” of flight 817 yesterday arrived in Minneapolis at gate E6, but the “continuation” departed from gate E10.
As I’ve written before, most flights labelled “direct” by U.S. carriers are fictitious — they don’t exist in real life. They are meant to make more money for the airlines by tricking customers and perverting a practice that was actually started to help travelers. In fact, they spell nothing but trouble for passengers.
Historically, United and Delta have had more fake “direct” flights in their schedules than any other U.S. carriers, though all airlines engage in that practice.
For years, United has focused on adding at least one domestic tag to most of its international flights. For instance, flight 917 from Frankfurt (FRA) to Washington (IAD) “continues” on to Seattle (SEA), though the second flight has nothing in common with the fist. Yesterday, the flight from FRA was operated by a three-cabin Boeing 777, as usual, and arrived at IAD at gate C1. The flight to SEA was operated by a two-cabin Boeing 757 and departed from gate D4.
In the last several months, United has significantly stepped up the questionable practice on purely domestic flights. Currently, there are very few flights with only one segment. Most flights between Washington National (DCA) and Chicago (ORD) used to be one-leg flights. Now, most are part of fake “direct” flights with two or three segments.
It’s clear why the airline is selling “direct” flights from DCA to San Francisco (SFO) — it wants you to think that you can go all the way to the West coast from DCA with no hassle.
But why on earth is it selling fake “direct” flights from IAD to SFO, given that there are nine nonstops on that hub-to-hub route on most days? In its upcoming winter schedule, it has four “direct” flights between those cities. Two of them have two segments — one “stopping” in Dallas (DFW) and one in SEA. The other two have three segments each — one “stopping” in DEN and Las Vegas (LAS), and the other one in ORD and San Diego (SAN).
Is it possible that United has run out of flight numbers because of the merger? That may be the case with three-digit numbers, but what’s wrong with four-digit ones?
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This should not be news, but it is: U.S. airlines have finally begun advertising some airfares properly, meaning they now show round-trip prices instead of the longtime marketing ploy of “each way based on a required round-trip purchase.” But those are just baby steps, as some taxes and fees are still being excluded.
When I wrote about false fare advertising in 2008, my copy editor at the Washington Times put this headline on my column: “Fare sales often lost in translation.” I compared the deliberately misleading airline practice to the mysterious “Twin Peaks” revelation “The owls are not what they seem.” I also wondered, If a round trip is required, why on earth is only half of the actual fare being advertised?
This month, United Airlines became the first major U.S. carrier to change its policy and advertise predominantly round-trip fares on its website — the only exceptions seem to be last-minute weekend specials. The airline is currently promoting five domestic and four international sales on its site, and they all include round-trip prices and fuel (YQ) surcharges — though some taxes and fees are excluded.
For example, a Business Class fare for a round trip from Los Angeles to Shanghai is shown as $3,513, while the total final price as of today is $3,572, if booked on nonstop flights. A round-trip Business Class fare from Washington to Rome is displayed as $2,411, and the final price is $2,460, if purchased today on nonstop flights. As you see, the differences are not that big.
All other carriers should follow suit. Continental and US Airways display some fares as round trips, but most of their advertising is still being done the old-fashioned way, as is American’s and Delta’s. Southwest, Alaska Airlines and Virgin America show one-way fares but don’t require round-trip purchases.
Although the Department of Transportation has looked into the issue and called on the industry not to deliberately mislead consumers, it has done nothing to stop the controversial practice. The European Union (EU), on the other hand, has been much more proactive on behalf of travelers. That’s why fares in Europe are advertised with the full ticket price.
Some of the European carriers that fly to the United States, such as Spain’s Iberia, are honoring the EU rules globally and displaying actual full prices on their U.S. websites as well. But others, such as British Airways, Air France and Lufthansa, while observing the rules on their home turf, have given in to the pressure from their U.S. competitors and adopted the “one-way based on a round-trip purchase” policy.
In January, all four above-mentioned European airlines offered the same fares from New York to London. The last three advertised $199, while Iberia showed $584, which is what the actual fare was, including all taxes and surcharges. Singapore Airlines, also having the guts to be honest with its customers, promoted a $586 fare from New York to Frankfurt that was truly the final price.
It’s high time the airline mentality of trying to trick customers changed once and for all.
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As United and Continental prepare to become one airline, they are making changes that, though necessary, are affecting negatively their customers. One consequence is that upgrades on international flights will be harder to get in the short run, and more expensive in the long run.
The carriers announced last month that they would begin “cross-fleeting” — swapping routes in each other’s network — and some of those changes have already been loaded in their schedules. Both United and Continental will be serving certain routes in the next several months, but each of them is taking over other routes entirely.
For example, all Anchorage flying goes to Continental, as do the Washington-Paris and Washington-Amsterdam routes, now operated by United. The current Continental flights from Newark to Zurich and Brussels, as well as its Houston-Lima flights, will be flown by United.
That practice is not unusual in airline pre-merger situations. While the United-Continental merger was legally completed late last year, they will be operating as separate airlines until they secure a single certificate from the Federal Aviation Administration, which is expected to happen by early next year.
However, United and Continental are implementing the route changes before resolving some technical issues that will harm their customers.
If you are a United 1K flier and have system-wide upgrade certificates, you can’t use them on the previously United flights now operated by Continental — and the other way around. The same applies to your confirmed regional upgrade certificates on domestic flights. As of now, it’s technically impossible for the carriers’ reservations systems to accept upgrade certificates from the other airline’s frequent-flier program.
Mary Clark, a Continental spokeswoman in Houston, confirmed that certificates will be “carrier-specific” for the time being. “We are in the process of aligning the programs, and changes to the current policies will be announced as they are rolled out throughout the year. We aim to fully combine the programs by 2012.”
United is expected to adopt Continental’s reservations system eventually, but until then, there may be another way to resolve the issue. The carriers announced this week that miles can now be transferred between United and Continental accounts. I wonder if they can make it possible for upgrades to be transferred as well. It’s unclear if they looking into such an option yet.
There is another issue with the United system-wide upgrades whose impact is just now becoming apparent. For years, they have been allowed only on tickets booked in W class or higher, which makes S, T, L and K classes ineligible. Continental recently adopted the same rules.
This means that customers often have to spend hundreds of dollars more than the lowest available fare, just to qualify for an upgrade request — and if the upgrade doesn’t clear, they are left with a lot less money and the same coach seat they would have had if they had paid much less for it.
Things are getting even worse. In January, because of the merger, United added a 14th coach booking class, G, which was a regular published booking class on Continental, but on United it was previously an unpublished travel-industry discount class — it didn’t earn miles and was ineligible for upgrades.
Now, instead of four, there are five booking classes ineligible for system-wide upgrades. So what? you might ask — just a small technicality. Not quite. As a result of this change, W fares are getting more expensive. For example, a base fare of $800 that might have booked in W class before, now books in S or T. A few days ago, I helped a friend with a ticket from Washington to Bangkok, and the W base fare was more than $1,400 round trip — including taxes and surcharged, it came up to $1,900.
There is no question that fares have been going up for some time. A few years ago, a W fare to Bangkok was about $900, including taxes. In 2002, an H fare was $900. So the trend is clear and it didn’t start yesterday. But adding one more booking class makes things even worse.
It’s worth pointing out that American Airlines system-wide upgrades are allowed on all published booking classes.
Another negative change as a result of the United-Continental merger is that, similarly to the upgrades, discount vouchers from one airline cannot be used on the other. So if you want to use a United voucher for a ticket to Anchorage, you can’t, because United has given its seasonal service to Continental.
This week, the United website seems to be including Continental flights in electronic certificate-discounted itineraries, but the official policy hasn’t changed. It may be a website glitch, given that it also allows Lufthansa flights, and the vouchers’ terms and conditions specifically say that they are not valid on code-share flights.
One positive merger-related change is that United customers can now avoid StarNet blocking — it has diminished but still exists — by transferring their miles to Continental, which doesn’t block Star Alliance partner award seats.
NOTE: Several months after this column was published, United and Continental made it possible to use upgrades on flights operated by the other airline, including on mixed itineraries.
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Delta Airlines has cemented its status as the network U.S. carrier with the worst frequent-flier program, further devaluing its long-cheapened SkyMiles. The leadership of the program or the airline — or perhaps both — doesn’t seem to understand what the loyalty business in 2011 is about. It may be time for a new team at the top.
For more than a year, Delta failed to publish an award redemption chart for most of the world, resulting in lack of transparency about how many miles were really needed for an award ticket.
When it finally unveiled a chart this week, the mileage rates on many routes were increased significantly. Many loyal SkyMiles members felt cheated and disrespected, calling Delta’s move a “stunt” in comments posted on FlyerTalk, the largest online travel community.
If you wondered why Delta announced last week the elimination of miles’ expiration, my guess is that it tried to soften the blow of what was coming — and to claim that it cares about its customers. In reality, almost everything SkyMiles has done in recent years has been decidedly customer-unfriendly. I’m not an active SkyMiles member and have no dog in this flight, but I’ve been appalled enough to write about it.
In comparison to its two largest competitors, American and United, Delta’s upgrade and award policies are the most restrictive and inflexible. Its system-wide upgrade certificates are only valid on tickets booked in Y, B and M class, and are not transferable. American’s upgrades can be used on just about any fare and gifted to other people. United’s certificates exclude only the lowest booking classes and can also be transferred.
In 2008, Delta devalued its miles by adding a third award tier, in an attempt to mask its very poor award availability at the lowest level. A year later, it devalued its elite status when it introduced a fourth tier, Diamond, on top of Silver, Gold and Platinum. If that’s not bad enough, Delta also charges some fees that are hard to justify, such as $50 for booking an award originating outside the United States.
The main reason frequent-flier programs exist is not to make customers happy, but to make money — and most of them do. I’ve never considered that a problem. A successful business deserves all the rewards it can get. My problem has been with the way airlines have been trying to make money through their so-called loyalty businesses. For decades, they have had an utterly peculiar philosophy, which can be best described at a “screw the customer” approach, which I explain with a misguided view of what the loyalty business is about.
Fortunately, a few airline executives recently saw the light, and things are starting to change. I’ve written several times about what Graham Atkinson did when he was president of United Mileage Plus for less than two years, beginning in the fall of 2008. He understood the essence of customer loyalty and showed that what’s good for the company doesn’t necessarily have to be bad for customers. While he wasn’t able to end StarNet blocking, he actually listened to customers and reversed decisions based on their feedback.
American’s AAdvantage program also has progressive leadership that rewards top fliers appropriately and has tried to make it easier for members to use their miles. There is still a lot to be desired, but it’s on the right track.
Delta, on the other hand, has been stuck in the 20th century. It seems it’s working hard to perfect the “screw the customer” approach.
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