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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You may have seen TV commercials featuring American Express or Capital One credit cards that promise points or miles with the clout to get you any seat on any airline without blackout dates. Those financial services companies try to distinguish their own loyalty schemes from airline programs, which restrict access to award seats.
Non-airline programs are not affected by award seat limits, because they don’t need award availability to book you on a flight. Instead, they sell you a regular revenue ticket, charge the ticket price on your credit card, then credit the cash amount back to your card and take miles or points out of your account, whose number is based on a standard formula.
Let’s say that you want to use your Capital One miles for a free ticket. The Capital One website performs a flight search and you choose a flight that costs $100. Once the ticket is issued, 10,000 miles will be deducted from your account.
While Capital One values $1 at 100 miles, the American Express Membership Rewards program converts $1 into about 80 points, though the precise number varies based on the type of card you have.
By any measure, that is a lot of points. If we assume that the average U.S. domestic round-trip ticket costs about $500, Capital One will charge you 50,000 miles and American Express 40,000 points. In comparison, you need only 25,000 miles from most airline programs — if there is award availability, which is a big if.
Of course, many airlines will also give you any open revenue seat on any flight, but for double the miles required for a “saver award” — they call it “standard” or “anytime” award. If you need a First or Business Class ticket, the airlines will actually give you a better rate even on a “standard award.” Such an award from North America to Europe in Business Class will be about 200,000 miles. Assuming that the average revenue ticket costs about $5,000, Capital One will charge you 500,000 miles and American Express 400,000 points.
It’s worth noting that the airline mantra about giving you the last available seat on a flight as a “standard award” is changing, and that privilege is no longer available to everyone. For example, it’s one of the benefits of United’s new Mileage Plus Explorer Visa card from Chase, which means that customers who don’t have the card — and are not elite fliers — won’t have access to that last seat.
The real advantage of the tickets purchased with non-airline miles or points is that they earn miles, because they are in effect revenue tickets — the airlines will never know that you didn’t pay money for them.
That same model is used by some hotel loyalty programs, including Starwood and Priority Club, which allow points to be redeemed for flights. Even some airlines offer such options, in addition to their regular award redemption opportunities. For example, United’s Mileage Plus Choices program is very similar to Capital One’s scheme, valuing $1 at 100 miles — only miles earned from Mileage Plus co-branded credit cards can be used for such tickets.
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There must be very few things more embarrassing to an airline than losing the luggage of a passenger who paid more than $12,000 for a First Class ticket. Even more shockingly, British Airways, which did just that last week, didn’t try to right the screamingly obvious wrong and offer some sort of a good-will gesture.
Many of us often wonder who would pay $10,000 or $15,000 for a plane ticket, but let me assure you, there are such people. Premium travel has staged a remarkable recovery in recent months. As I look at flight inventory, I’m amazed every day by how full Business and First Class cabins are on various carriers.
The case in point was actually very close to home, as the passenger was a colleague whom I’d helped book his ticket. Another curious detail was that, after the ticket was issued, he needed to move his return flight a day earlier, and British Airways imposed a $750 penalty for the change — yes, on a $12,000 ticket.
He had one connection — in London, of course — on his way to another European city. Not too complicated, one might think. However, when he arrived at his final destination, his luggage was missing. It was eventually discovered in London, but although British Airways had several more flights to the city where he was that day, the luggage wasn’t delivered at his hotel until 1 a.m. the following day — 12 hours after his arrival.
Not too bad, you might say. Many passengers wait days for their bags, and some never see them again.
I may have agreed with such an attitude had the airline not collected $12,000 from the passenger for this trip. How could any self-respecting carrier not take all necessary measures to ensure that such customers’ luggage arrives on time at the right place? In the grand scheme of things, this wasn’t a huge problem, but it speaks ill of the airline — and it certainly ruins the First Class experience.
What makes things much worse is that, a week after the incident, British Airways, which is a member of the Oneworld alliance, has offered no compensation, good-will gesture or whatever one might call it. Moreover, when the customer asked for a token of appreciation in the Concorde Room, the carrier’s First Class lounge at Heathrow Airport, on his return journey, his request was rejected.
Instead, he was advised to contact Customer Relations. While that may be considered a standard procedure in the airline industry, the airport agent could have been much more helpful and not passed the responsibility to someone else.
After all, the people who pay $12,000 for a plane ticket are not that many. Any airline should try really hard to keep them as customers.
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Today’s column is rather unusual. I’d like to use this space to introduce the world’s first company to bridge the widening gap between the services provided by travel agencies and the growing and diverse needs of the sophisticated modern air traveler.
The launch of a brand-new website means that Kralev International LLC, the company I founded recently, is now officially open for business.
Kralev International is a very different travel consulting and training company. Its mission is to improve its clients’ travel life in ways they never thought possible. It helps both businesses and consumers significantly reduce travel costs, increase convenience, comfort and luxury, and generally navigate the increasingly complex air travel system more effectively.
We are aware of the limitations of a travel agency and the frustrations they cause a busy traveler, who wants much more than an airline booking. We’ve all had questions a travel agent couldn’t answer: Why did I find a lower fare online? How do I secure an upgrade? What’s the best frequent-flier program? How many miles will I earn? Which airlines have flat beds in Business Class to Europe? What’s the best Star Alliance lounge in Tokyo?
Why don’t travel agents have those answers? Because their job is largely limited to booking tickets in an office — not traveling. They have never been in your shoes, globe-trotting and living on the fly, so they don’t truly know your needs. We live your jet-setting life, so we do have those answers.
Our corporate services include strategic travel planning and cost-saving, exclusive air travel intelligence, flight upgrade strategies and tactics, securing elite airline status and frequent-flier account management. We offer both one-time and recurring training sessions, as well as per-trip and retainer-based Executive Privilege consulting services.
Even though we are not a travel agency, we do book complex international itineraries, because we can save you hundreds of dollars per ticket. For consumers, we have customized in-person and web training, and our unique Travel Angel consulting service, which includes frequent-flier account management, upgrade strategies, securing elite-status and booking airline award tickets.
At the bottom of the new site’s homepage, there is a section called “Challenge us.” Anyone planning a trip can take advantage of it. Tell us about the lowest fare you found and challenge us to beat it. We have saved clients up to $1,300 per person in coach and almost $5,000 in Business Class. The biggest savings, of course, are on international tickets.
If you have comments on the new site, which was designed by Blue Water Media in Washington, we’d love to hear your feedback.
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US Airways has denied recent suspicion that it has begun to block award seats made available by its Star Alliance partners for mileage redemption by members of its Dividend Miles program — a practice pioneered by United Airlines, which I first exposed in 2008.
The airline has been silent on the issue since reports about apparent blocking surfaced last fall. Many travelers said they found award inventory on various Star carriers, using one or more of the publicly available sources — the websites of All Nippon Airways, Continental Airlines and Air Canada — but US Airways agents were unable to see those available seats.
To some of us, that looked very much like StarNet blocking — manipulating the alliance’s award “middleware,” which provides access to any Star partner’s inventory on a first-come-first-served basis, to avoid paying other carriers for seats booked on their flights. The patterns resembled those on United, with the most filtering applied to Business and First Class cabins, though some fliers stumbled on coach seats as well. The most affected availability appeared to be on Lufthansa, but also on Swiss, United and others.
In addition, it made financial sense for US Airways to be limiting access to premium partner awards. In the last couple of years, it has in effect been printing miles with lightening speed, as a result of extraordinary promotions it has had, including selling miles at 100-percent bonus. Many Dividend Miles members bought miles and redeemed them for Business and First Class on partner flights, which likely weighed heavily on US Airways’ budget.
Several travel bloggers wrote about the issue, including Gary Leff on “View from the Wing” and Ben Schlappig on “One Mile at a Times.” Leff was more inclined to give the airline the benefit of the doubt, suggesting the problem might have been caused by technical glitches, as well as US Airways agents’ ignorance that some of their partners have First Class in addition to Business.
I’m not a big Dividend Miles fan, though I did help my sister buy miles for a trip to Europe with her family last summer, so it took me some time to look into the issue. I finally got around to it and alerted a US Airways contact at its Phoenix headquarters who has been very helpful in the past — Valerie Wunder, associate manager of media relations. She asked the powers that be and gave me the following response:
“We don’t block award inventory on other airlines, nor do we do the inverse — other Star partners block us from seeing their inventory to maximize their revenues.”
Probably the most frequent difficulty Dividend Miles members have been experiencing has to do with intercontinental First Class awards on Lufthansa, Swiss and others, so I asked Wunder if US Airways may be trying to restrict access to those specific seats.
“We have no restrictions on redemptions, regardless of class,” she said.
However, she offered no explanation for the problem. The mystery continues.
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