Downgraded: Premium seats on Qantas
Qantas is cutting the number of premium seats. No surprises there.

Upgraded: A380 first class seats
The Global Traveller has flown the A380 on Singapore, Qantas, and Emirates, and offers a comparison of all three products. Well played, sir. Well played.

Downgraded: Airbus A380, not so premium
In direct contrast to the previous item, how about an A380 equipped with 840 seats? Air Austral, which travels between La Réunion in the Indian Ocean and Paris, has ordered two single-class A380s, jam-packed with passengers.

Upgraded: Tokyo
Forget Paris, New York, San Francisco, London, Chicago… Tokyo gets the nod for the city with the most top Michelin-starred restaurants.

Downgraded: Flying into de facto lava fields
Horrible event, but a great headline: “Plane Misses Runway, Lands in Lava“… The accident occurred in Goma, Congo, where the runway was cut in half by the lava flow from a 2002 volcanic eruption. Apparently, there were a few injuries, but thankfully no deaths.

Downgraded: Amex cards’ point/mile programs
Want to earn the miles or points from an affinity credit card purchase? Be sure to pay the bill on time. American Express is withholding the points if the cardholder doesn’t pay the bill by the due date. Customers forfeit the points, unless they pay a $29 reinstatement fee, in addition to late charges and interest. This isn’t just Amex: JPMorgan Chase has a similar policy with their United Visa. Expect this to be the norm. And try to pay that bill on time.

United must have gotten a lot of complaints, as they’re reinstating the so-called “regional” upgrades:

1K® members will continue to earn Regional Upgrades
Sometimes no change is good news. After our last announcement, we heard from our 1K members how much they value their Regional Upgrades. To thank them for their ongoing loyalty, we’ve decided to continue issuing Regional Upgrades to 1Ks, even after the Unlimited Domestic Upgrades program launches.

That gives top-tier elites the best of both worlds: A reserved upgrade if booked in advance (and if United releases seats for upgrade early…) and the top of the free-upgrade list if they’re sweating it out at the gate.

And entry-level elites don’t really lose anything here. The 1Ks would be ahead of them in line, anyway.

—

Separately, United and Continental announced that reciprocal “unlimited” upgrade privileges will roll out in mid-2010. No word yet on what the hierarchy will be; I assume that, in a tie, UA 1Ks will still outrank CO platinums…

And on the semi-upgrade front: Continental elites will also have free access to the Economy Plus section on United flights — a privilege which United hasn’t been extending to other Star Alliance partner travelers.

The problem, for airlines, is that the US Congress is starting to take a closer look at these and other fees. Not, alas, because this kind of surcharging misrepresents the price of air travel to consumers. Rather, Congress has noticed that taxes aren’t collected on surcharges the same way they’re assessed on base fares.

If the fees are fare increases in disguise (which fuel surcharges and peak travel surcharges certainly are) then the government has every reason to want its money. Yes, those fees would be passed straight to the the consumer, but it would be logically consistent and fair.

The Government Accountability Office is investigating the surcharges, and public hearings are coming. Airline executives won’t enjoy their time on the stand, but it’s an important debate to have.

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The ACLU (American Civil Liberties Union) took up Bierfeldt’s cause and sued the agency. The TSA has subsequently changed its rules, informing its agents that “screening may not be conducted to detect evidence of crimes unrelated to transportation security” and that “large amounts of cash don’t qualify as suspicious for purposes of safety.” In light of the policy changes, the ACLU dropped its suit.

Until very recently, the TSA defended the purpose of its interrogation of Bierfeldt (if not the unprofessional conduct of the interrogation.) In April, Francine Kerner, the TSA’s chief counsel reiterated the notion that cash is effectively probably cause for further prying. On the TSA blog, she wrote: “When presented with a passenger carrying a large sum of money through the screening checkpoint, the TSA officer will frequently engage in dialog with the passenger to determine whether a referral to law-enforcement authorities is warranted.”

The change in policy is welcome. But TSA refuses to publish the actual policy.

TSA spokeswoman Lauren Gaches said the new “internal directives” are meant to ensure their screeners are consistent. She acknowledged the policy on large sums of cash had changed, but wouldn’t provide a copy of either document. She said the directives would not be released unless a Freedom Of Information Act request was submitted by the Washington Times [the newspaper that published the change in policy following the ACLU's press release.]

I can understand that the agency may not want to release the protocols that its agents use for determining likely or unlikely threats. Some might perceive public knowledge of these guidelines as a roadmap for the bad guys to avoid a search. But in a democracy, people have a right to know what constitutes a reasonable search.

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Update: I’ve contacted Stephen Dinan, the author of the Washington Times article, to see if a Freedom of Information Act request is underway. If not, I will submit one myself.

Update 2: Thanks to Stephen Dinan for pointing me toward this link (PDF) on the ACLU website. It contains one of two policy clarifications by TSA, dating to September 2009. Start on page 14. At first read, it’s disheartening, because there is enormous wiggle room for TSOs to engage in searches unrelated to airport or travel security. For example:

As a general matter, there should be no reason to ask questions of the passenger about security, although there may be times when questions are warranted by security needs.

That’s a big loophole. It’s still not clear to me how cash can be a “threat item,” to use TSA terminology. What are you going to do, throw wads of cash at fellow passengers, like a ninja with Chinese stars?

Dinan also noted that his paper has indeed filed the FOIA request for the second set of TSA directives from October 2009. I’ll look forward to the update.

The state’s argument rests on the distribution model of the big agencies. When you book a $150 room with a hotel directly, the rate you reserve is the top-line number the hotel receives. Taxes are calculated on the basis of that $150 price, and submitted to governments accordingly. When you book with an Orbitz, Expedia, Travelocity, Priceline, or Hotwire, you may be paying one price, but the agency is paying another. So you may pay $150, but a Travelocity may be paying $100 to the hotel and keeping $50 in profit. For such reservations, the hotel submits taxes based on the $100 wholesale price. State and local governments argue that they should be receiving the taxes based on the retail rate, not the wholesale. So a thousand lawsuits bloom.

When I visited Orbitz headquarters in Chicago at the end of September, I asked Brian Hoyt, the company’s Vice President of Corporate Communications & Government Affairs, about this legal trend. Hoyt replied that the premise of these suits was fundamentally wrong: The lawsuits presumed that the agency was the hotelier, when in fact they were just the middleman, adding a convenience charge to the booking that they negotiated for their customers. “Orbitz is no more a hotelier than Ticketmaster is a baseball team.”

But the state of Florida has just upgraded Orbitz to the big leagues.

I’ve been sympathetic to the agencies on this front since I first posted about it in May. But the agencies aren’t doing themselves any favors: The problem for Orbitz and their peers is exacerbated by the fact that the agencies don’t break out their prices in a transparent manner. The $150 rate in the example above doesn’t show up as $100 plus $50 in fees. It shows up as $150.

Further, the agencies tack on extra “taxes & fees” (reduced recently, admittedly, but still there) without explaining the breakdown. Since the margins on hotel bookings are fat, and the taxes are based on the lower wholesale rate, there’s some room for profit in those fees, too. (It’s much like the “handling” in “shipping and handling” charges.)

The Florida case is a huge deal for the agencies, and the consumers who book there. Just the Orlando and Miami bookings alone would hurt the companies’ bottom line.

Let’s assume for the moment that the agencies lose this battle, regardless of the merits of the argument. One strategy would be to lobby for a federal solution, in which a national legal standard for tax collection is determined and applied federally. Another strategy would be to reform the ways in which agencies quote hotel rates.

Look at the these two current examples of hotel rate and tax quotation:

Expedia:

Orbitz:

Same hotel, same dates. First off, note the slight variation between the agencies. The difference may be due to variation in negotiated rates, or in fees. But you won’t ever know, because the agencies aren’t telling you what you’re actually buying.

I can understand the why the agencies want to keep their real rates quient. But since the prices aren’t broken out, it’s possible for states like Florida to launch lawsuits. If the agencies can’t get a federal solution, they may need to start quoting the wholesale rates plus the fees.

And if these lawsuits lead to greater price transparency, that’s going to be a huge change.

Upgraded: Frontier Airlines, front half
Downgraded: Frontier Airlines, rear half
Frontier Airlines is reorganizing the seatmap to put in an extra-legroom section in economy, a la United’s Economy Plus. The section, dubbed “Stretch,” will have 36 inches of pitch between seats. Seats in the rear will have between 30 and 32 inches. 30? That is tight.

Upgraded: The Expedia-Choice Hotels War
You may recall the spat between the Choice Hotels chain and Expedia. Expedia demanded numerous draconian terms of Choice, and Choice said no. But now… As of this evening, Choice is back in. But no details yet on what the deal actual consists of. Stay tuned.

Upgraded: Ways to share your miles with veterans
It’s not new, but on this Veteran’s Day (or Armistice Day in the UK), you may be interested in the Fisher House Foundation’s program that accepts frequent flier miles to share with “military (or DoD civilian employees) hospitalized as a result of their service in Iraq, Afghanistan, or surrounding areas, and their families. These tickets can not be used for R&R travel, ordinary leave, emergency leave, or other travel not related to a medical condition.”

Our Google overlords have spoken, and there shall be free wi-fi in airports for the holiday season.

Through a partnership with many of the providers that already power most airport wifi, albeit for a fee, Google is making wifi free at 47 airports through January 15, 2010. The service is in conjunction with Boingo, Advanced Wireless Group, Time Warner Cable, Electronic Media Systems, Lilypad, and individual airports.

The list of 47 is somewhat deceiving. For example, Charlotte already offers free wifi, so now there’s a Google-branded free option. Big whoop. But at others, like Boston, free service is new — and very welcome.

Unfortunately, some of the biggest airports aren’t on the list. Chicago, New York, Los Angeles, Atlanta, San Francisco?… Nope. Alas.

The airports included are below, after the jump.

* Austin (AUS)
* Baltimore (BWI)
* Billings (BIL)
* Boston (BOS)
* Bozeman (BZN)
* Buffalo (BUF)
* Burbank (BUR)
* Central Wisconsin (CWA)
* Charlotte (CLT)
* Des Moines (DSM)
* El Paso (ELP)
* Fort Lauderdale (FLL)
* Fort Myers/SW (RSW)
* Greensboro (GSO)
* Houston Hobby (HOU)
* Houston Bush (IAH)
* Indianapolis (IND)
* Jacksonville (JAX)
* Kalamazoo (AZO)
* Las Vegas (LAS)
* Louisville (SDF)
* Madison (MSN)
* Memphis (MEM)
* Miami (MIA)
* Milwaukee (MKE)
* Monterey (MRY)
* Nashville (BNA)
* Newport News (PHF)
* Norfolk (ORF)
* Oklahoma City (OKC)
* Omaha (OMA)
* Orlando (MCO)
* Panama City (PFN)
* Pittsburgh (PIT)
* Portland (PWM)
* Sacramento (SMF)
* San Antonio (SAT)
* San Diego (SAN)
* San Jose (SJC)
* Seattle (SEA) *
* South Bend (SBN)
* Spokane (GEG)
* St. Louis (STL)
* State College (SCE)
* Toledo (TOL)
* Traverse City (TVC)
* West Palm Beach (PBI)

* Seattle launches late November

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This should come as no surprise, given that US Airways’ Dividend Miles program had a more generous redemption structure than Star Alliance partner United. The US Airways release says nothing about partner awards — we await the next shoe to drop — but you should expect a similar scale. (For the time being, newbie alliance member Continental is the go-to carrier for cashing in alliance awards now.)

The biggest change is the introduction of two additional tiers of awards. Instead of the old “saver” and “standard” awards, the new program introduces “Off-peak,” “Low, “Medium,” and “High.” Delta added a third tier to their program recently; US Airways now has four. Whoo. As the names imply, the cost will vary according to the desirability of those dates.

As per the FAQs, the discounted “off peak” seats are available in a small window: “Off-peak awards are available from North America to Central America, Mexico and the Caribbean September 1 – 30; to South America May 1- 31 and October 1 – 31; and to Europe January 15 – February 28.”

So, while a saver business class award from the US to Europe now costs 80,000, it will soon cost either 60,000, 100,000, 200,000, or a whopping 350,000 miles, depending on the dates. And those 60,000 mile off-peak seats are only available for six weeks in winter. OUCH. And what are the odds that the 100,000 seats aren’t much more readily available?

The new program into effect January 6, 2010. Check the old award chart. Then compare to the new award chart. See where you stand. And if you can, book now.

Especially if you’re taking advantage of the great deal on purchased miles I posted about last week, as reader Chris notes in the comments.

Also, Preferred members of the program will not be exempted from blackout dates, of which there are several, though, oddly, they are different from the current program’s blackout dates.

This is a disappoint. Not a surprise, given United and Delta’s recent devaluations, but a disappointment nonetheless.

Upgraded: Your ability to earn lots of British Airways miles
Chase and British Airways have launched a pretty amazing airline mileage-earning credit card offer. 50,000 BA miles after one purchase, then 50,000 more after spending $2000 within three months. Gary Leff has thought this through and come up with a scheme for 420,000 miles between two people. That’s a lot of free tickets for a $75 annual fee.

Downgraded: Track suits
A Best Buy executive says that United refused him an upgrade because he was wearing a track suit. “United says there is no passenger dress code, but they cited two rules. Ticketed passengers can not be barefoot and must be clothed.” Standards!

Upgraded: Fees for Expedia phone bookings
Expedia announced that it was dropping the booking fees it charged for booking any flight, car rental, hotel or cruise on the phone. As online agencies compete to attract customers, this is the latest fee to drop. Yay, lower fees! Priceline immediately tweeted that they had never had phone booking fees. Nyahh.

Upgraded: Responsibility for rental car reservations
Avis Budget Group has worked with global booking systems to prepare their networks for an eventual introduction of no-show fees for car rental bookings. Frankly, I’m amazed that this is a fee that hasn’t been enforced more widely already.

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Over at View from the Wing, the bottom line is clear:

With this offer you can buy 40,000 miles for $1030, get 80,000 miles in return, and fly business class from the US to Europe. Or if you and a friend each have 40,000 miles, you transfer to each other for $430 apiece, and you now both have 80,000 miles — enough for a business class Star Alliance partner award to Europe.

And don’t forget that US Airways doesn’t block Star Alliance partner flights like United does. This is a great deal, and a great way to book a complex ticket in business class at a low price.

High-definition cameras perched on the exterior of the ship will broadcast real-time video to the circular monitors in the cabins.

From a design perspective, it’s pretty clever, and I could imagine other cruise lines following suit if this is successful. Some airlines already offer a camera pointed forward and/or downward on the inflight video. Perhaps this is just the logical extension.

And heck, imagine other faux windows… a hotel with a broom closet room with floor-to-ceiling LCD screens with ocean views?… hmm… alert a venture capitalist!

But leave it to Disney to not leave well enough alone and to “improve” upon the real world:

One twist: Disney says every now and then an animated Disney character such as Peach the starfish from Finding Nemo or even Mickey Mouse may appear in the virtual porthole (superimposed on the live outdoor feed to look as if they were outside the ship).

Take that, natural vistas!

Now, I’m not attracted to cruise travel in the first place, so I’m not a fair judge of this upgrade of windowless rooms. But for those of you who like to cruise, what do you think? Is this a genuine improvement, or is it lipstick on a pig? Vote in the poll, and leave your comments below.

(Reading this via the feed? Click here to vote and comment.)

Ric argues that hotel companies’ own best-rate-guarantee programs are superior to the new Travelocity program, for three reasons: 1) Travelocity caps the number of claims to 5 per customer per month. Hotel chains typically don’t place such a limit. 2) Group rates, such as AAA rates, aren’t covered by the Travelocity guarantee. 3) The loyalty benefits of booking through the hotels’ own sites exceeds the value of the potential rebate via Travelocity.

Ric’s argument may make sense for the high-frequency traveler with high frequent-guest program status — and established loyalty to a given brand, as his blog name implies. But the Achilles heel of the hotel chains’ programs remains their timeframe for making a claim. If you only have hours after purchase to find a lower rate, that’s not a really meaningful guarantee. To Travelocity’s credit (and, to a lesser extent, Orbitz’s credit) the agency’s rebate lasts days, weeks, or even months. And the five-claim limit per month won’t be a problem for all but the most high-volume travelers.

The Travelocity guarantee is far from perfect, as I’ve argued. But it’s not worth dismissing wholesale in favor of the hotels’ own programs.