View from the Wing

Congratulations to Frugal Travel Guy on his one year blogiversary!

Rick’s site, along with One Mile at a Time are the two miles and points-focused blogs i find indispensable.

Last week final plans were announced for implementing ’secure flight’ - the nomenclature for silly rules that all passengers will have to submit their gender and date of birth in order to obtain an boarding pass, starting in July of 2009. This applies to domestic US flights, flights departing or arriving the U.S., and flights overflying the U.S.

Terrorists could easily find out if they’re on the list, simply with a dry run — that is, buying a ticketing for a flight they don’t intend to bomb to see if they have any problems getting their boarding pass.

If they do face hassles, they could either turn the job over to someone else in their group or use fake documents (whether a fake boarding pass with their own name that matches ID or a fake ID to match the name of someone not on the list).

It’s nearly inconveivable that there’s a single terrorist competent enough to cause risk of harm that is not also competent enough to get through the TSA’s “security theatre” checkpoints.

ID requirements are a joke, sadly they simultaneously cost billions (for the new system, and also for the manpower required to perform the checks, not to mention the opportunity cost of lost time) and erode our freedoms by imposing requirements for the exercise of basic rights like moving around unhampered by the government. Some find the cost wasteful, I’m far more overwhelmed by the societal shift towards requiring government’s permission to travel inside the borders of the United States.

Rather than a classic ’security vs. liberty’ tradeoff, this is a case of no security benefit whatsoever and a reduction of liberty.

Advocates for the plan say it will reduce hassles for ‘false positives’, people with similar name matches to the no-fly list (a list which the TSA now says contains fewer than 2500 names, and fewer than 250 Americans, as well as fewer than 16,000 ’selectees’ ordered to undergo additional security procedures). So they propose to spend billions impinging on everyone’s liberties to reduce the hassle for a handful of people. But since the no fly list can not possibly impede terrorists (except, possibly, Ted Kennedy) there are certainly far better ways to improve the travel experience and protect the rights of currently-effected travelers.

Virgin America is offering 25% off of flights booked by October 31 for travel on Tuesday, Wednesday, Thursday, or Saturday using promo code 25OFF.

The discount applies to:

• San Diego to/from San Francisco
• Los Angeles to/from Seattle
• San Francisco to/from Seattle
• Seattle to/from San Diego

The discount applies to travel through February 25, 2009, and Thanksgiving, Christmas, and Presidents Day weekend blacked out.

British Midland is offering 5,000 miles for new account signups prior to November 2nd. It’s also supposed to come with ‘Blue Plus’ status.

If you don’t have a bmi account, this is the perfect time to sign up. It’s my favorite frequent flyer program at the moment, though if the program is eventually swallowed up by Lufthansa its special benefits could well go away.

• This is the account where I credit my short flights, now that United and US Airways give only actual miles flown rather than 500 miles minimum (bmi gives 600).
• bmi is the best place in my view to credit Hertz rentals and Hilton double dip miles.
• Gold members who have requalified for their status earn 625% mileage on paid first class travel.
• bmi offers one-way awards and a cash and points award chart that really leverages the value of miles, especially for premium cabin international travel.

Book by November 5, 2008 for stays between October 31, 2008 and February 1, 2009 and receive 21% off the ‘prevailing rate’ at Hyatt using offer code LTGP06. Rates are pre-paid, non-refundable.

Harrah’s Properties are offering some deep discounts in November and December (offer valid through January 5).

Their Vegas property offerings are rates at Ceasars Palace from $75, Paris from $60, and Flamingo, Ballys, Harrahs, and Rio from $49. For Laughlin rooms start at $22.

There are even some Saturday and Sunday nights available at the lowest special rates.

Hat tip to CalItalian.

As detailed in this Flyertalk thread, and discussed by One Mile at a Time, beginning this coming Tuesday Delta and Northwest will begin offering reciprocal upgrades — Delta elites will receive automatic complimentary upgrades on Northwest, and Northwest elites will receive automatic complimentary upgrades on Delta.

DL/NW Reciprocal Upgrades Are On The Way!
———————————————————————-
October 23, 2008

On October 28, 2008, SkyMiles and WorldPerks elite members will be eligible to receive complimentary upgrades on Delta and Northwest flights.

Reciprocal upgrade is for the elite members only.

SkyMiles companions will only be eligible for upgrades on DL coded and Delta operated flights.
WorldPerks companions will only be eligible for upgrades on NW coded and NW operated flights.

What is changing?
• Beginning October 25 you will start to see V/X inventory being added to some DL coded flights operated by NW. Even though you see the inventory, the upgrade won’t be applicable for travel before October 28.
• On and after October 28, SkyMiles and WorldPerks Platinum, Gold and Silver members will receive a complimentary upgrade on applicable DL or NW coded flights which are operated by DL, Delta Connection, DL Shuttle ( effective when F/C reconfiguration is completed ~ Dec ‘08), NW or NW AirLink (Mesaba, Compass, Pinnacle)
• Customers on delta.com will be able to add their frequent traveler number for any airline program to their new or existing reservation
• When a NW elite number is added to the PNR with applicable DL or NW flights, the upgrade will automatically be requested
• When a DL elite number is added to the PNR with applicable NW flights, the upgrade will automatically be requested
• NW elite status will be printed on the boarding pass

What stays the same?
• Area of travel: within/between the U.S. (excluding Hawaii) and Canada, Bermuda, Caribbean, Mexico, Central and non BusinessElite markets in South America.
• When a NW elite number is added to the PNR, the NW Platinum, Gold or Silver status will be shown in the SSR (this became effective in September)
• Clearance is based on member status and booking class. If status and paid class are the same, time of request will determine clearance order.
• Pending upgrade is automatically added to Airport Standby List
• Upgrades booked in G/Z class

American is running a $35 each way fare, Newark to Belize (EWR-BZE), clearly aimed at Continental. The $70 roundtrip fare comes to a total of $143 or $146 depending on connecting airports, the taxes consisting of

Tax: US International Departure Tax $15.40
Tax: US September 11th Security Fee $7.50
Tax: USDA APHIS Fee $5.00
Tax: US Immigration Fee $7.00
Tax: US Customs Fee $5.50
Tax: Belize Conservation Tax $3.75
Tax: US International Arrival Tax $15.40
Tax: US Passenger Facility Charge $13.50

Appears valid through June, a Saturday stay is required, and no travel is permitted December 19 through December 28 or January 1 through January 8.

(Hat tip to Online Travel Review.)

Through December 31, Delta is offering a 30% bonus on points transferred into a Skymiles account from American Express Membership Rewards.

This is not worth cleaning out your American Express Membership Rewards account for. Don’t dump your valuable Amex points into a less valuable Skymiles account unless you have a specific use for those Delta miles, and unless you’re certain there’s availability (and it’s possible to test that first, since Amex transfers to Delta are ‘live’ and show up in a Delta account instantly).

The other thing to bear in mind is that you’ll get the 30% bonus later, a week after the transfer takes place, so you won’t be able to use those points immediately to ticket an award.

My suggestion is to transfer the points you need for a given award, ticket it, and just view this as a bonus towards the next award. Or to top off an account with a small number of miles that you don’t need right away and incorporate the 30% towards the total you’re looking for.

But if you do plan to transfer Amex points to Delta, then you will definitely want to register for this bonus first.

Thanks Again is offering 1000 Delta miles for signing up. The offer is valid through October 31. If you’ve already signed up through another frequent flyer program, you should be able to sign up again with the Delta partnership — I would just use a different email address.

(Hat tip to Frugal Travel Guy.)

I’m Wendy Perrin’s hero. Pretty cool.

American Express cardholders have long had the benefit of buying American Express travelers checks at no fee, using their American Express cards. The limit recently has been $1000 per Amex card every two weeks.

The ‘little secret’ in all of this is that the travelers checks post as a purchase, not a cash advance, and thus earn miles and do not incur cash advance fees.

In order to take advantage of this deal you had to go to an actual (rather than independent but branded) American Express travel office.

Sadly, the free travelers check benefit goes away at the end of December.

However, in the meantime, American Express is offering these travelers checks for sale online for just $5.95 using promo code TCDIRECT. Which means you’re buying 1000 points with, say, your Starwood American Express card for $5.95. Then deposit the travelers checks into your checking account, you have the funds needed to pay your credit card bill. Rinse, repeat until the end of the calendar year.

(I vaguely recall that this does not work with Amex Membership Rewards cards, there’s an extensive thread on Flyertalk discussing the ins and outs of purchase of Amex travelers checks with Amex cards and that thread would contain the answer for sure.)

(Hat tip to Frugal Travel Guy.)

Update: A reader writes to correct me on two fronts — first, that while you can only make travelers check purchases up to $1000 online every two weeks, you can do it once every seven days in-store. And second that it is not fully confirmed, just a rumor, that December 31 will mark the end of fee-free travelers checks from American Express. The other point this reader makes, worth noting, is that the offer only applies to American Express cards issued by American Express and not by other banks such as Citibank or Bank of America.

Back in August I wrote that it looked like Marriott would be making changes to their program, moving towards the Starwood and now Hilton model of no blackout dates and capacity controls. Part of the change would involve modifying their award structure, offering fifth award night free just like Starwood. But this would come at a cost — Marriott currently offers point discounts for subsequent nights after the first, and this would go away.

Well, bingo, that’s exactly the change that’s been announced.

I don’t yet know whether Marriott is actually offering the same ‘true redemption’ as Starwood and for the most part Hilton, where ‘if a standard room is available it’s yours’. In fact, on Flyertalk the Marriott Concierge states

Hotels will only be able to limit the number of rooms available for redemption on a very limited number of nights.

So it looks like Marriott isn’t really matching the Starwood redemption benefit. But they’re making redemptions easier.

But it comes at a cost — more points required for awards in most cases (certainly for nights two through four). This will be offset for Marriott Platinum members who will earn more bonus points for their in-hotel spend. But for the member searching out award values, this isn’t on-balance good. For the member who wants to be sure there points are useful when they want to use them, but may be a positive.

On the whole, verdict mixed. Marriott needed to do something since Hilton eased their redemptions and now the industry was moving towards being far simpler than Marriott’s program. So they revamped their offerings, providing Starwood and Hilton light on the redemption side.

I haven’t vetted all the details, the peice that will be most important for me to investigate will be the effect on Marriott’s travel packages which have long been the best value in the program (free hotel nights and miles).

Update: The changes are a bit worse than I thought. The price of travel package awards (hotel nights and miles goes up. For instance, a package for a 7 night stay at a category 6 hotel and 120,000 American miles is currently 250,000 Marriott points and will be going up to 300,000 points. Plus they’ve also created a new more expensive redemption category 8.

40% off at the W Hotel Store is back using promo code WH4X5, probably valid through end of October only.

This discount comes up frequently (see for instance here, here, here, here, and here). But every time it does it’s worth noting because it really is a great deal, I bought my W Hotel bed (plush top with featherbed) in March of 2007 and I’ve been happy as can be.

40% off makes the price reasonable, shipping is free and they’ll remove your old bed for free as well. And the discount applies to bedding as well, though I personally didn’t choose mine from the W Hotel Store.

If you want automatic notification of the next time this deal pops up you might want to subscribe to this Flyertalk thread for updates.

US Airways dining for miles (aka Rewards Network aka iDine) is offering triple miles through the end of the year. Folks with an online account earn 9 miles per dollar spent instead of 3. VIP members who rate their restaurant experiences earn 30 miles per dollar. Sadly, the maximum miles earned under this bonus is just 3,000. But worth registering nonetheless.

The Southwest Airlines Blog tries to explain accounting rules and how how a $120 million quarterly loss is really a profit.

Which leads us back to the original question: “Did we make a profit, or not?”

The short answer is: yes, we made a profit running our airline in the third quarter. Thanks to strong revenues, relatively low costs, gains from hedges that actually settled this quarter, and lots of Employee elbow grease, we actually did pretty great (all things considered). We even beat Wall Street’s expectations!

The long answer is… well, long. There are these things called Generally Accepted Accounting Principles (GAAP) which govern how companies report their financial results. The intent of GAAP is to help standardize and simplify financial reports. In practice, however, GAAP can get really complicated – like, tax code complicated.

Case in point: fuel hedge accounting rules. As you may know, we hedge fuel. This is a great way for us to help control and predict costs. The thing is, GAAP requires us to report certain future-date hedges differently than others, which can result in a “paper gain” or “paper loss” on our books, above and beyond what we actually earned flying Customers and cargo. Why “paper” gains or losses? Because no cash is actually gained or lost in the period when we record them—after all, they’re future hedges. We just have to calculate and record them in a very specific way to comply with GAAP rules.

‘Mark to market’ accounting rules have gotten a lot of bad press in the current financial meltdown (a bit too much bad press in my view, we want to know what an asset is really worth ideally — but not hide our head in the sand and pretend assets are worth more than they are).

But here I think Southwest does a bit of a disservice to GAAP.

(1) Southwest’s earnings from operations number mentions that it includes fuel hedge gains on contracts that closed during the quarter. But if you include the upside of hedging, is it really fair to exclude fuel hedge investments that appear to be under water?

(2) The value of the hedge investment fell, because while Southwest has been brilliant over the years in protecting itself against increasing fuel costs it unsurprisingly didn’t guess the downward trajectory of fuel prices and spent real money and took on hedges that are now under water. Those are *real losses* whether the contracts have closed during the quarter or not.

Japanese banks got themselves in real trouble in the 90s with accounting rules that let them keep junk assets on their books and not report losses, and as long as they didn’t sell the assets they didn’t record the losses. (Japanese accounting rules permitted valuing strips and zeros equally, banks would sell the higher value piece at a paper profit and hold the lower value piece and not record a loss until it was sold, which more or less meant never.) It would be unwise to revert that sort of practice.

Now, if Southwest wants to say “The performance of our airline business made X dollars. Our fuel hedging was kinda a disaster last quarter, and it lost Y. So overall we lost Z. But our airline is great, our people are great, and if we can avoid big mistakes like betting wrong on fuel our future looks bright! And hey, at least we didn’t blow it like United did….” then that would be more than fair.

Southwest lost money for the quarter, even though their airline itself was pretty well run. Ironically they lost money because fuel got less expensive. The world’s a strange place. But own it, buster!

Venetian is offering $119 weekdays and $159 weekends through January (an extra $100 for a concierge level room).

Similar deal is supposed to be available at Palazzo but I can’t get the relevant links to open myself.

One Mile at a Time points to a Flyertalk thread with some (possibly momentary?) good news on the evil practice of United refusing to allow Mileage Plus members to book awards that are being offered by its partners (and frequently claiming falsely that the seats are not in fact being made available by the partner).

At the moment it seems that the blocking practice has let up some, at least for Lufthansa flights which normally seem to be the most heavily blocked flights for awards by United members. Reports are that intra-Europe flights are especially bookable, and some transatlantic flights too, including flights that Lufthansa had been offering but which United was previously blocking.

So now is a good time to try to book awards with United miles, or to make changes to awards already booked if a different set of flights would be more advantageous.

Bose is offering 150 American Airlines miles for watching a short online video. There’s also another 350 miles if you to into a store and demo the QuietComfort headphones. If you buy they’re offering 4 American miles per dollar.

The offer is valid through October 31 and miles are supposed to post in 6 to 8 weeks.

Via Online Travel Review, a TSA screener at Newark was caught stealing a $50,000 camera from CNN and selling it online. He’s accused of stealing at least 100 items.

He had an outstanding reputation on eBay.

The TSA defends itself by pointing out that only 465 officers have been terminated for theft in the past five years (”0.4 percent of those employed by the agency”). But that just underscores how hard it is to reach the point of firing bad agents — this one was busted by the FBI who won the auction and recovered the CNN’s camera at the guy’s house, and yet the TSA employee is on paid leave.