The Bush Administration is proposing to more than double the airline security tax under its budget for the Homeland Security Department.

Bush’s plan calls for boosting the security fee from $2.50 to $5.50 for a one-way airline ticket and from a maximum of $5 to $8 for multiple legs. The hikes are expected to generate $1.5 billion.

I know this makes sense to me, since the Department of Homeland Security gets so much value out of the budget they have now. Any money will surely be well spent. Heh.

(Hat tip to Tripso Daily.)

The Hagerstown, Maryland airport currently serves an average of fewer than 45 passengers a day. So it may be no surprise that the airport is currently slated to lose commercial service on April 30.

But they’re spending $60 million to upgrade the runways for bigger planes starting in April anyway. And bizarrely enough, the fact that they’re losing all service is seen as bolstering the decision to invest in support for larger aircraft.

Rewards Network’s Dining for Miles programs are being revamped, a.k.a. gutted.

You may know the program as iDine (what I’ll always call it), and its precursor was Transmedia — the old program where you paid to sign up and had a membership card which you needed to present at restaurants for a cash discount.

The program awards frequent flyer miles in the program of your choosing when dining at a participating restaurant. Traditionally the award was 10 miles per dollar, although increasingly of late some restaurants only offered 5 miles per dollar spent and some restaurants gave miles only on certain days of the week.

Now comes the announcement that earning in the program is being changed dramatically. Instead of a default of 10 miles per dollar (plus frequent bonuses), most members will only earn 3 miles per dollar beginning July 1, 2005.

On July 1, 2005, we will be changing the benefit structure of the [Airline] Dining program. We will be introducing a tiered membership structure. … Under the new program structure your benefits and tier level will be based on your level of participation in the program as outlined below:




• Elite Member – 12 or more qualified transactions in 2004 (full calendar year) or between January 1, 2005 and June 30, 2005 – 5 Miles/$1.00 Spent
  

  
  

• Engaged Member – 4-11 qualified transactions in 2004 (full calendar year) Or between January 1, 2005 and June 30, 2005 Or have/create an [Airline] Dining Online Profile – 3 Miles/$1.00 Spent
  

  
  

• Active Member – 0-3 qualified transactions in 2004 (full calendar year) Or between January 1, 2005 and June 30, 2005 And no AAdvantage / One Pass / Flight Fund Dining Online Profile yet created – 1 Mile/$1.00 Spent


At the beginning of each calendar year, you will be eligible for the benefits of the membership tier for which you qualified based on the number of qualified transactions at the end of the immediately preceding year.

(Note, some emphasis and elipses mine.)

Here are the notices for each of the participating airline programs:

• American

• Continental

• America West

• Northwest

• Delta

• United

• Alaska

• British Airways

That amounts to notices up on the websites for all participating programs except USAirways (as of this writing), which I presume is just a website updating issue.

Certainly this will save alot of money for Rewards Network. For me, I won’t seek out their participating restaurants anymore for miles earning. Miles now make the difference for me in deciding where to eat (I’m somewhat ashamed to admit, especially to my foodie friends). No longer.

The premium cashback program appears to be unchanged at the moment. In exchange for a fee, you can earn 20% back on your dining bills instead of miles. I haven’t seen any revised terms there.

And the Diners Club program remains unchanged as well — essentially giving you the premium cashback program for free when paying at participating restaurants with your Diners Club card.

I will certainly make the choice to pay with Diners Club where accepted now and take the cashback instead of the miles. And since Diners Club will become accepted everywhere that takes Mastercard next year, I will use the card at all participating restaurants period. No more Dining for Miles for me.

Aloha Airlines has filed for Chapter 11 bankruptcy, joining Hawaiian Airlines, United, USAirways, and ATA in reorganization. Hawaaian Airlines is expected to emerge from bankruptcy next month.

It’s still a long-shot, but United requested a bid from Independence Air to operate as a United Express carrier. This is precisely the move being pushed for by Independence Air’s largest shareholder.

The Washington Dulles-based low fare carrier has been losing buckets of money and warnings have been issued about a possible bankruptcy filing in January, a mere seven months after starting service as an independent carrier. FlyI used to operate as Atlantic Coast Airlines with most of their flying as the United Express carrier at Dulles and additional activity as a regional carrier for United at Chicago and for Delta at Boston (if I recall correctly, in this last case).

The problems they face are several-fold.

They decided to sell tickets directly to consumers, bypassing Global Distribution Systems. The model works well for an established carrier like Southwest, and saves on distribution costs. But for an unknown carrier, customers simply don’t know to check FlyI.com in addition to Expedia and Orbitz. It simply doesn’t occur to someone — especially outside of Washington, DC, based in the destination cities the airline serves. Furthermore, it doesn’t comport with the way that business travelers book tickets.

As a United Express carrier, they operated a plurality of all flights out of Dulles. They leased the planes and the gates themselves. So with this tremendous ongoing capital expense, they didn’t have the luxury of starting slowly and building routes. They began with hundreds of daily flights but without the customer base to support those flights. I was recently able to book a same-day return to Pittsburgh at $29 each way. Fares are that low because loads are so low, and loads remain low even at those prices.

A mixed strategy might work for the airline. They could operate as a regional carrier for a major airline with some of their planes, guaranteeing them income and utilization of much of their capital. That would buy time to develop markets without saturating those markets with their own planes. No doubt that would be a better strategy than burning all their cash in the next few months.

Developing…

A 10 year old grilled cheese sandwich with an image of the Virgin Mary on it sold for $28,000 on eBay.

Alas, this grilled cheese sandwich with an image of Hello Kitty is only currently pulling in $5.50.

Hat tip to The Volokh Conspiracy.

American is pulling pillows from its MD80 aircraft and redeploying them to other aircraft flying longer routes. They think they can save a six-figure amount in cleaning costs by not hunting down pillows on their MD80 aircraft. The usual silly explanation is given, however:

“It will streamline our cabin service,”

Hat tip to Today in the Sky.

I saw this the other day and didn’t get around to posting. Now NotiFlyer has beaten me to the punch!

Amtrak is adding a new top tier elite level to their Guest Rewards program.

Guest Rewards members who earn 10,000 points or more annually will be admitted to the new “Select Plus” level, beginning March 1, 2005.


Benefits include a 50-percent bonus points on all rail travel, unlimited access to ClubAcela, Metropolitan, and First Class lounges, single-class upgrades available 48 hours in advance, and companion coach vouchers.

This is a good move because the existing Select tier elite level is quite easy to reach and has been devalued slightly through limited club access as a result of having too many members.

The U.S. Department of Homeland Security wants passengers on planes headed to the U.S. to be on board an hour before flight time. They trot out the usual justification

The United States wants to tighten passenger checks to prevent a repeat of the Sept. 11

Even though, of course, this measure wouldn’t have prevented September 11 in the first place.

As if we didn’t already have to get to the airport early enough, not only would the push back that time even further but connections would have to be much longer. It would no longer be enough to have an hour between connecting flights if you actually have to be onboard the new plane an hour before takeoff.

New Zealand has decided not to tax Air New Zealand airports dollars.

Apparently there was some concern over the issue, now that Air New Zealand is rewarding ‘dollars’ instead of points those dollars might have been taxed. That fear has apparently been put to rest.