You likely won’t be surprised to hear that I had a great time at the bachelor party this weekend, but that means I had very little time to write. So, since every travel blogger on earth has written about the announcement that Continental will be leaving SkyTeam, joining Star Alliance, and instituting a very tight partnership with United, I thought I’d just point to a couple of the more interesting posts I’ve seen.

Make no mistake, this is more than just a codeshare and frequent flier mile deal. Continental will join United, Lufthansa, and Air Canada in a joint venture for all transatlantic flying. Latin and Asia joint ventures will be developed as well. There will be broad systems integration as well.

In terms of routes, the rest of the Star Alliance will be happy to finally have a big international presence in New York. Dan Webb takes a look at route compatibility here.

If you’re a member of United’s Mileage Plus or Continental’s OnePass programs, this will certainly mean changes. Take a look at View From the Wing’s effort to breakdown what this may mean, despite the fact that we have very few details so far. His take? Well, it’ll be a good thing for Continental fliers, but it’s a little less clear for United loyalists.

We don’t know what this will mean for US Airways right now. Is three a crowd when it comes to the Star Alliance in the US? They say they aren’t going anywhere, but they also haven’t had talks with Continental about cooperation either. Could they partner with American now that CO/UA and DL/NW are getting together? Maybe. Or maybe they’ll try a different tactic, as Holly suggests here in PlaneBuzz.

For American fliers, this could be decent news as well. Strange, I know, but it could theoretically mean that getting antitrust immunity with British Airways would become easier, as Terri Maxon discusses on the Airline Biz blog.

There are a lot of different angles to this partnership with a ton of potential ramifications throughout the industry when it develops. I’ll keep you posted as I learn more.

There has been a ton of interesting news to write about in the last few days, and I’d been having trouble figuring out with what to lead . . . until yesterday. Turns out that I was voted one of the the world’s 50 most powerful blogs by The Observer in the UK.

Holy crap! That’s kind of scary. But, I’m guessing that means I’ll have a bunch of new visitors from that side of the Pond (welcome, everyone), so I’m going to post Sunday night instead of my usual Monday morning. And, while I’m being accommodating, let’s focus on something that probably causes you newbies pain and suffering more often than not: Heathrow.

Usually, any discussion of Heathrow involves a lot of cursing, rising blood pressure, and possibly some crying. With any luck, we’ll see less of that in the near future, but it’s likely to get worse in the short term. Why?

Well, we’re getting closer to the big terminal move. On March 27, BA will land its first flights at the brand-spanking new Terminal 5 and that begins a long period of transition for the airport as just about everyone save Virgin Atlantic moves locations.

I’ve tried to put together a handy guide on all the terminal moves so you can actually figure out where you’re supposed to go for your next flight. First, we’ll start with oneworld airlines, since they have the most changes happening the earliest.

Now let’s take a look at SkyTeam. In short, when Delta, Northwest, and Continental start flying to Heathrow in March, they’ll be in BA’s old Terminal 4. The rest of the carriers won’t move until early 2009, when a major terminal renovation will have been completed. Anyone who has flown BA out of that terminal lately knows that it is in desperate need of some help.

I’d like to list the Star Alliance changes here as well, but I haven’t been able to find them. In fact, while oneworld and SkyTeam have been on top of the changes, Star Alliance has been silent. I sent the alliance a request and their response left me wondering if they actually meant to insult my intelligence or if they just don’t speak English very well.

We would like to inform you, however, that the Star Alliance is a network of 19 individual airlines. Operational matters are handled by the airlines themselves. Therefore, for more information, you will need to contact the individual Star Alliance member airlines directly.

Really? You guys aren’t an airline yourself? No sh**. Well, I also asked United directly and spokesperson Robin Urbanski told me that the airline will be moving to Terminal 1, but it’s unclear when that might be and that will happen on June 1. Clearly, this alliance is a little less organized, probably because the changes aren’t coming as quickly as with the others.

We know that the airlines in Terminal 1 will stay there for now. Terminal 2 will be demolished starting this year, so those guys have to move somewhere. On March 27, BA moves nearly all of its domestic and European flights out of Terminal 1, so I have to assume that everyone from Terminal 2 will move in before their terminal disappears. Will the Terminal 3 airlines move at the same time or will they stay longer? My guess is that they won’t move immediately because there’s no urgency. Here’s how they stack up right now along with my best guesses as to where they’ll go. The only thing I know for sure is that US Airways will go to Terminal 1 when it starts service to the airport on March 30.

Update 3/25 @ 822a - Star has put out a press release with much more guidance. All Star carriers will be expected to move to Heathrow East in 2012 when the terminal is completed, but I haven’t included those changes in here.

Of course, not all airlines are in alliances. Virgin Atlantic, for example, will stay in Terminal 3, so you won’t see any changes there. All other unaligned airlines (except for former oneworld member Aer Lingus which will be in Terminal 3) will end up in Terminal 4. Again, I’m not entirely sure when that might happen, but one thing is clear . . . there will be a lot of confusion at Heathrow until things settle down, and that could take years.

If you have to go to the airport in the near future, leave plenty of time and bring lots of patience. If you have the misfortune of connecting through Heathrow, especially while these changes are in progress, may God have mercy on your souls.

Click for more on Heathrow and more on BA. And click if you’d like to subscribe via RSS or daily email.

I had a completely different post lined up for today, but really, when news like this breaks, it’s hard to stay away. For those who haven’t yet heard, JetBlue will issue a bunch of new shares to Lufthansa giving them 19% of the company for about $300m. So far, there is no relationship between the two airlines in a commercial sense, but Lufthansa will hold a seat on JetBlue’s board, and after listening to their conference call this morning, it’s clear that they want more.

First thought? Enjoy your bitch-slap, United. Oh sure, that young little hussy JetBlue can’t replace you . . . yet, but Lufthansa is clearly not as faithful to you as you might have hoped. Maybe you shouldn’t have let yourself get so out of shape over the years.

Second thought? This is great for JetBlue. They get a bunch of cash, which is nice, and they get some solid external guidance from a very large, profitable European airline on their board. And yes, there are so many opportunities for cooperation here. Sweet.

Third thought? What exactly is Lufthansa thinking? This is why my brain hurts right now. They’ve already got a very strong presence in the US with both United and US Airways in the Star Alliance. Why not buy into them? Maybe they don’t like where things are going with those guys. But point-to-point JetBlue?

Even at the bare minimum, I think this makes sense. JetBlue’s shares, like those of most other airlines right now, are in the toilet. It’s a nice cheap investment that’s made even cheaper by the exchange rate. So, they have a good investment that also can give them a little presence in NYC with even the most basic of interline agreements, something that Star Alliance doesn’t have.

At most, it could be much bigger. I’m not really worried about US Airways in this equation, because they’ve never been a major Star Alliance player. But Lufthansa and United were founding Star members, lovers, and they share revenue on flights over the North Atlantic.

But let’s say that Lufthansa is sick and tired of United not paying attention to their business. Maybe they aren’t happy with management and they want something different. Hello, JetBlue.

United isn’t going to walk away from Lufthansa, because they have nowhere else to go (unless someone buys them). They need Lufthansa and Star more than the other way around. So, Lufthansa can keep United around while JetBlue has the chance to build up its domestic operation into a strong network. Does that take years? Most definitely. Can Lufthansa wait? Yeah, sure.

But what about international flying? Who cares? Right now, Lufthansa has to split Transatlantic revenues with United. So, they can kick them out and do the flying themselves with JetBlue waiting on the other end to fill up their planes. Remember, now with open skies, Lufthansa can fly from anywhere in Europe to anywhere in the US.

What about Pacific routes? Eh, ANA, Thai, Air China, Air India, Singapore . . . the list goes on and on. There are plenty of carriers on the other side that can take care of that market. So, JetBlue can become a major domestic powerhouse and then auf wiedersehen, United. They would lose US government traffic across the pond (since they have to fly US carriers), but I’m not sure how much business that is for them now.

Am I crazy? Probably. But remember, United has been talking about mergers for a long time. They may go run off with someone else and leave Star Alliance anyway. If Tilton can make enough money for him and his investors, don’t think he won’t do it.

Do I think this is going to happen? Nah, but it’s fun to think about it. We’ll probably see something happen that’s more in between these two extremes where Lufthansa gets to play with everyone. Pretty cool.

Buying a plane ticket can be a frustrating experience. As a former airline pricer, I can’t tell you how many times I’ve heard people complain about how often fares change and how there seems to be no logic involved. Why do they pay more than another person for the same seat?

It makes perfect sense to me, of course. Airlines price their seats based on supply and demand, so if you book early when the plane is empty (high supply) and you travel on an uncrowded day (low demand), you’ll likely find the best price. I’m simplifying, of course, but you get the idea. People hate the lack of transparency and the fact that they don’t seem to get more for paying more.

It certainly doesn’t help that airlines use the same systems to sell tickets that they used 30 years ago. Those systems are very rigid in what they can and cannot do, so even though there are plenty of great ideas out there, very few can be implemented without major changes.

That’s where Air Canada has excelled.

Why Air Canada? Well, it probably helps that they have the lion’s share of the market up in Canada, so they can experiment without nearly as much consequence as someone down in the US. Still, they’ve done some very innovative things that have made them a model in terms of revenue generation.

First, start with their new tiered fare structure. They have five different fare groupings. The lowest, called Tango, is bare bones. You only earn 50% of the miles you fly, there are change fees for everything, and you have to pay $12 just to get an advance seat assignment. That is followed by Tango Plus, Latitude, Latitude Plus, and finally Executive Class (which is their premium cabin). For a full explanation of the difference in classes, go here.

It’s rare in the airline world, but with these fare groupings, you can now see what you’re getting by paying more. Of course, this only works if you have the right interface for customers, so Air Canada did a major makeover on their website. If you searched for a flight from Vancouver to Toronto, for example, here is what you would see.

The first thing you might notice is that it looks a lot like the Southwest website. It shows you every available flight and then which fare classes are open for sale on those flights. Even better than that, they have tabs at the top showing the lowest fares for five days on either side of your chosen date, just in case you’re flexible. It makes it very easy to get a good picture of the fare landscape.

One thing I like as a former revenue guy is that they change fares within each fare group. You may have to squint, but look at the first flight as compared to the second flight. In Tango, you’ll pay $168 for the first one, but $194 for the second. Even within each category, they’re looking to match supply with demand. It may still hearken back to the black box idea of revenue management from the customer perspective, but it’s a good middle-ground that offers good transparency for the customer as well as the ability to revenue manage for the airline.

Now, in their latest move, Air Canada has taken things one step further to actually creating a world of a la carte pricing. So now, let’s say you want the Tango fare. When you select it, you’ll go to this screen.

This was just launched last week, and I think it’s great. The idea is to get to the point where every person can pay a different fare and actually feel good about doing so.

You don’t care about earning miles? Well, save $3. Air Canada will give you the discount so they don’t get the liability of those miles on their books.

You don’t need to check bags? Great, save $4 for not using the resources to get your bag in the belly of the plane.

Do you know you won’t change your flight? Excellent, save $6 on that one as well.

The best part about this is the presentation. US carriers will often tack on fees for various things. Air Canada could easily have said that there is a $4 fee for checking bags, but instead, they give you a $4 discount for not checking bags. It’s the same thing (assuming they can bump the base fare up $4 - something they can probably do in Canada), but the customer ends up feeling good about it.

So is this the future of ticket sales? I really hope so. It makes a lot of sense to tailor tickets to each person’s needs if you can. Let each person choose what they want and the buying process becomes much more pleasant as well as transparent.

Will the US carriers try this? Probably not in the near future, at least not the big guys. First, it requires a big change on the tech side. More importantly though, if competitors don’t go along with it, there is a lot of risk involved. If there was one big airline I’d expect to give something like this a shot, it’s US Airways since they have been known to take risks, but most of the others are probably too conservative to do it right.

In the meantime, Air Canada will continue to innovate. They’ve announced that they’ve signed on with ITA Software to replace their reservation system internally. That new generation software can only open up additional opportunity to improve the purchase process for everyone.

Remember the good old days when frequent flier miles lasted forever? Those were good times. Then a few years ago, the airlines decided that they would start expiring - they required that you earn mileage at least once every three years. Otherwise, they’d expire.

Well, Upgrade: Travel Better points out the sneaky move by US Airways to cut that time to a mere 18 months now. Once you click into the page on the US Airways site, you find that this new policy goes into place on Jan 31, 2007. If you need more than 18 months, you have the option to pay $50 + $.01 per mile to reactivate the account for another 18 months. After that point, they’re gone forever. The horror!

Wait . . . I like this idea.

If you can’t earn a single mile in over 18 months, what’s wrong with you? It’s not like you even need to fly. You just need to earn with any partner. That means you could get the credit card and earn miles, you can stay at a hotel, rent a car, and you can even buy some friggin’ flowers to get miles. If it’s not even important enough for you to do one of those things in 18 months, then you really don’t care too much about your miles, and the airlines should be able to wipe them off their books.

I guess this is what happens when Philadelphia Eagles fans are allowed to sling bags.

For a long time, Philly has been a nightmare of a baggage problem for US Airways. You may remember a couple winters ago when they had the meltdown at Christmas and tons of bags were lost. After that incident, the airline blamed the workers for walking out on the job, but it was later determined that management had left the airport severely understaffed.

That, in a nutshell, explains the oh-so-terrible labor relations at the old US Airways. Now that America West has taken over, they’re trying to right the ship, but it’s going to be a long road. Yesterday’s article in the Philadelphia Inquirer took a look inside the baggage operation for US Airways in Philly, and it found some pretty ugly stuff. Try this one for starters:

While most US Airways veterans are white, many recent hires are African American. Often, the two groups hang out in different break rooms. Some white workers won’t help pay for DirecTV in one break room, complaining that the set is always tuned to BET.

“The issues are generational, but they manifest themselves racially,” a veteran said. “It’s pretty ugly.”

And that’s just the tip of the iceberg. You’ll have to read the article to get an accurate impression of life at US Airways, but definitely keep in mind that it does seem a bit sensationalized.

Even with that in mind, this is a pretty ugly story. It’s a great example of why taking over US Airways won’t be as smooth for America West as it has seemed so far. The old US Airways employees are angry over pay cut after pay cut, and the change in way of life. As the article notes, working on the ramp used to be a good job you could have for life. Now, it’s considered something for people to do for a few years and then get out. The pay is much less, and that is reflected in the quality of the new hires. Apparently, the pay had even been cut too much, because the new America West management has already raised wages since taking over. This clash between older, highly skilled workers and green new hires is indicative of the difficulty the airline will face in trying to merge these workforces. Even they decide to operate the airlines separately, the problems will remain.

It’s going to take someone who can command respect in Philly to turn that ship around. They’ve gone through so many senior leaders over the years that finding someone who will simply stay around for a couple years might be considered a victory in itself.

Ok, maybe in this case, the correct term is “overweight,” but either way you look at it, you’ll have to leave those heavy bags at home from now on if you fly Continental.

Recently, most US airlines standardized their baggage rules to allow bags up to 50 lbs for free, bags 51 to 70 lbs for a fee, and bags 70 to 100 lbs for a bigger fee. Now, Continental has stopped allowing any bags over 70 lbs.

Really, if you can’t fit everything you need in a couple of 70 pound bags, there’s something wrong. Continental’s website does note, however, that you still check electric wheelchairs and other assistive devices free of charge.

Here are the weight restrictions for a few select airlines on domestic routes:

American - up to 50 lbs free, $25 per bag from 51 to 70 lbs, $50 per bag from 71 to 100 lbs
Continental - up to 50 lbs free, $25 per bag from 51 to 70 lbs
JetBlue - up to 50 lbs free, $20 per bag from 51 to 70 lbs, $50 per bag from 71 to 100 lbs
Northwest - up to 50 lbs free, $25 per bag from 51 to 70 lbs, $50 per bag from 71 to 100 lbs
Southwest - up to 50 lbs free, $25 per bag from 51 to 70 lbs, $50 per bag from 71 to 100 lbs
United - up to 50 lbs free, $50 per bag from 51 to 100 lbs
US Airways - up to 50 lbs free, $50 per bag from 51 to 70 lbs, $80 per bag from 71 to 100 lbs

A lot of people don’t know about the Guaranteed Airfare Rule. Many airlines have it, and it basically says that if the fare goes down after you purchase the ticket, you are entitled to receive the difference. Most airlines will charge you $100 to reissue the ticket, so it only makes sense if the price went down A LOT, but some airlines, like US Airways, will actually let you receive the difference in the form of a voucher without any service charge.

So a few days ago when I realized that the fare on a trip to Puerto Vallarta had dropped by $80, I thought I’d try to get a refund in the form of a voucher.

I called reservations and they told me that since the new lower fare was an internet-only fare, I had to call the internet desk to get it done. Sure enough, when I called them, they said there was nothing they could do about it since it was an internet only fare. I was stuck.

At this point, I decided to write in to customer relations and see what happened. They wrote back only a couple days later with this text:

The Guaranteed Air Fare Rule applies to tickets purchased through US
Airways Reservations or through www.usairways.com. As with
most fare rules, certain restrictions and exceptions apply.

The original ticket must be fully unused and the reissued ticket (to the
decreased or new fare) must reflect the exact itinerary with no changes made to
dates, times, cities or passenger name. Additionally, all conditions ofthe new
fare must be met, including booking code, advance reservations andticketing
requirements. If the decreased or new fare is a fare for sale for a limited
period of time only, this rule does not apply. If the fare is limited to
Internet booking only, the rule does not apply, as this type of fare is not a
filed/published fare with industry reservation systems. In other words, a
Reservations agent must be able to view the decreased fare or new fare in our
booking system.

When a fare qualifies for the Guaranteed Air Fare Rule, the customer may
request a refund of the fare difference. A $100 change fee per ticket will be
assessed; however, a customer may choose to receive the difference in fares in
voucher form. In that instance, the change fee would be waived. Should you still
have questions regarding the Guaranteed Air Fare Rule please contact our
Reservations Department at 1-800-428-4322 for assistance.

I’m lucky that I actually handled the domestic contract of carriage for America West while I was there, so I knew exactly where to look to see if this was true or not. Go to this page to see all the US Airways/America West contracts of carriage. Since I’m flying on America West to Mexico, I had to take a look at the ridiculously long international contract for America West.

Sure enough, upon further review, here is the text:

(D) EFFECTIVE RULES, FARES AND CHARGES ALL CARRIAGE OF PASSENGERS
AND/OR BAGGAGE SHALL BE SUBJECT TO THE CARRIER’S RULES,
REGULATIONS AND TARIFFS IN EFFECT ON THE DATE OF COMMENCEMENT
OF CARRIAGE COVERED BY THE FIRST FLIGHT COUPON ON THE TICKET.

(1) WHEN THE FARES OR CHARGES COLLECTED ARE NOT THE APPLICABLE FARES
OR CHARGES, THE DIFFERENCE WILL BE REFUNDED TO OR COLLECTED FROM THE PASSENGER AS MAY BE APPROPRIATE.
(2) IF AFTER A TICKET HAS BEEN ISSUED AND BEFORE ANY PORTION THEREOF
HAS BEEN USED, AN INCREASE OR DECREASE IN THE FARES OR CHARGES APPLICABLE
TO THE TRANSPORTATION COVERED BY THE TICKETS BECOMES EFFECTIVE, THE FULL
AMOUNT OF SUCH INCREASE OR DECREASE WILL BE COLLECTED FROM, OR REFUNDED TO
THE PASSENGER, AS THE CASE MAY BE. EXCEPTION: (APPLICABLE FOR LOCAL IN
THE U.S.A. AND A POINT OUTSIDE THE U.S.A.) NO INCREASES WILL BE COLLECTED IN
CASES WHERE THE TICKET HAS BEEN ISSUED PRIOR TO THE EFFECTIVE DATE OF A
TARIFF CONTAINING AN INCREASE IN THE APPLICABLE LOCAL OR JOINT FARE, (SEE
NOTE BELOW) PROVIDED:
(A) THE ORIGINATING FLIGHT COUPON OF THE TICKET WAS ISSUED FOR
A SPECIFIC FLIGHT AT THE FARE CONTAINED IN A TARIFF LAWFULLY IN EFFECT ON
THE DATE OF TICKET ISSUANCE DETERMINED BY THE VALIDATION STAMPED OR IMPRINTED ON THE TICKET;
(B) THE ORIGINATING FLIGHT SHOWN ON THE TICKET IS NOT
VOLUNTARILY CHANGED AT THE PASSENGER\’S REQUEST SUBSEQUENT TO
THE EFFECTIVE DATE OF ANY INCREASE IN THE APPLICABLE FARE;

(C) THIS PROVISION SHALL APPLY ONLY TO THE PASSENGER TO WHOM THE TICKET WAS
ORIGINALLY ISSUED. NOTE: PURCHASE OF A PREPAID TICKET ADVICE (PTA) WILL
CONSTITUTE PURCHASE AND ISSUANCE OF A TICKET FOR THE PURPOSE OF THIS RULE. THE
PROVISIONS OF THE CONTRACT OF CARRIAGE OR OF THIS TARIFF MAY BE ALTERED,
MODIFIED OR WAIVED ONLY IN WRITING BY AN AGENT, SERVANT OR REPRESENTATIVE OF
HP.

I told you this thing was wordy. You don’t even need to bother reading it, because what would matter isn’t in there. There is nothing saying that certain types of fares are excluded from the Guaranteed Airfare Rule. This means that they should owe me the difference. I sent that back today and I eagerly await their response. I’m fairly sure this will not be easy to get a hold of, but I’m persistent. I’ll keep you updated here.

The key takeaway from this is that you should always check the contract of carriage. For domestic flights, for example, they have a blanket statement saying that certain types of fares can be excluded from the Guaranteed Airfare Rule. (That seems completely unfair to me, but that’s a whole different story.) Since I’m flying internationally, I’m going to keep fighting for this.

Air Canada announced some time ago that they’d be installing in-seat audio/video on demand on all their aircraft (even the small 70 seaters), and it’s now coming to fruition.

The Toronto Sun has a “review” of the new system on its website. I put “review” in quotes because they don’t actually have much to say about it other than this gem of a quote:

“I don’t find that the navigation is very good at all when you get into watching the video programming,” says MacArthur, who tried out the system during a recent flight to New York.

Yeah, that’s helpful.

What we do find out is that the new system has “16 to 24 movies, various TV shows and 50 music CDs. Later this summer it will include up to 10 interactive games and an interactive moving map with flight-path information.” Sounds to me to be a little light on the number of movies when compared to other airlines, but really, how many do you need?

Oh, and this is cool. “A USB port next to the monitor will allow passengers to upload games, while each seat will be equipped with a power outlet, says McKenven.” Can’t say I’ve ever seen that before.

Unfortunately, it’s only on 27 planes right now, but it should be done sometime next year fleetwide. This will help it compete internationally with just about every non-North American airline and domestically with WestJet. That airline currently offers Live TV.

This will try to answer the age old question of whether or not people are willing to pay for this. I know that I personally am happy to shell out a few bucks for that kind of entertainment and even more than that if it’s a really long flight. On the long hauls, this is becoming standard issue. (Yes, United, that means your 747s with big projector screens need to be updated.) But on the short hauls, this is still a rarity. I do hope it becomes the new standard.

Airlines have relied on international routes recently to be their big money makers and none have been more sought after than flights to China. In the last few years, the US and China came to agreement to slowly phase in more flights between the two countries. Before that agreement, the only two US carriers flying to China were United and Northwest.

The party got started this year when Continental started Newark to Beijing and American started Chicago/O’Hare to Shanghai. For 2007, only incumbent airlines will be able to bid for new flights, and today United surprised everyone by applying for Washington/Dulles to Beijing.

The reason it was surprising is that United has had a long-standing desire to fly from San Francisco to Guangzhou (CAN). So when they came out with this request today, it was surprising. This may simply have been the realization that United wouldn’t win the new route out of SFO. It could be clear pandering to the politicians in DC with the tempting promise of nonstop flights.

American has applied for Dallas to Beijing while Continental has asked for Newark to Shanghai. Both of those applications are strong, but Continental’s seems like it should be the front runner. This new United service, however, is really an interesting twist. It opens up nonstop flights in an important market politically and that could help sway the vote.