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Another Day, Another Airline Merger

By Danielle Contray
updated September 29, 2021
Courtesy <a href="http://www.flickr.com/photos/sbeebe/6287888862/" target="_blank"> Sam Beebe, Ecotrust/Flickr</a>

Reports have come out that US Airways and American Airlines are circling a merger and preparing for landing.

Seems like these mergers are standard issue for major airlines these days. Southwest merged with AirTran 2010, Continental merged with United in 2011. And whenever these mergers happen, the first question always seems to be: what about my frequent flyer miles? We covered the AirTran/Southwest strategy yesterday. Reuters' Mitch Lipka did a thorough breakdown of what a US/American merger could mean for your frequent flyer miles if you were loyal to one of those airlines. He theorizes that American's AAdvantage program will reign supreme (it has more than twice as many members as the Dividend Miles program from US Airways). The real issue is that US Airways is part of the Star Alliance (along with United, Air Canada, Lufthansa, and others) while American aligns with Oneworld (airlines like British Airways and Qantas are also members). Lipka's advice: start using those points now.

Yes, the uncertainty of your miles is important but we can't help but wonder—what will the name be? May we suggest the fiercely patriotic US American Airways?


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Millions In Refunds In Limbo After Direct Air Collapse

When Direct Air canceled its flights and filed for bankruptcy last month it left its customers scrambling for millions of dollars in refunds, and now the company's credit card processor and escrow bank are claiming they don't have the cash to cover all the reimbursements. The Myrtle Beach, S.C.-based Direct Air sold charter flights and vacation packages up and down the Eastern Seaboard and in the Midwest. The company canceled its charter program on March 13, and on March 15 it filed for bankruptcy protection in the U.S. Bankruptcy Court for the District of Massachusetts. In a company press release issued on March 17, Direct Air explained that "rising fuel costs and other operating expenses pushed the charter company into a severe operating loss position." Following the bankruptcy filing, the U.S. Department of Transportation issued a statement for consumers impacted by the Direct Air shutdown that under federal regulations, Direct Air has in place an escrow account into which all charter participant funds were to be deposited until payment was made to the airline that was to execute the charter flight. The DOT also noted that customers who paid for their Direct Air flight by credit card should contact their credit card company to get their money back. But according to Bingham Farms, Mich.-based JetPay Merchant Services, the credit card processing company for Direct Air, the bank holding the escrow funds is not releasing them and is therefore putting almost the entire refund load on JetPay. In an affidavit to the bankruptcy filing, David Chester, COO of JetPay, explained the credit card processing company's predicament. "Without access to funds in the escrow account, JetPay is currently suffering a cash shortfall," Chester wrote. That shortfall "will likely exceed several million dollars and may reach as high as $20 million which will jeopardize the ability of JetPay to continue business." Later court filings further question whether the bank itself even has enough funds to cover the onslaught of refunds that need to be paid out and why those funds aren't available in the escrow account. The bottom line is that for Direct Air customers seeking to get their money back the process could be long and arduous, and there remains a great deal of uncertainty about whether there will even be enough money to cover all the refunds, and if not, who is responsible and what course of action customers will have. More from Budget Travel: What to Do If Your Airline Shuts Down Delta's 'Basic' New Fare: Cheaper Price, No Changes or Seat Assignments Allowed Tips On When To Book Summer Flights Amid Rising Fares


Delta's 'Basic' New Fare: Cheaper Price, No Changes or Seat Assignments Allowed

Most airline tickets are nonrefundable. But would you buy an airline ticket knowing that you couldn't change the date or flight time, even with a fee? How about the idea of buying a ticket in which you couldn't get a seat assignment, even by paying extra? Delta has just introduced a new "Basic Economy" fare on certain routes, and the tradeoffs for slightly cheaper fares are just that: no changes allowed, and seats are only assigned randomly at check-in. In other words, whoever buys these tickets has the best likelihood of winding up in the dreaded middle seat. How much cheaper are the fares? Delta doesn't say explicitly. For a sample Detroit-Fort Lauderdale round trip in June, the "Basic Economy" ticket cost $229.60, compared to $248.60 for a standard Economy round trip in which seat assignments are guaranteed at the time of booking at no extra charge and changes are allowed for a fee of $150. All things considered, a traveler sure does seem to be giving up a lot, all to save a little money. In this case, a mere $19. The Detroit Free Press categorized "Basic Economy" in a less-than-flattering way as a "new fair scheme." In Delta's press release, by contrast, the airline described the new class of service as "ideal for travelers who seek the lowest fare option, do not intend to make changes and do not consider seat choice an important part of their travel experience." So far, Delta is only offering the new "Basic Economy" option on a few routes connecting Detroit to gateways in Florida (specifically, Fort Lauderdale, Fort Myers, Orlando, and Tampa). Airlines have been "unbundling" tickets for years now, and each new change brings with it less inclusions and more restrictions. What's somewhat curious is that Delta's new "Basic Economy" option seems like it would rule out the possibility of the airline collecting some other fees from travelers who fly in this class of service. Delta notes of Basic Economy: Advance seat assignments are not permitted. Seats will be assigned by Delta at the time of customer check-in, and once assigned, no changes will be allowed. This seems to indicate that Delta isn't selling seat assignments, as carriers such as Spirit Airlines do. Also, because a traveler cannot change a Basic Economy ticket, there is no possibility of travelers with these tickets getting a chance to pay $150 change fees. There is also no incentive whatsoever for travelers to give Delta a head's up if the case arises in which they can't make their flights. If Delta were alerted early enough about someone having to miss a flight, the airline could sell the seat in advance. Delta may get lucky and wind up filling such a seat on the day of travel on a standby basis, but there's no guarantee that'll happen. "Basic Economy" doesn't seem like a good deal for travelers, and it might not even be a good deal for Delta. Nonetheless, the airline announced that, "Basic Economy may be expanded to other markets in the future as determined by Delta." MORE FROM BUDGET TRAVEL: Tips on When to Book Summer Flights Amid Rising Fares READERS' CHOICE: The Best Airports to Get Stuck In How to Get a Free Upgrade


Longer Vacations Don’t Harm Economy, Say Studies

Last week, voters in Switzerland said no to a referendum that would have given Swiss workers a mandatory two additional weeks of paid vacation per year, reports the AP. But don’t cry for the Swiss. They’ll still enjoy four weeks of paid vacation time. In the rest of the European Union, it is legally required for employees to have 20 days of paid vacation each year, though many companies count national holidays toward that 20 day quota. In comparison, workers in the US typically take only a dozen days off a year of paid vacation, according to a 2011 survey by Hotwire. One in four US private-sector workers doesn’t receive any paid vacation at all. US workers who do receive vacation days often fail to take all of the days they’re entitled to. In fact, nearly half of workers don’t use all of their days, a recent Ipsos survey found. Paid vacations may not harm economies. Ironically, some economists say there's no statistically significant proof that paid vacations lead to workers—or nations—to make less goods, services, and money, reports Time magazine. Productivity per hour, and not total hours worked, seems to be a more important factor in determining which people and countries get rich. Workers in Germany and the Netherlands produce just as much work per hour as Americans do on average, even though they take four times as many paid-vacation days (six weeks, on average). What about Greece, lately often criticized in the media? Well, the average Greek who is employed works more hours than workers in any other European Union country. But more than one in five Greeks is unemployed, leading to an impression that the country doesn’t work hard. Why is America the “no vacation nation”? Maybe it’s because we like working more than other countries do. Working makes Americans happier than it does for Europeans on average, according to a study published in the Journal of Happiness Studies and written by Adam Okulicz-Kozaryn, an assistant professor at the University of Texas at Dallas. What do you think? Do the Europeans know something we don’t? Should we have more paid-vacation in the US? Can vacations restore one’s mind, body, and soul—leading to more productive efforts when people are back on the job? Or should the US continue keep paid vacation time to a minimum, given that it makes us happy to work and given the growing competition from workers in countries like China, India and Brazil who almost never take vacation. SEE MORE FROM BUDGET TRAVEL How to Have a Happier Vacation 8 Ways to Save on Hotel Rooms FlightFox Uses Crowdsourcing to Find Best the Best Airfares


Vacation Home Site Tries To Boost Renter Protections

The vacation home rental market is booming, but what protections do renters have in the face of potentially inconsistent properties? In a step towards attempting to alleviate that concern, VacationHomeRentals.com has added an optional insurance product for its rentals that is meant to protect against a home that has been foreclosed on or is in bankruptcy, an owner who has double-booked the property, or a property that has been misrepresented in the ad. The insurance starts at $29, and goes up from there. For instance, for a total rental price of $2,000, the insurance costs $65. For a $10,000 rental, it runs $325. The protection is good for up to $10,000 in coverage. But as with any insurance policy, renters should read the fine print. For example, the item that probably catches most potential renters’ eyes is protection against a property that has been misrepresented. Anyone who has ever rented a vacation home has probably had some encounter with this item, but misrepresentation can be broadly interpreted. In the terms and conditions section of what VacationHomeRentals.com calls the "Happy Rental Guarantee," the site breaks down what the clause doesn't include in very precise detail. Additionally, VacationHomeRentals.com claims to prohibit owners from inflating their property reviews by having friends or family weigh in. How the site monitors this activity is not explained, however. But it did say that owners must pass a "rigorous screening process before being allowed to advertise their property on our site," executed by a third party "security enhancement firm." What has been your experience with vacation home rentals? Do you feel the market needs to have more protections like these for renters? Why? More from Budget Travel: The Dark Side of Vacation Rentals A service for finicky vacation home renters READERS' CHOICE: Which Airline Has The Nicest Flight Attendants?