United Matches American With One-Way Mileage Awards

United has announced that Mileage Plus members may now redeem awards on a one-way basis rather than the previous round-trip requirement. Best of all, there is no premium for a one-way redemption - it is a simple 50% of the miles required for a round-trip award. This new structure matches that of American, Alaska and British Airways, among others.

For members, it greatly simplifies award redemption. Now consumers can make an informed choice about to earn vs. burn based on the price in miles or money based on each direction of their travels. In addition, given the scarcity of frequent-flyer award seats these days, consumers can redeem the higher peak level one direction while taking advantage of the lower off-peak award in the other direction - previously, the higher mileage level applied round trip, even if the low mileage level was actually available.

One possible downside for consumers is that if they are booking these awards separately on the phone, they may get nailed with more phone booking fees - one for each direction of the trip.

And, alas, the new structure only works for United/United Express flights - no one-ways on Star Alliance partners. At least yet anyway - one Star carrier, BMI does allow one-way awards on all Star Alliance partners - we only hope United will do the same in time. And American and BA already allow one-ways on their partners.

United also announced that users can now combine "miles and money" if they are short on miles. While I like the flexibility this offers, I've never found combining miles and money to be in anyone's interest except the airlines....

Overall, however, greater flexibility is always a plus. Or a Mileage Plus in this case.

Virgin America Really is American Says DOT

The AP is reporting (even before Virgin America has put out a press release themselves) that the DOT has ruled that VA is, in fact, controlled by U.S. interests. Per U.S. law, foreign entities are limited to 25% of the voting rights of any U.S. carrier. (Heaven forbid that Singapore Airlines bought a good chunk of United and actually tried to bring it up to SQ's level!)

This whole ownership issue arose when Alaska Airlines requested the DOT review Virgin America's status as a US carrier early in 2009. Since then, both Alaska and Virgin America have gone back and forth in public regarding this issue.

While Alaska has claimed they are simply trying to ensure that all carriers in the US are on a level playing field (which is fair) one has to wonder how much happier Alaska (and the other majors, for that matter) would be without Virgin America around - not only for the inherent capacity reduction but to raise the flying bar. (Yes, there is a pun there!)

After all, brand new aircraft, great in-flight entertainment and happy flight attendants are something all U.S. passengers should have the opportunity to enjoy - no matter who controls the airline! Cheers to Virgin America.

Virgin America: Brother can you spare a dime?

Today's WSJ is reporting that Virgin America (VX) has lost the support of their US investors. The investors, Cyrus Capital Partners and Black Canyon Capital had negotiated a "put test" with Virgin Group when they funded the fledgling carrier some two+ years ago.

As we discussed earlier, US law (inanely) requires that US based carriers must be 75% owned by US entities and those entities must have at least 50% of voting control - an issue Alaska Airlines has already raised with the Department of Transportation in anticipation of this situation coming to a head.

Virgin America must now seek to raise additional capital from a particularly weak negotiating standpoint - a likely investor will nearly be able to name their terms given the situation.

Alaska Airlines goes after Virgin America (again)

As we discussed in an earlier entry, Alaska Airlines previously told the DOT that they were not going to file their quarterly Form 41 passenger and revenue data unless Virgin America was compelled to do the same. Last week, Virgin America complied and filed their data since inception.

Today, Alaska Air fired another shot across the bow by asking the DOT to review Virgin America's status as a US Carrier. For those of you not aware, our fine government requires that all carriers based in the US to be 75% owned by US citizens and "effectively controlled" by US citizens. During Virgin America's start-up days, the incumbent US carriers convinced the DOT that Virgin America was, in fact, controlled by Sir Richard Branson, resulting in the replacement of original CEO Fred Reid.

Lets talk for a minute about the silliness of this law. This law, which has been on the books in various forms for eons, was created back when airlines were thought to be an integral part of our national defense system. Way back when, we didn't want some foreign power to come in and scoop up our airlines and move all of their planes to far-off lands.

However, the world has changed dramatically since those times. Now, the law's biggest effect is to constrain US carriers' in their ability to raise foreign capital. In these times especially, when capital is so dear, it is bone-headed that our government continues this form of regulation.

Heaven forbid that some great airline (say Singapore Airlines) would come in and buy a US carrier (say United) and provide funding that enabled United to actually have a decent product, employ thousands of Americans and run an operation akin to what Singapore Airlines, arguably the best airline in the world, is able to do. We allow foreign operators to own our airports (Chicago Midway for example), our railroads, buildings, roads and all manner of infrastructure. But not our precious airlines. Because our airlines are so good at what they do, right?

Alaska Airlines claims they are just looking to ensure all US carriers are held to the same standard. Fair enough, but what a silly standard in these times.

Virgin America provides Americans with a great product to fly on, employs thousands of Americans, buys loads of American products and pays plenty of American taxes - shouldn't that be enough?