You'll soon be facing two new reverses in your ongoing struggles with travel suppliers. Although the preliminary indications are relatively obscure, they presage possible big new developments in the next few years. You need to start planning now.
Paying with plastic
Allegiant Air has quietly initiated a new way of treating plastic. Its all-up fare displays now feature a "debit card" price; if you want to use a credit card, you pay an extra $4 per flight regardless of the base price. The fine print still lists a higher base fare, then subtracts a $4 "debit card discount," but the net effect is the same: You pay $4 more to buy with a credit card than with a debit card.
What's going on here? Airlines would like to avoid the fees that credit card issuers charge. For Internet purchases like airline tickets, industry reports say those fees are roughly 2 percent of the transaction cost. Debit card fees are lower, about half that figure. Even a 1 percent difference represents lots of dollars on the multibillion dollars in airline revenues.
The reason for Allegiant's use of a "debit card discount" rather than "credit card surcharge" stems from a bit of Orwellian logic: Contracts between the card systems and merchants specify that merchants can't add credit card surcharges to nominal list prices, but they are allowed to give "cash" or "debit card" discounts.
So far, none of the other "usual suspects" airlines has introduced such pricing. But, as I've often noted, nothing catches on in the airline business as fast as a bad idea.
As consumers, you have a big stake in the outcome to this battle. Credit cards provide some important benefits that debit cards do not:
As this battle develops, I expect to see some blurring of the distinctions and the addition of some benefits to debit cards. In addition, independent payment systems such as PayPal will likely play a much bigger role. For now, however, you just need to keep watching developments -- and to decide on any given transaction whether to pay more for a credit card buy than with a debit card.
Delta Air Lines has reduced the miles it awards for travel on "unpublished" fares, including student, consolidator, group and similar fares. Mileage earning will run from the standard 100 percent to as low as 25 percent, depending on the fare class.
Unpublished fares in the Asia Pacific region are exempted due to some contract fine print.
I suspect this is the first of many such devaluations. When American started the first frequent-flier program, the spread between the highest and lowest fares was much less than it is now, so earnings based on miles flown made some sense.
Now, however, my belief is that most airlines would prefer to base earnings on amount paid or the equivalent, rather than miles flown.
Foreign lines and some smaller U.S. lines, which established programs much later, adopted this system. I think the giant U.S. airlines will try to follow as quickly as the public relations impact will allow.
The clear conclusion: Miles and mileage programs don't improve with age.
Contact Ed Perkins via firstname.lastname@example.org.