The federal government charges a 7.5% excise tax on domestic air travel. When you buy miles from a U.S. airline you have to pay the tax, because the assumption is the miles are being used for domestic travel.
The IRS notes that if you use purchased miles for international travel (or hotels, gift cards, or anything other than domestic air travel) you can claim a refund of that 7.5% tax.
A roundup of the most important stories of the day. I keep you up to date on the most interesting writings I find on other sites – the latest news and tips.
God Save The Points calls out Upgrade Pack, a startup which promises discounted airline and hotel upgrades. He apologizes for giving coverage to the startup over a year ago, since they’ve raised money, hired employees and customers have paid money to the company — but there’s still no product.
Upgrade Pack responded on twitter, defending itself by arguing that they’ve been successful in raising lots of money and hiring lots of people.
Against my own interests, and without concern for angering the people I know at the programs, I’m willing to call out the good, bad and ugly to come up with a conclusion of what’s actually best.
San Francisco – Singapore non-stop, SQ flights 1 and 2, are on sale for 66,500 miles each way in business class. That’s a 30% discount. You need to book in February for March travel. Premium economy awards are also on sale for several routes.
Barry Michaels has been trying to start an airline for at least 28 years. First under the name Family Airlines, and then Avatar Airlines, he’s had an idea to fly Boeing 747s between leisure destinations. He went to prison for tax and securities fraud in connection with the venture. The DOT insisted at the time that he give up control of the project.
Now he says he’s sent a letter of intent to Boeing to buy 30 Boeing 747-8 aircraft, and he’ll start marketing to investors on Wednesday to raise $300 million. When he tried to raise money on IndieGogo they kicked him off.
The reason that air travel in coach isn’t as luxurious as it was 50 years ago is because of deregulation. Air travel is much less expensive. Planes are full – and the number one determinant of a pleasant flight in back is whether you have an empty seat next to you. Airlines don’t operate with the high margins they did when government prevented them from competing with each other on price. As a result they don’t invest in luxurious food to lure travelers away from competitors, since they weren’t allowed us use low prices.
A roundup of the most important stories of the day. I keep you up to date on the most interesting writings I find on other sites – the latest news and tips.
If you are a oneworld sapphire member – think British Airways Silver – you get lounge access domestically within the U.S. even though American Airlines frequent flyers don’t.
In fact oneworld sapphires, which is the mid-tier elite level, get American’s Flagship lounge (international business class lounge) access on U.S. domestic itineraries. American gets a carve-out in oneworld rules so they do not have to offer this to their own members.
Government-owned Royal Air Maroc is apologizing to customers over a photo that’s gone viral in social media of a porn star wearing underwear on one of their flights. The airline says the photos have ‘menaced the reputation and values’ of the carrier.
Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel -- a topic he has covered since 2002.
Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »
