But to me this is another one of those death-by-a-thousand-nickels-and–dimes issues that once you pile enough of them atop each other, you just sort of shake your head. In the real world of delayed flights, crammed planes and exorbitant fares, a few extra miles on a flight doesn’t matter. But, still: When will these silly mileage schemes just collapse under the weight of consumer fatigue? What if the airlines actually found a viable alternative to induce our loyalty beyond the outdated mileage point? I say let the innovation begin.

To quote a popular college-football analyst on ESPN, "Not so fast, my friends." In short, this deal ain't going anywhere. My sense is the Bush Administration floated this proposal to placate the Europeans, who are still bristling that the "Open Skies" treaty that took effect recently gives U.S. carriers more freedom to connect through major hubs like London's Heathrow and continue on to smaller cities -- something that in the past required them to "hand off" the passengers to one of the European-based carriers.

The Euros are still frosted that they didn't win reciprocal rights in the U.S. market. In other words, if British Airways flies European passengers wanting to go to different U.S. cities, it still has to land in, say, Atlanta or New York and then hand the passengers to one of its American partners like American Airlines.

The Bushies know they're making an offer here that will cost them nothing. Why? Because such a plan would require legislative approval, and the Democrats control Congress. And if Hillary or Obama win the White House, the proposal is doubly dead. Democrats aren't crazy about any kind of consolidation, since it usually entails layoffs and reduction of service. And they really would object if it meant U.S. jobs were lost to Frankfurt, Paris or London.

So it was a nice, but empty, gesture -- like "giving a homeless man the sleeves off your vest," as the saying goes.

The new "Hertz 369" service is now available at more than 1,200 city and airport locations across Europe, including Belgium, France, Germany, Italy, Luxembourg, Netherlands, Spain, Switzerland and the UK.

At Hertz's European web site, you'll see that you can rent for as little as 3,6 or 9 hours and get 100, 200 or 300 free miles, respectively. But is it a good deal? Let's run the numbers.

I went to the Hertz web site to get a rate quote for nine hours and was offered a Ford Fiesta (pictured) "or similar" with a manual transmission and no air conditioning for £43 (or $84 U.S. dollars); a Ford Focus with manual transmission but with air conditioning rents for £46, or $89. (All of the prices I'm quoting here include taxes.)

Then I ran the numbers to see what the rate would be if you rented a car for a full day. That same Fiesta rents for £45 ($87) with unlimited mileage (but with a "refueling" charge if you return the car with a less-than-full gas tank). And the Focus rents for £60 (or $116). Add in the cost of topping off your tank, and you're clearly talking another $10 to $30 at London gas prices.

So is it a good deal? Yeah, it seems so, though Hertz's web site doesn't provide any details as to how badly you get socked if you return your nine-hour rental car late. But otherwise, you could save a fair bit off of what you'd pay a cabbie, if you don't mind navigating the streets of a strange city by yourself.

“For a variety of reasons, slightly fewer people will fly this summer and planes will be approaching 85 percent full,” ATA President and CEO James C. May said in a statement. The ATA cites higher fuel prices, capacity cuts and a weaker economy for the decrease. (Incidentally, crude oil marked a new record Tuesday, $126.71 per barrel.) The ATA's estimate covers the expected total for June 1-Aug. 31, the traditional summer travel season between the Memorial Day and Labor Day holidays.

Minus the horrendous national tragedy, I am wondering if 2008 may be shaping up in a similar vein. You see the new records for crude oil by the day, along with the steady stream of fare hikes and fuel surcharge increases. Fares have jumped more than 12% in the past 13 months, according to government data. Airline executives say they have yet to see demand softening, even though they are planning major capacity reductions right after Labor Day.

But come now. Americans are fiscally strained; no one argues the opposite. Some oil analysts talk periodically about the potential of a correction in crude, arguing that supply and demand have slipped out of sync as speculators rush in hunting hard asset hedges against a weak dollar. Maybe they're right, maybe not. But I have a question for all the airline pros: Is such a correction possible in the travel industry, ie, a rapid, radical plunge in demand? Is it possible that we all just might decide to stay home?

Interestingly, this is one airline contraction in which the credit crunch – not jet fuel prices – is starring as the villain. Fuel accounts for less than one-fifth of DayJet’s operating costs, chief financial officer John Staten said in a telephone chat Wednesday afternoon. He emphasized repeatedly that the job cuts do not affect DayJet’s current service or the viability of its business model, which features Eclipse Aviation 500 jets carrying up to three passengers on trips up to 1,100 nautical miles. The company, which launched service in October, 2007, says it has about 1,500 registered “members” and a rebooking rate of 40%. DayJet’s average flight is one hour, with fares averaging $600-$700. Its load factor is 1.8 people. (An amusing data point, to be sure.) DayJet has raised $60 million from private sources, to date, and has debt facilities totaling $140 million. “These cutbacks had absolutely no bearing on the fundamentals of the DayJet model,” Staten says.

But here’s the rub, the proverbial turkey in the jet engine, that speaks to the current capital troubles, as outlined in its statement: “DayJet’s business model is based on operating at a critical mass, requiring investment ahead of growth. We hired and trained a number of employees in anticipation of future growth and always planned for additional capital investment at this stage.” In other words, the expense arrives before the revenue. These days, with the finance world spooked, that’s a no-no. It is also one reason United parent UAL Corp. was forced to plead with its bankers earlier this week to revamp terms on some $1.5 billion of debt. The airline said May 6 it had received the "flexibility" it needs from a consortium led by JP Morgan Chase, Citi and Credit Suisse.

DayJet says it will continue to expand, albeit not as rapidly.

In other words, Delta must really feel a competitive pinch on the JFK-West Coast nonstops. The deal runs through June 30, and careful scrutiny of the tiny print reveals no fare class restrictions but Delta does toss in a "on select flights" notice. The $50 can be had on every r/t through June. Anyone jumping on this, please give a holler if there's a hitch that's not apparent.

Um, ok. Would this mean antitrust immunity across the Atlantic for that new trio? Some say maybe. I have doubts. Here’s another question: Has American ever been able to derive the kind of economic benefits Northwest and Continental reaped from their scheme? Nope. BA and American were just too large to pass the regulatory smell test. For the sake of argument, let’s say the regulatory environment shifts (massively) and U.S. and European bureaucrats decide that competition is robust and we’re in a new era where consumers are protected.

It’s that sort of thinking that saw nice pops today for all three stocks. BA shares rose 7% in London, while Continental shares are up 8% and AMR jumped 14%. But even if you stipulate a different regulatory take, how does an entity the size of a reconfigured oneworld – which would include the largest player at Heathrow – win antitrust immunity? That just seems a stretch to me, and to some other people, including Virgin boss Richard Branson, who has the resources to severely hamper whatever he deems a grave threat.

So what am I missing here? Does the advent of some kind of AA-BA-Continental business relationship mean much in the larger industry scheme? Even if you’re a million-plus miler on any of the five carriers involved here, will a revised SkyTeam and oneworld affect your life? Likely no. I’m most intrigued by the potential in an idea posed by a reader at Bart Noeth’s aviation site, Luchtzak: Why not a fourth global airline alliance? Yes, why not? Surely Continental could attract interested, revenue-worthy partners. After all, Sir Richard's affection for bold ideas is well-documented. Hint, hint.

My take: The airline mergers we're seeing now are bringing an end of the era of cheap travel. My favorite statistics: The average one-way fare is now $140. $140!! In real terms, the average fare has declined more than 50% in real terms since the industry was deregulated in 1978. When the major bus companies go bankrupt because they can't compete against these cheap airfares, you have to appreciate how good fliers have had it. But no more.

Oh sure, you can go to AirTran's web site and see a promotion for $49 fares. But I have a hunch that rather than being a standard offering, those $49 fares are going to be like those too-good-to-believe prices for new cars you see in the Saturday newspaper. But you get to the dealership and discover there was only one vehicle at that price--and, surprise, it sold at 5 am. Same for those great fares: One seat, and good luck getting it.

Here's my two cents on the release from Continental Airlines that it had , without naming United and its parent UAL Corp., had broken off merger talks with UAL and was going it alone "at this time."

"At this time" is the key phrase here. Because I don't think the other shoe has dropped here. As well-run as Continental is, I just don't see how it can not pursue a merger as a means of cutting costs to improve its chances of turning a profit at a time of $120-a-barrel oil. So either Continental feels passionately that oil prices are going to drop back down to $70 a barrel, as soon predict. Or, and this is where I'd put my money, Continental wants to merge but not with United and have to try to repair the poisoned relationship between management and its workers.

Or it may be a function of the fact that United's stock price has tumbled sharply recently since it reported pretty bad first-quarter earnings and threw the balance-of-power off enough to screw up the deal (Continental's market value is now on par with United's, which should give Continental more ammunition to demand a better deal. Maybe Continental is simply stepping to the sidelines in hopes that United will agree to rework the terms to give Continental's management, board and shareholders a better shake than what was negotiated two or three weeks ago.

But if not United, who? Not US Airways -- labor relations there are just as bad, at least with pilots, and you'd be merging with not one airline, but two, since US Airways hasn't completed its intergration of America West. And United seems to have taken Continental's rebuff as the last word and focused on negotiating a deal with US Airways. American, as some have speculated? That would be one monster airline, but no way--none, zippo--it would pass muster with anti-trust regulators, so it's a non-starter.

Some smart people I've talked to in the airline industry say that I shouldn't discount the possibility that someday a legacy carrier will merge with a discounter like AirTran or a more regional player like Alaska Airlines. Continental and AirTran? American and Alaska? My head is swimming. Anyone will to wager a guess on this one?

I mention this note to provide free advertising for aloft, but to note what's certainly a trend afoot. Starwood only has about a half-dozen aloft hotels open now, and many others won't open until 2009. But you can bet that if this proves a hit with travelers, other chains will have similar programs in place by fall.

For weeks, media reports have quoted sources saying that Continental and United parent UAL Corp. have been discussing a proposal to combine. Continental also was said to have talked with Fort Worth-based American about a potential strategic alliance. (Anything Continental and American do will most assuredly fall short of combining the airlines.)

All of which is why Continental’s decision is quite a momentous conclusion. It flies in the face of the steady onslaught from jet fuel and the consolidation juggernaut sweeping U.S. airline C-suites this spring. It shifts the perils of combinations back to the fore, possibly slowing the urge to merge for some.

A Web-conferencing company called Glance Networks has spied a marketing moment in the recent air travel travails. It’s collecting tales of airline woes through the end of May and offering new customers a free month ($49.95) of desktop meeting service. A rival company, Citrix Systems, offers a similar free month with its conferencing service, GoToMeeting.

“These kinds of delays have amounted to a loss in productivity that is nearly incalculable,” Rich Baker, CEO of Arlington, (Mass.)-based Glance, said in a news release. “We’ve heard reports from recent weeks of more than 300,000 displaced passengers who are missing meetings and losing sales.”

This concept jettisons the idea, now more than a half-century old, of arranging airline seats right beside each other. The design should also allow airlines to pack more seats on certain aircraft without sacrificing legroom, according to Thompson.

The movement toward new furniture placement has taken hold at the front of the plane, where high-paying folks acquire more real estate in the fare (including those much-publicized full-size beds on Singapore's A380s) but coach class has seemingly been immune from much innovation. The Dallas Morning News, which wrote about this design today, says Delta is interested in the seat for future 767s and 777s. Let's hope more airlines consider the approach.

When Delta left bankruptcy reorganization a year ago, it put $12 billion of goodwill on its books, and had a market cap of $9.4 billion. (At the time, Delta had recently been presented a takeover offer by a rival, so the market value wasn't totally out of whack.) Without mangling the accounting rules too much, goodwill impairment relates to the difference between book value and fair value for all the intangible assets a company owns. “A key assumption in that valuation was the price of fuel of $70 per barrel,” Delta said in its earnings statement. Oil settled Wednesday just above $118. Companies have to assess their goodwill at least once per year.

“This change in economic conditions combined with the recent merger announcement created a triggering event for accounting purposes, requiring us to update the valuation of our stand-alone business plan using current assumptions regarding fuel price and the economic environment,” Delta president and CFO Ed Bastian said on a conference call with analysts. As Delta’s stock has tumbled from almost $22 a share to $6 since resuming NYSE trading on May 3, the airline has a market capitalization of $1.9 billion, down from $3.7 billion at the start of 2008. Northwest’s market cap has plunged from $3 billion to $1.7 billion so far this year.