Novel Idea for Japan - Airport for Budget Travel

By HIROKO TABUCHI

MITO, JAPAN — The diktat from the governor was the kind of sweeping order that gives Japanese bureaucrats heart attacks: plans for a three-story airport terminal, painstakingly laid over years, were to be scrapped and replaced with a single-floor layout.

The New York Times

Trimmings would be pared to a minimum. Boarding bridges would be eliminated, with passengers told to board planes from the tarmac and even handle their own check-in luggage — an idea so blasphemous in service-conscious Japan that one local official said his “mind went blank” when he heard of the plan.

Ibaraki Airport, which opens Thursday about 85 kilometers, or 53 miles, north of Tokyo, is intended to be a completely new type of Japanese airport: a no-frills facility that could finally open up Japan’s expensive capital city to low-budget airlines.

Ignored by Japan’s big-league carriers, the little airport is up against all odds. It is the 98th airport in a country with a landmass smaller than California’s. Ibaraki Prefecture is devoid of tourist attractions, except for an ancient garden, known for its plum blossoms, and famous purveyors of natto, or pungent, fermented soy beans.

For now, Ibaraki will offer just two flights a day: one to Seoul by the South Korean carrier Asiana Airlines, and another to Kobe, a medium-size port city in western Japan, by the Japanese budget carrier SkyMark Airlines.

Even Japan’s transportation minister, Seiji Maehara, has been hard-pressed to muster much enthusiasm for the airport’s opening, despite its roughly ¥22 billion, or $243 million, in funding from local and national coffers. The news media have painted Ibaraki as just another money-losing airport, an example of the useless public works projects that dot Japan’s countryside.

“I’m not about to beg airlines from Japan and elsewhere to fly to Ibaraki,” Mr. Maehara said last week. “The prefecture needs to do what it can to make use of the airport.”

A closer look at Ibaraki, however, reveals a strategy that could jolt Japan’s long-stagnant aviation sector. Some experts say Ibaraki — with its explicit focus on cutting costs and budget carriers — could be just the kind of airport the country needs at a time when traffic demand is slumping, consumers are scrimping after a recession and airlines are being pressed to cut costs to the bone.

Some experts say low-cost air services have the best potential for growth, especially as incomes rise in big countries like China and India, bringing air travel to more people. Budget carriers have sprung up across the region, but Japan’s airline industry, dominated by giants Japan Airlines and All Nippon Airlines — and plagued by expensive and inefficient airports — has been largely left behind.

Experts say the greater Tokyo area, especially, could use another airport to handle flights by low-cost carriers, much like the Stansted or Luton airports outside London. The capital and its environs, the largest metropolitan sprawl in the world with a population of 40 million, are served by two airports, Narita — which handles most of the international traffic — and Haneda.

But capacity is notoriously tight, and that is expected to continue even after expansions at both airports in the next year. Strict regulations have stifled the flexible allocation of flights. Moreover, high landing and other costs put Narita and Haneda beyond the reach of low-cost carriers.

“Ibaraki is definitely on the right track,” said Ushio Chujo, a professor of transportation economics at Keio University in Tokyo.

“The airport’s success would hinge on whether more low-cost carriers will start up in Japan and in neighboring countries,” he said. “That could take 5 to 10 years, so Ibaraki will have to prepare for the long haul.”

In 2007, long after blueprints for an impressive terminal building at Ibaraki Airport were drawn up, and contractors hired, Ibaraki Prefecture’s governor, Masaru Hashimoto, called for building “an airport Japan had never seen before.”

“Just another standard airport wasn’t going to work. We’d be behind the times as soon as we opened,” Mr. Hashimoto said in an interview. “We needed to turn our thinking upside down.”

Mr. Hashimoto ordered a redesign of the terminal from scratch, brainstorming ways to cut operating costs, both for the airport and for carriers. He scrapped a plan to place arrivals, departures and a viewing deck on separate floors, instead putting everything on one level. That meant passengers could be served with fewer staff members.

Mr. Hashimoto got rid of boarding bridges, which are expensive for carriers to use, and for airports to maintain. Passengers instead will board from the tarmac. (“People will love it — they can pose for photos in front of the plane,” he said.)

He also wants passengers to carry their own check-in luggage to the plane, in a setup similar to some regional American airports — though he is still negotiating with officials on the point. (“We think that’s a bit too much,” one provincial official said on condition of anonymity, saying he was unauthorized to speak to the media.)

Planes landing at Ibaraki will taxi and park in a way that does not require the help of a tractor to push them back onto the runway before taking off — another reason passengers will board from the tarmac. That move, the first for an international airport in Japan, saves tractor usage fees for airlines and slashes maintenance costs for Ibaraki.

When officials protested that Japan’s finicky passengers would complain about the rain, Mr. Hashimoto and his aides offered this plan: give out free umbrellas on rainy days. (Japanese people love freebies, he said.) The governor is also pushing to accept private jets, as well as a helicopter link with downtown Tokyo, and is renting out extra space for parties and conventions.

Those efforts have paid off: Landing fees for a Boeing 737 on a scheduled flight at Ibaraki are about ¥89,000, two-thirds of Narita’s ¥139,600 fee and less than half of the ¥189,600 at Haneda, according to the industry publication Orient Aviation.

Other factors may work in Ibaraki’s favor: Its finances are not as dire as many of Japan’s other airports, in part because it was built as an extension of a military air base. And foreign carriers can serve regional airports without the bilateral agreements necessary for access to Haneda and Narita, making it easier to add routes. Asiana has had difficulty adding to the six routes it flies from Seoul to Narita and Haneda, for example.

Ibaraki offers unlimited free parking, while parking costs at Narita and Haneda are sky-high, and also plans to offer bus service from central Tokyo for 500 yen, or less than $5 — a fraction of the cost it takes to travel to Narita, and comparable to the cost of reaching Haneda.

Accounting for the time it takes for the plane to taxi on Narita’s runway and the passenger to make his way through that sprawling airport, the total journey to central Tokyo from Ibaraki is about the same — less than 90 minutes — according to Katsuichi Yabunaka, an Ibaraki official.

Meanwhile, the airport serves a big market in its own right: about 20 million people live within 100 kilometers of the new airport, according to Ibaraki Prefecture.

The airport faces plenty of headwinds. Haneda and Narita are planning extensions. Japan’s economy remains depressed. Foreign arrivals in Japan are also on the decline, though the trend could change with better access, particularly by budget carriers, experts say.

The airport is expected to lose ¥20 million in its first year of operation.

Still, Ibaraki is going on a sales offensive. The airline is in discussions with low-cost carriers in China, Malaysia, Philippines and Macao. Asiana, meanwhile, is studying an additional route to the South Korean port city of Busan.

“Ibaraki is the first airport in Japan to break the mold by really focusing on cost and efficiency,” said Dongshil Hyun, executive vice president at Asiana and head of the airline’s Japan operations.

“We finally have a much-needed new and cost-efficient route to Tokyo,” he said. “How could we not be excited?”

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• Airlines Vie to Serve Haneda Airport (nytimes.com)

What makes Singapore's Changi Airport so charming? - USATODAY.com

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By Harriet Baskas, special for USA TODAY

On a visit to Singapore earlier this month, I asked most everyone I met to tell me what they liked most about their island city-state. Locals sang the praises of the Lion City's food, its culture, its cleanliness and its safety. And more often than not, they told me how much they loved their airport.

Yes, their airport. Not something you're likely to hear from anyone living in Chicago, Detroit or New York City. But it seems most citizens of Singapore are sweet on Changi Airport. Given how often Changi lands on top of (or near the top of) surveys ranking airport shopping, dining, cleanliness and leisure activities, so too is the rest of the world. So I decided to set aside an afternoon to find out what makes Changi so charming.

It's not its coziness

With four gates, one security checkpoint, and about one million annual passengers, New York's White Plains Westchester County Airport is "cozy." Singapore's Changi Airport, which serves close to 40 million passengers a year, is not. It sits on about 3,200 acres of land (more than half of which has been reclaimed from the sea) and has three main terminals, a no-frills Budget Terminal, 230 retail shops, and more than 110 food and beverage outlets. The newest terminal (Terminal 3) has more than 900 skylights and a "Green Wall" that's covered in live plants and about five stories high.

So, cozy it's not. But in a hot, humid, rainy country just three and a half times the size of Washington, D.C., and with a population of close to 5 million people, cozy is not necessarily an asset. So the air-conditioned Changi airport, with its vast, bright public spaces, carefully-tended-to greenery, mall-like shopping and dining venues, and comfortable, out-the-way seating areas, has become a popular spot with locals. Many families spend their weekend afternoons shopping, dining and just hanging around at the airport and many students take their school books and head to the airport to study.

Good ambience, good value and plenty of perks

"Singapore is dense, and the airport is intentionally open and spacious, with a good ambience for both travelers and Singaporeans," Changi's corporate communications manager Lee Ching Wern explained during a walking tour of the airport. "We also want the airport to be perceived as a place of value." To that end, the airport is loaded with a wide variety of useful and, for an airport, unusual amenities.

Many airports these days offer travelers free wireless Internet access. Changi does that too, but it also provides more than 500 free Internet stations throughout the terminals, making it easy to check e-mail one last time before boarding that 10-hour flight to Japan. To help travelers while away long layovers, there are free movie theaters, free computer games, free music video and CD listening stations, and a complimentary karaoke-style music studio, where I watched two grown men turn into giggling teenagers before they even put on their headphones. Live entertainment includes "meet and greets" with celebrities passing through the airport and, just last week, a series of performances by a Michael Jackson impersonator. Numerous themed lounges offer showers, massages, meals and napping suites at very reasonable prices, but foot- and leg-massage machines scattered around the airport are free, as are the napping and lounge chairs in quiet, marked rest areas.

For my money, though, the best amenities at Changi are the tranquil koi ponds and a series of five themed gardens, all free and all exquisitely well-cared for. Indoors, there's a fern garden and an orchid garden displaying more than 15 species of the flower. Outdoors, there's a rooftop cactus garden with more than 40 species of cacti and succulents, a sunflower garden that will make you feel as if you've stepped into a Vincent van Gogh painting and, my favorite, a colorful, two-story tropical butterfly garden with more than 1,000 free-roaming butterflies native to Singapore and Malaysia. Each day, new, "just born" butterflies are released into the garden.

Little, low-cost things make a big difference

Changi Airport may be unusual in that it's got plenty of space, a hefty budget for amenities and promotions, and a mandate to make the airport an oasis for both passengers and local citizens. Few airports may be able to match Changi for the breadth and creativity of its complimentary amenities, but airports of any size can certainly take some tips from the airport's approach to customer service. During my three-hour tour of the airport my guides, higher-ups from the corporate communications division, were approached by an exhausted-looking woman wanting to know if there was a place she and her husband could go to rest during a long layover between two extremely long flights. Not only did one staff member stop to explain that there were free lounge chairs in the adjacent terminal – with built-in alarm clocks – right next to the gate for their next flight, but she insisted on walking the tired travelers to the next terminal to make sure that they found those chairs. Inexpensive, but very impressive.

Even more inexpensive and impressive: upon my initial arrival at the airport at 2 a.m. on a Saturday morning, a customs and immigrations officer welcomed me with a big smile and one of the airport's complimentary breath mints.

Now that's charming!

Harriet Baskas writes about travel etiquette for MSNBC.com and is the author of the airport guidebook Stuck at the Airport and a blog of the same name. Follow her on Twitter at twitter.com/hbaskas.

Japan Plans More Overseas Flight Capacity - WSJ.com

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Effort at Haneda Airport May Intensify Alliance Talks at Japan Airlines

By YOSHIO TAKAHASHI By YOSHIO TAKAHASHI

TOKYO—Japan's transport minister outlined moves to open a second airport in the Tokyo area to international traffic, which could intensify airline competition over the skies of Japan.

Such a move comes at a crucial time for Japan Airlines Corp., which is restructuring under government supervision.

Tokyo's Haneda airport now serves mostly domestic flights, while international flights are routed through Narita airport in the Chiba Prefecture, west of Tokyo. A fourth runway being built at Haneda is expected to open up for some international flights.

Seiji Maehara, Japan's minister of transport, said most planes departing from regional airports in Japan now fly abroad via Incheon International Airport in South Korea, a major hub in Asia.

"We need to drastically review this. We have to create a hub airport in Japan, and Haneda would be one at first," Mr. Maehara said.

The fourth runway at Haneda will eventually have a capacity to handle about 110,000 departures and landings. Mr. Maehara said he hoped half will be used for international-flight services.

Domestic flights accounted for 97% of the overall 303,000 departures and landings at Haneda in the fiscal year ended in March, while 93% of Narita's operations were international flights.

Mr. Maehara said plans to restructure JAL are progressing more quickly than expected, though he declined to comment on details. An airline spokeswoman declined to comment.

JAL reported its largest-ever quarterly net loss of 99 billion yen, or about $1.1 billion, in the quarter ended in June, crippled by a sharp decline in global travel. The airline expects a net loss of 63 billion yen for this fiscal year through March.

Among its own revival initiatives, the Tokyo-based company began separate tie-up talks with Delta Air Lines Inc. and American Airlines parent AMR Corp., with the U.S. firms potentially investing in their Japanese peer to enhance their services in Asia.

But the Japanese airline likely won't conclude alliance talks with Delta and American Airlines until a task force finishes a review of its ailing financial structure, people familiar with the matter said earlier this month.

Trains and Vans May Beat Taxis to the Airport

By JANE L. LEVERE

Getting to the airport on the outskirts of town used to be a simple proposition — catch a taxi, even if it meant sitting in traffic.

But in recent years, the number of options has grown, especially at some of the biggest airports, with direct trains and shared-ride services. The additional options are cheaper and also more reliable, in many cases, if there is a lot of traffic on the highways.

Shared-ride transfers offered by companies like SuperShuttle in the United States and Go Airport Shuttle, which operates in North America and Britain, can be more time-consuming than a taxi or limousine ride, but are significantly less expensive. And fast trains — like the Heathrow and Gatwick Express trains in London and AirTrain JFK and AirTrain Newark in the New York area — are less expensive than a taxi and often faster.

The express trains and shared-ride transfers are becoming more attractive to business travelers, said Dave Kilduff, managing director of ground transportation consulting for the CWT Solutions Group, because in “this type of economic environment, corporations are turning over every rock to save money. They’re looking at alternative forms of transportation.”

And services like the Heathrow Express “are not only faster, they’re keeping people off the road, they’re environmentally friendly,” he added.

In the first six months of this year, the number of travelers whose flights ended at Heathrow Airport was down 8.9 percent from the period a year earlier. But Heathrow Express’s share of those passengers rose 1.6 percent in that period.

Similarly, passenger traffic at La Guardia, Kennedy International and Newark Liberty International airports, all operated by the Port Authority of New York and New Jersey, declined 9.4 percent in the first five months of this year compared with the same period in 2008. But passenger traffic on the Kennedy and Newark AirTrains, also operated by the Port Authority, was 1.4 percent higher in the first five months of this year than the same period last year.

William R. DeCota, the Port Authority’s director of aviation, estimates that on weekday peak travel times, one-third to one-half of passengers on the Kennedy and Newark trains are business travelers.

Richard Perry/The New York Times

In budget-conscious times, trains and shared-ride vans are becoming more popular as a way to get to and from the airport.

Perhaps the biggest attraction is the cost savings. The AirTrain JFK, which picks up travelers at the Howard Beach and Jamaica train and subway stations, is $5 one way. Travelers flying out of Newark can take a New Jersey Transit train from Pennsylvania Station in Manhattan to Newark Liberty International Airport station, where they pick up AirTrain Newark; the one-way fare for the entire trip is $15. By contrast, a one-way cab ride from Midtown Manhattan to Kennedy Airport is $45, plus tolls and tip, while a one-way cab ride from Midtown to Newark can go as high as $90, plus tolls and tip. Depending on traffic, an AirTrain transfer can also be quicker than a taxi.

Kenneth Lin, a senior planning manager in New York for Parsons Brinckerhoff, a consulting company that advised the Port Authority on construction of the AirTrain JFK, says he is a devotee of public transit, including AirTrain JFK.

“It’s cheaper than a taxi and more reliable during rush hour,” he said. “It reduces stress, as it is less idiosyncratic than taxis, and it usually arrives on time. In a car or taxi, it could be a very fast or very slow trip, depending upon traffic.”

The Heathrow and Gatwick Express trains — both of which have economy and first-class cars — offer significant time savings: the Gatwick Express travels to Victoria Station in 30 minutes, while the Heathrow Express takes only 15 minutes to get to Paddington Station. During rush hour, those trips can take triple the time in a taxi.

A round-trip economy-class fare on Gatwick Expressis £28.80 (about $48) and a round-trip first-class fare is £48. On Heathrow Express, the economy fare is £32 round trip, and the first-class round-trip fare is £50.

Money saved by using these trains is also significant: During rush hour, a cab ride from Heathrow to Paddington can cost as much as £80 ($134), without tip, while a cab ride from Gatwick to Victoria Station can cost as much as £90 without tip.

To lure business travelers, Heathrow Express has installed Wi-Fi and cellphone service; Gatwick Express offers cellphone service and refreshments. There is a charge for the Wi-Fi service and refreshments.

The two top providers of shared-ride service are SuperShuttle, which is owned by Veolia Transportation and serves 33 airports in 26 markets in the United States, and Go Airport Shuttle, a group of franchised operators that serve 80 airports in 36 cities in the United States and in Toronto and London.

Both companies set a 15- to 20-minute window of time for passenger pickups, at their home, office or hotel. Passengers travel to the airport in a van with others picked up along the way.

A taxi ride may be faster, but will certainly be more expensive. A one-way SuperShuttle ride to La Guardia from the Waldorf-Astoria hotel in Midtown Manhattan is $14.15, and slightly higher from a Manhattan home or office. SuperShuttle typically requires a pickup three hours before a flight departure

ShuttleFare.com, a Web site that lets travelers book many types of airport transfers, including those offered by SuperShuttle and Go, recently introduced a corporate discount program that waives its normal $4 service fee per booking, and discounts fares by 7 percent.

Matthew Holdrege, director of international sales for Strix Systems, a wireless broadband manufacturer in Newbury Parks, Calif., said he found train transfers particularly attractive “as long as you travel light.” But, he added, “If I’m traveling with my wife, who can have a lot of luggage, she may prefer the princess treatment. So forget about public transportation.”

Airports Queue to Fly to Cuba

By PAULO PRADA

U.S. airports are pressing the government to broaden the list of ports of entry allowed to handle flights to and from Cuba, even though the White House is proceeding cautiously with changes in travel policy.

In a recent letter, Peter Horton, the director of Key West International Airport in Florida, urged the Treasury Department to add the facility to the list of three big international airports in Miami, Los Angeles and New York. Earlier this year, Tampa's airport made a similar request. And airport officials in Houston, already one of the biggest gateways between the U.S. and Latin America, say local business leaders have pressed them to push for access to Cuba, too.

In April, the Obama administration eased restrictions on travel and money transfers to the island by U.S. citizens or residents with family in Cuba. The recent requests are an effort by cities and airports to position themselves ahead of any further loosening of travel policy.

"Cities are looking to get ready for any other moves that could mean more travelers flying back and forth between the two countries," said Kirby Jones, a consultant in Bethesda, Md., who advises companies on business with Cuba.

A spokeswoman said the Treasury couldn't comment on specific requests for changes to existing travel policy, but that requests were reviewed when received.

Under Treasury rules, travel to Cuba by Americans is restricted to family members of Cuban citizens, government officials, academics and others who qualify for special licenses to travel there. About 50,000 American travelers, most of whom traveled by charter flights, received licenses last year.

If the travel ban were lifted, eventually as many as one million Americans a year would visit Cuba, according to the U.S. International Trade Commission, a federal agency. Already, charter operators say the changes earlier in the year have caused a spike in the number of Cuba-bound passengers.

"There's a lot of pent-up demand," said Tom Cooper, chairman of Gulfstream Air Charter Inc., a Fort Lauderdale, Fla., carrier that has seen a 25% increase in passengers on the flights it operates between Miami and Cuba.

For decades, travel-related businesses have decried U.S. restrictions, designed to punish Cuba's Communist government, because the rules prevent what could be a lucrative market from developing. Last week, Orbitz Worldwide Inc., the online travel agency, emailed customers asking them to sign a petition urging the U.S. government to lift the ban on travel to and from Cuba outright. The message cites bills, introduced earlier this year in Congress, that propose to do that.

The Obama administration, despite the easing of policy since it took office, hasn't prodded lawmakers to make the bills a priority. Both President Barack Obama and Secretary of State Hillary Clinton have said that any further changes in travel policy, or the broader and longstanding economic embargo against the Cuban regime, would depend on whether Havana takes steps toward democracy.

Still, airports angling for future Cuba service say they need to get ready. Mr. Horton, the Key West airport director, said the island's proximity to Cuba, plus the sizable Cuban-American community living nearby, are factors that would sustain a market for charter flights. The airport has been in the process of expansion and renovation this year.

The airport's letter to the Treasury was accompanied by a letter from Cape Air, an East Coast carrier that flies to Key West, expressing interest in flying to Cuba.

If demand for flights were to increase because of further lifting of restrictions, Mr. Horton said, "the last thing that we want is to get lost in the shuffle as people scramble to try to fly there."

Write to Paulo Prada at paulo.prada@wsj.com

U.S. 'Money Weapon' Yields Mixed Results

By Ernesto Londoño
Washington Post Foreign Service
Monday, July 27, 2009

BAGHDAD, July 26 -- Shortly after the U.S. Army turned over control of the business center and a restaurant of a multimillion-dollar hotel it built near Baghdad's airport to the Iraqi government last year, flat-screen television sets, computers and furniture vanished.

The looting unwittingly kept the military in the hotel business because officers were concerned that the rest of the hotel would be stripped bare. As the U.S. government is ceding control of hundreds of projects and facilities to the Iraqi government, the conundrum raised questions about the sustainability of billions of dollars worth of projects funded through the Commander's Emergency Response Program (CERP) that encourages commanders to think of "money as a weapon."

U.S. lawmakers and the Office of the Special Inspector General for Iraq Reconstruction, which has released a report about the Caravan Hotel, are increasingly scrutinizing the use of CERP and urging the Pentagon to be more vigilant in its selection and oversight of projects.

The success stories and cautionary tales of CERP initiatives in Iraq are shaping the way commanders in Afghanistan use the program as they place greater emphasis on counterinsurgency and keeping the civilian population safe.

Since 2003, the U.S. Congress has appropriated more than $10 billion in CERP funds for the wars in Iraq and Afghanistan.

"CERP was meant to be walking-around money for commanders to achieve a desired effect in their battle space," said the office's deputy inspector general, Ginger Cruz. "Slowly, it has become a de facto reconstruction pot of money."

Earlier this month, Rep. John P. Murtha (D-Pa.), chairman of the House Appropriations defense subcommittee, asked the Pentagon for a list of all pending projects worth more than $1 million. Murtha said the Pentagon has failed to fully explain how it is using CERP. He added that the military is taking on too many large-scale projects that should be handled by civilian agencies with reconstruction expertise.

"A fundamental review of CERP, its purpose, use and scope, is overdue," Murtha wrote in the July 15 letter to Defense Secretary Robert M. Gates. Murtha said he was disturbed by reports from Iraq suggesting commanders were in a "rush to spend" hundreds of millions of dollars by the end of the fiscal year. Murtha himself has come under scrutiny for backing projects important to constituents that critics call wasteful.

U.S. military officials say CERP has been invaluable in helping commanders get things done quickly, with little red tape. In recent years, they have used it to put insurgents on payroll, award micro-grants to business owners, compensate families of civilians killed in combat, and build schools and clinics.

"We think we've been pretty successful," said Brig. Gen. Peter Bayer, the chief of staff of the U.S. command that oversees CERP projects in Iraq. He said commanders in Iraq have approved few large CERP projects this year.

One of the most notable CERP-funded initiatives was the Sons of Iraq program started in 2006, under which the U.S. military put tens of thousands of insurgents on payroll and mobilized them to fight hard-line extremist groups. Last year the government spent $300 million on Sons of Iraq salaries, but it stopped paying them this year and turned over the program to the Iraqi government, which has often failed to pay the fighters on time.

As the U.S. military has withdrawn from the cities, several CERP-funded projects, such as neighborhood parks, civic centers and swimming pools, have not been successfully adopted by local or national government entities because they either don't have the capacity or interest to keep them running, U.S. and Iraqi officials say. For example, an outdoor performance hall built in Sadr City that cost hundreds of thousands of dollars and was completed several months ago has never been used, according to U.S. officials.

As U.S. troops have largely left the cities, U.S. officials say they have been more judicious in the number and types of CERP projects they approve.

U.S. commanders in Iraq were given $747 million in CERP funds this year, down from $1 billion allocated in 2008. So far this year, the military has spent $235 million of its CERP allocation in Iraq. Realizing they couldn't spend the remaining funds responsibly by the end of September, when the fiscal year ends, U.S. commanders decided to return $247 million.

"Our application has been deliberate and judicious," Bayer said.

The Caravan Hotel, a $4.2 million project, was completed in August 2008. U.S. military officials deemed it a worthwhile investment because there are few hotels in Baghdad that foreign investors would consider safe enough.

After the equipment was looted shortly following the Caravan's inauguration, the military hired a contractor to operate the $225-a-night hotel, fearing that officials at the Ministry of Transportation, which is run by members of the Sadr political block, would shut it down and steal valuables, inspector general officials said.

A spokesman for the ministry said he was not familiar with the hotel project or the allegations of looting. Bayer said the military considers the project successful and is working on a plan to hand it over to the Iraqis.

"Ultimately when you transfer a property to someone, it's theirs and they use it for their purposes," Bayer said. "That's a decision the government of Iraq makes."

Special correspondent Qais Mizher contributed to this report.

Practical Traveler - The Soaring Cost of Car Rentals

By MICHELLE HIGGINS

WHILE the global recession has sent prices plummeting on airfares, hotels and cruises, it is having the opposite effect on rental cars.

In May, the average rate for a weekly airport rental of a compact car booked seven days in advance was $345.99, up a whopping 73 percent compared with $199.65 for the same month last year, according to the Abrams Consulting Group, based in Purchase, N.Y., which tracks rental rates.

In mid-June, weekly airport rental rates for a compact car averaged $347.44, compared with $210.38 a year ago — a 65 percent jump. “There’s a lot of sticker shock,” said Neil Abrams, president of the consulting group. “People don’t understand. The economy is caving around them,” he said, adding, “so how is it possible that rates are as high as they are for car rentals?”

The reason is basic supply and demand. Although demand for car rentals is down — by roughly 15 percent, according to Mr. Abrams — rental agencies have cut their fleets by even more, essentially creating their own shortage and jacking up prices.

To trim fleets, companies have been selling cars to the used car market and holding off on buying new ones. That doesn’t necessarily mean renters are getting clunkers, but it’s not unusual anymore to see a car with 30,000 miles on it. The average age of a rental car is now about 11 months, compared with about nine-and-a-half months a year ago, Mr. Abrams said.

All of this has changed the booking game for consumers. With many hotel rooms and airline seats empty, travelers have become accustomed to booking trips at the last minute. But with car rentals, that strategy won’t work. A procrastinator risks paying an exorbitant rate for the last car on the lot, assuming there is a car left. Many rental agencies in Manhattan, for example, have been sold out for the busy Fourth of July weekend for weeks.

Besides starting your search early, there are several ways to find a cheaper car. Off-airport locations are typically cheaper than airport locations, which tend to tack on fees that can raise the final price by 30 percent or more. According to an Expedia search in mid-June, an economy car from Enterprise Rent-a-Car from Seattle-Tacoma airport was $110.31 a day, compared with $42.90 for a similar car from the same company in downtown Seattle.

Travelers willing to go farther can save even more. For a 38-day road trip from Portland to Michigan, Ed Immel is saving about $800 by not renting from the airport or even downtown Portland. Instead, he is going to an Enterprise branch in the bedroom community of Beaverton, Ore., about 25 miles outside of Portland. “My advice,” said Mr. Immel, a retired rail planner from Portland, “is to take the airport train downtown and pick up the rental car there or go further.”

Deals can also be found by upgrading. With demand for fuel-efficient cars particularly high, travelers can sometimes find a better deal by booking larger, roomier vehicles. A recent Expedia search, for example, found a full-size van for $90.42 a day at the Budget Rent a Car in Long Beach, Calif., compared with $97.86 for a standard car. While the added fuel costs (not to mention larger carbon footprint) might erase the savings, the extra space and comfort might prevent World War III between siblings in the back seat.

Also, look beyond national chains like Avis or Hertz, to the hundreds of independent car rental agencies. Because of lower operating costs and smaller overhead, mom-and-pop agencies, which can be found at sites like CarRentals.com and CarRentalExpress.com, typically offer rates between 15 and 30 percents less than national agencies.

Willing to gamble? Consider Web sites like Priceline.com and Hotwire.com, which offer deep discounts to travelers willing to be locked into a preset price before finding out the rental car company.

Another option: virtual coupons. Sites like FatWallet.com and CouponWinner.com list discount codes for car rentals, or type in the name of a car rental company and “coupon code” into Google to see what turns up. Good deals also show up on airline Web sites under mileage partner offers. For example, Delta is offering up to 20 percent off with the discount code CDP 165385, and double miles on Hertz rentals in the United States (including Puerto Rico) and Canada. The code brought the weekly rental of a Toyota Prius from Newark Airport in mid-July down to $503.90 from $685.05 — a 26 percent saving.

If you don’t have the time to seek out such discounts, Steve Ellis can do it for you. After his wife pointed out his uncanny knack for finding rental deals, Mr. Ellis, who is a business adviser and frequent traveler, created RentalCarMagic.com to allow customers to pay for his deal-sniffing services. The site, which charges $14.95 to $49.95, sends back a quote in a day or two.

Chris McGinnis, editor of The Ticket, a subscription newsletter for frequent travelers, recently tried RentalCarMagic.com for a trip to Hawaii. After paying a $30 fee, he said, the service saved him $54 on a convertible from Alamo Rent a Car. Though he found the process slightly cumbersome — he still had to go to the rental company’s Web site to book the deal using the discount code provided by Rental Car Magic — he noted in his newsletter that in the end, “it saved us more than we were able to save ourselves.”