|Friday 11 April, 2003|
Good morning. Another eventful week, and while we're all rejoicing over the positive developments in Iraq, many in the travel sphere are very saddened by Thursday's news that both British Airways and Air France will be retiring their Concorde fleets later this year.
I've only flown Concorde once, almost 20 years ago, but the wonderful experience is still a vivid memory and one I've always hoped to repeat. And so -
This Week's Column : Concorde : An Untimely and Unnecessary Demise : Could it be that there is more than meets the eye to Thursday's announcements by British Airways and Air France that they're ceasing to fly their Concordes? I calculate that the Concorde flights are profitable, and the extra fuel costs to operate Concorde negligible. So why then are the two airlines discontinuing their Concorde service, and why won't they sell their planes to Virgin Atlantic?
Perhaps if BA was to receive a UK government bailout, it would be able to keep its Concordes flying a bit longer. It now appears close to certain that our airlines will be given as much as $3 billion, while their competitors elsewhere in the world look unlikely to receive anything. If the tables were turned, you can imagine the outcry from our airlines about European airlines getting government subsidies. This is also an argument that Boeing regularly trots out against Airbus, with varying degrees of success.
Talking about BA, last Friday's newsletter featured a BA passenger who couldn't get the refund he deserved, and identified him by name, city and flight. That same afternoon, he was blessed by a call from BA, who advised that he will now get a full refund! Although BA is really slow (it took 95 days to action my luggage compensation request), they do eventually get there in the end (generous compensation for me, full refund to Chaim Freiberg). Thank you, BA.
I've commented before about how they do things differently 'downunder'. Here are two more examples. Firstly, Qantas is yet again boosting the quality of its service on flights between Australia and New Zealand. On the less than four hour flights, business class passengers are now being offered three different meal options and four choices of (complimentary) wine, along with special tablecloths and printed menus. Coach class passengers are also being given more food choices, and everyone gets to enjoy free drinks (after midday). It is encouraging to see a very profitable airline that continues to invest more money in passenger services.
The second example goes against global trends. Earlier this week, American Airlines and British Airways finally won government approval for codesharing services across the Atlantic. And last week, Northwest, Delta, and Continental were given permission to create their codesharing arrangements. In the South Pacific, Qantas has asked for permission to buy 22.5% of Air New Zealand and to then operate some joint services, but regulatory bodies in both countries have now refused permission. In a very difficult time for all airlines, and with increasing joint operations everywhere, New Zealand and Australia have refused to allow their two airlines a chance at working together to create a stronger joint operation. Strange.
The good news about the Iraqi conflict is of course being tempered by the growing bad news about SARS, and just when reasons to start feeling comfortable about flying again reappear, SARS squashes them once more.
I was taken to task by my last week's comparison between SARS and influenza, and in particular, a physician pointed out that whereas influenza survivors return to full health, SARS survivors will probably suffer permanent lung damage. SARS really is a nasty problem and getting worse by the day. I'm feeling slightly anxious about my next long-haul flights to London later this month, and am impressed by the bravery of flight attendants that continue to work their flights, day in and day out. To my mind, one of the least controllable and most dangerous places to be (in terms of catching SARS) is on an international flight, tightly enclosed in with other passengers who may or may not be infected.
There's little chance of any quick solution for SARS. On Thursday the CDC said that even in a best-case scenario, it will be at least a year before an experimental vaccine is developed.
While the airlines are currently feeling the pinch of SARS, my guess is that it won't be long before this flows through to cruise lines as well. Think back to all those mystery infections last year. Should someone contract SARS as a result of being on a cruise, you can bet that cruise bookings will evaporate in an instant.
Deathwatch Part 1 - United : Although you still get free beer on Qantas, United thinks it has found another way to return to profit - by increasing the cost of a can of beer served on its planes. A beer now costs $5. An internal memo said that the beer price increase 'will help the company remain responsive to customers and to the marketplace, while meeting its financial needs'. Translation from the corporate doublespeak in the memo : Our customers want beer, and we think we can get away with charging another $1, which will be pure profit for us.
Some concerns have been expressed that the current downturn in air travel, affecting not just United but most airlines, might throw UA's ability to meet the financial requirements of its bankruptcy financing. This is an issue that may well get larger if the current air travel downturn continues. Industry association ATA said that last week saw a 15% drop in domestic travel and a 25% drop in international travel.
Deathwatch Part 2 - American Airlines : After American's amazing step back from the brink of bankruptcy last week, its tentative union agreements are starting to unravel, due to what some union members feel are excessively long new contract terms - six years, with only 1.5% a year raises during that time. In a hard-hitting message to his employees, CEO Don Carty said 'Voting no is not a vote for a better contract as a better contract is unfortunately not an option. We've run out of time and we've run out of money. The painful truth is that we simply cannot afford it. So to be perfectly clear, voting no is a vote for bankruptcy and additional job cuts, something we and our union leaders worked very, very hard to avoid.' He went on to say that there would be no renegotiation of the job cuts deal.
He separately told employees at a different meeting 'I must tell you honestly, that given the impact of the war in Iraq and a continued weak economy, the possibility of a bankruptcy filing remains, these tentative agreements notwithstanding.'
Meanwhile, at a time when it needs all the support of its most valuable customers - its frequent fliers - AA has upped the number of miles needed to get some types of free tickets by as much as 25%. Although a spokeswoman said the airline was raising the required miles because it wanted to match the higher mileage requirements of competitors, frequent fliers will probably quickly discover that both United and Delta have lower mileage requirements than the new American levels.
Being miserly on frequent flier awards saves almost no money at all, but does engender a disproportionate amount of ill-will. Surely a more positive approach would be to recognize the lighter loads on planes at present and to bring people back to the skies by allowing awards at lower, not higher levels.
Deathwatch Part 3 - US Airways : Last week I mentioned that Southwest had increased its revenues by 1.1% in March. This week US Airways announced that its March passenger traffic was down by a huge 16% compared to last year. Equally worrying, its load factor - the percentage of seats sold - was also down, from 78% to 73.4%. Not a good sign at all.
When surrounded by such negativity, it is important to realize that some airlines are doing well. In marked contrast to the dinosaur carriers, JetBlue reported that its March traffic rose 76.4% on a capacity increase of 84.1%, compared to March last year. For the full first quarter of this year its traffic rose 82.1%.
And in international good news, it is plain that some Americans are still flying. Air Tahiti Nui announced that it is adding an extra flight this summer from Los Angeles to Tahiti, bringing it up to an amazing 14 flights a week. I say 'amazing' because not too long ago there were three main carriers serving Tahiti, each offering a mere two flights a week, and now this relatively new airline is offering 14 flights. Air Tahiti Nui, the flag carrier of Tahiti, offers full three class service on A340-300 planes.
Wednesday was the deadline for planes to have reinforced cockpit doors. Virgin Atlantic is the first European airline to fit all its planes, and most of the US airlines have also done this. The FAA is not granting any extensions, and planes that have yet to be fitted will not be allowed to fly until they have the new doors installed. These fancy doors cost between $25,000-$40,000 each.
A nice win for Boeing this week when All Nippon Airways announced an order for up to 45 737s, while at the same time phasing out 25 Airbuses, including some A320s that are only five years old. By the time deliveries are complete in 2008, ANA will have an all-Boeing fleet.
All but one of Boeings 36 orders in the first quarter of 2003 were also for 737s, something that must worry the program managers for all the other planes Boeing is trying to sell.
More Wi-Fi roll-outs : Wi-Fi is now available in Heathrow's Terminal 1 and also at Paddington Train station. Wi-Fi is also available at Stansted and Gatwick Airports in the London area and Aberdeen Airport in Scotland. There are 800 known public Wi-Fi 'Hotspots' in Britain at present, and Intel is predicting this will grow to 2000 by the end of the year.
A group of US travel agencies filed suit against 21 major airlines last week, alleging that the carriers were in a price-fixing conspiracy to end commissions. A series of reductions in commission culminated in the airlines cutting out all base level standard commissions for travel agencies last year. The travel agencies are seeking hundreds of millions of dollars in damages.
Remember the early spring cold snap last weekend? Pearson Intl Airport in Toronto used its entire 700,000 gallon supply of glycol (de-icing liquid) in less than two days. This supply normally lasts them for 30 days in mid-winter. They had to truck more in from Montreal and the US.
This Week's Security Horror Story : Mr Asim Javed Uppal is a Pakistani who went to visit Calgary. He duly obtained a Canadian visa, which was affixed into his passport. His passport shows his name as Asim Javed Uppal, but the Canadian visa showed his last name in a different order as 'Uppal Asim Javed'. Mr Uppal thought nothing of this, and proceeded to buy his ticket to travel to Calgary. He flew first to London and then flew with Air Canada on to Canada and Calgary. No problems.
But, when he went to start his travels home, the checkin agent for Air Canada in Calgary refused to let him travel, because his name on the ticket (Asim Javed Uppal) was different to the name on his Canadian visa (Uppal Asim Javed). Mr Uppal pointed out that it was merely a different order of last name, and that the visa was stuck in his passport which had the same name order as the ticket, and also pointed out that Air Canada had already flown him in to Canada, and the Canadian Immigration had stamped his visa and allowed him in.
The check in agent refused to listen and explained it was a security matter, and called the Airport Security Service who confirmed this situation. However, although this was apparently a 'security' problem, the Customer Service Manager did offer a solution - simply buy a new ticket with his name in the different order, and then there would be no more security problem!
To me - and to Mr Uppal - that sounds more like extortion than security.
Is security an absolute or is it a relative thing, to be traded off against other issues? In Britain there seems to be a willingness to trade security off against commercial concerns. When asked to explain why nail scissors are not allowed on planes, but glass bottles are (smash open a whisky bottle and you've got yourself a much more dangerous weapon than nail scissors) a UK Department for Transportation spokesman said the Government believed it had to strike 'a balance between convenience and security' and felt the current arrangement was 'about right'. 'We could ban glass bottles but that would mean stopping duty-free sales - and I'm not sure that would be favored by the public,' he said.
Regular readers will know that one of my frequent talking points is the vulnerability of our airplanes to surface to air missiles. I contend that the only solution is to install anti-missile devices on planes. Good news. Homeland Security Secretary Tom Ridge acknowledged on Tuesday agreed that this threat is so serious that the government might have to consider paying for the installation of these devices onto commercial airliners (they cost $1 million or more a piece).
A month or so back I commented on the Caribbean nation that was unapologetically using pictures of Florida and other places in its advertising, implying that the pictures were of its own country. Kentucky has now been caught doing the same thing. A Kentucky Department of Travel spokeswoman has admitted that a bridge used in a travel ad for the state is a New Hampshire bridge. There are eight remaining covered bridges in northern Kentucky, including a bridge that looks similar to the New Hampshire bridge appearing in the ad. The covered bridge ad is featured in the March-April edition of "Endless Vacation" magazine.
Here are three questions for you. First, what is one of the first symptoms of SARS? Answer - shortness of breath. Second, where is the major concentration of SARS victims at present? Answer - Hong Kong. Third question - what would therefore be the most inappropriate possible tourism advertisement for Hong Kong you can think of? Here is the answer.
Lastly, Delta's new Song airline continues to ready itself for its launch next week. They really are trying to make this into a good airline, and deserve credit for their efforts. One interesting aspect was uncovered in this USA Today story that reports on their flight attendants being trained in the art of telling jokes. The sample joke offered by one such trainee - 'We no longer have pillows but you can buy one,' said Britt Taylor, a flight attendant from Dallas during an exercise. 'Your own clean pillow. No one else touched it - no long hairs on it. After the flight, just push it down and roll it up. It goes right in your bag.' Why is it that I don't think Southwest feels terribly threatened?
Until next week, please enjoy safe travels.
|David M Rowell aka The Travel Insider|
|ps : Don't forget to visit Joe Brancatelli's site for his weekly updates, too.|
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