Friday 30 April, 2004
Sincere thanks to everyone who so kindly responded to our fundraising drive. At present, over 276 readers have sent in contributions, and more promised in the mail. With the exception of a special bonus offer I hope to introduce next week, there will be no more 'in your face' pleas for the next six months, although a subtle link will remain at the top of each newsletter (it would be nice to achieve 300 contributors) and of course you're welcome to send in any amount at any time.
This has been a frantic week, occasioned not only by the generous swell of contributions, but also by any computer reliant person's greatest dread - the need to switch from an old and lovingly customized computer to a nasty new one. No pair of new shoes ever fits as uncomfortably as a new computer, and an incipient hard drive crash on my old machine forced me to do what I'd been delaying for too long - replace my desktop computer with a new machine.
Are you reading this, Bill Gates? You, and your hardware manufacturing friends, would sell twice as many computers, because people would have no reason not to upgrade more frequently, if it was possible to simply and directly copy over all the software already loaded on the first machine, along with all the customized settings and everything else.
So my week has been a strange mix of delight (from donations) and frustration (from computers).
This Week's Column : Bluetooth in-car hands-free kits : Here are reviews of two products allowing you to conveniently use a Bluetooth equipped cell phone while driving in your car. Due to the dangers of regular cell phone use while driving, if you use your phone a lot in the car, one of these two units could quite literally save your life.
The NY Times needs your help again! Several of the journalists at the NY Times now recognize that there's no better source of real-world information about travel than you. Alina Tugend is researching an article on travel stresses - the things that make your blood pressure and frustration levels rise, while causing your health and happiness levels to fall. Got an interesting personal experience or thoughts on this? If so, please send them to me with your name and contact phone number, and I'll pass them on to Alina for her article.
Last Chance for 10% Discounts : Almost exactly a year ago, a small company in North Carolina introduced a new product that no-one knew anything about - the Plane Quiet noise cancelling headphones. Due to the underlying excellence of this product and its marvelous low price point, it now has a market leader share of the noise cancelling headphone market. The company has diversified and grown and now is offering a wide range of useful travel accessories. They've just rebranded and launched a new website, www.ProTravelGear.com .
Initially I negotiated a 10% discount on their headphones for you. I then managed to 'sneak under their radar' and get them to extend this 10% discount to all the other products they sell, but have long known this discount was a temporary anomaly. Their pricing is always competitive with any other low prices out there, and it makes no sense for them to discount another 10% off what is already the lowest price available.
They are now reducing your discount down to 5%, across the board, for Travel Insider readers (and for various other groups they also formerly had 10% deals with), but offered to extend, for one last week, the previous 10% discount.
It's never too soon for Christmas shopping, folks! Go visit their attractive new site, and perhaps help yourself to some savings, any time between now and next Friday night, 7 May. Simply use the special discount code travelinsider when confirming your order and you'll get the instant 10% discount.
Dinosaur watching : Try and say this with a straight face - only a highly skilled (or, at least, highly paid) airline executive could manage such a feat :
These words were uttered by Ben Baldanza, US Airways Snr VP of Marketing and Planning, as he announced across the board reductions in their fares.
So why am I so cynical about this? Not just because the message about fares being too high is a very old message, but because the US Airways response is curiously limited only to Philadelphia. By some amazing coincidence, this is where it is shortly to have a massive head to head battle with Southwest.
So, Mr Baldanza, you don't fool me for a minute. If you thought you had even the smallest chance of getting away with it, you'd continue to charge the fares you're now admitting were too high and too complicated - and, indeed, you're continuing to charge these same too high too complicated fares in the rest of your route system.
In a nausea inducing announcement, and stealing ideas from the ridiculous Ted promotion, US Airways says it will be mounting the largest awareness campaign in company history to promote these new fares, during which employees will be performing 'unbelievable' acts of kindness. A cynic might agree that an airline employee doing something kind is indeed unbelievable. These 'unbelievable acts' will be such mundane things as washing cars, feeding parking meters, and paying for gasoline and will 'pop up throughout the area without advance notice'.
Oh - this 'largest campaign' - it runs for nine days!
The sad thing about all of this is that if US Airways had 'heard their customers loudly and clearly' and done something a year ago, much as America West successfully did, there's a good chance that today they'd be rejuvenated, stronger, and with a strong hub in Philadelphia that would not have encouraged Southwest to swoop in for what is probably now going to be a death blow to US Airways. The words 'too little, too late' come to mind.
In related US Airways news, they announced this week their loss for the first quarter was $177 million.
United is also trying to beat out new competitor Independence Air, before it gets off the ground (literally and figuratively). It is offering free tickets based on the number of flights in or out of the DC area (Independence will be based at Dulles). A qualifying roundtrip earns two points. You get a domestic coach class award for only four points, an international coach class award for eight, and a round the world ticket for twelve. Twice as many points are needed for upgrades to first or business class on each award level.
A very generous program - you get one free domestic roundtrip for every two you buy. But don't be penny wise and pound foolish - give Independence Air a good chance of succeeding, and force UA to keep its fares low and/or this promotion in place for an extended period.
Delta's AGM in Atlanta last Friday was stormy in parts, with the shareholders passing a resolution requiring shareholder approval of special retirement benefits for senior executives. It seems the shareholders have no confidence in their board member representatives controlling executive compensation.
Unfortunately, a second shareholder proposal did not pass. This second proposal would have prohibited all raises and bonuses for executives until the company was profitable again.
CEO Grinstein said a bankruptcy would be 'undesirable' but when asked if the company had hired bankruptcy attorneys, he obliquely answered by saying that Delta has hired various "professionals" to review a number of issues. We'll take that as a 'yes' answer, shall we?
This year marks the 75th anniversary of DL's founding, and to commemorate the milestone, DL has unveiled a special 75th anniversary paint scheme on its 767, 'The Spirit of Delta'.
There's an interesting story about this plane. It was given to Delta, as a gift, by its appreciative employees, retirees, and community partners, who funded the complete $30 million cost back in 1982.
Grinstein also said at the AGM that DL views the 30% pay cut they're asking from their pilots (who have counter offered with very much less) as the 'minimum number'. Care to bet on the chances of DL's employees buying the airline another gift plane today?
Showing that Delta hasn't completely forgotten about its Song subsidiary, it was announced that they will be copying JetBlue (again!) by offering in-flight exercises. The Song exercises will use a rubber ball and resistance band, and will cost $8. Should be on all Song flights by the end of summer.
It is common to talk about the 'Big Six' (some say the 'Sick Six') - the leading US dinosaur carriers United, American, Delta, Northwest, Continental and US Airways. America West CEO Doug Parker said that the big six likely will shrink to the big two or three. The only profitable carriers in the first quarter have been the new breed of low cost carriers such as reformed dinosaur America West itself, Southwest (of course), AirTran and JetBlue.
What do you do if you work for an airline struggling to avoid bankruptcy? If the airline is Alitalia, you go on strike, forcing the carrier to ground all flights, as a way of demanding the government step in to save the airline. Meanwhile, before the added negative impacts of striking workers, Alitalia was losing money at a rate of an estimated €50,000 an hour, and it is more than five years since the airline last turned a profit.
Suggestion to Alitalia employees : Buy your airline an airplane. It is more helpful than going on strike.
Bravo, Boeing. It has been a good week for Boeing, with a strong financial result (would it be too cynical to note that this was lifted largely by 'stronger than expected military sales') followed by its first formal launch order for the new 7E7. All Nippon Airways, one of Boeing's most loyal customers, has given Boeing an order for 50 planes. In a probably not coincidental move, Boeing has subcontracted for 35% of all 7E7 production to be built in Japan, including wing structures, which is the first time Boeing has ever passed over the lead in wing production to outside companies.
Although I've aggressively poked fun at Boeing, the reality is that the 7E7 is a plane that had to, and would 'succeed', if for no stronger reason than there is nothing else in the middle part of the Boeing lineup any more. Basically, Boeing's passenger plane sales have collapsed down to sales of 737s, primarily to existing 737 customers, and sales of 777s.
The sale of 7E7s to ANA proves nothing, because this was not really a truly competitive win. What will be notable is when an Airbus customer switches from A330-200 planes (Airbus' closest competitor to the 7E7) and orders 7E7s instead.
The 7E7 is expected to take to the skies in 2008, two years after the Airbus super-jumbo A380.
This Week's Security Horror Story : We've all noticed and commented on the fact that middle aged businessmen and elderly grandmothers seem to be getting more than their fair share of scrutiny at airport security. Guess what - we weren't just imagining this.
The Department of Transportation fines an airline if it selects more than two young Arab males in secondary screening from any particular flight, because this would be discriminatory.
This shocking allegation was made, under oath, by the Presidents of both UA and AA in testimony to the 9-11 commission. Extraordinarily, the DoT denies these claims, and said 'Despite the testimony from current and former airline executives . . . secondary screening of passengers is random or behavior based'.
So who is lying? Let's demand some accountability here - either two airline presidents lied under oath, or DoT officials are now compounding a stupid policy with culpable falsehoods.
Question to the DoT - what percentage of the 9/11 hijackers were young Arab males?
An English accountant recently suffered the consequences of not being a young Arab male. Mr Pattison claims he was held for more than 24 hours in leg irons and denied food and water after flying into JFK with his wife. He said he begged for water but the Dept of Homeland Security staff just sat watching him, eating hamburgers. Security officials detained him and then deported him without allowing him into the country because an Interpol notice alleged he was wanted in Qatar for debts of 'up to' $10,000 (what a meaningless statement - even 5¢ is part of 'up to $10,000').
A spokesman for the Qatar Embassy said that they had no knowledge Mr Pattison was being sought.
The cost of airline security, prior to 9/11, was somewhere between $300-700 million a year. The cost now : Between $2-3 billion this year. Despite this enormous increase in cost, the only matching increase has been in aggravation, not in security. I mentioned last week about new testimony asserting we're no more secure now than we were 17 years ago. More on this testimony here, with one of the points being that even the best screeners are missing 20% of well-concealed 'threat objects'.
So, if 20 terrorists (like the 9/11 group) all tried to smuggle objects through security, and if they struck it very unlucky and had the 'best' screeners carefully checking them, at least four of them would still succeed.
In fact, increased airport security continues to kill increasing numbers of innocent Americans. It is generally accepted that more people are now driving short (and even not so short) distances rather than fly. Road traffic has increased as result of this, and while road fatalities, as a percentage of miles driven, remains at a low level, due to the increase in driving miles in the last year (and the year before) total fatality numbers rose in both years, with the 2003 count of 43,220 reaching a 13 year high.
Environmentalists are trying to blame this on increased numbers of SUVs on the roads. This is wrong. The accident rate per driving mile is almost steady, the only direct link is an increase in the number of miles driven - an increase which has nothing to do with SUVs and everything to do with airport/airline inconvenience avoiding.
405 more people died in 2003 than in 2002.
Another current hot security topic is equipping planes with SAM defenses. I've written about this a while ago. Two interesting developments. Firstly, El Al is in the process of testing a defense system on all its planes. But there's one slight problem - the US is threatening to ban planes so equipped from US airspace due to unspecified 'safety risks'.
Secondly, the airlines again prove what we've long suspected - when it comes to cost management, they don't have a clue. There are 6800 commercial planes in the US airline fleets. The cost of fitting a missile defense system is likely to run as little as $1 million per plane (the Israeli system is costing between $750k-$1 million per plane, and that is for a production run to protect only 30 planes). So how much would it cost to fit these defenses to all 6800 planes? At a cost of $1 million or less per plane, you might think the answer to be $6.8 billion. But Air Transport Association President James May said this week that the cost could be between $50-100 billion over a 20 year period, and urged the government to go slow on developing countermeasures.
He suggested other ways to protect aircraft from missiles might include buying up all the thousands of such missiles currently readily available on world arms black markets.
I thought the 'go slow on developing countermeasures' statement was the stupidest thing I'd heard this week, but the suggestion to buy all black market SAMs is even stupider. We can't even find Osama bin Laden, let alone try and negotiate with him to buy his arms supplies.
Wondering where to go this summer? Here's a day tour with a difference.
Lastly this week, I'm passing on this story, relayed by a gentleman currently in Dakar, of how we should count our blessings next time we're in the air
All going well, I'll be writing to you from London next week. Until then, please patiently enjoy safe travels
David M Rowell aka The Travel Insider
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