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Friday 29 October, 2004 

Good morning

I am now enjoying time on the Scottish Isle of Islay (pronouced 'Eye-luh').  Notwithstanding the promise of gale force winds at sea, the ferry crossing was surprisingly calm, and very beautiful.

My first night in Britain was spent in Blackpool.  This city bills itself as 'Britain's most popular holiday destination', and I felt it high time I visited.  It was an interesting experience, but I doubt I'll ever return.  I have never before seen such a concentration of people from the lower socio-economic demographic, and while there is nothing wrong with that, it was nonetheless a very depressing way of being reminded that we are so incredibly lucky in the US, both in terms of quality of lifestyle in general, and having high quality tourist facilities at the places we travel to.

The hotel - the grandly named Norbreck Castle Hotel - was a good example of that most dangerous of hotel types - the hotel that reads well in official reviews and brochures, but which in reality is awful all the way from the pot-holed car park through to the single small slow lift that had to serve several hundred rooms.

On a more positive note, my second night was in Inverary.  This will definitely be featured as the first night on the Scottish Islands Tour I'm researching at present.  A lovely small town, a nice welcoming friendly hotel (the Argyll) and Wifi in all rooms.

I flew to London with Virgin Atlantic and had a chance to enjoy their new Upper Class Suite.  This was an interesting experience, but somewhat marred by a less than highest standard of cabin crew on board.  I'll write a full review next week, and have to feel sympathetic for VS (and other airlines, for this is, alas, all too common, even in the first class cabins) in situations like this when they have a good product but which is randomly sabotaged by less than excellent service by their onboard staff.  With the cabin crew of most airlines being unionized, it can be woefully difficult for airlines to closely control their staff.

Your response to the special bulletin last Friday helped bring about a very positive demonstration of democracy in action.  Your calls (and those of others) to Sen Lautenberg helped persuade him to do a 180 degree change on this issue, and by the end of the day, his staff were telling callers that he is now in favor of protecting passengers left in the lurch if an airline closes down, and indeed trying to suggest that he never opposed this!

With the election just round the corner, and probably at least 75% of readers in a situation where their vote sadly doesn't count (living in a 'safe state' that will surely be won by one or other of the candidates by a comfortable margin) it is reassuring to know that old fashioned phone calls can still influence legislators and help shape the outcome of proposed new laws.

I'm not going to editorialize on who should win the Presidential election, because I actually don't care.  Heads - my preferred candidate wins and I'm happy.  Tails - the other guy wins, but if that happens, it closes out the scenario of a certain woman running for President in the future, and I'm again happy.  So go ahead and freely vote, either for the man supported by North Korea, Iran, various terrorist groups and France, or for the man supported by Britain, Japan, Australia, Russia and Italy.

Long time readers know that one of my regular hobby-horses is the topic of noise reducing headphones.  These devices are becoming less and less expensive, making it more and more compelling for you to own a pair for use when traveling.  My favorite model of noise reducing headphone was discontinued a month back, and replaced by a new model that was greeted by a fair amount of initial controversy, due to it sharing an external appearance with at least five other brands.

This Week's Column :  Noise reducing headphones, cheaper and better than ever before :  The new model NC-6 Plane Quiet headphones list for $60 ($20 less than the previous version).  However, they perform appreciably better, and, best of all, there's a 20% discount available to Travel Insider readers, dropping the price down to a bargain $48.

Dinosaur watching :  Another airline files for bankruptcy, but not the one most industry watchers were expecting.  Tenth largest US carrier ATA filed for bankruptcy on Tuesday, making it the fourth US carrier currently in Chapter 11.

It seems the ATA bankruptcy was well overdue.  Six months ago the airline had a negative net worth of $105 million, and after losing a further $90 million in the last two quarters, it now has debts of $940.5 million and assets of only $745.1 million.  A couple of weeks ago I was criticizing airlines that file for Chapter 11 prematurely; but here is an opposite case of a company that has continued trading while technically insolvent for over half a year.

AirTran said it will buy 14 gate leases at Midway from ATA plus matching landing rights, as well as extra landing rights at La Guardia and Reagan National Airports for $87.5 million.  America West and Southwest are also reported to have interest in some ATA assets.

AirTran has an ATSB guaranteed loan, same as US Airways, and (also the same as US Airways) is now seeking to get the terms of the loan lifted so it can spend its collateral on future operational needs.  This would put our taxpayer's money at risk.  When will the ATSB actually say to an airline 'A deal is a deal.  Do what you promised to do, or face the consequences.'?

The airline that was expected to enter Chapter 11 this week didn't.  Delta bought itself extra time by renegotiating some debt and also getting labor concessions from their pilots, who agreed to give back 32.5% of their salaries, enough to save Delta $1 billion a year.  This was very much a last minute move, with DL's board meeting, perhaps to approve a Chapter 11 filing, at the same time the pilots decided to make this concession.

A $1 billion a year saving is impressive, but DL needs a lot more than that to return to profit.  It lost $646 million in the last three months alone.

It seems that the airlines have found a new excuse for losing money.  America West announced a $47 million loss for its third quarter, and their Chairman and CEO, Doug Parker said 'We are disappointed to see our string of profitable quarters come to an end. These results are driven by an extraordinary increase in fuel prices and excess industry domestic capacity'.

In referring to his company's losses and Chapter 11, ATA Chairman, President, CEO and 69% shareholder in the company (wow, what a busy guy; he probably spends much of every day having business meetings with himself, but I wonder how he balances his duty to the company, to himself, and to the other 31% of shareholders) George Mikelsons said 'Excess capacity, extremely high fuel prices, which continue to escalate, and declining fares have necessitated that all airlines, including ATA, re-examine their business'.

The new scapegoat?  Excess capacity.  But how true is this?  Like most other airline excuses, this one doesn't stand up to much scrutiny.  The simple fact is that most airlines are enjoying passenger load factors way above typical historical percentages, and very close to the maximum levels that can operationally be supported (100% occupancy loads are essentially impossible on airlines that sell multi-segment journeys).  When was the last time you flew on a three quarters empty plane?

Not only are planes being flown with more passengers than almost ever before, passenger numbers in total are also increasing.  The LA Times says this will be the US travel industry's best year since 9/11, with domestic travel spending totaling $592.6 billion, a 6.9% increase on last year.

The International Air Transport Association is similarly optimistic.  International air passenger traffic is up 17.7% in the first nine months of this year compared to last year, and cargo traffic is up 14.1%.  IATA says that North American traffic is up 16.6%.

Doesn't sound like excess capacity to me.  Or, perhaps, what the airline executives mean when they say 'excess capacity' is 'competition from other airlines who are selling lower fares'.  This is a different thing entirely, and is of course the absolutely central part of the dilemma facing the major airlines.

But the amazing low fares on offer might be coming to an end.  In the last month airfares have increased on many routes, by $10 on three different occasions.  And on Tuesday, Southwest announced its latest airfare sale, with the lowest coast to coast fares now being offered at $149 each way, up from the standard $99 it has used for all previous sales subsequent to 9/11.

United gave a stunning example of how incredibly out of touch it is with its customers earlier this week.  It says it will be making itself more responsive to customers seeking competitive fares.  That sounds good.  But how is it going to do this?

By closing a call center in Bloomington, IN, and moving 650 reservation jobs to India instead.  United's executives must be the only people in the US who don't know we dislike dealing with a foreigner who doesn't understand US geography sufficiently well when booking our airline tickets.

I wonder if United will charge less than $5 for a phone reservation now that $5 buys probably a couple of hours of a reservationist's time in India rather than a couple of minutes of time in Indiana?  That would be 'responsive to customers seeking competitive fares'.

US Airways has some major problems with disgruntled employees at present.  An anonymous employee made an announcement at Philadelphia's airport on Sunday, saying

Due to the fact the employees have had a 20 percent cut in pay, it will be up to an hour and a half until you get your bags

Unfortunately, this wasn't a joke, with passengers reporting waits of well over an hour for their bags.  US Airways says that it is investigating.

The best thing to do if you fall off a horse is to get right back up on it and continue riding.  But the flight crews at Corporate Airlines - the commuter airline that serves some AA routes and which suffered a fatal crash in Missouri last week - apparently disagree.  The airline has had to ground all flights temporarily because the flight crews asked for time off after the crash.

I wonder how Corporate Airlines would like it if their passengers also decided to take time off from flying them?

I wrote last week about Air Canada's self described approach to streamlining customer service and developing innovative products through simplification

Travel Agent Emily writes to tell of another one of their steps to streamline customer service :

In the interest of customer service, Air Canada is now charging US$7.00 each direction for seat assignments on their "tango" (read cheap) fares.  I am sure that will help streamline the check in and boarding process and reduce problems at the airport---not!

Orbitz announced on Tuesday it will guarantee any airline ticket purchased on its web site will be the cheapest travelers can find anywhere. Orbitz will give a voucher worth $50 to anyone who finds the same flight at least $5 cheaper on another site because it doesn't want you to leave its site before purchasing a travel product. You have until midnight on the day you purchase the ticket to file a claim for any lower fare you find.

Talking about beating rates, after my strange experience with Hertz when booking a NZ rental car (entering my No. 1 club number and discount codes increased the rate they charged me over their walk up rate), I was more circumspect in booking a car for my time in Britain at present. I checked Hertz, Kemwel, and also asked my friend Bob Bestor at Gemutlichkeit if he could offer me a good rate. His contacts and a 'we'll beat any other rate' offer not only got me the best price for the mid sized car I requested but also a free upgrade to a full size car as well.

If you're renting a car anywhere in the world, you might want to see if Bob can help you, too.

The Victoria Clipper ferry company in Seattle has introduced the ultimate short cruise: a high-speed ride from Seattle to British Columbia for flu shots. They charge $105 to Americans who take the ride to Victoria, BC, on the Canadian side of Puget Sound, where the shots are administered. Tourists get to see bald eagles, whales, islands, and mountains along the way.

Some people feel much more strongly than I do about the dangers of cell phone radiation, including a small group of people in Britain who threatened to firebomb a local church if it allowed a cell phone antenna to be erected on its roof.

The minister observed that everyone who visited him to protest had a cell phone with them, and because the antenna can't now be mounted on the church roof - the highest local spot - there now have to be two antennas in the town, each transmitting at greater power, to compensate for their poorer locations.

Thanks to reader Norman for sending in this excellent web page that shows you an example of an altered ATM.  The alterations enable a normal seeming ATM to capture your bank card's details and PIN and pass them on to fraudsters.  Check out the pictures on the web page to see what to look out for before the next time you stick your card into a bank machine.

It is clearly the world's longest commute, but I envy the man doing the commuting.  48 yr old Chris McKee works as a policeman in central London.  But he and his family live in Dunedin, at the bottom of the South Island of New Zealand - almost exactly half-way round the world, and a 26 hr flight from London.

PC McKee works for two months, then has two months off-duty in NZ.  He found it cheaper and preferable to live in this manner than to live in London.

Good news for Boeing.  It has announced another sale, this time for 20 of its new 7E7 plane, and being its first sale to a US airline.

Bad news for Boeing.  It isn't actually a sale, because the contract has yet to be signed.  And the airline isn't actually one you'll recognize.  Primaris Airlines, which to date has done little more than operate charters for journalists following Air Force One and the President, hopes to take delivery of $3.8 billion worth of new Boeing planes starting with some 737s in 2007 and the 7E7s not until 2010.  Maybe, by that time, they'll have found the money to pay for these planes - or, quite likely, Boeing will be financing them into the planes just to get some more 'sales' registered.

So far, Boeing has confirmed orders for 52 7E7s - 50 to ANA and 2 to Air New Zealand.  Its earlier projection of 200 confirmed orders by the end of 2004 is looking unattainable, and the inevitable recent Airbus announcement that it will develop a head to head competitor to the 7E7 (the new A350) seems to have made many airlines wait until they can clearly evaluate both the Boeing and Airbus alternatives before committing to an order.

I'd been puzzled by the very small amount of cash that Virgin Airlines founder Sir Richard Branson was committing to his new space tourism enterprise - a mere 74 million ($130 million).  Where would the rest of the money come from, I wondered?

The answer is now apparent.  More than 7,000 people have already registered for the three hour space flights with his new venture, at a cost per journey of 115,000 - representing 805 million in air fare (space fare) revenue.

To put things into context, Sir Richard expects to commence space flights in 2008 - two years before Primaris hopes to take delivery of its first 7E7.

Alaskans are getting greedy again, and are reviving yet another proposal to tax cruise ship passengers.  They don't seem to appreciate that these people already leave a lot of money behind after spending it on overpriced junk souvenirs, tours, food and drink during their shore excursions.  Or maybe they do, and are indeed just greedy.

Alaska is so wealthy that it gives all residents an annual cash gift.  Maybe we should pressure AK to give cruise ship visitors a cash gift, too.

This Week's Security Horror Story :  Commercial airports have a three week window of opportunity to apply for approval to replace TSA screening services with privately contracted services.  It is expected that many airports may wish to explore this opportunity, due to problems with impossibly long lines of people waiting to be screened and the inflexibility of the TSA to respond to peaks in demand.  The applications need to be prepared according to formal guidelines and will of course be lengthy and complex, and until these guidelines are published, airports can't even decide if this is a step that would make sense to them or not.

The application period opens in three weeks time, and close three weeks later.  But the TSA have not yet provided the airports with the guidelines and data they need to evaluate their options and prepare applications.

Reader Dave uncovered a nasty quirk in TSA screening procedures.  His son was selected for secondary screening, but the TSA refused to allow his wife to accompany their son - she was told that he was not entitled to have a parent present during the secondary screening.

Name problems when checking in for a flight are not uniquely a US phenomenon.  A Tongan nobleman had problems checking in for a flight from Sydney to Tonga on Air New Zealand.  Because he is a nobleman, he only uses one name (a bit like Madonna or Cher) and the word Honorable before that.  Honorable Luani was kept waiting for 45 minutes while Air NZ staff fussed over the fact he only had one name and checked with Immigration Officials to make sure this was acceptable.

And now for the unique twist that our US airlines should emulate.  Air NZ apologized for the inconvenience, and credited him with an extra 10,000 frequent flier miles.

Lastly this week, reader Fred points out an exciting new development in international cuisine, in Peru.  I think I'll stick to haggis.

Until next week, please enjoy safe travels

              David M Rowell aka The Travel Insider

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