8 April, 2005
I hope you've reset your clocks after daylight saving. After several days of finding clocks needing to be changed, I'm down to one I can't seem to adjust. It is, of course, the most 'intelligent' of all my clocks, synchronizing to a radio time signal, but, alas, there's no way I seem able to tell it to switch to daylight saving. Oh well - at least it doesn't reproachfully flash 12:00 at me, like the VCR!
I'd mentioned last week the upcoming second annual fundraiser for The Travel Insider. Several of you 'jumped the gun' and sent in contributions before it started. All are of course very much appreciated, and I'm going to specifically mention one, an extraordinary $250 (!!!) from Jackie at 1st-air.net. It would have been entirely appropriate to have asked for any sort of mention or advertising message in return for this massive contribution, but she simply couriered (!) me a check with no strings attached.
And so, can I suggest that if you're considering international travel, you visit her site. Jackie's company specializes in creatively working the loopholes in international business and first class fares to get you much lower costing itineraries than you'll find quoted on any regular website.
Thanks also to reader Susan, and several others writing in with similar sentiments. Susan said, in reply to my invitation to supplier readers to help with premiums and incentives to encourage reader donations
I did get some very generous supplier responses, but I also understand the value of the KISS principle, and so without further ado will launch a plain unadorned appeal for funding.
In the last year, you've received 54 newsletters and I've also published about as many feature articles. In total, I've written more than 250,000 words, enough to generously fill three hardcover books. This has taken me most of most weeks to produce, and substantially more than the hours involved in a regular full time job. I've also, in the last year, had to buy three new computers, a variety of software, website design services, and had the site's monthly hosting bill skyrocket.
During this time, you've hopefully been variously amused, appalled, interested and entertained. You've been introduced to many useful new gadgets and been given much helpful new information, and occasionally had exclusive Travel Insider discounts (most notably the two week, across the board, 25% off everything offered by Travel Essentials in February).
Now - it's your turn. If I'm to continue the flow of information coming to you, I need to keep developing this site full time, and therefore inescapably need your financial support.
Last year's fundraising drive saw an average contribution of around $20. Of course, any amount is sincerely appreciated, but please only give whatever you comfortably can without involving yourself in any hardship. You can electronically send a credit card payment or you can send a check/cash the old fashioned way - details here.
Thank you for considering this and fairly responding. We now return to our normal programming.....
This Week's Feature Column : The Times Crossword Puzzle gadget : This device puts 800 of the famous Times of London crossword puzzles in the palm of your hand. Plus it gives you clues and assistance to solve these sometimes woefully inscrutable puzzles. But is it better than an old fashioned book of crossword puzzles? Read the review to find out.
Dinosaur Watching : More government bailing out of airlines. This time, the Georgia General Assembly extended a nice gift to Delta, capping its annual liability for sales tax on fuel, and eliminating the sales tax on food and non-alcoholic beverages served in flight. DL's obligation to pay sales tax on fuel is capped at $15 million, which is $7 million less than DL's payments in 2004. It also caps the local Clayton County fuel tax at $7.5 million, compared to $10 million last year. A nice $10+ million gift from GA to its local airline.
Where is Southwest's largest hub? Although not traditionally a hubbed airline, it continues to expand its presence at Chicago's Midway airport. By July, it will be operating 192 departures every day, a 32% increase in nine months, and has announced plans to increase still further up to 250 flights a day.
An interesting comparison - both UA and AA operate about 250 flights a day out of O'Hare. The stranglehold on Chicago that these two airlines formerly held is clearly being threatened by Southwest's operations at Midway.
The global airline industry could lose as much as $5.5 billion in 2005, according to Giovanni Bisignani, head of the International Air Transportation Association (IATA). Sounds like a lot? Well, no, not really - between 2001-4 the airlines have already managed to lose over $35 billion.
The current excuse-du-jour? Continuing high oil prices. Apparently the airlines are unable to act rationally and simply increase their fares to reflect increased jet fuel costs, or so Mr Bisignani fears.
IATA's solution is variously predictable and confused. Predictably, they call for lessening in government taxes. But, confusingly, they call for less regulation of the airline industry, but more regulation of companies that supply the airlines (eg air traffic control and airports).
He did fairly point out that while airlines are making record losses, airports are making record profits. But he errs in suggesting the record airport profits are the cause of the record airline losses. In any other industry - particular one that is currently growing at 6% a year - if costs go up uniformly for all participants in the industry, then the participants increase their selling prices. Airlines seem unable to understand this.
It isn't only the head of IATA who has no confidence in his members' ability to act rationally. Jim Corridore, an analyst at Standard & Poors, made an extraordinary statement, quoted at the end of this article. He said 'If oil prices continue to rise there's no way that [airline] unit revenue can compensate'.
We've seen airlines tack on about $60 to most roundtrip fares in just the last month, enough to cover probably all the increase in jet fuel costs and a bit more besides.
This curious belief that airlines don't know how to price their fares extends widely. Glenn Engel of Goldman Sachs writes in a research note 'At $55-a-barrel oil, even low-fare carriers cannot make money'.
Does anyone - other than Glenn Engel - want to bet that Southwest won't end up with another profit at the end of this quarter or year, no matter what the cost of oil?
In other Southwest news, they announced their March traffic results this week. Revenue passenger miles are 12% up on last year, with load factor tweaked up from 73.6% to 73.7%. For the entire first quarter, their RPMs increased 12.3% and load factor went up to 65.4% from 64.2% last year.
Other airlines are announcing similar increases. AA had a 9.1% increase and HP (America West) a 9.4% increase. Any other industry would be gleefully celebrating a period of extraordinary growth.
One airline that does seem to be having difficult increasing its fares is struggling startup, Independence Air. They announced a new program this week, selling flat rate $249 air passes to students. The pass allows the holder to take unlimited free flights on Tuesdays, Wednesdays and Saturdays on all routes east of the Mississippi between 1 May and 31 August. Taxes remain, of course, not free.
Bizarrely, the pass rules say that if you book a free flight, you must take it or pay a $25 cancellation fee. If you fail to take two flights (and not pay the cancel fees) they'll cancel your pass.
This must be a record, even for airlines : Giving away free seats but hoping to make money from people who decide not to use them.
Puzzling news : Hawaiian Airlines is about to exit its Chapter 11. But in 2004 they reported an increased $75.4 million loss, up from 'only' $49.5 million lost in 2003.
Good news : The other Hawaiian airline, and also in Chapter 11, Aloha Airlines, is paying back its ATSB guaranteed loan, two and a half years ahead of schedule. US Airways - take note.
Slightly more puzzling is this report from the Detroit News that rates your chances of being able to cash in frequent flier miles to get the free tickets you want. They are suggesting you can get the flights you want as much as 71% of the time. Bizarrely, they also report that people can upgrade their tickets 14% of the time with Southwest - an airline that does not have a first class section!
My interpretation - this 71% is people who pay double miles for a premium 'anytime' award rather than people seeking access to a regular (limited availability) award. This is not a fair statistic to present without a lot of explanation, because what we're in effect seeing are the airlines doubling the number of miles we need to get a free ticket. I continue to hear from people with horrendous problems getting regular awards - what were formerly the only and normal type of awards, but which are now called 'saver' awards.
Sir Richard Branson has not only re-affirmed his intention to have his as yet unformed US airline flying by the end of the year (something most people believe to be impossible) but is also talking about starting a second Australian airline, hot on the heels of seeing control of the first airline he founded in Australia pass to a different company.
His new Australian airline would provide international services, and in particular, he hopes it may operate from Sydney to Los Angeles. This is particularly interesting because it would put him in direct competition with his 49% partner in the Virgin Atlantic original and main airline, Singapore Airlines. SQ is desperately trying to get the rights for this route, and can hardly be pleased to see a possible Virgin venture take these rights away.
Sydney to Los Angeles is now the only open leg in what could become round-the-world service by Virgin, something very few airlines achieve and which gives an airline massive bragging rights.
There's been a slight delay - a week or so - in the first test flight of the massive new A380. Meanwhile, and almost unbelievably, Boeing says it expects to land more airplane orders this year than Airbus. In 2004, Boeing won 272 orders to Airbus' 370.
I mentioned last week a tip for saving money on your next car rental. Reader Phil wrote in with more on the same theme :
Phil also reports on an experience renting - at an airport - with National in Boston this week :
Chris Elliot reported in the NY Times on 5 April that rental car companies are getting more aggressive at claiming reimbursement from you, even for the most minor scratches.
It is common internationally to be required to inspect your car before accepting it, and to declare any existing damage. Perhaps we all need to do this with the cars we rent here too, although if it means a long wait at the counter like Phil suffered to report a single windshield chip, it becomes a very bothersome process.
Greedy rental car company, Acme Rent-a-Car in New Haven CT has lost its appeal to the CT Supreme Court. The Department of Consumer Protection had blocked them from 'fining' customers $150 if they drove cars faster than 79 mph. Acme claimed the fine was to compensate for additional wear and tear on their cars. Apparently no-one (including me) believes them.
There's an interesting survey on passenger attitudes to cell phone usage on planes on this webpage. Last I looked, 85% of responses were against allowing cell phone use.
However, with an almost unstoppable advance, cell phones on planes took a step closer to reality this week with the unveiling of the Arinc/Telenor AeroMobile service, with demonstration flights planned for the middle of this year, and a final certified product ready for regular passenger service by October.
Something else also seems unstoppable about cell phones : This article quotes the head of advertising agency BBDO who predicts that cell phone advertising will become the most important way of contacting technology-savvy consumers.
Look for a growth in advertising SMS messages, plus intelligent location based advertising - you walk past a restaurant and you get a message telling you their daily specials; you walk past a clothing store and you get a message with a discount coupon good for the next hour of shopping.
One more cell phone story. As cell phones become omnipresent, watch makers fear that people are no longer buying watches but are instead using the clocks built in to cell phones. And so the French watchmaking industry (I didn't know there was one!) is suing a wireless service in France for running ads showing people throwing away their watches and clocks.
This is an interesting example of an industry unexpectedly returning to its roots. We used to carry watches in our pockets before mounting them on our wrists. Now we're apparently replacing our wristwatches with what in effect are pocket watches once more.
Exciting news for anyone still besotted by Princess Diana. Her family home and final resting place, Althorpe House, is being turned into a rental property for overnight visitors. Family head (and Diana's brother) Earl Spencer says it costs more than $1 million a year to run the estate and this will help defray costs.
With guest rates ranging up to reputedly $56,000/night, one would expect the costs to be more than just defrayed!
This Week's Security Horror Story : If you 'disrupt' a flight (whatever that means) the TSA will put you on their security/terrorist list and for the next six months give you extra hassling at security. It doesn't matter that you're absolutely not a suspected terrorist, and neither does it matter that you'll be put on this list without any judicial review or chance to give your side of the story.
This astonishing revelation is half way down the second page of this breaking Washington Post story.
The good news is the main theme of the story is the TSA may be about to be closed down, or in some other way, highly marginalized.
This will be good news for the airlines. A senior executive of an international airline wrote to me earlier this week, pointing out that his airline is losing airport staff to the TSA. According to help wanted ads recently running in local newspapers, the TSA takes on new-hires at $27.37 an hour for full time positions, plus a 15.98% bonus for selected locations (such as Dulles), plus of course the usual generous raft of government employee benefits. That's close on $65,000 a year given to the new hire who wands your shoes.
Some people describe it as history's biggest funeral. I see it as a unique gathering of western and Christian leaders, and the tastiest terrorist target ever assembled. Let's all keep our fingers tightly crossed that nothing untoward occurs today.
Starting April 14, lighters will be banned from commercial flights. Passengers will still be able to carry up to four books of safety matches but the TSA is looking at banning matches from carry-on items as well. Longstanding safety rules have prohibited matches and lighters in checked baggage. Last year Congress voted to include a ban on carry-on-butane lighters and the TSA broadened that restriction to include lighters of all types.
Passengers screamed and 'mutinied', demanding the pilot abort his take-off when they spotted fuel streaming out of the plane's wing. Details here.
More passport nonsense. We'll soon have to start showing our passports to travel to/from Canada, Mexico and the Caribbean, while the State Department is refusing to extend the time period for visitors from 27 'friendly' countries to get new high-tech 'secure' passports. Citizens of these countries can currently enter the US without visas; if they don't have new compliant passports, they'll be denied their visa-waived entry.
The American travel industry estimates our economy could lose $10 - 15 billion a year if the visa waivers no longer apply.
Meantime, the hordes of illegal immigrants crossing our southern border continue to travel unimpeded, and with no requirement for any type of passport at all.
Terrorists must be laughing themselves silly as they watch us harm our economy to the tune of another $10-15 billion while still leaving our 'back door' wide open.
Almost lastly this week, many thanks to Jim, who sent in a very funny adaptation of the song '(I'm leaving on a) Jetplane'. The wma file is just over 3MB in size, but if you'd like to enjoy this song, you're welcome to download it from my site.
I was very impressed with the professional quality of this song and its lyrics, and after some Googling, discovered it to be the work of a group of Austin attorneys. The song is on their CD 'A Time to Grill' and you can find out more about this group and their other work here. All profits are donated to charity.
And now, truly lastly this week, thanks to Fred for sending this video clip in.
Until next week, please enjoy safe travels, and please consider contributing
David M Rowell aka The Travel Insider
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