Tax Day - 15 April, 2005
Our second annual fundraising drive has received a wonderful level of response from 94 of our 15746 readers. This is very much appreciated; but as an interesting comparison to the 94 readers who responded to our appeal at the beginning of last week's newsletter, 4260 readers downloaded the funny song offered for free at the end of the newsletter. (It is good to know so many people read all the way through!)
Last year, we had 86 of then 11988 readers respond in the same time frame. At the end of the short two week appeal last year, 276 readers had responded. Proportionately we therefore hope for 364 readers choosing to help this year....
Realistically, we all know that most readers will not respond, but - and in keeping with a theme of the newsletter - individual people and their actions can make a difference; and encouraging people to so act - could I ask you to become one of the active minority in this case too.
Please contribute - your support truly does make a difference to me and to the Travel Insider's newsletter, blog and website.
Reader Peter had an interesting suggestion - some of you may find it easier to expense or deduct your support if you receive an invoice from me for a Travel Insider subscription. If you need such an invoice, feel free to ask and I'll get one quickly to you.
Last week's highest donation came from international premium airfare discounters, 1st-air.net. Continuing the theme of how to pay less to travel 'up front', this week's highest donation came from Matthew Bennett, publisher of the First Class Flyer monthly newsletter. Like Jackie, Matthew also sent over a very generous contribution with 'no strings attached', and has also agreed to offer everyone introductory subscriptions to his newsletter for $67 rather than $97.
His newsletter has an unconditional money back guarantee, so if you find it to be a disappointment and not worth its cost, you can simply ask for a refund within the first 90 days and get the complete price refunded. Needless to say, with the exorbitant costs associated with paying full price for first class travel, it is very easy to save many times the subscription fee, even if you can use only one or two of his tips during the next twelve months.
If you'd like to take advantage of Matthew's kind offer, he suggests you contact his customer service to get the special rate because his website isn't set up for discounts.
And so, thanks to Matthew and, ahem, myself, you now have another $30 benefit as a Travel Insider reader. Please keep those contributions flowing, and we'll see if we can't find some more specials for you, too.
There's definitely a feeling of spring in the air, and a promise of summer to follow. If you don't want to experience the problems associated with air travel, perhaps a road trip - a long distance driving experience where the journey is more important than the destination - might have some appeal. And so
This Week's Feature Column : Let's Go Roadtripping USA : Thinking of a road trip this summer? Here's a review of a new 1010 page book and information about how it could help you experience an archetypal 'Great American Roadtrip'. Also linked to the review are two excerpts from the book itself.
Dinosaur watching :Thursday's Washington Post headlines a story that airline industry losses will widen in the first quarter, heavily quoting airline industry lobbying group, the Air Transport Association. The ATA projects an aggregate loss of $2 billion, compared to 'only' $1.5 billion last year. The scapegoat? High fuel costs. The stupidest statement in the article? A suggestion that more planes will be grounded, leading to less flight choices for travelers.
While the ATA is busy seeking to blame everyone except its own members for their colossal management failures, and then threatening dire consequences to everyone except its members, the chances of any overall reduction in flights is close to zero. Flights have never been fuller than they are at present. If an airline can't make money on average loads around 75%, it shouldn't just cancel selected flights, it should close down entirely.
However, the article does hint at what is now official. While doubtless the dinosaurs will shed more billions of dollars in losses, Southwest announced its first quarter profit - $76 million, which is nearly triple its profit for Q1 2004 ($26 million).
One has to wonder at the implications of the disconnect. Dinosaur airlines expect increased losses; Southwest almost triples its profit.
Some commentators are rushing to say that Southwest's profit is a result of its fuel hedging, as if this invalidates their profit tripling. This is nonsense.
Yes, Southwest has been largely unaffected by increased fuel costs, due to its aggressive fuel hedging program, something which looks to be more and more far-sighted with each passing day of high (and likely ever higher) fuel costs. Southwest (WN) was 86% hedged for Q1 this year, which it said reduced its costs by $27 million. But no matter how you might allow for the impact of its hedging (which all other airlines were free to do too if they wished), it is clear, by all measures, WN's profit has massively increased this year over last year.
Into the future, WN is 85% hedged at a contract price based on $26/barrel for the second half of the year, 65% hedged in 2006 at $32/barrel, 45% in 2007 at $31/barrel, 30% in 2008 at $33/barrel, and more than 25% in 2009 at $35/barrel.
Although oil prices dropped below $50/barrel for some of Thursday - the first time in seven weeks, it is the current price drop which is the temporary aberration, not the peaking up as high as $57 in the weeks immediately preceding. I don't know (neither, probably, does anyone else) at what level the demand for oil will switch from inelastic/price insensitive to becoming somewhat elastic, but I'm maintaining my March 18 projection of oil prices reaching $100/barrel sometime in 2006.
Is Southwest allowing its record profits to lull itself into complacency? It has now quietly discontinued its internet booking bonus, introduced eight years ago. This was a program giving extra frequent flier credits if you bought tickets through their website. Southwest says that with 60% of their bookings now coming through their website (up from 25% five years ago), it no longer needs to promote the website and encourage people to use it. By comparison, America West gets 27% of its bookings through its website.
Southwest's justification is backward logic, which restated, says 'our promotion has proven to be successful, so instead of continuing something that is spectacularly successful, we're going to kill it'.
Enough already : United has once more gone to its bankruptcy court, asking for yet another extension to file its reorganization plan without interference from other parties.
The good news : United projects fewer requests for extensions in the future. The bad news : United has switched from asking for month by month extensions to now asking for two month by two month extensions. United filed for bankruptcy in December 2002.
United's unions continue to resentfully stir. This time the Association of Flight Attendants is threatening to terminate its agreement in 90 days. It claims management are not giving back proportionally similar amounts of pay to that being given back by flight attendants - something which was apparently previously promised by the airline.
This could really prove a stumbling block, forcing UA's executives to choose between their own personal benefits or the probability of a strike by flight attendants.
US Airways continues to evolve into non-US Airways. Their latest move is to transfer call centers in Winston-Salem and Pittsburgh to the Philippines, Spain and Mexico.
Rumors continue to circulate about some other airline buying US Airways. I've commented before about a possible Virgin tie-in, but the latest rumors are now suggesting America West could be a suitor. America West has previously said it would like to acquire another airline to expand their operations into the eastern part of the country, and - at the risk of stretching the meaning of the word 'ideal' beyond breaking point - US Airways could be an ideal choice.
Well, there are lots of reasons against this. Why would America West choose to saddle itself with all US Airways' problems when it could instead simply cherry pick out the routes it wishes to service and grow selectively?
Another nail in the dinosaurs' coffins : Low cost airlines now account for one in eight flights worldwide - double the number before 9/11. The 12% market share currently held by low cost airlines is expected to increase to 15% by mid year.
But there's one low cost carrier that has yet to contribute to these numbers. Back in February I offered to take bets from anyone willing to side with Sir Richard Branson and his various claims that the new Virgin America airline will start flying this year. Since then, Sir Richard has re-affirmed this will indeed occur (most recently reported here just last week) but as each week passes with no announcement of the putative airline having secured its needed US equity partner, the chances of this occurring seem increasingly remote.
A Monday article in the San Francisco Examiner now quotes aviation industry expert (whatever that title means) Michael Boyd as saying the airline may completely 'die a quiet death'. Perhaps confirming this, the person whose full-time job is to promote the airline, spokeswoman Stacy Geagan, has apparently invented a self-imposed 'quiet period' and said that she can't comment on anything regarding the status of the airline's progress in finding a US partner.
That must be a cushy job, even by airline standards - being spokeswoman for a company that refuses to comment on anything!
Maybe Ms Geagan can't/won't comment now, or maybe she just doesn't know how to contradict her boss. However, on 6 Feb, she did say their best case scenario would be a 9 - 12 month lead time between filing the first paperwork with the Dept of Transportation and launching their first flight. And so, by her own calculations, this means a 2005 start is now impossible.
The SF Examiner article quotes expert Boyd as saying this process is more likely to take 15 - 18 months. Being as how the airline has yet to secure its mandatory 51% US equity partner, this makes even a 2006 launch date now look problematic.
The airline-to-perhaps-be continues to add more staff and now employs 17 people.
No-one accepted my bet back in February. I'll now double the odds, and offer 2:1 that the airline won't have its first commercial flight this year. Indeed, perhaps Sir Richard himself might like to consider a small wager? He's not been above wagering on other planned service starts himself, most famously on this occasion (he would have won that bet, except that Qantas refused to take him up on it). Perhaps someone close to Sir Richard could pass this offer on to him....
Don't misunderstand - I'd love to see another low-cost carrier take to the skies, and wish Virgin America the best of good fortune. But personal positive feelings are no reason to overlook the unrealistic promises they are making, and the unwelcoming market they're trying to enter.
In unrelated Virgin news, Virgin Atlantic is giving names to some of its Upper Class services between the US and UK (a bit like how some trains are named). Miami to London services will be known as 'The Trance Atlantic' and San Francisco services will be 'The Fly Chi'. The airline has also invented a new name for its target audience - jetrosexuals.
What is a jetrosexual, you might wonder? Virgin defines this as 'people who move business and culture forward'. As for me, every time I see the word, I read it as jethrosexual and think of the eponymous character in The Beverly Hillbillies.
A jury has cleared Cape Air of negligence for taking off on a gusty, rainy day that gave passengers an apparently scary ride. One of the nine passengers sued the airline saying he now suffers from post-traumatic stress disorder after the June 2000 flight. Let's hope the court awarded costs to the airline for having to defend this ridiculous and opportunistic lawsuit.
Now that pillows are disappearing from the skies, the Washington Post reviewed six different personal travel pillows, ranging from $240 (which it didn't like) down to $12.50 (which it also didn't like). Its favorite - the Eagle Creek Adjustable Travel Pillow, available from Magellan's for $14.85. I'd also endorsed this product back in February. John McManus from Magellan's writes :
One of the secret horror stories of the aviation industry has long been the number of pets that are lost or go missing on flights. No airline has been willing to divulge these numbers.
At last, the Department of Transportation has issued new rules, requiring airlines to report these issues, starting in June. They will start publishing how many pets were killed, lost or injured in the same monthly report that discloses late flights, lost bags and traveler complaints.
Nasty big cruise ships are polluting our waters, flooding pristine areas such as Alaska with raw untreated sewage. Something needs to be urgently done about it - right? Some members of Congress are choosing this as a new populist topic to make a visible stand on. For example, Sen Richard Durbin, D-Ill, tells us
The truth is as startling as these hyperbolic claims, but very different. Most cruise ships - and all in Alaska - already observe higher standards of treatment prior to discharging waste than do many land-based sources of pollution.
To put it in words that even Sen Durbin might understand, those same people who are - well, doing number two - on board a cruise ship are often causing less waterborne pollution than if they'd stayed ashore and used land based toilets.
Good news for lovers of old ocean liners. The Norway (formerly SS France) is to be taken over by Star Cruises. It has been out of action since suffering a boiler explosion in Miami in May 2003.
I wrote in outraged terms a month or so back about the two BA long distance flights on the same 747 after one engine unexpectedly failed both times. The British authorities seemed remarkably unconcerned by these actions, and BA claimed such a response was totally safe and responsible.
However, it seems to be a case of one law for BA, but a different law for Phuket Air. This airline had problems with one of the engines on a 747, but unlike BA, it abandoned a flight from Gatwick to Bangkok and returned to Gatwick. You might think this a responsible action, and even more so than BA's decision to ignore a failed engine and press on for another 11 hours of flying. The British Department of Transportation chose to respond by grounding the plane and not allowing it to fly until the damaged engine is repaired or replaced.
Why can BA fly 'perfectly safely' with three engines and not Phuket Air?
Good news for those of us who desperately don't want a cell phone transmission tower in our back yard. A new company plans to operate 'stratellites' that will replace ground based cell phone towers.
A stratellite is an unmanned robotic airship that will fly way above commercial planes and stay in one place for months at a time, acting as giant cell phone sites.
This sounds like a good idea in theory - more information here.
But there's a massive problem - cell phone service relies on having lots of small cells, so that the same frequencies can be reused over and over again in separate cells. Presumably airship based receivers and transmitters would cover vastly larger areas than the small micro-cells that sometimes have a range of less than one city block. So don't rush to invest in this company just yet.
This Week's Security Horror Story : The TSA has been told to rein in its burgeoning budget and staffing. Not for nothing do some people suggest that 'TSA' stands for 'thousands standing around' - with perhaps the emphasis on 'standing around'.
So how does the TSA respond? Unless the thought of one hour and longer delays to go through security in the world's busiest airport appeals to you, their ill chosen petulant response is truly this week's horror story. Details on my blog.
Here's a fascinating story with wide implications. KLM had to return a flight back to Amsterdam due to two men on board possibly being on a US security watch list. Okay - big deal. This has happened before with BA flights. But now for the big difference : The KLM flight wasn't traveling to the US. It was flying to Mexico, albeit over US airspace.
It seems the US is now asserting control over passengers on planes that simply fly over its airspace without landing. Does that mean that other countries will also start to insist on being given full details (very full details!) of all passengers on all planes overflying their territories, too? And control who will be allowed to overfly and who won't?
Do you really want every crackpot dictator in every insignificant little country that just happens to be positioned in the way of your flight (and also a lot of major countries with strategic locations - eg Russia and China) to know all details of your travels, and have the final say on if you can fly or not? Arab countries will know details of everyone who travels to Israel, for example.
Well, if we're to accept that our own government can do this, we have to allow other governments to act in similar fashion.
The US is already almost unique among nations by requiring people who simply change planes from one international flight to another, without leaving the secured transit lounges at an airport, to have a visitor's visa to enter the US, even though the passenger never actually goes through immigration and customs and moves out of the secured part of the airport.
This restriction is encouraging large numbers of transit passengers to now change flights in Canada, not the US, a move that harms US airlines and US airports.
Yesterday saw the start of new 'security' regulations banning lighters from all US flights. Unfortunately (if you're a smoker) you can't carry a lighter in your checked baggage, either.
The reason for this latest prohibition - Richard Reid, the 'shoe bomber', failed to set fire to his shoes with regular matches. Democratic Sens. Byron Dorgan of North Dakota and Ron Wyden of Oregon, worried that a lighter might have worked more efficiently, and so we can no longer take lighters on planes. Presumably this is an admission that there remains a tangible danger that shoe bombs can still be smuggled on board, and the only way to prevent their detonation is to eliminate lighters.
Up to four books of matches per customer can still be taken on board. Hey - have I ever shown you a really neat thing you can do with a book of matches, guaranteed to set fire to just about anything....
Third time's a charm? TSA Chief David Stone has resigned after only eight months, making him the third to leave after the organization's founding. Thanks to the BBC for their generous mention of this website in this related article.
Lastly this week, you'd think the World Travel and Tourism Council's winner of its 2005 Destination Award prize would be somewhere that any of us might have heard of. So do you know anything about the Jurassic Coast in Dorset, England?
Or perhaps you're more familiar with the second and third prize winners - the Chugchilan and Black Sheep Inn in Ecuador and the Rinjani Trek Ecotourism Program in Indonesia? In total, 90 different destinations from 30 countries were considered.
Until next week, please enjoy safe travels
David M Rowell aka The Travel Insider
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