7 October, 2005
Last week's two articles on the upcoming Bird Flu pandemic pushed the site to its fourth highest ever level of traffic last Friday.
Indeed, here's a little bit of trivia for you about the site in general - during the last week, we had people from 149 different countries visit the website (plus 2% from 'unknown' locations - could this be Vice President Cheney in his occasionally secure undisclosed location, perhaps?).
The top ten countries were :
Interestingly - although rather as anticipated - there was also a much higher than normal level of people unsubscribing from the newsletter. I do agree with their unstated desire not to be confronted by distressing information, but if we ignore the challenge posed by Bird Flu, our inactions make it all the more likely the pandemic will indeed occur.
With that in mind, I'm adding an occasional section to the newsletter - Flu Focus - to recount any significant issues, hopefully positive, but possibly not, that may develop each week.
I have however decided to defer the third part of the three part article until such time as it becomes urgent information in response to the reality of an unfolding pandemic; not out of concern for anyone's delicate sensibilities (ha!), but simply because the semi-apocalyptic concepts embodied in that scenario seem inapplicable to normal life and society. It is better to wait until we're more closely staring at the grim certainty of a pandemic before considering the steps we need to take to optimize our survival.
However, there is a bit of linkage between this deferred article and the earlier topic of emergency preparedness, and I'll be occasionally offering you some interesting things to add to your own home emergency kit, with the first such item being :
This Week's Feature Column : Emergency Radio Receiver : If you're stuck somewhere with no power, this radio receiver is what you need. It can use four different power sources including a built-in hand cranked generator, has a built in flash-light, and can even recharge your cell phone, too.
Dinosaur watching : United has secured $3 billion in exit financing to enable it to move out of Chapter 11. Although you might think an airline that has spent almost three years in bankruptcy, and stiffed any number of creditors and shareholders in the process, and gaily abrogated its contracts pretty much as it chose to, is less than a desirable credit risk, you'd apparently be wrong.
James Lee, vice chairman of JP Morgan Chase (one of the two companies syndicating the loan) said
United's executive vice president and CFO Jake Brace said
A far different company? Tested, successful management team? While making these platitudes, both Lee and Brace fail to point out that United's CFO and CEO are both unchanged. The same pair who brought United into bankruptcy are still in office today. Brace has been CFO, and Glenn Tilton has been simultaneously President, Chairman and CEO (does he have three offices).
United will be paying a rate based on LIBOR plus 4.5%, which is presently in the range of 8.39% - 9.03% for this money.
You might think these rates surprisingly high compared to what you pay on your mortgage, and you might wonder how to reconcile the high rate with the claims about United's highly attractive assets and tested successful management team.
But if you worked for Delta, you'd be feeling envy. They've just secured $1.9 billion of debtor-in-possession financing, but Delta is paying 11.198%.
Delta not only made the apparently obligatory comment about their loan being positively received in the market, but also said that $50 million of this would be used to pay down a $350 million loan they have at present from American Express, which has an even higher interest rate. Sounds like someone's been maxing out their Amex Centurion card to help pay the bills!
Not all airlines are desperately borrowing money, however. Air Canada emerged from its own Chapter 11 type reorganization in April, and now, six months later, has decided it has too much cash and so is looking to give C$300 million back.
Ah, but give back to whom? To the creditors who lost out during the airline's bankruptcy? To the shareholders of the former airline who also lost out? Or maybe to the employees and laid-off former employees, who gave back jobs, money, and working conditions?
Actually, no. The company is planning to give this money to its new shareholders, although this may make labor negotiations 'more difficult' when they come up for review next year.
This situation raises (at least) two interesting points. Firstly, it uncovers another area for potential abuse of bankruptcy proceedings. Is it right that an airline can write off valid obligations and debts by pleading bankruptcy, then six months after emerging, say it has $300 million more than it needs but not then pass it back to the creditors, shareholders, and employees who - it could be argued - contributed more than that amount to the airline's reorganization?
Secondly, the largest source of this spare cash is from the sale of a one eighth share in their Aeroplan frequent flier program. This sale occurred in June, barely two months after the airline emerged from bankruptcy, and gave the airline a C$250 million cash windfall. Doesn't that money belong to the previous creditors, shareholders, employees, etc?
Think about, for example, United Airlines. My article on United's undisclosed $15 billion asset seems even more relevant now than it was when first written in June this year. United should be forced to sell at least some of its Mileage Plus program and to pass the proceeds on to the people who are currently losing out in its bankruptcy reorganization.
Otherwise, what is to stop United doing the exact same thing Air Canada did? As my article discusses, the value of their Mileage Plus program is totally hidden and nowhere appears on their balance sheet.
Talking about United Airlines, it is introducing a new form of boarding. Window seat passengers will board first, then middle seat passengers, then aisle seat passengers last. If you prefer an aisle seat, that means you'll now probably find no overhead space by the time your turn finally comes to board.
United says this will save them an average of four to five minutes in boarding time, which represents $1 million a year.
The dinosaurs' current favorite excuse for losing money - the high price of jet fuel - has been worked even harder than normal this week.
American Airlines wants us to believe the cost of jet fuel is such that it can no longer afford to operate some flights. In its press release, it claims
We are told American will monitor jet fuel prices and possibly re-implement service subsequently.
AA is dropping one of the nineteen flights a day from DFW to ORD, and one of its twelve flights from DFW to Kansas City (probably a hangover from its amalgamation of TWA's former route system).
As these examples should make obvious, blaming these service reductions on the high cost of jet fuel is a nonsense claim. It isn't the high cost of jet fuel that has caused AA to cancel these flights. It is simply a rationalization of service on routes that are currently over-serviced.
Two factors tend to confirm this. The first is that oil prices have plunged this week, and the second is that American added $20 roundtrip to many of their fares (also this week). If you don't think $20 more than covers the cost of extra jetfuel on a short flight between, eg, DFW and Austin (two of 17 daily flights cancelled) then please ask me about some bargain priced oceanfront property I have for sale in Arizona.
Delta then came out with an even 'better' idea. They too are going to cancel some flights, also due to high fuel prices. But, unlike AA, Delta isn't going to tell you which flights they'll cancel - truly, I'm not making this up!
Delta spokeswoman Chris Kelly said it's impossible to say exactly how many flights will be reduced because it will depend on travel each day. She added that Delta will notify affected passengers a few days in advance and will try to offer them choices about rescheduling flights.
Amazingly, one academic thought this was a good idea. 'You want to save fuel to avoid higher costs in the future. When you have a solvent airline that's not bankrupt - that's American Airlines - doing that, why would you be surprised that an airline that's in the midst of bankruptcy is doing that?' said Anthony Sabino, a professor at St. John's University's Peter J. Tobin College of Business in New York. 'Delta has to get lean and mean ... This is what they have to do. This is the first wave, but it's going to continue.'
I couldn't disagree more. Heaven help Delta, and its passengers, if they continue down this path. How do you feel booking a flight on Delta now, never knowing if it will operate or not?
Delta also increased its fares this week.
The airlines don't really care what we think, or if we see through their transparent falsehoods blaming high fuel costs for their present problems. They're playing to a different audience, and for a different objective. We might not be easily fooled, but our elected representatives apparently are much more gullible.
Rep. John Linder (R-GA), a member of the powerful House Committee on Ways and Means, has sent a letter to Committee Chairman Bill Thomas (R-CA) and Ranking Member Charlie Rangel (D-NY) expressing support 'for a one-year suspension of the 4.3 cents-per-gallon excise tax on aviation fuel as the House considers ways to facilitate recovery and mitigate the economic impact of Hurricane Katrina and Hurricane Rita.'
Wow, he's managing to bring the two hurricanes into this too. Rep Linder adds in his letter, 'The Federal tax burden on airlines has amplified a serious problem - airline travel is now taxed at higher rates than any other form of transportation'.
If John Linder actually did his sums - but when has reality ever intruded on a politician's thinking before - he might consider the 4.3c a gallon on jet fuel to be way less than the 50+ cents a gallon on regular gasoline that ordinary motorists pay.
For sure, airlines also pay other taxes, but almost all of these taxes are passed on to us, their passengers, and if Rep Linder feels any of these other taxes are too high, he should advocate for their repeal rather than shifting his focus onto the minute fuel tax airlines pay.
While Rep Linder is at it, perhaps he could also spare a thought for :
and thousands of other businesses, all of whom are intensely transportation based and all of whom are being similarly affected by increases in gasoline, diesel and jet fuel. To say nothing of, last and apparently least worthy of consideration, us - the ordinary drivers in our family cars.
It is worth repeating that oil prices have dropped five days in a row and now are at their lowest level in two months.
We'll give the last word (for this week, anyway) on fuel cost issues to reader Walter, who writes
Talking about scams, here's an interesting article about Alaska Airlines painting one of its planes to look like a giant flying fish. The paint job is costing $500,000. But it isn't costing Alaska Airlines. It is coming from you and me - yes, the federal government has contributed taxpayers money to cover the cost of this plane's paintjob.
The purpose of the money is ostensibly to promote and enhance the value of Alaska seafood. Raising some doubt as to the wisdom of this expenditure, it is interesting to note the plane's first day of flying was actually within the state of Alaska itself, apart from a final flight down to Seattle, where it arrived in the dark.
Last week I wrote about new all business class airline MAXjet starting service between New York and London's Stansted airport. This week we learn another new airline, Eos, is about to offer similar all business class service, also between JFK and Stansted. Eos had been planning to start service on 1 November (the same date MAXjet will start flights) but is now bringing its first flight forward to 18 October.
The major difference between MAXjet and Eos? MAXjet fares are as low as $1558 roundtrip. The lowest Eos fare is $5000.
Business travelers may be able to charge high fares to their company, but they're not fools. The $1558 fare might well tempt them away from a full fare regular airline, but who in their right mind would pay $5000 on a new startup when there's a similar startup for less than a third the price, and major airline business class fares also well below $5000?
Flu Focus : Possibly good news : An Australian flu vaccine is going into field trials. Accelerated testing and deployment could see vaccine available for Australians within three months.
Unexplained issue - how do they test this vaccine? Do they give subjects a dose of real Avian Flu and see if they live or die?
Some readers have reported difficulties persuading their physician to prescribe Tamiflu for them to keep 'just in case'. And, even if you do get a prescription, filling it is far from easy (it took me almost a week of increasing desperation to round up my own meager supply).
I wondered about buying Tamiflu in Russia, where just about all medications can be purchased over the counter without any need for a prescription, but surprisingly, it is almost impossible to find, even in Moscow, and, when it is available, it is more expensive there than here (usually drugs are about 10% - 20% the price in Moscow that they are in the US).
A US doctor explained to me that even regular hospitals are having difficulty getting supplies that are urgently needed for currently sick patients, and as long as that situation remains, it is difficult to persuade a doctor to give Tamiflu to a healthy individual when there are sick and possibly dying people who urgently need it.
This article talks about local plans in the Seattle area for defending against a pandemic, but the underlying statistics will be pretty much unchanged, everywhere else in the country. A third of the workforce out of commission.... infect 1.2 million people (in the Seattle area alone) in the first six weeks.... but bizarrely, for a disease currently killing up to half of all people infected, the article then backs away and projects a mere 2,700 people dying (a quarter of one percent).
The article is probably right about 1.2 million people being quickly infected during the first 'wave' of the flu pandemic, but casualties are likely to range anywhere from 30,000 up to half a million or more. I wonder why the massive error in the casualty projection?
But maybe not all the country will be as severely affected as Seattle? This next article claims that Arkansas will be safe. This claim is apparently based on the fact the disease has not yet appeared in Arkansas. Neither has it yet appeared in Seattle or anywhere else in the US, but what reassures the Arkansans terrifies most of the rest of us.
Should we be pleased to learn that scientists have now recreated the 1918 flu virus, and found it to be at least as deadly as suspected? If that pleases you, how about the fact they've published its genetic code online, making it possible for any half-way clever bio-terrorist to make some of this virus too?
Lastly, our glorious leaders are busy trying to save the world from Avian Flu. Democratic senators apparently think the best solution is to pass legislation and add more bureaucracy, while President Bush wants to be able to deploy the military domestically to enforce quarantine zones.
Try not to think about that - our own troops, in combat gear and with loaded weapons, manning highway blockades, forcing vehicles to turn back, and presumably shooting those that don't, same as they do at present in Iraq.
This gives a hint of the 'doomsday scenarios' that my article series part three will examine and plan for, but which are best left alone until closer to the time.
There's been a bit of discussion about interpreting the constitution recently with the new Supreme Court appointment and nomination. But not even the most extreme judge or candidate would be likely to maintain that a citizen's basic rights extend to having universal access to Wi-Fi. This contention is now being offered by San Francisco's mayor, Gavin Newsom. And nearby corporate citizen Google is ready and willing to extend this right to San Francisco's residents.
Perhaps beating San Francisco is Philadelphia, which plans to have the nation's largest municipal wireless hotspot in place next year. Unlike Google's offer of free Wi-Fi to San Francisco, Philadelphians will have to pay $10 - $20/month for the service.
Next time you're vacationing in Italy and decide to quickly dash into an Internet cafe to check your emails, be sure to take your passport with you. Citing anti-terror concerns, the Italian government is now requiring companies to keep a photocopy of everyone's passport if they use internet, phone or fax services.
This Week's Security Horror Story : Although still theoretically ruled by Queen Elizabeth II, Australians are fiercely independent and some would say still slightly resentful at their historical deportation from the motherland. So it is perhaps no great surprise to learn that when the Queen's son, Prince Andrew (fourth in line to the throne) was leaving Melbourne last week, airport authorities demanded he be subject to the same security screening as everyone else.
However, Prince Andrew shouldn't feel unfairly singled out. In March, Papua New Guinea's Prime Minister Sir Michael Somare was ordered to remove his shoes by Brisbane Airport security, and New Zealand Prime Minister Helen Clark was given a body scan in 2003 to test for explosives at Sydney Airport.
A further example of Australia's sense of abundant caution when it comes to security could be found until recently on their official government website offering advice to Australians traveling internationally. This advice, no longer online (I wonder why) advised Australians to be 'particularly alert in areas known to be frequented by foreigners' including such terrorist danger zones as 'clubs, restaurants, bars, hotels, places of worship, cultural and tourist sites, schools and/or outdoor recreation events'.
Areas outside of Australia known to be frequented by foreigners? Doesn't leave much of the world safe for Australians, does it!
Here's more depressing news about the organizations that supposedly protect our country from terrorists.
And here's the latest either outrageous lie or shameful incompetence displayed by the TSA. They are claiming they're unable to search their database to retrieve data on individual travelers. Bottom line - whatever the reason, the TSA is currently in violation of federal law.
Here's an interesting article about the new 'secure' cockpit doors. Secure, except for the fact that interference from walkie-talkie radios apparently makes them automatically unlock and open, all by themselves.
Interesting to note that an almost identical door (with same malfunctioning control mechanisms from the same supplier) was being sold by Airbus for $29,000 and by Boeing for between $40,000 - $100,000.
Although this unlocking bug has now been fixed in most (but not all) doors, they still remain insecure. A terrorist could crash a drinks trolley into the door and the force of one such impact would pop the door open. $100,000 for a 'secure' door that can still be bashed in by a single man and drinks trolley....
The US government has generally been reluctant to spend money promoting the US as a tourist destination in foreign countries. This has been foolish reticence; most other countries spend hundreds of millions every year encouraging vital and profitable tourist traffic.
Good news - this year the government has decided to spend $6 million in the UK, and next year will split $10 million between the UK and Japan.
But at the same time, a bizarre group of Americans are spending money trying to persuade the British not to visit Florida, warning them that if they come to Florida, the locals might shoot them (yeah, sure, right). Such actions seem only a hair's breadth away from treason.
Planes are delayed for a number of reasons but not often by a tiny mouse. A Qatar Airways plane was preparing for departure from Manila last week when a crew member spotted a mouse scampering across an aisle in the economy class section. The captain ordered the passengers to disembark while maintenance staff fumigated the aircraft and laid traps, but the mouse was nowhere to be found. The plane was grounded for 13 hours while the engineers tried to find the mouse but they were not successful. The plane finally took off with nearly 250 exasperated passengers and an either dead or alive mouse.
Lastly this week, here's an enhancement every modern bathroom should have (what happens to the fish each time the device is used, I wonder?).
Until next week, please enjoy safe travels.
David M Rowell aka The Travel Insider
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