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Friday 15 February, 2008  

Good morning

Rumors were circulating on Thursday that Delta and Northwest have 'tied the knot' and concluded an agreement on merging.  Stay tuned for more details, their spin, and my analysis.

Of course any such merger will be subject to government approval, and almost certainly, the two airlines will have to make some concessions to win that approval - which while likely to be obtained, is far from a slam dunk.  Bottom line?  We won't know the real nature of any possible merger for some time yet.

Today sees the formal announcement of the balance of our Travel Insider tours for 2008.  This gives you in total four choices for this year - two of which you may have noted before (China in June and New Zealand in October).

The last two tours run one after the other.  The second is this year's Christmas Markets Cruise along the Danube, in early December, and is much the same as the four we've offered so successfully in the past, with only a couple of minor tweaks.  This tour is a perennial favorite and highly recommended.

The first is a similar cruise, but with a new itinerary - a 'Christmas Wonderland Cruise' on the Rhine (also with plenty of market visits) - from Trier in Germany to Amsterdam (with an optional pre-cruise visit to Paris, first).

If you are one of the many who have already enjoyed a Christmas Markets cruise with me on the Danube, why not come with me on this Rhine cruise this year.  And if you've never done a Christmas Markets cruise, why not be like me, and do both!

One further comment about Travel Insider tours.  Sure, the itineraries are great, and on my good days, I'm a passable host/tour leader.  But the consistently best feature of all the tours to date has been the people participating.  I guess there's a certain self-selection process - if you're a reader of my newsletter and choose to come on one of my tours, that makes you a particular 'type' of person to start with, and whether it is because of this, or just blessed good fortune; we always seem to end up with a great community of travelers and we all build strong new friendships for the future.  Truly, travel shared with more friends is more enjoyable than travel alone or with only one or two others.

And so, without further ado :

This Week's Feature Articles :  Christmas Markets Cruise and Christmas Wonderland Cruise :  Make for a magical prelude to Christmas on one of these delightful European river cruises, traveling on a deluxe river cruise boat, stopping at lovely towns, and visiting local craft and gift markets.

Travel Insider Travel Opportunities :  Wow - look at this week's list.  Four cruises with 15% discount, one with even more, and four Travel Insider hosted tours.  Surely there's something to tempt you from these :

Also available, some special European river cruise values :

March cruise from Amsterdam to Trier - details, including very special pricing, here.

May and June cruises through Spain and Portugal -  Here's a massive 15% off the cruise price on these two cruises.  In addition, you get another $100 discount if you're an AARP member, and yet another $100 discount if you're a past cruiser with Amadeus.  Cruise details here, but you must book through me, not Amadeus, to get the special 15% discount.

May 10 South of France cruise from Arles to Lyon, options in Barcelona to start and Paris to finish; 15% special cruise discount plus the 'usual' other discounts ($100 each if you're a past passenger and/or AARP member).  Cruise details here, and, of course, please book through me to get the 15% discount.

June China tour and cruise, hosted by me.

August cruise too for Spain and Portugal - If May or June don't work for you, here's another cruise, departing the US on or before 26 August, also with a 15% special discount in addition to regular discounts.  Cruise details here, and book through me to qualify for the discount.

October New Zealand tour, hosted by me.

Nov/Dec Christmas Wonderland Cruise, hosted by me.

Dec Christmas Markets Cruise, hosted by me.

Any time, any Amadeus cruise - A 5% Travel Insider discount if booked through me, plus, if applicable, an AARP preferred supplier discount and a $100 past cruise discount too.  Amadeus cruise information here.

Reader Surveys/Assistance :  Two requests for feedback from you this week, please.

Firstly, I'm planning to write an article featuring the best of what I term 'clever' websites that help you plan for, book, and manage your travel.  By 'clever' I'm thinking of sites such as YAPTA (which monitors your air bookings and tells you if the fare drops, and even helps you with claiming a refund from the airline when/if the fare drops), Farecast (which predicts if airfares for an itinerary will rise or fall in the future, helping you know if you should buy your ticket now or wait for the fare to drop) and Kayak (which automatically shops most airline and major travel booking sites to find the lowest price for whatever you're looking for).

Do you have favorite 'clever' sites that help make your travel arranging easier and better?  If so, please send me a note with the website and perhaps a line or two telling me why you think it is worthy of mention.

I'll collate and report back to us all with your various recommendations.

Secondly, would you buy this?  A friend asked me to poll Travel Insider readers about a new product/service he is developing.  The concept is that you'll get a brand new Blackberry and unlimited email service on it, good for anywhere in the world.  The phone would not come with voice service (he assumes you'll have a regular phone for voice service already).

He is proposing making this service available for a flat fee, payable in advance, of somewhere between $1000 and 1000 (ie almost $1500).  This fee would get you a free Blackberry handset (you'd be able to choose from several of the latest model Blackberry units) plus a year of the unlimited service, good in the US or 150 other countries around the world.  It would of course be of most appeal to roadwarriors who frequently travel out of their home country (and/or the companies that employ them) , and who wouldn't otherwise have a convenient or low cost way to keep connected to their email.

What do you think?  Please click on the link below that best summarizes your thoughts - this will send an empty email to me with your answer coded into the subject line.  If you have additional comments, please add them into the email, too - I (and he) will read and reply to any/all thoughts you might have.

Great idea - I may want multiple accounts for myself and my staff, $1500 sounds fair.

Great idea - I may want multiple accounts, but $1500 is too high.  $1000 is better.

Great idea - I may want multiple accounts, but even $1000 is too high.  Drop the price further to get my business.

Great idea - I may want multiple accounts, but would prefer a monthly billing arrangement, even if the cost per month is higher than a lump sum payment for a year.

Good idea - I may sign up as an individual user, $1500 sounds fair.

Good idea - I may sign up, but $1500 is too high.  $1000 is better.

Good idea - I may sign up, but even $1000 is too high.  Drop the price further to get my business.

Good idea - I may sign up but would prefer a monthly billing arrangement, even if the cost per month is higher than a lump sum payment for a year.

I already have a satisfactory solution in place and have no need of this service which would duplicate what I already have.

Other - comments in email.

Dinosaur watching :  Apparently anticipating a merger with some other airline, and recognizing the bruising process of integrating two different workforces with different work rules and seniority - a process that inevitably seems to create ill-will - famously union-free Delta's staff is moving closer towards getting union representation and perhaps protection.  The flight attendants have filed a petition for a union ballot, and this source seems to think it likely that the ballot will be affirmed.  The most recent previous ballet was rejected with only 29% of flight attendants voting in favor.

Northwest's International Assoc of Machinists union, representing agents and ground service workers at NW have said they're opposed to any merger, and are attempting to group together with NW's other unions to try and block a merger.  But the Air Line Pilots Association, representing pilots at both airlines, is taking a different approach, and is instead asking for a 5% share in a merged airline and a board seat.

Those of us who remember the phenomenal failure of the 'employee owned airline' (United) will roll our eyes at this suggestion.  No-one benefitted from the United arrangement (which was a factor in its recent extended bankruptcy), perhaps because of the classic conflict between shareholders and employees that usually exists in most corporate environments.  But a small 5% share shouldn't pose impossible problems to a merged DL/NW.

And Air France/KLM are saying 'me too' too, indicating they'd be willing to invest in a new merged airline in return for board representation.

I wrote fairly negatively last week about United's new charge for second and subsequent bags.  A United employee wrote in to defend his company's new policy, saying :

I have no love for United Airlines.  I work there.  But with regards to the new bag charge I would like to put some perspective on that issue.  If you were to ship the same bag at 60lbs on FedEx 4 day ground service it would cost you $56.  Second day air would cost $237.  So my question is, how much do we have to absorb as an airline?

Finally we are passing along the fuel cost.  Everyone is upset when we oversell a flight, but it's ok for the passenger to no show the flight which we then lose forever the revenue for that seat.  Everyone is getting fatter, so that requires much more fuel to carry all these heavy passengers.  Now we are supposed to send everyones oversized bags via air freight for free?  I don't think so.  I fly the B777. On average we have 15,000 to 20,000 pounds of baggage on each flight.

People way overpack as it is.  I don't think that it's reasonable for the airlines to absorb this cost when the freight carriers charge for these items.  Based on FedEx it's much cheaper to ship your 240 pound body on United than FedEx.

It is interesting to see this person's perspective, which of course is not the official airline perspective.  Some thoughts in reply :

First, comparing door to door guaranteed service with Fedex to the experience of traveling with a piece of luggage is far from a fair apples to apples comparison.

Maybe if an airline would collect us and our luggage from our front door, at no more than a few hours notice, and deliver us all the way to our final destination, then we'd be prepared to pay closer to a Fedex charge.

And, when you're thinking about buying a ticket the same day you want to travel, all of a sudden the airline's rate becomes probably much more than Fedex, and whereas Fedex never says 'I'm sorry, our flight is full' the airline often might, especially these days with many flights full.  Besides which, Fedex usually gets its parcels where it says it will, when it says it will, and reasonably undamaged, and if there's an issue, their tracking system can immediately tell you where your package is.

The writer leads us to believe that airlines lose money on carrying baggage when he says 'how much do we have to absorb'.  I challenge him to partially answer his own question - how much is United losing on baggage at present?  That's close to an impossible question to answer, because how do you say how much of a ticket price should be allocated for transporting luggage and how much for the passenger; his question is an empty piece of rhetoric with no meaning or substance.

But when he refers to passing along the fuel cost, we're now moving to something we can apply hard numbers to.  He's completely wrong on this point.  Let's think about what the 'fuel cost' is for a 60lb bag on a typical two hour flight.  That 60lb bag will require about 6lbs of jet fuel; just under 1 gallon.  Now let's say the airline pays $2.50 per gallon of jetfuel, and let's allow for a bit of spillage or wastage and say that bag requires a full gallon of jetfuel.  So, passing on the fuel cost?  Uh - a $2.50 fuel cost is dwarfed by the $125 and up cost that United now asks for that bag.

The writer is a bit out of date when he talks about everyone being upset at oversold flights (and going way off topic, but let's bear with him), but people being able to no-show, in which case the airline loses the revenue.  That's actually not often the case these days - it is common for restricted tickets to no longer be able to be applied to future travel if you no-show for your booked flight.  Only much more expensive tickets allow this - in other words, the airline is selling you some 'insurance' as part of the extra fare cost, and in any case, when the airline sells 130% of all the seats on the plane, and then leaves with 85% of the seats full, and pockets much of the revenue from the other 45% of tickets, I can't see how the airline is being harmed at all.  Besides which - guess what.  The airlines write their own rules for fares and tickets and refunds; if the airline felt it could gouge us more any other way, it surely would.

More fuel to fly overweight passengers?  Same formula as for the bags - say the average passenger weighs 10 lbs more than they did 20 years ago.  That's about a pint of jetfuel extra, costing the airlines little more than a quarter.  Big deal - not!

15,000 - 20,000 lbs of luggage on a 777?  Big deal - so what.  This is how it works out :  Take a 368 passenger capacity 777, assume it is 85% full (ie very full), and say that each passenger, on average, has only one bag, weighing a modest 50lbs.  That comes to 15,640lbs of baggage.  Increase the numbers to allowing every fourth passenger to have a second 50 lb bag, and you're at 19,550lbs.  And keep this in mind - on most routes, most planes are limited not by the weight they can carry, but by the space they have to stow it.  On that basis, the airline should be rewarding us for densely cramming more stuff into one suitcase, rather than spreading it airily across two suitcases.

People way overpack?  Oh - we now have the packing police, chiding us that we're traveling with too much luggage?  What a wonderfully clever thing that would be for the airlines - to make travel even less comfortable for us than it is already.  That'll surely encourage more people to fly more often.  You try flying somewhere cold in winter - say, for example, on one of our Christmas cruises.  You'll want to bring full sized shoes, a heavy coat, changes of clothing for possibly cold/wet ashore and warm/dry onboard, maybe a semi-formal outfit, plus all the other paraphernalia of traveling comfortably.  The airlines are now wishing to tell us we should just travel with just a single change of lightweight clothing and nothing else?

Sure, some people are wonderful at traveling with very little weight or volume of stuff with them, but others of us (me included) prefer the flexibility of overpacking, filling our suitcases with clothes, books, gadgets, gifts (and subsequently souvenirs) and all sorts of other things 'just in case'.  The freedom to do that is an essential part of making a travel experience positive.

United's new luggage charges still seem to me to be both inappropriate and exorbitant rip-offs.

And, lastly, many people actually do send some or all of their luggage via Fedex or one of the specialty luggage forwarding services, preferring the better service and safety of their luggage through these courier services than via the airline.  And with costs for an extra piece of luggage now easily exceeding $100, my guess is these luggage handling services will get a huge boost in business.  I wrote about one such service a while back, there are plenty of others out there too.

Talking about luggage, almost 2% of bags in Europe fail to reach their proper destination on the same flight as the passenger to whom they belong.  If you're on a typical 737, that means that maybe four of the people on board will have a baggage problem upon arrival; a horrifying statistic that speaks very poorly of the airlines and makes any attempt to compare their service with Fedex humorous at best and woefully inappropriate.

There's been a technology out there for over a decade that promises to massively reduce lost luggage, and to speedily assist the location of bags when they go astray.  The same technology would help when a passenger fails to reach the gate and his bags have to be offloaded at the last minute, and in many ways, would revolutionize baggage handling.

I'm talking about adding RFID chips to luggage tags.  These things - the same things that you find inside DVDs and other things that would trigger alarms if you tried to sneak them out of stores unpurchased - little slips of paper with a metal coil and chip inside - cost a quarter or less each, but to date, the airlines have resisted the necessary capital investment and extra cost that this presents, even though a succession of studies have suggested that the incremental costs would be more than recouped by reduced luggage losses.

At last, an airline is stepping up to the plate, and Emirates is trialling RFID technology on flights between Heathrow, Dubai and Hong Kong.  The trial will run for up to six months and involve up to 300,000 bags.  One of the clever parts of this new service is that passengers can register to get text messages on their cell phones upon arrival at LHR, telling them on which carousel their bags can be found.

Do you think United could afford to spend a quarter per bag to adopt this technology, particularly now it is charging up to $200 to transport each bag?

And talking about new airline systems, here's a really strange news item.  Ryanair - always an airline to embrace the concept of strange - is changing its website and reservation system, to bring it in line with new UK rules that require all taxes and fees to be included in advertised ticket prices.  No big deal, you might think?  Or, even if it is a big deal, that's what web developers and programmers are for, and once they've developed and debugged the new system, they can then seamlessly cut over to the new system with no more than a milli-second of downtime?

Well, apparently not.  Ryanair will be taking their website and call center booking system completely down for three entire days (from 10pm 22 Feb through 11pm 25 Feb) to enable this transition to occur.  I can't begin to guess at why they are doing this - if you're an experienced IT person, perhaps you might want to toss your resume their way; seems like they need some good people.

Actually, talking about job applications, there's a fascinating new website out there that uses the power of the internet and the ability for people to link together and network in a way that can help us all make some money and/or possibly find new jobs.

Called Blue Chip Expert, it is in part a new way for employers to find suitable staff, and also a clever type of pyramid marketing scheme whereby we are all encouraged to sign up (for free, and even if we're not actively looking for a job), and then encouraged to sign up our friends, and so on and so on.

The encouragement is fairly compelling - we get referral fees if someone we signed up gets a job offer, and we also get residual fees if someone they signed up gets an offer, and indeed, you get third level referral fees too.

For something that is free and easy, and with a great interface that makes it easy to import your various contact lists, it is definitely something that I quickly signed up for.  A few minute cost might bring some unexpected benefits.  Which brings me to, ahem, you, dear reader.....  Why not join as well.  If you click this link, you'll be able to join the program, and of course, I then get an override on any revenue and referrals you might get.  There doesn't seem to be a catch - give it a try.  I've currently got 12 people who have joined from my referral, and they have another 15 who have in turn joined.  But, ahem, no referral fees yet.

Very good news for those of us who like to fly down to Australia from time to time.  The route between the US and Australia has been one of the most profitable in the world, due to only two airlines offering nonstop service (Qantas and United).  Other airlines have tried to break into this route, but with no lasting success, due in part to the strength of Qantas in particular, and some of the convoluted restrictions on new airlines wanting to enter the market.

This is all about to change.  The Australian and US governments have now agreed on a new open skies arrangement that will massively liberalize the market, with the first beneficiary (other than us as passengers of course) being V Australia (a Virgin brand which due to a complicated arrangement with Singapore Airlines, can't actually use the Virgin name), a new startup that hopes to start service before the end of the year, with ten flights a week to start, using 777 planes.

One of the now to be eliminated hurdles had been an earlier restriction that limited new airlines to only four flights a week, making it difficult for new airlines to get established, and V Australia has been holding out for the ability to launch a sensible amount of service that can appeal to business as well as leisure travelers.  Business travelers, of course, need to have daily service so they can travel whenever they wish.

Qantas shares fell 3.6% on news of the announcement.  Translation - look for lowered airfares between the US and Australia, later this year.

Sometimes one has to dig to find a non-event that is news.  I think I've found one.

Sales of the massive A380 superjumbo still remain in the doldrums.  Now that Singapore have two of the planes in service, and are about to add a third, the airplane is publicly proving the claims earlier made about its reliability, its performance, and its capabilities, while disproving the ranks of naysayers who had all manner of ridiculous reasons why the plane would never be a success.

But there's been no new rush of airline orders.  Airbus must be starting to get slightly anxious, although it has recently upgraded its projection for total potential orders by 2% - it now says it might sell as many as 1698 of the planes over the next twenty years.  Someone better get a-selling if that's the case.

But perhaps the company has also revealed a part of where it seems the 1698 planes being deployed - it says it has several customers interested in outfitting the A380s as flying casinos.

As a Seattle resident, I naturally follow the fortunes of Starbucks, and perhaps a bit more closely than you might.  It has been interesting to see the company struggling to re-invent itself, and impressive with some of the positive changes it is bringing out at present.

The one with perhaps greatest significance to many of us is their change in Wi-Fi policy.  You may have vaguely known that, until now, every Starbucks store had a T-Mobile Wi-Fi service installed, and if you wanted to use it, you had to buy expensive access through T-Mobile.  Starbucks has now recognized that Wi-Fi can be a drawcard to bring people into their stores, and also has belatedly noticed some of its competitors who provide free Wi-Fi service.

And so, Starbucks has switched from viewing Wi-Fi as a profit center, and is dropping T-Mobile in favor of a more generously priced service through AT&T.  Many people will get free Wi-Fi when the new arrange starts in the spring - just use a Starbucks stored value card to buy your coffee, and those who bizarrely choose not to can buy Wi-Fi access at greatly reduced rates.  More details here.

This Week's Security Horror Story :  International security is running amok, with the US now pressing EU member nations to not only provide extensive data on every passenger flying to the US, but also to provide the same data on flights that merely fly over the top of the US and don't land.

Plus, the US also wants to have armed marshals on international flights, and plans to shortly introduce a type of 'electronic visa' that will require visitors to pre-register online and secure permission to travel before booking or buying their ticket.

Not only is this a hassle and sure to discourage tourism still further, but the permission to travel apparently may take several days to be granted.

But wait, there's more.  The US also seeks to be given complete data on anyone who may simply be escorting a passenger into the secure area of an airport (eg a caregiver with an elderly or infirm passenger, or a parent with a young child), even though the person is merely helping the passenger to the gate and not flying anywhere themselves.

More details here.

Meanwhile, our southern border remains as insecure and inviting as ever....  Why can't we devote even 1% as much energy and obsession with securing our southern border as we do in making it difficult and unpleasant for ordinary people to come visit our country?

And in a game of slow-motion tit-for-tat diplomacy, the EU is threatening to introduce similar measures for US (and other foreign) visitors, including fingerprinting upon arrival, and the same type of pre-visit clearance authorization.  These new measures would be implemented by 2015, so hopefully there'll be a chance for wiser heads to prevail in the next seven years.

What a terrible shame that would be.  It is always such a luxury to fly to Europe, where one can just breeze on in to any EU country without filling out a single piece of paper, and without the type of third-degree interrogation that many bona fide visitors report upon their arrival into the US.

Here's an interesting article on a day in the life of a TSA screener.

And here's a country - Bahrain - that apparently is having some difficulty coming to grips with the benefits inbound tourism brings to a country.

Perhaps they don't want to be bothered with the silly questions tourists sometimes ask.

Lastly this week, thanks to reader Dave for this video - but be careful, many a true word spoken in jest.

Until next week, please enjoy safe travels

David M Rowell aka The Travel Insider

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