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Friday 18 April, 2008
Not one but two Frontpage crashes tonight,
each with loss of data, make this a somewhat later than normal
newsletter. Thank you, Microsoft (not).
But while I struggle with my software, hopefully you're enjoying the full beauty of
spring wherever you are (unless you're on the other side of the equator,
of course, as is the case for almost 5% of readers).
It has been another interesting week for the
airlines, and more of that shortly.
The review of the phone service (unlimited
North American calling for $20/yr) that I delayed at the last minute,
last week, due to a new version of their software coming out this week,
will now be delayed until early May. The latest promise date for
that software upgrade is now 1 May; I do have a slight sense that
there's a feeling in the company 'We're giving you such a wonderful
product at such a great price that you should gratefully accept anything
we do for you, whenever we do it' rather than a more formal value
attached to the importance of sticking to promised dates for releases.
So here's a different type of phone related
gadget for this week - another Bluetooth headset. I occasionally
wonder if it is still necessary to write detailed reviews of individual
Bluetooth headset models - with prices dropping down to as little as $25
for a reasonably good headset, and with mature technology that implies
most headsets should work reliably most of the time, is it now
possible to semi-randomly buy a headset with confidence that it will
Alas, the situation remains that no
Bluetooth headset works as well as it should, and all have limitations
and challenges, particularly in the realm of sound quality. I
don't understand why a regular wired headset, costing $5 or less (and
costing as little as $1 wholesale) can give reliably good consistent
sound quality, but a state of the art Bluetooth headset, costing
anywhere from $25 to $250, can not give the same quality. What is
the problem? This week's headset review is interesting,
because the unit emulates the design of a regular wired headset, which
you'd think might eliminate any remaining weaknesses :
Week's Feature Column : Cardo S-640 Bluetooth Headset :
This headset copies the design of a regular corded headset, with a tiny
earpiece that is connected, by wire, to a control box you clip to your
shirt. So, if it copies the design and placement of microphone and
speaker, does that mean it can also copy the sound quality? To
answer that question, and see if you should buy one of these $35
headsets, you'll need to read the review.
China Tour Single Saving Opportunity :
As an often single traveler myself, I dislike single supplements
as much as anyone else, and try and keep them as low as possible on
Travel Insider tours.
Good news :
If you'd been thinking of traveling as a single on our
China cruise and tour, I've managed to
negotiate a special deal to help you with the single supplement.
Instead of a $1195 supplement (which is already very fair - usually
you'd be paying $1400 - $2100) I managed to get this halved, and now it
is only $595. This is a great deal and makes traveling to China
with us affordable.
Talking about affordable, the
value of the
tour has improved for couples, too.
It was originally costed out
in January when the Chinese Yuan was worth about 7.30 to the dollar.
As you know, the dollar has been dropping steadily since then, but I've
managed to hold the tour price with no increase.
For sure, if we
repeat the tour next year, it will necessarily be more expensive, so, on the
basis of a bird in the hand, come with us
this year and lock in the old exchange rate.
If you're thinking of going for an Amadeus
river cruise in 2009, hurry to book your cabin with me before the end of
this month. The 2009 early booking discount expires on 30 April.
If you book with me, you get a 5% Travel Insider discount, a 5% early
booking discount, and potentially a $100 per person AARP discount and
even another $100 per person past passenger discount. That's a lot
of savings, but you need to get your booking confirmed and deposited by
30 April to qualify.
One more special deal. The Solitude
best rated noise cancelling headphones are on sale at Travel
Essentials, but only until Sunday. Normally $200, you can get them on sale
Here's a review of
the headphones, and here's a
link to get the sale price. Recommended.
Dinosaur watching : When America
West/US Air tried to buy Delta last year, Delta acted as negatively as it could,
saying there was no value or sense in merging.
And when new CEO Richard Anderson took
over the reins at Delta, he said he wasn't about to merge Delta with
another airline but instead was confident of Delta's future as a
The truth changes, of course, and never so
dramatically or quickly as in the airline industry. All of a
sudden, earlier this year, the same Mr Anderson announced he was
planning on buying/merging with another airline, maybe UA or (much more
likely) NW. This was, he told us, an essential and necessary thing to guarantee the future
success of both DL and whatever airline he merged with.
But - ooops. The deal was cancelled,
because it was impossible to get the NW and DL pilots to agree on
integrating their seniority systems, and without the pilots' support, so
we were told, any merger would be impossible.
Except that, apparently, it is possible,
because now both airlines have formally announced the details of their
intended merger, notwithstanding not having obtained the agreement of
their respective pilot groups.
Confused yet? If not, consider also
the wildly varying justifications for a merger. It has been
offered as an essential step to ensure the airlines' survival, as a
necessary response to increased jetfuel prices, as a way of competing
against rapacious foreign carriers, as a way of boosting shareholder
value, and as a way of making a proud new American national flag
Oh, and that's not all - get this : The DL/NW
merger is also being offered as a way of protecting airline employees'
jobs and paying them better. Yes, even though the merger is being
promised as in some vague way bringing cost savings and 'efficiencies',
the two current CEOs went on record in a jointly signed article in the
Wall St Journal as saying that no 'front line employees' would lose
their jobs. Here's their quote :
We will furlough no
frontline employees as a result of this merger.
On the other hand, though, clearly someone
is going to lose their job - the New York Times reports that the
combined 89,000 employees currently working at NW/DL would reduce down to 75,000
in the new merged airline. So, 16% of current employees will be
losing their jobs. Some protection, that.
Of course, if you're one of the lucky front
line employees who keeps their job, then you've a lot to look forward
to. CEOs Anderson and Steenland promise
merger will create a financially stronger airline, better positioned to
protect jobs, compensation and benefits.
That the merged airline
may better protect Messrs Anderson and Steenland's jobs, compensation
and benefits, I have no doubt. But in a situation where total
employees are projected to reduce from 89,000 to 75,000, that's the sort
of job protection many of the rest of us would rather do without.
And does anyone really believe in this new era of obsessive sensitivity
to cost control in all forms, the new airline (which will be called
Delta, dropping the Northwest name) will start handing out gratuitous
increases in pay and benefit to those employees lucky enough to remain,
just because they feel generous? Perhaps only if the new bigger Delta
finds itself in a less competitive environment and no longer needing to
match the fares and underlying operating costs of other airlines, and of
course the merger is absolutely not about killing the competition
(unless they are nasty foreign airlines, which apparently don't count).
One more rhetorical
question. How does a merged airline better cope with high fuel
costs? Do the merged airline's planes burn less fuel? Does
the merged airline pay less for fuel because it buys more of it?
No and no are the two answers. The cost of jet fuel has nothing to
do with merging or not merging.
So what will the merger
mean for us as airline travelers? Well, Anderson and Steenland say
will keep all of our hubs open' so perhaps, in terms of getting from
point A to point B, it won't mean much. On the other hand, it will
be interesting to see if all their hubs do remain open in a manner
similar to at present.
My guess is there'll be some massive
changes in their hubbing - surely there has to be to offer what they
refer to as 'Building
a stronger route network '. What else can that mean, if not
re-allocating resources in a way that reduces unnecessary duplication?
Does it really make sense to have
a hub in both Atlanta (DL) and Memphis (NW)? The two airports are
a mere 340 miles apart. Or how about Cincinatti (DL) and Detroit
(NW) - even closer, with barely 235 miles between them? Especially
with MSP (NW) also nearby? Of course it doesn't.
An interesting related bit of trivia - some 4,000 news items
appeared about the merger, according to Google News, the first day the DL/NW merger was first announced.
After four weeks of seeing its share price
increase, Southwest's share price dropped slightly in the last week,
closing at $12.61 - still up on the $11.70 when I first commented
on its price, 13 March, but down from $12.94 last week.
Southwest announced this week what has been
described as a
disappointing first quarter, with its profit being down from $93 million
in Q1 2007 to $34 million this year.
But, if you exclude one time
items, the actual profit from ongoing operations climbed from $33
million last year to $43 million this year, and gross revenue increased
an impressive 15%. Disappointing? Hardly.
And whereas other airlines continue to cut back
on their US services, Southwest says it will add 'no more than' 14 new
planes to its fleet in 2009. This is half its earlier announced
level of growth, but still growth, nonetheless.
It is true that when other airlines increase
their fares, Southwest doesn't always automatically match, but that is a
win-win. If it matches an increase, it gets an increase in
profitability without any market share consequences. If Southwest
doesn't increase its fares, it stands to get an increase in market
share, and due to the massive difference between fixed and variable
costs on an airplane flight, the extra passengers lift Southwest's profits appreciably.
So, whether it matches increases or not,
every fare increase by other airlines helps Southwest. Farecompare.com researched which recent increases Southwest has
matched, and elicited the following official statement from
On April 10, we followed an increase by
United with a very modest, mileage-based increase from $2 each way for
short haul, $4 each way for medium haul, and $6 each way for long haul.
Last night [15 April], we instituted a fare
increase that takes effect June 13 and it ranges from $3 - $5 one-way
for short haul; $8 one-way for medium haul, and $10 one-way for long
So Southwest's fares are increasing, albeit
not at quite the same frenzied rate that the other airlines are
Longer term, as Southwest's hedging
diminishes, it will have reduced opportunity to outperform the
marketplace, particularly because (and many people don't appreciate
this) it has some of the highest paid staff in the industry. Yes,
they are more productive, but that edge is diminishing, and there's an
interesting danger that Southwest might end up as a high cost carrier.
Talking about fare increases, there's been
another one. Last week saw UA increase fares by $4 - $30 roundtrip
(matched by all other carriers), this week sees another UA increase that
has now been fully matched too; this one of $10 - $20 roundtrip.
These regular fare increases, usually
justified by increases in jet fuel, make nonsense of the oft-stated
claims that 'based on an increase of xx¢ a gallon in jetfuel, the
airline industry stands to lose $x billion this year'. Because,
guess what - when the price of fuel goes up, so too do airfares, and as
we can conclusively see at present, the airfare rates are going up at a
rate massively greater than the underlying operational costs of jet
A better claim might be 'The airline
industry can use an xx¢ a gallon increase in jetfuel costs as an excuse
to raise fares and increase profits by $xx billion this year'.
Earlier this week,
Aer Lingus found itself inadvertently selling €1,775 ($2825) business class seats for €5 (about $8).
The airline said the problem was linked to a special offer where
customers who bought a business class seat were to be given a second
ticket for free. Approximately 100 seats were sold for the
€5 euro fare. Aer Lingus said
it would not honor the fare and no money was collected for payment of
the tickets. The customers are claiming they have a legitimate
contract with the airline and should be compensated.
What's happening at Heathrow? Has BA finally got its act
together at the new Terminal 5? Apparently not.
Some British insurers have even stopped offering coverage for lost
luggage or delayed flights to travelers going through Terminal 5 at
Heathrow after the huge problems with flights and baggage. Only
those who bought coverage prior to the start of the problems will be
able to make a claim. The insurers say the situation is under constant
review and normal coverage will be restored as soon as Terminal 5
problems are solved.
Meanwhile, BA itself has conceded defeat of a sort and is delaying the
transition of more of its flights (ie those to and from the US) from
Terminal 4 over to Terminal 5. BA said the flights, scheduled to
move on 30 April, will now move sometime in June, but CEO Willie Walsh
also said, earlier this week, that the move might be delayed further
A word of warning - if you're booked on BA flights that will have you
transiting from a flight arriving into T5 and over to T4 for your
ongoing flight, allow plenty of time. One ARTA source is
recommending you should allow 3 hours for the connection - it took her
50 minutes merely to go through security at T4, and she says the 3 hours
is also needed in the hope of your luggage also making the transfer in
British Airways has meanwhile acted decisively in responding to its high
profile T5 problems. It has fired two senior executives.
Now, you may recall that CEO Willie Walsh accepted responsibility for
the messup. So does that mean he was one of the two executives
fired? Of course not. Instead, the airline's Directors of
Operations and Customer Services got the chop.
Have you noticed the new corporate trend - CEOs will shamefacedly stand
in front of the cameras and say 'I accept full responsibility' for
whatever messup occurred, but then happily walk off stage with no
further censure. What is the meaning of accepting responsibility
if you then turn around and fire someone else? What sort of
responsibility has no consequences associated with it?
But even if and when the T5 mess finally gets sorted out, Britain's air
problems might not be over. Indeed, quite the opposite.
Expanding Heathrow's capacity might make them worse, due to congestion
not in the terminal, but in the airspace over Britain.
An article in The Times shows that the Civil Aviation Authority in the
UK fears that congestion above the airports will take over from
congestion on the ground. The CAA is also suggesting that the
company that owns most of the London airports (BAA) has been distorting
some of the data it reports to conceal disastrous levels of customer
service and failure to meet mandated targets.
For example, the requirement that people wait no more than 10 minutes in
line for security screening is only being met, according to the CAA,
because BAA is timing how long it takes people in the middle of the line
to get through security, not how long it takes people at the end of the
line to go all the way through.
And the CAA also wonders why it was that in 2006, BAA was saying that
Heathrow was designed for 55 million passengers, but more recently, and
in support of seeking permission for a third runway to be added, BAA is
now saying that Heathrow was designed for 45 million passengers a year.
And in the claimed results of passenger surveys, BAA claims that
passengers rate Heathrow as a 4 on a 1 - 5 scale (5 being excellent),
whereas independent surveys all around the world consistently show
Heathrow as being the worst or nearly the worst airport of anywhere.
There are, apparently, lies, damn lies, and statistics.
And talking about both statistics and customer service problems, in 2007
a grand total of 42.4 million bags were lost or delayed by airports and
airlines, at a cost to the airlines of $3.8 billion (an average of
almost $90 per lost/delayed bag).
It is interesting to see what caused the bags to go astray. The
most common problem was mishandling bags during transfers - 49% of bag
problems happened then. 16% of bags never got on their first
flight, 8% were mishandled by the airport they ultimately arrived at,
and 5% were taken off due to planes being too heavy and needing to
offload some luggage.
According to SITA (the company that tracks luggage globally for
airlines), the industry could save $700 million a year if it adopted
RFID tags on bags to allow for more accurate tracking.
A $700 million saving? Seems like a no brainer, doesn't it.
So don't expect it any time soon.
But United has come up with a new way to
save money that doesn't involve improving bag or any other service at
all. Quite the opposite, of course.
Starting next month, they are reducing their
flight attendants from five down to four on 757 flights of under five
hours. Two will be in first class, and coach class will drop down
from three to two attendants.
Here's a slightly
alarmist item about another way the airlines are looking at saving
money. The underlying issue is far from new, and while some pilots
are cited as raising bona fide seeming concerns, the bottom line has to
be 'when did a plane last fall out of the sky due to running out of
gas?'. The most recent event I can think of - the 'Gimli
Glider' in 1983, was not due to deliberately underloading fuel, but
accidentally making a mistake as to the fuel required.
And some good news for a change. The compensation levels for being
bumped off a flight are to double, starting in May. You now can
get up to $400 for delays of less than two hours in getting to your
final destination, and up to $800 for delays of over two hours.
It is also good that flights on planes with more than 30 seats are now
liable to pay compensation; formerly it had been limited to flights on
planes with more than 60 seats.
But this compensation only applies to the very rare times when the
airline bumps people involuntarily. If you volunteer for a later
flight, you're still in a bargaining position the same as before in
terms of what you might get, and although what the airline pays
volunteers obviously now has a higher ceiling than before, if there are
plenty of volunteers, the law of supply and demand means you'll still
get the same sorts of offers at present. Delays for weather
related issues (or what the airline with a straight face claims to be
weather related) and various other things remain exempted, of course.
It is nice to see the limits double, but the old limits have been in
place, unchanged, for 30 years. Inflation has eroded away the new
levels to less than what the previous levels were when they were first
This Week's Security Horror Story
(being written for the third time, thanks to Microsoft's appalling
software) : Let me quickly type this before Frontpage crashes
again..... Actually, I can't bring myself to do it a third time,
at 2.10am. Just watch the
video, it is
good enough as is.
The EU's equivalent of our Supreme Court,
the European Court of Justice, supported a compensation claim from an
airline passenger who was prevented from taking his tennis rackets on
the plane with him. He was intercepted at the gate (after having
taken them through security with no problems) and told they were
After he expressed surprise, he was told
that, yes, the items were on a list of forbidden items that presented as
potential security threats. He asked to see the list, and was told
the list was secret.
Yes, truly, in the EU you are not even
allowed to know what you can't take on board a plane with you, because
that information is secret!
The Court roundly castigated this as the
nonsense that it truly is, and said having a secret list of forbidden
items was so absurd as to be legally worthless.
In response to the Court's ruling, the
European Commission has agreed to publish its secret list 'soon'.
Here are some
scandalous claims by a former guide book writer, who says he
never even visited the places he wrote about. Sounds serious,
and confirms what some of us have long suspected about much guide book
material, which often seems to be recycled press releases and other out
of date information from local tourist information bureaus rather than
real meaningful information garnered by people seeing and doing the
things they write about in person.
But here is a
persuasive rebuttal by Lonely Planet. And it is worth
remembering that the author is making these claims in a self serving way
of promoting his new book about his life as a guidebook writer. I
asked for a review copy, but there's been no response.
My closing video clip of the
kite surfer last week
drew quite a few reader requests for more information. Where was
it? Was it real?
As to where it was, it looks to me like it
was at St Maarten in the Caribbean, where the airport is famously right
next to a beach, and due to the short runway (a mere 7150 ft) planes
touch down right at the very beginning of the runway, barely missing the
heads of sunbathers on the beach as they come in to land. Here is
a clip showing some still
images of planes landing there.
But, is (was) the kite surfing video real?
Certainly it seems likely that planes would come in low enough to snag a
surfer's kite. But would a surfer be so stupid and unaware as not
to know about the planes that come in low, and not to see/hear the plane
in the video? That seems less likely to me, but on the other hand,
the video does look to be real. There have been some very strong
opinions offered about the video by people who all too often clearly
didn't know anything about what they were talking about.
There is two versions of the video on
Youtube that, at the end, cuts to frames of advertising for Sprite
(different in each case) - for example,
But is this really a Sprite ad, or did some prankster stick the last bit
on the end to trick us?
Snopes says the status of this is undetermined. Maybe someone
could contact the Coca-Cola Company for more information and share the
answers with us and Snopes.
Until next week,
please enjoy safe travels - and please do consider joining us on a
Travel Insider tour.