Friday 14 March, 2003

Good morning, with me writing to you from Inverness in Scotland today.  My travels around Britain saw me setting a new 'personal worst' on Sunday - when I came to check out of a lovely new apartment style hotel in Glasgow, I discovered, to my horror, that the phone bill was higher than the accommodation cost!!!  This was all the more surprising because I'd only used the phone to make calls to a local internet dialup number, and at evening/weekend rates.

No-one at the hotel could tell me how the cost of the calls were calculated, or what the actual cost per minute was - 'it was all done by the computer'.  Furthermore, because it was all done by the computer, the duty manager tried to get me to believe that it was therefore both impossible for the charges to be wrong and also impossible for her to make a manual adjustment to the charge.  I had no choice, she said, but to pay the full amount of the calls, even though she couldn't explain how the charge was calculated!

Needless to say, I absolutely did not pay the full amount of the calls, and equally needless to say, if you're visiting Glasgow, I recommend you don't stay at the Somerset Merchant City Hotel.

Last week I passed on a comment from a reader about a plane that glided 110 miles to safely land after its engines failed.  Quite a few of you wrote in to correct and add to this story, and I found the whole thing so fascinating that it developed into this week's column (with a lot of help from several of my pilot readers).

This Week's Column :  What Happens if an Airplane's Engines Fail? :  The good news is that having all engines in a modern jet fail is extremely unusual.  The even better news is that, even if this does happen, your chances of survival are good.  Read the article for an analysis of what can go wrong, when, and where, and how the pilots might respond.

I mentioned  again last week about how Wi-Fi service is rapidly growing.  This week McDonalds have announced that they are testing free Wi-Fi access to patrons who buy a Value Meal at a participating store.  This bears out my other Wi-Fi prediction - the cost of Wi-Fi access is going to steadily drop and many stores such as McDonalds will soon be giving it away as an enticement to get patrons into their stores.  McDonalds will initially test in 10 New York restaurants, expanding to several hundred in NY, Chicago, and 'an undisclosed major market in California' later this year.

T-mobile also seem likely to extend their Starbucks service into 400 Borders book stores by this summer.

Deathwatch Part 1 - United :  Good news for United - their passenger numbers rose 2.6% in February compared to February 2002.  But is this sufficient of an increase to compensate for slashing their prices on unrestricted 'business' fares?  Probably not.  And while United is reporting a 2.6% increase in passengers, SkyWest reports a 47% increase in its February year-on-year numbers, which puts United's tiny increase into a harsher perspective.  (But UA could have done worse -  for example, BA reported that its February traffic had dropped 5.6%.)

United has requested a 180 day extension for when it can file an exclusive reorganization plan.  It declared bankruptcy on 9 December and was originally due to file by 8 April.  While UA's bankruptcy filing was long anticipated by almost all market observers, it would seem that their own management team did not sufficiently anticipate this so as to enable them to make a fast filing.   The key issue is that during the period of exclusivity, only UA can file a plan - when this ends, other groups can file competing plans that might result in UA's current management team being booted out, hence UA's management wanting an extension of their exclusive time.

In an interesting example of 'the rich get richer and the poor get poorer', United now finds itself paying nearly twice as much for jet fuel as its competitors.  Most airlines purchase forward fuel hedging contracts, guaranteeing them a set price for a set amount of fuel to be supplied each year, but United lacked the funds to do this for 2003, and so is having to buy on the spot market.  With the massive increases in jet fuel (much greater than the increase in retail petrol at the pump) United now finds itself at a major cost and competitive disadvantage.

Deathwatch Part 2 - American :  Wow, when I put American onto 'deathwatch' status last week, their stock was trading at close to its all-time low at $2.55.  This week it fell so low that Standard & Poors dropped American from their 500 index as of the end of Thursday, when AA's stock was trading around the $1.50 mark.  Ouch!

The most significant reason for the drop in AA's share price seems to have been a statement from the AA flight attendants' union saying that it anticipates an AA bankruptcy filing 'sooner rather than later'.

Meanwhile, AA is discovering that the internet is not always its friend.  AA has filed suit against air fare shopping service to try and stop it from finding the lowest fares on the AA website and then passing them on to users of the Farechase service.  A FareChase spokesperson said 'The web fares found on are widely available to the public and are not private property. We firmly believe that once the airlines post their airfares publicly on their web sites, consumers have the right to use comparison shopping tools.' The outcome of this case (trial date currently set for 7 July) will likely affect other comparison services such as SideStep.

Deathwatch Part 3 - The Entire Airline Industry (almost) :  If we are to believe a highly self-serving study circulated by the airlines' industry advocacy group, the Air Transport Association, 'there is serious risk of chaotic industry bankruptcies and liquidations' as an outcome of a war with Iraq, and so perhaps the entire airline industry needs to be placed on deathwatch!  The ATA's solution is not slow in being offered, however.  A $9 billion rebate from taxes and fees for its airline members!

This report did admit that the airlines wouldn't be the only industry sector to suffer as a result of the likely war with Iraq.  But it notably did not suggest any other industry groups should also receive tax relief.  The sooner the sick old airlines die off and are replaced by fresh new carriers like JetBlue, the better, as far as I'm concerned, and we all should be adamantly opposed to selective support for only the airlines.  Either everyone should be 'compensated' for the effects of the Iraq war, increased security compliance costs, and higher fuel bills, or no-one should be compensated.  It is ridiculous to suggest that everyone should be compensated, so let's instead settle for us all taking our lumps as best we individually can.

The failure of an airline or two would definitely benefit the surviving airlines, which makes me think that while the ATA as a group want to get as much money as possible, several of the stronger members are quietly hoping to themselves that they don't get all they asked for, so that some of their fellow members will fail.

An example of a company that has lost millions of dollars since 9/11 is Smarte Cart - the company that rents storage lockers in airports (as well as luggage trolleys).  The lockers had to be shut down for some strange security related reason, causing the company to lose $400,000 a month in revenue from its 3300 lockers (an average of $4 per locker per day).  The company is now allowed to provide this service again, but the security wonks that 'protect' us have come up with an extraordinary new requirement.  The lockers now have to have fingerprint readers on them so that only the person that locked the locker can unlock it again.  As far as I can determine, Smarte Cart has not received any compensation for the almost $7 million in lost revenue it has suffered.

Here's an interesting item that challenges one's credibility.  Delta Chief Marketing Officer, Vicki Escarra, proudly announced that 'there is strong passenger demand for our Atlanta-Los Angeles service' and so the airline is increasing its capacity by a massive 50%, but only for a limited period.  Doesn't this strike you as extraordinary - the ATA are projecting doom and gloom for the entire industry, Delta itself is struggling to become profitable, but all of a sudden, a mature stable route like ATL-LAX is about to grow by 50%!  Delta will be adding five more daily flights between ATL and LAX, plus starting three new daily flights into Long Beach, and putting a larger plane onto the Ontario route.

Remember Long Beach?  That was the neglected airport in the LA area that no major airline was interested in.  Then JetBlue started using it, and all of a sudden, it seems that every airline wants gates there.  And, talking about JetBlue, it is believed that JetBlue plans to soon start service between ATL and LGB.  And another 'amazing coincidence' was the announcement by AirTran that it was about to start twice daily service between ATL and LAX.  Delta's discovery of its strong passenger demand occurred almost immediately after the AirTran announcement.

This is enough to make one wonder if the 'customer demand' that Escarra refers to is the demand from customers leaving Delta to fly with competing airlines!

Here's a public relations opportunity for Delta.  A lot of people will be cynically thinking that Delta is merely trying to kill the new competition on this route.  I accordingly invite Delta to show the existence of this 'strong customer demand'.  I see nine people who subscribe to this newsletter using their work email addresses at, and probably more do so in 'stealth mode', so my invitation is hardly going unheard.  Please show me the historic load data and the reason for the bullish marketing projections that indicate the need for five extra flights (I'll even keep it confidential if necessary); if it exists, I'll humbly apologize for thinking ill of Delta's motives; but if it doesn't exist, then we are all free to make our own inferences accordingly.

Delta - a member of ATA - can't ask for public funds without being prepared to offer public accountability for how it spends those funds, and it is entirely wrong that it should expect government subsidies that will allow it to operate flights at a loss merely to kill its competitors.

More Delta news - they have agreed to be the test airline for a new invasive passenger profiling system known as CAPPS II.  This new system - the Computer Assisted Passenger Prescreening System - matches passengers to all sorts of databases, including all the usual police databases and the master terrorist lists, and even checks their credit profile and history.  After matching all these things, each passenger is then categorised as low, medium, or high risk.  High risk passengers are not flown at all.  Medium risk passengers get extra screening, and low risk passengers get normal security screening.

There is a lot to dislike about this process, but perhaps the worst is that passengers are only informed at the security screening point if they are deemed to be high risk.  Read the article on my site about a poor lady that somehow ended up erroneously on the master terrorist list and the near impossibility of getting her name cleared off the list again, and then ask yourself what would happen to you if, at the airport with your flight due to depart in an hour, you're suddenly told that you won't be allowed to travel because you are a high security risk!  One thing is for sure - you won't be told exactly why you've been determined to be a high security risk, so how will you ever succeed in clearing your name?  Another thing is also for sure - there's no way you'll be getting on your flight, or any other flight for possibly days, week, and maybe even months or years.

Seems like flying has become a privilege, rather than a right.  What happened to the presumption of innocence, and due process?

It is also rumored that the Transportation Security Administration will store records of who travels where for up to 50 years.  James Loy, the retired admiral who heads the TSA, said last week that the system was 'being designed to serve our national security without sacrificing individual privacy.'  This nonsense statement that is completely contradicted by the facts is, alas, what you'd expect from the man that heads the agency with the doublespeak motto 'Freedom of Movement'.

It is worth adding that while there are grave potential problems for people incorrectly determined to be a high security risk, there may be fewer problems for people that are genuine security risks.  In October 2002 a study showed that there was a backlog of 1800 names that need to be added to one of the security 'watch lists'!

Reacting angrily to Delta's willingness to introduce this new screening, a group has set up a website  Over 200,000 people visited the site in its first week.  Delta's only response to what has reportedly been a barrage of complaints from travelers was to force the site to stop selling t-shirts, coffee mugs and stickers with a logo that consists of an all-seeing eye within a red and blue triangle.  The logo looked remarkably like Delta's logo.  Seems to me that Delta is shooting the messenger, while ignoring the message.

Forbes gave James Parker, CEO of Southwest Airlines the highest job approval rating of any executive they follow.  Forbes quoted his toughness on fares and his insistence on punctuality as having translated into higher revenue and a steadily growing stock price.  David Neeleman, CEO of JetBlue received a rating of 90%.  Lower scoring CEOs included Donald Carty, CEO of American, getting a 21% rating and airline novice Glenn Tilton of United with a mere 16% rating.

Last week I reported the amazing trial balloon floated by BA that it might give away its valuable Concordes rather than sell them, ostensibly due to BA's claim that no other airline would be capable of maintaining them.  This week, BA's own ability to maintain their Concordes was called into question when  one of its fleet had to twice abort an attempted takeoff in Barbados.  A very gentle warning to BA - don't tempt fate with such ridiculous statements about the unique quality of your maintenance services.

There is a proposal to build a new stadium for the Dallas Cowboys.  Now you might think that the logical people to pay for such a stadium would be the Dallas Cowboys themselves, or, failing that, the local residents of the Dallas region.  Unfortunately, no.  The proposal under consideration in Austin is that the car-rental tax should increase to 21% in Dallas, and the hotel tax go up to 18%, with the funds paying for the new stadium.  Our lawmakers think they've found a loophole to let them raise money with no comebacks - from visitors who can't vote them out of office, but this 'NIMBY taxation' is plain wrong.

It is well past time for some crusading group to challenge the constitutionality of local taxes on travelers from out of the taxing jurisdiction.  I have no problem with 'user pays' type fees, but with cities and states increasingly hitting up travelers, who can't vote them out of office, to pay for services and facilities that benefit locals, it is time someone drew a line in the sand.  You may recall that the Boston Tea Party was all about 'taxation without representation'; yet we're now finding ourselves surrounded by many equally unfair examples.

This Week's Security Horror Story :  Three overbearing British Airways crew members terrified two year old Marcello Ferrand when all three crowded around him and crossly insisted that he do up his seat belt.  The little boy panicked and tried to hide under the seat in front of him.  And so what did the captain of the BA flight from Milan to Heathrow do next?  He refused to carry the two year old - and his two grandparents who were traveling with him - called the police and had the three passengers taken off the plane, resulting in them having to spend an extra $480 to buy three tickets on Alitalia to fly back home to London.

You might think that the pilot did this so as not to delay the flight any further (but how long does it take to get a 2 year old back into his seat?).  Not so.  A substantial delay followed while the three passengers' baggage was located and offloaded, and the flight eventually arrived into London 45 minutes late.

I can't think of a suitable comment to make about the stupidity of this pilot.  Apparently, BA itself could not think of anything suitable to say, either, and so their spokeswoman released a statement comprising this pathetic corporate doublespeak :  'It is absolutely imperative for all passengers to be wearing a seatbelt during take-off, landing and when the fasten seatbelt light is turned on.  This is for their safety.  The captain was called and reinforced the importance of being strapped in the chair.  After speaking with the accompanying adults he made the decision to off-load the family.'

That statement doesn't actually sound like it came from a human being, and it sure doesn't sound like an apology to me.

There was a time when this next item would qualify as security horror story of the week, but nowadays it seems to be so commonplace as to be barely worth mentioning.  Yet another security screener 'allegedly' fell asleep while on duty at an X-ray machine checking baggage.  Authorities don't know how long he was (allegedly) asleep, and so the usual rigmarole ensued - evacuating the concourse, sniffer dogs checking for bombs, re-screening passengers, etc etc.  No terrorists were found, and fortunately, this time, because it was a smaller airport in Connecticut, there was only about an hour of delay.

The TSA announced that in its first 13 months of operation (and while its staff were awake), it seized 4.8 million banned items from passengers.  This included 2.4 million 'sharp objects' and 1.4 million knives.  Other items too dangerous to transport included a 15 piece cutlery sets, a trailer hitch, horseshoes, a circular saw and a kitchen sink pipe.   922 people were arrested at checkpoints, although 'how many of those resulted in convictions is not known' (why is this not known - could it be that the answer is embarrassingly low?).  As far as can be determined from the report, however, not a single terrorist was arrested, let alone convicted, or in any other way prevented from hijacking or blowing up a plane.

But all these confiscations do serve a useful purpose in California.  The State of California sells everything it can on eBay, splitting the proceeds with the federal government.  The state claims that it is 'too costly' to return the items to their rightful owners.

And here's another piece of non-news.  A newspaper reporter from a British tabloid was able to board a jet armed with a replica machine gun and pistol.  He got through security at Gatwick airport by hiding in the back of a catering truck supplying in-flight meals to planes at the airport.  Security officials are 'reviewing security measures' at Gatwick as a result (for the umpteenth time).

Here's a tour with a difference. Tourists in Israel can pay to fire weapons and hunt terrorists.  Visitors to the Middle East are being offered "terror tours" of Gaza and the West Bank, during which tourists are being given the chance to fire weapons and sit in the cockpit of a fighter plane.  The four day tours also include aerial tours of terrorist strongholds.  The tour organizer, Jake Greenwald, said the idea for the tours developed while he was watching coverage of 9/11.  'I realized that Israel, which has great expertise in dealing with terror, will be able to teach people to deal with fear, so there is not mass panic when something happens.'  Some 20 people, including doctors, a Middle East lecturer and a judge, have so far signed up for the tours, at a cost of $5,500 each.  One of the highlights of the tour is a paintball fight where participants are able to 'go from room to room clearing out "Arab terrorists"'.

Thanks to Pat from ARTA for also passing this last item along.  This was spotted on Egyptair's website and might bring one (or possibly even two) smiles to your face on this Friday morning.  Egyptair says

Fly Egyptair and earn a place in paradise. Join our Frequent Flayer program.

Until next week, please enjoy safe travels, whatever your choice of airline and frequent flier program.

David M Rowell aka The Travel Insider
ps :  Don't forget to visit Joe Brancatelli's site for his weekly updates, too.

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