Friday 30 January, 2004
As you can see, the newsletter format continues to evolve. Many thanks to everyone who sent in comments about their preferred type size last week. It seems that many people are not seeing the newsletter the way it should appear - email reading programs aren't as clever at correctly displaying formatting instructions as our internet browsers are. If you are not sure if you're seeing the 'official' version of the newsletter, you can check it out on the website, where there is an archive of all past newsletters (there's a link to this at the bottom of every newsletter).
The overwhelming majority of replies (90+%) asked for the larger sized font, although it isn't exactly clear 'larger than what'. Some people reported that in their email program, the sample small font appeared larger than the sample large font, and many others reported that all fonts appeared exactly the same!
I've now received the five $500 debit cards that I bought on Friday 16 January. One arrived on Monday, the other four arrived on Thursday. I took the first one to the Post Office and, in return for a 70¢ fee, had no problem buying a $500 money order with it. I also had my credit card issuer confirm that I'd earn miles on the $2500 purchase, and that they aren't charging a cash advance fee, meaning that, as best I can tell, everything is working exactly as it should (even though it still seems too good to be true!).
So, my cost for getting 500 miles was a paltry $1.70 ($1 fee for using the debit card and 70¢ for the money order). I'm hoping that when I cash in the next $2000 worth, the money order cost will be proportionately less, making it a still better value. But even if I have to pay $1.70 for every 500 miles, this is a trivial cost for miles that you'd otherwise spend about eight times more buying from the airline (if available at all). I've updated the special email I sent out explaining this opportunity; if you haven't tried this for yourself, then read my updated email and give it a try.
If you also read Joe Brancatelli's weekly newsletter (and you should), you'll notice that this week my featured column offered in his newsletter is different to the one below. I'm introducing my three May tours to his readers this week, but you of course already know about these (I hope), so here is a different column for you :
This Week's Column : Protecting Planes Against Terrorist Attack part 1 : In a perfect world, terrorists would never be able to smuggle guns or knives on board planes. But, even in this perfect world, would the plane be safe? Are we correct to focus so many billions of dollars on the impossibility of keeping guns and knives off the plane, while largely overlooking remaining risks from 'unarmed' terrorists on board?
Dinosaur Watching : A Prediction
The last couple of years saw the dinosaur major carriers essentially ignoring the new generation of lower cost carriers. Normally, whenever a LCC appears, the dinosaurs mercilessly stomp it out by increasing the flights they offer on competitive routes, while simultaneously dropping their fares to a level where both the dinosaur and startup carrier are losing money on the route.
The dinosaur is pleased to do this - a small financial sacrifice on a small part of its overall route system is usually something it can happily absorb, and in so doing, it quickly kills off a new competitor before it becomes too big and damaging. It even makes good commercial sense for the dinosaur to act this way, and while such actions are not what ordinary people would consider fair, the courts have consistently chosen to interpret them as legal and not anti-competitive.
But during these last two years, the major carriers have been so pre-occupied with basic survival that they largely ignored the growth of LCCs. In their dire financial straits, they couldn't afford to operate any routes at a loss, and so, deprived of their major tool for competing against LCC's, they chose to simply ignore them.
As a result, jetBlue appeared from nowhere, Southwest continues to grow, Frontier, ATA, AirTran, and various other small airlines all developed too. Indeed, one of the dinosaurs evolved and successfully emerged as a transformed LCC itself - America West.
At the same time, LCC's that have formerly been trying to keep a low profile and avoid the ire of the major carriers became more boisterous and bold. jetBlue has moved from secondary routes to prime trans-continental routes, and AirTran has based itself right under the nose of Delta in Delta's 'fortress hub' of Atlanta.
My prediction is that 2004 will see the major airlines 'get tough' with LCCs again. Although all major carriers continue to plead poverty, the reality is that most are close to breaking even or returning to profitability, and projections for 2004 strongly suggest good increases in both business and leisure travel. Airlines are bringing back furloughed staff and reactivating formerly parked planes. Now that the dinosaurs are starting to get a bit of spare cash flow, some spare aircraft and staff capacity, it is in their nature to use these resources to compete against the LCC's the way they know best - by trying to bleed them dry while operating competing services priced way below market rates.
We're already seeing the stirrings of this, such as American Airlines' special 'free ticket' deal offered to people flying on routes that - coincidentally - matched routes offered by jetBlue.
Another example - jetBlue announced it was adding service between JFK and Sacramento. Almost immediately thereafter, Continental announced that - surprise, surprise, it was about to start service between Newark and Sacramento, with flights scheduled very closely the same as jetBlue's new service. Is it just coincidence that, after all these years of ignoring the idea of nonstops between these two airports, CO suddenly chooses to do this, immediately after jetBlue?
Another example - Delta has announced it will spend $300 million in upgrading its JFK terminal facilities over the next six years. This move - while a positive development we should all welcome - is almost certainly a response to jetBlue's growing strength at JFK, and will doubtless be followed by DL matching more flights and fares against jetBlue.
Notice all three of these examples are in the form of dinosaurs moving against high flying jetBlue. It is probably not a dinosaur conspiracy, with the different dinosaurs ganging up against jetBlue in the hope that, between them all, they can succeed where one alone would fail. But it is, definitely, bad news for jetBlue, and has been reflected in its share price. After steadily maintaining or increasing in value through October last year, it has lost two thirds of its value in the last three months, including 10% in just the last two days. Ouch.
Some more airline results for 2003 have been reported, including jetBlue, ending up the year with a $104 million net profit, compared to $55 million in 2003. This did nothing to stop the fall in its share price, however.
Not quite such a pretty picture at United, which admitted to a $2.8 billion loss for 2003. Northwest did well, with a $236 million profit, and Alaska Airlines barely squeezed past breakeven with a $8.8 million profit.
An airline that many of you have probably never heard of - Atlantic Coast - earned $82.8 million. Atlantic Coast Airlines formerly operated regional services for the dinosaurs, but now is about to strike out on its own, and will be launching its own low cost carrier operation, Independence Air, to be based in Dulles and serving 50 cities, starting operation in late Spring this year.
This promises to be a well-financed startup, with some $300 million of cash available from Atlantic Coast. In comparison, jetBlue, which started with a richer warchest of cash than any previous airline, built itself up with a $140 million base. This could be an interesting airline to watch out for - they're adopting the winning combination of high quality (eg all leather seats - just like jetBlue) and low fares.
Low cost airline Frontier - itself about to embark on some ambitious expansion away from its current Denver hub - announced a profit for the December quarter of $5.5 million, compared to a $6.4 million loss for the same quarter the previous year.
The incredible shrinking airline (continued) : More details have emerged about what US Airways may be selling off. It looks like American Airlines is interested in buying the US Airways east coast shuttle operation, and it is rumored that jetBlue may also be bidding on this. Delta (which already has a shuttle operation) is believed to be interested in pretty much everything else except the shuttle, and AirTran is also thought to have submitted a bid for some parts of US Airways. The US Airways board will meet in early February to review the proposals, and as yet no formal decision has been made to actually sell anything.
The incredible shrinking Boeing (continued) : This article quotes rumors that Boeing may be about to shut down its 12 million square foot manufacturing facility in Wichita, KS. Boeing CEO Harry Stonecipher subsequently attempted to reassure state officials that this was not the case, saying that Boeing had no active plans to sell the plant. However, he also added that Boeing is always reviewing its plans. If I was in Wichita, I'd not find that very reassuring at all.
I'm rarely acting as an apologist for airline employees, but I think that British Airways CEO is not looking at the full picture when he complains that BA staff take, on average, twice as much sick leave each year as do people in other occupations. BA staff average 15 days sick leave every year, compared to a UK national average of about 7.5 days per person.
The simple fact is that there are few less healthy environments to work in than an airplane cabin. With the high level of recycled air, everyone on board is sharing each other's germs. Studies have shown that passengers are more likely to come down with an ailment after a long flight - it seems fair to accept that the flight crew may also be similarly affected. Former flight attendant Diana Fairechild has written several books on this topic, and has an interesting website at www.flyana.com.
Perhaps BA should consider improvements to the quality of their airplane cabin environments. That would benefit not only their staff but also their customers.
Here's an exciting article that has lots of good news for Californian train lovers. A recently released report advocates spending $37 billion in the next 15 years to set up a network of high speed trains to serve cities in the state. While this sounds like a prohibitive amount of money, the cost of alternatives - more freeway and airport capacity - would cost $87 billion. Unsaid, of course, is the cost of doing nothing and just letting traffic get worse and worse. If implemented, trains would travel between downtown San Francisco and downtown Los Angeles in 2½ hours, traveling at up to 220 mph. The trains would also reduce traffic deaths.
One in the eye for conventional wisdom and lobbying groups. In Zagat's New York survey on restaurants, taken after the smoking ban was introduced, only 4% of the 30,000 people responding claimed to be eating out less often since the ban, whereas 23% said they were eating out more often. 73% said it made no difference. Where areas are debating to get smoking banned in public places, most restaurants claim they will lose at least 50% of their business if patrons are not allowed to smoke. Apparently the people making these claims are - well, just blowing smoke!
The greedy politicians in Alaska are at it again. Cruise ships bring massive revenues to the state each year; every time the passengers spill off the ship and into the stores, they leave huge amounts of money behind, usually in exchange for the purchase of over-priced junk. Most people would be more than happy with this situation. But Alaska's politicians continue to try and get more. A new bill was recently introduced calling for a $100 per person cruise ship tax. Rep Carl Gatto claims that he personally polled passengers on the dock in Juneau, and they all said that the extra $100 would make no difference in their decision to visit Alaska. But the North West Cruise Ship Association (for sure, a group with just as much a bias as the Alaskan state government) said their surveys suggest that as many as half of all passengers might switch destinations if an extra $100 was added to the fares.
The ship owners are probably closer to the truth than the politicians. While some people will go at any price, and others will simply downgrade their cabin to keep their expenditure the same, other people will cut back on shore expenses, and some people will definitely switch destinations. Alaska needs to see its glass as very definitely half full with all the revenues it gets from cruise ships at present.
Winning an award for 'Visionary of the Week' is Cathal L Flynn, former associate administrator of civil aviation security at the FAA. In testimony to the Commission investigating the 9/11 hijackings, he said (talking about the FAA's evaluation of the potential risk of suicide hijackers)
But don't think of the FAA as a slow moving paper tiger. Oh no, absolutely not. While the FAA may not have been thinking of suicide terrorist risks, they have shown themselves to be all too well aware of the danger caused by a single, 77¢, burned out bulb on a Delta/Comair plane. In a one inch thick file of evidence dating back to the offence in 1999, FAA inspectors proposed fining Comair $44,000, because it flew the plane for four flights with the burned out bulb, causing the plane to be technically 'not in an airworthy condition'. Moving swiftly, and only four years later, the FAA resolved the matter, accepting a $3000 payment from Comair.
I wonder what type of airworthy condition the FAA would describe a plane under the control of terrorists?
Do you know any disabled people who'd like to tour Ireland? This small tour operator operates the only wheelchair friendly tours.
Here's an interesting story taken direct Commercial Aviation Today :
This Week's Security Horror Story : A janitor found a plastic knife while emptying out a trash bin in a restroom at Bradley Airport (Hartford, CT) on Tuesday. And so, airport authorities evacuated part of one of the airport's two terminals, and recalled a departing flight back to the gate for its passengers to be rescreened.
All this for a thrown away plastic knife? This airport is becoming a very frequent star of our weekly security horror stories, having also been featured twice last year (29 August and 11 July) and twice the year before (9 August and 5 July). Definitely an airport better avoided.
Whatever you do, keep away from the pay phones at Boston's Logan Airport. Earning an award as this week's 'Trust Me, I'm a Trained Professional' is this news - Federal air marshals who travel undercover through Logan will become the first in the country to use Israeli-style behavior pattern recognition training to scan people in the terminals for suspicious activity. Potentially suspicious passengers will be detailed for further questioning.
Potentially suspicious behavior could include wearing heavy clothes on a hot day, sweating on a cool day, loitering in the terminal without luggage, or using a pay phone.
How many of these suspicious behaviors have you been guilty of?
And this week's 'Ooops, how did that get there?!' moment goes to the lady who realized, while her plane was in the air, that she had accidentally left a stun gun and knife in her purse. Foolishly, she voluntarily told a flight attendant of her mistake and handed the items over. As a reward, she was arrested when the plane arrived into Denver. Other passengers were bussed to the terminal and the plane searched (why? what for?). There is no explanation for why security at La Guardia failed to notice the two items.
Lastly this week, one of the special highlights for people who participate in both my Scotland and England tours this May will be the chance to travel the country from tip to toe - from Land's End to John O'Groats. But, I hasten to add, if you join our tours, you'll be expected to conform to a slightly more formal dress standard than this gentleman.
Until next week, please enjoy safe travels
David M Rowell aka The Travel Insider
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