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Friday 30 July, 2004 

Good morning

We're proceeding with the Danube River Christmas Markets Cruise, and on a better basis than before.  Not everyone wants a free night in Vienna to start, so we've simply reduced the cruise price 8%, and you are free to use this saving however you wish - for extra touring, or just to keep as a valuable discount.  I'll still be arriving in Vienna early myself - using the vacation time around Thanksgiving to get some extra time in Europe without 'costing' official vacation days away from work, and if you're in town on the Saturday night (27 November) I'd be delighted to buy you dinner.

Austrian expert Bob Bestor, editor of the Gemutlichkeit newsletter on travel to Austria, Germany and Switzerland, has been providing helpful suggestions for where to eat in Vienna (and elsewhere on our journey) and we'll be dining in his favorite restaurant on the Saturday night.  Thanks, Bob!

I've put together a detailed description of the cruise and the daily itinerary of where we'll be each day and what we'll see.  The more I did this, the more excited I became, and I'm very much looking forward to November.  I do hope, after you look over the details and itinerary, you'll agree with me that this promises to be a marvelous experience, and most of all, I hope you'll choose to join me on this cruise.  We only managed to get a small allocation of cabins, so - please, send in your registrations now to be sure of participating.

And if you're a travel agent, ask about the special offer we can pass on to you.

This Week's ColumnDanube River Christmas Markets Cruise :  Join me on award winning and critically acclaimed Viking River Cruise's Danube River Christmas Markets Cruise, 28 Nov - 5 Dec.  Find out more and register on the web page.

Dinosaur watching :  Cynics might say that United has found a way of getting the financing it wants from the government, even without the government's agreement.

How so?  Simple.  United announced its intention to default on pension obligations, saying it must do this to fulfill the conditions of its latest financing.  It will not make a $404 million payment due in September nor a $91 million payment due in October, and 'deferred' a $72 million payment due last week (discussed here).  UA has not indicated when it might resume payments.

United had asked for a $1.1 billion loan guarantee from the government.  With the abrogation of its pension obligations, it has already freed up $567 million in cash, without having to borrow to obtain it.

Shame on United's creditors for apparently requiring UA to do what some view to be an illegal act, and what many others feel to be an immoral act.  And, of course, double shame on United for so acting, and then trying to blame its creditors.

The Pension Benefit Guarantee Corporation - the government body that would end up carrying the can if UA's defaults result in the pension plans needing to be rescued - issued a public ultimatum to United, demanding to know what United's plans are.  The PBGC said this could be the largest ever pension default and it chose to make the issue public due to the sums involved.  If United does default, the money ultimately comes out of our pockets as taxpayers.

United's Machinists Union has already filed a suit against United, claiming that company executives have breached their fiduciary duties.  The union seeks a court order forcing United to comply with the requirements of its plans.

The issue has potentially massive implications.  Which of the other dinosaurs would wish to continue to be stuck with a comparatively very costly pension funding program if United was able to walk away from its obligations?  Just as the airlines play 'follow the leader' in terms of other salary and benefit related issues, and in terms of marketplace fares and policies, it seems inevitable that one - or all - of the other major legacy carriers would choose to copy United's actions.  To do otherwise would be to leave UA with a massive and definitely unfair cost advantage.

At what point does someone say 'Enough, already' and require United to give up its increasingly desperate attempts to emerge from Chapter 11?  United must either sell off assets to pay down its debts or else declare Chapter 7 and cease business.  The American business ideal does not equate success with mismanaging a company into the ground, then breaking agreements entered into in good faith so as to compensate for past (and potentially present) management inadequacy.

This type of Chapter 11 is foisting a fraud on United's staff and America's taxpayers.  If United has been so destroyed that it can no longer exist in its present form, then, so be it.  Let it close down.  Anything else is rewarding bad behavior and encouraging future corporate recklessness and irresponsibility, in the airline industry and elsewhere.

Bottom line :  Chapter 11 should not be (ab)used as a 'Get Out of Jail Free' card by highly paid senior executives who make bad decisions.

Talking about bad decisions, Delta upset many of its customers when it established three call centers in India.  People complained the Indian agents had a poor understanding of English and of US geography.  On the other hand, it is estimated that employing Indian labor was saving DL $25 million a year.

Delta has now responded to these complaints - sort of.  It is closing one of the call centers, but leaving the other two open.

The intriguing thing about this was a survey DL sent to some of its frequent fliers.  These frequent fliers were asked if they'd be willing to pay a fee to speak to a US-based agent rather than one in India.  A DL spokesman said that the airline has no current plans to charge customers who wish to talk with a US agent, but would not speculate if this was something DL might do in the future.

In curious contradiction to this situation, Delta's CEO told employee representatives earlier this week that he wants to build a 'customer-focused culture' to restore DL to strong profitability.  If charging callers extra to deal with a competent reservationist is any indication of what a 'customer-focused culture' will bring, it seems plain that the focus is through the telescopic sights on a hunting rifle.

A new study from the UK's Cranfield University suggests paying a premium to get a ticket that can be changed is no longer good value for money.  Although based on UK market conditions, it closely mirrors the situation here - in both countries, new low cost carriers are offering unrestricted inexpensive fares that remove any need to buy high cost unrestricted fares from the dinosaurs.  The survey showed that less than a third of travelers paying extra for an unrestricted fare actually made any changes to it.

The world's latest politically incorrect airline seems likely to take flight in India, where brewing magnate Vijay Mallya plans to launch a new airline.  His company currently makes Kingfisher beer, and so his airline will be named Kingfisher Airlines.

He reportedly plans to hold 'Flying Models contests' to recruit flight attendants, and will hold regular in-flight beauty pageants.  He ordered 12 A320s last week, and expects the first four to arrive in January.

An interesting counter-current to the highly visible airline industry woes is the fact that air travel is growing at an amazing rate.  According to the International Air Transport Association, international passenger traffic for the first half of this year grew 20.4% compared to the same six months last year.  This is a staggering rate of growth.

If one compares the traffic to the first half of 2000 - generally considered to be the last 'normal' year for the industry, it shows an 8.4% growth - still a very large increase.

Boeing's 7E7 launch customer, All Nippon Airways, have now signed the formal contract for the 50 planes they said they'd order several months ago.  Casting an interesting insight into the process by which Boeing won this deal, Airbus complained that ANA didn't even approach them for a competing proposal before ordering the new 7E7.

Does this mean the 7E7 is so vastly superior that airlines don't even need a second proposal to match it up against?  Airbus are suggesting that ANA's purchase was a politically based decision rather than a commercially based decision.

Throwing a conciliatory bone to Airbus, ANA CEO Yoji Ohashi said of the A380 super jumbo 'that's definitely an aircraft that we will consider when the time comes.  But it's not something that we are considering now. It's something in the future.'

That's hardly as firm a commitment as the one he's just signed to Boeing.

Boeing should consider teaching some of its airline customers a course in business management.  In the second quarter this year, Boeing suffered a 3% drop in the value of airplane sales (down to $5.7 billion), but managed to increase its profit by 22% (up to $382 million), even with this reduced volume.  $180 million less sales, but $60 million more in profit.

Airbus had some good news, with Thai Airways announcing an order for six A380 super jumbos, plus one each A340-500 and A340-600.  Thai also ordered six medium range aircraft, but has not disclosed details of this (thought to be 777s).

Amazingly, Thai said it will pay cash for these planes as they are delivered) (total order value of just under $10 billion).  Thai says it expects to make about $500 million profit each year for the next five years.

Planes are increasingly being fitted with multiple video cameras to monitor passengers, a move enthusiastically welcomed by pilots.  But proposals to fit video cameras in the cockpit are being resisted by the same Pilot Unions.  The National Transportation Safety Board and the British Air Accidents Investigation Branch both believe that having a video record of cockpit events would be invaluable in solving plane crash riddles - for example, did the Egyptair flight 990 really crash because the co-pilot deliberately flew the plane into the ocean?

The ALPA pilots group said, after a hearing advocating video cameras in the cockpit was held this week by the NTSB, 'the benefits of video imaging are vastly overrated, because far more effective and efficient tools exist'.  A spokesman added that interpreting video imagery would be subjective and therefore ineffective.

How unlike the pilots to oppose anything potentially safety related.  What could they possibly have to be embarrassed about?

Trains blame planes part 1 :  The ill-fated and poorly performing Eurotunnel company had another bad half year; carrying 14% fewer cars and 14% fewer buses than last year.  Although it chose to blame the reduction in traffic on competition from low-cost airlines, it is interesting to note that the Eurostar trains recorded a 20% increase in passengers during the same period - could this be related?

Eurotunnel's losses increased from £17 million in the first half of last year to £82 million in the first half of this year.

Trains blame planes part 2 :  Australia is a country similar in size to the US, and with similarly poor train service.  Australian Transport Services Minister Michael Costa warned of 'timetable changes' (I guess that's how you say 'service cutbacks' in Australia) due to new discount air services draining passengers away from the trains.  Certainly it is true that the two new discount airlines in Australia - Virgin Blue and new Qantas subsidiary Jetstar - have caused massive increases in air passenger traffic.

But curiously, the proposed 'timetable changes' seem to involve rural trains operating between towns that have no air service!  A regional transport planner has dared to suggest the real problem is that the trains have a deservedly bad reputation with poor reliability and inconvenient schedules.

I've been writing for some time on the topics of how VoIP and cellular phone service can replace (and increasingly, are replacing) traditional wired phone service.  In WA state, local phone service provider Verizon said it is losing business and revenue as customers turn to cellular phones, e-mail, and VoIP to communicate.  So what is their proposed solution?  To lower their rates to a more attractive price point, and to add more services for less money to lure people back to wired phone service?

Well, actually, no.  They are seeking permission to increase their basic phone rental by 75%, and to increase some of their added value services by up to 355% (the same services that VoIP and cellular companies provide for free).

Let's see :  Competition is providing a better cheaper product, so Verizon responds by making its product even more expensive.  An interesting strategy.  I wonder if it will work....

Using a cell phone can be a dangerous thing part 1 :  Warronnica Harris, a college student in Florida, answered a phone call from her mom while watching the opening credits to Catwoman at a local theater.  An irritated police officer in the theater noticed her on the phone, shone a flashlight in her eyes, then pushed Harris and her boyfriend into the lobby where he doused them with pepper spray and arrested them for disorderly conduct.

Dangerous cell phones part 2 :  15 tourists on China's Great Wall were injured and hospitalized after a touristís mobile phone reportedly acted as a lightning rod as he made a call.  Security personal have been instructed to order people to switch off their mobiles on rainy days.  The risk of mobile phones doubling as lightning rods has recently been deemed as a public hazard in China. 'The electromagnetic waves emitted by mobile phones are quite good conductors of electricity' said a professor at the Atmospheric Science Department of Beijing University. He also advised against using mobile phones near gas stations during thunderstorms.

Apparently the laws of physics and nature work differently in China.  According to a hoax-busting site, this story has been making the rounds over email for quite some time, with no facts to support it.  In fact, many sites recommend you use a mobile phone rather than a fixed line phone in a thunderstorm, since they're much safer.  And rebutting the un-named professor,  the hoax busting site quotes a Motorola spokesman saying: 'No, lightning won't "follow the radio waves" back to your phone.'

A simpler suggestion - if you're in a lightning storm, don't stand on top of walls.  Lightning likes to strike at the tallest object.

This Week's Security Horror Story :  You're on your way to the toilet in the first class section of a United flight from Sydney to Los Angeles, and notice an airsick bag.  You idly pick it up and look at it.

This innocent activity marked the start of a major security scare when the pilot of a United 747 chose to turn around and return to Sydney after he was handed a note written on a sick bag warning of a bomb on board.

Well, as we all know, there has never yet been a situation where an airplane bomb threat has actually been proven to be true, but it is hard to blame the pilot for acting prudently, even though that did mean he had to jettison 18,000 gallons of fuel into the ocean (sorry about that, fish), and called out all fire and ambulance emergency services to be in attendance when the plane landed.  The plane was diverted to a remote part of Sydney airport, and other flights were delayed up to 30 minutes during the emergency.  All passengers had to be searched over a four hour period after landing, and the flight couldn't leave again until the next day.  All in all, a six figure dollar cost to United.

But the story of the bomb threat slowly collapsed.  The 'note written on a sick bag warning of a bomb on board' (as described in early reports) evolved to become 'a note the pilot judged to represent a threat to the safety of the plane'.

And then it was revealed that all the sick bag had on it were three letters - BOB.  The pilot decided - as of course would we all - that these three letters must obviously stand for 'Bomb on Board'.

And then it was revealed that Bob can have many meanings on a plane - flight crews commonly use it as a shorthand way of referring to good looking passengers - 'Best on board' or 'Babe on Board'.  It is not unheard of for passengers to be called Bob, and who hasn't idly doodled on a sick bag or something else while passing away the 15 hour flight, and what more logical to write than one's own name.

There had even been a segment on an Australian tv talk show just a couple of weeks earlier that discussed the secret 'BOB' code that flight attendants use amongst themselves to refer to good looking passengers.

If you're either a terrorist or a prankster, wanting to make an effective bomb threat, what would you do?  Write 'BOB' on an airsick bag, hoping the pilot would have the insight to understand your secret message, or write a note clearly saying 'There is a bomb on board this plane'?

Australia's Federal Transport Minister, John Anderson said :

It may have been a genuine and serious misunderstanding.  Nonetheless, someone has been irresponsible at least, and horrendously selfish and stupid at worst, and every effort will be made to find the person responsible.

You don't suppose that he was talking about the pilot, by any chance?

For about ten days now there has been an unfolding controversy over a story written by Annie Jacobsen who shared a flight with fourteen Arab men.  She thought they were acting suspiciously.  You've almost certainly read about this, and here are the original articles that started everything.

I chose not to join the chorus of commentators on this issue.  However, a fascinating twist in the story occurred earlier this week, when the Homeland Security Department admitted that the 14 Arabs were all traveling on expired visas, but none of the people who interviewed them when the plane landed noticed this until after they were released!  Various excuses were offered as to how such an oversight could occur.

And then, on Thursday, even more curiously, as this editorial details, the Department of Homeland Security changed its mind and said their visas were in order.

So - what to believe?  Were the men terrorists or innocent musicians?  Were they in the country illegally or not?  Was Annie Jacobsen acting rationally or irrationally?

A more obvious case of illegal immigrants has however been admitted by the Homeland Security Department, who reported that, since October, five Arabs have been caught while trying to sneak into the country across the Mexican border.  As I've repeatedly said, the more we make it difficult for terrorists to fly in through our airports, the more they'll choose to simply walk across either the Canadian or Mexican borders.

However, even this story has a bit of ambiguity.  The HSD admission that they'd caught five Arabs came as a rebuttal to a claim that there had been a flood of Middle Eastern men caught recently while trying to cross the border.  The HSD's explanation - the people caught were not Middle Eastern, but belong to a small southern Mexican Indian tribe known as the Oaxacan.  The Oaxacan people speak a strange dialect of Spanish and have an indigenous language that HSD says might have been mistaken for Arabic.  Hmmm....

Police detained a pilot and his family for an hour after a light plane violated a no-fly zone near President Bush' ranch while the President was at the ranch.  Police detailed the pilot when he landed at a nearby airport.

But - ooops.  Ambiguity here, too!  After an hour, they finally allowed the pilot to telephone to the nearby control tower who confirmed that the pilot the police were interviewing was not actually the pilot of the plane which had intruded into the restricted airspace!  The other pilot landed ten minutes earlier and left the airport.

There was an outrageous story in the Arizona Republic earlier this week.  It reported that the TSA screening chief at Phoenix Sky Harbor airport intentionally lengthened waiting times at passenger checkpoints at the same time they were asking the TSA for more screeners. The paper obtained e-mails written by Fred Carter alerting employees that screeners would be redistributed as a beginning step in an effort to increase wait times. The e-mail was sent to his supervisor Marcia Florian, federal security director for Arizona.  The goal was to increase wait times to 15 minutes which would be over double the average time of 5.2 minutes.

Britain's no-frill's airlines seem to be outdoing themselves in attempts to make flights as uncomfortable as possible.  Next thing you know, they'll be seating passengers in the toilets in an attempt to squash more people on board.  But - wait.  Many a true word is spoken in jest.

Lastly this week, while I was complaining above about border security in the US, those hardworking immigration officers in Canada are subjecting themselves to no end of extra effort in an attempt to ensure that only the most bona fide people are admitted to Canada.  It is a tough job, but I suspect there'll soon be a rush of volunteers from young men eager to assist.

Until next week, please enjoy safe travels

              David M Rowell aka The Travel Insider

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