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Friday 6 August, 2004 

Good morning

Last call for the Danube River Christmas Markets Cruise.  If you're interested in what promises to be a delightful tour through beautiful scenery at a pretty and festive time of year, please urgently register with us now - we're closing registrations for this tour on Tuesday 10 August.

I came across a great gadget a few weeks ago, and liked it so much, I decided to offer it for sale myself.  And so, hopefully free of commercial bias, here's my review of this product :

This Week's Column :  Back up your GSM cell phone's SIM data :  If you lose your cell phone, you'll lose all your stored phone numbers.  If you change to another wireless service, you'll have to painstakingly reprogram them into your new SIM and phone.  This new gadget saves you the bother.  It stores a backup copy of your SIM data, protecting you against data loss, and which you can transfer to other SIMs.  If you have a GSM phone, this is a great accessory.

There's an interesting new website out there with the slightly frightening name of Travel Battle.  But its intentions are peaceful and honorable.  It acts as an internet match-maker, attempting to introduce intending travelers to suitable travel agents who can help to recommend and confirm travel arrangements.  Registration and participation is free for travelers.

Currently they have an interesting problem.  They have too many potential travelers and not enough registered travel agents.  And so, as a special deal for Travel Insider readers who are travel agents, they are giving a limited number of free registrations, complete with 60 days of free introductions, to travel agents who sign up and quote the 'Travel Insider' discount offer.  First in, first served, so hurry if this is of interest.

How does the site make money?  In addition to normally charging a membership fee, they also normally charge a fee per referral passed on to a travel agent.  They also charge a 2% fee on any commissionable bookings made by the agency for the referred traveler.

This means they never cost the traveler anything, and - with this special deal - travel agents only incur any cost after having closed a sale and earned a commission.  Would you pay 2% so as to keep the rest of the 10% or more?  I sure would, and suggest you give it a try too.

Dinosaur WatchingLast week I wrote that UA's pension default has potentially massive implications.  A week later, Reuters issues an article headed 'UAL pension issue has big implications'.  In the article, Ray Neidl, analyst at Blaylock & Partners, mirrored my comments by saying that such a massive cost cut as the one United is studying would put its rivals at a competitive disadvantage.

'If UAL terminates (pension programs), it will bring further pressure on every other member of the top five' Neidl said of United competitors American, Delta, Continental and Northwest.

The problem is not one that will easily go away.  According to the Fitch rating service, UA's pension plans are underfunded by $6.2 billion.  The other airlines are not quite so exposed.  Using Fitch's data, DL has a $5.7 billion liability, NW has $3.7 billion, AA has $2.7 billion and CO has $1.1 billion in liability.  As for US Airways, it terminated its pilot pension plan last year as part of its Chapter 11 reorganization.  Many of its active and retired pilots lost at least half their benefits.

The Reuters article quotes Stan Pace, head of the airline consulting practice at Bain & Co, who said that in the cascade of concessions that began when US Air went into bankruptcy, once one major airline makes changes of the magnitude UA is considering, 'it becomes an incredibly tempting target' for others.

And, talking of US Airways, chapter 22 rears its ugly head again.  In a report to the SEC on Wednesday, the airline said that if it does not cut its operating costs sufficiently by 30 September, it might have to again file for Chapter 11 protection, because it would not be able to meet the loan financing terms required of it when the ATSB extended its loan guarantee.  The financing terms have already been amended once.

On Tuesday, the Port Authority of New York and New Jersey approved the construction of a new $850 million terminal for JetBlue at JFK.  The new terminal will be 640,000 sq ft in size, have 26 gates, and a new parking garage with more than 1,500 spaces.  It will be linked to the historic TWA Terminal 5.

JetBlue currently carries about 7 million passengers a year through JFK and is now the largest airline there.  It will operate the terminal under a 34 year lease and also contribute partially to the construction cost.

Here's an interesting table, taken from Commercial Aviation Today, showing the present relativity in operating costs between the various carriers in the US.  Note that JetBlue's costs are likely to rise when their new planes move out of warranty and start costing money for ongoing maintenance and repair.

Airbus is fighting fire with fire.  Boeing's threats to seek a renegotiation of the agreement between the US and EU about government subsidies for aircraft manufacturers prompted Airbus to seek to include Japan in any future discussion.  As this article details, Japanese manufacturers apparently are receiving sizeable government subsidies for their role in providing 35% of the new 7E7.  Seems that Airbus might be calling Boeing's bluff on this one.

Good news for Airbus.  In a hotly contested battle with Boeing, it won an order for 13 A340-600 aircraft from Virgin Atlantic Airways (VS) valued at $5.5 billion.  VS placed firm orders for 13 planes with options on another 13; choosing the four engined A340 over Boeing's two engined 777.

VS has 29 planes in its fleet at present, and plans to double in size within five years.  Adding this new order means they now have 18 A340-400s on order, as well as six A380s.

There may have been a further slight slip in Virgin's plans to accept delivery of its A380 orders, however.  Originally VS said it would start operating the super-jumbos in the summer of 2006.  In May, they announced a delay until late 2007, with deliveries complete in 2009.  In Thursday's press release, they are now indicating the first deliveries will occur in 2008, with deliveries complete in 2010.

Earlier rumors had suggested that, as part of the deal for ordering A340s, VS would ask to be allowed to completely cancel its A380 order, and so Airbus doubtless views a slight slippage in the delivery schedule plus a new order for 13 A340s as a perfectly satisfactory outcome.  A cancellation of an A380 order would be massively damaging to Airbus.

Virgin's chairman, Sir Richard Branson, in speaking of his airline's plan to double its planes and passenger numbers within five years, listed possible new destinations for the airline as part of its growth - Chicago and Toronto in North America, plus Jamaica, Rio, Melbourne, Dubai, Bangkok, Mumbai and Nairobi.  Alas, my efforts to encourage VS into Seattle remain unsuccessful.

Meanwhile, startup Virgin America might have made progress towards getting US investors.  Or maybe not.  A Bloomberg release on 25 July said Greenbriar Equity Group LLC, an investor group headed by former UA CEO Gerald Greenwald, had agreed to be the lead investor in the new airline.  But a 5 August Reuters article quotes Sir Richard as saying 'Greenbriar Equity will possibly be one of the lead investors' and adding that no final decision has been made.

Someone better decide something, fairly soon, if the airline is to start flying in the middle of next year, as currently projected.

One of the synergistic benefits seen for a new US subsidiary of Sir Richard's growing airline empire is that international flights on Virgin Atlantic (VS) could feed into and from domestic US flights with Virgin America.  But this week VS announced it has formed closer ties to America West and will now operate codeshare flights with the US carrier.

One wonders what will happen to this new codeshare agreement when Virgin America starts operating.

Another possible new airline has less chance of taking off.  Companion Air proposes to provide a pet-friendly service to people wishing to fly with their pets.  This would be in small private planes, and at considerable cost.  A person and their pet traveling from Miami to New York might pay $2,000.  A similar ticket on Delta costs about $335 per person plus $75 each way to transport animals as checked luggage.  Would you pay $1665 extra for a more comfortable experience for your pet?

The startup believes some people might, and points out that Americans own 143 million dogs and cats and will spend about $34 billion caring for them this year.   That sounds like a lot of money, but is only $238 per pet for a year of care.  It seems I'm already paying well over the odds for my lovely German Shepherd, but there's no way I'm going to start flying her around the country at Companion Air's prices.  She'll have to continue to enjoy her own 'vacations' at the local boarding kennels.

This week's amazing coincidence :  JetBlue announced plans to start flying from JFK to the Bahamas, with effect from 1 November.  Almost immediately thereafter, Song - Delta's 'low cost' answer to JetBlue, which has seen its expansion plans put on hold for several months - announced that it too would start flying from JFK to the Bahamas, from 1 December.

Discount airline Ryanair announced record profits for the first quarter of €53.1 million ($64 million). Passenger volume grew by a record 28%, and unit costs (including the cost of fuel) fell by 4 during the quarter.

While airlines are generally struggling to make profits, there is one related sector that seems to be doing very well.  BAA, the international airports management group based in England, has reported first quarter group revenue of £534 million ($972 million) an increase of 11.3% over 2003, while group operating profit rose 18.2% to £175 million.  Passenger numbers at the group's U.K. airports grew 9.7% in the quarter to 35.9 million, led by 11.3% growth at Heathrow and 15.8% at Stansted.

If you've got a few minutes to spare, here's a fun game to play on the Site59.com website.  Site 59 provides various last minute travel packages, and if you do well at the game, you get coupons for discounts off their sometimes very low rates.

The Nine Zero hotel in Boston has installed a new system which uses iris scans to unlock room doors.  Eye scans are becoming a popular way of uniquely identifying people, and of course of allowing the person to then be matched up to a growing database of information about them.  No longer will you be able to ask for two keys to your room and be vague about who the second key is for, or even just accept one key and share it with a friend.

It is hard to see how iris scanning adds any needed extra security to hotel guests over and above that already in place with unnumbered keycards.  The main beneficiary of iris scanning will be the hotel itself (surprise!), being able to keep detailed records on all its guests and their visitors.  Furthermore, iris scanning is far from 100% reliable, as this article points out.

The W hotel chain is also in the news.  They object to our President's middle initial, which they are claiming they have exclusive rights to.  W (the hotel group, not the president) have sent off cease and desist letters to two political merchandisers, demanding they remove the letter W from items they are selling.  They claim that these items, offered as part of the campaign to re-elect the President, are 'eroding the unique brand identity developed in the W logo'.

Unsurprising non-news :  NASA officials said Tuesday that the costs of returning the grounded space shuttle to flight have risen as much as $900 million over their earlier projections.  NASA grounded the shuttle following the Feb. 1, 2003, Columbia tragedy. Their announcement came 12 days after a key congressional committee passed a bill cutting the Bush administration's 2005 NASA budget proposal by more than $1 billion, dealing a sharp blow to the president's initiative to return man to the moon.  President Bush has threatened to veto the bill.

Savvy bookers of travel have long known that, if you're not getting the answers you're hoping for when trying to book some travel, sometimes the best thing to do is to hang up and then call back, hoping someone else will take the call.  The wisdom of this strategy was confirmed by a British Consumer Advocacy group, who anonymously tested Britain's National Rail phone booking service.  Booking agents gave the correct answers just five times out of 20.  Details here.

This Week's Security Horror Story :  With witty headlines, the San Mateo County Times reassures its readers that airport perimeter safety has improved in the San Francisco Bay area.  'Airports buoyed by security buffer - Waters around airports more secure' reads the heading, and a subhead adds  'If low tide doesn't stop the terrorists, various marine patrols on the Bay will'.

A new permanent security zone, extending 200 yards out from the airport into the harbor has been instituted.  We are proudly told 'The airports join the select ranks of New York's John F. Kennedy International and Newark Liberty International as the only airports in the nation protected by permanent security zones'.  Boaters who stray into the security zones face up to six years in prison and either a $32,500 civil fine or $250,000 criminal fine.  These fines will doubtless deter any would-be terrorists.

However, not quite so proud is the fact that, since 9/11, SFO and OAK airports formerly had 1000 and even 2000 yard temporary security zones.

So what are these security zones actually guarding against?  Coast Guard Rear Admiral Kevin Eldridge explains they are designed to keep recreational boaters out, and admits the zone is too small to protect against terrorists with SAM missiles.  SAM missiles can generally be launched at planes flying under 12,000 ft, and within 3 - 5 miles of the missile launch point, which makes most of the Bay Area - ashore and at sea - a potential launch site.

Does a 200 yard exclusion zone make you feel safer?

We know we shouldn't make jokes about bombs when going through security.  It now appears that we shouldn't even write the words on a piece of paper.  A UA flight made an emergency return to O'Hare after a 60 yr old Japanese passenger was observed by a fellow passenger to have written the words 'suicide bomb' on a piece of paper.  The pilot returned to Chicago (wonder if he was the same pilot that returned the 747 to Sydney last week after finding an airsick bag with 'Bob' written on it?) and the man was taken into custody.  For good measure, all the other 120 passengers were also taken off the plane and rescreened.  Investigators also searched the plane.  No bombs were found.

It appears the man is teaching himself English, and wrote the words after reading them in the newspaper he was reading.  He makes a list of words he is unfamiliar with and subsequently looks them up in a dictionary.

No-one thought to ask him, on the plane, why he was writing the words down.  Very few suicide bombers write a note to remind them of what they have to do that day. (Reminds me of a cartoon - a group of suicide bombers in the classroom, all with bombs around their waists.  Their teacher, similarly attired, says 'Now watch carefully, because I'm only going to do this once'.)

Britain's bleeding heart liberals are up in arms.  A report issued this week complains of the 'disproportionate impact of the use of the Terrorism Act powers on the Muslim community'.  The Joint Committee on Human Rights said powers under the Anti-Terrorism, Crime and Security Act 2001, which allow police to indefinitely detain foreigners suspected of being involved in terrorism, was being used too often to target Muslims. 'There is mounting evidence that the powers under the terrorism act are being used disproportionately against members of the Muslim community' it said.  I wonder why that is?

Shame on Scotland Yard for not finding more Episcopalian terrorists in Britain.  Doubtless the Joint Committee believes there to be equal numbers of Buddhists, Roman Catholics and Quaker religious leaders, in addition to the too many Muslim clerics who are making public calls advocating their followers to destroy our western society.

Unfortunately, we have our own politically correct problems here, too.  In this article, we are told that the US government is becoming increasingly concerned that al Qaeda terrorists might try and sneak across the Mexican border - something I've been writing about for a long time.  Officials said the 2000 mile border with Mexico is almost impossible to defend and estimate that 250,000 illegal aliens enter the country every year (an estimate that is almost surely much lower than the real number).

What if we spend $1 million per mile - surely we could then build a fence or other barrier to deter illegal immigrants.  This cost sounds excessive, but is only $2 billion in total, a very small fraction of what we're paying to equip our airports with immigration controls.  And if we refused to allow illegal alien 'rights' groups (what rights do illegal aliens have?) to set out refreshment stations in the desert, that would help make things more difficult, too.  If we're serious, there's nothing too difficult about barbed wire, searchlights, machine guns, and land mines (just ask the Russians).

But, of course, the 'inability to seal the Mexican border' is nothing more than political unwillingness.  So while we spend billions to secure our airports from terrorist entry, we literally spread out the welcome mat for anyone willing to swim across the Rio Grande.

Lots of cell phone lunacy around the world at present.  Palm Beach County schools are seeking to ban camera equipped cell phones, but will still allow regular cell phones and separate cameras in school.  Digital cameras such as the credit card sized one I reviewed a while ago are much smaller and more concealable than cell phones with cameras built in....

If they proceed with their ban, they'll be emulating the enlightened rulers of Saudi Arabia, who banned cameraphones from their kingdom completely.  If you inadvertently take one with you, it will be confiscated upon arrival and not returned to you when you leave again.

Saudi Arabia's equally enlightened neighbors in Kuwait have now criminalized the use of Bluetooth wireless technology.  This move came after reports of young men taking photos of women, without permission, with their cellular phones.  People misusing Bluetooth could face imprisonment of two to five years.

There's one small point the Kuwaitis are overlooking.  Bluetooth has nothing to do with taking pictures.

I have three main phones that I generally use - a Nokia 3650, a Sony Ericsson T610 and a Motorola V600.  All have Bluetooth and all have cameras.  I guess I won't be traveling to the Far East (or Palm Beach County schools) any time soon.

'God made me do it'.  So said the defendant in a murder case, who claims she was tricked into believing the SMS messages she received on her cell phone were from God, routed via the Swedish Lutheran pastor who then convinced the 27 year old nanny to murder his second wife and the husband of the woman next door.

Better ban all phones with SMS capability too.

Lastly this week, a new service from Cingular Wireless.  They are offering a service called 'Escape-A-Date' that automatically calls you at a pre-set time to help you extricate yourself from any unpleasant social situations. There are eight different scripts to choose from that prompt you to say the right things so you can make it sound like you’ve just gotten a very important and urgent call that requires you to leave immediately.

Until next week, please enjoy safe travels

              David M Rowell aka The Travel Insider

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