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Friday 15 October, 2004 

Good morning

Here I am, on the road again, and indeed, being 'on the road' will be a theme this week.  I'm waiting for my flight to Los Angeles, having noticed that Alaska Airlines no longer has any check-in desks for regular people with regular tickets needing boarding passes and to check baggage - instead you must go to 'Customer Service' - a sobriquet that of course promises more than it delivers.

The usual fun and games at security occurred.  'Please take off your shoes, sir.'

'Why, I thought it was optional?'

'Yes, it is, but you'll be sent to secondary screening if you don't.'

I refused to take off my shoes, did not beep as I went through the metal detector, but was indeed sent to secondary screening, where the first thing I was told to do was remove my shoes!

I was wanded and patted down for good measure, and my shoes were X-rayed.  Meantime, my carry on bag with 15 lbs of electronics, batteries, wires, and other vague shapes and objects sailed through the X-ray machine with no problems, same as always.

Memo to terrorists :  Play the game.  Take your shoes off.  Hide illegal objects in your carry-on, instead.

Having 90 minutes to kill prior to my flight, I searched diligently around the boarding area, and found the single available power plug, powered up my laptop and tried to connect to the Waypoint Wi-Fi service that was present.  There was excellent signal strength and a good connection, but when I opened up a browser window, I got a nasty error message that asked me to report it to their technical support.

Mike at technical support told me this was probably due to a weak signal.  I explained the signal was as good as it gets.  He said 'oh yes, I think they might be doing repairs on the equipment there, why don't you move to another part of the terminal'.  He couldn't tell me where to go, and neither could he confirm any problems with the nearby Wi-fi hub, so then said 'yes, it is definitely software related, you should go somewhere else'.

So he serially blamed poor signal, hardware and then software.  Whatever the problem, he sure had put his finger accurately on it.  I thanked him and gave up.  This experience is, of course, a reason why the sooner Wi-fi dies and is replaced by high-speed 3G cell-phone data connectivity, the better we'll all be.

Update - in Los Angeles, I found myself with a working Wi-Fi connection, but the only service offered was a $30/month service.  For the hour I wanted to access the internet, paying $30 seemed a bit much, and alas, the LAX provider had no service in any other airports I plan to visit in the near future, so I saved my $30 - the lack of 'roaming' between Wi-Fi services being another reason hastening its death.  Instead, I sat quietly and wondered whatever possessed me to choose to fly all the way to NZ to attend a high school reunion and see a small number of former classmates, none of whom I've kept in touch with or seen for almost 30 years.

I've always liked driving fast cars quickly, and won't tell you how short a time it took to drive the 550 miles to/from Spokane in my lovely Jaguar XJS convertible last week.  Suffice it to say, it was an exhilarating experience for me and extending for the car, which loved a chance to stretch its legs after too much dawdling around the city.  I was reminded again of how much I love this car, but only three days later, found myself forgetting all of this, due to the superlative experience of driving a supercar.  Which brings me to :

This Week's Column :  The Bentley Continental GT :  It costs as much as a Cessna, travels as fast, and has a much more powerful engine.  I get to put 'the pedal to the metal' in the 200 mph capable 552 hp twin turbo-charged Continental and live to tell the story.

A sad but relevant postscript to this story must be told.  Yesterday I was enjoying my Hertz rental car, which is both very powerful and very fast, although not quite as much of either as the Bentley.  Anyway, I was experiencing a nice fast drive on New Zealand's open roads, when all of a sudden I found myself having a chat with a friendly NZ policeman and being given a $300 speeding citation.  The reality is that speed limits apply equally to all cars and drivers, and if you're going to drive legally, you really don't need and can't justify a $150,000 car.

I promise not to emulate this psychiatrist when I pay the fine.

Dinosaur watching :  US Airways seems to have bought itself some more time, potentially at our expense (no surprise there).  The Air Transportation Stabilization Board has liberalized the terms of its loan guarantee for the third time, meaning that US Airways will almost certainly be able to continue flying through mid January.

In recent bankruptcy court filings, US said their October bookings had dropped, presumably due to passengers concerned about the dangers inherent in booking US tickets.  And, in the latest 'we got it wrong' admission, the airline said that - in its bankruptcy filing only a month back - it had underestimated the cost of fuel, and their revised projection is for an extra $200-300 million in fuel related costs.

It is hard to see why the ATSB is prolonging the death throes of this airline not just once or twice, but three times.

America West is looking at buying some or all of struggling airline ATA, and AirTran has also been looking closely at the airline.  Analysts have been predicting ATA's incipient Chapter 11 filing for a while.

Does it make sense to buy a struggling airline rather than allow it to die and then fill their profitable closed routes with one's own?  In boom times, it can be sensible to buy out a competitor so as to quickly grow (and of course fewer airlines go broke), but in bust times, the only sense in buying a competitor would be if you were getting assets which you needed yourself for much less than market price.

Coincidence?  Northwest hired a new chief attorney who just happens to have a lot of experience in bankruptcies. Barry Simon has more than 30 years of senior executive experience with major carriers.  He was involved with the Eastern Airlines bankruptcy filing as well as one of the Continental bankruptcies and most recently was a managing director for the global aviation practice of the Seabury Group. Their list of clients include US Airways, Air Canada, Continental and America West.

An analyst for Citigroup Smith Barney, Daniel McKenzie, has recommended investors should sell their Northwest shares because he doesn't think the airline will get a deal from its pilots by an October 24 deadline. He says Northwest's current cost structure is unsustainable and if it doesn't get an agreement from the pilots for wage cuts it will be forced into Chapter 11. The airline must refinance about $1 billion in debt which comes due in 2005 and if it doesn't the debt becomes a current liability, making it more difficult for the carrier to borrow money.

Northwest's pilots are the second highest paid in the industry, coming in behind Delta.  The airline wants them to give up $300 million but they are only offering $200 million a year. The carrier is expected to report a third quarter loss next week.

Although NW is expected to report a loss, Southwest (WN) has opened the series of third quarter results reporting with an excellent result.  Notwithstanding high fuel costs and a series of hurricanes, WN reported net income of $119 million for the quarter - a 12.3% increase over the same quarter last year.  Total income for the nine months is $258 million, down on last year's $376 million figure.

One of WN's strengths is its fuel hedging program, softening the impact of increased fuel costs.  The company is over 80% hedged for the fourth quarter at prices below $24 per barrel; over 80% for 2005 at $25 per barrel; 60% in 2006 at $31 per barrel; and over 40% at $30 per barrel in 2007.

As readers know, I'm often strident in my criticism of airlines and their management, so it is surprising when I find an article that is even more critical.  Here's one such example, written to commemorate the 26th anniversary, this month, of airline deregulation.  The writer makes some interesting points.

I received a note from Hertz on Thursday apologizing for still not having an answer to the intriguing issue of why my rental car quote increased when I keyed in my Number 1 Club number.  However, I've also received a lot of emails from you, and the situation is now crystal clear to me, even if not to Hertz itself - and in fairness to Hertz, it appears to apply to the other major rental car companies too.  I'll write a feature column about this in a week or two.

This Week's Security Horror Story :  In the week of 5 September, 60% of all test/fake bombs or weapons slipped past security screeners at Newark Airport.  On average, over the entire summer, 25% of these tests were not detected by TSA security screeners.  More details here.

However, you can be certain that 100% of all shoes were X-rayed....

I wrote, two weeks ago, about a Rand Corp study that showed a mere 5% increase in screeners at airports with long lines of people waiting to go through security would reduce delays by 80%.  You might think/hope the TSA would be sensitive to this, and keen to get closer to its earlier performance promise of a maximum wait of no more than 10 minutes to go through security screening.

I certainly hoped that while waiting many more than 10 minutes at LAX on Tuesday night - a delay caused not only by the appallingly inefficient way of processing people through screening (everyone has to wait while one person delays putting things on the X-ray belt and taking his/her shoes off) but also by the fact that only one of the six lines was staffed.

And so, how to reconcile this continued poor performance - in Newark and everywhere - with news published this week that the TSA spent nearly half a million dollars on an awards ceremony at an expensive DC hotel, including $81,000 for commemorative plaques.  One worker received a 'lifetime achievement' award - the TSA is only two years old.

The same senior TSA executives who should be fired for the appalling level of safety and service they provide the flying public were given larger bonuses than given by any other federal agency to its managers, with the TSA failing to provide any justification for the bonuses in more than one third of cases.  76% of senior managers received bonuses, compared to only 3% of non-executive employees.

Clearly the airline practice of selectively rewarding incompetence has flowed unchanged through to the TSA.

Guess how many names were on the 'No-Fly' list back on 11 September 2001?  Guess how many now?  In an interesting article, the NY Times reveals that there were only 16 names on the list back on 9/11, and details the subsequent confusion as the list of names grew to what is now referred to as 'a few thousand' today.

I don't believe there are only 'a few thousand'; or, if this is true, the impact of these few thousand names is way out of proportion to its number.  With at least four senators or congressmen having found themselves inconvenienced by having names identical to or similar to names on the list, it would seem that close on 1% of the population can expect to be impacted by the list in its present state.

This time the BA pilots were sober, but their cabin crew weren't.  Cabin crew are required to have the same 0.2 blood alcohol concentration as pilots.  Details here.

The end of an era in the Swiss alps.  St Bernard dogs are being replaced by high-tech devices.  It turns out that they haven't actually rescued anyone in 50 years.  Fascinating background and details here.

Lastly this week, Oklahoma tourist officials are recalling 200,000 copies of their '2005 Annual Events Guide' after finding numerous spelling errors, grammatical and factual mistakes, and objectionable pictures like the cow manure pitching contest held each year in Beaver, Okla.  Apparently, the guide was produced by a state employee who is 'no longer with the [tourism] office' according to state tourism director Rob Gray.

And now, I'm off to uncertainly greet my former fellow classmates at Hastings Boys' High School.  I return to Seattle on Thursday for four short days before flying on to London with Virgin on Monday.  Newsletters will probably be short rather than long.

Until next week, please enjoy safe travels

              David M Rowell aka The Travel Insider

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