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Friday 22 October, 2004 

Good morning

I'm writing once more from home in Seattle, having returned late on Thursday, but am away again on Monday for another three more weeks on the road.

Alas, my school reunion was a disappointment, with poorly lit crowded and very noisy halls and small sized printing on name badges meaning I got to see no more than perhaps one quarter of the people I was hoping to meet - it proved to be difficult to recognize people on appearance alone after 30 years apart!

It seems that life as a road warrior is becoming more challenging rather than less.  Increased numbers of emails every day and a growing assumption among correspondents that everyone uses a broadband line mean more and more time connected to slow (and expensive) dial-up connections, while seated on uncomfortable hotel room chairs at tables that are always either too high or too low to work at ergonomically.  The last place I stayed at in NZ - a nice property right on the beach with a gorgeous view over to islands on the Coromandel Peninsula - set a new low speed record - 19.2kb dial up, forcing me into an internet cafe for several hours each day to try and keep up with my online life.

Several points worth mentioning as a result of my travels.  First of all, the MyTag luggage tags.  These are so prominent I could even recognize my bags being loaded onto my Alaska flight when looking through the plane window to the men loading bags into the forward hold of the plane.

Secondly, the First Class Sleeper really does work, and helped me get some sleep during the long trans-Pacific flights.  Sure, it doesn't transform your coach class seat into the comfort of a lie-flat business or first class seat, but it only costs $40 rather than $7000 and those of us who don't have a spare $7000 per roundtrip flight for a business class upgrade surely have a spare $40 for the First Class Sleeper.

Thirdly, I loved being able to tell people what my cell phone number in New Zealand would be, a week and more before I arrived there.  I purchased a pre-paid NZ SIM card from Telestial before I left and so knew my local phone number in NZ as soon as it arrived.

It was also wonderful paying nothing at all for incoming phone calls while in NZ, and only 35c a minute for outgoing calls within NZ and even back to the US.  Compare these rates to the $2-5/minute for incoming and outgoing calls that a US cell phone company would charge, and I estimate I saved over $250 using Telestial's prepaid SIM.

Talking about cell phones, I've been experimenting with a Bluetooth headset the last few weeks, and this one is at least good enough to tell you about (there's little point in writing a full review of something that can be summarized as 'don't buy this').  And so :

This Week's ColumnAn Affordable Bluetooth Headset :  8com's BH220 unit costs only $45, and worked with all three test phones.  If you're looking for an affordable Bluetooth headset, and can live with the two weaknesses in the BH220 design, this may be a good choice for you.

One of the reasons for considering a Bluetooth headset may be to reduce the amount of radio energy close to your brain.  A BT headset emits only about 1% as much energy as does the cell phone itself.  As I've said before, the cell phone industry's current refusal to accept there is any danger from extended cell phone use will, in years to come, almost certainly be viewed in the same light as the tobacco industry's refusal to acknowledge a link between smoking and cancer 50 years ago.  Here is an interesting article reporting on the latest research confirming a link between cell phone radiation and health problems.

And for those people who hate all cell phones in general, here's an update on the growing trend towards jamming cell phones.  One problem with the jammers - they work by flooding an area with a more powerful radio signal than that available from nearby cell phone towers, and making the cell phones transmit at higher power as they try and pull in a signal - adding still further to the amount of cell phone radiation in the environment.

Dinosaur watching :  A big surprise from US Airways.  They announced changes to their flights with effect from 6 February, but instead of comprising a series of cutbacks and reductions in service on unprofitable routes, they are adding 230 extra flights every day, and will also boost total capacity by using larger planes.

Is this crazy or is it brilliant?  You might think if they can't make money with their present range of flights, adding more is crazy.  But there is a slim chance this might be brilliant, because the airline is adding these flights without buying any new planes (and quite likely without employing many more staff, either).  It is doing so by reducing turnaround times and by 'de-hubbing' some of their hubs - flights now come and go more evenly during the day with less bunching up of arrivals and departures at certain times.  This means they get more flying time from their planes and need less ground staff and fewer gates and airport resources.  It may also mean less convenient connections for passengers, and a need to spend longer waiting for a connecting flight.

This move strikes right at the heart of US Airways' biggest problem, which is not labor costs per se, but rather productivity and all their other costs.  From a marginal costing perspective, and apart from fuel and maintenance, these 230 extra flights will cost US very little to operate and it should be easy for the flights to break even with very low load factors, and similarly easy for them to become profitable.

Will this save the day for US?  Possibly not.  But it may be a step in the right direction.

US discovers another hidden cost of bankruptcy :  You scare off your best staff, who scramble to get more secure jobs elsewhere.  US Airways told their bankruptcy judge last week they have been losing 20% of their non-unionized employees every month at present.  And you can bet it is the best people who leave soonest, because they find it easiest to get an alternate job.

As expected, Delta reported a bad third quarter, losing $646 million, compared to 'only' losing $164 million in the same period last year.  Although the airline ended the period with $1.77 billion in cash, of which $1.45 billion is unrestricted, their CEO said the airline was only weeks away from filing for bankruptcy and warned that DL was burning through cash much faster than expected.

This raises an interesting question.  At what point can a business declare Chapter 11?  Does it have to be actually bankrupt before declaring bankruptcy?  If DL still has well over $1 billion in available unrestricted cash to spend, how can it go into Chapter 11?

Interesting factoid :  In 2003, salaries at Delta averaged $68,698, whereas at low-cost carriers they averaged just $40,972.  Could it be that DL simply wants to use Chapter 11 as a tool to bludgeon its unions and suppliers with?

Delta is being sued by three former employees who are upset about the performance of the Delta stock in their retirement plans. They are seeking unspecified damages for losses connected to retirement plans that invested strongly in Delta stock. Delta's stock lost 92% of its value between November 14 of 2000 and August 9 of this year, and the company has lost more than $6 billion since 2000. The plaintiffs are seeking class-action status.  The litigation started after the investment firm running two Delta employee retirement accounts announced in August it would block workers from buying any more of the airline's stock.

Northwest reported a small loss of $46 million for its third quarter, compared to $42 million last year.  With $2.54 billion in unrestricted cash, it is in a much stronger position than DL.

American also reported, with a $214 million loss and $3.1 billion in unrestricted cash remaining.

The new Air Canada, freshly out of bankruptcy, announced changes that, according to their press release, 'marked the beginning of a new era for the nation's flag carrier', which they describe as 'restructured and revitalized'.

What are these exciting changes?  Oh, a new promotional jingle sung by Celine Dion, new livery for the planes, and new uniforms for the crew.

The press release described the new livery as

features fresh clean lines and lighter colors; a more modern look with added energy that reflects Air Canada's approach to streamlining customer service and developing innovative products through simplification

Wow - all of that just by changing the color on the outside of the plane!

AC is also introducing seatback videos, which puzzlingly it claims will make it the first airline in North America to offer interactive video (guess they've never heard of JetBlue north of the border), and lie-flat sleeper bed seats in their 'Executive First' cabin (making it a good ten years after airlines first started introducing these types of seats).

Ten year old technology is innovative?  Changing the logo and crew uniforms is restructuring?

Eight of Europe's airlines have sent a letter to the European Commission claiming the latest Italian government bailout of Alitalia appears to be planned to violate or circumvent EC state aid rules. British Airways, Lufthansa and Iberia were three of the signers. They said Alitalia was aggressively expanding capacity and cutting fares while simultaneously asking for government aid.

As long time readers know, I'm a great believer in planes with more than two engines for long haul over the water flying.  While the official claim is that no modern jet engine has failed in flight for a long time, there's a lot that can - and sometimes does - go wrong short of total failure.

The latest example of this was a Continental flight from Tokyo to Houston that had to make an emergency landing this week at Cold Bay, a small community of 95 people, located about 642 miles southwest of Anchorage.

The two engine Boeing 777 was experiencing trouble with one of its two engines.  The pilot received a warning of a drop in oil pressure in one engine and immediately shut the engine down.  So although this may not count as an engine failure, the fact remains that the engine stopped working.

A replacement jet was sent to Cold Bay to pick up the passengers. Meanwhile, the 95 local residents provided shelter in the community center and food and drink for the 256 passengers and crew. The airport has a 10,000 foot runway capable of handling large jets, built by the military during World War 2.

'The road to hell is paved with good intentions' should be an adage that all legislators have drummed into their brains.  We're now seeing a dangerous first step back to government regulation of air fares, with Senator Breaux (D-LA) sponsoring legislation to limit the rates which airlines can charge people traveling on bereavement fares.

While it seems distasteful that airlines get to charge their highest walk-up fares to people traveling to attend funerals (usually with an insultingly small discount off that fare, and with a very complex set of requirements to qualify), government interference with free market pricing represents a major change in policy, and for sure, if they dictate bereavement fare policies today, what will stop them setting other fares tomorrow?

Strangely enough, the airlines probably feel reasonably good about a return to regulation.  In general, all airlines were profitable prior to deregulation, and were protected against each other, upstart competitors and marketplace forces.  Indeed, it is the inability of the dinosaur airlines to change the way they operate in the 26 years since the end of deregulation that represents the largest part of their present day problem.

And you can be sure that if they have to offer reduced rate bereavement fares, the airlines will use this as a bargaining lever to seek much larger concessions from the government.  And so, counter-intuitive as it may seem, we should feel happy at paying whatever rip-off bereavement fare the airlines ask, because, for sure, it will be cheaper in the long run!

Los Angeles International Airport has acquired its own stranded refugee. A Vietnamese refugee has been sleeping on airport benches and spending his days trying to get back to his country. The man, who speaks only an obscure tribal dialect, was part of a group of 900 Vietnamese refugees who settled in North Carolina in 2002. He lost his refugee passport and North Carolina ID card and he cannot leave the country without them. He has been staying in the Tom Bradley International Terminal and employees there have been feeding him and trying to help him replace the missing documents. One employee takes him to another terminal to shower.

Travelers Aid officials say this stranded-traveler case is like no other in the airport's history. "It's been the most unusual case we've dealt with and we've been at the airport since 1950," said one of the officials. "He's stubborn. He refuses to go to a hotel. Since he's been here almost a month, he feels comfortable here."

Happy birthday to the Eurostar train service, connecting Britain with Europe through the Chunnel.  Eurostar trains travel at up to 186 mph for the 2 hour 35 minute journey between London and Paris, with 14 departures every day.  Two thirds of all people traveling between London and Paris now choose Eurostar over planes or train/boat combinations.

To celebrate their ten years, Eurostar has a special offer - buy a $90 one-way standard class ticket for Monday - Thursday travel between now and 15 December and be upgraded to First Class for free.

This Week's Security Horror Story :  To illustrate the world-wide 'fight against terror' that we in the US are now engaged, here's a story that was the lead largest item on the front page of New Zealand's major newspaper on Wednesday this week.

A NZ resident learned his uncle in India was seriously unwell and needed a kidney transplant, which would cost US$3500.  And so he did what many people might do in the same situation - he went to the nearest Western Union, gave them $3500 plus their substantial fee, and told his family back in India they could immediately go to their local WU office and collect the cash.  Easy and simple?

After several days, with the money still not being available in India, the NZer started to get alarmed.  WU were only able to give him a vague excuse about the delay, and so he complained to the NZ Police about the matter.  He then escalated the matter and eventually enlisted the help of NZ's Minister of Foreign Affairs.  After an entire month of delay and prevarication, and with the assistance of both the NZ Cabinet member and the Police Financial Intelligence Unit, the money was finally released.  WU did not apologize for the delay.

The reason for the delay?  Notwithstanding this was money sent from NZ to India, it seems that WU's US based computers flagged it as a suspicious transaction under US laws, due to the sender's name being similar to that of a known terrorist.  Apparently WU allows the US to interfere with financial transactions anywhere in the world; and a WU spokeswoman said it takes up to a month to resolve cases of mistaken identity.

Interestingly, the NZ Herald also shows, on its front page, photos of the real terrorist and the ordinary NZer.  It took me much less than a month to spot the obvious difference in appearance.

A Northwest plane was evacuated on Tuesday morning at Fargo after a passenger claimed to have overheard someone mention a bomb, police said. Passengers were taken to a secure area and questioned by local police and TSA representatives.  No bomb was found.

What a great way to disrupt a flight.  Simply say 'I can't be sure, but I thought I might have heard someone in the boarding area say something about a bomb, and so I thought I better tell you to be on the safe side'.  You'll probably be thanked for your vigilance, rather than prosecuted for a making a false bomb threat.

Speaking of bomb threats, have you ever wondered what happens to the passengers on an international flight when it has to make an emergency diversion due to someone phoning in a claim there's a bomb on board?  Passengers on a plane that was diverted to Stanstead last week were held on the plane for 45 minutes after landing and were not told what was going on. Then they were marshaled off the plane, and had to pass through armed police and dogs and were taken to a small room, where they were held for about 9 hours. Many of them had to sit on the floor and they were not given anything to eat or drink for at least six hours.

Apparently authorities couldn't agree on who was in charge. One passenger said "No one seemed to know who was in charge. We had 10 hours of the most appalling incompetence and English bureaucracy."  No bomb was found.

American's expanding waistlines are adding to airline's rising fuel bills.  The Center for Disease Control and Prevention says the average American gained 10 pounds during the 90s and that extra weight translated into 350 million extra gallons of fuel at an estimated cost of $275 million in 2000 (when jet fuel was less than half what it is now). The higher fuel consumption resulted in an extra 3.8 million tons of CO2 and smaller amounts of other pollutants being released into the atmosphere. The report, in this month's edition of the American Journal of Preventative Medicine, focuses on the overlooked economic and health consequences of obesity.

It has always struck me as inconsistent that on many international flights, you are limited to 44 lbs of baggage and have to pay a very expensive penalty for each extra pound, but there is no limit, incentive, or penalty, based on one's own weight.

Interesting factoid :  It requires 3% of the weight of an object in fuel per hour of flying.  So if you're on a 10 hour trans-Atlantic flight and weigh 200 lbs, the airline has burned almost 60 lbs (about 10 gallons) of jet fuel to fly you.

Officials broke up a cocaine smuggling ring at the Port-au-Prince airport.  Millions of dollars of cocaine are smuggled in to the US via this airport every year.  One of the ringleaders of the gang?  Ooops - the American Airlines Security Director at the airport!

We're now fingerprinting all visitors to the US when they arrive, a move which is generating a great deal of resentment.  A great way to catch terrorists, right?  Wrong.  According to this article, the simplified fingerprint matching system being used means that terrorists can alter their fingerprints and have a 50/50 chance of slipping into the country unrecognized.

Naughty Boeing.  The Department of Homeland Security's Inspector General said in a report this week that Boeing received at least $49 million in excessive profits from a contract to supply explosive detection systems to airports.

Lastly this week, here's a great idea.  War-torn Chechnya's Prime Minister said the country planned to add a wide range of recreational activities, including a new soccer stadium, a water park, and a Disneyland.  No word if 'the happiest kingdom' will add a Terroristland to its other themes in a Chechnya Disneyland; indeed, notwithstanding Prime Minister Abramov's pronouncement, it isn't clear if Disney have been consulted at all.  A minor detail.

All going well, I will be on the Scottish island of Islay when writing to you next week.  Islay is renowned for its highest quality whisky distilleries....

Until then, please enjoy safe travels

              David M Rowell aka The Travel Insider

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