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Friday 12 November, 2004 

Good morning

And hello from Genoa.  The kindest way to describe Genoa is as a city with a great deal of tourist potential, but most of which is, alas, not yet realized.  And the kindest way to describe my hotel - the Bristol Palace - is as an awful experience best avoided.

My comments above are not intended as a criticism of Genoa, and while the city will probably not be on anyone's 'A' list of must-see places on a first trip to Italy, I do think for the return visitor seeking new experiences, the amazing transformation in this city as it evolves from a declining industrial center to a thriving new tourist destination makes it increasingly a rewarding choice.

It seems strange to use the word 'new' in the context of a city where its tourism draw relates to items that are hundreds and even thousands of years old.  The city is finally realizing that things such as having the largest historic city center in all of Europe can be of great interest to tourists, and is now setting about making itself tourist friendly and telling its message to the world, including travel opinion leaders such as you -  the Travel Insider reader.

I've had some wonderful experiences here, with the one freshest in my mind being walking into a plain looking village church in the beautiful seaside town of Camogli just 15 miles out of Genoa.  I was rewarded with the unexpected discovery of an extraordinarily ornate rich interior, but that - while very impressive - was not the most memorable feature.  I went in to the sacristy to find an archetypal village priest at work with various papers, at an old desk, seated on an uncomfortable bench, with a single overhead light shining down on him.  All of a sudden, this reality somehow encapsulated and explained to me the tight bond between villages and their parish priests - here was a man who exuded honesty, integrity, simplicity, wisdom and kindness - truly a holy man.

It was an unexpected and brief encounter, but profound and enlightening - one of those rare highlights that define one's understanding of the world.  Experiences like this are why we travel; why we endure long plane rides, jet lag, other inconveniences and costs.

I'll be writing more about Genoa in a few weeks time as a feature article.

It is hard to find a way to link from the concepts of honesty, integrity, simplicity, wisdom and kindness to this week's feature column, so please excuse me for not even trying  :

This Week's Column :  The Overcapacity Excuse (and others too) :  I've consolidated and added to my commentaries in several recent newsletters to create a broader look at the current reasons why the major airlines are doing so poorly.  Recommended reading for dinosaur executives.

Dinosaur watching :  There's an interesting article in Forbes about airline pension plans.  They echo my prediction of several months ago that if one airline fully defaults on its pension funding obligations (ie UA) the others will be forced to follow or else suffer the consequences of giving UA an unfair advantage in terms of cost reductions.  Forbes calculates that for many of the dinosaurs, their pension plan obligations represent 0.5c a mile in extra costs that they can't easily afford and which they definitely couldn't allow one of their number to erase while still retaining such burdens themselves.

Forbes published a table of who owes what to their pension plans - bracketed numbers show liabilities and unbracketed numbers show surpluses :

    Airline      1999    2000     2001     2002     2003
    American    ($346)  ($703) ($1,940) ($3,434) ($2,664)
    Continental  (287)   (282)    (587)  (1,190)  (1,079)
    Delta         148   1,135   (2,353)  (4,907)  (5,659)
    Northwest     519    (486)  (2,275)  (3,950)  (3,748)
    United      1,320    (741)  (2,520)  (6,380)  (6,156)
    US Airways*  (722)   (301)  (2,344)  (2,445)    (922)
    Total         632  (1,378) (12,019) (22,306) (20,228)

Note that US Airways already revised its obligations after its first bankruptcy, which is why its position 'improved' so much in 2003.

One analyst has already suggested these numbers are too low, because the airlines are using old actuarial tables and these days people live longer (and so collect more pension income).  United's pension plan shortfall is presently estimated to have increased still further from the year end 2003 figure to about $8 billion.

United is seeking yet another extension of its Chapter 11 exclusivity period to reorganize - now to run through 31 Jan 2005.  During this period, UA is protected from creditors or others filing competing reorganization plans, and so needs only to submit a plan for approval to the judge showing some vague sort of justifiable business plan for future viability.  If things became competitive, the judge might then conceivably get to evaluate several competing plans, and could measure them against factors such as which plan returns the most to current creditors, which plan is the most realistic, which plan does least harm to employees, etc.

This makes it easy to understand why UA is keen to keep itself protected by the exclusivity period as long as possible.  But just how long is fair and feasible?

When United declared bankruptcy in December 2002, CEO Tilton said the airline would consult its unions and business partners and 'quickly determine what step to take next'.  That was almost exactly two years ago.  Since that time, it has delayed and extended its exclusivity period again and again and again, and indeed United has further indicated that even this new extension of time won't be enough, saying it will file for a further extension in January.

Meanwhile, the airline continues to lose money, and its consultations with its unions have devolved into open confrontation and litigation.  United has been so slow in filing any sort of reorganization that they're even using their own slowness as a reason for further delays - they are having to update their plan to reflect further changes in circumstances.

It is a bit like painting the Golden Gate Bridge, isn't it.  Before you've finished, it is time to start all over again.  At this rate, United will be in an endless Chapter 11, eking out month by month extensions indefinitely.

Why is the judge allowing this to happen?

Independence Air takes a step closer to joining its former business partner, United, in Chapter 11.  On Tuesday it said that if it can't raise additional funding, it won't be able to make aircraft lease payments in January which would likely trigger a bankruptcy filing.  However, the company also said it 'remains confident in its business model provided that is successful in addressing its liquidity issues'.  Apparently the stock market took this statement at face value, because its share price closed the day at $1.91, up 6 cents!

This cash problem is even more severe that it might first appear (if such a thing is possible, of course).  Lack of cash interferes not only with the airline's ability to meet its current obligations, but also may prevent it from taking delivery of and paying for the new Airbus A319s which are an essential element in the company's plan for future viability.

We all, of course, wish the very best of success to Independence Air in their quixotic quest for success, but the present problems underscore the sad reality that it takes a lot more than a 'Field of Dreams' approach to build a successful airline, whether it be a low-cost carrier or a dinosaur.

Southwest puts more pressure on US Airways - they have acquired two new gates at Philadelphia, giving them now a total of 6 gates, and showing the reality of their CEO's statement that expansion in Philadelphia is one of their main goals in the short term future.

Southwest can work about ten flights per gate per day, and currently has 41 flights operating from the four gates they already have in PHL.

Average airfares at PHL dropped by 9.9% in the second quarter this year (compared to last year), compared to a nationwide average of a 0.4% increase.  This doubtless was influenced by Southwest starting flights in May.

The grass on the other side is always greener.  In a press release put out by the Association of Flight Attendants, an organizing executive on the committee trying to make Frontier's flight attendants unionized said 'Now more than ever, employees need a union and a binding contract to secure compensation, job security and a voice on the job.'

To everyone's undoubted shock and horror, over the past year Frontier has cut flight attendant pay and increased their job tasking.  Apparently - if the AFA is to be believed - becoming unionized will solve these problems for the flight attendants.

Perhaps the AFA could point out which airlines it has stopped from cutting their members' pay, laying off staff, and adding to productivity requirements as a result of AFA representations?  Seems to me that the union hasn't actually done much at all for its members for the simple reason that when an airline confronts it with a 'do or die' proposition such as threatening it with Chapter 11, AFA and its members has little choice but to accede gracefully to the airline's demands.

Another blue-sky dreamer on the organizing committee said 'We want Frontier to succeed, but we want a fair share of what we produce.'  Being as how Frontier has hovered between marginally profitable and small losses in recent quarters, just how greedy does this person hope to be?

The bad news - British Airways reported sharply higher operating costs in its last fiscal quarter, and also complained about US bankruptcy procedures which is described as being 'another form of state aid' - it is facing increased competition from bankrupt US carriers discounting flights across the Atlantic as a way to bring in some emergency cash.

But there's some good news, too.  In spite of their problems, BA managed to more than double its pre-tax profits from 105m to 220m for the last quarter.  Well done, BA.

BA also shows itself to be ever so slightly greedy (this is news?).  Currently it flies 19 times a week from London to India, Virgin flies 3 times, and bmi doesn't fly at all.  There are now rights for 21 more flights a week available, and all three airlines have applied to add service.

Although BA currently has 19 of the 22 flight rights at present, it has submitted to the UK Civil Aviation Authority that it should be given all 21 of the additional flights, leaving not a single one to be shared with Virgin or bmi.

A rose by any other name department :  British Mediterranean Airways has renamed itself  BMed.  Sounds a bit like a medicine now.

And talking about medicine, not very cheery news from the CDC.  According to a USA Today report, the CDC estimates that half of all US travelers heading to other countries will experience a health problem.  The most common problem - diarrhea.

Maybe I've just been lucky, but my own experience - and that of other travelers I know - is nothing like as dire as this suggests.  Fingers crossed and touching wood as I type this!

The risk of catching a really nasty bug from a glass of water on your next flight might be reducing.  Most of the major airlines (except for Delta and Southwest, who are expected to fall in line soon) have agreed to institute new programs to monitor and enhance the quality of onboard drinking water, including quarterly flushing of their systems to reduce the current moderately high incidence of contaminated water being found on planes.

The EPA did a random test of the drinking water systems on 158 planes two months ago and found twenty of the planes tested positive for coliform bacteria, including two testing positive for the very nasty E. Coli bacteria.  The airlines dispute these numbers and suggest the actual number of planes with water problems was only 8, not 20 planes.  Apparently the airlines think they can do better and more unbiased testing than the EPA.

Here's a great way to escape the winter blues.  USA3000 Airlines, in conjunction with Bermuda Tourism and some of the island's hotels, have put together a deal enabling a companion (or in some circumstances, apparently two) to fly free when one other person buys a ticket to Bermuda and stays a minimum of three nights in participating hotels.  Amazingly, even the lowest fares on USA3000 qualify for the fly-free offer.  Details on the airline website, and more about Bermuda here.

People that don't learn history's lessons are doomed to repeat them.  The worst airplane disaster in history was a collision of two 747's on a foggy runway in Tenerife in the Canary Islands, killing 583 people in 1977.

History repeated itself in 1991 when a USAir 737 landed on top of a Skywest commuter plane at LAX, killing this time 'only' 34 people.

And now, according to a NY Times article, history came within two seconds of repeating itself yet again, on exactly the same LAX runway on 19 August when a 747 was cleared to land at the same time a 737 was cleared to simultaneously take off from the same runway.

The NTSB doesn't think this is good enough.  Chairwoman Ellen Engleman Conners says

I think we were very lucky on Aug. 19.  Safety should never be dependent on luck.

The FAA already has a collision avoidance system deployed at LAX, which the NTSB - with apparent justification - believes to be inadequate and unsatisfactory.  How many more accidents must occur before the FAA takes a more timely and pro-active role?

Talking about timely and proactive roles, it is now 8.5 years since TWA's flight 800 exploded just off Long Island, which the FAA would have us believe was due to a spark in an empty fuel tank.  However, although the FAA claims to have pinpointed the cause of the crash, it has yet to promulgate any new measures to prevent its re-occurrence.  They now plan to publish a proposed rule - next year - for public comment, and has dropped the idea of requiring any simple and interim safety measures.

Meanwhile, safety has been sacrificed on the altar of saving money.  The FAA is now allowing some airlines to carry smaller fuel reserves on international flights to reduce weight and save money.  On some flights, airlines will be allowed to reduce their fuel load by as much as 10%.

In a Reuters article that carries the nonsensical justification 'fuel costs have grown exponentially this year as oil prices topped $55 per barrel' (in actual fact fuel costs increase less than the rate of increase of cost of oil per barrel) we are told the FAA has set itself the goal of helping airlines reduce their fuel costs by 1% through 2008.

This is a curious mission for the FAA to impose on itself and suggests its role as an airline advocate is taking priority over its role as a safety advocate and enforcer.  Let's understand exactly why an airline needs reserve fuel, and what the increased risks might be if the plane carries less reserve fuel.

Reserve fuel can suddenly become essential fuel if a flight finds itself encountering unexpectedly strong head winds (or unexpectedly less strong tail winds).  Reserve fuel can be needed if a plane has to divert to a secondary airport for whatever reason.  Reserve fuel can even be needed if there is just a simple mistake in calculating how much fuel is needed for the flight.  And, if a plane loses an engine and has to descend to a lower altitude, fuel consumption levels skyrocket and the plane might find itself needing every ounce of spare avgas to get to the nearest airport, which with increased ETOPS allowances might be three or more hours away.

I know of flights that have run out of fuel on the runway while landing and have had to be towed in to the gate due to no more engine power.

This Week's Security Horror Story :  While handing checked bags to the TSA luggage X-ray staff, the TSA screener asked if there were any matches or a lighter in the checked luggage.  The passenger said yes.  The TSA screener said 'You can't have them in your checked luggage.  You can put them in your carry on.'

The next statement referred to being able to have matches and lighters in one's carry-on making it easier for the passenger to light his shoe-bomb.

Now what would happen if the passenger said this?  He'd be arrested, of course, for the 'serious crime' of making a joke at security.  But in this case, as the passenger in question - reader Noel - tells me, the joke was actually uttered by the TSA official, who added 'You have to keep a sense of humor about this stuff'.

Yes, you do have to keep your sense of humor, but apparently only TSA staff can jape and joke - at us, but not with us.

The TSA approved luggage lock problem does not seem to be resolved.  One reader wrote to say

I bought locks for both my husband and myself. Because we have yet to find a screener with a key, we leave them at home.  We live in Omaha, so fly out of here, but have had the same problem flying out of St. Louis. When I "suggested" it was an approved lock, they told me, "By the time we find the key, you will have missed your flight."

And reader Mick writes

I emailed the TSA after a trip this spring.  At some point - Atlanta or Houston?....don't know which - both of my TSA-approved locks disappeared.  I complained to them about the loss, and they sent back a curt email response saying that they had no connection whatsoever with the locks and never approved them.

Ironically, at the bottom of their email was a link to the manufacturer's association website...after linking with that site, I found the whole story about how the locks were developed with the full cooperation of the TSA, and how the TSA has sets of keys for the different lock systems at every major airport.  When I responded to the TSA's email, asking them why they had a link to the lock's manufacturer's web site on their email if there was no connection twixt the two, they never responded back.  I forwarded all of this to my Congressman's office, asking for an enquiry.

After returning from Thailand this summer, both of my TSA-approved locks again disappeared, apparently at Customs at DFW.  My complaint to them garnered no response whatsoever.

Here's a bad idea made worse.  New X-ray full body scanners threaten to soak frequent fliers full of X-rays while looking for guns and explosives hidden on one's person.  But the scanners will obscure 'sensitive body parts' to protect the traveler's modesty.  So, if you're a terrorist, around which part of your body would you choose to hide your guns and explosives?

The world's longest high speed car chase?  A couple were chased for 300 miles at speeds of up to 115 mph in South Australia's outback.  There was no other traffic on the road apart from an occasional oncoming truck, and so the police contented themselves with simply following the car until it eventually ran out of gas.

In other Australian news, the country has found a new way for boosting tourism.  Studies show that whenever there is a news item about a crocodile attack, the number of international tourists increases.  Pascal Tremblay, a lecturer at Charles Darwin University who has studied the link between crocodiles and the Northern Territory's $1 billion-a-year tourism industry, said bookings from Germany rose after a German tourist was killed in an attack two years ago in Kakadu National Park.  'It's free publicity. The NT gets in the news. Bookings increase.'

The number of crocodiles in the Northern Territory is estimated to have grown from 5000 in 1971, when hunting them was outlawed, to 70,000 today.

Maybe Alaska is failing to appreciate the tourist potential that loose moose might offer.  Shortsightedly (perhaps), the municipal airport in Anchorage is installing 22 ft electric mats in the ground across its two entrance gates to give invading moose a low-power shock to scare them from entering the airport. The mats won't zap cars or people (unless you're barefoot).

Lastly, as planes become more computerized, many of us have a secret fear that the plane's computers may all be running a buggy version of Windows.  Reader Peter assures me this story is true :

The 777 I was traveling on was doing all the usual things at the airport preparatory for taxiing to the runway and departing, when we can to a somewhat sudden halt. Then all the lights went out, the engines stopped and all was silence for about three seconds before there were groans of recognition from the more experienced passengers :  We were hosed.

Then a few lights flickered on and the PA system kicked in.  "Ladies and gentlemen, this is the pilot speaking.  Please don't be alarmed - yet.  We had a light come on telling us that our landing gear wouldn't deploy.  As we are happily resting on our landing gear at the moment, the rule book says to head back to the gate, offload all of you and hope you can get to where you're going  by some other means.  We opted for rebooting the plane."

Seven minutes later, we were taxiing toward the runway for takeoff.

Until next week, which will hopefully find me happily, albeit briefly, back in Seattle, please enjoy safe travels

              David M Rowell aka The Travel Insider

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