[Web version of this newsletter]  [Newsletter Archives]  [Website Home Page]  [Please Donate Here]

April Fool's Day, 2005 

Good morning

The extraordinary upsurge in the site's Alexa traffic rating continues.  The last three Thursdays have seen our rating at 28,927, then 27,173, and now we are at 25,602 (meaning we are the 25,602nd most popular website in the entire world out of the many millions measured).  Alas, every silver lining is wrapped in a cloud, and in this case, the extra traffic definitely increases the bandwidth costs levied by our hosting service (currently we are sending out up to 1.5GB of data every day).

A year ago we held our first fundraising drive, and at the time I said it would be a twice yearly event.  Somehow the six month anniversary passed with no further requests, so now we're about to repeat the process at the one year anniversary.

But first, a request/invitation/opportunity to readers who sell things.  I'd love to be able to offer donors something more substantial than just my sincere thanks in return for their contributions.  If you think there could be a way for you to fairly participate that gives you appropriate recognition/return, while giving donors a valuable incentive and helping my fundraising, please let me know.  The best premiums are of course items of value, but other things, such as one time discount certificates/codes might also be a help.

Thank you to the many people who responded to my special newsletter on Monday about the dangers inherent in the new proposed passports.  Several people pointed out that old fashioned mail suffers from a massive disadvantage these days - with all the security checks, anthrax screening, etc, it can take an extra week or more for mail to get to government offices and our elected representatives.  Best way to get your voice heard - email to government departments and phone calls to your congressman and senators.

Another reader pointed out that government departments rarely care about what the citizenry think, but our elected representatives are more sensitive to such issues.  If you haven't done so already, please pass your thoughts on to your representatives on this issue.

And talking of passports, many of you may be considering your summer travel plans, and the luckier of you will be traveling internationally.  An unresolved - or at least, unoptimized - issue for many of us is how we stay in phone contact while traveling internationally.  I've written on this topic several times before, and now there's a new 'latest and greatest' product to excitedly tell you about :

This Week's Feature Column :  Global Riiing GSM Phone Service :  Offering unlimited free incoming calls in 64 countries, and reasonably priced outgoing calls, the Global Riiing SIM is perhaps the best solution for keeping in touch when traveling internationally.  I review and compare it to other available options so you can make the best choice.

Dinosaur Watching :  How much is too much?  United, now more than two years in Chapter 11, is not only continuing to lose money, but is doing so at an accelerating rate.  I'd said last week that United's silence about how its February loss of $291 million compared to Feb 04's loss almost certainly meant it was worse not better.

The comparative data has now surfaced.  United's $291 million loss in Feb 05 compares to a loss of 'only' $259 million in Feb 04.

With figures as bad as these, it can only mean one thing :  CEO Tilton will probably get an even bigger bonus in 2005 than he did in 2004!

One of the major contributors to United's poor performance is not mentioned as prominently in public by UA as are the 'usual suspects' such as fuel costs, labor costs, overcapacity, and whatever other excuses du jour they may trot out.  This other major contributor is the cost of paying the small army of attorneys, accountants, and consultants of every imaginable type, all of whom are supposedly providing invaluable support to UA during its reorganization.  In total, United has spent about $200 million on such fees - so far.

$54 million have gone to their lead attorneys, Kirkland & Ellis.  United's aircraft engineers' union claims that Kirkland & Ellis are 'overbilling' for their services.  Now, in this context, 'overbilling' does not mean charging ridiculously high hourly rates, although you might think that charging $950 an hour for a senior partner and $230 an hour for a mere legal assistant is beyond what fairness would allow.

In this case, overbilling means, ahem, billing for more hours than were actually worked.  One of K&E's attorneys billed United for 3500 hours last year, at a billing rate of $540.  Yes, this one person billed UA $1,890,000.

Now let's think about these hours.  Let's say this attorney worked only on United's case, and let's also say he worked six days a week, with only a couple of weeks vacation, and perhaps five official holidays and maybe two days of absence for sick or other purposes.  Let's also say he spends an hour a day with non-billable and administrative type duties.

In other words, this attorney would have us believe he was working 13 hours a day, six days every week, for an entire year.  Do you believe that?  Perhaps, in the attorney's defense, one could at least understand that if you had a chance to charge your time at $540/hr for an unlimited number of hours, you might put in some extra hours for as long as the going was good!

Whatever the circumstance, the engineers' union didn't believe the attorney's billing was honest and accurate, and so complained to - hmm - another attorney; in this case the bankruptcy judge, who agreed with the attorney and rejected the union's claim.

US Airways has come up with a brilliant way to encourage more high-fare paying frequent business travelers to use their services.  They're closing three of their airport lounges, in West Palm Beach, San Francisco and Los Angeles.  This is not an April Fool's Day joke.

Most of us find we end up spending more time waiting for our flight these days due to increases in advance checkin requirements, making airport lounges a more valuable convenience than before.

US Airways reported its February operating results on Wednesday.  It lost $119.2 million for the month - a huge number, being 24% of the airline's total revenues of $506 million.  Worse, it burned through $137 million in cash, after going through $195 million in January, and now has only $405 million on hand.

These numbers are particularly alarming when contrasted with the dribs and drabs of new financing the airline is getting - $125 million each from Air Wisconsin and Republic Airways.  So for the first two months of this year, it has secured $250 million in financing, while burning through $332 million in cash.  This is not encouraging progress.

However, encouraging or not, it seems to be good enough for their bankruptcy judge, who has extended the airline's filing deadline from 31 March through to 31 May.  US Airways had earlier said it hoped to exit bankruptcy by 30 June, and now is saying it hopes to be out by the end of August at the latest.

Enough of hopes.  How about some concrete plans?

Meanwhile, still more storm clouds are gathering about US Airways and its uncertain future.  The airline still has one largely uncontested hub - Charlotte, NC, although low cost airline AirTran is making a small incursion and will start operating six flights a day from 4 May.

Southwest's Chairman, Herb Kelleher, has now told the Charlotte Observer he considers Charlotte 'a very desirable city to serve. ... I can't make any immediate promises, but certainly I can tell you our focus is on Charlotte'.  He added that if US Airways were to liquidate, Southwest would move quickly to take up the slack caused by the closedown.

Congratulations to AirTran :  For the fifth year in a row, they have been named the Best Low-Fare Airline by Entrepreneur Magazine.

Congratulations also to El Al.  Their 2004 annual profit was $33.1 million, a massive 421% increase on 2003, and their best result for five years.  This excellent result occurred even though jetfuel cost them $67 million more in 2004 than in 2003.

An interesting issue that occasionally gets aired is the radiation danger from flying over the North Pole.  Due to the earth's magnetic field, cosmic radiation is at its densest in this region, and if a person does just two flights a month over the pole, their radiation exposure exceeds safe limits.

Few of us travel that regularly, but spare a thought for the flight crews.  Cathay Pacific flight crews are lobbying their management on this issue at present, but whatever the outcome may be, I'll wager one thing :  No airline will choose to line its planes with lead!

There's an interesting issue brewing between the IRS and the Latin American Airline Association.  Apparently the IRS is seeking to impose withholding taxes on the earnings of non-US based flight crew for the time their flights are flying over US territory.

This is an aggressive stance to adopt, and one can only guess at the mess that would happen if every country started seeking to claim taxes from flight crews for the time they were flying over each country.

It isn't clear why the Latin American airlines have been singled out by the IRS.  The carriers say that the IRS efforts to backdate this ten years could require them to work through over 100,000 time sheets to calculate the taxes due.

Remember Diners Club?  I certainly do - it used to be very big in New Zealand, at least as big as Amex, but up here it has steadily lost market share, and overall it has a mere 1% market share.  It is now owned by Citibank, and Citibank has now arranged for all merchants that accept Mastercard to also accept Diners Club too.

It will be good to see some more competition for Amex, a company that seems to have gone downhill, at least in my own personal experiences.

Ewww - yuck!  Chicago inspectors closed down a storage facility owned by Gate Gourmet on Wednesday. The facility was used to store snack food such as pretzels, beer and pop. The inspectors say they found more than a thousand rat droppings throughout the facility and Gate Gourmet did not have a business license to operate the facility.

Here's a great idea.  Hilton are replacing the various alarm clocks in their hotel rooms with a custom-designed clock that features what they claim to be the world's easiest to set alarm.  This is in response to many complaints from guests who couldn't work out how to set the alarm clock, and other guests losing sleep worrying if they'd set the alarm correctly or not.

The alarm clock may have the world's easiest setting alarm, but it probably has the world's worst name - the 'Hilton Family Timing is Everything Virtual Clock'.

One feature I hope they include - a warning that the alarm has been set.  I occasionally get woken up in a hotel room at some awful hour of the night, because the alarm had been set by the previous occupant and never switched off.

One of the cornerstones of the European Union is the expectation that similar products should cost about the same in all member countries.  Like much to do with the EU, this is often observed in the abeyance, and the latest example is a study showing that a package holiday in Gran Canaria that cost 523 in the Netherlands would cost 575 in Germany.  However, this 10% pricing difference was not the main finding of the study.  The same package holiday was being sold for 760 in Britain - nearly half as much again as the price in Holland.

The British consumer magazine did not even start to consider how much we in the US would be stung for the same thing.

Of course, there is nothing very new in hotels having different prices for guests from different countries, depending on where they think they can extract the highest rates, and what countries they are trying to develop more business from.  It had been hoped the internet would destroy these regional pricing biases, and for a while it did, but now that websites can automatically detect what country in the world you are visiting from, some websites will automatically only show you the regional pricing that applies to your country, and so regional pricing is returning, even more subtly than before.

A rose by any other name, part 2 :  In November last year, I described as 'nausea inducing nonsense' the decision by the National Tour Association to change its name to Crosssphere (yes, there should be three s's).  At the time, their chairman offered these comments

CrossSphere is the opportunity for our members who have celebrated this association's proud history, to make history.  It's a reflection of our growing and diverse industry.  By being a more inclusive association, we are achieving one of our fundamental goals, to maximize our members' profitability.  The new name is an effort to add value to its membership that represents 25 countries and stands for "the global association for packaged travel".

The Board, doubtless fully persuaded by their chairman's flowery rhetoric, attempted to 'cheat the system'.  Officially changing the organization's name would have required a membership ballot and a two thirds majority vote.  Instead, they kept the NTA name but substituted Crosssphere as its legal 'DBA' (doing business as) identity.

However, the chairman's attempt to 'add value' to his membership was not completely appreciated.  Most members displayed a great deal more commonsense than their board or chairman, and an uprising of members forced the name change issue to a vote.  The outcome?  77% of members voted to keep the old name, and only 23% supported Crosssphere as a name.

Here's a bit of depressing and unsurprising news.  In 2004, taxes increased to 26% on an average rental car booking.  In 2003, it was 24.4%.  The worst airports were Dallas, Houston and Phoenix.

And now for a tip :  If you're renting a car in one of these cities for more than a day or two, you might want to think about renting at the closest non-airport location and taking a cab from the airport to the rental depot.  Chances are you'll save a lot more than the cab fare with the reduction in taxes.  As this article shows, taxes on a rental are 61.4% at DFW airport but only 17% at nearby locations.

One of the hassles of battery powered devices such as cell phones is the time it takes to recharge them.  Good news - Toshiba plan to release a new type of lithium ion battery that will absorb 80% of its total charge in just 60 seconds.  Look for them to start appearing in 2006.

I've several times enjoyed memorable stays on board the original Queen Mary - not way back when it was crossing the Atlantic, but more recently, in its current form as a floating hotel in Long Beach.  And so I'm both puzzled and anxious when I read this article that says the future of this hotel/tourist attraction is in jeopardy due to the company running it filing Chapter 11.

What I don't understand is - how is it possible for the Queen Mary to lose money?  The ship is paid for and owned by the City of Long Beach.  Surely even an airline executive could run the famous ship at a profit with no capital cost of ownership.

If you ever have the chance, go stay for a night or two on board, and - absolutely - treat yourself to one of the suites, and ask about its history to find out what famous members of various royal families and which heads of state have previously slept in the same suite you're in.  I've slept in the same bed as have Sir Winston Churchill and King Edward VIII.  You can, too.

This Week's Security Horror Story :  The TSA lied to Congress, to the press, and anyone/everyone else.  This is what a report by the Homeland Security's Inspector General concludes, although it coyly uses the phrase 'misled the public'.  Details blogged here.

Which part of the following is the worst?

(1)  The LAPD left a bag with two pipe bombs unattended at LAX after a training exercise last week.

(2)  An alert FBI agent noted the unattended bag and alerted airport police.  After 30 minutes a policeman with a bomb-sniffing dog turned up.

(3)  The dog sniffed the bag and gave it the all clear, signaling there were no explosives present.

(4)  The police then opened up the bag, and discovered two pipe-bombs inside, causing an urgent evacuation of everyone within a 100 yd radius.

(5)  It took two hours to determine that the pipe bombs were actually 'legal' pipe bombs and the property of the LAPD.

The dog that failed to detect the explosives (the explosives were actually the exact explosives used to train dogs to detect explosives!) has been 'taken out of service'.  But apparently none of the humans involved have been similarly sanctioned.

And some very good security news.  New explosive sniffing machines are to be installed at 150 airports during the next year, reducing the need to hand-search people selected for secondary screening.  The sniffers are likely to be more reliable, and definitely less intrusive, and are wonderfully inexpensive - only about $100,000 each.  Details here.

Finally this week, did you hear about the passenger who had three bags to check for his flight to Los Angeles.  He asked the gate agent 'Could you please send the first bag to Las Vegas, the second bag to London, and the third bag to Hong Kong?'

The gate agent said that would not be possible.  The passenger replied

'I don't see why not.  That's what you did with my bags when I flew to LAX last week.'

Until next week, please enjoy safe travels

              David M Rowell aka The Travel Insider

If this was forwarded to you by a friend, please click here and subscribe to the newsletter yourself
If you ever wish to unsubscribe, simply reply to this email and set the subject line to say 'unsubscribe'.