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1 July, 2005 

Good morning

My gosh, we're half way through another year - already!  And, alas, we're also past our longest day.  The minute or two we're losing each day is not yet perceptible, but it always strikes me as paradoxical to mark the longest day as being the start of summer, with each successive summer day getting shorter and shorter.  Some countries denote the start of summer earlier (eg 1 June).

But, of course, this is but days on the calendar and artificial naming conventions.  More to the point, the dwindling light each day reminds me of how precious the long days are, and encourages me to continue preparations for a NZ winter home - hopefully for this winter.

People on the NZ Winter Home mailing list have been sending in very helpful responses to a second survey, uncovering some unexpected but vital information about how best to shape this project further.  (If you're not on the Winter Home mailing list, you're most welcome to join.)  More details to be revealed in the next few weeks.

Meantime, there is something I can proudly reveal to you now.  Our tour to New Zealand, and with more included, and at a lower price, than I'd hinted at last week :

This Week's Feature Column :  New Zealand Tour : Join me in October as I host a tour of my home country.  There's an extensive and varied itinerary of major sights and also some less well known places you're sure to enjoy as well.

As with all my tours, the group size will be limited to no more than two-thirds the seats on the coach, and has left the airfare out, giving you a great chance to cash in some of your frequent flier miles or to otherwise fly as you wish on the carrier of your choice.

Whether you view this tour as a 'fact finding' mission prior to investing in a NZ winter home yourself, or simply as a wonderful vacation, you're sure to enjoy the wonderful variety of experiences included in this tour.

And, at the risk of tempting fate, you're probably likely to enjoy your fellow tour members, too.  My previous tours have all been distinguished by great traveling companions - I guess only the 'best' people choose to become Travel Insider readers and travelers!

Dinosaur watching :  If you missed my article last week, I urge you to visit it now.  United, while remaining in Chapter 11 for two and a half years (so far) and using its bankrupt status as a massive 'Get Out of Jail Free' card enabling it to break agreements with suppliers and staff willy nilly, is at the same time sitting on an asset reported on its books as representing an $840 million liability, but which I estimate to be worth $15 billion!

In an action that looked very good but regrettably meant nothing, Congress voted  last Friday to block United Airlines from defaulting on its pension plans and shifting them to the Pension Benefit Guarantee Corp.  The bill was attached to a government spending bill and would have to be passed by the Senate in order to take effect.

Rep David Obey (D-WI) warned "This amendment is absolutely necessary if we are going to stop the dumping of pension obligations on the taxpayers of the US.  Without this amendment, Uncle Sam is being Uncle Sucker."

Admirable sentiments, indeed.  But very safely expressed, without any risk of upsetting the airline lobby, because - ooops! - the PBGC isn't accountable to Congress.  Congress may as well pass a bill forbidding the sun from rising in the East for all the effect this bill is going to have on UA's $6.6 billion pension bailout.

Perhaps Congress should also pass a law forbidding United from losing more money.  It would be no more useless than United's own efforts.  The airline has now announced its May result, and it's not good.

In May 2004, they reported a $9 million operating profit - an operating profit is a meaningless number and excludes just about all fixed costs and overhead, and is the most likely measure to show a positive profit, which is why the airlines love to quote it.

But in May 2005, United's operating 'profit' was a loss of $21 million, and its true net loss a massive $93 million.  As UA continues to go through bankruptcy, it continues to lose money every month, and there's no clear trend of reducing losses and returning to profitability.

However, loss or not, and bankrupt or not, the airline managed to increase its cash holdings by $143 million in May and now has $2.6 billion in cash.  And of course, its $15 billion asset that it isn't willing to sell any part of.  Very puzzling.

In other news, United's flight attendants say they might strike some time.  *Yawn*

Talking about Uncle Sucker, guess who the largest shareholder in the proposed merger between US Airways and America West will be?  Ignoring Warren Buffet's massive dislike of airline investments, the largest shareholder will be Uncle Sucker Sam, with over 16% (11.2% to the ATSB and more than 5% to the PBGC).

High fuel costs are being used by the airlines both as an excuse for massive losses and as an excuse for raising fares.  Have you ever wondered if the airlines might not be claiming more in fuel surcharges than the increased price of fuel is costing them?

This issue came up when reader Greg wrote in this week to say he'd just been billed $122 in surcharges (plus a bunch of taxes) on a 'free' mileage award ticket he'd been 'given' by BA.

The surcharges were $16 for security and insurance, and $106 for fuel.  Let's ignore - if we can - the dubious morality of charging $122 to issue a 'free' ticket Greg had earned by flying tens of thousands of miles, and look simply at the costing of the $106 fuel surcharge.

It costs an airline 3% of the weight of what it is transporting, per hour of flight, in fuel.  Let's say Greg and his luggage added 250lbs extra to the four flights he took (JFK to Heathrow then on to Munich and return).  Total travel time for these flights is about 18 hours, so BA had to burn about 18 gallons of extra jetfuel to carry Greg and his luggage.  Let's say BA's extra cost of this fuel, over and above whatever baseline rate they are using, is perhaps $1 per gallon.  So this $106 fuel surcharge relates to an actual extra cost of no more than $20.

This fuel surcharge ($87.64 for the two trans-Atlantic flights) is not just being levied on free tickets.  We're all having to pay it, on all our BA tickets.  We're probably all willing to pay a fair amount to reflect the actual increase in fuel costs, but do you feel good at being charged around five times BA's increase in cost?

Coincidentally, BA's last year annual profit was up a massive 33% (to almost US$1 billion).

And now for some good airline news.  Well, let's start off with something that isn't news at all, but which bears regularly repeating.  Continental put out a press release on Monday reminding travelers that CO continues to be the only major US carrier to offer a full choice of complimentary amenities to passengers traveling in economy on domestic flights, including meals, entertainment, non-alcoholic beverages, pillows, blankets, magazines and curbside check-in.   Meals and snacks are served at mealtimes in economy class on flights over two hours in length.   Many flights offer free inflight audio and visual entertainment and there is no charge for curbside check-in.

Thank you, Continental.

And good news for those of us planning trips to New Zealand.

Air New Zealand has unveiled a new fare structure for its transpacific flights, with significantly lower prices while eliminating many restrictions such as minimum and maximum stays and weekend stay requirements.

Fares are priced to encourage advance booking so the further out you book the lower the fare.  Seasonality has been eliminated on many fare types, and there is now a year-round, limited availability fare of $930 (previously the lowest fare offered was $1,238).

They are also completing a US$115 million upgrade of their 747s, with a new Premium Economy class as well as regular Economy and Business Class.  And, in another innovation, they allow you to buy 'half roundtrip' fares - you could, for example, travel down to NZ in Premium Economy or Business class, and then fly back home in regular Economy class.

Qantas has remained stonily silent to this move by its major competitor.  Probably they're pre-occupied with their merger talks with Singapore Airlines.

Here's a puzzling development.  Although US airlines have made their internet websites virtually the only way to book a ticket without incurring booking fees, Portugese airline TAP has announced it is going to start adding a fee onto tickets booked directly through their internet site.

The fee will vary, depending on the country you book in, and type of ticket you book, ranging up as high as €100 ($125)!  TAP said the fee is 'market based' and designed to encourage travelers to book with a travel agent.

And if you believe their fee is to help travel agents, I've got some ocean front property in Arizona you might like to buy.

I frequently bemoan the lack of investment in innovation at Boeing.  And so it was interesting to read about a massive $3 billion investment Boeing is now making.  Boeing is investing in - ooops - itself.  As this article details, the company is spending this money to buy back more of its shares.

Doesn't that strike you as rather closed-loop?  If Boeing has a spare $3 billion, why not invest into a radical new type of airplane technology to transform our flying experience?  And no, I'm not being stupid when I say this.  Boeing has done this twice already - when it developed the 707 and then when it developed the 747.  In both cases, Boeing says it risked its entire future on the success of its innovation.

It's time for another risk and another massive leap forward.

Also this week, Airbus landed orders for another 80 planes.  As for Boeing's proud boast it would sell more planes than Airbus this year - we're not hearing so much of that now.  Maybe Boeing is too busy making money investing in itself to care much about selling planes any more.

This week's Dynamic Man of Action Award goes to OPEC President Sheik Ahmed Fahd Al Ahmed Al Sabah.  With oil prices grazing $61 a barrel, he 'began consultations' with fellow members earlier this week as to whether to release another half million barrels of daily production into the market, but concluded they would monitor prices further first.

I think we've got to wait for a while to see exactly what is the behavior of the prices, because until now it's not clear,' said Al Sabah.

Not clear???

However, to be fair to the gentleman, a lot of people are not clear about the meaning of our high oil prices.  People persist in comparing them to past transient price peaks.  But this is not a transient price peak, because it is not caused by a short term blip or anomaly in the market.  It is a long term lift, caused by a long term shortage of oil producing capacity.  Here's a sobering article - if not downright scary - on this topic.

Strangely, there is not only a world crisis in the ability of oil producing nations to produce enough oil each day to meet demand, but there is also a crisis - particularly here in the US - caused by a lack of refining capacity to convert the crude oil to the products we actually use.  No new refinery has been built in the US since 1976.

All of which makes a possible new business venture of Sir Richard Branson seem very sensible.  Sir Richard is considering building his own oil refinery, and has even invited other airlines to join in the project with him.  He reasons that if he can add to the refining capacity, he might be able to better reduce and control his jet fuel costs.

Here's another statistic on the accelerating shift from having a landline at home to going completely wireless This article says almost 10% of US adults have abandoned their former regular phone line in favor of a cell phone, and further says half of the rest of us are considering doing the same.

But, for the bad news, the still too muted concerns about cell phone radiation continue to build.  This article says there's no such thing as a safe level of radiation in any context.

Puzzlingly, the article doesn't even mention the growing amounts of ever present cell phone radiation - from our own phones, from phones around us, and from cell phone towers; preferring instead to talk about decommissioned nuclear power plants and CT scans.

A cynic might observe that few abandoned nuclear power plants advertise on MSNBC, whereas cell phone companies do....

This Week's Security Horror Story :  Guilty until proven innocent?  A Massachusetts woman was busted at Logan Airport for committing the crime of carrying cash hidden in a secure travel pouch between her breasts while trying to board a plane.

You didn't realize carrying cash is illegal in this country?  Not only is it apparently now illegal, but if the Drug Enforcement Agency tosses a coin and, based on the coin toss, decides your cash is drug-related, it can keep it all, without having to take you to court or anything.  Instead, you have to spend more of your money to prove your cash is lawfully yours and not drug related (hard to prove a negative, isn't it).

In this case, the woman had almost $47,000 in cash on her person.  She said she was going to Texas and needed the cash to pay for plastic surgery she had scheduled there.  A DEA official said she had a nice body, didn't need any plastic surgery, and so arrested her for carrying drug money.

The pen is mightier than the sword - but how about the penknife?  An AA flight from Chicago to Rome had to turn back after a passenger found a small knife in one of the pillow and blanket packages being handed out.  A subsequent search of the plane failed to find any other small knives.  Passengers had to overnight in Chicago before a new flight could be arranged.

I've mentioned before about smokers now being unable to carry lighters either in their carry-on or in their checked baggage.

Relief is now at hand.  The Department of Transportation has granted an emergency exemption application from the Zippo Manufacturing Co, allowing passengers to pack up to two fueled Zippo lighters in checked baggage.  These lighters must be placed in special packaging.

Apparently an otherwise dangerous lighter becomes safe if it is packed in a $13 box.

Here's a must read article.  The TSA wasted $303 million of its $741 million budget for hiring screeners.  The extreme examples cited in this article make you wonder where to draw the line between abject idiocy and outright corruption.

I've sometimes wondered, when high-profile VIPs with common names have had problems flying due to their name being similar to a suspected terrorist, just how wideranging such problems may be.  This article suggests that 35,000 people are stopped at airline gates due to being similar to a name on a no-fly list.

That is not 35,000 people a year.  Nor every month.  Not per week.  35,000 people have their travel plans disrupted every day due to mistakes on the No Fly list.

Note also that people have to prove they are not terrorists to get their names removed.  Guilty until proved innocent, again.

Meanwhile, as this article reports, the 'gold standard' of US identity documents, the US passport, is seriously flawed, with many people being granted passports who should not be given them, due to the lack of adequate checking into passport applications.

I wrote last week about hotels and their attempt to catch a free ride on the environmental lobby by suggesting you don't ask for fresh towels each day 'to save the environment'.  Reader Steve wrote in with a commentary that matches my own experience, making the whole thing not only offensive but pointless :

My experience has been that the vast majority of hotels either don’t train their staff to follow the rules on the cards or they purposefully mislead their customers.

I admit to being guilted into rehanging a towel a few years ago at a hotel, but came back to my room to find all the towels changed anyways. Since then I have been doing my own informal studies at hotels/motels that display these signs. While I stay in hotels about 50 times a year, only about 12-15 of those would be multiple nights, so my sample size is admittedly limited.

In my experience over the last 6 or 7 years, only about 1 in 10 hotels actually will actually leave my towel in the bathroom. The cards usually say “on the floor, replace – hanging up, I’ll use again.”

I’ve tried hanging it on the hook behind the door (always taken and replaced), I’ve left it over the shower rod (always taken and replaced – once I even hung the “save the environment” sign next to the towel just to see if it would make a difference-it didn’t), and on the towel rack (the only place that a towel has ever been left, but even then, it is almost always taken and replaced).

But if you see a sign in your London hotel bathroom that includes words such as yellow and mellow, and brown and down, this might actually be for real.  London is experiencing a very serious water shortage, requiring Londoners to conserve water in all rooms of their houses.

And noting the restrictions on car washing, perhaps Londoners should consider not buying white motor cars, due to their apparent appeal as targets to incontinent birds.

Lastly this week, it seems the  4 July weekend this year will be the most traveled ever.  May your own travels be free of hassle, your weekend great, and may you too enjoy some really big and noisy fireworks.

Until next week, please enjoy safe travels

              David M Rowell aka The Travel Insider

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