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22 July, 2005 

Good morning

After a slow start, our summer is definitely here with a vengeance.  Instead of thinking of traveling to NZ to escape our winter, it seems some people in AZ would love to go down and escape our summer.

I'm off to New Zealand myself on Monday for two weeks.  So next week will feature a review of my flight down, featuring Qantas' lovely new business class SkyBed seat/bed.  I'm a sucker for anything with the red 'roo on the tail - I enjoy flying Qantas so much that I'm flying to Auckland via Sydney, turning a 12 hour flight into an 18 hour flight.  I'm delighted.

When did you last accept six hours extra flying time with the same happy anticipation?

And talking about flying to Auckland, what better way to introduce :

This Week's Feature Column :  Planning a Vacation in New Zealand :  Here's the information you need to plan your own vacation in lovely New Zealand.  The country is closer than you think, due to a conspiracy on the part of the map makers, who distort their maps to make the country look further away than it is.  Intrigued?  Read more in the article.

There's a very easy way to plan a vacation in New Zealand.  Simply join our October tour, and all the myriad of details is immediately taken care of.

Recognizing that not everyone can take the full 18 days for the complete tour, I've now split the tour into two shorter options in addition to the main tour.

  • An Introduction to New Zealand :  Auckland, Rotorua, Queenstown and Christchurch.  This is the complete 'A list' of NZ attractions, ideal for the first time visitor or the enthusiast seeking to return to the places they know and love.  This is 11 days, from the day you leave the US to the day you return (ie the main tour up to day 11, on which day you return home to the US from Christchurch).  $1299 per person

  • Advanced New Zealand :  Wellington, Martinborough, Hawkes Bay, and Taupo.  These are places most international travelers, with too little time, omit from their NZ touring.  But you'll find these places every bit as special, and perhaps more uniquely NZ-ish, than the 'A list' above.  This is 10 days, from the day you leave the US to the day you return (join the main tour by flying into Wellington on day 11).  $949 per person

I do hope there'll be a chance to meet some of you and introduce you to my home country on either or both parts of this lovely tour.

Dinosaur watching :  At last, after billions of dollars in cost savings, multiple fare increases this year, and passenger load levels that five years ago would have been considered impossible, some of the dinosaurs are finally starting to become profitable again.

Second quarter results have now been announced by several airlines.  Continental is showing a net income of $100 million, and American is reporting a massive $598 million profit.

American's result is their first quarterly profit (ignoring profits caused by special item transactions) since the fourth quarter of 2000.

Perhaps part of the reason for AA's profit is due to saving on jetfuel as much as possible.  An American flight was only minutes away from landing at DFW when it declared a fuel emergency and landed at the Naval Air Station Joint Reserve Base on Fort Worth's west side, a mere 20 miles from DFW.

Passengers weren't told what was happening.  Apparently the plane suddenly descended sharply then landed at the naval air station.  Passengers were subsequently bussed the rest of the way to DFW.

How out of gas does a plane have to be for the pilot to feel he must urgently land a mere 4 or 5 minutes short of his planned destination?

Interestingly, AA was one of the prime movers to get the FAA to reduce the minimum fuel requirement on international flights from 10% down to 5% of estimated needs, in June 2004.

Alaska Airlines and JetBlue have also reported small profits.

The airlines should be congratulated for their results, although with all the cost cutting and the extraordinarily high loads, only an extraordinarily maladroit airline could fail to make a profit at present.

But - wait.  Delta also reported its second quarter result on Thursday.  Ooops.  Delta lost $388 million, bringing total losses in the last five years to almost $10 billion.

CEO Grinstein showed how he earns his big bucks by blaming their loss on 'some things beyond our control'.  Which I guess implies that if they are ever to make a profit again, that too may be due to some things beyond his control.

The day before their announcement, Delta's CFO departed without prior warning.  This is the second CFO they've lost in fourteen months.

And Delta isn't the only airline to be losing its top executives.  US Airways is losing between 20 and 40 managers a month.  Its latest high profile departure is EVP Bruce Ashby.  He has left to run a new Indian Airline, Indigo, with former US Airways CEO Rakesh Gangway as major backer.

Delta has raised its fare caps on its Simplifares, increasing both the maximum coach and first class oneway fares by $100, up to $599 and $699.

Southwest's comment :  We love it when our competitors raise fares.

Most analysts are also projecting a big loss at Northwest when they announce their results next week.

United doesn't seem too confident about its situation, either, having just asked for, and been granted permission, to borrow another $310 million, so as to 'provide a stable environment during restructuring'.

They also asked permission for another extension of when they will file their business plan, with their new deadline being 31 August.

I've commented several times about the mysterious way an airline's shares continue to trade at appreciable values when the airline has filed Chapter 11; even after the airline indicates its shares will become close to valueless when it restructures.

The latest such mystery is United Airlines.  Since their bankruptcy filing in December 02, their share price has on occasion been as low as a dime, but at other times it has been over $2.75.  Currently it is at $1.52 (up 50% in the last two months); and this isn't just stranded investors desperately trying to sell at any price.  Obviously every share sold is bought by someone, and on average more than 1% of all UA shares are traded every day.  That means, overall, every UA share has been traded 5 or more times since bankruptcy.

United has repeatedly warned, since filing Chapter 11, that its shares will be worthless when it restructures.  Their advice is plainly borne out by the massive shortfall between what they owe and the assets they have to make good on their debts.

Now that a restructuring date is starting to appear in the near future - ie, a date at which the shares will be zeroed out, who in their right mind would buy any UA stock?  This article provides an interesting discussion on the topic.

Sometimes it seems the airlines are run by a bunch of adolescent schoolboys.  Certainly your average teenager could hardly bring a worse result than what some of the dinosaurs are reporting, notwithstanding their experienced senior management teams and many millions of dollars worth of consulting assistance.

So is it surprising then to read of an 18 year old teenager in Liverpool who is starting his own airline.  Its initial world headquarters are in his bedroom at home.

Daniel Reilly has leased a Boeing 737 and is about to operate flights from Liverpool to Tenerife, Gran Canaria, Lanzarote and Fuerteventura.  The airline - Nexus Airways - evolved from a school project he did at high school, and for which he is still waiting his final grade. 

Perhaps he should hope he gets a failing grade.  He would be in good company, and this might be a powerful indicator of future success in the real world.  Frederick Smith was laughed out of business school when he offered up a plan for a hubbed overnight air courier service.  You'll see the results of his creation all around you today - look for a purple Fedex logo.  And Memphis, TN is still their major hub.

Good news or bad news?  Depends if you're a farmer, a flier, or a regular person.  Congress is considering extending our daylight saving hours by two months - starting a month earlier and finishing a month later.  This would slightly reduce energy consumption because in theory we'd be asleep more during the dark and awake more during daylight.

But if you're an international airline, this loss of synchronization with other countries and their daylight saving means that precious slots at particular times at airports will no longer work.  The Air Transport Association says this change could cost $147 million (presumably each year) and would cause 'significant disruption' in overseas travel.

And that is truly scary - when an airline promises 'significant disruption' rather than 'minor inconvenience' one can only guess at what to expect.

The Boeing 737's cabin uses the same design and diameter as the 707, dating all the way back more than 50 years.  What was satisfactory back then is no longer nearly sufficient for six abreast seating today, due to people being bigger; and the inadequacy of the 737 (and 757) passenger cabin dimensions has exploited mercilessly by Airbus.

However, Boeing is adhering strongly to the 'if it ain't broke, don't fix it' school of thought, and so (and undoubtedly, much to Airbus' delight) has continued to invest still further in this 50 year old design, announcing this week yet another 737 model, this time the 737-900ER.  It will carry up to 215 passengers, almost exactly twice as many as the first 737 of 38 years ago, and 26 more than the largest current 737.

Don't you hate companies that add surcharges to their advertised rates.  The airlines, cruise lines and rental car companies are masters at this.  But let's not forget another class of major offenders - wireless phone service providers.

And so it is with great approval that I read about NYC filing a lawsuit against Sprint, T-mobile and Nextel for deceptive advertising.  Cingular and Verizon Wireless complied with the new New York City Consumer Protection Law and are not being pursued.

Some of the alleged offenses are

  • Nextel deceived consumers by advertising “ALL INCOMING CALLS ARE FREE” when in fact, a tiny, multi-line footnote at the bottom of the advertisement indicated “...an additional access charge of either $.10 per minute multiplied by the number of participants on the call...or a monthly flat fee,” would be charged to the consumer if he or she signed up for the advertised calling plan.

  • Nextel further deceived consumers by advertising “PLANS STARTING AT $10 PER MONTH,” and “POWERFUL PHONES STARTING AT $24.99” without clearly describing different service plans or products, and without adequately disclosing either the highest price of the advertised plan, or an “average price,” as required by law.

  • Sprint deceived consumers by advertising “NATIONWIDE LONG DISTANCE INCLUDED. EVERY MINUTE, EVERY DAY” when in fact, a tiny, multi-line footnote at the bottom of the advertisement indicated a charge for long distance—including the phrase “...an additional $0.25 per minute for long distance.”

  • Sprint further deceived consumers by advertising that “instant savings require in-store purchase and activation of a new line...” when a tiny footnote at the bottom of the advertisement stated “Requires in-store purchase and activation of two new lines of service on eligible plans.”

  • In the same ad, Sprint continued to deceive consumers by advertising a “FREE” cell phone offer forcing consumers to look at the fine print footnote to find that in fact, the offer required “...a two-year Sprint PCS Advantage Agreement.”

  • T-Mobile deceived consumers by advertising “FREE LONG DISTANCE” and “FREE ROAMING” when in fact, a tiny, multi-line footnote at the bottom of the advertisement indicated “Billing of roaming charges and minutes of use and services may be delayed” and “Call duration may be limited.”

I was looking at hotel prices on several websites yesterday for some future international travel (I'm trying to avoid telling you that I haven't yet booked anything for my trip to NZ next Monday!).

How frustrating that many of these sites quote a rate, eg, '$100' but nowhere can you see if the currency is NZ dollars or US dollars.  I ended up phoning the hotels directly, and on every occasion was quoted a rate substantially below any of the internet rates I could find.

Brad Pitt and George Clooney are getting into the hotel business.  They are investing in a new Las Vegas hotel called Ocean's 13. The hotel will memorialize the movies Ocean's Eleven and Twelve.  The two have entered into an agreement with owner Rande Gerber to build the new hotel and casino and will share in the profits in exchange for the use of their faces.

How sensitive we've become.  Not only do we seem to be very concerned at how Muslims might feel when ardent followers of their faith persist in blowing themselves and other people up, in London and everywhere else in the world; almost to the point of eclipsing our concern about how 'ordinary' people might feel, but the politically correct crowd has now set their sights on budget airline Ryanair.

In the wake of the 7/7 London bombings, Ryanair ran ads showing Sir Winston Churchill giving his famous V for Victory sign, with a headline adapted from one of his wartime speeches :  'We shall fly them to the beaches, we shall fly them to the hills, we shall fly them to London!'.  At the bottom of the ad is the message 'Let's keep London flying'.

Seems like an excellent and positive response to the terrorism London has suffered.  But Britain's Advertising Standards Authority says the ad has been heavily criticized, with people complaining that it was offensive and insensitive.

I found the bombings to be offensive and insensitive.  Who can I complain to about that?

One comment about yesterday's bizarre events - the four bombings that nearly were.  It seems the four bombs were of similar size and composition to those used exactly two weeks earlier, but for some reason, only the detonators went off, and the main charges failed to explode.  Thank goodness for that.

But the implications of this are truly terrifying.  We had our 9/11, but nothing since.  Britain nearly had an identical attack to that of 7/7, a mere two weeks later.  The four perpetrators/would-be suicide bombers remain at large.  What will the news bring this morning, and next morning, and next?

The extraordinarily pervasive police presence in London at present, security cameras quite literally on every street corner, and a very alert public at large - none of these factors prevented four more determined terrorists from trying to kill themselves and innocent bystanders.  Only good luck prevented another tragedy.

With that sobering thought in mind -

This Week's Security Horror Story :  The Fourth Amendment to the US Constitution reads :

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

In one Supreme Court case interpreting what the amendment means (it isn't obvious?) this was included in the court's verdict

[the] Fourth Amendment protects the 'right of the people to be secure in their persons . . . against unreasonable searches and seizures.' The essence of that protection is a prohibition against some modes of law enforcement because the cost of police intrusion into personal liberty is too high, even though the intrusion undoubtedly would result in an enormous boon to the public if the efficient apprehension of criminals were the sole criterion to be considered. 'The easiest course for [law enforcement] officials is not always one that our Constitution allows them to take.' Wolfish, 441 U.S. at 595 (Stevens, dissenting).  [my emphasis]

So what to make of the announcement on Thursday that New York police will start conducting random bag searches of passengers wishing to ride the city's subways?

Let me guess - this is not violating your Fourth Amendment rights because the police aren't actually insisting they search your bag.  The choice is yours - allow the search and, if nothing bad is found, you'll be allowed through the turnstile (if anything illegal is found at all, terror-related or not, you're going to be in a mess of trouble).  Refuse the search, and you're refused admission to the subway system.  So it can be considered you've given permission for a voluntary search, and therefore is constitutionally valid.

There are no plans in London to randomly search commuters' bags.

Reader Lawton wrote, replying to last week's security stories, with this comment, equally applicable to this latest loss of freedom.  He says

The security fear freaks will not rest until our lives are so unbearable, creating a country resembling a maximum security prison.  As we know, bad things occur in those prisons, including murder, drug abuse, rape and extortion.  What a country!  What a world!

Have you ever read about an anonymous unvalidated bomb warning that wasn't a hoax?  But still we persist in treating every scribbled note as if it were real.  Most recently this week, an AA flight bound for San Juan turned back to Florida after a threatening note was found on a food service cart.  The plane returned and was searched but nothing was found.  Passengers were rescreened and the plane flew to San Juan arriving about five hours late.

Seems to me today's terror bombers want to kill people, not play childish pranks.

Happy birthday to The Mouse.  Disneyland celebrated its 50th anniversary on 17 July.

But an unhappy experience awaits visitors to Disney World.  If you want to enter the park, you have to provide two fingerprints.  Do Disney really need our fingerprints?  What are they going to do with them?  Who are they going to share them with?

Fellow Orlando parks, Universal Studios and Seaworld, have indicated they plan to add similar technology later in the year.

We all know not to joke about security matters when within earshot of anyone at an airport, because the various security people 'protecting us' claim they're required by law to treat even the most transparent attempt at good humor as if it were a genuine threat, even if it were made quietly as a private joke to one's traveling companion, and punish the person accordingly.

Apparently TSA employees are held to the same standard, even off the job.  TSA employee and baggage handler Bassam Khalaf was fired last week.  He moonlights as a rapper under the name of the Arabic Assassin, and likes to expound on such themes as killing, blowing things up, and planes flying into buildings.

Perhaps worried that he really intended to do such things, the TSA fired him.  Do you feel safer, now?

Reader Art wrote in to comment on sky caps.  He says

An interesting scam I've seen several times is the sky-cap hustling tips by stating "I will personally be handling the security of your bag from here to the airplane." He then turns around puts it on a cart, which another (untipped) person rolls away... the guy handled my bag for maybe 7 seconds -- what does that work out to in hourly wages.

I mentioned how expensive it is to speed in France last week.  Well, count your blessings if you're caught speeding in France.  Reader Rune writes from Norway

There are very few 'freeways' in Norway, but regular speed limit on roads outside 'area with people' is 80 kph [50mph], with up to 100 kph [63mph] on 'selected' roads.

If driving 63 mph in an 50 mph area, it will set you back 3600 NOK (US$550).  If driving 72 mph, it'll cost you 7800 NOK (US$1190).

And if driving more than 115 kph [72 mph], they'll take away your license and put it in their pocket, report it as a crime - with possible prison time (in addition to a fine exceeding the earlier amount).  However, since confiscating foreigners' licenses isn't always easy (because of laws and regulations), these are instead fined a bigger amount of money, in the range 10.000 NOK to 20.000 NOK (US$1500 - US$3000) - according to what the police officer 'measures your crime' to.  Watch your speed.

I wrote about spray-on mud last week.  The other reason for buying it?  To innocently obscure your number plates so the myriad of photo radar traps in Britain can't read your plate details and send you a speeding ticket in the mail.

I hope you all bought your HP6 last Friday midnight.  If you would like to know who the HBP is and who dies, well, I ain't telling; but a scan of the internet newsgroups well before midnight last Friday quickly answered both questions.  And now, the long wait for HP7 <sigh>.

Until next week, please enjoy safe travels.  The newsletter timing next week is a little uncertain, due to writing and sending it from New Zealand.

              David M Rowell aka The Travel Insider

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