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19 August, 2005 

Good morning

There was a joke, some years ago, comparing MS Windows to an automobile.  Omitted from the joke was a comparison between the auto manufacturers' generous recall policies and those of Microsoft.  I'm feeling particularly aggrieved at present because my main server has a viral infection - the new virus that shut down some major organizations earlier this week.

This virus didn't get on the server as a result of anything I did (or did not do - the server was kept regularly up to date with all Microsoft's countless security patches).  The server was infected due to a vulnerability in Windows 2000; analogous to a defect in a car causing a safety problem; but whereas the car manufacturer would issue a recall notice and fix the problem; Microsoft does nothing.

Microsoft does have a 24hr virus support (800) number, but when I called and worked through the menus, I ended up with a message 'We're sorry, we can not process your call' and the system disconnected!  Do you think they've hired some airline customer service executives recently?

It is accordingly easy to be sympathetic to people such as Mr J S-B Barnes when they too suffer at the hands of computers and the people who manage them.

Bottom line - due to a flaw in the MS product, my main server is incapacitated, and the only way I can get MS to help me is to buy a 'support incident' from them at enormous cost.  Why do we insist on high standards from car manufacturers, but not from software manufacturers?

It was just a week ago that Microsoft triumphantly obtained a seven million dollar judgment against a spammer.  Guess what, Microsoft.  Your software bug has enabled this virus to use my server as a spam relay.  That means you're a proximate cause of the spam that was flooding out of my server.  Hey, Bill G - care to send me $7 mil?

Talking about software, and wrenching myself away from the unhappiness of this current problem, VoIP phone service continues to evolve and improve, and now has gone full circle and is again available as simple program to run on your PC, rather than as a standalone piece of separate computer equipment.  But is this a good thing, or does it suffer from all the weaknesses the first generation of VoIP software suffered from?  I'm glad you asked that question, because here now is :

This Week's Feature Column :  Skype VoIP Phone Service :  Gaining 50 million users in less than two years, Skype is taking the telecom world by storm.  But does the reality match the hype?  I test Skype and report on the good and the bad.

The New Zealand tour registration closes on Monday morning.  Please let me know if you'd like to join us.  This is, alas, your last chance to participate in this tour.

There will be a 'special event' on the tour.  One of the days sees me celebrating one of the more significant birthdays in my life (although each birthday seems increasingly an achievement!).  So please, come down to New Zealand and celebrate my ??th birthday with me.

Talking about age, thanks to all the readers who wrote in admitting to their respective ages.  It seemed for a while that Warren would be our youngest reader.  He said he was only eight years old, and wrote a very impressive letter for an eight year old.  But he spoiled it by pointing out this was eight 'dog years' not human years.

Actual youngest reader is Jack, who is 15 years old.  Which just goes to show there may yet be hope for the next generation.

Skipping ahead several generations brings us to the gentleman who has earned the honor of being designated 'Senior Reader'.  John, formerly an RAF Squadron Leader flying B24 Liberators in World War 2, wins that prestigious honor.  He is a sprightly 90 years young, and says he still flies whenever he can afford the airline prices.  Let's all hope John remains as a reader and frequent flier for a very long time to come.

John narrowly edged out Dora, who is a mere 89.  Dora exemplifies the truth of the adage you never stop learning when she says

I am 89 years old and no longer travel, but I haven't lost my intense interest in it. I feel I can travel vicariously by reading all I can on the subject

Many more happy, albeit vicarious, travels to you, too, Dora.  And, for the rest of us, may we too be similarly hale and healthy at such points in our own long lives.

Dinosaur watchingDelta's share price continues to drop.  Last Thursday night it was at $1.79, down from $2.24 the week before.  By Monday's close this week, it had plunged still further, to $1.39.  An announcement on Tuesday morning that the airline was selling off its regional carrier subsidiary, Atlantic Southeast Airlines, saw the share price leap up to $1.60 on the open, Tuesday morning.  And now, this Thursday night, it is at $1.54, an overall 14% drop for the week.

Delta is selling its regional carrier for $425 million in cash.  The airline is being sold to Sky West, and Sky West will continue to provide regional services to Delta under a 15 year agreement.  The $425 million sale contrasts with DL's $382 million loss for the last quarter - it doesn't buy DL a lot of time, and selling off this part of DL isn't likely to materially affect their underlying cost structure and potential profitability.

$100 million of the sale proceeds will be used to pay down DL's debt.  $100 million is a lot of money for most of us, and this sounds impressive, until you realize DL currently has more than $20 billion in total debt and lease/pension obligations.  $100 million is one half of one percent of DL's total.

Suggestion to Delta :  If you need some cash, do like Air Canada did, and sell a share of your frequent flier program.  Chances are you could pick up a quick billion or two (or ten!) that way.

Meanwhile, Standard & Poors have said they're dropping Delta from their S&P 500 index because the share price has dropped so low.  S&P also placed DL's ratings on credit watch with negative implications, saying the move reflected a very high risk of bankruptcy.  S&P said the airline needs legislative relief from substantial upcoming pension funding requirements; but that relief may not be passed until November or December - too late for Delta to benefit prior to the 17 October tightening in the bankruptcy laws which is setting an unacknowledged deadline on DL's efforts to avoid Chapter 11.

S&P expect Delta to file for bankruptcy as soon as they have closed the sale of Atlantic Southest Airlines, concluded a new credit card processing agreement and arranged debtor-in-possession financing.  They're working on the first item, have done the second, and are also working on the third, so it mightn't be long now.

It will be interesting to see which airline files for bankruptcy first - Delta or Independence Air.

Strangely, while DL stock has been going down the gurgler, NW stock has been leaping up in value, gaining 38% in value since Monday.  This suggests that insiders are betting the big disaster waiting to happen at one minute past midnight on Friday night/Saturday morning - a strike/lockout at Northwest - isn't going to happen.

There's little public evidence to support this optimism, and on Thursday afternoon, union leaders expressed doubt about reaching an agreement.  The reality, of course, is this is a high stakes game of bluff being played out in public, with each side using public pressure and opinion to advance their cause.  NW wants to lay off about half their mechanics, and requires the ones remaining to accept 25% pay cuts.

On the other hand, perhaps the rise in NW share price doesn't mean a resolution to the strike issue; maybe instead the investors are betting NW will be better off without its mechanics.  Certainly that appears to be the underlying strategy being used by NW's executives, who seem to be spoiling for a fight.

Perhaps this is why Northwest has spent almost $1 million in lobbying during the first six months of this year.  One thing is for sure - no-one spends $1 million on lobbying without expecting payola substantially greater than their investment.

With all the talk of cost cutting and employee layoffs, it is interesting to note that US scheduled passenger airlines employed a total of 452,666 workers in June 2005, only 3.4 percent fewer than in June 2004, according to figures from the U.S. Department of Transportation's Bureau of Transportation Statistics this week.

Wishful thinking?  The 'new' US Airways has picked its ticker symbol.  The symbol for the new merged airline will be LCC, standing for Low Cost Carrier.

It is time to respond to the new excuse du jour trotted out by airline executives and, alas, by the mindless sycophants who write about them.  Formerly, it has been 9/11, the cost of complying with new security measures, and overcapacity (a trio of nonsense claims, none of which survived close examination).  The current most popular excuse for airlines doing poorly is equally nonsense, and the reality is completely the opposite of what the airlines claim.

This excuse is the high cost of oil and jet fuel.  I've repeatedly shown that fuel surcharges are much higher than the underlying increases in jet fuel incurred by airlines (starting with this article and follow the links back to earlier articles).

In addition to loss making airlines' executives trotting this excuse out regularly, the latest proponent of the fuel excuse is the Business Travel Coalition, an allegedly consumer friendly group.  Their spokesman is quoted as saying 'This industry was never built to operate at this level of $70 a barrel'.  While the statement is possibly true, it is also meaningless, or at best implies the airlines have no vision and no ability to respond to the changing world around them.

The industry was originally built to operate single seater bi-planes, and with inflation adjusted fuel costs per mile comparable to (or indeed higher than) what they are today.  Using historical justification for today's problems makes no more sense in the airline industry than it does in any other industry.

Who really cares if the industry was built to operate at $70/barrel oil prices or not?  The solution to higher jet fuel costs is simple - so simple that even airline executives can understand :  increase your fares to cover your increased costs.

The truth, as I've detailed in the articles linked above, is this is exactly what astute airline executives are doing.  Most recently, this week, JetBlue and Southwest increased their prices by up to $8 roundtrip - a particularly surprising action on Southwest's part because 85% of its fuel for the balance of this year is hedged at a fixed price of $26 a barrel, and a further 65% of its 2006 fuel purchases are hedged at $32/barrel.  Even the profitable airlines are using this excuse as justification for raising their fares.

Another airline that seems to be doing well is SAS, with their second quarter profit more than tripling to SEK499 million (US$66.2 million) compared to a year ago.  Increased fuel costs don't seem to trouble them.

And Qantas has just reported a nice increase in its profit for their financial year ended 30 June 2005.  In the 2004 year they made A$648 million (US$486 million) after tax, this year their profit jumped 18% to A$764 million (US$573 million).  Interestingly, although Qantas is strongly hedged against its fuel purchases, it too is adding fuel surcharges to its fares.

Indeed Qantas is feeling very flush at present, and is looking at buying either 100 787s or A350s.  You can bet that Boeing and Airbus are camped out on Qantas' rather unassuming doorway in Mascot at present, day and night.

I've been somewhat harsh on Alaska Airlines in a couple of recent newsletters.  Reader Cary wrote in with what he sees as good news about AS :

You might make a note for your readers that for the last two months Alaskan Airlines has had an unpublished promotion - for all customers the first beer or alcoholic drink is free!  I was shocked when I took two flights in July and August and was told each time that my smile was payment enough.  When no one came onto me further I asked another stewardess the reason and she said it was a summer promotion.  You can't get anything to eat, but you can get a free drink!!

I'm both bemused and disappointed.  What is the point of an unpublished promotion?  Isn't that like holding a party but not inviting anyone?  As for the disappointment; on the flight from hell with desert sun type temperatures for almost half an hour at the gate, what a shame no-one mentioned there were free drinks available for the asking.

How'd you like a job that paid $108,500.  That is, $108,500 every month.  This equates to just over $1.3 million a year.  This was the rate agreed to with Hawaiian Airlines' bankruptcy trustee, Joshua Gotbaum.  But after some 23 months at this rate (he worked 4995 hours, about 217 hours a month, at a rate of $500/hour) and successfully completing the airline's restructuring, he is now asking for more.  Actually, in total he thinks he deserves $9.4 million.

Let's hope he finds no-one to agree with him.

BA is probably back to normal after its problems of last week and last weekend.  Much of the problems were in large part not BA's support, but BA did manage to do at least one thing spectacularly wrong.  When they started flying again, they needed to try and accommodate as many cancelled people onto the flights that were now operating, as well as of course flying everyone who already had bookings on these flights.

But, although there were tens of thousands of people desperate to get onto a plane, BA refused to upgrade anyone into their business or first class cabins, and so while lots of planes were flying out with full coach cabins, their business and first class cabins had empty seats.

BA has tried to portray this in terms of 'we wouldn't let ordinary people with coach tickets get free upgrades'.  But what they should have done was upgrade their frequent fliers who had coach class tickets, and people who'd paid full coach class fare, allowing stranded passengers to then move into the vacated coach class seats.  How difficult is that?  This common sense approach would have satisfied everyone.

Here's a good idea in theory, but one which hopefully crashes and burns before being launched.  France wants to give government seals of approval to safe airlines, and the EU as a whole wants to blacklist unsafe airlines.

What is the problem with this?  Because - as France should know with its recent Concorde crash - a single crash can skew an airline or airplane's statistics from safest to most dangerous (as happened with Concorde).

And, as also may have happened with Concorde, a crash may occur due to reasons totally outside of the airline's control - should Air France be responsible for metal debris on the runway puncturing a Concorde fuel tank?

Luck plays a large part in crashes.  Sometimes good luck changes a potentially fatal catastrophe into a non-event.  Other times, bad luck takes a minor issue and makes it into a hull loss and 100% casualty rate.

As strange as it may seem, safety ratings are not only unreliable and subject to wild and almost random swings, but also involve a great deal of subjective evaluation.  Coming back to the Concorde crash, for example, how much culpability should be ascribed to Air France?  Certainly there were some less than optimum elements of how the pilots handled the takeoff, and perhaps AF should have known about the vulnerability of its planes' fuel tanks.

Would you also seek to take points off Continental (it was an inappropriately fitted part on a CO jet that fell off onto the runway that started the tragedy that followed), even though there was no problem for CO, its planes or its passengers?

There's a reason no airline ever promotes its safety record, and indeed Concorde was about the closest any airline or airplane manufacturer ever got to promoting safety.  And if you're wondering what that reason is, look still at Concorde.  All of a sudden, the world's safest plane became the world's most dangerous.  No airline wants that massive embarrassment, or the liability which would surely follow.  And neither should any government.

Airlines like to offer, as justification for people choosing to fly business or first class, the ability to comfortably do some work during the flight.  And with in-flight internet access slowly appearing, there will be even more ways to stay connected and productive during a flight.  I'm sure many readers already work on flights; as I do myself.

A fascinating thing to come out of the mysterious Helios Airways flight ZU522 crash is this table of the impacts of reduced air pressure on people, researched by National Transportation Safety Board tests in which subjects undertook simple cognitive tasks, such as counting backwards, during tests in altitude chambers.

  • 35,000 feet: Oxygen may flow from the bloodstream into the air. Effects include incoherence in seconds and loss of consciousness. Time of useful consciousness: 20 seconds.

  • 25,000 feet: Obvious physical and mental impairment and the possibility of sudden loss of consciousness. Time of useful consciousness: 2 to 3 minutes.

  • 15,000 feet: Reduced physical capacity and impaired performance of skilled tasks. Time of useful consciousness: Indefinite.

  • 8,000 feet: Degradation of night vision and difficulty with new cognitive tasks.

The reason for this is simple.  The higher you go, the lower the oxygen pressure, and so the less oxygen that reaches your brain.

Now for the fascinating fact.  Normal cabin pressurization, and in all parts of the plane, not just coach class, is to the equivalent of an 8,000' level.  So we're paying top dollar to try to work, often on fairly complex tasks, while the reduced air pressure in the cabin means our brains are starting to dumb down due to oxygen shortages and we're experiencing, probably without even realizing it, 'difficulty with new cognitive tasks'.

Note also you have only 20 seconds of consciousness and almost immediate incoherence at 35,000' (normal cruising altitude on a long flight). If the oxygen masks drop, don't waste time in putting it on. It really is an urgent thing.

The new A350 might need to be called an Airbuski rather than an Airbus.  Airbus has signed a preliminary agreement with a Russian fighter plane designer/manufacturer to participate in the design and manufacture of the new plane.  The Russian company - Irkut Corp - is best known for its Su-27 and Su-30 fighters.  Perhaps this means the plane will be designed with the latest in SAM countermeasures.

Here's an amazing idea that apparently works.  Turning airplane wings into giant loudspeakers.  This apparently makes them more aerodynamic and allows them to sustain higher angles of attack.  Planes could be built with smaller wings, making them cheaper to build and fly.  But this is not an idea from those innovative geniuses at Boeing.  This comes from a Qantas aerospace engineer.

When are we next going to see something truly innovative from Boeing?  For that matter, when did we last see something truly innovative from Boeing?

This Week's Security Horror Story :  Ms Sanden was not allowed to take her recent flight, because her name was on a TSA no fly list.  A similar misfortune occurred to Mr Zapolsky.

This is a sadly common occurrence for too many passengers, all the time.  But these two people, who couldn't fly because their names appeared similar to those of possible terrorists, have every right to feel particularly aggrieved.  You see, Mr Zapolsky is only 11 months old.  And Ms Sanden is a mere 1 year old.

Potential terrorists?  Not in this universe.  Only in that warped distortion of reality inhabited by the TSA.  Details here.

The Helios Airways crash on Sunday is - at the time of writing - still profoundly puzzling.  Hopefully most of the present mysteries about this crash will be answered, but here is a stark fact that isn't a mystery at all.

At 09.37, the plane entered Greek airspace, and was non-responsive to Air Traffic Control.  Half an hour later, at 10.07, the plane is officially labeled as being out of contact.  The Greek ATC issued a 'renegade aircraft' alert 23 minutes later, at 10.30.  This required fighter planes to intercept the 737.  Greek fighters scrambled 25 minutes later, at 10.55, and another 25 minutes later rendezvoused with the plane (11.20).

Impressive?  How about pathetic!  From silently entering Greek airspace to being intercepted by fighters, 1 hour and 43 minutes passed - enough time for the plane to fly 1000 miles.  Or, if you prefer, from the plane being declared 'renegade' to fighters intercepting, 50 minutes elapsed (485 flying miles).  Here's an interesting timeline.

Some good news.  The TSA might allow pocket knives and assorted other currently banned items.  I truly hope this occurs - if so, I can start flying with only carry-on once more (I always fly with a Swiss Army Knife, which now mandates me checking a bag).

If you read this article, you'll note the TSA is also proposing to extend blanket immunity from searches to various categories of individuals such as judges, airline pilots, high ranking military officers, state governors, members of cabinet, and members of congress.

I'm all in favor of allowing most of such people to breeze through security, but perhaps the TSA has a hidden agenda item here.  They are adopting the same ploy the airlines have used for so long and so well - giving special VIP treatment to politicians so as to isolate them from the experiences real people suffer.  Can I suggest Congress absolutely does not allow any currently serving politician to be given an exemption from security screening, but instead mandates they must be treated at least as poorly as the rest of us.  This is the only way to goad Congress into improving the TSA situation.

The camera is mightier than the sword?  Here's a way for a pretend terrorist to tie the US into costly security knots, without breaking any laws.  Simply travel around the country, ostentatiously filming prominent places in a suspicious manner.  And what is a 'suspicious manner'?  Oh, just about anything.

As regular readers know, these types of news stories remind me sadly of when we used to incredulously laugh and joke about the repressive Soviet Union, where it was illegal to take pictures of railway stations or even railway trains.  But now, the joke is on us.

And talking about jokes, here's a new type of battery that apparently is not a joke.  It is, ahem, 'person powered'.

Until next week, please enjoy safe travels.

              David M Rowell aka The Travel Insider

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