18 November, 2005
The New Zealand tour is now fading into distant memory, even though it ended only one week ago. How quickly we forget our past pleasures, and - more to the point - how quickly we start to get afflicted by wanderlust and wish to travel again.
In case any of you are vicariously interested in seeing what the tour was like, one of the people in our group posted a selection of pictures on his web/blog site at https://hans.wynholds.com/nzinsider/ and you're welcome to have a wander around. Thanks, Hans, for graciously assuming the role of (un)official group photographer.
I was away for three weeks in NZ, plenty of time to start to miss some of the creature comforts of home. One of the comforts I found myself surprisingly noticing the lack of was a wonderful thing I am embarrassed to confess I only started enjoying very recently. So much for me as an 'early adopter' of good new technologies.
I'm referring to satellite radio, and now, this week, offer you a chance to understand and appreciate this marvelous new service too :
This Week's Feature Column : Satellite Radio Service : Why pay $10-14 a month for satellite radio when you can get plenty of regular radio stations for free? There are many reasons, such as national coverage with almost no dead spots or poor reception, over 150 channels of advertisement free music, and high quality sound. Find out more about this must have service for anyone who spends time in their car.
I'm starting to get a few cabin pressure reports (thanks Bill) and it is interesting to see the widely varying levels of pressurization between flights, with the current thinking being this is primarily a function of airplane type rather than airline policy. If you'd like to help by sending in your experiences, it has now become easier to do so. Reader Rick advises of a cheaper source for the altimeter watch I recommend. This watch, listing for $90, is available on Amazon for $70 and Rick has now found a source that sells it for $48.
Dinosaur watching : My comment last week about Delta paying up to 12% commission to travel agencies brought a lot of emails from travel agents who knew nothing about it. Agents said they variously asked Delta and ASTA for information, and neither Delta nor ASTA could help.
It is hard to understand how an airline doesn't even know about its own commission policies. But in this case, it turns out that Delta's offer was a semi-secret and limited offer, only to certain agencies. But Delta's secret was exposed in an article in a travel industry magazine (Travel Trade) who in turn received the information from an ASTA official (making it strange that ASTA were, last Friday, denying knowledge of the situation).
Oh - where did I get my information from? The daily ARTA newsletter, an essential intelligence source for all travel agents. If you're a professional travel agent, you should belong to ARTA and get this excellent daily briefing.
My gloomy prognosis of the ongoing nature of this commission deal is confirmed by the obscured status of the offer. And, as another pointer, one of the few remaining US airlines that had been paying US travel agencies commission - AirTran - announced it will stop paying base commissions on 31 December.
But, note carefully the wording. AirTran will stop paying base commissions. That doesn't mean they won't still offer overrides (on top of a zero percent base) to agencies they wish to cultivate; same as all the other airlines and their preferred agencies. In a way, the zeroing of airline commissions has merely been the visible part of the transaction - overrides have still been negotiable if an agency can make a deserving case for consideration.
If you're dealing with a large agency who now charges you fees to issue tickets, ask which airlines they are getting overrides with and whether their fee will be adjusted when you buy tickets on those airlines.
Talking about Delta, the airline is attempting to use its Chapter 11 status as a bludgeon to beat up its employees with. In this article, DL is quoted as describing their pilots' objections to having their contract unilaterally torn up and rewritten as 'murder-suicide'. The pilots might choose to claim, in return, that their alleged murder was merely an act of self-defense.
Delta had accepted $1 billion in concessions from their pilots in 2004. But now they've decided it isn't enough, and are demanding another $325 million.
Delta has lost over $11 billion in the last four and three quarter years. Pilot salaries are only a very small part of their problem.
While the outcome of Delta's pilot dispute remains unresolved, Northwest has been given permission, by its bankruptcy judge, to make a temporary 19% pay cut to its 14,400 ground workers. This is to 'give the workers more time to bargain on a permanent contract'.
To bargain? Just exactly what type of fair bargaining process is possible when the airline can use its almost unilateral Chapter 11 powers to do whatever it likes, and where the judge (it would seem that the least visible of the constituents he is representing and protecting are the employees) 'gives' workers a 19% pay cut, just to set the scene for negotiations.
Would you want to work for a company in bankruptcy; a company that has laid off vast numbers of your fellow workers, and cut the salaries and pensions of those remaining? Well, if you're a wannabe flight attendant, and the company is United, the answer is apparently 'heck, yes!'.
Notwithstanding a starting salary believed to be under $1500/month, United was deluged with applications when it announced it was accepting applications for 2,000 new flight attendant jobs. They received over 7500 applications on the first day through their website, of which more than 2600 were considered to be excellent matches.
Does that mean the skies might be getting friendlier sometime soon? I wouldn't bet on it.
I regularly write about the deceptions airlines practice when they attack us with so-called fuel surcharges. These are exorbitant rip-offs and recover vastly more than the actual increased cost of jetfuel. They should be called 'extra profit surcharges' not 'fuel surcharges'.
Of course, the airlines maintain the reason for these surcharges is because fuel prices are volatile (as if air fares are not also volatile!) and this way they can quickly adjust their total fare based on the changing cost of jetfuel.
Oil prices are now below $50/barrel, down from peaks of over $60. Pump prices for gasoline, as well as spot market prices for jetfuel, are down too. But the fuel surcharges? Unchanged.
Shame on the airlines for their rapacious fuel surcharge pricing, and double shame on them for leaving them at the highest levels, even when their fuel costs have materially dropped.
I've written several times about the possibility/inevitability of a merger between Qantas and Singapore Airlines (most recently here). I think the concept is both unnecessary and stupid - there's absolutely no commonality of corporate culture or image at all between these two airlines.
They're both excellent airlines, but the image of the 'Singapore girl' and their sophisticated oriental service is about as removed from the image of the affable casual Australian flight attendant as possible. Both airlines are robustly profitable and neither needs the other; at the same time, the public interest would be materially harmed if two strong and competing airlines were to merge into a mega-airline with no effective competitors on many major routes.
But it seems both airlines are keen to pursue this as aggressively as possible, while interposing public statements of support with public statements against. The latest supporting statement comes from an imposing source - Australia's long-serving Prime Minister, John Howard, who said the two airlines should merge, describing it as ultimately a commercial decision and referring to the economic environment as a challenging one (notwithstanding the massive profitability of both airlines).
Qantas had no comment to make, and Singapore Airlines coyly referred to it as 'an idea ahead of its time'.
Why is the preferred approach to competition these days is to merge with the competitor rather than to compete with them? The two airlines are presently and profitably competing with each other and with other airlines. Isn't that what the western economic system is all about? Isn't this a good thing? It is possible to understand why the two airlines would rather create a megalithic monopoly than be forced to creatively compete, but why are the airlines' respective governments also keen for this to happen?
Bottom line - boosting the airlines' bottom line will not benefit travelers. Quite the opposite.
A SQ/QF merger would send ripples throughout the industry. Qantas is a major member of the oneWorld alliance, Singapore a major member of the competing Star alliance. The move by either of them into the other alliance would massively tilt the scales in favor of that alliance's global dominance.
SQ is also a 49% shareholder in non-aligned airline, and often-times major Qantas competitor, Virgin Atlantic. Could Qantas end up as a shareholder in Virgin? What would Sir Richard think about that!
While we don't (yet!) know Sir Richard's thoughts on having Qantas as a major shareholder, he has been talking some more about sourcing fuel for his airline's planes. But when he hopes it may be possible to save money using biomass derived fuels, he is overlooking a simple economic imperative. If he truly does come up with a practical lower cost jetfuel than the oil based fuel currently in use, then while the cost of this may be lower, there is still an 'opportunity cost' associated with using it - that is, he is losing out on making profits by selling this lower cost fuel to other companies.
Sir Richard, never one to feel the need to conform to business norms, is the only airline executive who has admitted to an interest in developing fuel sources. But let's hope he at least accepts some social constraints on where he gets his fuel from, and doesn't try to make fuel from dead cats.
Still talking about Qantas, it is normal, when a head of state is traveling by commercial airline and not flying by private jet, to fly on their country's flag carrier. When the flag carrier also offers direct service to the destination, it is not just loyalty but also common sense. And when the government owns 82% of the flag carrier, it is not just loyalty and common sense, but also financially prudent to do so. Choosing to fly with the major competitor would be a strange move indeed.
And so, how to explain New Zealand Prime Minister Helen Clark's decision to fly on Qantas to Los Angeles, and then on another airline to (eventually) Ireland, rather than to fly with Air New Zealand direct to London?
I guess I'm not the only person who prefers Qantas to Air New Zealand.
Rome wasn't built in a day, part next...... The FAA has issued a notice of proposed rulemaking to require the operators of more than 3,200 existing and new large commercial jets to reduce flammability levels of fuel tank vapors on the ground and in the air, so as to remove the likelihood of a potential explosion from an ignition source.
Why are they doing this? As a response to the TWA 747 crash (TW 800) off New York, way back in 1996. The FAA is accepting public comments on this topic through 20 March 2006 - their sedate pace is proceeding with no urgency at all.
Will the new rule be in place by 17 July 2006 (the tenth anniversary of the TWA crash)? Maybe, but even if it is, the airlines will be given several years to then upgrade their planes.
What does it take to get the FAA to move at a speed faster than a crippled snail?
One rule the airlines have learned - or should have learned - is that the public will never pay a price premium for better quality service, at least in coach class. But the cruise ship industry has generally based its much less price sensitive cruises on the assumption that luxury and quality can be sold and do have values which their passengers will happily pay for.
Is this assumption now to be challenged, and successfully? I've written before about easyCruise, a company formed by the founder of discount carrier easyJet. It seems their discount no frills approach to cruising is catching on, because they've just signed a contract for two new 500 passenger ships. Their current one ship is running at 90% occupancy levels this month. Apparently ridiculously spartan - but ridiculously cheap - cruising is proving popular.
Boeing has now formally announced it will develop a new model in its venerable 747 series. And in yet another indication that style now takes priority over substance, guess what this new model will be called? The previous models in the 747 series have been the 747-100, -200, -300 and -400. So it naturally follows that the new model will be the 747-8, doesn't it.
Well, it is natural only because the number 8 is a very lucky number for the Chinese. Indeed, to translate the entire meaning of variously the 747-400, the implications of a 747-500 and the meaning of a 747-8, the following meanings would apply :
Which is about the best meaning Boeing can hope for with its 747 series - a plane that hasn't sold spectacularly well, to date, in China. Hopefully the new number will prove the magic element in Boeing's future success in this huge burgeoning market.
To be fair to Boeing, it isn't just the 747 which is being gifted with lucky number 8. Of course, it also had the great good fortune that its new plane was logically to be numbered the 787, in keeping with the series to date. And Airbus jumped its numbering series when it went from its A300-310-320-330-340 series planes to its A380. Only subsequently did its most recent new model plane return back to the number A350.
The number 3 signifies growth, so for the very large A380, the number appropriately means 'grow rich'.
How long before one company or the other - or perhaps both - number their next new model plane simply the 78 or the 888?
But didn't they just say the plane had no competitors in its category?
We're getting close to the end of the year and both Boeing and Airbus are struggling to get their year end order numbers as high as possible - with the struggle being particularly acute at Airbus, currently lagging behind Boeing in the new order stakes.
The upcoming Dubai Air Show starting on Sunday, and a potentially humungous sized order from Qantas, possibly in the beginning of December, are the two remaining big opportunities, with a surprise win to Boeing this week when it won an order for up to 26 of its 777-300ER planes from the apparently unstoppably growing airline, Emirates. Emirates has been one of Airbus' best customers until now, so this is a credible win for Boeing.
Sister plane to the 777-300ER is the 777-200LR, which just broke the world record for longest flight by a commercial airplane, when it flew from Hong Kong to London the long way - a distance of 13,422 miles, and a flight that took 22 hours and 43 minutes. The previous record, set in 1989, was with a Qantas 747-400, which flew 10,500 miles from London to Sydney.
The plane has a standard range of 10,875 miles and an unnamed airline is reputed to be in talks with Boeing to buy some to use for nonstop London-Sydney service. The flight would take about 19 hours to Australia and 21 hours to London (due to prevailing winds).
One of the key elements of all new airplanes is keeping their weight down as low as possible. This was underscored this week when Air Canada decided to copy American Airlines, by removing the paint off one of its 767s; thereby saving 360lbs of weight. This represents a fuel saving of $20,000 a year for this one plane, or $900,000 if done to all their 767s.
No-one can really object to cutting back on the external paint to save weight. But some of Boeing's increasingly desperate weight saving measures for its new 787 don't sound quite so benign. In the 'good old days' I've had Boeing engineers boast to me about how all Boeing planes have been massively over-engineered with triple redundancies and tremendous tolerances for stress and safety. But note in this article how Boeing is now seeking to 'design for zero margin'.
Call me old fashioned, but I'm not sure I'm comfortable with the concept of 'zero margin'.
Note also in that article the ridiculous nonsense in the sidebar box which claims it costs $39,000 to fly an extra 2500lbs of weight on a single 3000 mile journey. The actual cost is approximately $91.30. Think of it this way : 2500lbs = 10 passengers and their bags. A coast to coast (ie 3000 mile) one way ticket can be bought for $150 or less. Now, I know the airlines are losing money, but to sell a fare for $150 when the fuel cost alone is $3,900 is beyond impossibility.
Flu Focus : A new study by University of Hong Kong researchers has found that bird flu virus is ten times deadlier to humans than regular flu.
But of course, this is only a problem if bird flu mutates into a more human to human transmittable form, right? Well, bad news on that front, as this article explains.
And, meanwhile, in its non-human form, it is continuing to infect - and kill - people. This article also claims that the virus has already mutated into a more readily human to human transmittable form.
One last worry for this week. We're all hoping we'll be saved by Tamiflu if the virus hits - even though Tamiflu is almost impossible to obtain at present, and most western governments have appallingly inadequate emergency supplies. Well, maybe Tamiflu might help with resisting bird flu, but it does have some alarming side-effects according to this article.
This Week's Security Horror Story : Remember the panicked rush to introduce new security measures to protect us from box-cutter wielding hijackers? Or the haste with which the TSA deployed ill-suited luggage scanning X-ray machines that are unreliable, costly, and prone to errors?
And then remember the speed with which the TSA closed the other vulnerability - the ease with which terrorists could simply ship a bomb as air cargo on a passenger plane?
You probably remember the first two events, but, alas, the third event has yet to occur, and it is now four years after 9/11. Every year, 6 billion lbs of air freight - 25% of all air freight - is carried on passenger planes, but according to a Government Accountability Office (GAO) report released on Wednesday, less than one third of the freight shipping companies have data collected from them by the TSA, and the data the TSA does receive may be unreliable.
Some cargo is randomly inspected, but much is not, and GAO inspectors, during visits to four airports, observed that 'a considerable amount' of cargo was not being inspected.
The TSA promised to resolve these weaknesses by the end of 2003. The date today is 18 November, 2005. The weaknesses remain.
Here's a new approach to airport security - having passengers submit to lie detector tests. The fact that this procedure produces a false positive rate of about 12% (one in every eight people, although innocent, are failing the lie detector test) doesn't seem to be dampening enthusiasm for this new device.
I wrote about the causes and cures for seasickness a while ago. But nothing in either article is likely to be of help to this lady, who has been seasick for four years - four years after finishing her Mediterranean cruise.
Here's an interesting table of the top ten common accidents that happen to cell phones, and - in case you wondered - here's some more data on accident number six.
Lastly this week, and still talking about cell phones, long time readers know of my concerns about cell phone radiation. Alas, it seems my hoped for solution to cell phone radiation may not be effective.
Until next week, please enjoy safe travels.
David M Rowell aka The Travel Insider
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