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13 January, 2006 

Good morning

The balance of CES was much the same as the first few days, although I do need to correct the record on one minor point :  Attendance was estimated to exceed 150,000 this year, making it the largest show ever.

Not all products were of high standard.  For example, a 'revolutionary new keyboard' which promised to be easier to learn and faster to use.  As readers may know, the traditional QWERTY layout keyboard has some limitations, and many years ago an alternative layout - the DVORAK style - was proposed, but has never been widely accepted.

And so what is the layout of this even better keyboard?  Well, it isn't really that new at all - it just displays the letters sequentially, ABCDE style!  I was unsurprised to learn the manufacturer has no studies to confirm their assertion of this layout being the most efficient style.

Then there was a Skype VoIP competitor, and when I asked 'in what way are you better than or different to Skype?' their reply was 'our main advantage is we don't need broadband to work - Skype needs broadband, and won't work on dialup.'  I pointed out my perfectly satisfactory experiences using Skype on slow dialup, calling all the way from a country town in New Zealand to London; but do you want to guess what the salesman would be telling the next person who stopped by?

Another snake-oil vendor at the show offered a Tivo-type radio recorder which, he claimed, would automatically eliminate the advertisements out of radio broadcasting, just like some DVRs do with television programming.

One small problem :  The tv ad skipping capability relies on tv stations inserting a special control signal (a SMPTE 'blacker than black' frame) between ads and programming.  Radio stations don't use video technology.  And some radio ads are simply read out by the on-air announcer.  I asked the exhibitor how these issues were handled by their product.  'It intelligently learns' was their reply.  Sure sounds like snake-oil to me.

Becoming more prevalent are attempts, with varying degrees of success, at making universal power supplies.  These devices work from car or mains power (and sometimes have built in batteries) and supply power for many of the battery operated devices you have - cell phones, laptops, PDAs, and all sorts of other things.  These promise to reduce the tangle of chargers and wires we all currently travel with, but I'm still looking for a really good model.

In among all the new things, it was interesting to see something old.  Hewlett Packard were celebrating the 25th anniversary of their HP12C calculator.

In 25 years they've been unable to improve on a unit that was then - and still is now - about as close to perfect in a calculator as you're ever likely to get.  I have several myself.

What I like most about the HP12C is it uses 'Reverse Polish Notation' to enter calculations.  Few people understand how this works (it is brilliantly intuitive and much better than normal calculator logic - don't let it stop you from buying one) and so I'm rarely needing to lend my calculator to others.  As soon as they see the calculator has no ' = ' sign and no obvious C/CE button either (but 39 other keys, most of which do three different things), the calculator is invariably handed back to me with a sheepish grin.

One last observation about the show.  The dominance of Asian companies - especially China - is now virtually complete.  Whether it is in research and development, own brand manufacturing, or OEM manufacturing, almost every such company is no longer from North America (or Europe).  But, interestingly, there still seems to be one area of weakness by the new up and coming global players.  Design.

Most of the Asian products were poorly designed and poorly manufactured.  They are inexpensive and look it.  I say this not to be complacent, because for sure this will change, too.

By the way, did you read in Auto Show news this week that the Chinese are starting to manufacture automobiles for export to the US?

With all the new gadgets from CES fresh in my mind, it is time to look back and decide the best gadgets from 2005.

This Week's Feature Column :  Vote for the 2005 Third Annual Travel Technology Awards :  Cast your votes for the best new travel and other gadgets in 2005.  Choose from the various items reviewed during 2005, or add your own favorites to the list.

The next show I plan on attending is also in Las Vegas - the Travel Goods Association Show in March.  I'm hoping to get materials from there to enable me to add reviews of full sized suitcases and also carry-on computer bags to the reviews I already have on wheeled carry-on bags.

Not only am I asking you to please click the feature column link above to give your thoughts about the best products of 2005, but can I also ask for your help with an instant email survey.

I'm trying to get a sense for the possible hazards of having magnetic items close to credit cards.  For example, I have a magnetic clip billfold, and many people have magnetic fasteners on travel accessory items.  In theory, moving an item with magnetic stripe encoding past a magnet can erase the encoded information, but what about in the real world?

Have you ever experienced a situation where you know for sure a credit card's stripe has become unreadable due to a magnet?  Or, vice versa, have you had a credit card next to a magnet with no problems?

Please click on the link below to open an empty email with your answer pre-loaded in the subject line and send it to me.  Results next week.

Yes, I know for sure I've damaged the information on a credit card by placing it too close to a magnet

Not sure, but I think I may have harmed a credit card by placing it too close to a magnet

Not sure, but I think I've sometimes placed credit cards very close to magnetic items and never had any problems

Yes, I know for sure that I've had credit cards next to magnets and have never had any problems when doing so

Dinosaur watching :  United says it plans to exit bankruptcy 'on or about' Wednesday 1 February, not quite three weeks away.  That would make it close to 38 months from when it entered bankruptcy in December, 2002.

United also said it plans to spend $400 million this year on improvements we will see such as more electronic check in kiosks and refurbished airplane interiors, as well as things we won't see such computer system upgrades and new ground equipment.

The airline will keep mainline capacity flat in each of the years until 2010 and expects revenue passenger miles to be flat as well.  In an SEC filing, United also stated that 2005 would be its last unprofitable year this decade.

The forecast is based on oil being $50 per barrel, but United expects if oil is higher they will be able to raise fares to cover the increased costs.  The airline expects a loss for 2005 of $5.3 billion, due in part to bankruptcy related items.

If you were CEO of a company that had been in bankruptcy for three years, and which lost $5.3 billion, you'd probably be desperately reading the Help Wanted ads in your local newspaper.  But United's CEO, Glenn Tilton, stands to get stock and options worth $15 million as part of a bonus when United exits bankruptcy.

Three executive vice presidents will pocket restricted stock and options worth $6 million each, and four senior vice presidents would each receive equity grants worth $3 million.  Thirty-one other company officers would each get $750,000 in grants, and 366 other managers would receive $100,000 in equity.

What about the union members who have accepted pay cut after pay cut?  What do they get?  Apparently nothing.

It isn't only United rewarding employees for a job well done.  American Airlines looks likely to be awarding as much as $600 million in bonuses, with some executives getting more than $1 million apiece, based on its share price performance.

In contrast to these generous bonuses, American has lost more than $7 billion in the last five years, and is expected to have lost about $675 million in 2005.

So why is its share price doing so well?  As this chart shows, the company's share price nose-dived in early 2003, when the airline reputedly came within hours of filing for bankruptcy.  The airline's share price rapidly recovered when bankruptcy was averted.

The stock plan, put in place shortly thereafter, has $5 as an option price, which as you can see from this (logarithmically scaled) chart has been almost continually less than the share price over the last five years, both before and after the option price was set.

I've been generally disparaging when various commentators have predicted airline mergers.  On the one hand, this is a simplistic comment anyone can make; on the other hand, mergers rarely benefit any of the affected groups - the companies, their employees, or their customers; and on the third hand, I've thought (hoped) that regulatory approval would not be easily secured if the small number of major airlines in the US attempted to become even smaller.

So imagine my surprise when Transportation Secretary Norman Mineta told a meeting in Shanghai on Tuesday 'I sometimes wonder whether or not ... Delta and Northwest will come out as a merged carrier'.  He added that he was 'just thinking out loud'.

But perhaps the word 'thinking' was a bit overly complimentary.  He also uttered the specious nonsense that 'We're going to have to see consolidation, but right now we do have too many seats following too few passengers'.

Does Mr Mineta not read his own department's statistics which show all airlines at the highest load levels they've ever operated at?  More passengers traveling than ever before?  And does he also not realize that the 'too many seats' excuse is no longer the current excuse - the present fashionable excuse for airline incompetence is 'high cost of jet fuel' (but don't tell anyone the price of jetfuel has been dropping while the inflated ticket surcharges remain unchanged).

Even though Mr Mineta is thinking out loud about Delta and Northwest merging, just a couple of weeks ago his own department rejected an application from the two airlines for exemption from anti-trust laws as part of their joint membership of the Skyteam alliance.  At the time, officials from the DoT said the carriers did not prove that a waiver for restrictions on coordinating pricing, scheduling, and route planning would mean better service or lower prices.  They said granting antitrust immunity would combine global networks with routes that already overlap substantially.

So, Mr Mineta.  If your department doesn't allow NW and DL to work more closely together, how is it possible you'd allow the two airlines to merge?

Air Canada, suing WestJet Airlines for $220 million, has been told by an Ontario Superior Court judge that it will have to open its books if it wants to proceed with the lawsuit.  The airline does not want to do this but since it claims WestJet has cost them millions by stealing vital statistical information on flights, Air Canada must now prove it.

The passing of Independence Air seems to have transpired with few problems for potentially stranded passengers.  Although other airlines honored their statutory obligation to sell moderately priced space available tickets to such people, Southwest Airlines decided to give completely free tickets to people with now valueless Independence tickets.  Thank you, Southwest.

Congratulations to Atlanta's Hartsfield-Jackson International Airport, named by the FAA as the world's busiest airport.

In 2005, ATL had 980,197 takeoffs and landings, up from 964,793 in 2004.  Second place went to former consistent winner, O'Hare, with 972,246, down from 992,471 in 2004.

News you didn't really want to know :  The number of passengers killed in accidents involving revenue passenger flights increased during 2005, from 347 in 2004 to 913 during 2005.  There were eight fatal accidents involving western-built jets.

And talking about air accidents, a domestic Air New Zealand flight on New Year's Eve experienced two loud bangs in mid-air followed by one of the two engines stopping.  The plane was met by emergency services when it landed in Auckland.

A passenger on board reports the crew seemed as frightened as the passengers, and was astonished when she was called by the airline's customer service department afterwards.  The customer service agent told her the problem was only turbulence.  She doesn't believe that turbulence causes explosions and an engine to shut down.  A spokesman for Air New Zealand said they were unable to comment, due to it being the holiday season.

Thanks to the various readers who wrote in with feedback about the issue of US credit cards working internationally.  Many wrote to report no problems during extensive travels (and I've never had a problem myself).

Kevin wrote in to say that after having problems with his HSBC card, he managed to bully them into issuing him with a chip card, but he had to go through several levels of customer support to get a positive answer.

LuAnn said she has found some retail store clerks are unnerved by a non-chipped card, especially if it requires a manual phone authorization.

Peter has had difficulties using his ATM card in Japan.

And thanks to David Morton for basing this note on from the inestimable Bruce Schneier, who believes US banks are profiting from withholding more secure credit cards from their customers.

The most authoritative comments came from reader Pascal in San Francisco, a director in a consulting company specializing in the payments industry.  He writes (I've paraphrased)

Smart cards (cards with a chip in them, usually called Chip cards) have been around since 1992 and are becoming increasingly common in Europe and even in Canada (ie Interac debit cards and over the next some years, all Canadian Visa cards).  There are good reasons for this.  Chip cards are more secure and more flexible, and can support multiple functions all on the one card (eg credit, debit, stored value and membership).

Although chip cards are backwards compatible with regular cards (they have a magnetic stripe on them too), traditional cards obviously don't work with chip readers.

Fortunately most point of sale terminals, everywhere in the world, still have equipment for reading 'old fashioned' magnetic stripes as well as the new chip cards.

As for Howard's problem, my guess is he encountered places that don't take foreign credit cards of any type.  For example, in France, there is a so-called domestic card scheme / card brand (in France it is called CB), and there are some places in France that only accept the CB cards that are issued by French banks.  For instance, you can only use a (French) CB card at the French train ticket machines.  However these are rare exceptions.

Most of your readers should continue to have no problems at most locations.

This issue also brought some comments from readers about a related topic.  A while back, banks changed the way they profited from your foreign currency purchases.  Formerly, when you bought an item in another currency, a series of fees by the various banking services involved were likely added to your purchase, and simply added into the converted fee, making the exchange rate seem slightly less favorable - a subtlety few people noticed.

US banks have now been required to separately show the fees they charge for exchange rate services, and so now you'll note on your credit card the cost of the item you purchased, plus a separate fee for the currency conversion.  Reader Van Vu says he was assessed a 3% charge on all his foreign currency purchases when he received his latest Master Card statement.

Noting similar things, reader Andy wonders if travelers checks are becoming a better form of managing foreign currency again.

I also noticed a several hundred dollar fee on my Visa statement after I returned from New Zealand late last year.

Now here's the interesting part of this story.  I called my Visa card issuer, and they agreed to waive all their fees.  Apparently, from what the customer service representative was saying, they selectively charge different levels of fees (and in some cases, no fees at all) to different categories of clients.

Needless to say, if you charge lots of money in foreign currencies onto your credit card(s), it is worth your time to find the bank with the most generous policy.

Are travelers checks becoming a good idea again?  Almost certainly not.

First, just because the exchange rate fees are more obvious now does not also mean they are higher than before.  I'm sure there is probably another 1% or so cost that has been added, but back when the fees were hidden, they were still present, just not so obvious.

Second, what type of exchange rate do you get when buying travelers checks?  Probably no better than you'd get by using a credit card.

Thirdly, as surprising as this may seem, not all places accept travelers checks.  Some stores have an official 'no traveler check' policy, while others will refuse to accept them out of the ignorance and abundance of caution of individual cashiers.

Fourthly, having to buy and pay for travelers checks in advance of your travels is nowhere near as convenient as paying your credit card bill a month or so after the completion of your travels.

I'd mentioned, last week, that one of the hot themes at CES was accessories for iPods.  However, one accessory I overlooked was a new style of Levi jeans designed to be 'compatible' with the iPod, with a joystick in the watch pocket, a built in docking cradle, and retractable headphones.

Let's hope a 'wardrobe malfunction' doesn't send electricity where it doesn't belong.

This Week's Security Horror Story :  Senator Ted Stevens, R-AK, chairman of the Senate Commerce, Science and Transportation Committee, says it is time to crack down on carry-ons so as to allow airport screeners greater flexibility in searching bags for explosives.

During a hearing in December, Stevens said he was concerned that screeners were too busy processing and searching through carry-on bags at checkpoints and this could slow down the process of looking for explosives.  He intends to continue this debate at the next aviation hearing being held on February 9.  So far he has suggested that passengers be limited to only one carry-on, but has not defined what that one carry-on could be in terms of size of quantity of items it may contain.

Why is it that when confronted with a problem, some people automatically seek the most negative possible solution?  And, of course, if we extend his 'logic' a few steps further, we'll be banned from any carry-on, banned from checked baggage, and probably all passengers will be banned from flying, too.

Think I'm joking?  The airline lobbying group, the Air Transport Association, can possibly see this same vision of the future, because they're objecting to any limitations on carry-on baggage.  Astonishingly, the ATA and I find ourselves on the same side of an issue.

Remember all the proud puffery from the TSA in December about how they were going to be reducing their fixation on shoes and even daringly allowing small scissors back on planes, while empowering their screeners to profile potential terrorists and act in a random and unpredictable manner?

Have you noticed any lessening in the insistence you should remove your shoes?  I've been made to remove mine on both flights last week.

Of course, we have every right to expect TSA screeners to be very capable people.  A recent report by the Homeland Security Department's Inspector General reported that it was costing up to $143,432 to hire a single new TSA employee.

Perhaps they should also select physically strong people as part of this extensive screening.  Airport screeners have the highest rate of injuries for federal workers.  The Labor Department tracks about 600 job categories and airport screeners have a 29% injury rate (the average is 4.5%).  Screeners are five more times likely to get injured than coal miners and seven more times than textile millworkers.

The TSA says it is a physically demanding job as screeners repeatedly lift and move heavy bags.  Screeners missed nearly 250,000 days last year and cost taxpayers about $52 million to cover wages and medical payments.

In an impressive display of the new mental adroitness and alertness the TSA is instilling in its finest, a Los Angeles security screener became suspicious when searching through the carry-on bags of a lady passenger.  In the bags were lots of details of airplanes, including diagrams showing seat-layouts.

'Why have you got all of this?' he asked.

'I'm the chairman of an airline. I'm the chairman of Qantas' said Margaret Jackson.

'But you're a woman' said the screener, subsequently described by Mrs Jackson as a 'black guy, who was, like, eight foot tall'.

It took about an hour for Mrs Jackson to establish her identity sufficiently to satisfy this alert screener.  Details here.

After proving her identity, Mrs Jackson produced paper with her letterhead on it and wrote a note to the guard, whose name was Bill.

'And I wrote, "Dear Bill, this is from the chairman of Qantas, who is a woman".'

The long arm of the law, part 1 :  A Canadian man flew to Mexico for vacation with his wife and two young sons.  But because his flight flew over US airspace, his name was vetted against the US No Fly lists, and he was deemed to be a potential terrorist.  Although the 38 year old man has lived in Canada for 20 years and owns a shoe store in Scarborough, and notwithstanding his name being a very common Middle Eastern name (he is originally from Lebanon), this was enough for the forces of law to spring into action.  Mr Kahil was placed in detention in Mexico and then flown back to Canada under escort by RCMP, apparently being guilty of nothing more than having his name on the US no-fly list.

Does this sound right to you?  A non-American citizen, who doesn't travel to the US, is locked up in Mexico, not having committed any crime?  What Mexican or Canadian law has Mr Kahil broken?  More details here.

If appearing on the no-fly list is enough to get you locked up, what about Senator Kennedy, and all the countless other notable US citizens who have had their names on the no-fly list, too?

The long arm of the law, part 2 :  The FAA wants to screen potential space tourists against the no-fly lists.  Perhaps they believe they've made is so impossibly difficult for terrorists to operate on regular flights that the only way very wealthy terrorists can now commit acts of terror is from a commercial space flight.  Details here.

As one who recently got stuck while driving, I can understand the frustration that an unidentified man in Paw Paw, MI, must have felt when his car got stuck in the mud near Leroy Township.  But I'm not sure I'd have adopted his method of freeing the vehicle.

He placed his toolbox on the accelerator, got out of the car, and attempted to push the vehicle free.  He was successful in freeing his full-sized Mercury sedan, which then proceeded at speeds of up to 100 mph, sometimes going airborne over bumps in the road, until finally smashing into a tree.

Quite a few people wrote in asking for copies of the picture in last week's newsletter.  If you'd like a copy, here's the link direct to the gif file.

Lastly, security isn't only a problem on planes.  Here's a report of a most alarming type of security problem currently being experienced on some Melbourne (Australia, not FL) suburban trains.

Until next week, please enjoy safe travels

              David M Rowell aka The Travel Insider

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