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22 September, 2006  

Good morning

We're at the fall equinox - the day when there are equal amounts of day and night, and the day beyond which the southern hemisphere has longer days than we do for the next six months.  It is also, in the US if not everywhere, the conventional end of summer and start of fall.

Thanks to the various people who expressed interest in an Egyptian Nile cruise/tour next March.  And thanks also to the others who wrote in with helpful comments about why they wouldn't or couldn't take part.  I hope to have more on this next week.

This week's article was to have been a review of British Airways' first class, based on two recent flights I took - Chicago to London and London to San Francisco.  But while writing it, I was increasingly struck by the question 'Who needs First Class anymore?'.  These days, business class comfort, service and amenities have improved so much, and first class has deteriorated so much, with the result being little difference in overall experience and perhaps no need to spend extra and travel first class.

Before completing the article, I'm keen to get your feelings on this topic.  If you travel internationally several times a year and variously fly first or business class, I'd like to know what you think about this.  Why do you choose (or not choose) one class of service over the other?  Have there been changes in your choice over the last few years?  How do you see things evolving into the future?

I hope to get the article completed for next week and will appreciate any comments you can offer to ensure the article reflects not just my view but the collective wisdom of us all.

Dinosaur watching :  Last Friday saw the judge in the case between Northwest and its flight attendants decide the flight attendants can not strike.  To be more exact, he said the bankruptcy court has the authority to decide the case and returned it back to the bankruptcy court for further review, but in the meantime, and pending such further review, he has granted an injunction preventing the flight attendants from striking.

Apparently he felt the harm to the airline and perhaps the traveling public outweighed the ordinary freedom workers have to negotiate with their employers and to withhold their labor if necessary, and the right to insist on existing labor contracts being honored.

The flight attendants and Northwest will meet with the National Mediation Board next week, although noting how Northwest has obdurately refused to make any concessions to date, it is unlikely anything good will come from the meeting.

(In case you are interested, Microsoft Frontpage crashed on me while I was writing the newsletter this evening.  This is as far as I had saved, alas, at the time of the crash.  So the balance of the newsletter is now going to be somewhat truncated.  Thank you, Microsoft.)  ps - no need to send me gloating emails suggesting I get a Mac....  :)

Good news for the dinosaurs.  They're making lots of money.  According to new statistics from DoT's Bureau of Transportation Statistics, the 21 domestic airlines in their survey made an average 7.9% operating profit on US domestic flights in Q2 2006.

Regional carriers averaged 7.9%, dinosaurs averaged 7.2% and low cost carriers averaged 10.6%.  The dinosaurs enjoyed a sharp uptick in their fortunes compared to Q2 2005, where they averaged a 2.2% loss.

Although their profits were lower than the low cost carriers, dinosaurs charged 50% more per available seat mile flown than the low cost carriers (15.8 cents compared to 10.8 cents).  This suggests the dinosaurs are very vulnerable to ongoing encroachment from low cost carriers such as Southwest and JetBlue, who are able to make bigger profits from lower average fares.

The overall industry profitability and rising airfare costs is confirmed in this article, which reports a 13% increase in business class airfares between Q2 in 2005 and Q2 in 2006.

And this article reports a doubling in business travel budgets in nine years (equating to an annual 8% increase).

Question to airlines :  You've reduced your operating costs.  You've increased the number of passengers on every flight, and you're operating newer more fuel efficient aircraft than nine years ago.  So why do you need to increase fares at a rate close on twice the underlying inflation rate?

Even though travel costs are massively increasing, and notwithstanding the apparent possibilities to reduce business travel by using new technologies such as video conferencing, this article points out that business travel shows no signs of slowing down.

There's an interesting quote on page 2 of the article from Kevin Mitchell of the Business Travel Coalition.  He says

As technology has advanced, it increases the need for face-to-face travel.  In 1990, you and I might have managed 100 relationships, and that was a lot. Now with e-mail and instant messaging, you and I may manage 1,000.

He is probably correct about the increased efficiencies brought about by new technologies, but we all seem to be traveling as much as ever before, and - alas - liking it less.

But wait.  Maybe travel numbers are showing some signs of slowing down.  This well written article patches together various indicators and suggests this might be so.

The bottom line?  Whether air travel numbers are increasing or leveling out, the new efficiencies and higher load factors of the airlines, combined with currently dropping fuel prices (but unchanged fuel surcharges), are likely to see the dinosaurs stay profitable for the foreseeable future.

The OAG did an interesting report on the most successful new airline routes, and reports that over the last year, 2,133 new routes have been added around the world, with more than 18,000 new flights on these routes.

The busiest new route is between Charlotte and Hilton Head, with 124 flights a week (operated by US Airways' small turboprops).  The second busiest new route is the helicopter service between JFK and the Downtown Manhattan Heliport, with 120 flights weekly.

The airport benefiting the most is Atlanta (39 new routes), followed by Dublin, London's Stansted, and Moscow's Domodedovo.

Talking about Stansted, happy birthday to Maxjet.  The all business class airline, which operates 767 service between Stansted and the US, is celebrating the first anniversary of its founding, and is doing so with a magnificent special fare.  For only $999 - roundtrip - you can fly from either New York (JFK) or Washington (IAD) to London (Standsted).  Buy your fare any time prior to 1 October, and travel between 1 Nov and 28 Feb.

Most amazing of all - the $999 fare includes all taxes, fees, fuel surcharges, everything - these hidden extras can add $200 or more to a regular airfare.  I've heard good reports about Maxjet, so if you're considering travel from NY or DC to London between 1 Nov and 28 Feb, why not treat yourself to Maxjet's comfortable business class service.

And talking about hidden extras, here's an interesting article on that subject.  Among other things, it refers to a 'certain Asian low-cost carrier' that sells blankets on its flights.  When blanket sales are slow, the flight attendants, who get a commission on sales, ask the pilots to lower the cabin temperature....

In general, airlines are increasingly turning to ancillary revenue - ie, income from anything other than passenger ticket sales - as a way to make more money.  Whether it is the traditional inflight duty free sales, or the newer inflight food sales, or other services still to come such as gambling, video on demand, or more fees for services otherwise free, this will increasingly be a major part of our airline travel experience.  The airlines are realizing that it is a 'waste' to have an airplane full of potential consumers just sitting passively there and spending no money at all while on board.

Air Canada has found a new way to make money.  It is seeking to recover $1,350 from a passenger who they say caused a trans-Atlantic flight to be delayed 27 minutes.  Apparently he may have been in the wrong seat on board and refused to move, and was eventually escorted off the flight by police prior to its departure, with a resulting 27 minute delay.  Air Canada says the $1,350 is required to cover the cost of overtime for flight crew, extra baggage handling, and various other unspecified expenses.

The passenger is currently refusing to pay.

Question :  If the airline can seek to recover its costs from passengers when the passengers cause a flight to be delayed, does that mean we, as passengers, can recover our costs if the airline delays our flight?

And now for the most outrageous way of making money from passengers.  Imagine if airlines had Customer Service and Refund departments that could only be reached by dialing an expensive (900) type number, with the proceeds of the (900) call fee going to the airline itself!  And imagine some more that when you dial this number and have to pay for every minute of your call, the airlines then put you on hold for ten or even twenty minutes before talking to you, while all the time your per minute call fee is mounting up.

Impossible?  Not so in the UK, where such things are already happening.  As this article reports, a test call to easyJet's pay phone number resulted in a 2.90 (US$5.50) call fee being incurred, primarily due to the 29 minute wait before the call was answered.  And one person is quoted in the article as estimating they spent over 100 during more than fifty unsuccessful attempts to get through to Customer Service.

What's up with Airbus?  What's not up is its exciting new A-380 super jumbo.  The good news is that it is apparently lovely to fly (as a pilot).

But now for the bad news :  I hinted last week at more delays being announced to the delivery schedule for this project, and Airbus has sort of confirmed these delays this week, admitting that ongoing problems exist with the new plane's wiring, but - get this - saying it doesn't yet know what the impact will be on its delivery schedules.

Insiders are suggesting this is likely to be another six month delay; Airbus says it will make a formal announcement in one month's time.

The most recent delay was announced in June, with an approximate six month delay being admitted at that time.  There had been earlier delays as well, and as we write this, launch customer Singapore Airlines had originally been expecting to be already flying its A-380s.

The last six month delay apparently cost Airbus billions of dollars, but it didn't lose any orders.  Will its airline customers stoically continue to wait?  Without knowing the contract terms, one would ordinarily expect the answer to be 'yes', but don't lose sight of Boeing's new 747-8.

The 747-8 is stretched 11.7 feet compared to the current 747-400 and will hold 34 more passengers in a typical 3 class configuration.  To date the plane has only been bought in a freighter version, and my original take was it would fail as a passenger plane.  It won't start commercial service until late in 2009, but with a few more A-380 delays, who's not to say some frustrated airlines might not turn to the 747-8 passenger version rather than wait for an A-380?

Update - just found this article, which reports that both Emirates (43 A-380s on order) and Virgin Atlantic (six on order) are making public comments about their orders now being 'up in the air'.  The chances are these are merely public chastisements of Airbus, and will result in further cash settlements rather than order cancellations.  The impact of losing the 43 plane order from Emirates on the program (with only 159 planes sold) would be enormous, and one can expect Airbus will do everything it must to keep Emirates as a customer.

In reality, both Emirates and Virgin are very likely to want to keep their orders in place.  It is hard to imagine Sir Richard Branson, Virgin's publicity-seeking founder, being happy with anything other than the biggest plane in the sky, and Emirates seems to want to buy anything with wings on at present.

Even if no airline cancels its A-380 orders, Airbus' credibility and reputation is being rocked by these poorly handled revelations.  Although rumors suggest Boeing is encountering some delays with its new 787, it isn't suffering the same publicity Airbus is.  It has certainly happened in the past that when an airline is unhappy with an aircraft supplier, it may 'punish' the supplier by choosing to order different model planes from the other company, or by pushing for much keener deals to stay 'loyal' to the primary supplier, and these less obvious issues will hurt Airbus for some time to come.

It is staggering to see Airbus, a company which little more than a year ago seemed unable to do anything wrong and with a strong lead over Boeing in all parts of the airplane market, implode so spectacularly on itself.

Airbus massively misjudged the 787's competitive threat, and seems to have equally massively mishandled the A-380 development/delivery timeline.

One interesting airplane deal was announced this week, and it is difficult to say if Airbus ended up being the winner or the loser.

Aeroflot announced an order for 44 new planes - 22 to be Boeing 787s, and the other 22 to be Airbus' potential new 787 competitor, the A-350.  Probably, Airbus should count this as an ill-deserved win - it seems that if it weren't for political considerations, Aeroflot would have done the same thing just about every other airline has done and give the entire order to Boeing.  It makes no sense whatsoever to buy two closely similar planes and split your fleet into two incompatible halves.

One of the delicate issues I always face, when booking accommodation for couples traveling together, is enquiring whether they wish to have one bed or two.  Here's an interesting article on the subject of sleeping together - it is, apparently, an as yet under-researched subject.

Warning - if you're planning on using your cell phone while driving in the great state of California, you might want to get a hands-free kit.  From July 2008 (these things take time, don't they!) it will be illegal to use a phone while driving unless using a hands-free device.

And if you decide to buy a new phone with the latest Bluetooth or other capabilities as a response to this law, be careful what you do with your old phone.

A bizarre accident involving a plane hitting a car resulted in an even more bizarre insurance company response last week.

This Week's Security Horror Story :  I'm choosing to copy, in its entirety, an excellent article by security guru Bruce Schneier, headed 'What the Terrorists Want'.  You can sign up for his free monthly newsletter here.

On August 16, two men were escorted off a plane headed for Manchester, England, because some passengers thought they looked either Asian or Middle Eastern, might have been talking Arabic, wore leather jackets, and looked at their watches -- and the passengers refused to fly with them on board. The men were questioned for several hours and then released.

On August 15, an entire airport terminal was evacuated because someone's cosmetics triggered a false positive for explosives. The same day, a Muslim man was removed from an airplane in Denver for reciting prayers. The Transportation Security Administration decided that the flight crew overreacted, but he still had to spend the night in Denver before flying home the next day. The next day, a Port of Seattle terminal was evacuated because a couple of dogs gave a false alarm for explosives.

On August 19, a plane made an emergency landing in Tampa, Florida, after the crew became suspicious because two of the lavatory doors were locked. The plane was searched, but nothing was found. Meanwhile, a man who tampered with a bathroom smoke detector on a flight to San Antonio was cleared of terrorism, but only after having his house searched.

On August 16, a woman suffered a panic attack and became violent on a flight from London to Washington, so the plane was escorted to the Boston airport by fighter jets. "The woman was carrying hand cream and matches but was not a terrorist threat," said the TSA spokesman after the incident.

And on August 18, a plane flying from London to Egypt made an emergency landing in Italy when someone found a bomb threat scrawled on an air sickness bag. Nothing was found on the plane, and no one knows how long the note was on board.

I'd like everyone to take a deep breath and listen for a minute.

The point of terrorism is to cause terror, sometimes to further a political goal and sometimes out of sheer hatred. The people terrorists kill are not the targets; they are collateral damage. And blowing up planes, trains, markets, or buses is not the goal; those are just tactics. The real targets of terrorism are the rest of us: the billions of us who are not killed but are terrorized because of the killing. The real point of terrorism is not the act itself, but our reaction to the act.

And we're doing exactly what the terrorists want.

We're all a little jumpy after the recent arrest of 23 terror suspects in Great Britain. The men were reportedly plotting a liquid-explosive attack on airplanes, and both the press and politicians have been trumpeting the story ever since.

In truth, it's doubtful that their plan would have succeeded; chemists have been debunking the idea since it became public. Certainly the suspects were a long way off from trying: None had bought airline tickets, and some didn't even have passports.

Regardless of the threat, from the would-be bombers' perspective, the explosives and planes were merely tactics. Their goal was to cause terror, and in that they've succeeded.

Imagine for a moment what would have happened if they had blown up ten planes. There would be canceled flights, chaos at airports, bans on carry-on luggage, world leaders talking tough new security measures, political posturing and all sorts of false alarms as jittery people panicked. To a lesser degree, that's basically what's happening right now.

Our politicians help the terrorists every time they use fear as a campaign tactic. The press helps every time it writes scare stories about the plot and the threat. And if we're terrified, and we share that fear, we help. All of these actions intensify and repeat the terrorists' actions, and increase the effects of their terror.

(I am not saying that the politicians and press are terrorists, or that they share any of the blame for terrorist attacks. I'm not that stupid.  But the subject of terrorism is more complex than it appears, and understanding its various causes and effects are vital for understanding how to best deal with it.)

The implausible plots and false alarms actually hurt us in two ways. Not only do they increase the level of fear, but they also waste time and resources that could be better spent fighting the real threats and increasing actual security. I'll bet the terrorists are laughing at us.

Another thought experiment: Imagine for a moment that the British government arrested the 23 suspects without fanfare. Imagine that the TSA and its European counterparts didn't engage in pointless airline security measures like banning liquids. And imagine that the press didn't write about it endlessly, and that the politicians didn't use the event to remind us all how scared we should be. If we'd reacted that way, then the terrorists would have truly failed.

It's time we calm down and fight terror with anti-terror. This does not mean that we simply roll over and accept terrorism. There are things our government can and should do to fight terrorism, most of them involving intelligence and investigation -- and not focusing on specific plots.

But our job is to remain steadfast in the face of terror, to refuse to be terrorized. Our job is to not panic every time two Muslims stand together checking their watches. There are approximately 1 billion Muslims in the world, a large percentage of them not Arab, and about 320 million Arabs in the Middle East, the overwhelming majority of them not terrorists. Our job is to think critically and rationally, and to ignore the cacophony of other interests trying to use terrorism to advance political careers or increase a television show's viewership.

The surest defense against terrorism is to refuse to be terrorized. Our job is to recognize that terrorism is just one of the risks we face, and not a particularly common one at that. And our job is to fight those politicians who use fear as an excuse to take away our liberties and promote security theater that wastes money and doesn't make us any safer.

With Bruce's thoughts in mind, it is helpful to look at this table.  In the eleven years from 1995 through 2005, 3,147 people died from terrorism related acts in the US.  But check the numbers of people who died after being shot by law enforcement officers (3,949) or who accidentally drowned (38,302) or who died from a work related incident (59,730).  And so on for various other categories of death by misadventure.

We're more likely to be shot by a policeman than killed by a terrorist.  Is fear of terrorism inappropriately dominating our thinking, our expenditures, and our lives?

And while there are plenty of obvious dollar costs associated with our new preoccupation with security, this article touches on a less obvious cost.  In the last five years, the US has lost an estimated $286 billion in revenue from foreign tourists who have chosen not to visit.

Anecdotally, I know this to be the case.  I regularly overhear, at foreign airports, and on international flights, people complaining about - and making fun of - the ridiculous degree of unfriendly difficulty which they have to go through in order to visit the US; and many of these people conclude their story by telling about how they went to some other more welcoming country instead.

It's time to restore balance to our country.

Here's an interesting story.  In the past three years, perhaps one half of the federal air marshals have been awarded a worker's compensation claim for some type of job related ailment.

Apparently being a federal air marshal is very dangerous work indeed.

If it isn't bad enough with the growth of 'terrorist spotting' at airports whereby just about any airport employee will be able to nominate just about any passenger as being a potential terrorist, based on any passing whim they may have, plans are under development for automated terrorist spotting systems to be added to airplanes too.

Just imagine - there you are, acting a bit tensely on a plane (perhaps due to being hungry, or tired, or just generally stressed out by unpleasant air travel) and the monitoring system decides you might be a terrorist.  Next thing you know, you're being wrestled to the floor by flight attendants, handcuffed, and the plane is diverted for an emergency landing, being 'escorted' by fighter jets ready to shoot the entire plane out of the sky at the slightest provocation.

One such type of terrorist behavior is apparently kissing.  My usual response, upon sighting two men kissing, is simply to look away.  It is a shame the flight crew on this American Airlines flight couldn't have done the same thing.

In particular, was the pilot within his rights to threaten to divert the plane if the passengers didn't do everything exactly as he demanded?  If airlines can try and sue passengers for delaying planes (see above), what can they (or the passengers) do if a pilot diverts/delays a flight for such a specious reason?

Here's a very upsetting story about what happens if you're misidentified as a terrorist.

Fans of Fawlty Towers will find this interesting.

The camera never lies?  Well, never - unless you buy an HP digital camera with the latest feature, that is.  A 'slimming' adjustment.

And lastly this week, reader Richard points out that at least one airline is offering some appealing new customer services  (I wonder if the photo was taken with an HP camera).  At least Nok Air has no excuse for not providing the best service $4 can buy.

Until next week, please enjoy safe travels

              David M Rowell aka The Travel Insider

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