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Friday 18 May, 2007  

Good morning

Exciting news.  Amadeus Waterways have offered us one more B category cabin on the Black Sea Discovery Cruise this October.  They have other people on the waitlist too, but we have a 24 hour hold on this cabin.

If you'd like to join the 20 of us already participating on this wonderful cruise from Budapest, through exotic countries such as Serbia, Croatia, Bulgaria and Romania and then concluding in Istanbul, Turkey, please rush to fill out the application at the bottom of the cruise detail page.  First in, first served.

A self serving piece of information :  I was invited to participate in a Microsoft usability study on Wednesday.  These are always fun things to do, and as well as getting a sneak peek at potential future software and hardware, it is great to have a chance to influence how things might work.  At the end of the study they gave me a copy of Office Professional 2007 - yes, the very software I've been complaining about for the last month or so.  Hardly the most welcome gift for me, but for someone who wants it, a very valuable item - it has a $500 retail price sticker on it.

My intention was to sell it on eBay, but if anyone here would like it, then you're welcome to take it off my hands at half price - $250.  This is the full version of Office Professional and still sealed, it is not an upgrade only version, and neither is it an 'academic' version or in any way restricted.  It has the latest versions of Word, Excel, PowerPoint, Outlook (including the new Business Contact Manager), Publisher, Accounting Express and Access.  Let me know if you'd like it - $250 including priority mail to any US address.

Two and a half years ago I wrote about a great gadget - the Steripen UV Water Purifier.  Back then, it cost $150 - expensive but a good price to pay in return for being able to effortlessly and quickly create clean safe water to drink, anywhere in the world.

Since then the price of the unit has dropped by a third, and Steripen have come out with two new models - smaller and lighter than the original unit, making it still easier to pack a Steripen any time you're going somewhere the water may not be safe to drink.  And so, for more about these wonderful gadgets :

This Week's Feature Column :  New compact Steripen UV Water Purifier :  If your travels take you where the water may not be safe to drink, perhaps you need a Steripen UV Purifier.  Here's what you need to know about the two new models from Steripen.

Dinosaur watching :  A well deserved bonus for a job well done?  Outgoing Northwest Airlines Chairman Gary Wilson will get $2 million when he steps down, the airline disclosed in a bankruptcy court filing.

Wilson, who led a leveraged buyout of Northwest in 1989, said he will resign when the airline emerges from bankruptcy next month.  Northwest said it was giving Wilson $2 million in 'consideration of the substantial contributions provided by Mr. Wilson to the debtors during the Chapter 11 cases.'

And, that's not all.  He's also to be given lifetime medical and dental insurance coverage, travel, and reimbursement of up to $75,000 a year to run an office.

All most well deserved, of course.

It is interesting to compare Wilson's retirement bonus with the pending departure of Margaret Jackson, chairwoman of one of the world's most profitable and best run airlines, Qantas.  She joined the Qantas board in 1992 and has been chairwoman since 2000.

At this stage, there's little expectation she'll get much more than a farewell cake and card from her fellow board members.

Here's an article supporting my concern about airline labor costs eating up any potential profitability they may create.  But with $2 million payouts to former chairmen, perhaps cost control needs to be equally exercised among airline executives as well as airline employees.

That's not likely to happen any time soon.  As this article recounts, an attempt to make executive compensation even slightly accountable to shareholders failed at the AA AGM.

Not reported in that article was the strange situation where shareholders attending AA's AGM were screened with metal detectors before being allowed into the meeting.

AA said this was in response to the Virginia Tech killings, but shareholders ridiculed the notion, as well they should.  Leslie Mayo, a spokeswoman for AA's flight attendants said 'It's ridiculous.  It's clearly an attempt to intimidate the employees.'

Pilots at American Airlines plan to picket the New York Stock Exchange next week to protest the executive compensation at AA.

Labor problems with US Airways and their pilots, too - the merged airline announced its new seniority list and seem to have managed to upset just about everyone with how they did this contentious calculation.  As a possible result, half their flights were delayed on Sunday and passengers felt employees were not giving their all to the job.

The airline said it was due to packed planes and holding flights to avoid stranding passengers.  The pilots said that many of their number didn't show up for work or did the minimum required and took their time to do routine items.

Unrest also at the United AGM.  About 400 United pilots, flight attendants and mechanics marched outside the main south entrance of Chicago's Field Museum, brandishing signs reading 'Fix It Now' and 'We Are United, They are Pigs' to protest a management team that union leaders contend is overpaid and out of touch with workers.

At the meeting's close, when United Chief Executive Glenn Tilton walked past one group of 70 workers, uniformed pilots dropped their hats to the ground in a show of defiance, according to several different participants.

You think United, of all airlines (having been a victim of pilot unrest in the past) would show a modicum of sensitivity to its workers.

We face a potentially 'interesting' summer.

Skybus Countdown to Something :  The FAA awarded certification to Skybus Airlines last week, enabling it to start service on Tuesday, May 22 as promised.  The airline is based in Columbus, OH, and will initially fly to eight cities from there -  Bellingham, WA; Greensboro; Portsmouth, NH; Oakland; Burbank; Fort Lauderdale; Kansas City; and Richmond, VA.

Alitalia continues to lose money, with a pre-tax loss of €147 million for the first quarter this year.  This is, however, an improvement on the €157 million loss a year ago.

The Italian government hopes to find someone foolish enough to buy the airline on the government's terms.  The good news - it has received three offers to buy at least a 39.9% share in Alitalia.

The bad news?  The least favored of the three offers is from Aeroflot, who is understood to have made an offer that approximates to about €0.40 a share.  The other two, more favored, offers are at even lower prices - one values the airline at around €0.10 a share and the other at almost no value at all.

Alitalia shares are currently trading at around €0.89.  Possibly a good stock to go short on?

The 'Cult of Personality' is alive and well at Southwest Airlines.  Not content with writing its founding CEO, Lamar Muse, into the scrapbook of its corporate history, another one of the airline's founders, Rollin King, expresses some polite resentment at how his own role has also been eclipsed in favor of Herb Kelleher, who can claim only to being the third of the three founders.

Naughty LAX.  A judge found against the airport, saying that quadrupling the rents charged to some airlines was unreasonable and discriminatory.

Not content with merely throwing out the rent increases, the judge said the airport's 'entire accounting system is suspect and cannot be relied upon to provide accurate and timely information'.

Here's a good article on flight delays, contrasting the regular seeming horror stories of passengers trapped on planes with the industry's claim such events are exceedingly rare.

And noting such problems as flight delays, is it any wonder this year's University of Michigan survey of customer satisfaction found the airlines ranked even lower than the IRS and federal government in general.

United was the lowest ranked airline, followed by Delta.  The top airline was Southwest, followed by Continental.

Only the cable tv industry got a lower rating overall (at 62) than the airlines (at 63).  The IRS scored 65.  Respondents were asked to rank 19 different industries.

There was an interesting article in the Wall St Journal earlier this week, including a table of passengers per airline employee.  Lower cost carriers currently carry an average of 180 passengers per employee, up from 135 in 2001.  Dinosaurs carry 90 passengers per employee, up from 55 in 2001.

How amazing that Southwest, with fewer employees per passenger, is viewed as giving much better service than labor intensive dinosaurs.

Here's an ongoing survey you can participate in, about what you most dislike about flying.  Currently the number one dislike is tiny seats, followed by flight delays.

Vanishing dinosaurs, continued :  United proudly announced a further reduction of 2% in its domestic capacity, in response to 'slow revenue growth and excess capacity'.  Way to go, UA - keep shrinking and soon you'll have disappeared entirely.

But - wait a minute.  Excess capacity?  What/where?  All airlines are running planes at record breaking loads, with higher percentages of sold seats than ever, ever before.

Excess capacity is one of the oldest excuses in the book - airlines trot it out at regular intervals as an excuse to explain away any type of incompetence they choose, hoping no-one will call them on it.

There's absolutely no way the full flights the airlines are enjoying at present can be described as 'excess capacity'.

It so often seems that frequent flier awards are impossible to redeem, and the perception can be that airlines have very minimal numbers of frequent flier seats available.  That perception may be wrong.

This article quotes statistics suggesting that 7.5% of all AA passengers were traveling on frequent flier tickets last year, but worries that with increasing numbers of full fare paying passengers on increasingly fully planes (so much for 'excess capacity', apparently), it will get even harder to cash in your miles to get free tickets.

One thing the article doesn't consider, of course, is how many of the frequent fliers being transported on award tickets are using the standard capacity controlled awards and how many are flying on the premium awards that cost twice as many miles.

And although the article uncritically mentions the ability to trade miles for other types of gifts and merchandize awards, it fails to point out that the value of your miles drops terribly when doing this.  The rule of thumb is that a frequent flier mile is worth about 2 cents (although it will of course cost you more than that to buy miles).

So what sense is there in swapping 100,000 frequent flier miles (worth $2000 at 2˘/mile, and about what it takes to fly you to Europe in Business Class with some airline programs) for items worth as little as $500 or less?

The more things change, the more things stay the same?  Ordinary, plain and boring travel agents have been considered passé by many travelers in this modern internet age, but the fact remains that a good travel agent will help you in three invaluable ways - they can often save you money on your travels, they can save you time planning and arranging your travels, and they can help you to plan better vacations than you could yourself.

The latest recognition for the continuing value of travel agents is in the June issue of Smart Money magazine, with a cover article headlined 'Forget Online, Travel Agents Get Better Deals'.  Look for it at your newsagent soon.

I've often opined that airline alliances are anti-competitive and benefit no-one except the airlines in the alliances.  Too often they provide a way for airlines to flout anti-competitive rules and to effectively merge together in situations where a formal merger would be prohibited.

This article quotes from a UK study that agrees.  Their main findings state

... the main beneficiaries of alliances were the airlines themselves.

The major spurs for forming alliances is that members can gain access to a larger network at relatively little marketing costs, they can cut costs through economies of scale and sharing routes and practices and this enhances their revenues.

Teaming up with foreign carriers can enable airlines to by-pass constraints on obstacles like foreign ownership, it can give them access to airports where slots are at a premium –see bmi's increased popularity following the EU-US Open skies deal because of its numerous slots at Heathrow - and can avoid anti-immunity rules which are designed to stop airlines working together at the customers' expense.

Airline costs can be saved by coordinating schedules rather than running competing flights, and through working together on sales and distribution, airport services and administration.

However there is little evidence that any of these savings are passed on through lower fares.

Here's a fascinating NY Times article that traces the history of Avis and its 17 or 18 changes of ownership since being founded in 1946.

It provides insight into how some parts of corporate America are now focused on making money not by trading but by buying and selling themselves.  Progress is a funny thing, isn't it.

See if you can guess where in the world this news story comes from :  Two gunmen attacked some tourists Monday night in their room at the xx hotel in xx.  A couple from Germany was attacked and forced to open the room's safe.  The suspects covered the man's head with a blanket and raped the woman.  About 20 minutes later they attacked a second man in a room at another hotel and pistol whipped him.

Definitely a dangerous place to avoid, wouldn't you say?  If you agree, be sure to stay well away from International Drive in Orlando!

This Week's Security Horror Story :  More than four years after its creation, the Department of Homeland Security still 'lacks a comprehensive integration strategy with overall goals, a timeline, appropriate responsibility and accountability determinations, and a dedicated team to support its efforts' according to a new report from the Government Accountability Office.

The report goes on to say that failure to fix these problems 'could have serious consequences for our homeland security.  Despite some progress, this transformation remains high risk.'  Details here.

But apparently not all DHS activities are totally disfunctional.  Never mind the billions of dollars being spent on creating watch lists, do-not-fly lists, and other databases of potential and real terrorists.  An alert border guard prevented a potential threat to the wellbeing and security of the US from entering the country after typing the person's name into a Google search at the Blaine, WA border crossing.

Canadian psychotherapist, 66 yr old Andrew Feldmar has a distinguished resume, no criminal record, and has been a frequent visitor to the US from his home in Vancouver, BC.  Both his children now live in the US.  He was intending to briefly drive down to Seattle to collect a friend off a flight and drive him back up to Vancouver.

This means, of course, that Mr Feldmar is a prime suspect for many types of nefarious endeavors and so the border guard quite correctly was very cautious in allowing him into the country.  A Google search revealed that Mr Feldmar had written an article about drug use in a scholarly journal in the 1960s.

Upon being confronted with this 'evidence', Mr Feldmar conceded that he had indeed taken drugs himself, but not for over 30 years, and without ever being arrested.  As a result, Mr Feldmar was held for four hours and then deported.

Do you feel safer now we've banned one harmless Canadian from briefly visiting our country?  And is Google now a new secret weapon in defending our borders?

Talking about Canada, it seems they can't learn from the mistakes of their bigger brother south of the border.  They're about to institute a No-Fly list of their own, requiring the airlines to advise the Mounties if a passenger on the list attempts to fly.

That's sure to add a new element of delightful uncertainty and possible surprise when flying out of a Canadian airport.

The saddest thing about all the nonsense and inconvenience to do with banning liquids from planes?  It is all meaningless, because the 100 ml limit per bottle, and one quart bag full per person ignores the simple fact that two (or ten or any other number) of terrorists could simply mix their respective quantities together after passing through security.  They wouldn't even need to do this on a plane - they could do it in the privacy of the restrooms in the airport terminal, leaving just one of their number to take a large sized bomb onto one unlucky plane.

The security people seem to have worked out one small part of that issue - the fact that people on a plane could then mix together their respective liquids.  As a result of this, several reports are indicating that some flights to the US from international airports such as London, Manchester and Frankfurt are being staffed by as many as five or six air marshals, spread out around the plane, in the hope of spotting anyone mixing up a bomb in plain view at their seat.

I'm not reassured by this.  If there is a clear and present danger posed by liquids on planes, and an apparent admission that security screening isn't addressing that danger, would 5 or 6 air marshals on a full 747 be enough to spot the furtive mixing of liquids somewhere?  I fear not.

Until next week, please enjoy safe travels, and keep a watchful eye out on your fellow passengers if traveling from London, Manchester or Frankfurt back to the US....

              David M Rowell aka The Travel Insider

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