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Friday 22 June, 2007  

Good morning

This is a very brief newsletter and there's no feature article this week - blame it on Thursday being the summer solstice, perhaps?

The feature article was to be about (and still will be, next week) the Garmin Nuvi 680 GPS unit, but it became clear this couldn't be meaningfully released without considerable extra detail about its added-value data service options, so I'm holding out until next week for a probable double length article.

And I'm putting the annual fundraising plea on hiatus for a week as well until I get caught up.

Dinosaur watching :  Here's an interesting article about the airline industry in the Economist magazine.  Two things are particularly noteworthy.  The first is a quote by former AA CEO, Bob Crandall.  He describes the airline industry as in 'a complete state of disrepair', and then, showing that once an airline executive, always an airline executive, he is quick to point the finger of blame.

Who does he blame for the industry's definite problems?  You might think he blames the airlines themselves.  But, oh no.  Instead, he says 'For the most part that is a function of deplorably bad government policy'.  Yes, that's right - it is the government's fault that the airlines are in the mess they're in (uhh, Bob - does that also mean that for the years when your airline made big fat profits, that was the government's success rather than yours?).

And, for sure, as long as airline executives continue to believe this, they'll stay in their present mess.

The other fascinating thing in the article is this chart tracking airfares against the consumer price index.  But don't allow yourself to be too persuaded by this chart - note that one of the sources of the data is the Air Transport Association - the airline lobbying group, and they for sure have a vested interest in how the data is presented.

Without understanding the methodology of how the airfares were calculated, this chart is interesting but not authoritative, and perhaps not even particularly relevant.

It is important to put this data into context.  Airline deregulation began in 1978, and you'll see that a year or two later, airfares stopped tracking inflation so slavishly.  Don't let the years from 1968 - 1980 persuade you that the natural state of airfares is that they should closely track the CPI.  That is nonsense - each new generation of more efficient jet, each new operational enhancement, and each new cost saving by the airlines all point to the clear ability for airfares to become better and better value, and a large part of the reason for the uncoupling of airfares from inflation over the last twenty years is all the years of accumulated inefficiency prior to that time.

It was flawed reasoning, in place prior to deregulation and carried over after, that caused so many of the problems the airlines face now.  For way too long, airlines believed that travelers would pay any amount for their tickets, and so were happy to keep heaping more costs onto their operational models, and passing them on in the form of higher and higher tickets.  Most people now recognize the error in those earlier assumptions, but the airlines now seek to blame anyone and everyone for their foolishness.

These days, the market as a whole seems to be significantly price resistant to airfare increases, even if, adjusted for inflation, airfares remain good values (although note the chart above is only through 2005 - my guess is you'll see the cost lines showing clear up-ticks for 2006 and 2007).  Here's one consideration for the airline execs to ponder - they have so debased their product that none of us now see it as worth more than pocket change to endure.  While the airline execs are congratulating themselves on saving small sums of money by eliminating blankets and pillows and food and generally making the travel experience as unpleasant as possible, they don't see that these 'savings' are actually harming themselves as much as they are helping.

Who'd pay $500 to fly from coast to coast these days unless they really had to travel?  Heck, you'd have to pay me the $500 to get me on a plane at present, there are few things less pleasant in the country today than a lengthy (and probably delayed) flight on a full plane with a surly staff and in a too-small seat.

You've probably already heard about the problems with United having a systemwide computer failure on Wednesday, halting all United departures - everywhere in the world - for two hours, and with massive ripple through effects for the rest of the day.

It isn't only United that is having problems.  Travel agent Becky said she has seen five flights cancelled in the last few days by Northwest due to lack of crew.  She believes that labor tensions and unhappiness at the disparity between executive bonuses and worker sacrifices is an underlying part of this problem, and for sure, there's no sign of any NW execs giving back their bonuses or supporting improved wages to the frontline workers.

Confirming Becky's observations, earlier this week the pilots executive council at Northwest unanimously passed a resolution saying management has created a pilot staffing shortage this summer that will lead to cancelled flights and rescheduling problems.  They also criticized recent stock awards given to top executives.

If you have a long layover at Gatwick, you might be interested in trying out their new on-site Yotel.  This is a de minimus type hotel with miniature hotel rooms, and moderate prices (25 - ie $50 - for hour hours in a standard room).  One is expected at Heathrow's Terminal 4 in the near future, too.

Sad news for the Queen Elizabeth 2 - or perhaps not.  Cunard (now part of Carnival) had said they'd keep the ship operating for as long as it was profitable, and had warned that new health and safety regulations to come into effect in 2010 would make it difficult for the ship to continue in service.

But what does one do with a former specialized trans-Atlantic luxury liner?  Its predecessor, the Queen Elizabeth, had a most ignominious end with a suspicious fire while the vessel was in Hong Kong harbor being converted to a floating university, which lead to its subsequent scrapping.  The Queen Mary has had a financially troubled post-sailing life in Long Beach.

Cunard this week announced the pending sale of the QE2 to a company owned by the Dubai royal family.  In November 2007, she will sail for the last time, to Dubai, and be converted into a floating hotel.  At least this will save the ship from the wrecker's yard, and presumably her new Dubai owners will spare no expense in making her beautiful once more.  Details here.

This Week's Security Horror Story :  Stupid security measures aren't the exclusive preserve of the US.  The UK can be just as capricious when it comes to refusing to allow people to visit as tourists.  A report by a UK government ombudsman is critical of some decisions to not allow people to visit with reasons given such as 'you plan a holiday for no particular purpose other than sightseeing'.  Details here.

Perhaps the officials were worried about the long security lines at Heathrow.  Have a look at this video clip for a horrifying indication of how long the lines can grow.

Here's an interesting statistic.  Our new Department of Homeland Security was a creation in response to the 9/11 terrorist attacks, and its mandate revolves around keeping the US free of terrorists.  So some commentators find it surprising to discover that a mere 0.0015% of charges filed by the DHS are terror related.  Of the 815,000 people charged by DHS in immigration courts in the last three years, only 12 faced charges of terrorism.

Which raises the question, posed in this article - Is there no terrorism out there, or is the DHS useless at finding it?

And although the DHS predictably says the reason for such a low number is that it has succeeded in keeping terrorists out of the US, this article shows how terribly easy it is to get fake ID in Mexico (or even to borrow real ID) to use to enter the US.

There was an interesting and outrageous seeming story filed last week about a woman's problems going through the TSA screening at Reagan National Airport in DC.  But, in a rare move, the TSA posted its security video and official incident report on its website, under a new section named 'Mythbusters'.

While you might think releasing its security film of the incident would dispel any doubts as to what occurred, the video is close to useless in explaining anything at all.  It is strangely edited (with lots of waste video that doesn't feature the woman) and with no sound (can you believe that - all the billions spent on new security measures at airports, and their video cameras don't record sound as well as video?), who knows what is really happening or who is saying/doing what or why, although clearly some aspects of the woman's story are contradicted by the silent drama we seen enacted in the video clips.

It is good to see the TSA trying to respond to and rebut such stories, but it will have to do a much better job than this to make a clear and compelling case.

Nearly lastly this week, I mentioned last week that I'm using some of the money kindly donated by readers to buy new equipment for review - such things as more GPS units and a fascinating e-book reader.  I wonder if supporters of the site would agree that this too would be a good thing to acquire, purely for the purpose of review?

We've read about the airlines adding advertising to the outside of their planes, to seat backs, to tray tables, and just about everywhere else possible.  So is it any wonder than an enterprising UK company is now advertising on the ground on approach paths into busy UK airports?  Regrettably, their subject matter is not very highbrow.

Until next week, please enjoy safe travels and be sure to ask for a window seat

              David M Rowell aka The Travel Insider

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