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Friday 1 February, 2008  

Good morning

No feature article this week - personal commitments intruded, alas, leaving me little time for much other than fighting fires, and not always extinguishing them.

But may I instead remind you of our China tour?  This tour, in June, promises to be a very interesting exposure to both rural and urban China, combining high energy Beijing with the relaxation of cruising down the Yangtze river, and combining the urban architecture of Shanghai - itself a curious contrast of stately late 19th/early 20th century on one side of the river and futuristic 21st century on the other side - with the gorgeous beauty of the countryside and mountains.

I could go on in similar poetic vein, but I think you get the idea!  China is a massive land and of course full of contrasts, while united by the twin themes of its pride in both its antiquity and its future.

Please do come join with a small group of your fellow Travel Insiders (and myself) for this, our inaugural China cruise and tour.  Full details here.

Interestingly, and as an aside, China's currency, the Yuan, still remains reasonably closely linked to the US dollar.  This means that China is still a relatively good value destination, not having been affected as much by our falling dollar.  In the last year, the dollar has only lost 7.5% of its value against the Yuan, compared to 12.5% against the Euro.  But, whereas the fundamental strength of the Euro is suspect, the strengthening of the Yuan seems certain to continue for the middle term, meaning that whereas China is a relatively good value at present, it is almost certain to become more and more expensive into the future.  I'll stop short of calling our June tour 'the chance of a lifetime' - but do please think about coming if you can fit the dates into your schedule.

I was reading an interesting commentary on China this week, suggesting its ascendancy is under a small measure of threat.  The country - even though it has a population of 1.3 billion people - is running out of workforce to staff its continued extraordinary growth, and they can no longer spare many more people to move from the countryside into the cities, due to the need to maintain and grow their agriculture as well as their industry.

The other tour to consider is our October New Zealand tour - it is three years since the last NZ tour, so if you want to enjoy a Travel Insider style exposure to my home country of NZ, please try and come this year, because it will probably be another three years before another NZ tour again.

Dinosaur watching :  This week's thought on airline mergers :  In addition to my comments last week and the week before, there's another issue that seldom is considered.  How much is an airline worth?

'Oh, that's simple', you say?  'It is worth its share market capitalization, plus or minus a bit to adjust for the foreseeable future changes in valuation and growth.  Well, that answer probably gets you a pass in Business 101, but in the real world, you could be spending money unnecessarily if you adopt that strategy.  The first part of rebutting this answer is simple - in theory, in an efficient marketplace, a company's stock price already reflects all future expected events, and so no adjustment is needed to a company's market capitalization, and if a company buys another company for a penny more than its market capitalization, it may have paid too much.

Even this isn't quite that simple, because a company's value to the open market as a whole may be less than its value to a competitor.

But, for the big second part of the rebuttal, let's switch from theory to the real world.  Consider the US Airways attempt to merge/buy Delta back in 2006.  Delta refused an offer from US Airways that was valued at about $8 billion, because it believed its value was about $12 billion.

But - what is Delta worth today?  Its market capitalization, earlier this week, was a mere $6.3 billion.  Is there a danger, in any such future merger, that an airline will be paying way over the odds for buying another airline?

Meanwhile, the concept of mergers has appeared on the radar of politicians, and judging by their bluster, they might even disapprove of the concept.  House Transportation and Infrastructure Chairman James Oberstar, D-Minn., pledged a vigorous effort to slow or stop, if possible, a proposed merger between Delta and either Northwest or United, and promised hearings to review airline mergers.  He also said he'd pressure the Departments of Justice Department and Transportation to aggressively investigate anti-trust and other implications of any merger.

Oberstar said he opposes mergers in the airline industry because, he claimed, they will reduce consumer choices, raise fare prices, and result in less service to remote areas. In the hub-and-spoke system of today's airlines, he said, "the communities at the furthest end of the spokes are the ones that are left out and left behind."  He also predicted that a successful merger between Delta and either Northwest or United would trigger a 'domino effect' of airline consolidation. 'We could have in a very short period of time, two or three major global carriers,' he said.

Gosh - do you think he might be reading The Travel Insider?

But perhaps Mr Oberstar need not worry.  Betsy Talton, a spokeswoman for Delta, reassuringly said the company will make all decisions regarding mergers 'on what is in the best long-term interest of all of our stakeholders. That means employees, customers, shareholders and the communities we serve.'  She also said she was selling the Brooklyn Bridge at a very low price.

Possible good news for Continental fliers.  The airline says it hopes to introduce onboard Wi-Fi services to support email and IM, as well as offering 36 channels of LiveTV entertainment.  CO is testing the Wi-Fi connectivity at present.  If it works, CO says it will be free (!) and would allow passengers to connect to Yahoo Mail and Messenger, and Blackberry email and messenger services.  It wouldn't allow across-the-board email and internet surfing.  Television programming would also be free for first class passengers, and $6 for coach class.

The new service is to be installed on 737NG and 757-300 planes, but you'll have to wait until January next year before it starts to appear, and will take 18 months to be rolled out across their fleet.

Congratulations to my home country airline, Air New Zealand.  Although many NZers would disagree, Air Transport World has named Air NZ as having the best passenger service in the world.  The award was based both on the actual passenger experience on their planes, and on the quality of their staff.

Their 'Airline of the Year' award went to Singapore Airlines, in apparent large part due to their being launch customer for the Airbus A380 super jumbo.

Perhaps one of these high quality airlines might consider responding to this new startup airline service in Germany.  One puzzling note about this service - why are the crew not similarly attired - what are the 'safety reasons' they are seeking to demurely hide behind?

I'm sure we'll all look forward to, ahem, seeing the success of this new airline.

And talking about, well, you know what, on a mildly related topic, iconoclastic airline Ryanair found itself in a wee bit of trouble earlier this week, after Britain's Advertising Standards Authority (ASA) demanded the airline cancel an ad promoting an airfare sale.

Did Ryanair apologise?  Well, that is not the airline's style.

Instead, spokesman Peter Sherrard said in a statement 'We will not be withdrawing this ad and we will not provide the ASA -- Absurd Silly Asses -- with any of the undertakings they seek'.  He added 'This isn't advertising regulation, it is simply censorship. This bunch of unelected self-appointed dimwits are clearly incapable of fairly and impartially ruling on advertising.' and pointed out that many of the UK's leading daily newspapers regularly run pictures of topless or partially-dressed females without causing any serious or widespread offence.

All true, of course.  Apparently 13 complaints, from an estimated 3.5 million readers, were received by the ASA.  Some people have wondered if it was a Ryanair competitor who sent in the complaints, while the truly cynical among us wonder if it wasn't Ryanair itself complaining about its ad so as to get some free publicity.

More details - and, yes, a picture of the ad - can be seen here.

Speculation continues as to the cause of the BA 777 crash a couple of weeks ago.  We know that both the plane's engines failed to power up when commanded to, causing the plane to land hard and short of the runway, but no-one knows why both engines failed to respond.  One possible theory is a bug in the computer software that controls the engines, and a more fanciful theory is that some sort of electronic 'death ray' could have been focused on the plane, zapping or at least confusing some of the computer control systems.

This theory is definitely far fetched for several reasons, not the least of which being there was no other interference to other electronic systems, and also because Boeing very carefully shields important computer systems rendering them very resistant to electronic interference.  What's that, you say?  Oh, you're wondering why, if the plane is resistant to electronic attack, it is still dangerous to have a CD player operating in the cabin?  Well, some questions are best not asked, for fear of embarrassing the person who knows the answer!

Indeed, one of the currently active theories is nothing to do with the electronics at all - a simple old fashioned fuel problem is also being considered - a fuel blockage or something similar.  But, for lovers of futuristic electronic puzzlements, here's a fascinating story closer to home.  Read here about a five block zone around the Empire State Building in New York; within this zone cars sometimes have their engines die mysteriously.

Here is an interesting article offered as further background to the potential vulnerability of all types of electronically controlled devices (in the case of this article, primarily cars) to being remotely disabled.

One of the big problems when flying in the US these days - and in much of Europe too - is congestion at the airports.  JFK, ORD, LHR, and many other airports are struggling to cope with way more flights and passengers than they were originally designed to handle.

One solution to this problem would be to simply build new airports, of course, but even a simple thing like adding one more runway or terminal to an airport complex can take ten or even twenty years to accomplish, due in part to the morass of planning constraints, and the peculiar actions of people who buy property next to an airport and then choose to object to the fact that there's an airport next to them.

Switch scenes now to China.  Last week the Chinese government announced plans to add to the airport infrastructure in their country.  But whereas in the US or EU, a single new airport is a once a decade rarity, the Chinese plan to build 97 completely new airports between now and 2020.  That is an average of eight new airports each year for the next twelve years.  And if we say the first airport won't come on stream until perhaps three years from now, that means ten new airports each year for the remaining nine years.

This is just one measure of the extraordinary growth in China, which is all the more extraordinary because it is being distributed across the country, not concentrated in just a few major cities and regions.  And it isn't just air travel that is being developed.  You'll recall that in my lengthy commentary on my recent China trip I also indicated that in just the last year alone, China completed 5200 miles of new freeway.  And there are massive developments adding new rail track, and upgrading existing track for faster services, too.  China and the US are almost exactly the same size in terms of land area, but unlike the US government's Amtrak, China seems convinced it can sensibly and appropriately continue to offer both short and longer distance passenger trains throughout the country.

Talking about China and Amtrak, I wrote last week about how Amtrak cancelled service between Los Angeles and Seattle with very little protection or rerouting for passengers affected by the cancelled trains.  But this was probably a few hundred people, only.  Spare a thought instead for the 200,000 Chinese people stranded at the train station in Guangzhou (close to Hong Kong), where severe cold weather disrupted train service (one source even estimated the total number stranded at 500,000).

The Chinese government is trying a bit of subtle social engineering to try and discourage people from the traditional return home to their family to celebrate the Chinese New Year, which was a factor in the large crush of people stranded in Guangzhou.

As I keep repeating, China is very big, and it is hard to keep a sense of scale - come on our Chinese tour this June to see for yourself.

Here's a fascinating way to make some money on your next hotel stay.  Make a short video about the hotel, then upload it to this site and get paid a share of the commission the site makes by selling stays in the hotel from your video.  The site isn't well visited at present, so don't go expecting massive income from your hotel video, but if you're in the hotel anyway, why not quickly shoot a short video of the exterior, the 'common' or public areas  (reception, bars, restaurants, etc) and your room.  Hint - film your room before you start unpacking, so it still looks clean and fresh.

What is worse than a drunk pilot?  A crazy pilot!

This Week's Security Horror Story :  The airport in Bullhead City, AZ was evacuated for an hour and a flight delayed after a security officer spotted an object that appeared to be a grenade during X-ray screening of a piece of luggage.

It turned out that an 8 yr old boy had put a novelty grenade in his bag.

Talking about young boys, here's a story aggressively headlined 'U.S. Teen Arrested In Plane Hijack Plot'.  But if you read the story carefully, you'll see the teenager actually did nothing at all except fly with handcuffs, rope and duct tape in his carry-on bag, and had some type of mock cockpit at home.  But he was arrested and taken into custody, nonetheless.

How'd you like a job that pays from $83k - $128k a year, plus a huge swag of benefits, and offers the ultimate in job security.  College education not required.  Here's a job that does just that - a vaguely described 'Master Scheduler in Security Operations' working for the TSA.  Seems that basically your job would be to work out which screeners go on which shifts.

The good news is you still don't need a passport to drive across the border between the US and Mexico and Canada (that is expected to be required, perhaps in the middle of next year).  But, as of yesterday, you now need some sort of paperwork both to show photo ID and also to prove that you are a citizen of the country you say you are.  More details here.

Is Boeing's new proposed tanker for the airforce a 'Frankentanker'?  That's what the Mobile, AL Press-Register would have you believe.

Been there and done that all around the world?  Do you find, every time you look at a list of 'top ten travel destinations' you've already been to all ten of them and have no desire to return?  In that case, here's a 'top ten' travel destination list with a difference for you to consider.

Lastly, here's a fascinating feel good story of how a lost camera was tracked back to its owner.  Kudos to the good samaritans who chose to return the camera rather than just keep it.

Until next week, please enjoy safe travels

David M Rowell aka The Travel Insider

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