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Friday 4 April, 2008  

Good morning

I spent most of the last week in Las Vegas, attending the CTIA convention, all about mobile phones and related wireless gadgets and goodies.  Yet again, the continued growth in Las Vegas continues to astonish me, with new megaprojects sprouting along the strip on both sides.  Are there any limits to how much further growth Vegas can accept?

Surprisingly, I encountered one possible constraint that may prevent continued unlimited growth - the sidewalks along the strip.  They were often very crowded, even in the wee hours of the night, and it seems possible that in the future 'traffic jams' on the sidewalks will be worse than the perennial jam on the strip's roadway (which seems to be improving, with more and more traffic now choosing to take the service roads that parallel the strip on both sides).  It is hard to know what can be done to widen the sidewalks or provide alternate routes for people to use while strolling along the strip.

Vegas is absolutely not a low cost destination any more.  Gone are the days of inexpensive rooms and bargain priced food and drink.  I stayed at the cheapest hotel I could find on the strip, which ended up as being the Monte Carlo, and while the nightly rate see-sawed up and down from night to night depending on how full the hotel expected to be, it averaged about $150/nt for a bland generic hotel room.  Add another $14/nt for internet access.

There is something bizarre at booking in to a hotel, and spending six nights in the exact same room, but with the room rate varying from night to night, with a low rate of $69 and a high of $189, all for the same room.  When I checked in, I had to initial the space for agreeing to the room rate, which had six different rates printed out - a different rate for every night.

As for food and drink, a buffet brunch at Paris cost $25 and a buffet dinner at Bellagio was $30.  Dinner at one of my favorite off-strip restaurants, the Brazilian Yolies churrascaria style steak house , was $36 a person (all you can eat portions of seven different fire grilled meats), and while I didn't eat there, one of the restaurants at the lovely Mandalay Bay was serving Kobe steak portions for $175.

I did hopefully eat at the Harley Davidson cafe on the Strip, attracted by its bold promise of having the best barbeque food in Vegas.  Alas, their pork ribs were dry and tough, and definitely in no way slow-smoked.  Fortunately the waitress graciously took the $21 charge off the bill without any argument or unwillingness at all.

Drinks were similarly expensive.  A margarita from one of the 'instant' margarita dispensing machines was usually $10 - $15, and a round of two ordinary beers and two shots of Jameson's whiskey at the Irish Pub in New York, New York was a hefty $33.

As for the gambling, minimum bets continue to move upwards, it being hard to find $3 tables for Blackjack (but easy to find $10 tables).  Something I hadn't noticed before were special 'High Stakes' lounges for slot players, with machines accepting bets of up to $100 per line.  I can't even start to guess at the type of people who choose to play in multiples of $100 per pull of the slot machine handle (not that you pull handles any more).

At the other extreme, I was delighted to discover some penny slots, and decided to have a small play on those machines (when the major part of your business is publishing a free newsletter, the penny slots are about all you can afford!), but quickly discovered the 'gotcha!' catch to the penny slots.  The machines don't accept coins.  So the minimum amount of cash you could feed into the machine was a $1 bill.

Attraction tickets also seemed up noticeably on last year, with most of the major attractions charging $80 - $100 and up for their better seats, and, as always, most of the Circle du Soleil productions being not only very expensive but also sold out way in advance.  The CdS productions seem to grow in number every time I'm in Vegas, too, and I'm not even sure how many different CdS shows were simultaneously on offer this time.  I have to wonder if they are a passing fad that will be replaced by something else in a few years time, but I can't guess as to what the next new big thing might be.

Mercifully, viewing the lions at the MGM Grand remains free and fun.

Fresh in my mind from my return flight with Alaska Airlines back to Seattle very early on Thursday morning was an announcement, 15 minutes prior to the airplane stopping loading passengers.  A flight attendant said, over the PA 'Ladies and gentlemen, now that the majority of passengers have boarded the plane, would you please turn off and stow all electronic devices, including laptops and cell phones'.

The former official policy had been you could use your electronics until they closed the door and got ready to push back from the gate; but - at least with this particular crew - the new policy seems to be that when 51% of passengers have boarded, electronics must be turned off.

This is of course outrageous lunacy on the part of an idiot flight attendant.  But was I brave enough to point that out to them?  Absolutely not, for fear of being accused of various randomly chosen terrorist type acts and marched off the plane at gunpoint.  We all can do nothing except meekly comply when faced with the power crazed lunatics we surrender control of our lives to on flights these days.

No wonder we hate flying so much.

The fire that - at the time - seemed hopefully small and minor continues to impact on my life in many unexpected ways.  I'm not becoming neurotic, but just this evening I suddenly started worrying that I could smell smoke in the alternate accommodation I'm currently staying in, and started anxiously hunting around for the source of the fire.  I think it was just some clothing I'd brought from home which was still smoke contaminated, but all of a sudden, the now familiar smell was matched with a terrible sick fear of 'Oh no, not again!'.

As promised last week, and in the hope this will never happen to you, here now is a two part article about fire prevention and fighting.  One more comment - I'm still keen to accept any extra commentary or suggestions on this topic, and can edit my articles if necessary to correct or complete the material now being offered, so if there's something you'd like to add on the topic, do let me know :

This Week's Feature Column :  Fire Prevention and Fighting : I managed to contain a seemingly minor fire before it destroyed my entire house, but even so, the repairs, the water and smoke damage, and everything else make even this 'minor' fire a major inconvenience. Here are some lessons to help reduce your chance of a similar disaster.

Dinosaur watching :  It has been a bad week for airlines beginning with the letter A.

Aloha, freshly into Chapter 11 bankruptcy last week, abruptly stopped flying on Sunday/Monday this week.

Aloha's earlier announcement of Chapter 11 filing implied the airline had working finance lined up to enable it to continue operations, but apparently that was not the case.  It seems unlikely the airline will resume passenger services, although its pilots are attempting to do something to save it.

I'd written just three weeks ago about ATA, observing at that time how it was becoming more a 'virtual' airline and less a real one since its emergence from its previous Chapter 11 in 2006.  On Wednesday this week ATA suddenly went into Chapter 11 and then followed up on Thursday morning by cancelling all flights and laying off its staff.  This makes it the ultimate in virtual airlines - no flights at all, and wasn't quite the evolution I had earlier been discussing.

The demise of ATA will be particularly bad news for people who had boldly joined their Flightbank program, paying in advance for (discounted) future travel.  Maybe they can get a refund from their credit card company, and of course ATA's response to the question 'how could you in good faith still be selling future travel in return for upfront cash when you closed down the next day?' will likely be 'we didn't know we'd be closing down then - it wasn't our fault we closed down, but rather the fact we unexpectedly lost a major military contract'; a rather specious excuse.

Rule of thumb - although some airlines occasionally have bona fide programs that involve you paying money up front for future travel, when smaller struggling airlines offer 'buy now, travel later' incentives, it is a dangerous warning sign indicating the airline is desperately mortgaging its future to pay for its present (and past due!) expenses.  Only buy into these programs if you're sure your credit card company will reimburse you if it all goes bad, and/or if you're confident the airline will stay in business in the same or expanded form for the future period you're planning on using your prepaid travel.

ATA's demise no doubt has minor ramifications on the services offered by its unlikely codeshare partner, Southwest.  But Southwest's stock price showed merely the mildest blip on Thursday, dropping 7 to close at $12.71 on a day when the main airline index was almost completely unchanged (ie other airlines very slightly trended upwards).

If you took advantage of my suggestion three weeks ago to consider buying some Southwest Airlines shares, the closing price on 13 March ($11.70) has now increased to $12.71 on this Thursday's close, a happy making 8.6% increase for the three weeks (compared to a 3% increase for the airline index as a whole, most of which is a result of Southwest's strong showing in any case, and a 4% increase in the major indices such as Dow Jones, S&P, etc).

Back to the 'A list' (not that this is synonymous with a good list).  Pilots at Argentina's flagship air carrier, Aerolineas Argentinas, walked off the job on Thursday, suspending international and domestic flights by the airline. This has stranded thousands of passengers.

The pilots say they're demanding better work conditions.

Last, but definitely not least on the A list is Alitalia.  Its President and Chairman, Maurizio Prato, quit on Wednesday, saying the company was cursed.  Hardly a ringing endorsement and a change from the usual homily about 'wanting to spend more time with my family'.

Alitalia, which looked set to be sold at a low price to Air France/KLM, has seen its sale unravel as part of Italy's current electioneering, with likely to be Prime Minister (again) Silvio Berlusconi vowing to overturn the AF/KL sale, and the airline's unions demanding safeguards that would in effect make it impossible for AF/KL to make the changes/improvements that need to be made to allow the airline to have any chance of future profitability.

Alitalia's board said in a statement late Thursday that it would take the next few days to study its financial options before deciding on Tuesday whether to continue its operations.  The Milan stock exchange suspended trading in Alitalia shares on Thursday.

While it is unlikely the Italian government will allow Alitalia to collapse (it has rescued the airline, obediently, at every past crisis) it seems all possibilities are on the table this time around, and I'd surely hesitate before booking any travel on Alitalia in the foreseeable future.  Even if the airline doesn't shut down entirely, it may drastically prune its services.

I claimed last week that the airlines have increased their fares by more than the increase in cost of jet fuel to them so far this year, and offered some 'back of an envelope' type ballpark calculations as to the underlying increased cost of fuel compared to the increased ticket revenue they are now receiving.

This received several interesting responses, including 'if that is so, how come the airlines are losing more and more money, even with fares increasing above their cost increases?' (partial answer - dropping passenger numbers, plus many other factors too).  And a couple of readers pointed out that not all fare types have increased equally, suggesting that many of the fare increases have applied primarily to full fares, not to discounted fares, with the implication being either that people have shifted to a lower costing fare, or that the higher priced fares don't represent a large part of the total fares sold.

I didn't have exact data to respond to those comments then, but thanks to those wizards at Farecompare.com, here's a fascinating table of what has happened to Northwest's fares so far this year.  The other dinosaurs can be assumed to have largely similar impacts.

Don't stare at this table for too long, but even a quick glance shows that most leisure fares have increased at levels almost identical to the increases on the so-called 'business' type fares, and while it is true there have been few increases in the 30 day advance purchase fares, note that half those increases have been for $120, and also note that the number of seats released into this type of fare level and actually sold as such is probably very low.  Most leisure fares fall in the 14 and 21 day categories, and most business fares are in the 3 and 7 day categories.

Coming back to my guesstimate of last week, I said the average fare has absorbed a $58.50 increase in jet fuel.  Look at the table above and see how many increases there have been of over this amount compared to how many of less than this amount.  The $80 - $90 increase is the most common, across all fare types, with strong showings in other categories including the $110 - $120 increase level, and remember that some of the lower increases apply to lower priced fares for shorter journeys (with less underlying fuel cost).

One other way of looking at this is 'how much fuel can these fare increases buy'?  If we say jet fuel has increased by slightly more than $1/gallon so far this year (I'm not sure of the exact number), and if we say the average passenger and free luggage represents a 250lb load, then each $10 of fare increase pays for the extra cost of enough fuel to fly a person pretty much from coast to coast.  Using this measure, it is hard to see how any fare would need to increase by $25, let alone $50, $100 or $120.

The exact data remains elusive, and I'm uncomfortably reminded about there being lies, damn lies, and statistics, but I remain comfortable with my assertion that the average air fare has increased by more than the average underlying increased jet fuel cost so far this year.  The airlines can not blame jet fuel increases on their current woes, and neither can they justify future fare increases on their increased jet fuel costs.

Talking about current woes, would you believe that - a week later - BA is still struggling to come to grips with its nightmare at Heathrow's new Terminal 5.  Things are so bad that they don't even know how many bags are messed up - at one stage they said 15,000, but one industry source said 20,000 bags and another suggested 26,000 bags might have been delayed.  A BA spokeswoman was unable to say when passengers could expect their bags, predicting that it could occur during the next few weeks.  Flight cancellations continue, with 50 flights cancelled on Wednesday and 34 yesterday.

BA is even sending bags in bulk to Milan, where a private company is sorting them and then driving them to their owners across Europe.  So much for the so-called 'world class' baggage system that was claimed would 'work perfectly on day one'.

But the problems weren't only with bags, cancelled flights, and mysterious 'behind the scenes systems', whatever they might be.  On last Friday morning, with throngs of frustrated passengers packed into the terminal, not knowing what was happening to them, their flights, or their bags, BA had only two of its 26 Customer Service desks open.

Among the more noteworthy and surprising excuses for the disgraceful disaster was that both the airport's and BA's employees couldn't find their way to the new staff carparking at the airport, meaning that people were reporting for duty up to two hours late.

And what official comments are being offered by British Airways.  Well, it seems we're being chided for not seeing the broader picture.  Shifting focus from the earlier glowing hyperbole about how perfect their new terminal would be right from day one, CEO Willie Walsh is now saying

British Airways will be in this terminal for 40 years.  It is not going to be judged on the basis of the first few days - and it is up to us to ensure that it becomes the resounding success the travelling public deserves.

What does this mean, Willie?  Should we allow 5% of the 40 years for getting up to speed - that would give you two full years to foist misery on us without you feeling guilty or us being allowed to judge your corporate (in)competency.  Or would a mere 1% be enough?  That would still give you almost five months of messing up.

So much for BA's earlier boasts about how smoothly their move to the new terminal would be, and how well they had tested everything prior to the start of service there.

I've written before about airlines flying empty planes to stupid destinations so as to preserve their landing rights at Heathrow, and a few weeks ago American Airlines was chided by ecological extremists for flying a scheduled flight that had been delayed, and had only a few passengers on it (the others having been shifted to other flights).

But what about the airline Flybe that actually paid people money to fly its service between Dublin and Norwich so as to qualify for an incentive payment from Norwich?  While this sounds like outrageous deceit on Flybe's part, maybe the truth is somewhat different.

It appears that Norwich offered a $555,000 incentive if Flybe could generate at least 15,000 passengers on this route in a 12 month period (ie a generous $37 per passenger).  Flybe found itself approaching the end of the year, and a few passengers short of the 15,000 needed.

Norwich Airport said it was an all or nothing deal - 14,999 passengers would mean Flybe would get nothing, and 15,000 would get the airline the full $555,000.  And so, with a shortfall of a mere 172 passengers, the airline paid 172 people between $60-$80 to fly roundtrips to Dublin.

The shame and stupidity in this case surely lies with Norwich Airport, not with Flybe.

Cell Phones are Bad for You, continued :  One of the most convincing studies to show a link between cell phone use and brain tumors was released this week.  Its conclusion, determined by an award winning cancer expert - cell phones could kill more people than smoking or asbestos.

The key new thing in this study is an understanding that it can take up to ten years or more for the negative effects of cell phone use to appear in users, and so a longer time series was used to correlate cell phone usage and brain cancer.

The analogies between this and the earlier arguments about the now universally accepted link between cigarette smoking and lung cancer are impossible to ignore.  And not only do we have the negative consequence of too frequent use (cancer) but we also have increasing reports suggesting there is an addictive quality to cell phones.

Do you suffer from Nomophobia?  If you do, perhaps you might want to start a twelve step program.

Good news for Airbus - while Boeing and its political shills try and muddy the waters over its tanker contract win with the Air Force, it has meantime chalked up yet another country as a purchaser of its tankers - the venerable Royal Air Force.

Bad news for Boeing - it looks like its 787 may be delayed yet again, by another six months.  This is becoming an increasingly open secret and obvious outcome, but Boeing itself is dragging its feet at admitting to further problems in its 787 program.

New airlines :  Australian airline Virgin Blue, part owned by Sir Richard Branson, has announced that its international subsidiary V Australia will start daily service between Sydney and Los Angeles on 15 December this year.  It will be flying spacious well appointed 777-300ER planes.

The airline will codeshare with Northwest to service points beyond Los Angeles.

David Neeleman, Jetblue's now largely sidelined founder, announced that he is planning yet another new airline, this time to be based in Brazil.  He says he has already raised $150 million to fund the airline's launch.

Why Brazil?  Neeleman was actually born in Brazil and has dual Brazilian/US citizenship, making it easy for him to meet local airline ownership rules in Brazil as well as the US.

This Week's Security Horror Story :  I wrote scathingly last week about the pilot who had an 'Accidental Discharge' (AD) of his firearm while coming in to land his plane.

But - gasp! - I may have been placing blame in the wrong quarter.  The pilot is saying the weapon accidentally discharged while he was stowing it away.  But, no matter what the circumstance, that still sounds like egregious mishandling of a loaded firearm, right?

Well, maybe no.  Have a look at this Youtube video that demonstrates how this could have happened in a completely bona fide accidental manner.  This video fairly and sensibly suggests the bizarre (or, should I say, stupid) TSA requirement to stick a padlock hasp through the trigger guard of the weapon while obscured by its holster is the root cause of the AD.

There are plenty of better ways to make a weapon safe, including trigger locks that cost about $15, or locked metal carry containers.

I wrote about the TSA inappropriately handling the case of a lady with some, ahem, 'personal jewelry' last week.  To give credit to the TSA, they acted swiftly, almost managed to utter an apology, and have now formalized a new and more appropriate policy in such cases for the future.  Well done (but that doesn't excuse the inappropriateness of their behavior to start with).

In the past, I've lampooned the hyperbole associated with the concept of TSA screeners spotting potential terrorists based on behavior analysis of people at airports.  But here's a story that - on the face of it - suggests that this really works.  Bravo!

One has a mental image of some heavily disguised terrorist attempting not to draw attention to himself, furtively hiding behind a newspaper in the airport, but a twitch of his knee or some other subtle telltale giveaway being noted by the eagle eyed highly trained and grandly named TSA behavioral specialists.

But, when you read the story, you'll see, near the bottom, the subheading 'Witnesses: Man Acted "Crazy"'.  Apparently it didn't take any special training at all to recognize the guy as a certifiable loony tune.  But you can be sure that this will be proudly cited, for ever into the future, as a great success of the TSA's behavioral analysis program.

Until next week, please enjoy safe travels

David M Rowell aka The Travel Insider

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