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Friday, 31 July, 2009
Good morning
While our stock market has posted
encouraging gains over the last few months, the same is, alas, not true
of the US dollar, which, as reported in
this article, is falling to its lowest levels of the year against
our six major trading partner currencies. The Euro, which was as
low as $1.25 earlier this year, is now up more than 12% at over $1.40,
and the pound, which dropped as low as $1.37 is now back up around
$1.65.
This reinforces the values inherent in the
special deal discounts for river
cruises we have (which expire today). This truly may be the
very best year ever for river cruising values in Europe. We
have cruises that were good values to start with, and which haven't
increased in cost with the change in exchange rate, and which are now
being discounted by $500 - $1500 per person. Because river
cruising covers just about all your costs, you're locking in the vast
bulk of your total travel cost to this one single US dollar based
payment.
The twin events that made up for the deep
discounts this year are less likely to reoccur in the future. The
unexpected closing of Peter Deilmann Cruises will result in eight boats
being taken out of Europe next year, which will act to diminish or
destroy the over-capacity that was present this year, and the sluggish
but apparently steady return to better economic conditions will
encourage people to return to their higher levels of leisure travel.
This year's combination of too many ships to start with, and then
compounded by too few people traveling, has seen these amazing values
appear, but don't look for them again next year.
Anyway, you still have today to choose any
of the approximately 50 different discount cruises operating between now
and the end of the year.
And you have two more weeks to take
advantage of the $500 discount on our
2009 Travel Insider
Christmas Markets Cruise. The lowest price E cabins are now
all sold out, but there are still D, C and B cabins all available for
under $2000 per person, and even the best A category cabins are only
$2098.
We've ten people coming on this lovely
cruise already, and would love to have you join us.
Oh - and if you're not able to come
cruising, but want to get best value for your travel dollar any other
way, here's an interesting article from Forbes listing what they refer
to as
Fifteen Cheap Countries to See in the Recession. I'm not sure
I want to visit all the 15 countries featured, and I don't entirely
agree with their methodology, which seems to be primarily focused on the
US/local currency exchange and nothing else.
But some are definitely great ideas, such as
The Czech Republic, Hungary, Poland and Romania, and for those of us in
the Seattle area with recently introduced air service by Icelandair, the
recommendation of Iceland (and Norway and Sweden too) is also
appropriate. But the suggestion that Russia is a cheap country is
way removed from reality - it might be better value than last year, but
it still remains a very expensive destination.
It has been an intensely hot week here in
the Seattle area. On Wednesday the temperature in Redmond reached
105° (twenty degrees above the normal high for this time of year), and
much/most of the week has seen temperatures above 90°, all of which is
way too hot for me. I'm living testimony to the accuracy of
research that suggests productivity drops by about 5% per each 2° rise
in temperature about 70°, and so have no feature article to offer you
this week. I do have several articles almost completed, but they
are all variously waiting on inputs from other people before they can be
completed, so expect something good next week.
One of the articles I have under preparation
is on travel scams - both scams to trick you out of your money by
selling you worthless things, and scams to trick you out of your money
when you're traveling away from home.
If you have any experiences or
suggestions about scams to be on the alert for, please do share them
and let
me know.
Just as your comments helped make the eight
part series on being bumped off flights more comprehensive, anything
you can add on the subject of scams and tricks and traps to do with
travel would help ensure another comprehensive coverage.
Dinosaur Watching : Frontier
Airlines posted a small profit in its second quarter - $12.6 million,
and said it would have enjoyed a $27.6 million profit if it were not for
reorganization expenses.
The airline is currently in Chapter 11, and
its future will be decided at a bankruptcy court managed auction on or
about 10 August. One airline - Republic Airways - filed a $108.8
million bid on 22 June, and then on Thursday this week Southwest
Airlines surprised most industry watchers by making a conditional bid of
$113.6 million.
Southwest's bid is seen as a way to quickly
grow its presence in Denver. By taking over Frontier, it would get
in total about a 33% share of Denver traffic, with market leader United
having a 50% share.
The benefits to Southwest however would
not be fully realized so quickly. Integrating Frontier
Airlines - its planes, its people, and its systems - would take some
time, most notably because Frontier flies a fleet of 51 nearly new
Airbus jets - mainly A319s plus a few A318s and three A320s, with an
average age of two years. Southwest (WN) on the other hand has
always entirely and exclusively flown Boeing 737s and has, to date,
strenuously resisted the introduction of any other aircraft type to its
fleet, saying that having a single airplane type gives it better cost
efficiencies - this is contrary to conventional airline wisdom,
but it seems to have worked well for them until now.
So, does the $113.6 million bid on Frontier
represent the easiest best way for Southwest to boost its presence in
Denver? When one considers that WN has been conspicuously not
growing during the last little while, it seems strange they would now
suddenly seek to buy Frontier's complete route system in a single
transaction, especially when one considers that almost every one of the
Frontier routes duplicate routes already operated by Southwest, with the
notable exception of Mexico - Southwest has yet to fly into Mexico
itself.
Wouldn't Southwest have been better
advised to simply grow organically? Or is WN paying top dollar
just to buy out/buy off what would become a reinvigorated competitor if
Frontier were to be sold to Republic?
No questions asked refunds are a hallmark
of many leading and successful businesses, and even those businesses
that don't have a 100% liberal policy for returns are generally fair
about exchanges - for example, if you bought a dress the wrong size
and wished to exchange it for the same dress in the correct size, few
retailers will hit you with a change fee.
But, of course, the airlines play by
different rules. The Department of Transportation is now
keeping more detailed records on airline fee income - to match the
growing prominence of airline fees, and they report that in the first
quarter of this year, we paid some $528 million in change fees and
cancellation penalties, almost the same as the amount paid for baggage
fees.
Yes, the airlines are taking $2 billion
from us every year merely for allowing us to change our tickets.
And another $2 billion for allowing us to take our luggage with us.
Some good news from Delta. They
are adding a new feature to their frequent flier program - a type of
'rollover miles'. Essentially, if you get enough miles to qualify
for one of their Medallion elite frequent flier levels, plus you earn
some more miles beyond that, but not enough to qualify for a higher
level of status, you can apply those miles towards your next year's
qualification.
This is a major added benefit,
because most of us have some miles left over after reaching whatever
qualifying level we achieve each year, and indeed some of us will even
'time shift' flights either into one year or the other based on where
the miles will do the most benefit. Now we can roll over the extra
miles and get a head start on the next year's qualifying.
Delta is also adding a fourth level of elite
status - in addition to regular frequent fliers, and then the Silver,
Gold and Platinum elite levels, they are now adding another level -
Diamond, and there are rumors of a fifth semi-secret 'by invitation
only' level to be added also. I'll not hold my breath expecting my
own gilt edged invitation to appear in the mail any time soon.
Lots of disappointing news about British
Airways this week.
As I've been anticipating pretty much from
their commencement of operations, and as has been looking increasingly
inevitable, with the only question being when rather than if, BA is
abandoning their OpenSkies subsidiary. BA is putting the
airline up for sale, and meantime, with barely three weeks notice, is
cancelling its flights between New York and Amsterdam, leaving only its
Paris/New York service remaining.
I wrote about OpenSkies
here. They offered a good
experience at a great price, but have clearly failed to turn the profit
corner, due to what I guess to be a combination of too-low fares and
too-few passengers. It is a shame that the airline launched
shortly before the 'perfect storm' of high fuel costs followed by tough
economic times and decline in business travel numbers.
After this latest of several failures to
create an all-business class trans-Atlantic service, one has to
wonder as to the future success of BA's soon to be launched new
all-business class service between London City Airport and New York.
BA is also cutting back on its other
flights between the US and UK. JFK loses one of its seven
daily flights, and both Newark and Chicago reduce from three to two.
Alas, Seattle is also affected, with its 10 flights a week going down to
seven.
More BA cutting back - this time on
food and drink service on its shorter flights within Europe. No
great surprise there, and not too much hardship either.
But BA is also cutting back on the food
served in first and business class on its flights to/from the US.
No more after dinner chocolates, and no more pre-dinner canapés.
While one might say that the loss of an after dinner chocolate (or, on
one notable BA flight, I was given the entire box and allowed to eat as
many of them as I wished) is hardly a deal breaker, it is another
regrettable step that cheapens the first or business class experience
and makes it harder for a passenger to justify the sometimes $10,000+
premium as between first/business class and coach or premium economy
class.
You'd really think that when an airline
charges $10,000 more than a base coach class fare, it could afford to
spend $1 for a chocolate or two, and another $1 or $2 for a canapé
or two.
And while no-one will probably book down a
class based on the omission of these two items, it is a further step
down the slippery slope of making business and first class less premium
and more ordinary, and just helps to accelerate the trend for
passengers to fly in coach class.
BA is suffering enormously due to passengers
deserting its first and business class cabins - people who no longer see
the value or sense in these overpriced and under-featured offerings;
people now choosing to pay very much less money to fly coach class.
BA's best response should be not to cheapen its first and business
class products, but rather to spend a few dollars more and make them
more appealing.
Instead of taking away the canapés and
chocolates, why not double the quantity being offered and the regularity
with which they are being offered? Why not add one or two
additional hot towel services? Why not upgrade the lounges?
Why not provide chauffeur transfers to/from the airports? And so
on and so on.
Is the best their highly paid marketing and
product and brand managers and consultants can do is to come up with
suggestions to save a couple of dollars per remaining passenger by
cutting down still more on the amenities that the passenger has paid a
$10,000 premium for? Any fool can say 'cut the cost', but
only an intelligent sensible person can come up with new ways to appeal
to passengers and encourage them back to the premium cabins.
Here's a cost-cutting measure that BA has
mercifully yet to introduce, however. Reducing the size of the
cutlery on board so as to save weight. This is what Japan
Airlines did, trimming a fraction of an inch off their cutlery, and
saving several pounds of weight per typical 747 flight as a result.
One would think that reducing the weight of
a 747, which can weight up to almost 900,000lbs, by perhaps 5lbs per
flight would be so trivial as not to be worth considering.
There are changes afoot at Aeroflot too,
not the least of which is that its flight attendants will now be 'very
striking, very eye-catching girls' who will not exceed a US 12 dress
size. Presumably this is also to save weight? Their new CEO
offered a new maxim for his airline - 'The passenger is always right'.
Perhaps he might care to teach this concept to some western airlines,
too - but only after he has completed the training of his Aeroflot
staff!
Aeroflot is also discontinuing the use of
its fleet of older Soviet built airplanes, replacing them with more
modern Airbus and Boeing planes. Although some commentators have
snidely suggested this may be due to safety issues, that is not correct.
The main driving reason is that the newer Airbus and Boeing planes (and
in particular the western engines on them) are vastly more fuel
efficient and economical to operate. More details
here.
Government interference can be a good
thing. Sometimes, when an industry falls outside the
guidelines of free market forces, government interference can be a
positive factor, and the airline industry is consistently showing that
it can't be relied upon to police itself and treat its passengers fairly
and decently. Although our own government continues to wink and
look the other way, the EU is taking more aggressive action. This
is already apparent if you read the impressive list of passenger rights
the EU created and which are referenced in my recent article about
your rights
in Europe if overbooked.
Not content to rest on their laurels, the EU
is now proposing that each member country set up an agency to monitor
bags that the airlines lose or damage, and to enforce rules for
passenger compensation in such cases. It is also mooting the
possibility of increasing the level of compensation airlines much pay
for lost/damaged bags.
Suggestion to the EU - don't just increase
the level of compensation, but also remove the exceptions the airlines
in the US all gleefully cite - basically the airlines currently refuse
to be liable for anything valuable in your luggage, creating a Catch-22
where anything of value will not be reimbursed to you.
A slowly unfolding tragedy in Britain?
Traditional British pubs are closing at an ever increasing rate - in
2004, pubs were shutting at a rate of 8 a week. This increased to
27 a week in 2007, went up to 38 a week in 2008, and for the first six
months of this year, they've been closing at a rate of 52 a week, at
least according to statistics released by the British Beer & Pub
Association.
Recognizing this alarming trend, two MPs
tabled a motion in the House of Commons urging their colleagues to
'support their local pubs' (whatever that might mean). They said
the pub industry was 'hugely important to the British tourist trade'.
This of course begs the question - if
Britain is losing 52 pubs a week, how long before it has no pubs
remaining at all? Well, there are still 57,500 pubs (that is about
one per thousand population), so it will be about 21 years before the
pubs have all gone (to be replaced by appalling 'trendy' bars).
Meanwhile, in France the French government
is practicing 'tough love'. It has warned its citizens that they
could be asked to pay back the cost of rescuing them under a bill
unveiled this week. The bill targets French nationals who travel
without a valid reason, to dangerous areas, despite travel warnings.
The state wants them to pay all or part of
the costs incurred from rescue operations, according to a government
statement. The government wants travelers to take out better
insurance to cover such costs, seeking to avoid repeats of, for example,
the hundreds of thousands of Euros the government spent to repatriate
French tourists from Thailand during last year's riots.
Under a 1985 law, French citizens already
have to reimburse the state for mountain rescue operations if they
are found to have caused an accident by taking excessive risks.
Sounds like a very fair idea. I'm sure
I'm not the only one irked by a sometimes hundreds of thousands of
dollars rescue effort to save people who acted very foolishly and
unpreparedly.
Bad news for Boeing : Their new
787 plane, repeatedly delayed already, is now experiencing open ended
further delays that will probably add at least six more months to the
two years of delay so far accumulated. A 'stress test' of the
wings showed cracking occurred well below the forces necessary for safe
operation and for FAA certification. This is requiring changes to
the design of the area where the wings join the body of the plane.
Unfortunately, Boeing already has ten 787s completed and another 30 in
various stages of completion, most of which will need to have 'after the
fact' fixes applied to them.
It is hard to know how to feel about this.
Perhaps Boeing placed too much reliance on computer modeling and did not
do enough real world testing earlier in the development cycle -
particularly because it was building the plane in large part from new
composite materials which it has little relevant prior experience with,
and perhaps the company's outshopping of the airframe construction to
different sub-contractors, all around the world, further delayed a
chance to discover problems until the pieces were finally assembled.
And was Boeing over-confident by proceeding with building many more
planes before the first one had been tested and approved?
But, whatever the underlying causes, the
bottom line is stark - analysts estimate that the development process is
now going to be about $11 billion over budget (an estimate
increased by about $5 billion for the implications of this latest
problem). In addition, and with airplane deliveries looking to be
at least 2.5 years after initial promised dates, the 'window of
opportunity' that Boeing initially exploited so successfully - the
period of time when it was selling the 787 and while Airbus had no
appropriate competing airplane - is closing still further.
The good news is that Boeing has managed to
secure orders for a staggering 850 787s so far, but the bad news is that
the Airbus alternate, the A350, is proceeding apace and currently is
thought to take to the skies in 2013. An airline wishing to order
either a 787 or an A350 today is now as likely to be able to get an
earlier delivery on an A350 than a 787.
Having now spoken out in favor of the
iPhone as being the best 'smart phone' for most people, I'm now a
bit sensitive to all issues to do with iPhones.
Here's a
really scary story of a security bug - worse still, a bug
that Apple has known about for more than a month, but done nothing
about.
And while one has to admire the 25,000+
applications available for the iPhone, one also feels some concern
about the monopolistic and controlling nature of Apple, which
rigorously sets and enforces rules and policies for which applications
it will or will not allow to be distributed. I encountered that
myself last week when I thought I'd found the perfect way to call
internationally for next to nothing - I'd use the Skype application on
my iPhone. But when I tried to do that, a blocking message came up
saying that Apple/AT&T would not allow Skype to make calls over AT&T's
3G data network, eliminating my ability to call out via Skype until such
time as I found a Wi-Fi hotspot. The only reason for this
restriction seems to be to force people to pay over the odds for
international calling direct with AT&T.
Sure, there are plenty of Wi-Fi hotspots,
but I was in my car at the time, and no Wi-Fi hotspots work when you're
driving down the highway (due to their very limited range).
Another example is the growing suite of
Google Voice applications, which Apple has banned entirely - details
here. Again, it 'protects' other Apple partner revenue
sources, but at the cost of not allowing Apple's customers to freely
choose whichever call management program they wish.
Talking about Wi-Fi, Barnes and Noble have
announced this week that the Wi-Fi hotspots at all their stores will
now be free for everyone to use.
And talking about AT&T's 3G network, here's
an
amusing story of the ongoing battle between AT&T and Verizon as to
which carrier has the better network, and how they may fairly describe
their networks in advertising.
This Week's Security Horror Story : When you cross the land border
that Canada has with the country to the south of it, what country do you
enter?
The answer to that question is, of course, the United States,
as almost everyone in the world knows. But the US Customs
and Border Protection agency wish to keep this a secret. They are
removing the large letters that spelled out 'United States' on the
building that houses the immigration and customs services at the border
crossing at Massena, NY. Says a spokeswoman for the CBP, 'There
were security concerns. The sign could be a huge target and
attract undue attention. Anything that would place our officers at
risk we need to avoid.'
Excuse me, but writing the name 'United States' on the border patrol's
building at a Canadian border crossing is an unacceptable security risk?
Have we become completely terrified of our own shadow? The
terrorists have won - game, set and match - if we are now too frightened
to show the name of our country on a federal border building.
Details
here. What will be next? A prohibition on flag flying?
Taking the name of our country off our stamps and currency?
There's no limit to such lunacy.
Talking about unlimited lunacy in the
name of security (as we seem to do every week), how about forbidding
a child from taking a very unrealistic plastic replica toy sword
or toy plastic flintlock pistol onto a plane? In
this article, we read about an eight year old boy who bought these
two articles from the Pirates of the Caribbean ride at Disneyworld, but
had them seized when flying home again. This makes us safer?
Still, it could be worse for the eight year
old. He could have been sent to prison. The United States
has both the highest incarceration rate (prison population as a
percentage of adults) in the world and also the highest absolute number
of prisoners. We have about 2.3 million adult prisoners, and
with about 230 million adults in the country, that means 1 in every 100
adults is currently in prison.
Interestingly, after having an incarceration
rate that remained moderately level for a long time, in the 30 years
between 1978 and 2008, rates have skyrocketed sevenfold, pushing us from
somewhere in the middle range of national incarceration rates to now
being the clear world leader.
Why does the US have such a high rate of
incarceration? Are we unusually dishonest? Or is our society
unusually vengeful? Or is there some other reason? What has
happened over the last 30 years that has caused a seven-fold increase in
the rate we are imprisoning people? And - most to the point - is
it a good or a bad thing that we are locking up so many of our
population?
I don't know the answers, but I think the
questions are important. A society that willingly (and/or
necessarily) incarcerates high proportions of its citizens is not a
healthy society. Some quick thoughts on these points.
Most importantly, please read
this appalling story of a man who ended up being prosecuted by
federal agents twice for the 'crime' of failing to put a warning safety
label on a package he sent via UPS that contained some sodium in it.
No-one was harmed and no problems occurred during the package's shipment
and delivery, but an out-of-control enforcement system ended up with
the man spending two years in prison, all because he forgot to (or
didn't know he must) put a warning sticker on a package that was sent
harmlessly through the UPS system.
How many other people find themselves caught
up in the legal system for such victimless non-crimes, and end up having
spend tens or hundreds of thousands of dollars defending themselves in
court, and possibly losing and ending up in prison? And how
many billions of taxpayer dollars are we spending to chase after such
people, to prosecute them, and then to incarcerate them?
To answer just the third part of that
question - on average states are spending 6.8% of their total annual
budgets on corrections. California spends the most in dollar terms
- $8.8 billion a year, and Oregon the most as a percentage - 10.9%.
Add to that the extra costs of the legal system and the police and other
enforcement and regulatory agencies, and the complete costs are
enormous.
In the twenty years 1987 - 2007, states
have increased their spending on prisons at a rate six times greater
than they have increased their spending on higher education.
Is this the best way to spend money on our people? The answer to
that question is resoundingly 'No!'. One study in 2002 suggested
that every dollar spent on pre-kindergarten education resulted in a
$16 saving in subsequent costs of welfare, incarceration, etc.
Here's an
interesting piece that rebuts five myths about US imprisonment
policies. In quick summary, the article says the growth in prison
population is not caused by longer sentences - the average prisoner
spends only about two years behind bars. Low level drug offenders
are not driving the growth in prison numbers either - only about 20% of
inmates are there for drug offenses (compared to 50% for violent crimes
and 20% for property offenses). And the article suggests there's
at best only a very weak correlation between locking more people up and
crime rates declining (or freeing more people and the crime rate
increasing).
There's something terribly wrong with our
society - a society that was built on the tenets of a respect for
freedom and justice - if it takes away the freedom of so many of our
fellow citizens, and in some cases where clearly no serious crime was
ever committed.
There's also an interesting example of
unintended consequences. The 'three strikes' laws that have proved
popular over the last decade or two as a way of perhaps taking career
criminals off the streets don't always work the way they should.
Rather than making a criminal who has had two convictions already become
extremely law abiding and honest, they can instead make such people
become more extremely criminal, because they know they'll be facing
life in prison, whether their third crime be for something moderately
petty or for first degree mass murder. There have been suggestions
that this actually encourages more extreme criminality in such people.
More fascinating data on US incarceration
rates, and comparisons with other countries, can be seen in this
excellent presentation
here.
One last comment, semi-related. You
all know how difficult it is to cause a policeman to lose his job.
I've written myself, regularly, about egregious violations of citizen's
rights and due process by police, and the result is often nothing or
perhaps merely an admonition to the guilty officer. There are even
cases involving dubious use of deadly force that have brought no
sanction against the involved officers.
But if an officer should write an email to a
friend in which he exercises his right to free expression, albeit in an
unfortunate manner, about a person or thing that is a politically
incorrect statement, and if that email should fall into the hands of his
superiors, then - notwithstanding a previously faultless record, he can
be immediately suspended, and scheduled for a termination hearing
within a week.
The whole concept of the First Amendment is
to protect distasteful speech that we disapprove of - because if we
don't allow distasteful speech we disapprove of, pretty soon we find the
need to pass a 'speech we approve of' test becomes increasingly
difficult and constraining. Details
here.
Finally, what do you think Prof Gates was
shouting at the top of his voice when
this picture was taken? My guess - something vastly more
insulting, and direct to the arresting officers, than the private email
from Officer Barrett to some friends. But whereas Officer
Barrett stands to lose his job, Prof Gates gets invited to have a beer
with his long time friend in the White House.
Talking about getting police officers fired,
an even harder feat is to get a TSA employee fired. But apparently
they don't feel they have enough job security already, and are looking
to join a union, and seek to give the union power to collectively
negotiate on their behalf.
As a former union official myself, I'm fully
understanding and supportive of the need for unions, and the value they
can add, but primarily in situations where the employees don't already
have the upper hand. Surely TSA employees would be near the top of
anyone's list of employees who do not need unionization - they are a
group of people already with job security and fair to generous pay and
conditions. Adding another layer of job protection merely adds
another layer of non-accountability to these people and the jobs they do.
Details
here.
I opened by talking about inexpensive
destinations, and would like to close with one more suggested
inexpensive destination. If you're a fan of The Office television
series, why not take advantage of an
Office themed tour of Scranton, PA.
Lastly, thanks to reader Mark who thought
we'd enjoy this presentation of
the strangest items left in hotel rooms.
Until next week please enjoy safe travels |