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Friday, 9 October, 2009

Good morning

My goodness me.  Or, more to the point - what a lot of goodness from you!  Support continues to come in for our 2009 reader fundraising, with the current total now showing 842 people having chosen to help out.  1000 seems tantalizingly close....

We have new - I guess we should call them 'Platinum Elite' to copy the airline frequent flier programs - supporters, too :  Thanks this week to Warren W, Beverly B, Ed F, and Joanne S for generosity above and beyond any reasonable call.

You may have read one of the many items in the press earlier this week about new FTC guidelines that require bloggers to now disclose any relationship they have with the companies that make the products they review and comment on.  In particular, the FTC is now requesting/requiring that bloggers disclose when they have been paid money to make endorsements of products, and also that bloggers must disclose when products have been provided for free.

The FTC rule making notice was full of references to new media (ie primarily bloggers) and the need to create some sort of controls on the information coming from such new media so that consumers/readers could be better protected and able to understand the commercial motivation which might be coloring the creation of positive reviews.

This is all praiseworthy and positive, although the thought of 'controls on media' is never a comfortable one, no matter how apparently well intentioned the purpose.


Here's the extraordinary thing :  In creating these new disclosure requirements, the FTC also considered whether traditional media (ie newspapers, magazines, television and radio programs) should be subject to the same disclosure requirements.  Their conclusion, you'd think, would be a no brainer - of course all publishers of reviews should be required to show their degree of dependence/independence.

But what did the FTC decide?  Oh, it decided not to subject old media to the same controls (see page 47 of their notice).

Strangely, in all the news items from the old media gleefully pointing out these new standards now being applied to bloggers, none seem to mention their own continued freedom from any such disclosures.

Am I the only one to find this slightly strange?  The editorial compromises inherent in product reviews in most of the traditional/old media can be massive - for example, I was told one time by a person who wrote reviews for a computer publication that he was told never to rate a product at less than three (out of five) stars.  The whole rise of blogging reviews, which are often edgy and cutting - including the product reviews I do myself - has been largely driven by the inadequacy and always positive approach that dominates so much of the old media.

Or - another example :  A company I'm closely acquainted with makes an electronic product which it sells under its own little known brand name.  It also makes the product for a better known company, which sells the product too.  Now, please understand - the only different in the product is the brand name.  Everything else is absolutely identical.  So one of the most respected major website/reviewing publications reviewed both products.  Did they get identical reviews?  No.  The well known brand got 5/5.  The less well known brand got 3/5.  That's too big a difference to suggest it was just a random variation or slight subjective error.  Who only knows what underlying commercial issues - way beyond simply getting a free sample product to review - may have come into play.

Which also points up another issue.  It is not clear to me if reviewers need to disclose more than just getting product for free.  Do they have to say 'I've been paid $1000 to write a positive review' or 'I've been given a free trip to Hawaii' as well as 'I've been given a free sample of the product to review'?

I've no problem with disclosing which products I get for free and which I pay for myself (and I've never been paid $1000 for a positive review or offered a free trip to Hawaii!).  But in the case where the federal government has now chosen to reach down to every last blogger resident in the US, imposing conditions on them and their blogging, I'd really like to see the same standards imposed on the mega-circulation old media outlets (and their online websites/blogs too).

Traditional mega-media are generally the most respected and widely read sources of information, and so should be held to the same high standard as the smallest microblogger, rather than being exempted.

I'm reviewing the new Bose Quiet Comfort 15 noise cancelling headphones this week, and apropos this new FTC requirement, I list on the bottom of the review that the headphones were not obtained free and no other inducements were received (I bought them at full price through Amazon).  But there's an interesting story behind that.

When I first reviewed the original Bose Quiet Comfort headphones, way back in 2001, it was to be my second ever headphone review, and followed on the heels of a positive review of the first headphones.  Even though my website and newsletter was almost brand new, Bose eagerly sent me a free set of headphones, along with various complementary other travel related goodies.

In my naivety, I thought the other goodies were things that Bose sent to everyone who bought headphones from them, and Bose quickly corrected me when I mentioned how nice it was to get other presents along with the headphones in my review.

But my review of the Bose headphones was not very flattering to Bose.  I had unknowingly broken the unwritten rule of reviewing free products - never say anything bad about them.  Bose reacted negatively to my review and offered some empty nonsense statements in rebuttal.  In particular, they said that a loud electronic hiss in the headphones was unavoidable - something their own QC2 headphones showed not to be the case!  And they also offered the amazing line 'Bose Acoustic Noise Cancelling technology works across the range of human hearing - if your ear can hear it QuietComfort will dramatically reduce it' - a claim that is simply not correct.  Most noise cancelling tapers off at somewhere around 1000 Hz, whereas the human ear can hear up to 20,000 Hz.

Anyway, flash forward to 2003 and the release of their new (and much better) Quiet Comfort 2 headphones.  I optimistically asked for a review set, and by this time I now had two years of longevity, and very high ratings on Google for search terms such as 'noise cancelling headset reviews'.  But, guess what - Bose refused to cooperate.  Of course, they didn't flat out say that due to a bad review of the previous product, they now were not going to be my best friend any more, but the message was received loud and clear.

So these newest headphones too - like the several Bose products before them - were purchased at full price.  And here's the strange dichotomy - the free headphones got a bad review from me.  These latest ones that I paid full price for - well, see for yourself, but you'll probably agree it is about as positive a review as you'll ever see on my site!

My point - and yes, I have one - is to use this example to point out that my reviews have never been tainted by commercial considerations, and I promise you that they never will be.

So, with that as extraordinarily lengthy preamble :

This Week's Feature Column :  Bose Quiet Comfort 15 Noise Cancelling Headset :  Bose's latest product, being sold at the same price as the QC2 that they replace, are massively better at noise cancellation and unquestioningly deserve the accolade as 'very best headphones yet tested'.  If you're looking for the ultimate in noise cancellation, you'll feel compelled to buy a set.  But if you're looking for a midpriced better value product, perhaps you'll choose not to spend the $300 needed to buy the QC15s.

I mention, in the article, that Bose headphones can not be found at a discount price anywhere, and that is generally/regrettably true.  But there is currently a short term promotion in association with American Airlines - you'll earn 150 Aadvantage miles just for watching this short video about the Bose QC15s online, and then if you buy a set, you get another 1500 Aadvantage miles.  So that is better than nothing.

Dinosaur watching :  What industry is this person talking about when he says

... we have visionary leadership that goes for each other's throats.  This may be the one US industry that can take over the world.

Are we talking software?  Legal services?  Supermarket chains?

No, believe it or not, this aviation industry consultant was talking about our airlines.  I guess it is easier to get work from airlines if you tell them they're blessed with visionary leaders than if you tell them they're shackled to the chains of failure by fools in their executive offices, which is perhaps why I've only ever had one (non-US) airline approach me for advice (which they gratefully accepted but never paid me for)!

So I wonder if consultant-to-the-visionaries Boyd could explain exactly where and what the vision is?  Is it the vision of massive losses (need I repeat the statistic that, in total since the Wright Brothers, the airlines have amassed a stunning net loss from all their years of operations, including all the protected years under the shelter of government regulation)?

And when he talks about going for each other's throats, does he mean so as to affectionately give each other love bites and kisses, perhaps?  How else to describe the scenario where there's scarcely a single out-of-step move by any of the dinosaurs, who march lemming-like and lockstepped towards each year's losses, copying each other blindly and seldom daring to do anything different from each other.

And - taking over the world?  To listen to the howls of fear and terror when tiny little Virgin America first applied for an operating certificate, even the biggest and baddest of these visionary world leaders felt mortally threatened by the presence of a diluted piece of Sir Richard Branson in the US.  Rather than taking over the world, they're running scared from it.

On a somewhat related note, here's a slightly interesting article about how airlines cheat - sorry, 'get creative to skirt foreign ownership rules'.

Winners and losers.  Data is coming in for September airline traffic.  American Airlines reported a 3.5% drop in total Revenue Passenger Miles.  Delta had a 5.2% drop.  United had a 3.3% drop.

But Southwest had an 8.8% increase, JetBlue had an 9.8% increase, and AirTran had an 11% increase.

Spot the difference in airline type as between the dinosaurs and their traffic decreases, and the newer lower cost carriers and their traffic increases.  I wonder how Mr 'visionary leadership' Boyd (he of the quote above) would explain this?

Interestingly, probably the best of the dinosaurs - Continental - also reported a traffic increase in September (7%).

Joe Brancatelli has an interesting explanation that is well worth reading.  His analysis - airlines that charge more for bags are losing business, while airlines that charge less for bags are winning business.

Apropros of which, something new from United Airlines.  They are offering a 'Premier Baggage' flat fee - $249 - which will entitle you to the 'privilege' of checking two bags at no extra cost for a year of flying.  The fee covers bags checked on both domestic and international flights, so can save you $20 - $30 on domestic flights and $50 on international flights (these fees being each way).

With the cost of checking two bags on a single domestic roundtrip totaling $100, it only takes a few journeys to get your money's worth.

Note that these fees don't exempt you from liability for overweight or oversize charges, however.

I asked Joe how he sees United's initiative in the framework of his analysis.  His answer :

United seems more concerned about ancillary revenue than actually running the airline and getting real revenue.

Another question for Mr 'at each other's throats' Boyd - how does he reconcile these claims of vigorous competition with the propensity of airlines to form alliances with each other every which way they possibly can.  The AA/BA/Iberia proposed alliance, which our own DoJ and DoT seem to have sleepily okayed, is now getting some negative scrutiny from the EU, who feels it may be uncompetitive.

The Commission is also currently investigating the four Star Alliance members - Air Canada, Continental Airlines, Lufthansa and United Airlines - and their trans-Atlantic 'cooperation' and planned four-party tie-up,  And there's more - the Commission also has on its plate the proposed pact between SkyTeam members Air France-KLM and Delta Air Lines, which merged with Northwest last year.  Details here.

Not exactly the best examples of airlines at each other's throats, Mr Boyd?

Here's a NY Times headline that massively overstates an issue - 'Woes of Aircraft Leasing Companies Could Mean Higher Ticket Prices'.

The article says that leasing companies are having difficult times getting the money they need to finance their fleets, and that the higher interest rates they must pay mean that the lease costs of airplanes will rise, which will in turn flow through to higher ticket prices, even though a quote on the second page of the article says that lease rates will stay soft (an apparent contradiction).

Three short responses to this.  First, airlines primarily lease planes when it is cheaper to lease a plane than it is to finance the plane's purchase directly.  If leasing costs go significantly over the alternate costs of owning a plane, airlines that can, will simply switch to directly financing the ownership of planes.

Secondly, if the cost of money for leasing companies goes up, probably the cost of money to airlines goes up too, and for essentially very similar reasons.  The relative costs/benefits of leasing vs owning planes is likely to remain very similar.

Third, let's look at the impact of lease costs on a typical passenger ticket.  Let's take some sort of generic used Boeing 737/Airbus A320 type plane worth perhaps $10 million.  Let's compare the monthly lease cost of this plane if the leasing company is paying 5%, and if its cost doubles to 10% for the money it in turn needs to finance the plane's ownership, and see how it translates into dollars extra per ticket.

If we say the leasing company is planning on keeping this plane for ten years, and plans to sell it for $5 million at the end of ten years, then its monthly payments would be $74,000 at 5% and $108,000 at 10%.  Let's say the leasing company adds 20% to its cost when it is paying 5% interest, but only 10% to its cost when the money is at 10%, and let's ignore all the other costs of ownership, simply focusing on this one variable component.

This means that an airline would pay $88,800 or $118,800 a month for the plane (as well as all the other costs of ownership/operation).  As it happens, that is an easy round $30,000 extra, or $1,000 extra per day.  Truly - I didn't make the figures fit this nice round number, it just happened that way!

Now let's say this plane flies 80% full and has 165 seats, and makes 6 flights a day, each of about 1.5 - 2 hrs flying time.  That means it carries 792 people during its daily flying.  In this example, the extra cost per ticket if the lease company's finance cost doubles is a mere $1.26 per passenger - allow the airline to round that up and call it $1.50.

And, if interest rates are doubling, the airline will need to increase its fares anyway due to its own borrowing costs increasing.

Hardly a major scoop or worthy of a headline in the NY Times.

Here's an interesting new service offered by Gary Leff, a respected and knowledgeable commentator about all matters airline related, and someone I've swapped occasional emails with for some years now.

He is offering to help people book award travel, and says he can both take the hassle out of the process and also use his extra knowledge and familiarity with the ins and outs of award travel restrictions and - well, not so much loopholes as the creative opportunities that can be taken advantage of, in a way that might enhance your ability to secure the travel you're trying to find.  He'll do this for a $150 fee for one person, and $100 for each extra person traveling on the same itinerary.  He tells me he'll only charge his fee if/when he has secured you satisfactory arrangements - if you're not happy with what he can devise, there's no charge.

I'm impressed with some of the strategies he uses to get award travel, and I'm impressed with Gary in general.  If you're very au fait all the latest ways to find award seats - and Gary freely shares many of these in his ongoing blog entries - maybe you don't need his assistance.  But if you don't have the time to read through hours of content and to digest the sometimes labyrinthine complexities, you might find his service worth a try, particularly in light of its money back satisfaction guarantee.  Details here.

More bad news for Boeing.  Not only is its 787 program riddled with delays (and I heard a non-authoritative rumor recently that there could possibly be further setbacks still) but its 747-8 program is now being delayed too.  Details here.

Meanwhile, Japanese airplane manufacturer (I think that is the first time I've typed those words) Mitsubishi Aircraft announced its second order for its new 78 - 100 seater regional jets.  The first order was from ANA, and for 15 planes and options for 10 more.  This second order is larger - for 50 planes plus options for another 50.

More to the point, the order is from a US airline - a regional operator (of course), Trans States Holdings, which flies services for UA, AA and US.  Details here.

As I've said before, these regional jets do not threaten Boeing or Airbus.  They are half the size of the smallest Boeing/Airbus planes.  But if Mitsubishi is successful with its regional jets, don't you think it almost inevitable that it will seek to expand into the more profitable larger models of jets too?

This order is a major step forward - it shows that the US market is willing to quickly accept a new model plane from a new manufacturer.  The barrier to entry for new participants/competitors is clearly lower than Boeing and Airbus might hope.

Here's a terribly dismaying story of a person's suffering at the hands of Hertz.

This Week's Security Horror Story :  It is a long one this week in several somewhat related parts.  It seems the government wants to know where we are, but not who we are.  This story shows how the New York police are snooping into your cell phone whenever they have a chance to do so (you did realize, didn't you, that you're leaving behind a record of your exact daily movements, all day every day, all the time your cell phone is switched on?).

The NY police are doubtless emboldened by this quote from Mayor Bloomberg, made while announcing increased camera surveillance in New York :

We live in a world where we have to have a balance.  We canít just say everybody can go everyplace and do anything they want.

I wonder what the founding fathers would think of that quote?  Seems to me their view of the United States was of a place where, subject to very few exceptions, a person could indeed go anyplace public and do anything lawful they wished.

It isn't just Mayor Bloomberg and the NY Police who want to know where you are and what you're doing.  A phone company proudly announced earlier this week a new service whereby employers could see, real-time on a Google map, the exact location of all employees, everywhere in the world, based on information retrieved from their cell phones.

Do you want your boss to know where you are 24/7?

Not only do the authorities want to more closely watch us all, they're also advocating that we spy on each other in a manner that could be lifted out of a Soviet Union textbook.  But, even while advocating paranoia, we must also give lip service to political correctness.

As you can see from this article, you are encouraged to report suspicious behavior, but only if your suspicions are completely independent of the race of the person you are suspicious of.  A middle class middle aged white male wearing a hoodie in summer?  Call 911!  But a 25 year old Arab male with a hoodie?  Don't bother calling anyone, because you'll be ignored.

So the police - the same police who are too busy doing who knows what to respond to real calls for assistance and real reports of actual crimes being/been committed, now want us to deluge them with calls about suspicious people who may be doing nothing wrong at all?  Where will all the additional personnel resource come to follow up on even a small fraction of these calls?  How much resource will be taken from fighting real crime to respond to reports of imaginary crime?

Note also the strange comparison to the Smokey the Bear campaign to prevent wildfires.  Has the Smokey the Bear program really been a success?  It seems that wildfires rage throughout the west of the US most years, as bad or worse these days than ever before.

Actually, it is clear that the government has already identified one aspect of crime fighting that they can repurpose.  They don't want our police arresting illegal aliens.

And, if any illegal aliens are as unlucky as to get arrested, they now want to release them, or put them in hotels rather than jails.  Note also the headline of this article - illegal aliens are now referred to as 'detained migrants'.  Oh my.

One interesting thing in that article.  It says - as partial justification for moving illegal aliens detained migrants from jails into hotels that more than 90 detainees have died in prison in the last five years.  Doesn't that sound dreadful?

Actually, no.  The article also reveals that on average there are 32,000 illegal aliens in prison.  Think of a typical community of 32,000 people.  There's not a town in the country that only has 90 people die in five years - that is one death every 2 - 3 weeks.  How many people would an average community of 32,000 have die in 5 years?  Oh, about 2000, plus or minus 50%.

In other words, these illegal aliens are either super-humanly healthy, or are being given state of the art medical care.  But still that is not good enough, it seems.

We should all be so lucky.

A fight broke out on a flight recently, but amazingly, the plane did not divert, and the people fighting were not then arrested, imprisoned, and subsequently fined a ridiculous sum for the pretend costs of the plane's diversion.  The reason for this astonishing leniency?  Oh, the people fighting were the crew of the plane.

I wrote rather scathingly last week about the United flight that returned to the gate and made everyone deplane then had the plane searched after a passenger ran to the bathroom during the plane's pre-take-off taxiing.  Reader Deb, a flight attendant for 19 years, provides a sad alternate perspective on why the airplane crew acted as they did :

Regarding the gentleman running to the bathroom. As for the knee-jerk reaction of the flight attendant reaction to the man, I would like to share a short story with you.

I had a flight attendant friend who was suspended for 30 days (no pay, no benefits) because she allowed a passenger to go into the lavatory upon take off. She felt it was appropriate, and like you, thought "when you gotta go, you gotta go".

Unfortunately, a couple on her flight did not agree with her sensibilities, and wrote a letter of complaint to the NTSB and the FAA. (They got her name by asking her for it...she thought it was for a compliment!!)

Lo, and behold, the FAA launched an investigation. She was brought before leadership at our airline, and with FAA influence and breathing down their neck, they agreed to suspend her for allowing the passenger to leave his seat during take-off to satisfy the FAA. She also had to pay a fine.

Of course, the story is widely known among us. I know that I cannot afford to lose a month's worth of income because someone didn't plan to go to the bathroom. Now when it happens, except for the immediate stage of actually lifting off or touching down, I immediately call the cockpit. The decision then becomes the pilot's responsibility.

And to play devil's advocate.....IF that passenger who ran to the bathroom before take off had not been stopped and something HAD happened, who do you think would take the heat? Of course, the flight crew. We are damned if we do, damned if we don't.

And it is hard to have a positive response to that, isn't it.  We all sometimes forget that many times our flight attendants are the meat in the sandwich - they don't make the rules, they just have to rigidly enforce them for fear of ridiculous consequences such as that recounted above.

Maybe, some other time Deb - or any other flight attendant - will write and tell me how she/they manage to stick at a job like that for 19 years.  It sure seems thankless as heck to me.

Talking about planes and toilets, you're sure to have heard this week about how Japanese airline ANA is conducting a limited test where it quizzes passengers when they board the plane to ask if they have recently, umm, relieved themselves, with the request that if they haven't, they go back to the terminal and do so before boarding the plane.  The airline figures this will slightly reduce the total take-off weight of the loaded plane.

The typical bladder holds about a pint of urine, and after it is about half full, starts telling you that it is time to be emptied.  So if we assume that passengers seldom board a plane when already needing to go, and if we further assume that some passengers choose to take a precautionary trip to the toilet before boarding the plane, in the knowledge that it might be a while before they can get to a toilet on board, or because they dislike the toilets on board, and if we further assume that many/most passengers will lie and say they've recently been rather than lose their place in the boarding queue, just exactly how many pounds of weight is the airline saving per flight, and what does that mean in terms of fuel saving?

Let's do the numbers.

Say 150 passengers on the plane.  Say that 50 of the passengers are encouraged to make a 'bonus' trip to the bathroom, and say they each have a bladder that was one third full - 5 ounces.  So a 737 plane load of people is saving not quite 16lbs of weight.  If it is a three hour flight, that means the 16lbs less weight represents a fuel saving of about 1.6lbs - let's say a quarter of a gallon of jet fuel.  In other words, this is a 50c per flight saving.

So the airline is quizzing all 150 passengers about the state of their bladder to save 50c???

And, where will this end?  What is next?  To put it delicately, must we also answer questions about the state of our bowels?  Will we end up with a requirement to get a receipt from a restroom confirming not only that we visited but that we also, ahem, did something while we were there?

And all to save less than 1c per passenger?  Have the airlines lost all sense of reality and good sense and decency?

I am also again reminded of the curious contradiction between being increasingly charged for the weight of baggage we take with us on a flight, and now being urged to lose the last couple of ounces of 'personal weight' before boarding, but at the same time, we see a 100lb woman paying no more for her ticket than the 250lb man next to her.

On a very similar subject, and almost as foolish as urinating on an electric fence is this story of a tourist who answered the call of nature next to (or perhaps into) a crocodile infested lagoon.  Wounds only to his neck and legs?  I'd say he was very lucky not to have had a more sensitive part snapped off.

As we move ever closer into winter, it is time to start thinking about swine flu again.  In addition to the usual suggestions - mainly washing your hands and getting a flu shot - there are other strategies being developed, including this innovative approach from Japan.

Lastly this week, sometimes I choose to identify primarily with my adopted country, the US, and sometimes I still think of myself as a New Zealander.

In this case, I think I'll definitely hope to be considered a New Zealander, but am terribly puzzled and chagrined at how the Australians placed ahead of NZ.

Until next week, please enjoy safe travels

David M Rowell aka The Travel Insider

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