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Friday, 23 October, 2009

Good morning

My weekly happy-making celebration first :  Eight more people became Travel Insider supporters last week, including one more 'Platinum Elite' member - Don D.

In return, all 858 supporters received their second supporter-only newsletter on Wednesday, offering them a 50% discount on some items - although it was an offer with strings attached; they had to agree to help me write a review on the products (note to subscribers - Renee tells me two opportunities remain, so it is still not too late to respond).  And I'm already lining up a third special offer for supporters.

Needless to say, if you choose to join our 858 current supporters, you'll be eligible for these deals too.  And, again needless to say, if you/your company has special offers it would like to make to supporters or readers in general, please get in touch.

Talking about joining, it is almost time for the 'last call' for our annual Christmas Markets cruise, now only some six weeks away (14 - 21 December).  There are still some cabins remaining, so if you'd like to join our group, please do let me know.

And talking about deals, David from Golf Odyssey tells me a lot of you have already chosen to take advantage of his special Travel Insider offer - ten days of free unlimited access to all the information on his website and a $50 discount if you subsequently choose to subscribe to his excellent newsletter.  Details here.

I recently added another amazing application to run on my lovely iPhone, which got me to thinking about two things.  Firstly, it pointed me in the direction of this week's feature story (to follow shortly) and secondly, it made me wonder what other amazing innovative creative applications are lurking out there.

In total, there are thought to be 85,000 different applications that can be run on an iPhone, but in a way this is too many.  Searching for interesting good applications in among the 85,000 is like trying to find a needle in a haystack.  A reader suggested I offer a feature article listing the best programs for an iPhone, but there's no way I can start to look at even a small percentage of the 85,000 different applications available.

So - using the collective wisdom of crowds concept, or, in this case, the collective wisdom of Travel Insiders, maybe we can collate a list that comprises the favorite applications of us all.  So, if you have an iPhone and have added some extra applications to it that you would like to recommend, please would you send me an email and tell me the application name, what it does, and why you like it.

I'll see about collating our various favorites and publishing it next week.

The application I loaded is a remote control program for my lovely Logitech Squeezebox music playing system.  Although one of the positive features of the Logitech system is its own excellent remote controller, complete with color screen that shows what is currently playing, the iPhone application is even better.  Who'd have thought I'd be controlling the music I play in my house, via Wi-Fi, from my phone.

I've been getting a lot more use out of my Logitech system recently after mastering the wonderful music services that can be played through it - music services that amazingly adapt to send you only the music you are likely to enjoy, based on some simple information you give the service about the music you like and dislike.

There was a feeling of déjà vu about this - I had tried to start such a service myself ten years ago, but it was ahead of its time and was right when the dot com was transitioning to the dot bomb.  I couldn't get financing, and so the idea faded away.  It is nice to now see the marketplace affirmation of the concept, however, and if you haven't tried these services yourself you really should (they are even, for the most part, completely free).  And so here's a three part series :

This Week's Feature Column :  Personalized Internet Radio Service : New internet music playing services flip the old concept of 'broadcasting' on its end and offer you free music streams customized exactly to reflect your likes and dislikes. Here's all you need to know about such services and how to best enjoy them yourself.

Dinosaur watching :  Airlines continue to lose money, even in the third quarter this year which is traditionally the most profitable quarter of each year.  With jet fuel prices at five year lows, and staff costs at even lower levels, with more fuel efficient planes than ever before, and with greater passenger loads per flight than at any other time in history, it would seem that every possible positive trend is all in the most favorable level possible; but still the airlines can't get it right.  Need I restate that the airline industry has lost more money than it ever made - from the dawn of flight until the present day, the airlines have lost more money than they've made.

Sure, we know that business travel is down, but possibly it was unpleasant overly costly air travel that turned business travelers away as much as it was the generally depressed business climate, and for sure, it is these same factors that are keeping business travelers away.

Businesses are now re-examining the two-part assumption they formerly held - firstly that their key employees need to travel a lot, and secondly, that paying top dollar for premium cabin service is justifiable.  Are we now seeing a complete paradigm shift on the part of business travelers; maybe they've finally decided they don't need to travel as much, and also they can travel coach instead of first class when they do unavoidably need to travel?

Whether this is an underlying issue or not, you must agree that the extended inability of the airlines to be profitable shows some sort of fundamental disconnect between the market's needs and the services provided by the airlines to meet those needs. The airlines need a top-down rethink of what they do and how they do it - starting from the clean sheet of paper (as corny and overworked a concept as that is) and must come up with something that is more of a win/win for everyone.

Currently, no-one is winning. Business people would presumably like to travel more, leisure travelers definitely would, and airlines presumably like to carry more people (although goodness knows they seem to consider any opportunity to reduce their total lift as a success rather than failure!).  How then to create a service that is affordable and appealing for travelers and profitable for airlines?

Alternatively, if there isn't a way to achieve this built upon the current airline service offering, the airlines need to completely redefine their business.  Possibly airlines need to retreat back to being high end niche providers of occasional transportation to the wealthy and privileged?  Or possibly they need to consider something totally different, unlike anything they've done before.

I can't pretend to have guaranteed solutions myself, of course.  But I just don't see any sign of much soul searching or creative thinking emerging from the airlines.  The apex of their current creativity seems to be new ways to charge for luggage and formerly free award tickets, and as Joe Brancatelli points out, with some amount of validity, the more airlines charge for luggage, the more money they lose.

Certainly his point about the disconnect between the people who create new revenue/profit centers and feel good about it, and any sort of overall perspective about 'are we being penny wise and pound foolish' is very true.

What sort of fundamental changes could the airlines make?  Just about anything should be considered, including re-examining all their underlying assumptions.  For example - one of the most hallowed assumptions is that airlines should cater for high-fare paying business travelers who demand frequent flights to their destinations.  Here's an example of an airline that is proving to be extraordinarily profitable by turning that assumption on its ear, and doing exactly the opposite - offering infrequent flights (perhaps just a couple of times a week) on routes with more interest to leisure travelers - people wanting to pay bottom dollar for their travel.  But, as contrarian as this strategy sounds, Allegiant Air is both profitable and also rapidly growing.

The response from the dinosaurs and the talking head (or should I say 'empty head') commentators?  Much the same as was formerly the response to discount airlines (the dinosaurs first pretended they didn't exist, then said they didn't matter, because passengers would always happily pay a 30% premium to fly on a full service airline - a statement that sounded like nonsense ten years ago and which has been definitely shown to be nonsense well before now).  They've tended to decry and denigrate Allegiant's success, rather than point to it as a possibly significant new business model that should be embraced by others.

Another example of redefining the business the airlines are in can be seen with much-loathed Ryanair.  CEO O'Leary has stated that his objective is to give away all the tickets on all the flights he operates, making his money instead through add-on fees.  Our local airlines have imperfectly glommed onto one half of this - the fee part, but they don't seem to appreciate the other part of Ryanair's success - giving away tickets for free.  People mightn't like Ryanair, but who likes the dinosaurs either?  And at least Ryanair continues to grow, and to do so profitably, unlike the dinosaurs.

I mention these two examples simply to prove the point that the underlying assumptions of how airlines do business are not inviolable.  Here are two very different airlines, doing things very differently to the dinosaurs, and succeeding - perhaps because of this.  And so, the lesson to the dinosaurs is simple - don't unquestioningly accept and continue any of your past business practices.  Nothing is working right for you at present, so consider changing everything.

It isn't just the US carriers that are in trouble.  Japan Airlines - Asia's largest airline - has had three state-bailouts since 2001 already, and looks set to need a fourth.  According to this article, currently its liabilities exceed its assets by US$8.8 billion.  JAL lost money in four of the last five years, has $15 billion in debt, and a bloated cost structure making it difficult for the airline to successfully compete with ANA.

So who would want to have anything to do with such a terrible business?  Oh - other airlines.  Both Delta and American Airlines are desperately keen to buy in to JAL - both to get access to JAL's extensive route network and also as a strategic measure.  Delta would do this to take JAL out of the Oneworld alliance and to move it instead to its own Skyteam alliance, and AA would buy into JAL as much to keep it in the Oneworld alliance, which would be massively weakened if it lost JAL.

But, really - how much would you pay to get a share of a chronically unprofitable airline with a net negative worth of $8.8 billion?

While airlines have problems, and are shrinking, airports are apparently not so challenged, in large part because they can charge us 'Passenger Facility Fees' and/or float public bonds to finance most types of expansion without having to justify the need for it in the same rigorous process that a normal business has to justify its expenditures.

So, let's see how well you would do as an Airport Director.  Let's say you work for a large airport, one blessed with a new international terminal some 25 years ago.  Over the last few years, your numbers are down - you now have fewer planes landing and taking off, and fewer passengers going through your airport than any time in the last five years, plus the region you're situated within is suffering from the effects of the depressed economy.

Do you :

(a)  Cut back on expenses due to the reduced income

(b)  Discount the fees you charge airlines to encourage some more airlines to use your airport rather than nearby competing airports

(c)  Embark on a $1.3 billion expansion program, including adding a million square feet of new international terminal space

If you chose option (c), you've obviously recently watched 'Field of Dreams' and you're plainly able to manage an airport, because that is the option chosen by LAX and its political overseers.

Now think not just about the $1.3 billion, but the one million square feet of extra terminal space.  How big is that?  Think of an area half a mile long and 125 yards wide - that's a million square feet.  If it was a plane, and including space for aisles, bathrooms, and the like, it would be enough space to seat 200,000 coach class passengers.  A million square feet of new terminal space at an airport with declining passenger numbers and declining revenue?

Seriously, isn't this a classic example of all that is wrong with government today (and not just today)?  Even airlines know that when times are tough, you have to cut back on spending.  That's why they take extra leaves off your salad.  But LAX seems unconcerned with where the money is coming from, or what the underlying need/justification is, and embarks on an expansionary program that they have no money to pay for.  The project - the largest ever undertaken in Los Angeles - will be financed by bonds.  And the money to pay off those bonds?  Well, ultimately, it will come out of our pockets, won't it.

Can you think of a worse time to start a $1.3 billion expansion?  Details here.

Talking about airports, Gatwick Airport in London has been sold for £1.51 billion.  Its previous owner, BAA, was ordered to sell the airport due to BAA owning Heathrow, Gatwick and Stansted, giving it what was perceived to be a monopoly position.  BAA retain Heathrow and Stansted (although it may also have to sell Stansted), while the new owners of Gatwick are also the current owners of London City Airport.

BAA said, in announcing the sale 'We are delighted to receive this money, which we plan to use to add another million square feet of terminal space to both our Heathrow and Stansted Airports' and Global Infrastructure Partners (new Gatwick owner) added 'We too plan to add a million square feet of extra terminal area at both our airports'.

Well, actually, I joke.  Neither BAA nor GIP said any such thing.

And still talking about airports, we all know airports can sometimes be a bit of a challenge to drive in and out of with lots of confusing signs and such like, although the chances are that once you've driven in and out of your home airport a few times, you know where to go and how to get there.

But what is it like from the air?  Is it as hard for pilots to know where to land and take off?  There was the high-profile fatal accident just a year or so back where pilots attempted to take off from a taxi-way instead of from the runway.  And now this week there was a case of a Delta flight that landed (mercifully, safely) on a taxi-way instead of runway at Atlanta (Delta's home airport and one which you'd expect pilots to have more than a passing familiarity with).

So how hard is it to mistake a taxi-way for a runway?  Quite hard, actually.  Runways have pretty flashing lights leading up to them, big arrow heads pointing to them, colored lights on the side of them, big numbers on them, and black markings from tire scuffs where planes land at each end.  Taxi-ways have none of those things.

Indeed, why not go to maps.google.com and have a look for yourself.  Zoom in on the general Atlanta area, then search for ATL and that will take you to the airport on the south side of the city.  Switch to satellite view and zoom in some more on the runways and see if you can work out which are runways and which are taxi-ways (and that's without the flashing lights).  If you can see the airport's five runways, you're doing well.  But if you see six or more, please don't volunteer to fly any plane I'm on.

Still, at least the pilots on that plane landed at the airport, more or less as expected.  That's more than can be said for pilots of a Northwest flight who, as this and other articles coyly put it, were 'apparently distracted' and flew 150 miles on past MSP, ignoring calls from increasingly anxious ground controllers, before finally turning the plane around and taking it back to MSP and landing (on a runway not taxi-way).

According to this article the pilots did not respond to radio calls from 7pm until 8.14pm.  Their explanation - the two pilots said they 'were in a heated discussion over airline policy, and they lost situational awareness'.

It will be very interesting to see if the cockpit voice recorder tapes show the heated discussion to sound like rhythmic deep snoring.  And, if so, one hopes that the pilots will suffer extreme consequences, not just for falling asleep, but for then making a pathetic lie to cover their sin.

Thank you to everyone who sent in translations of the 1919 KLM poster.  I think I've ended up with a good collective translation that makes idiomatic sense, and (at least for now), the poster wins pride of place as being the oldest airline advertisement and slogan I've yet found.  You can see it on the airline slogan page.

I wrote a couple of weeks ago about how Hertz is suing a company, Audit Integrity, that allegedly defamed Hertz by naming it on a list of 20 large capitalization companies that Audit Integrity deemed most at risk of declaring bankruptcy in the last year.

Audit Integrity is now fighting back.  They wrote to the Securities and Exchange Commission saying Hertz is trying to 'silence' its independent analysis, claiming that Hertz 'has offered no evidence of factual errors or inaccuracies in our analysis'.  Audit Integrity suggested 'The SEC would serve the markets and investors well by insisting that companies with material financial risks not be allowed to deny these problems exist without providing substantiating evidence'.

This is a superficially valid claim, but when you think about it, Audit Integrity is saying that it should be allowed to make such allegations as it wishes, and when it does so, the subject companies should be obliged to prove the negative, rather than Audit Integrity being required to 'put its money where its mouth is' and substantiate its claims.

For a change, a new airplane is about to be released by a new airplane manufacturer, and it is not a threat to Boeing and Airbus.  The Terrafugia Transition is the latest attempt at a (don't laugh) flying car.  It actually looks very interesting and with the option of a full vehicle parachute (when the wings fall off or something similarly dire occurs, you push the 'open parachute' button and the remains of your plane - and yourselves as occupants - float serenely down to ground under a billowing white parachute canopy) seems to be reasonably safe, too.

The vehicle promises 30mpg on the road and 23 mpg in the air.  Because it's takeoff speed is 80 mph you're not supposed to activate the automatic wing extending control and take off from a straight stretch of highway, but with a mere 27'6" wingspan, you could actually take off from about 3/10th of a mile of straight two lane road with no problems if you were so minded, and land in a shorter distance.  Deliveries are expected to start in less than two years, and the car/plane is priced at just under $200,000.

I've been watching the explosion in eBook development with astonishment.  Even a keen eBook advocate as myself is amazed to see how the technology has suddenly caught fire, and there is a flurry of new eBook readers and eBook formats being announced and soon being released.

The most interesting recent announcement came from Barnes & Noble, who will be releasing their eBook reader on 30 November.  In most ways it is nothing spectacularly different from Amazon's Kindle, but it does offer an interesting new twist on the copyright limitations of eBooks.

Unlike with the Kindle, the B&N product (called a 'Nook') will allow you to 'lend' your titles to other Nook readers.  You can check your book out, giving electronic rights to read it to any other Nook owner, and when they return the rights back to you, the book becomes available for you to either read or lend on to other people again.

This is a very clever idea - not just because it is a much fairer compromise than the 'no compromise' approach taken by Amazon, but also because it encourages other people to buy Nook readers too, so that they can share books between themselves and their friends.

And, the same as with the Kindle and its free iPhone/iPod Touch reading program, the Nook will also offer free reading programs that can work on (of course) the iPhone/iPod, and also on Blackberries as well as on PC and Mac computers.

People continue to express disbelief at the good sense in reading an entire big book on the tiny screen on a cell phone.  My response - don't knock it before you've tried it.

The iPhone in particular has a higher pixel density than do the dedicated eBook readers, making for better formed characters that are easier to read, and the small screen becomes something you forget all about - I've read lengthy novels in single six hour sittings on my iPhone and have found the experience as positive and pleasing as if I were reading the hardcover book.

My advice - don't force yourself to choose between a Kindle or a Nook (or any of the other devices that are being released too).  Simply download the free reading software for all the devices you are interested in, onto your iPhone, saving yourself the cost of buying the $250+ eBook reading device and the hassle of another electronic device (and charger, etc) to travel with and look after.

At present the iPhone seems unstoppable, and not just as a phone but as a portable electronic 'Swiss Army Knife' device that does just about anything/everything you could conceivably dream of.  The latest quarter shows even greater sales than any previous quarter, and Apple is admitting the sales numbers could have been even higher if it had been able to make enough iPhones to meet demand.

But my feeling is that the iPhone's future pre-eminence is far from certain, due to the broad diversity of phone manufacturers and wireless companies who are making and selling Android based phones.  And although the iPhone operating system is a brilliant example of intuitive user friendliness, it suffers one enormous weakness - it does not multi-task.  The Android operating system, developed by Google and based on Linux, can and does multi-task, and with phone applications becoming more and more sophisticated, the lack of multi-tasking is becoming more and more an Achilles heel of the iPhone.

On the other hand, there's no underlying reason why a new version of the iPhone OS couldn't introduce multi-tasking (and in truth it does actually have some multi-tasking already in place - eg, making a phone call and surfing the internet simultaneously).  So, for now, the iPhone remains the phone of choice, and with the short life of most phone handsets (due to their becoming technologically obsolete) I continue to recommend it as being currently by far the best phone to consider.

This Week's Security Horror Story :  What happens when the irresistible force meets the immovable object?  Or, in this case, what happens in Britain when political correctness and prudery conflicts with airport security?

There was concern about the new airport 'back scatter' X-ray scanners that show a person's body outline and parts on a screen, making it also possible to see any items concealed beneath a person's clothing, whether they are metal or not.  Some people were concerned that such images, of young children, would be of interest to - how to say this without tripping everyone's email filters and getting rejects - well, to people interested in seeing images of unclothed young children, although it is unclear how the images would be taken from a private screening booth at an airport and into the hands of such sad people, or even how much interest the shadowy blurry images would pose.

Happily, as it turns out, everyone knows that terrorists are always aged over 18, and never below.  So that pointed out the obvious solution - exempt children aged below 18 from needing to go through these scanners.  Details here.

On the other hand, although all us enlightened souls know that terrorists only take up their wicked ways after reaching full maturity and adulthood, it sadly seems that not all terrorists yet know this, as a Google search for 'young terrorists' clearly shows.  And one has to also hope that no terrorist would choose to 'cheat' by tricking a child to conceal something under their clothing, even if the child didn't actually know what the nature of the object might be.

But at least we don't have to worry about people somehow getting to see shadowy vague images of unidentifiable young children.  Because surely that would be a much worse outcome than having a 17 yr old precocious terrorist smuggle a bomb onto a flight.

He wasn't under 18, but he did manage to smuggle a loaded handgun onto an international flight from DFW to Narita in Japan.  The US male was arrested when being rescreened for a subsequent flight on from Narita, at which point the more alert Japanese security officers noticed the handgun in his carry-on bag.  Ooops.

The man said he had placed the gun in the bag several years ago and mistakenly brought it with him.  Question - how many other flights had he taken the gun mistakenly on in the several years it had been in the bottom of the bag?

Here's a tongue-in-cheek account of border 'security' on the border between Canada and the US.  One of these days I must try and walk across the border, just to see what happens.  I did, last weekend, drive across the border at an official crossing, and on the way back from Canada, I blessedly had no wait at the border, and drove straight up to one of the 'toll-booth' points to speak to the US Border Patrol officer inside.

Imagine my astonishment when, almost before I'd stopped the vehicle alongside the toll booth, he stepped out and said 'Good evening, Mr Rowell, how are you today?'.  My goodness me - in the short 50' distance approaching his toll booth, systems had presumably detected my Nexus card and vehicle license plate, and flashed who knows how much data onto his screen, allowing for him to then make the cheery greeting to me, using my name.

Very impressive, so much so that I felt compelled to confess the importation back into the US of a liter bottle of ridiculously over-proof rum that by rights (because of my short stay out of the country) I perhaps shouldn't have purchased.  He was gracious enough to 'not officially see' the bottle.

Here's a different take on 'Big Brother is Watching You' - this time in the form of GM's OnStar vehicle monitoring system being used to foil a carjacking.  Also impressive.

Until next week, please enjoy safe travels

David M Rowell aka The Travel Insider

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