Weekly Roundup Friday 27 August 2010

Good morning

I am now back from a delightful 12 days in New Zealand.  While I enjoyed the visit, I continue to be dismayed and aghast at the costs of everything in New Zealand, and found it significant that my comments about how expensive NZ is to visit – and live in – last week attracted more response than anything else I've said in newsletters for some weeks – both from New Zealanders, variously in NZ and overseas, and from others who have visited the country, all of whom agreed with my comments.

There's another issue bubbling below the surface as well.  New Zealand's 'clean green' image is at growing risk of being sacrificed by interests who are aggressively ratcheting up the intensity of NZ's dairy farming industry.  Effluent run-off from intensive dairy farming is harming some of NZ's streams and rivers (to quote somewhat out of context from a fascinating 2009 paper (ask me if you'd like a 4MB PDF copy emailed to you) written by scientists at New Zealand's National Institute of Water and Atmospheric Research 'water quality has continued to deteriorate in NZ' and 'diffuse pollution [primarily from dairy farming] has degraded a large proportion of New Zealand waters').

At the same time, the notion of free range roaming cows providing some sort of pure organic milk is being challenged by the ugly reality of cows being fed imported palm oil products to maximize their milk fat solid yield and subsequent profitability.

The growth in dairy farming is also a fairly joyless one for New Zealanders.  NZ's easy going rural-centric lifestyle is being conflicted by the inability of dairy farms to get NZers to do the hard work needed, and it seems that foreign labor is often being needed to answer the employment needs, even though NZ currently has a 6.8% unemployment rate.

New Zealand seems to have found an exciting new market for its dairy products in China, with China in turn seeking to buy its way into NZ's dairy farming operations so as to own the entire process from the farm through to the end purchaser in China – so much so as to excite some unfortunate and increasingly prominent xenophobic feelings about 'selling our land to foreigners', feelings that threaten to result in tightened laws on foreign ownership of NZ land.

Paradoxically, NZ's businesses have no such restrictions on foreign ownership, and companies that were formerly NZ owned and household names are increasingly now owned by off-shore interests.

At the same time, and similar to trends almost everywhere else in the world, international companies continue to establish themselves in New Zealand.  I was astonished to notice Denny's restaurants popping up around the country – sure, one expects and accepts the ubiquity of McDonalds and KFC 'restaurants' everywhere in the world, but Denny's had seemed so uniquely American and feels extraordinarily out of place in NZ.

NZ, like all countries, is losing a lot of its uniqueness, with increasingly generic and global restaurants, food and drink, brands in general, and retailers.

As for the beautiful green countryside dotted with millions of sheep, that image needs a reality check and update too.  NZ's sheep numbers are falling and are now down to the lowest level since 1948 – a mere 32.4 million and less than half the peak of 70.3 million achieved in 1982 (happily I did manage to find a few, as the picture of me at Rotorua's Agrodome at the top of this newsletter shows).

Sure, NZ is still overwhelmingly green (particularly in mid-winter!) but how much of the green is real?  NZ has always been aggressive at fertilizing its land. particularly with 'super phosphate' type fertilizers, and in the last 20 years the fertilizer spread per acre has almost tripled from 160 lbs to 465 lbs.  So NZ's green image can perhaps be fairly said to be a result of chemical saturation rather than pure natural beauty.

The tourism implications of this are interesting.  New Zealand's consistent tourism branding and positioning over the last several decades has been to play ever more prominently on the country's reputation as being an ecological paradise.  You can be sure that there is little motivation to reveal some of the underlying ugliness beneath the country's thin veneer of ecological sensitivity.

Meantime, political correctness continues to grip the country ever tighter (another phenomenon that NZ is far from uniquely suffering).  Many placenames are now being given dual names, with the second name being a new Maori name (the Maoris are the Polynesians who settled NZ prior to the Europeans).

The country has awarded the Maori language official equal status with English, and is not only promoting Maori but in recent years is also making it harder to spell by introducing accent signs over some of the letters for who knows what purpose (other than pompous affectation).  Being as how Maori was never a written language at all prior to the European civilization of the country, it seems strange to now make the language more complicated to write/spell than it was 10, 20 and more years back (especially on a computer keyboard).

The Maoris continue to demand and receive massively preferential treatment, but in spite of this – some might say because of this – their unemployment rate is higher than that of any other demographic group in the country (16.4% for all Maoris, and a terrible 30.3% for younger Maoris aged 15 – 24; in contrast Europeans have about a 5.2% unemployment rate).

Sadly, New Zealand scores poorly in terms of living standards, being 15% below the OECD average, and perhaps because of this, it is unsurprising that it leads the OECD in terms of 'brain drain' – the loss of skilled workers who leave to other countries, as reported in this article.

Here's an interesting article on NZ's economy if you'd like to read further on this topic.

Anyway, enough of my home country for now.  New Zealand remains a lovely country to visit as a tourist on a short term vacation, but I didn't feel any overwhelming desire to return back there to live.  Let's talk instead about – oh, how about airlines.

Now that I'm back home again, I can return to my ever-expanding series on airline regulation/deregulation/reregulation.  Tonight's section is on the present situation.

Many people perceive the airlines as now being deregulated, but I've managed to add 4,000 words, spread over another two web pages, to describe just some of the more obvious remaining areas of regulation or other external constraint.  Do be sure to read on down to near the bottom of the second of these two pages, to find out about how first the airlines were regulated in the sense of being given exemption from the usual consumer protections applying to them, and then to compensate, the airlines had new regulations imposed on them to try and restore some sense of balance and fairness.

So we need a second set of regulations to compensate for the first set?  Why not just abolish the first set, and all the other constraints that continue to prevent a true fair free open market for airlines.

There's also the rather ironic situation at present that the reasons some people advance in favor of their calls for a return to regulation are not the results of airline deregulation, but rather the results of remaining external constraints on the airlines and their operation.  And so :

This Week's Feature Column :  The Prevalence and Problems of Continued Airline Regulation : To mis-use Churchill’s phrase, the Airline Deregulation Act of 1978 was not the end of airline regulation.  Neither was it the beginning of the end, and apparently neither is it even the end of the beginning.  In this latest part of my detailed series on airline deregulation, I look at some of the many aspects of running an airline which remain subject to regulation and other external constraint.

Please do consider this year's Christmas Markets Cruise.  December is approaching at an ever increasing rate, and now is a great time to make your plans for this wonderful pre-Christmas experience along the fabled Rhine river, enjoying castles, Christmas markets, and lots of wonderful Christmas cheer on board the ship and in the towns and cities we visit.

I wrote a couple of weeks ago about how Alaska Airlines required all passengers to turn off all electronics 30 minutes prior to the flight to Los Angeles closing its door, and before passengers had finished boarding and even before both pilots were on board.

And now, another Alaska Airlines flight, and, alas, another imposition by their 'electronics nazis'. This time the situation was made even more farcical by the flight attendant telling us we must have all devices with any radio transmitters in them turned off for the entire flight, while in the seat pocket in front of me was a promotional piece encouraging passengers to pay to use their new in-flight Wi-fi service.  Ummm – how can we do that without turning on the Wi-fi transmitter/receiver in our computer or in our phone or in our iPad or whatever else?

For my flight on Tuesday we again had the assertion they were about to close the front door, and with repeated demands that all electronic devices be switched off, even though again it appears that first the pilots weren't on board and then, when they did arrive, were busy with 'paperwork' for some time due to being late into Los Angeles from their inbound flight.  So, for twenty minutes, we were not allowed to have any electronics open, with the front door open all the time, with repeated demands to turn everything off alternating with apologies for the delay in pushing back.

Oh – most of the time, we had no a/c either, and instead had to swelter in the heat in conditions that a humane person would hesitate to subject an animal on its way to the slaughterhouse.  If we're to have more airline regulation, how about a regulation about the maximum allowable temperature inside an airplane cabin?

I've written again to Alaska's manager of inflight policy, safety and regulatory compliance on the subject of why her cabin crew are inappropriately requiring passengers to turn electronic items off so ridiculously in advance of door closing (itself an arbitrary requirement dreamed up by Alaska Airlines rather than a requirement of the FAA) but she's maintaining a doubtless embarrassed silence on the subject.  Or maybe she is going to be flying somewhere in the next week or two and has set a good example by turning all her electronic devices off well in advance of departure.

It has slightly surprised me that from the hundreds of airlines, from all around the world, we have ended up with only three main groupings – the Oneworld, Skyteam and Star alliances.  Not all airlines belong to any of these alliances, although some unlikely airlines have been welcomed into them (for example, Aeroflot).

Some airlines though remain stuck on the outside, wishing they too could have a place in one of the alliances, but finding none of the three alliances wish to have them, while other airlines seem to be happy to successfully build their own future without the need to join forces with other airlines.  Emirates is clearly a leading example of the latter type of airline; and Virgin Atlantic might have appeared to be another such airline but these days they've been wistfully indicating their interest in becoming someone's best friend.

Another outsider is El Al, which was unembarrassed to tell the world that all three alliances were united in their refusal to allow El Al to join (I'm sure that this is nothing to do with anti-Semitism or political correctness, oh no, absolutely not).  So El Al is now looking to create a fourth alliance of 'refuseniks' – other airlines that are currently unallied.  It says it is considering three Eastern European airlines as launch partners, and hopes to get as many as 20 members in time.  El Al even has a name already developed for the new alliance :  Western-Eastern.

I wish El Al the very best of good fortune in all matters, but if I were a betting man, I'd not be wagering any cash on the positive outcome of this possible new alliance.

This week's most puzzling travel statistic :  CLIA – the Cruise Lines International Association – released a survey that shows the (positive) economic impacts/benefits of the cruise industry in the US.  It claims positive benefits have been enjoyed in all 50 states, and lists the top ten states that have benefitted the most as being FL, CA, TX, NY, AK, WA, GA, IL, MA and CO.  The three largest cruise ports are Miami, Port Everglades (ie Fort Lauderdale) and Port Canaveral.

Florida's position as number one holds few surprises, but – wait a minute.  Colorado?  To place CO as the tenth most benefitting state – a state with no coastline – isn't something a bit strange with the calculation that suggests this result?

Decoding the press release suggests that perhaps CLIA is saying CO benefits as a result of the cruise commissions earned by travel agents who sell cruises to Colorado residents, and the advertising done in CO by cruise lines, and other such activities.  But I'm still puzzled.  And if one were to do a fully balanced study, shouldn't it also factor in the money that each state loses from in-state tourism not received because people chose to go spend their money on an out-of-state or out-of-country cruise, instead?

Who still uses travelers' checks these days (and why?)? American Express clearly hopes that some people still do, although in truth there's almost no benefit and appreciable downside to those who still choose to do so.  Far from being the universally recognized and enthusiastically accepted form of payment they may once have been, these days many travelers report problems getting establishments to accept travelers' checks.

But be that as it may; American Express has now launched travelers' checks denominated in Chinese yuan this week.  Amex says they are a jointly developed product with the Bank of China, and can be redeemed at any of 2,000 Bank of China branches.  That may possibly be so, but 2,000 branches is not a lot in a huge country the same size as the US and with 1.3 billion people.  How many regular retail stores will also accept them, and at full face value?

Not recommended.

Read on for a series of tales of woe in the security horror section, and for some happily lighter humor towards the end of the articles that follow.

I'm traveling to Nevada next week, and will be in the small town of Pahrump on Thursday night.  Hopefully I'll be connected to the internet and able to send on a newsletter then.

Until next week, please enjoy safe travels.

David.