Weekly Roundup Friday 4 August 2011

Good morning

To my surprise, my mentioning of the IBM Selectric typewriter’s 50th anniversary last week evoked a lot of comments and memories from readers.  It is amazing how a plain piece of technology has touched so many of our lives and brings back so many – and such positive – memories.

A few readers even proudly advised of still having – and even still using – Selectrics.  And one reader is offering to give away her old Selectric II, complete with a collection of about 8 golf balls and even a few ribbons and lift off tapes to go with it, if you can arrange for the typewriter to be collected/shipped from her Middletown VA address.  She advises that it needs some work done to it before it becomes fully operational.  I’ll put you in touch with her if this is something you might want.

As an aside, if you want a Selectric but can’t conveniently get to VA, I just checked and if you go to your local craigslist.org site and search the For Sale section, there’s a good chance there might be one for sale.  There’s one for sale close to me for $100.

I also saw some for sale on eBay where the seller will ship the typewriter to you, with total costs probably in the same $100 range.  I’m trying to fight off a sudden wave of nostalgia and not buy one myself!

I boldly did something I’ve never done before on Thursday.  I reviewed a woman’s fashion/accessory item, albeit from a guy’s perspective (a perspective which may or may not invalidate the review completely!).

Usually I admit my limitations and steer well clear of such items, but I found myself curious and interested in the item and while it is pricey (at least from a guy’s perspective – you could probably buy two Selectric typewriters for the cost of one of these items) it is not without its redeeming features (especially for members of the fairer sex, although for sure, appreciation of Selectric typewriters cuts evenly across the gender divide).

Okay, enough of the Selectric typewriter theme – you’ll see the review of the Abrigo Coat Bag following in today’s newsletter compilation.

Our political lords and masters have gone on vacation and are not expected back in session until September, although they are playing some games with the rules by having semi-pseudo sessions in the meantime so as to constrain our President’s ability to make recess appointments.  In other words, one branch of our governing triad is ‘cheating the system’ so another branch of the triad can’t also cheat the system – do two wrongs make a right?

Although the House of Reps and Senate did time find to pass a law allowing the government to borrow more money (did anyone ever truly expect they would not – something about as likely as a heroin addict, lying in the gutter next to a free full bag of heroin, deciding instead to go ‘cold turkey’) – an act appropriately greeted by near financial meltdown on Wall St this week – they did not have time to resolve the FAA re-authorization, meaning that they are missing out on probably $1 billion or more in taxes during what could become the better part of a two month partial closure of the FAA.

I guess when you’re authorizing the expenditure of trillions of dollars of money that no-one actually has, it is easy to overlook a mere billion dollars of ‘real money’ here or there.  The impasse is over a couple of differences between the Senate and House versions of the authorization extension bill.

If the Senate agrees in its bill to cut $16.5 million in air service subsidies to 13 rural communities, and to some provisions relating to how airline employees can unionize (returning things to the status quo before new labor laws were recently passed), so as to match an already passed House bill, then the impasse would have been lifted (or, of course, vice versa, if the House amended its passed bill to eliminate these requirements).

The subsidies – a noble idea when first started – are probably a concept long since past its expiry date.  Some of these subsidized routes are costing over $3,000 per seat per flight in federal government subsidies, and the notion of people being entitled, as of right, to ‘affordable’ air transportation, no matter where they live, is one which is at best a curious concept.

Two airlines have now announced procedures to directly refund fees on tickets relating to travel during this tax collection hiatus – US Airways and Delta.  Good on them both for being customer-sensitive.  Here’s a good article about the status of getting refunds and what to do.

Update – according to this article, a compromise may be just around the corner.  It seems that Transportation Secretary LaHood had a sudden epiphany on Thursday and is now claiming he can override the provision to cancel subsidized air service (it is unclear how it took him almost two weeks to come to this realization), so Senate Democrats would presumably be happy passing a law that eliminates them if the law has no effect (what a crazy world we live in!) but it is not clear how the other issue about unionization procedures will be resolved.

This article has a memorable quote about the entire debacle – ‘… we’ve now lost $364 million in fees to save $16 million…’

One of the suspended FAA programs has been certifying airport facilities as appropriate for the new 747-8, which most of us will only see, at a distance, as a freighter (very few passenger versions have been sold).  Meanwhile, Boeing is proceeding with its testing of this plane, which is only slightly less delayed than its infamous and disastrous 787 program.

In a rare and welcome example of corporate humor, Boeing had one of its test 747-8s fly across the country on a 17 hour flight path that (sort of) traces out the number 747.  You can see a map of where it flew here.

Two airlines have announced a special type of airfare sale (Jetblue and Virgin America) whereby you pay now to get future travel rights – unlimited in number, but restricted in routes in Jetblue’s case, and a specific number of coupons in Virgin America’s case.

Would I be too cynical in wondering if this wasn’t an effort on the part of both airlines to try and get as much extra revenue as possible during the tax-free period?  The airlines can indeed offer ‘discounts’ to their customers and subsidize these discounts out of the tax revenue they are keeping for themselves.

While most airlines are now enjoying windfall extra revenues by pocketing the taxes that would have otherwise gone to the FAA, Spirit and Alaska Airlines remain notable hold-outs.

Spirit – famous for charging for just about everything – is an unlikely ‘good guy’ but seems to be getting its own reward for so acting – not in the form of pocketing money that should be either ours or the government’s, but in the form of extra business.  It has reported a leap in year on year bookings, with new bookings running at a level 43% above the same period last year, compared to ‘only’ a 23% increase in the three weeks immediately prior to the suspension of the FAA-bound taxes.

Spirit also reported a solid $16.9 million profit for the second quarter, compared to a loss of $10.1 million, although this was not due to anything related to the tax holiday.

Perhaps much of that is due to the fees it charges.  According to this article, the 47 largest airlines worldwide collected some $21.46 billion of fee income in 2010 in total between them.  This is an extraordinary 775% increase in fee income over three years, as well as a doubling of the number of airlines reporting fee revenue income.

The airline with the greatest fee income – UA/CO ($5 billion).  The airline with the largest percentage of its total income derived from fees – Allegiant with 29.2%.

The massive explosion of fee income is something to keep in mind next time you see a chart claiming to show how the average price of an airline ticket has been failing to keep up with inflation rates overall.

Quite apart from the invalid assumption embodied in such charts (who says anything has to rise in line with inflation rates – imagine if computer prices were increasing rather than decreasing every year, for example!) the data itself is suspect, due to the fact that nowadays we don’t just pay for a ticket and nothing else.

We pay extra for baggage, extra for seat assignments, extra for food, extra for drink, and so on and so on.  And we get less for our basic ticket price, as well.  When was the last time you were offered a magazine to read, for example?

So a more meaningful chart would show the total cost of a ‘typical’ ticket including all reasonably related charges, rather than just the naked ticket price by itself.

While it is undeniably true that air travel is indeed cheaper today than it was before deregulation (see my extensive series analyzing the benefits of airline deregulation for more discussion on this point), no-one should consider this the only measure of ‘fairness’ in the airline industry and its pricing policies.  How about also looking at total income earned each year by the airline industry – that has massively increased since deregulation, even though ticket prices have not.

The ‘m’ word appears again.  This article reports that AA and BA are getting all lovey-dovey and wishing they could merge, but it is – for now – a forelorn hope due to the limits the US places on foreign investment in US airlines.

There is reference in the article to the current joint operating agreement between AA and BA on their trans-Atlantic services, something that was approved by the DoT due to the alleged passenger benefits that such a pseudo/semi-merger would bring.  The airlines themselves of course make massive promises along these lines, and the DoT seems happy to accept them at face value, and have confirmed to me that there is no subsequent checking of the validity of such claims post-approval.

But how real are these benefits?  One of the benefits always claimed is a closer tie-in between the frequent flier programs of alliance or semi-merged airlines.

Reader Pat discovers that when it comes to cashing in miles for awards, there’s little cooperation between AA and BA and absolutely no benefit to him.  He writes :

I have earned 90k plus BA frequent flier miles and my wife 80k plus miles and thought we would use them on an AA flight from Tampa to Antigua in December.

Well, per the BA phone rep, the flights you see on AA.com for awards are not available to the BA folks and apparently AA holds back some prime seats and just gives, per the BA rep, the scraps left over i.e, economy seats and poor routing, to the BA customers redeeming awards.

They sure don’t advertise it like that.  Also, the two systems don’t talk to each other very well as the BA system gets confused when you fly your first leg in first class and the second leg in business class on AA.

Bottom line, they have a lot of work to do but we will use them on a BA flight at some point and take AA out of the equation. We are still glad we racked up the miles but using them on AA is a challenge in first or business classes.

So tell us again about the consumer benefits of anti-competitive mergers?

Pilots in the news, lots of different ways, and little of it good.

In France, new details have emerged of the final moments of the AF447 flight as it plunged out of the sky, while its three pilots inexplicably persisted in doing the exact opposite of what they should have been doing to recover from what could have been a relatively simple problem.  I wrote about this when the last tranche of information from the black boxes was released, and nothing I wrote then needs to be revised now.

Equally inexplicably, Air France continues to praise the three pilots, while at the same time, just about all aviation commentators around the world are saying, to a greater or lesser extent, that this seems to be an extreme example of utter pilot error.  Here are a couple of commentaries – Ben Sandilands and Associated Press.

As for the French pilots union, what are they saying?  Well, not much, because they’ve decided to boycott the investigation and inquiry entirely.  Only in France….. (one hopes!).

Talking about pilots crashing, you probably didn’t hear much about an Asiana 747 cargo plane that crashed last week, killing the two pilots on board.

An interesting twist has just come to light.  One of the two pilots had just taken out not one or two but seven different life insurance policies.  Hmmm – makes you wonder, doesn’t it.

Being a pilot isn’t always without its consequences.  After a pilot cancelled his flight’s take-off and returned the plane to the gate to deplane a sleeping (as in ‘dead drunk’ apparently) passenger who didn’t want to wake and fasten his safety belt, the passenger and his brother assaulted the pilot twice.  Details here.

The two brothers are now in jail awaiting trial on assault and battery charges.

A luckier passenger is the one I wrote about a couple of weeks back – the student (Deshon Marman) in San Francisco who was taken off a US Airways plane due to wearing pants that were ‘too baggy’.  The matter deteriorated and he ended up with felony assault charges for allegedly assaulting the arresting police officers.

Two developments.  First, supporters on Thursday delivered a ‘petition’ to US Airways with 40,000 signatures, complaining about the student’s treatment.

And, second, the District Attorney’s office has declined to proceed with the felony assault or any other charges against the student.

This latest development is halfway good news.  But what about the other half – the people who filed the complaints and allegations that caused the student to be arrested in what by all accounts was an unpleasant encounter, and who caused him to face the felony and other charges?  What about the nightmare the student had to suffer for six weeks while the prosecutors mulled over the charges before dropping them all?  What about the legal costs he incurred?

And, most of all – what about the consequences now being experienced by the people who conspired to cause these problems and false allegations against the student?  Because, as far as I can determine, no-one – neither airline employees nor police officers – are now being investigated for laying false charges.

That’s the part of the puzzle that still needs to be addressed.

Talking about US Airways and suing pilots, that’s exactly what US Airways is doing to its own pilots.  The airline is alleging their pilots union is waging an illegal job action campaign, and says it has overwhelming evidence of illegal activity by the union.

It is asking a federal court to block what it claims to be a work slowdown, saying that the union is encouraging its members to taxi slowly so as to arrive 16 minutes late (making the flight officially ‘late’) and causing passenger and baggage misconnections, as well as slowing down their online training so flights will be cancelled, and to write up non-critical maintenance items just before departure to cause flight delays.

The airline also alleges the union is intimidating and retaliating against individual pilots who don’t cooperate with the slowdown.  If proven to be true, the allegations are illegal under federal law and the union could be liable for damages.

Presumably these allegations are part of the reason why a US Airways pilot refused to fly a plane a week or so back and ended up being escorted out of the airport by security officials.  A second US Airways crew then also refused to fly the plane.

While there’s a certain amount of histrionics for sure on both sides of this dispute, don’t you wonder what’s happening here?  Is the airline trying to get pilots to fly unsafe planes full of passengers (in this case, on a long over the water international flight)?  Or are pilots willfully refusing to fly perfect safe planes?

Either which way, it is we, the fare paying passengers, who are losing out.  Either our lives are being risked, or the certainty of being able to fly when promised is being thrown away by prima donna pilots, trying to score a point against their employer, and using us as their gambling chips.  Neither outcome is acceptable, and I again call for accountability in these histrionics.  If pilots are misbehaving, they need to lose their jobs.  And if airline executives are trying to force unsafe planes onto their pilots and passengers, they need to lose their liberty.

But who is there to show some ‘tough love’ and solve this problem in the best interests of safety and the flying public?

Many years ago, I sometimes fell for the trap of accepting a morning newspaper at hotels, during the time when they evolved from being always free to becoming usually charged.  A smiling receptionist, while checking me in, would ask ‘And would you like a newspaper each morning?’ – sometimes even giving me a choice, and upon checking out, I’d discover a daily charge for the service.

In such cases I winced a tiny bit, but thought it to be my own silly fault for not asking if the paper was free or a chargeable item, and after being caught out a few times, now know to ask first how much the paper costs (or, more normally, just to refuse a paper, whether free or not – they’d usually end up being almost totally unread).

But that isn’t what Rodney Harmon did when staying at a Hilton Garden Inn at Sonoma County Airport on March 28 this year.  He was outraged at being charged 75¢ for a copy of USA Today.  So outraged, in fact, that he didn’t simply complain and ask for the charge to be reversed (which almost certainly would have been done, even though it was mentioned in the ‘fine print’ of his checkin documents that the newspaper was chargeable).

Nope.  Instead, Rodney lawyered up and is suing Hilton.  What – suing for 75¢?  Actually, no.  As his attorney explains, Mr Harmon believes that his court case is on behalf of all other people who have similarly been stung for a 75¢ charge.  And, riding the popular bandwagon, the lawsuit also alleges that this is harmful for the environment.  So he is suing for – guess how much?  $10?  $100?  $1000?  Keep going up – and up, and up.

Mr Harmon – no under-achiever, he – is asking for either $5 million or $50 million (I’ve read both numbers in reports, not sure which is correct).

The biggest loser could potentially be USA Today.  It seems that almost exactly half their official circulation is copies ‘sold’ to hotel guests each day.  If the practice were to stop, not only would it lose the minimal revenue it nets from those ‘sales’ but it would also lose its readership base that is used to set its advertising rates.

So, in a way, the 75¢ lawsuit actually really truly does have tens of millions of dollars – every year – at risk.

Who’d have thought that so much of USA Today’s circulation – and income – is based on semi-throwaway copies in hotel bedrooms.

Is the US dollar likely to rise or fall in the future, with respect to other currencies around the world?  That’s a question some people get very rich (or very poor) betting they know the answer to, and trying to gauge whether a currency is over-valued or undervalued can be an exceedingly complex process, involving the evaluation of dozens of different econometric variables.

Or, if you prefer, there’s also a very simple way of testing for currency values – what has become famous as the ‘Big Mac’ index, a measure propounded by The Economist magazine.

This index postulates that the cost of a Big Mac should be the same, everywhere in the world, if currencies were all at fair levels, because the inputs into a Big Mac are uniform everywhere, and involve a broad range of different inputs, ranging from electricity to labor to meat, dairy and produce.  I always use it out of curiosity, having a quick look at what a Big Mac costs when I’m in a foreign country.  If the cost converts to be more than the cost of a Big Mac back home, that tells me the foreign currency is over-valued and should decline; if the cost is less than back home, that implies the foreign currency is undervalued and should increase.

Here’s a chart that shows the latest set of figures.  Of particular note is the Canadian dollar, which it would seem is over-valued by 23%, and the Swiss franc which is at almost twice the value it should be.  On the other side, it seems that the Chinese yuan is under-valued by 44%, an observation very much in line with critics of China’s monetary policy, claiming the country is keeping its currency artificially low so as to give its exports a boost and to protect the country’s economy against imports.

There is no shortage of new cruise ships being launched, all the time, and it seems every few months there’s a new ship announced or launched that is bigger or better than every ship before, so it is normally hard to get to excited at the news of another ship being launched.

But here’s a ship that is truly a one-off.  It is the new Queen of the Mississippi, an American Cruise Lines vessel that was launched in Salisbury, MD (how rare is that – an American built ship!) just a week or so back (and – even more amazingly, nine weeks ahead of schedule).  You can see an artist’s impression of the ship at the top of this week’s newsletter.

The sternwheel driven luxury river boat is scheduled to start offering cruises along the Mississippi from August next year.  It will offer nine different itineraries going along varying stretches of the Mississippi, Cumberland and Ohio rivers, as far south as New Orleans and as far north as Minneapolis/St Paul on the Mississippi and Pittsburgh on the Ohio rivers.  More details, and a video of the launch, here.

In other cruise themed news, here’s a helpful article about how to phone home (or anywhere else) from a cruise ship.  The article’s conclusion is to either call from a port stop or to use Skype through a computer connection on board.

Talking about phones, there is some bad news for AT&T cell phone users.  If – like me – you chose not to swap your ‘unlimited’ data plan for an allegedly lower costing limited data plan last year, and instead took advantage of the opportunity to keep your old plan grandfathered in, AT&T has just unilaterally moved the goal posts and redefined the word ‘unlimited’.

Now you – and I too – might have thought we understood what ‘unlimited’ meant, and all the more so when it was contrasted with other data plans that sold the data used by the Gigabyte.  But now AT&T is saying that ‘unlimited’ actually doesn’t mean unlimited at all, it means ‘a reasonable amount and no more’.

Instead, it says that if you’re in their top 5% of data users – and if you’re on an unlimited plan you’re much more likely to be somewhere near the top band of users right from the get-go – then it will reduce your bandwidth once you’ve used a non-defined amount of data each month, so as to reduce your data speeds down to a crawl.  AT&T doesn’t say what the trigger point will be for this curtailment of access, and indeed it seems the numbers might change from month to month.

Oh, AT&T also helpfully points out we have choices.  We could switch to a metered data plan (and therefore pay very much more for our data!).

Unfortunately, in this vast nation of 300 million people, there’s one choice we don’t have.  Switching to a different wireless service provider.  Because our 3G data equipped AT&T phones will only work on one network – AT&T’s.  They are not compatible with any other network.

Tiny countries one tenth and one twentieth the size of the US offer multiple competing and compatible wireless service providers to their populations, but in the US – the home of free enterprise and competition and the world’s largest consumer market, AT&T users have nowhere else to take their business, unless they’re willing to junk their phone and buy a new cell phone as part of a switch to a new wireless company.

If you are buying a new phone – whether as part of a switch to a new carrier or not – one thing is increasingly certain.  It is less and less likely that it will be a Blackberry that you purchase.  This article quotes an industry analyst as predicting that Blackberry’s parent company, RIM, has less than two years to live as an independent company, predicting it will be acquired by some other company no later than the first quarter of 2013.

He describes the company’s two founders and co-CEO’s (a crazy managerial concept, for sure) as ‘bad co-founders, and they’re going to drive this company straight into the ground’.

I wish I could say I disagreed with the analyst, but as a former BB enthusiast who is now ten times happier with my iPhone and Android phones, and as one who can’t help but observe BB’s inexorably shrinking market share, there is little reason to predict anything positive in BB’s future.

One of the cornerstones of our aviation security is matching our names against all sorts of ‘do not fly’ and ‘watch’ databases, so that the TSA can intercept suspected terrorists and either prevent them flying or subject them to close security inspections before letting them on a flight.

But this presupposes that the TSA knows who each passenger really truly is.  As you know, it does so by asking to see our ID and matching the name on the ID to the name on the boarding pass.  Okay, so that sort of makes sense, but what is the weak link in that chain?

Yes, the weak link is the ID that we show.  Supposedly the latest generation of state IDs and drivers licenses have high-tech anti-counterfeiting features – we sort of guess at these when we see the TSA officer flash a UV light at our ID and quickly make out something normally unseen reflect back, and we can also see, in normal light, various embossed and holographic things on the ID.

Now, I’m not even going to start about the weaknesses in the process to get an official ID, because that’s not the focus of this story (suffice it to say that the official ID we show is only as good as the less official ID we first presented to a state ID issuing office to get the ID, and particularly if we are an illegal alien, the quality of that originating ID may be very poor and inadequate).

We all know vaguely that you can buy a fake ID, even a fake green card, and we also vaguely understand these fake IDs to be rather amateurish, and unlikely to fool an alert ‘trained professional’ in a TSA uniform at an airport.  But do you know about the new generation of super-fake IDs that you can buy from China, costing about $300 per ID, and almost impossible to detect as fake?

Well, you might not know about them, but apparently they are well known by large groups of college students (not exactly aspiring terrorists – more interested in getting into bars) and so presumably are also well known by terrorist groups.  Details here.

So, if it is relatively simple and affordable to get an ID to defeat this key part of the TSA’s security procedures, what is the TSA to do?

Well, it seems they’ve been giving a great deal of thought to this, and have decided to extend still further their much criticized ‘behavior detection’ programs.  Claiming the new concept borrows the best of a totally different Israeli passenger interview/screening process (a bit like saying that a Yugo is a derivative of a Rolls Royce because they both have four wheels), the TSA is proposing to briefly engage each passenger in a few quick and casual questions while we go through security.

You know the rest of the story, I’m sure.  If we should suddenly start panicking and trembling when we are asked a searching question such as, apparently, ‘How long did you stay here’, then the highly trained and observant/perceptive TSA office might possibly notice this and select us for secondary screening (but only if we’re not black or Hispanic or Arab, of course, because they’ll have to very carefully ensure that no race is unfairly selected more than any other).

The new program is being perfected at present in Boston, then from mid August will undergo a full 60 day trial, also at Boston/Logan, then may be extended nationwide.  Details here.

So we can relax.  We’re all safe.

We all know about daylight saving, but how about a permanent shift in time zones and the loss of a day in the process?  Western Samoa is to lose an entire day.  Currently it sits just to the east of the notional international date line, making it one of the last places on earth to see each sunset.  On 29 December, it will switch and now place itself just to the west of the date line, making it one of the first places to see each sunrise, and in the process, leaping ahead to the 31st of December.

It is doing this to place itself closer, time-wise, to its major trading partners of New Zealand, Australia, and lesserly other Asian/Pacific rim countries.

As you will know if you’ve crossed the date line, strange things happen as you do so.  Going west, you sort of skip a day (for example, leave Los Angeles in the evening of Monday and arrive in NZ or Australia on Wednesday morning); going east, you repeat a day (for example, leave Australia or NZ on Monday afternoon/evening and arrive into Los Angeles earlier on the same day than when you left).

Lastly this week, it is time for this year’s ‘America’s Best Restroom Contest’.  The ten finalists range from a portaloo trailer to a Las Vegas casino, and with eight other restrooms also offered for your appraisal.  You can see the finalists and enter your judging/ranking here.

Until next week, please enjoy safe travels (and, of course, clean restrooms)

David.