Jun 082012
 

This plots the Qantas share price against the US airline index. In the last five years, Qantas value has declined by 80% compared to a 20% US airline index decline.

Good morning

I hope you got to see some of the pomp, pageantry and circumstance of Queen Elizabeth II’s diamond jubilee this last weekend, which was a special four day holiday in the United Kingdom.  It is an honor to be one of her subjects; long may she reign.

As the associated graphic hints, we have a feature story on Qantas this week.  It seems the airline is in an almost unstoppable period of decline, but I do have an ‘outside the box’ set of suggestions for them as to how they can turn themselves around.

As to exactly what Qantas’ current problems are, and what my suggested solutions may be, you’ll have to read on to find out, but a quick hint :  They might involve Kiev.

What else do we have?  Lots, including :

  • Airlines Considering Copying Spirit’s Carry On Bag Fees
  • A New Wrinkle on Airline Seating
  • Airline Saves Money by Telling Passengers Not to Complain
  • Airline Fuel Economy
  • The Hotel that Charges a Car Parking Fee – Even if You Don’t Have a Car
  • Texas to Get an 85 mph Freeway
  • Cruise Lines Copy the Ryanair Approach
  • The Great Value in Laptop Service Contracts
  • TSA BDO’s Get to Play on iPhones and iPads
  • A New Solution to US Immigration Problems
  • And Lastly This Week…..

Airlines Considering Copying Spirit’s Carry On Bag Fees

There are few airline fees that any of us like, but it is fair to say that we hate some more than others.  One in particular that aroused a lot of ire was Spirit’s fee, introduced last year and increased this year, for bringing a carry-on bag onto the plane with you.

The fee wasn’t quite as draconian as it sounds.  If you brought a carry-on with you, but stowed it under the seat in front of you, it was free, and if you paid for the privilege of putting the bag in the overheads, you were also upgraded to the first block of people boarding the plane.

The unbalanced situation where you pay a fee to check a bag but not to carry it on to the plane has encouraged even more people to cheat the system by bringing even bigger bags (and more of them) onto the plane with them, making the overheads fill even more quickly than ever before.

Plus, there is the ‘heads we win, tails we don’t lose’ situation whereby many airlines will say ‘We have a full flight today, so if you’d like to gate check your bag for free, it will be waiting for you when you get off the flight at the other end’.  In other words, instead of paying to check your bag, back at checkin, and having to wait as much as half an hour for it to appear on the luggage carousel, you were being offered a chance to check your bag, for free, at the gate and have it turn up with no waiting at the gate at the other end.

But now the airlines have realized that many people are choosing to cheat the system this way, and they’ve also noticed that despite the public wailing and theatrical commentaries about Spirit’s carry-on bag fee, there seems to have been no noticeable harm done to Spirit as a result of pioneering this new type of fee, and so the dinosaurs are inching closer to charging fees for carry-on bags too.

Here’s an article that tells you more about the evolution of this latest airline fee.

A New Wrinkle on Airline Seating

Here’s an interesting story of a brave (or perhaps foolhardy) airline – Latvia’s Air Baltic, now offering a new dimension to its seat assignments.  In addition to the standard window/middle seat/aisle type choices, you can also specify your style of travel in terms of how you’d like to interact (or not) with people seated beside you.  You can choose from one of four different ‘flight moods’ – ‘Business Talk’, ‘Easy Chat’, ‘Work’ and ‘Relax’.  Sadly, there’s no provision for ‘Singles Dating’.

This might seem like a great idea, but it opens up a whole new topic for complaining – ‘I asked to be seated next to someone for business talk and instead I got an air-head wanting to engage in easy chat’ and so on.  Or ‘What do you mean, you don’t want to talk to me?  I specified that the person next to me would be willing to talk to me and entertain/amuse me all flight long.’

Of course, one has to wonder as well how long it will be before airlines see a way to generate fees from this.  ‘If you don’t pay a $25 quiet travel fee, we’ll sandwich you between two garrulous talkers’.

Has Air Baltic made itself an airline to choose, or an airline to avoid?  More details here.

Airline Saves Money by Telling Passengers Not to Complain

Skymark Airlines, which describes itself as Japan’s third largest, and fastest growing airline, is a low cost style airline that started operations in 1998.  It might be the fastest growing and third largest, but it is still massively smaller than Japan’s two major airlines (JAL and ANA), and has only 24 planes in its fleet and serves a mere 15 destinations.

The airline believes it has found a new way to cut costs.  Although some of us believe that politeness, courtesy, and good customer service is the least expensive part of operating a successful airline, Skymark has apparently been taking lessons from some western airlines that shall be nameless, and announced a new policy.  Politeness is no longer included, nor is it optional.  It has been completely eliminated.

A brochure placed in the airplane seat pockets explains to passengers that they aren’t allowed to complain while on the plane.  If passengers have a problem, they can call customer service after the flight has landed. It also advises its crew that it need not use ‘polite words’ when speaking to the passengers and tells them not to help load bags into the overhead bins.

After the new policy had been in place for almost a month, and after many complaints, including from Tokyo’s metropolitan government, the airline this week said it would revise its notices – which is a far cry from saying rescind the policy.

More details here.

Airline Fuel Economy

Excellent aviation bloggist Ben Sandilands does some fascinating number-crunching on Emirates.  One of his calculations needs translation for us in the US, where the concept of ‘liters per 100 km’ doesn’t mean as much as good old-fashioned ‘miles per gallon’.

According to IATA data, the industry-wide average fuel consumption for passenger planes is 44.4 passenger miles per (US) gallon (or 5.3 liters per 100 passenger km if you prefer).  That means each gallon of jet fuel is enough to fly 44.4 passengers one mile (or, if you prefer, to fly one passenger 44.4 miles or any other combination of the two).  If we compare that to the typical family car, clearly this fuel economy is better if you are driving your car somewhere alone, slightly inferior to most cars if you are driving with a second person (ie 22.2 mpg equivalent), and starts to become appreciably less efficient if there are three of you in the car (an equivalent of 14.8 mpg).

That is an interesting statistic by itself, but Ben then pulls out specific airline statistics as well.  These reflect more than just the underlying fuel efficiency of the planes – the numbers are also influenced by the number of passengers on a plane (the greater the load factor, the better the fuel efficiency per passenger) and the length of average flight (in general longer flights tend to be more economical than shorter flights).

United scores well with an economy rating of 55.4 passenger miles per gallon, much better than the industry average.  But leading the pack is Emirates, with a rating of 57.2 passenger miles per gallon.  Better than a Prius – and much faster, too.

The Hotel that Charges a Car Parking Fee – Even if You Don’t Have a Car

Hotels are learning from airlines.  They’ve learned to come up with multiple rates for the same hotel room, depending on how you book and when you stay, and if your stay is one way or roundtrip (What?  No – they’ve not yet done that, but it is far from unusual for a two night stay to feature a discounted second night).

And now they’re learning more about fees, too.  We’ve come to grudgingly accept such impositions as an energy surcharge and a resort fee, but how about a $3.50 fee each time you avail yourself of one of the what were formerly free coffee sachets in your room, or a $25 – $100 upgrade for luxury linens on the bed, or a bellman fee even if you carry your own bags.

This article also discloses a hotel that charges a parking fee whether you have a car or not, and so it isn’t surprising to learn that industry-wide, hotels expect their fee income this year to increase from last year’s $100 million, all the way up to $1.2 billion this year.  Ouch!

Texas to Get an 85 mph Freeway

Talking about cars, Texas last year passed a law authorizing freeway speeds of up to 85 mph on newly constructed freeways that were designed to appropriate standards.  It has now approved some 80 mph speed zones on its new State Highway 130 that goes from east of San Antonio to north of Austin, relieving the often congested I-35.

The state expects to approve parts of the freeway to 85 mph speeds, making it some of the fastest freeway in the world.  Of course, this is nothing compared to the German autobahns, some (but not all) of which have unlimited speeds allowed, and it is also not as good as used to be the case in Montana which between 1995 and 1999 had no speed limits other than what was ‘reasonable and prudent’ on its interstates, before reducing its speed limit down to 75 mph in May 1999.

Interestingly, Montana’s roads were safer with no speed limit than they are now – a phenomenon now termed ‘the Montana Speed Limit Paradox’.  The 75 mph restriction was introduced due to the ‘reasonable and prudent’ requirement being ruled by the courts as unconstitutionally vague.  Alas.

More details about the Texas speed limit here.

Cruise Lines Copy the Ryanair Approach

I don’t like airline and hotel fees, but I doubly dislike cruise ship fees, because they mark a terrible retreat from the once wonderful ‘everything except alcohol for free’ concept that was a key part of the feel-good cruising experience.

And, as is inevitably the case, once a cruise line ‘breaks the ice’ and starts with some minor fees for major and very optional services, it soon starts to charge larger and larger fees for smaller and smaller and more and more essential services.

A case in point – Carnival, which is now increasing its former $30 per meal fee for dining in its upmarket steakhouses, and will now charge $35.  Adding insult to injury, they have taken their 24 oz porterhouse steak off the menu, but have put a much cheaper 18 oz prime rib chop on the menu instead.  Carnival says, without a hint of embarrassment, that the value for the $35 surcharge is outstanding, and they’re doing no more than what other cruise lines are also doing.  Wow – just like an airline – ‘Our fees are in line with the rest of the industry’ sort of thing.

Weren’t you always taught that two wrongs don’t make a right, and just because others might do something wrong doesn’t justify one’s own similar actions?  How can any cruiseline say it is outstanding value to charge an extra $35 for a steak when they have already promised their guests a high quality dining experience included in the price.  Yes, I know that a very few restaurants ashore charge ridiculous sums for steaks, but they don’t have a second dining room where they feed everyone who walks in for free as a starting point.

Carnival is are also starting to charge $2 for espressos and $2.95 for cappuccinos and lattes in their Miracle’s main dining room, too, with a plan to roll these new fees out fleet-wide.

I guess in a few more years time, you’ll find yourself paying for almost everything on a cruise line – perhaps paying for absolutely everything except the cabin itself.  Things might flip 180 degrees, and instead of giving away everything else ‘for free’ as included with the cabin price, they’ll now charge for everything and comp you a cabin for free.  If you commit to spending $200 a day on extras, you’ll get an inside cabin with a picture of the sea where a porthole would be, and if you agree to spend $500 a day on extras, you’ll get the outside balcony stateroom instead.

In other words, the cruiselines are migrating towards the Ryanair pricing model.  Heaven help us all.

The Great Value in Laptop Service Contracts

I was watching a serviceman swap out and replace the motherboard in my Dell laptop earlier this week as part of an escalating series of activities to hopefully resolve my computer’s current problems, and realized an interesting thing.

I’ve owned laptops for probably a couple of decades, and have always bought service contracts with the laptops, and have always got value out of the service contracts.  Often one realizes that the extended warranty or service contract being sold with home appliances and electronics are high profit/low value items that savvy shoppers should not buy, but in the case of laptop service contracts, I’ve always felt I’ve received more than fair value.

Indeed, I’m currently counting my lucky stars that I renewed my service contract just a couple of months ago – the first two year contract expired, and after some careful thought, I bought another two years of next day on-site support for $241.  I figure I’ve more than recouped that cost with my current issue, so I’m already ahead of the eight-ball, with most of the two years still to run.

This phenomenon – of always winning on warranties – doesn’t extend to desktop computers.  I never buy service contracts on them, and never need them.  It is much easier to do one’s own work on a desktop, replacing standard components in a roomy case with other standard components – a very different situation to that with a laptop.

I don’t think I’m unusually ‘hard’ on my laptops, and the repairs are usually due to electrical/electronic failures, not due to the result of physical abuse or wear and tear; indeed the serviceman was astonished to learn the current laptop is more than two years old, saying it looked to be close to brand new in condition inside and out.

I don’t know if this is just my unique experience or not, but I’d sure recommend you too consider getting a service contract with your next laptop purchase.

TSA BDO’s Get to Play on iPhones and iPads

The TSA’s airport Behavior Detection Officers – those super sleuths who are secretly searching through the crowds in the airports for terrorists, using their highly trained powers of observation and their knowledge of tell-tale giveaway signs that signal to them if a person in a crowd is actually a terrorist hell-bent on blowing up the plane he is about to board – must have a frustrating life.

They’ve never caught a terrorist yet, and about the most they can brag about is that some of the people they have erroneously, unnecessarily, inappropriately, and possibly even illegally stopped have been outlaws on the lam – yes, they’ve uncovered people with unpaid parking tickets, no less!  We can all pass through airports much more safely – unless we also have an unpaid parking ticket somewhere in our past – knowing that thousands of BDOs are tirelessly patrolling the concourses, alertly looking for (but never finding) terrorists.

The mind numbingly boring and fruitless task of being a BDO seems like it is about to get a bit more fun.  The TSA has announced plans to spent $3 million on Apple gear, including a thousand iPhones, iPads and iPods for bomb appraisers and BDOs.  Yup – that guy playing the air guitar with iPod earbuds jammed into his ears – he might be a BDO, as might the person texting away on his iPhone, or that other person who is, I guess, merely pretending to be engrossed in a game of Angry Birds on his iPad.

Exactly how Apple’s latest electronic toys will help the BDOs in their daily searches for terrorists is presumably classified information.  But we can all be reassured that the TSA is adopting the very latest technology to ensure the best possible performance from their BDOs.

More details here.

A New Solution to US Immigration Problems

I regularly write about how ridiculously difficult the US makes it for foreign tourists to come visit us and to spend their money with our airlines and rental car companies, in our hotels, restaurants, bars, malls, and tourist attractions.  We lose billions of dollars of foreign exchange each year, and also miss out on hundreds of thousands – perhaps even millions – of new jobs that could be created if we’d just lighten up a bit and observe the common protocols for allowing tourists in as other countries do.  China just last week announced an extension of its visa-free tourism rules, allowing tourists visiting Beijing for short stays to enter with no visa at all.

If a still communist closely controlled country that censors its internet (and much of the time doesn’t even allow its citizens to read The Travel Insider) allows anyone to visit Beijing and Shanghai without any visa at all, can’t we do the same?  With all our amazing online databases, can’t we do, real-time at the airport, the same thing that Visa officers supposedly do in consulates around the world and simply check each person’s passport details against our terrorist watch lists while the person stands opposite the immigration officer at the desk?

However, the problems don’t stop with tourists.  They extend on to business people – to entrepreneurs wanting to come to the US and start up new business ventures.  Unless the person can wade through the time-consuming paperwork and qualify for an EB-5 investor visa (which requires $1 million in capital and establishing a new business that creates at least ten new jobs – a somewhat hypocritical requirement because there isn’t a US government program out there that creates new permanent jobs at a rate of ten per million dollars invested), or unless they can qualify for one of the other quantity restricted and many times waitlisted visa categories, they’re stuck and unable to set up business here.  Again, we are turning our back on money and employment opportunities – perhaps part of the reason that so much innovation is now happening in Asia rather than in the US is because we don’t let the innovators come and innovate with us, here.

Some people are so keen to leverage their new venture off the massive infrastructure of high-tech companies, brainpower, know-how and financing that exists in the US that an innovating entrepreneur has come up with a novel solution.  A converted cruise ship, made into a floating city, moored just 12 miles off the Californian coast, close to Silicon Valley.  Entrepreneurs can work on/from the ship, and if they need any face to face meetings with investors or partners, they can simply take a launch to shore, arriving on a simple B1/2 visitor visa, staying for the day, then taking the launch back out to their permanent home in international waters.

We commend the entrepreneur for his clever approach to this, but we have to feel there should be an easier better way, with a bit of desperately needed reform to our Immigration process.  More details here.

And Lastly This Week….

Whenever you travel around Europe, you notice how so many of the towns and cities proudly display signs showing a list of other cities around the world they are twinned or sister cities with.

There seems to be no rhyme nor reason to the selections of sister cities, and apart from providing excuses for elected officials to go on junkets to the twinned cities, I’ve never understood the reason or benefit of such partnerships, even though I was for a while involved in the Seattle/Christchurch Sister City Committee.

However, here is a match between two cities that clearly was made in heaven, and as the article tells, is already – prior to its consummation – bringing tangible tourist benefits.

And now, truly lastly this week, let’s try to feel some sympathy for this poor gentleman who ended up stuck in a Virgin Atlantic toilet for 20 minutes.

Until next week, please enjoy safe travels

 

 

David.

 

 

  3 Responses to “Weekly Roundup Friday 8 June 2012”

  1. Regarding hidden hotel fees: I stayed at the London Marriott County Hall over the Jubilee weekend. Upon checkout, I discovered a £3.00 (~$4.50) fee to remove our room service cart! Outrageous.

  2. Good news on the elimination of the short stay visa requirement in China. We just returned from a 10 day stay in Beijing, Xi’an and Shanghai a few weeks ago and had to obtain visas for the trip. Having to send away to Houston for our visas, the cost for the visas themselves, the agent’s fee and the FedEx for two people approached $500. That was a hefty addition to our overall tour costs.

  3. I think your “one passenger can fly 44 miles on one gallon” is not comparable to flying 44 passengers one mile. Much (most) of the weight is the aircraft regardless on the passengers (and baggage load).

    Then you compare to driving. See what amount of fuel you use to drive 44 passengers one mile – would need 11 cars IF all were comfortably full – 22 cars if 2 passengers per car.

    Of course many other factors enter into the facts. Depreciation, maintenance, airport and support vs. road costs, etc.

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