Good morning
Happy birthday to the ball point pen, which turned 75 just a few days ago. Although I still love my fountain pens, 99% of the time, they lie unused in a drawer, while I (and just about everyone else these days) use ball point pens every day for every thing. It is hard to recall life without them being omnipresent.
I do remember one amazing thing, however. I remember, in the early 1960s, that the cheapest ball point pen cost, in New Zealand, one shilling (5c in NZ money these days). Amazingly, 50 years later, and you can still buy ball point pens for almost the same amount of money.
My goodness me. Yesterday/today is the summer solstice (depending on your time zone); and so we’ll start experiencing shorter days again already, starting from tomorrow. How quickly time passes.
On Wednesday I found myself moved to write an article about a 787 problem that caused United to abort a flight from Denver to Japan. And then, Thursday afternoon, lightning struck a second time. Another United 787 had to be cancelled, occasioning another article from me of course, too. They are attached to this newsletter.
Also in this roundup itself, please find articles on :
- GAO Discovers Startling Truth – US/AA Merger Would Reduce Competition
- Ryanair Talks About Trans-Atlantic Service (Again)
- 747 and A380 Orders This Week
- The TWA TW800 Mystery to be Revisited Again
- EVA Air Suddenly Gets 28 New Best Friends
- Never Mind a Flying Car. How About – A Flying Bike
- GPS On? Check. Brain Off? Also Check.
- Fast Trains, But Slow Deployment
- More Vegas Extravagances
- And Lastly This Week….
GAO Discovers Startling Truth – US/AA Merger Would Reduce Competition
The Government Accountability Office made a startling discovery. The proposed merger between US Airways and American Airlines would reduce airline competition in the country. 1665 routes would lose a competitor, while 210 routes would gain one.
You might wonder – as I did – how the merging of two airlines could create new competitors (they’re not promising to add 210 new routes, that’s for sure!). Some explanation is clearly required. The GAO deems an ‘effective’ competitor to be an airline with at least a 5% market share on a route. So on some routes where both airlines currently operate, but neither has a 5% share, when the two airlines merge, they would together have a 5% share and therefore be deemed as a competitor.
We don’t actually agree with that concept. A large airline with a small presence on a route can be as competitive as it chooses, because obviously it has the resources to add extra flights if it wishes to do so; and there’s also no reason to be confident that in cases where both airlines were flying a route before, they will continue to operate as many flights as before.
The GAO’s definition of ‘competitor’ also means it isn’t counting the loss of an airline choice as the loss of a competitor if it had less than 5% market share before.
So the GAO study, in our opinion, appreciably understates the impact of the merger. It invents the creation of new competition where we don’t feel it is created, and it undercounts the number of times when current competition is diminished. But even if we simply accept their methodology without question, the numbers still speak strongly and clearly. This merger is bad – indeed, the GAO’s study suggests that 35.5 million passengers will be deleteriously affected.
We think the number is massively more, but even if it is ‘only’ 35.3 million passengers, that’s surely enough to argue convincingly against the merger.
Details of the FAO study here, and here’s a writeup/summary of their report.
The GAO has attempted to share this discovery with their colleagues at the Depts of Justice and Transportation; meanwhile we (and the airlines) wait to see if approval will be granted, and, if so, what conditions may be appended to the approval.
Ryanair Talks About Trans-Atlantic Service (Again)
Every once in a while, Ryanair CEO Michael O’Leary switches from his favorite line of headline grabbing controversy (the threat of removing and/or charging for toilets on his planes) and instead comes out with another topic sure to get him some column inches – the concept of starting to operate flights to the US. These plans however are a bit like Sir Richard Branson’s promises for double beds on his planes – always far into the future.
O’Leary was at it again this week, this time talking in very bold terms, but giving himself an ‘out’ as well. He said that the best way to do add trans-Atlantic flights would be to immediately start with service from 15 – 20 European cities to about 15 US cities, and with a fleet of 30 – 50 wide-body planes. This, he says, would give economy of scale. The planes would offer both economy and business class seating, and he says fares would start at around $10.
It wasn’t clear if he meant $10 one way or $10 roundtrip, but at that price, who really cares!
But when it comes to putting his money where his mouth is, he instead placed an order for 176 current model Boeing 737-800s, and said he hopes to order 200 of the new 737 Max planes later this year. All these planes would be for his current short-haul European network, and the plan to order the 200 737 Max planes is conditional on being able to secure a good price for them, he said.
As for his trans-Atlantic plans, all he could say in terms of specifics was that it would have to wait until both Airbus and Boeing have worked their way through their respective backlogs of widebody jet orders.
So, if you were a betting person, you might care to take a small wager. Which will happen first – the removal of toilets from his 737s, or the inauguration of a 30 – 50 wide bodied jet service across the Atlantic?
Although I hope I’ve still got a long and healthy life ahead of me, I’m personally dubious as to if I’ll be around long enough to see either event come to fruition. But I hope for the latter, while fearing the former!
747 and A380 Orders This Week
Talking about Mr O’Leary’s ‘problem’ of needing to wait until Airbus or Boeing could supply him with a lot of widebody planes, I’m fairly sure that he could get some 747-8I planes from Boeing at very short notice. Indeed this article says that Boeing is building them without matching orders and storing them quietly in the Arizona desert.
There was some good news for Boeing at this week’s Paris Air Show though – well, actually a lot of good news with both Airbus and Boeing announcing a large number of new plane orders. In Boeing’s particular case, however, it surprised everyone by landing another order for the unloved and largely overlooked 747-8I. Korean Air made a ‘commitment’ (not quite the same thing as a firm order) to buy five.
A cynic might wonder if the airline’s apparent enthusiasm for the plane has anything to do with also being involved in the manufacture of part of the plane. KAL already has five of the planes on order, but has yet to accept any for delivery (hey – we know where there are some ready for immediate delivery….).
The reason for the planes sitting quietly in the desert is due to a mismatch between Boeing’s need to operate a production line at a steady and unvarying pace, and the schedules airlines have for when they will/can accept the delivery of new planes. So even though Boeing has a backlog of maybe a couple of dozen 747-8I orders, its challenge is that none of these customers want their new planes right now.
Airbus has not quite such a severe problem with its A380, but it sure would be much happier with many more orders for the plane. The company hopes for 25 orders this year, and at the Paris Air Show was able to announce an interesting order for 20 A380s – interesting in the sense that they are not going to an airline, but instead to a leasing company – Doric Leasing Group.
Doric has already bought and leased back 18 A380s, apparently from Singapore Airlines and Emirates, but our sense is this new order is not on behalf of SQ or EK, but rather is for their own leasing inventory, available for any airline that wants them (it costs about $2.5 million a month to lease an A380, in case you wondered).
This is very good news for Airbus, because it provides an easy path to future A380 sales. An airline can now make a small commitment to start with, by leasing an A380 from Doric. If things work out well, it can then buy planes direct from Airbus (or lease more). Plus, knowing that there is an available inventory of A380s available for lease, airlines will feel better about committing to small orders of A380s in the hope they can get an A380 at short notice and for a short term in case of unusual operational requirements.
Airbus doubtless hopes this order marks a key turning point, where the A380 is finally starting to break through into the broader market, and is no longer seen as a specialty plane for only very limited and special operations, but instead will be seen as a more generally deployable plane on a wide range of city-pairs. I hope so too. My one A380 flight (on Emirates) was a lovely experience, on a lovely plane.
The TWA TW800 Mystery to be Revisited Again
I occasionally refer to the crash of the TWA 747 shortly after taking off from JFK in 1996, and the controversy surrounding the investigation that followed and the eventual finding, some four years later, that the crash was caused by a spark initiating an explosion in a near empty fuel tank.
I’ve always been of the opinion that we have yet to see the full truth on this matter, but it is merely my own ‘quick to see a conspiracy’ thinking here, rather than based on any inside knowledge of the case. On the other hand, a reader always writes in cogently to lambast me every time I bring the matter up, raising good reasons why we should trust the official report – one that he was closely associated in preparing.
One of his several reasons is ‘there’s no way a secret this big could be suppressed for so long’. Well, while he still has an inventory of other good reasons, that particular point is about to be blown away, with a new documentary to screen shortly that features some of the people involved in the investigation, now claiming that they were ordered to keep silent about what they found. Being now safely retired and reasonably free from retribution, they are now blowing the whistle.
We’ll all be given another attempt to form our own opinions when the documentary airs. Here’s a notice of its pending presentation, and here’s a fairly evenhanded commentary that airs reasons both for and against accepting the official report as valid.
But with the latest round of digging for Jimmy Hoffa again failing to find him, there’s no reason to be too positive that this documentary will answer all currently open questions!
EVA Air Suddenly Gets 28 New Best Friends
It is just over 15 years ago that the latest new thing in the airline industry appeared – alliances. After various false starts and failed alliances, these days there are three alliances – Star, Oneworld and Skyteam, and most major airlines belong to one of these three alliances.
However, venal opportunism is again triumphing over alliance loyalty, and we’re seeing some interesting fracturing of alliance ties. For example, Oneworld member Qantas, partnered with BA and AA and CX (Cathay Pacific) used its alliance ties to strengthen its relationship with BA for flights between Australia and Europe, and has comfortably got into bed with AA for travel between the US and Australia. As for CX, the two airlines often compete and seldom cooperate in any special close manner, which points to the first problem with alliances – when allied airlines still see each other more as competitors than cooperating colleagues. (This is of course a problem for the structure of the alliance, but an unexpected small bonus for us as passengers.)
More recently, Qantas spurned BA in favor of a new relationship with Emirates – an airline that does not belong to any alliances at all. So while QF ostensibly remains a partner with BA, most people wanting a Qantas flavor to their travels between Europe and Australia will now find their travels as likely to be on EK as on QF, and no longer very likely to have any BA travel at all. One has to imagine that this has BA rather cross.
The reality is that alliances are great for allowing airlines to ‘cheat’ and avoid some controls that would otherwise fall on their international operations, but when the chips are down, it seems they’ll partner with anyone, no matter what the alliance structure and existing partners might seem to suggest/provide.
And as for all the wondrous promises of alliances, making it easier and more convenient for us as passengers, those promises continue to be observed as much in the breach as in the reality. Furthermore, there has never been any explanation why it is necessary for two airlines to be alliance partners and in a code share arrangement in order to be able to best handle anyone’s travel needs. These claims of alliance benefits to passengers are, of course, more ‘window dressing’ to smooth the obtaining of governmental approvals than reality.
So is there a future for the three alliances or not? Some might think not, but what is clear is that, whether within alliance structures or outside them, all airlines are keen to link in with other airlines any which way they can. ‘If you can’t beat them, join them’ is the catch cry of airlines the world over.
The latest major alliance partnership was officially sealed this week with EVA Air – a Taiwanese headquartered airline – getting inducted into the Star Alliance. That’s a nice outcome for both Star and EVA.
Taiwan is of course an important and increasingly important country, and EVA is a well-regarded airline, being Taiwan’s first privately owned international airline, starting service in 1991. Today it flies to 62 destinations (including six in North America), and has a fleet of 61 planes, with up to four different cabin classes per plane.
Never Mind a Flying Car. How About – A Flying Bike
Two ‘evergreen’ stories that keep on coming around are those to do with new supersonic planes, and those to do with flying cars. About the only thing in common between these two wildly different types of transportation is that neither has yet become a reality, notwithstanding regular bold promises and predictions.
News this week tells us about a company that is aiming less extravagantly than the flying car designers. A startup company in Britain hopes to build a flying bicycle. The device that will travel at about 15 mph on the road or 25 mph in the air, at heights of up to 4,000 ft.
The unit has a deployable parasail as its ‘wing’, and it does double duty as a tent. But – a point of clarification. While using pedal power on land, it has a tiny 250cc engine to spin its propeller when flying. Details here.
Whereas flying cars seem likely to cost $250,000 and up, and the companies developing them have capital budgets in the many millions of dollars, the flying bike is expected to sell for perhaps $16,500, and the company is currently seeking a mere $85,000 in funding through Kickstarter.
The company also proudly points out that it already has some design experience under its belt, having made a bicycle which boasts a 178dB horn – louder than a Concorde – known as the Hornster. A fun video of this bike and how surprised people are when it sounds its horn is here.
We wish them well.
GPS On? Check. Brain Off? Also Check.
Remember the episode of The Office where Michael Scott drives his car into a river because the GPS tells him that is the best way to go? Alas, real life imitates art all too often, and there’s yet another story this week of a driver turning off their common sense while turning on their GPS.
This time a woman says she followed her GPS instructions, taking her and her two young children (and the minivan she was driving) onto railroad tracks, and when she belatedly realized what was happening, she found herself stuck on the tracks. Fortunately, the three of them got out before a commuter train slammed into the vehicle.
Details here.
Fast Trains, But Slow Deployment
After a three-year process to get what was essentially a rubber stamp of approval, and successful test operations in October 2010, German rail operator Deutsche Bahn now has approval to operate its trains through the Channel Tunnel. Yay.
This means DB will be able to provide single train service between London (St Pancras, of course) and Rotterdam and Amsterdam in Holland, and Cologne and Frankfurt in Germany.
Trains with 16 carriages (and 888 passengers) will either merge or split in Brussels, with eight carriage trains going between there and Rotterdam/Amsterdam or Cologne/Frankfurt, and doing the London/Brussels sector joined together. The trains will travel at up to 200 mph.
But when we talk about slow deployment, we don’t just mean the inexplicable three-year delay to date.
We also mean the further delay from getting this approval to running the first train. We’re not talking days, week, or months of delay. We’re looking at probably another three-year delay – the first trains are unlikely to run before 2016, we’re told, and when anyone associated with a rail operator says ‘unlikely to run before’ what they are really saying is ‘won’t run until well after’ whatever date they specified.
Oh – no new facilities need to be constructed for these trains to be added to the current Eurostar services. So, in total, six years (maybe more) to get this new service up and running.
Some more details of the new service here, but the article is silent as to what takes so long. A totally inexplicable situation.
More Vegas Extravagances
I wrote last week about plans for a new mega-development some distance out of Vegas. This week, news comes of a roller coaster proposed for the Strip itself – a roller coaster that would be so high that FAA approval is required before it can be erected.
The roller coaster would rise 650 ft above the Strip (at the Tropicana), at a similarly high cost of $100 million (one wonders how much each ride will cost if there’s a $100 million capital investment to get a fair return on!).
Details here on the company’s site. And more information about the roller coaster, plus a bunch of other new Vegas attractions that are coming online in the near future, here.
Let’s hope the FAA can approve this more quickly than DB can get its trains approved. They’ve had the application since April, so far.
And Lastly This Week….
I wrote about airline logo evolution last week. On a related topic, here’s an interesting list and illustrations of what the article grandly claims to be the ten oldest corporate logos in the US.
Unfortunately, I’m not sure I can agree with all their nominations. Some of the logos have changed massively from when they first came out, to what they now appear as, almost beyond recognition. I’ll wager that each tweak along the way was accompanied by much self-congratulatory nonsense about how their logo had been changed, updated, and improved.
You’ve doubtless been reading about the revelations over the last couple of weeks about the degree of spying on us that our own government’s agencies are doing – for our own good, of course.
If you’ve wondered what sorts of things would draw you to their attention, here’s an interesting article listing known keywords that can cause alarm bells to ring at the NSA. But, of course, the really big thing about these revelations is that you don’t even need to utter ‘dangerous’ words like ‘archives’ or ‘Bubba’ or ‘artichoke’ (yes, all these are apparently on the list!) – you are being monitored, no matter what.
Something else that is no joking matter. An Austrian hotel has seriously advertised for a full time jester. The hotel says they treat their guests like royalty, and in the past, jesters were enjoyed at royal courts. So, therefore, it is perfectly logical for the hotel to have a jester now.
And lastly this week, we all of us are fixated at the seemingly unstoppable rise of the Chinese as the world’s new leading economy (not that it is an absolutely sure thing, as articles such as this point out). But, certainly, based on population size if nothing else, China’s eventual supremacy seems inevitable.
On the other hand, every so often, one gets a glimpse of the reality behind the curtain, and realizes that the country has a long way to go before truly becoming the world’s leader at anything, and in particular, there’s a lot they still have to learn about the delicate art of loading freight onto a (China Southern) airplane.
Is this the point where I mention that Briggs & Riley uniquely give their luggage a lifetime guarantee against everything, for ever – including airline mishandling? Maybe the shipper in this video should pack his product in B&R suitcases!
Until next week, may both you and any luggage/freight traveling with you enjoy safe travels.
David.
