Weekly Roundup Friday 11 October 2013

KLM - by one measure, the world's oldest airline.
KLM – by one measure, the world’s oldest airline.

Good morning

Happy birthday this week to the airline that claims to be the world’s oldest airline still trading under its original name.

I refer of course to KLM.  It was founded on October 7, 1919, and operated its first flight on May 17, 1920, between Amsterdam and London’s Croydon airport.  During 1920, in total it carried a mere 440 passengers.

It started regular scheduled services in 1921, and was the first European airline to fly to New York.

The poster on the left is thought to date to about 1927, and shows Indonesians (remarkably smaller than the heroic Dutch aviator) and probably was brought out subsequent to KLM starting service to Jakarta.

Casting some ambiguity on KLM’s claim to be the world’s oldest airline is the fact that in 2004 it merged with – in the sense of being essentially bought by – Air France.  While it still has its own separate identity, this is mainly so as to avoid EU restrictions on foreign airline ownership (ie the French owning a Dutch airline).

Talking about old airlines makes me think of old planes, and so happy belated birthday to the 747.  It was 45 years ago on 30 September that the first 747 rolled out of the new enormous assembly building specially built by Boeing to assemble these planes.

I really like this article not just for the fascinating information on the 747 but also for the story of our country’s greatest aviation failure – our inability to complete the development of Boeing’s SST-2707 supersonic plane.  Indeed, it isn’t just a failure and loss to the US, it is a failure and loss to the entire world.

As I’ve often pointed out in the past, the Concorde, when designed, was to be cost competitive with its contemporary subsonic slow planes, and so too was the 2707 designed to be cost competitive with its contemporary subsonic planes, too.  There’s no immutable law of nature why supersonic planes must be extravagantly more expensive than slower planes.

Sure, cars burn more gas per mile, the faster they go, but a supersonic plane has a major advantage over its subsonic siblings.  It flies higher, where the air is thinner and there is less resistance.  Resistance is the main reason why, all other things being equal, going faster requires more energy, because resistance increases, more or less, at the square of the speed.  If you go twice as fast, you have four times as much resistance.  But if you move higher up into the atmosphere, the resistance diminishes.

Furthermore, there’s another obscured but major benefit of a SST over a sub-sonic plane.  It can cover more miles a day.  Depending on the route, it can fly nearly twice as many flights a day, and each hour of crew time and airframe time gets you twice as many miles.  This means these costs can be spread more broadly over more flying miles, making a lower operating cost per mile.  That means more profit if you sell tickets for the same price on a SST as a slow subsonic plane, and there’s every reason to believe an airline could charge a modest sum more for a fast SST flight.

This is a contentious claim – charging more for a faster flight, but it should not be so.  All airlines happily charge more for faster flights at present, in the sense that a nonstop flight will often cost more than one which makes stops along the way.  Furthermore, the price premium for a fast flight doesn’t need to be enormous.  But if you could shave two to three hours off a flight to Europe, would you happily pay $100 or $200 more?  Even if you only pay $100 more, that is another almost 3 cents a mile to the airline for a NYC-LON flight, and that is probably more than a doubling of the airline’s profit on the fare.

Remember, these are the same airlines that will cut anyone’s throat for another 1% improvement in fuel efficiency or for other apparently trivial savings/gains.  If you could offer them another 3c a mile in revenue, and tell them that the plane could fly almost twice as many miles per typical operating day, it seems reasonable to expect they’d be tripping over themselves in an unseemly rush to buy the planes.

The big problem with supersonic transport is simply lack of investment in developing optimum solutions.  A new model subsonic plane typically costs $10 – 20 billion to develop, so how many hundreds of billions of dollars has been spent on perfecting subsonic engines, airframes, etc, over the last 45 years?  No wonder today’s subsonic planes are so enormously more fuel-efficient, quiet, reliable, and so on than those of the mid 1960s.

But at the same time, supersonic technology has hung, unnaturally suspended in time, without any substantial development, for almost five decades.  No wonder that by today’s ‘state of the art’ it seems to be prohibitively expensive.

But, in truth, it probably is not prohibitively expensive at all.  The simple sad reality is that there is no pressure on our airplane duopoly – Airbus and Boeing – to create a new technology race between themselves.  They’ve successfully managed to ignore the desperate need for a new improved successor to the 737/A320 family for a decade or more, and their final reluctant approach was nothing more than a minor tweak to the present dated designs, with most of the improvements coming from the engines rather than the airframes.

We need a new company willing to commit the tens of billions of dollars needed to make a viable state of the art SST – one with clean burning quiet engines, modified/eliminated sonic boom, and a reasonably long-range and large passenger carrying capacity.  That might sound like a tall order – who has tens of billions of dollars floating around, with no clear current purpose?

Actually, that’s not an impossible order at all.  Apple has right around $150 billion of cash.  Microsoft has just under half that.   Google has $50 billion, Cisco only slightly less, and Oracle about $35 billion (founder Larry Ellison has more – he has about $43 billion).

One wonders what Steve Jobs would have thought of the idea of developing the world’s neatest plane.  He might have been tempted, don’t you think?  Or, if not Steve Jobs, doesn’t it sound like the sort of project Paul Allen would delightedly invest in (he is worth $15 billion)?  We have several high-tech billionaires investing in space travel, why not have one invest in travel closer to the earth’s surface.  The rewards could be much greater.

Enough dreaming of a real ‘dreamliner’.  Back to the here and now.  Many tweaks and extensions later, the 747 at 45 is struggling to make it to 50.  Indeed, here’s an article that suggests the era of large jumbo jets is essentially over.  It isn’t a new argument at all, but every time I see it, I tend to disregard it.  As long as some key airports are over-crowded, there will always be a need for big planes, carrying more people in fewer flights.  And when we get to the point that airlines are flying long distance routes with departures more than once an hour, the greater efficiency and economy of larger planes, but ‘only’ once an hour, surely starts to have appeal.  This particular article is simplistic and tries to link together multiple issues with uncertain success.  In particular, there seems to be an interesting correlation between the airlines with A380s and those airlines which are the most successful in the world (yes, I’m thinking most directly about Emirates when I say this).

Furthermore, there’s also a subtle shifting of definitions.  A very large plane used to be thought of as over 400 seats.  But nowadays, some 777s have over 400 seats, and they are not thought of as ‘very large’.  This growth in capacity is across the board – look to the 737, which has almost doubled the number of seats it holds over its own almost 50 year life.

The 747’s problem is that it is being squeezed between large 777s that can carry almost as many people and even larger A380s that can carry even more people.  Back when it was the very biggest passenger plane in the sky, carrying 50% more than the next largest plane, it had a clear and broad niche.  But now it has a tiny – and some would say, nonexistent – niche between a plane only very slightly smaller and a plane not very much larger.

Anyway, we wish the 747 happy birthday, no matter what its future.  As is often – and correctly – said, the 707 ushered in the modern jet age of fast safe comfortable travel; the 747 then took that to the next level, adding the key words ‘mass’ and ‘affordable’ to the phrase.

What else this week?  We’ve a separate piece about the new T-Mobile ‘unlimited international data roaming’ announcement made on Wednesday – we’re not quite as excited about this as are some other commentators.

I’ve also been pulling up some of the items that have been appearing this week about the ugliness and unnecessaryness of our government shutdown (which isn’t really a shutdown at all) and the gratuitous harm being inflicted on tourists, particularly by the National Park service, and these are showcased on our News page, including an interesting analysis by National Park Service retirees (who are as outraged as we are by these shenanigans) that suggests $76 million of tourism spending is being lost every day.  Yes, that would more than pay for the sometimes zero costs of leaving unmanned national parks and monuments open.

And items below on :

  • Correction – Obamacare Taxes
  • Boeing Loses a Big One
  • More 787 Problems
  • Alitalia on Bankruptcy Watch
  • The Changing Shape of the World as Shown by Airline Service
  • Ryanair’s Impossible Flights to the US Again
  • Terrorists Continue to Test Our Flights
  • Could You Drink Your Money’s Worth of This?
  • Free to a Good Home – an International Airport (or Two)
  • And Lastly This Week….

Correction – Obamacare Taxes

I was wrong last week to suggest that a 1.78% tax on some house sales in Washington state went to Obamacare (although that’s what a realtor told me).  On the other hand, there is a new Obamacare tax on non-wage income and investment profits.  The amount (which can be 3.8%) depends on your tax filing status and other stuff.  And, in general, I guess this shows not just how gullible/foolish I might be, but the total opaqueness of what exactly Obamacare is and how it is funded and what it does and for whom.

One reader also suggested I was being too critical by expecting Obamacare to be functioning perfectly on the first day.  My answer was to point out that I’m simply holding the government to the same standard I hold commercial organizations to, and to further point out that Obamacare has had a long gestation with plenty of time for everyone to get everything right.  And now today, a week later, there’s nothing to show that the ‘teething problems’ have been ironed out, and my lost and not yet replaced healthcare insurance not only rebuts the false promise ‘everyone can keep their present insurance if they want to’ but also shows very starkly (to me) the continued dysfunctionality of the new program.

Although quite a few readers wrote in about Obamacare, mainly to complain and add more horror stories to the thousands already out there of lost coverage, lost jobs, or, at the very least, increased insurance costs, no-one wrote in to say ‘I myself have directly benefited from the new Obamacare system’.

Boeing Loses a Big One

Boeing has steadily seen airlines that were formerly 100% loyal Boeing customers now start sharing orders with Airbus.  But it has had a few remaining strongholds that have remained staunchly loyal, and prime among those was Japan and its two carriers, JAL and ANA (the latter of which was the launch customer for the 787 and still, now, operates a larger 787 fleet than any other airline).

But this week, JAL announced its intention to purchase 31 A350 jets from Airbus, and nothing from Boeing.  This came as a surprise to Boeing, and now commentators are wondering if ANA might follow suit with a similar order, likely to be announced early in 2014.

Here’s a fascinating piece that analyzes the how and why of the Boeing loss, and suggests that in a modern-day aeronautical version of the domino theory, the JAL order will lead to a sequence of orders from many other Asian carriers, not just ANA.

More 787 Problems

Boeing’s dramatic loss to Airbus with JAL of course begs the question about the role played by its 787 problems in JAL’s decision-making.

Both the articles linked to above conclude that while the 787 problems didn’t help Boeing, they weren’t the core central reason for Boeing’s loss, either.

Be that as it may, it can not be considered propitious by Boeing for JAL to suffer two separate unrelated 787 problems this week.

Six of the seven toilets failed on a flight from Tokyo to Moscow, causing the 787 to return back to Tokyo, and the de-icing system failed on a flight from San Diego to Tokyo, causing it to return back to San Diego.

You might think there’s nothing in common between toilet problems and de-icing problems.  But both may well have, as a root cause, a problem in the electrical systems somewhere.  The electrical systems seem to be this plane’s Achilles’ heel, and one never knows what form the next electrical system problem might take, or – and more to the point – how benign and survivable it may or may not be.

In related 787 news, the 787 taken out of service by Norwegian remains grounded, almost two weeks on.  Clearly the repairs needed were more substantial than expected, and Norwegian has said it will take its other 787 out of service for similar work as soon as the first can return to the skies.

Alitalia on Bankruptcy Watch

It is a few years since we were able to regularly write about the perennial problems at Alitalia, but the airline is back in the news with a vengeance now.

Since its last rescue in 2009, the airline has managed to lose another €1 billion, and – surprise surprise – now finds itself running out of money, even though most airlines around the world are being happily profitable at present.  Passenger numbers are up, fares are up, profit is up, and fuel prices are down.  But Alitalia seems gifted at being able to lose money, no matter how favorable the economic climate may be.

So Alitalia has become a bit slow paying its bills, including its fuel bill.

Accordingly, Italian oil firm ENI has said it will stop supplying the airline with fuel from Saturday unless it is reassured by the airline’s management and the Italian government that the business is viable and it will get paid.

Alitalia’s shareholders are meeting to discuss a new financing plan, but not until next Tuesday (and there’s no guarantee of any instant solution emerging from that meeting).

Don’t be alarmed, though.  We would be astonished to see the airline unable to fly from Saturday due to not being able to fuel its planes.  However, the airline is knee-deep in its latest financial quagmire.

The Changing Shape of the World as Shown by Airline Service

It is interesting to observe the shifting focus of where in the world people travel and to ponder the implications of such things.

News this week tells of Etihad adding service from Abu Dhabi to Los Angeles, to start on 1 June 2014.  The airline already flies to Chicago, New York and Washington DC.

Etihad seems to be running neck and neck alongside its larger neighbor, Emirates, in terms of the excellence of its products – particularly its premium cabins, and both airlines are steadily and significantly increasing their flights to the US.  It is good to see their presence, but for those of us who mainly travel to Europe; sadly, neither airline has much relevance.

In related news this week, the Jetblue/Emirates codeshare agreement goes live, with Emirates flights from the US now also bearing Jetblue flight numbers (many Jetblue flights already have Emirates flight numbers too).

Ryanair’s Impossible Flights to the US Again

Talking about new routes reminds me of the route that never happens.  Ryanair CEO Michael O’Leary is a bit like a broken record (an analogy that dates both me and you too if you know what I mean).  Every few months, he talks about taking the toilets out of his 737s, or at least charging for their use, and once or twice a year, for variety, he instead mutters about wanting to start service between the US and Europe.

But – and here’s the but – these expansion plans are never given any firm timeline.  They are always remotely in the future, and based upon something impossible happening to give Ryanair an advantage over all present airlines.

Here’s a typical statement of his, reported this week.  He says that the airline could only operate these flights if it were able to get cheaper airplanes.

But, with all respect to Mr O’Leary, that’s a nonsense statement to make.  Is he saying Ryanair is unable to compete with current airlines if he pays the same price for planes they do?  If that is so, how does he manage to succeed with his profitable flights in Europe?

It is actually an interesting and serious question, as well as a snide comment.  Here’s an impressively successful airline that has taken on full fare airlines across Europe and stolen huge market shares from them – why is this growth oriented airline unwilling to now take on the three giant alliances across the Atlantic?

Could it be because there are three giant alliances across the Atlantic, managing and controlling the routes much more so than in the more piecemeal approach to aviation that typifies Europe?  Are we seeing an anti-competitive outcome of the various airline mergers and joint operating agreements that have been allowed on this route?

Whatever the reason for never actually doing anything, O’Leary knows that any mention of starting service between multiple European cities and multiple US cities is always a headline winner, and so when he needs a boost of some extra free publicity, he makes these statements, knowing full well it is safe to say so with such conditions, and that his bluff will never be called.

Terrorists Continue to Test Our Flights

I occasionally read stories, and occasionally am told stories by people who saw such things with their own eyes, about strange/bizarre behavior on planes involving men ‘of Middle Eastern origin’.  This involves running up the aisle to the front of the plane, getting up and sitting down repeatedly, strangely interacting with one another, passing packages backwards and forwards, sequentially going in and out of toilets, arguing with flight attendants, and sometimes other activities too.

The common assumption by both professionals and those who have witnessed such things is that these are deliberate probing activities by potential terrorists, seeking to find what they can and can not do on a plane before creating some sort of response, seeking to understand who and where air marshals might be located, and what they will do in such situations.

This is invaluable information, allowing terrorists to ‘game’ the system and learn a great deal about our in-flight security measures, and to test strategies to see if they work or not.

If they experience push-back from flight attendants, on-board air marshals, or others, they act either innocent or aggressive, and there’s basically little or nothing anyone can do.  They’ll be fast to shout ‘racial profiling’, or to play dumb and passive aggressive.  And, in truth, it is difficult to react too harshly.

So a person went up the aisle ‘too quickly’ to the first class cabin and ended up rushing into the toilet by the cockpit door – sure, they could have instead attacked/rammed the cockpit door and maybe forced their way in before anyone could react, but they didn’t, so all they would experience would be a warning and a request not to act that way in the future.  Maybe they needed to urgently use the facilities.

So they passed benign ‘safe’ packages between them, and spent long times in the toilets.  That’s not a crime either.  But maybe next time the packages are the components of a bomb or other weapon, and the time in the toilets is time spent assembling it.

There’s little that can be readily done to combat such things.  But that’s not the same as saying there’s nothing that can be done, and we need to reverse-engineer these events and walk them back to their ultimate sources, and wreak havoc on such places and people before they instead wreak havoc on us.  Where’s the NSA when you actually need it?

Here’s a very disquieting article that quotes a current air marshal as saying about the TSA and its claims that it takes all reports of suspicious activity on planes seriously :

They’re liars. They’re flat out liars.

He – and many others – feel there are some serious activities going on and that little attention is being paid to the event or their implications.  We agree.

Could You Drink Your Money’s Worth of This?

Holland America Line has now joined most other cruiselines by announcing an alcohol inclusive beverage package, which for $44.95 a day allows you up to 15 drinks a day from a variety of wine, beer, spirits and cocktails, as well as mocktails, sodas and coffee too.  Except that, well, read the fine print.

The first piece of fine print is that there’s a 15% service charge added, so the cost is actually $51.69 a day.

And now, I know what you’re thinking.  You’re thinking ‘Well, I’ll try to work my way through this, but my wife is a light drinker, so she’ll just buy drinks as and when she needs them’.  But, no.  The second piece of fine print is that all adults in a cabin must purchase the same package.  So now you’re at the high side of $100, and your wife isn’t going to help much with your dogged determination to drink your way through the money you’ve spent.

And, wait, there’s more.  Items from the mini-bar and in-room dining are excluded, as are, also, beverages while on Half Moon Cay.

So, unsurprisingly, few of us can probably ‘get value’ from this package.  Which is, of course, exactly why HAL is offering it.

Free to a Good Home – an International Airport (or Two)

Prestwick is an airport serving Glasgow, but further out of the city than Glasgow’s main airport (it is about 30 miles from the center of the city, whereas Glasgow airport is only 8 miles away).  As such it has more appeal to low-cost airlines than full service airlines, and is a hub for Ryanair.  It has plenty of capacity, being the largest airport in Scotland in terms of physical area, but only the fourth largest in terms of passenger numbers.

In its heyday, 2007, it was handling 2.4 million passengers a year, but last year saw a mere 1.1 million passengers pass through the airport.

The airport was bought by a New Zealand company in the early 2000s, but declining passenger numbers have led to declining profits (and actual losses), so in March 2012 they put the airport up for sale.

After a year with no purchaser stepping forward, it seems the airport will be given to the Scottish government.  You’d not need to offer much more than a few pounds to take it from them instead.  Details here.

Oh – if Prestwick is a bit big, you could instead offer to take Manston Airport in Kent off the Kiwi company’s hands.  That too was put up for sale in March 2013, and they’d probably take a very lowball offer to be rid of it.

And Lastly This Week….

We mentioned above about a 787 suffering problems with six of its seven toilets, requiring the plane to quickly fly back to Tokyo.  But at least the problem was simply with the electrical circuitry causing the toilets not to flush.  Things could have been much worse, as this unfortunate man in Brooklyn discovered with his toilet.

We’re getting close to Halloween.  Is it too soon to include a piece about a scary tourist attraction – so scary that visitors have a ‘Safe word’ to use if they want urgently out.  Here’s a piece with utterly hilarious pictures of tourists experiencing the attraction.

My question – why are so many of the men cowering behind the women and even children they are with?

For some of us, Monday might be a holiday.  Happy Columbus Day to you all, whether you spend it working, shutdown, or on holiday.

If the 5500 words in this week’s newsletter and article on T-Mobile’s international data plans isn’t enough for you today, do please click on to our News site, where in the last week we’ve added almost 100 items over the last week.

Until next week, please enjoy safe travels







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