Good morning
I omitted mention last week of a very historic birthday. July 15 saw the first flight of the 707 prototype, the ‘Dash 80’.
The development of the 707 (and subsequently the development of the 747) has sometimes been described as Boeing betting its corporate future on the success of the plane. Sure, we know that both the 707 and 747 ended up as wonderfully successful programs, but the success of the 707 came at a particularly critical time for Boeing, and after a string of airplane failures.
Most of all, the success of the 707 was never pre-ordained, and Boeing very nearly suffered another commercial disaster with the 707.
The story of Boeing’s challenges and near-disaster with the 707 is very well told with this article. I certainly learned some things I’d not earlier appreciated about the 707 program. A great read.
Without giving away the story in the linked article, at the time of the Dash 80 first flight, Boeing was doing very well with its military contracts but very poorly with its commercial airplane division. There’s a curious irony therefore to read this story about how, today, the situation at Boeing is exactly reversed. An alarming future for its military division, and a sunny outlook for its commercial airplanes.
Talking about challenges and near-disasters, I’ve been asked by several people to give an assessment of the current Ebola outbreak in west Africa. What does it mean for us – as travelers in particular, and for our lives in general. Is the world about to succumb to a global Ebola pandemic?
Or is this current outbreak nothing to worry about at all? I’m not a doctor, so take my comments with a grain of salt, but I have tried to distill the maximum meaning out of the various official commentaries by various health organizations around the world, while also rolling my eyes at some of the current scare stories (and also a bizarre ‘don’t be scared’ story that seems way out in left field) in the media. The analysis – all 5000 words of it – is attached at the end of today’s newsletter.
Also, below, please keep reading for :
- Etihad Offers to Save Alitalia, so Baggage Handlers Go On Strike
- Continued Escalation of Pin-pricks between Russia and the West Now Reaches the Airlines
- 36% of Americans Now Afraid to Fly Internationally
- Finally – A Coach Class Airline Meal I’d Love
- But, Elsewhere, Meals Withdrawn
- Pre-Check About to Become More Exclusive
- Other TSA/DHS Programs Similar to Pre-Check
- High Speed Rail in the US : Five Years and $11 billion Later
- Self-driving Cars on Sale Within Five Years
- Interesting Safety Statistics
- And Lastly This Week….
Etihad Offers to Save Alitalia, so Baggage Handlers Go On Strike
It is either an unusually brave airline, or an unusually foolish one, that chooses to buy into Alitalia – the airline that refuses to die, but which also equally stubbornly refuses to stop losing money. Back in 2009, Air France/KLM invested €322 million (US$430 million) in getting a 25% share of the freshly recapitalized airline, but their share of the airline these days has reduced down to 7.1%.
Much as before, Alitalia has continued to lose money every year since its 2009 relaunch, including €50 million ($66 million) last year – a year when just about every major international airline enjoyed massive profits. Alitalia has about €800 million in debt currently.
Etihad has expressed interest in investing about €560 million into the airline (around $750 million), in return for a 49% share. In a curious case of a very odd couple, they would be joining the Italian Post Office, who is also investing into the airline.
But if Etihad were to do so, they realize that Alitalia’s business model needs to be massively changed, something the airline and the Italian government have been resisting. There’s obviously no sense in just pouring more money into a chronically loss making airline.
One of the changes would be laying off staff – about 2,000 of the 14,000 employees. Glass-half-full people would see this as protecting the jobs of the other 12,000 in a company that is surely otherwise staring dissolution in the face, but Alitalia’s baggage handlers see it the other way, and so are risking the company’s entire future by striking.
We can see some strategic advantages accruing to Etihad from teaming up with a new improved lower-cost more efficient Alitalia, and this is in line with Etihad taking minority positions in other airlines, ranging from Virgin Australia to Aer Lingus, from Air Berlin to Air Serbia. On the other hand, with strategic partnerships with airlines such as Air Berlin, maybe there is less need for Etihad to buy into Alitalia as well.
So Alitalia has to transform itself, or else Etihad would be crazy to drop €560 million into a chronic loser of an airline. Their CEO, currently in Italy to possibly consummate the deal today, may well be having second thoughts as he surveys the growing mountains of baggage at Rome’s Fiumicino Airport.
Continued Escalation of Pin-pricks between Russia and the West Now Reaches the Airlines
It is now three weeks and one day since the crash of MH17 over eastern Ukraine. We’re none the wiser as to how it came to crash, although the likelihood is that it was shot down by a BUK surface to air missile. We’re also very much none the wiser as to who it might have been who launched the missile, but it almost seems now that this central point has become irrelevant. The west is officially asserting, albeit without any certain proof at all to back up their assertions, that it was Russia or the Russian aligned and assisted rebels who launched the missile, and Russia is asserting it was Ukraine who launched the missile, again with no proof.
Our side is using that unsubstantiated assertion to support increasing various sanctions against Russia and Russian people, and Russia is willingly playing a game of ‘tit for tat’, responding to each action of ours with an action of their own.
Before looking at the latest round of mutual sanctions, two quick comments.
The first is to observe the eerie similarities between the current escalations in tension and rhetoric between the west and Russia with what was happening almost exactly 100 years ago. Let’s hope that our current situation gets defused before we find ourselves recreating the ‘War to end all wars’ that resulted from the arguments of 100 years ago.
The second is to draw your attention to this interesting open letter to President Obama by a group of retired former highly placed intelligence officers. Not only does it tell some interesting things about the Soviet shootdown of KAL 007 back in 1983 – things that I didn’t know before, but it makes a very interesting oblique statement at the beginning :
Twelve days after the shoot-down of Malaysian Airlines Flight 17, your administration still has issued no coordinated intelligence assessment summarizing what evidence exists to determine who was responsible – much less to convincingly support repeated claims that the plane was downed by a Russian-supplied missile in the hands of Ukrainian separatists.
Your administration has not provided any satellite imagery showing that the separatists had such weaponry, and there are several other “dogs that have not barked.” [our emphasis] Washington’s credibility, and your own, will continue to erode, should you be unwilling – or unable – to present more tangible evidence behind administration claims.
One wonders what their allusion to other dogs that did not bark means. Clearly these people – on our side – are suggesting there just isn’t the evidence to confirm the west’s assertion that Russia was culpable.
Now for the details of a recent round of the nonsense flowing between the Kremlin and the western powers. In response to the west banning a Russian airline (Aeroflot subsidiary Dobrolyot) from flying to Europe, Russia is threatening to ban all western flights from traveling over Siberia. This would appreciably lengthen the distance needed to be flown between Europe and Asia, and therefore increase the cost to western airlines such as BA and LH.
On the face of it, that would seem to be a logical step by the Russians. But, if Russia were to forbid western airlines from overlying its territory, it would also lose the fees it receives currently from granting such permissions. It is thought that about $300 million a year in fees is received by Aeroflot – it being Aeroflot, rather than the Russian government, who is the beneficiary of the fees charged.
The point of salient confusion is how much it would cost the western airlines if this ban was instituted. In particular, would the cost be more or less than the fees that Russia would be forsaking?
It would seem enormously obvious that the fees charged are less than the operational savings for flying over Russia – if the fee was greater than the cost, airlines would not pay them currently. One Russian source went as far as to say that the cost would be in the order of $5 billion a year. Another source confusingly said that the fees were less than the operating costs otherwise would be, but said the costs would only come to about $100-200 million a year, clearly a nonsense figure.
What is most of all nonsense however is this escalation of rhetoric and trade sanctions. No-one is winning, and they are of course not causing any sudden confessions or apologies.
Details here.
Whatever the numbers, this latest move by Russia would be a classic lose-lose-lose. Russia would lose, the airlines would lose, and we as passengers would also lose. Which, alas, makes its enactment seem almost inevitable and assured.
Is it time to plaintively ask ‘Can’t we all just get along’?
36% of Americans Now Afraid to Fly Internationally
There’s a tragic logical link between the last item and this item. A new poll for website Thestreet.com suggests that 36% of Americans agree that due to recent political turmoil, they have become afraid to fly internationally.
That’s an enormous number that defies belief, and one wonders exactly what the survey question and offered responses might have been, and how many of the respondents might have rated themselves as scared to fly internationally in any event.
But, whether the real number is 3.6% or 36%, what airline out there would happily turn their back on that much of their potential business? The airlines, as well as the rest of us, need to be pressing our government to take a more cool-headed and rational approach to its relations with Russia.
Details here.
Finally – A Coach Class Airline Meal I’d Love
One of the things I miss most about New Zealand, and enjoy at least daily when in NZ or the UK, is ‘proper’ fish and chips. Not the terrible ‘filet o fish and fries’ abomination, and not the peculiarly off-target imitations of proper fish and chips served up in restaurants in the US, but the real thing.
British Airways has announced plans to serve British style battered cod filets and chunky fries, complete with tomato sauce (aka ketchup), malt vinegar and tartare sauce (no word about mushy peas). This feast is to be offered in coach class, and will be the airline’s first ever attempt at serving fish and chips (both crispy battered fish and good quality chips are different to reheat up in airplane warming ovens).
Alas, the meal will only be served on selected short-haul flights within Europe. But if it proves successful, it might be distributed more broadly, but apparently still only on short-haul flights. Details here.
But, Elsewhere, Meals Withdrawn
While BA is looking at upgrading the coach class meals on its shorthaul services, American Airlines is eliminating their meals. And from first class, on most flights lasting less than three hours.
But, dear first class passengers, fear not. AA still loves you, albeit slightly less than before. The airline will now be providing snack baskets. Yummm! And just in case you think this is just AA trying to save more money, that is not the case. It is for ‘consistency’ and is AA aping the actions of its new owner, US Airways, who recently cut back on first class food too.
Details here.
Pre-Check About to Become More Exclusive
The TSA Pre-Check program requires participating flyers to enroll in the program, to be scrutinized and evaluated as a high or low risk passenger, to attend a personal interview, and – of course – to pay a fee ($85 for five years). In return, the vague promise is shorter lines through security at many (but not all) airports and less screening ‘hassle’ (ie no need to remove shoes, or to take laptops out of bags, and only going through metal detectors rather than whole body scanners).
But the TSA has been semi-randomly directly other passengers into the Pre-Check lanes so as to ‘balance’ the length of lines of people waiting to go through security. This has meant that on regular occasion, passengers in the ‘fast’ Pre-Check lane have ended up waiting as long or longer than people going through the regular lane, a delay made all the more frustrating as it is often in part caused by ‘regular’ travelers dithering and taking unnecessary extra time removing shoes, etc, rather than efficiently going through the Pre-Check process.
Apparently the TSA have now heard the complaints of people who paid the fee and went through the process to get Pre-check status, and say they will stop allowing regular passengers into the Pre-Check lines, as explained in this article.
One thing which does make one’s eyes roll uncontrollably.
The TSA call their current process of shifting regular passengers into the Pre-check lanes a ‘managed-inclusion’ process, and say that such passengers are individually selected and have been pre-screened and deemed to be low risk. But, as I understand it, much of the shift of passengers into the Pre-Check lanes happens realtime at the screening location, where a TSA agent simply opens up one of the rope barriers and shifts the next ten passengers out of the regular lane and into the Pre-Check lane.
There’s nothing managed about that process at all.
Other TSA/DHS Programs Similar to Pre-Check
If you’re thinking about signing up for the Pre-Check program, there are a couple of other programs you might want to consider instead. One will save you money, the other costs only a little more but gives you more benefits.
For only $15 more than Pre-Check (ie $100 instead of $85 for five years) you can get Global Entry. This gives you all the benefits of Pre-Check plus also fast tracks you through both the Immigration and Customs lines when returning from overseas. The extra $15 can quickly be money well spent if you travel internationally from time to time.
If you live not far from Canada, you might want to consider getting a Nexus card instead of either Pre-Check or Global Entry. These cost only $50 for five years, and give you all the benefits of Pre-Check and also all the benefits of Global Entry, plus also give you fast track lanes when crossing the Canadian border in both directions.
Nexus is the best deal of all – the most benefits, and the lowest cost. But it requires an in-person interview at one of a limited number of locations, and it is likely the hassle of this, if you don’t live close to such locations, would outweigh the saving in fee.
There is a fourth similar program – Sentri – which could be helpful if you go down to Mexico from time to time. It is also the most expensive. Summary details of all four programs can be seen here.
High Speed Rail in the US : Five Years and $11 billion Later
President Obama’s administration has spent over $11 billion since 2009, ostensibly on high-speed rail, but according to a NY Times analysis, ‘the projects have gone mostly nowhere and the US still lags far behind Europe and China’.
Neither observation should come as startling news, particularly our relative standing compared to Europe and China. Europe already has a spider’s web of high-speed rail and more coming on stream every year, and China, despite being a late entrant into the high-speed rail arena (first fast trains in 2007) has now amassed the largest amount of high-speed track in the world – over 6,850 miles so far, and is expected to almost double this by the end of next year.
In his 2011 State of the Union address, the President promised us
Within 25 years, our goal is to give 80 percent of Americans access to high-speed rail. This could allow you to go places in half the time it takes to travel by car. For some trips, it will be faster than flying — without the pat-down.
So we’re now just over three years into that promise, and five years into the overall investment in high-speed rail. Last month, the administration asked for a further $10 billion to continue our path towards giving ‘access’ to high-speed rail (a curious term that permits multiple definitions) to 80% of our citizens.
This begs the question ‘So what did we get for our first $11 billion?’. According to the NY Times article, the answer seems to be ‘Almost nothing’.
I love trains and I love fast trains even more. I also understand that high-speed rail requires massive investment and lengthy construction times. I even think that high-speed rail is viable in some parts of the US, and accept that the social and other benefits of trains allows us still to countenance high-speed rail where its financial justification is less obvious.
But I don’t understand how, five years and $11 billion later, we have almost nothing to show for half a decade and that much money, and I’m far from clear on what another $10 billion would now achieve.
Perhaps the problem isn’t so much wasting tens of billions of dollars as it is needing to spend not tens but hundreds of billions of dollars to create anything worthy of the high-speed rail label.
As example of that, the 520 mile Californian high-speed rail project (between San Diego, Los Angeles, San Francisco and Sacramento) was estimated to cost $100 billion at one point before it was re-costed down to a more politically acceptable (but not necessarily more realistic) $68 billion. In simple terms, that’s no more than 7.5 miles per billion dollars (at the low-ball $68 billion figure, only 5.2 miles at the higher figure).
So the $11 billion was never likely to get us much more than 50-75 miles of high-speed rail, which is useless. You need 100+ miles of track to make any significant difference to travel time, and ideally 200-500 miles to come up with enough distance and benefit to make it worthwhile to take a train rather than drive, while still being better/faster than flying.
If we’re serious about any type of national commitment to high-speed rail, we need to be spending hundreds of billions, not tens of billions. And if we want the support of the nation, we need to be showing tangible returns for each of those billions of dollars.
Currently, we’re getting it all wrong, in every respect.
Self-driving Cars on Sale Within Five Years
While high-speed rail remains elusive and far in the future, the same can not be said of self driving cars.
Audi has been testing its self-drive technologies in an A7 on a designated test road in Florida. Apparently it is designed more for lower speed driving in dense traffic – up to 40 mph, and indeed the phrase ‘traffic jam’ was mentioned in Audi’s press release.
Audi says it plans to be selling the first version of its product within five years.
Yes, I know I’ve confidently asserted that self-driving cars will become a reality sooner than we think, but ‘within five years’ is remarkably fast. That’s less time than it takes to develop many new car models, and certainly less time than it takes for a new airplane model. And compared to a high-speed rail development schedule, well……
The transformative effects of self driving cars – particularly when combined with anywhere fast internet through phones and tablets (and even through built-in screens in our cars) can not be understated. A huge unproductive part of our lives – commuting – promises to soon become either more productive or at the very least, massively more pleasant. And safer. Maybe self driving cars will nullify many of the benefits of rail?
Plus, with self-driving cars, roads will be able to handle greater traffic densities, unjamming some of the freeways and making our driving faster (and safer) than it currently is, too.
In other words, the sooner the better for this new technology. But I do hope they get it thoroughly debugged first!
And, perhaps equally relevant, there’s an alarming darker side to self-driving cars. What happens if they are hacked? You might think this impossible, but it is already possible to remotely hack into some cars – even into essential systems such as braking and steering. Details here.
As a bonus for those of you still reading, it isn’t only cars that are becoming vulnerable to hacker attacks. Yes, you guessed it, airplanes too…..
Interesting Safety Statistics
There seem to have been – indeed, there truly have been – an unusual number of airplane accidents recently. And just when we’re starting to calm down from those concerns, the threats of Ebola are adding a new frisson of uncertainty to our traveling.
So it is interesting to read the results of a recent Stanford report on comparative safety. To get one chance in a million of dying, you need to travel
- 6000 miles by train
- 1000 miles by plane
- 230 miles by car
- 17 miles by foot
- 10 miles by bicycle
- 6 miles by motorbike
Adjusting the plane figure to reflect the recent crashes makes almost no change.
And Lastly This Week….
Here’s an interesting bit of hotel trivia that explains some of the science and thought that goes into selecting in-room amenities such as soap and shampoo.
In Britain, there’s a semi-urban legend (alas, it is totally true and did happen, but the details change a bit from telling to retelling) about how a pediatrician was victimized by a group of locals who were confused as to the difference between a pediatrician and a pedophile.
You might wonder how anyone could be so utterly ignorant. At least such a thing would never happen here in the US, would it? Well, maybe not, but something eerily similar happened to a teacher in Salt Lake City who was fired for creating the impression that his school had a gay agenda.
His crime? Posting a blog tutorial explaining what homophones are. Details here.
An announcement possibly heard on a flight recently :
It’s customary after a long-haul flight to ask for volunteers to clean the toilets. If you wish to volunteer, please stand up before the fasten seat-belt sign has been switched off.
Until next week, please enjoy safe travels
David.
