Weekly Roundup, Friday 13 February 2015

Will Hyperloop revitalize America's transportation system?
Will Hyperloop revitalize America’s transportation system?

Good morning

The first Black Friday of the year, to be followed by another one in March.  Superstition suggests it to be a bad day to travel – be careful.

Yamaha motorcycles.  The Shinkansen ‘bullet trains’ of Japan.  And the classic Kikkoman soy sauce bottle.  What do these three things have in common?

All three were designed by Japanese designer Kenji Ekuan, who died this week at the age of 85.  While we of course realize that motorbikes and trains have designers, did you ever think about how the instantly recognizable soy sauce bottle with its dual spouted red top and graceful bottle beneath came to be?  It took Mr Ekuan over 100 different prototypes before settling on the design that has now been sold more than 400 million times, and was designed in 1961.  More here.

One more anniversary this week.  9 February, 1995, saw the ‘beginning of the end’ of the former travel agency distribution model.  It marked the start of the airlines reducing the commissions they would pay to travel agencies – formerly agency commissions ranged typically from 8% to 11% of the ticket value, and starting from 9 Feb 1995, the airlines steadily cut back on the percentage and absolute dollar amounts they’d pay on tickets, eventually reaching the point of no longer paying any commission at all, on most fares, to most agencies.

The benefit to the airlines was both obvious and subtle.  They saved the cost of the agency commissions, but they also succeeded in reducing the travel agency role in the middle, making it harder for travelers to accurately and conveniently comparison shop different airlines and different fares.  Sure, we now have the Expedias and Kayaks and other online travel agency type services to help us, but the best of the online booking services don’t show you a tenth of the information that even the simplest of the travel agency computer systems offer to travel agents.  That is part of the reason why independent studies continue to show travel agencies do a better job at finding lower fares than do travelers directly, themselves.

I wrote, a month ago, about how Boeing is again losing out to Airbus, this time because after discontinuing its 757 in 2004, it no longer has a plane to bridge the gap in capabilities between the largest 737 and the smallest 787.  Airbus has recently announced a plane to fill that gap – the A321LR; Boeing has done nothing.

This week saw a surprising claim appear in the Wall St Journal, suggesting Boeing might be considering re-introducing the 757.  Might this happen – will ‘new’ Boeing planes be resurrected old planes?  The WSJ says it might, Boeing says absolutely not, and the reality is that it would be harder than it seems for Boeing to do this.  On the other hand, how else can Boeing fill the gap in its product line?

This is another fascinating example of the grand game of chess being played by Airbus and Boeing, where each company plans its own product development and the timetable for that not only to give itself the best advantage but also so as to trip the other company up.  Boeing’s current problems date to bad decisions made in 2011, 2010, and for several years prior to then.

I give an analysis of Boeing’s current difficult choices in an article attached at the end of today’s roundup.  Oh, and to be fair, while Boeing is being bested by Airbus in some of this, Airbus itself is hardly a brilliant player in the game.  If it weren’t for Emirates, its A380 would be a staggering failure, and its missteps with the earlier versions of its A350 plane cost it valuable time and market share that were grabbed by Boeing in the widebody section of the market.

Also this week, please continue reading for :

  • The Little Person’s Revenge :  South Korea’s Nut Rage Case Resolution
  • A More Deserved Imprisonment?
  • Delta Obscures its Frequent Flier Award Levels
  • American Airlines Joins United with 787 Service
  • South African Airways – Technically Insolvent
  • Update on Crashes
  • Hyperloop Becomes (A Little) More Real
  • And Lastly This Week….

The Little Person’s Revenge :  South Korea’s Nut Rage Case Resolution

I wrote before about the much talked about case where on 5 December a Senior VP of Korean Airlines, the woman in charge of in-flight cabin service, objected to the service on her flight which was not up to the official specifications and standards, and after getting into an argument with not just the offending flight attendant but the chief flight attendant as well, suspended the CFA and had him taken off the plane.

This happened prior to the flight departing from New York.  At the point she required the plane to offload the CFA, it was being pushed back, and was a mere 30 ft, from the gate.  It took only two minutes to return to the gate, and the net result was the flight ended up arriving into Seoul 11 minutes late, which is officially ‘on time’ and the 11 minutes could have been due to any number of reasons during the long flight and possible delays getting in to Seoul at the other end.

I thought the woman did an excellent job at insisting on the airline’s service standards being scrupulously upheld.  When you pay as much as $18,000 to fly first class on Korean Airlines between New York and Seoul, and when the airline promises the very best possible passenger experience, I thought it was wonderful that the airline’s senior executives were personally insisting on the promised level of service actually being delivered, and creating instant consequences for lazy uncaring flight attendants and their supervisors when they couldn’t be bothered removing nuts from a snack pack and placing them in a bowl, and were too stupid (or arrogant) to not even at least make a special effort for the Senior VP when she was traveling as a passenger.

The woman, who was not only the Senior VP in charge of cabin services but also the daughter of the airline’s Chairman, would seem to have had ample authority to do just about anything she chose to do, particularly in the fairly rigid hierarchical structure of KAL and when it was merely enforcing written company policies and procedures.

But the ‘aggrieved’ flight attendants got to the media first, and so the story unfolded on their terms.  And what a different story it was, alleging the Senior VP had a ‘hissy fit’ and endangered the safety of the flight and all sorts of other ridiculous nonsense things.

But the thing was that the actual events were merely the tip of the iceberg.  The woman became a lightning rod that attracted the pent up decades of South Korea’s ire, hatred, envy and resentment – both at the concept of a mere woman being in charge of men, and also at the concept of South Korea’s wealthy ‘ruling class’ – its chaebols, of which the woman (and definitely her father) were prominent members.

The net result of this was the woman resigned her job, but the attack-stories kept piling on, pressuring South Korean prosecutors to file charges against her, seeing her arrested on 30 December, charged with a variety of crimes, and kept in jail rather than on bail pending trial.

Her case has now been heard (the legal system is nothing if not apparently swift in ROK), and the judge ruled that even though the plane was being towed at slow walking speed, mere yards from the gate (do I need to add ‘on the ground’ and possibly not yet with all engines started), it was legally ‘in flight’ and so convicted her of forcing a ‘flight’ to ‘change route’, obstructing the captain, and assaulting a crew member.  The judge also said that the case damaged South Korea’s international reputation.

The prosecutors called for a three year sentence.  The judge awarded a one year prison sentence.  Details here.

So, yes, South Korea’s reputation almost certainly is – or definitely should be – greatly harmed, but maybe the judge should consider his own role in causing such harm.  A one year prison sentence for insisting an employee follow company procedures!?  Way to go, South Korea – has North Korea secretly taken over South Korea’s justice system?

A More Deserved Imprisonment?

It is almost exactly three years and three weeks since the Costa Concordia sank off the Italian coast.  32 of the 4252 passengers and crew lost their lives in the accident.  By all accounts, it seems the accident was caused by the ship being deliberately sailed too close to an island and running over submerged rocks, and it also seems the ship’s evacuation was poorly handled by the ship’s officers, some of whom abandoned the ship before all the passengers were assisted off.

The Captain, Francesco Schettino, was not only deemed to be the person who was responsible for giving the orders to bring the ship too close to shore, but also was found to be one of the more poorly behaved of the officers, abandoning the ship well before everyone else was off.  Charges were filed against him and he was found guilty this week of multiple counts of manslaughter and abandoning the ship before all passengers were off.

Prosecutors had asked for a 26 year term of imprisonment, the judge handed down a 16 year sentence (ten for the manslaughter charges, five for causing the shipwreck, and one for abandoning his passengers).

Puzzlingly, for only the first five of those 16 years, he also won’t be allowed to captain any more ships.  You can decide whether it is more puzzling that by implication he might have otherwise been able to simultaneously be in prison and also captaining a ship, or that his prohibition on captaining ships lasts for only five years.  Details here.

Oh – in case you were wondering what the good captain has been doing for the last little while, he has been using his experience to now teach courses in panic management at a university in Rome.

One last point.  Schettino was not the only officer to abandon the ship and leave the passengers to their own devices.  But it seems he will be the only one to be imprisoned.  His attorneys claim he has been unfairly made a scapegoat.  I don’t think his poor judgment and poor management of the accident should go without consequence, but if leaving the ship before the passengers have been safely evacuated is a crime, why stop only with him?  How about also the first of the officers to abandon their post?  And all the others, for that matter, too.

My point is that it is convenient for the cruise line and for the Italian government to make what was a broad and systemic failure on many different levels appear like it all was exclusively the fault of only one person, the captain.  While the captain is traditionally the one ultimately responsible for the fate of his ship, that doesn’t mean that others who also acted improperly should escape without consequences.

Delta Obscures its Frequent Flier Award Levels

I don’t usually write much about frequent flier awards; not only because many other people do an excellent job of covering the topic and its labyrinthine complexities, but also because the news about the programs is consistently and depressingly bad.

But Delta may have started a new trend among our copy-cat airlines, one so egregious that it needs to be commented upon.

This week it took down its table of awards.  You can no longer conveniently see what you can get in return for so many miles accumulated in a single simple chart.  Last year it complicated the formula for how many miles you earn per flight, and now you have a matching complication – you no longer clearly know what you can do with the miles you may or may not earn.

Delta says that frequent fliers no longer need an award table.  In the sense that there is little remaining value in its award program, I guess they’re right.  Details here.

American Airlines Joins United with 787 Service

It is now almost exactly two years since the 787 battery fires debacle, and I think I need to accept that the plane is proving to be safe and acceptable reliable.  I’d still not be overjoyed to find myself flying on a 787, but I’ll no longer book away from it.

With that in mind, AA is about to start operating 787 flights, and this article tells you where to expect to see AA 787s first.

South African Airways – Technically Insolvent

The airline confirmed a situation that surprised no-one this week, admitting it was ‘technically insolvent’.  It had delayed issuing its annual report for the year ended 31 March 2014 until it could secure more government funding guarantees, and has now revealed that while the 2013-4 year was better than the year before, it still managed to lose US$35 million, at a time when most airlines were enjoying strong profits.

It has an interesting approach to returning to profitability, and one which I expect to see become much more common in the future, everywhere in the airline industry.  It is discontinuing its own flights on unprofitable routes and instead code sharing with other airlines.

This is of course un-competition rather than competition.  Just because you still see a SAA flight number on a flight doesn’t mean they’re operating their own planes or competing on the route; quite the opposite.  As a code-share carrier, that generally makes them much more beholden to their ‘competitor’ airlines than if they were operating their own flights.  More subtly, one has to guess at some of the complex series of trade-offs that go on – ‘We’ll give you the seats you ask for on this route for you to save face and sell as your flight on a code-share basis, but if we help you with this, you’ve got to agree to go easy with us on that other route where we still compete’ and other sorts of similar things – things that probably could never be clearly proven, and which almost definitely will never see the light of public exposure.

My prediction is that the growing degree of code-share flights around the world, and the growing generic nature of all flights (particularly in coach class) will see a shift into ‘airplane operating companies’ and ‘air marketing companies’.  This would only be a small step further than what we have already – we already have regional carriers in the US who operate flights for the major carriers (even for supposedly competing airlines), and never show their own name (or, if they do, obscure it).  Similarly, airlines can already ‘wet lease’ planes complete with crewing and all related services.

So why not go all the way and create a new airline, no longer tied to the reality of physical airplanes – heck, call it Untied Airlines, perhaps.  And simply contract for seats on other flights and resell them on to passengers.

This could actually be a good thing for us as passengers, because it would reduce the ‘cost of entry’ of new ‘airlines’, and would also give a floor to the underlying costs of the ‘airlines’ which would make it harder for them to play games and price new entrants out of the market.

Back to SAA, my sense is that national pride will keep the airline aloft for longer than it should continue flying on any sort of commercial basis.  Details here.  (Sort of like what has happened with other national flag-carriers in the past….)

Update on Crashes

MH 370 remains stubbornly lost, 11 months after it disappeared.  Here’s an article that attempts to collate some of the many different theories about what might have happened.

The AirAsia crash investigation remains cloaked in semi-secrecy, even though an examination and analysis of the black box data has almost certainly given the authorities major leads as to what happened and why.  It remains a mystery why the Indonesians are being so secretive.

But there has been news, of sort, about the MH 17 shot-down flight over Ukraine.  The Dutch authorities released a heavily redacted set of materials about the crash, which still continues to carefully avoid telling us exactly what happened or who was responsible.  The censoring of the information was justified for several reasons, including “in the interests of the Netherlands’ relationship with other states”.

That bland statement rather says it all, doesn’t it.  It seems the Netherlands authorities deem it to be more important to remain on friendly terms with whichever nation was responsible for shooting down this plane, than it is to expose that criminal action and subject the country to international shame.

The most fast moving and transparent of all the investigations is the TransAsia ATR72 crash in Taiwan.  I’d struggled to be polite when writing about it last week and expressing my puzzlement as to why the three pilots (there was a third instructor pilot in the cockpit along with the two flying pilots) had not been able to recover from the apparent engine failure at take-off, and now we understand more about why they had such severe problems.

It seems that after being advised that one of the two engines had lost power, the crew shut off engine power and then went through the standard engine restart process, exactly as they should have done.  Well, everything they did was perfect, but for one slight mistake.  They shut down the wrong engine!  They shut down the one remaining working engine, not the one which had lost power.  So during the critical period, the plane had both engines out.

It is possible there were cross-wired controls or who knows what else that contributed to this mistake, and I desperately hope that proves to be the case.  The breathtaking degree of incompetence it would otherwise indicate is truly terrifying.  Perhaps confirming that it may have been egregious pilot error, the airline grounded all its ATR72 pilots for emergency testing and retraining.

The thing I find most inappropriate is how these pilots were instantly branded as ‘heroes’ with newspaper headlines singing their praises, including such gems as ‘hero pilots gallantly fought to regain control of their plane all the way down to the water’.

But, does struggling to save, most of all, their own lives make them heroes?  Absolutely not.  A hero is someone who voluntarily and without compulsion accepts extreme personal risk in order to assist someone else.  But these pilots did not volunteer for anything, and were fully motivated to try and save themselves.  There was nothing heroic in the circumstances, nothing heroic about what they actually did, and nothing heroic about the outcome.

A similar comment applies to ridiculous observations about the heroes ‘gallantly flying the plane to avoid buildings and land the plane in the river’.  Have a look at the flight path of the plane, shown partway down this page, and tell me if you see any sign of any actual directional control, and as for landing the plane in the river, they should have turned the plane to the right not left if that was their objective.  The port wing drop was almost surely the start of an uncontrolled spin, not a volitional act of the pilots.

Hyperloop Becomes (A Little) More Real

I’ve written several times about the innovative ‘Hyperloop’ concept – pods shuttling through tubes at almost the speed of sound, potentially taking people and cargo between cities in less time than it takes to fly, while costing less to build than regular high speed rail and much less to operate.

There’s no shortage of weird and wacky ideas for new forms of transportation, but the apparent endorsement of Elon Musk (he of Tesla and SpaceX fame) seemed to give the concept, when he first floated it in August 2013, more credibility and potential.

Nothing much happened after his first announcement, then late last year a story did the rounds about a group of mainly unpaid volunteers working on refining various Hyperloop type concepts.  One might be forgiven for rolling one’s eyes at learning that a group of unpaid volunteers are attempting to develop a new transportation concept that almost surely will require billions of dollars to become a reality.

New news came out this week about a second group that has also been developing the Hyperloop concept (Musk released his idea into the public domain), unrelated to the group of unpaid volunteers.  This second group actually has some money – not nearly enough, but it has the support of people who could certainly arrange substantial extra funding if their seed investments bear fruit and encourage more development.

It is too soon to start buying tickets on the inaugural Hyperloop service – indeed this group is planning to first operate freight rather than passenger services – but it is encouraging to see the concept starting to attract some serious consideration.  While we seem to have totally failed at attempts to build high speed rail, maybe our failure there will help focus efforts on Hyperloop transportation, giving us three or four times faster travel times than high speed rail, and twice as fast as planes, and at lower costs.

Details here.

And Lastly This Week….

We know that flight attendants hate us, and wish we’d go away (seldom realizing that without passengers, their jobs would disappear too).  And we also know that some passengers – never you and definitely never me, of course – truly are ‘passengers from hell’.

Nonetheless, it is disconcerting when one encounters a Facebook posting by a flight attendant describing a passenger as ‘absolutely barking mad’ – and accompanied by a picture of the hapless passenger.

Here also is an unrelated article about ‘flight attendants’ secrets‘.  Aisle surfing sounds like fun.

Until next week, please enjoy safe travels






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