Weekly Roundup, Friday 3 July 2015

Good morning

Yes, it’s really me again, back after an extended time gallivanting around the UK and EU, including a delightful three weeks with my 10 yo daughter, who proved herself to be a great traveler and companion.

With Greece potentially dropping out of the Euro, the first part of my travels gave an interesting reminder of the ‘bad old days’ of traveling around Europe – not just every day a different country, but every day a different currency, too.  I went through Iceland, Norway, Sweden and Denmark before arriving into the Euro-zone, and the hassle of having to learn four different currency values and coin shapes in as many days, prior to arriving in Germany and Euro-land, was not pleasant.

I always keep leftover currency in plastic bags at home, and bring the relevant ones with me the next time I travel, and I guess it was longer since I was last in Denmark than I’d thought.  I handed a banknote from my stored supply of money from the last time I was there, to pay for something, and the girl behind the counter looked puzzled and surprised, went away, then came back and graciously agreed to accept the note, while pointing out it had been changed many years ago and the note was older than she was!

Our Scotland tour in particular was another great success, and apart from a couple of blustery days, we had another marvelous combination of a wonderful group of people, fantastic touring, and good weather.

Special thanks to Joe Brancatelli for sending material your way each week in my absence, and to the docents of our News curation site for keeping up a flow of interesting travel related articles every day.  If you don’t get our daily news summaries, you really should think about doing so – they appear in your email early every morning, and you never know what gems of information aren’t contained therein.

As seems inevitably the case, I have picked up a minor ailment on my travels – happily nothing worse than a sore throat.  Try as I might with careful handwashing, etc, I still don’t seem to be at all good at avoiding picking up minor coughs/colds/etc when on lengthy flights.  Maybe I’m catching the germs through my eyes, as this article suggests.  Should we wear not just a breathing mask but goggles too?

Most of my flights were on Icelandair.  They are a good airline, and while their 757’s could do with a few more restrooms on board (their pre-takeoff briefing comically said ‘Please don’t stand in line for the toilets’ – fortunately there was no enforcement of that requirement with at times ten people uncomfortably waiting their turn) they had excellent quality in-flight-entertainment, nice big screens, and USB charging at all seats, and generally arrived on time.  And while there were lines for the loos, there were no lines to check-in for their flights, a much appreciated luxury.

Particularly if you’re flying from the west coast to Europe, Icelandair is a very convenient way to travel, and the small airport at Reykjavik, while spartan, is easy to get around, with little distance between gates.

I was struck by two things on the long-haul flights.  The first was how, for almost the first time ever, the seatback screen offered a really good quality video picture.  And the second was recognizing that this arrival of good quality video was happening just barely in time for seatback video, as we know it, to be obsoleted.  Here’s an interesting article.

So what has happened during my time away from the keyboard?  A lot, of course, and a couple of possibly slightly good things in among the bad news of fare increases and other pinpricks of gratuitous gouging inflicted upon us.

The Department of Transportation has slightly revised upwards its maximum limits on the compensation the airlines are required to pay if bumping us off flights.  They do this every couple of years, based on inflation.

It is a while since I last wrote on the topic, so I’ve added an update, with the new limits and current eligibility and compensation requirements, attached to the end of this newsletter.

The other interesting piece of news happened earlier this week when – hot on the heels of its victory in a price fixing suit against Apple – the Department of Justice announced it was investigating possible illegal collusion between the US carriers, seeking to keep airfares high by limiting the number of flights they each operate.  Yes, there is something rather ridiculous at the thought of the DoJ – the agency that has empowered the collapse of our former competitive airline system down to the few remaining uncompetitive leviathan we have today, now turning around and investigating that which it created, and I’d hesitate to expect much to come from their investigation.

For sure, there’s been an enormous increase in airplane load factors – when was the last time you flew on anything other than a full flight?  On the other hand, there is no obligation on the part of an airline to deliberately fly planes that are only half full.  All those seats are on the plane for a reason – to be filled.

The potential perfidy would come about if one airline said to another ‘I won’t add more flights if you also don’t add more flights’.  But, of course, no airline would actually say those exact words to another airline.  Instead, they might possibly do some ‘signalling’ where they make oblique comments indirectly, but which they expect other airlines to be able to interpret and act upon.

Something is clearly up.  In the five years 2009 – 2014, and after adjusting for inflation, real airfares rose 13%, even though fuel prices dropped, bag and other fees increased, and overall operating efficiencies improved.  As a result, airline profits are at record levels, higher than ever before.  That’s a prima facie indication of less competition.

Most notable is the reduction in airlines in the US – now a mere four (American, Delta, Southwest, United) control over 80% of the market, and perhaps because of this, there have been no notable airfare ‘wars’ or new breakout disruptive airline startups.  Yes, there still are a few competitive areas (happily for me, in Seattle, with an ongoing struggle whereby Delta is trying to force Alaska Airlines out – something that is very much an ‘all or nothing’ struggle for AS because it is headquartered in Seattle and has its major hub here).  SEA-LAX roundtrips can be had for $198, lower than I’ve seen them in a decade or more.

Absent a ‘smoking gun’, it will be difficult for the DoJ to prove any wrongdoing by the airlines.  But look around you on your next flight, and you know that, for sure, even with higher fares, the flights are full, and this means that the airlines are all turning away extra passengers.  They seem to have decided they’d prefer to fly fewer passengers at higher fares, rather than more passengers at lower fares – a decision which might make sense to the airlines, but which sure doesn’t sit well with us as their customers, and which is not something you’d normally expect in a fully free and fair open market.

It also puts the lie to the airlines’ claims, offered to and accepted enthusiastically by the DoJ when approving past airline mergers, that such mergers would benefit travelers with, if you can believe the ridiculousness of the claim, more competition.

So why isn’t one of the airlines using their extra profit margin to steal market share and/or to grow the market?  The ‘Southwest effect’ – if an airline releases lower fares into a market, the number of people choosing to fly will grow substantially – is a well accepted scenario and certainly has worked for Southwest for decades, allowing it to profitably grow into new markets and take market share from the existing dinosaur carriers.

That’s a question for the DoJ to consider.  We hope it comes up with appropriate answers.

The Business Travel Coalition says that there’s more to it than ‘just’ restricting flights.  They wrote to 34 state attorneys general on Thursday pointing out other problems and suggesting some solutions.

What else this week?  Please keep reading and enjoy your traditional Travel Insider, now once more appearing in your Friday morning email :

• The World’s Largest Airline
• (In)Famous Last Words
• A New Low in Air Crash Compensation?
• Most Expensive Hotels in the World
• Watch Out, Berlin’s New Airport (and London’s Old Airport)
• Palace of Versailles to Tourists :  Go Away
• And Lastly This Week….

The World’s Largest Airline

The title of ‘World’s Largest Airline’ is a surprisingly complicated one to award.  It all depends what you’re measuring.  The number of passengers flown, the distance they fly, total revenues, total profit, fleet size, number of different destinations served, or your choice of any one of several other metrics.

IATA has just released a report crowning Delta Air Lines as the world’s largest airline, in terms of total passengers carried (129.4 million), followed closely by Southwest (129.1 million) and China Southern in third place with 100.7 million.

But, on the basis that ‘everyone wins’, they also awarded Ryanair the title of world’s largest airline, in terms of international passengers carried.  Ryanair carries no domestic passengers, and so, by that measure, its 86.3 million international passengers make it the world’s largest, followed by Easyjet (56.3 million) and Lufthansa (48.2 million).  Delta only carried 24.2 million international passengers.

Ryanair quickly reworded the reward, claiming to be the world’s “most popular airline”.  Yes, the airline that is perhaps also the world’s most hated airline now claims to be the most popular.

We predict that next year will see Southwest pass Delta for the most passengers in total, while in terms of international passengers, this year’s number four (Emirates) will easily pass Lufthansa and move into third place.  Details here.

(In)Famous Last Words

Do you remember the spectacularly filmed ATR-72 crash in Taiwan back in February?  Immediately afterwards, the headlines filled with stories of the ‘heroic’ flight crew adeptly steering their plane away from buildings and crashing it into the river, avoiding extra casualties on the ground (for example, here), even though the flight path showed little evidence of any deliberate steering or positive control at all.

But two days after the crash, we learned that it appeared that the ‘heroic’ flight crew actually may have caused the accident.  After losing power in one engine, they then killed the power to the other engine by mistake, and didn’t realize their mistake in time to rectify it and save the plane, changing what was a readily survivable event into a tragic crash.

We now learn the last words of the pilot, as recorded by the black box, eight seconds before the fatal crash killed 48 of the 58 people on board (including both pilots).

Wow, pulled back the wrong side throttle.

Infamous last words, indeed.  And – at the risk of stating the ugly secret most people selectively ignore – another vivid illustration of how human pilots contribute to catastrophe rather than avoid it, with information now pointing to pilot skill deficiencies dating a year or more back.

Details here.

A New Low in Air Crash Compensation?

At least the airline in the Taipei crash, TransAsia, quickly offered compensation to the families of its victims.  A mere week after the crash, it was offering US$473,000 to each of the families concerned.

Compare that to Lufthansa’s offer to the victims of its Germanwings ‘co-pilot suicide’ crash three months ago.  Only now has it extended an offer to families, and that offer is US$28,000 per family to those families covered by German law, plus some additional payments to immediate relatives and trust funds for children’s education.

$28,000?  Hopefully that’s a typing error only, and someone will quickly realize that instead of being perhaps $28,000.00, it should have been $2,800,000.

Why so little, and why so long to extend the offer?  Details here.

Most Expensive Hotels in the World

There have been some surprising shifts in hotel prices in major cities around the world.  Moscow, once one of the very most expensive cities to stay in 4/5 star hotels, is now one of the least expensive (5 star hotels for $228/night).  New York – for decades an expensive city – is now moderately priced (overall average of $202/night).

And the world’s most expensive city, with hotel rooms in all categories coming up with an average of $397/night?  San Francisco, which has seen its hotel rates skyrocket 88% in the last year alone.  This compares to the cheapest tracked city (Hanoi) with a $62/night average.

Details here.

Watch Out, Berlin’s New Airport (and London’s Old Airport)

One of the most disgraceful disasters of the last decade is the ongoing trainwreck that is the building of the new Brandenburg Airport in Berlin.  Initial planning started in 1990 with reunification, and construction began in 2006.  But cost overruns (now at twice the initially estimated price in 2006), design flaws, and delays galore have seen its opening shift from 2010 and now perhaps it might finally open in 2017.

Of course, it isn’t only Germany that should hang its head in shame.  Just this week has seen the latest non-event in Britain’s never-ending saga of doing nothing about addressing its ever-greater airport congestion – a new report has been published advocating adding a third runway at Heathrow, prepared after three years of research.

The recommendation comes as no surprise to anyone, but the government is now ‘studying’ the report while desperately seeking some type of excuse to avoid having to implement, due to the political tensions and controversy surrounding the issue.  Prime Minister Cameron says they’ll make a decision by the end of the year.  Perhaps.

You could wonder why Britain’s government is involved in controlling airports and runways in the first place, but in placing every runway in the country under government control, Britain is doing nothing more than following in the footsteps of North Korea – a country which recently opened a new terminal at its main Pyongyang airport.

When I visited a couple of years ago, the airport terminal was nothing more than one big unadorned hall, doing double duty as both an arrivals and departure facility, and with no amenities or facilities except a table in one corner selling a few low quality souvenirs.  From that perspective, their new terminal appears extraordinary in its lavish lushness, and its long line of checkin counters an inexplicable oddity based on how few flights depart each day.

But while it seems like an enormous accomplishment, apparently the country’s ruler, Mr Kim, was not altogether pleased.  One wonders how quickly Brandenburg’s problems might be solved if a similar ‘performance incentive’ was in place in Germany…..

In related news of airports and terminals, this week saw the closing of Heathrow’s Terminal 1.  Here’s an interesting photo retrospective on its 47 years of operation.  It is being replaced by added extensions to the lovely new Terminal 2, and then in 2019, Terminal 3 will also close, leaving only Terminals 2, 4 and 5.

Palace of Versailles to Tourists :  Go Away

Talking about growing travel numbers, this summer looks to be a beyond-busy one in Europe.  The weak Euro is bringing many more Americans to the continent, and the continued extraordinary growth in Chinese tourism is filling the continent up still further.  Tourist attractions are struggling to manage the crowds, and some are opening for extended hours.

Perhaps because of this, the Palace of Versailles for a while, a week ago, had a message on its website suggesting to people considering a visit that they not come at all!

And Lastly This Week….

Lastly this week, I noted an oddity on Thursday when receiving an email from someone telling me their office would be closed on Friday for ‘America Day’.  I’ve not seen July 4th, Independence Day, called that before.  But perhaps it is part of a cultural shift in our country, and this article points out that 25% of US citizens have no idea what country the US declared its independence from, and only 58% correctly named Britain.

Anyway, I hope you have a wonderful holiday weekend.  Here in the Seattle area we have an ‘Excessive Heat Warning’ with the usual platitudes about keeping cool (specifically suggesting we go stay in shopping malls!) – our ‘excessive heat’ sees temperatures in the mid to high 80s.  Not quite the public health emergency you’d think, but by our standards, definitely hotter than normal.

And now, truly lastly this week, some people sometimes accuse me of being too fast to complain about travel related issues.  But, try as I might, I can’t get anywhere near these complaints.

Until next week, please enjoy safe travels

David.