Weekly Roundup, Friday 28 April, 2017

Good morning

Our lovely December Christmas Cruise continues to attract plenty of comment and interest, but not many firm bookings.  If you are thinking you’ll come, please don’t delay confirming your participation.  The best value cabins are disappearing, and the pre and post ground options are getting steadily tighter to confirm.

One person suggested there is a switch to more people preferring to book closer to departure, what with all the seeming uncertainty in the world around us at present.  That may well be so, and when I’m planning my personal travels I seldom make plans far into the future, even in the most certain of times (whenever that might fleetingly be!).

So, I’m trying something new and different – how would you like to come join my daughter, Anna, and myself, for a cruise/tour in France (between Paris and Normandy) this August – little more than three months from now?

I’m making this really easy to plan, and really tempting to take advantage of.  You can have a $1000 per person discount off the published price if you’re traveling with a second person, and if you’re traveling alone, the single supplement (usually 50%) is waived.  This means this 2017 summer French cruise is actually less than the 2016 summer French cruise we did last year!  Plus if you’ve cruised on Amawaterways before, there’s another $100 discount to be had, too.  And a few extra ‘bits and pieces’ from me to make the cruise even more enjoyable.

And although you could of course extend your time in Europe before or after the cruise, if you just wanted to come for the cruise alone, it would only take a week and a day out of your schedule to do so (leave home on/before Wednesday 9 August, return home on/after Thursday 17 August).

Full details here.

My attempts to balance last week’s all-United newsletter with a no-United newsletter this week have rather failed, but at least it isn’t exclusively United, this week; indeed there’s a glorious 4600 words of content here to (overly?) fill your Friday morning :

• Dr Dao Secretly Settles With United
• United’s Weasel Words
• United’s Improved Compensation
• Delta Still Eagerly Offloads Passengers
• American’s Flight Attendant/Stroller Fight – An Alternate Perspective
• To Recline or Not To Recline, That is The Question
• Boeing Accuses Bombardier of Dumping Planes with Delta, but…..
• Electronics Ban to be Extended?
• Amazon Offers to Answer ‘Does This Dress Make My Butt Look Big?’ Questions
• US Might Have Asked that New Zealand’s Foreign Minister be Searched Prior to Flight
• And Lastly This Week….

Dr Dao Secretly Settles With United

For all the excitement and angst over the events surrounding the forcible eviction of Dr Dao off a Republic Airways flight, there is more than a sliver of doubt as to how much of the blame – currently being directed 100% at United – actually should be laid at their feet.

The role of the airport security guards was definitely a contributing factor, and so too were the actions of Dr Dao himself.  Plus there is the additional salient point that none of the people involved were United employees – all worked for Republic, not United.  It wasn’t even a United plane – that too belonged to Republic.  I’ve discussed these points in the last two weeks’ newsletters.

Surprisingly, the person quickest to blame United has been none other than United’s CEO.  After initially daring to suggest that maybe it wasn’t all United’s fault, he was vociferously shouted down, and now has reversed his view and enthusiastically accepted every morsel of blame, without sharing any of it with other parties involved.  Some people think that credible, but I’m not sure I’d agree, and I wonder how the rank and file of United feel at being told it was all their company’s fault, even though no-one working for United was involved.

To no-one’s surprise, Dr Dao lawyered up with not just one but two separate firms of attorneys jointly representing him.  But rather than a lengthy trial, and lots of embarrassing discovery and revelations – potentially on both sides, it seems the parties have speedily agreed to a confidential settlement.

So, just how guilty and culpable did United decide it actually was?  Did it agree to a $1 settlement or a $1 million settlement?  Surely this is the ultimate measure of United’s contrition – the cash it forked over?  So why will United’s CEO, Oscar Munoz, say in public that it was everyone’s fault at United (and therefore no-one will be fired), and express his profound sorry and regret, but why won’t he then reveal (indeed, even boast of) the tangible depth and detail of his mea culpa by revealing the extent of the settlement.

About the only thing we do know is the settlement also included a release of all liability that might otherwise have attached to Republic Airways and the City of Chicago – United insists on keeping all the blame completely to itself.

Sure, confidential settlements are a dime a dozen.  But when an event becomes such a public matter of concern and focus, when Congress talks about becoming involved, shouldn’t the outcome be as public as the incident itself?

Almost certainly, the only reason that Dao has received what seems to most likely be a very generous settlement is due to the publicity surrounding the event.  If the event itself was a secret, United is unlikely to have done anything other than blame others and dare Dao to bring a lawsuit.

When a case becomes massively public, shouldn’t its resolution be similarly public, so as to formally record exactly who was in the wrong and by how much?  Otherwise, isn’t it a bit like someone accused of a serious crime being given both a secret verdict and then a secret sentence – justice, both criminal and civil, is best served in full public view.

And, while I suspect that Dr Dao – and his attorneys – are all now a millionaire several times over; for all we know, the settlement might have been for only $1.  Or possibly for nothing at all.  Which party is the one embarrassed by the settlement, and if they are embarrassed by it, why did they agree to it?

An unsatisfactory end to an unsatisfactory event.

United’s Weasel Words

United sent out a note to all their frequent fliers on Thursday as part of its non-secret acts of contrition, and included in that note was a formal statement of their new policy about not removing passengers from planes.  They said

… as CEO, it’s my responsibility to make sure that we learn from this experience and redouble our efforts to put our customers at the center of everything we do.

That’s why we announced that we will no longer ask law enforcement to remove customers from a flight and customers will not be required to give up their seat once on board – except in matters of safety or security.

Sounds great, doesn’t it.  But the extent of the promise (and promises are not legally binding to start with) is belied by the ‘fine print’ at the end of the sentence – ‘except in matters of safety or security’.

When you consider that 99% or more of all forcible passenger removals are due to allegations (whether they be real or farcically removed from reality) related to safety or security, this new promise essentially means ‘we’ll continue to take people off our flights whenever we choose’.

United’s Improved Compensation

United is now moving to respond to Delta’s initiative – as advised last week, Delta will now pay up to $9,950 in compensation to bumped passengers (up from a previous limit of $1350).

In their email to frequent fliers, United advised that it will slightly raise Delta’s offer, plus also offered a new sweetener, an automatic acceptance of claims up to $1,500 per lost bag.  They wrote :

We will increase incentives for voluntary rebooking up to $10,000 and will be eliminating the red tape on permanently lost bags with a new “no-questions-asked” $1,500 reimbursement policy.

We will also be rolling out a new app for our employees that will enable them to provide on-the-spot goodwill gestures in the form of miles, travel credit and other amenities when your experience with us misses the mark. You can learn more about these commitments and many other changes at hub.united.com.

Both these points are excellent.  But whereas paying up to $10,000 exceeds their federal obligations to bumped passengers (capped at $1,350), paying up to $1,500 without question for lost luggage does not exceed their obligation if they lose your bag(s).  The Department of Transportation currently obliges the airlines to pay up to $3,500 per passenger for lost or damaged luggage, and it is very easy to have a claim go over $1,500.

A good suitcase from Briggs & Riley represents as much as $650 right from the get-go; and if you’ve been forced to load your laptop into your checked bag, or if you’ve a good suit or dress packed, you’ll quickly have more than $1,500 claimed, to say nothing of any temporary costs incurred while waiting and hoping your bag might be found.

So United seems to be saying ‘We agree to follow our obligations up to $1,500, but expect us to push back if you ask us to continue to meet our obligations up to the full $3,500’.

If your claim is greater than $3,500, you could always seek additional reimbursement via a small claims court – you might get lucky, especially if United doesn’t send a representative to contest your claim.  On the other hand, your insurance policy should cover you, so it is probably not worth the bother.  And the airlines know this full well.

Delta Still Eagerly Offloads Passengers

One wonders if United’s new policy about not offloading passengers unless safety or security is at risk would apply to this story of Delta offloading a passenger who couldn’t wait any longer to use a bathroom on a flight that was delayed taking off, and, in briefly doing so, resulted in the plane returning to the gate to offload him.

The ridiculous thing is that by returning to the gate and offloading the passenger, Delta’s ostensible concern – that he delayed the flight by going to the bathroom – caused the delay to be massively magnified, by their own actions.

But, in case anyone thinks that United would not now be so fast to do the same, note that Delta is invoking the ‘safety and security’ excuse for its actions.  While ostensibly it might seem that he was offloaded for allegedly causing the plane to miss perhaps one place in the line of planes waiting to depart, the official reason is, of course, the ‘Hail Mary’ claim of ‘security and safety’.   No matter what.

American’s Flight Attendant/Stroller Fight – An Alternate Perspective

News erupted earlier this week, alleging an AA flight attendant had got in an altercation with a woman passenger who was struggling to put her stroller in an overhead bin while keeping two young children in tow.  He ended up striking the woman with her own stroller, and this caused another passenger, outraged, to get up and add to the conflict whereupon the flight attendant got aggressive with him, too.  Or so we were told.  Video from passengers’ phones of the event was being widely circulated.

I watched the video, and found myself unexcited by the story, or the video.  The video did not show the flight attendant striking the woman, and the other passenger seemed to gratuitously meddle in and escalate a matter that absolutely did not need his participation.  He was fortunate not to be offloaded.

But American, just like United with Dr Dao, rushed to express their horror at the situation with various carefully worded statements of regret.  Unlike UA, they have removed the flight attendant from duty.

However, there’s a point that few people consider when rushing to judgment.  These videos never start at the beginning, and never show the full story, or even clearly show the part they ostensibly do show (this sounds like a ridiculous statement to make, but there have been detailed studies done, particularly in the context of police cameras, that uncover the enormous difference in perception that observers get from different viewpoints).  Sound is often poor and visibility limited, and restricted to just one point of view, which is very different from that seen by the participants.

Here’s a rather overly long commentary that reads what a passenger who did see the actuality of the altercation says.  It tells a totally different story, and it is relevant to note the altercation occurred at the back of the plane, not up front at the door, and is a story which deserves to be heard.  Rather than a put-upon passenger, it seems more like an exploitive passenger, taking two over-sized strollers on board, and refusing to have them gate checked.

The only thing I disagree with in the commentary is the prediction/suggestion that passenger videotaping should be and will be made illegal.  The solution is not to have less videotaping, but rather to have more.  Let’s get official video cameras into the passenger cabins for our safety and our protection, so there is a full and fair record of all our interactions with the flight crew.

To Recline or Not To Recline, That is The Question

It is true that with seats so close together, choosing to recline one’s seat does cause its seat back to get ever closer to the person behind one.  But it is also true that “what goes ’round, comes ’round” – meaning that if everyone reclines their seats, there’s no more of a problem than if no-one reclined their seat.

For sure, most of the time, it is vastly more comfortable to enjoy the meager amount of recline afforded us these days in coach, with the exception to that being at meal times when one wishes to minimize the potential for spilled food to spoil one’s white shirt.

But some precious souls, raised to believe the world owes them a living, choose to blame the person in front of them for reclining their seat, rather than simply accepting it, blaming the airline for insufficient space, or simplest of all, reclining their own seat in turn.  These people invariable get stridently militant and insist that the person in front of them not recline their seat at all, somehow believing that they can dictate to the rest of the plane how they choose to sit.  Passive flight attendants do little to disabuse such passengers of their notions of primacy, alas.

A recent survey shows that arguments about seat reclining have become the most common source of problems on flights.

A commentator is quoted in the linked article enabling such seat-nazis, by suggesting that passengers should seek the permission of the person behind them before reclining their seat.  And what does this person suggest we should do when the person behind us, lying comfortably back in their reclined seat, refuses to allow us to recline at all?  He is silent on that point, of course.

The situation is simple to all but this commentator and the seat-nazis he seeks to empower.  Everyone can recline their seat to the extend the airlines allow the seat to move.  If you don’t like the person in front of you reclining, you have several choices :

• Recline your own seat to match
• Travel in a class of service with more space between seats (although note that such cabins often allow the seats in front to recline back further)
• Complain to the airlines and insist they reconfigure their cabins with either (or both) more space between seats and/or non-reclinable seats
• Book seats in the rows behind non-reclinable seats (some exit row seats won’t recline)
• Stop traveling by air

Your choices do not extend to dictating to the person in front of you what they can and can’t do.

Boeing Accuses Bombardier of Dumping Planes with Delta, but…..

It seems someone at Boeing is a bit behind in reading their weekly Travel Insider newsletters.  I noted, exactly a year ago, that Bombardier appeared to have sold 75 of its lovely new C-series jets to Delta at a price that was probably below cost.

News emerged on Thursday that Boeing has now filed a complaint with the US Department of Commerce and the US International Trade Commission, alleging that Bombardier sold the 75 CS100 planes to Delta for less than $20 million each, whereas they cost Bombardier about $33 million each to produce.  On the face of it, that would indeed be dumping.

But there is a lot of difference between classic dumping and what Bombardier did.  With classic dumping, you are selling a product below its ‘best’ or its ‘variable’ cost price, perhaps to get rid of excess stock and/or perhaps to harm competitors and force them out of business.

Bombardier had several sensible and commercial reasons to sell these planes below cost, primarily so as to generate some marketplace action and to give some credibility to their plane, in the hope of encouraging other airlines to start to treat it as a serious viable competitor to its established rivals – companies primarily like Embraer.  At a stretch, Boeing too is a competitor, although in reality, the CS100 with 108-133 seats is slightly smaller than Boeing’s smallest 737-600s (which ceased to be offered for sale four years earlier, in 2012) and definitely smaller than the smallest current model 737, the 737-700.  The larger CS300, with 130-160 seats, is starting to more clearly tread on the 737-700’s toes.

There is a lot of ambiguity with any product, and particularly airplanes, that have a very large element of amortized capital costs and a much lower element of variable costs, in terms of deciding when a price is an unfair dumping price rather than a justifiable ‘marketing initiative’.  If an airplane costs $10 billion to design and create, and then $15 million per plane that rolls off the assembly line, and if the manufacturer expects to sell 500 of the planes, then it would view its costs per plane as being $15 million for the variable costs and 1/500th of the fixed costs, ie $20 million, for amortized capital costs, and so it should sell the planes for something above $35 million.

But if the manufacturer sees a chance to sell some more planes, it can instead decide to skip the amortized fixed costs and look only at the variable costs; and even the variable costs are a mix of variable and semi-variable costs, such that it might even be ‘profitable’ by some measures to sell the plane even for less than $15 million.  And definitely, if it could credibly say ‘if we sell ten planes at $10 million each, that will open up future orders of hundreds of planes at full price’, then that is a very sensible business decision to make.  We feel that Bombardier’s actions were more a case of this latter motivation, edged with the desperation of ‘if we don’t get some sales at any price, we risk having to abandon this plane entirely’.

The best example of selling at discounted marginal pricing is, oooops, Boeing itself.  It is believed that in an earlier competition with Bombardier, to sell planes to United Airlines, Boeing was selling 737-700s for about $24 million each.  Its list price in 2016 was about $74.8 million and now is $80 million, depending on configuration, and while it is common to see that list price reduced by 30% – 40%, it is extraordinary to see Boeing offering the plane for less than one-third of its list price.  And, unlike Bombardier’s struggle to break into a new market, Boeing had no such justification in its sale to United, which was indeed all about preventing a new competitor (Bombardier) from securing a strategic toe-hold in the US airline market.

So, did Boeing dump 737-700s when it won the United deal against Bombardier?  If Boeing chooses to sell 737-700s for one-third of their list price to United, isn’t what Bombardier subsequently did in negotiating the deal with Delta merely responding to the price pressure Boeing itself created?

Our feeling is that the deal Bombardier did with Delta was an essential business decision to boost the marketplace present of their new C-series planes, and an action forced on it by Boeing (and possibly by Delta).  Sure, it almost definitely is a deal that Bombardier will lose money on, but not all loss-making deals are dumping deals.

Electronics Ban to be Extended?

They call it a ‘trial balloon’ – a situation where an ‘anonymous official’ deliberately leaks a possible and sure to be controversial new policy initiative so they can see how the public reacts to it.  If the reaction is acceptable, they’ll then proceed, and if the reaction is overwhelmingly negative, they can cancel their plans without ever being publicly committed to them.

Of course, with something like security, public reaction shouldn’t be a factor.  Something either is or isn’t essential/unavoidable/necessary/prudent, no matter whether it also be convenient or not.  But it seems very likely that an anonymous leak to The Guardian newspaper was indeed a trial balloon.  The leak suggests that the US is considering extending its ‘no electronics bigger than a cell phone in an airplane cabin’ ban to all airports in Europe and the UK.

Details here.

I’m totally unsurprised about this proposed extension, and have been fearing such a move ever since the original ban was announced.  The original ban makes no sense at all, because either there should be a blanket global ban, or else, why bother with any ban at all.  Terrorists can readily fly from a banned city to an unbanned city before then smuggling their new ‘impossible to detect’ bombs onto a flight.

I am surprised though that the next extension is to UK/EU rather than the rest of Asia and Africa, but I guess ‘they know best’ about such things, and if we are to see the ban extend to Europe, I’m sure the rest of the world would quickly follow, and then, a similar ban would be imposed on all domestic flights too.

About the only good thing about such a move is it would shut up the critics who continue to claim that the original ban was a thinly disguised plot against Emirates, Etihad and Qatar – even though the ban was copied, and extended, by the UK, adding more airports that affected BA and other airlines as well as the airlines affected by the US selective ban.

As I wrote before, our response has to be to travel with a backup battery and a large screened cell phone (possibly being a second cell phone in addition to our regular one).

Amazon Offers to Answer ‘Does This Dress Make My Butt Look Big?’ Questions

Many of us feel anxious about the rise of artificial intelligence, and for most of us, our occasional interactions with such systems at present seem to show more unintelligence than intelligence.  Here now is an unexpected new application of AI.

Earlier this week, Amazon announced the latest member of its Echo family of semi-intelligent voice controlled devices.  The new addition is called the Echo Look, and will be priced at $200 (compared to $50 for the basic Echo Dot).

So what more do you get for your extra $150?  The Look has a built-in camera and offers a ‘Style Assistant’ that will comment and advise on your fashion choices.  Does this jacket go with those trousers?  Is your clothing fashionable (ugh)?

But, really, the question we should all be asking is are we taking leave of our senses by asking a computer to advise us on our clothing choices?  And, if we are to seek computerized advice, should it be sourced from an Amazon computer – the world’s largest online retailer with, ahem, a vested interest in encouraging us to buy more clothing?

Talking about Amazon’s size, I was reading an item earlier this week about a new would-be Amazon competitor, Boxed.  They don’t aim to be as broad focused as Amazon, and sell about 1,500 products through their site – more of a Costco approach, with limited products and selling in bulk.

Okay, nothing too special about that, but can you guess how many products Amazon sells these days?  I’ll show the answer in the last item.

US Might Have Asked that New Zealand’s Foreign Minister be Searched Prior to Flight

Here’s a strange story.  New Zealand’s long serving and very vanilla/uncontroversial Foreign Minister, Murray McCully (I think I went to school with him, but truly he is so unforgettable, I’m not exactly sure) was about to fly from NZ to an anti-ISIS meeting in Washington DC.

He went to board his flight from Auckland to the US, and was told that – even thought he was traveling on a diplomatic passport and therefore normally exempt from such things, apparently the US had requested he be selected for secondary screening.  Being a polite gentleman, he submitted to the search.

When I first saw the story in NZ’s main newspaper of record, the NZ Herald, I remember it saying this was at the request of the US, but when I look at it now, the same story makes no mention of the US involvement and merely says it was due to an administrative error (whatever that means).

I would normally think I must have imagined the earlier version, but I see the independent Otago Daily Times still carries a story that ascribes the reason for the search as being a request from the US.  Most interesting of all, the ODT attributes its story to the NZ Herald.

Needless to say, such a request would be a grave breach of protocol, particularly with NZ being one of the US’s four closest and most trusted allies (a member of the ‘Five Eyes’ security group).

And Lastly This Week….

Here’s a moderately interesting story about electric cars; what I find fascinating however is its chart showing how electric car prices are and will continue to decline due to lower battery costs.  A bit further down is another interesting graph that shows improving energy density for batteries – the point here being that the weight of an, eg, 80 kWh battery pack, currently shown to be in the order of 725 kg/1600 lbs, will drop to 500kg/1100lbs in the next five years and continue to drop.

Both things are obviously good – lower priced batteries and lighter weight batteries.  The sooner that both happen, the better for us all.

As promised, here is the answer to the question, ‘how many different items does Amazon sell?’.  Apparently, 350 million different products.  That astonishes me every possible way – I didn’t realize there were that many different items available for sale, in the US, in total.  Here’s the article citing that number.

A recent survey ranked the things people dislike the most about long-haul flights.  The least liked was uncomfortable seating, followed by lack of space (pretty much the same concept, restated) and then annoying passengers.  The fourth item was another seating issue – not enough leg room, and so was the fifth, not being able to sleep.

Tenth on the list was bad food.

So Air New Zealand decided to address that tenth point, politely ignoring the nine items considered more annoying, and created a temporary ‘pop up’ restaurant in London, serving only airline food.  Apparently they didn’t expect it to be very successful, because it was planning to only be open a couple of days.

Details here.

Truly last week, New Zealand’s great living comedian died a couple of weeks ago.  In memory of John Clarke, here’s a YouTube clip of him parodying an Australian politician who is being quizzed about an oil tanker disaster off the Australian coast.  The deadpan humor of this is universal – you don’t need to know anything about the incident, or Australia, to enjoy it.

Until next week, please enjoy safe travels, and please choose to join our Christmas Markets cruise and our August Paris-Normandy cruise.

David.