Weekly Roundup, Friday 8 September, 2017

An amazing idea for a new canal, across Thailand, would cut down transit times and reduce pressure on the congested Straits of Malacca.

Good morning

Although official summer continues for another two weeks, traditional summer has finished, the schools are back, and traffic patterns, at least in Seattle, are returning to their terribly jammed state.  Perhaps Amazon’s announcement this week of creating a second HQ in North America employing as many as 50,000 people – a crazy concept on the face of it (How can you have two headquarters?  Two locations, yes, but two headquarters?) will help further pressure from being applied to our woefully inadequate roading.

Of course, there are real reasons for a second location – headquarters or not – that have nothing to do with organizational sense.  By having two states massively beholden to Amazon’s corporate presence, Amazon instantly doubles its voice in Congress (to say nothing of all the other states it has distribution centers in, and now all the states it has Whole Foods stores in too).  The company will almost surely scoop up billions of dollars in incentives from whatever state ‘buys’ Amazon’s decision to open there, and then it can continually play the two states off each other.  Exactly the way Boeing does with WA vs SC.

It is not only the end of summer, it is also time for the start of another annual Travel Insider fund raising drive.  May I hold out the ‘tip jar’ for your annual kindness.  If you’re a recently joined reader, I should explain that we operate on a PBS type model.  The site, articles and newsletters are offered for free to everyone, and once a year I ask for readers to voluntarily help out by contributing whatever they feel to be a fair amount in return.

Many people never respond, and that’s fine.  Some people get burdened by guilt and unsubscribe each year – please don’t do that!  Stay as a reader by all means, and contribute if you can and wish to, but if you can’t or don’t wish to (why ever would you not wish to!), then that’s fine too.

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Add to that advocacy pieces ranging from being allowed to film on planes to being allowed to travel to North Korea, and 3,000 – 5,000 words of general news and happenings each week, and – well, you know this already, don’t you.  There’s a lot of content and hopefully you’ll agree, a matching lot of value.

I need your help to continue.  The ‘business model’ is, to be blunt, a very weak one, and the little bit of advertising on the website – none of which comes through to the emailed newsletters – barely covers the webhosting costs.  Just like PBS, I need support from you, the recipient/reader of this material.  I hope I can now count on your to do your part to keep The Travel Insider alive for the next year.

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Now for a little something extra for supporters.  Last year I published a lengthy piece on the best ways to get internet data access while traveling exclusively for supporters.  That is still available to this year’s contributors too, and I’m also adding another piece this year as an extension of this week’s feature article below.

The article below talks about how streamed video content has taken over from DVDs and Blu-rays, and is now threatening to eclipse cable and satellite tv, just like how cell phones are displacing regular wired phones.  For example, there are almost 6,000 streaming channels of content on Roku alone.  If you’re not yet well-connected to the expanding world of streaming video services, the article should tell you what you need to know to do so.

Plus, the exclusive bonus feature for supporters – a review of the eight leading streaming devices, explaining the differences (some more obvious than others) and telling you which you should get, and a bonus bonus tip on how to watch any television programming (many people get this wrong).

Please do consider becoming a supporter.

As further inducement, would you like to know how to get a free Amazon Alexa/Echo type device?  Become a supporter, and I’ll tell you.  And, oh yes, I just claimed a $10 credit from Amazon, totally for free, doing nothing other than what I’d normally do.  You might be able to do so too.  Become a supporter, and I’ll tell you about that, too.

So, whether for altruistic motives, out of appreciation for the content and value you’ve received, possibly for 15+ years, or in exchange for the items mentioned above, please do become one of our vitally essential supporters.

Oh – there’s one more reason to become a supporter, too.  As soon as we get to 400 supporters, I’ll stop pestering you!

What else this week?  Well, as always, an assortment of pieces.  Please continue reading for :

  • United’s Strange Reason for Not Buying the Best Plane in the World
  • Used A380s For Sale – Going Cheap
  • BA’s Sister Airline Searches Out the Depths of Non-Service
  • Pilots Union Doesn’t Understand Basic Math
  • Should We Get China to Build Our High Speed Rail?
  • Month End Silence from Tesla
  • And Lastly This Week….

United’s Strange Reason for Not Buying the Best Plane in the World

What would you suggest to be the best plane in the world?  Some people might say the A380, others might suggest the 787 or A350.  A few might try to ‘cheat’ and say ‘any private jet that someone else was paying for’ and of course, if eligible to be considered, there is the Concorde (actually cramped inside, but ‘best’ in so many special ways, nonetheless).

But, for many of us, the ‘best’ plane promises to be one that we may have never heard of, and sadly may never get to fly.  As improbable as it may seem, our cousins to the north of us may have created the plane which offers the best passenger experience.  Most comfortable/wide seats, most windows, and extra overhead space, all in a whisper quiet cabin.  This is the new C-series passenger jets by Bombardier.

Available only in small passenger capacities, smaller than a 737, they have been sold to Delta and international airlines, but other US carriers have looked away.  Why?  Because they are convinced that passengers won’t pay a premium for a more comfortable travel experience.  As I’ve said before, we’ve met the enemy and he is us.

But United in particular had a strange reason for why it had no interest in the C-series planes.  In an article that was open to read earlier this week but which might now be paywalled, (and which has now been paraphrased and summarized here) we are told

United President Scott Kirby, whose airline canceled an earlier C Series order, says he’ll probably examine the 100-seat market again someday.  But his preference is for bigger planes. Even if you can’t fill a 737 on a particular route today, he says, in 10 years you’ll likely be able to, and the airline will own the plane for 20 years.

It is true that air passenger volumes are steadily increasing, everywhere in the world, and perhaps United would indeed hold onto any new planes it buys for 20 years.  But this logic would mean that buying any ‘right sized’ plane today would also be too small in ten years.  And that has never been a problem in the past – airlines, even United, either fly more flights with the same planes, or upgrade to larger planes and redeploy the smaller planes to other new routes that are opening up.

Why would it be a problem for the C-series but not for the 737, 757, and so on?  Indeed, looking at the top end of the market, with the 747, rather than upgrading to larger 747-8I or A380 planes, United did the opposite and ‘downgraded’ to smaller 777 or arguably 787 planes!

Used A380s For Sale – Going Cheap

Talking about United’s surprising response – replacing 747s with smaller rather than larger planes, the airline industry is fascinated by the question of how much a used A380 will be worth.  Although very little in the airline industry comes within a country mile of the concept of classic free competition, used airplane values are probably one of the more ‘efficient’ transactions with values reflecting the general perception of the planes’ worth.

A number of different services offer valuations on used airplanes, and there are services which report, to a greater or lesser extent, on the price for which planes are bought/sold and leased.

With most types of passenger plane having been sold over many years or even decades, there is a fair amount of sales volume allowing for some reasonable valuations to be set, and giving comfort to both buyer and seller that they are striking a fair deal.  The buyer also knows that if he chooses to sell the plane on again, there continues to be a steady market in the plane, making a re-resale of the plane reasonably easy.

But what about the A380?  To date, not a single one has been sold on the second-hand market.  There are no ‘comparable sales’ figures to look at.  But that’s a trifle of a problem compared to the lack of a clear market for selling the second-hand planes on.  Even if an airline decided to buy a second-hand A380, how readily could it sell the plane on again to someone else in the future?  No-one knows.

Both Singapore Airlines and Emirates have early-delivery A380s that are notionally coming close to the point where their fleet policies and financing deals would suggest the airlines should sell them.  But who would buy them?  At what price?

The matter isn’t just hypothetical.  It is very important to everyone involved.  Airbus of course, because the less their planes depreciate and the better they hold their value, the easier it is to justify buying them to airlines.  The airlines, of course, because the ‘total cost of ownership’ is a key measure in evaluating the planes they purchase and how long they hold on to them.  Leasing companies, because their lease rates have built-in assumptions about the market value of planes over time.  And, yes, there’s even some importance to us, in terms of impacts on the types of planes airlines buy and how they operate them and make them available to us.

Singapore Airlines has four A380s nearing the end of ten-year leases with a German lessor later this year, and the lessor is ‘thinking out loud’ that the best thing to do with them might be to break them up for parts.  They estimate they could sell the planes (including their engines) as parts for about $100 million a piece, and this seems to be more than they believe they could sell or lease them on for.

Not a good outcome for planes that are probably less than half-way through their hoped-for economic and operational lives.  The planes apparently sold new for something somewhat under $250 million, and these days you could probably buy a new A380 from Airbus for about $300 million.  Dropping $200 million in value in ten years is quite something.

More details here.

The situation is even more complicated – Airbus is far from committed to continuing to sell the plane, and if it should end the A380 program, used plane prices would drop even lower than they hypothetically may be.

This also means that in a terrible chicken and egg paradox, Emirates is hesitating to order more A380s, for fear that the program will then be discontinued, causing them to lose tens, maybe hundreds of millions, in second-hand value on each of the hundreds of planes they already either have or which are on order.  But if Emirates doesn’t order more A380s, the program quite likely will be ended.  Details here.

BA’s Sister Airline Searches Out the Depths of Non-Service

No, I’m not going to apologise for the gratuitous mention of BA in the headline, because its holding company, IAG, is in large part a superset of BA, now with other elements including Iberia and more recently Aer Lingus, too.

And BA has decided to add itself to the Hall of Shame, the listing of carriers that have decided to squeeze an extra seat per row into their 777s, going from nine abreast to ten abreast.  This article refers to it speciously as BA ‘cutting costs’, but that is a distortion of what is happening.  BA isn’t cutting costs, it is boosting profits.

But the main point I’m making here is that Aer Lingus has decided to no longer allow passengers the free use of blankets on trans-Atlantic flights, and neither will it give you the throwaway in-your-ear headphones that most airlines pass out on international flights.  Instead, the use of a blanket will cost you €3, and a set of throwaway headphones will be another €5.

You can buy fleece blankets that are every bit as good or better than airline blankets, and a great deal cleaner, too, for less than $10.  I hesitate to recommend the purchase though because, although they are very light, they are bulky.  If you have space in your carry-on for a compacted fleece blanket, then by all means buy one – they will pay for themselves almost completely after a single roundtrip, and definitely after two, as well as being much more hygienic.

However, you definitely should buy your own headphones.  Indeed, no need to even buy them.  Just save them after your next trip with any other airline that still gives them away by the handful.

You can buy a better set for under $10, and a very good set for not much more.  Or you could do what I do, and travel with a quality and comfortable set of noise cancelling headphones, enjoying a much more comfortable flight every which way, whether you’re listening to music and movies or not.  The Bose QC25 noise cancelling headphones are clearly the best out there, but their predecessor QC15 headphones are almost as good, and sometimes still available at Costco or elsewhere for much less money.

Pilots Union Doesn’t Understand Basic Math

The Horizon Air subsidiary of Alaska Airlines has been struggling with pilot shortages, so much so that it is regularly being forced to cancel flights due to a lack of pilots available to fly them.

The lack of pilots also means that its scheduled deliveries of pre-ordered new planes are rather unwelcome.  What is the point of getting additional planes if you have insufficient pilots to fly the present planes?

As for the pilots union, you think they’d be besides themselves with glee, with their members having opportunities to fly every possible legal hour to boost their income as much as possible.  Full employment, when you’re the employee, is a wonderful thing.

Parent company Alaska Airlines is wondering how best to address the situation, and has been considering shifting the newly arriving planes to independent airline SkyWest.  Both Horizon and SkyWest do contract work for Alaska Airlines.  Presumably SkyWest have sufficient pilots to operate the planes.

Now, for the pilots union, you might think they’d see a rising tide as lifting all boats.  More planes in the air means more pilots at the controls, and even if they don’t belong to the Horizon pilot union (a branch of the Teamsters, which provides amusing confirmation of my claim that pilots are little more than overpaid bus drivers with fancier uniforms), more employment overall for pilots is surely a good secondary benefit.

But the Horizon pilots union is insisting that these new planes be only flown by their members.  Never mind they have insufficient members to fly the planes Horizon is already being forced to idle and park unflown.  The union seems to wish to see the extra planes also be parked at airports, unused.

I get it – the union is doubtless reasoning “If we give Alaska no other option, they’ll be forced to start paying our members above industry-rates so as to recruit pilots from other airlines, and that will be good for our members and our ‘local’.”

But don’t you wish the union could think two steps ahead and keep thinking “…. but if Horizon flights operated by our members end up as being more expensive than other contracted flights by other airlines not staffed by our members, maybe Alaska Airlines will shift more and more flights to those other airlines.”  Details here.

And as for SkyWest, it has ordered more planes directly from Embraer.  Horizon’s pilot union might be able to prevent SkyWest from flying planes originally intended for Horizon, but it surely can’t prevent SkyWest from flying planes it orders itself.

Should We Get China to Build Our High Speed Rail?

We seem unable to afford or agree on much transportation related infrastructure at all, with the starkest example of paralysis and inaction being high-speed rail service.

But are we overlooking a potential solution?  Why not get China to build some high speed rail for us?  Malaysia has just negotiated a deal for China to build a $12.8 billion, 430 mile rail line across its country.  Trains, each carrying 600 passengers, will travel the line in under four hours, including 22 stops along the way; less than half the time it takes to drive by car.

If Malaysia can get China to build a $12.8 billion rail line, couldn’t we do the same.  Our trade imbalance with China is $25 billion – every month!  Couldn’t Mr Trump insist that some share of that be used to invest in US infrastructure?

As an interesting aside, China may be interested in building other things, too.  Have you heard about the transformative plans to possibly build a canal across Thailand, making a 2 -3 day or longer time-saving for shipping that currently goes around the bottom of the Thailand/Malaysia peninsula and through the very congested Malacca Strait?  (See map at top of the newsletter.)

Month End Silence from Tesla

After celebrating its staged ‘delivery’ of 30 Model 3 cars to employees at the end of July as proof the car was on schedule, Tesla set itself the not-too-lofty target of producing 100 cars during the 31 days of August.  This is to be followed by ‘more than 1500’ in September, and by the end of the year, a staggering 5,000 cars a week.

So how did Tesla manage with its August target of 100 cars?  Ummm, no-one knows.  While quick to boast of their self-claimed successes, Tesla has been totally silent as to the number of Model 3 cars ‘delivered’ (again, probably only to employees and closely associated others) in August.  It is also rumored that the people who received the first 30 cars have had to sign non-disclosure agreements, so very little is known about how wonderfully well (or not) the July Model 3 cars are performing in the real world, either.

This article, in what is in large part a Tesla fan magazine, guesses that perhaps 40 – 75 Model 3 cars might have been delivered in August, but it doesn’t have any more accurate knowledge than does anyone else.  The article published overall August numbers that show the Tesla Model S with 2,150 sales, followed closely by the Chevrolet Bolt at 2,107, then the Prius Prime at 1,820.  The Tesla Model X came fourth with 1,575 units, and then the Chevy Volt with 1,445.

The current model Nissan Leaf is still selling surprisingly well, with 1,154 cars sold.  And the new model Leaf has now been announced, although with less range than had been rumored a few weeks back.  The extended range version will apparently come a bit later – the opposite of Tesla which, it is thought, is delivering extended range Model 3 cars first.

Nissan hopes to sell 90,000 Leafs (Leaves?) each year, compared to Tesla’s claim of producing 250,000 or more Model 3 cars a year.

And Lastly This Week….

It doesn’t really deserve a heading of its own, but it seems there is no stopping items related to my theme of Germany and Naziism.  This week, mention is delicately made in the NY Times of a popular board game, ‘Secret Hitler’.  Alas, neither the NYT nor the game manufacturer can prevent themselves from linking this to our present Administration.  But the game, while complicated, has at its heart an interesting concept, and admirably, you can download the game, the pieces, and the rules, all completely for free, from its website.

Our feature article this week is about one of the modern-day uses of the internet that one would never have dreamed of, even ten years ago.  Another modern-day use is internet dating.  In a story that seems to have come from the scatological final scenes of the movie, Dumb and Dumber, a blushing young lady went out on a date with a man she met on-line, and suffered a mishap in a toilet.  What happened next – well, you really have to read the story.

I wrote about BA squeezing more seats into its 777s, above.  Perhaps they got the inspiration for this from what purports to be a new seating chart for a Delta plane.

And now truly last this week, the world’s longest stage (almost 20 miles long)?  Almost definitely.  Details of this whimsical notion here.

In case you missed it, please don’t overlook our annual fundraising appeal.  Please help us to continue our weekly gifts to you in turn.

Until next week, please enjoy safe travels





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