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May 312018
 

If it makes you feel any better, the airline you were almost forced to fly on (due to lack of choices), probably has even less choice of airports than you do of airlines. See article, below.

Good morning

Things are slightly panicky here, with me off to Britain on Monday for our Grand Tour of Great Britain.  This will be the biggest and most complicated tour we’ve ever done, covering more distance, staying at more places, and seeing more things, than ever before.  Happily it is with a great group of 24 Travel Insiders participating.  I’m immensely looking forward to it, even though it promises to be hard work (for me but hopefully not for them!) during the three weeks it is underway.  Mind you, if “hard work” involves enjoying a tour through some of the best known and least known highlights of Britain, in (hopefully!) lovely summer weather with a great group of companions, then bring it on.

Talking about ‘bringing it on’, sadly, it is obviously too late for you to join us for this year’s tour.  But we do have two more Travel Insider excursions later in the year, and also both distinctive, in their very different ways.

The first is our Quad K Tour in October, which will be setting new records for ‘adventurism’ – taking you to places in Moldova, Ukraine, Kazakhstan and Kyrgyzstan (and ‘the country with no name that doesn’t exist’), but happily in comfort rather than distressed conditions.

And then in December, we’re offering a new type of tour – a “Land Cruise” around the traditional Christmas Markets in Northern France and Belgium.  We define a “land cruise” as a tour that emulates the concept of “stay in one hotel room for a week” such as is offered by the river cruises, and also a tour which takes you somewhere different every day for sightseeing, but by coach or train rather than by boat, and therefore not limited only to places close to navigable rivers.

So, continued travel innovation, however you wish to enjoy it.  Please do join us for either (both!) of these tours.

And, to encourage you to travel with us, or even to travel somewhere/anywhere, without us, this week’s feature article is on yet another attempt to make coach class travel more comfortable, another type of travel pillow.

This one – the BCozzy pillow – comes close to displacing my long time favorite, the Caldera Releaf.  But, the more I stare at the two pillows, side by side on my desk, the more I suspect that on Monday morning it will probably be the Releaf that I stuff into my carry-on, simply because it takes up less space.

What else this week?  Please keep reading for :

  • The Only Thing Worse than Monopolistic Airlines?
  • How Ryanair Makes its Money
  • MH370 to Remain a Mystery?
  • Britain Thinks Big on Rail
  • Talking About China, A Sobering Statistic
  • Microsoft’s Stealth Turnaround
  • Why Does the TSA Search “Safe” Areas and People?
  • And Lastly This Week….

The Only Thing Worse than Monopolistic Airlines?

One has to appreciate the delightful irony when airlines complain about being negatively affected by monopolistic suppliers of services.  While their hypocrisy knows no bounds when telling regulatory bodies that their own alliances and unions will magically create additional traveler choices and bring more competition to the skies (of course they do utterly the opposite), when they find themselves up against monopolistic suppliers, they run complaining, often to the same regulatory bodies they had earlier been proclaiming the benefit of their own monopolies to.

The biggest monopoly of all, when it comes to the totality of the air travel experience, is something we generally take for granted and seldom think about.  No, I’m not talking about the TSA.  Neither am I talking about the FAA.  After all, government monopolies are, by definition, ‘good’ and here to help us all, right?

I’m thinking instead of airports.  Now it is true that in some locations, there are apparently multiple airport choices.  How many airports are there in the New York area?  You might immediately say three, and think that is surely enough choice for the airlines, but let’s not forget that all three of these are operated by the same organization – the Port Authority of New York and New Jersey.  If you say “Well, there are other airports in the area too”, perhaps you should be reminded that Teterboro and Stewart Airports are also operated by PANYNJ.  (Tiny White Plains Airport avoids PANYNJ ownership, for what it is worth).

My point is that, for the airlines, there is no escape from PANYNJ within the New York area.

On the other coast, it is true that the Los Angeles area might seem to support more competition.  The Los Angeles World Airports organization (a department of the city of Los Angeles) only operates LAX and tiny Van Nuys Airport, and there are plenty of other airports in the area.  But if you’re an international airline, it seems your only practical choice is LAX, because it is so large, and has all the connecting flights in and out to offer.  LAX has an almost 80% market share of all air travel in/out of the Los Angeles region, with the other half-dozen or so airports sharing the other 20%.  That’s as near a monopoly as you’re likely to find, even with the apparent competition from other airports.

Many smaller centers have only one airport.  And, indeed, many smaller countries have only one airport for international flights, even though it might have multiple tiny airports for regional flights within the country.

A case in point is my home country of New Zealand, where the Auckland Airport dominates the rest of the country for international flights.  Only one other airport has runways that can readily accept all international types of airplane anyway (Christchurch), and most airlines fly only to Auckland, nowhere else.

Which brings me to this delightful article, where the airlines that are essentially forced to fly in and out of Auckland, and to accept whatever terms and conditions and fees the airport chooses to levy on them, are now complaining to New Zealand’s Commerce Commission, saying that the airport is charging higher than it should for its services.  They make this claim based not just on the fees they are charged, but they follow the money all the way through to the airport company’s bottom line profit and dividend distribution to shareholders, claiming that at every step of the way, the airport is making more money than it should.

“Making more money than it should” is an uncomfortable concept to free marketeers, but so too is having no viable alternates of choice.  At least we can appreciate the airlines trying to control their costs in this situation, so as to pass such savings as they can negotiate back to their passengers in the form of lower fares  on to their executives as bonuses and shareholders as extra profit.

Yes, the pot is calling the kettle black.  One wonders which is the lesser of two evils – at least airports go halfway to making a credible pretense of trying to create a moderately pleasant experience for us as we pass through them.

Imagine if airlines owned and operated the airports.  We’d have to pay to sit on a seat while waiting for our flight, and we’d have to pay more if we wanted a seat in our own gate lounge.  Seating would shrink in size, and the rows of seats would be pushed together so as to make it impossible to take a seat in the middle of a row.  We’d have to pay to bring bags into the airport, and even more if we wanted to take them into the secure area.  There’d be ten times fewer bathrooms and long lines to use a stall, which would be halved in size.  Food choices would disappear and prices would skyrocket, and stores would be reduced to selling expensive junk, cigarettes, perfume and alcohol.

How Ryanair Makes its Money

I mentioned last week that Ryanair had reported a record profit for its last year, while observing that it generally offers the lowest published fares of any carrier in Europe.

So, the secret of its success?  It has a more imaginative and lengthy list of “optional” extra fees and services than most other carriers, and often offers these “options” at higher costs than its competitors.  If you are flying Ryanair, you have to be very carefully aware of what these fees are, and adjust your travel planning to avoid as many of them as possible.

This week showed a great example of a Ryanair “gotcha!” type fee.  They’ll charge you if you don’t check-in online, in advance, and if you don’t print your own boarding pass before getting to the airport.  The reason these fees made the news this week is that they have narrowed the time window you have to do these things online, from four days down to now only the last two days prior to the flight’s departure.  Clearly, the less time you have to do this task, the more likely it is you might forget or not be able to conveniently do so.

Oh yes – how much does Ryanair charge should you turn up at the airport without having checked in online and pre-printed your boarding pass?

If you checked in, but either didn’t print, or lost your boarding pass, they’ll charge you £20 (about $27) to print you a new one at the airport.

And if you haven’t checked in already at all, their fee increases to £55 – about $75.

Yes, for some Ryanair flights and fares, you could pay more to check-in for them, at the airport, than you paid to buy the ticket in the first place.  Details here.

And the airlines wonder why we hate them…..

MH370 to Remain a Mystery?

The revived search, earlier this year, for the mysteriously disappeared 777 that was operated as MH370 caused a flurry of media coverage these last few months, including the revival of many old theories that had long since been passed over, but now being offered breathlessly as sensational new theories as to what happened to the disappeared plane and its passengers.

The confidence manifested by the searching company (they agreed to only get paid if they found the plane, and exuded a near certainty of belief that they’d quickly find the plane), the seemingly more exact science behind establishing the plane’s probable location, and of course, the huge areas of ocean already searched, leaving little still remaining, all seemed to make it likely that the plane would be found.

But now, after completing both the new search area and two additional ‘bonus’ search areas too, still no plane.

Am I the first to suggest that perhaps it is time to re-examine the nature of the assumptions that are ‘telling us’ where the plane ‘must’ be?  Is perhaps the MH370 disappearance more mysterious than it has been reduced to apparently being; are there more unknowns and uncertainties, and is the reason the plane remains obstinately unfound due to the fact we’re working from the wrong data, the wrong assumptions, the wrong interpretations, and looking in entirely the wrong place?

We know only two things for sure.  The first is that MH370 remains entirely unaccounted for.  The second is that it is not where the consensus of conventional wisdom asserts it must be.

The good news is that whatever it was that caused the loss of the 777, it clearly is not an endemic design weakness in the 777.  With over 1500 777s having been delivered, and most still flying, the plane has been extremely reliable, and the mysterious disappearance has not been repeated in the four years since March 2014.

But while that might be comforting to us all next time we set foot on a 777, it adds to the mystery of what happened to this particular 777.  Even if “the pilot did it” as seems to be the current suggestion, how did he do it, and where is the plane, and why is it not where it is ‘supposed’ to be?

The harder it is to locate, the less interested the authorities are in continuing the search.  But, it seems to me, the harder it is to find, the more interesting the entire puzzle becomes, and the more important it is to resolve.  Why are the Malaysian authorities unwilling to extend the contract with US searching company, Ocean Infinity, when it is costing the Malaysians nothing to have Ocean Infinity continue to search?

More details here.

Britain Thinks Big on Rail

Sadly, ‘making America great again’ seems to be more focused on negative penalties rather than positive incentives.  Although there were promises for massive investments in our infrastructure, and even in our rail system, most of the MAGA moves undertaken by President Trump seem to revolve more around erecting trade barriers and creating domestic protection policies.  Rather than boosting our ability to compete on the world stage, he is protecting our industries from the pressure of more advanced competitors from other countries.  This perpetuates weak companies and poor practices, and delays rather than encourages our industries from improving their game, something that we as consumers deserve, and which any type of government support should assist.

A tariff/trade barrier approach has never ended well for any country and its economy – I say that still vividly remembering the days of quotas, import licenses, and 150% import duties on many goods some decades ago in New Zealand.  Surely making America great involves boosting our industry and enabling it to compete on a world stage, not handicapping its competitors and restricting our businesses to limping along within the US alone.

The reason for this outburst is the despair engendered by reading an article about proposals for further investment by Britain in its rail network.  We’ve already seen how in little more than a decade China went from zero to now leading the entire world with its high-speed rail services, going from no high-speed rail track at all to now having more high-speed rail in service than the rest of the world combined.

But the people who excuse China’s success and apologize for our abject failure have to come up with a different set of excuses when it comes to countries such as Britain – countries that are even more massively crippled by dysfunctional planning requirements and approvals and permissions, even higher labor costs and more union intrusion, and where land is exceedingly scarce, always expensive, and invariably involving things that are immediately elevated to the status of unique/precious landmarks, historical sites, and so on.

But not only does Britain already have way more high-speed rail than we have today, it is considering an enormously ambitious plan to add much more – 1,000 miles of new track by 2050.  Details here.

And before the apologists rush to point out that Britain is better suited for rail than the US due to its shorter distances, allow me to respond by observing that while the vast emptinesses of the mid-west are perhaps not prime candidates for high-speed rail, the dense east-coast and rust-belt regions have comparable density and more population than does Britain, and are every bit as well suited for similar or even greater rail investments.

Talking About China, A Sobering Statistic

My sense is that 99% of the US people are 99% wrong about 99% of the reality of China today.  I fear that level of misunderstanding pervades our political leadership, too.

We tend to misunderestimate (to use that delightful term) China in every respect.  For example, look at this chart which only goes to 2016.

China has already exceeded the US in terms of GNP measurement.  And its dependence on exporting to the US is diminishing every year, because its domestic markets are growing much faster.  In the last decade, exports (to everywhere in the world, not just the US) have gone from being 35% of the total Chinese economy to now 18.5%, and it is expected this trend will continue.

Is it just a coincidence that China’s military posture and willingness to adopt positions at odds with the US has been growing to match the reduction in China’s dependence on the US?

However, many of us ignore these things and sneer at China as still being an impoverished nation of peasants.  Even the better informed people seldom visit outside of Beijing and Shanghai, and never experience the reality of the extraordinary development and renewal that is surging across every part of China, not just within the major cities.

Never mind that there are 772 million internet users in China (compared to about 300 million in the US).  Never mind that more than twice as many students graduate from universities in China each year than in the US.  And noting that China outpaces the US 9:1 in STEM graduates, we suspect that few of China’s graduates are emerging with degrees in “Womens’ Studies” and “The Problem of White Privilege”.  China is building a new university, somewhere, every week.  For that matter, never mind that there are thought to be more billionaires in China than in the US (594 compared to 535, although the real number in China is probably higher).

The statistic that most hits home, to me, today, is one about health.  I’ve always said that while the US undoubtedly is afflicted with the most expensive healthcare system in the world, it also has the best healthcare system in the world, concluding that, yet again, you get what you pay for.  Yay for us.

But, no longer.  Sure, there have always been countries with greater life expectancies; and we suffer from the vices of modern civilization – overeating, overindulging, and underexercising.  But to now find that China is beating us at healthcare, too – a WHO report just now released shows that people in China (including the peasants) now (well, as of 2016 data) live healthier, longer, than we do – that’s a truly sobering revelation.

Microsoft’s Stealth Turnaround

With my usual sense of impeccable (but bad) timing, I held off on buying Microsoft shares during the 1980s and 1990s, always reasoning that its meteoric growth must surely stop and correct itself any day now.  When I finally did buy in, it was time for Microsoft to experience its terrible years under Steve Ballmer, and its share price more or less froze in place for a decade.

But then a wonderful thing happened.  Steve Ballmer left (not long after I sold my shares).

And at some point, probably during his bombastic reign, people shifted from hating Microsoft to either no longer thinking of it at all, or feeling sorry for it as having quietly left the center-stage position it once held in the IT revolution.  We no longer talked of Microsoft’s predatory practices, or its seeming unshakeable dominance in multiple markets.  Sure, Windows continued and continues to hold the overwhelming largest OS share, but somehow, it no longer seemed as important or as threatening a choke-hold as it once was; so much so to the point that Microsoft actually gave away its latest version of Windows (Windows 10) for free; and not only was this an astonishing change on Microsoft’s part, few people really noticed or commented on it.

These days, the headlines are full of anti-competitive acts and privacy infringements galore by Google and Facebook in particular,  and the eliteness of Apple has also faded.

Two articles are relevant to this.  Here’s a Wall St Journal article on the new monopolies being created by high-tech companies, and it features Amazon, Google, and Facebook.  But no Microsoft.

Meanwhile, this article observes how Microsoft’s share price has taken off again, growing 40% in the last twelve months alone, and causing it now to catch up to and then overtake Google’s parent company in total market capitalization.

The most astonishing thing of this is the stealth-mode way in which Microsoft has revived itself.  No-one hates Microsoft at present, not even the EU.  Not even me!

Why Does the TSA Search “Safe” Areas and People?

Here’s a good article from a writer who seems to dislike the TSA considerably more than I do.

As you may know, and hopefully not from personal experience, two things sometimes happen when you go through security at an airport.  You might go through the metal detector with no beeping, only to be told you’ve been randomly selected for secondary screening, a process which can range from trivial and non-invasive (running some explosive trace detecting swabs over your belongings) to the mild (a quick patdown) to the unpleasant (an intimate exploration of the bulges and recesses of your personal areas).

The second thing that sometimes happens, with the new machines that you walk into and stand, feet apart and arms raised, while you’re scanned for illegal things on you.  At the end of that scan, the machine might show, on a generic outline of a person, an area of ambiguity that it requires a screener to check – usually a rectangle that covers perhaps a square foot of body area, somewhere on your front or back.

Usually the reason for the alarm is obvious, and sometimes it is a total mystery with nothing being found.

But, in such cases, and here is where we move to the cited article’s main point, usually that search to resolve the ambiguity is focused on the specific area highlighted on the outline figure of a person, perhaps extended a few inches further on every side just to be sure.

Why, if the machine shows something around a shoulder, should the screener be getting intimately acquainted with your crotch area?

Yes, why indeed.  Why, if you’ve been passed by the machine, are you then ‘randomly’ selected for a second and possibly very intimate search for no reason at all?  Can’t the machine be trusted?  If it can’t be trusted, why are we using the machines at all?

And, if the machines can be trusted, why, when one shows a suspicious area of your body, might a screener use that as an excuse to unpleasantly touch you in places you’d prefer not to be touched?

And Lastly This Week….

There is a respected investing strategy – contrarian investing, to do the opposite of what everyone else does.  Apparently, there may also be a contrarian travel strategy too.  Whereas most of us are thinking of Hawaii’s current volcanic activity and perceiving it as a place best avoided (or, at least, that part closely impacted by the newly active volcano), and regular news stories are painting apocalyptic pictures of the lava flows and the “vog” that is being released and spreading, some people see it as a great reason to go visit.  A future Travel Insider tour destination, perhaps?

Chances are you’ve treated yourself to one of the ‘big name’ Vegas magic shows at some point in the past.  And chances are, like me, you’ve been amazed at some of the routines and the seeming impossibility of how they work.

I’ve always thought that the features where the performers ‘randomly select’ members of the audience are particularly staged.  The only way to explain some of the things that happen would surely be if the audience members were actually participating in the show.  But this news story and the law suit it reports on seems to suggest, that at least for some of the tricks in some of the shows, the audience members truly are random tourists.  Maybe it is magic, after all?

Talking about magic, a Canadian attorney seems to be perplexed not at a magic trick, but at why the Canadian Customs people select some nationalities more than others for inspection at airports.  He says “there doesn’t seem to be any logical reason to have such a high statistical number of people being checked”.  Seems perfectly obvious and logical to me.  The relative chances of being stopped are shown in this article.

Of possible interest though is the statistic that Canadians are searched twice as often, when returning back to Canada, than are Americans.  While you might say that confirms your perception of the relative honesty of ‘us’ and ‘them’, the simple reality is that people are much more likely to be bringing ‘a little something extra’ that they forget to declare when they return home from time out of the country, than they are when briefly visiting a foreign country for a couple of days.  I’m sure that US border statistics would show that when arriving in the US, American citizens get more attention than Canadians do.

And truly lastly for the week, much of the world took time out from their obsession with the strange American women with names beginning with K to spend a day or two gazing at the Royal Wedding in Britain a week ago.  The wall-to-wall tv coverage created a great demand for ‘talking head’ experts who could try to talk away the hours of not very much happening that the networks chose to treat us all too.

One of the more popular of such experts was a posh Englishman with a plummy accent and an appropriate upper class name – Thomas J Mace-Archer-Mills.  Except that, it now emerges, he is neither posh nor English.  He is actually a lower/middle class American from up-state New York who changed his name (and his accent) and moved to the UK with an, ahem, uncertain immigration status.  Ooops.

The newsletter will be a bit irregular for the next several weeks.  I’ll try to send out a newsletter or two, but no promises.

Until perhaps next week, please enjoy safe travels

 

David.

 

 

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