Weekly Roundup, Friday 31 August, 2018

Good morning

Welcome to another Labor Day Weekend and, sadly, the end of another summer.  I’ve been alternating between days with the a/c on and then a day with the heaters on, and soon there’ll be no question which way to set the thermostat at all.

In an interesting counter-current, although the US is producing (and exporting) oil at record levels never before attained, and the net oil imported is at a 24 year low – down from 9 million barrels/day to 6.8m bpd currently, our gas prices at the pump for the Labor Day weekend are at a four-year high.

So that should be providing plenty of boost for electric vehicles, one would think.  But there’s precious little sign of that.  Apart from Tesla’s Model 3 slowly ramping up production to levels promised almost a year earlier, all other electric vehicles for sale in the country are struggling to maintain sales at the level they were at an entire year ago.  This disconnect between the hype and reality of electric vehicle sales is very surprising.

While the cost penalty of electric cars continues to drop, performance and range rises, and general awareness and infrastructure improves, the actual sales remain obstinately flat.  And all the promised “Tesla killer” cars remain ‘next year’.

I’ve added a short article after the morning’s roundup to explain about our Christmas Markets Land Cruise in December.  Some people have been puzzled by the term, and maybe there’s a better phrase to use.

I do think this new approach to enjoying Christmas Markets has enormous appeal (or else I’d not be doing it!) and for the many of you who’ve been with me on a Danube or Rhine Christmas cruise, it brings us to a different part of the European Christmas tradition.

What else this week?  I’m never sure whether to offer more or less when there’s a holiday weekend looming.  Guess which I chose.  🙂   So keep reading for :

• Maybe We Might Finally See a Spacious Plane?
• More MH370 Madness
• A Measure of Baggage Fee Impacts on Airlines
• Another Sort of Dishonest Fee to Hate
• The Cheapest Thanksgiving Flights
• Don’t Buy a New Cell Phone Just Yet
• Musk Ends His Privatization Charade
• And Lastly This Week….

Maybe We Might Finally See a Spacious Plane?

How many times have we watched the cycle of initial hype about a new airplane type that will have lounges, shopping arcades, exercise areas, and so on, only to see the final cabins as cramped as any other airplane?

That happened with the 747 and again with the A380,and occasionally happens with less gargantuan planes too.  Indeed, don’t laugh, but the first 707s (these days a larger sized 737 – something we consider small – is the same as the once ‘enormous’ 707) were also hailed as offering a new era of spacious flying.

This vision is being evoked again, this time by Qantas, and on this occasion, there may be a unique reason why it may come to pass.

Qantas has a dream – being able to fly non-stop between London and Sydney.  The interesting thing about that journey is that the distance – 10,573 miles as the crow flies – is almost exactly half way around the world  Add the unavoidable indirect routings, occasional head winds, and air traffic control delays, and you basically need a plane that can fly halfway round the world for the route to work.

There’s no insurmountable reason why a plane couldn’t be built to fly that far, but the practicality is that you get into a vicious design circle.  If you want to give a plane more range, it needs to carry more fuel.  To carry more fuel, you need to make the plane stronger.  If you make the plane stronger (ie heavier) and load more fuel onto it, you’re going to need still more fuel to compensate for the extra weight of the airplane and the fuel you’re carrying.  But then, you need still more fuel to compensate for the extra fuel which you had to load to compensate for the extra fuel and airplane weight in the first place, and so on.

In other words, you need extra fuel to carry the extra fuel which you need to carry the extra fuel to fly further.  You can see the nasty spiral, mainly of costs, that this points to.

But with greater fuel efficiency (ie flying considerably more miles per gallon) of modern airplanes, the amount of fuel needed to achieve this length of route is no longer ridiculously more than longer range planes are carrying already.

While both airplane sizes and airplane speeds are either reducing or staying the same, airplane ranges have been steadily increasing, to the point where the longest range 777 and A350 planes are tantalizingly close to allowing LON-SYD flights.  Qantas is already operating nonstop flights between Perth and London.

(Here’s a Labor Day Weekend puzzle for you – why don’t airlines want planes that can fly further than half-way around the world?)

Qantas has been pressuring both Airbus and Boeing to give their planes the modest increase in range needed to allow for nonstop London-Sydney flights, and reports that both companies have come up with possible solutions.

The airline goes on to dream about how this would lead to onboard facilities to while away the 20+ hour flights such as child-care facilities, bars, exercise room, and sleeping berths.

This is actually possible.  We would not be surprised if such planes had some weight restrictions placed on them, meaning they couldn’t manage the weight of a full squeezed-in-like-sardines load of passengers and all their baggage.  This is the case already on various routes around the world, and currently airlines simply block off some seats on such flights so they fly less than completely full.

With the new dedicated planes for LON-SYD, it might make sense to apply the unused space to other passenger amenities.  We hope that will indeed happen.

But, how long would it be before someone realizes “Well, why don’t we enhance the design slightly and allow it to carry more weight so we can get passenger loads back up to ‘normal’?

So, with today’s technology, spacious planes might indeed briefly appear.  But tomorrow’s technology is sure to return things back to the normal scenario of terribly small seating, insufficient toilets, etc.

More MH370 Madness

The missing 777 flight, MH370, continues to have new theories advanced to explain part or all of its mysterious disappearance.  Unfortunately, the astonishing early parts of the mystery, and the strange route the plane took, gives much opportunity for ‘creative’ theories, and the Malaysian government’s handling of just about everything – from the critical early stages, doing nothing when the plane failed to ‘hand over’ from one traffic control zone to the next, all the way through to limiting the information it released to investigators, has certainly added fuel to the fire of suspicion that there’s more than meets the eye with this mysterious event.

Of course, there is no denying there is more than meets the eye.  The plane remains obstinately unfound, with nothing more than some arcane theory and reliance on the accuracy of source data that could well be wrong to start with, to suggest the plane is actually somewhere off the coast of Western Australia.  Shift a decimal point, change an assumption, incorporate other data which the current theory requires us to ignore and pretend does not exist, and you could as easily have the plane pretty much anywhere in about a 7 flying hour/4000 mile radius of its last known point.  That is a 46 million square mile area, or almost exactly one-quarter of the entire planet.

Is the Malaysian government actively trying to cover up something more than ‘mere’ colossal incompetence?  Are other major powers involved in a high-level conspiracy?  Was it just a coincidence that a second Malaysia Airlines 777 was mysteriously shot down by we’re not entirely sure whom, over Ukraine four months later, or are the two events somehow linked?

A new theory is now being promulgated, suggesting the Royal Malaysian Air Force was somehow involved in the flight’s disappearance.

There’s really not much to say in response to the theory, because none of us have a full knowledge of many of the facts at all.  And, oh yes, the Malaysian government has strangely cancelled the search for the plane, even though the searching company had offered to search for free.

Was the search cancellation because the government was concerned the plane would be found?  Or was the government concerned that the plane would not be found where it ‘should be’, throwing the official explanation of where the plane flew into a more critical light?

A Measure of Baggage Fee Impacts on Airlines

I mentioned last week the lunacy that sometimes sees it costing more to bring an extra bag with you than it costs for you to fly on the plane, yourself.  Remember, while forking over as much as $400 per bag, per direction; that only 15 years ago you could fly with three 70 lb bags for free on most US airlines.

Three 70 lbs bags now will cost you at least $1020 for a round trip within the US on UA (most likely the same on DL and AA too).

So, remember when the airlines cry about how the average cost per ticket has dropped over the last however many years that they are not adjusting for where all the action is these days – their runaway fees for changing flights, cancelling flights, reserving seats, eating meals, boarding early, and of course, for bringing bags with you.

This article about some increases in baggage fees in Canada is interesting because at the end, it tangentially mentions how the world’s top ten airlines collected $29.7 billion in fee revenue last year, up from $2.1 billion a decade ago.

That’s some increase.  How is it that the airlines are (maybe, maybe not) slightly reducing their ticket prices, while at the same time increasing almost 15-fold in a single decade their usurious fees?

Could it be because the fees usually don’t attract the federal 7.5% tax that the ticket price does?  (7.5% of $29.7 billion is $2.2 billion, although of course much of these fees wouldn’t attract US tax, but still…..)

Could it be because the airlines make it really hard to find out how much these fees actually are, and seek to surprise us with them after we’ve already made our travel plans?

Whatever the reason, just keep in mind the nonsense claim that air travel is cheaper today than it ever has been before is utterly that – a total nonsense claim.

Another Sort of Dishonest Fee to Hate

Talking about airlines and their rapacious race to see who can come up with new and higher fees to add to their tickets, I was booking a restaurant for my daughter’s birthday party lunch this Sunday, and noticed fine print at the bottom of the website that said :

20% service charge: 100% of these funds are distributed to our team in the form of wages, sales commissions, benefits and revenue share. Thank you for dining with us, we appreciate it.

Now let’s fully understand what that means, and also the context in which it is offered.  Seattle now has a $15/hour minimum wage, including for restaurant and all other service type employees who formerly had lower minimums, recognizing the reality that their tip income would most likely boost their income way over the minimum level.

The new high minimum wage destroys one of the two main reasons for tips – ‘because they need the tips to raise their earnings up to a fair level’.  Many restaurants instantly raised their prices to reflect their new higher staff costs.  And some of the bolder diners started no longer paying tips.

So, what have restaurants done?  Have they written in large red type at the bottom of their menus “The chances are that our servers now make as much an hour as many of you do, so there’s no need to tip them any more”?

No, as you can see, at least some have changed from a voluntary tip in whatever amount you choose, to now a mandatory added 20% “service charge”.  And, read the smarmy words carefully.

Sure, all the money from the service charge goes to the “team” (whatever that means, but it probably includes everyone on the payroll, including the office bookkeeper and the CEO), and note how it is allocated in unstated amounts now to cover the base wages of the “team”.  And are we to believe that dish washers in the kitchen get a sales commission?

Instead of a discretionary payment you could choose to make direct to people who need the money, and hopefully in return for good service, you’re now making a higher mandatory payment, which in probably largest part is simply being applied to the total wages bill of the entire company.

The real tragedy?  The number of fools who continue to also add a 15% or larger tip, because of course, the credit card charge slips still “helpfully” have a line for that when you sign them.

The Cheapest Thanksgiving Flights

Google – probably primarily in the form of its ITA Software subsidiary, but these days as a result of its ‘big data’ harvesting in general, is getting into the game of predicting if airfares will go up or down on any given itinerary between now and when the actual travel occurs.

The airlines of course wish to obscure that as much as possible.  The idea of dropping prices isn’t to make it cheaper for everyone to buy tickets.  It is to encourage a few more people to buy tickets on flights that are currently too empty.

Although, as crazy as it might seem these days, this was not always the case.  Until the mid 1990s, the airlines would cheerfully refund anyone and everyone who had bought a ticket at a higher price, if they came out with a lower priced airfare sale.  It would be a nightmare for us at the travel agency I owned – every time an airfare sale would come out, we’d have a rush of clients bringing back their tickets and asking for refunds – a process which I swear the airlines deliberately made as complicated as possible, and which would take 15-30 minutes per ticket.  We’d have to go to all this extra bother, and lose the commission on the difference in fare too, and do so with a weary smile on our face, because that was the way the airline industry worked back then.

Now, not only do the airlines make it almost impossible to get money back if they drop the fare price, but many travel agents will quite sensibly charge a reissue fee for redoing your ticket and refunding whatever might be coming back to you.

Enough of the reminiscing.  These days, with refunds generally out of the question, there’s more focus on buying at the right time.  A number of online services have come up with prediction engines to tell you if a fare might maybe perhaps possibly go up or down, whether you should urgently buy the ticket now or wait a while and possibly see the fare drop.  These work based on historical fare change patterns in the past, and whatever limited view of how full or empty the flight is becoming, and are moderately helpful.

Google, which surely has much more data than anyone else, has now offered a similar service.  This is another inching forward to the point where Google stops pussy-footing around and comes out directly with its own airfare booking service.

Now for the real ‘secret’, such as it is, for the best value airfares.  It isn’t so much about the day you book/buy your ticket as it is about the days of week and times of day you choose to travel.  Shifting your travel dates a day forward or back might change the airfare by $100 or more – if two of you are traveling together, and you save $100 each, that’ll pay for another day of vacation at your destination.

The better internet sites usually allow you to now specify if you want airfares for only the exact dates or if you’re interested in plus or minus a day or two or three for both outbound and return travel.  Usually, you’ll want to see the date range fares rather than the exact date fares, and often you’ll find a lovely surprise lurking in the variation of dates.

Don’t Buy a New Cell Phone Just Yet

A friend asked me to buy a new phone for them and bring it with me when I traveled to their country in the near future.  They were surprised when I refused, and I had to explain why.

In case you’re about to buy a new phone, you too might want to delay doing so for a couple of weeks, maybe for a month.

On September 12 Apple will announce its annual lineup of cell phones.  Not only is this a chance to (shortly thereafter) get the latest and greatest, but it also usually means that their previous generations of phones will drop in price.

And the first week of October is expected to see Google announce its latest Pixel cell phones too.

Cell phones often drop in price a bit in the run-up to Christmas, so whatever type of phone you might be considering, it probably is well to wait at present.

Musk Ends His Privatization Charade

After increasingly far-fetched claims and increasingly desperate attempts to substantiate his claim that he had funding secured for a private buy-out of Tesla, Musk announced on Friday evening last week that he was abandoning this attempt.

You’ve got your choice of reasons why he did this.  Reason #1 is his official claim that it is because most of the current investors didn’t like the idea.  Except that, this would presumably not be the 70% of current investors who just a week ago Musk was saying were keen about the idea and would (somehow?) remain investors in the new private company.

Reason #2 is that his ‘funding secured’ boast turned out to be as vapid as many of his other claims, and it seems he was unable to get the funding that he claimed had already been secured.

Meantime, the SEC investigation continues.  As mentioned last week, this farce of a slow-motion bureaucratic nonsense should have already been concluded (justice delayed is justice denied), and now that the entire proposal has collapsed, it is clearly even easier now to formally ascertain the accuracy of Musk’s original tweeted claim.

Tesla’s stock has now been testing $300, dropping below it briefly a couple of times on Thursday before closing at $303.  This is the same stock that was at $345 on 7 August before Musk’s ‘quirky’ announcement about his privatization plans.  Rather than burn the people holding short positions on Tesla stock (as some people think was his wish), the net result has been to slice 10% off the share price for regular long holders of the stock while benefitting the people with short positions, as well as making it almost impossible now for even mainstream media and analysts to ignore the growing problems surrounding the increasingly mercurial Mr Musk.

Own goal, Elon!

And Lastly This Week….

$75 compensation to keep quiet and not bring charges.  Or perhaps a dinner voucher?  That’s how much United and Southwest respectively offered as compensation to passengers on flights when the passengers found that the man next to them was, ahem, eagerly and unabashedly self-pleasuring himself for much of the journey.

Does that strike you as appropriate – not the self-pleasuring, but United’s apparent desire to avoid calling the police and making an issue of the event?

So, if a federal air marshal on duty briefly flashes his service sidearm to a flight attendant, the pilot calls an emergency and four armed police haul the marshal off in handcuffs (discussed last week).  But if a passenger next to you works away at his ‘short arm’ all flight long, nothing happens.

Details here.

On a not altogether unrelated note, but from a more positive perspective, a new survey suggests that one in 50 passengers claim to have found ‘lasting love’ during a flight.

Now there’s an idea for a new airline fee.  They already charge premiums for various seating options, how about an extra fee to be seated next to an eligible member of the opposite sex.  How much would you pay?  (Probably less than they’d charge!)

Details here.

One of the amusing collections of trivia that has seemed to somehow survive in this world of Google’s knowledge of everything is the Guinness Book of World Records.  We all are vaguely aware of really strange records being created, usually by similarly strange people.

But did you know that, for some people, there’s actually great value in being a record holder.  So much so that after a contested dethroning of one record holder by a new winner, Guinness showed its own version of the wisdom of Solomon and in decreeing which of the two men had the best entitlement to the claim, they – errrr – responded by deleting the category from their list of records entirely!

Details here.

Truly lastly this week, it is sometimes interesting and even fun to look at how email has changed the way we communicate.  Not all the changes have been positive (although we suspect that many of the phrases cited have transferred over directly from older typed memos – probably the doubtless twenty-something-year-old who put together the linked article is unaware that before email, offices had other ways of communicating).

Please do now read on about our December Land Cruise in Northern France and Belgium, and please do consider joining us.

Most of all, please enjoy your three-day weekend, and, as always, enjoy safe travels

David.