Weekly Roundup, Friday 31 May 2019

Good morning

Exciting news today, well, at least, exciting by my own rather narrow and self-centered definition of the word.  I’m starting to roll out a new design for the blog website and associated articles, and the first example of this can be seen on the two pages detailing our 2019 Christmas Markets Tour.

Most of the other pages on the blog site (but not the earlier main website) have slightly changed as well.  The original main site will be updated over the next few months; and there’ll be some newsletter changes too fairly soon.  Indeed, as I write this, I’ve actually no idea what it will look like when it arrives in all our email inboxes this morning.  The main reasons for these changes are to take advantage of new formatting and layout possibilities and expectations, and to make everything appear better on phones and tablets.

There are sure to be some formatting errors and inconsistencies.  If you spot anything that seems wrong or not well managed, please let me know.

Although I have very little design aptitude at all, the two tour pages (the main tour page and the itinerary page) sort of “designed themselves” due to the rich collection of lovely pictures available to showcase the places we go and the sights we see.

I’ve lost count of the number of Christmas Markets tours we’ve done over the years – at least 12, and maybe more.  Most of the time they have been on river cruises, on either the Danube or Rhine rivers.  This one is very different.

This is another of our “land cruise” type tours.  We will spend an entire week based in Munich, in the heart of Bavaria.  Before the tour we have an option in Vienna (including a day tour to Bratislava), during the tour we go as far away as Lichtenstein one day, and after the tour we have an option on to Prague, a city that always exceeds even my very high expectations.

The main tour runs from Monday 9 Dec – Monday 16 Dec, and even adding the extension to Prague you can still be back a week before Christmas.

With a weak Euro and strong dollar, I’ve managed to hold the price the same as last year’s Christmas landcruise in Lille, making it a great value and a truly wonderful experience.

The weather might be cool in December, but please do choose to come along and join in what is always a warm and convivial shared pre-Yuletide experience with a great group of fellow Travel Insiders, or as we sometimes think of ourselves, “escapees” from the madness of the pre-Christmas season back home.  Full details here.

And please don’t forget also our two September tours.  Our Scotland’s Highland Highlights now has 17 people coming along, and our French Landcruise now has 12.  There’s room for you on either (or both!).

Another exciting piece of news was my receipt this week of an Apple Watch.  I’ve been slow to convert to the concept of “smart watches”, and indeed it was only the extraordinary kindness of a reader, Mike M, who was so insistent that I should try one that he sent me this Apple Watch as a gift, that saw me finally place one on my wrist.  How lovely it is to receive a free product to review, and with no obligation at all to say nice things about it in return!

It is early days yet, and I plan to have a detailed review to share next week.  But, suffice it to say for now, that I feel Mike’s kindness might not only be in the form of another electronic gadget, but also in a more abstracted sense, a device that truly could be life-saving, or, at the very least, life-extending.  Stay tuned for the full review next week.

What else?  Please keep reading for :

• The Latest 737 MAX Delays
• The Mitsubishi Regional Jet, Now Renamed
• Happy Birthday, Airbus
• Playing Games with Seating Classes
• Uber’s Increasingly Selective Service
• New Amazon Echo Show Promises to be a Winner
• And Lastly This Week….

The Latest 737 MAX Delays

Global airplane groundings are exceedingly rare.  Since the end of World War 2 almost 75 years ago, there have only been four.

In 1946 the lovely Lockheed Constellation was grounded for about six weeks after a series of engine fires culminating in a crash.  In 1979 the unlucky DC-10 was grounded for five weeks after a crash subsequent to an engine falling off its wing.

More recently, in 2013 the Boeing 787 was grounded for three months after a series of battery fires.  (Details of these and other groundings here.)

And now, starting from mid-March, we have the Boeing 737 grounding, which seems likely to set a new record for the longest grounding ever.  This is not a record that Boeing (or the FAA) should be proud of, and totally shows up the lie that there was no need to ground the plane at all, and also places severely into question the claim that a simple quick software fix would solve the problem.  Simple quick software fixes – which in this case we were told was almost ready to be released prior to the grounding, anyway – don’t take many months to complete, to check, and to deploy.

Boeing is being very unhelpful when it comes to understanding what is happening and when we can expect to see the planes return to service.  For the briefest of moments, it almost seemed they were going to “own” the problem and accept responsibility for it and tell the truth, no matter how awkward that may be.

But it seems their legal department quickly ended that approach, and now, while we see their CEO’s lips move, no discernable or helpful facts can be heard.   Earlier this week CEO Muilenburg said that steady progress was being made on returning the 737s back into service.  But what does “steady progress” mean, and when will they start flying again?  Well, that’s a detail he wasn’t willing to share with us.

Boeing’s very good friends at the FAA were similarly upbeat but vague, declining to set any sort of timeline.

But the airlines can give us a clue, with the three affected US carriers (AA UA WN) all now extending the cancellation of their respective 737 MAX flights until some time in August.  That’s not to say they expect the planes will be flying again in August, but instead, it is merely a continuation of continuing to shift the cancellation period further into the future every month or so.  If the planes were to return to service in mid August, that would represent five months of grounding, an unprecedented and almost unbelievably length period of time.

IATA has also said it doesn’t expect to see the planes back in service prior to mid-August.

Keep in mind that mid-August now seems to be a best-case rather than worst-case scenario.

One can only guess how the affected airlines feel about all of this.  If you’re an airline and you’ve already bought and paid for a 737 MAX (at a cost of probably around $55 – 75 million), you have the triple whammy of not being able to earn money by flying the plane and carrying passengers, of losing passengers to competitors who aren’t suffering from grounded 737 MAX planes, and meantime, having to make payments on the $50+ million plane now parked somewhere.  Just the cost of parking the plane is estimated at being in the order of $2000/month – a very modest cost that a cynic would point out is little more than the cost of parking a car at many airports these days.

But what about the interest costs and depreciation on a $50+ million plane?  If we say interest is 5%, then that’s $200,000+ a month for each plane, before all the other above and below the line costs and opportunity costs.

Now you might think that the hurting airlines would turn to Boeing and seek compensation.  But Boeing seems to be adopted an uncooperative attitude, saying that delays in delivering planes are an excusable event, and as such, Boeing has no liability to compensate airlines.

Excusable?  That’s not what lawsuits are now alleging, although it is easy to see why Boeing’s lawyers are taking control of the company’s dialog.  A week ago, a particularly high-reaching lawsuit was filed by a French lady who lost her husband.  She is suing Boeing for $276 million as a result of her husband’s death.

Why that amount?  It is one day’s gross income for Boeing.  There’s of course no measurable chance she’ll be awarded an amount even one tenth this figure, but perhaps she (and her attorney) hopes that by starting high, they’ll be able to settle at a higher than expected amount, too.

While we feel for the lady’s loss, and are no happier than anyone else at the circumstances that gave rise to the two fatal crashes (and Boeing’s subsequent actions), we feel that asking for $276 million is not only unrealistic but also opportunistic and harms the validity/credibility of her claim.

The Mitsubishi Regional Jet, Now Renamed

One of the curious things in the airplane manufacturing world has been the incredibly drawn out development of a regional jet by Mitsubishi, a process with several mistakes and problems, resulting in delays, and now with testing and further work being done in the US rather than Japan.  It has surprised me to see Japan stumble so badly – they have appeared to be so invincible with other forms of manufacturing, but they’ve yet to get their act together with the MRJ – the Mitsubishi Regional Jet.

But this week, things have progressed significantly.  Perhaps as a result now of too many American influences, they’ve decided to rename their plane.  It is no longer now the Mitsubishi Regional Jet, it is now the “Spacejet”.

That’s a name that even Sir Richard Branson might blush and hesitate to bestow on a plane that is a small 70 seater regional jet.

Interestingly, I’d surveyed readers in February asking if they ever used the word “Dreamliner” to describe the Boeing 787.  Only 10% of readers said they refer to the 787 as a Dreamliner.  It would seem that renaming a small regional jet as a “Spacejet” will merely serve to make the plane a joke.

Details here.

Happy Birthday, Airbus

I mentioned above that I’ve been surprised by Mitsubishi’s clumsy and so far unsuccessful attempts to break into making/selling planes.  It seemed they had great potential.  In stark contrast, although I was too young to have an opinion 50 years ago when Airbus was founded, most people back then probably looked upon Airbus as a very unlikely-to-succeed venture.

Lockheed was still making passenger planes, the Douglas Aircraft Company had just merged with McDonnell Aircraft Corp to create a new strengthened larger operation, exciting new Boeing planes were appearing such as the 737 and 747, and there seemed little need or opportunity for a cumbersome clumsy inefficient European company to elbow its way into the marketplace.

(Note that the commencement date of the Airbus entity is rather vague and depends on what you define as its start.  This article and others like it are vaguely referring to this general time now as being about 50 years from its birth.)

The first passenger plane Airbus created – the A300 – was actually rather startling.  Its claim to fame was that it was the first wide-body twin jet airplane.  Until then, all larger twin-aisle airplanes had either three or four engines.  The A300 proved to be a steady seller, and between its entry into service in 1974 and the end of production in 2007, 561 planes were built.

The A310 came next, and wasn’t so successful, being overshadowed and displaced by the A320 when it came out in 1987.  Just as the 737 has been the “meat and potatoes” in Boeing’s product line for a very long time, so too has the A320 become the mainstay in the Airbus product line.

A pivotal moment in the Airbus history was in 2003.  Airbus had been steadily increasing the number of planes it delivered each year, and in that year, it delivered 305 planes, compared to 281 delivered by Boeing, being the first year that Airbus delivered more than Boeing.  This achievement was repeated in 2004 and in the seven years that followed.  It was only in 2012 that Boeing managed to out-deliver Airbus again, which it has done for the six following years through 2018 as well.

I’ve been maintaining a fascinating series of tables showing the respective orders and deliveries for both companies.  They can be seen here.

There are many ways to measure which is the larger company.  By some measures, in some years, Airbus is now larger than Boeing, and because there are currently only two major aircraft manufacturers in the entire world, our sense is that airlines are strategically buying from both manufacturers so as to keep them both viable and actively competing against each other.

With excellent planes such as the A320 (slightly wider seats than the 737), the wonderful A380, and the lovely A350 (similar to a 787 in terms of state-of-the-art comfort) and now the A220 (formerly Bombardier) spacious regional jets, Airbus has a great product lineup and seems likely to continue to be a strong competitor alongside Boeing.

Here’s to its next 50 years.  May we all be present to toast their continued success in another 50 years time!

Playing Games with Seating Classes

Two things have happened over the last several decades.  Airplane premium classes – business and first class – have become more and more extraordinarily luxurious, at least in respect of fundamental things like lie-flat seats and personal space.  The food, drinks, and service levels as a whole have struggled to remain adequate, but the comfort of the seat, and its wonderful In-Flight Entertainment system, is surely a great improvement over yesteryear.

But at the same time, coach class has got worse and worse.  Seats have become narrower, seat pitch has similarly shrunk, meals have disappeared entirely, and even a simple glass of water is sometimes no longer free.

Business class has become better than first class used to be, so much so that many passengers stopped paying thousands of dollars more for a service experience almost identical to that in “only” business class, and as a result, many airlines have dropped first class entirely.

But one of the laws of marketing and product positioning is “the rule of threes”.  It is always great to give any type of customer for any type of product three choices, and so airlines invented a new class of service, Premium Economy, to bridge the growing gap between coach and business class.

As a rule of thumb, in some cases, on some airlines, premium economy is much like business class used to be, so the three service levels have remained, just with different names.

But whereas business class today is like first class used to be, and maybe premium economy is sometimes like business class used to be, what is coach class today like?  There’s nothing to compare it to – it is just a doubled down version of uncomfortable awfulness.

So the airlines, seeing a profit opportunity as a solution to the misery they have created in the back of their planes, are now starting to talk about a fourth class of service, without yet any standardized name or service concept.  We’ve seen the first steps towards it by airlines charging premiums for exit row seats and for seats near the front of the coach class cabin, and now Air New Zealand is talking about creating an entirely new class of service for some of its planes.

Let’s be clear, however.  This is not a good thing for us.  It is merely a device for the airlines, when accused of inhuman treatment of people in coach class, to be able to say “If people are not happy with our coach class, they are free to upgrade to any of our other three classes of service”.  Except that, of course, the big lie in that sentence is the word “free”.  It ain’t free.

Uber’s Increasingly Selective Service

Do you remember the good old days – actually, just a few years ago – when Uber (I am using the word “Uber” but it equally refers to Lyft and other similar services) promised to transform short distance on-demand transport services.  It was an easily understood concept – people with free time could become temporary taxi drivers, using their personal car, and picking up some extra money with no real associated costs.  They already had a car, they’d only incur driving costs while on jobs, and it was something they did in their spare time.  Better to make money driving people around town than to spend money in bars.

It seemed like a classic “win-win” triumph of new efficient technology over an old-fashioned and costly business model which most people disliked – traditional taxis.  Uber drivers picked up extra cash, and Uber clients got to enjoy better service, in a nicer car with a nicer driver, and at a lower cost, all with the convenience of internet based booking and paying.

For a while, this was indeed what it was really like.  But then, people became so entranced with Uber that they started working fulltime as Uber drivers, and Uber grew so much it developed a bottomless need for more and more drivers.  Uber started to impact on traditional taxi service, causing the value of a taxi license (“medallion”) to plummet in some cities, and harming driver and owner earnings.

So taxi drivers started to become Uber drivers.  And, no matter what type of driver, all discovered that it was very hard to make money, either full-time or part-time, as an Uber driver.  Uber’s fares started to go up and up, and even the “no need to tip” concept disappeared.  At the same time, Uber cars and drivers started to look very much like the beaten up old cars that used to have the word “taxi” emblazoned on their side.

The thing about taxi services is that they are a regulated public transportation service, and they are required to meet certain standards.  Not very high standards, for sure, but they are required to accept all fares, other than for demonstrably fair and appropriate reasons, and they are required to adhere to a formal tariff of charges.

Uber, on the other hand, is largely unregulated.  Both the company and their drivers can choose to accept a ride request or not, and the company can vary its rates, minute by minute, and block by block, based on what it senses the appropriate point on the price/demand curve might be.

So we now have a situation where Uber’s drivers all log-out of the system, causing the supply/demand equation to skew to a serious shortage, which means Uber starts to charge two or three or more times its normal rate to encourage drivers to start work, at which point, the drivers log on again and accept fares, at rates perhaps twice what they’d have been if they stayed logged in all the time.

Plus, drivers can rate their passengers.  We’re never anonymous when we’re taking an Uber ride.  Uber has now said that if passengers don’t have a sufficiently high rating, the company will ban them.

What does that mean?  It means the next time a driver is late collecting you; next time a driver just sits behind the wheel and doesn’t get out to help you with bags, whatever you do, don’t complain to him.  If you do, he’ll give you a low rating, and the next thing you know, you risk becoming banned for life from Uber.  If the driver wants to chat mindlessly with you, or if he wants to share his different political views vehemently with you, you are now obliged to listen politely and agree enthusiastically.  Even if you close the car door a bit too vigorously, you now run the risk of being banned.  Details here.

Already, as I discovered myself, if you give a driver a bad rating, you are penalized for doing that because Uber says that, “for your convenience”, it will make sure you never get assigned that driver again.  But when you’re running late to get to the airport, and the only two cars in your area are both local guys you’ve each down-rated so that neither of them will be assigned to you, tell me how good you feel about that policy?

The problem is that Uber is destroying the traditional taxi service model, but rather than replacing it with something better, it is replacing it with something worse.  And when Uber finally gets to the point of no longer being able to continue exploiting drivers, and having to pay them fair market wages, and when Uber finally gets to the point of wanting to stop losing hundreds of millions/billions of dollars a year, it is going to have to push its rates up higher – probably higher than what we used to pay for taxis.  Uber’s overhead – countless staffers earning six figure salaries – is very different to a typical taxi company with a single overworked and underpaid dispatcher.

Which means we’ll end up with a service that is worse than traditional taxis, and which costs more, too.  Progress can be a funny thing, can’t it.

New Amazon Echo Show Promises to be a Winner

We love our Amazon Echo Dot devices, and are slowly adding them throughout the home.  We are getting more familiar with how to use them, and little by little, we find we’re using the Echo Dot devices more and other devices less.

My internet connected clock-radio recently was honorably retired, and now I no longer need to struggle with choosing alarm times and radio stations, etc.  I just say when going to bed “Alexa, wake me at xx am with Classic FM”, and at the designated time, the unit in my bedroom starts playing the English radio station Classic FM for me.  If I need weather information upon waking, I simply say “Alexa weather”.

Indeed, when I go to bed at night, upon entering my bedroom, I say “Alexa, enter bedroom” which causes various lights to turn on and the radio to start playing, and when I go to sleep/leave the bedroom, I say “Alexa, leave bedroom” to turn off the lights and music.

Right from the very first time I reviewed one of these units, I’ve bemoaned the lack of a screen interface.  Well, there have been units with screens, but they have been outrageously expensive – $230 or thereabouts.

However, just today, Amazon has announced a new screen-fitted Echo unit, what they are calling their Echo Show 5.  Priced at $90 (or, for a short while, $150 for two) this unit has all the usual Alexa/Echo functionality, plus a small 5.5″ screen as well.  That’s not an ideal size – I’d prefer larger – but it is an ideal price, and the extra functionality it offers is very exciting and enticing.  Things such as the nonsense of being offered a recipe by voice only, with nothing to see or refer to, are now replaced with the ability to actually see the information you want on the screen in front of you.

To put the price in perspective, the small Echo Dot units that I currently use are priced at $50 on Amazon (although often discounted down to $40).  Paying an extra $40 to stick a camera and screen onto a Dot seems like a fair deal.

(Actually, we just checked.  If you’re new to these devices, the best starting point might be to get a refurbished earlier generation Echo Dot for only $25.  It seems some are currently available again.  All our Echo Dots are this generation; they are excellent and we see little reason to pay twice as much for the newer units.)

The new Echo Show 5 devices, announced today, start deliveries on Wednesday 26 June.  I expect they’ll quickly sell out, so you might want to do like me and pre-order one or more now.

And Lastly This Week….

Here’s a must-read and very alarming article about the extraordinary amount of spying/snooping and data sharing that goes on if you have an Apple iPhone.  All sorts of apps are regularly sending information off to who-knows-who about where you are and what you’re doing.

We’d suggest this to be a reason to switch to Android, but realistically, we fear Android phones are little better.

But one thing you can do is not buy a new phone.  This article points out the slowing rate of new phone purchases.  These days most new phones are almost indistinguishable from the previous years’ models, and any new features they might have are seldom/never in the “must have” category.

We’d go one step further.  Not only should you extend the time you keep a phone before replacing it, but when you do, don’t buy an expensive top-of-the-line brand name phone.  There is no reason to spend more than about $400 for a phone these days, even though high end phones will try to charge you two or three times that amount, while giving you little/nothing more in return.

The TWA styled hotel at JFK has gone through some teething problems and policy problems since it opened a couple of weeks ago.  But here’s an article addressing a more fundamental challenge – who exactly would choose to stay there, and why?  That’s an answer the hotel’s management will need to quickly uncover.

We all know that McDonalds has been mightily struggling to remain relevant in the last decade or so.  Fast food has become fad food, with various “fresh” concepts stealing market share from traditional burger vendors such as McDonalds.  There’s a certain irony and amusement in noticing McDonald’s switch in positioning.  It used to seem to have adopted a mission of taking American food and sharing it with people in other countries – so much so that a popular name for their restaurants in some countries is “The American Embassy”.  Indeed, that was a reason why I and many others went to McDonalds when it first came to New Zealand in the mid/late 1970s – a chance to experience “real” US style food.

But now, McDonalds offers regionalized menu items alongside its Big Macs, and has switched roles, and is profitably bringing some of its international variants back to the US and featuring them here.  We’re looking forward to the Aussie fries.  Details here.

This article – five things airlines can do better (and in reality, only four because it twice refers to better communications) has a great idea in among the more mundane and commonplace.  Why not announce, at the beginning of a flight, the times when meals will be served, rather than keeping it a vague mystery.  It would help us all better plan our flights and our feedings.

We read this article and tried not to feel guilty.  We vividly remember, back in New Zealand, when international travel was very costly and therefore very rare, how it was that when people returned from an overseas trip they’d invite everyone they could around for an evening of viewing their slides.

These events seemed to last way too long, and featured very ordinary and meaningless slides, usually of places that the host could no longer even remember anything about.  “Oh yes, and now this is a picture of, hmmmm, well, I think it might have been the xxxxx, but perhaps it was something else….”.  We will confess to having been a little guilty of that ourselves, even to the point of rigging up computer controlled multi-projector extravaganzas to try and make the presentations more interesting.

These days, we would never dare invite anyone to come around for an evening of looking at travel pictures.  But we’d never analyzed the effect our pictures might have had on our audiences in the past.

And here’s another article we read with a pang of familiarity.  A meal on Mykonos for $935.  In our case, we overpaid back in the pre-Euro days.  We’d just gone from Italy to Greece, and foolishly thought our food was very cheap, because we were still converting using the lire to dollar rate rather than the drachma to dollar rate (about ten times more expensive).  One of the benefits to us as travelers now that Euros rule through most of Europe is saving us all from exchange-rate type errors, but not from the depredations of greedy restaurants such as the one mentioned in this article.

I roll my eyes every time someone talks about battery-powered airplanes.  Here’s a great article explaining the impossibility of the concept.

And now, truly lastly this week, a quick question for you.  Visualize a map if you need to, and then answer the question – which is bigger?  The UK, or New Zealand?  Here’s a fascinating article all about the distortions and misperceptions caused by the omnipresent Mercator projection on maps.

Until next week, please enjoy safe travels

David.