Weekly Roundup, Friday 22 May 2020

Not a sight seen in the air for a long time – a Norwegian Air 737MAX8 plane. As we say in the article below, it has been a very unlucky airline.

Good morning

Another busy and productive week, as you can see, below.  Not so visible has been the continued progress on my new travel/tourism concept, based on what I perceive as the changing style of tourism and vacation/lifestyle experiences people will wish in the future.  As I mentioned earlier, I’m looking for a few investors to go into this with me.  Please let me know if you’d like to know more.

With the lockdown, such as it ever has been, some of us have been fortunate enough to have more time to read than before, and with the attendant difficulty of buying regular books at bookstores, eBooks have been even more convenient.  Choose a book on Amazon, pay for it, and then instantly download it to whatever device you use to read your eBooks with – possibly a dedicated Kindle eReader, maybe a regular tablet or even phone with the Kindle reading app on it.

I’ve written about Kindle eReaders ever since the first ones came out, way back in 2007.  Here’s our most recent review of current models.  The eReader software also runs on most tablets and phones too.

Over the years, since 2007, I’ve been slowly adding to the number of eBooks I have – I see I’ve been averaging one book every not quite two weeks over the years.  Confession – I’ve not yet read them all, and indeed, some I’ll probably never read (but I’ve plenty of print books like that, too!).  Things have got to the point where my eBooks are as “scattered” and as hard to keep track of and find again as my regular books.  So, with some diffidence, I braved Amazon’s stridently user-unfriendly Kindle software and learned how to create “collections” as a way of categorizing books and making it easier to find the ones I want again in the future.

Of course, I’ve now written up my experiences and an article on how to organize your eBooks is now appended after this morning’s roundup.  I hope you find it helpful, and if it empowers you to now feel confident about getting some more books, well, there’s unlikely to be any harm in that!

One more thing.  Talking about books, I’ve added a few more entries to my list of easy classical music pieces.  I dared to disparage Mozart last week, and a reader wrote in to protest.  So, as a self-imposed penalty, I added four pieces of Mozart as well as three other items.  Because I expect to continue adding to the list, I’ve now added a date column to the table so if you simply want to see what’s new, you can sort the entries by date.  I hope you continue to find pieces of interest and appeal.

As you know, I’ve been writing daily articles about this terrible coronavirus for over two months now.  I started off Thursday’s article as I often do with some opening commentary and analysis, and realized it was important enough to be given its own page, and so you’ll find below an article on how much distancing we really need between each of us.  The answer was difficult to quantify, but I hope you understand the thought process so you can make your own choices, at least in cases where you are able to choose.

Talking about my daily Covid-19 diary entries, I’ve put Thursday’s entry at the end of the newsletter too, and here are links to the other six articles this last week.  As always, please remember, if you’d like to get all the articles I write, and sooner than once a week, you can sign up for the “express” or “daily” versions of the newspaper here.  It is completely free.

Thursday 21 May (copy below)

Wednesday 20 May

Tuesday 19 May

Monday 18 May

Sunday 17 May

Saturday 16 May

Friday 15 May

(Complete listing of all virus related articles here)

What else this week?  Please keep reading for

  • Emirates-Etihad to Merge?
  • Ryanair’s Dream Almost Comes True
  • (Not Quite So) Norwegian Air
  • Boeing Caught in the Crossfire
  • Farewell to the Dyson Electric Car
  • And Lastly This Week….

Emirates-Etihad to Merge?

This is far from the first time there has been speculation and rumor about a possible merger between these two airlines.  The two airlines are based a mere 45 miles apart as the crow (or A380) flies (Emirates in Dubai, Etihad in Abu Dhabi), and there’s a lot of overlap in the routes they serve.

While they are competitors, they are cooperating competitors – perhaps a bit like how Air New Zealand and Qantas used to be, a few decades ago.  The Covid-19 challenges have encouraged further cooperation between the two carriers.  Also like NZ and QF, Etihad is very much smaller in size than Emirates, but both airlines offer high quality experiences on relatively new planes.

A merger would make sense, but as two separate flag carriers for two separate emirates, maybe national pride will interfere with business sense, and in particular, while it would make tremendous sense to merge the two hubs into one, we don’t think the Abu Dhabi ruling family would allow that.

One possible solution would be a high-speed ground transportation line to run between the two airports, making them essentially two halves of  a single hub.  High speed rail or a hyperlook could do the run in 15 – 20 minutes, which is nothing when you think how long it can take to go from one end of one terminal to another end of another terminal in some of the other sprawling airports around the world, currently.  There is a current proposal for a hyperloop link, but I’m not sure what its current status is.

Even though the two airlines are working more closely together at present than before, conventional wisdom, while enjoying the speculation, concludes a merger won’t proceed any time soon.  But never say never.

Ryanair’s Dream Almost Comes True

Ryanair’s CEO, Michael O’Leary, has been uncharacteristically quiet for several years, with the airline trying to reposition itself from being “the airline passengers love to hate” and moving slightly closer to more positively being simply “the airline passengers love”.

In the past, whenever he was feeling restless and wanted to get some free headlines and publicity for his airline and its truly astonishingly low fares, he’d make a statement about how they were considering either removing all toilets from their planes and replacing them with more seats, or making them pay toilets that you had to pay to use.

This would reliably, every time, get him some excellent coverage, and of course, he never did anything about removing the toilets or converting them to pay access.  But he and his airline have now come up with the “next best thing” – to use the toilet while still ensuring “social distancing” on a plane, you will have to “put your hand up” and wait until a flight attendant tells you it is your turn to go.  Details here.

It is of course both hypocritical and farcical to talk about social distancing concerns when waiting to use a toilet, but requiring the passenger to stay in their seat, as likely as not with other people 18″ on either side of them, and more 30″ ahead and behind.  But farce and airlines (and Mr O’Leary in particular) have long been close companions.

(Not Quite So) Norwegian Air

Napoleon famously said that he’d promote and rely, not so much on skilled generals, but on lucky generals.  It is certainly true that even in the most quantified elements of business endeavors, luck remains a substantial wild-card factor.

An airline that has had a never-ending run of bad luck would have to be Norwegian Air.  No part of its business-plan to date has moved forward without incident.  It has had plane problems not its fault, labor problems (possibly its fault), enormous problems getting approvals to operate its routes (not its fault), and now, just when its business was starting to turn the corner and show promising signs, the Covid-19 virus came crashing into its world (again, not its fault).

The airline has now managed to restructure its obligations and to qualify for $265 million of Norwegian government aid as well.  It was very down to the wire, with the airline days away from running out of cash.  Its lessors in particular have converted lease obligations into shares, meaning that the company is now owned in part by an Irish leasing company (Aercap, 15.9%) and also by the Chinese Government, via the Bank of China through its leasing arm, BOC Aviation, which now has a 12.7% share.

China’s quiet push into aircraft leasing is interesting, and seems like another way the Chinese government is asserting “soft power” around the world.  They currently own 323 planes, manage another 40, and have 204 more on order.

In North America their clients include Air Canada, Alaska, Frontier, Southwest, Spirit and Westjet.  You can see a list of companies they have relationships partway down this page.

We wonder if a standard condition in their lease agreements is a prohibition on Tibet or Taiwan appearing on airplane seat back navigation displays.  This requirement has been imposed on airlines seeking landing rights into China before, and here’s now a chance for China to rewrite maps in the way it chooses, globally.

Boeing Caught in the Crossfire

We couldn’t help noticing on the BOC Aviation webpage we linked to above that 114 of the 204 planes they have on order are from Boeing.  That’s not unusual, most leasing companies have a mix of both Boeing and Airbus planes.

But the growing hostility between China and the US, and in particular, the totally valid concern that using Huawei electronics on sensitive internet and phone networks (and all networks are potentially sensitive) would be allowing Chinese intelligence agencies to have a “back door” directly into whatever traffic was flowing through those networks, sees China raising the rhetoric and threatening to cancel its entire backlog of Boeing airplane orders.

China has been deliberately going slow on ordering Boeing planes for the last several years, although it has been expected that once the inevitable rapprochement between China and the US next occurs, it will then announce all the orders it has been sitting on and holding back.  It hasn’t been especially flooding Airbus with more orders, merely holding off on Boeing orders.  But cancelling all current orders by all Chinese airlines (and now leasing companies, too) would send a nasty shock through Boeing’s already lean forward order book.

Oh – in case you’re wondering why I say it is a totally valid concern that Huawei electronics would have a backdoor for the Chinese intelligence agencies, there’s a very simple reason for expecting this.  It is, ahem, no more and no less than what the CIA did.  It owned a hardware company for many decades, gaining access to data traffic all around the world.

Farewell to the Dyson Electric Car

We had watched with fascination as Sir James Dyson, the English inventor of the vacuum cleaners named after himself, plus various other gadgets, bravely waded into developing an electric car.  He spent a lot of money, while making some strange decisions such as deciding to headquarter the new car factory in Singapore – a place most known for its sky-high costs of business and not somewhere with low cost land or labor for car factories.

The big problem with his project was that it relied upon a new type of battery that had yet to become a commercial reality.  As we’ve wryly noted in the past, there’s no shortage of “revolutionary” new battery technology announcements, all promising commercial reality in “a few years time”, and none of which have yet to eventuate.

Unfortunately, and this is my inference, his revolutionary new battery technology has also proved to be elusive, so much so that he has now announced he has cancelled his plans to proceed with the development of what had promised to be an impressive vehicle.

Yet again, another potential rival stumbles, and Tesla is left center-stage, all by itself.  Neither new startups founded by tech-savvy innovators, nor the existing major auto manufacturers, seem capable of mounting a credible challenge to Tesla, even though there’s nothing particularly unique in a Tesla.

The Model S came out in June 2012.  Almost exactly eight years later, there’s still no other car quite like it, nor anything like its stablemates, the X, the 3, and now the Y too.  American, European, Japanese, Korean, even Chinese car manufacturers have all failed to displace Tesla from the world stage.  We continue to find this astonishing.

And Lastly This Week….

What a strange Memorial Day weekend it promises to be.  Certainly there won’t be the same crushes on the roads, beaches, parks, and elsewhere.  Indeed, San Francisco is copying an idea from New York, and we expect other cities will doubtless do the same, with chalked circles in parks setting out appropriately spaced out sites for people to sit in.

Did you know that today – Friday – is National Road Trip Day?  Details here.

Until next week, please stay healthy and safe

 

David.

 

 

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