Weekly Roundup, 8 January 2021

The new Amtrak Acela train undergoing trials in Colorado.
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Good morning

With the Christmas/New Year discontinuity starting to subside, and the heavy lifting on my second book now done, I had time this week to catch up on some of the pending product reviews I’ve got on my “To Do” this.

One of the “editorial decisions” I sometimes have to make is what to do when I encounter a disappointing product.  As often as not, I just throw the item away and don’t review it, because usually they are items you’d not normally be buying, but which I’d discovered and hoped to be able to recommend.  There’s little interest in publishing an item “here’s a gadget you’ve never thought of buying and, guess what, you don’t need it”.

But sometimes an item is well known, and has a great reputation and a large market share; and if I really don’t like it, I feel that a negative review warning you off the product is as helpful – maybe more so – than adding another positive review to what is typically a great number already out there.

So this week I’ve a product review for you on one of the most revered of high-end noise cancelling headphones.  What do I think of them?  Well, you could read the review, which follows after the newsletter – indeed, I hope you will.  But if you’re in a hurry, the headline says it all :  Don’t Buy the Bose NC-700 Noise Canceling Headphones.

The reason why might surprise you.  I hope it will also upset you, the same as it self-evidently did me.  And I’ve a question for every other reviewer out there – do you not care about the issue that I am so concerned about?  Shouldn’t you at least mention the huge issue these headphones have attached to them?

Next week I hope to write about the Bose QC35 II noise cancelling headphones, and then the week after, a wonderful $50 set of headphones that are currently sold out, but which performed on a level with the Bose NC700s.  The surprising part of that is the NC700 headphones cost over seven times as much ($380 compared to $50).

Also attached is yesterday’s Covid diary entry, with a really touching “thank you” note in it from a reader of my new Virus book (and now another lovely note in the reader comments too), plus plenty more.  The virus book is going up in price on Monday, so if you haven’t already, perhaps now is a great time to get a copy.  Sunday’s Covid diary entry is available online.

Plus a few additional items in this morning’s roundup :

  • Passenger Numbers Now Starting to Drop
  • Airline Mergers?
  • Boeing’s Gentle Slap on the Wrist
  • FAA Does Another Covid-Caused Control Center Closure
  • What About Amtrak?
  • Virtual CES
  • Mobile Data is Expensive in the US
  • Editorial Bias?
  • And Lastly This Week….

Passenger Numbers Now Starting to Drop

I’d predicted last week that when we emerged from the Christmas/New Year travel period, air travel numbers would start to drop off again.  My rolling one week average peaked on Monday this week at 47.9% of last year, then dropped on both Tuesday and Wednesday, by which time it was back down to 44.1%, back where it was two weeks ago.  As a measure of the volatility, the passenger numbers on Wednesday were almost exactly half what they were on Sunday, just three days earlier.

Will it go lower before returning to a steady upward climb again?  It is still too soon to tell, but stay tuned for next week’s update (or the daily tweets).

Airline Mergers?

With the depressed air travel numbers, it is astonishing there hasn’t been more speculation about airline mergers, sooner.  Perhaps the main reason there haven’t been such discussions (that we know of) is because there are very few airlines left to merge.  American, Delta and United are the big three traditional carriers, Southwest is of similar size but works on a less readily integrated type of business model, then there are the much smaller airlines, usually with less developed networks, particularly internationally – Alaska, Hawaiian and JetBlue being the three obvious names.  And a sprinkling of even smaller budget type airlines such as Allegiant, Frontier and Spirit.

Even with the extraordinary permissiveness of the DoT, it is hard to see how any type of merger between American, Delta, and/or United would be allowed.  They’re also major players in each of the three different international airline groups, making mergers even more complicated.  But a merger between two of the smaller airlines doesn’t seem an impossibility, or maybe even between a major and a small airline.

For no particular reason, this article reports that maybe United and JetBlue might merge.  We’d be disappointed to see that happen.  It also reports on the possibility of Allegiant, Frontier and Spirit merging, and we’d actually quite like to see that happen, making a larger and perhaps stronger budget carrier, and also then creating a gap that might allow for a new budget carrier to emerge.

Boeing’s Gentle Slap on the Wrist

Ending a lengthy investigation, the Department of Justice levied a massive-seeming $2.5 billion fine on Boeing as a settlement in response to criminal charges of hiding information about the 737 MAX design from FAA officials charged with reviewing and approving the plane as safe.  It was claimed that Boeing used “misleading statements, half truths and omissions” to make the plane seem safer than it was.  For the first six months of the investigation, Boeing refused to cooperate.

So, you might be thinking “A $2.5 billion fine.  That’ll hurt.  Well done, DoJ.”

But let’s break down the fine.  $1.77 billion of it is to be paid to its airline customers to help reimburse them for losses incurred as a result of the plane’s grounding.  Another $500 million is to be paid to the families of the 346 victims of the two 737 MAX crashes, and the balance of $243.6 million is a penalty paid to the DoJ.

That still adds up to $2.5 billion, however.  But, there are a couple of points worth considering.

The largest amount, $1.77 billion, is money that Boeing is going to pay to its airline clients anyway.  This is not a bonus extra payment.  This is just part of the negotiated settlements Boeing is making anyway.  The $500 million to victim families is in addition to payments already made, but it is probably again money that Boeing would have ended up paying, even without the DoJ mandate.

So the only part of the $2.5 billion fine that Boeing actually has to pay as extra money is the $244 million to the DoJ.  Less than one tenth the headline $2.5 billion figure that the DoJ is boasting about and Boeing is theatrically expressing regret about.

In 2018, the last “normal” year for Boeing, it made a net profit of $10.5 billion.    So the $244 million is just over one week’s net profit at 2018 levels.  So, 346 people killed, six months of refusing to cooperate, the deliberate lies and deceit in the first place, and the consequence is 8 1/2 days profit.

What is wrong with the DoJ?  Do they have no sense of proportion?  This is not a victory.  It is a stunning loss for DoJ, and an enormous win for Boeing.

FAA Does Another Covid-Caused Control Center Closure

 I wrote last week about the FAA’s stunningly self-centered decision to gratuitously close a regional control center in busy early evening hours in Texas for some Covid cleaning.

They did it again this week, in Florida.  This time they even acknowledge there are protocols available to ensure no service interruptions when they take a center offline, and agree such closures for Covid cleaning usually occur at night.  But, and the same as last week in Texas, the protocols weren’t followed, the closure was late afternoon during a busy time of day, and flights were delayed.

One is left with the same conclusion as last week.  They simply don’t care at all, and don’t realize their job is to provide a service, not to themselves, but to their client airlines and the people on those planes.

What About Amtrak?

We haven’t heard a lot about Amtrak since Covid.  By all accounts it has been hit even harder than the airlines, and who can be surprised about that.  It is bad enough having to endure a several hour plane flight at present; the thought of a several day train journey in an uncontrolled and relatively high risk environment becomes massively less appealing.  It seems their passenger levels are running around 25% of normal, in round figures about half that of the airlines (in the mid 40 percents).

This article reminds us that Amtrak is continuing its testing prior to introducing new faster trainsets (pictured above) on its Northeast Corridor (between Boston and Washington DC).  These will be able to run at speeds of up to 167 mph; the only problem is that very little of the track and signaling supports those speeds.

It seems clear that Amtrak’s annual operating subsidy will need to greatly exceed the $2 billion or so it has been getting recently if it is to ride out the Covid storm.

Virtual CES

Running perhaps a week late this year is the Consumer Electronic Show, one of the very largest tradeshows hosted in Vegas every year, and typically the week after New Year.  This year was to see the inauguration of the Elon Musk tunnel transport system between the different halls of the Convention Center.  But, instead, the entire show has been cancelled and replaced with a “virtual” tradeshow instead.

I’ve been “attending” some of the pre-show events.  I hate it.  Instead of being able to walk past a booth, slow down, quickly scan the booth and its contents, and decide whether to go in or not, and whether to engage in discussion or not, one has to watch self-congratulatory corporate videos, and try to avoid sales people eager to get you into a Zoom discussion.

The main show is next week; so far the only thing of note has been a ridiculously expensive big-screen television, all the more ridiculous for being as expensive as it is (six-figures for a 110″ screen) but only offering standard 1080P resolution.

I’ll try and give my usual analysis next week but with the virtual event, who knows what it will be like.

Mobile Data is Expensive in the US

Here’s a fascinating map, with additional tables and data below it.  It shows average, high and low costs for 1GB of wireless data for each of 228 different countries, in both local currency and USD.  In the US, the low cost is $2.20, the average is $8, and the high cost is $60.  You’ll note that most other countries have lower pricing.

I’m not entirely sure of the methodology and how they adjust for “unlimited data” plans, or for plans including some free data together with basic access costs.  But the results clearly show North America to be the most expensive of the 13 regions, with the next expensive region only about half the price, and the least costly region 1/7th the price.

Editorial Bias?

One of the most dubious boasts, with many magazines, is that the editorial department is completely independent of the advertising department.  Another almost as dubious boast is that the editorial department is not influenced by whoever owns the publication.

Startling news this week was the announcement that Travel + Leisure Magazine had been bought by Wyndham Destinations, for $100 million.  The question on everyone’s lips wasn’t so much “why so inflated a price” as it was “what does Wyndham expect to get by adding a moderately prestigious travel magazine to its corporate group”.

Print magazines seem to be in an unstoppable spiral of decline, and the Lonely Planet publishing group has just been sold again, this time for an undisclosed sum (probably embarrassingly low, and unlikely to be much in excess of $50 million and possibly much less).

It is unclear what the T+L magazine should be valued at, but its former owner, Meredith Corp, posted a $289 million loss, group-wide, for the third quarter of last year.  It is extremely hard though to believe that Travel + Leisure’s normal valuation would run as high as $100 million.  It is a monthly magazine with a claimed print run of 950,000 copies.

Amusingly, while Wyndham claims to be keen to focus on younger potential clients (a claim that almost certainly reflects on the age of their marketing staff rather than a realistic understanding of their time-share style potential customers), the average T+L reader is 54 years old – that’s at least a generation beyond Wyndham’s new primary target market.

And Lastly This Week….

From time to time, people stow away on/in an airplane – I’m not quite sure which preposition is appropriate, because I’m referring to people who climb onto wheel pylons, and when the wheels are stowed after takeoff, go up into the stowage compartment with the wheels and stay there until the plane lands at the other end.

The two problems, which few stowaways seem to anticipate, is that it gets extremely cold (-40° or more sometimes – I deliberately don’t show C or F alongside that number because -40° is the “magic” number that is the same on both scales), and also the wheel compartments are not pressurized.  Get a plane flying at 35,000 ft and there’s almost no oxygen to breathe.  Mt Everest reaches “only” 29,000 ft and most climbers use oxygen up the last part of that climb.

So few survive anything other than the shortest flights (the plane doesn’t go as high, so more oxygen and less cold, and a shorter total flight time).  Here’s a story of two people who took a flight 5,600 miles – an 11 hour flight.  One survived.  Doctors say he only survived because after falling unconscious, the cold slowed down his body and he didn’t need as much oxygen.

In a sudden segue from the stowaway, probably one of the world’s poorest people, this week saw Elon Musk become the world’s wealthiest.  I guess one could say that at least he invests some of his accumulated capital into some wild and crazy, but quality-of-life enhancing projects.

My favorite at present is his Starlink plan to bring fast inexpensive internet to everywhere, via a constellation of up to 42,000 satellites.  The profound transformational effect that would have on property which currently has no internet access is staggering.

Until next week, please stay healthy and safe

 

David.

 

 

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