|Friday 16 August, 2002|
Last week's article on airfare loopholes set a new
record for popularity (the previous most popular article
being the second of the four part series on zeroed airline commissions).
Thusly encouraged, I am expanding this topic; we'll have part two today and
a part three next week.
This Week's Column : Air Fare Loopholes - Legal or Not? : Is it your right to buy the cheapest airfare, or your duty to buy the most expensive one? The airlines say you're obliged to buy the most expensive fare, but seem to be avoiding testing their claim in court. Read more about your rights (and obligations) in this article.
And, talking about legalities, last week I expressed dismay at the US Air Line Pilots Association for defending the pilots who were appealing against being dismissed for being drunk in charge of a plane. Several readers, including an Air Line Pilots Association member, wrote in to suggest that the union has an obligation to defend its members (much like a public defender) whether it agrees with their actions or not. They may be correct. There is indeed a 'Duty of Fair Representation' that a union has for its members, but it is unclear if it extends to these situations, and meantime the Pilots Union has yet to get back to its member to explain its obligations. I used to be an executive member of a militant union in New Zealand, but, even so, there were cases when we'd back down and tell our member 'it was a fair cop, accept the consequences' rather than contest the uncontestable (but of course different laws apply in NZ). I'll let you know more on this point if it comes to light.
Continuing a legal theme, the Department of Transportation politely reminded airlines of their obligations to help passengers inconvenienced by bankrupted airlines. Did you know that, in such a case, other airlines have a legal duty, 'to the extent practicable' to carry such passengers, eg, on a space-available basis, and at a cost not exceeding $25 each way (sec 145 of the Aviation and Transportation Security Act of November, 2001 applies).
The DOT note seems to have been instigated by how the airlines responded to passengers left with worthless tickets when Vanguard suddenly closed down. All of a sudden, the 'generous' offers of the airlines to charge 'only $100' or to waive advance purchase on their normal fares (costing way more than $100), and apparently even refusing to make available the standby travel that they are obliged to offer can be seen as the disappointing attempts at illegal profiteering that they were. The DOT note is about as condemnatory as a government paper ever can be, and makes interesting reading on their website.
Airline bankruptcies have been in the news a lot. In contrast to Vanguard's collapse, the bankruptcy of US Airways seems to be a carefully staged event and not necessarily indicative of an airline about to disappear. However, I'd really hesitate to subscribe to the viewpoint of some industry pundits who are claiming that US Airways' bankruptcy may lead to more competition, more choices, and lower fares! Even more aggressively, one commentator was widely quoted as saying that the bankruptcy may signal a move away from the hub system, not just for US Airways but for the whole industry.
Let's get real. Airlines have come and gone many times in the past, but never has the industry made any fundamental change in how it does business as a result. While it is true that airlines are casting around for a 'new business model', the long expected US Airways bankruptcy is unlikely to precipitate much fundamental change.
US Airways' on-again, off-again, sometime sort of partner, United, is also increasingly the subject of bankruptcy speculation, much of it coming from itself! It is definitely true that United's share price has plunged dreadfully - in the last three months alone, it has lost 80% of its value (compared to about 20% for the Dow Jones and NASDAQ indices). Its market capitalization at the end of today's session was a mere $150 million - about the same price as a single new medium sized plane! Would you like to quickly multiply your money ten-fold? Buy up United for $150 million and then cash the company out! As of 31 March, it had net tangible assets of $1.491 billion dollars - ten times its market capitalization.
United's latest predictions ('bankruptcy in the fall') sound very much like history repeating itself. Almost exactly ten months ago, then Chairman James Goodwin threatened bankruptcy. He was quickly replaced by the board, but now new CEO Jack Creighton said earlier this week "Unless we lower our costs dramatically, filing for bankruptcy protection is the only way we can ensure the company's future and the continued operation of our airline."
One has to wonder how much the threat of bankruptcy is being used as a club by the airlines to beat their unions with. While I'm the first to agree that it is ridiculous to pay a part-time pilot $300,000 a year, the airlines have only themselves to blame for this, and with so many other areas to improve their service and lift their revenues, it is disappointing that instead of looking positively outside themselves to improve their revenues and operations, they seem to concentrate on looking inwards and narrowly at cutting costs (ie reducing services) rather than at lifting revenues.
Closing out the bankruptcy topic, thanks go to loyal reader David for forwarding this excellent article from the Baltimore Sun chronicling the disconnect between US Airways' profitability and the pay rises given to its CEO and now Chairman, Stephen Wolf. It is 'must read' material. Here's a quote :
The State Department has just issued a series of revisions to its Foreign Per Diem rates. This useful table shows what they believe to be the fair level of cost or reimbursement for people traveling overseas. Their levels range from realistic to wildly inflated, such as to encourage a five star lifestyle and gourmet dining. Well, we always wondered what the government did with our money, didn't we!
Some employers use these rates as a guide to what their staff can spend when they are traveling, and I think (but don't know for certain) that the IRS accepts these levels of payment as being fair reimbursement rather than extra income. Recommendation - if you can get your employer to pay you at close to State Department levels rather than at actual costs, do so! You'll make substantially on the deal if you stay at sensible hotels and eat carefully (eg, in Moscow the State Dept authorizes $191 for a hotel and $103 for meals and incidentals per day; I spend $72 for a hotel and average $35 a day for meals and other costs).
Travel agencies are closing at a rate of about 300 a month at present. In June, there were 26,120 agencies - I remember only a few years ago when there were over 35,000. Pretty soon now, Congress will pass a law declaring travel agencies an endangered species! That's not to suggest that the agency you work with is likely to go bankrupt or run away with your cash (most agencies are bonded and if you're paying by credit card, you have protection there, too), but it sure means that they'd love to hear from you next time you're traveling somewhere.
It appears that Americans are choosing to travel to safer and less 'foreign' international destinations in these increasingly uncertain times. Most preferred tourist destination remains Australia, then Britain moves up to number two spot (was third last year), and Canada leaps up to fourth place (from ninth). Four of the top five countries are English speaking. Other popular countries included Italy (down from 2nd to 3rd), France (down from 4th to 6th) and Germany (down from 5th to 7th) while Ireland went up from 6th to 5th. Japan and Israel (10th and 11th last year) both disappear out of the top 15 list.
Britain might be considered a safe and desirable destination, but beware if you travel to Edinburgh. The Edinburgh Dungeon has just had to modify its theme ride to make it less scary - too many terrified visitors were fainting! The attraction, which recreates a medieval Scottish witch-hunt, caused squeamish visitors to faint as bolts of lightning, chilling screams and dismembered bodies added to the terrifying atmosphere. A 26-seater boat carries tourists to an attraction depicting the cave of legendary Scots cannibal Sawney Bean. They are plunged into pitch-darkness for five minutes while they sail through underground caves, seeing witches fly overhead, bloodied bodies in the water and costumed staff submerged to the waist. Finally, they are surprised by an actor dressed as the cannibal. Manager Scott Williamson said, after the modifications, "Some tourists are still coming off looking pale, but that's what they're paying for." I think I'll stick to the Whisky Exhibition, myself!
I think we all have a bad story to tell about taxi drivers, don't we! I'm originally from New Zealand, and so was amused to read this story that tells how seven out of ten taxi drivers agree that it is too easy to qualify for a taxi license in New Zealand, while the other three - ooops, failed to understand the question!
This Week's Security Horror Story : A rich selection this week. Last week I mentioned the woman who had the 2" plastic gun part of a GI Joe Doll confiscated. And now, this week, it happens again. This time in Mosinee, Wisconsin (nope, I'd never heard of it, either!), where a 9 year old child, traveling unaccompanied except for his 7 year old sister, had his GI Joe doll also confiscated for the same reason. The boy's mother asked 'why are you doing this' and so she got a 'random' search for her troubles. While confiscating 2" soft plastic guns from children's dolls is regrettable lunacy, a deliberate 'punishment' to an innocent person who complains (ie a close search) is an inexcusable abuse of power.
And, qualifying for this week's Understatement of the Week Award, an unnamed spokesman for the TSA, when told of the incident, said 'it may be that we had an overzealous screener'.
Perhaps the real security horror story for this week, however, is the worry about just exactly who those people are that are manning our security checkpoints in the airports. A Houston man was arrested and accused of shooting at residents of an apartment building (which he then tried to set on fire) works as a security screener! He took a job at Houston's Hobby Airport as a baggage screener after being fired from his previous job, and is also both a registered sex offender and convicted rapist. So, yes, ladies, next time you wonder if the security screener is getting a bit too much pleasure while checking the underwires in your bra, you just might be right.
And there are problems not only with the ground based security screeners. This expose in USA Today highlights major problems in the air marshal program, including lack of training, no background checks, a marshal who left his pistol in an airplane toilet, and much much more.
Here's an interesting article. It says that each year, 15,000-20,000 people are murdered, 35,000 or more people die each year on the roads, and I don't know how many die of illnesses (such as cancer, AIDS, Alzheimers, or whatever) for which funds for research into cures are desperately needed. By contrast, 2800 people died on 11 September last year. So guess which preventable cause of death is getting by far the hugest share of the federal budget??? This article says this, and I repeat it, not to belittle the enormity of what happened, but to point out that all of us have a far greater chance of dying before our time by one of these other causes, and if we want to invest in giving the best and longest quality of life to everyone, the current 'war on terrorism' is not the best investment.
Interesting item a week ago. Early reports said that a Delta pilot refused to fly the Israeli Deputy Foreign Minister from Cincinnati to Toronto because the pilot considered having him on board would be a security risk. Subsequent reports (after a predictable initial refusal by Delta - 'we don't comment on our security incidents') indicated that the reason the Deputy Foreign Minister was deplaned was due to irregularities in the paperwork for a firearm he was transporting (makes you wonder why the 'irregularities' couldn't have been quickly corrected). There have been no more developments since Monday. Apparently this is the third high-profile Israeli to be refused passage on US flights due to the pilot being worried about the security risks they pose. So what for are we spending billions of dollars on airport security if pilots can unilaterally refuse to carry passengers for no reason other than an unformed fear that they might attract terrorist attention to their flight? (Note that the Delta flight was actually a small regional jet operated by their Comair subsidiary - hardly the first place a terrorist would strike!)
And, talking about pilots, another drunk pilot incident this week (making the third in recent weeks). One Mesa Airlines pilot tested positive and was fired, his co-pilot tested negative but curiously resigned, as did a flight attendant who was with the two of them.
So what is a person to do these days? Flying doesn't seem to be much fun. Forget about trains - Amtrak are having ongoing problems with their Acela trains. Maybe one should travel by car? But, ooops, did you hear about the woman in France that drove for 12 miles on the wrong side of a freeway, causing seven collisions involving 18 vehicles as oncoming traffic swerved to avoid her?
And, if you're driving in this country, beware of the next set of road works you drive past in Florida. Florida Highway Patrolmen have taken to impersonating road workers, with radar and laser guns disgused as theodolites and other construction tools! One such trap was so overworked that it took seven police on motorbikes and one patrol car to 'service' all the cars that were being pulled over!
Lastly, this picture came from the Farnborough Air Show, held in Britain a couple of weeks ago. Airbus was proudly displaying their new model A340. But, don't you think they'd have been slightly more proud if they closed the emergency exit door?
Until next week, please enjoy safe travels.
|David M Rowell aka The Travel Insider|
|ps : Don't forget to visit Joe Brancatelli's site for his weekly updates, too.|
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