The build up to the Apollo 11 celebrations is reaching a crescendo. As I type this, a website that is recreating the journey in real time tells me that at this moment, 50 years ago, the Apollo 11 craft was on the way to the moon, travelling at 2040.8 mph and the crew were sleeping.
I totally acknowledge the technical brilliance beyond measure of every part of the Apollo program (or the faking of it!), and it is a feat not to be forgotten. But, whenever it comes up, I feel more sadness than joy at the memory, because what has happened since that time? The last of the six missions that landed on the moon was in 1972, and since that time, no man has even managed to get out of very low earth orbit (ISS at about 254 miles).
Even the various geosynchronous satellites up there are way beyond that at 22,236 miles, and of course, let’s not forget the dubious Space Shuttle program (costs immeasurably over budget, launches way down on projection, and 2 of the 135 missions ending in disaster) ended on 21 July, 2011 – almost exactly eight years ago. Now we’re reliant on the Russians to get people to the ISS.
Adding a degree of comic relief to what was once a serious business, there is the very long list of broken promises by Sir Richard Branson with his overly optimistic approach to “space” travel. He first estimated, in July 2008, that his Virgin Galactic company would be flying within 18 months (ie the beginning of 2010) and since that time we’ve had to endure his repeated promises on a regular basis, all of course shamelessly broken.
Earlier this year he was predicting commercial flights around the middle of this year, and only three weeks ago he was planning on hurling himself into space at a time coincident with the Apollo 11 moon landing on 20 July. But on Thursday 18th, Branson said there needed to be “just a few more test flights before he jumps on board for the first tourist trip”. We’re aware of test flights in July and December last year and another in late February this year, but not of any more since then and have no idea what the schedule may be for “just a few more test flights”. But the need for them were not anticipated a mere three weeks ago, so we can only conclude that still more things have gone wrong and still more delays of an indeterminate nature are resulting.
So from the extraordinary feats of excellence and bravery by people of the highest integrity and quality in the 1960s, has our space program now been reduced to the public tomfoolery and broken promises of Sir Richard Branson, along with the at best ambiguous claim of his flights reaching to “space” (they are believed to go about 70 miles up, so just over 1/4 of the way to the ISS)?
Meantime, NASA’s somewhat variable mandate for the future (not its fault, it is a plaything of the politicians who fund it) suggest that their directive to get a man back on the moon by the end of 2024 is drastically unfunded and unlikely to occur. As for traveling on to Mars, there is no sign of any type of commitment to make that a realistic undertaking at all – not by NASA, not by the government, and not even by sometime Mars-enthusiast, Elon Musk, who seems to have lapsed into a relatively quiet period when it comes to his plans to move to Mars himself.
So – yes, we surely should celebrate the extraordinary efforts and accomplishments of getting a man on the moon in just over 6 1/2 years between Kennedy’s speech in September 1962 and the actual first landing on July 20 1969. Few who didn’t live through that period can guess at the extent of the challenge and the national effort to succeed. Every part of the program required the total invention from scratch of new futuristic technologies. Almost nothing was “on the shelf”. Computers were barely a thing, with much of everything being done with slide rules (with a mere 2.5 digits of accuracy) and books of logarithm tables (probably with four digits of accuracy, although my absolute treasure, back in the days when log tables were a thing, was a rare book of seven digit logarithm tables.
But at the same time we deservedly rejoice in our success, please also be humbled by our retreat from space and from associated scientific research and excellence. We no longer go into space (nor do we have have supersonic passenger planes either – another creature of the incredible can-do successes of the 1960s).
One thing we did have back then, though (segue alert). The Boeing 737. Based on the 707 which dated back to the mid 1950s, which itself was designed before even Sputnik-1’s launch and first flown a couple of months after Sputnik 1; the 737 first flew in April 1967, making it a contemporary of or even older than the Apollo moon rockets. The FAA certification for the first 737s, more than 50 years ago, is still the basis for the latest 737 MAX planes’ certifications today.
Those were indeed the glory days for aviation and space technology. Boeing’s role was at the leading edge, pushing forward boldly with new planes, and quite literally “betting the company” on the success of such new and, at the time, more or less unproven things as passenger jets (707) and huge passenger jets (747).
Now, alas, not quite so much, but did they, inadvertently, make another “bet the company” decision in mid 2011 that is only now slowly seeing the light of day? The exploration of that fascinating question makes up this week’s feature article, below.
What else this week? Please continue reading for :
- Travel Insider Touring
- Another Bad Week for Boeing
- This Year’s Greediest Law Suit?
- Lies, Damn Lies, and Airline Statements
- More Tweaking at Norwegian
- Extension of EU Compensation for Airline Delay Regulations
- Marriott Claims Resort Fees Benefit Their Guests
- Amazon Prime Day – Bargains and Blunders
- Abigail Disney on the Warpath Again
- And Lastly This Week….
Travel Insider Touring
It is looking like our European Christmas Markets tour in December might be a miss this year. Two more couples are all we need to make it a “go”; so why not decide to join us for this great experience in and around Bavaria, including my favorite Christmas market in all Europe and my favorite city in all Europe. If you’re going to come, please tell me asap so I can leave the tour open. Details here.
Happily a definitely proceeding tour is our lovely France tour in September (and the Scotland tour before that of course too). Our France tour keeps you off the beaten track, although you can spend time in Paris (and anywhere/everywhere else) if you wish prior to its commencement.
We go to the iconic Mont Saint Michel, just off the Normandy coast and these days a World Heritage Site (pictured above), to Honfleur made famous in paintings by Monet, to the Bayeux Tapestry of 1070, to assorted grand chateaus and castles, and of course, to wineries and lovely towns and villages set in beautiful countryside. Details here.
Another Bad Week for Boeing
My gosh, how long can I continue to write, every week, an often lengthy item under this heading? I keep thinking, and indeed, truly hoping, that each week’s entry will be the last, but this week sees another solid entry in the “very bad week” category.
On Thursday Boeing announced its second quarter results, reporting the worst quarter ever in its financial history. This is due to it taking a financial charge to cover the costs of the 737 groundings. The exact details of this charge are unclear in terms of how much relates to expenses already incurred or known to be coming due in the future, and how much might still be waiting to emerge out of the woodwork in the future, although it is a time-hallowed tradition that “if you’re going to have a bad quarter, make it a dreadful quarter so the following quarter shows a turn-around”. Boeing did indicate that the charge was based on likely total costs to be incurred, assuming the plane is to return to service early in the fourth quarter, which would mean October.
But how realistic is October as a time for securing approval for the plane’s return to service? That’s of course the biggest question and variable. Earlier in the week, all three US operators of the 737 MAX (AA UA WN) extended the cancellation of their 737 MAX fleets until November 2. It seems the airlines are canceling only the minimum amount needed to reflect their need for operational forward planning rather than to reflect the reality of when they expect their planes to return to service, so we view this action as indicating nothing more than an expectation that there’s no way the planes will return to service before early November, and as for if they actually will be flyable again in November, who knows, and they’ll revisit that issue in another month or so.
The Wall St Journal is opining that the grounding could extend into 2020. If you can’t read the WSJ original, it is cited in this article. We’ve not seen any strident criticism or convincing rebuttal of the WSJ’s analysis, especially not from Boeing itself. The new big issue seems to be related to the flight computer “overload” condition which can occur; this is an issue that may or may not be capable of a quick software fix. It may require a more powerful processor, and that would (or at least should) involve a thorough retest of all the software it handles.
The other point is that not only are airlines suffering extended groundings of their current fleets of 737 MAX planes, but they’re not receiving of new 737 MAX planes that have been expected since March, making their problems steadily growing worse.
Boeing had an earlier schedule for producing 52 planes a month and had hoped to increase that to 57 during the year, and during the grounding is continuing to produce the planes at a slightly lower rate of 42/month. So, for the four months so far, there are another 210 planes that airlines had planned on receiving and have not received, and about 170 planes sitting on the ground waiting to be delivered at some future time.
The impact on airlines is getting worse every month, and as each month passes, the growing backlog of produced but undelivered planes grows too, and when the grounding is lifted, neither Boeing nor the receiving airlines have the ability to suddenly start delivering/receiving airplanes at 2/3/4/more times greater rates than normal. So the time to recover from the grounding, after it is lifted, is extending each month.
The point about this is that nothing magical happens on the day the FAA finally says “okay, the grounding order is lifted”. Airlines then need to check their grounded planes, fit whatever modifications are required, and train their pilots on the new software and procedures. That will take some weeks depending on how many planes an airline has, and as for the delayed new plane deliveries, those will probably take 2 – 3 months to catch up on. Plus, with the reduced production rate currently, Boeing has already lost about an entire month’s production of planes, adding further to the schedule slippages.
Now for the amount of the accounting charge Boeing reported in its second quarter. It is widely being reported as a $4.9 billion charge. That’s not wrong, but as CPAs know, accounting is a fuzzy rather than exact science, quite different from literal bookkeeping. The $4.9 billion figure is the after tax value of the charge. That’s a meaningful number, especially if you’re a shareholder, but it is also relevant to note that the $4.9 billion after tax sum is based on a before tax actual cost being booked of $5.6 billion.
An earlier $1 billion charge was taken in the first quarter. We suggest the actual measure of the harm to Boeing is more fairly reflected in the $6.6 billion variously of lost revenue or extra expenses, not in the lower after-tax amount reported. And we also encourage you to consider all the “soft costs” to Boeing – loss of reputation and confidence, loss of sales that will now go to Airbus, the need to discount more to keep/win business, and so on. These numbers are impossible to measure and probably will not be included, but are certainly present.
All these costs, and the others that are likely to continue to be incurred, are because Boeing made an extraordinary blunder by choosing to consider only one rather than both Angle of Attack sensors when evaluating the plane’s performance. There were plenty of other blunders too, but this seems one of the seminal blunders. How this oversight slipped through Boeing’s QC and the subsequent evaluation and certification by the FAA remains an extraordinary puzzlement.
A larger potential blunder may have been the decision to freshen up the tired old 737 one more time, rather than to finally develop a replacement plane. That’s a point considered in the separate article, below.
One other minor pinprick of bad news. It seems Ryanair has decided to rename its 737 MAX planes. They will be termed a 737-8200 instead. In this case, it is likely true that a rose by any other name will be just as thorny.
Finally, not so much bad news for Boeing as bad news for the country and the world. Could Boeing’s problems destroy our long-running bull share market? Possibly so, according to this article.
This Year’s Greediest Law Suit?
Still on the Boeing 737 subject, alas, but a point which deserves its own heading is what may be this year’s most opportunistic and greedy law suit.
The chances are that many of you reading this today may have already flown on a 737 MAX prior to their grounding. Indeed, there’s a good chance that many people don’t even know what model 737 they are flying on, and, as airplane enthusiasts know only too well, many more people don’t even know if they’re on a 737, or a different Boeing plane, or perhaps an entirely different Airbus plane.
Ask most people “How was your flight” and you’ll get some sort of answer; but follow up and say “What was the type of plane you were on” and a sudden look of uncertainty crosses the other person’s face. Some people will even wonder why on earth you’re asking, because to them, a plane is a generic concept with nothing much to distinguish one single aisle plane with three seats on each side of an aisle from any other similar plane. Who cares what the make and model is.
But nearly a dozen people have banded together to sue Southwest Airlines and Boeing for a “reckless greedy conspiracy to launch the defective 737 MAX 8 and keep it flying”. Why are these people suing? Because these people actually traveled on a 737 MAX plane operated by Southwest at some point between when WN started flying them in August 2017 and the grounding on March 13 this year.
The actual harm suffered by the plaintiffs? Umm, nothing at all. Probably not even any type of flight delay. Just ordinary normal flights, on an ordinary normal plane, or perhaps slightly nicer than normal due to being newer.
But the plaintiffs claim that if only they’d known about the dangers concealed within the plane, they’d never have bought tickets on flights that would be operated by the 737 MAX. Maybe that is true – and that’s a big “maybe”, but where is their loss or harm? What is their suffering or inconvenience?
This lawsuit seems to be nothing other than greedy opportunism at its worst. We hope the claimants spectacularly lose, and that Boeing and Southwest are awarded the right to claim full costs against the claimants and their enabling attorneys.
Lies, Damn Lies, and Airline Statements
How do you know when an airline exec is lying? His lips are moving. So goes a well-worn gag, but like all gags, there’s an uncomfortable measure of truth associated with it.
Recently the CEOs of American, Delta and United joined editorial forces and co-signed an “Op-Ed” article in USA Today. The focus of the article was their oft-stated concern that the Gulf airlines are unfairly competing with AA/DL/UA, and in doing so, the American economy was being harmed. As high-minded individuals, they feel compelled to warn not of any danger to their own airlines, but rather to the pervasive insidious harm being done to God, Mom, and Apple Pie.
This is a topic the three airlines have tried to talk up repeatedly, and have failed at every turn. But perhaps emboldened by a more protectionist focus in the Trump administration, they’re not giving up; instead, they double down and try harder each next time.
If you read their op-ed, it even seems fair and sensible at a casual glance and quick read.
But, please, don’t stop at that point. Now turn to this stunning tour-de-force rebuttal by blogger/commentator Gary Leff. He goes through the op-ed, literally paragraph by paragraph, and mercilessly savages every statement and distortion within it.
It is a sobering display of the sophistry of the airlines trying to deceive us for their benefit, while pretending they’re trying to help us. Perhaps it is indeed true – if you see an airline executive’s lips move, you’re being lied to.
More Tweaking at Norwegian
We don’t mind seasonal changes in airline schedules, for example, four or five flights a day between two cities during high season reducing to two or three flights a day during low season. We don’t like it, but we understand and accept it.
But seasonal changes that show the difference between daily flights in high season and no flights at all in low season are more difficult to stomach, especially for the airlines themselves. It is hard to have a meaningful presence in a market if you’re not there year-round. Just when you start to get some name recognition and passenger loyalty, and get your “frequent flier hooks” into passengers, you close down for six months and have to restart all over the next year again, and win back all the people who had supported you until you shut down for the low season.
However, needs must, and Norwegian is to be congratulated for taking hard decisions and deciding to close some city-pair services entirely between Europe and North America for the winter season. Not only does that reduce their low season losses, which have been harsh in recent years, but it also allows them to redeploy the planes to other destinations that are more popular in winter -Southeast Asia in particular.
We hope they’ll quickly return to a point where they can support loss-making low-season operations from greater profits in high-season, but until that point, we’re glad to see them doing what needs to be done to ensure their survival. We think we’ll risk booking our flights to Scotland and France with them for September/October as a result.
Extension of EU Compensation for Airline Delay Regulations
Don’t misunderstand. We love that, in Europe, airlines are held liable for delays due to matters within their control, and rather than some faceless EU authority occasionally/rarely fining them and keeping the money for itself (such as happens in the rare cases when the DoT enforces its tarmac delay regulations in the US), individual travelers can claim from their airline and the delay compensation goes to the travelers, not to the government.
So, if, for example, you are flying on Lufthansa from Frankfurt to Boston, if the flight is delayed, you’ll be liable for compensation.
But what happens if, when you bought the ticket, there was another final flight, connecting with the LH flight in Boston and flying on “Brand X” (a US airline) from Boston to anywhere else? More to the point, what happens if the LH flight operates with typical German precision, but the US airline operates with, well, not-uncommon US slackness and suffers delays in getting you to your final destination.
Until now, delays due to the US carrier’s flight were nothing that LH was liable for. That seems sort of fair and reflective of the real-world reality. There’s nothing LH can do if the US connecting flight suffers from a mechanical problem, a weather problem, a drunk pilot, or whatever other misfortune that might arise.
But the European Court of Justice has now decided that, if your ticket for the US flight was bought through LH (or any other European airline), then that airline is responsible not only for its own flight but for the other airlines’ flights too, and the European carrier (not the US airline) will be liable to pay you up to €600 (US$700) in compensation if this other flight is delayed by more than three hours or cancelled.
We can sort of understand their reasoning, but it will surely make a nightmare for European carriers and their international partners. Of course, they’ll rewrite their agreements with other carriers to allow for such costs to be charged back to the ultimate carrier, but it will add much extra paperwork and bureaucracy, plus creates an interesting issue. Say your final flight is a short hop from Boston to Bar Harbor or Rochester or somewhere not far away. You probably paid, let’s say, an extra $100 on the international ticket for the final flight home, and for simplicity, let’s say that LH is paying the actual airline $100, too. (In reality, LH might be paying much less than $100, or possibly even much more than $100. Like everything to do with air fares, there’s no connection between what you pay and what it costs an airline to actually fly you.)
Now imagine that this flight has a delay. LH pays you the $700 it is obliged to. It then turns to the actual US carrier and says “Ummm, you know the passenger we paid you $100 to fly to Bar Harbor. Well, because your flight was delayed, we had to pay them $700 in compensation. So will you please give us $700 plus another $50 for our accounting costs and handling fee.”
What airline will feel good at carrying passengers for $100 when there’s a chance of incurring a $750 penalty? For LH, a penalty is also unpleasant, but if it charged you $1400 in total for the fare, then at least it is still cash-flow positive on the deal, and $700 is only half the total fare. But for a regional carrier in the US?
We think the ECJ’s zeal to protect the rights of airline travelers may have slightly overreached in this case. But be aware that this new entitlement now exists, and be ready to claim it should you suffer a delay.
Marriott Claims Resort Fees Benefit Their Guests
Here’s a shamefully uncritical piece of reporting in Skift, a travel focused publication that sometimes releases good stories, and sometimes seems to do nothing more than endorse press releases from travel suppliers without comment or criticism.
Actually, the greater criticism should perhaps be levied at the “hired guns” giving testimony of behalf of Marriott in a court case where the hotel group is defending itself against claims that it has been deceptively charging resort fees to its guests. A Bjorn Hanson says that if Marriott and other hotels groups can’t charge amenity fees, they might end up having to increase their regular room rates to compensate.
To all ordinary residents of Planet Earth, this piece of analysis is unsurprising. Our complaint is not so much with how much we pay for a stay at a hotel, but with the deceptive way the rate is constituted, with a resort fee ostensibly providing us with benefits we often don’t want but can’t opt out of, and with the resort fee massively more than the probable cost of the “benefits”, and sometimes two or more times the apparent normal cost of the hotel room itself.
Charge us whatever you wish as a regular nightly rate, but be honest about it, and don’t treat us as fools and lie to us about resort fees that are obscured away from the published price leaders on websites and in advertisements.
Another “expert” in the article is quoted with the ridiculous suggestion that resort fees should be offered, voluntarily, to guests in various packages. There’s not a single component of a resort fee I’d pay money for, other than internet access, and if that gets too pricey, I’ll simply use my phone as a wireless hotspot and use my very affordable Google Fi data plan.
There’s a reason hotels make resort fees mandatory. That’s because they are outrageous rip-offs that no-one would ever voluntarily pay for, and so there’s no way hotels wish to allow any part of a resort fee to become optional.
Mr Hanson points out helpfully that hotels have been forced to charge “resort” fees, even at ordinary city hotels, because some of their operating costs have increased. For example, they now have to pay more for insurance, land taxes, and staff labor. So apparently what you and I would consider ordinary costs of doing business, the type of costs that are included in the cost of the regular purchases we make at a supermarket and most other places, can now be relabeled as a “resort fee” and justified on the basis of giving us a “free” bottle of water in the room, and access to a pool and gym, etc.
Why can’t hotels simply charge whatever single inclusive rate is needed for them to make the return on their investment they need, and call it, hmmm, let me see, how about a “nightly room rate”. Why should they be allowed to play games and offer loss-leaders and advertise rates that have asterisks and fine print pointing to true rates that, in places like Vegas, might in reality become two or three or more times the advertised rate.
Abolish resort fees.
Amazon Prime Day 2019 – Bargains and Blunders
Did you pick up some bargains this year? The most popular items for Travel Insiders seem to have been smart plugs to work with Alexa, the Echo Show 5, the 400GB SanDisk Micro-SD card, the Echo Dot, and the Fire HD 10. Great choices, one and all, and great values too.
Out of curiosity, and a cynical desire to keep Amazon honest, we checked on Thursday and all the Prime Day prices do seem to have been truly/fairly discounted compared to their “back to normal” prices on Thursday. But there’s one slight exception to this, within which there’s an opportunity for you still. The Echo Dot, normally $50 and reduced to $22 for Prime Day, is back to $50 again. But you can buy two Dot units, also for $50, if you use the discount code DOT2PACK when checking out.
If you already have an Echo Dot and like it, this is probably the best way to get two more at half price until Black Friday when other deals might appear.
We gather that Amazon sold some high end camera gear at crazy-low mistake prices – various items up to $13,000 each for $94.48. Even more extraordinary, as reported in the linked article, apparently some people were able to get those surely mistaken priced matched by other retailers. Alas, we seldom (oh, alright then, never) check prices on very high end camera gear. But for sure, we will next year!
Abigail Disney on the Warpath Again
Abigail Disney is the granddaughter of Roy Disney, who in turn was the brother of better known Walt Disney. The two co-founded The Walt Disney Co. She is also an occasional social activist, and, credit where it is due, has regularly expressed concern about policies of the Disney Corp, of which she owns some shares but has no management role.
This week she appeared in print having channeled what she believes her grandfather and his brother would feel about the present situation where, according to her, many Disney park employees struggle to live on the wages they’re paid, while CEO Bob Iger is enjoying a $65 million pay package. That pay package is 1,424 times more than the earnings of the average Disney employee, and of course, many times more than junior level park staff.
She can’t comprehend how it is possible to have such a discrepancy between underpaid frontline staff, actually creating the product and generating the wealth for the company, and the individual at the top of the organization chart. Neither can we, and we view with concern the widening multiplier between senior executive earnings in companies and the amounts earned by regular employees. Several decades ago that multiplier was in the order of 50, and now, as witness the Disney and other experiences, it is over 1,000 and sometimes over 2,000.
Sure, we understand that with companies making tens of billions of profit a year, paying tens of millions of dollars to the CEO is less than 1/10th of 1%. But, here’s the thing. Could they not find a suitable CEO who would eagerly work for them, just as well, for “only” $32 million instead of $65 million? Couldn’t they find someone who’d work for $6.5 million instead of $65 million? Of course they could, indeed, they probably only need to go one or at the most two levels in their own hierarchy to find plenty of eager and able contenders who’d love to accept the CEO position for $6.5 million.
It is also true, to add further perspective, that Disney employs in total 200,000 people world-wide. Let’s say it applies that $60 million in saved CEO income to the lower half of its staff. So those 100,000 people would get an extra $600 a year each – another 30c an hour. Not exactly a complete solution. Even if Disney could then scoop up another $60 million in savings from the other CxO officers, that is still only $1,200 a year or 60c an hour for its lower paid workers. Not exactly transformational. But, a good start and not to be discouraged.
Disney replied a couple of days later calling Abigail’s comments a “stunt” and describing it as “egregious hyperbole” while ignoring her criticisms of Bob Iger’s pay, and claiming that their lower paid staff were actually sufficiently well paid.
We wish her luck in her crusade, but don’t expect to see Iger’s pay packet reduce.
And Lastly This Week….
Here’s another of these dubious lists, this time purporting to be a list of the world’s top 100 hotels.
Noting how nearly all of these hotels are in wonderful/special destinations, we think there’s some conflation as between “nice hotel” and “amazing place to stay”, as well as wondering how many of the people voting on the top 100 hotel list have actually stayed at more than one or two of the hotels on the list. But, while the hotels might not truly be the top 100, they probably are indeed very good hotels, and well worth a visit. Details here.
Well done, the TSA. Sunday July 7 was the busiest day in TSA history, with 2,795,014 passengers and crew being screened, narrowly beating the previous record set over this year’s Memorial Day weekend. Few if any unusual delays were reported, according to this article.
Therapy animals on planes are a contentious topic. Get ready for a new twist in this debate. Therapy cows. See this article.
One of the reasons we all love to travel internationally is to see how different people do things differently to the way we live our lives at home. Here’s an amazing story of one such difference.
Talking about cars (as we were in the preceding paragraph) did you know that on your Uber rides, not only do you get to rate the driver but the driver gets to rate you? One of the things you’ll be rated on is the quality of your conversation, something I find terrible. I don’t want to talk to the person driving the car most of the time. I want to relax, to work on a device, to doze at the end of a very long series of flights, to make some phone calls, or whatever else. To think that I’m being rated on my ability to be a good conversationalist, and the underlying assumption that I’m obliged to chat, appalls me.
So you can guess which of the eight ride options on this amusing list I’d choose.
Bathrooms done wrong? Yes, and sometimes spectacularly so, according to this article and its pictures. We’ll confess that one of our bathrooms at home has one of these flaws/features. Can you guess which one!?
Until next week, please enjoy safe travels