The skies are friendly; the passengers are not
Sun, 2008/10/26 - 15:03 by aargh

International travel is a boon for some and a bane for others. I fall into that third camp for which it's a simple reality. It may as well be listed on a calendar, like Halloween and taxes and the neighbors' Sunday afternoon mattress opera.

That hopping the pond is my routine isn't to say I dislike playing Johnny Foreigner. Quite the contrary. There's a certain pleasure in the experience of meeting face-to-face with friends and colleagues. Ordering food in a language I barely speak and hoping to avoid international indicent. Taking in the occasional inescapable tourist trap, the type you visit regardless of entry price, simply because It's What One Must Do When They Visit This Location. (Would you really pass through Paris without seeing the Eiffel Tower? Of course not. That's why they charge you 12EU for the privilege.)

Something I do not enjoy, however, is visiting currency exchanges. They are a unique form of tourist attraction, a mutant lovechild of a magician and a pickpocket, to whom I fork over money and they return a smaller amount.

currency exchange: no commission
really, what's the catch?

Admittedly, the currency exchanges are due some fees. It's only fair we compensate the poor bastards who have to sit behind bulletproof glass and endure foreign-language obscenities from people who are simply frustrated that their currency is worthless. Fair enough. But these guys go above and beyond, just a step shy of gunpoint, and we have no choice but to see them. Usually when I am forced to engage a business that I know will rob me in the process, it involves my tax dollars.

For every place that charges a flat fee and grossly exaggerates the forex bid/ask spread, there's another that takes a percentage cut, and then two more that do a voodoo mix of both. All the while you're left with flashbacks of grad school calculus trying to figure out which of these bulletproof booths will leave you with enough money to buy a drink. Which is all you'll be able to afford.

It's a hell of a business when you think about it. Most of them post exchange rates in digital signs that they can (and do!) flip at the drop of a hat. I swear these currency exchange booths are manned by rogues who found trading too civilized and realized muggings required too much moving around. -or maybe they're just former toll booth operators who wanted a more lucrative version of their usual atmosphere.

currency exchange: rates, digital sign
worse than watching the stock ticker

Whatever the case, you're doomed. Ignore the finance journals' currency charts and accept that you're set to lose. Maybe add "currency exchange" to the list of costly and inescapable tourist attractions one visits when travelling abroad.

-or maybe, just maybe, visit the local casino. At least there you stand a chance of breaking even.

Mon, 2008/09/08 - 21:23 by aargh

Talk about going for broke: United's stock price took a plunge from roughly $12 to just pennies due to an errant bankruptcy announcement. The official end-of-day reports show it hit a minimu price of $3, but I could have sworn I saw just one cent shortly after the announcement. That's a 99.9% drop for the mathematically inclined among you.

For those who prefer visual aids, here's a chart of today's UAL stock price movements (the clock is based on Eastern time):

stock price chart

That asymptotic drop around 11AM? That's when the news hit.

The story itself was genuine, yes; but in UAL's defense they issued the statement six years ago. Hats off to the Florida Sun-Sentinel and their journalistic expertise. They could pick up some quality-control tips from aateur blogs. Just not this one.

Better still, this panic about United sank other airlines' share prices as well. Sounds like investors were expecting another industry-wide crash. Here's American Airlines:

stock price chart

(Same drop around 11AM!)

... and here's Delta:

stock price chart

(Thanks to Yahoo! Finance for the charts.)

"Six-Year-Old Story Causes United Airlines Stock to Plummet"

"United shares gyrate on rumor: Tell us how this affects you.",ual090808.article

"Inside The UAL Story Debacle"

Not to be outdone, Jet Blue announced fares (but not shares) for mere pocket change. The airline put some tickets and vacation packages on eBay and started the bidding at five cents.

I almost shed a tear when I saw the headlines. An airline had heard my cry and was experimenting with a more market-based model to hock its wares. Any day now, Jet Blue would change their own website to an auction model! Both airline and passenger will share the concept of a seat's value and act accordingly! The hazy mystery of ticket prices will become clear and all will be well in the world. Why, I think I'll buy a ticket now, just to participate in this marvel!

Then I read the fine print: it's just a publicity stunt. Apparently Jet Blue is trying to take a bigger bite of the eBay-using market share.

Too bad. Moving to an auction-based fare model would have let Jet Blue eliminate fare buckets so customers could compete with each other over prices. (I'll get to fare buckets another day. For now, simply search for that term along with "price discrimination" to get a 777-full of articles on airline pricing strategies.)

Best of luck with those actions, Jet Blue! Sadly, that news paled in comparison to the United price drop. Again, notice the dip at 11AM:

stock price chart

"Going, going gone: JetBlue auctions flights on Web"

"JetBlue Airways is Nickel-and-Diming Fares! Flights and Vacation Packages Now Up for Bid On eBay Starting At Five and Ten Cents* Each"

Sat, 2008/08/09 - 21:34 by aargh

The airlines play catch-up yet again: not long after Continental and AA announced ("AAnnounced?") in-flight internet service, Delta followed suit.

Some people ask why airlines are adding in-flight wi-fi service ("wi-flight?") while cutting other perks and raising prices in the name of soaring fuel costs.

I think those are separate, unrelated issues. I expect the airlines see wi-flight as a mild yet long-awaited perk that will yield little or no revenue. Let's work through this together:

It's not as though airlines can offer the internet service as a loss-leader, hoping to make up the money on tickets. At least not this year. Slim chance wi-fi will woo back customers alienated by high fares and new fees.

That said, I think wi-flight will pay for itself:

  • The fixed costs of the equipment should be fairly low, once amortized over a product lifespan that I would expect to be several years
  • The variable costs of the data service to the airlines should be low as well. Depending on the how the airlines structure the contracts with their internet service providers, this may even be a fixed cost instead of a variable cost.
  • Low fixed and variable costs permit the airlines to keep the service fees low, as well. (Delta expects roughly $10 to $13 per flight.)

If I am correct in that wi-flight will pay for itself by user fees only -- that is, the airlines aren't padding ticket prices so that everyone is unknowingly chipping in for the service -- then this works out. If you use wi-flight and get a new travel perk; otherwise you're no worse off than you were before. Given the state of the airline industry that's as good as one can expect.

Eventually, all this will be moot: I expect, over time, the airlines will declare wi-flight "free" for all passengers and just bury the fee in the ticket price.

Time will tell.

"The Latest Hot Spot Is on the Plane"

"Delta to Offer Wi-Fi on U.S. Flights"

Tue, 2008/08/05 - 14:30 by aargh

Some quick links for your summer reading pleasure.

(The New York Times and Wall Street Journal links may require registration if those articles aren't part of their wide-open content -- the Times is free, the Journal is not.)

Passenger tries to open plane door mid-flight

The title pretty much says it all. Well, I'm sure we could all say more, but it'd hardly be printable.

Come Dine With Me

A retrospective on airline service, specifically in-flight dining, and how it has declined. The author says airline food hit its peak in the 1980s; however I will contend that Air France was beating the competition hands-down in the early 2000s.

A Tip for Overseas Travelers: Leave Your Cellphones Home

Want to avoid high mobile phone bills when you travel? Get a local pay-as-you-go phone number in your destination country or use a VoIP service such as Skype.

I've done both in the past, and with great success. What's interesting is the difference in personal information collected in various countries for the pay-as-you-go SIMs. The US practically wants a blood sample, and France wants to see some ID. The UK, by comparison, only asked two questions: you sure you have an unlocked phone? and how much money do you wanna put on it?

Tue, 2008/06/24 - 18:58 by aargh

Updating your Twitter feeds. Catching up on work. Submitting complaints to airline websites. All this and more shall soon be yours at cruising altitude.

This summer AA is testing Gogo, a new in-flight wifi service.

Well, it's about time airlines caught up with the hotels and cafes in providing internet access. All that's left is overpriced food and rude neighbors. Wait ...

Some of you will rejoice, others will cringe, and the real pessimists among you (read: realists) will see onboard web surfing as the harbinger of mobile phone chatter. You thought the in-flight movies were bad? Wait till you get six hours of, "I miss you, too! ... No, I miss you more!"

Me? As always, I just have a few questions:

- Will the airlines leave the wi-fi running while you're stuck on the tarmac? Let's hope so ... I can just imagine real-time updates to TravelHell. Maybe forum members will get to know one another as they find themselves ranting on the same flight.

- Should we expect to see more airplane-themed YouTube videos? I can see it now: Flight Attendant Nails Passenger With Food Cart. -or even, Overhead Space Brawl.

- Speaking of videos, how soon till the airlines filter the internet traffic? Because we all know some wanker will forget he's in a public place and ... ahem ... use the internet for more personal motives.

- Most of all, will there be enough outlets? The AllThingsD article says the initial Gogo flights will be AA 767s. SeatGuru says that's 32 or 36 outlets in coach, depending on the configuration.

Answers, maybe, over the coming months.

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