March 25, 2008

From Peter Greenberg Worldwide Radio

FAA GROUNDINGS

Last week, you know we talked about Southwest Airlines grounding 38 planes, dealing with a record fine of over $10 million and, of course, issuing an apology.

But here’s the best part of the story …

The FAA is really the story here, not Southwest. The FAA announced that it would inspect all maintenance records of all domestic airlines, to ensure they respect safety directives, following incidents at Southwest Airlines.

Now, do you find something stupid in that? Are they going to inspect the safety records or the maintenance work?

That is what they are supposed to do—they are supposed to actually inspect the maintenance, not the paperwork. That’s the problem. The FAA is so understaffed, they’re not inspecting the maintenance work, they’re inspecting the paperwork. Well, anyone can mess with that.

This is nuts, and the whole idea that they’ve now announced that the FAA was going to look at the maintenance work for all domestic airlines. But they didn’t, they said the “paper work.” So guess what happens? Oh my god, United Airlines suddenly grounded seven planes. Why? Because maybe they weren’t inspected.

Well this is just the tip of the iceberg and we need to shake up the entire FAA. The agency takes Quaaludes to get up in the morning. And it’s got to stop—it just has to stop.

LOW-YIELD MARKETS

Then, what did the airlines announce? They are cutting capacity; Delta airlines offering buyouts to 30,000 people; all the other airlines announcing they’re going to start grounding planes. Not because of safety, but because of revenue.

And you know what? I don’t buy it for a second that they are going to ground planes. What they are going to do is redeploy the planes. Because of the dollar being beaten up against the yen, the euro and the pound … guess what? They can make more money flying them overseas than between New York and L.A.

This is all about yield, and it’s going to affect your travel plans this summer. Have you been on a plane yet that has not been totally full? No, of course not, so all the other airlines complain that there is not enough capacity. No, they are over capacity. The problem is yield. How much are they making per seat, per passenger on each route?

Guess what, the low-yield routes are going to get beaten up. Hawaii is not a high-yield route, it’s a vacation route. There is a lot of frequent-flier mileage redemption on those flights. Orlando— no business travelers there, they are all going to see Mickey. And then, of course, there is Las Vegas. Not a lot of business travel over there.

So, anytime there is a downturn in the economy, guess what? They pull out of the low-yield markets. So, you are going to see less and less capacity to Orlando, Las Vegas and Hawaii as they take those planes and put them on routes to Europe. For the folks there, we’re a bargain.

Last year, 57 million foreign visitors came to the United States. That is an increase of 11 percent. That’s huge, over the year before. Boy, are we the bargain, and it’s getting bigger this year.

So, the old metric, the old way that you would look at how you would actually book a flight in advance is out the window. You can’t book 45 days out, you can’t even book six months out—you’ve got to book every two seconds to make sure that there is a seat available, maybe, at a price you can afford.

It’s not about us anymore, it is about the foreigners and what they are going to be able to spend and willing to spend. And guess what? They are willing to spend it because we are the bargain, so get ready for that.

TERMINAL 5 AND FINGERPRINTS

We have Terminal 5 opening up in a couple of days in London. Here is the weird part about it now—it is going to be like this great military expedition. On the night of March 26, as all of British Airways, in one eight-hour period moves over to a new terminal.

I don’t think I want to be there that day.

What’s worse, they are going to start a new program now, in which every single passenger going through Terminal 5 is going to be fingerprinted. That’ll be fun. Just another line to stand in. I love how they inaugurate a new airline terminal by announcing a new line. Yeah, that’s progress.

CHAPTER 22

And then, we have what we call Chapter 22. Don’t you know what Chapter 22 is? It is what happens when you file bankruptcy twice. And that is what just happened.

Aloha Airlines announced, over the weekend, that they had to file Chapter 11 again. Now, why does that happen? It is called “predatory pricing.”

There is another airline in Hawaii called go!. They have no intention whatsoever of making money, they just want to undercut everybody else. And the problem is, they did.

The result was millions of dollars of losses between Aloha and Hawaiian Air. Just because this other carrier came in and said, you know what, we can lose money longer than you can. Isn’t that a sad state of affairs? That we define a successful airline by which can lose money longer.

And what’s worse, is that it is not going to go away. Now, Aloha is still going to operate, they are going to operate under Chapter 11 again, like they did the last time. But it is not a good state of affairs when an airline that basically used to own the market on inter-island travel. That is all they do, can’t survive because a third guy came in just decided it just wanted to mess with them. They don’t want to make any money, they just want to mess with them. It’s nuts.

PUBLIC SEX IN AMSTERDAM

And then, of course, I have to give you the stupid story of the week.

The city council in Amsterdam has now has ruled that visitors to Amsterdam’s popular Vondelpark will be allowed to have sex in public. That’s right! Book your tickets now.

And now there are protests from who? Animal lovers. Think about it.

Because the city officials also announced that dogs would no longer be allowed to roam the popular park without leashes. That’s right, because the dogs get very excited watching people having sex in the park.

I mean, come on, what is this? So bring your cell phone camera, we would love to share those videos on YouTube.

Still interested (more interested?) in visiting Amsterdam? Check out our Off-the-Brochure Travel Guide to Amsterdam.

From Peter Greenberg Worldwide Radio

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