Sunday, November 30, 2008

Big Mess at Airports

Overall air travel is down during this Thanksgiving holiday period, but bad weather (ice, snow, heavy rain) has caused major snarls at airports in the East and Midwest today.

The New York-area airports, natch, are the biggest mess, with delays of up to four hours at Newark and over two hours at Kennedy and LaGuardia, according to

Also reporting big delays: O'Hare, Denver, Orlando, Boston, Miami and Louisville. As the early evening peaks arrive, the delays are sure to ripple to other airports. Lighter-than-usual Thanksgiving air travel aside, the Sunday after Thanksgiving is traditionally one of the busiest travel days of the year.


Saturday, November 29, 2008

Hotlines, Updates Posted by Mumbai Hotels

The two luxury hotels that were among the targets of terrorists in Mumbai have posted Web sites with helplines and updates.

Here's the Taj Mahal. And here's the Oberoi.


Friday, November 28, 2008

GM Wants to Hide the Heavy Metal

[Above: A G-IV cabin]

General Motors evidently got the F.A.A. to keep the public in the dark about the use of at least one of its corporate jets, Bloomberg reports today.

That would be the leased $50 million G-IV jet, tail number N5116, that the GM chief executive, Richard Wagoner, flew into Washington on Nov. 19 to beg Congress for a $25 million industry bailout. The top dogs at Ford and Chrysler, Alan Mulally and Robert Nardelli, also swanned into the capital from Detroit that day in their own companies' private jets.

Information on the movements of all aircraft, including private jets, is usually readily available at Web sites like

But movements of the GM aircraft, which last visited Washington on Tuesday, could no longer be tracked publicly after that.


Thursday, November 27, 2008

International Air Travel Slumps for 2nd Month -- This Means More Fare Sales Are Ahead

International air traffic declined in October for the second consecutive month, the International Air Transport Association said today.

The fall-off was 1.3 percent compared with October 2007, smaller than the 2.9 percent drop in September.

And here's a strong indication that we can expect to see even more fare sales ahead on most international routes. Load factors -- the percentage of available seats filled with paying customers -- dropped 7.6 percent and 11.1 percent, respectively, on the all-important North Atlantic and Asia-Pacific routes, compared with October 2007. That means far more seats are flying empty, and until they're able to reduce capacity, airlines are going to be looking to fill those empty seats at whatever price they can get.

"While the drop in oil prices is welcome relief, recession is now the biggest threat to airline profitability," said Giovanni Bisignani, the executive director of the air transportation organization. He added that a "deepening slump" in airline cargo traffic (which fell 7.9 percent in October) is "a clear indication that the worst is yet to come."


Mumbai Terrorist Deaths Over 100

The auhorities haven't fully secured Mumbai after a wave of terrorist attacks that evidently singled out Westerners and killed more than 100 people yesterday. Hostages are still being held, and anyone with immediate business-travel plans to Mumbai -- also widely known by its former name, Bombay -- really needs to carefully assess current conditions in that city.

By the way, I don't quite get why most of the media today are pointedly referring to the perpetrators as "militants," rather than "terrorists."

Evidently, the rationale is that various unnamed but learned authorities on known terrorist groups have never heard of the so-called Deccan Mujahedeen, which is what the terrorists who pulled off these coordinated attacks in Mumbai call themselves.

Dunno, but from my point of view, this parsing of nouns reflects an overall mistake we've made in bestowing standing on terrorists, as if terrorists are defined exclusively as enlisted, formerly sworn member of an official group -- a recognized army, of sorts -- and not as ideologically driven organized criminals who employ terror to achieve their goals -- which makes them "terrorists," in my English book.


Wednesday, November 26, 2008

Terrorist Attacks on Luxury Hotels and Tourist Spots in Mumbai

Terrorists attacked the Taj Mahal and Oberoi hotels and several other tourist and business-travel locations and a train station in Mumbai, India. More than 60 people have been killed.

Here's the AP report as of mid-afternoon Wednesday. A more timely BBC report put the number of dead at over 80. Unconfirmed wire-service reports said that terrorists are holding hostages at both five-star hotels.

Here's the current report in the Times of India newspaper.


Tuesday, November 25, 2008

Eclipse Failure: The Reckoning Begins

The strange saga of Eclipse Aviation, which filed for bankruptcy this morning, citing debts of more than $770 million, has not been fully told yet. Not by a long shot.

Explanations are required -- for employees at the Albuquerque, N.M. plant, for customers who put down money for orders, for customers who already possess one or more of the approximately 250 Eclipse 500 jets that have actually been delivered since Eclipse announced its start-up 9 years ago.

Originally, the Eclipse 500 very light jet was priced (and heavily promoted) at $775,000. That price was $1.35 million early last spring, and Eclipse raised it to $2.15 million in May.

A year earlier, Eclipse was claiming nearly 2,700 orders and options -- 1,400 of them accounted for by DayJet, the air taxi enterprise that went out of business in September with 28 Eclipse 500s on hand.

There are a lot of numbers to add up -- or subtract. Lawsuits have been filed. A blog, Eclipse Aviation Critic, has been diligently following the saga.

In all of this, with all of the manufacturing and certification problems, where was the F.A.A.? Oh, I forgot. In the tank.


Eclipse Aviation Files for Bankruptcy, Seeks to Sell Assets

Eclipse Aviation, which blazed the way for the manufacture of cheap very-light jets, filed for Chapter 11 bankruptcy protection in Delaware today.

Eclipse said it would seek court approval for debtor-in-possession financing and
the sale of "substantially all" of its assets under Section 363 of the U.S. Bankruptcy Code.

Eclipse announced an agreement to sell its assets "for a combination of cash, equity and debt," to an affiliate of ETIRC Aviation of Luxembourgh -- "subject to higher and
better offers."

Eclipse described ETIRC Aviation as "a principal driver" of the very-light jet industry in Europe. ETIRC is Eclipse's major shareholder and its chairman, Roel Pieper, has been the acting CEO of Eclipse since July 2008.

Citing "unprecedented economic challenges," Pieper said that the asset sale would "position the business for aggressive global expansion." He did not elaborate on whether there are potential plans to resume production of the $2.15 million, five-seat Eclipse 500 jets.

From what I can ascertain, ETIRC Aviation is a distributor and marketer, not a manufacturer. Here and here.


Monday, November 24, 2008

British Airways Sharply Discounting Premium Seats to London

Walk-up business class fares cost about $9,200 roundtrip between New York and London (and about half that for corporations that negotiate high-volume discounts). As traffic falls, many airlines are discounting.

But British Airways moves aggressively into major cost-cutting tomorrow when it will start offering its Club World business class at roundtrip fares between the U.S., Canada and London starting at $1,998 between JFK and London.

First class roundtrip travel also is available starting at $3996 from New York to London. First class on B.A. can cost over $12,000 walk-up.

British Airways said that comparable prices for Club World and first class will be available from all 22 North America gateway cities to London and most major cities in Europe. The sale fares will be available from tomorrow, Nov. 25, through midnight Monday, Dec. 1 for travel from Tuesday, Dec. 2, though Sunday, March 22 -- with no blackouts.

Travel must be purchased seven days in advance of travel. Minimum stay is one Saturday night, with maximum stay 11 months. Fuel surcharges are included, but taxes of approximately $260 and the $2.50 Sept. 11 Security Fee are additional.

Sample fares (Club World, followed by first class)

Origin city to London Club World First
JFK&Newark $1998 $3996
Boston $2197 $4396
Philadelphia $1998 $4196
Washington, D.C. $2197 $4396
Baltimore $2197 N/A
Miami $2698 $4696
Orlando&Tampa $2698 N/A
Atlanta $2398 $4396
Chicago $2598 $4596
Dallas/Ft. Worth&Houston $2598 $4596
Denver $3098 N/A
Phoenix $3098 $5096
Los Angeles&San Francisco $3298 $5296
Seattle $3998 $5995


Zagat Air Travel Survey: Flying Less, Liking It More

The new Zagat Survey on air travel lists the top five airlines as rated by respondents for overall satisfaction in coach cabins: JetBlue, Southwest, Continental, AirTran, Delta.

Continental, which led in most domestic categories, was also rated No. 1 for domestic premium cabins.

In the "Outtakes" section, which lists general customer comments without specifying which airline they refer to, someone said of an unnamed airline: "Bathrooms smell like the lion house at the zoo on a hot day."

I'd add: On the other hand, the lions get fed and have room to walk around, and there's an organization that makes sure they're treated humanely.


Friday, November 21, 2008

Holiday Travel Slumping, Fare Sales Continue

I was amused by the phony baloney from the White House last week in announcing that military air-lanes would be turned over to commercial airliners during the holiday season to help alleviate crowded skies. Now there's an inane solution in search of a non-existent problem.

I'm in dark-sky Tucson where it's 4.45 a.m. as I write this (I have a plane to catch), and the only thing I see in the sky right now is the stars.

Seriously, air travel is down sharply. It is down because of announced and unannounced capacity cuts, and because demand has fallen well below expectations.

Here's one example: Los Angeles International Airport says that it expects to handle 14.3 percent fewer passengers during the 10-day Thanksgiving holiday from today through Nov. 30.

Meanwhile, good news for travelers beyond less-crowded skies. Those fare sales the airline stock market analysts said weren't going to occur are continuing well past the holidays.

Southwest Airlines just extended its winter sale -- with one-way fares from $49 to $159, depending on day of travel -- through Dec. 4 for travel from Dec. 12 through Feb. 28.


Thursday, November 20, 2008

Sometimes a Ride On a Business Jet Is a Real Bad Idea ...

Breathing new life into the term "corporate pantloads," top executives of the three Detroit automakers each flew to Washington on private jets to ask Congress for a total of about $25 billion in bailouts.

Good for the news organizations -- here, -- that saw this for the helluva story that it was. I do not see any phony populism in the outrage over this one.

Granted, there are times when a corporate jet makes sense in terms of productivity. Usually, this would involve the case of a solid, well-run company that needs top executives -- as well as management and technical teams -- in efficient motion and can justify the expense on the bottom line. Said company would not be sending said executives to Congress to whine for taxpayer bailouts.

This was similar to, but I would argue even worse in tone-deafness, A.I.G. spending $500,000 on a St. Regis hotel for a sales retreat a week after it got its own multi-billion-dollar bailout from taxpayers. At least the retreat, as bad an idea as it was to go through with it, had a viable bottom-line purpose.

It takes a few hours to fly from Detroit to Washington. These Detroit characters swanning through the skies in their executive jets on a mission to beg for a taxpayer bailout in these awful economic times represents a big fat black eye for the business-aviation industry -- currently involved in major efforts to dissuade government from raising landing fees and taxes and from cracking down more on private-jet security.

I can't wait to see the reaction from the arch-enemy of business aviation, the Air Transport Association, which represents commercial airlines and insists that business jets essentially get a free ride on taxpayers' backs.

And by the way, does anybody know exactly which models of business jets our Detroit worthies flew in?


More Bad News (Cont'd)

For weeks, I've been reporting incrementally, here, in the paper and in the current Institutional Investor magazine, on a story that is really sneaking up in travel: the fact that the hotel business is in a serious tailspin.

It started at the mid-level hotels in late summer as business travel fell off, and suddenly smacked the luxury hotel brands upside the head in mid-September, and worsened since.

People in the hotel industry, which is generally a pretty happy business, full of optimists who really love travel, tell me they have never seen anything like this.

Smith Travel Research reports today that revenue per available room (called Revpar, it's the basic measurement of hotel performance) dropped a startling 13.2 percent during the week of Nov. 9-15, compared with the comparable week last year.

Average occupancy rates fell 11.6 percent and average room rates (which haven't yet shown a drop that directly reflects the malaise) fell 1.7 percent.

Leading industry forecasters are scrambling daily to keep up with the bad news. Smith Travel, which stays right on top of these things, said the latest Revpar decline was "certainly worse than we expected."

I'm in Tucson, holed up in the beautiful desert. My wife is back east till the weekend. She was on the train into Manhattan early this morning sitting near some very anxious Wall Street types who were discussing the collapsing Dow.

"Well, how low can it really go?" a woman asked.

"To one," a guy replied.

So the good news is that the Dow Jones average closed today a whopping 7551 points above the potential low. Whew.


Bad News (Cont'd)

This just keeps getting worse, doesn't it. Some air-travel items from this morning:

---There has been a sharp deterioration in international premium traffic, on which major airlines have basically bet the farm in recent years. According to the International Air Transport Association, international first-class and business-class traffic fell 8 percent in September, and the decline is likely to have worsened in October, though the figures aren't available yet. For years, that segment of the market had been growing monthly. Largely because of robust international premium travel, major U.S. airlines have been diverting capacity to international routes.

---In a trend with implications for hotels and big-city retailers as well as airlines, there has been a 15 percent decline in the last month in online searches for flights to the U.S. from the U.K., according to the European search engine Skyscanner. "In previous years, there has been an increase in flight searches to the USA at this time of the year" as travelers from the UK came to the U.S. to do holiday shopping or to book leisure trips to ski resorts. Not only has the worldwide recession affected this, but so has the weakening pound, which no longer provides major buying power here.

---Air France/KLM said quarterly profit is down 44 percent largely due to weakening business travel demand internationally.

And it's only 9 a.m. here in Arizona where I'm holed up in the desert working on a book ... about air travel. Title: "High Anxiety," natch.


Wednesday, November 19, 2008

Travel Slumping, Airlines Dealing on Holiday Fares

Tom Parsons at, the discount travel booking site, says that airlines are so concerned about the drop-off in Thanksgiving travel demand this year that advance-purchase requirements are being relaxed.

He reports:

"The major airlines have now reduced their 14-day advance purchase holiday discount airfares to three days or no advance purchase...

"Travel on these little or no advance purchase airfares are valid from November 20 through December 3, 2008. We do suggest that travelers avoid traveling on Sunday, November 30, because prices are overly high due to demand on that date. As we get closer to Thanksgiving, the airlines will lower those three-day advance fares to no advance, so they can gobble up as many last-minute travelers as possible.

...We also suggest that this a very good week to book holiday travel for Christmas and New Year's. Many of the major airlines are offering cheaper airfares than they did just six short weeks ago.

Travel between major U.S. cities, except those in Florida, and fares to the Caribbean, Mexico and Hawaii have dropped since the week of October 6.

We believe there are two primary reasons why consumers are not booking travel.

1. The economic crisis we now face has made many travelers rethink a holiday getaway. Travelers would rather stay home than face the many new charges including increased ticket change fees and baggage fees that the airlines are now imposing on them.
2. The cost to travel by car had dropped. In many parts of the country the cost of gallon of gas is at least two dollars less than the price during July 2008 and at least a dollar less than November 2007.

...Lowest priced travel dates - December 13, 14 and 24, '08, January 6-8, '09.

Second lowest priced travel dates - December 15-19, 22, 25, 30 and 31, '08, January 1 and 5, '09.

Second highest priced travel dates - December 21, 23 and 26-28, '08, January 2-4, '09.

Highest priced travel dates - November 30, '08, December 20, '08.

... With no sign of an economic recovery in the near future, many of the major airlines are discounting airfares this holiday season much more than we expected. Imagine how many bargain basement airfare sales they will have to offer us in the first three months of 2009 to get us back in the air and flying."


Southwest Seeks New York City Service

Everybody's favorite domestic airline, Southwest, is finally planning to operate out of a New York airport, La Guardia. Southwest said today it submitted a $7.5 million bid to acquire the unused slots of ATA Airlines, which declared bankruptcy last April, in a plan to operate seven non-stop routes from La Guardia.

Here's the announcement.

Southwest has been conspicuous in its absence from Kennedy, Newark and LaGuardia in the vital (and delay-ridden) New York air-travel market.


Monday, November 17, 2008

Annual Airport 'Healthy' Food Rankings: Consider the Source

Each year, local newspaper and television-news editors faithfully assign hapless reporters to cover the annual ranking of airports whose restaurants have the most "healthful" food. The rankings come from a group called the Physicians Committee for Responsible Medicine.

Predictably, some news outlets -- knowing a cheap local angle when they see one -- run credulous stories saying "Bumbutt Tri-State Regional Airport Scores High on Physicians' Healthy Food List." Or something to that effect.

Seldom do reporters go beyond regurgitating the press release and ask, just what it this Physicians Committee for Responsible Medicine that we give so much credence to?

Well, as I have reported in the past, it's a group, mostly made up of animal-rights activists, including some physicians, that campaigns against meat, milk, animal medical experimentation and other perceived threats to health. That inconvenient information never appears in the press material.

First, credit where it's due, because of course we want to encourage healthy eating, and the last time I was in an airport, the amusingly named George Bush Houston Intercontinental Airport, to be specific, I noticed enough butts the size of baggage carts to wonder if some people have ever heard of a nice salad.

The Physicians Committee press release, due out later today, cites airports where restaurants offer good vegetarian options. Ranked at the top were Dallas/Fort Worth, Detroit Metropolitan and Chicago O'Hare. At the tail end of a list of 12 were Reagan National, Hartsfield Atlanta and Las Vegas McCarran, with the hilariously named Newark Liberty close, um, behind.

And here is some critical background information on the group. Remember, now, that other pseudo grassroots groups that oppose the Physicians Committee may be funded by the meat or dairy industry! Everybody's got a PR angle.

I have no real beef (so to speak) with the Physicians Committee, except that they really should disclose where they are coming from. And reporters should look it up.


Friday, November 14, 2008

Darkening Skies for Eclipse Aviation

Things do not look good at Eclipse Aviation, which makes the innovative Eclipse 500 very light jet. Eclipse said today that it was "unable to meet its payroll obligations" that were due yesterday. Eclipse said there have been no layoffs and that the company is working on a "long term financial solution" to keep operating.

Employees will be paid next week, Eclipse said. The company is based in Albuquerque.

The respected aviation analysis company Forecast International said it will soon issue a new report predicting the end of production for the Eclipse 500 line. Forecast International said it believes that Eclpise Aviation "will not attract new investment necessary to allow it to continue making the aircraft beyond the first quarter of 2009."

Forecast International analyst Douglas Royce said that Exlipse is making the planes "at a low rate as it seeks to preserve cash" and predicts that total production of the jets will be 162 for this year.

Eclipse aggressively marketed its little jet, but the main customer, the air taxi service DayJet, ceased operations in late summer, a victim of the credit crunch. DayJet had 28 Eclipse 500s in its fleet, and about 1,400 more on order.

Forecast International said part of Eclipse's current dilemma is that the manufacturer accepted a large number of orders for the plane at a unit price of $1.5 million. The price rose to $2.15 million in May, but Eclipse still "is required to deliver aircraft at the earlier, lower price."

"Every aircraft delivered under the old price is delivered at a loss," Forecast said, noting that Eclipse has said publicly that it needs between $200 and $300 million in new equity investment.

Eclipse said in June that it had orders for 2,600 aircraft.

Competitors in the very-light jet market include the Cessna Mustang, the Embraer Phenom 100 and HondaJet.


Friday, November 07, 2008

High Load Factors: Airlines Crow, We Cower

I don't quite get the point of airlines crowing about their record-high load factors these days. Delta, the latest to report October traffic, leads off the announcement proclaiming that domestic load factors for the month were 83.7 percent -- "higher than any previous October on record."

I guess that plays well with those poor devils who invest in airline stocks. But to the rest of us, it simply underscores how crowded and constricted the airline system has become.

Delta is no exception to the trend. Planes are more full than ever despite a sharp fall-off in demand. That's because there are fewer flights and fewer seats going up. Delta's domestic capacity in October, for example, was down 13 percent from October 2007.


Speaking of a fall-off in demand, my wife and I are in San Francisco right now, marveling at how few tourists are around.

We usually avoid Fisherman's Wharf, but we had reason to stay at the Hilton Hotel here this time. I've been coming to San Francisco for 40 years, in every month of the year. I know that the pre-Thanksgiving weeks are usually slow everywhere, but I have never seen the tourist areas of this city emptier.

On the other hand, the grand old San Francisco spirit is always in evidence.

Take the Tuesday election (San Francisco went 85 percent for Obama, incidentally). While decrying those "wacky San Francisco stories" and tropes that the media are so fond of, the San Francisco Chronicle yesterday ran an editorial that praised local voters for rejecting a ballot measure on Tuesday that would have renamed a sewage treatment plant after President George W. Bush.

Dunno, I had to think about that one. Passing the measure would have been an act of sarcasm, of course. Rejecting it strikes me as an act of delicious San Francisco irony.


Tuesday, November 04, 2008

Delays? What Delays?

Airlines have sharply slashed domestic capacity and cut routes, and fewer people are flying. One result is that delays are dropping. reports today that in October, 84 percent of domestic flights arrived on time (defined as within 15 minutes of schedule). It was the fifth straight month of improvement in on-time performance.

The lesson: You may not be able to get there anymore ... but you'll get there faster.


Monday, November 03, 2008

Those Airline Capacity Cuts

...look fairly significant, at least from the first two major airlines to report October operational results, United and Continental.

United flew 12.6 percent fewer domestic seats in October, and reported 10.3 percent fewer domestic revenue passenger miles, compared with October 2007. Continental flew 10.8 perecent domestic seats, with a 10.2 percent drop in revenue passenger miles.

As I keep saying, we are witnessing a fundamental shrinking of our national air-transport system, and as airline executives keep saying, it's a permanent situation.


Airline Stocks? No Thanks

Above: Baker Bowl's right field wall.

No disrespect to the world champion Philadelphia Phillies, my former home-town team. But I recall my father speaking about Baker Bowl, the Phillies' home at Lehigh Ave. and Broad St. from 1887 to 1938, when they moved six blocks west on Lehigh to join the Athletics at Shibe Park, later Connie Mack Stadium. The Phillies were, of course, famous for being one of the worst teams in baseball.

Old-timers in Philadelphia like my father recalled that Baker Bowl had a huge billboard forming the right-field and right-center wall. It was for Lifebuoy, a popular soap brand up through the 1960s that promoted itself delicately as a remedy for body odor. For decades, the sign said, "The Phillies Use Lifebuoy."

And Philadelphia fans being Philadelphia fans, the popular retort became, "And they still stink."

That's a long way around third base for this note on airline prospects and airline stocks, from Zacks Investment.

As Warren Buffett famously said of investing in the airline industry: "If we knew then what we know now, we'd have shot the Wright Brothers down."


Sunday, November 02, 2008

Just Sayin'

--Lots of commotion over Rick Seaney's report that airlines are hoisting up an unusual number of fare sales for the holidays. Not so, says an airline stock analyst, widely quoted in media. Dunno, I think Rick makes a persuasive case.

--And by the way, was that a tectonic shift toward online political news coverage that I just felt? Yup. Here.

--America's most dangerous cities? No, New York, Chicago and Los Angeles aren't on the top 10 list. Orlando is, though. Here's a photo list, from the Orlando Sentinel newspaper.