Pssst...Change Money? Avoid Travelex

Yeah, I already know this and so do you, but one of the worst ways to exchange money, short of an armed robbery, is to use one of those ubiquitous Travelex booths in an international airport terminal.

But I was bound for London recently, and needed to hit the ground running on arrival at London City Airport, an airport I'm unfamiliar with. (A very nice and extremely convenient airport from which British Airways operates all-business-class service to New York on Airbus A318 planes -- and more on that later).

Normally, I'd simply get pocket money in British pounds at an ATM machine at Heathrow -- no great shakes, but way better than the exchange rate I got at the Travelex booth before departure at JFK Terminal 7:

So I wanted a mere 100 British pounds? At Travelex at JFK the other day, that came to $177.27 US, please, plus a $7.95 "service fee" (as if the vig on the exchange rate were not sufficient). Total: $185.22 (and I haven't checked yet to see if my American Express card slapped on its own fee. More on that later, too.)

Actual international exchange rate for that same day, as shown on the very useful Oanda.com site: 100 British pounds = $154.27.

Travelex describes itself as "the world's largest foreign exchange and international payments specialist with over 700 retail branches across 30 countries at key airport, seaport, rail and tourist locations."

Thanks for the warning. I'd plumb forgot.

###

Rudy, Rudy, Rudy!

[Left: Judy. Right: Rudy]

I do a lot of radio shows, love to do them and have gotten pretty good at it.

Good at it, that is, till this morning, when I did a five-minute segment on the live weekly program of Rudy Maxa, one of the great figures in broadcast travel journalism.

Long story short: I'm just back in Arizona from a very quick long-distance book-research trip that involved a two-hour drive to Phoenix, a red-eye flight from Phoenix to New York, a round-trip flight to London and back, a flight back from Kennedy to Phoenix, and then a two-hour drive to Tucson through monsoon rains -- all in four days.

Cut to the call this morning from Rudy's show, where the subject was to be the issue of credit-card hacking from hotel systems.

"Welcome, Joe!" Rudy said on the air.

"Hello, Judy," I blurted out, before adding frantically, "I mean, Hello, Rudy."

No way to get out of that gracefully, except to mutter an excuse about jet lag.

My wife has now insisted that I perform no complicated duties today. So I'm going out into the desert to clear some mush -- I mean brush.

###

Free Speech and Bananas: The First Amendment Stands

[Above: The Legacy 600 business jet after it made an emergency landing at an Amazon airstrip on Sept. 29, 2006]

[UPDATE AUG. 2 -- By the way, until the president signs this bill into law, I wish the media would stop cluelessly presenting this issue as simply a problem with the libel laws in the UK.]

A serious reporter absolutely hates to be the subject of any news story. Trust me, there is no percentage in it at all, unless you like seeing your face in print or on television -- which I do not.

So I am very happy to report that my own role in the Brazil/free speech/libel-tourism saga appears to be nearing its end. And not for nothing, but this article about me by Blake Fleetwood in the Huffington Post the other day is actually illustrated by a photograph of the beauteous Cameron Diaz, who plays but a peripheral part in the issue at hand. What a delight to see her there!

The overriding issue for me centers on one incident. On Sept. 29, 2006, I and six others on a business jet inexplicably survived a horrific mid-air collision at 37,000 feet over the central Amazon with a Brazilian 737 airliner that went down in the jungle, killing all 154 aboard. Here's the story I wrote about the crash in the New York Times on the day I got home from Brazil. (At the time, by the way, the official death toll was incorrectly given by the Brazilians as 155.)

That story, and the reader comments attached to it online, and most especially a series of hard-hitting follow-up stories and commentaries I subsequently wrote in a personal blog about the incident (that blog has been inactive since January 2008) got me sued in Brazil on the astonishing charge that I had insulted the entire nation by my reporting on the incident.

The lawsuit papers were served to me at my former home in New Jersey by an errand boy (who described himself as an official with the New Jersey State Constable Department, an entity that does not exist), acting on behalf of the Brazilian court, which had hired a New York law firm to handle the case against me.

Despite the ongoing death threats and the lawsuit, the issue for me went beyond personal and financial peril.

As is no longer in any dispute, the Amazon crash was caused by egregious operational and systemic errors by Brazilian air traffic control, which is a part of the Brazilian Air Force. As I reported on this in the months after the crash, while arguing for the Brazilians to release the two American pilots being unlawfully detained without charge in Rio, I became a lightening rod for virulent anti-Americanism in the Brazilian media. The Brazilian media, known for its emotionalism and xenophobia, fanned anti-American flames, while abetting the Brazilian government in its attempt to scapegoat the two American pilots of the business jet for the catastrophe.

To make a long story short: The personal issue quickly became, to me, one of freedom of speech. I was being sued, and threatened with arrest in international travel, on false and patently ridiculous charges. Among those false charges was that, in writing about this incident in the United States, for a U.S. readership, I called the Brazilian authorities "most idiot of all idiots," and, furthermore, described the nation of Brazil as a "banana."

Now, I have been making a living as a writer for over 40 years now. If I choose to be insulting, I think I can probably come up with something better than that, and something that more closely approximates English-language rhetoric. I mean, even "ass-hat" is better than "banana."

But never mind that. What struck me like a hammer upside the head was my inability, as this matter progressed, to interest some of the major U.S. journalistic organizations in the issue. I mean, here was a case where a U.S. citizen was being sued on spurious charges in a foreign country for alleged comments made within the U.S. -- comments that would have been laughed out of any U.S. court had some lawyer tried to present them as evidence of libel or defamation. Here, in short, was a fundamental First Amendment issue.

Not only that, but the basic contention of the lawsuit was that my comments and reporting within the U.S. were actionable in the foreign country and enforceable in the U.S. -- on the basis that I had offended the sensibilities of an entire foreign nation, and not a person.

If this line of reasoning were to stand, no American could safely write or utter a statement that some foreign country -- think Iran, Syria, Saudi Arabia, North Korea and on and on and on -- might find objectionable. Because, you see, anything you publish or even utter publicly say here in the U.S. becomes accessible on the Internet. It's called the World Wide Web, obviously.

My own situation aside -- that dubious precedent, to me, was the most basic threat to free speech in this country in my lifetime. It simply could not stand.

But where were my colleagues in the profession of journalism? The best stood up. The New York Times, while agreeing with my position that defending this lawsuit directly in Brazil could only lend credence to an absurdity, was in my corner from Day One and was prepared to defend me in the U.S. once the Brazilians got their judgment (it's imminent, I am told) and tried to enforce it in an American court. That despite the fact that I am not an employee, but rather an independent contractor who has written freelance columns every week for 14 years for the Times.

Also, the now sadly defunct journalism trade magazine Editor & Publisher, and its stand-up editor Greg Mitchell, also weighed in on the matter. As did the international Committee to Protect Journalists. The very important Reporters Committee for Freedom of the Press also came in with both feet. The American Center for Democracy did, too.

Missing in action, though, were some of the windbags of kept journalism. The amusingly oversubsidized Poynter Institute, which I regard as the Ding Dong School of journalism academe, went into deep cover and refused to address the issue. So did the once important, but now irrelevant, Columbia Journalism Review (Motto: "Strong Press, Strong Democracy") -- whose intrepid editor, one Mike Hoyt, didn't even bother to respond to e-mails and phone calls.

This dangerous threat is now about to be eliminated for all American journalists, bloggers, researchers, authors and even users of social media, with a stroke of President Obama's pen, when he signs the SPEECH Act, recently overwhelmingly passed in Congress, which will prohibit enforcement in the U.S. of foreign libel judgments that are repugnant to the U.S. First Amendment.

Here is the text of the SPEECH Act that's about to become federal law.

The indefatigable Rachel Ehrenfeld deserves most of the credit for this. A diligent working group of First Amendment attorneys and legislative aides on Capitol Hill performed brilliantly in drafting the bill. The Senate Judiciary Committee, among others, showed how a democracy works at its finest.

Here's another link focusing on Rachel Ehrenfeld, a true free-speech hero.

And so the First Amendment stands. Would someone please inform those few timid worthies in the journalism establishment, I mean the ones who chose to sit the fight out quietly, that it has now been won, honestly and well, by those who chose to stand and fight?

###

Business Travel Coalition: The 3-Hour Tarmac Rule Is Working

So far, it would appear, the draconian rules imposed in late April by the Transportation Department to address the problem of stranded passengers and long tarmac delays have worked. The reports of three-hour-plus tarmac delays by U.S. carriers almost disappeared in May, as the rules -- including a fine of $27,500 per person for unwarranted delays over three hours -- took hold.

At the same time, however, routine airline arrival delays in general, which had been running in the 25 percent average numbers for years, dropped sharply. A reason for that is that airlines have cut back. There are fewer flights, for one thing.

Still, I'm persuaded that the DOT rules put the fear of God into the airlines. The only major tarmac stranding I'm aware of recently is one by Virgin Atlantic -- a foreign carrier that is not covered by the DOT rules (though the department has issued a new proposal that would, if enacted, include foreign carriers.

The airline industry fought the DOT rules tooth and nail, and has also been fighting similar regulations that are included in a passengers-rights section of the pending F.A.A. Reauthorization bill. In the spring, airline after airline warned of massive preemptive flight cancellations when bad weather approached, in what would be moves to avoid the penalties.

That hasn't happened, though the weather has generally been good for flying. We shall see if and when a period of big thunderstorms disrupts operations.

Nevertheless, the industry recently released a detailed study by two aviation consultants and academics claiming that the DOT rules will cause massive harm to airlines, and result in costs to the public of $4 billion over 20 years for canceled flights. The researchers were Darryl Jenkins and Joshua Marks, airline consultants who were formerly with the George Washington University Airline Institute.

The DOT itself scoffed at that report in an unusual statement on Tuesday. "The study, conducted by two business consultants for aviation companies, offers a misleading and premature assessment of the impact of the new passenger protections," the DOT said.

Jenkins, for one, is known as one of the authors of an annual report on airline quality that is generally derided by consumer experts for its total dependence on published statistics that anyone with an interest already knows. Nevertheless, the media usually pay credulous attention to its "findings."

Anyway, another organization now weighs in on the DOT matter, the Business Travel Coalition, which represents travel executives and suppliers and works to encourage transparency in air-travel operations, including costs.

In a report to be published tomorrow, the BTC disputes the airline consultants' assertion and says, "the three-hour rule has in fact forced airline senior management to finally prioritize extended ground delays as a problem to be thoughtfully, if not urgently, addressed."

Here's the full BTC report:

"On April 29, 2010 a U.S. Department of Transportation (DOT) rule went into effect, after a 120-day notice, requiring U.S. airlines to provide passengers an opportunity to deplane after 3 hours of an extended tarmac delay, on most commercial aircraft, providing it is safe and operationally feasible to do so.

AT ISSUE
Last week two airline consultancies (The Aviation Zone and Marks Aviation) published an analysis exceedingly critical of the DOT’s 3-hour rule asserting that the public harm from the rule could reach some $3.9 billion over 20 years; a conclusion based upon just the first full month’s aggregation of flight-cancellation data. The analysis, seriously flawed on many levels, would have likely received little press attention were it not for overreaction by a sensitive DOT that criticized the report in an official statement, supported by a quote from Secretary of Transportation Ray LaHood himself!

The factual and statistical defects in this study are stunning and include:

• ignoring the significant and complex work ahead for airlines to efficiently comply with the 3-hour rule;

• avoiding the central fact that passengers need only be given the opportunity at 3 hours to deplane versus cancelling a flight;

• dismissing the built-in exceptions to the 3-hour rule for safety and unworkable operational conditions; and

• basing conclusions on only the first full month of data since the rule has been in effect (1).

Any experienced analyst or business executive understands the significant length of time it takes to drive fundamental change to where a new model produces normalized and predictive results; to take a snapshot at the beginning of such a major change-management process and make such grand assertions is inexpert in the extreme.

BACKGROUND

The airlines brought the 3-hour rule on themselves after 10 years of not treating the issue as a management priority; on this there is nothing to debate. The issue all along has not been the cause of these extraordinary irregular operations, e.g., severe weather systems, but rather, how airlines responded to them. Were there coordinated plans in place for such events? Were communications systems adequate? Were staffs trained? Did senior executives care enough to engage? Were their spokespersons indifferent? Too often since 1999 the answers were the wrong ones; airlines did not sufficiently heed the many early warning signs of government intervention coming at them.

We live in a country compassionate enough to send a fire truck to extract a cat from a tree or a Coast Guard helicopter and crew to rescue a dog from a swollen river, and without a second thought! What were the airlines thinking? Did they seriously believe our country would allow elderly, infants and health-compromised citizens to be kept on parked planes in freezing cold or sweltering heat at risk for 4, 6 or 8 hours in poor and deteriorating conditions while some airline industry leaders disingenuously dismissed concerns on the rationale that such circumstances are rare?

On the other hand, DOT gave just 120 days for airlines to prepare for the 3-hour rule; under these circumstances it is no surprise that flights will be canceled this summer. No study needed to be conducted to know this. This was a terribly insufficient amount of time to implement the rule given the enormous work that will be required to make adjustments, which includes complex internal airline planning as well as negotiations with federal and local governmental bodies such as TSA, FAA, Border Control, airport authorities and law enforcement.

Many airports, for example, can and should arrange for removal of passengers (who want to deplane after 3 hours, per the rule) by way of truck-mounted stairs, as Dallas Fort Worth International Airport does, thus minimizing flight cancellations. It will likely take a good year or more for airlines, airports and other participants to adjust to this rule. As I stated in a May 2010 National Journal posting, “Passengers will likely be negatively impacted by the rule, largely emanating from flight cancellations, at least during a transition period of a year or more from April 29, 2010.”

INDUSTRY LEADERSHIP MISSING

The Air Transport Association (ATA), which represents U.S. airlines, acknowledged its leadership responsibility in stepping up some 10 years ago, after the Northwest Airlines winter-storm debacle at Detroit, and subsequent Congressional hearings, with airline Customer Service Plans. Business Travel Coalition (BTC) had advocated that very step to the U.S. House Transportation and Infrastructure Committee and ATA in 1999, i.e. let the industry solve its problems before considering legislation. That positive ATA initiative unfortunately turned into industry indifference, and then annoyance that this issue continued to persist.

The airlines, at the industry level, have provided next-to-zero leadership on this issue since those Customer Service Plans were announced in September 1999. BTC testified 4 times in Congress over the past decade against Congressional / government intervention in this passenger-rights area. After 10 years of airlines not taking the issue seriously BTC, the American Society of Travel Agents and the National Business Travel Association all reversed positions last summer with respect to supporting a 3-hour rule.

WHAT’S REALLY HAPPENING

The new DOT rule will have been only the proximate cause of cancellations this summer. The root causes will have been over-scheduling, especially at NYC airports, as well as inadequate planning and implementation time to comply with the new rule. Blaming the 3-hour rule and DOT for cancellations is akin to saying Mexican President Felipe Calderon’s crackdown on drug-cartel activities is responsible for the 25,000 violent, cartel-related deaths since 2006, without acknowledging underlying root causes.
Despite the disruption that is likely to be rained-down on passengers this summer, the 3-hour rule has in fact forced airline senior managements to finally prioritize extended ground delays as a problem to be thoughtfully, if not urgently addressed. To their credits, Continental Airlines and US Airways proactively implemented steps to comply with the new rule ahead of its April 29 implementation date. Airline hyperbole as mirrored in these consultants’ report regarding mass cancellations is really just part continued denial of a legitimate problem, part advance blame-game antics to set DOT up as the cause of all 3-hour rule-related problems and part posturing to have the $27,500 per passenger fine reduced.

THE 3-HOUR RULE IS ALREADY EFFECTIVE

The simple fact of the matter is that because of the new rule, airlines are now forced to fix this extended ground delay problem, and they are and will continue to do so. Canceling flight-loads of business travelers on a sustained basis would disastrously dampen demand just as these high-yield travelers are returning to the market, or drive these customers into the open arms of more able competitors. Mass cancellations represent an unworkable proposition, and well-managed airlines will successfully emplace new systems and processes to avoid this highly undesirable outcome.

UNINTENDED CONSEQUENCES ANYONE?

From a DOT perspective this study and its associated branded website and PR campaign probably look like more of the same coordinated airline industry stonewalling on this issue; apparently the study was initiated before the ink was even dry on the order! What negative "unintended consequences" for airlines might this ill-considered and ultimately shallow attack likely have as DOT takes all manner of decisions later in this year regarding the currently open passenger-rights Notice of Proposed Rulemaking? Have airlines not learned anything from the “gift” of the 3-hour rule? Not content any longer to just shoot themselves in the foot, are airlines now embracing amputation in place of true industry leadership?


1)SOURCE: AirlineForecasts, LLP

May 2010’s 1.24% cancellation rate is much lower than the annual average of 1.5% over the last 15 years, as reported by the DOT. However, the 10-year average has been 1.17% and may be a more representative base line. However, there is a large variation around the mean cancellation rate over the last 20, 10, and 5 years so a one-month comparison would be too noisy to produce anything that could be considered representative of a trend. As an example, cancellations as a percentage of operations increased 116% year-over-year in 2005 [May-over-May] and 85% in 1998, but decreased 48% in 2001 and 45% in both 2002 and 2005. The monthly variations are significantly more volatile than the annual variation."

###

God Almighty!

Southwest Airlines last week issued a revised "contract of carriage," which is the fine print laying out what an airline risibly regards as a legal contract between passengers and itself, in which mechanical breakdowns are included under the standard "force majeure" clause, commonly known as the "acts of God" clause.

That would mean that mechanical failures are God's fault, rather, you see, than the airline for screwing something up that is entirely under its control. You want a refund for that missed connection caused by a mechanical problem? Pray!

[Here's a smart story on the Southwest move in today's Arizona Daily Star, the Tucson newspaper.]

Here's the exact language of the force majeure section in the revised Southwest contract of carriage. The italics are mine:

"Force Majeure Event means any event outside of Carrier’s control, including, without limitation, acts of God, meteorological events, such as storms, rain, wind, fire, fog, flooding, earthquakes, haze, volcanic eruption or any other event, including, without limitation, government action, disturbances or potentially volatile international conditions, civil commotions, riots, embargoes, wars, or hostilities, whether actual, threatened, or reported, strikes, work stoppage, slowdown, lockout or any other labor related dispute involving or affecting Carrier’s service, mechanical difficulties, Air Traffic Control, the inability to obtain fuel, labor or landing facilities for the flight in question or any fact not reasonably foreseen, anticipated or predicted by Carrier."

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Airline 'Fee' Revenue Up 43 Percent in Year

I was talking today to Jack Riepe, the savvy PR guy for the Association of Corporate Travel Executives, about the apparent discrepancy between surging airline revenues and improved, but still lagging, hotel revenues.

"The way I see it, there's a lot more people flying, but apparently they're staying in public shelters," he said.

As he and I and a lot of the rest of you know, the real reason for that discrepancy is that airlines are in pig city over fees that are slapped onto regular fares. For the first time in a long time, airlines have been reporting big profits for the second quarter. Business and travel demand is, without question, generally greatly improved and fares are also up significantly, in an environment where airlines have managed to shrink supply.

But wow, then add up those fees.

A report released today by IdeaWorks, the airline revenue consultancy, and Amadeus, the giant reservations technology network, shows that world airlines racked up $13.5 billion in fees and other ancillary revenues in 2009. That's a 43 percent increase over 2008.

Even more interesting than the overall haul of money, I think, is the breakdown by airline on per-passenger fee revenue. This highlights those airlines that are banging their customers for the greatest amount of extra charges.

The top three in terms of fees as a percentage of per-passenger revenue:

Allegiant -- 29.2 percent (or $31.90 per passenger)

Spirit -- 23.9 percent ($28.64 per passenger)

Ryanair -- 22.2 percent (per-passenger figure NA)

Overall, the top three in total fee and ancillary revenue in 2009:

United -- $1.94 billion

American -- $1.92 billion

Delta -- $1.4 billion

Also of great interest, the report finds that fee revenue from the top producers has become more stable in the last two years, while that from previously lower ranked fee producers has "jumped dramatically," said IdeaWorks.

That means, of course, that airlines in general are jacking up fees wherever they can.

"By every measure the ancillary revenue movement is growing," IdeaWorks says. "More airlines are switching on a la carte fess [and] existing practitioners are boosting revenue streams by adding services, testing price limits and becoming better marketers."

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American and British Airways Get Antitrust Immunity in Joint Venture As Airline 'Consolidation' Grows

The trend toward U.S. airlines operating jointly on some international routes with foreign carriers is one of the most important, and most overlooked, developing stories in commercial aviation.

Basically, while U.S. carriers can't merge with foreign carriers under federal law limiting foreign ownership, under recent practices they can essentially form quasi-mergers on certain routes, with immunity from anti-trust prosecution for setting fares and limiting competition. The airlines in question, meanwhile, can point to various efficiencies, and to the widening of choices of easier-to-reach destinations such quasi-mergers create for passengers.

American Airlines, British Airways (and BA's partner Iberia) today received approval from the U.S. Department of Transportation to create a joint business governing flights between North America and Europe. Both said they will expand their global cooperation as a result of receiving antitrust immunity. Fellow oneworld alliance members Finnair and Royal Jordanian also received antitrust immunity from the DOT.
The European Union approved the joint business on July 14.

Said Gerard Arpey, American's CEO: "By working collaboratively with our oneworld partners, we will enhance our product offerings, strengthen our route networks, and better position our airlines to compete in the ever-changing global aviation marketplace."

Said British Airways CEO Willie Walsh: "As we have argued all along, the EU-U.S. market is highly competitive, and Heathrow’s liberalization in 2008 opened it up even further. We are delighted that the U.S. and EU authorities have recognized this.

"We’re pleased that the DOT and EU have worked together to ensure that there is consistency in the number of slots that the three airlines have to give up to our competitors to use on services from Heathrow to the U.S. We made the pragmatic decision to give up these slot pairs so that we can start operating the joint business as soon as possible."

Said Iberia’s chairman, Antonio Vazquez: "I am convinced that consolidation is the best and only way to succeed in the airline industry, and the approvals we have received to create a joint business are a very important step towards this consolidation process."

Said airline passengers: What the hell does this "consolidation" trend mean for fares and competition? More on that later.

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Airlines Had a Happy 2nd Quarter: United Reports Big Profit

Airlines continue reporting happy second-quarter results as business travel rebounds, boosting demand amid shrunken supply.

United Airlines today reported a $430 million profit for the second quarter, compared with a $321 million loss in the second quarter of 2009.

United's healthy earnings report comes one day after Delta reported a second-quarter profit of $467 million compared with a $257 million loss in the 2009 second quarter.

As noted here yesterday, the second quarter was a very good time for most domestic carriers, with planes nearly full and fares rising as demand picks up. Airlines have kept those planes full by reducing capacity -- cutting flights and retiring some planes to the desert.

At the same time, U.S. airline revenues have been boosted significantly by all of those extra fees they have been merrily slapping on passengers. ($785 million for checked bags and $553.9 million for reservations-change penalties in the first quarter, for example -- and that doesn't count fees for priority coach seats, upgrades, meals, blankets, etc. etc.)

By the way, even when they have great news to report, airlines seem constitutionally incapable of honestly providing information.

United today describes its $430 million second quarter profit as "an improvement of $751 million from second quarter of 2009." Delta used the same kind of wording to make its second quarter results look more swell.

Who do they think they're fooling? Reporters? ... The poor souls employed as airline stock analysts? (Well, maybe). ... Customers?

United coming up with that $751 million "improvement" required a wondrous kind of arithmetic that did a kind of back-flip to count the big fat loss of the previous year as a positive number. That is: $430 million profit + $321 million loss = $751 million "improvement."

Only Wall Street could love semantics like that.

Come on, airlines. Just state the facts without jive, please. The facts are good enough.

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Senate Unanimously Approves Free Speech Protection Act

The Senate Monday unanimously approved bipartisan legislation authored by Senators Patrick Leahy (D-Vt.) and Jeff Sessions (R-Ala.) to protect American authors,
journalists, publishers, researchers and others from foreign libel lawsuits that undermine the First Amendment. The bill, called the Securing the Protection of our Enduring and Established Constitutional Heritage (SPEECH) Act, now goes to the
House of Representatives.

Leahy said, "The freedoms of speech and the press are cornerstones of our
democracy. They enable vigorous debate, and an exchange of ideas that shapes our political process. Foreign libel lawsuits are undermining this informational exchange. While we cannot legislate changes to foreign law that are chilling protected speech in our country, we can ensure that our courts do not become a tool to uphold foreign libel judgments that undermine American First Amendment or due
process rights."

Sessions said, "This bill will allow American writers to clear their names when they are improperly found by a foreign court to have committed libel. It will also bar enforcement in this country of foreign libel judgments that are contrary to our Constitution and laws. In short, this bill is a needed first step to ensure that
weak free-speech protections and abusive legal practices in foreign countries do not prevent Americans from fully exercising their constitutional right to speak and debate freely."

Leahy and Sessions are the chairman and ranking member, respectively, of the Senate Judiciary Committee, which unanimously approved the legislation on July 13. The SPEECH Act provides protections from foreign libel suits and prevents a U.S. federal court from recognizing or enforcing a foreign judgment for defamation that is inconsistent with the First Amendment.

The bill also provides a separate declaratory judgment remedy for an author or publisher who wishes to demonstrate that a foreign judgment would not be enforceable under American law, even where the foreign party has not attempted to enforce the judgment in the United States. This provision would allow authors and publishers to clear their names, regardless of the actions of the foreign party.

Rep. Steve Cohen (D-Tenn.) is the author of similar legislation (H.R. 2765), and last year worked to secure the House passage of that bill. The Judiciary Committee adopted the Leahy-Sessions SPEECH Act as an amendment to the House-passed companion
bill. The House is expected to consider the SPEECH Act soon. The SPEECH ACT is supported by the Reporters Committee for Freedom of the Press, the Vermont Library Association, the American Library Association, the Association of American Publishers, the American Civil Liberties Union, First Amendment lawyer Floyd Abrams, former Attorney General Michael Mukasey, and the former Director of the Central Intelligence Agency, James Woolsey.

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After Years of Losses, Airlines Now See Profits

[Chart: AirlineFinancials.com]

The nine largest U.S. airlines will report about $1.77 billion in profits on $31.5 billion in revenues for the second quarter, Robert Herbst, of AirlineFinancials.com, estimates.

Airlines have begun announcing second-quarter results. Delta today reported a $467 million profit for the quarter, for example. That compares with a $257 million loss for Delta in the second quarter of last year.

Much of the new airline prosperity is being driven by a rebound in business travel.

According to Herbst: "Every major airline, excluding American, should be reporting significant profits for the recent 2nd quarter. American is estimated to be at or near break-even. ... "If these second-quarter 2010 estimates hold true, excluding 2007, they will be the highest second-quarter profits in the last ten years. Further, 2010 industry revenues are estimated to be the second highest in the history of the airlines, topped only by 2008."

He added, "Excluding American, and assuming fuel prices remain in the $75-$85 per barrel price range, the airline industry should see significant profits for the current third quarter."

Delta, meanwhile, crowed about its results.

"Delta's profit this quarter is our best result in a decade and proof that our plan has positioned us well as the economy begins its recovery," said Richard Anderson, the airline's chief executive officer.

Aside from relatively stable fuel prices, airlines are benefiting from record load factors, the percentage of seats filled by paying customers. In general, domestic flights are taking off 85 percent or more full on average -- meaning that most flights are full. To keep planes full, airlines have been carefully reducing seat capacity to try to keep it in sync with growing demand. For passengers, that means crowded flights and less comfort, of course.

Oh, and they've been raising fares, too.

Airlines are also raking in unprecedented piles of dough on unbundled fees. In the first quarter of this year, U.S. carriers nailed passengers for $768.5 million in charges for checked bags and another $553.9 million in penalty fees for changing itineraries on so-called nonrefundable tickets, according to the Transportation Department's Bureau of Transportation Statistics. (The BTS doesn't break out revenue from things like selling meals, priority seating and boarding, etc.)

Internationally, things are also improving for airlines. International premium travel -- that is, people flying in first class and business class -- rebounded sharply in May to a level 18.7 percent above May of 2009, the International Air Transport Association (IATA) said. Coach travel was 10.2 percent higher; total passenger numbers were 10.9 percent up in May.

For the first five months of 2010, premium travel was up 10.8 percent.

"This strong post-recession rebound is being driven in large part by business travel, as business confidence and world trade rebound sharply," IATA said.

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Strong Demand From Asia-Pacific Airlines Buoys Boeing Forecasts

Surging growth in the Asian Pacific market buoys Boeing's forecast of $3.6 trillion in new aircraft sales over the next 20 years, with 30,900 new commercial passenger and freighter airplanes expected to be bought by 2029.

Boeing said it foresees passenger traffic growing 5.3% a year over the long term, and the single-aisle airplane segment, which has outpaced long-haul markets over the past 10 years, is expected to continue to dominate worldwide growth worldwide due to the retirement of older fleets, proliferation of low-cost carriers, emerging markets including India, China and Southeast Asia, and volatile fuel prices.

"The world market is doing much better than last year, but there are still challenges," Boeing's marketing vice president, Randy Tinseth, said.

Boeing identified Asia-Pacific as the region showing the healthiest market growth, and said that region's airlines are expected to be the largest buyer of twin-aisle airplanes, roughly 40 percent of total demand.

"Today, about one-third of all airline traffic touches the Asia-Pacific region, and as a result of the growth in this market, by 2029 almost 43 percent of all traffic will be to, from, or within the region," Tinseth said.

It called the Middle East as another "very strong market," and said that North American and European markets will see "substantial demand for replacement airplanes," as they retire the less-efficient, older aircraft from their fleets.

Boeing said it predicts that airlines will grow by responding to their passengers' preference for more flight choices, lower fares and direct access to a wider range of destinations. Air carriers will focus on offering more flights using more efficient airplanes, rather than on using significantly larger airplanes. As a result, the market for large airplanes (747 and larger) is small at 720 airplanes. But it remains an important market segment with a value of $220b. It is a market largely for replacement of existing airplanes, not additional growth, with 45 percent of the demand from Asian customers and 23% from Middle East customers."

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Boeing's New 787 On Display

The long-delayed and greatly anticipated Boeing 787 "Dreamliner" made its international debut, landing at the Farnborough Airport for the annual global airshow in England.

In the first international trip made by a 787 Dreamliner, a new long-range mid-size plane, the airplane arrived after a nonstop flight from Seattle. Boeing officials said the crew performed tests along the way.

When flying commercially, the aircraft -- an innovation in the use of composite materials for fuel efficiency and to enable more spacious cabin design -- will carry 210 to 330 passengers depending on configuration.

The 787 introduction has been marked by delays. The plane originally was due to enter service in the spring of 2008, but it now appears as if the first flights by commercial airlines won't occur till late next year or early 2012.

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Free Speech Protection Act Advances in Congress

The Senate Judiciary Committee unanimously approved legislation that would prohibit federal courts from enforcing foreign libel judgments in the United States, in cases where the alleged offense would not constitute libel under the U.S. Constitution.

The bill, now called the SPEECH Act, now goes to both the Senate and the House for what is expected to be approval.

Here is the text of the bill.

The issue is the growing number of libel lawsuits filed in foreign countries against Americans, for speech (or writings) made in the U.S. that someone in another country doesn't like. That is, you say something here and some known terrorism financier in, say, Saudi Arabia takes exception to it and sues you in a foreign court -- even traveling to, say, Britain to do so. That's what happened to the American scholar and author Rachel Ehrenfeld, who fought back. Dr. Ehrenfeld's case led to a law in New York state against enforcement of judgments in specious foreign libel suits. A handful of other states copied the New York law and now it looks as if the issue will be addressed nationally with a federal law.

Such suits always maintain that, even if the the allegedly offensive comments were not published in the foreign country, they nevertheless were available everywhere in the world on the Internet.

The threat to free speech doesn't just affect authors, journalists and bloggers. It affects scientific (and medical) researchers, speakers, and even users of social networking. If someone in any foreign country takes exception to something you say here that is utterly protected by the U.S. First Amendment, that aggrieved person can file suit in a foreign country that has weak or nonexistent free speech protections -- and then attempt to enforce that judgment in the U.S.

The federal law would put an end to that.

(In Arizona, one of the states where such legislation had momentum, the proposed state law has stalled in the state House after it passed 30-0 in the state Senate earlier this year. It isn't clear to me (yet) why proponents of that law, including the Arizona Republic newspaper, have now gone into hiding.)

I do have a dog in this fight, as is well known. I'm being sued for libel in Brazil after I reported (utterly accurately) on surviving a mid-air collision over the Amazon in 2006, and on the cover-up in Brazil over the causes of that crash. The charges are not only false but ridiculous, and would be laughed out of any court in the U.S. -- but the suit is real.

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T.S.A.: This Stuff's Asinine

[UPDATE JULY 6--The TSA reversed part of the ban in face of public ridicule today]

Continuing a long and breathtakingly expensive tradition of security theater farce, the Transportation Security Administration is blocking its Web users from accessing sites that might contain "controversial opinion," according to a report by CBS News. [UPDATE, July 5--The TSA reversed part of the ban in face of public ridicule today]

An e-mail was sent to all TSA employees from the agency's Office of Information Technology on Friday afternoon. It states that TSA employees will no longer be allowed to access five categories of websites that have been deemed "inappropriate for government access."

The categories include: "Chat/messaging; controversial opinion, criminal activity; extreme violence (including cartoon violence) and gruesome content; and gaming."

Wait a dang minute now, TSA. I hate to offer a "controversial opinion" here, but employees of the security agency can't get information on "criminal activity" and "violence," which sort of defines the terrorist threat? I'll bet that's going to go over big with the public and in Congress, where patience with TSA folly has worn very thin.

As to cartoons, let me quote the fighting words of Mr. Daffy Duck: "What a revoltin' development thith is."

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Surf's Up in Southern California, Way Up

Big waves are hitting the Southern California beaches today and will continue for days. The surf is being generated by a large storm off New Zealand. Here's the report in great detail on Socalsurf.com

No doubt, the truly skilled surfers will be out there doing spectacular things. For the rest of the surfing population, though, the warnings are serious, especially on south-facing beaches.

From today's story in the Los Angeles Times: "Everyone should take serious this surf forecast," said Ken Kramer, a district superintendent who overseas state park beaches from San Clemente to Huntington Beach. "It's going to be dangerous."

Gulf Coast Hotels Buoyed By Oil-Spill Workers

[Biloxi, Miss., Sun-Herald]

On the face of it, hotel occupancy and revenues aren't too bad -- so far -- as the summer season gains traction in the tourist hotels along the northern Gulf of Mexico. But a lot of the occupancy reported by hotels is by workers hired for Gulf-disaster cleanup and response work.

You can't sustain a beach-destination and resort industry with temporary emergency workers occupying the rooms, of course. But they do generate money.

Here's a report by Smith Travel Research, the leading hotel research firm.

Here's a smart story today in the Pensacola (Fla.) News-Journal, which has been doing an excellent job covering this intensely local story. It quotes an official from the Pensacola Bay Area Chamber of Commerce, which also has performed admirably in this awful time, saying that 75 percent of reservations might be canceled this month.

When this awful crisis has abated, at least to the point where tourism returns, I hope travel writers will remember how honest and up-front local organizations like the Pensacola Bay Area Chamber of Commerce were in this catastrophe.

The photo, above, is by the Biloxi, Miss. Sun-Herald, accompanying this story.

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Summer's Here and Airlines Are Packing 'Em In

Not to pick on Continental, the subject of the previous post on how airlines are lousing up elite status benefits. Continental is actually one of my favorite airlines, all things considered.

(Which is sort of like saying the flu is one of my favorite diseases ... all things considered.)

Anyway, Continental, which is always the first airline to report monthly operating statistics, says today that its mainline domestic load factor for June was 88.2 percent, a record. Load factor is the average of available seats occupied.

At over 80 percent, the general rule of thumb is most flights are operating full.

Let's see how the rest of the domestic airlines come in for June. For well over a year now, domestic airlines have been running at load factors well in excess of 80 percent.

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Continental Screwing Its Platinums

Continuing what appears to be a coordinated campaign to annoy the hell out of its elite-status members, Continental Airlines today reminded them by e-mail that the date is looming to "deliver the redemption and fulfillment" of what Continental calls new "OnePass Elite benefits."

"Last year we announced several OnePass Elite benefits and their intended implementation in mid-year 2010. We’re working as quickly as possible through some technical issues and expect to deliver the redemption and fulfillment of these benefits to you by September 2010," Continental said.

The main "benefit?" Well, Continental is starting a new invitation-only level of Platinum Elite that has priority over the existing Platinum Elite. That means, if you faithfully patronized Continental last year to the tune of at least 75,000 flown miles, achieving Platiunum status -- well, guess what: Assuming you didn;t spoend at least $30,000 to do so, they're moving a whole new group of people ahead of you in line for those diminishing rewards such as free upgrades.

And of course, those in the mid-level Gold and lowest-level Silver niches also move down in priority.

As of September, here are the "benefits" Continental touts, "once you qualify" for invitation to the new Presidential Platinum Elite level. Boldface is mine:

"Presidential Platinum is an invitation-only Elite benefit designed to reward Continental’s top Platinum Elite members. Members who achieve this level will be given all the benefits of a Platinum Elite member, plus top priority in Elite Upgrade recognition and flight standby, a dedicated VIP phone line and an annual fee waiver on the Continental Airlines Presidential PlusSM Card subject to credit approval. ..."

Forget the fee-free offer for some crappy credit card, as if any of us needed another affinity credit card. It's the priority on the already diminishing pool of available upgrades that counts.

How does one get this coveted "invitation" to the new elite level? Well, one flies a minimum of 75,000 miles in a year and one spends a lot of dough doing so, meaning one's booking cheaper nonrefundable fares won't count all that much.

"To keep this program exclusive, our Presidential Platinum Elite level requires you to both earn Platinum Elite status and spend the minimum threshold required for a Presidential Platinum invitation." Which initially will be $30,000 a year, Continental says.

I have said this before, and it is becoming more clear by the day:

Airline mileage programs are already in a state of Weimar Republic-style hyperinflation. And airline elite-status programs within those mileage programs are increasingly not worth the effort.

Airlines are betting that customers will have no place else to go as mergers and capacity cutbacks make the system smaller. Take it or leave it.

Can we spell S-O-U-T-H-W-E-S-T? How about J-E-T-B-L-U-E? Or V-I-R-G-I-N A-M-E-R-I-C-A? ... E-T-C.

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Delta Selling 2 Regional Carriers

[Photo -- Delta: What's the connection?]

Delta Air Lines today sold its Mesaba and Compass regional carriers to Pinnacle Airlines and Trans States Holdings Inc. to cut costs and, Delta said, to focus more on its mainline routes.

Both airlines will continue to operate under the name Delta Connection -- but the flights will no longer be operated by Delta itself.

Why should we care?

Well, consider the safety concerns that have been raised about regional airlines and the training and scheduling of pilots. A regional airline owned and operated by Delta is run with Delta standards. An independent regional-airline holding company has its own standards -- not necessarily poor ones, but different ones.

One of the big issues in regional carriers has been that customers often do not realize that they are boarding an airplane that is operated by a company other than the airline whose name is on the side.

An example is Continental Connection Flight 3407, which crashed on approach to Buffalo in early 2009, killing 50. The flight was actually operated by a sub-contractor, Colgan Air, which in turn is owned by Pinnacle Airlines.

After that crash, the National Transportation Safety Board raised serious questions about training, working conditions and pay of the two pilots whose mistakes on landing in rough weather caused the crash.

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