Wednesday, February 28, 2007

JetBlue redux

Another week, another weather-related service disruption for JetBlue at its New York City hub. Monday's snowstorm required JetBlue to cancel almost 70 flights, but that was nothing compared to the havoc caused by the "Valentine's Day Massacre" of a couple of weeks ago, which was a public relations nightmare for the popular airline. Newsweek financial columnist Allan Sloan suggests that JetBlue's biggest obstacle in the wake of that meltdown is not its need to change its operational structure to better deal with such weather-related disruptions in the future, but the simple fact that it, as an airline, is part of a money-losing business:

Consider this: since 1947, the first year for which the Air Transport Association has profit-and-loss figures, the U.S. airline industry has lost a cumulative $14 billion. And that's after including the up to $3 billion the association estimates that airlines made last year.

"Grocery stores give you better returns [than airlines]," says the Boyd Group's Michael Boyd, a Colorado-based airline expert. "Airlines are a crummy business, and will always be a crummy business." When people ask about starting an airline, Boyd told me, "first, we say no. Then, if they still want to do it, we say, 'Only if you're using your ex-wife's money'."

Sloan, noting that JetBlue was forced to shut down service to places like Richmond, Virgina; Raleigh-Durham, North Carolina; and Portland, Maine, goes on to bring up this interesting point:

A final note: Amtrak runs trains from New York to Richmond, Raleigh and Portland. I should have asked JetBlue why it didn't put its passengers on trains, but even I—an Amtrak Select Plus customer, yet—never considered rail service as an option. The lesson: we think of government-owned Amtrak as money-losing socialism, but the money-losing airline industry as a bunch of noble capitalists. Maybe we should re-examine our national transportation policies the way JetBlue is rethinking its customer-service policies.

The nation's commercial airline industry is, like the nation's passenger rail network, federally subsidized. Both industries are net money losers. It's funny how we hear so much controversy about one form of transportation in regard to its economic health, but comparatively little controversy about the other.

Tuesday, February 20, 2007

A sad discovery

My aunt found her daughter dead in her College Station apartment Saturday morning.

I cannot say I was particularly close to Evelyn. She was the product of my aunt's first marriage, before she met my mother's brother, and I only met her on a few occasions over the course of my life. Ironically, the last time I saw her was rather recently, at Thanksgiving. This was right after she moved from Kansas to College Station, where my aunt lives.

My family and I are all shocked and saddened, but I don't think any of us are terribly surprised. Evelyn was not in good health; she suffered from a host of chronic physiological problems and was taking a variety of medications for her various ailments. We obviously won't know more until the autopsy and toxicology reports come back, and that will probably take a few weeks.

Right now my thoughts are with my aunt, my uncle and my cousins, who will miss Evelyn terribly. Memorial services will be this weekend.

JetBlue's reputation takes a hit

Last week, popular low-fare airline JetBlue suffered a huge setback after extreme weather conditions at JetBlue's hub at John F. Kennedy Airport in New York City all but shut down the airline. Several planes were grounded on the JFK tarmac, with passengers inside them, for as long as ten or eleven hours. Tempers flared as passengers trapped inside the airplanes became restless, toilets overflowed and cabin crews ran out of food. Inside Terminal Six, events were also chaotic as flight after flight was canceled, leaving thousands of passengers stranded.

JetBlue has apologized for the disruptions, but repercussions from the storm haunted JetBlue all weekend as it struggled to resume normal operations. Flights to several cities, including Houston, were cancelled Sunday and Monday as the airline ferried its equipment to necessary locations and ensured that flight crews had the proper amount of rest, per FAA regulations, before taking to the skies once again. The airline reports that it has returned to operating normally as of today.

JetBlue, which has won fans in the past for its reluctance to cancel flights because of bad weather, is blaming the problems on its inability to cope with rescheduling so many flight crews.

“We had a weakness in our system,” said (JetBlue CEO David) Neeleman. “We were overwhelmed.”

Overwhelmed? That's a bit of an understatement. "Caught with your pants down" is probably more descriptive of what happened, as the incident exposed some serious flaws in the airline's operational philosophy:

When the bad weather struck Feb. 14, JetBlue didn’t have a system in place for many stranded flight crews to call in to be rerouted, something the airline is working to rectify, Neeleman said. The service breakdown “was absolutely painful to watch,” he said Monday.

One travel expert suggested the airline had brought the crisis on itself by trying too hard to accommodate its passengers.

“Most airlines don’t try to operate when there is an ice-storm problem — they’ve learned that it’s better to cancel all flights at the outset and then try to get back to
normal operations as quickly as possible,” said David Stempler, president of the Washington-based Air Travelers Association.

Stempler said the fast growth of airlines such as JetBlue can create demands that are beyond their capability, especially in crises.

“JetBlue tried to do their best — tried to keep the system rolling,” he said. “Their heart was in the right place, but their head was not.”

Neeleman, who has said he was “humiliated and mortified” by his airline's failures as a result of the storm, has promised to fix the problems revealed by last week's service outage, spending up to $30 million on new procedures for operations disruptions and introducing "bill of rights" for its customers.

While JetBlue as a corporation will likely recover from this incident, it remains to be seen how much damage has been done to JetBlue as a brand.

To be sure, massive weather-related disruptions and the accompanying distress placed on the flying public happen to airlines all the time; last December's blizzard-related shutdown of United's operations at Denver, or the recent incident wherein an American Airlines flight en route to Dallas/Fort Worth was stranded on the tarmac at Austin Bergstrom for many hours, are two such examples. But JetBlue takes pride in not being "another airline." It has won a loyal following and has become a popular airline due to its unique perks - in-flight DirecTV and blue potato chips, for example - and an incident such as this carries much more potential damage to an airline with a carefully-cultivated image, such as JetBlue, than it does to many other carriers - the bigger ones, especially - who don't have quite as positive a reputation.

It will be interesting to see if Neeleman's attempts to repair the airline's operational problems - and with it, its image - are successful over the coming months and the airline is able to retain its loyal customer base as well as its reputation as being a unique, passenger-friendly carrier. If not, JetBlue runs the risk of becoming "just another airline." And that, more than any economic damage caused by last week's fiasco, would be a disaster for JetBlue.

Thursday, February 15, 2007

Why the new dollar coin won't work

Today, the United States Mint is unveiling a new dollar coin. The new coin, featuring the likeness of George Washington, will be the first in a series of dollar coins bearing images of the Presidents of the United States. Later this year coins for John Adams, Thomas Jefferson and James Madison will be released into circulation. This program, which follows in the footsteps of the current 50-state quarter program, will last until at least 2016. The Mint hopes that these new dollar coins will succeed where previous attempts at a dollar coin - the Susan B. Anthony and the Sacagawea - have failed.

I'm sure they'll be a hit with coin collectors. I'll probably collect them, just as I currently collect the 50 state quarters (can't wait to get my hands on that James A. Garfield coin!). But will the general public use the coins, instead of the venerable dollar bill, for day-to-day purchases? Don't get your hopes up.

Coin experts, however, questioned whether the rotating designs will be enough to allow the new presidential $1 coin to succeed where the Susan B. Anthony dollar, introduced in 1979, and the Sacagawea dollar, introduced in 2000, failed.

“I don’t know of any country that has successfully introduced the equivalent of a dollar coin without getting rid of the corresponding paper unit,” said Douglas Mudd, author of a new book on the history of money, “All the Money in the World.”

To be sure, by doing away with the dollar bill and requiring everybody to use coins, the federal government could save hundreds of millions of dollars every year. Metal coins, after all, last much longer than paper bills. Other central banks around the world have already done this; Great Britain phased out the one-pound note in favor of the £1 coin during the 1980s, Canada replaced their dollar note with the "loonie" in 1987, and the European Union uses coins instead of notes for its €1 and €2 denominiations.

However, here in the United States, an overwhelming majority of people (including some local bloggers) are opposed to phasing out the dollar note in favor of the dollar coin. Some people like dollar bills because they're lighter and easier to carry than dollar coins. Others like bills simply because they don't like messing with coinage. (An argument I hear amazingly often in favor for the dollar bill is that you can't stick dollar coins into the g-strings of the dancers at topless clubs!) Even if it makes economic sense to phase out the dollar bill in favor of a more durable coin, people have an emotional attachment to the greenback, and the Federal government is loathe to buck that public preference (that's also why the Mint still strikes pennies, even though they now cost more to make than they're worth).

As long as there is both a paper bill and a metal coin in circulation, people are naturally going to prefer using the bill. And that's why this latest incarnation of the dollar coin, as interesting as it might be, is likely destined to flop.

Thursday, February 08, 2007

IAH - DXB nonstops begin December 3rd

Looks like the 8,181-mile journey is about to get a bit shorter, according to the Chronicle:
Emirates will kick off nonstop service between Houston and Dubai beginning in early December.

The new flight will be among the world's longest, but it will shorten travel times between Houston and Dubai, said Nigel Page, senior vice president for Emirates.

"We believe we will have the fastest service from Texas to the Gulf, to Dubai," Page said.

The flight time from Houston to Dubai will be 15 hours and 10 minutes, Page said. That compares to a total of 18 hours and 25 minutes for a flight on British Airways connecting in London, which is one of the shorter flights now.

This new service would compare even more favorably to the 23-hour treks I've taken on KLM via Amsterdam, or on JetBlue and Emirates via JFK. I think I've said before that I've noticed that a good number of the people on KLM flights from Houston to Amsterdam also seem to appear on the flights from Amsterdam to Dubai, and vice versa, which indicates that there is a steady stream of people flying from the two cities. The folks at Emirates obviously believe this, as well, especially given Houston's large Indian and Pakistani communities:

The head of Emirates said in a prepared statement that there is a growing demand for convenient air travel connections between the U.S. and cities in the Middle East and Indian subcontinent.

Houston will be the second gateway city for Emirates, which has three daily flights to Dubai from New York's John F. Kennedy International Airport.

I knew that this route was under consideration, along with routes from Dubai to Chicago and Los Angeles, but I honestly didn't think nonstop service from Houston to Dubai was going to happen this quickly. I am pleasantly surprised.

It's hard to say when, or even if, I'll be sent back to Dubai again. But regardless of how often I'll get to use this service, this is good news for the entire city of Houston.

UPDATE: Ben Mutzabaugh's entry about this new service is here. He links to Emirates' press release. Dubai Informer's story on this new service is here.

ANOTHER UPDATE: According to the Emirates press release, the initial flight numbers and schedule for this new service will be as follows (all times local):

EK211: Departs Dubai (DXB) at 9:05 am on Mondays, Wednesdays and Fridays, and arrives in Houston (IAH) at 4:10 pm

EK212: Departs Houston at 6:25 pm on Mondays, Wednesdays and Fridays and arrives in Dubai at 7:35 pm the next day

Friday, February 02, 2007

If college football writers covered world news...

...this is what the front page would look like:
May 8, 1945

Berlin -- In the end, its capitol lay in ruins. In the end, the "master race" wasn't. In the end, it wasn't even close.

A conflict that started with the hope of world domination for the once top-ranked army on the planet ended in a rout as the Allies defeated Germany yesterday, ending World War II on the European continent. The loss dropped Germany to 0-2 this century in world wars and left its people asking themselves how a plan to rule the world had once again gone so terribly wrong.

Even before their second crushing defeat in less than 50 years, support was building among the German people to oust their mercurial leader as secret underground printing presses were already beginning to crank out and "You can't spell Adolf Hitler without two 'Ls'" newsletters. But, in the waning days of the war, Hitler made the point moot, abandoning the once-proud program by committing suicide in his Berlin bunker.

The Allied victory was especially sweet for United States President Harry "The Buck Stops Here" Truman who was following in the footsteps of legendary President Franklin Delano Roosevelt who died mere days before the U.S.-led victory.

"This one was for FDR!" shouted Truman before being drenched with Gatorade by his war cabinet. "And I think this ends once and for the debate all about which country is tougher."

But Truman added that there was still work to be done. "I'm going to tell my staff, my generals, my soldiers and the American people to enjoy this one for 24 hours.
But then let's turn out attention to the Japanese."

(Hat tip: Patrick McLeod)