The Brancatelli File
ISN'T THIS WHERE
I LOGGED ON?
BY JOE BRANCATELLI
July 28, 2005 -- Shocking as it may seem, this is the beginning of the ninth year of the Internet-specific version of The Brancatelli File.
Trust me when I tell you that nine is positively ancient in Internet years. Want proof? Surf over to WaybackMachine.org, that amazing archive of what has gone before on the Net. As you can see when you type in the appropriate Web addresses, the 1997 debut of The Brancatelli File on the Internet predates American Airlines' use of AA.com. (In 1997, AA.com belonged to a Japanese firm called Architect & Arts.) I was here before Delta got Delta.com. (In 1997, typing Delta.com brought you to a software-development company.) The Brancatelli File on the Net is older than United.com (United Airlines was using Ual.com back in 1997). Continental.com was the home page of a cable-TV company when The Brancatelli File debuted on the Web in 1997. There were no hotels at Marriott.com and no rental cars at Budget.com back in the day, either.
I babble thusly because looking back is valuable. The breaking news has rushed by in the blink of an eye since 9/11 and some truly important trends have been ignored. So let's use my electronic anniversary to examine at least a few of the issues that have not gotten their due.
THE PERMANENT BUSINESS-CLASS SALE
We first started seeing discounted international business-class fares right around Christmas of 2001. I specifically remember wonderfully absurd, holiday fares to Europe below $900 roundtrip in business class. Now, less than four years later, advance-purchase international business-class sale fares are a permanent part of the fare landscape.
Just surf over to the Airlines Steals&Deals page and see all the offers. And I heard from a reader this week that he scored a business-class roundtrip for less than $2,500 between New York and Peking on United Airlines.
Or just look at the business-class fare sale that British Airways launches tomorrow: as much as two-thirds off the walk-up fares to London from each of 22 of its North American gateways. A $2,911 roundtrip price from the East is joined by a $4,088 roundtrip from the West and fares in the $3,000-$3,500 range from other U.S. gateways. From Canada, the roundtrip London fares are C$3,000 to C$3,330. This particular travel window is narrow (August 12 to September 7) and you must buy your tickets in the next week, but this is at least the third business-class sale BA has offered this year. (You should be able to get complete details of the sale here starting Friday morning.)
THE AXIS OF EXCESS NEVER DIES
More than three years ago I wrote a column called The Axis of Excess that detailed a few of the egregious golden parachutes and bonuses that the bosses of The Big Six were paying themselves while their carriers gushed billions in losses. While the barbarians are no longer at the Big Six boarding gates, so to speak, not one airline has ever tried to reclaim money from these disgraced and disgraceful former Skygods.
Want an example? How's this. Delta Airlines has lost more than $10 billion since the year 2000, but former chief executive Ron Allen, who was forced out in 1997, has just recently left the payroll. Delta has been paying him $500,000 a year for unspecified consulting services. Allen's dependents would have received the money--paid quarterly, in advance--even if Allen himself had died or was incapacitated. Allen also got a $4.5 million lump-fund cash severance; a $765,000-a-year pension; a company car; more than $400,00 to furnish an office in a swanky Atlanta building; a full-time secretary; about $300,000 for incidentals and 10-year memberships in a private club and a golf club. No one at Delta can say what consulting services Allen ever provided--or even if he was ever asked to consult by his successors.
Lest you think this kind of egregious corporate behavior is uniquely American, however, consider the case of Air France-KLM Chairman Jean-Cyril Spinetta. While lower-level employees at the combined carrier made do with a 2 percent average raise, Spinetta's compensation last year jumped 82 percent to €710,000. His salary this year will jump to €750,000 before bonuses.
FORGET THE BIG SIX, CONSIDER THE TERMINATED 222
Shaky as they may be, The Big Six are still standing almost four years after 9/11. Two may be bankrupt and two more may be on their way to Chapter 11, but their simple survival is a testament to the power of bailouts, federal loans, tax holidays, pension dodging and a willingness to bludgeon line employees for givebacks while defaulting on their pensions. But at least 222 other airlines around the world haven't been so lucky. According to a running list compiled by a Web site called JustPlanes.com, that's the number of carriers and airline brands that have disappeared since 2000. Two of those casualties occurred just this week: Westward Airways, a commuter carrier that served Nebraska and New Mexico, and EUjet, a low-fare start-up that flew from Kent, England.
TWO IS THE LONLIEST NUMBER
Congressional Republicans led by then Majority Whip Tom DeLay refused to federalize airport security after 9/11 until they were assured that airports would eventually be allowed to return their checkpoint screening and other tasks to the private sector. The Republicans also demanded a pilot program of private screening be carried out at five airports. The Republicans got their way, of course.
Now here's the rest of the story: Only two airports--Sioux Falls, South Dakota, and Elko, Nevada--have requested the right to remove federalized security screeners in the nine months since the opt-out clause has been available. And what of those five airports in the pilot private program? The biggest one, San Francisco International, says it will stop using private screeners unless it receives blanket immunity from security-related passenger lawsuits.
AMTRAK AND THE FINANCIAL MADNESS OF LONG-HAUL TRAINS
Back in February, I wrote a column about the madness of Amtrak's insistence on burning through its taxpayer subsidy by continuing to underwrite inefficient and unnecessary long-haul trains. Exactly how much money Amtrak is throwing out the caboose window has now come to light in a report released this week by the Transportation Department's Office of the Inspector General (OIG).
On an operating basis, the OIG says, Amtrak subsidizes every coach passenger on the Sunset Limited to the tune of $286. The subsidy is $114 per coach traveler on the Crescent, $129 per coach passenger on the Cardinal--I wrote about my trip on the Cardinal in March, 2004--and $140 on the California Zephyr. But here's the real news from the OIG's report: Sleeper Car service on these long-haul trains is a cesspool. Anyone who books a sleeper on the Crescent is underwritten by taxpayer dollars to the tune of $330 per trip. A sleeper-car passenger on the Sunset Limited receives a taxpayer gift of $366.
If you've got some free time this summer weekend, download and read this report. Even if you don't care a whit for trains, you'll find it a fascinating read and an alarming indictment of the "conventional wisdom" in transportation. While you're reading about Amtrak's refusal to provide cost-effective, reliable, basic passenger service, you'll be struck by the similarities to the intransigence and arrogance of the Big Six airlines.
And that, conveniently enough, is just about where The Brancatelli File logged on to the Web nine years ago.
Copyright © 1993-2005 by Joe Brancatelli. All rights reserved.