The Brancatelli File
BY JOE BRANCATELLI
June 16, 2005 -- Part of the problem of living a life on the road is that it warps our perspective.
We're constantly on the move and only get snatches of news culled from quick glances at newspapers, a sound bite overheard as we were passing the television at an airport club or a minute or two surfing the Web. And the information we do get tends to be warped because the mainstream media outlets, frankly, know precious little about how business travel really works.
So allow me to offer a reality check on some things you think you've heard lately. You'll be surprised (and not necessarily pleasantly) by what you didn't hear or wasn't explained correctly.
FOLLOW THE MONEY ON THE TSA
You don't need a demagogic Congressman to tell you that the Transportation Security Administration is doing a lousy job at the airport. The security checkpoints are increasingly chaotic and inconsistent from airport to airport. Almost four years after the agency was created, we still have no acceptable way to separate the potential terrorists from the average traveler and every TSA "watch list" proposal seems more intrusive and less effective than the previous one. We're still not adequately policing our seaports and we still don't check about 90 percent of the cargo loaded onto our passenger jets. And if one more plane gets diverted to Bangor because of a phony security risk, it's possible that Maine will secede from the Union.
But to suggest that the TSA is burning through vast caches of taxpayer dollars is simply wrong. In point of actual fact, we're running the TSA on a starvation budget. To date, we've spent about $20 billion to fund it since November, 2001. Not an insubstantial sum, to be sure, but we've probably spent about $100 billion in Afghanistan and at least $170 billion on the war in Iraq.
WHY WIRELESS COMPANIES DON'T WANT IN-FLIGHT CALLING
The nation's two largest wireless carriers, Cingular and Verizon, have told the Federal Aviation Administration and Federal Communications Commission that they are against relaxing the current ban on cellphone calling in-flight. Regardless of where you stand on the issue of using cellphones during flights, the positions of Cingular and Verizon seem puzzling. After all, companies rarely favor legislation or regulations limiting the use of the devices and services they sell.
But look just below the surface and you'll see the reason for their counter-intuitive stands. Verizon owns the Airfone service and it's made a fairly heavy investment in it. Verizon knows that Airfone is doomed if passengers are allowed to make calls from their own cellphones. Cingular's rationale? It wants the FAA and FCC to permit text messaging from cellphones rather than voice calls. What's the difference? Cingular sells text messaging as an optional feature on its calling plans. If the FAA and FCC embrace the middle ground of permitting text messaging but banning voice calls, Cingular thinks it can hit up frequent travelers with a fee for a new "must-have" option.
IT'S IN THE CARDS (AND THE FUNDING)
Wondering why you've been buried in a blizzard of solicitations to take a new version of the Delta SkyMiles card from American Express or a new flavor of the United Mileage Plus card from JPMorgan Chase? It's certainly not because you need a new card or even that the new versions of the cards are all that appealing. It's just that both American Express and Chase have been key players keeping Delta and United afloat. American Express last year loaned Delta $100 million and advanced the airline more than $500 million against the future purchase of SkyMiles. Chase gets a huge percentage of its credit card profits from the Mileage Plus portfolio and is also one of United's largest creditors. Bottom line: Both financial organizations have ponied up big bucks for the right to market the frequent-flyer cards and they have to do lots of marketing to make their money back.
UNITED'S $10-AN-HOUR SOLUTION
United Airlines generated an immense amount of publicity this week with the announcement of Business1, a plan that offers Chicago/O'Hare travelers to and from seven cities dedicated gates and a 500-mile bonus if flights arrive more than 30 minutes late. Forget that the plan is older than the hills--Northwest once had a similar program called FasTrack, TWA used to call its dedicated-gate scheme TWQ and even United offered a nearly identical service before 9/11--and concentrate on those miles. United thinks a half-hour of your time wasted on a delay is worth 500 miles. A frequent-flyer award for a transcontinental ticket costs 25,000 miles and is worth about $250 at current prices. Which means a 500-mile bonus is worth about $5. Which means that United thinks your time is worth $10 an hour. By contrast, United chief executive Glenn Tilton earned $1.1 million last year. Assuming he worked 50 weeks and put in 40 hours a week, Tilton earned $550 an hour last year.
Boy, I sure hope he isn't stuck on a delayed Business1 flight this summer.
This column originally appeared at JoeSentMe.com.
Copyright © 1993-2005 by Joe Brancatelli. All rights reserved.