Portfolio.com: Seat 2B

Life with Laptop

Tue, 13 May 2008 04:00:00 GMT

After 25 years of traveling with portable computers, I have come to a somewhat racy conclusion: Laptops are like lovers. No matter the initial attraction, passions are fleeting. The gorgeous ones always break your heart. You constantly lust for the next great thing. And you remember every one you leave behind.

My first, a Kaypro, was chunky and ugly, but willing. My first true love, a Hyperion, was beautiful, slender, and sexy. But it didn't work out. Actually, it never worked at all. Then brief affairs with dowdy first-generation Compaqs and Tandys; a Datavue, my first notebook; and faster, younger Toshibas, NECs, Sonys, Hewlett-Packards, Zeniths, and Dells. There were ill-fated liaisons with portable Macs and ThinkPads and a doomed affair with a Sharp Actius. It moved like a runway model and sacrificed everything to make the weight. Lately, it's been meaningless hookups with nameless clones that always leave you wanting more.

The good news? Unlike Eliot Spitzer's dalliances, portable computing has consistently gotten cheaper. That Hyperion cost five grand in 1983; today you can get an entry-level laptop for a tenth of the price, and it'll do things you didn't even fantasize about a quarter-century ago.

What else can I tell you about my star-crossed love affair with laptops? Consider these hard-won insights, which will help you make your life with a laptop more productive, less frustrating, more fun, and less painful.

Go for the Gusto
Unlike with desktops, upgrades for laptops are pricey and often require installation by a pro. So buy a new machine with as much memory and hard-drive space as you can afford. And, all things being equal, choose the one with the most USB ports.

Work the Keyboard
I don't understand folks who buy laptops without ever having tested the keyboards. Too many otherwise great portables are ruined by inferior input devices. Keyboards are intensely personal, of course, and no two travelers will like the same one. Before you buy, pay attention to the layout; the size of the board and the keys; and the overall "feel" of the response when you type.
Watch the Weight
The smallest, lightest laptop I ever owned was that Actius. At three pounds and just two inches thick, it was the perfect size and weight for true mobility. My next model weighed four pounds, and my current machine is five. Other computers tip the scales at six, eight, or nine pounds. Why are supposedly portable machines getting heavier? Some notebooks are really "desktop replacement" units, not designed for true mobility. And manufacturers have decided that consumers want larger, widescreen-style monitors to watch movies and other videos. Maybe so, but each extra pound feels like 20 when you're dragging it around airports and hotel lobbies. If you never leave home without a laptop, consider the thin and light "ultra-portable" machines from Thinkpad, Sony, or Dell, or the Mac Air from Apple. They may cost twice as much as other units and entail some functional trade-offs, but your back and shoulders will thank you.

Add Some Bling
I'm a fast (but sloppy and fat-fingered) typist and I always inadvertently drag my thumbs on those below-the-keyboard touch pads. So I've purchased an ultrasmall mouse that plugs into a USB port. I love my Aviator Laptop Stand. It's light, stable, folds flat, and puts the laptop at a perfect typing angle on an airline tray table or hotel desktop. I carry a lifetime of data on a half-dozen thumb drives and I've found the perfect organizer case for them: an empty Altoids tin. I'm okay with the wired and wireless high-speed internet access I get on the road, but if you're not, get yourself a wireless card from a mobile-phone service provider. I throw it all in a formfitting neoprene sleeve from Incase.

Use Software Tricks
I wouldn't think of telling you what software to use, but two programs have made my life on the road with laptop more productive and satisfying. LogMeIn allows me to access (and work on) my desktop machines from my laptop over any internet connection. And Slingbox software works with the Slingbox connected to my home television. From anywhere in the world, I can watch Keith Olbermann railing against President Bush or the New York Mets blow another one in the late innings. My frequent-flying wife reports she gets HGTV and the Food Network just fine on her Slingbox-enabled laptop.

Be Prepared to Walk Away
The day will come when you have to break up with your laptop. I last an average of 18 months before I bolt for something newer and better. But now you need to be prepared to leave your laptop long before the passion cools. A federal appeals court last month ruled that laptops are the equivalent of luggage and Customs officials may search--and, if they choose--confiscate your portable when you enter the country. As with any border search, no "reasonable suspicion" is necessary. You need to safeguard your proprietary data. Always have it backed up somewhere other than on your laptop.

The Fine Print
Get ready for WiMax, a superfast form of wireless internet access. Sprint Nextel and Clearwire announced a $14 billion joint venture last week, and they have the backing of some major cable companies too. WiMax promises to deliver data faster than existing 3G wireless networks and operate at speeds equivalent to wired broadband access.

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Summer Forecast: Clear(er) Skies

Tue, 06 May 2008 04:00:00 GMT

Here is some good, old-fashioned irrational exuberance: I don't think travel this summer will be as arduous or as infuriating as it was last year.

My comrades in the commentary class disagree, of course. They rightfully point out the dark clouds casting the proverbial pall over the summer travel outlook: Airfares are skyrocketing. Fees for everything from ticket changes to checking bags are jumping. Airports and aircraft are crowded, flights are delayed or canceled, and service levels have deteriorated. Hotel rates are rising. Gas prices are headed to the moon, and the nation's automotive infrastructure is crumbling. And the dollar is in the tank overseas, so we can't even escape by going Over There.

But your curmudgeonly companion here in Seat 2B somehow sees silver linings this summer. A batch of airlines has gone out of business recently, so that should mean fewer flights crowding runways—and fewer delays. The government has imposed caps on flight schedules at the New York airports, and that will mitigate some of the problems at the national aeronautical choke point. The orgy of price hikes imposed by the airlines this year has probably passed the tipping point. Such a rapid runup is likely to depress demand; I think the airlines will panic and start discounting to get butts in seats. Hotels have pushed up prices a bit too fast also; they're already beginning to bargain to keep heads on beds. Even the weak dollar has shown some tentative signs of a revival in the last week, so international-travel costs this summer aren't likely to be as high as we were predicting even a month ago.

A word to the wary, however: Even irrational exuberance has its limits. This will be a challenging summer, and you'll need some strategies and tactics for maximizing your opportunities. Allow me to be your tour guide.

Watch for Fast Fare Sales
This won't be a season filled with big breaks broadcast via huge newspaper ads. The airlines will probably rely on brief sales that are announced only through select distribution channels. So if you're looking for a sale to a particular destination, sign up for the fare-watcher features from travel agencies such as Orbitz.com or Travelocity.com. Another good choice: The hyperactive alert system from FareCompare.com, which allows you to choose the routes, dates, airlines, and class of service you want to monitor.

Break the Hotel Chain
Hotel-rate rises have been fueled by our own reliance on the frequent-guest programs of the major worldwide hotel "families." We often don't look past the chains when we're seeking a hotel bargain—and they price accordingly. The solution? Check an independent site such as Quikbook.com. It offers discount rates from thousands of independent properties around the nation. Independents also offer another benefit: diversity. Unlike chain properties, each offers its own quirks and charm.
Look for Dollar-Friendly Destinations
Planning an overseas holiday this summer? Despite the dollar's rapid descent against the euro in Western Europe, it is relatively strong in Eastern Europe. You won't have Paris, but Budapest is a charming stand-in. The Dalmatian Coast, across the Adriatic Sea from Italy, does a passable imitation of the Amalfi Coast. In Asia, the Hong Kong dollar is tied to the greenback, so prices remain stable. (By the way, I don't know a single person going to the Summer Olympics in Beijing.) Closer to home, Argentina is cheap and trendy; everyone comes back raving about Buenos Aires and schlepping a case of Malbec wine. And don't forget Mexico: At 10 pesos to the dollar, it's a terrific bargain. Just avoid the sterile, overpriced resort ghettos like Cancún.

Use Your Loyalty Strategically
Airline frequent-flier miles and hotel frequent-stay points are the Zimbabwean dollars of travel: They are printed with abandon, and it takes millions of them to get the simplest commodity. Planning ahead in hopes of scoring the "best" rewards at the "restricted" levels is a Sisyphean task. But most programs allow you to cash in extra miles or points for virtually any available seat or hotel room. Using the so-called unrestricted option is a terrific strategy when you are traveling at the last minute or on a whim. One example: Continental Airlines is selling advance-purchase business-class seats from Newark to Zurich this summer for as little as $1,800 roundtrip, or 100,000 restricted OnePass miles. That means the miles are worth just 1.8 cents each. But walkup tickets to Zurich this summer will cost about $6,700 roundtrip—or 250,000 unrestricted OnePass miles. That's a much heftier payout of 2.6 cents per mile.

Stay Home
A summer getaway needn't be far away; consider hanging out in your hometown. Every decent hotel has "value-added" packages that bundle room accommodations with everything from in-room movies and museum admissions to spa treatments and shopping discounts. A package at the Ritz-Carlton, Denver, for example, includes the room, wine and fruit, breakfast in bed for two, and one admittedly practical amenity: free valet parking.

The Fine Print…
A followup to our merger column and the potential payoff for outgoing Northwest Airlines chief executive Doug Steenland: According to a Securities and Exchange Commission filing, Steenland has given up his potential merger cash-out package of $7.8 million. He traded it in for a new one worth $18.3 million. It's contingent on the merger with Delta Air Lines closing by the end of the year and his employment terminating on January 1, 2009.
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What Will Become of AOL?

Wed, 30 Apr 2008 18:00:00 GMT

With Jeff Bewkes' long-anticipated announcement that Time Warner will split off its cable business, the focus again turns to what will happen to AOL, the company's struggling internet unit.

During the earnings conference call, Bewkes and John Martin, the company's chief financial officer, sought to cast AOL's performance in a positive light despite a 38 percent decrease in subscription revenues and a substantial decrease in operating income this quarter from the same period last year.

Martin explained the 25 percent decline in operating income, saying that the first quarter of 2007 had been the highest quarter of the year, making a comparison "tough." And he said that this quarter's weak ad increase—1 percent—would improve substantially by the second quarter.

The good news included 52 billion page views—up 6 percent from the first quarter a year ago—and record highs for traffic and viewer engagement in March.

Still, the unit remains a thorn in the company's side.

"For the last two conference calls, Bewkes has talked about dividing the company into three buckets: content, AOL, and cable," says Chris Marangi, senior vice president at Gamco Investors, the asset management and financial services company led by Mario Gabelli.

Cable growth has been strong, and pretax operating earnings for content—Time Warner's publishing, film, and television-network properties—grew 10 percent in the first quarter. So Marangi says it's natural for investors to turn their focus to AOL, the weak link.

Bewkes has made much of his intention to separate AOL's internet-access business, once the dominant player in its field, from its burgeoning online- advertising business, Platform A. This morning, he said that such a change would "increase the accountability and enhance the strategic flexibility" of both pieces of the business.

"By splitting the two, it's clear that the core focus is on the ad-platform business," says Fred Singer, a former senior vice president at AOL and the current C.E.O. of Anystream, a company that produces and distributes streaming media. Singer believes that to remain viable in the face of a Microsoft-Yahoo merger, which would take away two potential acquirers for AOL, Time Warner's best bet is to restructure AOL around the new ad platform.

As for the access business, a cash-flow generator, AOL could keep it around for cash or sell it off to a company like Earthlink. Marangi speculates that it could even make a good buyout target, should that market return. "Some bottom fisher could come along and buy it, put on a lot of debt, and run it as a cash cow," he says.

Such a scenario is far away—for now, Time Warner doesn't break out the profitability of AOL's access and advertising businesses separately, although Bewkes has promised to provide more financial color in the future. That did nothing to ease analysts' concerns; their questions on the conference call focused almost entirely on AOL.

Does the business have sales-channel issues? Had it missed opportunities on pricing?

A particularly pointed question about Bebo, the social-networking site that AOL acquired in March, touched on the site's unknown revenue and profitability and wondered about the chain of command for the acquisition approval. After a very long pause, competing voices spoke at once.

Finally Bewkes cut through. "If you're asking did I approve acquiring Bebo, yes!" But he declined to break out profitability numbers, saying that the acquisition hadn't closed yet.

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Lobbying for Change

Tue, 29 Apr 2008 04:00:00 GMT

When Beijing’s first boutique hotel opens in July, guests of the 99-room Opposite House may not even notice the lack of a traditional lobby or the absence of a clichéd, imposing, officious front desk. They won’t be in the hotel’s public area long enough to see what’s missing.

“An assistant will take you directly from the hotel car to your room and check you in with a handheld computer” explains Brian Williams, managing director of Swire Hotels, the parent company. “There’s no need for a formal reception center because everything will be paperless and we’ll have the guest’s information before they arrive.”

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The disappearing lobby isn’t unique to Opposite House, the first hotel-management venture of the Swire Group, the Anglo-Sino behemoth with interests in everything from airlines to sugar. Hotels around the world at every price point and luxury level are rushing to refashion their sterile, stereotypical arrival halls into convivial lounges, alluring restaurants, hip cafés, mini-museums, and even comfortable, casual work centers and socializing areas. They’re pumping in music and designer scents and ripping out all of the visual cues and furnishings that once defined a hotel lobby.

Hoteliers speak persuasively about the societal and technological shifts driving them to reinvent their public areas. And you’ll hear the lobby being rapturously described as the hotel’s living room—or the lodging equivalent of the local coffee bar.

But the bottom line is, well, the bottom line: Hotels need to make money from their lobbies. “A vast lobby that generates no revenue just isn’t practical anymore,” says Welf Ebeling, executive vice president and chief operating officer of Leading Hotels, a worldwide marketing alliance of luxury hotels.

One logical way to turn lobbies into cash cows is with food-and-beverage outlets. The Wyndham Hotels chain, for example, is installing E.R.L. Cafés (for Eat, Refresh, Live) in the lobbies of its full-service hotels and resorts. The deluxe Montage Laguna Beach resort in California has a public area that emphasizes the property’s stunning vistas of the Pacific Ocean. But there’s also what managing director James Bermingham calls “a great room in an elegant home.” It’s decked out with Arts and Crafts-inspired decor, wooden floors, indoor and outdoor seating—and it peddles cocktails from just after breakfast until well past midnight.

At the Opposite House in Beijing, the traditional lobby space will largely be replaced by contemporary Chinese art, water features, and other architectural flourishes. But there will also be a total of five bars, restaurants, and nightclubs. “This category of hotel, a small and luxurious lifestyle property, doesn’t exist yet in Beijing,” Williams says. “It will be confusing to some people, but we’re aiming for unique—a one-off experience.”

Unique and one-off has no place at Courtyard by Marriott. The 700-hotel chain is “rooted in research, not intuition,” says Brian King, the vice president and global brand manager. But he says the chain’s research confirms other hoteliers’ intuition: The traditional lobby and its stiff transactional ambience is toast.

“It’s what I call the Starbucks phenomenon,” King explains. “Travelers want a place where they can plug in their laptop, use their iPod, mingle with other people, hang out, have a snack. And they want it some place that isn’t their guest room. For a hotel, that place has to be the lobby. But it has to be the right kind of lobby.”

So Marriott and an outside design firm have reengineered the entry area of Courtyard. Out with the big check-in desks; in with several smaller areas called welcome podiums. Flexible guest-seating areas, such as a communal table at the center of the lobby and private “media booth” workstations were installed. Sectional sofas replaced traditional lobby furniture. A 52-inch L.C.D. touchscreen called the GoBoard dispenses news and conciergelike information. There’s free WiFi, lots of easy-to-find power outlets, a library, and printer stations. The furnishings are all “laptop friendly,” says King.

And, naturally, there are revenue-generating opportunities galore. A 24/7 market dispenses snacks, beverages, and sundries. The breakfast buffet has been jettisoned and replaced with all-day dining, snacking, and grazing options. There’s even evening cocktails and custom coffee drinks. And everything is coffeehouse mellow: communal yet convivial and private; casual with a veneer of style; and designed with an eye toward multitasking on a laptop or a palmtop.

“About 30 to 35 percent of our customers were literally walking out the door because they didn’t want a buffet and they thought our lobbies weren’t interesting enough,” King says. “That’s revenue that we were giving away.”

Ebeling finds all these lobby changes a matter of back-to-the-future thinking. “The old European hotels always used to have a wonderful lounge in the lobby where people could sit down, have a coffee, and read the paper,” he says. “The lounge was always the soul and heart of a great hotel. It’s where guests went to mingle, to socialize.”

The Fine Print…
The first new Courtyard lobby opened recently in a Virginia property, and the rest of the chain will be renovated by 2010. King says the changes will cost hotel owners $650,000 to $750,000 for lobby space that averages about 5,700 square feet. And in keeping with the new age, new-wave approach to public space, Marriott has built a special promotional website. Besides starring in YouTube videos flogging the lobby transformation, King writes a blog too.
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Merger Most Foul

Tue, 22 Apr 2008 04:00:00 GMT

I’ve lost track of the number of real or attempted airline mergers that I’ve flown through in the last 30 years, but I can tell you this: The play is old and the plot is tired, but there are always enough twists to keep you watching until the final scene.

If it lives up to form, the week-old proposal to combine Delta Air Lines with Northwest Airlines will be a four-act melodrama and a months-long struggle among squabbling labor unions, petulant managers, and queasy stockholders and investors.

We’re already watching Act One, in which the two C.E.O.’s do the “done-deal dance.” The chief executives of both carriers proclaim that there are no impediments—legal, regulatory, or competitive—to a swift, seamless merger of equals. They give interviews to the hometown papers that are long on platitudes and promises and short on reality and circumspection. So-called media influencers—industry analysts, talking heads, even cranky columnists like yours truly—are offered private briefings. Slick promerger websites appear; the C.E.O.’s write predictable op-ed pieces. And key national media outlets—the New York Times, the Wall Street Journal, and USA Today—crank out reams of copy and acres of charts, all of which help foster the idea that the merger is, in fact, a done deal.

In a later scene, the plot thickens as all that is revealed to be baloney. Airline mergers require the blessing of both the Justice and Transportation departments, and there are always meaningless but time-consuming congressional hearings. The process takes months—or, in the case of a never-consummated United-US Airways merger, first pitched in 2000, more than a year. As Continental Airlines, itself eyeing a merger, told its employees last week: Aviation combinations happen only after a complex, “lengthy, and rigorous regulatory review.”

And this time, the State of Minnesota has a sizable role. A $245 million bond held by a state agency immediately comes due if Northwest Airlines leaves Minnesota. The combined carriers will be based in Atlanta, so Delta chief executive Richard Anderson, who once ran Northwest, is talking about his desire to “fulfill the spirit” of the bond’s covenants. But the state’s political infrastructure, embarrassed by its past largesse toward Northwest, will want more than spiritual restitution.

Act Two of the all-too-familiar airline-merger melodrama is what I call the time’s-a’wasting warning. As the regulatory process drags on, the airlines begin to raise the specter of dire consequences: Jobs will be lost; service to small communities will disappear; travelers will be inconvenienced; and one or both of the carriers will disappear if the government doesn’t move with dispatch.

The plot twist this time? Delta and Northwest seem desperate to get the merger approved before the presumably business-friendly Bush administration departs. All of the aforementioned talking-head experts are already prophesying that the next administration will be unwilling to approve a $17.7 billion deal that would create the world’s largest carrier.
But the regulatory process at both the Justice and Transportation departments is controlled by lower-level career bureaucrats, and they are rarely motivated by the timetable of administration changes. The United-US Airways merger was passed seamlessly from the Clinton to the Bush administrations. And it was Bush’s Justice Department that spiked the deal in July of 2001.

Act Three is the “union dues” phase. Airlines are heavily unionized and longtime line employees resent highly paid, transient bosses controlling their careers. One example: Almost three years after the US Airways-America West merger was first announced, the combined carrier is still trying to consolidate its old union contracts. A bitter fight between the two competing pilots’ groups wasn’t settled even after a supposedly binding arbitrator’s ruling. And just last week, the pilots voted out their old union. The labor squabbles have helped drive US Airways to the bottom of the passenger-satisfaction charts.

This time, pilots are the only unionized employee group at Delta; Northwest’s rank and filers, who despise the airline’s union-breaking chief executive, Doug Steenland, might have welcomed the merger. But the atmosphere has been poisoned: Anderson, who’s slated to be top dog of the combined carrier, cut a separate, premerger contract deal with Delta’s pilots. Naturally, Northwest’s aviators now oppose the merger, and most other Northwest unions have lined up in opposition to the deal too.

The final act is what I call transition turmoil. While they await the government, Delta and Northwest will start contingency planning. Putting two carriers together entails worldwide coordination of hundreds of moving parts—fleets, employees, routes, maintenance, schedules, airports, advertising, marketing, pricing, distribution—and requires the spade work of hundreds of middle- and top-level executives. While management diverts time to planning for what may never be, ongoing operations suffer. In the runup to the doomed United-US Airways merger, for example, United’s performance was horrific. During some weeks in the summer and fall of 2000, three out of four flights ran late; hundreds were cancelled; and passengers and luggage were stranded from Hong Kong to London’s Heathrow Airport. United never recovered: It declared Chapter 11 bankruptcy two years later, spent more than three years working on a botched reorganization, and has been looking for a merger partner since it exited bankruptcy, in February 2006.

The plot twist this time? There isn’t one. The Delta-Northwest deal dwarfs any other previous airline combination and will be tricky to execute. And since neither carrier has any spare management, logic dictates that there will be months of pain inflicted on business travelers even before the two airlines learn if they will be allowed to merge.

The Fine Print…
Another familiar theme of airline-merger melodramas: Which executive has feathered his nest best? The winner this time is Northwest’s Steenland. He has a clause in his employment contract that allows him to leave in June with a $7.8 million special payout. But the payout window reopens if he departs after a merger. As currently configured, Steenland would become a director of the combined carrier with no executive role. In other words: ka-ching! Related Links
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The High Cost of a Low Dollar

Tue, 15 Apr 2008 04:00:00 GMT

How would you like your analysis of the unprecedented worldwide decline of the U.S. dollar?

Political? President Bush told the Economic Club of New York last month that he “believe[s] in a strong dollar.” But since his 2001 inauguration, the greenback buys 14 percent fewer Japanese yen; 27 percent fewer British pounds; and 45 percent fewer Australian dollars. The dollar buys 43 percent fewer euros than when it launched as a street currency in 2002. So travelers who take Bush’s “strong dollar” overseas have less international buying power than at any time in decades.

Humiliating? The greenback is falling so fast that the government of India, which used to accept dollars as payment for admission to the Taj Mahal, now demands that visitors pay in rupees.

Surrealistic? With the dollar worth just 50 cents against the British pound, everything in London costs twice what it does in New York. A room at the Hilton New York, in Rockefeller Center, costs $259 next Tuesday night, but you’ll pay $518 (£259) at the Waldorf Hilton in London’s West End.

Anecdotal? I had a free Saturday in Rome not too long ago, so I grabbed a copy of the International Herald Tribune ($3.50 for the 16-page weekend edition) and sat at a coffee bar with an espresso ($8 for a two-ounce cup). Then I wandered into a kitchen-goods store. A panini press I’d purchased for $130 back home was selling for 189 euros—or $283.50.

Ironic? The traditionally enfeebled Canadian dollar was worth 62 cents against the U.S. dollar in early 2002. Now the loonie is at parity with the greenback. There’s the psychological blow of the world believing that a U.S. dollar is no more powerful than a Canadian dollar and a financial blow for businesses that purchase north of the border.

When the dollar slumped in years past, business travelers shrugged and moved on. Currency fluctuation is like air: It’s there, and there’s not much you can do about it. Usually, this year’s run on the dollar in England becomes next year’s run on the yen in Japan. Over the course of a couple of years, it all works out, give or take a shekel or a forint.

This time, though, the dollar has fallen so far, so fast, and so universally that business travelers are getting dinged—in both the wallet and the psyche.

“I cancelled a business trip to Stockholm in January. It was just too damned expensive,” says Susan Tomlinson, a frequent-flying financial-services executive whom I’ve known to be physically and financially fearless over the years. “At six krona to the dollar, everything is out of sight. So I did my business by email.”

A dollar was buying more than nine krona a few years ago. Even for business travelers, 50 percent currency shifts don’t go unnoticed.

Leisure travelers can stay home and rediscover America or travel to places where the dollar is still strong, such as Argentina and Turkey. But business travelers are screwed. Unless we’re prepared—and able—to scrap business trips, our options for hedging against high prices overseas are limited and not all that palatable.

We can, of course, trade down overseas, by staying in less-expensive hotels, eating at less-pricey restaurants, and switching from taxis and car services to mass transit. But trading down is risky.

Europe and Asia don’t have America’s diversity of shiny, new, low-cost lodging options. If you’re staying at a five-star grande dame property, you can trade down to a four-star Hilton or Marriott. But below the Hilton/Marriott level, there’s very little lodging stock suitable for business travel. Two- and three-star hotels overseas usually lack basics like in-room workspace, high-speed internet access, and 24-hour service.

The only other practical advice I can offer (as well as eliminating the purchase of a $3.50 newspaper) is to cut back by keeping your currency-transaction fees as low as possible. Credit-card issuers now sock you with a 2 to 5 percent “international service assessment” whenever you make a charge in a foreign currency. If you travel overseas frequently, get yourself a credit card issued by Capital One. Alone among major issuers, it offers fee-free transactions.

Large banks have also begun piling on the surcharges for those using ATM cards overseas. Before you travel, check your bank’s current ATM policy and demand that it waive any overseas fees. If it won’t, open a Capital One money-market account. It not only offers higher-than-normal interest rates, Capital One eschews fees on ATM withdrawals.

One other tip: Never sit down at an Italian coffee bar. You pay for the service—and the table. Standing at the bar generally yields espresso at half the sit-down price. In these weak-dollar times, Americans simply can’t afford to sit.

The Fine Print…
A followup to February’s column on airport clubs: Delta is closing nine Crown Rooms by the end of April, and United Airlines has already shuttered its Red Carpet Club in Sydney. But there is good news: United now offers free WiFi access in 27 Red Carpet Clubs and in five of its international first-class lounges.

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Who Takes the Hit?

Tue, 08 Apr 2008 04:00:00 GMT

Four small airlines stopped flying last week. And about the only thing more dramatic than the rapid-fire demise of Aloha, ATA, Skybus, and Skyway was the shoot-from-the-corporate-hip response of the big network carriers.

They quickly added a blizzard of new fees, fare increases, fuel-surcharge hikes, and travel restrictions aimed at business travelers, their most loyal, most frequent, and most profitable customers.

“Desperate people do desperate things,” notes the oft-quoted airline watcher Terry Trippler, a travel agent and former airline employee who isn’t particularly antagonistic toward his old bosses.

Whenever the airline business turns sour—as it has with metronomic regularity since deregulation, in 1978—the big airlines turn on business travelers. When they drive up our fares and complicate the travel process, we get angry. Then we stop flying or defect en masse to carriers like Southwest, JetBlue, and AirTran, airlines that offer more rational service and pricing policies. That only exacerbates the economic troubles of the big airlines, and they respond by slashing leisure-travel fares below operational costs until several more of them go the way of Pan Am or Eastern or TWA. It happened in the mid-1980s, in the early 1990s, right after 9/11, and it’s happening now.

This latest round of sturm und drang in the skies is being blamed on $100-a-barrel oil. Jet-fuel prices have definitely tripled in the last five years and the nation’s six network carriers—American, United, Northwest, Delta, Continental, and U.S. Airways—say they cumulatively face about $10 billion in additional oil costs for 2008.

But what is also true is that the big airlines bet fuel costs would decline this year and foolishly reduced their fuel-hedging positions. (By contrast, Southwest Airlines has remained consistently profitable for more than 30 years, partially by aggressively hedging its fuel costs.) More to the point, however, is that none of the carriers that folded last week were specifically doomed by the high cost of crude.

Hawaii’s Aloha Airlines was taken down by a combination of poor management strategy (it eliminated inter-island first-class cabins, driving local business fliers to Hawaiian Airlines) and the arrival of a well-financed startup carrier called go! A federal judge has already ruled that go! illegally used proprietary information from Hawaiian Airlines and ordered it to pay $80 million in damages.

ATA Airlines was seriously wounded several years ago when it accepted a short-term financial bailout from Southwest, in exchange for its crucial Chicago hub and other prime assets. When it lost a key charter-travel contract last week, it didn’t have enough scheduled service to survive. Midwest Airlines, a niche player with limited financial and managerial wherewithal, shuttered its ill-equipped, high-cost commuter operation Skyway Airlines and turned its routes over to a larger commuter airline.

Then there was Saturday’s demise of Skybus Airlines. Launched last May, it burned through tens of millions of dollars offering erratic schedules on tertiary routes (Gary, Indiana, to Greensboro, North Carolina, for example); gave no customer service (Skybus had no published phone number and refused to take calls from its travelers); and used an “unbundled” fare structure (travelers paid separately for everything from checked baggage to notification of flight delays). Its bizarre marketing angle—a heavily promoted promise of a few $10 seats on all flights—guaranteed that anyone who paid $11 felt overcharged.

It was simply a matter of unfortunate timing that those four carriers tanked in the same week. But in response to the unrelated failures, the six network carriers pulled out an assortment of old and failed pricing tactics. They increased the “minimum-stay” restriction on some prices, to force business travelers to buy higher fares to secure the travel flexibility they need. Five of the six airlines are now charging $25 for a second checked bag. (The lone holdout, American, is likely to match the new one-free-bag standard.) Several carriers raised so-called nuisance fees on items such as frequent-flier award redemption and itinerary changes.

The big airlines also raised their fuel surcharges again, a tactic cynically aimed at business travelers. Surcharges are piled atop a business traveler’s fare and do not qualify for any negotiated corporate discounts. On some international routes, the surcharge now exceeds $300 roundtrip.

Airlines insist that these new pricing gambits are necessary to cope with higher oil prices, but consider the state of fares since the New Year. Prices have already risen at least six times in the last 90 days, says Rick Seaney, whose FareCompare.com obsessively tracks airline-fare patterns. Seaney adds that prices charged by at least one carrier, Northwest, have jumped by as much as $120 roundtrip since the beginning of the year.

What will business travelers get for all these increases? Less service than ever before, according to the big airlines. Each of them plans to reduce their domestic route networks by as much as 5 percent by the end of the year. That means fewer opportunities for business travelers to fly with them, which will further reduce revenue, thus extending the fear-and-loathing cycle into next year.

The Fine Print…
The big airlines’ fare structure continues to be inexplicable. If you want to fly from New York to Los Angeles today, one-way fares on the 2,475-mile route are as low as $379. That’s less than 16 cents a mile. But the 374-mile flight between Atlanta and Cincinnati costs $734.50 one-way. That’s a staggering $1.96 cents a mile.
Related Links
Steer Clear
Tips for a Sky-High Spring
Taking the Laptop on the Train or Plane

The Waiting Game

Tue, 01 Apr 2008 04:00:00 GMT

As far as I can tell, 1963 was the last time that passengers were treated well at an airport after a flight disruption. It was at London’s Heathrow Airport, and a gaggle of jet-setters had been grounded by fog. They were escorted to a private lounge, fed lavishly, doted on by uniformed attendants, and given overnight rooms at a nearby hotel.

It all happened in a movie, of course, and the kid-gloves treatment of distressed passengers, including Orson Welles, in Terence Rattigan’s The V.I.P.s, was about as realistic as Richard Burton impetuously writing a huge check to bail out a stranger’s business and Elizabeth Taylor fitting her Givenchy-designed costume changes in a carry-on.

In the real world, life at the airport when our flight is delayed or canceled is more like a bad cop movie. We’re treated like perps—given little or no truthful information about our situation; held incommunicado from the outside world; herded in groups; fed institutional slop; and forced to sleep on floors or in hard chairs.

Decades of experience with airlines that screw up and don’t deliver on their schedules has helped me to rewrite the script. I can’t get you V.I.P. treatment, but I can guarantee that you’ll do better than the madding crowd during your next long delay.

Don’t Get Stuck at the Airport
The best airport layover is the one you never have. I don’t leave on a business trip these days without mapping out five or six other flights and routings to my destination. During the chaos of widespread flight delays or cancellations, gate and ticket agents won’t always have access to the latest travel information. If you have all the options at your fingertips, you’ll have the best chance of getting out with minimal hassle. And don’t forget: Airport agents aren’t the only folks who can reroute you. If you’ve booked with a travel agent, call for help. If you’ve booked directly with the airline, dial its reservations number. The phone agents won’t be as busy as the on-the-scene employees and can rework your plans more quickly and efficiently.

Establish a Base of Operations
If you’re going to spend several hours at the airport, you’ll need a comfortable, well-equipped place to regroup. There’s only one spot like that: the airport club. Airlines still operate the kinds of private lounges depicted in The V.I.P.s but only if you’re traveling in a premium class on an international flight. The rest of the time, you’ll need to be a paid member of a club or have a Priority Pass card. If you haven’t listened to my sage earlier advice, fear not: Many clubs will sell you a day membership for about $50. It’s a small price to pay for refuge.
Load Up Your Laptop
Waiting out a long delay can be a nightmare if you don’t have a conduit to the outside world. Besides obvious diversions—internet access and music and video entertainment—I’ve supplemented my laptop with two extras: Slingbox software, so I can tap into my home television system, and The Complete New Yorker, which includes every issue in the magazine’s 80-year history. I never want for reading material. (The New Yorker is owned by the same folks who publish Portfolio.com, but I bought my software at retail long before I agreed to sit in Seat 2B.)

Have a Nice Meal
There’s a term for having to hang around an airport: It’s called dwell time, and it’s why airports have transformed themselves into shopping malls and food courts. I have no use for airport shopping but am happy to linger over a good meal. Many airports now have branches of beloved local eateries, and chef-entrepreneurs like Todd English and Wolfgang Puck are building airport-specific chains. Even the formidable Gordon Ramsay has ventured into airport dining; his aptly named Plane Food opened last week in Heathrow’s troubled new Terminal 5. You can drink in style at airports too. A chain of surprisingly cool wine bars called Vino Volo is sprouting up at airports around the nation.

Get a Good Bed
In worst-case scenarios—when you’re stuck overnight—don’t wait for your airline to provide accommodations. Even if it’s willing to pony up, the lodgings may only be a step above a hot-sheets motel. And you’ll wait hours for a voucher and a shuttle bus. Arrange your own accommodations and argue with the airline about compensation later. I’ve programmed my mobile phone with the reservation numbers of my favorite hotel chains, and I call immediately to beat the crowds. Alternately, make a reservation online. If you don’t have a preferred hotel chain, consult the appropriately named AirportHotelGuide.com.

The Fine Print…
Getting stranded at the airport has spawned its own diva: Harriet Baskas has published a book called Stuck at the Airport; profiled dozens of airports for Expedia.com; writes a monthly airport column for USAToday.com; and recently launched a Stuck at the Airport blog.

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Tips for a Sky-High Spring

Tue, 25 Mar 2008 04:00:00 GMT

It sounds insane, but most of the big airlines bet oil prices would fall this year and have fewer fuel hedges in place today than they did in the first quarter of 2007. With prices settling in around $100 a barrel, independent analyses say the U.S. airline industry now faces as much as $10 billion in extra costs this year.

Travelers, of course, are the ones who will take the hit. Last week, two airlines (Delta and United) announced they were grounding some older, less-fuel-efficient aircraft in their fleets. All of the big carriers are shrinking their seat capacity, flight schedules, and route networks. They added a comparatively massive (as much as $50 roundtrip) fare increase, the sixth fare bump of the year. And they began searching for new ways to cheapen the flying experience and raise nuisance fees. Delta, for example, jacked up prices for overweight and oversized bags, then joined United and US Airways in charging customers $25 if they deign to check a second piece of luggage.

How do we cope? Here’s some of what I’ll be doing this spring to keep my business-travel costs under control.

Exploit the Two-Seat Coach Scenario
As the big airlines increase the retail price of seats for walk-up coach flyers like us, history shows that they’ll mount deep-discount sales to keep price-sensitive vacationers flying. If you’re able to plan ahead, you can take advantage of that dichotomy. Buy two sale-priced coach seats, which will cost less than one walk-up. That will guarantee the seat next to you will be empty, allowing you to spread out and affording you some privacy. But you need to call the airline and alert them to your two-seat purchase. One example: A walk-up coach roundtrip between Chicago’s O’Hare and Dallas-Fort Worth currently costs $923. Buy your tickets 7 days in advance, however, and you can score a pair of coach seats for just $436 roundtrip. In other words, twice the comfort for less than half the price. They’ll flag the second seat as an empty one; some will even assign it to Mr. E. Seat.

Fly Alternate Airlines
The days when the major carriers could dominate the skies and the business-travel agenda are long gone. Domestically, AirTran Airways, Southwest Airlines, and JetBlue Airways have all gone after business travelers with terrific value-added features. Last week, for example, all-coach JetBlue added legroom to several rows in the front of its Airbus A320 aircraft and sells upgrades for just $10 to $20 above the going fare. (With 38 inches of legroom, these chairs are roomier than some carriers’ domestic first-class seats.) The rest of JetBlue’s Airbus fleet has 34 inches of legroom, more than any other standard coach seat in the domestic skies.

Internationally, smaller airlines offer equivalent comfort to the big guys at a fraction of the price. Air New Zealand, for instance, sells business class on its Los Angeles-to-London flights for about half the price of the U.S. and British carriers on the route. And I recently paid just $1,500 roundtrip in business class on Eurofly, which flies between New York and Italy several times a week. That’s a fifth of what the big guys charge.

Get a Good Carry-on, Ship the Rest
Even as airlines hike their luggage fees, they are losing more bags than ever before. That’s a double whammy you can avoid by packing smarter and buying better carry-on bags. If you don’t want to spring for the custom-made stuff from artisans like Myron Glaser, you’ll find capacious carry-ons from the better commercial suppliers. And when you must travel with lots of luggage, ship with Fed Ex, U.P.S., or the special services rather than paying for the privilege of using the inefficient airline system.

Work the Premium-Class Pricing System
If you are used to flying up front, especially on longer-haul international trips, don’t assume you have to pay the inflated walk-up retail price. Airlines long ago broke the last taboo about business-class discounting. If you book between three and 60 days before departures, you’ll find discounts of as much as 75 percent. One example: The walk-up business-class price on the crucial New York-to-London route is now more than $10,000 roundtrip. Both British Airways and Virgin Atlantic sell advance-purchase seats for as little as $2,400 roundtrip.

Use Alternate Airports
Most of us are prisoners of the airports we know; the airlines depend on that mental sloppiness and overcharge us for flying into a city’s best-known facility. But you can save dough—and often end up closer to your final destination—if you look at the map. Going to Chicago? Try Midway, which is closer to the Loop than O’Hare, or even Milwaukee, which is convenient to the far northern suburbs of Chicago. Instead of LAX, try Burbank, Long Beach, Orange County, or even Ontario, which serves the so-called Inland Empire east of Los Angeles. The airports in Manchester, New Hampshire, and Providence, Rhode Island, often have less expensive flights and may be closer to your business destination than Logan, Boston’s main airport. This trick works internationally too. If you hate Heathrow, the behemoth in London, try flying into Stansted, Luton, or even the airport in Bristol. Instead of Paris’s choppy and annoying Charles de Gaulle, fly into Orly, which is closer to central Paris.

The Fine Print
Never buy tickets between Friday and Monday morning. Why? Airlines file fare increases on Thursday evenings and watch over the weekend to see if all of their competitors match the price bumps. If they don’t, the carriers roll back prices by Monday afternoon. But you won’t get a refund if you purchased a higher-priced ticket over the weekend.
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Flying Solo
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Achtung, JetBlue

Pump Up the Deal Volume

Mon, 24 Mar 2008 19:30:00 GMT

When the combination of XM Satellite Radio and Sirius Satellite Radio was proposed more than a year ago, it seemed to some to be wishful thinking.

The two are not just the leading satellite-radio providers, they are the only satellite-radio providers.

But Bush administration regulators have rarely seen a merger they didn't like, and the Justice Department said today that a merger was not "likely to substantially lessen competition."

"The evidence did not show that the merger would enable the parties to profitably increase prices to satellite-radio customers for several reasons, including: a lack of competition between the parties in important segments, even without the merger; the competitive alternative services available to consumers; technological change that is expected to make those alternatives increasingly attractive over time; and efficiencies likely to flow from the transaction that could benefit consumers," the Justice Department said.

The Federal Communications Commission must still approve the deal. While the commission may impose a number of conditions, it is not expected to go against the Justice Department and try to block the deal.

While the combined company would have a monopoly in satellite, radio is very fragmented, with internet radio providing competition to conventional broadcasting.

Sirius, known for having Howard Stern on its roster, has 7.7 million subscribers, while XM, whose programming includes Oprah & Friends, has 8.6 million.

The two companies have been bleeding billions of dollars. Shares surged this afternoon on hope that a combined company could become profitable.