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November 4, 2009

What does Warren Buffett’s train investment say about airlines?

Filed under: Budget airlines, Flights v. Trains, Ryanair, The Travel Business — Tags: Airlines, airlines bloodbath, airlines industry, BMI, bmibaby, BNSF, coal, deregulation, Europe, freight transport, high speed trains, Lufthansa, Michael O'Leary, Netjets, perfect storm, private jets, rail, rail industry, railfreight, Ryanair, style over substance, subsidies, the indefensible, three decades, trains, US Airways, US economy, USA, Warren Buffett, Wilbur Wright, Wright brothers — ja @ 8:09 am

So, Warren Buffett has invested some $26 billion buying American freight operator BNSF, with news commentators hailing this as an ‘all-in’ bet on the future of the US economy. But there’s more to it than that - it is, of course, a huge leap of faith into the future of railways, even if lumping coal isn’t exactly as glamarous as swish new high speed train sets. But Buffett has never been about style over substance, and trains in Europe are usually associated with massive subsidies.

In typical long-term Buffett style, he has talked about growth potential of rail in the USA over the next 3 decades, and even if this investment is in freight railways, there is no doubt that passenger rail networks will also see substantial development over this period.

Compare this to Buffett’s attitudes towards airlines, after he lost 75% of his $385 million investment in US Airways back in 1995. He pointed out that the he didn’t think the US airline business had ever made money - and this was in an industry without the kind of state carrier subsidies which were common elsewhere in the world. Buffett is quoted as saying, in respect of the Wright brothers’ first flight:

“If there had been a capitalist down there, the guy would have shot down Wilbur. One small step for mankind, and one huge step for capitalism.”

Has anything changed in the airline industry since 1995? Well, there’s been plenty of deregulation across the pond, and plenty of former big names are no longer with us. In Europe, we have Ryanair’s Michael O’Leary echoing many of Buffett’s sentiments, describing the current situation facing European airlines as a ‘bloodbath’, and the ‘perfect storm’. Of course, Ryanair are one of the few airlines to buck the trend, whereas this morning’s announcement from Lufthansa that they can’t find a suitable bidder for bmi, and that consequently bmibaby are shedding jobs hardly comes as a surprise.

Despite all this, Warren hasn’t been put off from investing in flying alltogether, having ditched his own private jet, aka ‘The Indefensible’ back in 1998, in favour of buying private jet hire company NetJets.

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July 19, 2009

A local rant about transport integration

Filed under: Uncategorized — Tags: airport, Architectural Merit, bingo, Birmingham airport, bus, Coventry, Europe, Germany, integrated transport, interchange, multi-modal, Netherlands, public transport, Switzerland, systems, train — ja @ 4:09 pm

I’ve just thrown up a post on my personal blog about a new development around Coventry Railway station, which really should include a proper multi-modal interchange between bus, taxi and rail. Sadly, Coventry Airport does not look like it will offer any passenger flights in the near future, but any scheme which improves bus access to Coventry Station will also mean better access to Birmingham Airport, which is just 10 minutes by train from Coventry.

Thinking around Europe, and particularly to countries like Switzerland, the Netherlands and Germany, it is easy to praise their public transport systems for being efficient and integrated. Such a dream might not seem so easy with so many different bus and train operators plying for trade, but what has this current government achieved in its 12 years of promising to bring more integrated transport? Putting my Conservative, profit driven thinking cap on, surely any opportunity to combine transport modes, increase property values and open up new development land should be grabbed before it is too late.

One such scheme is happening right here in Coventry, under the brand name of ‘Friar Gate’. The design seems generally quite reasonable, but couldn’t it be so much more exciting if they rebranded it as “Cov Central”, and made it totally accessible from any part of the city by bike, bus, car or train? Such a scheme might be a little bit more bold than the current one, but it would at least provide a chance to connect everything together, something which could be such a symbolic gesture in this City of Peace and Reconciliation.

And the bonus? Good bye Pool Meadow - a dingy, ugly and badly designed bus station which merits no Architectural distinction whatsoever. It might inconvenience the Gala bingo players a little, but it would bring a much greater prize to the rest of the city.

I hope my references here can be of interest to people who have no connection with the city of Coventry, although you are probably quite small in number! Coventry started the whole twinning junket, and we’re now linked with some 23 cities around the world. You can also fly over Coventry in an instant using Google maps - our city centre really is quite compact - but still big enough for the distance between bus and train stations to be a major disabling factor in encouraging more people to use public transport.

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March 30, 2009

Weigh me up before you go go

Filed under: British Airways, Easyjet — Tags: adapters, airline reports, BA, British Airways, camera, chargers, checked baggage, clothes, Easyjet, Europe, excess luggage, foldable backpack, go travel, hidden charges, laptop, Low-cost airlines, luggage, Luton, security, shorthaul flights, Stansted, transatlantic flights — ja @ 6:28 pm

One of the most frequent complaints at the moment about low-cost airlines — and even some very high cost airlines nowadays as well, especially for flying across the pond — is the amount being charged for checked baggage, sometimes up to £16 for shorthaul flights within Europe.

Personally, I’ve always felt that it is much fairer to charge for baggage, rather than giving people who want to carry a lot more with them a free ride, but the flipside of this is that the legacy airlines which don’t charge for checked baggage can suddenly become much better value when compared with their rivals which do.

When baggage charges started at just a few pounds each way, the little bit extra didn’t make that much difference, but £16 doubled could make a seemingly expensive £100 flight with an airline like British Airways, which would also include free food and drink, become much better value than a £70 return flight with Easyjet, and this is before you add in the cost of getting to and from a more remote airport like Stansted or Luton.

However, these extra luggage charges really do just reinforce the argument in favour of travelling light, not to mention making sure that you do know how much you are carrying before you leave. For this, we would have to recommend buying some form of travel scale — I have a simple lightweight analogue scale, made by Gotravel products, and available in the travel department of many major stores.

Here are a few personal tips for travelling light:

Clothes — how many do you really need? Hotel laundry might still be ridiculously expensive, but you would probably be better off by washing your clothes halfway through a holiday at a local launderette, rather than paying for extra baggage charges. It’s always worth taking some clothing to cater for sudden changes in the weather, but if you are packing tight, isn’t it better to wear that raincoat through the airport, rather than having to take an extra checked bag?
Camera — I used to travel with a large SLR where I went, sometimes complete with long zoom lenses, but now I just take a compact digital camera. Where are your pictures likely to end up? If they are only going to be shared with friends on the Internet, resolution is never really going to be that important, so a decent compact digital camera should give you the versatility you need, especially if you can find a model with a high enough ISO for flexibility when taking photos at night. even if you do plan to print your images, aspect ratio (print shops still default at 3:2) might be a more important consideration than megapixels, as a standard 6×4″ print at 300 dpi will need just 2 megapixels (1800×1200px).
Laptop — are you travelling for business or pleasure? If the former, then lightweight models can certainly save considerable extra hassle, and if the latter, then I hope you can just ditch the laptop and enjoy yourself! Same goes for PDAs etc, but if you must get yourself connected, you can always use a hotel business centre or Internet cafe.
Adapters and chargers — I used to take a whole load of different power adapters, especially to go with my laptop on camera, but as their technology has improved, most portable devices will go for several days now without being charged. Many hotels will have chargers for standard mobile phones behind the reception desk. Can you get by with just taking a spare battery?
Buying stuff on the way — buying souvenirs and other products might be part of a travel experience, but they could end up by lumping you with a whole load of extra charges to get home. Always bear in mind that if your goal is hand luggage only, you won’t be able to take any liquids over 125 mL through security, so it is best not to even look at those cheap wines and spirits. With the buying power of modern supermarkets, not to mention online, can you actually get the product you are looking at back home anyway? Work out the difference in price, and the cost of getting it home, and make your own decision. If you’re getting someone a gift, it might well be cheaper to post it direct from wherever you are — this will save you lugging it around all day anyway. Using the postal system might also be a way of avoiding checked baggage charges for your own stuff – so if you want a little bit more space in your bag for non-liquid gifts, why not leave the task of taking your dirty laundry home to the Postal Service?

If you do find yourself scrunching everything down just to fit in one bag to get through the airport, you might want to take a foldable backpack so that you can put your coat in it once you have reached your sunny destination.

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