An Airbus A380 hits 2 Light Poles at LAX while carrying Fewer Passengers than a Smaller Boeing 777 can Carry

Posted by PITHOCRATES - April 17th, 2014

Week in Review

The Boeing 747 ruled the long-haul routes for decades.  Because of its range.  And its size.  With it being able to carry so many passengers the cost per passenger fell.  Allowing it to offer ticket prices at prices people could afford while still making airlines a decent profit.  Airbus took on the Boeing 747.  And produced the mammoth A380.  A double-decker aircraft that can carry around 555 in three classes.  But this plane is big.  With a wingspan greater than the 747.  Not to mention special boarding requirements to load and unload its two decks.  But this extra large size couldn’t board at any run-of-the-mill 747 gate.  It needed a wider parking place.  Double-decker boarding gates.  As well as wider taxiways (see Korean Air A380 Hits 2 Light Poles At LA Airport by Tami Abdollah, AP, posted 4/17/2014 on Time).

A Korean Air A380 superjumbo jet hit two light poles while taxiing to its gate at a remote end of Los Angeles International Airport with hundreds of passengers aboard.

Airline spokeswoman Penny Pfaelzer says the flight arrived from Seoul Wednesday afternoon with 384 people aboard. She says an airport operations vehicle guided the jet onto a taxiway that wasn’t wide enough…

The A380 is the world’s largest commercial airliner, carrying passengers in a double-deck configuration. It has a wingspan of nearly 262 feet.

The search for Malaysian Airlines Flight 370 is important.  Because Malaysian Airlines Flight 370 was a Boeing 777.  One of the most popular long-range, wide-body aircraft flying today.  So if there is a mechanical defect every airline flying that plane would want to know.

Because of the cost of fuel airlines prefer 2-engine jets over 4-engine jets.  Which is why they like the 777 so much.  The 777-300ER can take 386 passengers in three classes 9,128 miles.  On only 2 engines.  Whereas the Airbus A380 can take 555 passengers in three classes 9,755 miles.  But on 4 engines.  Burning close to twice the fuel a 777 burns.  So the A380 can out fly the 777.  But at much higher fuel costs.  And with greater restrictions.  As the 777 can fit most any gate and taxiway at any airport.  Unlike the A380.  So is that extra passenger capacity worth it?  It is.  As long as you can fill the seats.  In this case, though, the A380 flew the approximately 6,000 miles from South Korea to Los Angeles with only 384 people aboard.  Something the Boeing 777-300ER could have done on half the engines.  And about half the fuel cost.

This is why the Boeing 777 is one of the most popular long-range, wide-body aircraft flying today.  Because it allows airlines to offer tickets at prices the people can afford while allowing the airlines a handsome profit.  And it has an incredible safety record.  Unless Malaysian Flight 370 changes that.  Which is why it is so important to find that plane and determine what happen.  As there are so many of these flying today.

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Autopilots and Lawyers take Flying Time away from Pilots, Increase Stalls

Posted by PITHOCRATES - November 3rd, 2013

Week in Review

Flying has never been safer.  Air craft incidents make the news because they are so rare.  Such as two planes clipping wings on the tarmac.  And any crash is on the news 24 hours a day.  Because they are so rare that statistically they just don’t happen.  But as rare as they are they still happen.  And planes fall out of the sky (see Crash investigator urges stall training for pilots by Bart Jansen posted 10/30/2013 on USA Today).

A federal crash investigator urged a conference of aviation safety officials Tuesday to better train pilots to avoid stubborn problems such as stalls.

Earl Weener, a member of the National Transportation Safety Board, recalled four separate fatal crashes over the past two decades that he said involved stalls, with pilots basically pulling the plane’s nose up too much until the aircraft fell to the ground.

“The question in my mind is why did the crew continue to pull back on the elevator all the way to the ground,” Weener told about 300 people attending the Flight Safety Foundation’s International Aviation Safety Summit, rather than leveling off to regain power and speed.

Lack of training is feared to be one culprit…

A NASA study of voluntary reporting by pilots found stalls 28% of the time while cruising at high altitude, Weener said. And an airline database study by the International Air Transport Association found 27% of stalls occurred while cruising, he said.

But a survey found only 26% of airlines trained for high-altitude stalls – even though 71% of stalls occur when the autopilot is typically engaged, Weener said.

Lack of training?  With 71% of stalls happening while flying on autopilot try lack of flying.

Most accidents today are pilot error.  Is it because we have bad pilots?  No.  It’s because we’re not letting them fly.  In the risk-averse world we live in today we try to avoid all risk.  We have autopilot systems that are so sophisticated that they can fly a plane without a pilot aboard.  In our litigious society airlines feel machines will make fewer mistakes than people.  So they have the machines fly the plane most of the time.  While pilots monitor the systems.  Entering set-points into the flight computers.  While the computers fly the plane.  And when there is a problem pilots try to get the flight computers working.  Instead of taking the controls themselves.

Before pilots turned flying over to the machines they flew the planes.  They felt the planes.  They listened to the planes.  And flew by the seat of their pants.  If there was an odd vibration they felt it.  If there was an engine problem they heard it.  And if the plane stalled they felt it in the pit of their stomach.  And instinctively pushed forward on the column and applied full power. 

Today, because of lawyers, airlines want pilots to fix the autopilot.  Not take the controls.  So the machines can start flying again as soon as possible.  As they feel they are less likely to make a mistake than a pilot doing some real flying.  Unfortunately, a machine will only fly as well as a human can tell it to fly.  By entering those set-points.  And if the human makes a mistake at data entry the computer will assume that the human didn’t make a mistake.  And follow those instructions exactly.  Even if the plane flies into the ground.  Or stalls and falls out of the sky.

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Allegiant Air the most Profitable Airline despite being the least Fuel-Efficient

Posted by PITHOCRATES - September 21st, 2013

Week in Review

When people fly on vacation they’re about to spend a lot of money.  And a big cost is airfare.  Which they will try to book in advance to lock in some low prices.  This is what people think about when they are about to fly on vacation.  Not carbon emissions (see America’s greenest airlines by N.B. posted 9/17/2013 on The Economist).

IN THEORY, fuel efficiency should be a win-win proposition for airlines. Burning less fuel is better for the environment and the carriers’ bottom lines—fuel is generally their biggest single cost. That’s why one finding from a recent fuel-efficiency study is so surprising. In a new report (pdf), the International Council on Clean Transportation (ICCT) found that Allegiant Air, the most profitable airline on domestic American routes between 2009 and 2011, was also the least fuel-efficient airline during 2010.

…The upshot is obvious: according to the researchers, the financial benefits of fuel efficiency have not been enough to force convergence—”Fuel prices alone may not be a sufficient driver of in-service efficiency across all airlines…. Fixed equipment costs, maintenance costs, labour agreements, and network structure can all sometimes exert countervailing pressures against the tendency for high fuel prices to drive efficiency improvements.”

So if the bottom line cannot force airlines to be more fuel efficient, what can? The researchers suggest that airlines can start by making more data available to the public…Cars come with fuel-efficiency ratings, and appliances come with energy-efficiency stickers. Maybe flights should include that kind of data, too, so that concerned passengers can make an informed choice.

Allegiant Air is a low-cost no-frills airline that caters to people going on vacation.  And when you’re on vacation you are taking a break from worrying.  About the bills.  The job.  Even the environment.  You may drive a Prius back at home.  But for two 4-hour flights a year (to and from your vacation spot) you’re just not going to worry about carbon emissions.  Because you’re on vacation.

Allegiant Air flies predominantly MD-80s that sit about 166 people.  An MD-80 is basically a stretched out DC-9.  These have two tail-mounted turbojet engines.  The least fuel-efficient engines on planes.  But these turbojet engines are small and can attach to the fuselage at the tail.  Allowing it to use shorter landing gear.  These planes sit lower to the ground and can be serviced with the smaller jet-ways you see at smaller airports.  Where Allegiant Air flies out of nonstop to their vacation destinations.  People like not having to make a connecting flight.  And will gladly dump a few extra tons of carbon into the atmosphere for this convenience.

The Allegiant Air business model includes other things to help keep costs down.  They are nonunion.  They also fly only a few flights a week at each airport.  Allowing a smaller crew to service and maintain their fleet.  These labor savings greatly offset the poorer fuel efficiency of their engines.  The airlines that have unions (pilots, flight attendants, maintenance, etc.) all share something in common.  Recurring bankruptcies.  Which Allegiant Air doesn’t have.  Despite their higher fuel costs.

Fuel costs are an airlines greatest cost.  Especially for the long-haul routes.  Which burn a lot more fuel per flight than the typical Allegiant Air flight.  Which is why the fuel-efficient Boeing 787 is so attractive to them.  As they need to squeeze every dime out of their fuel costs as they can.  To offset their high union labor costs.  Those very costs that return a lot of airlines to bankruptcy.

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Stock Options

Posted by PITHOCRATES - April 29th, 2013

Economics 101

It takes a Lot of Time to Design, Develop and Bring to Market a Radical New Aircraft

The number one cost airlines have is fuel.  So anything that can reduce fuel consumption can cut an airline’s costs.  Aircraft manufacturers are aware of this.  And want to incorporate new fuel-saving technology into their aircraft.  Because that’s what airlines want.  And if you can give the airlines what they want they will buy your aircraft.  But sometimes new technology can be a little temperamental.  Everything doesn’t work as expected.  And sometimes problems that come up can take a long time to engineer through.  Like it did for the Boeing 787 Dream liner.

Boeing did everything they could think of to squeeze every last ounce of weight from the 787.  One thing they did is well known.  Thanks to a problem with it that caused the grounding of the entire 787 fleet.  The lithium-ion battery.  But that’s not the only weight-saving innovation of the 787.  They added Dual Electronic Flight Bags in the cockpit.  So pilots don’t have to bring bulky and heavy books aboard.  They went from conventional pneumatic architecture to more-electric architecture.  Eliminating the engine bleed air system and associated pneumatic system components.  Reducing weight and improving efficiency.  Which reduced fuel consumption.  They used simple trailing edge flaps.  Not slotted flaps.  Letting them use smaller flap track fairings (those canoe-shaped things underneath the trailing edge of the wings that operated the flaps).  Reducing drag.  And fuel consumption.  They used bigger engines with higher bypass ratios (the amount of air pulled into the fan disk but NOT used for combustion).  Increasing engine efficiency.  Reducing fuel consumption.  The use of composite materials decreased weight.  And the use of one-piece barrel sections eliminated additional joints, fasteners and splice plates.  Reducing weight.  And fuel consumption.

These and other innovations result in a fuel savings of 20% over similarly sized aircraft.  This is huge.  Which is why airlines are ordering this airplane.  But such a radical change in aircraft design comes with a lot of risks.  As the problem with the lithium-ion battery has shown.  And it takes a lot of time to design, develop and bring to market a new aircraft.  Especially one that is radically different from other airplanes.  So the decision to put the aircraft company on this course was a very risky decision.  And one that took a lot of guts.  Because so many things can go wrong.  Leading to cost overruns.  Which can delay promised delivery dates.  And Boeing had their share of those bringing the 787 to market.  Which they have worked through.  Will it be worth it?  As long as airlines want to save on fuel costs, yes.  And no problems arise that they can’t overcome.

Stock Options get Risk-Averse and Cautious CEOs to be Bold and Take Risks

These are big decisions.  Decisions that lead to great successes.  Or great failures.  Some so bad that they can bankrupt a company.  Someone has to be responsible for these decisions.  That one person sitting at the top of the corporation.  The CEO.  It is the CEO who has the ultimate say on the direction of the corporation.  And with this one decision all the resources of the corporation are marshaled together to take the corporation in this new direction.  Incurring great costs that will be on the books for years.  Making it hard to change course until these great investments pay off.  If they pay off.

These are the things CEOs have to deal with.  Not just at Boeing.  But throughout corporate America.  CEOs have to make these singular decisions that can have consequences for years to come.  Where it may take years to see if that one decision actually pays off.  There are few CEOs in the labor force.  So few can imagine the stress these people work under.  And in that pool of CEOs there are only a few that have the Midas touch.   Who can consistently take great risks while making all the right decisions.  Board members desperately want these CEOs.  Offering very generous compensation packages to lure them in.  And to keep them once they have them.  This crème de la crème of CEOs may make the big bucks.  But in exchange for that fat paycheck they do something few others can.  They make shareholders rich.  And they love making these owners rich.  For they love the thrill of the job.  Relishing that high-stress environment.  Where every little decision has great consequences.  Thriving under the kind of pressure that would leave most others whimpering in their beds.  Curled up in the fetal position.  In a pool of their own tears.

But not every corporation can get one of the crème de la crème.  They may have a great CEO.  But one that suffers from a major CEO character flaw.  Being averse to taking big risks.  Who instead wants to be a little more conservative.  And a little more cautious.  Shareholders don’t like overly cautious CEOs.  Because the people getting rich are doing it by breaking away from the pack.  By doing something different.  Abandoning convention.  Trying something bold.  And new.  Bringing something brand new to market that no one knows anything about.  But once they learn about it they can’t live without it.  This is what shareholders want.  Not cautious and conservative.  So to light a fire under these CEOs they came up with a new way to compensate them.  To appeal to their greed.  By letting them get rich if they can make that next great thing that sends the stock price soaring.  And the key to their greed is the stock option.

Stock Options provide a Powerful Incentive to bring Great New Things to Market

The CEO that creates the next big thing everyone will want to buy will send sales revenue soaring.  And with great sales revenue comes great profits.  Increasing the value of the company.  Which, in turn, makes the stock price soar.  This is what shareholders want.  A soaring stock price.  So to encourage the CEO to give them what they want they tie the CEO’s interest to their interests.  By giving the CEO stock options.  Making the sky the limit.  For the more the CEO increases the stock price the greater the CEO’s compensation.  Thus encouraging the CEO to try something bold and new.

A stock option is a right to buy a share of stock at a fixed price in the future.  Say the current stock price is $70/share.  The board of directors gives the CEO the option to buy, say, 500,000 shares of stock at $80/share up until some date in the future.  Creating a strong incentive for the CEO to raise the stock price.  The greater the CEO raises the price above $80 the greater his or her compensation.   Let’s say the CEO was bold and took a great risk.  And it pays off.  Sending the stock price soaring to $110/share.  When the CEO exercises those options he or she will buy 500,000 shares of stock from the company at $80/share.  The company gets $40 million in new capital to help finance further growth.  And the CEO will sell those 500,000 shares at the current market price of $110/share.  Pocketing $15 million.  And the shareholders, of course, get what they want.  A higher stock price.  Everyone wins.

Now let’s say that nothing spectacular happens.  And the stock price only rises to $75/share.  Because it’s below the ‘strike price’ the CEO will let these options expire.  The CEO profits nothing from these options.  But doesn’t lose anything either.  But what happens when the stock price falls because of that bold, new direction?  Causing the corporation to lose value.  As well as the shareholders.  But the CEO?  Again, the CEO will let those options expire.  And will lose no money.  Which is one of the benefits of stock options.  It got those risk-averse and cautious CEOs to take those big risks that got shareholders rich.  As there is no downside risk for the CEO.  Which is both good and bad.  On the one hand it encourages risk taking.  But on the other it encourages risk-taking.  Some CEOs will take excessive risks as they have nothing to lose.  Some will even cook the books to boost the stock price so they can exercise those options.  So it’s not a perfect system.  But they do provide a powerful incentive to bring great new things to market.  Which is what shareholders want.  And will take great risks themselves to get it.

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Vacuum Toilet

Posted by PITHOCRATES - April 24th, 2013

Technology 101

The Siphon in a Flush Toilet sucks the Waste out of the Toilet Bowl

The common flush toilet in our homes is located in a bathroom.  A dedicated room in our houses.  Often times tucked away off of a bedroom.  Private and secure.  Where we can take care of any of our business with comfort and dignity.  It’s nice.  Hiding that part of our life away from the rest of the world.  In fact, some people are such nervous pooers that they can’t go anywhere but at home.  Lucky for them they didn’t live in ancient Rome where communal toilets were long benches with holes in them.  And people sat next to each other while doing their business.  Elbow to elbow.  Literally.

What makes the flush toilet in our homes possible is basically one thing.  They don’t move.  They’re permanent installations that sit on terra firma.  And because of that they can use gravity.  When we flush a toilet water pours down from a tank into a bowl.  Forcing the contents of the bowl up and over the drain out of the bowl.  The siphon.  Filling this pipe completely with water.  So that when the water falls down into the sanitary sewer pipe it creates a siphon.  Pulling everything behind it down into the sanitary drain.  Where gravity pulls it down to pipes under our houses and into the sanitary sewer system under the street in front of our house.  Where these pipes slope downhill towards the wastewater treatment plant.

The flush toilet works in our house because they don’t move.  And we can dig pipes deep underground.  Two things we can’t do on boats, trains and planes.  So early boats and trains had a simple toilet.  If you looked down into the toilet seat on a boat you saw the water.  And if you looked down into the toilet seat on a train you saw the railroad track underneath.  Which could really chill a pair of butt cheeks on a crisp winter day.  Making a cold toilet seat in your bathroom in the morning seem toasty warm by comparison.  Early planes had a chemical toilet.  Basically a port-a-potty.  Filling the air with the aroma of a construction site toilet.

The Suction of a Vacuum Toilet is greater than the Siphon of a Flush Toilet

Today in most countries you can’t defecate into a river, lake or ocean.  Or onto railroad tracks.  It’s not sanitary.  And just plain disgusting.  But because boats, trains and planes move a flush toilet with a bowl full of water just isn’t an option.  Because water in a moving bowl tends to splash out of the bowl.  Which can splash corrosive waste in nooks and crannies around the toilet.  Making a mess in the lavatory.  Though chemical toilets were an option and we used them for some time they just didn’t smell good.  Especially on an airplane.  As you just couldn’t roll the window down for some fresh air.

A flush toilet on an airplane has another problem.  Water has mass.  To carry water for flush toilets increases the weight of the airplane.  Requiring more fuel.  As fuel is the greatest cost of flying airlines and aircraft manufacturers do everything within their power to reduce the weight of an airplane.  Which is why today’s aircraft use a vacuum toilet system.  Where instead of using water and gravity to create a siphon they use a vacuum pump to create a suction.  A vacuum toilet does not use water.  There is no water in the bowl.  When you ‘flush’ a drain opens in the bottom of the bowl and a powerful vacuum sucks it clean.

The suction of a vacuum toilet is greater than the siphon of a flush toilet.  Allowing smaller pipes as the powerful suction does not allow any clogging of pipes.  Smaller pipes (and no water like in a flush toilet) reduce weight.  Helping to cut the cost of flying.  That powerful suction also sucks out all of the stink with each flush.  Another benefit of the vacuum toilet.  Which is a good thing in a small room without a window you can open.

A Truck transfers the Sanitary Waste from an Aircraft Holding Tank into the Sanitary Sewer System

Planes pitch up, pitch down and bank left and right.  Which would be a problem for wastewater moving under the force of gravity.  Or for water in a bowl.  Which is another benefit of a vacuum toilet system.  Which doesn’t use gravity.  Or water.  So the pipes of a vacuum toilet system can run in any direction.  Up, down or flat and level.  The force of the suction will pull the waste to the holding tank no matter the path it takes to the holding tank.

As the flight progresses people use the toilets.  And the holding tanks fill up with waste.  When they land they are pretty full.  And the airlines need to empty them.  If you ever watched an airplane at a gate after it lands you will see a whirlwind of activity.  Baggage and freight comes off.  Then they load baggage and freight for the next flight.  Cleaning crews enter the aircraft.  Food service cleans out the galleys and loads food and beverages for the next flight.  Fuel trucks refuel the aircraft (either from a fuel truck or a fuel hydrant system in the apron).  And then there’s the poop truck.  Which will open a hatch on the belly of the aircraft.  Connect a large hose.  Open a valve.  And drain the holding tank into the truck.  Pump in some blue disinfectant.  And make the toilets ready for the next flight.

The poop truck then drives someplace where they can dump their load.  Larger airports may have a special building for this.  Where they drive in and stop over a grate in the floor.  Dump their load onto the grate.  Water sprays onto the floor to help wash everything into and through the grate.  Where it falls into a ‘chopper’ pump to break down the solids more.  And then it enters the sanitary sewer system at the airport.  Where it uses gravity to flow downhill towards a wastewater treatment plant.  Just like it does when we use the bathroom in the privacy and security of our home.

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One Passenger Airline charging by the Passenger’s Weight may offer new Funding Idea for Obamacare

Posted by PITHOCRATES - April 7th, 2013

Week in Review

When the price of oil soars it doesn’t affect the railroads that much.  Because fuel costs are not their greatest cost.  Maintaining that massive infrastructure is.  For wherever a train travels there has to be track.  It’s different for the airlines.  The only infrastructure they have is at the airports.  And the traffic control centers that keep order in the sky.  Once a plane is off the ground it doesn’t need anything but fuel in its tanks to go somewhere.  And because the flying infrastructure is so much less than the railroad infrastructure fuel costs are a much larger cost.  In fact, it’s their greatest cost of flying.  So when fuel costs rise ticket prices rise along with them.  And they start charging more bag fees.  As well as any other fee they can charge you to offset these soaring fuel costs.

Boeing made their 787, the Dreamliner, exceptionally light.  To reduce flying costs.  They used a lot of composite materials.  Two large engines because they’re lighter than 4 smaller engines.  They even used a new lithium-ion battery system to start up their auxiliary power unit.  And made it fly-by-wire to eliminate the hydraulic system that normally operates the control surfaces.  They did all of these things to fight the biggest enemy they have in flying.  Weight.  For the greater the weight the more fuel they burn.  And the less profitable they are.

Freight airlines charge their customers by the weight of the freight they wish to ship.  Because there is a direct correlation between the weight of their freight and the amount of fuel they have to burn to carry that freight.  In fact, all shippers charge by the weight.  Because in transportation weight is everything.  But there is one mode of transportation that we don’t charge by the weight.  Passenger air travel.  Until now, that is (see A tax on overweight airline passengers: a brutal airline policy by Robin Abcarian posted 4/3/2013 on the Los Angeles Times).

When teensy-weensy Samoa Airlines debuted its pay-by-the-kilo policy in January, I doubt it expected to set off an international controversy about fat discrimination.

But that’s what happened when news seeped out this week after the airline’s chief executive, Chris Langton, told ABC News radio in Australia that the system is not only fair but destined to catch on.

“Doesn’t matter whether you’re carrying freight or people,” explained Langton. “We’ve amalgamated the two and worked out a figure per kilo.”

Samoa Air, he added, has always weighed the human and non-human cargo it carries. “As any airline operator knows, they don’t run on seats, they run on weight,” said Langton. “There’s no doubt in my mind this is the concept of the future because anybody who travels has felt they’ve paid for half the passenger that’s sitting next to them…”

“Samoa Air, Introducing a world first: ‘Pay only for what you weigh’! We at Samoa Air are keeping airfares fair, by charging our passengers only for what they weigh. You are the master of your Air’fair’, you decide how much (or little) your ticket will cost. No more exorbitant excess baggage fees, or being charged for baggage you may not carry. Your weight plus your baggage items, is what you pay for. Simple. The Sky’s the Limit..!”

One bright note to this policy: Families with small children, who often feel persecuted when they travel, stand to benefit most from this policy. Since Samoa no longer charges by the seat, it will cost them a lot less to fly than it did before.

The appeal of this policy depends on your perspective.  If you’re of average weight sitting next to someone spilling over their seat into yours it may bother you knowing that you each paid the same price for a seat and resent the person encroaching on your seat.  But if you paid per the weight you bring onto the airplane then that person paid for the right to spill over into your seat.  Which they no doubt will do without worrying about how you feel.  As they paid more for their ticket than you paid for yours.  So the person who weighs less will get a discount to suffer the encroachment.  While the person who weighs more will have to pay a premium for the privilege to encroach.

Under the current system the people who weigh less subsidize the ticket prices of those who weigh more.  It’s not fair.  But it does save people the embarrassment of getting onto a scale when purchasing a ticket.  So should all airlines charge like all other modes of transportation?  Or should they continue to subsidize the obese?  Should we be fair?  Or should we be kind?

Chances are that government would step in and prevent airlines from charging by the weight.  Calling it a hate crime.  Even while they are waging a war on the obese themselves. Telling us what size soda we can buy.  And regulating many other aspects of our lives.  Especially now with Obamacare.  Because the obese are burdening our health care system with their health problems the government now has the right to regulate our lives.  And they have no problem calling us fat and obese.  But a private airline starts charging by the weight of the passenger?  Just don’t see how the government will allow that.  For it’s one thing for them to bully us.  But they won’t let these private businesses hurt people’s feelings by being fair.  So the people who are not overweight will continue to subsidize the flying cost of those who are overweight.

Until the government determines obese people are causing an unfair burden on society.  The obese have more health issues.  Which will consume more limited health care resources.  Also, flying these heavier people around will burn more fuel.  Putting more carbon emissions into the air.  Causing more breathing problems for everyone else.  As well as killing the planet with more global warming.  So while the airlines may not want to weigh people when selling them a ticket because of the potential backlash, the government won’t have a problem.  To cut the high cost of health care and to save the planet from global warming caused by carbon emissions they may even introduce a ‘fat’ tax.  Like any other sin tax.  To encourage people to choose to be healthier.  And to punish those who choose not to.  If they can force us to buy health insurance what can stop them from accessing a ‘fat’ tax?  Especially when they do have the right to tax us.

This is where national health care can take us.  When they begin paying the bill for health care they will have the right to do almost anything if they can identify it as a heath care issue.  Because it’s in the national interest.  They’ve painted bulls-eyes on the backs of smokers.  And drinkers.  With tobacco and alcohol taxes.  And you know they would love to tax us for being fat.  Perhaps even having our doctors file our weight with the IRS.  So they can bump our tax rates based on how obese we are.  If the tax dollars pay for health care they will say they have that right.  As the obese consume an unfair amount of those limited tax dollars.  Anything is possible with an out of control growing federal government faced with trillion dollar deficits.  Especially when they can call it a health care issue.

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Boeing’s Problems with Lithium-Ion Batteries illustrates the problem of the All-Electric Car

Posted by PITHOCRATES - February 24th, 2013

Week in Review

The greatest cost of all airlines is fuel.  Airplanes that burn less fuel make airlines more money.  And help airlines go from losing money to making a profit.  Aircraft are complex machines.  Full of high-tech stuff.  But one of the best ways to burn less fuel is not all that high-tech.  You just make planes lighter.  One of the ways of doing that, though, is very high-tech.  The new lithium-ion battery.  Which packs a whole lot of energy in a tiny package.  Allowing Boeing to make their Dreamliner just a little bit lighter.  Allowing it to burn less fuel (see Japan Finds Swelling in Second Boeing 787 Battery by Mari Saito, REUTERS, posted 2/19/2013 on the New York Times).

Cells in a second lithium-ion battery on a Boeing Co 787 Dreamliner forced to make an emergency landing in Japan last month showed slight swelling, a Japan Transport Safety Board (JTSB) official said on Tuesday.

The jet, flown by All Nippon Airways Co, was forced to make the landing after its main battery failed…

The U.S. Federal Aviation Authority grounded all 50 Boeing Dreamliners in commercial service on January 16 after the incidents with the two Japanese owned 787 jets.

The groundings have cost airlines tens of millions of dollars, with no solution yet in sight.

Boeing rival Airbus said last week it had abandoned plans to use lithium-ion batteries in its next passenger jet, the A350, in favor of traditional nickel-cadmium batteries.

Lighter and more powerful than conventional batteries, lithium-ion power packs have been in consumer products such as phones and laptops for years but are relatively new in industrial applications, including back-up batteries for electrical systems in jets.

As it turns out it can be a little risky packing a whole lot of energy into tiny packages.  It may make batteries lighter.  But it’s like putting a tiger in a box.  If it isn’t a good box it’s not going to restrain that tiger.  And that’s what sort of has been happening with lithium-ion batteries.  People who bought discount replacement cell phone batteries saw those cheap knockoffs burst into flames.

Lithium-ion batteries have a tendency to burst into flames if they are overcharged.  This is the risk of using concentrated energy.  It’s why they grounded the entire fleet of Boeing Dreamliners.  And it’s why the all-electric car is not practical.  The one battery that gives it a useful range can be a little temperamental.  Like a tiger in a box.

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China to Punish Airbus and EU Airlines if the European Union Proceeds with their Emission Trading System

Posted by PITHOCRATES - September 16th, 2012

Week in Review

Fighting global warming is one thing.  But hurting aircraft sales is another.  Which will happen if the EU goes ahead with their Emission Trading System.  So Airbus is begging the EU not to ruin the aviation industry (see Airbus ministers seek EU CO2 plan delay: Hintze by Maria Sheahan and Victoria Bryan posted 9/14/2012 on Reuters).

Aerospace officials of the European countries where Airbus (EAD.PA) makes its planes will push for a suspension of the European Union’s Emission Trading System (ETS) for airlines to avert retaliation from China, an official said on Tuesday…

Michael Fallon, new business minister in Britain, said at the ILA Berlin Air Show on Tuesday: “Airbus has left us with no doubt that the threat of retaliatory action is a clear and present danger to its order list.”

There is harsh opposition to the ETS from European air travel companies and countries outside the EU such as the United States, Australia and Brazil that have said they want a global agreement to curb carbon emissions rather than a European law that extends to non-EU companies.

Which is a nice way of saying they should scrap the whole ETS.  But if they said that the environmentalists would say they hate the planet.  That they’re global warming deniers.  And that they, of course, hate children.   So by saying we should have a global system instead of just a European one sounds like they believe in global warming.  While at the same time knowing there will never be a global system because the world can’t agree on anything.  And that China is not going to fall for any of this nonsense.  Because they play hardball.

China has threatened retaliation – including impounding European aircraft – if the European Union punishes Chinese airlines for not complying with its emissions trading scheme (ETS), intended to curb pollution.

The dispute between China and the EU froze deals worth up to $14 billion, though China signed an agreement with Germany for 50 Airbus planes worth over $4 billion during Chancellor Angela Merkel’s visit to Beijing last month.

If the dispute is not resolved, Airbus will have to cut its production target for the A330 “pretty soon”, Airbus Chief Executive Fabrice Bregier said late on Monday.

Cancel billion dollar orders AND impound European aircraft?  That’s right.  The Chinese don’t take crap from anyone.  Especially from a bunch of whiny global warming alarmists.  Airlines everywhere are thanking China (behind closed doors, of course) for playing the heavy here.  So they can act like they really want to do what is right for the planet.  Without losing billions in business.

The airline industry has said the ETS distorts competition, forcing European carriers to pay more simply because of the fact they are based in the EU.

“We feel we are being discriminated against,” Hintze said. “We demand a global solution from an industrial policy point of view because we could otherwise put ourselves at a disadvantage in major markets…”

Airbus sales chief John Leahy suggested at a separate news conference on Tuesday that one possible solution could be that all airlines around the world pay a tax to ICAO for carbon emissions, regardless of where they are based.

The ETS is nothing but a way to generate revenue for a cash-strapped European Union.  For what will they do with the money they raise from their ETS?  Pretty much anything they want.  And one of the things they most desperately want is to close their budget deficits.  And the EU thought they had a real winner in the ETS.  Collect money from EU members.  And collect money from non-EU members.  Effectively transferring some EU costs onto nations outside of the EU.  It was perfect.  Except for one thing.  It required other countries to voluntarily pick up the tab for some EU spending.  And some are choosing not to no matter how worthy the cause.

A global carbon tax payable to the ICAO?  The United Nations’ International Civil Aviation Organization?  And what, pray tell, will the UN do with that money?  Spend it on grants to green manufacturers to see if they can make jet fuel out of sea weed?  The aircraft manufacturers are doing everything they can to reduce jet fuel consumption because a plane that burns less fuel is a plane that sells better.  They don’t need a grant to do that.  Planes are carrying and burning less fuel per passenger mile than they ever have.  And they still have an incentive to reduce that even more.  Without any grants from the UN to improve fuel efficiency.

As countries around the world are suffering through economic problems the last thing they need is a new tax.  If anything they need a tax cut.  So the ETS should be the last thing we should be doing.  The earth will get by just fine without it.  In fact, it might even do better.  For the rise in global temperatures interestingly correspond to the time we began to fight global warming.  Back in the days when industry, trains and home furnaces belched coal smoke, soot and ash into the air we didn’t have a global warming problem.  Our cities were covered with coal smoke, soot and ash but the temperatures were just fine.  Perhaps a little more of the same would reverse this warming trend.  Say, encouraging our airplanes to burn a dirtier fuel so they put more emissions into the atmosphere that can block those warming rays from reaching the earth’s surface.  It works with volcanoes.  Perhaps it’ll work with manmade emissions, too.

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High Fuel Costs makes Union Contracts too Costly on Qantas’ International Flights

Posted by PITHOCRATES - May 26th, 2012

Week in Review

There is an inverse relation between gas prices and driving distance on your summer vacation.  The higher the gas price the shorter your drive.  When gas is cheap you can travel across the country in a recreational vehicle.  When gas prices are high you may limit your drive to a single day.  Perhaps even a single fill up.  Because driving adds up.  If you fill up twice a day you may pay $150 at the gas pump.  If you drive two days out and two days back that’s $600 in driving costs.  Which you could put towards a nice hotel or some fun.  Or into your gas tank.  Which isn’t really a whole lot of fun.  Especially when you have some bored kids fighting each other in the back seat.

Fuel costs can make the difference between a nice vacation and a bad one.  And between a profitable operation and an unprofitable operation (see Australia’s Qantas to Split Business into Two by Reuters posted 5/22/2012 on CNBC).

Qantas Airways, said it plans to split its loss-making international and profitable domestic businesses, though Australia’s top airline was viewed by analysts as unlikely to spin off or sell the international operations…

The changes are part of a five-year turnaround plan aimed at shrinking costs and getting the international operations into profit…

The airline…is emerging from a bruising industrial dispute with unions…

Weak demand and high fuel prices are taking a toll on airline profits, pushing airlines across the world to cut costs and delay capital expenditure. 

The reason companies go through these bruising disputes with their unions is because of the good times when all other costs aren’t so bad.  When fuel was cheap the airlines were making some decent profits.  And it was affordable to be generous to their unions.  When they had little choice but to be generous.  For a strike during busy times is not good to the bottom line.  So they enter into these agreements that just cripple a company when fuel costs soar.

The international business is losing money because it takes a lot more fuel on those international routes.  And when demand is low it is very difficult to raise ticket prices.  Because even though Qantas is a quality airline there are other quality airlines out there trying to make it in an industry suffering from low demand.  And they are all trying to keep their ticket prices as low as possible to get the few passengers out there still flying.  It’s gotten so bad that some airlines are charging for things they’ve never charged for before. 

Such as carryon bags.  Which helps revenue in two ways.  It helps pay for fuel costs.  And it discourages passengers from carrying on luggage.  Which reduces weight and saves on fuel costs.  For an airline only puts into their fuel tanks the amount they need to fly.  They don’t top them off.  They count everything going onto that airplane and calculate the weight to add to the weight of the airplane and the weight of the fuel they carry.  The less the weight on that plane the less fuel they have to burn.

The short routes tend to be the more profitable ones.  There are more of them (one plane can make 2-3 round trips in a day).  And they burn less fuel.  That adds up to profitability.  Which is why Qantas is profitable on their domestic routes.  But not on their international routes.  And why the domestic business can pay the high union contracts.  While the international business can’t.

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American Airlines to file Bankruptcy to get their Labor and Pension Costs under Control

Posted by PITHOCRATES - December 4th, 2011

Week in Review

American Airlines is hurting.  They’ve lost about a billion dollars for each of the last 10 years.  Because of high fuel costs.  And high labor and pension costs (see American Airlines files for bankruptcy protection by DAVID KOENIG, AP, posted 11/29/2011 on Yahoo! News).

The parent company of American Airlines filed for bankruptcy protection Tuesday, seeking relief from crushing debt caused by high fuel prices and expensive labor contracts that its competitors shed years ago…

AMR Corp., which owns American, was one of the last major U.S. airline companies that had avoided bankruptcy. Rivals United and Delta used bankruptcy to shed costly labor contracts, reduce debt, and start making money again. They also grew through mergers.

American — the nation’s third-largest airline and proud of an 80-year history that reaches back to the dawn of passenger travel — was stuck with higher costs that meant it lost money when matching competitors’ lower fares…

AMR, however, wants to push ahead with plans to order 460 new jets from Boeing and Airbus and take delivery of more than 50 others already ordered. New planes would save American money on fuel and maintenance, but the orders will be subject to approval by the bankruptcy court.

The two greatest costs of an airline are fuel and labor.  Which have to be paid for by passengers buying tickets.  Airplanes are expensive but they’re fixed costs amortized over time.  Their other costs are relatively fixed and aren’t volatile.  It’s fuel and labor that will make or break an operation.  During good times unions demand generous pay and benefits packages.  Which airlines can pay during good times.  It’s either that or face a strike.  The problem is the bad times.  And there are always bad times.

Bad times are when people aren’t flying and airlines have to cut ticket prices to encourage them back onto their planes.  And high fuel prices.  Fuel costs are such a large percentage of an airline’s costs that spikes in fuel prices results in marginal routes losing money.  Put the two together and it’s impossible to pay those generous pay and benefits packages any more.

The losers will be American Airlines employees and AMR stockholders.

Shareholders almost certainly will be wiped out. The stock had already lost 79 percent of its value this year on fears of bankruptcy.

AMR has lost more than $12 billion since 2001, and analysts expect it will post more losses through 2012. Speculation about an AMR bankruptcy grew in recent weeks as the company was unable to win union approval for contracts that would reduce labor costs. The company said it was spending $600 million more a year than other airlines because of labor-contract rules — $800 million more including pension obligations.

On Tuesday, Horton said no single factor led to the bankruptcy filing. He said the company needed to cut costs because of the weak global economy, a credit downgrade that raised borrowing costs, and high, volatile fuel prices. The price of jet fuel has risen more than 60 percent in the past five years.

If you’re losing $1 billion a year you’re doing something wrong.  Either you’re not charging enough for tickets.  Or your costs are too great.  Competition sets the price of tickets.  So it’s not that.  Which leaves costs.

Approximately 80% of their losses are due to labor and pension costs.  And math doesn’t lie.  So it’s the labor and pension costs.   But wait a minute, you say.  What about that 60% increase in fuel costs?  Well, that could be a problem.  If it wasn’t for the fact that all the airlines are paying 60% more for fuel.  So you can’t blame the fuel costs.

You see, those other airlines can afford that 60% hike in fuel prices because they already went through a bankruptcy to get their labor and pension costs in order.  Which is what American Airlines needs to do.  If, that is, they want to keep flying airplanes.

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