An Airline Buys an Oil Refinery; What Took Them So Long?
Fascinating article in today’s Wall Street Journal, by Susan Carey and Angel Gonzelez: “Delta to Buy Refinery in Effort to Lower Jet-Fuel Costs.” Coupled with the news of Microsoft bankrolling B&N’s Nook business, the Delta deal shows how far and fast existing business models are shifting, and how vertical integration continues to not be dead. Read More »
Markets in the Air
I stumbled on this nifty business idea, Nanny in the Clouds, to create a market in the air for nannies. Think match.com, but for wanna-be-nannies and parents on airplanes.
A clear market failure: people on flights with kids want some help; other people on flights want to make some money taking care of kids. Social norms don’t really allow for instantaneous markets to appear (“hey, for $10 I’ll watch your kid for the next two hours so that you can take a nap” is unlikely to get many takers, I suspect). But prearranged, where the norm adheres to our expectations in the babysitter market, and we have a market helping make trades otherwise not made.
Here is how it works: Sign up on the website, put in the flight you’re going to take, and see if any parents (nannies) signed up and are looking for a nanny (parent who wants a nanny) on the same flight. Negotiate your rates directly, and pay Nanny in the Clouds $10 if the match is made. Read More »
Cockpit Confidential: Debunking the Autopilot Myth
This is a guest post by commercial airline pilot Patrick Smith, who writes about the hidden side of the airline industry. You can read his writing for Salon.com here.
Cockpit Confidential: The Autopilot Myth
By Patrick Smith
One evening I was sitting in economy class when our jet came in for an unusually smooth landing. “Nice job, autopilot!” yelled some knucklehead sitting behind me. Several people laughed. I winced. It was amusing, maybe, but was also wrong. The touchdown had been a fully manual one, as the vast majority of touchdowns are.
I’ve been writing about commercial aviation for nine years – a job that entails a fair bit of myth-busting. Air travel is a mysterious realm, rife with conspiracy theories, urban legends, wives’ tales and other ridiculous notions. I’ve heard it all, from “chemtrails” to the 9/11 “truthers.” Nothing, however, gets under my skin more than myths and exaggerations about cockpit automation — this pervasive idea that modern aircraft are flown by computers, with pilots on hand as little more than a backup in case of trouble. And in some not-too-distant future, we’re repeatedly told, pilots will be engineered out of the picture entirely. Read More »
Flight Status
If you are in the least bit an airplane junkie, you should follow the advice of Jason Kottke (no relation to Daniel, or Leo, fwiw) and search for “planes overhead” on the Wolfram Alpha search engine. It returns a list of airplanes above your geographical location, including carrier, origin/destination, altitude, angle, type, slant distance, as well as a sky map so you can find the actual planes in the sky:
Cockpit Confidential: How Difficult Was That Landing in Poland?
In the past, we’ve brought you the airline expertise of Captain Steve. Now, in a new feature we’re calling “Cockpit Confidential,” commercial airline pilot Patrick Smith writes about the hidden side of the airline industry. First up, Smith takes you behind the scenes of the recent belly-landing of a Polish Airlines 767, looking at what the media got wrong and what was likely going on inside the cockpit as the crew scrambled to deal with an almost unprecedented situation. Read More »
Dollar Coins for Airline Miles? Bon Voyage!
A few weeks ago, we wrote about the Fed’s $1 billion stash of unwanted coins, and the Federal government’s seemingly failed experiment to get us to trade in our dollar bills for dollar coins. The folks over at NPR’s Planet Money got inside access to see the pile of coins, which so far has cost $300 million to manufacture. Despite the clear failure to create demand, the program, authorized by Congress in 2005, won’t end until 2016.
Now it seems some folks have found an easy way to profit from all those unwanted coins. Planet Money reports that people have started buying the coins with their credit cards, thereby earning lots of airline reward miles. The coins are sent to them by the government for free. The buyers then deposit the coins in their bank accounts, pay off their credit card bill… et voila, a free plane ticket to Paris. While the U.S. Mint is a bit miffed by the scheme, a spokesman admits that there’s nothing illegal about it.
FREAK-est Links
This week: Why is our vision getting worse? Could an airline-style loyalty program work for public transportation? Why rich people are bad at reading the emotions of strangers, and a Cornell study uncovers corruption among Amazon’s top reviewers. Read More »
Why Do Airlines Always Lose Money? Hint: It’s Not Due to Taxes or Fuel Costs
It’s been more than 30 years since the airline industry was deregulated in 1978. Since then it’s lost nearly $60 billion on U.S. operations, though most of the losses have come since 9/11. The airlines were already in trouble before the attacks happened. The plunge in demand and resulting liquidity crisis led to billions in government cash and loan guarantees– the first true bailout of the 21st century, and certainly a sign of things to come in the next decade.
In a paper published last month, (Abstract here; full version here) Berkeley economist and overall airline guru Severin Borenstein examines some of the most common explanations for the airline industry’s dismal performance, and why experts and deregulation advocates failed so badly to predict what would happen after deregulation 30 years ago. Read More »
and 
. You can also watch it on 