- In 20 years technology will advance enough that planes will drive like cars making air traffic control obsolete.
- There aren’t actually a lot of people out there trying to blow up airplanes and the only useful changes in aviation security post-9/11 have been reinforced cockpit doors and a new equilibrium where passengers will fight back against any hijacking. In fact, more people have been harmed by the germs they’ve picked up taking off their shoes without socks walking through security checkpoints than have been protected by the TSA (which has never caught a terrorist).
- On American’s earnings call last week airline President Scott Kirby made the point that they make money on the lowest fares they sell (when matching ultra low cost carriers like Spirit) because their marginal costs are so much lower than average cost. Taken seriously high revenue customers aren’t always an airline’s best customers and airlines focusing only on ‘rewarding spend’ do themselves a disservice (though ironically Kirby may have hinted at moving in that direction). The fundamentals of recognize and reward are universals and mean that travel loyalty programs have a strong future.
- Travel insurance is a complete waste except for the most expensive ‘once in a lifetime’ trips
- New payment technologies will compete down credit card interchange rates, making it uneconomic for banks to offer frequent flyer miles as incentives for spending on their cards. Basically that competition will do to credit card mileage earning what the Durbin Amendment did to debit cards.
- ‘Chip and PIN’ credit cards will eventually shift liability onto consumers with a presumption that credit card fraud results from an individual failing to safeguard their PIN.
- The Justice Department has no case in its collusion investigation against the airlines, especially with airfares falling (although that doesn’t mean the government isn’t strong enough to extract a settlement if they’re determined enough). That’s even accounting for,
[M]y starting point is an assumption that there are almost always anti-trust violations. Anti-trust is something you almost can’t not violate. If prices are too high, it’s indicative of market power. If prices stay the same it’s collusion. And if they’re too low it’s predatory pricing.
- The Citi Prestige card’s benefits are too generous to last in their current form
- We don’t need nicer airports in the U.S. Instead we need airports that get people in and out quickly, and get planes in and out of the air quickly.
Passenger Dropoff at New York LaGuardia’s Central Terminal - The US government will ultimately side with American consumers over the airlines in United, Delta, and American’s quest to limit flights by Emirates, Etihad, and Qatar. The Gulf carriers aren’t really that much better than US airlines in business or economy, and clamoring for protectionism keeps the US airlines from actually competing effectively.
US Airlines Believe Emirates Showers in the Sky are Unfair - The central theme of Star Wars “is that power corrupts, but also that good guys have power too. Our possible safety lies in our humanity, not in our desires to transcend it or wield strange forces to our advantage.” In the new film out in December, is it Luke who revives the Dark Side of the Force?
About Gary Leff
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The day that credit card fraud liability lands in my lap is the day I start using cash for everything. Credit card companies are the ones to blame for being too cheap to fight the rampant fraud. My Citi Prestige card was compromised to the tune of $2,300 a couple of weeks ago, and I couldn’t possibly care less…not my problem.
Since chip and pin credit cards are rare in the US, I think that point is moot. There has been no overwhelming show of desire of chip and pin cards, even though they are probably the most secure to the card issuers and card holders. I think also the Fair Credit Billing Act would have to be changed as that act doesn’t address the chip and pin liability change that you state.
@JohnB I’m talking about the future – a world where chip and pin is commonplace leads to changes in the legal framework governing liability for fraud.
Chip-and-pin is 1990s technology, and the window’s closed. Biometrics (standalone or via smartphone) is next. Paradoxically, the US will probably get there ahead of Europe, because of skipping chip and pin. (But China and India will get there first, which will drive the cost down.)
I don’t think ATC is going away any time soon. The main thing that enables self-driving cars is the realization that you don’t need a network that knows about other cars – just a car that can “see what is around it and act like a human.” However ATC knows about things “beyond the view of the plane.” I am skeptical that we can rely on a communication network to handle this – i.e. who keeps a plane from landing on top of a playing taxiing? Either ATC or a 100.0% reliable communication network, which doesn’t exist.
Also, self-flying planes exist completely today – an A380 can take off, navigate and land 100.0% on its own. Except when there is an oil leak, an uncontained engine failure and the reason 420 people are alive is because there were humans in the machine. Anyway, replacing pilots, I could see that (although I am skeptical it could occur). But you I don’t think you can replace ATC with computers and call it safe. Certainly not in 20 years!
@bode no, not anytime soon, as I say 20 years
Wow, Garys fear/hatred of barefeet returns! I agree that taking off your shoes is completely worthless, but saying that people are getting ill because people don’t wear socks is…well, just plain rediculous.
Basically I agree with your views about the TSA. We don’t need that agency in its current form. What would be your better model for airport security?
Gary,
Re: ATC: We have all of that technology today, but I doubt we’ll see your vision in 20 years. Three reasons: First, you have to have a migration plan. You certainly won’t have a system where every ATC’er goes home one night and never comes back. It’s going to take quite awhile to develop that plan.
Second, our current political system won’t fund something like that. In order for that vision to materialize, we need stable multi-year funding to plan for that. In an era of CR’s and government shutdowns, we just don’t have a governing body with any sort of long term vision.
Third, because of the political uncertainly, it’s been difficult to get airlines to invest in that kind of equipment fleet wide. It’s cheaper to get that stuff (such as ADSB) installed OEM, but why invest the upfront capital if the airline won’t see the ROI on it for 5, 10, or even 20 years?
Gary,
Re: Insurance
You never discuss it this way, but I consider miles and points to be the best travel self-insurance ever. I’ve had to cancel trips planned out far in advance, and my only out of pocket expense? A few hundred dollars, pretty much all for award ticket redeposit fees. Hotels? Those on points can be canceled free.
@Gary:
“We don’t need nicer airports in the U.S. Instead we need airports that get people in and out quickly, and get planes in and out of the air quickly.”
Airports already get ppl in/out fairly quickly.
What the US needs is public transportation that actually works, and that does NOT rely on the regular road network (aka no BUS stuck in traffic to/from airport, rather a rail system or metro). Once airports/cities are connected, then connect cities together for real.
In Japan, you get from Tokyo to Kyoto/Osaka in 2-2.5 hours even if the distance is 500km. The population density is probably just about the same on the East coast. By building a high speed train from BOS-NYC-PHL-DC, and by connecting cities to airports on rail, you free some much needed space on the road network and in the skies as well. If it’s just 5%, then so be it. Every bit helps.
Bravo @Pat. What the US needs is severe investment in our infrastructure. Rails, roads, bridges, etc. Government should be investing large sums to fix these projects, and employ our own people in doing so.
Gary, re #6, you are (or should be) smart enough to know that while the card issuers may try to shift liability on to consumers, there is virtually zero chance of them succeeding.
“New payment technologies will compete down credit card interchange rates, making it uneconomic for banks to offer frequent flyer miles as incentives for spending on their cards.”
I think you underestimate the amount of consumers that micro debt finance their day to day living. Banks will always make good money on credit cards because of the ridiculously high (and legal and fair IMO) interest rates they charge on revolving debt cards.
The question really is: will stores actually stop accepting Visa/MC/Amex because other technologies that utilize EFT are ubiquitous to the extent that it’s profitable? I don’t think they will:
A) As I said, many consumers use their credit cards to bridge paycheck to paycheck or even go into and out of debt as they need to. They’re not going to overdraw their checking account to save the merchant money.
B) Merchants could already be doing this with cash, which is very easy to obtain at the millions of ATMs at this country, and they’re not doing it.
C) The transaction fee is a business expense that’s partially or wholly baked into the price of the goods/services and it’s not high enough to really let somebody else come in and undercut an established company by 1-2%–particularly when that large established company will have many other cost advantages.
I’m disappointed – thought I was going to find out you believe in ancient aliens, the hollow Earth, and big foot.
There weren’t a lot of people trying to blow up planes on 9/11 either. Only 19 out of what would have been 1 million or so US air passengers that day.
I found this article in today’s Washington Post informative. I did not know about the extensive intelligence work that goes into airline safety (and I didn’t read about it on VFTW):
https://www.washingtonpost.com/local/trafficandcommuting/connecting-the-dots-is-anti-terrorism-centers-mission/2015/10/24/03595a50-7781-11e5-a958-d889faf561dc_story.html
I must admit that Gary has the better side of the debate here. As long as there are no incidents, he can claim the security efforts are not needed. And then if there is an incident, he can say those efforts didn’t work.
@Sam funny, the TSA claims as long as there are no incidents that they are winning, regardless of what they’ve done and whether there were any attempts or not. In a perfect world we’d have better intelligence, but we focus too much on gathering all information rather than developing understanding. Our intelligence bureaucracies are way too given to infighting, turn wars, and fighting the last battles no matter what sort of love letter their hometown paper sends them.
Why is no one commenting on the his Star Wars statement? Luke reviving the dark side? Blows my mind. #mindblown
I largely concur, expect with 5, 6, and 9. (5) Banks still want consumers to use THEIR card products vs other bank card products, and so deals with airlines for frequent flyer miles absolutely will continue–even as airlines likely devalue their miles even further. Nothing drives business to particular credit cards more than airline/hotel loyalty or aspiration for an airline/hotel award for far too many consumers. (6) Chip and Pin will not push liability to consumers as you expect–unless the GOP controls the White House and Congress, thereby permitting the Big Banks to co-opt the entire legislative process with no chance for a Presidential veto. Also, I suspect that biometric/electronic fingerprint scans will eventually supplant even Chip and Pin, which likely is where more US banks eventually will go to alleviate fraud. That biometric insurance will substantially mitigate credit card fraud for in-person transactions where most fraud occurs. (9) Airport renovation/improvement will continue to be critical for no other reason than increased public pressure for a more widely traveling public…and especially with more Americans beginning to travel abroad and able to see how much nicer and better airport services are throughout the rest of the world. Getting people in and out is more important, but our author wrongly assumes that airport improvements/refurbishments will not greatly assist in that effort, especially in improved check in/security areas that apply the new TSA reality into airport design. Not only will we see such improvements continue, but we will begin to see increased pressure for better public transport into and out of major hub airports–most of which are located in progressive cities/states where the need for better public transport is already obvious. California’s high speed rail system eventually will spur the Northeast to do something similar between DC-Phila-NYC-Hartford-Boston. The Southeast eventually may wise up to do something similar between MIA-MCO-ATL-CLT in the future, though conservative politics in that region will make it take much longer.
I have to comment on travel insurance. It just depends on so many variables. I think the older one gets, health issues can become very expensive problems while traveling. Having elderly sick parents, who might pass away while traveling is another good reason. Cards do provide many cancellation benefits, but the benefits are not extensive. But, lately, I have been purchasing trip insurance for one reason. Evacuation coverage! Last year, I purchased an inexpensive plan to cover a 3 week trip to Asia. SO was diagnosed with congestive heart failure, 2 weeks before departure. That $200 plan covered every single nonrefundable expense, to the tune of $1500. It easily was worth the money. The insurance company was easy to deal with as well.
@JohnB medical evac coverage is a different matter entirely.
turn wars are the worst
I’m not a star wars expert but you might be right about Luke. It depends on what religious parallel that they are trying to portray in this new movie. As you may know Star Wars is filled with various religious based themes.
I agree also with the credit cards ceasing to offer airline miles in the future. Today may be the peak of this game we all enjoy.
@Ryan: He said “limited evidence,” so that rules ancient aliens right out. There’s TONS of evidence for them. Just ask Giorgio Tsokoulas!
Liability shifts are already occurring for chip-and-pin in Europe; merchants that don’t have EMV hardware are liable for any fraudulent transactions that happen on their terminals. Will that shift go so far as to reach consumers? I thought I heard reports of some banks in Europe trying to do so with chip-and-pin asking how someone got their PIN (ignoring the fact that chip-and-pin isn’t 100% invulnerable itself), but can’t find those reports now. I’d say it’d be tough to push that in the US, and would have thought it tough in Europe as well.
“There aren’t actually a lot of people out there trying to blow up airplanes and the only useful changes in aviation security post-9/11 have been reinforced cockpit doors and a new equilibrium where passengers will fight back against any hijacking.”
Actually, you got part of that exactly backwards. The “reinforced cockpit doors” were actually the worst change made. Now that you can rely on passengers to fight back, the last thing in the world a rational individual would want would be to make it harder for them to fight back, which is what “reinforced cockpit doors” do.
See German plane crashing as pilot suicide method for more downsides of this move.
@GregD
You are the 1st person that I have seen, heard or read that brought up that preposition. You are 100% right! If the other flight crew member or the passengers could get thru the door, the outcome could have been different!
” TSA (which has never caught a terrorist).”
Given the number of weapons confiscated, many of them loaded, I don’t understand how you can say that. What do you think the owners of those weapons were planning to do with them?