Why Do The Airlines Need A Bailout? They Made A Fortune Over The Past Decade. Now They’re Demanding $50 Billion To Stay In Business.

(By Henry Grabar, Slate, 17 March 2020)

If Washington doesn’t do something, all U.S. airlines are going under.   That was the message that industry lobby Airlines for America delivered on Monday, arguing that under the most likely  scenario, all seven major U.S. passenger carriers would run out of money between July and December. The group asked for $50 billion in assistance from the federal government, divided evenly between grants (free money) and low-interest loans.   


That’s a lot. For comparison, the feds spent $50 billion to bail out General Motors during the financial crisis—most of which was repaid.   It has been a little more than two years since American Airlines CEO Doug Parker told investors, in an instant business school cautionary tale, “I don’t think we’re ever going to lose money again.” How time flies when a viral pandemic ravages the earth.

Help is on the way, President Donald Trump said on Monday. The coronavirus outbreak and the sudden decline in air travel is “not their fault,” the president observed, “they were having record seasons.”   Fact check: true. Airlines are coming off a remarkable 10-year run. Delta’s profits for each of the past five years, back from 2019 to 2015, were $4.8 billion, $3.9 billion, $3.2 billion, $4.2 billion, and $4.5 billion. Mergers have given the big four (Delta, United, American, and Southwest) about 80 percent of the U.S. market. With oil prices low and the economy humming along, it has been a great time to run an airline.

So now that the lean times are here—admittedly, a surprising turn of events for us all—where did all that money go? Why are multibillion-dollar airlines held to a budgeting standard that, if it were adopted by a typical American household, would seem totally irresponsible? And why, if they blew through all that cash, should we help them now?

The last question is the easiest to answer: because we have no choice, if we want to maintain our national travel infrastructure.   The first question—where’s the money?—is also not so complicated. Over the past decade, according to Bloomberg, U.S. airlines spent 96 percent of their cash profits on stock buybacks to enrich investors and their own executives, whose positions often come with stock holdings.*  As for why airlines behave with relatively little foresight, that’s more complicated.

Investors see little reason for airline companies—or any other companies—to have cash on hand. In 2017, analysts at McKinsey concluded that the 500 largest companies in the U.S. (excluding banks) had about 20 percent of their revenues in cash. That was too much, they thought. “While companies do need to hold some cash to do business,” they wrote, “in the past we’ve found that companies can typically do with cash balances of less than 2 percent of revenues.” (This cash is mostly held off shore, but that’s another story.)

By keeping cash in the bank, executives weren’t just depressing their own salaries. They were also making their companies look bad. They risked the ire of activist investors who saw cash as “unproductive capital,” workers who saw cash reserves as raises that hadn’t been paid, and even savvy consumers, who would protest stingy service and aging equipment.   And so at the end of a record decade in profits, according to Bloomberg, American had $7 billion on hand, United $4.9 billion, and Delta $2.9 billion.

Those rainy-day funds still sound like a lot of money, but there’s another problem with airlines. Historically, they were considered a bad investment prone to bankruptcies. In 2007, Warren Buffett wrote, “if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.”* (Even Buffett came around and bought stock in the big four in 2016.) Despite this recent merger-driven boomlet, they are low-margin, capital intensive  businesses.  Low margins mean your savings don’t get you far. At the rate it’s going now, United’s blockbuster 2019 profits will be spent down in less than 90 days. The company says it’s losing $1.5 billion a month.  Capital-intensive means it’s hard to tighten your belt. You can save some money on fuel and food, but not on labor or rent. You still have to pay banks or leasing companies for your planes. You can’t save those seats for later, or fly twice as many flights when business picks up again. There is no factory to shut down. Even if you ground flights, many costs are fixed.

Which brings us to the current pandemic-induced crisis, and the fifth reason—after the unprecedented disruption, shareholder capitalism, low margins, and a capital-intensive business—that airlines do not have enough money sitting around: moral hazard. America won’t let the airlines fail, and the people who run the airlines know it.   Nobody wants to bail out executives and shareholders who spent years lining their pockets as hundreds of thousands of owner-operated restaurants go out of business. But letting the planes go down would put nearly a million people out of work and deprive the country of nearly all its long-distance travel infrastructure.

The mergers that helped the companies throw off such big profits have left us with corporations so fundamental to American life they are basically utilities. Let McDonald’s go under and you still have Burger King. Let American Airlines shutter and Dallas will be as distant as Timbuktu.  The question for Congress, then, is not whether to save the airlines—but how to redraw corporate governance to fix its bad incentives.

After Sept. 11, Congress passed an airline bailout of grants and loans. It was designed to help airlines obtain insurance again, but it also included caps on CEO pay and “golden parachutes” for departing executives. In a bigger bailout, the public can demand more significant oversight. “We won’t let this look like the bank bailout of 2008, nor can you compare the two,” Sara Nelson, the president of the flight attendants’ union, said on Twitter. “The airline industry didn’t cause the pandemic and money should come with significant conditions to help workers and keep planes flying, not enrich shareholders or pad executive bonuses. Airlines must commit to maintaining payroll. It means no bonuses, no buybacks, & no breaking union contracts in bankruptcy. Companies should commit to pay a min $15 wage and board seats for workers.”

It’s a good template for how Washington should approach the crisis: With an open mind toward fixing corporate America’s problems. In the New York Times, the antitrust advocate Tim Wu writes that we should force airlines to cap or abolish fees and take steps to undo industry consolidation. Over in Europe, Italy has announced it will nationalize Alitalia, and other European airlines will not be far behind.  Whatever we decide to do with the airlines will be just an appetizer to the considerably more fraught negotiation that’s just around the bend, over the future of death-plane producer Boeing, whose departing CEO Dennis Muilenburg walked away with more than $60 million earlier this year.

One thing is for sure: The central condition of any assistance has got to require airlines keep their profits in the bank for the next time this happens (as was required for automakers after the 2008 crash—Ford has $37 billion in reserve). This pandemic is a surprise. The next one won’t be. If you’re expected to keep your savings on hand, so should American, United, Southwest, and Delta.


https://slate.com/business/2020/03/airlines-bailout-coronavirus.html

Travel Tips

Travelers’ Most Common Mistakes And How To Avoid Them

(By Christopher Elliott, Washington Post, 15 May 2014)

 

The secrets to a hassle-free summer vacation seem simple enough: Keep a checklist. Read the rules, especially if you’re flying. Take photos of your rental car. Don’t make assumptions about your hotel. And remember your paperwork when you’re traveling overseas.  But simple as that sounds, in practice it’s not always that easy.  Let me say right from the outset that I hardly started out as the world’s smartest traveler. But over the past decade and more, I’ve learned, from my own wide-ranging travels and from the many problems I’ve helped resolve for readers, what not to do when you’re on the road.  So what are the most common mistakes that travelers make? And, more important, how do you avoid them? How, in other words, can you vacation like the world’s smartest traveler?

1. Be prepared

Bob McCullough, a sales representative for a cheese company in Hainesport, N.J., admits that he’s a serial procrastinator, so he decided to start packing for a recent trip a full week in advance. He even booked a flight leaving Philadelphia on a Sunday to avoid the Monday crush of business travelers.  “I got to the airport two hours before my flight, found the parking garage pleasantly unpacked, and parked in a spot I had never dreamed of finding on a weekday,” he says. “I opened the trunk and reached in to grab my suitcase — which wasn’t there. I realized then, in shock with a cold sweat building, that I had left my suitcase in its normal pre-staging area of my laundry room.” 

The smartest travelers plan ahead, like McCullough, but they also have a fondness for checklists. Did you pack the right clothes? Remember all the power cords? Is your luggage in the trunk of your car? Lists are your friends. Smart travelers know when to wing it and when not to. Sure, your friends and family might poke fun at you for keeping a list for everything, but they’ll thank you when you’re the only one with a power adapter in France. Travelers who keep lists are far less likely to get into trouble on the road.

2. Read those airline rules

Airline policies can be counterintuitive, even bizarre. For example, a one-way ticket can sometimes cost more than a round-trip ticket on the same plane. A change fee can exceed the actual value of a ticket. Also, “non-refundable” means non-refundable, except when it doesn’t.  Confused yet? If it’s any consolation, even airline employees sometimes get mixed up about their own rules. Don’t laugh, I’ve seen it.  Kelly Hayes-Raitt remembers seeing an unbeatable deal for a flight from Los Angeles to Tampa, Fla. But when she arrived at the airport, she noticed her itinerary. “The plane landed in Phoenix, Dallas, Houston and New Orleans before finally arriving in Tampa,” remembers the writer from Santa Monica, Calif. “I still groan when I think of how stupid I was.” 

Based on the cases I’ve mediated, my best advice is to familiarize yourself with the always-changing, often Byzantine rules developed by the airline industry — rules that are often created for the sole purpose of “protecting” an airline’s revenue or, to put it in terms that everyone else can understand, to separate you from your money.  They may make about as much sense as a coast-to-coast flight with four stops, but you — and you alone — are responsible for knowing the rules.

3. Take photos of your rental car

Anna Arreglado didn’t do that when she recently rented a car in Bardonia, N.Y. “My mistake,” says Arreglado, who works for a pharmaceutical company in Ridgefield, Conn. Sure enough, the car rental company came after her, insisting that she’d damaged the vehicle. She couldn’t prove that she’d returned the car unharmed. It was her word against the company’s.  Fortunately, Arreglado reads this column and knew how to fight back. She disputed the claim in writing and copied her state attorney general on the correspondence. “Within an hour of sending my e-mail, I got the case dropped,” she says.

Listen up, campers: Take pictures of your cars before and after your rental. Some customers allege that car rental companies have built a profitable business around charging you big bucks for small damage, and the only way to avoid a repair bill is to show an “after” image of your undented car. That, and maybe having the e-mail address of your attorney general.  Actually, the takeaway from Arreglado’s story applies to more than rental cars. Sometimes, a brief, polite e-mail to any travel company will get the resolution you want — if you copy the right people.

4. Assume nothing about your hotel

No segment of the travel industry — except perhaps the airlines — profits more from our collective ignorance than hotels. They would like you to think that they’re the only lodging option in town, but they’re not. Today’s accommodations cover the spectrum, from glamping to vacation rentals. Don’t lock yourself into a traditional hotel or resort, at least not without first shopping around. You might be able to find a bargain on Airbnb.com with a better location and fewer hassles. 

Travelers make other assumptions about their accommodations that aren’t necessarily true, too. For example, you’d imagine that the room rate you’re quoted is the room rate you’ll actually pay, maybe not including sales taxes.  But when Tom Alderman recently tried to book a room at his favorite casino hotel in Las Vegas, he was broadsided by a mandatory $14-per-night “resort” fee, which supposedly covered in-room wireless Internet access, use of the fitness center and “printing of boarding passes.” He was particularly outraged because the resort had repeatedly promised on its Web site to “never” charge a resort fee, like other Vegas resorts. “I’ll never stay there again,” says Alderman, a retired documentary filmmaker.  Resort fees are normally disclosed just before you push the “book” button, so don’t thoughtlessly click through. If you see a fee you don’t like, stop what you’re doing and look elsewhere for a room.

5. Don’t forget the paperwork

Having the right visas and permits and an updated passport is your responsibility, no two ways about it. That’s a difficult message for many travelers to hear. They rely on the advice of a travel agent or what’s posted on a Web site and believe (incorrectly) that those third parties should reimburse them when something goes wrong. This is especially common in the case of cruises, where a birth certificate, instead of a passport, is often enough to board a ship.  The consequences can be heartbreaking. A worried mom from Sacramento recently contacted me because her daughter and son-in-law, en route to their honeymoon in St. Lucia, had been stopped at the airport and denied boarding. The reason? The bride’s passport was due to expire soon — too soon for her to be allowed into the country. Some countries require your passport to be valid for six months from the date of your entry. An alert travel agent might have caught the problem, but now it was too late. And without travel insurance, the entire trip would be lost. “Can this trip be salvaged?” the mom wrote to me, with only hours before the vacation was to have begun. Sadly, it couldn’t be.  Point is, the most common travel mistakes are easily avoided with a little planning and by taking common-sense precautions. It looks easy, and sometimes it is easy. But the truth is, in many cases, there’s often a lot more to it, and questions arise. And that’s what this column and I are here for.

 

http://www.washingtonpost.com/lifestyle/travel/travelers-most-common-mistakes-and-how-to-avoid-them/2014/05/15/4fca7b56-d54a-11e3-8a78-8fe50322a72c_story.html

Summer 2014: Best Vacation Escape Routes For Drivers Leaving The D.C. Area

(By Robert Thomson, Washington Post, 16 May 2014)

The Memorial Day weekend marks the traditional beginning of the summer travel season, and we’re back with our annual guide of problematic routes and roadways you might want to avoid in your rush to get out of the Washington region.  The 95 Express Lanes project is on a fast track, but that probably means summer vacationers won’t be going anywhere fast when they drive through that construction zone on Interstate 95 in Northern Virginia.  Of all the compass points travelers will follow on their getaways from the D.C. area in 2014, the most difficult — for the second summer in a row — will be due south. The express lanes project, begun in late summer 2012, is building “29 miles in 29 months,” said Walter J. Lewis III, project director for Fluor-Lane 95, the construction company.  The 2013 work included construction of nine bridges, sometimes forcing weekend detours on I-95. Through the rest of this year, the remaining work will include frequent weekend shutdowns of the HOV lanes in the middle of the interstate, limiting its capacity to handle vacation traffic.  While that slow ride is likely to be the biggest challenge at the beginning and end of long trips, it won’t be the only one. Here’s a look at what’s ahead along the main summer escape routes.

 

Northeast corridor

Classic route: I-95 to I-295, across the Delaware Memorial Bridge to the New Jersey Turnpike to northern New Jersey approaches to New York (about 227 miles).

Alternatives: Consider I-95 to I-695, just before Baltimore, to I-83 to York, Pa., and Harrisburg, Pa., then I-81 to I-78. Options include staying on I-78 across New Jersey toward New York or taking a more northerly course: following Route 22 just before Allentown, Pa., to Route 33 to I-80 across the top of New Jersey.

Or take Route 50 across the Chesapeake Bay Bridge, follow Route 301 to Route 896 (Churchtown/Boyds Corner roads) to Route 1 (toll) or Route 13. From there, drivers can reach I-295 and the Delaware Memorial Bridge, which connects with the New Jersey Turnpike.  For those who want to vacation while they travel, consider driving about 120 miles from the District to take the 80-minute ferry ride from Lewes, Del., to Cape May, N.J. Reservations recommended: 800-643-3779 or www.capemaylewesferry.com.

Travel tips: North of Baltimore on I-95, the Maryland House rest area has reopened, but 14 miles beyond that, the Chesapeake House in North East, Md., is now closed for reconstruction.

Approaching the Newark, Del., toll plaza, the two left lanes will take you to the highway-speed E-ZPass toll readers. Tune your radio to WTMC (1380 AM) for traffic reports.

Before leaving home, check the Delaware Department of Transportation Web site at www.deldot.gov for traffic conditions.

The widening of the New Jersey Turnpike continues between interchanges 6 and 9 in the central part of the state, but construction may end late this year. Tune to WKXW (101.5 FM) for New Jersey traffic reports.

New York’s Tappan Zee Bridge remains open as construction begins on a replacement span to take I-87/287 over the Hudson River.

Deep Creek Lake

Classic route: I-270 to I-70 west to I-68 west to Exit 14A at Keysers Ridge, Md., then follow Route 219 south (about 180 miles).

Alternatives: Between Frederick and Route 219, try portions of Route 144 and Alternate 40, which weave along with the interstates. Much of that route is the Historic National Road. Take it to enjoy a different drive to Western Maryland rather than to save time. Maryland travel maps, including a map of scenic byways, are available at ­www.marylandroads.com.

Travel tips: Maryland’s major roads — including I-270, I-70, and Routes 15 and 40 — pass through a bottleneck at Frederick. Try to avoid starting your trip between 1 and 8 p.m. Fridays.

Between school closing and Labor Day, the roads around Deep Creek Lake can get very crowded. There are peaceful state parks with cabins along the way west, including New Germany and Herrington Manor. At Frederick, vacationers could swing north on Route 15 to cabins at Cunningham Falls State Park in Thurmont.

Travelers can make reservations on the Department of Natural Resources Web site at ­www.dnr.maryland.gov.

The Maryland State Highway Administration has some highway repair projects in the western part of the state this summer, but they are unlikely to severely affect traffic flow during the peak travel times.

Eastern Shore

Classic route: Route 50 east to Ocean City (about 150 miles).

Alternative: There really isn’t a good highway alternative to the Ocean Gateway (Route 50). Around Wye Mills, Md., Route 404 branches east from Route 50 and heads for Rehoboth Beach on the Delaware shore, but it’s narrow and crowded.

Along the Route 50 corridor, there are some short breaks, including Route 662 at Wye Mills. Approaching the shore, Route 90 (Ocean City Expressway) provides an alternative way into the city, at 62nd Street.

Travel tips: The best Bay Bridge travel times for summer weekend getaways are Thursday and Friday before 10 a.m. and after 10 p.m.; Saturday before 7 a.m. and after 5 p.m.; and Sunday before 10 a.m. and after 10 p.m. The regular car toll for the bridge is $6, paid eastbound.

Headlight use is required at all times on the bridge. At peak periods, the westbound span is sometimes realigned for two-way traffic. In that case, the five lanes on the left side of the toll plaza are directed to that span. Drivers who want an E-ZPass Only lane for the exclusively eastbound span should use toll lanes 6 or 9.

Maryland offers traffic information for the bridge at www.baybridge.com. To get information about your entire route, dial 511 from within the state and use the voice-recognition system, or use the Web site www.md511.org.

Outer Banks

Classic route: I-95 south, to I-295 south, to I-64 east, to I-664 south, then I-64 to Exit 292 for Chesapeake Expressway/I-464/Route 17. Then keep left to continue to the Chesapeake Expressway (Route 168) and take Nags Head/Great Bridge Exit 291B to routes 168 and 158 and the Outer Banks (about 270 miles to Kitty Hawk, N.C.).

Alternatives: South of Fredericksburg, some I-95 drivers pick up Route 17 south at Exit 126 and take it to I-64 in the Hampton Roads area. Others take the I-295 bypass around Richmond into the Petersburg area, then take Route 460 east into Hampton Roads.

Drivers on the east side of the D.C. region could take Route 301, crossing the Potomac River on the Nice Bridge ($6 car toll collected southbound), then connect with Route 17 south. Drivers starting southbound trips from west of the D.C. area may avoid some of the I-95 congestion by taking Routes 29 and 17 to the Fredericksburg area.

Travel tips: I-95 traffic on Friday and Sunday afternoons can be stop and go between the District and Fredericksburg. Traffic volume is very high, plus there’s the 95 Express Lanes construction.

There will be lane closings on I-95 during off-peak hours and overnights, plus those weekend closings of the HOV lanes. Also watch for many construction vehicles turning into and out of the work areas.

Get information about Virginia traffic conditions through the 511 system. On the Web, it’s at www.511virginia.org. You can also call 511 from any phone in Virginia.

http://www.washingtonpost.com/blogs/dr-gridlock/wp/2014/05/16/summer-getaways-2014-best-vacation-escape-routes-for-drivers-leaving-the-d-c-area/

 

 

Travel Agents

The Travel Agent Is Dead. Long Live The Travel Pro

(By Charlie Funk, Travel Weekly, 2 October 2013)

 

Have you noticed it too? Travel professionals are resurgent.  In the 2007 marketing plan we gave each of our suppliers, Sherrie and I stated that we believed online bookings that did not involve a live travel professional had peaked and traditional agents would be more involved in vacation decisions going forward.  Sure enough. It took a while, but travelers did begin seeking assistance of travel professionals again, a phenomenon noted by a fair number of reporting entities including CBS, CNN, Fodor's, Budget Travel, the New York Times and the Washington Post. Both PhoCusWright and Forrester Research detected steady growth in those leisure travelers who increasingly turn to travel professionals for guidance.

And to clarify, I'm referring to those travel professionals who help translate clients' ideas and dreams into reality in the form of a vacation that meets or exceeds expectations, not those who are primarily a booking- and payment-processing entity, a toll booth on the highway to a vacation.  Travelers are returning to travel professionals for four key reasons:

•Knowledge: Travel professionals have specialized knowledge of destinations, things to do, places to see, the best places to dine and more.

•Time: Consumers increasingly place a higher value on their time, where a five-minute call to a travel professional often avoids literally hours of mind-numbing online searches.

•Price: Travelers are more aware than ever that a travel professional has the same rates offered by a supplier.

•Advocacy: It turns out things go wrong on a trip: a missed flight, an unpleasant experience, an emergency during the trip and more snafus that require assistance. More and more, travelers have learned that without a travel pro, they are on their own.

These are the professionals who know they add value. Like the one who gives clients his unlisted phone number, charges a $100,000 fee to join and a $25,000 annual retainer. But they are also the ones who take calls at home, at 3 a.m., who take the time to counsel a client on what to do from the time they take the suitcase from under the bed until they put it back.

I've written here about the growing sense among this group that they must be in control of their business: how they go to market, how they develop and maintain their business model and which products they sell. Many have "taken a stand" to make their business profitable, even if it meant walking away from long-standing supplier partnerships.  Similarly, growing cadres of agency owners have decided that they don't have to do business with every person who calls or stops by. With increasing frequency I hear of and see reports from travel professionals telling of experiences with clients who just aren't a good fit for their business.

Many share common characteristics, the most frequent being a conversation that begins with, "What's your best deal on ..." I often wonder just how cheap a bad vacation has to be before someone can overlook all the problems and issues that arise from being price-driven, looking for the "best deal." More than a few agency owners tell me they have found that these bookings are typically very high-maintenance with zero loyalty.  Another frustration is working to find the best vacation value for a client only to have them book it direct with the supplier. More and more agencies have begun charging fees: some that are standalone and are not applied to subsequent bookings, others that can be applied. 

Perhaps the best example most recently involved a client who questioned the use of a travel agent when the same price was available direct and took exception to being charged a fee to make an airline reservation. This was, it would turn out, one of those final-straw situations.  In this case, the agency owner took the time to craft a 474-word email response to this "client" that touched on all the reasons mentioned above. It clearly set forth the benefits of using the agency's services. The part that I liked best was the closing. With the owner's permission, I quote it here:

"All that to say, if you are price-driven, and not motivated by good and reliable service or a corporate culture to go above and beyond for every single client, then I'm not the right travel agent for you anyway. We are grateful for the opportunity to have served you in the past, and we wish you the very best success and enjoyment in your future vacations."

That's right. The agency fired the client. Have you ever wanted to do that? It seems sometimes there just isn't another way to handle the situation.  What really prompted this column was the sense that travel retailers are obsolete, unnecessary, passe. Specifically, I was writing a response to President Obama's comment on the Sept. 15 edition of ABC's "This Week," apparently in an effort to explain stunted economic and job growth, suggesting that technology had eliminated so many jobs: "Technology. If you go to -- a lot of companies now, they've eliminated entire occupations because they're now robotized. We don't have travel agents. We don't have bank tellers."

I was all set to refute this latest statement. I had some surgically honed witticisms about who was handling all the planning for all those trips that the POTUS and family take.  But then it occurred to me: The president was partially right, because in the context in which "travel agent" was used it might well be a disappearing species indeed. We're no longer merely travel agents; we're professionals. I'm going to write my first letter to a president, thanking him for giving us travel professionals the opportunity to set ourselves apart from those all-but-extinct travel agents of old.

Charlie and Sherrie Funk own Just Cruisin' Plus in Brentwood, Tenn., and are members of the CLIA Hall of Fame.

Airline Industry

How The Airlines Put The Squeeze On Passengers

(By Bill Saporito, Time magazine, 09 September 2013)

If you want some insight into why the department of justice put a gate hold on the merger between American Airlines and US Airways, here's a number to ponder: 13 million seats--gone.  That's how many airplane seats have disappeared over the past year--removed from the system by airlines as they reduce capacity. According to the website Aviation DataMiner, these cuts have come from across the industry. Only ultra-low-cost carriers Spirit and Allegiant are growing.  This means life in the skies will not be improving anytime soon: no empty seats, no room overhead and stressed-out staffs. With fewer seats available, the domestic load factor--the percentage of seats filled--reached a record of 87.1% in June. And as there is little or no capacity growth in the forecast, the future of flying promises more cramp for more cash.

That reality became painfully obvious in a two-day, three-airline lap around the country in late August (LGA to FLL / MIA to LAX to JFK).  "You can't go out with flights that aren't filled," says Blair Pomeroy, an aviation expert with consultancy Oliver Wyman. "The load factor is up 20 points in the last two decades. They have gotten that increase by eliminating marginal flights." Fares are rising because airlines have stopped chasing market share. Instead, they've tried to maximize profit from existing customers by upsizing or downsizing their equipment and adjusting timetables. That means, in some cases, making fewer trips with larger jets. Or sometimes just the opposite: flying smaller jets that are cheaper to operate. This is why you are stuck on a 70-seat Embraer 175 for close to four hours from Pittsburgh to Denver rather than a more comfortable Boeing 737 or Airbus A320. 

At the same time, the industry continues to harvest what it calls ancillary revenue (and what passengers call fees--along with a few other words) for everything from checked baggage to so-called premium economy seats, priority boarding, trip insurance, movies, meals and drinks.  The fees are part of a strategy to "decommoditize" air travel, as Delta said in a recent presentation to analysts, by focusing on a "customized and differentiated experience." Translated, that means you pay to get on the plane, then keep paying until you reach the level of comfort and service that matches your lifestyle or pocketbook, from zero extra for a middle seat in the way, way back of a fully loaded wide-body to a vast sum to be cosseted in business class. The major carriers, of course, also try to lock in their less budget-restricted corporate customers with global alliances and frequent-flyer programs that offer better seats and upgrades. But even for the top ranks of flyers, belts are tightening--Delta announced that it would be adding a spending qualification for its medallion level. "Every customer," says Marty St. George, head of marketing for the low-cost carrier JetBlue, "has to decide what they value."

The fare-and-fee strategy has rewarded the industry with plump profits. Last year, Delta's net profit hit $1.6 billion on rising revenue and profit per passenger; the industry's pretax profit margin is up 8 percentage points since 2009. More important, carriers have developed the operational discipline to sustain these profit levels for years, as long as fuel prices remain manageable. "The legacy airlines used to be run like government agencies and not hungry businesses," says Pomeroy. "Those days are over." Indeed. In July, American racked up $349 million in earnings. Not a bad bounce back from being broke.

How did we get here? You have to go back to 2008, when oil reached $147 a barrel and jet fuel peaked at $3.89 a gallon. The domestic airline industry lost nearly $10 billion that year. Struggling Northwest Airlines landed in the arms of Delta, dooming Northwest's struggling Memphis hub; for Delta, it was so long, Cincinnati. In 2010, United united with Continental. Cleveland is getting nervous about being dumped. And US Airways' earlier merger with America West ended Pittsburgh's hub dream. In merging, the combined companies shrank their footprints--and their costs.  As of 2012, jet-fuel prices were roughly at the same level as in 2008, yet the industry made about $2.3 billion. A new age has dawned.

The mixed glories of the new aviation age are on full display at New York City's LaGuardia Airport, where I wait in the luggage-check-in line for a Spirit Airlines flight headed for Fort Lauderdale, Fla. The scene is chaotic as passengers lugging shopping bags, boxes and all manner of containers frantically attempt to repack so they can avoid bag charges.  The flight looks full despite a 6:50 a.m. departure. Spirit often flies vampire hours to keep its planes in the air as much as possible. How about a 10 p.m. flight to Plattsburgh, N.Y., from Fort Lauderdale, and a return at 1:30 a.m.? It's filled with Canadians escaping high-priced fares in Toronto.  On board, seating is tight. Spirit gets 218 passengers on its Airbus 321s vs. 159 for, say, JetBlue's Airbus 321s. The guy sitting next to me, in the middle seat, has his knees jammed into the seat in front of him. Because I paid $25 extra to get a window seat next to the emergency exit, there's no chair in front of me and I can stretch out my 6-ft. 2-in. frame. The first row goes for another $50. Advertising is pasted on the overhead compartments and tray-table backs.

Spirit has become today's most profitable airline by attracting passengers who otherwise wouldn't fly: low-margin customers the network carriers no longer desire. "The simplest way we describe the Spirit market," says the company's CEO, Ben Baldanza, "is the people who pay for the tickets themselves."  Here's how Baldanza summarizes the changes he sees in the industry: "Less competition, less capacity, fewer intervening marginal hubs." He means, for instance, that St. Louis, once a hub for airlines like TWA and American, is no longer a Western gateway. And good luck finding direct service to Omaha--or much of any service to Sioux Falls, S.D. Closing midsize hubs "created an industry that is financially more stable for the first time in a long, long time," Baldanza tells Time. It's good for consumers in the sense that a stable industry has value, but not so good in that there are fewer flights between midsize cities--and some smaller markets have lost service completely.

Baldanza has been working hard to provide more options and city pairs. In doing so, he is shaking up the industry. After taking charge of the then money-losing Spirit in 2006, Baldanza analyzed all the world's airlines and reached a conclusion. "The airlines that were perennially successful were really at the extremes," he says. "We realized they were either high touch like Emirates, or low cost like Ryanair."  He went low cost, unleashing a highly disciplined, highly discounted airline that is growing 20% annually with industry-leading profit margins. At Spirit, price is the product. The average base fare is $79, which gets you a seat. Everything else is extra. Spirit charges for checked bags as well as those in overhead bins. If you want an assigned seat, a middle, aisle, window or exit-row seat, that will cost you, based on a sliding scale. Would you like some water? Two bucks. The average passenger typically spends an extra $30 for add-ons, but the average total cost, at $110, still beats most of the major carriers.  Baldanza has his sights set on expansion. He figures there are at least 400 city pairs in the U.S., Caribbean and South American markets--or roughly any market where 200 people a day are flying. "We have more growth opportunities than we have airplanes on order," he says. In the airline industry, that's revolutionary, even if it's not exactly the kind of revolution that brings a smile to the face of a frequent flyer.

I am flying with a senior citizen out of Miami--that would be the jet, not a fellow passenger. I'm on one of those aging Boeing 757s that have served as industry workhorses for years. This one is owned by American and has all the hallmarks of its age: the upholstery is tired, and the first-class seats are old school, not much different from the coach seats (or so I tell myself as I head back to Row 17). The in-flight entertainment is hilariously outmoded--ancient screens suspended from the cabin ceiling with your choice of the same movie. A woman behind me remarks that she was expecting something "where you could change the channels."

American and United have ordered hundreds of new jets, which theoretically could make life better in the air. The 787 Dreamliner, for instance, has a cabin altitude pressure of 6,000 ft., meaning you will suffer less from jet lag. But you might suffer elsewhere on the jet. Boeing has configured the long-haul Dreamliner with eight seats across in the coach section, with an option for nine. Likewise, it has offered its extended-range 777-300ER with nine seats across the back, with an option for 10. Typically, only charter outfits opt for sardine seating. But some airlines, like United and Japan's ANA, are converting to or ordering nine across in their Dreamliners. The loser gets seat 33-F, LAX to Tokyo. And on its 777s, American has opted for 10 seats, 3-4-3 across (meaning each row has four middle seats). Aviation designers are even broaching the idea of making middle seats narrower to offer the cheapest of the cheap seats.

The next day, homeward bound, I'm on another 757. A different carrier. And a better seat. An upgrade! This time it's United, from LAX to JFK, and there's evidence that the airline, newly consolidated with Continental, is trying to raise its game after a rocky start. The Los Angeles--to--New York and San Francisco--to--New York flights are among the most profitable routes in the U.S., and United has upped the ante in business class. The company has given up a couple of rows of coach seats to install lie-flat seating and everything else you would normally associate with transoceanic travel. American and Delta have no option but to match the offer, and they are doing so.  The seats have just about everything--and they should, given that their cost to the airline can easily exceed $50,000 apiece. There's a shelf for things like mobile phones. The individual in-flight entertainment includes movies, audio, games and the ability to connect your iPad or iPhone if you have the right cable. There's a USB port. And there are meals, served on actual plates, with unlimited wine and beverages. (This being a morning flight, coffee and juice will suffice.)

Business-class seats in the transcontinental market are typically priced from $3,000 to nearly $5,000. That's what has lately lured JetBlue into the premium market. It will begin business-class service on the coast-to-coast route next year, at what will likely be half the current market prices. "Our competitors all have that front-cabin product that creates a subsidy for them," says JetBlue's St. George. In other words, United can use the revenue generated in its business class to offer cutthroat coach fares against JetBlue's single-cabin coach offering.  Experts say this move by JetBlue and Southwest's expansion into international travel suggest that the days when low-cost airlines differentiated themselves from legacy carriers are over. They are now all fighting for the core corporate customer, plus as many leisure travelers as they can entice. Southwest, which thrived on its one-size-fits-all model, is now separating the herd with early-check-in fees; having acquired AirTran, it also has business-class seats to sell. "It's a hybrid world," says Pomeroy. St. George rejects that idea and says JetBlue is instead bringing innovation to another overpriced market.

As the United flight approaches JFK, the pilot announces that we are arriving early. Perhaps, but that's only because there's a time cushion routinely built into airline schedules; a flight is considered on time even if it arrives up to 15 minutes late. In reality, as many as 40% of flights nationwide are late, a consequence of an outdated air-traffic-control system and carriers' squeezing everything they can out of a handful of very busy hubs. Being early, however, often just means that you get to wait on a taxiway for a departing jet to get clear of your gate. At least the chair's comfy.

American and US Airways have gone on the offensive against the Department of Justice, vowing to fight for their merger in court on the grounds that it is pro-consumer. The companies say the combined airline networks are complementary and would offer more choices to more destinations across a broader global network. For frequent flyers, there's also access to American's OneWorld alliance, a network of connections with foreign airlines. The financial stability of the merger would also ensure job stability, the two carriers say.  The DOJ argues that having a grand total of three legacy carriers will lead to higher fares, especially at dominant hubs. Said Assistant Attorney General Bill Baer: "Consumers will lose the benefit of head-to-head competition between US Airways and American on thousands of airline routes across the country--in cities big and small." In the meantime, the merger is frozen until after the trial, which may not start until next year.  Economic history tells us that consolidation in the airline industry--and in virtually any industry--leads to higher prices. But the previous mergers were necessary for the airlines to survive. The DOJ could negotiate an agreement in which the new American gives up slots at Reagan National or Charlotte, say, to foster more competition here and there. But a settlement would surely mean a reduction of service to the smaller markets now served by those airports.  That's the way it is in the airline industry these days. Whatever happens can hardly make things worse. Until it does.

http://content.time.com/time/magazine/article/0,9171,2150624,00.html

 

 

Centralia

Few Remain As 1962 Fire Still Burns in Coal Town

(By Michael Rubinkam, AOL News website, Feb 5, 2010)

 

Standing before the wreckage of his bulldozed home, John Lokitis Jr. felt sick to his stomach, certain that a terrible mistake had been made.  He'd fought for years to stay in the house. It was one of the few left standing in the moonscape of Centralia, Pennsylvania, a once-proud coal town whose population fled an underground mine fire that began in 1962 and continues to burn to this day.  But the state had ordered Lokitis to vacate, leaving the fourth-generation Centralian little choice but to say goodbye -- to the house, and to what's left of the town he loved.  "I never had any desire to move," said Lokitis, 39. "It was my home."

After years of delay, state officials are now trying to complete the demolition of Centralia, a borough in the mountains of northeastern Pennsylvania that all but ceased to exist in the 1980s after the mine fire spread beneath homes and businesses, threatening residents with poisonous gases and dangerous sinkholes.  More than 1,000 people moved out, and 500 structures were razed under a $42 million federal relocation program.

But dozens of holdouts, Lokitis included, refused to go -- even after their houses were seized through eminent domain in the early 1990s. They said the fire posed little danger to their part of town, accused government officials and mining companies of a plot to grab the mineral rights and vowed to stay put. State and local officials had little stomach to oust the diehards, who squatted tax- and rent-free in houses they no longer owned.  Steve Fishman, attorney for the state Department of Community and Economic Development, said "benign neglect" on the part of state and local officials allowed the residents to stay for so long.

No more.  Fishman told The Associated Press that the state is moving as quickly as possible to take possession of the remaining homes and get them knocked down.  "Everyone agreed that we needed to move this along," he said.  In 2006, 16 properties were left standing. A year ago, the town was down to 11. Now there are five houses occupied with fewer than a dozen holdouts.  Centralia appears to be entering its final days.  The remaining holdouts, weary after decades of media scrutiny, rarely give interviews. But the town's 86-year-old mayor, Carl Womer, said he doubts he'll have to go. Indeed, Lokitis and others believe that elderly residents will be allowed to live out their final years in Centralia- even after a Columbia County judge decides next month how much they should be paid for their homes.  "Nothing's happened. We're still here," Womer said. His wife, Helen, who died in 2001, was an implacable foe of relocation. "No one's told us to move."

Like Womer, resident John Lokitis Sr., 68, father of Lokitis Jr., was polite but short. "Why worry about it? When it comes, it comes. I don't give a rat's ass," he said, shutting the door.  Those who remain in Centralia like to keep up appearances. In mid-January, Christmas decorations still adorned the street lamps, a large manger scene occupied a corner of the main intersection, and a 2010 calendar hung in the empty borough building. But the holdouts are fighting a losing battle. The building's wooden facade is in dire need of a paint job; in the Odd Fellows Cemetery, vandals recently knocked over dozens of tombstones. Nature has reclaimed parts of the town.

In reality, Centralia is already a memory -- an intact street grid with hardly anything on it. All the familiar places that define a town -- churches, businesses, schools, homes -- are long gone.  A hand-lettered sign tacked to a tree near Womer's home directs tourists to a rocky outcropping off the main street where opaque clouds of steam rise from the ground.  "It was a real community, and people loved the place," said author and journalist Dave DeKok, who has been writing about Centralia for 30 years and recently published "Fire Underground," an updated version of his 1986 book on the town. "People lived their entire lives in that town and would have been quite happy to get rid of the mine fire and keep on living there."  With swifter action, DeKok said, that might have been Centralia's destiny.

The fire began at the town dump and ignited an exposed coal vein. It could have been extinguished for thousands of dollars then, but a series of bureaucratic half-measures and a lack of funding allowed the fire to grow into a voracious monster -- feeding on millions of tons of slow-burning anthracite coal in the abandoned network of mines beneath the town.  At first, most Centralians ignored the fire. Some denied its existence, choosing to disregard the threat.

That changed in the 1970s, when carbon monoxide began entering homes and sickening people. The beginning of the end came in 1981, when a cave-in sucked a 12-year-old boy into a hot, gaseous void, nearly killing him. The town divided into two warring camps, one in favor of relocation and one opposed.  Finally, in 1983, the federal government appropriated $42 million to acquire and demolish every building in Centralia. Nearly everyone participated in the voluntary buyouts; by 1990, Census figures showed only 63 people remaining.

Two years later, Gov. Robert Casey decided to shut the town, saying the fire had become too dangerous. The holdouts fought condemnation, blocking appraisers from entering their homes. The legal process eventually ground to a halt.  Until recently, Lokitis Jr., who works a civilian job with the state police in Harrisburg, had been one of Centralia's most vocal defenders, starring in a 2007 documentary on Centralia. He expressed hope that it could stage a comeback, claiming the fire had gone out or moved away.  State officials say the fire continues to burn uncontrolled and could for hundreds of years, until it runs out of fuel. One of their biggest concerns is the danger to tourists who often cluster around steam vents on unstable ground.

While Lokitis felt he was in no danger, he had little recourse than to move from his late grandfather's two-story row home on West Park Street when an order to vacate arrived, one of two such notices sent last year.  Now living a few miles away, he tacked a sign on the front porch of the old homestead. "REQUIESCAT IN PACE" -- rest in peace, it said. "SORRY POP."  He couldn't bear to watch the home get knocked down a few weeks before Christmas. But he couldn't stay away, either, going back after the wrecking crew had finished its work.  "It was part of my life for all 39 years, that house," he said. "It was difficult to leave it and difficult to see it demolished."  Difficult, too, to give up his dream of Centralia's rebirth.  "I'd always hoped the town would come back and be rebuilt," Lokitis said, "but I guess that's never going to happen."

Virginia's Crooked Road

Virginia's Crooked Road: A Warm Welcome to Mountain Music

(By Melanie D.G. Kaplan, Washington Post, October 4, 2009)

I arrive at the Marathon gas station in Stuart, Va., just above the North Carolina border, to find a man eating beans out of a can and a collection of animal heads peering down at an understocked convenience store. I am at my first stop on the Crooked Road: Virginia's Music Heritage Trail - a 250-mile path of music venues in the Blue Ridge and Appalachian regions of southwestern Virginia - and I don't see anything that resembles the jam session I expected.  But soon, a 70-year-old man named G.C., a third-generation musician from town, brings his guitar over to the picnic table outside the store. Then a fiddle shows up, followed by a banjo. One by one, gray-haired men climb out of pickup trucks with their instruments and amble over to the patio, home of the Thursday night State Line Grocery Jam Session. And by the time I leave, two hours later, I've fallen under the spell of mountain music.

It's not the first time. Last year, I joined a friend for my first bluegrass concerts in Washington and was drawn to the music so suddenly that I had barely learned which instrument was the mandolin before I'd bought one. Now, after six months of lessons and calloused fingers, I am bravely, naively joining the Thursday night crew in a corner of Virginia where it seems that everyone plays a "git-tar" or fiddle, and plays it well.

"There's music everywhere here," says Joe Wilson, one of the architects of the Crooked Road, which was established in 2004 to support tourism and economic development in one of Appalachia's distressed areas. Wilson is a folklorist and the longtime director and current chairman of the National Council for the Traditional Arts. Earlier this month, he received a Living Legend award from the Library of Congress. "Americans don't know diddly about their music," he says. Traditional American mountain music came about when the African banjo and European fiddle met in Virginia, he explains. "Appalachian music has been the most accepting music -- whoever you are and wherever you are, you're welcome to play it. It's the sound; it has a joy to it. It's working-folk music."

It's also infectious. Even though I can't keep up with the State Line crew (I should have practiced a few years longer), I want to sit here all night, next to G.C., singing from his songbook, and the banjo player, simultaneously pickin', smokin' and drinkin' coffee. I am in the company of folks who make good music with less effort than they make simple conversation. For them, it's just another Thursday evening, doing what they do. But for me, it's the beginning of a whirlwind trip exploring 188 miles of the Crooked Road and listening to some mighty fine tunes.

The Crooked Road mostly follows Route 58, the longest roadway in the state; this part of it is a two-lane mountain route that passes idyllic farms, moseying cows, sparkling rivers. The trail covers 10 counties, three cities and 19 towns, including Floyd, Galax, Damascus, Abingdon and Bristol along the North Carolina and Tennessee borders, then Norton and Clintwood bordering Kentucky. In every spot, nearly every day of the week, you're bound to find a concert, a festival, a square dance or a jam. Take it slow, and keep both hands on the wheel. The route looks like an intestine on my GPS device, and, as a local says, "The roads are so curvy, you can almost see your taillights 'round the bends." As I leave the jam Thursday night, after 9, G.C. gives me a stern warning about deer on my hour-long mountain drive to a B&B in Floyd. "They'll jump outta nowhere, right in front of your car," he says. "Be careful."

Friday night in Floyd (home to Floyd County's one stoplight), there's no question that I'm in the right spot for music. I show up early at the Floyd Country Store for the Friday Night Jamboree. The store, celebrating its centennial next year, sells everything from Carhartt overalls to sweet potato biscuit mix and still records sales in a steno notebook. The show is held in the back of the store, but when the weather's nice, pockets of music (and some nights, as many as 1,000 people) spill out onto the street. An hour before the first band, always gospel, I find seats saved, some with tap shoes.

Woody Crenshaw, the store's owner, welcomes everyone. "We have two gallons of blueberries picked in Floyd County this week, and we're making fresh blueberry milkshakes!" he announces. After gospel hour, another band takes the stage, and flat-foot dancing, which looks a lot like Irish dance, begins. The crowd is largely "down-home folk," old-time regulars who come every week. But there are also Floyd transplants who have moved here recently for the music and the farming, a handful of students from nearby Virginia Tech and visitors from as far away as Denver and Edinburgh, Scotland.

The next morning, one of Miracle Farm Bed and Breakfast's owners brings breakfast to my cottage door, featuring pears, rhubarb, cape gooseberries, tomatoes and eggs, all from the farm. I set off with my beagle and mandolin traveling west on Route 58, stopping at several towns along the way. My radio's tuned to WBRF (98.1 FM), which plays bluegrass and old country: Merle Haggard, the Stanley Brothers, George Jones. The DJ reads an advertisement for a chain-saw company.

The region boasts a high concentration of luthiers, or stringed-instrument makers. So I stop in Galax, home of the Old Fiddler's Convention, to see one of the best: Jimmy Edmunds. He learned the trade from his dad years ago and recently opened a shop in his wife's garden center. He shows me pieces of guitars in production and one he is making for Kenny Rogers's guitarist. He says he makes about 25 instruments a year and has 100 on order. I tell him where I'm headed, west into the mountains, and he says it's "a few hours and a couple brake pads" away.

That night, I take the Crooked Road past Bristol into the middle of nowhere, otherwise known as Hiltons, Va. It's home to Clinch Mountain and the Carter Family Fold, a large, rustic theater that hosts weekly acoustic-only concerts in the tradition of the original Carter family. At that evening's concert, which is dog-friendly, the concession stand sells dollar sodas and ham biscuits, and folks in the audience trade cowboy boots for dance shoes.

The bluegrass band is terrific, but I'm equally taken by everyone offstage and the friendliness one can encounter in the middle of nowhere. The ticket lady shows me pictures of her dogs, I chat with a few couples I'd seen in Floyd the night before, I get smiles from a little girl dancing with her grandfather, and a volunteer takes time to fill me in, at length, on Carter family history (and lets me sit in a rocking chair that belonged to Johnny Cash, who played his last concert here). Maybe the mountain air is clouding my senses, but I feel as if in no time at all I've been folded into the Crooked Road family. As I head back to my car and mandolin, I pass the volunteer. "It was nice talkin' to you," he says. "Now watch out for the deer."

Drive Time : 11 hours over 3 days; Cost:  $540 (Transportation: $95, lodging: $370, meals: $75)

Getting There:

The easternmost stop on the Crooked Road, Rocky Mount, Va., is about 270 miles from the Beltway. Take Interstate 66 west to I-81 south. Merge onto US-220 south at Exit 143. Follow 220 to Rocky Mount.

 
Where To Stay:

Miracle Farm Bed and Breakfast Spa & Resort, 179 Ida Rose Lane, Floyd, 540-789-2214, http://www.miraclefarmbnb.com. Full vegetarian breakfast with farm-grown ingredients brought to your door. Pet-friendly. Cottages with kitchenette start at $115.

New River Lodging, 307 Stockyard Rd., Galax, 276-236-4022, http://www.newrivertrailcabins.com. Adorable cabins (with names like Chance for Romance) stocked with jacuzzis, gas log fireplaces and gas grills. Rates start at $130 on weekends.

 

Where To Eat & Drink:

Over the Moon Gallery & Cafe, 227 N. Locust St., Floyd, 540-745-4366, http://www.harvestmoonfoods.com/gallery.htm. Wraps and sandwiches from $7.25. Live music Friday to Sunday.

Oddfella's Cantina, 110A N. Locust St., Floyd, 540-745-3463, http://www.oddfellascantina.com. Local and organic food, including "Appalachian Latino" tortilla wraps starting at $8. Live music most nights and some days. Reservations suggested on weekends.

Stringbean Coffee Shop & Shamrock Tea Room, 215 S. Main St., Galax, 276-236-0567, http://www.stringbeancoffeeshop.com. Good coffee and basics for cheap: $2 hot dog and $5.60 BLT. Jam sessions Tuesdays at 7 p.m., and live music Saturdays at 8 p.m.

Harvest Table Restaurant, Meadowview Town Square, Meadowview, 276-944-5142, http://www.meadowviewfarmersguild.com. Farm to fork at its finest. Lunch entrees start at $7; dinner $11.

 

What To Do:

State Line Grocery Jam Session, Patrick County, 276-694-6377, Session starts at 7 p.m.

Floyd Country Store, 206 S. Locust St., Floyd, 540-745-4563, http://www.floydcountrystore.com. Friday Night Jamboree features three bands, starting at 6:30 p.m., $4. Sunday Bluegrass/Mountain Music Jam at 2 p.m., free.

Blue Ridge Backroads Show, Live at the Rex Theater, 113 E. Grayson St., Galax, 276-238-8130, http://www.rextheatergalax.com. Fridays at 8 p.m., broadcast live on WBRF(98.1 FM). Admission is free, but donations are requested.

Leaf & String, 401 S. Main St., Galax, 276-236-7702, http://www.edmondsguitars.com, http://www.leafandstring.com. Visit luthier Jimmy Edmunds's workshop and wife Debbie's garden shop. Test instruments, and if you're lucky, catch an impromptu jam in the store.

Carter Family Fold, AP Carter Highway, Hiltons, 276-386-6054, http://www.carterfamilyfold.org. Family-oriented acoustic-only music shows (and Appalachian-style dancing) Saturdays at 7:30 p.m.

For More Information: http://www.crookedroad.org

 

New Law Threatens Amsterdam’s Cannabis Culture

Not that I ever went to Amsterdam for the pot, but this ruling seems like it will crush some of the tourism trade.  There are lots of good reasons to see the city anyway but the availability of the pot shops and sex trade always made the idea of Amsterdam more appealling somehow.  It's like you were being slightly more risque going there instead of, say, Switzerland.

New Law Threatens Amsterdam’s Cannabis Culture

(By Anthony Faiola, Washington Post, May 4, 2012)

Hendrix (Jimi) gazes down with bloodshot eyes from a portrait on the wall. Jagger (Mick, “Gimme Shelter”) groans on the sound system. And sitting joyous amid clouds of swirling smoke at the 420 Cafe is Savage (Jason, of Morgantown, W.Va.), a tourist who arrived a few days ago on one of his frequent trips to the Netherlands.  He does not come for the tulips.  Yet even as he eagerly anticipates his turn on a joint the size of Texas in his pal’s hand, this 38-year-old visitor is troubled. Word is spreading fast through the United Nations of Stoners: For foreign tourists — generations of whom were drawn to this city’s open cannabis culture — these could be the last days of Purple Haze (or Lemon Larry, White Widow, NY Diesel, Space Cake and any of the other earthy-spicy morsels on this city’s extensive marijuana menus).

Enforcement of a new law banning all but Dutch residents from pot “coffee shops” started in southern cities in the Netherlands, where drug-related organized crime became one of the main drivers of the new regulations. Roadside signs put up by authorities across the south now bluntly warn visitors, “New Rules, No Drugs,” with at least one cafe shut down by police for serving foreigners and several others closing voluntarily in protest of the tourist ban.  But for global Bohemia, what truly matters is the second phase of the plan: On Jan. 1, the ban is scheduled to go into effect across the rest of the country — the 250 cannabis cafes of Amsterdam included. Just like that, a thriving scene where aging hippies toke with the Occupy movement’s tweeting classes, where themed pot cafes seem to teleport you to Paris of the 1890s, Casablanca of the 1920s, Haight-Ashbury of the 1960s, could vanish in a puff of smoke.  “This is huge,” Savage moaned, head in hands. “I mean, how could they do this to us?”

 

From the macro perspective, the move could deal a blow to global efforts to legalize marijuana — a movement that through legal medicinal sales has been making steady gains in the United States, where even televangelist Pat Robertson has come out in favor of treating cannabis like alcohol in the eyes of the law. Now, opponents could seize on the rolling back of tolerance by even the accommodating Dutch as evidence that legalization might not work as well as advocates claim.  But for weed lovers of the world — a group for whom Amsterdam became a sort of rite of passage and a liberation from the confines of home — the personal loss could be incalculable.

“The coffee shops became extensions of your living room, a place where you find a 65-year-old Brazilian lawyer talking to a 20-year-old American backpacker, both relaxed and open because they’re smoking weed”, said Jonathan Foster, 40, a Rhode Island musician who in 1995 opened Grey Area, Amsterdam’s only American-owned cannabis cafe.  In his cramped space, Foster said he has helped the likes of Willie Nelson, Snoop Dogg and Woody Harrelson get high. “Nationalities mix, people bond. The idea that could go away is too much to imagine.”

 

A judge in The Hague ruled against a legal challenge to the ban last week, but cafe owners are appealing that decision. If their case fails, many owners say they will simply ignore the ban and hope Amsterdam city officials — who have publicly come out against it — will look the other way. They take stock in the fact that it took authorities 10 years before they truly began enforcing the official ban on alcohol and marijuana sales at the same establishments.  But with national authorities insisting on the ban, a cloud of another sort is suddenly hanging over Amsterdam.  Walk through the red-light district, where beckoning women in fishnets display themselves in dimly lit windows, pass the bigger cafes such as the Grasshopper and Homegrown Fantasy, and soon you come to the 420 Cafe, where you can always spot the first-timers. Fresh-faced young things bravely walk through the door. Bravery quickly fades. Is this really, like, legal? But eyes light up at the menu. Dude, no way. They’ve even got hash.

Bongs, papers and vaporizers (the “Rolls-Royce of toking”) are free with purchase, along with a dense atmosphere rich in THC (tetrahydrocannabinol). In one little corner, deep conversations (at least they seemed so at the time) are going on in English, Turkish, Spanish, French and Hindi. At the register stands Steven Pratt, 420’s budtender and sommelier of Amsterdam weeds, many of which are grown in the Netherlands and discussed with the same academic passion as wines in France.  The new policy would see cannabis cafes become members-only clubs, with “pot passes” to enter issued only to registered Dutch citizens and resident foreigners. But the idea of registration ­directly clashes with the notion of liberation being peddled at cafes, and many owners and Dutch clients insist they will simply refuse to comply.

Technically, buying pot and hash in the Netherlands has always been illegal, but since 1976 a sort of “don’t ask, don’t tell” policy arose over possession of less than five grams. By the 1990s, pot coffee shops or “cannabis cafes” were issued “toleration licenses,” effectively allowing them to sell small quantities of soft drugs as long as they didn’t also sell alcohol. The opaque procurement of large stocks by cafe owners clearly violates Dutch law, but authorities simply look the other way. 

 

Statistics show the rate of marijuana use in the Netherlands is actually lower than in the United States or Britain. The pushback against drug tourism came as a result of a rise in organized crime. Opponents say the Netherlands has become the wholesale supplier for illicit sales across Europe. In 2010 in the southern town of Helmond, for instance, a cannabis cafe was attacked with hand grenades, and the mayor and his family were forced into hiding after being threatened by suspected drug runners.

In recent years, Rotterdam and other cities have sought to curb cannabis cafes, with the current nationwide total of 650 about half the peak numbers in the 1990s. Nearly one-third of those are packed block to block along the pot-scented streets of central Amsterdam, where tourists account for up to 90 percent of the cliental at some establishments.  If the new law is rigorously applied here, cafe owners insist it will simply mark a return to the days of unsafe street-corner deals.  “You might hurt tourism and the cafes, but a few new guidelines are not going to stop people from buying weed in Amsterdam, trust me,” said Michael Veling, 56, owner of the 420 Cafe.

http://www.washingtonpost.com/world/europe/new-law-threatens-amsterdams-cannabis-culture/2012/05/03/gIQAvQ570T_story.html