Six fundamentally strong value stocks in the technology-laden Nasdaq index to invest in, amid the racing market.
Gordon Bethune isn’t backing down. Which shouldn’t surprise anyone. In a recent interview at the Asian Cultural Center in New York the iconoclastic former CEO of Continental Airlines clarified a remark he made about Dr. Dao, the passenger who was dragged off a United flight back in April. Immediately after the incident Bethune had called the passenger, “immature.”
The way United Continental Airlines treated Dr. David Dao is disgraceful... but the scandal is unlikely to make a long-term dent in United stock.
At a time when you would think the airlines would be a little more image conscious, you know because of that whole beating customers and dragging them off the plane thing that United did, they're apparently doubling down on efforts to make "Flying The Friendly Skies" the most miserable experience ever. After years of finding new ways to charge for 'perks' that used to be standard (want to use our aisle to access your seat...that'll be a $10 fee, please), according to the Wall Street Journal, airlines are getting ready to implement a whole new set of restrictions on their poorest customers. So, for those of you who have grown accustomed to lavish perks like free overhead bin space, get ready for your new reality. Battling it out with discount carriers, the world’s biggest airlines are rolling out ultracheap economy-class tickets, or cutting back sharply on basic amenities for their lowest-paying customers. At the same time, they are pulling out the stops to lavish their premium fliers with more perks. American, United Continental, and Delta all now offer super-low fares, dubbed “basic economy,” that strip out even once-standard allowances, such as carry-on baggage or a choice of seat before boarding. Those are now extra for these ticket holders, who also generally board last. But the fares are competitive with discount airlines such as Southwest Airlines Co. A United basic economy ticket between Washington and Minneapolis for travel in early May was recently listed as low as $128, $20 less than a regular economy fare. Some of the cheapest fares passengers can get on discount carriers are for seats so basic they don’t recline even an inch. “When we look at economy, we are looking at a commodity product, without a doubt,” BA Chief Executive Officer Alex Cruz said in November. But, while while flying in the back of the plane is starting to feel a bit more like a cattle stampede than a pleasurable prelude to a vacation, flying in the front of the plane is about to get even more luxurious, including everything from fully-reclining seats to comforters from Saks Fifth Avenue...because a regular blanket just won't work for some folks. But at the front of the plane, the same carriers are showering premium passengers with ever more comfort. Middle East and Asian airlines are among those leading the way, with U.S. carriers trying to catch up. American Airlines has upgraded its business class. Delta last year unveiled plans for business-class suites, effectively small cabins that can be closed off from others, with fully reclining seats. The suites should feature on planes this year. United on intercontinental routes is introducing an upgraded business class, called United Polaris, to try to keep pace with its nearest rivals. The cabin sports fully reclining seats, bedding by Saks Fifth Avenue and noise-canceling headsets. United is rolling it out on its San Francisco-Hong Kong route. A round-trip ticket for a May flight lists at about $5,000. British Airways, meanwhile, is spending about $500 million to upgrade its premium classes. BA, which popularized the fully reclining business-class seat in the mid-1990s, is planning a new business-class seat design. So while the 'millionaire, billionaire, private jet owners' are sleeping in first class... ...we wish you main streeters the best of luck maintaining your sanity in 'last class.'
In a letter to employees, United CEO Oscar Munoz said he was "upset to see and hear about what happened," but defended his staff's actions because the passenger had been "disruptive and belligerent." It seems not acquiescing to a computer's decision to select you for 'reaccomodation' is "disruptive" and warrants violence? As The BBC reports, Mr Munoz has faced criticism on social media for his response to the incident. He told staff in the private email that he was "upset to see and hear about what happened" but defended United employees. "Our employees followed established procedures for dealing with situations like this," the Associated Press quoted the email as saying. "While I deeply regret this situation arose, I also emphatically stand behind all of you, and I want to commend you for continuing to go above and beyond to ensure we fly right." Mr Munoz wrote that the passenger refused to voluntarily leave the plane, with staff "left with no choice but to call Chicago Aviation Security Officers to assist in removing the customer from the flight". Jayse D Anspach, who posted footage that went viral, tweeted: "#United overbooked and wanted four of us to volunteer to give up our seats for personnel that needed to be at work the next day." "No one volunteered, so United decided to choose for us. They chose an Asian doctor and his wife." "The doctor needed to work at the hospital the next day, so he refused to volunteer," Mr Anspach added. "Ten minutes later, the doctor runs back into the plane with a bloody face, clings to a post in the back, chanting, "I need to go home." A video that appears to show the man back on the plane, dazed and with blood around his mouth, saying "just kill me", has also emerged online. One of the three security officers involved has been "placed on leave", the Chicago Department of Aviation said, and his actions were "obviously not condoned by the Department". The department also said it would carry out a review into the incident, which it said was "not in accordance with our standard operating procedure". United said it was trying to talk to the passenger directly in order to "further address and resolve this situation". So what went wrong? It appears to have been a series of errors. A group of flight crew needed to be in Louisville, properly rested, in order to operate the next morning's plane. Had they not been able to get there, then many more passengers would have had their plans messed up. The big mistake the airline made was allowing all the fare-paying passengers on board, and then trying to entice enough people off. It would have been far better to conduct the auction at the gate; physically preventing someone boarding is less harmful than dragging them kicking and screaming from their seat. Many in China felt the man's removal was simply discrimination, posting he was only chosen to be removed from the flight because he is Chinese. We can only imagine the uproar if this passenger was a muslim or an african-american. Finally, we leave it to The Mises Institute's Ryan McMaken, who explains United's violence perfectly illustrates the problem with government monopolies... United Airlines managed to provoke a firestorm of opposition over the weekend when the airline overbooked one of its flights and resorted to removing at least one passenger by smashing his face and physically dragging him off the plane. At least two other passengers filmed the altercation between the non-violent passenger and the law enforcement officers — it's unclear if they were private security agents or government police officers. In response, the airline issued a creepily Orwellian "apology" for "re-accommodating" the passenger who had been selected "by computer" to make room for some airline staffers. The response over social media has been swift with countless posters on Twitter vowing to boycott the airline. My purpose here, however, is not to dissect what United should have done differently or how they can better manage space on the airplane — which should be regarded as private property. It should be obvious that on a philosophical and moral level, United is entitled to remove anyone it wishes from its airplanes for any reason it pleases — provided the airline properly compensates all affected customers. However, the fact remains that few passengers would like to be treated the way United treated its passengers in this case, and the airline must be prepared to deal with the consequences of what anyone can see is amateurish management of an airline. It is in these consequences that we see the difference between a private competitive firm like United, and a monopolistic entity like a government. The Difference Between Private Firms and Government Agencies When United beats someone up for no good reason and throws him off a plane, both the victim and those who sympathize with him have immediate recourse to a solution: they can elect to never fly on United Airlines again. They can also attempt to convince others to never fly United either. Such reactions are perfectly peaceful, moral, and perhaps even prudent. After all, if one wishes to reach one's destination in a timely fashion, one might wish to avoid United, which it turns out, is the second-worst in the nation for bumping its passengers from flights. And, of course, if you're tired and grumpy and really want to just remain seated in a seat you already paid for, you might also not want to have your face thrown into an armrest by the airline's "security" personnel. But the important fact here is that in most cases, passengers have the option and the choice of avoiding United Airlines and electing to fly on other airlines. Yes, it's true that using other airlines might mean fewer non-stop flights or flights to less-convenient locations. After all, goods and services are not homogeneous even if we do casually refer to airline flights as if they were more or less interchangeable. But, the fact remains that for many people a call to "boycott United" is something that can actually be achieved without requiring that one drastically alter his or her daily life. Things are much different, however, when we start talking about governments. When a government agency beats someone up — or treats people in a way that most people regard as unjust or despicable — there is usually no recourse. Thanks to the state's extensive monopoly power, one cannot simply say "boycott the Federal government" and select alternative services instead. One cannot decline to pay for a monopolistic government's "services" whether they be road building, welfare programs, "security," or publicly funded universities. Any refusal to pay will be met with overwhelming force, fines, and possibly imprisonment. Moreover, thanks to the sheer size, scope, and power of the US government specifically, the only way to avoid these mandatory "fees" is to completely uproot one's entire life, moving 1,000 miles away (in many cases), and possibly never seeing one's friends and family ever again. And even then, you may not be able to escape US power. This of course, illustrates the absurdity of the "love it or leave it" mantra that jingoists often rely on to claim that anyone who doesn't like the US should simply avail himself of other "options." These alleged options are not really options at all when they most likely require one to give up his career, his family life, and many of his assets. Monopoly Power Invites Abuse of Power And perhaps worst of all is the fact that the government knows it has monopoly power and acts accordingly. As with any monopolistic firm, a state can get away with offering lower-quality service at higher prices. After all, if one has to pay for services "or else" why strive to offer high-quality services? Why keep costs low? On the other hand, if it were easier to refuse payments, refuse services, or easily relocate to an area controlled by another state "firm," then the situation would be quite different. Indeed, we do find that it is different for smaller states that are in fact more competitive and must act in ways that attract new investors and new residents. It has been demonstrated that small states tend to be wealthier than large states — and this may be due to the fact that small states tend to be more sensitive to those who wish to avoid it or leave it. As Peter St. Onge has noted: [A]ccording to numbers from the World Bank Development Indicators, among the 45 sovereign countries in Europe, small countries are nearly twice as wealthy as large countries. The gap between biggest-10 and smallest-10 ranges between 84 percent (for all of Europe) to 79 percent (for only Western Europe). This is a huge difference: To put it in perspective, even a 79 percent change in wealth is about the gap between Russia and Denmark. That’s massive considering the historical and cultural similarities especially within Western Europe. Even among linguistic siblings the differences are stark: Germany is poorer than the small German-speaking states (Switzerland, Austria, Luxembourg, and Liechtenstein), France is poorer than the small French-speaking states (Belgium, Andorra, Luxembourg, and Switzerland again and, of course, Monaco). Even Ireland, for centuries ravaged by the warmongering English, is today richer than their former masters in the United Kingdom, a country fifteen times larger. Why would this be? There are two reasons. First, smaller countries are often more responsive to their people. The smaller the country the stronger the policy feedback loop. Meaning truly awful ideas tend to get corrected earlier. Had Mao Tse Tung been working with an apartment complex instead of a country of nearly a billion-people, his wacky ideas wouldn’t have killed millions. Larger states can afford to raise the cost of emigration and avoidance for existing "customers" and for potential ones. That is, larger states are simply more monopolistic than smaller ones. When there is meaningful competition, people really do have options. They can avoid the firm they view as abusive and reward the abusive firms' competitors. This isn't to say that abuses within private firms will never exist. Even when firms are subject to stiff competition, there is no way to completely avoid human stupidity, incompetence, and criminality. What consumers need, however, is a way to escape these problems when necessary. In the modern political debate, we're told that exit and choice are not acceptable, and that we have democracy instead. That everyone should patiently wait for "reform" and have faith in "the system." This, of course, is the equivalent of mandating that all current customers of United Airlines remain the airline's customers forever — no matter how inept the airline becomes or how much it abuses its customers. If United's customers don't like it — by this way of thinking — they should seek "reform" from within and remain "loyal" no matter how many times the airline forces its customers to miss flights or be assaulted in their seats. Such a view is absurd when talking about an airline, and it should be regarded as equally absurd when applied to a government.
Update: as of 9:30pm ET, Delta said in an advisory that the ground stop has been lifted. * * * One week after United Continental was forced to ground its flights for nearly three hours due to a computer failure, on Sunday around 7pm Eastern, Delta Air Lines - the second-largest US airline - halted all U.S. flights because of another technology glitch. Can confirm. Stuck on the tarmac at MSP ???? https://t.co/xSOvNIql6U — Thrifty Traveler (@thriftytraveler) January 30, 2017 Still no real info from @delta as we are counting down over two hours since the screeching ground halt. #infosec pic.twitter.com/JOzvIw8tu8 — Michael J Daugherty (@DaughertyMJ) January 30, 2017 #BREAKINGNEWS #Delta update. Ground stop in effect until at least 8:30p EST Captain added this could be an extensive #deltaoutage pic.twitter.com/G94a4uKrcK — Craig Lucie (@CraigLucie) January 30, 2017 "Our systems are down," Delta tweeted, adding "the IT department is working to rectify the situation as soon as possible," said Atlanta-based Delta. Delta teams are working to fix a systems outage that has resulted in departure delays. Flights in the air remain unaffected. — Delta (@Delta) January 30, 2017 Delta apologizes to customers for the inconvenience and will provide updates as they become available on https://t.co/QS4ugj8hOa. — Delta (@Delta) January 30, 2017 The company's international flights are exempt from the grounding, which was caused by “automation issues,” the Federal Aviation Administration said in a statement. The second consecutive froced grounding at Delta struck as airlines struggled to comply with new travel restrictions following President Trump’s executive order blocking travelers from seven predominantly Muslim nations. As Bloomberg adds, last year, a rash of computer failures disrupted flight operations at U.S. airlines. Thousands of passengers were stranded as carriers struggled to keep older information systems working. Delta took a $100 million hit to sales after a power-control module at the company’s Atlanta command center caught fire in August, cutting power to computers. Southwest Airlines Co. had to halt flights the month before that because of issues with “multiple technology systems.” Ground stops, as the FAA calls them, are relatively common reactions to thunderstorms and other disruptions in the U.S. aviation system. They are typically short-lived and narrowly drawn, such as halting departures to a congested airport for an hour or two. Nearly two hours after the FAA first notified about the ground halt, Delta still has to resolve the system outage.