ImaginativePRO Blog

KAYAK PUTS IPO ON HOLD DUE TO POOR MARKET CONDITIONS, REPORTS Q3 2011 REVENUE AND EARNINGS, THINGS LOOKING GOOD

As AllThingsD reported in September, travel search engine Kayak has put its IPO on hold until market conditions improve. Kayak filed its S-1 for a public offering nearly a year ago. Today, the company just filed a new S-1 with its revenue numbers from the third quarter ended September 30, 2011.

During the most recent quarter, Kayak posted $61.16 million in revenue, up 28 percent from the same quarter in 2010. The company also increased revenue slightly from the second quarter 2011, which came in at $56.7 million.

Net income for the third quarter 2011 was $12.7 million, up 44 percent from the same quarter in 2010, in which net income was $8.7 million. Profits were up from $5.7 million in the second quarter of 2011.

In the nine months ended September 30, 2011, Kayak processed 679 million user queries for travel information, which is up 45% over the nine months ended September 30, 2010.

It’s a good sign for Kayak that revenues and profits are increasing both yearly and quarter over quarter considering the intense competition the site faces in the online travel space. Google just launched its flight bookings and search portal, which is powered by the recent acquisition of ITA Software.

Of course, it’s important to note that in the filing itself Kayak says that the most ‘significant portion’ of its revenues is earned in the second and third quarters, with revenue declining in the fourth quarter.

These positive numbers could bode well for Kayak’s pending IPO. With Yelp, ExactTarget, Zyngaand perhaps even Facebook in the mix, the IPO market for tech companies hasn’t dried up.

COMMENTARY:   Kayak is one of the first IPO startups that I can say without any qualification know what they are doing.  They have experienced consistent revenue and profitability growth for the last five years ending December 31, 2010 and nine months period ending September 30, 2011.

Kayak does have potential exposure with Google, which acquired ITA, the airline reservation service in April 2011.  That acquisition has been approved by regulators and has now become finanalized.  This is what their S-1 (Amendment No 8) says about Google:

On April 8, 2011, Google, Inc., or Google, entered into a consent decree agreeing to conditions on Google’s acquisition of ITA, and Google subsequently completed its acquisition of ITA. The consent decree stated Google’s intent to offer an online travel search product and Google has recently launched hotel and flight search tools and services that directly compete with the tools and services we offer. Google’s flight search offering appears to include significantly increased speed on return of search results and, in the future, may include other enhancements or improvements in performance of the ITA software which may not be made available to us. Although the consent decree will provide us with the right to renew our existing ITA agreement on the same terms for up to five years from the date the court approves the decree, if ITA or Google limit our access to the ITA software or any improvements to the software, separately develop replacement software to which they claim we are not entitled or increase the price we pay for any improvements or replacement software and we are unable to replace ITA’s software with a comparable technology, we may be unable to operate our business effectively and our financial performance may suffer. 

Kayak claims that their top ten travel suppliers and OTAs accounted for approximately 62% of their total revenues. In particular, for the nine months ended September 30, 2011, two customers accounted for 37% of their total revenues:

• Expedia and its affiliates, including its Hotels.com and Hotwire subsidiaries, accounted for 25% of their total revenues. 
• Orbitz and its affiliates, including its CheapTickets, HotelClub and ebookers subsidiaries, accounted for 12% of their total revenues. 

If Kayak's relationship with any of their top travel suppliers or OTAs were to end or otherwise be materially reduced, their revenues and operating results could experience a significant decline.

Business Overview

Kayak is a technology-driven company committed to improving online travel. Co-founders of Expedia, Travelocity and Orbitz started KAYAK in 2004 to take a better approach to online travel. Kayak's websites and mobile applications enable people to easily research and compare accurate and relevant information, including pricing and availability, in one comprehensive, fast and intuitive display.  Kayak's software gathers information from multiple sources, including third party providers, travel suppliers and OTAs, and allows users to compare travel information from hundreds of websites.  Kayak requests information from their data sources based on a user’s travel criteria, and displays query results with the broadest set of websites that are relevant to the users travel criteria.  Once users find their desired flight, hotel or other travel product, Kayak sends them to their preferred travel supplier or OTA website to complete their purchase, and in many cases, users may now complete hotel bookings directly through Kayak's websites and mobile applications. Kayak also provides travel management tools and services such as flight status updates, pricing alerts and itinerary management.

Revenue Model

Kayak’s services are free for travelers.  Kayak earns distribution revenues by sending referrals to travel suppliers and OTAs and by facilitating bookings through their websites and mobile applications, and they earn advertising revenues from advertising placements on its websites and mobile applications.  On the distribution side, travel suppliers and OTAs either pay Kayak at the time of referral on a set cost per click, or CPC, basis or after a user completes a transaction on a supplier or OTA website or through the Kayak booking feature on a fixed cost per acquisition, or CPA, basis or as a percentage of the transaction value.

Advertising revenues primarily come from payments for text-based sponsored links, display advertisements and compare units.   A “compare unit” is an advertising placement that, if selected by a Kayak user, launches the advertiser’s website and initiates a query based on the same travel parameters provided on the Kayak website. The major types of advertisers on its websites consist of OTAs, third party sponsored link providers, hotels, airlines and vacation package providers. Generally, their advertisers pay them on a CPC basis, which means advertisers pay them only when someone clicks on one of their advertisements, or on a cost per thousand impression basis, or CPM. Paying on a CPM basis means that advertisers pays them based on the number of times their advertisements appear on its websites.  Kayak believes that offering advertisers the ability to pay on a CPC or CPM basis provides advertisers the ability to choose the method of payment that best suits their needs and ultimately results in more advertisers choosing to advertise with us.

Kayak generates a significant portion of its revenues from a few large customers. Expedia and its affiliated brands, including Hotels.com and Hotwire, together accounted for 24.9% of its total revenues for the nine months ended September 30, 2011.  Kayak has separate contracts with respect to Expedia and each of its affiliated brands, each of which have varying terms and expiration dates. Orbitz accounted for 12.4% of total revenues for the nine months ended September 30, 2011.  Kayak contract with Orbitz expires on December 31, 2013.

Revenue Growth

Kayak's revenue for the nine months ended September 30, 2011 was $170.6 million, a 33.0% increase over the first nine months of 2010 and its revenue for the year ended December 31, 2010 was $170.7 million, a 51.5% increase over 2009. This increase in revenue is primarily due to increased travel queries on its websites and mobile applications, which increased 44.7% and 38.3% for the first nine months of 2011 and the full year 2010, respectively, over the comparable periods in 2010 and 2009.  Kayak believes that traffic and queries on its websites and mobile applications will continue to increase in 2011 and 2012 as more people learn about its websites and our brand.

Key Operating Metrics

Kayak's operating results are affected by certain key operating metrics. These metrics help them to predict financial results and evaluate our business. These metrics consist of queries and revenue per thousand queries.

• Number of Queries - Queries refer to user queries for travel information we process through our websites and mobile applications.  Kayak counts a separate query each time a user requests travel information through one of it websites or mobile applications. Therefore, a user visit to one of its websites may result in no queries being counted, or in multiple queries being counted, depending on the activity of the user during that visit. On average, approximately 1.1 queries have historically been conducted during a typical user visit to our websites.
• Revenue Per Thousand Queries - Kayak uses revenue per thousand queries, or RPM, to measure how effectively they convert user queries to revenues. RPM is calculated as total revenues divided by total thousand queries.

Kayak uses query metrics to understand historical revenue performance, and to help in forecasting future revenues. In particular, RPM is a key operating statistic that they use in their analysis of past performance and in connection with our evaluation of potential changes to their business model and operating activities.

Revenues for the nine months ended September 30, 2011 increased $42.3 million over the same period in 2010 primarily due to a 44.7% increase in query volume.  Kayak attributes the increase in query volume to a variety of factors including its investment in marketing activities, the acquisition of swoodoo in May 2010 and checkfelix.com in April 2011, and its partnership with Bing Travel which began in March 2011. The increase in query volume was partially offset by a reduction in RPM due to an increase in mobile queries, for which we earn revenue at a lower rate. Mobile queries were 13.2% of total queries in the first nine months of 2011, as compared to 7.0% in the same period in 2010.

Revenues, Queries and RPM - Nine Months Ending September 30, 2010 and 2011

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Revenues, Queries and RPM - Years Ending December 30, 2008, 2009 and 2010

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Shareholders of 5% or More of Total Shares Outstanding

 

Fimancial Statements

Income Statement

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Balance Sheet

Althought they do have a lot of their "eggs in one basket" with ITA, and their top ten accounts represent 62% of their revenues, I like Kayak's IPO.  They have developed a very successful and predictable revenue model and their key operating metrics with the exception of revenue per query are experienced continued growth.  

Kayak will use the proceeds from the IPO for working capital and execute their growth initiatives, especially their international expansion.  Kayak is only now just starting to expand internationally, and recently opened an office in Zurich, Switzerland, and if the exchange rate for the EURO should continue to drop versus the dollar, this will help their revenues, making travel to Europe cheaper.

Kayak's management team is very experienced and are executing their business plan very well, and that experience is reflected in their consistent trackrecord of revenue and earnings growth.

Kayak has not announced their IPO stock price per share, but they have done internal computations and the price will probably range somewhere between $20 and $25 per share.

Courtesy of an article dated November 23, 2011 appearing in TechCrunch

 

THE AIRLINES GET TOUGH WITH PARENTS WITH VERY YOUNG CHILDREN, AND SOME GREAT TIPS FOR PARENTS FLYING WITH THEIR KIDS

Babies on airplanes. It's enough to make parents—and all the passengers around them—cry.

Parents are complaining of airline seating policies that create "baby ghettos" in the back of planes. Even worse, families are increasingly split up, leaving small children in middle seats in the company of strangers unless passengers arrange seat swaps on board.

Michael Lyon booked seats together for his family for a trip from Washington, D.C., to Bangkok on United Airlines in July and checked his reservation frequently to make sure the seat assignments didn't change. But when he checked in, all three had been split up, and his 6-year-old son was moved to the back of the wide-body plane by himself for the 13-hour trip.

 

Most airlines are now seating parents with babies in the back of the plane. Quietly, airlines are blocking babies from bulkhead seats and in one case, first class. Leslie Yazel has details on Lunch Break.

A United gate agent told Mr. Lyon there were no seats and nothing could be done. He protested, ultimately getting a supervisor who found two seats together so he could sit with his son. Mr. Lyon said.

"Not only did the United gate staff not seem to understand the importance of having him next to us, they were hostile."

Even during peak holiday travel periods, adults, of course, outnumber children on planes, and airlines have to balance the needs of parents with other passengers whose nightmare is a long, crowded flight next to a noisy child.

The Parent Trap - Many airlines are changing rules that often requires parents with young children to sit in the rear of the plane, or even worse, separating the children from their parents, and having their children sit alone in the rear of the plan next to a total stranger. 

Several factors are at play.

• Many seats on flights are reserved for elite-level frequent fliers or full-fare business travelers. Routinely full flights have less seat-assignment flexibility. 
• Airlines are increasingly selling choice seat assignments for extra fees, an expensive option for families. 
• Bulkhead rows at the front of coach cabins that used to be ideal for traveling with infants, offering more privacy for diaper changes and more space for restless toddlers, now have to be reserved for passengers with disabilities. 

As a result, families often end up separated or at the back of the plane.

In Mr. Lyon's case, United says its systems are set up to keep groups together, but his seat assignments may have been altered because of a change in aircraft for his trip. After he complained, including sending United the names of passengers who witnessed the confrontation, the airline said it conducted an investigation and apologized to him.

Baltimore mom Teresa Toth-Fejel flies AirTran occasionally and has been told by airline agents that if she wants seats together with her kids—ages 1, 2 and 6—she should pay extra for reserved seat assignments. She sets alarms for 24 hours before departure to check-in online.  She said.

"I'm so freakishly worried about it." 

When that doesn't work, she has been able to take the free seat assignments in different rows and trade with willing fellow passengers—who likely don't want to be caring for a toddler on their own.

She said.  

"I feel like it's discrimination against families. For us, it is not an option to not be by my 2-year-old."

Summer Smith Hull, who blogs about frequent-flier miles for families, checks over and over for seat assignments if she doesn't get them right away, grabbing seats that open up when travelers cancel or get upgraded to first class. She said.  

"The No. 1 way you set yourself up for trouble is if you go to the airport without seat assignments."

A recent flight didn't have seat assignments, so she kept calling the airline until she finally got seats.

 

Traveling with kids can be a challenge especially when you're flying to your destination! Parents TV Host Juli Auclair shares some of her packing and traveling secrets as she heads out on a family vacation.

Adding to the complexity: Several airlines, including American and United, don't let travelers add children flying free on a parent's lap to reservations online. Instead, they must call the airline or get an airport agent to add a lap child to their reservation. Southwest Airlines requires taking a lap child to a ticket counter with a birth certificate on the day of travel to verify the child is younger than 2 years old.

KLM Airlines offers baby bassinets for parents flying with their babies

The plane's configuration can also affect placement. On smaller regional jets, for example, some rows don't have an extra oxygen mask to be used on an infant traveling on an adult's lap. That means someone who reserved a seat and has a lap child must be relocated, splitting up a family. (SeatGuru.com has information about location of oxygen masks.)

For their part, airlines say they try to keep families seated together, encourage gate agents to rearrange seating to accommodate families and still provide some kid-friendly amenities. While microwave ovens have been removed from many planes since airlines no longer serve hot food, carriers say flight attendants still warm bottles with hot water. Wide-body jets still have diaper-changing areas.

American recently installed new software that attempts to seat together families with children 12 years and younger who don't have seat assignments 72 hours before departure, significantly ahead of most other customers.

Other carriers suggest families should pay for seat assignments to make sure they stay together since it's harder to get seat assignments in advance, free of charge. US Airways has no restrictions on families reserving seats in advance, but a spokesman said.  

"We do encourage families to take advantage of Choice seats to ensure seating together."

Overall increased stress of travel due to luggage charges and security procedures has made travelers less tolerant of kids, some parents say.

"Sometimes other passengers are willing to help you out. But others look at you like you are the devil for bringing a child on an airplane," said Alecia Hoobing, who works for a technology company from her home in Boise, Idaho. The evil eyes are more acute when families upgrade to first class, she and Ms. Hull agree. Malaysia Airlines decided this year to ban babies from first-class cabins of its Boeing 747 jets and next year in its new Airbus A380 super-jumbos because of passenger complaints of crying children in the expensive seats.

Ms. Hoobing thinks the hardest part of travel with kids is boarding. Airlines typically no longer let families with small children board first on flights. Instead, they often come after first class and top-tier frequent fliers. Kids and parents—lugging car seats, diaper bags, videogames and toys—clog the aisles and delay general boarding. Though airlines provide leniency, such as exempting diaper bags for carry-on bag limits and waiving checked-baggage fees for car seats and strollers, they have tightened restrictions.

On June 1, for example, American stopped letting parents check jogging strollers, non-collapsible strollers or strollers heavier than 20 pounds at the gate. United already bans gate-checking strollers that don't collapse.

COMMENTARY:    My greatest fear has always been long distance flights and sitting next to a family with very young children.  Babies cry all the time, and if you sit near the aisle, you have to move all the time, so the parents can take their children to the restroom for diaper changing.  I don't mind it as much on very short airline flights.  Don't get me wrong, I went through the parenting phase myself, but as parents we decided not to fly with our young children.  Parents need to understand and take into account the needs of fellow passengers.  We guard our privacy and look forward to an enjoyable and comfortable flight.  

Some airlines have a lower tolerance for parents with babies and toddlers.  So, if you are a parent with very small children, and plan on taking with you onboard a plane, check these websites: 

• MomAboard.com may provide invaluable information before making your airline reservations.
• HOW TO: Fly Cross-Country With Small Children (Without Benadryl).
• TakingTheKids.com provides all kinds of information for parents traveling with their children.
• KidsFlySafe.com offers the Child Aviation Restraint System, the only harness type child aviation safety restraint  ever certified for airplane travel by the Federal Aviation Administration (FAA).
• BabyOnBoard explains Southwest Airlines special rules for parents flying with infants and toddlers.
• Flying With Kids - Best Flying Tips For Parents is a blog that offers a wealth of information help to parents flying with very young children.
• Toddler Bassinets can be arranged if you are flying onboard British Airlines.
• BestFamilyTravelAdvice.com offers excellent advice if you are flying with a baby or young toddlers, especiallhy on international flights.
• TheMomCrowd.com offers an excellent article titled "Flying With A Baby," which may prove very helpful.

I hope the above links prove helpful for parents with babies and young children traveling with their children on airlines.

Courtesy of an article dated November 17, 2011 appearing in The Wall Street Journal

AIR NIPPON AIRLINES TAKES DELIVERY OF FIRST BOEING 787 DREAMLINER THREE YRS LATE, ANA FLIES MAIDEN FLIGHT FROM TOKYO TO HONG KONG

 

ABOARD THE BOEING 787 DREAMLINER – Boeing's much-ballyhooed but long-delayed 787 Dreamliner finally entered commercial service this week, flying paying passengers for the first time on an All Nippon Airways flight from Tokyo to Hong Kong on Wednesday.

 

ANA Airlines takes delivery and maiden flight of its first Boeing 787 Dreamliner

The ultramodern 787 is being hailed in the aviation industry for its technological innovations, including the carbon fiber construction that makes it the first jetliner not made of traditional aluminum and steel.But while the 787 is drawing acclaim from industry observers, how will it go over with ordinary passengers?

Boeing delivery ceremony of its first 787 Dreamliner to All Nippon Airlines

The Dreamliner — which Boeing designed with passenger comfort as a priority — drew nearly unanimous positive reviews from the roughly 240 passengers lucky enough to secure a seat on its inaugural flight.

Those passengers, however, might not be a good barometer for how the jet is received by the average traveler. Nearly all of them were on board because they enthusiastically sought it out.

 

Inside the International Long-Haul Flights Boeing 787 Dreamliner

Only 100 seats on the 264-seat jet were made available to the general public, and ANA received more than 25,000 applications for those. The other 140 on board were a mix of journalists, airline officials and other industry workers.

 

Inside the International Short-Haul Flights Boeing 787 Dreamliner

Also among those 140: six business-class fliers who bid for their seats on Flight 7871 via auction. One passenger — Gino Bertuccio of Miami — paid more than $33,000 via that auction to get his spot on the inaugural flight. He also flew on the inaugural flight of the Airbus A380 in 2007.

 

Inside the Boeing Special Domestic 787 Dreamliner

So will the glowing reviews of the 787 hold up as the Dreamliner's passenger counts soar and as more airlines begin to fly the jet — possibly in less customer-friendly configurations than Boeing had envisioned?

Henry Harteveldt, co-founder of San Francisco-based travel research firm Atmosphere Research Group says.

"I think the 787's benefits will be appreciated mostly by frequent travelers and aviation enthusiasts.  Passengers may have a better flight but may not know why, since some of these benefits are somewhat subtle."

ANA Airlines first Boeing 787 Dreamliner #JA801A ZA101

ANA's Boeing 787 Dreamliner cockpit interior

Among the potentially "subtle" passenger-experience upgrades that were put before fliers on the 787 inaugural:

Bigger windows. In what was hands-down the top new feature cited by passengers on the inaugural flight, the Boeing 787's windows are now the biggest of any commercial passenger airliner. Boeing says the 787's windows are 30% bigger than those on aBoeing 767. The windows also are now positioned closer to eye level for most passengers, meaning fewer strained necks from looking out the window.

 

The windows of the Boeing 787 Dreamliner will be 30% larger than those on the Boeing 767

Flight 787 passenger Stephanie Wood of Davie, Fla., when asked about her favorite feature on the 787 said. 

"The windows.  You really notice it and it makes the plane feel so bright and like you're not shut in."

Boeing 787 Dreamliner windows can be adjusted from clear to dark

Stephanie Wood who also joined the flight via the charity auction after she and her husband, Dean, successfully bid on a pair of business-class tickets. The couple would not divulge the price they paid.

In addition to the well-received larger size, the windows on the 787 do not have manual shades. Instead, they are darkened by a button control that can electronically dim the light partially or entirely

Storage bins. Boeing says they were designed to accommodate the wheeled roller bags that have become ubiquitous. The bins on ANA's 787 — which are about 30% bigger than on Boeing 777 aircraft — easily accommodated even large roller bags, though irregularly sized luggage could mean a less-than-optimal fit.

Boeing 787 Dreamliner overhead luggage storage bins are much deeper allowing storage of larger carry-ons

In addition to making it easier for customers to fit their bags into the bins, Boeing thinks that will help more flights take off on time, because — in theory — passengers won't need as long to hoist their bags into the overhead bins.

Cabin environment. Thanks to new technology on the Dreamliner, flights are pressured to the equivalent of 6,000 feet in elevation, lower than the 8,000-foot mark that's typical for commercial passenger aircraft. Boeing says that — coupled with the higher humidity levels possible on the 787 — should alleviate headaches, fatigue and reduce the general wear and tear travelers often feel from flying.

Protected lap space. Patrick Smith, an airline pilot and Salon.com columnist, wasn't on the inaugural flight but was intrigued by ANA's economy class seats.  She says.

"ANA's shell-style economy-class seats. They have double-wide armrests and recline by sliding forward, not by hinging backward, meaning you never impinge on the legroom of the person behind you, even in the full recline position."

ANA has selected fixed back shell seats increased the seat pitch to  34-inches from 31-incheswith a sliding headrest and footrest for its new economy cabin. Each seat will have a 10.6-inch LCD touch screen, universal power port, iPod connector, USB port and a special cup holder.  For premium economy, ANA has increased the seat pitch from  38-inches to 42-inches. Each seat back will have a 12-inch LCD touch screen with universal power port, iPod connector and USB port.

Economy seats on board each ANA Boeing 787 Dreamliner economy seats are equipped with a video screen and phone

ANA's new business class will feature  fully a lay-flat seat in a  staggered arrangement with a large side table, shoe storage and small in-seat baggage area. Each seat back will have a 17-inch LCD touch screen with universal power port, iPod connector and USB port. 

Re-branded as the  ANA First Square, the new first class suite features fully lie-flat beds and a baggage compartment and mini-closet to hang your coat. Each Square will have a 23-inch LCD touch screen with universal power port, iPod connector and USB port.  

ANA' s business class lighting, reclining, electrical ports and other controls

Cabin aesthetics. Vaulted ceilings between luggage bins and over galley areas help play off the larger windows to make the cabin feel more spacious. Despite that, the aisles on the 787's inaugural flight still felt clogged when passengers got up in bunches.

Boeing 787 Dreamliner's vaulted ceilings and large overhead storage bins

The bar area onboard ANA's Boeing 787 Dreamliner

ANA flight attendant stands inside the huge back galley

Lavoratories onboard ANA's Boeing 787 Dreamliner's are quite roomy with window view 

Gadget friendliness. ANA's configuration offered USB ports and electric outlets at every seat, allowing customers to charge a cellphone or access music or movie files via the in-flight entertainment console. Power outlets mean laptops now can stay charged for an entire flight.

Quieter cabin. Boeing has said cabin noise on the Dreamliner will be lower than on other jets that typically fly on long-haul routes. While that was hard to quantify on the inaugural 787 flight to Hong Kong, most passenger conversations seemed to flow easily.

Another advantage for airlines (and environmentally concerned passengers): The Dreamliner's reduced weight and aerodynamic profile will increase fuel efficiency up to 20%.

Still, Smith of Salon.com warns that even with all of those perks, not all Dreamliners will be created equal.

Smith says.  

"In the end, though, how the plane is received will mostly come down to the way its operators tailor and customize the experience."

Chris Sloan, another inaugural flight passenger, suggests the Dreamliner has been subject to overhyped expectations lingering from the 2007 debut of the Airbus A380 — now the world's biggest passenger jet.  During that rollout, the A380's selling point was obvious: size. Sloan says the 787's significance is just as important, albeit more subtle.

Sloan says of the 787's possibly inflated expectations. 

"Superficially, the windows are great. The high ceilings are great. And the bins.  Do people really think all of a sudden economy class is going to become first class? No, it's not."

Sloan and others say the 787's strengths will get a chance to shine once the carrier begins flying the ultra-long-haul flights it was designed for — flights of more than 10 hours that will be significantly longer than the Dreamliner's four-hour debut flight between Tokyo and Hong Kong.

Sloan says.

"We'll really see those advantages on a 14-hour flight.  A lot of these features will be much more apparent on ultra-long-haul flights. When you're exposed to those sort of conditions for 13 or 14 hours, that's when the Dreamliner will be at its best."

The first such service for the Dreamliner will start in January, when ANA will deploy the aircraft on a route between Tokyo and Frankfurt. Starting next year, United hopes to put its first Dreamliner on a long route of its own: Houston to Auckland, New Zealand. 

Until then, however, that leaves the question of whether ordinary travelers will be savvy enough to notice the 787's differences — such as the double armrests that will keep middle-seat customers from fighting over a single armrest.

Stephanie Wood says she isn't sure. 

"Will people notice those things? I don't know.  "They're nice features, but — for some — they may not."

 

The Boeing 787 Dreamliner, which is revolutionizing how jetliners are being built, takes to the skies October 26 for the first time with passengers on board. The jet was from Tokyo to Hong Kong by All Nippon Airways.

COMMENTARY:   The Dreamliner may well deliver on the flight improvements. But as more than 800 orders for the $185+ million plane piled up from airlines, the ambitious high-tech advances and far-flung manufacturing process caused world-class headaches. The delays gave Airbus time to develop its A350, a carbon-composite plane the Europeans claim will carry more passengers, fly farther and burn less fuel than the Dreamliner. 

Analyst Michael Boyd, president of the Boyd Group in Evergreen, Colo says. 

"The A350 is going to be a whale of a competitor. If Boeing could have brought out the 787 three years ago like they were supposed to, it really could have hurt Airbus." 

Even Boeing managers, whose predecessors were cavalier about the Dreamliner's challenges, say the company will reevaluate offshoring strategies for future planes. Yet Boeing's bacon may be saved by massive overall demand for jetliners. 

Boeing expects a $4 trillion world market for new aircraft over the next 20 years. Airlines must replace aging fleets. China and other emerging nations are expanding aviation. And most importantly, carriers need fuel-efficient planes. 

So Boeing is boosting commercial aircraft production by 40 percent over the next three years.

NOTE:  Boeing fucked up, pissed off a lot of customers, and many of those 800 orders could endup being cancelled due to the three year long delay.  Boeing executives are in China, Australia, Southeast Asia, Latin and South America, furiously negotiating with a dozen airlines to prevent massive cancellations of orders.  If those orders are cancelled, we could be seeing the end of Boeing as we know them, and lose another major manufacturer to Airbus.

Brief Description and Specifications: 

The Boeing 787-8/9 Dreamliner is a super-efficient airplane with new passenger-pleasing features. It will bring the economics of large jet transports to the middle of the market, using 20 percent less fuel than any other airplane of its size.

Seating: 

• 787-8:  210 to 250 passengers
• 767-9:  250 to 290 passengers

Range: 

• 787-8:  7,650 to 8,200 nautical miles (14,200 to 15,200 kilometers)
• 787-9:  8,000 to 8,500 nautical miles (14,800 to 15,750 kilometers)

Configuration: 

• Twin aisle

Cross Section: 

• 226 inches (574 centimeters)

Wing Span: 

• 197 feet (60 meters)

Length: 

• 186 feet (57 meters)
• 206 feet (63 meters)

Height: 

• 56 feet (17 meters)

Cruise Speed: 

• Mach 0.85

Total Cargo Volume: 

• 787-8:  4,400 cubic feet
• 787-9:  5,400 cubic feet

Maximum Takeoff Weight: 

• 787-8:  502,500 pounds (227,930 kilograms)
• 787-9:  545,000 lbs (247,208 kg)

Manufacturing Cost Savings and Efficiencies:

787 vs 777 on composites and aluminum (by weight):

• 787 - 50 percent composites, 20 percent aluminum
• 777 - 12 percent composites, 50 percent aluminum

Material breakout on 787:

• Composites - 50%
• Aluminum - 20%
• Titanium - 15%
• Steel - 10%
• Other - 5%

Fuel Efficiency:

• 20 percent more fuel efficient than similarly sized airplanes 

Carbon emissions:

• 20 percent fewer than similarly sized airplanes

Cash seat mile costs than peer airlines:

• 10 percent

Anticipated maintenance cost savings:

• 30 percent

Manufacturing cost savings:

• Less than 10,000 holes due to composites.
• 1 million less holes drilled than the 747
• 1,500 less aluminum sheets
• 80% reduction in fasteners

Sales Price, Size of Market and Firm Orders: 

Sales Price Per Unit:

• 787-8:  US$185.2 million (2010) 
• 787-9:  US$218.1 million (2010

Potential Market Size for 787:

• 3,310 units over 20 years (2009-2028) or $4 trillion

Firm Orders as of October 1, 2011:

• 787-8:  555
• 787-9L  266
• Total:  821

Comparison Boeing 787-8 Dreamliner versus Airbus A380

Boeing 787-8 Dreamliner Cutaway View

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Courtesy of an article dated October 27, 2011 appearing in USA Today and Boeing 

CHINA'S AMBITIOUS BULLET-TRAIN NETWORK CONSTRUCTION HALTED AFTER WORST BULLET TRAIN CRASH IN ITS HISTORY

 

SHANGHAI—China celebrated its bullet trains as the home-grown pride of a nation: a rail system faster and more advanced than any other, showcasing superior Chinese technology.

However, China's high-speed rail network was in fact built with imported components—including signaling-system parts designed to prevent train collisions—that local engineers couldn't fully understand, according to a review of corporate documents and interviews with more than a dozen rail executives inside and outside China.During a late July lightning storm, two of China's bullet trains collided in the eastern city of Wenzhou, killing 40 people and injuring nearly 200 in one of the world's worst high-speed passenger-rail accidents. China's government initially blamed flawed signaling and human error. It recently postponed public release of its crash findings.

The precise cause of the disaster remains uncertain, so there is no way to know what role, if any, the signaling assembly may have played.

An examination of China's use of foreign technology in its bullet-train signal systems highlights deep international distrust over China's industrial model, including weak intellectual-property protections, which can complicate efforts to acquire state-of-the-art technology.

Key signaling systems were assembled by Beijing-based Hollysys Automation Technologies Ltd., one of the few companies China's Ministry of Railways tapped to handle such work. In some cases of the signal systems it supplied, technology branded as proprietary to Hollysys contained circuitry tailor-made by Hitachi Ltd. of Japan to Hollysys specifications, according to people familiar with the situation.

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The problem, these people say, is that Hitachi—fearful that Chinese technicians might reverse-engineer and steal the technology—sold components with the inner workings concealed from Hollysys. Hitachi executives say this "black box" design makes gear harder to copy, and also harder to understand, for instance during testing.

 

A senior Hitachi executive said.

"It's still generally a mystery how a company like Hollysys could integrate our equipment into a broader safety-signaling system without intimate knowledge of our know-how." 

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A rail signaling system is a complex assemblage of dozens of devices, circuits and software that helps train drivers and dispatchers keep everything running safely. As trains pass beacons along a route, known as "balise modules," information about location and speed are fed into the train-control network. According to Hollysys statements, it supplied key parts of the system including the onboard brain, the Automatic Train Protection, or ATP. Hitachi supplied Hollysys with a primary part of the ATP, according to Hitachi executives.

Hollysys didn't respond to requests for comment. Two days after the crash in July, Hollysys issued a statement confirming its ATP components were installed on both trains. Hollysys said its components "functioned normally and well."

A separate state-owned Chinese signaling company, which also works with foreign firms and supplies most of the gear to bullet-train projects, issued a statement around the same time expressing "sorrow" and pledging to accept its responsibility.

China's high-speed railway, budgeted at close to $300 billion, already challenges the travel time of jetliners between cities like Beijing and Shanghai, which are roughly as far apart as Philadelphia and Atlanta. The trains, with advertised cruising speeds on the fastest lines topping 215 miles per hour, are said to "fly on land," demonstrating a future where China is a recognized peer of the U.S., EU and Japan in big-ticket ingenuity. China is designing airliners to compete with Boeing Co. and nuclear reactors to challenge Toshiba Corp.'s Westinghouse Electric Co. It already exports high-speed rail equipment:  This month it reached a deal to supply locomotives to the nation of Georgia.

In less than seven years, China has built a bullet-train network larger than the ones Japan and Germany took decades to construct. China is only about halfway through a 15-year plan to build a total of nearly 10,000 miles of high-speed track connecting 24 major cities.

Former Railways Minister Liu Zhijun declared four years ago. 

"We aim at the world's top-notch technologies."

A few months before the July crash, Mr. Liu was fired after China's Communist Party accused him and other top officials of unspecified corruption. Mr. Liu couldn't be located for comment.

July's rail tragedy—in which two bullet trains collided during a storm, sending some cars plunging 65 feet from elevated tracks—is tarnishing China's effort to portray the project as technologically advanced and safety-minded. Among other things, the Ministry of Railways chose not to install lightning rods and surge protectors on some high-speed rail lines even as an industry association recommended doing so on major infrastructure projects, He Jinliang, director of China's National Lightning Protection Technology Standard Committee, said in July.

 

The Ministry of Railways didn't respond to requests for comment. Through state media and on its website, the ministry has stressed its attention to safety. A Sept. 5 statement said, "Our cadres should be leading the work, changing their style, going to the grass-roots level and trying to solve problems."

Last week, Chinese authorities reiterated their safety pledge after two subway trains in collided in Shanghai, injuring more than 280 people, in an accident blamed on errors after a power snafu knocked out signals, according to the subway operator.

From the initial days of the high-speed railway program, Beijing turned to local firms, including Hollysys, rather than foreign expertise. Hollysys says it is one of just two companies eligible to supply certain signaling technology for China's fastest trains. Ministry of Railways rules effectively forbid foreign companies from bidding.

Though new to high-speed rail, Hollysys became a central supplier of the signaling systems, circuits and software that are supposed to prevent the kind of accident that happened near Wenzhou by automatically stopping trains if trouble is detected.

Integrating signaling components is a challenge, particularly at the pace that China was expanding its rail network, train executives say.

Marc Antoni, technological innovation director at SNCF, the French national railway operator, which runs the high-speed TGV said.

"The problem is to put all these pieces of the puzzle into a coherent system." 

Originally part of China's Ministry of Electronics, Hollysys in the 1990s became a privately owned business focused on "controls"—the technology that keeps factory assembly lines humming smoothly. In a Hollysys timeline of its railway achievements, the company says it won its first noteworthy high-speed-rail signaling contracts in 2005, about when China began construction.

A year later, in a filing with the U.S. Securities and Exchange Commission, Hollysys played down the importance of high-speed-rail signaling by describing it as "adjacent" to core operations in industrial controls. The sector was mentioned just once in a 300-plus page SEC filing in 2006, part of a successful effort by Hollysys to list its shares on Nasdaq through a special-purpose acquisition company, or SPAC, a practice that involves adoption of a current listing by another company.

By late 2008 Beijing was speeding construction of its bullet trains in part to help power the Chinese economy through the global economic slump. Hollysys described itself in regulatory filings as one of just two companies that possessed "the capability" to supply the Ministry of Railways with signals on its fastest lines.

Hollysys became a tech darling and in September 2009 its chief financial officer, Peter Li, speaking to analysts, credited the Ministry of Railways' "very clear mandate of localizing the product." When an analyst asked whether he feared competition, Mr. Li said,

"Basically, foreign players are not allowed to bid independently for high-speed-rail projects."

The Ministry of Railways awarded Hollysys more than $100 million of high-speed-signaling contracts in 2010 alone, according to company statements. For the fiscal year ended this past June, Hollysys reported total revenue of $262.84 million.

The ministry also played matchmaker for Hollysys. When a leading Italian signaling company, Ansaldo STS, sought a business foothold in China, the Ministry of Railways indicated that it should be in the form of a partnership with Hollysys, according to Ansaldo spokesman Roberto Alatri.

A $97 million contract followed in July 2008 for a Hollysys-Ansaldo consortium to design, build and maintain signal-control systems on China's then-fastest train line, a 459-kilometer section linking the central China cities of Zhengzhou and Xian. The Hollysys portion was $22 million.

Hollysys had a longer relationship with Hitachi, which supplied the Chinese company components for high-speed rail signaling starting in 2005, the year Hollysys says it got its start in the business. The main cooperation was on the onboard ATP system, which Hollysys documents describe as components in the nose and tail of trains that act as its "last line of defense in safety."

The Hitachi-made ATP components came with a catch. Two Hitachi executives familiar with the matter said the company adopts what the industry refers to as "black box" security to conceal design secrets by withholding technical blueprints known in Japanese as zumen.

Black boxes make it tough to reverse-engineer the equipment. They can also make it more difficult to troubleshoot the gear, according to executives of several companies familiar with the practice in China.

A senior Hitachi executive said, 

"Providing zumen means…we completely trust the buyer of our technology, with the understanding that the buyer would not become a competitive threat in other markets."

Hitachi doesn't always withhold its design secrets. When working with companies elsewhere on a common project, the senior executive said, it will provide the zumen, or blueprints, in some cases.

Hitachi executives say the arrangement with Hollysys wasn't a technology-transfer deal—in which it would be expected to share technical details—but rather a contractual arrangement to manufacture parts to specifications provided by Hollysys. Hitachi says it did provide "limited" technical support that is typical of contracts of this type.

A spokesman at Hitachi's headquarters in Tokyo, Atsushi Konno, said the company

"Hitachi has no comment about Hollysys's products, as we do not have any information as to what kind of end product Hollysys developed using our devices. We also provided technical explanation regarding those components, and we believe Hollysys, as a result, fully understands them."

The official confirmed that Hitachi supplied Hollysys some equipment for the signaling systems used aboard trains. 

At least one installation of Hollysys components didn't go smoothly, according to one Europe-based engineer who worked on the job. An onboard Hollysys computer, part of the ATP called a driver machine interface, kept freezing, displaying old information.

Technical bugs aren't unusual when fine-tuning a train system, but the temporary fix was, according to the engineer. To avoid the embarrassment of canceling an opening ceremony, operators decided to begin passenger service on the high-speed line and assign one person in the train's cab the exclusive task of watching that the seconds continued to scroll on the computer's clock—thereby ensuring the device was functioning.

The problem was later fixed, the engineer said.

"It was a random failure that was not managed very well." 

Dominique Pouliquen, head of Alstom SA's China operations, said China and its rail-equipment suppliers remain in the learning stages. Mr. Pouliquen told a small group of reporters last week. For China,

"You acquire the technology. Then you need to absorb it; you need to master it.  I think it's all about absorption and fully mastering the whole technology that has been acquired over the last 10 years."

Alstom supplied, through a local joint venture, hardware for train dispatchers on the line where July's collision occurred. Mr. Pouliquen said the JV didn't provide any of the signaling technology that the Chinese government has said was possibly flawed.

In an August letter to shareholders, Hollysys Chief Executive Wang Changli cited the "tragic" Wenzhou accident and reiterated that Hollysys equipment wasn't to blame. China's biggest signaling company, Beijing-based China Railway Signal & Communication Corp., originated within China's railways bureaucracy. Shortly after the crash, a CRSC unit, Beijing National Railway Research & Design Institute of Signal and Communication, issued a statement of "sorrow" and pledged to "shoulder our responsibility."

CRSC hasn't commented about the accident directly, aside from a statement Aug. 23 stating that its top executive, 55-year-old Ma Cheng, collapsed and died during questioning by crash investigators.

Below is a video of Tifa, the very hot and busty Asian chef and star of the YouTube "Hot For Cooking" channel riding on one of the China's bullet trains.  I just became a fan.  Beats the hell out of those other celebrity chefs.

 

COMMENTARY:   Hitachi's patent description is for a "Signaling safety system" or Automatic Train Protection (ATP) system and is protected by Japanese patents (2004, 2005) and in the U.S. by patent #7,201,350 issued on April 10, 2007.

According to Hollysis, Hitachi's signaling safety system or ATP is incorporated into their High-speed Rail Signaling System (300~350km/hr) which consists of an onboard component (installed on the trains) and ground-based (installed along the train tracks) and described on the Hollysis website as follows:

"The high-speed rail signaling system is mainly consisted of two products, one is on-board ATP or Automatic Train Protection) which is installed at the front and tail end of each train, the other is ground-based TCC (Train Control Center) stationed along the rail way track. TCC collects all the information about the track condition, speed limit, and etc., compiles it into a digital file and sends it over to on-board ATP, which generates a driving instruction curve, so that the high-speed rail train knows exactly what is expected in terms of speed, slope or turn before it enters the next radio block. ATP also functions as the last line of defense in safety, as it can trigger emergency break if it detects a danger ahead or potential collision. ATP in combination with TCC provides the crucial control elements in the high-speed railway signaling systems to ensure the safety and reliability of the high-speed railway traffic and operation. There are only four 300-350km/h high-speed rail lines in commercial operation in China today, which are Wuhan-Guangzhou, Zhengzhou-Xi’an, Shanghai-Nanjing, Shanghai-Hangzhou high-speed rail lines, among which Zhengzhou-Xi’an line was commissioned by Hollysys.  Hollysys will continue to play a leading role in China’s 300-350km/h high-speed rail market, following our great success in 200-250km/h segment. Hollysys will leverage on this leading position to capture its fair share in China’s unprecedented high-speed rail build-out going forward."

If Hollysis engineers deliberately tried to "jimmy rig" or modify Hitacfhi's ATP components as a way to backward engineer it to meet their specific requirements, this could be a Hitachi patent violation.  In any event, Hollysis' CEO has already reiterated that Hollysis equipment was not to blame.  

Hollysis, is a publicly-traded company listed under NASDAQ:HOLI.  HOLI's stock was battered in early trading, with investors dumping shares for unexplained reasons, and causing its price per share to drop by nearly 6% to $5.50.   The company has dramatically improved its revenues, gross profits and after-tax profits over the last two years ending June 30 and appears to be financially sound.  

On August 12, 2011, China's Ministry of Railways put a halt to further high-speed train projects while the bullet train crash is being investigated.   

China CNR Corp Ltd has recalled 54 bullet trains used on the Beijing to Shanghai line for safety reasons.

The government’s handling of the crash triggered bold media coverage and public outrage.

Railway officials have blamed design flaws in the rail signal equipment as the cause of the accident.

The Minsitry of Railways also put a halt to further high speed projects whilst the crash is being investigated.

Operational bullet trains will run 40 to 50 kilometers below their top design speed as a safety precaution. The fastest speed one of these high speed trains is currently around 350 km p/h.

Courtesy of an article dated October 3, 2011 appearing in The Wall Street Journal 

AIRBUS UNVEILS FUTURISTIC CONCEPT PLANE FOR 2050 WITH A SEE-THRU CANOPY AS PART OF THE CABIN

At the 2010 Farnborough air show, Airbus revealed concept photos of its vision of what a passenger jet might look like in 2050. 

Now, as the Paris Air Show approaches - it opens on 20 June - the futurists at Airbus have turned their attention to inflight entertainment and the cabin experience for passengers in such jets. And a pretty wacky look-ahead it is too.

(Image: Airbus - Click Image to Enlarge)

The "biomimetic" frame of the Airbus Concept Plane, as it is known, is inspired by the super-lightweight bones of birds - though the company isn't quite sure yet what it might make this bone-inspired material from. Airbus cabin designer Tobias Mayer says it could be a 3D-printed - and largely hollow - titanium based material that the firm's parent, EADS, is becoming adept at manufacturing at its Additive Layer Manufacturing lab in Filton, UK. 

With a criss-cross structure it will supposedly allow some kind of bird-strike-resistant dimmable glass to be used as the exterior skin - giving passengers the astonishing ability to see everything outside.

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Airbus envisages its plane having many different zones - because by 2050 budget air travel will have been abolished (along with economy seats) - and there'll be no more squeezing-as- many-seats-in-as-possible. Of course, says Airbus thrillingly in its pre-Paris statement.

"Passengers in 2050 could join an interactive conference, enjoy a game of virtual golf, or read the kids back home a bedtime story whilst watching the planet spread out beneath their feet." 

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It doesn't end there. Morphing seats will sense the tension in your body using an intelligent neural network, allowing the seat to morph and conform to your body shape - and no matter how obese the population gets by 2050, these seats will be able to cope, Airbus promises. You'll get "vitamin and antioxidant-enriched air, mood lighting, aromatherapy and acupressure treatments". Has no-one told them antioxidant supplements have been debunked?

(Image: Airbus - Click Image to Enlarge)

COMMENTARY:   I think I would be an incredible experience flying through the skies in a plane with a see-thru canopy as part of the cabin.  The airticle didn't show pictures of the Airbus Concept Plan for 2050, but I found a video on YouTube and it's even more impressive.  Enjoy.

 

Here's a YouTube video of the Paris Air Show showing the new Russian Sukhoi SuperJet 100, a mid-size passenger jet now in operation, and the first passenger commercial jet designed to compete with Boeing and Airbus outside of Russia.

    

Courtesy of an article dated June 13, 2011 appearing in NewScientist

GOOGLE ACQUIRES CONSUMER REVIEWS SERVICE 'ZAGAT', DEAL IMPROVES AND ADDS VALUE TO 'GOOGLE PLACES'

Google Inc. bought restaurant-review company Zagat Survey LLC, thrusting the Internet giant into the new roles of content creator and print publisher as it seeks to attract more advertising dollars from local businesses.

Google didn't disclose the price it paid for New York-based Zagat, whose pocket-sized maroon books rate restaurants, hotels and other local attractions with the help of 350,000 contributors world-wide. Zagat, whose online presence is relatively small, has been called "the gastronomic bible."

The deal comes at a time when Google—and its ambitions to capture more local-business ads—are under scrutiny by federal antitrust authorities, who are looking into allegations that the company undermines online-review sites such as Yelp.com by directing its search-engine users to specialized Google Places pages that provide information and reviews on local businesses.

Google has denied any anticompetitive practices and has repeatedly said it creates its services to benefit users, rather than other websites. A Yelp Inc. spokeswoman declined to comment Thursday.

In an interview, Marissa Mayer, a Google vice president, and Zagat co-founders Nina and Tim Zagat said they planned to continue publishing the Zagat books for now and that the company's reviews from more than 100 countries would be integrated with the business-listing sites Google Maps and Google Places.

Google has said more than 20% of all searches on its site are related to local businesses.

The acquisition fits squarely into one of Google's top priorities under Chief Executive Larry Page: providing people with information about local businesses, including ratings and reviews.

Google, based in Mountain View, Calif., is trying to make money by getting local businesses to spend money on Web ads—its main source of revenue—or offer special discounts to Google's users via Google Offers, among other things. The company tried to buy Yelp in 2009, but the deal fell through, people familiar with the matter have said.

Though Google has been on an acquisition spree, picking up many small technology and online-advertising companies over the years, it rarely has purchased other well-known consumer brands, let alone companies that publish their own content. Last month it agreed to buy cellphone maker Motorola Mobility Holdings Inc. for $12.5 billion, and in 2006 it paid $1.65 billion for the YouTube website, the top brand in online video.

Earlier this year it bought Next New Networks, which produced online video content for YouTube, but the company's employees were brought in mainly to guide aspiring YouTube content creators.

In recent weeks, Google has expressed interest in buying video site Hulu LLC, which would include rights to television and movie content, people familiar with the matter have said.

"Consumers care about reviews and reviews influence purchasing," so Google "wants to be the marketplace" of reviews, said Greg Sterling, senior analyst at Opus Research, an Internet market-research firm.

The Zagat acquisition also helps fill a gap in Google's business listings, Mr. Sterling said. On Google Places pages, Google recently removed snippets of reviews that were taken from other websites like Yelp and TripAdvisor after those sites alleged Google was "stealing" their reviews. The Federal Trade Commission, which is conducting a broad antitrust probe of Google but hasn't accused it of any wrongdoing, had been looking at that issue, among others, people familiar with the matter have said.

Though Google has been increasingly successful in getting its own users to post local-business reviews, the removal of the outside reviews left its business listings with less information.

Mr. and Mrs. Zagat, who started their company in 1979, will be joining Google and said they expected to remain at the company for a period of years. The couple had looked to sell the business in 2008 but gave up after five months, citing the fragile economy. Ms. Mayer said she began speaking to them about an acquisition in March of this year.

When asked whether Google would use Zagat's famous 30-point rating scale on its own Web pages, Ms. Mayer implied it would, saying the rating system "works, people understand it, and it's one of the things that's attractive" about Zagat.

Copyright 1999–2011 Zagat Survey, LLC.

With the deal, Google picks up Zagat's 120 New York-based employees and could benefit from its relationship with hundreds of thousands of reviewers, who fill out surveys for the company in exchange for free Zagat books or subscriptions to reviews on its website. Google could also leverage the direct relationships Zagat has with thousands of local businesses.

Zagat's publishing arm is relatively large; the company has said its New York City guide to restaurants sells more than 600,000 copies a year. Its website, which gets a small amount of traffic compared with Yelp and others rivals, has a partnership with OpenTable.com to help visitors make restaurants reservations.

Ms. Mayer said that partnership "is a healthy one and one we're interested in continuing." Still,OpenTable Inc.'s shares were down 8.3% at $57.50 Thursday in 4 p.m. trading on the Nasdaq Stock Market.

Private-equity firm General Atlantic, an investor in Zagat, said in a statement that it was "pleased" with its involvement in Zagat. A spokesman said the firm views Zagat as "having been a good investment," but declined to comment on the purchase price.

Zagat previously said it was valued at $125 million in an investment round in 2000.

COMMENTARY:    The first Zagat guide was published in 1979 based on Zagat's core belief – that the shared opinions of thousands of avid consumers with real experiences are inherently more accurate than the opinions of just one or two critics. This New York City Restaurants guide was an instant success and quickly became "The gastronomic bible" (Wall Street Journal) and a #1 bestseller in the travel category.

Today, Zagat has expanded to cover over 100 countries worldwide and a range of leisure activities including dining, travel, nightlife, shopping, golf, movies and music. Zagat represents a vast community with over 350,000 consumers participating in our surveys each year.

In each Zagat guide you'll find:

• Reviews – a concise establishment description distilled from the latest survey results and packed with witty surveyor quotes.
• Ratings – based on our signature 30-point scale, ratings are given for several distinct qualities within each category (e.g., restaurants receive ratings for Food, Decor, Service and Cost).
• Indices and lists – establishments are categorized by a wide range of useful criteria (e.g., location, cuisine, best buys, top Italian) enabling users to search efficiently and make smart decisions.

I think Zagat will certainly improve Google Places and allow restaurants to offer deals.

Courtesy of an article dated September 9, 2011 appearing in The Wall Street Journal

HOW SOCIAL FLIGHTS PLANS ON USING THE POWER OF SOCIAL MEDIA TO FILL UNUSED PRIVATE CHARTER JET SEATS

Now that people can organize themselves online, private air travel isn’t just for the wealthy anymore.

Facebook CEO Mark Zuckerberg likes to say that social dynamics are going to work their way into every industry, and the companies of the future will be the ones that bake them in from the beginning, rather than slapping them on as an afterthought. This series takes a look at companies that are discovering new opportunities by using social components in the foundations of their businesses.

Have you ever wanted to take a quick weekend trip to some out-of-the-way place, but canned the idea because there was no practical way to get there without having to make a connection or two followed by a long drive--all of which would have eaten up half your weekend? Social Flights, a new company that is using the social web to fill up private planes, is betting you’re not the only one.

The founders of Social Flights believe that, if you had the chance to grab a seat on a private plane that would fly point-to-point, as the wealthy are able to do today, and the cost of your seat was comparable to what you’d pay to fly commercial, you’d grab it.

The idea behind Social Flights makes sense.

The social web gives people the ability to self-organize. Why not allow them to self-organize into groups of people that want to fly to the same place at the same time?

Weekend getaways aren’t the only use envisioned for the new service, Chief Innovation Officer Dan Robles tells Fast Company. The company also sees applications for business travel, where executives often waste countless hours wending their way to meetings via commerical aviation’s hub-and-spoke system.

 

Until now, however, the idea simply wasn’t feasible. Brokers, who arrange charter flights, have historically focused on wealthy individuals and companies, because the brokers could only sell whole planes, and those were the only groups that could afford to shell out the bucks.

But now with the social web, people don’t have to rent the whole plane. A member of Social Flights can simply post an itinerary they'd like to take. If enough other people want to travel to the same place at the same time, a plane gets booked, and each flyer simply pays the cost of their seat.

Social Flights soft-launched at the end of February and so far has arranged about 12 flights, CEO Jay Deragon tells Fast Company, including about 90 Mississippi State football fans who flew in three planes from Jackson, MS, to Jacksonville, FL, for a bowl game. The cost was about $350 per person, Deragon says, compared to the $500-$600 it would have cost to fly commercial, not to mention the time they saved--and possible hotel overnights--by flying direct.

Deragon says the number of trips booked through Social Flights will ramp up as individual locations get critical masses of customers, a process he says should take about 18 months. People have started to sign up in about 30 locations so far, including San Francisco, Los Angeles, Denver, Charlotte, Charlottesville, Nashville, Memphis, and Detroit.

The idea doesn’t just appeal to travelers. It’s also attractive to charter companies. On any given day, 60% of the country’s 15,000 top-rated charter jets go unusued. And of the 40% in service, about a third travel empty during their one of their legs.

“Most people don’t think of the social web as anything more than a marketing scheme,” Deragon says. “But there is so much waste that can be eliminated by using it.”

COMMENTARY:    This is a very interesting concept, but if 60% of the country's 15,000 private charter jets go unusused, this indicates either over-capacity or inefficiency in the industry or both.

I justed checked the U.S. Air Carrier Traffic Statistics Through February 2011 by the Bureau of Travel Statistics (BTA) and this is how non-scheduled (chartered) airlines compared with commercial scheduled airlines:

         

In terms of the four key airline metrics this is how private chartered jets faired:

• Revenue passenger enplanements = 0.008
• Revenue passenger miles = 0.0135
• Available seat miles  = 0.0194
• Passenger load factors = 56.93

I calculated the average number of passengers flown per private chartered jet, and this works out to 2.74 passengers.  I obtained this number by dividing the number of passengers flown by private chartered jets (5,913,000), and dividing this by the number of jets utilized (15,000 x .40). Thusly,. (5 913 000 / (15 000 * .40)) / 360 = 2.7375

Definitions:  

• Revenue passenger enplanements (RPE) - The total number of passengers boarding aircraft. Includes both originating and connecting passengers. 2) Total number of revenue passengers boarding aircraft in scheduled service including origination, stopover or connecting passengers.
• Revenue passenger miles (RPM) - A measures of traffic for an airline flight calculated by multiplying the number of revenue-paying passengers aboard the plane  by the distance traveled.
• Available seat iles (ASM) - A measure of an airline flight's passenger carrying capacity.  It is equal to the number of seats available multiplied by the number of miles flown.
• Passenger load factor (PLF) - A measure of the amount of utilization of the total available capacity of a transport vehicle.

So what does this all mean?  It means that the private chartered jet business is a very low volume, underutilized, and mostly unprofitable business.  The load facter for private charter jets is 56.93, meaning that less than 60% of the available seats on private charterted jets are filled with a paying passenger.  

Private chartered jets hold between 4 and 12 passengers.  How can private chartered jet companies make money when they fly only 2.74 passengers per flight.   These companies have to be careful they do not operate a flight below the breakeven point.  They have to skillfully adjust their passenger flying costs per hour ($1,150 to $5,200 per hour depending on the aircraft) and organize their flight schedules to make sure they fill those seats so they can generate a profit.  According to New Flight Charters, the average operating cost per flight for large charters averaged about $46,000.  How they are able to do this, when there are so many variables is anybody's guess. 

The key variables in the private chartered jet business is passenger demand, passenger flying costs per hour, and the cost to operate each flight.  Whether Social Flight can increase demand using their business model remains to be seen.  Their CEO claims their will need 18 months to reach "critical mass".   The company is going to have to be very picky about where they fly from. Ssince they launched in February 2011, their results have been hardly spectacular.     

In my opinion, Social Flight should concentrate on the scheduled airline segment where load factors average about 82%, so there is still room to grow.  There's a hell of a lot of unfilled seats on scheduled airlines, millions and millions more.  The scheduled airline segment also has much more traffic than non-scheduled.  In order to do this, they will need to partner directly with the airlines, matching passengers by point of embarkation and destination.  If there is sufficient chartered aircraft at those points of embarkation, this could be a great way to upgrade them and use some of that under-utilized capacity.    

I do love their commercial though, especially that native American indian music:

 

Courtesy of an article dated May 17, 2011 appearing in Fast Company 

 

 

 

 

UNREAL VIDEOS OF A PASSENGER CRUISE SHIP BEING ROCKED VIOLENTLY BY THE WAVES OF A HURRICANE

Ever wonder what it's like to be a passenger inside a luxury cruise ship in a full-fledged hurricane. Be sure to watch both videos.

 

The video belows shows the chaos inside the ship as ships furniture, contents and passengers are being knocked around like riding a brahma bull.

COMMENTARY:    I can attest to the power of the sea, having experienced first hand a typhone during my U.S. Navy days.   I can remember how difficult it was to walk from my bunk room to the bridge to relieve the midnight watch on the bridge. This happened in the middle of the night, without any moonlight, so you get very disoriented and quickly became seasick.  No coffee that night.  Passenger cruise ships are supposed to be equipped with stabilizers that keep the ship from listing violently.  However, this passenger cruise ship is being bounced around mercilessly, no wonder the passenger's and contents of the ship are swaying back and forth.  If you know the name of the ship and date this happened, please psot a comment.   

I wonder how the Carnival Lines' Oasis of the Seas, the world's largest passenger cruise ship would fair in a full-fledged hurricane.  

Courtesy of an article dated May 10, 2011 appearing in Before It"s News

 

 

 

VIRGIN GALATIC'S SPACESHIP TWO MAKES SUCCESSFUL FIRST MAIDEN FLIGHT TO A HEIGHT OF 52,000 FT BEFORE MAKING A SOFT LANDING

 

Latest test saw SpaceShipTwo deploy its twin tail sections in a way to allow it to gently return to Earth's atmosphere from the vacuum of space.

After plunging towards Earth at a near-vertical angle, Virgin Galactic's SpaceShipTwo completed its latest test flight as plans to send tourists into space edged ever closer.

The 'maiden feathered flight' of SpaceShipTwo saw the rocket bend its wings into a near-right angle landing position after descending from 52,000ft.

SpaceShipTwo was lifted 6,000ft higher than during its last test flight in October, before an 11-minute descent demonstration which included 75 seconds in its 'feathered' mode.

As SpaceShipTwo descended almost vertically through the sky, it was slowed by the drag of the folded tail, similar to the way feathers slow a badminton shuttlecock.

Virgin Galactic's rocket plane deployed its twin tail sections in a position created to allow it a soft return to the Earth's atmosphere from the vacuum of space.

The craft, which was captured by ground photographers with high-powered telescopes, descends at 15,500ft per minute in its near-vertical state.

During the test, SpaceShipTwo did not fire its rocket engine for a climb into space. Instead, a mothership lifted it to 52,000 feet where it was released. 

It then rotated its twin tail booms upward 65 degrees during the test flight yesterday in the Mojave Desert, California, Virgin Galactic said.

The latest test was hailed as a success by experts, with Will Pomerantz, Virgin Galactic vice president for special projects, tweeting soon after: 'What an awesome way to start the day. SpaceShipTwo looked positively beautiful today on her maiden feathered flight!'

The reconfiguration will be a critical part of the spaceship's descent through Earth's atmosphere after suborbital trips into space.

At 34,000 feet, pilots returned SpaceShipTwo to its normal configuration and landed it like an airplane. 

The demonstration from release to touchdown lasted 11 minutes, including 75 seconds in the 'feathered' mode.

'It flew stably,' said Virgin Galactic chief executive George Whitesides.

SpaceShipTwo is based on Burt Rutan's award-winning SpaceShipOne prototype, which became the first privately financed manned rocket to reach space in 2004.

Rutan retired last month from Scaled Composites, a company he founded that built and is testing SpaceShipTwo for Sir Richard Branson's Virgin Galactic.

 

SpaceShipTwo's unique re-entry has been touted by aerospace experts as a way to overcome the problem of searing heat that other types of spacecraft face when they plunge back into the atmosphere at high speed.

NASA's space shuttles need a layer of thermal tiles and Russia's Soyuz rockets employ heat shields to insulate against damage during re-entry.

Another key test for SpaceShipTwo will come when engineers start powered flights into space, expected sometime this year. 

Until now, all the tests have been unpowered glide flights.

No date has been set for the first commercial flight from a custom-built spaceport in New Mexico.

Some 410 people have paid the full $200,000 or a deposit for a chance to experience a few minutes of weightlessness, according to Virgin Galactic.

 

COMMENTARY:   I have been reporting on Virgin Galactic's SpaceShip Two or VSS Enterprise's progress since March 2010, when I first learned about Richard Branson's Virgin Galactic--the first company for "space tourists".   For $200,000 per person, Virgin Galactic Enterprise will rocket you into the edge of outer space six at a time, where you will be able to experience the weightlessness of outer space for about two minutes before Enterprise gently floats back down to Earth.  It's one of the coolest commercial space enteprises, and even at $200,000 per seat, Branson claims there over 400 space tourists waiting in line to be the first non-astronauts to experience outer space.  

In previous blog posts dated March 11, 2010, October 23, 2010 and October 11, 2010  I profiled Virgin Galactic and its progress.  Below is an animated video showing Virgin Galactic's VSSEnterprise attached to Mother Ship Eve as it takes off from the ground.  When Eve reaches the right height, Enerprise is detached and its rocket engine is lit to rocket its passenger's into outer space, where they are able to experience weightlessness for a couple of mintues, before Enterprise gently floats back down to Earth.

     

You can view pictures of Virgin Galactic's SpaceShip Two on the Virgin Galactic website.

 Courtesy of an article dated May 5, 2011 appearing in Mail Online

 

GOOGLE AND APPLE SET TO DO BATTLE OVER THE NEXT MOBILE FRONTIER: AUGMENTED REALITY, A POTENTIAL $3 BILLION INDUSTRY

Google and Apple are set to tussle in mobile augmented reality, pitting Android handsets against the iPhone, according to ABI Research, which sees a $3 billion AR market.

Google and Apple meet on several battlefields in the mobile computing war, but there is one big front where the rivals have yet to show their weapons: mobile augmented reality.

Mobile augmented reality (AR), which comprises the overlay of information on real-world views seen through a mobile phone's camera viewfinder, is the window to the Internet of Things, where real-world objects have data associated with them.

For example, one AR application could allow users to point their phone's camera at a building, click on an information label associated with the building and see information about the building's history.

ABI Research analyst Mark Beccue has been studying mobile AR, which to date has largely been a niche market covered by startups such as Layar and Wikitude, which have built AR browsers for smartphones such as Apple's iPhone and Google's Android platform.

Beccue said the 2010 revenue total associated with AR amounted to only $21 million, but added that the total could explode to $3 billion by 2016.

How wil AR get to $3 billion by 2016?

• Mobile marketing 
• Online search 
• Tourism 
• Retail 
• Social Networking 
• Other verticals 
• Google and Apple, of course.

Google and Apple will become major rivals and facilitators in this space because they each possess computer vision technologies that rely on smartphone cameras that send image information to the companies' computing clouds, then back to the users' phones to complete an action.

• Google Goggles - Google's visual search application that lets users take pictures of objects such as landmark bridges, book covers, wine bottles and other two-dimensional objects.
• Polar Rose - Acquired by Apple and makes facial recognition software and other products that enable the "automatic creation of events based on visual cues in images."

Apple hasn't said what it is doing with these assets, but Beccue believes the computer maker could adapt the assets as a social networking capability on the iPhone. For example, Beccue said a user might hold his or her phone camera up to a person and see that person's social networking feeds from Facebook, Twitter and other social apps.

Of course, there are all sorts of privacy concerns with this, so Beccue said such a service would have to be completely opt-in. If an iPhone user didn't choose to turn on the facial recognition enablement for the app, his or her social feeds would not be accessible from other users' iPhone cameras.

Google, which has deliberately (Google Buzz) and inadvertently (Google Street View) challenged privacy boundaries, has interestingly declined to make facial recognition a part of Goggles due to the privacy concerns.

"Google is being driven by search, which is being driven by a new kind of search, [which] would be [the Internet of] Things," Beccue said. "They started with books and CD covers, but we're talking about anything. There are a lot of different pieces they need, but they have very sophisticated algorithms."

For example, Google could marry Google Goggles with its Google Shopper application.

This would allow a shopper to point his or her phone camera at an article of clothing in a retail store and learn perhaps not only all of the sizes available, but all of the colors and even information about which stores might carry the clothing article at a discount.

The key to real AR market growth, Beccue told eWEEK, is to embed AR into a wide range of apps running on a variety of devices. That's when we'll see the tipping point en route to that $3 billion estimation ABI expects in the next five years.

COMMENTARY:   Augumeted reality presents the same challenges of adoption that location-based social networks like Facebook Places, foursquare and Gowalla are facing,  only it's going to be much worse.  User's who opt-in to an AR services are quite literally revealing aspects of their personal life they may not want revealed.  Mr. Beccue is getting a bit carried away with the potential revenues from AR technology without understanding its full ramnifications  In the wrong hands, AR could be very destructive.   From my vantage point, I see three social networking levels:

• Level 1 - Regular social networks like Facebook and Twitter.
• Level 2 - Location-based check-in services like Facebook Places, Gowalla and foursquare.
• Level 3 - Augmented reality.

AR is on a different plane altogether, which is why augumented reality, if taken to the extreme, can become your worst nightmare.   The technology has to be controlled.  I visualize several categories of AR:

• Retail - Used in the retail environment to obtain product information, increase retail store traffic, capture a bigger share of the consumer wallet at the point-of-sale and enhance the overall shopping experience.
• Non-Retail - Finding and discovering information about places and things (non-human).  Restaurants, museums, stadiums, zoos, amusement parks, universities, hospitals, and tourist spots would be a an excellent fit.
• Personal Information (PI) - The use of AR in identifying and obtaining information about individuals.  I see the following possible levels:
  • PI01 - The disclosure of basic personal information about you to your close friends and fans.  Does not include contact information or very personal information. Similar to your connections on LinkedIn.
  • PI02 - The disclosure of more indepth personal information on a by-invitation-only basis to a small group of specific individuals, friends and fans.  Similar to a protected account on Facebook and Twitter.
  • PI03 - Used by corporations, educational facilities, governmental agencies, private clubs, and so forth to identify individuals, students, employees, contractors and temporary workers, and to allow access to secure facilities and areas, offices, lunch rooms, libraries, research labs, and so forth.  
  • PI04 - Used only by law enforcement agencies like, the local police, CIA, FBI, NSA and so forth.  Used for positively identifying individuals through facial recognition and in the apprehension of criminals.  
  • PI05 - Used by the military to allow military personnel and contractors to access highly classified areas and facilities requiring security clearances (confidential, secret, top secret, above top secret, and so forth).  

I just don't see how you can just open the flood gates and use AR without placing strict limits on who can use AR and for what purpose.  Children under 12 should not be allowed to use AR apps. You must also set a time limit, and be able to turn-on, turn-off and terminate AR.  Wanton missuse would just result in total chaos.  

Back on December 9, 2009 I posted an article titled, "Tonchido's Augmented Reality Takes Position-Based Marketing To A New Level", about Tonchido Corp, a Japanese startup located in Tokyo that had created quite a stir at the TechCrunch50 show, when it introduced Sekai Camera, the first mobile augmented reality applicaton.  Today, Tonchido has developed the following AR apps:

• Sekai Camera For iPhone
• Sekai Camera For iPad
• Sekai Camera For Android
• Sekai Camera ZOOM 
• Sekai Camera Web

Here is a screenshot of the Sekai Camera For Iphone app:

 

It appears that Tonchido Corp has come a long way and now has quite a following in Japan.  In September 2010, Takahito Iguchi, Tonchido Corp's founder and CEO, said the Sekai Camera for iPhone "has been enjoyed in all corners of the globe, having created millions of 'AirTags' in the busiest of cities and remotest of places in the process".    

I thought it was important to share this information with you, since a lot of people don't have any idea what augumented reality is all about and that Tonchido Corp was the original inventor of this technology for commercial purposes.

Just for fun, I want you to review my blog post dated July 11, 2010 titled, "Augmented Reality: The Nightmare Scenario", about about augmented reality taken to the extreme.  So be careful what you wish for, you just might get it.

Courtesy of an article dated February 21, 2011 appearing in eWeek.com