Gulf Airlines: must read

I am a gold card holder on Emirates because my work and leisure travel normally take me further afield than Bradford and Birmingham.

As a result I like to see what is happening to Emirates from time to time and have just come across the following article as I was doing a bit of research into international expansion for a colleague.

Not only Emirates but Qatar Airways and Etihad are also going for broke in the world of civil aviation.

The figures are stunning, the competition livid: read the article and make up your own mind!

Here are a couple of diagrams from that article, too, to whet your appetite:

http://www.economist.com/sites/default/files/images/images-magazine/2010/23/bb/201023bbc564.gif

http://www.economist.com/sites/default/files/images/images-magazine/2010/23/bb/201023bbc569.gif

Find the article itself at http://www.economist.com/node/16271573?story_id=16271573, published on 3rd June 2010 by The Economist

Duncan Williamson

Cameron: no thanks

Looks like the Tories are doing what I predicted, gaining the most seats in the House of Commons.

Here's another prediction: this will be a failure government. The Tories' team is inexperienced and filled with oafs. All they have ever done is blether for a living. Probably clever lads but not good enough.

DW
Sent from my BlackBerry® wireless device

Try Doing Business Online at Holiday Time

This is a simulcast with Duncan's Diurnal Diatribe
Have you ever had a problem and tried to solve it online over a bank holiday weekend? For the last few bank holidays I have had something to try to resolve that surfaced just as the holiday had started or was about to start. Something different each time.
In all faith and with confidence you write to the support line, help line ... and explain everything. Then sudden death. Nothing happens. Nothing.
So this has happened again: I got an email on Thursday to tell me that the latest upgrade to some software that I want to upgrade has arrived. Yesterday, Good Friday, I tried to upgrade but for some reason it won't accept any of my email addresses as my registered address even though my copy is fully registered.
So I wrote yesterday morning to ask how to resolve this and pay for the upgrade. Death by silence.
If I complain about this or make a suggestion when they do reply, which effectively will be Wednesday because it's American software and I am more than a working day ahead of them, they will ignore it as a whinging Limey's rant!!
End of rant!
DW

How NOT to dismiss someone

If you’re a moral coward and you have been advised to dismiss some people, this is how you will do it:

• start a rumour that some people are to lose their jobs and refuse to confirm or deny it
• when the time comes, send them an email
• tell everyone who’s left that they MIGHT be next if they don’t behave

What’s the right way to do it? Be a man and interview everyone, the exit interview, to find out what they know and think about everything and to explain to them the why and wherefore of their dismissal. The exit interview is also a chance to offer help if they need it or ask for it.

Duncan Williamson

If you must Prepare a Forecast ...

... do it right!

I have just read a report by the IDB (International Development Bank) on estimates of reparation costs for putting Haiti back together again. The headline figure is that it will cost $13.9 billion to rebuild homes, hospitals, schools, roads and other infrastructural elements. The question is, where did they get that figure from? Well, here's the warning, they did it by using regression analysis.

Using historical data and regression analysis can be fine but in this case I seem to see that historical data is probably not sufficient in the case of Haiti. Secondly, that $13.9 billion is at the top end of the confidence limits for just one of their estimates.

Here's the URL: read it and see if you agree with me ... you might not. Why not give me your comments? Happy to hear them.

http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=35072649

Duncan Williamson

Bankers' Fees

There's a lot of talk about the bonuses that bankers are being paid these days. There's also a question that no one is asking, however, which is: where do these bonuses come from? After all, even if I pay, say, 5% or even 10% on my overdraft, it's going to take a lot of very big overdrafts to finance some of the bonus payments we keep hearing about.

At least part of the answer to the question of where these bonuses come from can be found in recent articles in The Financial Times newspaper:

• Floating: but plain sailing cannot be guaranteed By Jennifer Hughes, Senior Markets Correspondent 2^nd February 2010
• The real deal: Why it still takes courage to go Dutch By Lina Saigol 2^nd February 2010

In these articles we find that in 2009 the total equity raised worldwide amounted to $892.4 billion and in 2008 total equity raised worldwide amounted to $635.1 billion.

Moreover, we are told that the following are the rates that bankers charge their customers to take their company public.

Fees	%
USA	6.7%
Europe	3.2%
Asia	2.5%

The FT provides us with the regional breakdown of where all of this equity was raised and by making some assumptions as to which fee rates apply to which region, I have come up with the following analysis and estimates:

Equity Raised (from the FT)

$bn	2009	2008
North America	294.7	265.7
Europe	274.6	205.4
Northern Asia	115.8	30.8
SE Asia	21.8	14.1
Japan	62.7	15
Caribbean	0	1.2
Latin America	29.1	25.8
Africa	4.4	11.5
Middle East	4.6	13.4
Indian Subcontinent	22.1	14.1
Australasia	62.7	38.1
Total	892.5	635.1

Estimated Fees (my estimates)

$bn	2009	2008
North America	19.74	17.80
Europe	8.79	6.57
Northern Asia	2.90	0.77
SE Asia	0.55	0.35
Japan	1.57	0.38
Caribbean	0.00	0.08
Latin America	1.95	1.73
Africa	0.14	0.37
Middle East	0.15	0.43
Indian Subcontinent	0.55	0.35
Australasia	1.57	0.95
Total	37.90	29.78

There you are: in 2009 I have estimated that the total fees that banks have charged for helping companies to raise their equity by $892.4 billion amounts to $37.9 billion. Of course, the fees do not represent pure profit and they are not the only basis on which bonuses are calculated. However, you now have a better idea of where the bonus calculation begins.

Duncan Williamson

US Double Standards

Remember when there was the US tyre company scandal, just a couple years ago. Goodyear was it? Everyone in the industry knew the problem and knew that many accidents had been caused by some rubbish tyres. There was a cover up initially and many denials.

Now Toyota has found a problem with the accelerator pedal on millions of its cars. Problem identified, solution worked one, repairs scheduled ... No expense spared.

Today I read that the US government has advised Toyota drivers in the USA to stop driving their cars and to demand a repair.

Well, that's one way to boost the image of your own companies: pour rubbish on the competition. Especially when the competition usually runs rings round you.

Very shabby.

Duncan Williamson
Sent from my BlackBerry® wireless device

Read that Graph CAREFULLY

Everyone here knows that I find it difficult to respect a man who feels able to spend $1,600,000,000 on his own job interview expenses but even Obama needs some protection from the badly drawn graphs and charts. Even the Financial Times can get it wrong!

Here is a graph cut and pasted from yesterday's Financial Times:

How about the corrected version where the vertical axis is NOT chopped off just below the half way point ... no such a drastic change over the year is it?

This post was also uploaded to Duncan's Diurnal Diatribe

DW

Follow your own advice laddie

I wish I had!

Just before he set off on a monster trip of the Far East, my nephew asked me for some advice. He wanted to know the best strategy for foreign exchange for his trip: he asked about taking dollars, traveller's cheques and so on. I told him, whatever you do DO NOT get your currency here in the UK.

As I was leaving Dubai I checked the rates there as I had a little bit of foreign currency with me. Why oh why did I not follow my own advice? I ran out of time and opportunity to change my money in the end although I did change a little bet at Dubai International Airport. The rate there was a bit worse than I would have got in town but I changed it.

Anyway, when I got to the bank here at home I found their rate was £:$ of 1.74 ... in Dubai the rate at the time I SHOULD have changed my money was £:$ 1.61.

Just imagine I was changing $1,000 ... in Dubai I would have got £621, here in Halifax I would have got £575, a difference of £46.

Don't do what I do, do what I say! What a clot I am!!

DW