Daily Archives: May 18, 2004

Flyin’ taxi

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This Scott McCartney Wall Street Journal ($) article reports that business travelers will have a new alternative to flying commercial airlines or buying their own jet as early as next year — an “air taxi.”

Using a new generation of small jets that are currently in flight testing, several entrepreneurs are trying to launch “air taxi” services. The goal is to let corporate travelers bypass crowded airports and fly into smaller, local airports, at half of the current cost of chartering a jet.

An outfit called IFly Air Taxi Inc. is floating the concept, and the owners of IFly are an eclectic mix of airline types — Donald C. Burr, the founder of People Express Airlines back in the 1980s, his son, Cameron, and Mr. Burr’s old rival, Robert L. Crandall, the former CEO of American Airlines that was instrumental in running Mr. Burr’s People Express out of business.
One of the reasons that the air taxi concept is drawing interest is the new jet technology — “micro jets” — that will be used:

One reason for optimism that now is the right time for air taxis: The arrival of a new generation of four-passenger “micro jets” that can operate more cheaply than conventional jets. These aircraft typically are much lighter than conventional private jets, and are powered by a new generation of small, fuel-efficient engines. None of the planes are in service yet. Manufacturers are accepting advance orders, which so far are being placed by a mixture of private individuals and hopeful air-taxi operators.

iFly is expected to announce an order for Adam Aircraft jets soon. The Adam A700, which at $2 million is half of the price of the cheapest Cessna Citation jet right now, began flight tests in July 2003.

And how does an air taxi trip stack up to the current conventional modes of business air travel?:

The new planes have the potential to revolutionize transportation. Currently, chartering private jets is extremely expensive, costing $7,000 or more for a 500-mile hop, round-trip. Fractional ownership (where you buy a “share” of an aircraft that entitles you to use it periodically) is no bargain either. Corporate-owned jets, while sometimes economical for shuttling groups of executives, are often viewed as overly expensive perks.
Air-taxi service would be different, in theory at least. Mr. Burr says he can provide rides for $3 to $4 a mile, on average — which works out to be a bit more expensive than most first-class tickets. A trip to Cleveland from Teterboro, N.J., for example, might cost $1,000 to $1,400 on average. By comparison, an unrestricted first class ticket on Continental Airlines from Newark, N.J., to Cleveland costs $1,338.

Of course, there are still a host of unanswered questions about the air taxi concept, such as how best to manage a fleet of such small jets to ensure maximum usage. However, Mr. McCartney sums up what the concept does make clear, which is really the beauty of American capitalism:

What seems clear is that transportation in the future will take many forms, and that our choices in the future may well be better than the ones we have today.

Stros pound Fish

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Baseball is a bewildering game.
Last Wednesday night at the hitter friendly Juice Box, Dontrelle Willis threw 91 pitches in hurling a complete game 5-2 victory for the Marlins over the Stros. The Stros’ Wade Miller left that game in the sixth inning with a sore neck.
On Tuesday night, Willis threw 96 pitches in four innings and Miller pitched seven effective innings as the Stros’ pummelled the Fish, 9-2 at pitcher friendly Pro Player Stadium. Go figure.
Lance Berkman led the Stros’ hitting attack as he whacked four hits — including a double and a solo yak — and had 2 RBI’s and 2 runs. Inexplicably, Stros’ manager Jimy Williams continues to bat Berkman in either the fifth or sixth hole even though every player hitting in front of him in the Astros’ lineup is an inferior hitter. Oh, well. Even outmaker supreme Brad Ausmus had a two run crank and 3 RBI’s. The big lead allowed the Stros to give seldom used relievers Ricky Stone and Brandon Duckworth some work, and they worked the last three innings without incident.
Things are likely to pick up for the Fish in the Wednesday game as Tim Redding pitches for the Stros against the Marlins’ Carl Pavano, who dominated the Stros’ in a game last week. Roy O and the Marlins’ Josh Beckett — two of the best young pitchers in MLB — tangle in the Thursday game.

Strategic oil reserve thoughts

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Almost on cue, this NY Times article reports on Congressional Democrats calling for the Bush Administration to use the Strategic Oil Reserve to increase supplies of oil in the economy to ease the recent spike in energy prices. On a more thoughtful note, Arthur Kling over at EconLog points us to a Allan Sloan’s better analysis in this Washington Post article:

[T]he $41.55 price for oil today is much higher than the $35.50 it costs for a barrel to be delivered next year. This disparity inspired Loews chief executive Jim Tisch, whose company has extensive energy holdings and plays financial markets like a violin, to propose a trade. Let’s sell oil out of the reserve, he says — not for money, but for oil to be delivered next year. We could get seven barrels next year for six today. We’re now buying 160,000 barrels a day for the reserve, which has 660 million barrels. But by trading rather than buying, we’d save taxpayer dollars, reduce the demand that’s driving up prices today, and spook the speculators. I love it.

Meanwhile, this WaPo article indicates that the amount of oil going into the reserve amounts to less than two-tenths of 1 percent of the world supply, which is too small to have any more than a two to five cent price per gallon effect if the government’s current “buy” policy were changed.

Revenge of the “C” students

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In this Wall Street Journal ($) op-ed, novelist Herman Wouk addresses the serious implications arising from the fact that governmental funding of science research in America has become simply another political football. Mr. Wouk focuses on the poor political decisions that undermined the Texas Supercollider Project back in the early 1990’s:

Back in 1993, Congress abruptly killed the largest basic science project of all time, the Superconducting Super Collider in Texas. With three billion dollars already spent, and the project pretty much on time and on budget, our lawmakers cut off all funding, and voted another billion just to shut the project down. This bizarre abort sent a shock wave through the scientific world which has never entirely subsided. The event remains in controversy, but one undeniable outcome has been the diminished international repute of American science.
The Superconducting Super Collider would have been an oval tunnel 54 miles around, where some 10,000 magnets cooled by liquid helium would accelerate protons to collide almost at the speed of light, and thus to wrest from the subatomic debris a prime secret of nature: the Higgs boson, dubbed by one Nobel laureate the “God Particle,” a possible key to the final understanding of the universe. Ronald Reagan approved the project, George Bush senior sustained it, and it died under Bill Clinton. Today a powerful super collider in Geneva is being upgraded by a consortium of European physicists, intent on beating the world to the Higgs boson, with the Americans out of the picture.
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Nevertheless, even Benjamin Franklin, a founding father and a one-man interface of science and politics, could not have foreseen how this loose play in American governance might one day affect world destiny, nor how the pace of scientific advancement would lethally accelerate in times to come. It is a long reach from the capture of a lightning spark in a Leyden jar in Philadelphia, to the dropping of a uranium bomb on Japan. Yet the same intellectual curiosity that moved Franklin to risk electrocution from the clouds motivated the British physicist James Chadwick to discover the neutron, and so to unlock the horrific energy in the atomic nucleus. And it motivated thousands of high-energy physicists to venture their careers and years of their lives on the Superconducting Super Collider, only to be stranded by Congress, high, dry and unemployed at a vast abandoned hole in Texas.
These scientists had been the darlings of Congressional budgeting ever since the end of World War II, when they delivered into President Truman’s hands a weapon new in human history. The president, an artilleryman in World War I, said of the bomb, “It was a bigger piece of artillery, so I used it.” It did stop the war at once, to be sure. The historical debate about his decision may never end, but the triumph of particle physics was brilliant, and the rise in its annual funding spectacular, until the ax rudely fell. One SSC physicist bitterly exclaimed on getting the word, “It’s the revenge of the C students.” A more philosophical colleague observed: “Well, our 50-year ride on the bomb is over.”

And then, with the wisdom of his almost 90 years, Mr. Wouk makes an insightful observation for us to ponder:

I go through the days with good cheer and jokes, aware of dark threats looming ahead for our little global home, probably beyond my time, but close enough. The prime task of today’s politicians, after getting themselves elected and re-elected, is to deal open-eyed and intelligently with those threats in the light of the best science. We who elect them bear the ultimate, inescapable responsibility to choose well.

3rd Circuit orders recusal in asbestos bankruptcies

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This NY Times article reports on the unusual order issued yesterday in which a Third Circuit Court of Appeals panel ordered U.S. District Judge Alfred M. Wolin of Newark, N.J. to withdraw from three of the five important asbestos-related bankruptcy cases that are pending in his court. The basis of the order is the appearance of bias.
In a 2-to-1 decision, the 3rd Circuit ordered Judge Wolin to withdraw from overseeing the bankruptcy cases involving W. R. Grace, Owens Corning and U.S. Gypsum. The appellate court will decide later whether to remove him from a fourth case involving Armstrong World.
Lawyers for the creditors objected to meetings that Judge Wolin conducted with plaintiffs’ lawyers and other parties to the case without a record being made for those who were absent. The 3rd Circuit agreed, holding that such meetings “were flawed because no opportunity existed for their adversaries to know precisely what was said” and what effects might result. The creditors also contended that Judge Wolin had appointed advisers who were not impartial because they represented plaintiffs in the G.I Holdings, Inc. bankruptcy case, and the appellate court noted that two of them had a conflict of interest in the five cases because they represented individuals with asbestos claims against G.I. Holdings.
Asbestos-related personal injury litigation has been controversial for years. Some economists estimate that companies have already paid more than $70 billion in asbestos claims with insurance companies paying one-third to one-half of the total. A RAND Corporation study estimates that there have been 8,400 defendants in thousands of asbestos-related lawsuits over the past 15 years.
Legislation to create a no-fault trust fund to compensate victims of asbestos-related diseases is stalemated in Congress. Proponents of the legislation say that asbestos-related litigation risk has forced more than 70 companies into bankruptcy.