It’s no secret that the cost of flying has skyrocketed. Fliers see it in their ticket prices, increased fees and a lowered level of service. But when one of the nation’s largest airlines decides to file for bankruptcy, it raises a lot of eyebrows about the state of industry.
Let’s break down American Airlines’ bankruptcy and see what it means for you:
Why did AA file for bankruptcy?
The airline says that high fuel prices and labor costs contributed to the filing. One contributor has been the older fuel-guzzling MD-80 series plane that American has been using for years as a major part of their fleet. With the high cost of jet fuel, operating these planes at a profit becomes much more challenging. In fact, CNBC took cameras inside American Airlines a few years ago to document how razor thin their profit margins are. Check out this clip and be surprised about how little they make off of a flight:
American filed for Chapter 11 reorganization. Meaning, they plan on continuing their business but they need help removing dead weight and starting fresh again. In this case, AA wants help dealing with their debt and will probably ask labor unions to agree to lower wages and benefits for its employees.
Check out this clip to learn more about the different types of business bankruptcy:
It really doesn’t, thankfully. Images of stranded passengers won’t be seen during this bankruptcy as American will continue operations as usual. According to their press release, American will still:
Fly a normal schedule
Honor tickets, reservations, refunds and exchanges as usual
Maintain the AAdvantage frequent flyer program
Continue to operate the Admiral Club
Remain in the oneworld alliance and continue existing codeshare partnerships
Barring any hiccups along the way, American will be fine and will shine once again in a few years. So as they say in the airline industry, sit back, relax and enjoy the ride.
Frankly, it’s easy to blame Wal-Mart for many of this year’s incidents. After all, the company is the most influential retailer in the United States and promised to improve how they manage Black Friday crowds after the 2008 stampede. But the National Retail Federation (NRF) should also share the blame for standing idly by while this wave of violence continues to spread from year to year.
To understand why the retail industry’s trade organization is to blame for the Black Friday melees is to understand their ulterior motives.
The NRF’s stated goal is to be the “voice of retail worldwide,” advocating for the interests of retailers. But under the surface, the NRF has turned has turned the entire holiday shopping season into the cornerstones of their annual campaign to help line its own pockets and those of its member retailers. Using public relations experts and influential messaging, they’re able to cajole shoppers into opening up their wallets during the holidays and, in turn, rake in higher annual membership fees from their members.
Right about this time of the year, most of us will start seeing this publicity campaign in full-swing, with NRF experts on-air proclaiming how this year’s holiday discounts are better than last years, how shoppers could miss out on great Black Friday discounts, rattling off shopping statistics on your local television newscast about the robust shopping season.
All of this messaging leads shoppers into a frenzy about holiday shopping, thinking about the scarcity of deeply-discounted products and, more importantly, helps to get Americans feeling good about shopping.
In essence, their purpose is not only to help themselves and their members, but also to set up the right conditions for a profitable shopping season. In fact, the NRF has progressed so far in this goal that it even created a self-proclaimed “Cyber Monday” shopping holiday back in 2005 to help its online retail members increase their business during the holiday season. After all, if their members do well, the NRF does well too, right?
But there is a problem. As good as the NRF is at drumming up publicity and business for its members, it has an abysmal track record when it comes helping them with crowd management and security planning around these violence-ridden Black Friday events. The only advice that the organization puts out to its members is a short guide about crowd management that provides no substantive advice other than using common sense in planning sales events (as seen below or on the NRF’s Website).
If the NRF truly wishes to help its members stop the Black Friday violence and be the de facto leader of the retail industry, it needs to play a more proactive role in preventing the violence from occurring in the first place. The organization needs to use their power and influence as the mouthpiece for the retail industry to get their members to create and implement an innovative solution to the problem. Absent government regulation on this issue, NRF could and should evolve into a quasi self-regulatory organization for the retail industry on the matter of shopper safety.
Under this new model, the NRF could take the lead by requiring members to abide by a set of Black Friday operating procedures. It would require retailers to create a comprehensive plan to address crowd and security issues at each individual store on this day. Independent law-enforcement, security and crowd management experts would approve or disapprove a “Black Friday-ready” certification for each store after reviewing the plans. In turn, forward-thinking municipalities and fire marshals could also require that stores obtain this certification before being allowed to open their store for Black Friday.
Furthermore, the NRF could also require these same members to develop a uniform Black Friday shopping experience for all shoppers, no matter which big-box retailer they visit. Ideas include handing out tickets before each event that entitle the shopper to one of the door buster items to be picked up at a later time, providing copies of in-store maps to shoppers before and during Black Friday so they can find their way to product displays, and most importantly, drastically limiting the number of people allowed in the store at a time. Removing the uncertainty in Black Friday shopping helps shoppers know what to expect, no matter where they shop that day.
Screengrab of Deciple87′s video on Youtube.
Video shows incident woman releasing pepper spray into a crowd at a Porter Ranch, California Wal-Mart.
Self-regulatory organizations (SRO) are not a new concept. The National Association of Securities Dealers, National Association of Realtors and the American Medial Association are all SRO’s. Though self-regulation, the NRF can take advantage of their status as the industry leader by requiring independent verification of the retailer’s readiness to accommodate Black Friday shoppers and provide customers a consistent shopping experience across all stores nationwide.
In truth, the feasibility of this idea is debatable and the probability of it being adopted is a next-to-nil. But the hope isn’t for the NRF to fully adopt this idea. Instead, this one idea helps to illustrate that creative solutions to this problem are endless. It’s limited only by the willingness of the NRF and its member retailers to conceive and implement them. And unless they step up to quickly to solve this persistent violence, policy makers and regulators will step in and implement their own solution.
The NRF and its members may not have a legal requirement to implement such crowd management and shopper safety policies, but they have a moral and ethical obligation to protect the lives of their own customers attending Black Friday events. Let’s hope they wake up to this fact before Black Friday goes by again with yet another shopper injury or fatality.
Why should you be afraid of an upside down car loan? It’s actually a fancy way of saying that you’re accruing negative equity in your loan. Watch this two minute video to learn what being “upside down” in your loan means, why it’s bad and how you can avoid it.
In just a matter of days, tens of millions of Americans will descend on America’s malls and shopping centers for the kick off to the holiday shopping season. “Black Friday” is the designated name for this day, but where did the term originate?
According to the not-so-reliable source, Wikipedia, the earliest known reference to Black Friday was made in a 1966 publication. According to the story, the Philadelphia Police Department hated the day after Thanksgiving because shoppers crammed the city center and brought traffic to a grinding halt. As you can imagine, the term took on more prominence from that point forward, especially within the last decade.
Flash forward to 2005 when the term “Cyber Monday” entered our lexicon. The term did not gain popularity organically, but rather, was created by the National Retail Federation to signify the busiest online shopping day of the year. You could think of it as the self-created “Hallmark” holiday of the retail industry, one that was tightly organized. The day typically falls on the Monday after Thanksgiving.
Within the past few years, with retail stores opening on Thanksgiving, the term “Gray Thursday” also came into prominence. Not every store opens on Thanksgiving, but those that do are in a collective “gray” area, not sure whether to count on a surge of early-bird shoppers or a more tepid response. In fact, some retailers experienced a public backlash this year for requiring employees to work the evening of Thanksgiving, when many families are still enjoying a turkey dinner
Regardless of what day you choose to shop on, the deals are in full swing this year. Retailers are hoping that America might be turning the corner on this recession and will start spending some money. Call it what you want, but you’ve basically got a weekend bookended with a shopping extravaganza. Enjoy it while the deals are still hot.
A little-known communications company rolled out a $19 unlimited everything monthly smartphone plan yesterday. You read that correctly, unlimited minutes, texting and data for $19 month with no contract.
Republic Wireless is hoping to blow the competition out of the water by dropping the price of smartphone service 50% below the nearest competitor. Now that you know the scintillating offer, what’s the catch and how does it work? Let’s break it down.
What are they offering?
$19 unlimited monthly voice, texting and data with no contract and no overage charges. Only one phone model is available, the LG Optimus, for $99 (with coupon code: “welcome19”, courtesy of Y! Tech). The price goes back up to $199 after November 27, 2011.
How does it work?
Republic Wireless knows that providing cellular network service can be costly, both for voice and data traffic. So they rely on routing your calls through wifi networks instead of cellular networks whenever possible. If you’re sitting at home or at a coffee shop, your calls, texts and data will go through wifi (through VoIP, for you tech geeks out there) instead of a cellular network.
But don’t fret! Stray outside of an available WiFi network and the phone will switch to cellular mode. Republic Wireless leases time and bandwidth from the Sprint network. If you get a Sprint signal, you’re good.
What’s the catch?
You’re going to have to keep an eye on your overall usage.
The company will keep tabs on your cellular voice, text and data usage. They track your usage over a rolling 7-day period and compare it against a “Cellular Usage Index.” It’s basically their way of ensuring that you’re not using too much of their resources on the cellular network. Just remember to stay below this index number or else they’ll send you a nastygram in the mail asking you to comply.
***UPDATED 12/23/2011: Republic Wireless has announced that they will be ditching the Cellular Usage Index. The service is now truly unlimited through at least the end of the beta period, if not, longer. See this blog post for more details: http://2mf.in/tBsOph***
Is it for me?
If you’re a light to moderate cell phone user, then you’re good. According to Republic Wireless, consuming 550 voice minutes, sending 150 texts and downloading 300 MB of data a month would not cross the index threshold.
Also, if you’re a penny pincher and willing to go along with the restrictions, then this deal is also good for you. You can also port your number over to them if you have a phone number you want to keep.
However, you should also probably view this deal with a little bit of skepticism. Republic Wireless’ parent company, Bandwidth.com, has been around for over 10 years. However, Republic Wireless itself has not been around that long. Could they close up shop overnight, leaving you in a lurch? Possibly, if business goes downhill. I’m not predicting or saying this will happen, but its just something to keep in mind.
How do I get it?
Just go to the Republic Wireless website and click “Join.” Hurry though, they’re technically in beta and could close down the service to new subscribers at anytime.
What if every time you made a deposit into your savings account or made a loan payment, you could win $2 million or a new car? Too good to be true? Not anymore. It’s called a prize-linked savings plan and a San Francisco-based startup, Save Up, launched their own version through a public beta today. Learn about the concept, their new product and how you could be rewarded handsomely for being smart with your money in this two minute video.
***Special offer: Save Up has a special offer for 2 Minute Finance viewers. Sign up for their free service (with a bonus sign-up offer) by using this link.
