Articles by mgedwards

A Rant against airline ticket price gouging

With all my rants against airlines, you would think I would never fly again.  Unfortunately, when you’re a World Adventurer, you have very little choice but to be dependent on these mindnumbingly frustrating airlines to get you where you want to go.  Otherwise, you would find yourself sailing on a slow boat to China.  Tonight my wife booked tickets for my family to travel from Seoul to Shanghai, China over the Chuseok (Mid-Autumn Festival) holiday.  The price is over $800 per ticket!  I repeat, $800.  It’s a 2.5 hour flight.  868 kilometers separate Seoul and Shanghai.  That’s 539 miles.  That’s half the distance between Seattle and San Francisco.  When was the last time you paid $800 to fly anywhere in North America?  If you live in Europe, when is the last time you paid $800 to fly anywhere in Europe?  You haven’t.  Asian air travel is ridiculously expensive.  We would have liked to visit Japan, which is very close to Korea, but we might as well have traveled to Australia or Thailand.  It’s virtually cheaper than crossing the East Sea to Japan.  If you think the high ticket price just because we will travel during a holiday weekend, consider that tickets to fly the week before, during off-peak season, cost just $75 less.  About $725.
 
Why is it so expensive to fly internationally in Asia?  Domestic flights are a bit more affordable, but international fares are absolutely aggregious.  Two words–landing rights.  Asian governments offer national carriers preferential treatment and allow them to dominate their major airports.  Korea does it, but it is not alone in this respect–most Asian governments do likewise.  Incheon International Airport, which serves Seoul, is dominated by Korea’s two major airlines, Asiana Airlines and Korean Airlines.  Foreign airlines such as China Eastern and JAL fly in and out of Seoul, but they collectively control less than one quarter of the gates at Incheon Airport.  Asiana and Korean control entire hubs.  In addition, some major foreign carriers such as Delta Airlines must co-share with the Korean majors because they can’t secure landing rights for their aircraft.  Asian airlines take advantage of this competitive advantage by charging outrageous rates for their airline tickets.  Certainly, the quality of their service and the staff is top notch.  Asian airlines are well known for offering the best service in the world.  (Who doesn’t want to be served by a beautiful Korean air hostess in mid-flight?)  Honestly, like many Americans, I would much rather sacrifice this award-winning service for a modestly-priced ticket.  I prefer discount airline tickets.  That’s why I’m rooting for Jeju Air to succeed and expand internationally to other East Asia destinations.  I don’t need to fly from Seoul to Shanghai non-stop on a Boeing 777 in 2.5 hours for $800.  I’d rather fly on a Jeju Air Bombadier jet to Jeju Island, transfer, and arrive in Shanghai in five hours and pay $350-$400.  I can use the money I save to buy an overpriced Starbucks cappuccino while in transit.
  
In times like these, I wish I still worked for Intel and still had corporate jet privileges.  There’s nothing like driving to a county airport, flashing your company badge, bypassing any security checkpoints, boarding a small corporate jet, eating freebie snacks, and jetting off close to your destination.  When I left Intel, it was scaling back corporate jet privileges for employees and cutting some flights (who knows, maybe the corporate jet program has been discontinued because of high fuel prices and Intel’s recent struggles–I wouldn’t be surprised).  It sure was nice to have the privilege, if even for just a brief time.

Spoke and mirrors

I read a book review yesterday of White Man’s Burden:  Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good  by William Easterly, a book that asserts that development assistance has been ruthlessly squandered and is highly critical of how development aid is disbursed by wealthy nations and used by developing nations.  The book’s author believes that rather than having large-scale, top-down aid projects that ultimately fail, development must from the bottom-up, particularly through micro-credit projects. 
 
The book’s premise got me thinking, as I occasionally do, about grandiose ideas that are idealistic and perhaps achieveable, although not practical given the current global geopolitical situation.  I thought about South Korea’s dramatic rise as an economic power and what it could do by itself to empower developing nations to pursue economic development and political reform.  The Republic of Korea Government acknowledges that its development assistance efforts thus far have been insufficient, although it has stated that it plans to increase aid substantially in the coming years.  South Korea’s total 2004 official development assistance (ODA) efforts amounted to just 0.06% of the country’s total gross domestic product (GDP), a sum far below 0.25% mandated by the United Nations’ Millennium Development Goals, of which Korea is a signatory (the U.S. also falls short at 0.22% of GDP).  When South Korea’s total aid to North Korea is added to its ODA (aid to the DPRK is considered domestic aid rather than ODA), Korea’s total 2004 DPRK/ODA figure rose to about .11% of GDP.  This is still far below UN mandates.  The Republic of Korea Government is working on a plan to increase ODA but has not announced any specific goals.
 
Pondering this book and Korea’s rapid economic rise, I came up with a concept I call "spoke and mirrors," the idea that OECD nations such as Korea should target and administer development aid to one or more peer nations rather than simply remitting aid to an international body that redistributes it through wide-scale development organizations (the Organisation for Economic Cooperation & Development, or OECD, represents the world’s 30 largest economies).  In essence, developed nations such as South Korea could effectively "adopt" one or several nations to mentor in the development process, rather than distribute aid to a gaggle of nations.  Mentoring nations such as Korea could become "spokes" in the ODA effort, and mentored nations could "mirror" the economic success of nations such as Korea in an effort to improve their own economic status.  By focusing on specific nations, all members of the OECD can concentrate on institution-building in developing nations rather than simply spreading the wealth to large-scale development projects.
 
While Korean aid disbursement remains largely focused on South, Southeast, and East Asia, the list of recipient nations of Korean aid is quite lengthy.  Korea’s three largest ODA recipients in 2004 were Indonesia, Iraq, and Afghanistan.  These disbursements, made principally by KOICA through the Korea Eximbank’s EDCF, largely followed world events (war and the Tsunami).  However, with Korea seeking to increase ODA, it has given itself an excellent opportunity to use that money to achieve targeted development.  Korea could use this increase and disburse much of it to strategic partners such as Indonesia or Vietnam to further assist them with economic development.  Likewise, Australia could focus on nations such as East Timor and Fiji.  The scale and scope of mentoring relationships would depend on the size and historical relationship between of the nations involved.  For example, former European colonial powers could focus their efforts on former colonies, just as Great Britain has tried to maintain relations with its former colonies through the British Commonwealth.
 
Call me crazy, but it might be an idea that might just work.