April 01, 2012

Robert Z Nemeth "Another airline snafu"

Telegram story link.   

"The handwritting was on the wall for some time, and it spelled doom."    Bob, I got to ask you.    If you saw this so clearly, why didn't your warn the people, who have bought tickets and have millions of dollars in limbo and ruined travel plans?     On other hand, I did come to this realization this past November and opted to warn people and posted on this blog that Direct Air would be out of business by February 2, 2012.  I felt that I owed it to my readers.   Guess that is why I am a silly blogger.

Another silly blogger idea was when you came to my office and I urged you to put the entire airport out to bid--"privatization".   Remember, I had to explain what this meant and gave you the example of how National Express had paid 35 Million to take out a 99 year lease of Stewart Airport from Newburgh New York in 2000.   They did such a good job and created competition for the Port Aurthority of New York that in 2007 , the Port Authority of New York bought out the remained of the 92 lease in 2007 for 78 million.    Story click here.
You then told me nothing gets done without going through you and for me to write  a letter to the Airport Commission, which you chaired, urging you to do an RFP for the entire airport not just parcels of land.   I did, it was read into the minutes of a board meeting (February of 2005) and the idea was dismissed (as fast as it was submitted).  Why?  I was told that nobody would bid for the entire airport.   On one hand you say "state of the art airfield, with an adjoining industrial park, remains a major asset", but when you are urged to put it out to bid , you say nobody would bid on it? 

Instead, parcels of land were in fact put out to RFP and nobody did bid.   Imagine if some big gaming operation had saw an entire "state of the art airfield" out to bid and took an educated bet that gambling may come to Worcester?    But again what do we "silly bloggers" know.

Bob, my favorite line of you story, however, is "Despite the failure of Direct Air's overall operations its Worcester-based service...... was profitable".      Say that again??   One of the reasons the "handwritting" was on the wall for me were the prices that they were charging.   Between the cost to lease a plane, the cost of the crew and the exploding cost of fuel, there was no way in hell the costs of the tickets that they were charging covered these expenses.    Bob, these flights were far from being profitable!!  Can you say Chapter 7 bankruptcy... 

Do you want proof?  No other airline has stepped in.    Believe me if these routes were profitable airlines would be here the day Direct Air stopped flying.   A prospective airline needs to calculate what they need to charge to make money (avoid going out of business) and how many people would buy tickets at that price, not base their projections on Direct Air sales.    Anyone can sell alot of tickets if the business plan is to pre-sell as many tickets/vouchers/memberships as possible, don't pay any bill and take off with the monies then file Chapter 7 bankruptcy?

Bob, under your guidance the airport commission made a big mistake not trying to market the airport to as large an audience as possible.  Instead you focused soley on one buyer--MassPort.         Maybe instead of reading the "handwritting on the wall" you should have paid attention to a letter urging you to put the entire airport out to bid 6 , or was it 7 years ago, and our "bright future" may have been getting realized today.


jahn said...

WOOOOOWEEEEEEEEE!!!! Excellent, even I have not got on someones case like that in quite while.

You go Bill !!!!!!!!!

You know I have been wondering about all the efforts that go into the Worc Airport topic on this blog and I got to thinking last week why the hell do we even bother, esp. all the time you have into it Bill.

Call me defeated, but why do we even bother? No one who can affect the airport listens. No one seems to care. 10 years Massport has had control of the airport and look where it is (not). How many more years will this blogs futility continue, before we all say enough is enough?

jose said...

jahn: if you admit defeat, the same thing will keep happening. if you keep going with the blog/question those in charge, and bring awareness to those who can investigate.i dont know about some of you, but ive learned somethings that i didnt know. one example is i didnt even know worcester airport had flights till last summer. i used to spend almost everynight with my g/in 2008 and was unaware of direct air. massport clearly failed at advertising worcester airport when they did have flights, not even massport, everyone. i listen to 96.6 fm and heard more advertisment for linear air out of hanscom, but never once for direct air. not even at sharks games, in the paper, nothing.

Jahn said...

Jose, you say if I (we) admit defeat the same thing will keeep happening.

But Jose, in 10 years we have NOT admitted defeat, yet the same thing keeps happening. I.e. by not accepting defeat, we keep trying only to continue to be unsuccesful.

Sorry, but we disagree. At some point everyone has to know when to fold their hand and move on, realizing that they (we) are just not able to influence change at Worc Airport and very possibly that no one in power really wants any change at the moment at Worc Airport.

Jahn said...

A couple of comments on the airport payroll thread.

There are 9 security officers and I dare say from the looks of their pay they are all full time. Now there are 168 hours in a week and we also have to cover vacation times, holidays, sick days personal days, etc. But 9 employees to cover this function? MAybe certain sec. coverage is mandated by the FAA?

PLease do not forget that $1.3M in payroll does not include benefits which will add another..30%+ to the compensations costs. total cost. Just as an example a security officer making $40,000 proabably has a family health ins plan that Massport probably pays $10-12,000 of. Maybe Bill can help me here with costs for health ins. plans. So the Health ins. benefit alone is 25 to 30% of wage cost. Then there is pension cost, disablity ins. cost, life ins cost, mass unemployment tax cost, federal unemployment tax cost, medicare cost, social security tax cost.

Also, I did not see any cost for airport liason? I believe we do have a 1/2 time airport liason up there. I also believe he's not listed because the city pays him and not Massport and the article listed only Mssport Payroll?????????

Bill Randell said...

It really bothers me that the Telegram does not somehow make Mr Nemeth put some type of foot-note as to what years he served on the airport commission and was in fact the commissioner, who wanted MassPort to take over ORH.

Imagine the Wall Street Journal letting a writer rave about a stock, but then not disclose he or she owns shares in that stock.

jose said...

How cool would it be, imagine 2 or 3 airlines coming in, build a cafe inside the airport with a view of the runway, post the arrivals and departures, and airplane watch? Last fall I was eating at crown bakery outside and a plane was arriving, flew over the bakery and I was like" this is a nice spot ot airplane watch".

Jahn said...

Jose', I would actually go to the airport and do this if it was available. I am not really into flying, but could be into coffee pastry, and flight observation; but we do need some flights 1st :( I think i have flown once in the last 30 years.

BTW, this past time is quite common out in the Castle Park area of South Boton. However, from my limited experience it can be done with beer and chips at night or coffee, pastry and a newspaper during the day. Chose your own poison. :)

Another great place to watch planes approaching Logan is the formerly abandoned, but now "re-cycled" Quincy quarries which has a golf course and club house near the highest points of the remaining granite. And if you're really into granite and geology, it gives new meaning to getting stoned.