Linklist: May 8, 2012

Strib: No-frills air carrier is filling in gaps :

“Meet Great Lakes, a no-frills newcomer that believes there’s a lucrative opportunity in connecting rural America with bustling airports like MSP. The Wyoming-based airline is in the midst of adding more than a dozen new cities to its local roster, with the Twin Cities serving as its hub for 20 percent of its destinations.”

It provides “essential air services” with big government subsidy.

The frequent fliers who flew too much – Los Angeles Times. Matt Yglesias writes:

Back in 1981, American Airlines needed cash. Interest rates were sky high, so rather than borrowing the money, they hit upon a weird idea: sell lifetime passes good for unlimited first-class air travel for $250,000. Add a companion pass for $150,000 more. The resulting program, the AAirpass, turned out to be a huge disaster brilliantly chronicled over the weekend in the Los Angeles Times. Losing millions of dollars a year on its highest-use members, American has in recent years been employing investigators to try to find instances of rule violations that let them cancel members’ passes.
I absolutely love this story because it illustrates so much about the business and economics worlds. It highlights the fact that there are a lot of ways to engage in “hidden borrowing” and that this kind of hidden leverage is often very costly. It illustrates the importance of avoiding adverse selection if you want to succeed. And most of all, it illustrates that over and above the structural issues facing the notably unprofitable U.S. aviation industry there also seems to be a problem of systematic mismanagement and repeated blunders.

Amtrak to Use iPhones to Streamline Service –

“Old-school train conductors are finally ready to give up their hole punchers to try something new: the iPhone.
Amtrak, the government-owned corporation that oversees the nation’s railroad train services, has been training conductors since November to use the Apple handset as an electronic ticket scanner on a few routes, including from Boston to Portland, Me., and San Jose, Calif., to Sacramento.”

Ars: Google gets license to test drive autonomous cars on Nevada roads:

“On Monday, the Nevada Department of Motor Vehicles approved Google’s license application to test autonomous vehicles on the state’s roads. The state had approved such laws back in February, and has now begun issuing licenses based on those regulations.
The state previously outlined that companies that want to test such vehicles will need an insurance bond of $1 million and must provide detailed outlines of where they plan to test it and under what conditions. Further, the car must have two people in it at all times, with one behind the wheel who can take control of the vehicle if needed.
The Autonomous Review Committee of the Nevada DMV is supervising the first licensing procedure and has now approved corresponding plates to go with it, complete with a red background and infinity symbol.”

The Prospect Park Newsletter sends me to Pete LeBak … :

“Pete LeBak’s barber shop is a neighborhood institution in Prospect Park.  He’s been here over 31 years.  Light rail is going in on University Ave. now, and the work has wiped out the parking in front. Access is daunting folks; traffic has slowed to a trickle. So business has cratered.  By the way, that’s ‘Bug’ (short for Ladybug) on the floor in her usual posture. She’s about 110 in dog years.  Neighbors and friends are trying to get Pete some press and spread the word to help him make it through the construction gauntlet.  Pete was fixing to move out, but he thought back on the 31 years he’d been there, all the friends he’d made, and it got his back up.  Longtime customers stopped by to beg him not to go. So now he’s fighting to stay.  We’re rallying the troops.”

[the external cost of transportation construction is non-trivial]