High fuel prices are causing heartburn in aviation circles. Therefore, here are some of the ways airlines are and can employ to tame high fuel costs:
1) Fly higher, you burn less fuel. Particularly, at congested airports, avoid holding at lower altitudes. That is also the reason why planes have winglets on them. Winglets reduce drag and help the plane climb up, saving fuel up to 3 percent to 4 percent per flight.
2) Avoid level flying with gear down and full flaps. Doing so could actually reduce fuel consumption by 300 Kg per engine. Not doing so increases the charge, using up more fuel.
3) Cruise while descending.
4) Use light leather for seats instead of heavy cloth.
5) Switch off the Auxiliary Power Unit (APU) – which is used for the lights and the AC - when on the ground and use the Ground Power Unit (GPU). An APU consumes 200 liters of fuel an hour. Whereas, a GPU, as it runs on diesel, saves money.
6) Reduce magazines and newspapers, flush lavatories during delays, change cutlery to plastic.Start APU just before engine shutdown.
7) Wash the plane more often; dust and moisture slow it down.
8) Stop taking excess fuel unless required. Modern jets burn 3 percent to 4 percent of the weight of additional fuel carried per hour of flight.
9) Decrease loading of water on the plane.
10) Encourage single-engine taxi after landing.
11) Use proprietary flight planning software that suggests the flight path, so that the plane can be aligned with the wind, thereby reducing friction.
12) Go in for more fuel-efficient planes that are aerodynamically well designed, like the A-380 and the Dreamliner.
13) Hedge in fuel. For example, Southwest Airlines has stolen a march over its competitors by hedging fuel till 2012 at USD 51 a barrel. According to the International Herald Tribune, “The hedges have helped Southwest Airlines profitable, producing gains of $455 million in 2004, $892 million in 2005, $675 million in 2006 and $439 million for the first nine months of 2007, as oil prices nearly doubled.”
Sunday, July 27, 2008
Saturday, July 26, 2008
Mark Twain On India
Here are some excerpts from Mark Twain’s travelogue, Following the Equator:
"This is indeed India; the land of dreams and romance, of fabulous wealth and fabulous poverty, of splendor and rags, of palaces and hovels, of famine and pestilence… The country of a thousand nations and a hundred tongues, of a thousand religions and two million gods. It is the cradle of the human race, birthplace of human speech, mother of history, grandmother of legend, great-grandmother of tradition… The one sole country under the sun that is endowed with an imperishable interest for alien prince and alien peasant, for lettered and ignorant, for wise and fool, for rich and poor, for bond and free. The one land that all men desire to see, and having seen once, by even a glimpse, would not give that glimpse for the shows of all the rest of the globe combined… Its marvels are its own; the patents cannot be infringed; imitations are not possible."
"This is indeed India; the land of dreams and romance, of fabulous wealth and fabulous poverty, of splendor and rags, of palaces and hovels, of famine and pestilence… The country of a thousand nations and a hundred tongues, of a thousand religions and two million gods. It is the cradle of the human race, birthplace of human speech, mother of history, grandmother of legend, great-grandmother of tradition… The one sole country under the sun that is endowed with an imperishable interest for alien prince and alien peasant, for lettered and ignorant, for wise and fool, for rich and poor, for bond and free. The one land that all men desire to see, and having seen once, by even a glimpse, would not give that glimpse for the shows of all the rest of the globe combined… Its marvels are its own; the patents cannot be infringed; imitations are not possible."
Friday, July 25, 2008
Energy Security
Coal is easily the cheapest option for energy. However, coal-based power produces massive greenhouse gases, and for this reason it may not be a good option in future decades. Moreover, coal is going to be exhausted, eventually.
Alternatively, it is possible that breakthroughs in solar technologies could make energy-generation cheaper and economically more viable. Solar energy is also available everywhere and is renewable. Moreover, it has none of the toxic. Recent advances in solar thermal technology show a lot of promise. Yet, nobody knows whether the technology is scalable, can work in cloudy countries, or can overcome maintenance issues.
As it seems, the most promising alternative source of energy is nuclear power, although nobody knows for sure, since the future is full of uncertainties.
Opponents of nuclear power for energy say that nuclear power will never account for more than a fraction of power needs, and will be the most expensive form of power.
The economic viability of nuclear power is far from proven. A detailed MIT analysis in 2003 suggested that nuclear power was distinctly more expensive than power based on coal or natural gases.
Since then, the prices of fossil fuels have sharply increased. And, meanwhile, the nuclear power industry argues that economies of scale can substantially reduce the cost of nuclear power. Nuclear power plants have high upfront costs, but have low running costs. If they are built without cost or time overruns, nuclear power could be competitive with natural gases even at today’s prices.
For example, France, which gets three-quarters of its electricity from nuclear power, has shown that once production is standardized and plants are built on time, nuclear power is competitive.
Fourth generation nuclear power plants are now on the drawing board, and could further improve the economics of nuclear power.
We need to keep all the options open, aim for a mix of energy sources, and try to be at the leading edge of all technologies, so as to hedge the future.
Alternatively, it is possible that breakthroughs in solar technologies could make energy-generation cheaper and economically more viable. Solar energy is also available everywhere and is renewable. Moreover, it has none of the toxic. Recent advances in solar thermal technology show a lot of promise. Yet, nobody knows whether the technology is scalable, can work in cloudy countries, or can overcome maintenance issues.
As it seems, the most promising alternative source of energy is nuclear power, although nobody knows for sure, since the future is full of uncertainties.
Opponents of nuclear power for energy say that nuclear power will never account for more than a fraction of power needs, and will be the most expensive form of power.
The economic viability of nuclear power is far from proven. A detailed MIT analysis in 2003 suggested that nuclear power was distinctly more expensive than power based on coal or natural gases.
Since then, the prices of fossil fuels have sharply increased. And, meanwhile, the nuclear power industry argues that economies of scale can substantially reduce the cost of nuclear power. Nuclear power plants have high upfront costs, but have low running costs. If they are built without cost or time overruns, nuclear power could be competitive with natural gases even at today’s prices.
For example, France, which gets three-quarters of its electricity from nuclear power, has shown that once production is standardized and plants are built on time, nuclear power is competitive.
Fourth generation nuclear power plants are now on the drawing board, and could further improve the economics of nuclear power.
We need to keep all the options open, aim for a mix of energy sources, and try to be at the leading edge of all technologies, so as to hedge the future.
Wednesday, July 23, 2008
Economics of the Rupee
If exports go up, or foreign investors bring in foreign currencies into the country to invest in the stock exchange, the demand for the rupee goes up, and the external value of the rupee appreciates. Conversely, if the trade balance deteriorates, our demand for foreign exchange goes up, and the rupee depreciates.
At times, the government – precisely, the Reserve Bank of India - also influences the value of the rupee by buying or selling foreign exchange to affect the demand for the rupee. For example, the sale of foreign exchange by the RBI will result in a fall in the supply of the rupee.
When Foreign Institutional Investors pour money into the economy, a huge inflow of foreign money increases the demand for the rupee, causing the rupee to appreciate. However, this phenomenon might hurt Indian Exporters, because their products become more expensive on foreign markets.
But, when the situation is exactly the opposite, say, when the Indian-share market is bearish, Foreign Institutional Investors pull out of the Indian-share market, reversing the inflow of foreign exchange.
Most of the times, adverse trade balance, along with the outflow of foreign exchange due to the actions of the Foreign Institutional Investors, increases supply of the rupee on the foreign exchange market, resulting a fall in the external value of the rupee.
Like all other prices, the exchange rate too plays an important role in correcting demand or supply imbalances. For example, the lower the value of the rupee, the easier it is for Indian exporters to sell their goods abroad. Moreover, the higher volume of exports will help restrict the fall in the value of the rupee.
As our import bill is not very large as a proportion of GDP, so the rupee when appreciates does not help much in countering the inflation. Thus, a fall in the rupee value of our basket of imported goods can only have a small impact on the rate of inflation in the near future.
At times, the government – precisely, the Reserve Bank of India - also influences the value of the rupee by buying or selling foreign exchange to affect the demand for the rupee. For example, the sale of foreign exchange by the RBI will result in a fall in the supply of the rupee.
When Foreign Institutional Investors pour money into the economy, a huge inflow of foreign money increases the demand for the rupee, causing the rupee to appreciate. However, this phenomenon might hurt Indian Exporters, because their products become more expensive on foreign markets.
But, when the situation is exactly the opposite, say, when the Indian-share market is bearish, Foreign Institutional Investors pull out of the Indian-share market, reversing the inflow of foreign exchange.
Most of the times, adverse trade balance, along with the outflow of foreign exchange due to the actions of the Foreign Institutional Investors, increases supply of the rupee on the foreign exchange market, resulting a fall in the external value of the rupee.
Like all other prices, the exchange rate too plays an important role in correcting demand or supply imbalances. For example, the lower the value of the rupee, the easier it is for Indian exporters to sell their goods abroad. Moreover, the higher volume of exports will help restrict the fall in the value of the rupee.
As our import bill is not very large as a proportion of GDP, so the rupee when appreciates does not help much in countering the inflation. Thus, a fall in the rupee value of our basket of imported goods can only have a small impact on the rate of inflation in the near future.
Tuesday, July 8, 2008
How Can You Smoke More?
Smoking is undoubtedly extremely injurious to health – it’s the main cause for lung cancer, lung diseases, and heart and arteries diseases. So, if you love your longevity, you should quit right now.
On the contrary, Mark Twain, a great philosopher, said, “It is easy to quit smoking. I have done it hundreds of times.”
If you are one of his “disciples,” you should continue reading this blog, otherwise go and do something more fruitful.
So, how can you keep smoking and still love your longevity? Well, it depends on what you smoke! There are plethoras of brands on the market. And, you should opt for the least damaging one.
The primary factors you should keep account for in your “slim lady” are: Amount of Tar, Amount of Nicotine, and Amount of Carbon Monoxide – the less these are, the better it is for you.
So, which is, perhaps, the best option on the market? So far, the best I have figured out is Dunhill – that comes in a white pack with 1 mg written right on the front face. A White Dunhill pack contains 1 mg of Tar, 0.1 mg of Nicotine, and 1 mg of Carbon Monoxide. Whereas, Marlboro Lights, which is arguably the world’s most popular slow-killer brand, contains 6 mg of Tar, 0.5 mg of Nicotine, and 7 mg of Carbon Monoxide.
Now, you know what to do! And, by the way, if you get to know something still better, do let me know too!! :-)
On the contrary, Mark Twain, a great philosopher, said, “It is easy to quit smoking. I have done it hundreds of times.”
If you are one of his “disciples,” you should continue reading this blog, otherwise go and do something more fruitful.
So, how can you keep smoking and still love your longevity? Well, it depends on what you smoke! There are plethoras of brands on the market. And, you should opt for the least damaging one.
The primary factors you should keep account for in your “slim lady” are: Amount of Tar, Amount of Nicotine, and Amount of Carbon Monoxide – the less these are, the better it is for you.
So, which is, perhaps, the best option on the market? So far, the best I have figured out is Dunhill – that comes in a white pack with 1 mg written right on the front face. A White Dunhill pack contains 1 mg of Tar, 0.1 mg of Nicotine, and 1 mg of Carbon Monoxide. Whereas, Marlboro Lights, which is arguably the world’s most popular slow-killer brand, contains 6 mg of Tar, 0.5 mg of Nicotine, and 7 mg of Carbon Monoxide.
Now, you know what to do! And, by the way, if you get to know something still better, do let me know too!! :-)
Monday, July 7, 2008
How Does Adobe Make Money?
Adobe gives away its innovative technologies, such as, PDF Reader, Flash Player, the Flex development framework, and now AIR, for free. So, how does Adobe make money? For Adobe, the revenue comes from several sources.
One of the revenue sources is from tooling – Adobe builds some of the best tools in the world. The more people build widgets that work on Adobe’s free technologies, the more interest Adobe hopes to drive to its tools: Photoshop, Creative Suite, Dreamweaver, and new tools, such as, Flex Builder.
The second source of revenue is from its server technologies. Adobe makes servers, like LiveCycle, which manages business process workflow, documents production, and reliably shares documents, Flash Media Server, which does streaming of video, and ColdFusion, which is a rapid application development framework.
The third source of revenue is from hosted “freemium services”, which means the services are free to some extent and then you need to pay some premium for using those services thereafter.
The fourth source of future revenue is going to be from its own standalone media player. The media player is also going to be free to end users. The way this generates revenue is: You can either watch free video streams or, if the content providers want to monetize their content, they can associate advertising with Adobe’s media player, and then Adobe shares in the advertising revenue.
Strategically, Adobe feels like the more it can help innovate and move the expressiveness of the Web forward, the better off Adobe is in terms of enabling people to produce that expressive content with its tools and servers.
Saturday, July 5, 2008
Energy-frugal Japan
According to The New York Times, Japan is a role model of modern energy efficiency, harnessing its waste heat and gases - that had previously been released into the air or had burned off as waste - to generate much of its own electricity to power generators.
Superior technology and a national spirit of avoiding waste give Japan the world’s most energy-efficient structure. Japan even urged the leaders of the G8 nations to adopt numerical targets as they discuss new ways to curb carbon dioxide emissions. The existing pacts, the original climate treaty from 1992 and the Kyoto Protocol, which expires in 2012, have been called failures by energy and climate experts.
Japan is by many measures the world’s most energy-frugal developed nation. After the energy crises of the 1970s, the country forced itself to conserve with government-mandated energy-efficiency targets and steep taxes on petroleum. Energy experts also credit a national consensus on the need to consume less.
According to the International Energy Agency, based in Paris, Japan consumed half as much energy per dollar worth of economic activity as the European Union did, or as the United States did, and one-eighth as much as China and India did in 2005. While the country is known for green products, like hybrid cars, most of its efficiency gains have been in less eye-catching areas, for example, in manufacturing.
Corporate Japan has managed to keep its overall annual energy consumption unchanged even as the economy doubled in size during the country’s boom years of the 1970s and ’80s.
Japan looks certain to fare better than other countries in the new era of high energy costs.
Friday, July 4, 2008
Trade-offs For Doing Business in the UAE
Undoubtedly, the UAE is a very fast emerging market for businesses. The opportunities for a very high growth are paramount. However, the UAE economy shows some weaknesses, too. Its business freedom, investment freedom, financial freedom, and property rights are low, due to certain local government's regulations and policies.
According to the Index of Economic Freedom (IEF) report, which covers 162 countries, the UAE's regulatory environment doesn't seem to be very appealing to people who intend to start, operate, and close a company in the UAE.
Starting a business, in the UAE, takes on average of 62 days, compared to the world's average of 43 days. The minimum capital requirement to launch a business is high. Although, obtaining a business license takes less time than the world's average of 234 days. But, bankruptcy proceedings are lengthy and cumbersome.
The IEF report says foreign investors do not receive the same national treatment that the local investors receive, except for those who set up offices in the free zones. The UAE requires that at least 51 percent of a business must be owned by a UAE national.
In the UAE, goods have to be distributed through an Emirati partner, although "liberalized" items may be brought in without an agent's approval.
While the UAE's two stock markets are open to foreign investments, foreign ownership of listed firms is limited to only 49 percent, while some companies shun foreign ownership.
The government owns all the land in Abu Dhabi. And, Mortgages have been introduced for select Dubai-based, five-star property developments, and are otherwise generally unavailable.
Thursday, July 3, 2008
Issues with Outsourcing
There are a lot of issues with outsourcing. You need to take care of all those issues, if you really want to take the full advantage of doing so. You just cannot sit back, saying you have outsourced something to someone, and you need not bother anymore. In fact, when you outsource, you should bother much more, because you are not only outsourcing some parts of your business, but also outsourcing a big chunk of your brand value, which you have made by investing millions of dollars.
The issues of utmost importance that you should be taking care of are:
1) Labor cost in the market where you are outsourcing to. You should keep in mind that this is NOT the most important factor you should be giving the highest priority. It’s just one of the factors.
2) Transportation cost and time involved in transporting the goods from the point of production, in the outsourced market, to the point of your further operations, which can again be anywhere in the world.
3) The inventory that you need to maintain and its associated costs to keep your show running, while your products are getting manufactured in the outsourced market.
4) The cost of hedging risks. In case, say, because of some catastrophes, you fail to procure your goods from the outsourced market; then in that case how you have planned to keep the show running. Sometimes, the cost of hedging is so huge that companies change their entire plans of outsourcing. You just cannot afford to overlook this! If you don’t plan for this, you might be giving your competitors a definite edge, or a big number of your customers, or a big chunk of your own “monopoly.”
5) Manufacturer’s technical capabilities, for making sure that you get your products right in the right way, and practical capabilities, for making sure that the manufacturer can deliver the products in time to the right place. After all, you have a reputation to maintain. Don’t you?
6) You might need to take care of your intellectual properties. By and large, Intellectual Property Rights in low-cost economies are not in good shape. So, chances are that your products might get copied by someone out there, and you lose a future market before even taking a stance. Can you afford losing a market with almost more than half the world’s population? I bet; you just cannot!
7) Above all, you need to seriously consider your procurement on a global basis. The reason is that - say, if you get a 20 percent cost savings in a business that might have a 10 percent or a 15 percent margin - that creates a massive competitive advantage. If you don’t do so, your competitors will surely take advantage of this, giving you a big disadvantage. Can you afford not doing so? I bet; you just cannot.
And, opponents of outsourcing, especially those in the US, must consider the findings of the McKinsey Global Institute that for every dollar the United States sends abroad through outsourcing, it gets about $1.12.
The issues of utmost importance that you should be taking care of are:
1) Labor cost in the market where you are outsourcing to. You should keep in mind that this is NOT the most important factor you should be giving the highest priority. It’s just one of the factors.
2) Transportation cost and time involved in transporting the goods from the point of production, in the outsourced market, to the point of your further operations, which can again be anywhere in the world.
3) The inventory that you need to maintain and its associated costs to keep your show running, while your products are getting manufactured in the outsourced market.
4) The cost of hedging risks. In case, say, because of some catastrophes, you fail to procure your goods from the outsourced market; then in that case how you have planned to keep the show running. Sometimes, the cost of hedging is so huge that companies change their entire plans of outsourcing. You just cannot afford to overlook this! If you don’t plan for this, you might be giving your competitors a definite edge, or a big number of your customers, or a big chunk of your own “monopoly.”
5) Manufacturer’s technical capabilities, for making sure that you get your products right in the right way, and practical capabilities, for making sure that the manufacturer can deliver the products in time to the right place. After all, you have a reputation to maintain. Don’t you?
6) You might need to take care of your intellectual properties. By and large, Intellectual Property Rights in low-cost economies are not in good shape. So, chances are that your products might get copied by someone out there, and you lose a future market before even taking a stance. Can you afford losing a market with almost more than half the world’s population? I bet; you just cannot!
7) Above all, you need to seriously consider your procurement on a global basis. The reason is that - say, if you get a 20 percent cost savings in a business that might have a 10 percent or a 15 percent margin - that creates a massive competitive advantage. If you don’t do so, your competitors will surely take advantage of this, giving you a big disadvantage. Can you afford not doing so? I bet; you just cannot.
And, opponents of outsourcing, especially those in the US, must consider the findings of the McKinsey Global Institute that for every dollar the United States sends abroad through outsourcing, it gets about $1.12.
Wednesday, July 2, 2008
What Does a Telecom Company Need to Get Right?
According to McKinsey, a telecom company needs highly efficient, automated self-services. Telecom companies play a key role in automating the sales and service processes of other sectors. Now they must automate their own. This can be achieved by:
First, Telcos must do a better job of creating a compelling online experience. Too many Web sites or a poorly-designed Web site stumps consumers, who don't understand what information is being sought and find them hard to navigate through. For example, it may be possible to book a repair online, but not to check when the technician is coming, so the customer gives up and picks up the phone.
Secondly, Telcos must also use state-of-the-art sales approaches on their Web sites. Managers who fear that the online channel is a less effective sales tool than a human being who sells to another human being miss the point. Well-performing Web sites are capable of achieving higher sales per interaction than call centers do; it's a matter of execution.
Thirdly, companies can, for example, deploy sophisticated interactive sales approaches customized for specific kinds of customers and what they are trying to accomplish. Such tailored pitches achieve high close rates; Amazon, for instance, knows who you are and what you have purchased in the past, and it immediately woos you with personalized merchandising. Well-structured sites can segment customers into low-potential prospects - who are served cheaply online - and good prospects - who are directed to pick up the phone to complete a service or sales transaction that began online. This approach allows call-center employees to work their magic, but more efficiently and effectively. The tremendous flexibility, provided by Customer Relationship Management (CRM) and dynamic HTML, is an invaluable tool for giving each consumer this kind of unique service and sales experience — a "virtual store" designed for every individual. But such a careful tailoring of the online experience requires the marketing and IT functions to work together, closely.
The cost of coordinating a problem across separate functions is therefore high, as is the potential for error - which might be a result of rekeying information, for instance - so a delayed response to the customer is inevitable. Such processes are ripe for improvement, including better automation. Telecom companies that want to tackle their back-office problems successfully should bank on the use of IT as the glue to hold cross-functional processes together.
Tuesday, July 1, 2008
The Future of Convergence
Think back to the PC revolution. For ten years before the PC came on the scene, we were programming on microprocessors. Microprocessors alone didn't make the PC market. What made the difference was that software was eventually put on top of the hardware, so that people could put applications on it. Suddenly you had the PC revolution.
Now fast-forward 25 years and we're at the same place, except that instead of having only the hardware in your PC box there is also the hardware of your connected devices. Increasingly, people hop from one connected device to another throughout their daily lives — BlackBerry, cell phone, work phone, PC, laptop, music and camera phone, TV, game console. The number of connected devices we use and carry increases every year, and more and more they are as much for our personal lives as for our professional lives. Family rooms are becoming more technically interesting than offices!
What if we did today the same thing that happened 25 years ago — wrap a layer of software, but this time around the hardware of connected devices, so that people could build applications on top of all this!!! The applications of such a platform are limitless, and will be centered as much on the user's quality of life as on business productivity. The enabling technologies and applications here are the next big thing for the convergence market and the IT industry as a whole.
Verizon's iobi platform is all about this. It will enable people to remotely control their content and events on any device; the content here could be calls, voice mails, files, notes, pictures, music, and video. For example, I'd like to know instantly anywhere in the world if my office calls any of my devices and be able to bring the call to where I am. I'd like to contact any individual or group in my business or personal circle at any time, using any device, and with the communication method of my choice. I'd like to have my media available to me at all times on any connected device capable of rendering them. I'd like to be notified of to take my prescription wherever I am. I'd like to have an "off" button to hold all forms of communications. Of course, most applications on such a platform will be created by various different companies —independent software vendors and so forth — which have intimate knowledge of a special vertical segment of life or business. Many of the applications will be as unpredictable as PC spreadsheets were back in the early '80s.
Now fast-forward 25 years and we're at the same place, except that instead of having only the hardware in your PC box there is also the hardware of your connected devices. Increasingly, people hop from one connected device to another throughout their daily lives — BlackBerry, cell phone, work phone, PC, laptop, music and camera phone, TV, game console. The number of connected devices we use and carry increases every year, and more and more they are as much for our personal lives as for our professional lives. Family rooms are becoming more technically interesting than offices!
What if we did today the same thing that happened 25 years ago — wrap a layer of software, but this time around the hardware of connected devices, so that people could build applications on top of all this!!! The applications of such a platform are limitless, and will be centered as much on the user's quality of life as on business productivity. The enabling technologies and applications here are the next big thing for the convergence market and the IT industry as a whole.
Verizon's iobi platform is all about this. It will enable people to remotely control their content and events on any device; the content here could be calls, voice mails, files, notes, pictures, music, and video. For example, I'd like to know instantly anywhere in the world if my office calls any of my devices and be able to bring the call to where I am. I'd like to contact any individual or group in my business or personal circle at any time, using any device, and with the communication method of my choice. I'd like to have my media available to me at all times on any connected device capable of rendering them. I'd like to be notified of to take my prescription wherever I am. I'd like to have an "off" button to hold all forms of communications. Of course, most applications on such a platform will be created by various different companies —independent software vendors and so forth — which have intimate knowledge of a special vertical segment of life or business. Many of the applications will be as unpredictable as PC spreadsheets were back in the early '80s.
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