Posts in category Business and finance


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How should recessions be fought when interest rates are low?

ONE day, perhaps quite soon, it will happen. Some gale of bad news will blow in: an oil-price spike, a market panic or a generalised formless dread. Governments will spot the danger too late. A new recession will begin. Once, the response would have been clear: central banks should swing into action, cutting interest rates to boost borrowing and investment. But during the financial crisis, and after four decades of falling interest rates and inflation, the inevitable occurred (see chart). The rates so deftly wielded by central banks hit zero, leaving policymakers grasping at untested alternatives. Ten years on, despite exhaustive debate, economists cannot agree on how to handle such a world.

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Business and financeGulliver

Private jets are getting cheaper

ONE of the first corporate jets was owned by Harry Ogg, the president of a washing-machine company. Bought in 1929, the four-passenger plane was named “Smilin’ Thru” and was decked out with a desk, a typewriter and space for washing machines. On sales trips Ogg told the pilot to fly low over a town, with the plane’s siren wailing. The commotion drew residents to the airport, where Ogg demonstrated the benefits of his white goods in a slick sales pitch.

Most aspects of corporate jet setting have changed since Ogg’s day. Planes are more likely to be owned by a hedge-fund manager than a white-goods salesman. They are kitted out with televisions rather than typewriters. Moreover, they tend to be too costly for entrepreneurs to use as clever marketing tools. Yet even though such stunts remain a dream for many, their revival may be edging slightly closer. That is because the price of private jets has tumbled in the last few years, Continue reading

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Business and financeGulliver

Carriers in America are doubling down on budget airfares

GLEN HAUENSTEIN, the president of Delta, is optimistic about the future of basic economy. On a conference call this week, he boasted that the stripped-down airfares actually act as an incentive for passengers to upgrade to the more expensive standard economy tickets. Despite Mr Hauenstein describing it as a product that “people don’t really want”, the airline says it will expand the revenue-boosting basic-fares system in 2018.

Delta was the first carrier to roll out basic economy fares—sometimes called “last class”—in America in 2012. Since then the model has caught on. Both American and United quickly introduced similar services on some domestic routes. By taking away a perk here and adding another there, each airline has created a unique version of the same miserable experience.

The new fare system is not without its critics. Many have Continue reading

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Business and financeGulliver

Airlines are trying to cram ever-more seats onto planes

AIRLINES use all sorts of clever tricks to make more money from passengers. They charge extra for bags, for food and for selecting where you sit. Now they are embracing another strategy: packing more seats onto each plane. Last month American Airlines announced that it will insert 12 more seats, or two rows, into its economy class on its Boeing 737-800 fleet and an extra nine seats into its Airbus A321s. Similarly, JetBlue recently said it will cram 12 additional seats into its A320s.

But flyers do not like being packed ever-more tightly into the sardine tins that planes have become. This summer American Airlines announced that it would reduce the distance between rows—known as seat pitch—from 30 to 29 inches on some of its new planes. The public outcry was so heated that the carrier scrapped its plans, as Gulliver has previously reported. This February a member of Congress Continue reading

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