BMED - the world's worst airline

For those who understand the importance of customer service and its impact on word-of-mouth marketing, consider the following:

As my readers may know, I spend a great deal of time in Senegal, travelling back and forth to tend to the 4x4 export start-up business that I launched last year. While direct flights do exist on South African Airways (which flies from both JFK and Dulles directly to Dakar en route to Johannesburg), I usually prefer to take one of the European carriers - either because they allow me to stop in London where I can re-acquaint myself with the city I called home for 2 years, earn Frequent Flyer miles on Continental's OnePass program (AirFrance, Virgin Atlantic, and Alitalia are partners), or both.

Such was the case during a trip last fall. I flew to London on Virgin Atlantic, spent 3 days with friends, and then had a flight on British Mediterranean (BMED), which operates as a franchise of British Airways, from London to Dakar.

On this trip, I had 2 suitcases, one of which had some promotional materials inside so it was rather heavy. But I had looked on the British Airways website and saw that flights to Nigeria (in the same region as Senegal) allowed for 2 bags, so I figured I'd be okay. (continued...)

Arriving at Newark, the Virgin Atlantic staff informed me that one of the bags exceeded 23 kg, so I would have to pay an excess baggage fee. How much? $35. No problem.

Fast forward to London and my departure. I arrive for check-in and the British Airways clerk tells me, "Sir, you've got 2 bags here, your ticket only allows you one." Well, I'm going to Africa for a month, I explained, and furthermore I check the regulations for Nigeria (which is all that was listed on the website) and saw that 2 were permitted. "That's an arrangement with the Nigerian government. It doesn't apply to other African flights." Well, what can I do, I can't leave behind a suitcase! "I will have to charge you for the second bag." Okay, I figured, no big deal. How much? "£23 per kg." WHAT? I protested, but was told, either pay, or miss the flight. What's the total? "£536".

For those of you not accustomed to the British Pound, the exchange these days is roughly 2:1. So £536 is well over $1,000.

$1,000 for the privilege of bringing a bag into the cargo hold for a 5-hour long-haul flight. For perspective, my ticket for the flight was only about $900. I paid more for my suitcase than for myself! I suppose I should have ordered food and drinks for my suitcase as well.

Then, imagine my shock when I got on board the flight and saw that the plane was only at about 15% capacity with only about 30 passengers on board! So it's not as if space was at a premium.

Once I returned from the trip, I explained all of this to BMED in the hopes that they would rectify the situation. I was told by a British Airways agent when I landed in London and inquired that because I was transferring from the US, the more generous trans-Atlantic provision for baggage should be applied. Not so. BMED rejected my claim flat out.

I then discovered in February that British Airways on the whole had revised its excess baggage policy (presumably because of insane situations like mine) and now there were flat rates charged for excess baggage. Under the new policy, I would have paid less than 1/4 of what I was charged. So I recontacted BMED and asked that they refund the difference between the 2 charges. Rejected again. I mentioned that I was a long-time customer, and that I would be more than happy to accept vouchers for the difference, that I could apply to future flights. Rejected again.

Why they would be such sticklers about a regulation that had later elapsed because of its unfair nature was beyond me - air travel is a very customer-service oriented business. Yet they just didn't seem to understand the potential to damage a relationship with a would-be lifelong customer.

On the advice of a friend, I took my case to the corporate level and sent a letter to British Airways CEO Willie Walsh. I reiterated the entire case once again. I received a reply, this time from British Airways customer service. Unfortunately, it was equally as stubborn and inflexible.

Thus I will never be purchasing another British Airways ticket again. For those in the US, I urge you to take one of the American carriers, or Virgin Atlantic, should you wish to fly to London. For those in the UK, and anyone else who may have the opportunity, consider very carefully whether you wish to deal with BMED - I advise you against it.
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Interviewed by Used Car News

A few weeks ago, in Senegal, I got a call from a Detroit-based business editor named Jim Stickford, who writes for Used Car News, an automotive trade journal that covers behind the scenes trends in the industry. He had seen the previous Herald News article and wanted to do a follow-up story. Here is the outcome.
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Dealer Finds New Market in Africa
By Jim Stickford

New Jersey-born George Ajjan has found a market for American-made used cars in Africa. The 30-year-old former Republican congressional candidate originally planned on being an exporter when he first visited Senegal. He soon learned the local population was in love with American SUVs.

Ajjan, speaking from Senegal during a recent visit, said the Senegalese fascination came from seeing tricked out sport utilities on MTV. The vehicles also enjoy a good reputation for quality and durability. Ajjan changed his business plan and became an importer of used American vehicles to Africa. (continued...)

He can buy a 2003 Jeep Grand Cherokee in New Jersey for $10,000. Shipping and insurance add another $1,500 before the SUV reaches Dakar, Senegal's capital and main port city. Once it reaches the country, the cost can soar. Senegal assesses a 59 percent tariff on the value of an imported vehicle. The tariff is meant to prevent the country from being a dumping ground of older, more beat-up cars. It is based on a vehicle's highest value as listed by Kelley Blue Book.

That can be a problem when the government values Ajjan's $10,000 Cherokee at $13,000. That's why Ajjan recently had a trade delegation from Senegal visit Borough Jeep-Chrysler in Wayne, N.J. He wanted to explain how cars are valued and what the difference is between Kelley Blue Book's highest retail value and a vehicle's wholesale value. Joseph Franchina, a sales leader at Borough Chrysler-Jeep, hosted the Senegalese visitors. "We talked about how placing the tariff based on the retail value makes a vehicle too pricey," Franchina said. "We explained the difference between the retail price, the private party price and the wholesale price of a car."

Franchina said the event was part of an effort to create a bridge so that they could do more business in Senegal. He promoted the idea of basing a vehicle's tariff on Kelley Blue Book's listed private party value, which more closely reflects the wholesale value. Once the customs officials add the tariff, then an importer can sell in Senegal, after paying licensing fees and taxes.Since Senegalese licensing fees are based on engine size, this can add another $400 to an SUV's cost.

Ajjan finds buyers first and then finds SUVs to fit their orders. He takes an advance payment of up to 20 percent before the vehicle ships. The rest is paid on arrival. This export method benefits Ajjan because it avoids customs if the vehicle is sold to the buyer while in port. Then it is the buyer who pays to get the car out of customs. The buyer benefits because he gets some control in picking a car. A Senegal native is probably better at navigating the system anyway, Ajjan said.

There are challenges despite the SUVs' popularity. For one, diesel is the preferred fuel over there. Also, consumers are scared off by the higher costs of filling up a V-8 engine and are concerned about the availability of parts. While Ajjan eases their concerns about fuel costs, he has to admit parts for American vehicles can be hard to come by. Ajjan said he's been pretty good at providing the basics, like air and oil filters. But if the SUV's paneling is damaged, those parts are rare and expensive. "I try to mitigate these factors by emphasizing the fact that these are vehicles built less than five years ago," Ajjan said. "Senegal's big industries are fishing and mining and their road system is rough, so tough SUVs are needed." Franchina said the strong influence of the Chinese creates challenges as well.

The potential market is strong because Senegal is a stable country, Ajjan said. The recent presidential election went off without any problems.
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Senegalese visit to Borough Jeep in Wayne

Several weeks ago, I got a call from the Embassy of Senegal in Washington, DC - specifically from my friend and advisor Alhousseynou Diallo, the Economic Counsellor. He informed me that a delegation of high-ranking customs officials would be travelling to New York to meet with their American counterparts and discuss bilateral trade.

As an auxiliary component of their trip, he wanted me to organize a presentation on used automobile valuations, and I was happy to oblige. I immediately contacted Joe Franchina at Borough Jeep Chrysler in Wayne, which has been owned by the Hagedoorn family (Prospect Park Hollanders) for over 80 years, and they agreed to host the delegation.

It was a fantastic event, especially given the weather conditions and the excitement with which these dignitaries played in the snow! Samantha Henry at the Herald News covered the event, as seen below.
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Senegal eyes ties with Jersey car dealers

Wednesday, March 21, 2007 By SAMANTHA HENRY - HERALD NEWS

partial scan with photos

WAYNE -- A light snow was dusting the lot at Borough Jeep Chrysler, when a beat-up minivan with diplomatic plates rolled up. It discharged a delegation of port officials from the West African nation of Senegal.

"Welcome, Senegalese friends!" said George Ajjan, a former Republican congressional candidate-turned-entrepreneur, greeting them in French.

Ajjan, 30, of Clifton, had arranged the delegation's March visit to forge better trade ties between New Jersey and West Africa and to capitalize on what Ajjan said was the growing popularity of American SUVs there. "You mention Cadillac Escalade or Hummer to them, and they're beside themselves," Ajjan said. "Rap videos are popular, and Senegal is behind the U.S. and France as the third rap capital of the world."

A Senegalese member of the delegation agreed. "They see everything on TV -- rap music, black culture," said Al Housseynou Diallo, first economic counselor at the Senegalese Embassy in Washington, D.C. "It's popular, especially with young people."

In trying to find ways to export American cars, Ajjan said he came up against the dominance of French car makers in Senegal, the preference for diesel-fueled vehicles, and the high tariffs on American imports. The per capita income of Senegal's 12 million people was $709 in 2005, according to the U.S. State Department.

Ajjan decided that the first thing to do was persuade Senegalese trade officials to lower import taxes. "We're pricing American cars uncompetitively, by basing the tariff on the highest price," he told the group, explaining to them in French about ''le Kelley bleu book,'' -- or the Kelley Blue Book -- and American methods for pricing used cars. "It's an opportunity to build a bridge to Africa," said Joseph Franchina, sales leader at Borough Jeep Chrysler.

Africa isn't the only place where American popular culture -- arguably one of the nation's biggest exports -- may be contributing to a demand for cars that might not otherwise be practical in countries where unleaded gas is exorbitantly expensive. Vecdi Ugurlu, who owns King Motors Inc. on Route 46 in Little Ferry, said American cars -- especially SUVs -- are also catching on in his native Turkey. "Cadillac Escalade, Hummers, all these cars are popular over there, because people have such love for America," he said.

Ugurlu said a Lincoln Navigator, which sells for about $65,000 in the U.S., retails for $175,000 in Turkey, after taxes and shipping costs are factored in. Only a select clientele can afford them, according to Ugurlu, but selling just a few can be lucrative. "It's all image, it shows they are rich," he said. "Here in America, you don't see the difference, because money doesn't distinguish -- if you have credit here, and a steady income, you can drive the same truck as a rich man. But in Turkey, it's impossible to drive the same car, or eat at a fancy restaurant, as a rich man."

Ugurlu said selling cars overseas is a complicated business -- different countries have varying import restrictions and tariff structures. But despite the obstacles, he's seen a number of North Jersey car dealers testing the waters of the international car market via the Internet. "We have buyers all over the world from our Web site," Ugurlu said. "Today, you can get on the Internet and see cars anywhere, transfer funds, and do legal matters. After they wire the money in, we take the car to the port and ship it to them."

Understanding the cultural nuances of international buyers is also important, both Ugurlu and Ajjan said. Ugurlu said in many countries, high mileage on a used car rarely factors into the price, the way it does in America. In Senegal, Ajjan discovered that few prospective buyers are interested in test driving a car, but will insist on a pristine spare tire as a condition of sale. After his presentation to the Senegalese at the Wayne dealership, several of the customs officials seemed persuaded that lowering tariffs and allowing more American cars into Senegal would make a market of willing buyers.

"We live the American life," said Papa Moussa Sy, an airport customs official in Senegal, through a French translator. "If it happens here in the morning, we have it in Senegal by the evening."

Reach Samantha Henry at 973-569-7172 or henrys@northjersey.com.
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Frank Lautenberg's nightmare hotel

If NJ Senator Frank Lautenberg (D) ever has occasion to stay in a hotel in NYC, perhaps he'd like to try the Essex House on Central Park South, which was devilishly acquired by an international investor group in 2005. I passed by there today en route to catch up with my dear friend and adopted older sister, Syrian reformer extraordinaire Hind Kabawat.


I was going to go inside to have a look, but there seemed to be lots of skinheads hanging out in the lobby.

All in all, it seems like a fine hotel, but I definitely wouldn't stay there during an election year.

Note the American flag in the background. Always a good reminder.
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Snowy still water surprise

What a delight, descending upon Heathrow from Dakar 2 days ago (on a BMED flight), to hear the captain announce that London had been covered in a blanket of snow the previous day! In my experience, snow (or at least snow that sticks) is quite rare there.

But I had a bigger shock when a friend and I sat down to eat at Sofra (a Turkish chain) in my old stomping grounds of St. John's Wood, and the waiter brought us the still water that had been ordered. Having been in Africa for the past month, such highly-advanced packaged and marketed products seem other-worldly. I mean I really did a double-take when served such "high-class" hydroxylic acid.
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How NOT to manage your Google Adwords account

While digesting more of the depressing news coming from the Middle East today, I came across this randomly-generated text ad from Google, shown below.


It says:

Cheap Flights to Lebanon
Get Free Airfare Quotes for your cheap flights from US to Lebanon

Sadly, I don't expect this ad to get many click-throughs for quite a while, because Lebanon currently has no runways upon which flights can land. So for the advertiser's sake, I hope they are not paying per impression.
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Los mercados libres - me encanta!

Americans continue to debate the importance of embracing English as a unifying language. But what about an embrace of free market principles?

A controversy erupted in Bogota, New Jersey this week in response to a McDonald's advertising campaign featuring Spanish billboards, as discussed by Brian Aberback in The Record:

Mayor Steve Lonegan said the McDonald's billboard on River Road near Elm Avenue and the railroad overpass is offensive because it sends the message that Spanish speakers and immigrants do not need to learn how to speak English.

"English is the language that binds us as a community and as a country," Lonegan said Thursday. "This billboard says, 'You Hispanics can't learn English, so we're going to put up this sign.' It's really sending the wrong message" ... Lonegan said he is not racist and would demand that the billboard be removed if it was in Italian, German or any language other than English.

"Demand that the billboard be removed?" That is definitely not the position of a free market advocate. It certainly does not reflect Republican ideology, which is largely supportive of laissez-faire policies and limited government intervention in markets. I am surprised that Mayor Lonegan, who heads the NJ chapter of Americans for Prosperity, an organization "committed to educating citizens about economic policy", did not make the following analysis:

McDonald's, a profit making corporation providing jobs to over 100,000 Americans and possessing a market capitalization of over $41 Billion, acts first and foremost with the interests of its shareholders in mind. Recognizing that Bogota has a 21% Hispanic population, McDonald's obviously determined that a Spanish advertising campaign would drive up business.

Therefore, the logical course of action for a free market advocate who feels that the business decisions made by McDonald's do not suit his personal sensibilities would be to organize a grassroots effort to buy up McDonald's stock (which is freely traded to the tune of 5.6 million shares per day on average) and seize control of the corporation's Board of Directors, thereby gaining the ability to control advertising strategy.

To his credit, Mayor Lonegan has proposed another option: arranging a boycott of the nearest McDonald's restaurant, to show the corporation that its advertising campaign had negative financial results. A well-managed company like McDonald's would respond swiftly to curtail losses. The Star Ledger reports (7/8 addendum):

"If they don't want to take that billboard down," Lonegan added, "I don't want to buy their products and maybe other Americans like me should share that thought. We should boycott McDonald's."

This is the beauty of free markets. It tells us: don't just complain, DO something about it.

p.s.
Steve, it's nice to be on the evening news, but you've gone overboard on this one. Maybe we can discuss it over a pizz...I mean, "an open-faced tomato and cheese pie".
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The latest Arab-Armenian success story

Arabs and Armenians have a long history of friendly and warm relations, whether in Aleppo, Baghdad, Beirut, Jerusalem, or elsewhere.

Tens of thousands of Armenians fled southwards into Greater Syria from Southern and Eastern Turkey during the Genocide of the early 20th century, where they were welcomed by the Arab populations. They have retained their language and culture, including Armenian-rite Christianity, while still integrating into Arab society.

When I read about the proposed deal between Nissan/Renault and General Motors, I could not help but think of this historical link.

Nissan/Renault's CEO Carlos Ghosn, born in Brazil of Lebanese extraction, has been negotiating with prominent GM shareholder Kirk Kerkorian, an American whose parents fled the Armenian Genocide.
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Africa Day in London

I just returned yesterday evening from a brief visit to my old stomping grounds, centered around an "Africa Day" conference at my alma mater, the London Business School on Saturday, May 13. The theme was Africa 2020: A Vision for Empowering an Enterprising People, and the event was simply outstanding and inspirational.

The day itself consisted of opening remarks by Baroness Valerie Amos of the British House of Lords, who is of African origin. Then there were 2 panel discussions focused on entrepreneurship and investment. The final address was given by a Coca-Cola executive named Larry Drake, a black American stationed in Nigeria. Then we were treated to a wonderful reception, featuring the motivational speaker René Carayol, a Brit of Gambian origin.

I have attended many similar events at the London Business School in the past, but this was by far the most lively. It was refreshing to see the participants in such good humor, able to laugh about Africa's corruption and poverty, but at the same time confronting the issue head-on. There was no politically-correct BS at this conference.

I was also delighted to see the consensus decidedly against the foreign aid paradigm that has had mediocre results. The emerging generation of African leaders recognize that investment must be made in human capital to allow the entrepreneurial spirit of people throughout Africa to shine through to its true potential. Indeed there are tremendous business opportunities in Africa - Europe and certainly China realize this, but sadly America is missing the boat (if there even is a boat!)

Here are some memorable quotes and discussion points from the Africa Day conference:

"If Bill Gates had looked only at financial models, he would not be the world's richest man." - George Twumasi, CEO of African Broadcasting Network Holdings, a social enterprise

"...invisible capital..." - an audience member, who humorously chided Nigerian tech entrepreneur Bruce Ayonote about the family connections that enable a select few to raise capital in Africa. Bruce and his team raised a significant sum to start up Suburban (a telecom), on the premise that they would pay it back in 1 year, which they did! The audience member suggested that perhaps without the "invisible capital" Bruce likely possessed, he would not have even raised a small fraction of the start-up funds he and partners managed to obtain. Bruce politely countered by suggesting that it was the skills-set of he and his team that was needed in Nigeria to make any use of the new IT and Communications infrastructure. That is why they succeeded in raising the money and becoming very successful.

"Those Coke bottles are used in riots." - an audience member, while asking Coca-Cola executive Larry Drake why the company chooses glass bottles as its primary delivery mechanism. Drake's talk was humble and moving. Often having an "African-American" address proper Africans can be a recipe for disaster. But Drake was simply amazing, talking about learning from falling down and getting up again, with a passion for development in Africa and making a positive contribution. He is the real deal, not a corporate fake by any means.

"Rich. Struggling. Poor. Subsistence." - Coca-Cola Executive Larry Drake, outlining the 4 classes in Nigeria that his company uses to segment the market.

"When self-belief and humility are in equal measure, we are in a very special place." - René Carayol
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