Economist 6/7/16

  1. WHEN the World Anti-Doping Agency (WADA) detailed widespread use of performance-enhancing drugs by Russian athletes in a report last autumn, Russian sporting officials employed their government’s usual diplomatic tactics and called it “a political hit job.Yet now, with a decision due from the International Association of Athletics Federations‎ (IAAF) on June 17th on whether to allow Russian track-and-field athletes to compete in this summer’s Olympic games in Rio de Janeiro, Russia has softened its tone.The scandal boils down to one key question: whether Russia’s doping problem is systemic, or the fault of rogue individuals. The WADA report described a “deeply rooted culture of cheating”.The All-Russia Athletics Federation, Russia’s track-and-field body, was suspended from competition. Several trainers and athletes, including gold- and bronze-medal winners, received lifetime bans.The obsession with winning goes beyond sport in Russia.
  2. On May 28th Lufthansa announced that it was suspending its thrice-weekly flights from Frankfurt to Caracas as of June 18th. Two days later LATAM, Latin America’s largest airline group, declared that it would cut all its services to the country after August 1st. In recent years Air Canada, American Airlines, Alitalia and Gol have all scaled back or suspended their Venezuelan operations.A nosedive in the price of oil, compounded by years of mismanagement by Hugo Chávez and his successor, Nicolás Maduro, have left Venezuela’s economy in tatters.Desperate to avert a sovereign default, which would cut off credit to the ailing oil industry, the government has tightened currency controls introduced by Mr Chávez in 2003. The restrictions make it almost impossible for companies to convert local bolívares into dollars. This has made it difficult for international airlines, who typically charge customers in local currencies, to repatriate their profits.Demand for flights to Venezuela has, in any case, fallen in recent years as fewer business travellers visit the country.
  3. It is an incontrovertible truth that economy-class passengers will now put up with nearly any level of discomfort in return for a cheap fare. So airlines have merrily shrunk seat pitches and withdrawn perks and still managed to fill their flights. But business-class passengers are more discerning. They are higher margin and usually where an airline will make its money, at least on longer-haul flights. So they must be wooed by ever-fancier seats, posh food and plush lounges.A few years ago, a flat-bed seat in business class would have been considered opulent. No longer. Today they are considered standard. So while the back of the plane is engaged in a race to the bottom, the middle section is moving rapidly in the other direction.Amid the fanfare that sounded when United Airlines unveiled its new international business-class cabins last week (pictured above), was a quieter announcement that the operator would be phasing out first class. It is not alone. Other carriers, including British Airways, Air Canada and Delta, have also decided that on some routes business class is now sufficient for the needs of its premium passengers.
  4. THIS is the summer that miles will officially stop having anything to do with miles. American Airlines was the last holdout among the big carriers in the United States in maintaining a frequent-flyer programme that rewarded customers for the distance they travelled. The formula was simple: fly a mile, get a mile. But all of American’s main rivals—from legacy carriers Delta and United to Southwest, JetBlue and Virgin America—have already made the switch to a system based on the amount people spend on flights, not the distance they travelled. On Monday, American announced that it would do the same.Under American’s new system, which is being brought in on August 1st, most travellers will earn five miles for every dollar they spend on flights. But elite status will confer substantial benefits.
  5. Unlike America and China, the world’s two largest polluters, India did not pledge a future reduction in aggregate emissions. It offered instead to reduce the intensity of its emissions—the amount of pollution per unit of economic output—by around a third by 2030 as measured against 2005 levels. Its greenest promise was to install 175GW of renewable power by 2022 (most of it solar). This is an enormous undertaking. In 2014, for example, the world’s entire installed solar capacity was 181GW.The country’s total installed solar power capacity now comes to 5.8GW; to meet its targets it will need to speed up from adding around 4GW a year to adding more than 15GW instead.

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