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January 2010 Archives

Problems at Machu Picchu

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I hiked the Inca Trail in 2006 and found the conditions along the way to be rustic, to say the least. (It's a beautiful hike but after four days without running water, "real" food or a bed, I was beginning to think I'm getting too old for this kind of thing.)

Anyway, my rustic experience sounds like sheer luxury compared to what's happening now:

By ANDREW WHALEN

LIMA, Peru (AP) -- Tourists visiting Peru's famed Machu Picchu citadel said Wednesday they lack enough food, water and shelter and are at the mercy of price-gougers three days after mudslides trapped them in a nearby village.
The visitors complained that restaurants are inflating their prices, and many have slept in Machu Picchu Pueblo's train station or in the central plaza after they ran out of money or the hostels ran out of space.
"It's chaos. We don't have food, we don't have water, we don't have blankets, we can't communicate and the police lack an evacuation plan to put us at ease," Argentine tourist Alicia Casas told Lima's Canal N TV station.
Machu Picchu Pueblo city spokesman Ruben Baldeon told The Associated Press that bottles of water are selling for $3.50 in the isolated region -- five times the typical price -- and electricity to the town has been cut.
A thick cloud clover kept helicopters from flying to the village Wednesday morning, but flights resumed in the afternoon, Baldeon said.
There was no immediate word on how many people were taken out. Choppers dropped off food and water and ferried out 475 people on Tuesday.
Authorities say 1,400 travelers remain, stranded since Sunday's mudslides damaged sections of the railway to the city of Cuzco -- the only way in or out of the area.
"It's worrisome. We didn't think it would take this long," Tourism Minister Martin Perez told Lima's RPP radio. "We can evacuate 120 tourists per hour; now the only thing we need is for the climate to help us out a little bit."
Meteorologists forecast moderate rain for the rest of the week.
About 400 Americans, 700 Argentines, 300 Chileans and 215 Brazilians were among the roughly 2,000 travelers initially stranded. U.S. authorities have sent four helicopters stationed in Peru for drug interdiction and police training to join four Peruvian military and several private choppers in the rescue.
Argentina's foreign ministry said in a statement that oil company Pluspetrol sent two helicopters to deliver food and evacuate the Argentines, an operation expected to take a day or two.
Five days of torrential rains in the Cuzco region have destroyed bridges, at least 250 houses and hundreds of acres (hectares) of crops.
Mudslides have killed five people, including an Argentine tourist and her guide who were hiking the Inca trail from Cuzco to Machu Picchu.
The spectacular Inca citadel, perched on an Andean mountaintop, is Peru's top tourist destination.

JAL files for bankruptcy protection

By TOMOKO A. HOSAKA

TOKYO (AP) -- Japan Airlines filed for bankruptcy Tuesday in one of the nation's biggest corporate failures ever, entering a restructuring that will shrink Asia's top carrier and its presence around the world.
Staggering under a $25.6 billion debt mountain, the carrier applied for protection from creditors under the Corporate Rehabilitation Law -- Japan's version of Chapter 11 -- with the Tokyo District Court.
Japan's flagship airline will slash nearly 16,000 jobs, reduce pensions for retired staff, cut routes and shift to more fuel-efficient aircraft as part of its restructuring.
Some $10 billion of government cash will keep JAL's planes in the air during the reorganization. Lenders will forgive $8 billion in debt, and JAL shares will be removed from the Tokyo Stock Exchange on Feb. 20, wiping out investors.
There was no word on the outcome of a fierce tug-of-war between Delta Air Lines and American Airlines for a slice of JAL's business. Despite its woes, the airline's access to Asia is a mouthwatering prize for foreign airlines.
A state-backed turnaround agency pledged 900 billion yen ($10 billion) in financial support for JAL -- 600 billion yen in credit lines and a 300 billion yen cash infusion. The bankruptcy is the fourth-largest in Japan, according to figures from Teikoku Databank, which tracks corporate failures.
"This is not the end of JAL," transport minister Seiji Maehara told reporters. "Today is the beginning of a process to keep JAL alive."
JAL President Haruka Nishimatsu resigned, bowing deeply as he apologized for the company's troubles. Kazuo Inamori, a Buddhist monk and founder of Kyocera Corp. and Japan's No. 2 mobile carrier KDDI Corp., has been tapped as its next leader.
"This is our last chance," Nishimatsu said. "I believe we can be reborn as an airline that can represent Japan again."
JAL said flights will continue uninterrupted and that frequent fliers would not lose their miles. Tokyo asked foreign governments for cooperation to keep JAL flying around the world.
The day's events culminate a process that began in October when JAL -- saddled with debts of 2.32 trillion yen ($25.6 billion) -- first turned to the Enterprise Turnaround Initiative Corp. of Japan for help. Under the prepackaged reorganization, it will embark on a massive overhaul to shed the fat and inefficiency that hobbled its finances.
Maehara said the turnaround would involve 15,661 job cuts -- a third of JAL's payroll -- by March 2013.
The carrier will retire all 37 of its Boeing 747 jumbo aircraft and 16 MD-90s, which will be replaced by 50 small and regional jets. As of March, JAL's fleet consisted of 279 aircraft, mainly from Boeing Co. It served 220 airports in 35 countries and territories, including 59 domestic airports.
JAL shares, which have lost more than 90 percent of their value over the last week, tumbled another 40 percent Tuesday to 3 yen before finishing flat at 5 yen. The company is now essentially worthless, with a market capitalization of about 13.7 billion yen ($150 million) -- the price of one Boeing 787 jet.
Nevertheless, American and Delta have continued to battle over JAL.
Delta and its SkyTeam partners have offered $1 billion, including $500 million in cash to lure JAL away from American's oneworld alliance. American Airlines and its partners say they would inject $1.4 billion cash into the Japanese airline.
"Delta and SkyTeam fully support Japan airlines and stand ready to provide assistance and support in any way possible," the Atlanta-based airline said in a statement following JAL's bankruptcy filing.
Maehara declined to comment on which U.S. carrier the government preferred and said it is "not in a position to force any partners on JAL."
The bankruptcy represents a humbling outcome for Japan's once-proud flagship carrier which was founded in 1951 and came to symbolize the country's rapid economic growth. The state-owned airline expanded quickly in the decades after World War II and was privatized in 1987.
But it soon became the victim of its own ambitions.
When Japan's property and stock bubble of the 1980s burst, risky investments in foreign resorts and hotels undermined its bottom line. JAL also shouldered growing pension and payroll costs, as well as a network of unprofitable domestic routes it was politically obligated to maintain.
More recently, JAL's passenger traffic has slowed amid the global economic downturn, swine flu fears, competition from Japanese rival All Nippon Airways Co. and a spate of safety lapses that tarnished its image. It lost 131.2 billion yen ($1.4 billion) in the six months through September.
Geoffrey Tudor, a principal analyst at Japan Aviation Management Research and former JAL employee, said the airline needs to be leaner and meaner.
"It wasn't commercially brutal enough in dealing with the facts of economic life," said Tudor, who spent 38 years at the Japanese carrier and now watches its collapse with a mixture of sadness and frustration.
Its four government bailouts since 2001 only exacerbated JAL's problems, officials now say.
Passengers seemed to agree as much.
"I guess they did not work in earnest and so fell into this situation," said Isao Sasaki, 72, who waited in line Tuesday at a JAL check-in counter at Tokyo's Haneda Airport. "Weren't they spoiled as they always had protection from the government?"
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AP Writers Jay Alabaster, Yuri Kageyama and Mari Yamaguchi, and APTN staffer Kaori Hitomi contributed to this report.

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