Financial Beat

By Yvonne Chilik Wollenberg

Airlines: Who has the best service? Ask the passengers

Smaller domestic airlines trumped the nationwide heavyweights in a recent survey by Zagat, which tallied opinions and gripes of air travelers. For premium-class service, top marks went to Hawaiian Airlines, which offers smiling crews and fancy food, according to passengers. Midwest Express Airlines, a Milwaukee-based carrier, rated No. 1 for economy-class travel; its customers raved about the wide seats, free champagne, warm chocolate chip cookies, and motivated crew members. The worst-rated domestic airline in economy class was American Trans Air, which unhappy passengers described as "barely a step above taking a bus."

In Zagat's survey of international airlines, Singapore Airlines was voted tops in both economy and premium classes; travelers reported spotless and comfy cabins, friendly crews, and tasty meals. Passengers also liked Virgin Atlantic Airways for its hip environment, topnotch service and amenities, and the chance to get a massage and a manicure on board. At the other end of the scale, Aeroflot got rock-bottom ratings for its cold, uncomfortable ride. The Russian carrier is "not for the faint of heart," said one disgusted passenger.

These are the fifth and sixth travel surveys from Zagat, better known for restaurant reviews. The survey of domestic airlines reflected opinions of 20,000 passengers and 900 travel agents; international airlines were rated by 12,000 passengers and 400 agents.

Top-rated domestic airlines

Top-rated international airlines

Source: Zagat Survey 2001 US Airlines and Zagat Survey 2001 International Airlines

Stocks: Who's actually making your trades?

You probably don't realize it, but the way your broker processes orders affects your cost of buying and selling stocks. Starting July 2, therefore, the US Securities and Exchange Commission is requiring brokers to begin telling investors exactly how their orders are filled.

Among the brokers' options:

• They can fill orders from their own inventory of stock, making money on the difference between the selling and purchase prices.

• They can send orders to an electronic communications network, which processes them automatically for a set fee.

• They can find a regional or national stock exchange that offers the stock.

• They can use trading firms known as market makers, which fill orders from their inventories and pay a fee for the business. Brokers must disclose how much they earn from such payments.

Most trading firms were required to begin disclosing how quickly they execute orders and at what prices on May 1. The SEC says it found significant differences among market centers in how well orders were executed. For example, some firms obtained better prices for the brokers than the publicly quoted values, at least for certain orders, such as those for less than 500 shares. A difference in price of 1/16 per share for a 1,000-share order could save the buyer $62.50.

Privacy: Fight the junk invasion

A new federal law designed to protect your financial privacy gives you the opportunity to cut down on telemarketers' calls and junk mail—but you'll have to take action. Banks and other financial institutions will soon have to ask your permission before they give out certain facts about you to other companies. Under the federal Gramm-Leach-Bliley Act of 1999, financial institutions must let you know by July 1 what kinds of data they collect and whom they may share it with. You then have the option of keeping some information confidential. The law covers banks, savings and loans, credit unions, insurance companies, securities firms, and retailers and auto dealers that collect and share personal information about borrowers.

To take advantage of the new law, you'll have to watch carefully for notices tucked in with monthly statements or in a separate mailing. They should tell you what kinds of data the company shares with other businesses, which information you can block, and how to block it.

You can prevent these companies from revealing data such as your consumer tastes and income level, but you can't block publicly available information, such as your name, address, and published phone number. You also can't shield information needed by the firm to conduct normal business or to protect against fraud.

Teens: Does the cost of tutoring pay off?

All that coaching for college admission tests may not be worth the price. A new study has found that commercial test preparation courses and private tutoring have only a slight effect on SAT I and ACT scores. Test preparation courses charge between $700 and $3,000 on average, while private tutors often get up to $450 an hour.

For all this expense, coaching raised SAT I scores on the math section by only about 15 points, according to a national study of over 14,000 high school students published in Chance, a publication of the American Statistical Association. On the verbal section of the 1,600-point exam, tutoring produced gains of only 6 to 8 points.

Coaching didn't do much better for the ACT test. Students who'd gone through prep classes scored 6 percent higher on the math section and 11 percent better on the English section. Tutoring actually hurt scores in reading comprehension, with an 11 percent decrease.

The findings support the contentions of The College Board, which administers the SAT, that coaching has little effect on test scores. Other researchers have found that test preparation boosts scores only slightly.

One leading test preparation company, Kaplan, argues that the new study is flawed because it doesn't differentiate between the effects of a one-day course and intensive, long-term coaching. The company claims that its own program increases SAT I scores by an average of 115 points.

Cars: Magazine picks the best 2001 models

U.S. automakers take notice: Consumer Reports has released its top picks in cars and trucks for 2001, and all of them are foreign models. The vehicles were rated on their emergency handling, acceleration, braking, fuel economy, comfort, and convenience. Here are the winners:

Family sedan or wagon - Volkswagen Passat

Small car - Honda Civic EX

Green car - Toyota Prius, a hybrid gasoline/electric model

Most fun to drive - Honda S2000

Upscale sport sedan - BMW 330i

Best car tested - Mercedes-Benz E320

Small SUV - Toyota RAV4

Midsized SUV - Lexus RX 300

Pickup truck - Toyota Tundra

Minivan - Honda Odyssey

Most makes and models are getting more reliable, according to Consumer Reports. New vehicles averaged 20 problems for every 100 cars—a huge improvement over 1980 cars, which had 88 problems per 100. Trouble with air conditioning and rust has declined dramatically; the most common complaints today concern squeaks, rattles, and faulty electrical systems.

The author is a freelance writer in Teaneck, NJ.

 

Yvonne Wollenberg. Financial Beat. Medical Economics 2001;9:10.