I don't think it's going to be as bad as people are making out.
How many times has MOL said there will be a bloodbath "this coming Winter".
He said that every Autumn for the past 4/5 years - and it never came.
Look at the signs - they're not that bad. A few premuim airlines, with flawed business models, and a few badly run US airlines have gone under.
A couple of small regional Euro airlines may be a bit precarious - but if they go, someone else will pick up the slack.
Rumours of Lufthansa buying everyone will continue to be abound, passengers will still fly, and this time next year, we will all be thinking it was like Y2K all over: we got worked up over something that turned out to be nothing.
And of course, Alitalia will still be here, governments will still be selective over who they pull over airline mergers and deals, and it will be business as usual.
Can we leave out these daft smiley things? They make postings look incredibly immature and silly. A bit like the first one! What was the point of it? Drink, I think!
Anyone remember '91? Gulf War, or, even worse, 2001?! Troubled times, these may be, but not a patch on the above two. A lot of my colleagues lost their jobs...and there, but for the grace of god.....?
Can we leave out these daft smiley things? They make postings look incredibly immature and silly. A bit like the first one! What was the point of it? Drink, I think!
Those daft smiley things have no place in a (supposedly) grown-up forum such as this one.
But at least they allow us to make an informed judgement on the maturity and sobriety of the poster.
This will be a very difficult time, not just Winter 08-09, but also throughout 2009 both in the UK and wider. Even the economic illiterates in the Government know that we are in for a fairly serious recession, and there is talk of it being worse than that in the early 90s. If you are under 30 you will not have clear memories of economic conditions in the early 90s, if under 40 you won't remember the early 80s, which was worse. You need to be pushing 50 to remember the oil shock/banking crisis of the early 70s. At present, we are facing a massive increase in fuel costs, even allowing for the recent reduction in oil prices. There will be a serious recession in the UK caused by the credit crunch, which will take a massive amount of liquidity out of the economy. Because the Banks have written off billions in bad debts, they are and will continue to soak up investment capital in rights issues to repair their balance sheets. This will lead to job losses. That means the newly unemployed will have less to spend, and will cost Government more in welfare payments. House prices are falling and will continue to do so, increasing repossessions and creating a feeling of unease and caution amongst homeowners. Removals are down 60-70%, and a lot of DIY is done following a house move. Additionally, the prices of basic foods have risen dramatically over the past few months - a worldwide phenomenon that won't go away. So, less credit, less cash in the economy, less money in people's pockets, and the lack of a feeling of prosperity will impact on spending patterns. What will suffer most - discretionary spending, like meals out, that new car, the second holiday, weekend breaks, etc. The last two have a direct impact on the aviation industry by reducing demand. It's not just private individuals that will 'hurt'. Companies will tighten their corporate belts too, reducing headcount, cancelling conferences, encouraging videoconferencing rather than face-to-face meetings, restricting unnecessary travel, etc. And that too will affect demand for air travel. Some companies may insist on employees travelling with budget airlines rather than legacy carriers, or on travelling Economy not Business class. Airlines are in for a rough time, all of them. Only the ones with robust business models, good management, and cash in the bank will survive relatively unscathed. I predict a trickle of bankruptcies throughout the next 18-24 months, some predictable, some surprising. I name no names deliberately. But I would encourage all airline employees to devote their efforts to assisting the managers of their company to ensure their business survives.
Yes this winter will be very tough for all businesses. After Olympic fever and the Crash Gordon re-launch, you can look forward to chickens coming home to roost. Those who have overstretched themselves will find winter miserable. Its all happened before, 3 times in my lifetime.
But this isn't the end of the world, flying in general won't stop. Infact the Premiership will have just started and of course we will be looking forward to bombing Iran again; winter is fighting season in the middle east!
If anybody saw the Northern Rock reposession figures today, thats the really scary thought, lot of families on the streets. All the bailing out of the banks is going to put severe restriction on Public Funds. Lack of Income Tax revenue will have a compounding effect. The UK will revert back to the 70s. (I have bought candles already)
But the good news for the tradesmen, is we can have a return of Auf vediersien Pet. With nice mister Ryanair taking hard working brits to build Summer Holiday Homes and roads, for our new Eastern European masters. We could even sell them the format for "Place in the Sun or LLL"
How strange life goes full circle!
As for charter, will go back to being a summer job for the crews (always was really once you take out Florida and Carib)
The Atlantic looks like it is already being carved up by AA/BA/IBERIA expect Spain and Uk governments to turn the screws in Brussels. AA to cancel open skies at 2010 point.
As for BMI and Virgin I really hope they can survive the winter. It is terribly unfair for two of the best Atlantic airlines to be sacrificed for the Flag Carriers.
F14, I hate to say it, but I think your apocalyptic forecast smacks more of accuracy than anything else I have read! The hangover hasn't struck yet. Brown is going to start bribing the electorate to save his own skin with our money that he hasn't yet got out of us and still has to raise. An awful feeling of deflation will strike after the Olympics as hundreds of thousands start heading for the Benefit Offices his winter. The UK economy is heading for a cold winter!
looking Better All The Time Oil Down To Below $118 A Barrel. Pundits Seem To Think Will Be Below $100 By The End Of Month (bbc News Website An Ft Index):
Last edited by flowy50 : 6th August 2008 at 00:25.
With the price of fuel currently falling (and expected to continue according to FT today), could the airline industry see abit of a flux in it's luck over the next few months.
What I love is how people don't realise that when they pay for their flight and their fuel surcharge, that the price of fuel will change during that time between booking and flying. So, as they price falls, the airline are paying even less for the fuel than they would be at time of booking therefore they are making an even bigger profit from the fuel!
As the price of fuel falls (which is one of the main reasons why food, trnasport etc. prices are rising), will this mean we, the public are able to save money on our shopping? If so, surely this will make for some more disposible income? Which could mean more flying?
Anway, for anything like that to even happen, two things would need to occur:
1. Fuel would have to drop well below the $100 mark which I cannot see for some time 2. And what I really can't see - companies reducing prices that were risen because of the fuel, ie) my local petrol station who thinks they can charge me £1.32 for a litre of diesel!
What we need to remember - all of the other recessions in living memory (notwithstanding - flights were a luxury - BA were charging up to £600 for a midweek return from London to Dublin - and flying was still a once a year thing for many people (myself included).
Now, flying is cheaper and safer than ground transport within the UK, and also, instra-European flights are equally affordable. Flying, thanks to Ryanair and easyJet is now part of everyday life - it is nothing special - but we can't life without it, a bit like mobile phones.
Traffic is up and up at a lot of airlines, and others are reporting small reductions in pax numbers. Yes it is Summer - but moving in to Winter, people will still have their Chrismas shopping breaks, stag weekends, random weekends away.
Yes - longer routes - like Spain - may suffer, in favour of shorter city break routes - but airlines make less on longer missions, so shorter trips work in their favour.
This time next year, things will be exactly the same as they are today. No biggy!
crude is dropping but this is just the deflation of the speculative bubble. ie we are now close to delivery dates and the clever investors have taken their profits and now end uses are getting the black stuff.
World economy is in recession demand is dropping. I think alot of individuals and companies have made big changes to lifestyle, ie car usage or shipping stuff halfway across the globe for cheap processing in Asia then shipping it back for sale(did I see a piece about shellfish from Scarborough)
Its called demand destruction and leads to deflation and it is much worse than inflation, because we end up having cheap petrol to drive our X5s but we wont have work (therefore pay taxes and fund publuc spending)
Normally this ends in a violent way (then we can create jobs and therefore inflate money supply again) Think of Falklands conflict.1982 or Gulf War 1. Oh and after 9/11 Gulf War 2. The economic benifits of a short war are well known in increasing money supply and economic activity to kick start US and UK.PLC..
You're right, the boom in the 80s came in the wake of the Falklands conflict which marked a turnaround in UK finances and self esteem. Shame we couldn't keep it going, who can deny we haven't moved backwards since in business and entrepreneur unfriendly labour administrations. The delayed reaction to their policies will be striking this winter as unemployment grows like a cancer. Then Brown will be desperately throwing our own tax money back at the underclasses to bribe out of it another administration.
I still think oil is heading down to $80. That would still make it significantly higher than previously. It is still a commodity NOT in short supply. There is no way it can be sustained at those stupid speculative prices.
Now I'm all for bombing Iran, North Korea, Zimbabwe....in fact anyone who looks at us a bit cheeky. We could slip one in on the French.....why should they have such a fit Presidential wife? And Nice is far too gorgeous for them- we should have it.
Interestingly enough, retired people in the UK are starting to look at getting out of that Country for the winter to cheaper sun spots to escape the crippling energy prices, that they cannot afford at home.
Bookings for apartments for W09 are starting to indicate this.
So have the likes of Jet2, shot themselves in the foot by slashing winter flights?
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