Industry outlook, oil prices

[saccade]

In Europe we have the advantage that we don't need a crystal ball for predicting the effect of increasing oil prices on air travel. The US airlines have bigger problems because of their weak dollar, but the bullish outlook in the oil price makes it likely that airlines in Europe will soon be facing the same situation. It's pretty spectacular: despite recession they still have a strong demand, but Southwest airlines will be making a loss for the first time in 17 years. Just because of oil prices!

Airlines cut jobs, ground planes as fuel costs soar

http://www.statesman.com/business/content/business/stories/other/03/19/0319airlines.html

Don't want to be negative, but I think it is a factor to consider before you make a large investment in flight training. Air travel won't collapse, but it seems that the outlook of IATA and Airbus are unrealistic about the growth of aviation. Anyway, time will tell.

[mcgoo]

You don't want to be negative but nearly every post and thread you have made on Pprune has been about oil. :confused:

[coodem]

I guess if saccade convinces everyone that this is true, he will have more chance of getting a job.

The way I see it, people need to travel, more now than ever. So no doubt fuel will run short oneday, but the oil will be replaced by something else, whether it's coal, steam, hydrogen, nuclear. It will still require pilots to operate. They will still be planes and still fly by the same rules.

Before all this happens, I'm guessing all of us will be retired, as its probably 40 years from now

[350Z]

Yeah definitely, anyone thinking about starting aviation training should give up now! The industry is going to die and there will no longer be any jobs for pilots! Where does that leave you?- Jobless and £60k in debt! Do you really think its worth it?? I don't! i really wouldn't be thinking about it if I were you, give up now!!




;)





....sorry I couldn't resist! I can't wait to start my Integrated APP FO course at OAA! lol.

[CY333]

people need o travel more now than 10 years ago.
There is more need now for pilots tha 10 years ago,at least where i am.
u going on about the users giving up their dreams because oil prices but you never mentioned airlines expanding i.e
http://www.aviationnews.eu/?p=1612
maybe you should lay off and let people follow their dreams.

[CY333]

BTW:
http://answers.google.com/answers/threadview?id=519509
just for you that believe pilots should fly aircraft that their engines run on oil products and believe that after oil runs out we will be without jobs

[PPRuNe Towers]

The judgement you have to make is how much people actually need to travel versus how much of it is purely discretionary.

Rob

[saccade]

nearly every post and thread you have made on Pprune has been about oil.

True, and some people found this a bit annoying, hence the new thread. I just would like to have an idea how many people are worried about this, and reviewing the discussion so far, nobody. I don't really understand this considering all the warnings from geologists, oil companies, politicians that have appeared in the news over the past 6 months. Anyway, I'm not an energy expert and I may be totally wrong (believe me, I hope I am)!

[coodem]

I agree, people don't need to travel as much as they do. And thats one of the first things that stops when the economy goes pear shaped.

But it ain't going to happen to th whole world, So as long as you are prepared to work in Africa, China, ect, there won't be a problem

[saccade]

you never mentioned airlines expandingSouthwest airlines took delivery of 8 new 737's in 2008 (source: boeing), and they might need to reduce capacity. (see the link in my first post).

maybe you should lay off and let people follow their dreams.I am seriously considering that

[Wee Weasley Welshman]

easyJets shareprice tanked 16% this morning on news that the oil price was going to knock nearly £50m off the bottom line this year. Like all major UK airlines the share price is now half what it was last year.

House prices are falling everywhere. Mortgages are getting more expensive and inflation is soaring. Job losses are just starting. The worlds largest economy is in recession and we will be by the end of the year. The public finances are a disgrace. The green lobby is harming aviation and shorthaul breaks in Europe are not helped by the Euro rising 15% against the pound. The CEO of a major UK airline today stated that smaller less efficient airlines would probably fail soon as the airline sector downsizes and amalgamates. Openskies is about to arrive on the transatlantic whilst the Middle Eastern carriers continue to improve and expand their product whilst not worrying about the fuel costs their Soveriegn owners pump out of their own deserts.

In 1990 when we entered the last recession we went from the Lawson late eighties boom to the collapse of several household name airlines in the matter of a year. Thousands of pilots were out of work and many took the option of flying rubber dogpoo out of Hong Kong and worse.

It happens faster and harder than you probably can imagine. As a 200hr Wannabe you'll struggle to get an interview at the McDonalds drive-thru because there will be 5 guys with turbine time already at the interview stage.

Its going to be ugly, 100%, guaranteed.


WWW

[getoffmycloud]

I have actually put my training on hold because of the weakening outlook... was not an easy decision to take but with the oil price where it is and a profit warning almost daily at the moment from different airlines much as I would love to believe 'it will be fine' a conversation with an aviation analyst and several experienced line pilots made me decide that a more conservative stance is probably required (you think easyjet is bad Ryanair have not hedged their oil costs into 08/09 I am told :uhoh:). Just didn't feel like I wanted to be popping out of the training pipeline in 6-12 months time (and I wouldn't get into debt to finish my training... and I've already done written exams!)... I'll be back but when the sun is coming up on an economic cycle not going down....:cool:.... for now I wil content myself with something fun to fly at the weekends...

[MarcoFF]

I am a wannabe, and i do worry about recession and oil question.

But people will need to travel, borders are gone (in europe especially) and we're moving globally very much. Companies everywhere in the world seek opportunities to enlarge/expand their business globally (wreight, business travel), people are getting wealthier in not-so-developed countries (i.e. China, India..) and they will have change to see something else than their backyards.

But oil runs out, there will come time when pilots may lose their jobs, but i believe it will recover very fast, because like i said - we need to travel. No matter is the energy we use oil, hydrogen, nuclear,tidal,solar etc. We have engineers which will make it possible, it is a smaller challenge than heavier-than- air flight back then:ok:

[BerksFlyer]

saccade,

The current oil prices are because of the current economic climate. It has nothing to do with the amount of oil left. Hence, when the world economy gets out of this rut it's heading for things will carry on as usual. Sure we're heading for rough times, but eventually it will right itself. The only problem is economists simply don't know when and they also don't know how bad it actually will get.

So my point is, despite the downturn and oil prices rising, there will be light at the end of the tunnel. Whether or not you want to take a risk with training now is up to your discretion. But remember, all is not doom and gloom - more millionaires are made during recession than any other time ;) (but to be fair those millionaires aren't going to make millions flying planes).

[Wee Weasley Welshman]

I am reminded of a certain Blackadder Goes Fourth Sketch: General Melchet (bellowing); "And if NOTHING else a blind refusal to face facts will see us through - BAhhHHH!".

This is the phoney war stage.


WWW

[BerksFlyer]

Nichibei,

Let me make a prediction then. The UK will join the Euro at some stage within the next decade.

And just one more point. The UK's economy is much more dependent on the US economy than the EU economy. UK exports to the US far outweigh the value of exports to the EU.

[v6g]

I started a similar thread a while ago (http://www.pprune.org/forums/showthread.php?t=280719), I was surprised how little prospective pilots knew about the subject despite having their careers invested in the single industry most dependent on cheap oil.

From reading saccade's posts it sounds like he's done his homework and that he 'gets it'.

It was during my final CPL training that I first started learning about the oil industry - I've already got my license and paid my money - but I've subsequently made the decision to stick to my previous career that is not so utterly dependent on cheap oil. Aviation is simply not a good career choice in their 20's or 30's expecting it to last for decades. There is simply not enough cheap oil remaining. I certainly didn't take this decision lightly.

But don't take my word for it - do a little research, if you're thinking of spending 60k then why not spend an hour and read this article (http://dieoff.org/page140.htm) for an introduction. (It's written by a retired geologist - the kind of guy who spent his career make analytical decisions based on verifiable facts, not political persuasions that fit the current fashion). There's a slight chance that people like me and saccade aren't crazy wacko's just following the latest enviro-religion but might actually speak of serious concerns.

I actually expect the oil price to fall over the next couple of years as recession bites but that will lull the world into a false sense of security and delay the real geologically-imposed peak 5-10 years later.

I wouldn't be so concerned about this whole peak oil thing if it wasn't for the attitude of the detractors. The argument's against an imminent supply shortfall always lack open analytical research using verifiable data and typically boil down to "trust us" or open-ended phrases like "enough for the foreseeable future".

Anyone in the UK remember the fuel blockade in 2000 - amazing how unforeseen and unprepared we were for something so simple - surely that could never happen again?

we need to travel
How many people we still "need to travel" when oil is $1000 a barrel and a trip across the atlantic is 6-months salary?

The dollar is falling. Oil prices quoted in dollars are rising.
Yes, it's true that oil is currently being used as a hedge against a falling US dollar (which partly explains the recent price rise) but that doesn't explain why 60% of all oil producing nations have already peaked and are now in decline - and they are joined by more every year. See the published numbers in the BP Statistical Review (http://www.bp.com/productlanding.do?categoryId=6848&contentId=7033471) if you don't believe me.

I think young prospective pilots taking out huge loans need to be aware of this. I wish I was wrong - I really do.

[HN1708]

With economic downturn a reality now i think all of us low houred guys will see stiff competition for any jobs from experienced pilots finding themselves jobless as airlines start to go under. I got my blue book yesterday and i am already considering what else i can do to earn a wage until the economy sorts itself out. I hate to be negative but aviation is always the last thing to show improvement from an upward economy and the first thing to suffer as it downturns.

As for other parts of the world's continuing to boom in aviation, when a butterfly flaps it's wings in New York the ripple can be felt in Beijing! The credit crunch is a global problem, i'm sure Emirates will feel it when people in the UK can't afford to make use of their new UK routes.

[paco]

Berksflyer, you said:

"It has nothing to do with the amount of oil left."

There are reports of enough oil under the Prudhoe Bay area in Alaska to last for the next 200 years.

phil

[Wee Weasley Welshman]

This thread should not drift into a discussion about peak oil.

Its the economy stupid. People's disposable income really is being squeezed by falling asset prices, increased finance costs and a loss of confidence. Discretionary spending is taking a big hit whether its sofas, PC's, cars, frocks, restaurants or leisure. A large percentage of airline revenues come from discretionary spending so it doesn't take a genius to work out what will happen.

Airlines work on tiny margins with highly expensive fixed costs. Which makes them unstable. Which is why most pilots have worked for an airline that no longer exists today.

We've had a boom since 1997. Booms end in busts. Guess where we are now..

WWW

[Grass strip basher]

Nichibei, to be fair and give everyone a true perspective as to where you are coming from perhaps you should start each of your treads with "I work for a modular flight training organisation" so people can put you comments into some perspective. :ok:

[Right Touch]

But stopping training? No guys, I wouldn't do that. If a recession is all it takes to stop you, then it makes you wonder why you chose for this career in the first place. If you hold a CPL, you will get a job one day.



True but you may just have to wait 4-5 years to get it. That was the standard wait back in 1990 at the beginning of the last recession when folk started tightening their belts on holidays abroad and the likes of Air Europe and Dan Air went to the wall ,flooding the market with experienced pilots.

The current price of oil at $1000 a tonne will be stretching many airlines flying older less fuel efficent aircraft to the limit.

History about to repeat it itself ? food for thought for a lot of wannabees

[saccade]

Don't worry about oil, airlines will not be hurt as long as gas stays affordable enough to allow the average and lower income people to get to work with their car.In Europe we proof that we are willing to spend $360/bbl on gas to fill up our cars, with our taxes included. I don't see why the US and China are not prepared to pay the same amount, if the supply/demand balance gets tighter. Aviation will face very tough competition from car's.

Government people will make sure that happens because it's the fundations of an economy.I agree with the last part of your statement, but I'm afraid you are overestimating the governments. What can they do? And what are they doing at the moment?

The day oil rises too high, alternative energy will be used for aircraft propulsion. I don't see it happening. I would assume that 2008 would be an appropriate time to make the switch to alternatives. Instead, JetBlue is selling 10 A320's because of oil prices. Some airlines are experimenting with biofuels but Willy Walsh has stated that there is no realistic alternative for carbon based fuels. Richard Branson is expecting peak oil within 6 years, hence he is developing biofuels:

“Apart from global warming, in about four or five years’ time there’s going to be more demand for fuel than there is fuel on this planet. So fuel prices will go through the roof, and so planes, ships, we’ve all got to come up with alternatives”

http://globalpublicmedia.com/branson_acknowledges_peakoil

If oil prices rise to over 200USD they can start designing an electrically propelled aircraft the next day, the technology is there.
That is a lie. I'm aware of the Antares, http://www.lange-flugzeugbau.com/ , but there is no a/c manufacturer which has concrete plans to produce electrical or hydrogen passenger planes.

But we're not there yet and we won't be there for another decade.
What makes me think that? Arabic oil sultans buying 50+ A380's.Soutwest and JetBlue also have aircraft on order, but apparently they don't need them anymore. Things are changing, hence this threat.

Dick Cheney made a trip to the Middle East this week:
"Cheney, on a trip to the Middle East that started in Iraq, said he did not see a lot of excess production capacity worldwide."

http://www.guardian.co.uk/feedarticle?id=7391387


In my view, the whole issue with a possible peak in oil production is that the middle east is probably unable to boost production much further, to compensate for depleting field over the world. For example, the Saudis might be able to produce 12 mb/d over the next few years, but this is far from the originally planned 30 mb/d that was required to meet global demand until 2030 ish. Yes there are massive reserves worldwide, from what I've read is that we have used only 15% of all oil, but that is not the issue with the possible supply problems. Example: the tar sands in Canada have 180 billion barrels reserve, but are producing only 1.2 mb/d. There is a big difference between the easy ME oil which you can just suck out of the ground, and the difficult tar sands, oil shale etc with low EROEI ratio's. The overall picture is according to Shell: peak in 2015, according to ASPO: peak in 2010, but the exact date doesn't really matter.

For prospective pilots, I would say take v6g's advice and do some studying. Or take a bit more time before you start training and follow the news closely over the next months/year and try to get an idea of the problems, solutions etc.

[Philpaz]

Well once i've completed the design of my star trek style transporter you'll all be out of work and i shall rule the world!!!! Mwa hah hah.......:}

[MarcoFF]

How many people we still "need to travel" when oil is $1000 a barrel and a trip across the atlantic is 6-months salary?
When oil cost a $1000 per barrel, we are using some other technology/energy form to keep on flying around. And we have oil very much, just technology dont allow yet to take it all enough easily. And when it really runs out, we're not anymore oil addict people, fuel efficiency its not complete answer, but technologies will found the answer on time. Energy will always exist, it is eternal.

[v6g]

And we have oil very much
Yes - we have a lot of oil left - we have almost half of the ultimate amount of oil left - that's the problem.

[Wee Weasley Welshman]

Well, I don't know.

VLJ's are selling like chocolates.

These account for less than 1% of the world aircraft fleet and employ even fewer pilots

Emirates alone will hire 2000 European pilots over the next 7 years.
Then there's Ryanair that's going to start flying TATL and to Asia.

Whopee. Less than 300 European pilots a year. OATS alone pump that out. God knows what all the schools in all the EU pump out every year!

African aviation is waiting to boom together with the economy while Asia is booming already.

Hmmm so Zimbabwe and Ghana and the like are all about to require low cost airlines and start flying a global network are they? More like South Africa is going into the toilet and after that Africa won't have any widebody aviation to speak of. Asia booms. Making stuff that America buys. For now.

Then there's the retiring pilots.

Given that aviation had always expanded the numbers retiring will always be smaller than the number entering the profession. Plus retirement limits are going UP not down such as in BA and soon all JAA states.

Conclusion: there will always be new pilot jobs.

Conclusion: there have been several busts before when lots of pilots lost their jobs and couldn't get work in burger bars.

The safest is to go modular and to work aside. After getting your fATPL you'll be able to apply while keeping another job and staying current/hour building/instructing. The big advantage over integrated is that you don't have to make loan repayments.

At last - something I can agree with.

The problem of the high oil is not the fault of the OPEC but the American economy:

VIENNA, Austria (AP) -- OPEC on Wednesday accused the U.S. of economic "mismanagement" that it said is pushing oil prices to record highs, rebuffing calls to boost output and laying blame at the feet of the Bush administration.

US governments and oil product suppliers are coming up with lies such as "the reserves are limited,blablabla" just to push OPEC to lower their oil prices. OPEC is not stupid.

http://edition.cnn.com/2008/WORLD/eu...5/opec.oil.ap/

Saudi's aren't going to pay the price of the Bush administration's addiction for the Irak war.

FORGET oil. Fuel account for around one thirds of the fare on a low cost European ticket which costs around 50 pounds. If Oil doubled it would only add less than 20 quid to a ticket. The problem is people don't want and don't need to spend ANYTHING on air travel when they are worried about affording the roof over their heads and the food on their table.


ITS THE ECONOMY STUPID! (not oil)


WWW

[hollingworthp]

I don't want to get involved in this conversation directly - but this was of interest earlier.

Surprise rise in UK retail sales -
http://news.bbc.co.uk/1/hi/business/7306333.stm

[ReallyAnnoyed]

The oil price corrected for the weak dollar has risen 60% in euros in one year, so to say that the oil price is actually falling in Europe is a pure lie.

I find it prudent to warn wannabes against Nichibei Aviation again. He promotes the business that provides his livelihood and thus renders ALL of his advice highly biased. Listen to those who are not directly dependant on the choices you make. The short Welshman is not affected by whatever choice you make, so his advice is free from bias. He is a bit sceptical in my opinion, though, but maybe he is just trying to get through to thick-headed wannabes :}

As with all things, you should form your own opinion and take responsibility for your own decisions. Use pprune for information, but not as a primary source of information.

[Wee Weasley Welshman]

UK retail sales include food. Food prices are up 12% in three months so unless you are on a diet then they alone account for the retail spending figures holding up.

The other side of the coin shows peoples savings dwindling as they use up their rainy day savings to keep the show on the road. This will not last long.

The real story is the February mortgage lending figures from the Council of Mortgage Lenders which shows lending at a 9 year low. Its well down on Feb '06 and what activity there is is largely re-mortgaging. New mortgage lending is falling off a cliff. Been in an estate agents recently? You're not exactly struggling to find a seat in there these days.

City centre flats are now going through auction for HALF what some poor suckers paid for them in 2006 and 2005 - I can show you dozens. This means they will be rented out for rents FAR below that which other Buy To Let landlords can afford to charge. This will send loads of BTL landlords into insolvency which means they will lose their homes.

This is going to be far far worse than the 1991 recession.

WWW

[saccade]

ITS THE ECONOMY STUPID! (not oil)A recession is disastrous for the holiday budgets, and is one of the reasons why the value of the airlines on the stock markets have dropped, but oil has definitely his share.

All the way from $40, $60, $80 etc people where complaining but the economy was still coping with it, and inflation was relatively low. Many airlines were making record profits and expanding like never before. But, it seems that $100+ oil does start to cause some problems.

"Higher fuel costs drive higher prices, which results in fewer passengers,'' Northwest Chief Executive Officer Doug Steenland said in a March 14 message to employees. "We have to rethink the size of the airline we operate.''
Larry Kelner, CEO of Houston-based Continental, said in a message to his employees that ``if these prices continue for the next couple of months, we're going to have to make some tough decisions to make sure the size of our network is right.''


http://www.bloomberg.com/apps/news?pid=20601103&sid=aPsOwUF5Tufg&refer=us


And from EasyJet:
EasyJet joins other carriers in concern over high fuel price

http://www.independent.co.uk/news/business/news/easyjet-joins-other-carriers-in-concern-over-high-fuel-price-798472.html


The thing that worries me is not a little bit capacity reduction or a profit warning, but the solid upward trend of the oil price, and the damaging effect it seems to have on the airlines. What is plan B from the airlines if oil hits $200 over the next few years? China is still increasing it's energy demands at 20% per year... But I've made my point.

[Wee Weasley Welshman]

Well that's lovely but if Angolas GDP increases by 20% for the next 50 years it will still be less than the GDP of Cardiff and that city cannot support even one airline. If you think there will ever be 3000 Eclipse 500's built then you have a dissapointment in store.

You think 4 pilot jobs on crummy wages for every VLG based in god-knows-where in some way compensates for the coming losses of jobs paying 6 figure salaries in established EU airlines?

People here are gambling 50 - 60 - 70 - 80 k on getting a career that involves living in Britain and earning £100k a year+ at some point. That's the pay off. Flying some plastic jet powered bath tub for 40 squillion Rupees an hour/day/month/year out of Mumbai ain't really part of the solution for most people here.

The Western economies are just all going to take a big bite out of the ****e sandwhich. Airlines will open wide more than many other parts of the economy. Its the way it is.

WWW

[lazy george]

I have to agree that the economy is going to rat sh*t. I am a builder specialising in new build houses and every major house builders have stopped building as none are selling, due to nobody being able to get a mortgage. Even barrats have got rid of thier helicopter. So people cant move but also people cant get a loan to do their old houses up. Now we've got builders who were earning £200 a day now scrapping for work taking anything we can.
Then there's fools like me undertaking a new career thats looking more bleak than the one im currently doing...

Big debt, no work, not much of a future.....Drink anyone:bored:

[Grass strip basher]

Nichibei this is taken directly from the website of the organisation you represent.... you clearly have a vested interest in continuing to get people to part with their hard earned cash whatever the outlook or job prospects.... so please don't pretend you are offering independent advice... you are pushing a product plain and simple... might be a good one I have no idea but you are a salesman just like the marketing guys at OAT...

"Often, unfortunately too often, students enroll into excessively expensive integrated ATPL courses provided by Flight Training organisations (FTO) all over Europe.

The costs of these courses range between 75 000€ and 140 000€.
Students graduate with a little over 200 hours of time logged, which is far below the requirements of European airlines. On average, an European airline will consider a student with more than 500 hours of flying experience.

Many graduates therefore try to make themselves attractive to the market by self-funding expensive type-rating course in excess of 25 000€.
Unfortunately, a type-rating does not often work out to the students' expectations as airlines do not consider a type-rating as additional experience.

Other graduates follow the Flight Instructor (FI) path and log hours while earning a low pay and occasionally experiencing dangerous situations. Also, most hours will be logged on single engine aircraft, while airlines consider twin-engine experience to be most relevant.
Another minor disadvantage of this path is the reduced flexibility: candidates will often find themselves glued to a one-year contract with the flight school, which could be an issue when an airline decides to hire you immediately. The training to FI costs around 5000€.

Stop gambling with your career investments!!

Nichibei Aviation presents the affordable alternative: the hour building at prices 40% lower than anywhere in Europe!!"

.... oh and the fact that you think the pilot market in Angola will have any impact at all had me laughing so much I nearly fell of my chair! :D

[dartagnan]

countries which have based their economy on fuel will struggle,specially the USA, where it' s all trucks, boats , planes and mainly cars.

cost of life will increase because everything is brought to you by fuel... US trucker think even to give up their jobs if fuel cost continue to raise...

so even if there are jobs in the aviation market, it s going to be jobs that dont pay you anymore...so what's the point to spend all this money in an aviation training, to find yourself with no experience or jobs which pay close of nothing.
who is going to give you money for your training?, and how are you going to pay back?.
just be realist, this job is for people who can afford it.:(

[Grass strip basher]

Ha ha Nichibei you are hilarious! I have never heard anyone tell wanabees to base a career choice in aviation based off an expanding African aviation market! :D Bravo.... you truely have a "unique" view of the world.... :ugh:

[preduk]

WWW,

I don't agree with your overview of the UK housing market. If you look at the housing markets in Scotland they have been in a nice rate of growth over a number of years and this is expected to continue.

My main concern is the increased tax on oil due later in the year and what affect this will have on North Sea Oil which has been doing very well.

[jonjam]

Im sorry i have to agree with nichibie aviation..

For its this negative thinking thats resulting in our econmic slow down..This same negative thinking that forced northern rock into collapse, everyone to rushing in panic to collect their savings and again last week with the american bank Bear Stearns.

This negative thinking has now resulted in other banks refusing to lend money. As mortgages become harder to get and evermore expensive we find our friend lazy george the builder now struggling to find work.

And so the domino continues....

WWW and saccade, if everyone thought like you we would all already be in recession!

[saccade]

There are other projects as well such as this one: http://www.apame.eu/Projet03.html which is a more traditional design than the glider with the electric engine. And Boeing is also working on it: http://www.boeing.com/phantom/news/2...70327e_nr.html (http://www.boeing.com/phantom/news/2007/q1/070327e_nr.html) From your Boeing article:

"While Boeing does not envision that fuel cells will provide primary power for future commercial passenger airplanes, demonstrations like this help pave the way for potentially using this technology in small manned and unmanned air vehicles,"

Batteries have a very poor energy/weight ratio in comparison to kerosene. I won't be surprised if it's possible to fly an A380 with electric motors, but it's useless if it's range is, say, Luton-Stanstad. There are many problems with the application of hydrogen as a transport fuel. Costs, transportation, volume, the required pressurization to 70 bars to liquefy it, and it is not an source but only an energy carrier. Some do see it as a future fuel, but not for the next 40 years. There is a lot on the internet about hydrogen, and I'm sure Boeing and Airbus didn't just forgot about it.

Stop fighting useless wars, stop financing useless projects, develop better consumer policies by lowering VAT and excise taxes and providing more jobs by improving relations with countries who are eager to import products, improve export, reduce import from China, etc...The US military intervention over the past decades is all about securing an adequate flow of oil. The US oil production peaked in 1970 and from that moment they were more and more dependent on imported oil. The fuel crises in 1973 and 1979 made it very clear how vulnerable an economy is without enough oil.

Literally words from president Bush the first, in relation to the first gulf war:
"The stakes are high. Iraq is already a rich and powerful country. It possesses the world's second-largest reserves of oil and over a million men under arms. It's the fourth-largest military in the world. Our country now imports nearly half the oil it consumes and could face a major threat to its economic independence. Much of the world is even more dependent upon imported oil and is even more vulnerable to Iraqi threats."

Full speech is here:
http://query.nytimes.com/gst/fullpage.html?res=9C0CE0DC1F3FF93AA3575BC0A966958260

And this is only Iraq. The Saudi's have a very close relation with the white house, and despite their very poor human rights records they get military protection from the US whenever needed. US is also active in the Caspian sea, and are protecting pipelines wherever necessary. I don't really see how the rest of your proposals should bring the oil price down, but some will definitely make the US economy a lot healthier.

My main concern is the increased tax on oil due later in the year and what affect this will have on North Sea Oil which has been doing very well.Preduk, the North Sea is doing horrible! They peaked in 1999 with a very significant 6 mb/d, and is since that date declining on average 8 % per year. The UK is again a net importer of oil from 2005. Even the US is producing more at the moment and they peaked 38 years ago.


Here's an interesting article about Exxon Mobil, but I think it says a lot about oil companies in general.
Why Exxon Won't Produce More

http://www.businessweek.com/bwdaily/dnflash/content/mar2008/db20080319_269345.htm

[Wee Weasley Welshman]

Neither Boeing nor Airbus have any plans for aircraft that isn't burning mostly Kerosene. The costs or engineering something else would equate to oil being $5000 dollars a barrel. It won't happen. You can re-engineer land transportation, ship transport and energy production at far less cost and safety risk. The last drop of oil will go in an aeroplane so lets not get too distracted by the peak oil and future propulsion dreams.

In the real world we have the City analysts who look at the actual data and come up with an opinion on the future prosperity of the airlines. Conveniently they summarise this in a single figure called a shareprice.

This is their view of the three largest airline flying into and out of the UK:


BA


http://www.lse.co.uk/tools/shares/GetGraph.asp?gcode=BAY&mode=ShareCharts&t=2&p=90&ma=9


easyJet


http://www.lse.co.uk/tools/shares/GetGraph.asp?gcode=EZJ&mode=ShareCharts&t=2&p=90&ma=9


Ryanair

http://www.lse.co.uk/tools/shares/GetGraph.asp?gcode=RYA&mode=ShareCharts&t=2&p=90&ma=9



Arguably each of these businesses are stronger than the average airline as they have strong cashflow at hand, a clear or a protected business plan and are really quite large companies able to lever economies of scale.

If things are this bad (more than half the value written of in a year) for the big three then how bad is it for the industry as a whole?

This is the calm before the storm I think.

WWW

[Grass strip basher]

Jonjam WWW and others on this site were warning wanabees about the UK mortgage market seizing up 4-5 months ago now and they were met with the same "it ain't gonna happen" response..... well you admit yourself it has... and it is still getting worse (did you see HBOS share price last week?). The US is already arguably in recession and growth forecasts in the UK are still being downgraded.... this will impact how wealthy people feel and how much they are willing to spend on hols/travel etc

People are now warning about a downturn in the aviation cycle that is frankly as clear as the day is long but wanabees still don't want to listen. That of course is their choice but you have to admit it is important people are told how life is currently in the real world before spending 50-100k on the hope of getting a job in 12 months time when frankly there may not be many about?

If that involves acting as a counterbalance on Pprune to the numerous flight training organisation that constantly post glowing reviews about how the world is going to be all bright and rosey then the cautious commentary serves a very necessary purpose.

I can tell you from first hand experience that conditions in the financial markets that "oil the cogs" of the global economy have perhaps not been this jammed up since 1929. Ongoing government intervention means that things may get better but a huge amount of damage has already been done that is only just beginning to filter through into the "real economy" (e.g. a falling availablility of mortgages etc).... yes we will probably muddle through but you have to admit the chances of getting a job in 12 months time are not going to be the same as they have been for the past 1-2 years.

[ReallyAnnoyed]

Nichibei Aviation, the good thing about this thread is that you show your true colours. You deliberately lie, deceive and misrepresent the facts to show what you would like them to show. You try to turn everything into an argument for joining your flight school, but when you are so willing to slaughter the truth for personal gain it must be assumed that you would not for one second hesitate to screw over your students. An organisation devoid of moral to maximise financial gain should be avoided at all costs and I sincerely hope that wannabes manage to see through your smoke screen and steer well clear of you.

I have followed your posts for a while now and it never ceases to amaze me what you claim to have knowledge of. It was pitiful when you tried to lecture on the Scandinavian market from your island on the other side of the world.

Whether or not students should start their training is decision, which can only be made by themselves. Ppprune is a place of information. The only thing you provide is misinformation. Naturally, you’ll come out guns blazing with more senseless propaganda praising your organisation and trying to fend off this direct attack on your dubious character. Perhaps you should contact RyanAir. MOL would be proud of you.

[clanger32]

I don't wish to get involved directly in this discussion, because (unlike many who are participating in this) I'm happy to admit I don't know enough about it. One thing I would comment on though, is that everyone should take a pinch of salt when discussing the world economy on a pilots forum. I doubt you'll find monetary policy makers on PPRuNe, which makes anything on here opinion, although obviously in some cases researched and to a greater or lesser degree accurate opinion.

The only real point I did want to make however, was in relation to WWWs last post. A case of semantics really, but the banks do NOT set share prices. All the city analysts will do is look at the outlook for a given company in context of the socio-political outlook and predicted economical trends and on the basis of this make recommendations to buy, sell or hold shares. The actual share price is determined simply by supply and demand - look no further than the late 90s dot com boom for a great example of hideously overvalued companys that continued to rise. It's slightly untrue to say the banks have no input to all of this as clearly the banks trade inter-bank to fulfill customer orders and to profit themselves, but they don't directly "decide" what the share prices should be

Non of this detracts from the main point that WWW has made, if anything it strengthens the point as it's actually the public that has no appetite for these shares, which indicates either a lack of disposable income to spend on shares, or a lack of faith in the aviation industry...either way, not good.

What will be interesting is to monitor the governments continuing efforts to fend off a full blown economic downturn and how far they can [are willing to] go to prop the economy up. One final point, it's not a good environment currently, but it's not as bad as some would have you believe.

I am mid training currently, but my previous job (analyst with Barclays Capital) is not so dim and distant that I'm completely off the boil now. Granted, I don't view the current economic situation as advantageous to my chances when I finish in Dec, but neither am I going to pull out of training now.

Lastly, different topic, but Nichibei - I don't mean this as a personal offence at you, but half your problem is that you constantly position yourself as a master of all things in all continents - yet you have missed sooooooo many salient points in different posts (perfect example, the OAA/Netjets scheme thread where you demonstrated a total lack of understanding of the scheme, the renumeration package on offer and the loan repayment methods, yet still insisted you were right - even in the face of contradictory evidence from those with far greater knowledge of the scheme than yourself - namely those ON the scheme) that you unravel all of the good points you make.

You clearly don't believe in the integrated route, which is your choice, but you consistently fail to recognise the drawbacks of modular at the same time. This leads to the general consensus that your only interest is in promoting the services of your employer...again leading to a discrediting of your good points. The truth, as I think most if not all, would agree is that both routes have benefits and both have drawbacks. Each individual needs to assess those in context of their own situation and make their own judgement which represents the best training method. Your views are so deeply polarised however, that it discredits you. For all the grief OAA take on these pages, if you speak to them they will lay out the benefits and drawbacks of both methods of training and I know people they have recommended to either route and not even necessarily at OAA. As I say, I mean no offence to you, this is only intended as helpful. As a wise man once said, know exactly enough to know you know nothing. You would gain a lot more credibility if occassionally you would admit to having it wrong, or just not knowing the answer....

[Nichibei Aviation]

You clearly don't believe in the integrated route, which is your choice, but you consistently fail to recognise the drawbacks of modular at the same time. This leads to the general consensus that your only interest is in promoting the services of your employer...again leading to a discrediting of your good points.

This is a wrong assumption because most requests we get are from integrated students who want to raise their hours quick quick.

As demonstrated in the OAA/NJE topic, the scheme is overpriced.
If you go modular, join an air taxi company for 2 years and then apply to NJE, you'll save alot on the training and you'll benefit from the full salary 4 years earlier than your colleagues from OAA. That's a huge difference if you ask me. Another disadvantage is that you are bonded to NJE.
I have exagerated some aspects of the cost indeed but the point was made.

Integrated or modular, the job chances are the same.


This is their view of the three largest airline flying into and out of the UK:


What do airline share prices have to do with job prospects for pilots?
All shares of all airlines in Europe have dropped strongly in 2007 but traffic has grown 5%. Which one is the real indicator of job prospects?

It seems that moderators have deleted some posts of mine that have made good points.

I will repost them here:

The US military intervention over the past decades is all about securing an adequate flow of oil. The US oil production peaked in 1970 and from that moment they were more and more dependent on imported oil. The fuel crises in 1973 and 1979 made it very clear how vulnerable an economy is without enough oil.

Literally words from president Bush the first, in relation to the first gulf war:
"The stakes are high. Iraq is already a rich and powerful country. It possesses the world's second-largest reserves of oil and over a million men under arms. It's the fourth-largest military in the world. Our country now imports nearly half the oil it consumes and could face a major threat to its economic independence. Much of the world is even more dependent upon imported oil and is even more vulnerable to Iraqi threats."

my answer was a quote:
<H3>$90 a barrel: Is it time to start worrying about the oil price shock of 2007?

Oil shocks in 1973, 1979, and 1990 were each followed by a recession. But we saw the price of oil climb from $20 a barrel in 2002 to $75 a year ago, and so far it has not resulted in a significant economic downturn. What's different now, and can we count on it to continue?
</H3>from: http://www.econbrowser.com/archives/2007/10/90_a_barrel_is.html

We got the AEA january statistics:

Passenger-km grew just 2.8%, the lowest monthly growth rate excluding calendar effects (Easter and leap year) since September 2003. Cross-border traffic within Europe remained relatively buoyant at plus 5.7% but domestic traffic registered a drop of 2.4%.
The two largest longhaul regions both posted low growth rates, of 1.7% in the case of the North Atlantic and 0.9% for Far Eastern routes. The South Atlantic retained its place as AEA’s top-performing market at plus 10.0% but suffered a major slump in load factor, of 5.4 percentage points.

http://files.aea.be/News/PR/Pr08-009.pdf

Just to avoid that some start panicking when reading "5.4% load factor slump", when capacity is added, load factors tend to decrease. Ryanair's load factors are decreasing year after year but their fleet is growing, therefore total traffic is growing.
Europe's fleet is growing bigger: the AEA figures show that capacity has increased by 4.4% compared to January 2007.
Also domestic figures decrease are justified by alternative means of transport. AirFrance has decided this month to cut alot of domestic routes because more customers decide to take the TGV.


Nichibei Aviation, the good thing about this thread is that you show your true colours. You deliberately lie, deceive and misrepresent the facts to show what you would like them to show.


Try to find arguments to prove me wrong instead of just saying I'm lying, that's too easy. You can not judge an organisation based on one employee who is giving figures to support facts. I'm a student pilot myself and I'm sharing info that people do not have at hand. For your info, Nichibei is also not interested in the European market but is aiming at the Asian market.

By 2010-2011, big flight schools charging high prices will start having difficult times. The same way there was an emerging number of low-cost carriers, there are an emerging number of low-cost flight schools.

To people who intend to spend 60k+ now: by the time you graduate or during your training there will be training becoming available for 20K. So think twice before enrolling integrated. If you go modular, you will still have the possibility of switching schools.

Just to prove you that this is the actual tendency: http://www.gsaviation.it/scuola.php

See the prices of that flight school? It's like 70% cheaper than the famous integrated flight schools.

[saccade]

No plans of capacity reduction yet, but $100+ oil is definitely spoiling O'leary mood. Ryanair is for 97,5% unhedged in the next financial year and the fuel bill will probably be around 55%-60% of the total operating costs of Ryanair in 2008 (it was 39% when hedged at $68 last year).

Ryanair seeks 400 mln eur in cost cuts to offset oil price, imposes pay freeze

O'Leary said Ryanair's 2008 fuel bill would rise by about 400 mln eur, and confirmed the airline needs to cut costs by the same amount.

http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-24032276.htm

My question remains: what happens when oil hits $200, or $300 over the next few years? Do the FTO's know the answer to this?