Airliners grounded

[Horas]

This will be the end of the airline pilot shortage thousands of airline pilots will be available,Europe and Asia will be next . Airline jets will become a dime a dozen , cheap leases for anyone brave enough to start another airline.The higher the cost of a barrel of oil the higher the number of grounded airliners and crews. Unfortunately the consumer airline passenger is going to have to pay substantially more for the fewer seats available and we will probably end up having to bring our own sandwich on board.

Helicopter crews should be ok and the shortage will remain because they are generally employed for the Oil, Gas and Mining industries and Oil & Gas is what the world needs most right now so exploration and therefore helicopter utilization will increase.


Continental cuts 3,000 jobs, grounds planes

Nation's fourth-largest airline takes 67 airplanes out of service and slashes payroll in response to high fuel prices.

By David Goldman (http://money.cnn.com/2008/06/05/news/companies/continental_cuts/mailto:[email protected]), CNNMoney.com staff writer
Last Updated: June 5, 2008: 11:38 AM EDT
NEW YORK (CNNMoney.com) -- The crisis facing the airline industry, propelled by out-of-control fuel costs, claimed another victim on Thursday.
Continental Airlines said it is eliminating about 3,000 jobs, or 6.7% of its staff, and grounding 67 mainline aircraft in an attempt to cut costs amid record oil and fuel prices.
The airline - the nation's fourth-largest by miles flown by paying passengers - said it was facing the worst industry conditions since the terrorist attacks of Sept. 11, 2001.
"The airline industry is in a crisis: Its business model doesn't work with the current price of fuel and the existing level of capacity in the marketplace," said Larry Kellner, Continental's chairman and chief executive officer, and President Jeff Smisek in a letter to employees. "We need to make changes in response."
In recognition of the company's crisis Smisek and Kellner said they would not be paid the remainder of their 2008 salaries and will refuse payment under the company's annual incentive program.
"The move to decline their salaries is symbolically important, but the company's image will still be weighed down by the impending layoffs," said DePaul University transportation expert Joe Schwieterman.
New airline economics
The company said the 3,000 job cuts will come starting in September, and it expects most will be made with voluntary severance packages. After 9/11, Continental (CAL (http://money.cnn.com/quote/quote.html?symb=CAL&source=story_quote_link), Fortune 500 (http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/2065.html?source=story_f500_link)) cut 12,000 staff, then about 21% of staff, in reaction to the terrorist attack and the drop in demand for flights that followed.
"These record fuel costs have fundamentally shifted the economics of our businesses," the letter said. Continental estimates that the year-over-year rise in jet fuel amounts to about $50,000 per company employee.
Many airlines have hiked fuel surcharges to fares and added fees to once-free benefits, such as food and checked baggage. This latest move by Continental most likely means that passengers will need to pay even more to fly, according to Schwieterman.
"There's going to be enormous upward pressure on fares," he said. "Consumers are going to feel this in a big way."
Continental would not offer further comment beyond the press release.
Despite other cost cutting attempts, Continental said its increased fares will lead to fewer passengers, which will necessitate a reduction in its capacity. The airline said it will trim its domestic mainline departures by 16% starting in September by accelerating the retirement of much of its Boeing (BA (http://money.cnn.com/quote/quote.html?symb=BA&source=story_quote_link), Fortune 500 (http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/59.html?source=story_f500_link)) 737 fleet. Customers should expect crowded planes as airlines reduce capacity.
"The bad news is that airplane load factors could be pushed to 90%, which greatly affects the perceived quality of service," said Schwieterman. "The good news is that if they can shrink by as much as 20%, the airlines will become financially stable."
Fuel fallout may not be over
The last time U.S. Airlines were under this much pressure from fuel prices - in September 2005 - two of them, Delta Air Lines (DAL (http://money.cnn.com/quote/quote.html?symb=DAL&source=story_quote_link), Fortune 500 (http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/2126.html?source=story_f500_link)) and Northwest Airlines (NWA (http://money.cnn.com/quote/quote.html?symb=NWA&source=story_quote_link), Fortune 500 (http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/2115.html?source=story_f500_link)), filed for bankruptcy.
On Wednesday, No. 2 airline United (UAUA (http://money.cnn.com/quote/quote.html?symb=UAUA&source=story_quote_link), Fortune 500 (http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/2102.html?source=story_f500_link)) announced it was grounding 100 planes and cutting up to 1,600 jobs. But it may not be long before another airline makes a similar announcement. Some analysts believe that airlines will continue attempt to show Wall Street that they have a handle on the fuel crisis.
"The cuts have been bigger than we expected, and more are still to come," said Schwieterman. "Low cost carriers haven't yet played their hand." http://www.pprune.org/forums/mhtml:http://3.3.3.3/multipart/money.cnn.com_0_525cf0ca6ee90a8a452dd5eac474b0ab.mht!http://i.cdn.turner.com/money/images/bug.gif (http://cnnmoney.printthis.clickability.com/pt/cpt?action=cpt&title=Continental+cuts+3%2C000+jobs%2C+grounds+67+airplanes+-+Jun.+5%2C+2008&expire=-1&urlID=28956667&fb=Y&url=http%3A%2F%2Fmoney.cnn.com%2F2008%2F06%2F05%2Fnews%2Fcom panies%2Fcontinen#TOP)
First Published: June 5, 2008: 7:28 AM EDT



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Find this article at:
http://money.cnn.com/2008/06/05/news/companies/continental_cuts/index.htm

[PlankBlender]

The article ignores a small detail -- the global economic climate. :ugh:

China, India and the Middle East are growing massively, and so are their aviation industries. The global pilot shortage is here to stay!

So a few US airlines have done a dumb thing or two, possibly built capacity that proved suplus to requirements (wouldn't be the first time some yanks get over-excited :E), are are now being punished for it. Big deal! Hardly enough data to declare the pilot shortage over methinks :=

As always, the fundamentals are important: Pilot demand in the world's growing econonmies will increase for years to come, Australia will profit from this because of their strong position in the training market among other things.

The US is headed for some sort of slowdown, of course high oil prices don't help, and some companies will suffer, but a few hundred US pilots laid off will not make a big difference globally.

Air travel and freight demand will continue to grow globally, and fuel prices will need to rise another several hundred percent (!) until that demand will slow down significantly. Until then, prices at the pumps and the ticket counters will rise, but, for a lack of alternative, people will continue to book :ok:

AFAIK, there has never been a better time to become a pilot, especially on planks. The helicopter market is too small in this country to move quickly, but changes are beginning to be felt..

[SNS3Guppy]

The article also ignores the fact that Continental is taking on some 31 additional airplanes, meaning they're losing only half in numbers of what's advertised..and most of the jobs lost don't involve crews, and the ones that do will likely be at the retirement end. There shouldn't be a big upset. I wouldn't get too excited, just yet.

There is no pilot shortage...never was, and won't be.

[PlankBlender]

Guppy if there's no shortage then why can you

- walk into an Award (or better!) paying plank instructor's job pretty much anywhere in the country these days (offered lately to my humble self in a capital city, and I don't even have the rating yet),
- get a GA gig in regional centres by putting up your hand rather than sweeping hangars in the bush for weeks on end
- get into the Qantaslink cadetship with a bare CPL and 150 hrs TT/70 PIC?
- even become a Qantas direct entry S/O with 500 hrs PIC/MECIR and not much else??

:eek:

[Horas]

Well lets hope you are right for the guys and girls that are spending money to become FW pilots. I do think though that this redundancy is effecting the Jets most of all especially the big fuel guzzlers . On the other hand there is a marked increase in the use and new orders of more economical turboprops like Dash 8 & ATR series especially on the less then 500 NM sectors where jet speeds do not necessarily get you there very much faster. For sure the B 747's are being grounded and new orders cancelled.

[Senior Pilot]

This is beginning to look less and less like a Rotorheads thread :confused:

[powerstall]

This is beginning to look less and less like a Rotorheads thread :confused:

I second the motion! :oh: