It is a slaughterhouse out there. And the culling of the herd has only just started. Airlines are having a hell of a time adjusting to the new oil prices, and it will shake out this business like nothing has in its history (this is no short term thing like SARS, or a war). Last year at my airline (a really, really big one), fuel constituted 29% of our total expenditures, this year it will be 33% and this is at 70% hedging at 85 dollars per barrel. At many airlines it is going to approach 40% of total expenditures.
The consumer is showing an unwillingness to absorb the costs, and at the end of the summer thousands upon thousands of airline employees will be laid off in Canada alone. Worldwide we are talking about tens of thousands. Including thousands of pilots. The pilot shortage is over, batten down the hatches!! Harmony starting up again "if" it happens will only be of short duration, and only if someone wants to lose money at a pace that would even scare the hell out of Bill Gates. What a business, we are at the breakeven point after 90 years of flying (that is right not a dollar made worldwide in flying passengers and freight, when adding all the profits against the losses). It is a great business model.
Last edited by Otterman; 18th June 2008 at 13:20.