The small reduction in oil prices was raised by RVR800, not me.
Whilst any large company such as BA has sophisticated currency hedges the fact is that for more UK airlines revenue is mostly in Sterling and the price of Oil is set in Dollars. As the Pound slumps the real cost of oil increases for companies who generate most of their revenue in Sterling.
All those clamouring for an interest rate cut to help mortgage holders and businesses need to remember that lower of IR's will put downward pressure on Sterling. As we are net importers of goods and materials this will only accelerate the high rates of inflation experienced. Those in debt will be tortured either on their loan repayments, or their lowering living standard caused by inflation, or by experiencing unemployment. You pays your money and takes your choice. A little of each is probably the Bank of Englands desire. Mr Brown would probably rather just see inflation as he can pass that off as being out of his control and a global event.
Either way, the years of millions of people living a lifestyle way way beyond their means in the UK is now over. Unfortunately, ski holidays, second homes, weekend breaks and exotic holidays were all part of that lifestyle. Which is the problem now about to confront Wannabes.
The name of the Wannabe game in the years to come will be longevity. Those that can hang around keeping their ratings current and actively seeking flying work will eventually make it. Those with high debt levels who need a job quickly will find themselves forced back into their offices or previous careers where their dreams of a flying career slowly die.
Unless of course people start using personal bankruptcy as a tool. Which they might. But then you can forget about any kind of flying training finance for many years to come.
Interesting times ahead, unfortunately.
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